Plenary, 09 Oct 2003

Meeting date: Thursday, October 9, 2003

Official Report 692KB pdf

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First Minister's Question Time

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Scottish Executive's Cabinet. (S2F-263)

The next meeting of the Scottish Cabinet will discuss our progress with implementing the partnership agreement and the legislative programme.

I wonder whether the Cabinet will discuss the statement issued on 17 September 2003 by the Scottish Liberal Democrats, which says that

"The Government … is crippling … Scottish manufacturing firms",

that the Government is

"unable to … tackle the difficulties facing"

manufacturing, and that Scottish manufacturing is in "crisis".

Is that the view of the whole Executive, or just the party of which the Minister for Enterprise and Lifelong Learning happens to be the leader?

This Government is not crippling Scottish manufacturing, but some sectors of the Scottish manufacturing industry are facing very difficult international conditions. We saw that yesterday, when the workers at the Hoover factory received 90-day notices on their jobs, which will cause difficulties for their families and communities. Although we feel strongly about the condition and the situation in which those workers find themselves, we should note that in the same week there has been other news in other parts of Scotland about new manufacturing jobs. There are clearly difficult international conditions for Scottish manufacturing; however, in some sectors and in some parts of Scotland people are rising to that challenge and are delivering new jobs to Scotland and real growth in their sectors.

I am no further forward in understanding what the Executive's view is. On 17 September, the Liberal Democrats said:

"The Government … is crippling … Scottish manufacturing firms",

that the Government is

"unable to … tackle the difficulties facing"

manufacturing, and that Scottish manufacturing is in "crisis".

Manufacturing exports have fallen by one fifth over the past year, 50,000 jobs have been lost in manufacturing in the past five years, and yesterday 260 workers at Hoover started their search for work. Does the First Minister now accept the view of his junior coalition partners that the policies that he supports are "unable to … tackle" the crisis that faces manufacturing in Scotland?

We had this discussion to some extent last week, and I am happy to have the debate again. The issue here is not in the analysis of the problem that faces the Scottish economy, but in the solutions that our respective parties propose. That is the difference between us. That difference lies in our Government's commitment—now widely recognised, including by Mr Swinney's party, or at least by its spokesperson prior to the elections in May—that a policy that delivers a smart, successful Scotland that competes on the international stage is the right policy for Scotland. Much more important, however, is our recognition that that needs to be backed up by investment in transport, in skills, in broadband—again this week we have announced new developments in broadband for the Scottish islands—and in a range of other areas. That investment by this Government, here in Scotland, backs up successful companies that have the ability and the potential to grow their jobs in their local communities. That is the right way for us to go, and it is entirely different from the policy that Mr Swinney wants us to pursue, which would see those same Scottish companies broken off from their main markets, isolated on the north-western corner of Europe and unable to compete in the modern world.

It might have escaped the First Minister's notice that thousands of jobs have been lost in Scotland in the manufacturing sector. He talked about the long term; last year, the Minister for Enterprise, Transport and Lifelong Learning issued a press release boasting that the long-term future of the Hoover plant was secure. She said:

"The Hoover plant at Cambuslang has shown how Scottish manufacturers can beat the competition when they invest in skills and innovation."

That is the strategy, but it has just failed because it is not enough. We have the highest business rates in Europe, manufacturing is in crisis and exports have collapsed. How many more jobs must be lost before the First Minister joins the growing consensus that the Parliament must have the powers to safeguard the Scottish economy?

There was a consistent debate in the Parliament over a fair length of time between those of us who believe that we need to see the Scottish glass as being half full and those who see it as being half empty. It seems increasingly to be the case that Mr Swinney thinks that the glass is completely empty. That is not an accurate picture of Scotland today.

Mr Swinney will receive no credit from the workers at Hoover, their families or the community in which they work for using them as political footballs to justify his policies, which would damage their situation even more. The workers at Hoover have worked long and hard to preserve the plant and the decision that was announced yesterday is regrettable. The workers have competed against that decision and tried their very best to ensure that it did not come about.

