Scotland's Economy
The next item of business is the debate on motion S1M-2582, in the name of Miss Annabel Goldie, on the Scottish economy. The chamber is just about quiet enough for me to ask Miss Goldie to speak.
It has been a matter—
Excuse me, Miss Goldie, but there seems to be a delay in clearing the chamber. Will members leaving the chamber please do so quickly?
My apologies, Miss Goldie, please begin now.
It has been a matter of concern to the Conservatives in the Scottish Parliament that debates on the Scottish economy are too few and that statements by the Minister for Enterprise, Transport and Lifelong Learning in response to job crises are too infrequent. It is for that reason that the Conservatives wish to signal to the business community in Scotland that we consider the Scottish economy to be a priority, notwithstanding the obscurity that seems to enshroud that topic in the list of priorities that were delivered to the Parliament yesterday by the First Minister.
Two needs are overdue. One is to signal to the business community in Scotland that the Executive has some sense of commitment to the economy and some idea about how to address current, cogent problems. The other is to try to illustrate to the business community that devolution can be a catalyst for a healthy economy, a dynamic for facilitating growth and investment and an instrument whereby some of the more pressing problems that affect business can be identified and addressed.
The needs are overdue because the factual backdrop to the debate is depressing. Last year, in excess of 20,000 jobs were lost to the Scottish economy. Labour has delivered to Scotland a higher business rate poundage than there is in England. The consequence of that is that Scottish business is paying 9 per cent more than its English counterpart. From 1997, business start-ups have been in steady decline. I wish that I could share the minister's optimism about start-ups over the past year but, with respect, the evidence on which to found that optimism seems insufficient.
Economic growth in Scotland lags alarmingly behind that of the rest of the United Kingdom. No member of the Scottish Parliament can afford to feel uninterested in, remote from or complacent about that background. Unless that is addressed, the Scottish Executive's list of priorities that was launched yesterday will sound even more unconvincing and the stature of the Scottish Parliament will be diminished further.
Another disturbing dimension of the backdrop to the debate is the burden of red tape and regulation that strangles Scottish business. Those words tend to be uttered with a regularity that may make them sound like platitudes. Indeed, to people who are uninterested and uninvolved in business and who feel remote from it, they may sound tedious and boring.
For the benefit of such an audience, let me illustrate what red tape and regulation mean. For a small business with 10 to 14 employees, it means spending 31 hours a month complying with Government regulations and paperwork. For a business employing more than 50 employees, it means spending approximately 43 and a half hours a month complying with Government regulations and paperwork. It goes without saying that while such a burden is unwelcome to business of any size, it is particularly oppressive on medium-sized and small enterprises. Larger concerns can probably afford to fund the resource to cope with red tape alone, and many larger organisations do just that. While it is a sterile use of resource, benefiting neither the work force nor the generation of economic growth, at least the larger concern can manage the problem. However, that is not an option for medium-sized and smaller businesses, which account for nearly 90 per cent of the business community as a whole.
It is therefore no surprise to find in a Federation of Small Businesses survey that 83 per cent of small businesses were unhappy at the level of legislation encroaching on their firms and that red tape is annually cited as one of the biggest barriers to business growth in Scotland. Something has to be done about it—to do so is not beyond the wit of man. In fairness to the Scottish Executive, the creation of the improving regulation in Scotland unit—the IRIS unit—was an encouraging innovation. My Conservative colleagues and I welcomed the creation of that unit. Indeed, the initial omens were positive. The Executive described the IRIS unit as equipped to take speedy action and outward looking, and said that the unit would take on board the concerns of the Scottish business community, put a searchlight on business regulation and be serious about tackling unwanted burdens on business. In answer to a parliamentary question, the minister confirmed:
"The Improving Regulation in Scotland (IRIS) Unit can make the most telling contribution by ensuring that the Scottish Executive takes fully into account the need for all regulations to be proportionate and fit for purpose."—[Official Report, Written Answers, 11 October 2001; p 280.]
We all waited with excitement and anticipation for the newly created shining knight of IRIS to gallop forth on a white horse with sharpened blade to start slashing his—or, in this politically correct age, her—way through the jungle of stifling red tape that cocoons our business community. My first encounter with IRIS was not encouraging. It suggested that the horse was limping, the knight had become saddle-sore and the sword had been handed over to the theatrical props department. I make that comment because I was invited to and, with anticipation, attended a seminar organised by IRIS. On arriving, I found that there was a generous representation of civil servants and an audience of few people whom I recognised. When I perused the attendance list I found that the audience comprised multiple representations from some local authorities, representation from trade or business organisations and associations and, from what I could see, hardly anyone from business. The attendance complement seemed to number between 50 and 60 people, and when I inquired about the composition of the audience, I ascertained that approximately three people were in business in their own right. It was no surprise, therefore, to read the editor's comment in the December 2001 issue of Business in Scotland. He said:
"The IRIS seminars on red tape went largely unnoticed by business people, those who did attend as individual businesses were few and far between and came away with little hope that the Scottish Executive could do more than sympathise."
While I agree with much of Annabel Goldie's analysis of the current situation, does she not recognise that the situation has not really changed in the past 30 years and that, as a result of the constraints that she identifies, the Scottish economy lagged behind growth in the rest of the United Kingdom for two painful decades under the Conservatives? The problems that we are experiencing under Labour were inherited from the Conservatives. More radical action needs to be taken to change this parlous situation.
No, I do not share that view at all. In fact, when someone from the Scottish National Party benches talks about radical proposals my heart trembles, fear rapidly mounts in my gorge and I wait with horror for the day that might dawn if the SNP ever got its hands on government.
Will the member take an intervention?
