Meeting of the Parliament

Meeting date: Thursday, June 7, 2012

Official Report 1090KB pdf

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First Minister’s Question Time

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Engagements

1. To ask the First Minister what engagements he has planned for the rest of the day. (S4F-00744)

I will meet the aforementioned Prime Minister of Lower Saxony. It is of huge interest to Scotland that somebody with strong Scottish roots is Prime Minister of such an important German state. The discussions will be for the mutual benefit of Scotland and Lower Saxony. [Applause.]

I join the First Minister in hoping that he has very constructive and useful discussions.

Last week, the First Minister advised me that I had made the mistake of not asking the right question. I think that I am going to do it again. Last Thursday, the First Minister said:

“The Bank of England is an independent central bank that does not take direction on policy”.—[Official Report, 31 May 2012; c 9629.]

Does he stand by that statement?

The Bank of England is an independent central bank that is independent of Government. That position was awarded to it by the Labour Government in 1997, when Gordon Brown was Chancellor of the Exchequer. He regarded it as one of his greatest achievements during his term in office.

The First Minister now knows that the statement that he made is not true—or perhaps the First Minister is again struggling with the definition of “independence”. The only independence that the Bank of England has is to set interest rates to meet the inflation target that is set by the United Kingdom Government. When it comes to printing money, it needs the Treasury’s approval. Indeed, the Bank of England does not have any money—it is all taxpayers’ money, through the Treasury. The First Minister’s spokesman is quoted as saying:

“The UK government has had no say over monetary policy since the Bank of England was made independent in 1997.”

He was wrong, was he not?

The Bank of England is an independent central bank. If that is not the case, what on earth was Gordon Brown boasting about in 1997 as his great démarche? Johann Lamont disagreed with the former Prime Minister on a range of things: perhaps she should consult him to see what on earth he was doing in 1997.

I welcome Johann Lamont’s continuing contribution to the debate. She will have read this morning the comments of Professor Blanchflower, one of the most prominent members of the monetary policy committee in recent years, which substantially support the very reasonable suggestions that have been made by the Scottish Government. I know that Professor Danny—[Interruption.]—David Blanchflower was quoted at length by the then Labour Government in a range of ways. Given that her party accorded such importance to his comments, will Johann Lamont accept that there must be something in the arguments that have been put forward by the Scottish Government when such a prominent member of the monetary policy committee says that they are substantially based?

Johann Lamont should move away from the idea that Scotland is, for some reason, the only country that cannot have normal procedures, that cannot conduct a monetary policy effectively and that cannot have control over its taxes and finance, which would enable us to direct the Scottish economy in a substantially better way than it is being directed under the dead hand of the UK Treasury.

The First Minister’s problem is that he said:

“The Bank of England is an independent central bank that does not take direction on policy”.

That is simply not true.

The First Minister also cited David Blanchflower, but Professor Blanchflower was talking about whether there should be a Scot on the current monetary policy committee; that there is not is the First Minister’s objection to it, as it stands. He was not making an observation on the First Minister’s and the Deputy First Minister’s assertion—and absolute statement—that an independent Scotland would have representation on the monetary policy committee. That is not true, because he has not even asked the Bank of England whether that would be the case.

Let us see what the Treasury says. It has said that

“Scotland using the pound through a sterlingisation mechanism”—

last week, the First Minister called it the “sterling zone”—

“would have no say over its own monetary policy as set by the Bank of England.”

The First Minister wants to leave the United Kingdom, remove Scotland’s representation at Westminster and have less say in the formulation of monetary policy. Why does the First Minister plan to lessen our influence over our own economic policy? [Interruption.]

Order.

It is arithmetically impossible to have less than zero say. We have zero say at present. This new interpretation of the status of the Bank of England is fantastic. The Bank of England is an independent central bank. It was established as such by Gordon Brown when he was Chancellor of the Exchequer in 1997. If he was not establishing that, what on earth was the direction of policy about that he announced in 1997?

Johann Lamont will be delighted to know that the fiscal commission that has been appointed by John Swinney, and which comprises two Nobel laureates and other distinguished economists, is working on these very matters in order to develop proposals. I will inform Professor Joseph Stiglitz and Professor Jim Mirrlees that Johann Lamont has an important contribution to make, and I will pass on that expertise to them.

However, I think that we had better start with the premise that the Bank of England is an independent central bank, because it was established as such in June 1997, and that Scotland has no influence at present. The proposals that we are putting forward, which are supported by Professor David Blanchflower, represent an entirely better position than the one that we are in at present. [Interruption.]