The difference between Mr Swinney and me is not in the analysis that Scottish manufacturing currently faces a difficult set of international conditions. Even in those conditions, the oil and gas industry in Scotland is still competing on the international stage, our financial services are still among the best in the world and our renewable energy industry can be the best in the world if we invest in it. In a range of other areas, the Scottish economy remains strong and is strengthening. The difference between Mr Swinney and me is that, in his world and in his economy, Scotland would have less public spending to invest because we would break off from the rest of the United Kingdom. We would apparently cut taxes and increase public spending at the same time as we had economic chaos as a result of independence. Mr Swinney's outcome is wrong. Our policy is right and is starting to deliver.

Will the First Minister join me in expressing sincere regret at Hoover Candy Ltd's decision to cease manufacturing in Scotland, which will result in the expected loss of 250 jobs at its plant in Cambuslang in my constituency? Does he share my deep concern that it is intended that some of the jobs that will be lost will go to Wales? Will he assure me that he will offer the workers at Hoover's Cambuslang plant his full support in urging the company to overturn the deeply unfortunate decision and will he provide what assistance he can to facilitate such an overturn?

There is no disagreement between us that Hoover's announcement yesterday is extremely regrettable and has deep implications for the families that are involved. Our job is, of course, first of all to support them and to make the case for Scotland. However, it is also our job to ensure that, should the company implement that decision, we are as successful at the Hoover plant as we were at the Motorola plant in West Lothian and in a number of other areas in supporting workers who were in the same situation to achieve alternative employment or train for new work.

That is fundamental to turning round the situation in the Scottish economy. In Scotland, we currently have more people in work than ever and we have the lowest unemployment in my adult lifetime. In the circumstances of Hoover's announcement, we can use the employment situation to rebuild people's careers, give them new hope and new opportunities and support companies that can prosper and are prospering. That is the challenge for us. It is not to run down those companies and the Scottish economy, but to give them support. That includes those whose jobs are under immediate threat.

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Prime Minister (Meetings)

To ask the First Minister when he will next meet the Prime Minister and what issues he intends to discuss. (S2F-264)

I expect to meet the Prime Minister on a number of occasions before Christmas and I expect to discuss a number of issues with him.

That was a characteristically enlightening answer from the First Minister. I will take on some of the earlier discussion about the economy in the light of the job losses at Hoover that we have already discussed and the fall in manufacturing export sales.

The First Minister is always telling us that he wants to help grow our economy—it is, of course, one of the Executive's many first priorities—but I am sure that he is aware of the study that was published this week by the Executive's own economists which showed that Scottish businesses face higher business property taxes than do their counterparts in England and Wales. Indeed, the Hoover plant in Wales to which Janis Hughes referred pays a business rate that is more than 4p in the pound lower than the equivalent plant in Scotland. In light of that evidence from his economists, will the First Minister acknowledge that his policies on business rates have damaged Scotland's competitive position? Will he cut our business rate poundage as a matter of urgency?

I am pleased that Mr McLetchie chose to get an enlightened answer today, rather than to listen to an enlightened speech down in Blackpool—it is good to have him here.

The study that was published on Tuesday makes it clear that Scottish businesses are not at a competitive disadvantage in comparison with their counterparts in other European countries. It shows conclusively that, in spite of the scaremongering that goes on, business taxation in Scotland is not higher than the European average but is, in fact, more competitive than in most comparable locations in Europe.

It is vital to put that on the record, because every time that fact is distorted, it might affect businesses' decisions about whether to locate in Scotland. First, I make a plea that people do not distort the position, but state it accurately. Secondly, I point out that businesses take account of a wide range of factors and keep the whole picture in mind when they make their decisions. They make their decisions not just on the basis of local property taxes, which do not even exist in some other European countries, but on the basis of all the different factors that would lead them to locate in a country. That means that we must invest in transport, skills and the things that make our economy grow. If we were to cut that investment, as Mr McLetchie urges me to do week after week, we would be making a mistake—we would be going for a short-term political hit, rather than for the long-term good of Scotland. We are not prepared to put cuts before investment.

I am afraid that the First Minister is confusing the position. It might well be the case that Scottish businesses, as part of the United Kingdom as a whole, are not uncompetitive vis-à-vis other businesses in the wider world or in Europe, but that is a matter for the UK Government. With regard to matters that are the Scottish Executive's responsibility—business rates and water charges—there is no doubt that Scottish businesses are at a serious competitive disadvantage in relation to businesses in the rest of the UK as a whole. That is what this week's report discloses.