Let me deal with Mr Wilson's point. As Mr Wilson rightly acknowledged, during the Conservatives' time in government in Scotland the economy in Scotland was transformed from a Victorian and decaying economy into a new platform-based economy that has proved to be the founding stone for such growth as the Executive might seek to lay claim to.
In so far as IRIS is concerned, I was prepared to be charitable. I thought that perhaps the radical, biting edge of IRIS to look objectively at regulation had not had an opportunity to show itself. However, the evidence is discouraging. IRIS seems to think that it is there either to be a propaganda machine for the Labour party and to find virtue in regulation or to be more or less passive. If that is the role that has been determined for IRIS, I suggest that it should be rechristened the inert, risible, impotent stagnation unit, because it will have no hope of cutting through even one thread of a very small strand of red tape, far less of tackling the jungle. In fact, I suggest that it should be rechristened GRAB—get rid of additional burdens unit—and then we might get somewhere.
The unit should go out to Scottish business over the next six months and prepare a short leet of the most oppressive regulations that are time consuming and costly for business to administer. It should then return to the Scottish Executive and the Parliament for a debate on what action should be taken here and in partnership with our colleagues in Westminster to reduce that intolerable burden.
Will Annabel Goldie give way on that point?
I am running short of time.
There is an example that we should look at. In Ontario, Canada, a determined Government gave teeth to the body charged with reducing red tape, to very good effect.
As far as the unfairness of business rate poundage is concerned, the advice of the Conservatives is quite simply to remove it. It is a deterrent to potential investors and a poor advertisement. I am comforted by the tone of part of the SNP amendment, which seems to take on board that suggestion.
The Executive's amendment seems to offer business about as much comfort as bailing out a boat with a jagged hole in the side. It seems neither to understand the current problems nor to propose any instructive or constructive approach to addressing them. Had the amendment called for a moratorium on the imposition and application of the aggregates tax, that might have been a different matter, but I suppose pigs might fly.
I sometimes like the cut of Andrew Wilson's jib, but not always. I sometimes like the tone of his words, but not always. Although his amendment contains elements that I think would elicit support from my party, he will have to elaborate considerably in his speech before we are sufficiently reassured to feel minded to support it.
I move,
That the Parliament notes with grave concern that in excess of 20,000 jobs were lost throughout the Scottish economy in 2001 and that the Scottish economy has failed to perform as well as the UK economy; further notes that the higher business rate poundage in Scotland relative to England is having a damaging effect on the competitiveness of Scotland's economy, and calls upon the Scottish Executive to restore as a matter of urgency a business rate poundage uniform with the rest of the UK as part of a sustained effort to reduce burdens of tax and regulation, which are hindering the creation of jobs and prosperity in Scotland, and demonstrate to the business community a commitment to restoring growth and competitiveness to the Scottish economy.
I am delighted to have this chance to debate the Scottish economy. I share with the Conservatives the sense that we cannot debate the Scottish economy too often.
In the limited time that is available, I would like to concentrate on three things that are of contemporary relevance. The first is the recent performance of the Scottish economy. The second is the Scottish Executive's response to the current short-term difficulties. The third is our medium to long-term strategy.
The starting point for the economy's recent performance is the terrorist attacks in America. Even before 11 September, the world economy was slowing down. It is the first time since the 1970s that growth in all major trading blocs has slowed down or halted. The macroeconomic response in the United States, in the UK and in the euro area has been a rapid easing of monetary policy and, in the US, the injection of a sizeable fiscal stimulus. There are a number of inevitable lags before the impact of that is felt domestically in output and employment. So, despite the good news that people will have seen in the Financial Times yesterday about the G10 central banks' prediction of a more rapid turnaround than had been anticipated, many businesses in the developed economies have been undertaking fundamental reassessments of their operations in the light of 11 September. In particular, the tourism sector and aviation have been affected.
The minister may recognise world problems, but does she not take responsibility for longer-term problems closer to home? Does she recognise the following quotation and will she say whether the coalition Government agrees with it? The quotation is:
"Labour's management of the macro economy and the high pound hits Scottish business, hindering growth."
What is the coalition position on that quotation?
The coalition's position relates to our management of the macroeconomy. Mr Wilson is on somewhat dangerous territory. We look forward to being enlightened as to what the SNP's monetary policy is, what currency it would use, whether it has any fiscal rules of any kind and what its taxation policy might be.
Leaving that aside, I will answer the question that I was asked. On macroeconomic management, we are benefiting from the longest period of sustained low inflation since the 1960s. Base rates are at 4 per cent, which is the lowest level for nearly 40 years. I draw the Conservatives' attention to the fact that 10 years ago, when there was previously a slowdown in the world economy—again as a result of a crisis, precipitated then by the Gulf conflict—the Conservatives had base rates in excess of 10 per cent. Those rates then rose to 15 per cent and unemployment rose above two million.
I was in business during the 1980s. At one point, I paid 18.5 per cent in interest and my business made a profit. It is not doing so at the moment.
It is unusual for a Conservative to suggest that macroeconomic stability is indicated by high rates of inflation.
I want to move on. I was asked to defend macroeconomic fundamentals. The National Institute for Economic and Social Research, which is a key independent forecaster, suggested that, in less than propitious circumstances, the UK will have the fastest-growing economy of any of the G7 industrialised nations in 2002.
On 14 June 2001, the minister said in reply to a question that I put:
"In the most recent quarter, Scotland's growth rate had accelerated to a higher rate than that of the UK. Sadly, the Irish rate is heading in the opposite direction."—[Official Report, 14 June 2001; c 1646.]
Does the minister accept the Executive's statistics, which show that gross domestic product growth in the UK is 2.5 per cent, whereas it is 0.3 per cent in Scotland? A growth rate of 0.3 per cent is one twentieth of the Republic of Ireland's 6.1 per cent growth rate. Does she accept that the Executive has completely failed to deliver growth in Scotland? Whether one uses the model of Finland, Norway or Ireland, she must accept that small, independent countries are doing well.