Regardless of that, control over Scotland’s spending and taxation, which are crucial matters, is currently directed by the United Kingdom Treasury. I think that it should be directed in Scotland because no one—certainly not the UK Treasury—would do better by the Scottish people and the Scottish economy than Scots making decisions about our taxation and spending here in Scotland.

One moment, Ms Lamont. If Mr Paterson, Mr Gibson and Mr Scott could please cease their conversations, perhaps we might hear the questions and the answers.

The First Minister would require his colleagues with the Nobel peace prize—or whatever kind of Nobel prize—to explain the answers that he has just given. They are entirely incomprehensible to us.

On the question of Scottish influence, we had a Scottish Chancellor of the Exchequer making policy for 13 years, but that was not good enough for the First Minister. Now, we are hoping that, in an independent Scotland, we might possibly have representation on the monetary policy committee—but, of course, that has not been confirmed.

The truth of the matter is that the First Minister’s plans for leaving the United Kingdom will leave Scotland with less control over our economy, not more. Either monetary policy is handed over to a foreign Government under sterling or it is handed over to German bankers under the euro. All the assertions in the world will make no difference to that. [Interruption.]

Order.

If the First Minister had the courage of his convictions, he would be alongside his old deputy Jim Sillars, arguing for a separate Scottish currency. We can only presume that he has worked out that no one would vote for that. Is he just coming up with an incoherent assortment of assertions in the hope that he can hoodwink the Scottish people for long enough to win his referendum?

Johann Lamont is in desperate need of a new scriptwriter so that she can read out better questions each week. Her argument is that we have some sort of control over policy at present. If we follow her argument and the Bank of England is not really independent—despite what happened in 1997—that means that the Chancellor of the Exchequer, George Osborne, is directing things at present.

Johann Lamont’s argument rests on the idea that we have some influence and control over the activities of a Tory chancellor. It seems quite obvious that we have no control and zero influence at the moment. As I pointed out to Johann Lamont, arithmetically we cannot have less than zero control. Let us establish the point: in terms of direct monetary policy, the Bank of England is independent.

Let us move on to fiscal policy, which is control of taxation and spending. Currently, this Parliament has control of 8 per cent of our taxation base, which will rise to about 18 per cent with the changes that are being made by the Scotland Act 2012. The Scottish National Party and very many people in Scotland want to control 100 per cent of our taxation. That—I say to Johann Lamont—is what we call “independence”. She thinks that “control” means that we should rely on a Tory chancellor in London. We would rather rely on a Government that is elected by the people of Scotland to take decisions in the interests of Scotland.

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Secretary of State for Scotland (Meetings)

2. I have met the Prime Minister of Lower Saxony this morning and I, too, wish the First Minister well for their discussions later today.

To ask the First Minister when he will next meet the Secretary of State for Scotland. (S4F-00738)

I have no plans to meet the Secretary of State in the near future.

This week saw a British aid worker being rescued in Afghanistan in a textbook raid by United Kingdom special forces. The daily work of our security forces at home is to look after our people and our assets. The First Minister has repeatedly staked the economic stability of a separate Scotland on North Sea oil and gas. Those assets are currently protected by the full range of the British security services, including the marines, special forces and the intelligence community.

The Scottish National Party’s defence spokesman, Angus Robertson, has conceded that it would be imperative to ensure that our oil and gas fields are adequately protected. As Angus Robertson has identified the need, has Alex Salmond come up with the plan? Will a separate Scotland have its own special forces?

In an independent Scotland, a range of forces would be required to establish the country’s security. There is a working example of that, is there not? There is a small European nation that has marginally more North Sea resources than Scotland would have—only marginally more, and very, very substantial. That country is, of course, Norway. I have never heard it suggested that Norwegian oil installations are in any way at risk because they are protected and supervised by Norwegian forces. Does Ruth Davidson seriously argue that an independent Scotland could not provide the same security over our oil and gas assets as Norway does over its oil and gas assets? There would be one big difference in an independent Scotland: the revenue with which to pay for the range of public services, including our security services, would come to Scotland, as opposed to disappearing into the maw of the Tory Treasury in London.

As he has mentioned Norway, I am sure that the First Minister will want to join me in welcoming the Prime Minister’s announcement this morning of an energy partnership with Norway, which will see multibillion pound investment in the North Sea.