The First Minister's problem is that he and Mr Kerr are so concerned about getting a few hundred million pounds extra into their pot from our businesses that they cannot see the wider United Kingdom picture. I urge the First Minister to put aside those parochial concerns, to look at the bigger picture, to cut the burdens on our businesses, to put our businesses on the same plane as those in the rest of the UK and to let them play their part in growing our economy as a whole.

I urge Mr McLetchie to tell the truth and to state the facts as they are. Overall tax revenues in Scotland, relative to total income, are similar to those for the UK and are substantially below European Union averages. It is not right to tell businesses that they should not come to Scotland because we tax them too much and it is certainly not right to blame the level of local taxation on the past few years' Government. Between 1993 and 1997, local taxation in Scotland increased by 27 per cent; since 1997, it has gone up by only 11.1 per cent, which is an increase of less than half the increase during the last six years of the Tory Government.

This year, local taxation rises have again been pegged at a level that is substantially lower than the levels in England and Wales. That is good news. This year, 70 per cent of Scottish businesses are paying less in business rates than they paid last year because we froze the business rate and introduced a small-business relief scheme that is benefiting them directly.

My plea to the Opposition parties is that they tell the truth about the Scottish economy and about taxation. Scotland is a good place to invest, to do business and to create jobs. The more often we all say that, the more those things will happen.

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Common Agricultural Policy (Reform)

To ask the First Minister what the policy objectives of the Scottish Executive are in relation to the launch of its consultation on the implementation of common agricultural policy reform. (S2F-269)

Our objectives for CAP reform are clear: farmers should produce for the market, rather than for subsidy and more Government support should be used to protect our rural environment while securing a thriving agriculture industry at the heart of a strong rural economy.

Does the First Minister agree that the CAP reform gives us a huge opportunity to rebuild some of our hard-pressed rural communities? Will he give a clear commitment that the Executive will provide strong leadership, explore fully the radical opportunities that are available to us and ensure that any decision is made in the best interests of the Scottish people and is not subject to veto by any vested interests?

On Monday, the consultation on implementing the CAP reforms was launched. I remind Parliament that we were fully engaged in the CAP reforms. They will be better for Scotland than the original proposals would have been and can be used to preserve, support and develop not only our agriculture industry, but our wider rural economy. Those reforms are ready for implementation and we will consult on that. In doing that, we must achieve the right balance between supporting farming that is designed to produce food that is right for the market, that consumers want and that is at the right price, and ensuring that the wider rural economy and the rural environment are preserved and enhanced.

The consultation started on Monday with an event that involved in the discussion all interests—those with direct farming interests and those with wider environmental and rural interests. That is how we will conduct the consultation. By the end of the consultation, I am sure that we will have heard a wide range of views. We will then present our decisions to the Parliament.

I am sure that the First Minister agrees that a tremendous opportunity is available for rural Scotland. The consultation is critical to the future of many rural businesses. Does he agree that this is not the time or the place for those who want support to rural Scotland to be significantly redistributed and concentrated on some regions to attempt to influence the process? Does he agree that if we allow those people to have their head, the result could be that the rural east of Scotland becomes an environmental desert?

I certainly hope that north-east Scotland never becomes an environmental desert. Such descriptions are not helpful. North-east Scotland has strong agricultural and rural economies, but it requires similar support to other parts of Scotland. We need to have a proper debate about that, so that everybody can influence the consultation's outcome and the final decisions. That is why it is important that agricultural interests, other rural interests and environmental interests can participate in the consultation. We must take a balanced judgment at the end of the consultation and do the right things for Scotland.

At the margins of the CAP reform, we have the flexibility for which we argued. We can use that in Scotland's interest. If we can do that after all the wider rural interests have been engaged in the debate, we will make better decisions and deliver what I hope will be a better environment and economy for rural Scotland.

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Land Ownership

To ask the First Minister what plans the Scottish Executive has to establish a publicly accessible and complete register showing land ownership in Scotland. (S2F-268)

Scotland has had a publicly accessible register of land ownership since 1617, which is being replaced by a fully computerised and plan-based land register of Scotland. Land registration is organised by reference to the old counties of Scotland and the new land register has been operational in all those counties since April this year. Registration first takes place when ownership is transferred.