I remind Ms Alexander that she had seven minutes when she started. I will extend that slightly in the light of that intervention, but I advise her not to take any more interventions.
I am happy to turn to growth. On the most recent quarterly figures, Scotland grew at 0.8 per cent and the UK grew at half that rate—0.4 per cent. The Scottish growth rate was poor for the previous four quarters. I am happy to talk about the reasons for that. We have a much more internationalised economy. Our exposure to electronics, agriculture and tourism is much more significant than that in the rest of the UK. That is important and I look forward to the SNP dealing with that. The SNP cannot tell us what its fiscal rules would be, whether it has a monetary policy or what its taxation rate would be. Its motion proposes a commitment to doubling the growth rate. I want to ponder that. We hear much about Ireland, but the Irish growth rate has halved in the past 12 months. The reasons for that are not dissimilar to those that apply to Scotland—the world economy has had an impact.
The SNP wants to set a growth target without mentioning taxation policy, the currency that we should have, monetary policy, whether we should have an independent bank in Scotland and whether we should save the Bank of England. All the macroeconomic fundamentals remain a secret, yet we are asked to set a target on something that is most difficult for a small and open economy to regulate.
I will move to the substance of the matter—how to respond. It is important to touch on what the Conservatives said. The redundancy announcements in the recent past bring anguish and distress to all those who are affected. We cannot insulate Scotland from the effects of the global economy, but we can seek to help those who are affected to make a new start. Perhaps that is the difference between the coalition and the previous Conservative Government. Throughout the length and breadth of Scotland, we have created rapid response teams every time there have been major redundancies. We have specialist action plans that are geared to the specific needs of the workers.
Will the minister give way?
Certainly, I will take an intervention.
The minister is over time already.
I will finish on this matter. The Motorola task force has set targets and I am confident that 19 out of 20 members of the work force will have been redeployed within 12 months of the first redundancies at Motorola. That is how to deliver in the circumstances of the global economy. There is a difference between the Conservative members who say, "Let's leave it to the market and let people sink when they are made redundant," and the SNP members who resist change and turn everything into a constitutional crisis. They do not even offer the fundamentals of a macroeconomic strategy.
The critical issue is that we are not thrown off course by the need to set a new long-term economic strategy for Scotland. The strategy is based on our science and skills and not on scouting the world and selling Scotland as a cheap labour location where people happen to speak English. The strategy is not based on the little Scotlander view that would cut us off from our major market and which believes that fiscal tinkering is a substitute for strategic underpinnings of the economy. The only way to deliver long-term growth for Scotland is a science and skills strategy of the kind that the Executive is pursuing. We should have more debates on the Scottish economy.
I move amendment S1M-2582.2, to leave out from first "notes" to end and insert:
"endorses the work undertaken by the Executive in its handling of the Scottish economy within the context of a continuing stable UK economic performance; commends the work undertaken by the Executive to help improve performance of the Scottish economy as set out in The Way Forward: Framework for Economic Development in Scotland and A Smart, Successful Scotland: Ambitions for the Enterprise Networks; commends the work undertaken by the Executive to assist Scottish business to prepare for the introduction of the euro, and supports the Executive in its aim to increase the sustainable growth of the Scottish economy over the long term."
In the interests of protecting the open session of the debate, I ask Andrew Wilson, who will move amendment S1M-2582.1, to stick strictly to the five-minute allocation.
I shall endeavour to do that, Presiding Officer. I do not wish to liken the Minister for Enterprise, Transport and Lifelong Learning to a mermaid, but the siren voices that we hear from the Labour Government as it drags the Scottish economy's ship on to the rocks have gone on for too long. The complacency that is explicit in their actions and statements is totally unacceptable.
I read a quote to Ms Alexander during my intervention, which states:
"Labour's management of the macro economy and the high pound hits Scottish business, hindering growth."
I asked for the coalition's position because the quote is from the Liberal Democrat group research paper for this debate. The coalition is split by the reality that the macroeconomic context—which, as we hear from the Labour party, is far from stable—delivers a situation of parlous slow growth and long-term relative decline.
Will the member give way?
I shall be delighted to give way to the Minister for Enterprise, Transport and Lifelong Learning in a moment. However, I am aware of the watchful eye of the Presiding Officer.
Relative decline has been the post-war experience of the Scottish economy. If the management of decline and lowering of expectations satisfies Labour members, that is all well and good, but it does not satisfy those of us who have ambition for Scotland and want to empower the Parliament and the country to deliver more for themselves. That is why we target a doubling in the rate of economic growth.
Ms Alexander laughs at the Republic of Ireland's growth rate of 6 per cent. Perhaps she is too close to Gus Macdonald, who once said that Ireland was good enough for a stag night but not for economic policy. There should be a bit less denigration of our cousins across the Irish sea and more respect for small, independent nations that are delivering fast growth and a higher standard of living for their people. As Kenny Gibson said, in the latest year for which full annual statistics are available, the Scottish economy grew at an eighth of the rate of the economy of the United Kingdom. Our standard of living rose at an eighth of the rate of that in the rest of these islands. In the Republic of Ireland—independent Ireland—despite the denigration and sneering from a minister who should know better, the economy grew 20 times faster than Scotland's. The minister would do well to spend more time in Dublin learning how the Government there delivers growth, and less time apologising for the outcome of Gordon Brown's parlous economic policy.
I yield to no one in my admiration for what the Irish have achieved through a clear strategy. I discussed these matters last summer with the Irish Minister for Enterprise, Trade and Employment, who was clear about their monetary policy. Perhaps Andrew Wilson can tell us which currency we are going to have—the euro or the pound.