However, the First Minister somewhat misses the point. Former Special Air Service deputy commander, Clive Fairweather, has said that special forces expertise is vital for looking after our oil and gas assets and that it would take Scotland years to build its own regiment at a cost of tens of millions of pounds. The First Minister's fag-packet blueprint for defence, which was unveiled in January, has one naval base, one air base and one army brigade. Special forces were conspicuous only by their absence. Norway has special forces. Would Scotland have the same? We did not hear a peep about special forces, a Scottish MI5, a Scottish MI6 or Government communications headquarters monitoring. We know from a few moments ago that the First Minister is happy to rely on the Bank of England to be the lender of last resort, but is he content to have what would be the special forces of another country as Scotland’s defence of last resort, too?

The first thing that I said in answer to the previous question was that we would have the range of forces that are required to protect Scottish assets.

It is interesting that the Prime Minister is in Norway today. I say to Ruth Davidson that one thing that the Prime Minister of the United Kingdom will absolutely not do in Norway today is suggest that in any way, shape or form the Norwegian Government is incapable of protecting the Norwegian oil and gas assets in the North Sea. Is it not extraordinary that the unionist parties in Scotland—Tory and Labour—are willing to praise those small, independent European countries, saying how well they are doing in managing their assets and signing agreements with them and lauding them, except when it comes to the small European nation of Scotland, which according to the Conservative party is somehow incapable of doing the things that other countries take for granted?

In terms of the security of this realm, the reason why we have but one Royal Air Force base and one naval base is that the Conservative party and the Labour Party before it closed all the rest. In terms of our armed forces there is, of course, the continuing threat to the integrity of the Scottish regimental tradition. I read a report in the papers today in that regard that should make all Conservatives in this Parliament hang their heads in shame.

Finally, on the security that we are charged with at present, let us look at the record numbers of police in Scotland, the standing ovation for the Cabinet Secretary for Justice at the Scottish Police Federation conference, the huge decline in police numbers in England and Wales and the slow handclap that the Police Federation of England and Wales gave to the Home Secretary, which is another reason for Conservative party members to hang their heads in shame.

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“The National Fraud Initiative in Scotland”

3. To ask the First Minister what the Scottish Government’s response is to the recently published Audit Scotland report, “The National Fraud Initiative in Scotland”. (S4F-00746)

The Scottish Government welcomes the latest national fraud initiative report. These reports make a huge contribution to the protection and security of public sector finances. This is a time of severe pressure on public sector budgets, so any fraud against the public sector is entirely unacceptable. We must take every action that we can to safeguard taxpayers’ money and ensure that, as far as possible, it is used for all intended purposes.

I am sure that the First Minister will join me in commending Audit Scotland for its work, which has uncovered £78 million-worth of fraud and overpayments over the past 10 years. However, the report highlights that a number of public bodies are not using or integrating the national fraud initiative. Given that this is an area of financial policy over which the First Minister does currently have control, can he tell us how those bodies will be encouraged to make greater efforts to save vital public funds?

There are two points to make. First, Scottish Government bodies fully co-operate—as Murdo Fraser should know—with the national fraud initiative. Secondly, to put the matter in context we should look at Robert Black’s comments in the report. He states:

“Most people are honest and behave with integrity. Some do make genuine mistakes, but there is a small number who set out to cheat the public sector. Our successful National Fraud Initiative should be a deterrent.”

That is exactly why we set up the national fraud initiative. Robert Black states that the overall findings show that there is in Scotland a “high degree of commitment” to the national fraud initiative. That contrasts with the criticism that has been levelled at the UK Government in the UK NFI report, which highlighted that only two central Government agencies have participated, to date. In comparison—I am sure that Murdo Fraser will be the first to acknowledge this—all Scottish central Government departments participate in the national fraud initiative.

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Year of Homecoming 2014

4. To ask the First Minister what plans are being made for the year of homecoming 2014. (S4F-00748)

The first year of homecoming delivered £54 million in additional tourism revenue for Scotland. I can confirm that planning for homecoming Scotland 2014 is progressing well. EventScotland is leading that work on behalf of the Government, with a wide range of partners involved in the planning. An inspirational nationwide programme of events will be developed and set around the five themes of ancestry, food and drink, and active, creative and natural Scotland. We are investing an initial £3 million in the events programme and details of the funding application process will be announced shortly.

What concerns me as a local MSP is that although there will undoubtedly be some very large events in our large cities—I am sure that that is entirely appropriate—there should also be events in some of the smaller communities that I and other members represent. What plans are there to ensure that such communities are given the opportunity to host events?