Is it smart that our current land register conceals beneficial ownership of a huge part of our land? Is it successful to allow that concealment to be used to avoid effective tax collection? Should Scotland's people be able to find accountable owners when they need to? Smart, successful Scotland requires transparent land ownership.

Stewart Stevenson raises two issues. One is about having a complete land register, towards which we are working. The register is added to when land is sold or transferred. In time, that will be a good asset for Scotland.

The second issue is beneficial ownership of land, which the land reform policy group has raised. In the previous parliamentary session, the Executive researched the subject and found that a strong case could not be made for implementing the changes that Mr Stevenson advocates. However, we will keep the matter open for consideration; I am sure that the matter will be discussed in Parliament over a long period.

Does the First Minister agree that, although compiling lists and directories of land ownership may be interesting, what really matters to people in Scotland is access to the countryside, regardless of who owns the land?

How the land is operated is just as important as how it is owned. It is also important that everyone in Scotland can enjoy the new rights of access that the Parliament has created and of which we should be proud. One obligation that the Land Reform (Scotland) Act 2003 created was on local authorities and others to create and maintain a system of paths throughout Scotland. We want to make speedy progress on that in order to ensure that everybody, regardless of their income, background or community, has access to the countryside and the open spaces of Scotland so that they can take exercise and enjoy their country.

The Scottish Federation of Housing Associations argues that the fact that vast areas of Scotland are owned by a few wealthy individuals, many of whom live abroad as tax exiles and refuse to free up land for housing, is a substantial and serious obstacle to providing social housing in rural areas. Does the First Minister agree with the federation and, if so, what does he intend to do about the situation?

One of the most significant things that Parliament has achieved is a shift in the balance of power, particularly in rural communities, by giving people new rights of ownership of the land on which they live. That measure has had opponents, but I am proud of it. Those rights, which have been overdue for many decades, now exist in Scotland.

I am not in favour of the compulsory transfer of land ownership; the right time to transfer ownership is when the land has been put up for sale. However, where ownership of estates has not been transferred and is in private hands, an important part of our strategy must be to achieve access to those estates to build homes for local communities. The new money that Margaret Curran announced this week in Stornoway for rural housing developments will be part of the package that will be considered for that strategy. The money will not be used only for new housing association and local authority developments, but for new developments on private and Forestry Commission Scotland land.

In addition to compulsory registration of land when ownership changes, will the First Minister consider looking back? I understand that the present register is seriously defective because existing owners have not registered. Could the law be extended to make such people register their land?

I have no doubt that there will come a point in the process at which that measure will be required for the last few pieces of land that will not have been registered. The process of moving from the old register to the new one in Scotland has been successful. The move has been done stage by stage, county by county and property by property during the past two decades. We must now look to escalate the process and ensure that property is registered whenever it changes hands. We must also consider a medium-term voluntary agreement by which people can register land, whether or not it has changed hands. Subsequently, at the end of the process, we must consider dealing through a compulsory scheme with the few remaining individuals who have not co-operated.

Does the First Minister agree that the option to purchase land ought to be registered, so that the potential beneficial ownership of land, particularly land that might be available for development, is clear and transparent?

We should try to ensure that things are as clear and transparent as possible, but we also need to act in a way that is seen to be reasonable by the public and which is reasonable in relation to the rights that people have over land that they own. That is why we have taken the absolutely right and radical—but not crazy or extreme—step of ensuring that when people sell their property, in certain circumstances they must give the community the first option to buy it.

I disagree fundamentally with the Scottish nationalist party and others, who insist that there should be a compulsory purchase scheme, under which the original landowners would have no rights whatever. That policy is fundamentally wrong, whereas our policy achieves the right balance between community engagement and the rights of those who own the land in the first place.

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Ferry Services (Tendering)

To ask the First Minister whether the Scottish Executive will review its plans to tender Caledonian MacBrayne ferry services in light of the European Court of Justice's decision on government subsidies for essential services. (S2F-276)

We are considering the implications of the Altmark judgment on European Union rules regarding maritime state aids, including Caledonian MacBrayne's ferry services.