I would be delighted.
He thinks that the high pound is the issue and he wants us to enter the euro.
Ms Alexander, this is an intervention, not a second speech.
Will he please clarify the matter?
A simple examination of the SNP's manifesto and policy commitments would inform the minister that our ambition is to get Scotland into the European single currency as soon as possible at a rate that is competitive.
At what level?
If the minister would stop sneering from a sedentary position and stand up and tell us the rate at which the UK intends to take us into the European single currency, we might make some progress.
Despite the nonsense that we have to endure from the Labour members who sit there like empty vessels making noise with little content, the experience of businesses and people in Scotland is that the Scottish economy under Labour, as it was under the Conservatives, is in a parlous state of relative economic decline. Manufacturing is in recession. Agriculture is in recession. Tourism is in recession. The primary industries are in recession. We have a spiralling trade deficit. Inward investment is at a quarter of the level that it was when Labour came to power. Research and development spending is at half the rate of that in the UK and there are 7,600 fewer business start-ups now than there were when Labour came to power. The situation is grave and is the outcome of a Labour policy that has driven the Scottish economy into the rocks. If the Executive spent a little less time congratulating its friends in London on their macroeconomic disaster zone and a bit more time acting on behalf of the people of Scotland, it would do us good.
Getting the economy moving is critical to the future of this country. We should set more ambitious targets, such as doubling the trend rate of growth. Why not? No ideology is attached to that. Once we have agreed on that target, we can start arguing about how can meet it. The Executive should stand with us and, I suspect, the Conservatives in our attempt to secure a competitive tax regime and a competitive environment but, instead, it sticks its head in the sand, congratulates itself and tells us how wonderful things are. Complacency is delivering relative decline and it cannot be maintained.
Our amendment shows ambition and offers a direction for the economy. The status quo is unacceptable—we cannot maintain the situation that we are in. The labour market is in dire straits. The level of employment is set to drop this year. If students are removed from the equation, Labour has presided over a fall in employment—the minister must recognise that. Across the Scottish economy, the position for too many people is one of relative economic decline. Wendy Alexander is talented and able and must recognise the reality of the situation. Rather than parroting Californian textbooks, she should start delivering growth.
I move amendment S1M-2582.1, to leave out from "restore" to end and insert:
"target a doubling of Scotland's trend rate of growth as a key policy objective and bring forward proposals to deliver this including a business taxation regime and a policy environment that place Scotland at a competitive advantage in Europe, beginning with the removal of Scotland's business rate disadvantage compared to the rest of the United Kingdom."
Well, we are all doomed, are we not?
I am interested to see that Andrew Wilson got hold of our research paper but I note that he did not read out the section that says:
"By making the economy dependent on the price of a barrel of oil, both the public and the private sector would find it impossible to plan investment decisions".
I wanted to make a couple of observations on the economy. We had a great deal of doom and gloom from the SNP. I prefer Annabel Goldie's style because she ladles lovely rich metaphors over her speeches and leads Andrew Wilson on—it is clear that he is always up for being led on.
Andrew Wilson did not put this debate on the economy in the context of world events, particularly what happened on 11 September, which, as the Fraser of Allander Institute's most recent quarterly summary states, has had a significant impact. The summary breaks down the effects on some of the sectors of our economy that Andrew Wilson was talking about. Only Andrew Wilson and his party would blame all the effects of the events of 11 September on the Government without some acceptance that there are wider factors.
For the sake of clarification, will Tavish Scott say whether he agrees with me and the statement in his briefing for this debate that
"Labour's management of the macro economy and the high pound hits Scottish business, hindering growth"?
I will pick out the parts out of that document that I want to. When I think about making a speech, I get my team to write such a paper but I do not necessarily agree with everything that is in it.
The exchange rate is causing difficulties for businesses. Before Christmas, I visited a shellfish processing factory in my constituency and discovered that the issues that it is struggling with are freight and the exchange rate. The events of 11 September are extremely significant. World trade growth grew by 10 per cent last year. It is not expected to grow at all this year. That says something. The fact that world growth is expected to be stagnant is important in our context.
Scottish economic growth appears to be triggered to a large extent by strong retail growth at the moment. The retail sector represents 29 per cent of Scottish GDP. That is a significant spur. However, good labour market intelligence and the new Future Skills Scotland organisation are crucial in assessing how to create the conditions for sustained growth and competitiveness.
To examine one sector, the turmoil in electronics, which Bristow Muldoon raised at First Minister's question time, raises two fundamental issues about the way in which we consider our competitiveness. The first is that we should not be dependent on companies that will ultimately take their decisions not in Livingston, but in air-conditioned offices in San Diego or Seoul. We should therefore invest in strategies to build domestic birth rate and in such measures as the £1 million that the minister announced before Christmas for the Alba Centre. That is much more the way forward.
I welcome the point about the euro in the Executive amendment. According to the Scottish Council for Development and Industry's 2000 survey of Scottish export, 63 per cent of Scotland's manufactured goods go to the European Union. That export is valued at some £13.2 billion. We are and always have been a European trading nation, which makes the case for British membership of the euro even stronger.
The politics of where Britain stands on the euro are utterly depressing, none more than the Prime Minister's recent speech, which indicated that Britain has always, over the past 50 years, prevaricated on the great issues of Europe. I urge all those who have influence—the minister certainly has influence—to move the argument forward. It is demonstrably in the interests of the Scottish economy. Those who were at the Scottish Retail Consortium's event last night heard, I am sure, from right across the sector a strong indication of business's views.
The launch of the euro throughout 12 nations and affecting 300 million people has gone remarkably smoothly. That fact must be a real blow to the Eurosceptics. Our European Committee produced a report on the state of preparation for the euro in Scotland before Christmas. Its main recommendation was that the Executive endorse the pressing need for
"sustained effort to ensure preparation throughout Scotland".