That point is very well made. Knowing that Nigel Don was going to ask that question, I took the opportunity to look back at the 2009 events and I noticed that the Angus and Dundee roots festival was one of more than 400 homecoming events that took place in Scotland. Such events across the communities, towns, villages and cities of Scotland are absolutely fundamental to the success of a homecoming initiative. I think that in 2014 we can surpass that number. Once the application process is announced, I will encourage all local authorities and their partners, the community organisations, to work together to harness the unique potential for Scotland of that extraordinary year.

After the gathering in 2009, many businesses were not paid for services that they had provided in good faith. What safeguards will the First Minister ensure are put in place to prevent businesses from losing out again?

Sarah Boyack knows that—as I said—the homecoming involved more than 400 events, of which the gathering was one. The Public Audit Committee’s report on the gathering provided valuable information that was of interest.

A key aspect is that major events that are part of the homecoming should have major significant partners and should not rely on relatively small private sector companies. Stirling Council’s having taken the initiative to buy the rights for the gathering is a significant step forward.

Further to his answer to Nigel Don, will the First Minister ensure the involvement in the plans and publicity for the year of homecoming of the various common ridings that are held annually between June and August in communities in the Borders and Midlothian?

That is a splendid suggestion from Christine Grahame, which I will ensure becomes part of the homecoming Scotland planning. As ever, she has put her finger on an extra aspect of community involvement on which we would do well to listen.

As the First Minister plans for the 2014 year of homecoming, will he ensure that the 100 small businesses in Scotland that are owed £300,000 as a result of the 2009 gathering receive payment before further plans are made?

I have every sympathy for the creditors that were affected by the liquidation of The Gathering 2009 Ltd, but it was a private company. As the Public Audit Committee’s report showed, we received clear advice from the Scottish Government’s chief accountable officer on what we could and could not properly do within the law. I am sure that Mary Scanlon has read that advice and will understand the limitations under which we worked.

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Prisons (Proposed Statutory Monitoring Service)

5. To ask the First Minister whether members of the existing prison visiting committees will have a role in the statutory monitoring service proposed by the Scottish Government. (S4F-00740)

Under our proposals, independent monitoring of prisons will be carried out regularly by professional monitors who will report directly to the chief inspector of prisons. Many opportunities will remain for people who wish to volunteer to work with prisoners, including mentoring, community mediation and restorative justice, as well as the potential to be involved with the new prisoner support service that the Government is establishing as part of the movement forward.

In relation to Scotland’s international obligations on independent visiting of prisons, I think that that answer means “No.” The answer is disappointing for people who have given their time and effort on prison visiting committees.

Does the First Minister really believe that replacing 240 unpaid volunteer members of visiting committees with three former prison governors or other senior people with prison experience as full-time Government inspectors is the right way to respond to the public service commitment of prison visitors, including councillors of all parties? Is it the right way to meet Scotland’s international obligations on independent monitoring of our prisons?

Lewis Macdonald is being less than fair. As he probably knows, we revised our proposals to reflect concerns about the independent monitoring of prisons that were expressed in Parliament on 2 February. The Cabinet Secretary for Justice wrote to key stakeholders on 24 May to set out his proposals on monitoring, which were sent to the Howard League for Penal Reform, the Scottish Human Rights Commission, the Convention of Scottish Local Authorities, the Scottish Independent Advocacy Alliance, the Association of Visiting Committees for Scottish Penal Establishments and the chair of the United Kingdom national preventive mechanism.

Lewis Macdonald should not underrate the importance of some of the things that I mentioned. The mentoring service offers support for offenders who want to reduce their offending and to lead healthier lifestyles, travel services provide a regular transport service to many of Scotland’s prisons, and restorative justice is hugely important in addressing the harm that is caused by crime and helping to work out practical solutions for the future.

As I said to Malcolm Chisholm on 2 February, many opportunities remain for interested parties to feed in their views, including the three-month consultation that the justice secretary is progressing. Lewis Macdonald is being less than fair about the range of mechanisms that are available to allow people to participate in that vital and valuable service.

The Government has stated that a criterion for the recruitment of the new prison monitors

“will be that they possess previous high level experience of working within a prison service”.

To be blunt, the justice secretary is proposing that the Scottish Prison Service be monitored by former senior employees of the Scottish Prison Service. How independent is that? Can the First Minister explain why that criterion is necessary when it is not required for HM Chief Inspector of Prisons or his staff?