I am sure that the First Minister, being a native of Arran, will be aware of the need for clarity on the subject: it is of great importance to the communities that I represent that we understand whether the tender process has to take place. I urge the First Minister to do everything in his power to get clarity on the subject and to get to the bottom of whether we need to progress along that route.

There are two decisions to be made. First, we must get good legal advice and make a sound judgment on the implications of the ruling for the current tendering process. That is what we seek to achieve. When we have received the advice and made a judgment we will be able to confirm it to Parliament.

Subsequently, we will have to make the right decision about the tendering process. Although at this stage clarity on the implications of the judgment for the tendering process is important, it is also important that those who are involved in the preparation of tenders and are preparing for that process do not take their foot off the pedal based on the assumption that life is somehow going to change over the next few months. They must continue with their preparations until such time as we have managed to clarify the matter.

Will the Scottish Executive review its plans for the tendering and supply of other services for the Highlands and Islands, such as air services and broadband, in the light of the European Court of Justice decision—the Altmark judgment?

Clearly, we are examining all the implications for the different state aids that might be affected by the judgment. We will make a statement in the usual way when we have got information on that.

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Healthy Living Campaign

To ask the First Minister whether its national healthy living campaign will lead to healthy eating habits. (S2F-284)

No.

I certainly hope so. The campaign is not helped by members in this chamber running it down and shouting "No" when a sensible question is asked about an important campaign.

The healthy eating campaign is one part of our overall effort to improve public health in Scotland. It is designed to influence demand for healthy food and to work with all those who influence the supply of that food to ensure that Scotland's eating habits can and do change fundamentally.

The First Minister will be aware that today sees the official opening of the new Royal infirmary of Edinburgh, where the food that is supplied will be frozen, pre-processed, pre-packaged and delivered by truck from Wales. Is the First Minister proud of that? What will he do to promote a joined-up approach so that schools and hospitals are supplied with fresh produce from local farmers and producers? Is he aware of the Soil Association's food for life pilot? Are there plans to extent that to schools in Scotland?

I was delighted this week to read that the Soil Association had praised our Government in Scotland for its initiatives on healthy eating in schools and that it was advocating that our colleagues south of the border follow our example. I am always pleased to be in accordance with the Soil Association when it gives us some praise.

I believe that it is very important that we use the levers that we have in the public sector in Scotland to influence eating habits and to ensure that decent food is available. I have expressed my regret previously about the fact that the food contract for the ERI had no Scottish tenderers, and that the tender eventually went to a company in Wales. I do not think that we should be particularly nationalistic about that, but I think that it is a regret that no Scottish companies felt able to tender at the early stages. I certainly hope that they will tender when the contract comes up again.

We should not forget—I notice that a lot of comments have been made in the past week about the advertising campaign—that the public advertising campaign is a very small part of the overall healthy eating campaign that we have under way. The new standards in hospitals and schools and the work with the private sector and food producers are all part of that effort. Those measures are already making a significant difference.

We started late, so I will allow a final question.

The First Minister acknowledged in his answer the importance of the healthy eating campaign as part of a much wider effort. Will he say more about any discussions that are taking place with food producers to address, as other countries have done, the levels of saturated fat, sugar and salt that work through the food chain and into our diets via food that is produced not just in Scotland but throughout the United Kingdom?

I repeat to some extent what I have already said. The advertising campaign that is part of the healthy eating campaign, but which is also part of a wider health improvement campaign, plays only a small part. Crucially, it is designed to influence demand for healthy foods in Scotland because we are competing with massive international businesses that would like people to eat other kinds of food. That is why an advertising campaign is important, but is only one part of the jigsaw.

The Executive's healthy eating unit is currently working with the food producers; we are working with the agricultural industry and we are working with the private firms that have been part of the problem in the past. To my knowledge, Scotland is the only country in the world where Coca-Cola has agreed to take its branding off the vending machines that it supplies to places where young people are in order to ensure that it does not abuse and exploit young people in a commercial situation. It is a positive development that we are working not only with the agricultural industry, but with major multinational companies.

Our healthy eating campaign is making a difference and all parties in the chamber should get behind it.

Meeting suspended until 14:30.

On resuming—