The Parliament and the United Kingdom must ultimately answer one question: is Scotland a European country and a European trading country? The answer is yes. Scotland's trading pattern indicates that. The consequences of a clear and decisive route towards the euro are important. I urge the minister to make progress on that.
I will draw the Parliament's attention to the problems of the Ayr constituency. In particular, I will highlight the problems of the Prestwick area.
First, on 3 October, the National Air Traffic Services project was put on hold. The building of the new air traffic control centre at Prestwick will now not go ahead in the foreseeable future. The 70 new jobs that were to be created have evaporated, at least temporarily. Construction jobs for the building phase of the project will now not materialise in the short term. On 16 October, 170 jobs were lost at GE Caledonian because of the downturn in the aircraft engine servicing business. As planes fly less, their engines need less servicing.
On 1 November, HMS Gannet closed its doors finally on 400 service personnel as their posts were transferred to Culdrose. That was another 400 jobs lost for Prestwick. On 27 November, 219 jobs were lost at BAE Systems at Prestwick, due to the downturn in the aviation market. Then, in November, in Ayr, less than two miles from Prestwick—
Will John Scott give way?
No I will not. I have a lot to say. I am sorry.
Less than two miles from Prestwick, British Bakeries Ltd announced another 300 jobs losses—another 300 jobs gone from the Ayrshire economy.
I expect that members are all getting the picture by now: the Ayrshire economy is not booming. It has not been booming for some time, but nothing is being done. The job losses that I have described add up to more than 1,000. Those jobs have been lost in the past three months in a constituency in which unemployment is significantly higher than the Scottish average.
As a constituency MSP, I believe that I have a duty to promote and sell my area. As those job losses started to accumulate, I was initially reluctant to make a fuss. I do not want to talk down Ayrshire; rather I want to talk it up. However, as the totals started to rise, I felt that it was important to seek help with the problems and draw them to the Executive's attention. If I had not done so, I would have been correctly accused of burying my head in the sand and doing nothing.
On 16 November, I wrote to Ms Alexander expressing my fears about the developing situation at BAE Systems. On 27 November, I wrote again to the minister, asking for her help to address the deteriorating situation and death by a thousand cuts of the Ayrshire economy. In that letter I specifically asked her to consider setting up a task force to address Ayrshire's problems, as has recently been done elsewhere in Scotland. The answer was no reply.
On 6 December, I asked a question at First Minister's questions and got nowhere. On 19 December, I wrote to Jack McConnell asking whether he intended to help Ayrshire. On 20 December, I wrote again to Ms Alexander asking her to respond to the problems and again I received no reply.
In all, I have written on three occasions to the Minister for Enterprise, Transport and Lifelong Learning, once to the First Minister and I have asked one question at First Minister's question time. I have yet to receive a substantive response to any of those letters or my question. As well as being incompetent, that is not good government.
Will the member take an intervention?
No, I will not take an intervention. The minister had her chance in the debate to make an announcement. I am not taking an intervention.
The member is in his last minute.
What the minister has given the Parliament is not the caring, open and transparent Government that she and other ministers promised for so long.
Mr Scott is not being transparent either.
I beg your pardon.
Mr Scott is not being transparent. He accused the minister of not responding, but did not allow her an opportunity to explain.
Excuse me, Mr Gibson, but I do not think that you were invited to contribute. Do continue and conclude please, Mr Scott.
Thank you very much, Presiding Officer.
I have written and spoken to the chief executives of South Ayrshire Council and Scottish Enterprise Ayrshire. They have both offered any help that they can give and would welcome any additional help that the Executive would give to the Prestwick area. However, it appears that this Labour Government does not give a damn about that part of Ayrshire and its problems.
Once again, I ask the Executive today, for the sixth time, whether it will do something to help with our problems in the Prestwick area.
Will the member take an intervention?
No, Mr Scott is finishing. He was given four minutes and was told that he was in his final minute and that there would be no more interventions. Please close now, Mr Scott.
I beg your pardon, Presiding Officer. Will the minister set up a task force to address our problems in Ayrshire today?
The minister will make a closing speech at the end of the debate. It is clearly open to her to answer that question then. Are you finished now, Mr Scott?
Thank you for your forbearance, Presiding Officer. I look forward to the minister's response in due course.
Before I call Marilyn Livingstone, to be followed by Duncan Hamilton, I point out to the SNP that the last member whom I intend to call is an SNP member. I hope that that might earn the SNP's co-operation on timing.
Thank you, Presiding Officer. I will try very hard to stick to time.
As others have said, the global economic backdrop of 2001 has been difficult and the terrible events of 11 September considerably heightened those difficulties. The performance of the Scottish economy must be gauged and the resounding glut of statistics and analysis points to a year in which the achievements of low unemployment, low interest rates and low inflation have been cemented. I could not agree more with the minister that we must not be thrown off course. We need a long-term strategic approach to economic success.
I wish to concentrate on the need to develop a smart, successful Scotland, a knowledge economy and entrepreneurship, which are pivotal to the agenda of the Scottish Executive and the UK Government. The promotion of education and lifelong learning is the key driver for raising productivity and competitiveness. Scotland cannot and will not compete on the basis of a low-wage, low-skilled economy. Investment in education, universities, colleges and specific retraining programmes provides the basis for success today and tomorrow. Record levels of expenditure in all those sectors clearly demonstrate the Executive's commitment to developing the Scottish labour market and to spreading wealth and opportunities throughout Scotland.