It is reasonable to ask for significant expertise, qualifications and experience, but I will ask the justice secretary to look at that question in detail and to give Alison McInnes a fully considered reply. We should not diminish that request. There are many people in Scotland who fulfil the criteria, and we want the very best people available for the institutions that are being established. However, I will ask the justice secretary to reply specifically in order to allay Alison McInnes’s concerns.

How much more expensive is the proposed new system?

We are confident that the move to the new system will fulfil not just our statutory requirements but other requirements, and we believe that it will deliver substantial value for money.

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Population

6. To ask the First Minister what the Scottish Government’s response is to the figures from the National Records of Scotland showing that the population is at its highest-ever level. (S4F-00742)

It is very encouraging that Scotland’s estimated population has now reached 5,254,800, which is its highest-ever level. Population growth is a key priority in the Scotland performs indicators. The target is to match the average European population growth over the period from 2007 to 2017, and those latest statistics indicate that we are substantially on track to reach that target.

Scotland has a proud history of welcoming people from around the globe, and they have undoubtedly enriched Scottish society. However, in Dundee our life sciences and games sectors often have problems in recruiting specialist staff due to restrictive United Kingdom immigration laws.

What steps can the First Minister take to get the message across to the UK Government that “immigration” is not a dirty word, and to ensure that we can recruit the talent that is needed to drive forward Scotland’s economy?

Joe FitzPatrick touches on a key point. It is not only the life sciences and games sectors that are bringing that issue to the attention of Government: a range of industries are finding difficulties in meeting key skills requirements, which is preventing investment in our country, at present. I assume that that was not the Home Office’s intention in issuing its most recent guidelines, and I believe that it should listen. I am particularly concerned, because we have had huge success—as members will know—given the increase of more than 20 per cent in overseas students coming to Scotland and our universities.

As members have always reflected during the Parliament’s entire 13 years of existence, it is important not only to encourage international students into our economy, but to allow those students the opportunity of work experience in it.

I hope that we can send a substantial joint message to Damian Green, the UK Minister of State for Immigration, that his proposals should not be allowed to harm businesses and investment in Scotland, nor should they in any sense restrict the international excellence of the Scottish education system.

The First Minister will know that the greatest population growth is recorded in Edinburgh, Midlothian and Aberdeen. I am anxious to know that there will be a reallocation of resources, which this time will take account of that population growth. We would then avoid the mistake of underfunding the health boards, for example, which happened under the Arbuthnott review.

I know that Margo MacDonald will have noted and welcomed this Government’s decision, in the face of criticism and opposition from others, to put a funding floor on the Convention of Scottish Local Authorities allocation to local authorities, which has benefited both the City of Edinburgh Council and Aberdeen City Council. That was designed to ensure fairness for all Scotland’s local authorities, and a similar system has been introduced for health boards. Those are substantial changes, and they have not been greeted unanimously with satisfaction. [Interruption.]

I hear voices from members on the Labour benches. I hope that they will be able to tell people in Edinburgh—which we now control in an SNP-Labour coalition—or in Aberdeen why on earth they want to criticise the obvious fairness that was introduced to funding allocations.

I know that Margo MacDonald would want to welcome the changes and acknowledge their significance.

The increase in population is in part accounted for by the increase in the number of births. Since 2001, the annual number of births has gone up from 52,000 to almost 59,000. Will the First Minister invite his Cabinet Secretary for Health, Wellbeing and Cities Strategy to reconsider the 40 per cent cut to the student midwifery intake, which is happening at a time when the birth rate has gone up, complex problems to do with drugs and alcohol are increasing, breastfeeding rates are poor and there are high rates of smoking among pregnant women? This is not the time for such cuts.

Richard Simpson should welcome the excellent population trends. The matters that he raised are fully discussed in order to ensure that there is adequate provision of midwifery and other key services in the Scottish health service.

It is worth remembering that if Scotland had had the misfortune of there being a Labour Government in 2007, that Government would have spent less on the health service. Members may remember that other services, like health, were to “cut their cloth”, because all consequentials were to be awarded elsewhere. Of course, at the most recent election, no guarantee was given by the Labour Party, led by Iain Gray and Johann Lamont, to protect national health service spending. One thing of which we can be absolutely certain is that if the Labour Party had won the election in 2007 or the election last year, less money and less resource would currently be being provided for the Scottish national health service. That is only one reason why Richard Simpson is sitting where he is sitting and this Government is where it is.

12:31 Meeting suspended.

14:15 On resuming—