However, it is vital that we not only develop a learning culture in our society, but continue to develop alongside that a culture of entrepreneurship as one of our fundamental priorities. I had the pleasure of doing some of my Christmas shopping at a young enterprise market in my constituency of Kirkcaldy, where the next generation of entrepreneurs from local schools gains a valuable insight into the world of business. That excellent scheme is a small step towards changing the culture and encouraging young people to believe that it is possible to start up their own business. However, changing cultures requires considerable time, investment and strategic thinking.
The Executive's and Parliament's role is to put in place the infrastructure and framework for a pro-business, pro-growth environment throughout Scotland. A rates-relief package is being provided, a broadband strategy is being developed, record levels of funding are being made available to Scottish Enterprise and a comprehensive economic framework for development is being established. Those are just some of the areas in which massive steps are being taken. The Executive is also committed to creating an environment that encourages investment.
The Enterprise and Lifelong Learning Committee sees it as important to reward risk taking. The committee has produced some major reports on the Scottish economy, including a report on local economic development, from which emanated the development of local economic forums. The committee's report on its inquiry into the new economy also made major recommendations on the way forward, which were taken on board by the Executive. The findings of the committee's current inquiry into lifelong learning in Scotland, which is vitally important for short-term, medium-term and long-term strategic development, are eagerly awaited in the sector.
Much work has been done, but we all recognise that more is needed to achieve the ambitions that we have set ourselves. In today's modern global economy, it is essential that we create a dynamic business environment that generates growth and social justice. We want and need an economy that achieves the correct balance. Supporting business and enterprise is important, but we must remember to promote social and regional development alongside that.
Given that the previous speech finished five seconds early, I hope that you will be lenient with me about time, Presiding Officer. I can use every minute that you can give me.
In this debate there has been an interesting contrast of vision. There has been some discussion of the SNP amendment, which would set us the target of doubling the trend rate of growth in Scotland. The minister for enterprise and everything else took time out of her busy schedule to sneer at the prospect that Scotland might want to set such a target. It is an ambitious target and would be hard to achieve—we might not even achieve it. However, why is it wrong to set that aspiration for Scotland? Why is it wrong for the Minister for Enterprise, Transport and Lifelong Learning to accept that that might be a step forward?
Will the minister take an intervention?
I am not a minister yet, but I will take an intervention.
As I understand it, the target of doubling the trend rate of growth would apply at all times and in all places. Does the member think that the Irish economy, which he praises so highly, should have set itself such an ambition last year?
Well—
The question is simple: would the target apply in all circumstances and at all times, irrespective of where we were in the economic cycle?
I am not sure that the minister understands the difference between an intervention and talking over everyone else in the chamber.
It is worth exploring the Irish example. The minister said that it was a disaster for Ireland that its growth rate had halved. That is a bit like saying that Martin O'Neill will be gutted by the prospect of Celtic winning the Scottish Premier League by five points rather than 10. The key issue is where one starts. In the past decade, the Irish have outperformed the UK with double-digit growth. The minister does not even have the humility to try to learn from the Irish example in order to get Scotland on to the same map; instead, she sneers at it.
Will the member give way?
I will not. Rhona Brankin is now acting as the shadow minister for interventions, but we are not very interested in that.
Rather than managing failure—
Here comes her deputy.
Would it not be right for the minister, rather than managing failure, to show some real political leadership?
Will the member take an intervention?
No.
The member is not giving way.
In 1995, Scotland's growth rate stood at 78 per cent of annual UK growth. In 2000, that figure was down to 65 per cent. Rather than concentrating on the figures for one quarter, in some sort of economic sleight-of-hand, the minister needs to face up to the fact that this is a long-term problem. She needs to consider the fact that Scotland is growing one third more slowly than the UK. As the Scottish Minister for Enterprise, Transport and Lifelong Learning, is she happy with that scenario? If not, why will she not join us in setting a target to double the rate of growth? That seems to me to be a logical solution.
The minister has a second problem to resolve. She says that a hands-off approach is required. The global economic downturn gives the minister a get-out to say that we can do nothing. Manufacturing output and orders are down for the ninth consecutive month and the quantity of goods that are produced in Scotland is down for the 13th consecutive month. On business start-ups, from 1994 to 2000—I stress that taking a longer-term view is vital if we are to have any credence in the statistics—there has been a net loss to Scotland of 1,160 indigenous businesses at the same time as there was a net gain of more than 35,000 businesses in England.
When the minister says that, thanks to our friends in the Treasury, we are in a stable, enterprising, macroeconomic picture, does she consider that while that might work in some parts of the UK, it certainly is not working in Scotland? She says that we cannot do anything about that and that we cannot insulate Scotland against the vagaries of the global market, but everyone would accept that, almost by definition, the global economy demands that we cede some control and become an open economy. That does not mean that we can do nothing. The problem with the minister's approach is that she takes the opportunity of global downturn to wash her hands of any responsibility. She must remember that many goods and services are produced and consumed locally. Our economic market is not totally global and there is a role for the indigenous company in Scotland. She should recognise that that is something that she can use to insulate us against the downward global economic trend.
We might yet come on to another part of the debate: the future. I want to close by agreeing with Annabel Goldie, when she said that the minister had to accept that constitutional change and the creation of the Parliament could stimulate economic growth. That is true, but if it is true for devolution, surely it will also be true for independence.
Yesterday, the First Minister gave us a litany on where the Executive is headed. However, he did not mention tourism, which is our largest industry and which is bigger than sales of oil, gas and whisky put together. There was little mention, if any, of the rural economy. A tourism minister with power and accountability, for which I campaigned, has been delivered—it was Conservative policy to establish that post. However, it is a pity that, in response to the first written question that I sent the minister, which was to ask him what plans he had to give a statement on tourism in the chamber, his answer was that he had no such plans. He is not even present to listen to the debate. Do the McConnell omission and the Watson wobble mean that the industry, in what is, for a variety of reasons, its hour of need, will not become one of the myriad Executive priorities?
Under new Labour, we have had four years of decline. Foot-and-mouth disease and 11 September have compounded that decline—the VisitScotland figures for foot-and-mouth alone amount to a loss that is probably in the region of £300 million. Will the new Executive define the remit of VisitScotland? Will the new ministerial team play centralisation—as it seems to want to do—or will it devolve power out? It would be nice for the industry to know the answer to those questions at some stage.
What plans will we hear from the Minister for Tourism, Culture and Sport on support from the public purse? We have a unique situation, as the industry's product is delivered by private business, but new systems for and marketing of the sector are resourced through central support from public funds. When will the Executive pay attention to the activities of other countries where the private sector works in closer partnership with the public purse in the promotion of tourism? Examples of such an approach can be found in Germany and Canada, to name but two.
At the tourism conference that was held in November at the Edinburgh International Conference Centre, the industry clearly spelled out its concerns and its disappointment with the Government's performance. Can the minister give me an assurance that she will press the Minister for Tourism, Culture and Sport to engage both with the Parliament and with the industry as soon as possible? There are priorities out there, such as the identification of new markets and the delivery of effective marketing, about which there have been complaints from throughout Scotland.
Many problems affect both the rural economy and the tourism industry. Some of those problems are to do with high fuel taxation. My colleague Annabel Goldie mentioned the costs of running a business. If the aggregates tax were imposed, it would sorely damage the north-east economy and the link with transport costs would put Scotland at a disproportionate disadvantage. It is time that the Executive started to liaise with those from the deep south who inflict certain conditions on Scotland.
Will the member give way?
No, the member is in his last minute.
I seem to have been saved.
The rural economy, which was devastated by foot-and-mouth disease, received only belated recognition from the Executive. I hope that some lessons have been learned. Many sectors within the rural economy that would not be classified as farming or fishing have been equally damaged, but I am not sure that the minister has grasped that fact.
Investment in infrastructure is required if we are to sustain investment and encourage expansion. For example, north-east Scotland has a fairly robust Aberdeen economy, but there are warning clouds on the horizon, especially in the traditional industries. For the past three years, I have been pushing to get the Aberdeen bypass included in the Executive's programme. I see that the Deputy Minister for Enterprise, Transport and Lifelong Learning, who is responsible for that, is present in the chamber, so I hope that he is listening. It is time that the Aberdeen bypass was included.
On the promotion of sea transport—
Wind up, please.
I am just going over my final point to the minister. Last year, Wendy Alexander promised me that she would set up a task force for the Peterhead economy but, one year on, we are still waiting for action. The local enterprise company was quite happy to be involved but it needed the minister's approval. When the minister winds up, will she tell us why, despite our lengthy meeting that took place upstairs in this building, that has not been delivered? If I may give the minister a recommendation for the future—
No, please close now.
That recommendation is that the minister should listen to what goes on in this chamber.
So wide is today's subject for debate that it can be difficult to get a focus for a four-minute speech. I want to use my time to talk about manufacturing and shipbuilding and, if time allows, information technology.
I have always believed that the test of any nation's prosperity is its ability to create wealth. As such, the importance of Scotland's manufacturing industry remains crucial to our long-term stability. I am pleased that the Scottish Executive is fully committed to a manufacturing strategy as a strong feature of Scotland's economy. Notwithstanding this afternoon's positive approach from Annabel Goldie and other members of her party, such a claim could not have been made by the previous Thatcher Government, which attempted to slaughter Scottish manufacturing industry in the 1980s and 1990s.
Will the member give way?
I will give way if the member makes his intervention brief.
I thank the member for letting me in.
In the year to June 2001, manufacturing output grew for the UK economy while it fell by 4.8 per cent in Scotland. Does the member not accept that that shows that the failed policies of the Tories have been equalled—indeed exceeded—by the failed policies of new Labour?
Kenny Gibson makes a predictable point. The point that I want to make is that a Government that is committed to manufacturing industry is the key theme. Unlike the previous Administration, Labour is committed to manufacturing industry.
For Scotland to continue to produce and make things, it is vital that our economy retains its existing skills, learns new ones, and generates ideas and employment. We can all agree that the service sector is important, but no economy can rely solely on the service sector.
My constituency contains Scotstoun shipyard, which is now part of BAE Systems. Scotstoun has a proud tradition in shipbuilding. I am somewhat relieved to have a Labour Government and Labour-led Executive that are both utterly committed to the retention of the shipbuilding industry, which means that such skills will be retained in the UK and in Scotland, where the Clyde is a long-established centre of extreme excellence.
The shipbuilding task force recently reported that job losses are down considerably. We await a final outcome, but we hope that the news is even better than that. There can be no doubt that the strategy of the Ministry of Defence is to keep shipbuilding manufacturing in the UK. The contracts for the type 45 frigates and alternative landing ships logistics have been designed specifically so that the work is retained as part of our manufacturing base. That will secure the contract in the UK, rather than simply make use of cheap labour. That move must be commended. The strategy, which is supported by Scottish ministers, means that we will have a secure future in shipbuilding for another generation. All parties that believe in a manufacturing industry should applaud that.
I am hopeful that the strong desire to retain the existing skills on the Clyde and the new work that will begin in July will mean that there will be almost no job losses, despite the short gap. I will certainly campaign for such an outcome, as will all who believe in that goal.
Although there is no obvious connection between shipbuilding and the information technology industry, there is a common theme concerning the ability of the nation to produce and export. I want to talk about the opportunities that Scotland is creating in the digital age.
The commitment to broadband is essential: business and commerce rely heavily on the exchange of information. The current market does not offer the kind of choices, at competitive prices, that ought to be available. I commend the Enterprise and Lifelong Learning Committee for its in-depth work on broadband. Until more is done to support the telecommunications industry, we will have little chance of achieving results from the broadband strategy. The collapse of Atlantic Telecom devastated a number of Scottish businesses—many of them in my constituency—which relied on a cheaper phone company but were oblivious to the fact that such a company could fold.
The dominant position of British Telecom means that we will not get the choices that we need to deliver broadband, and that is a concern. I ask the minister to address aspects of the telecommunications industry in her summing-up.
I welcome this debate, especially as it was initiated by the Conservative and Unionist Party. The economy is a broad subject that covers both reserved and devolved matters. I welcome the recognition that constitutional change can stimulate the economy and I look forward to hearing more support from the Conservatives for the SNP position.
I would like to deal with some issues over which this Government perhaps does not have control. We were slightly misled by the Conservatives over their past record. Had a Scottish Parliament had control of the natural bounty of oil, and had it invested it prudently and properly, we would not have had the situation in the Thatcher and post-Thatcher years of Scottish oil funding the monetarism of the Conservatives and the high unemployment and high claimant rates that went with it. I acknowledge the Conservatives' efforts in holding this debate, but I have some concerns about their background and their past policies.
I agree with Pauline McNeill that we have to support manufacturing. We need a strategy of having high-value and high-skill manufacturing. However, 10,000 jobs, mostly in manufacturing, have been lost in the Lothian economy alone. The global situation has not been the only reason for that. I accept that Government cannot solve everything—obviously, we live in a situation of global capitalism. However, in the past few years, employers have told me that the British high-pound policy has damaged us. We are an exporting nation, and the high pound affects manufacturing.
I want to get to the nub of the debate. Various speakers have suggested that all that comes from the SNP is doom and gloom. Well, if we consider the current state of the Scottish economy, it is doom and gloom. We have to consider the facts. I find it absolutely incredulous—[Interruption.] Yes, it is a good word. I find it absolutely incredulous that the minister cannot have a target of doubling the growth rate from 0.8 per cent to 1.6 per cent when the UK rate is 2.5 per cent. Is the minister saying that we are not good enough to have the same rate as the UK? Is the minister—who is not averse to setting targets—saying that she does not have enough confidence in the Scottish economy to set a higher rate?
Does Fiona Hyslop acknowledge that, in the most recent quarter for which figures are available, Scotland's economy grew at double the UK rate? Yes or no.
The minister tends to judge economic rates in the same way that she judges homelessness rates; she considers a trend over one month and one month only. We should be considering what has been happening historically in the Scottish economy. It is not good.
The SNP is ambitious. Sometimes we are over-ambitious, but—at the same time—we tell the truth, and somehow that is regarded as spreading doom and gloom. We cannot deal with the Scottish economy unless we deal with the facts. The minister has admitted in recent weeks that, in the Scottish Executive's first year, it took its figures for joblessness from newspapers. It took the Executive until November to decide to review that practice. How can the Executive care about people losing their jobs when it does not even bother to count them in the first place?
I want to move on to discuss the situation in West Lothian. West Lothian could be a powerhouse for Scotland. It has been extremely resilient in the face of many job losses. However, the minister says that 4,000 more people are employed in West Lothian than before the Motorola announcement. That is true, because West Lothian is one of the few places where the population is increasing. However, it is also one of the few places where the claimant count is rising—there are 400 more people on the dole now than there were a year ago.
There are some things that the Government can do, and Bristow Muldoon made some valid comment on that point during question time. Perhaps the minister can address this point in her summing-up. The Government expects to claw back £16.7 million from Motorola from regional selective assistance grants. I understand that £10 million has already been allocated. Will the minister commit an additional £6.7 million to the infrastructure, skills and indigenous business that West Lothian needs to ensure that we have the type of manufacturing that Pauline McNeill was talking about?
Like Wendy Alexander and other members, I welcome the opportunity to discuss the Scottish economy. I will concentrate on research and development and particularly on how we get the ideas out of Scottish laboratories and into businesses.
I draw members' attention to an example of where that is happening very effectively. Midlothian is in the sometimes painful transition process from an economy that was heavily dependent on the mining industry to an economy that is becoming a UK, European and world centre for biotechnology and life science. Midlothian has an international reputation for research development and production, with world-renowned research institutes such as the Roslin Institute and the Moredun Research Institute.
I am sure that everyone has heard of Dolly the sheep. Not so many members may be aware of the importance of the Dolly-the-sheep technology, its spin-off and the development by PPL Therapeutics plc of drug therapy that will be used to treat thousands of people suffering from cystic fibrosis and hereditary emphysema. The initial research was carried out by Professor Wilmut and his team at the Roslin Institute. The spin-out was taken forward by PPL Therapeutics, which developed the drug therapy, and the final piece of the jigsaw will be the building of a production facility at Gowkley Moss in Midlothian, close to the research institutes and the biotech companies.
Those developments have not happened by accident. They are the result of a combination of high-quality research from the Roslin Institute, a recognition of the huge potential for commercialisation by an innovative company—PPL Therapeutics—and the significant contribution of Midlothian Council, which had the foresight to recognise and support the biotechnology sector in Midlothian. The project has also been supported by Scottish Enterprise, the local enterprise companies and, importantly, the Scottish Executive.
The minister has already visited Midlothian, but I would like to take the opportunity to ask her to meet me and key players in the biotechnology and life sciences sector in Midlothian to discuss the recently launched science strategy and the contribution that Midlothian can make to the creation of a smart, successful Scotland.
I acknowledge the member's concern regarding expenditure on research and development. However, does she accept the comment in The Scotsman of 5 December that there has been an "evident and continuing deterioration" in research and development spending in recent years? Does she accept that under the current Government, research and development expenditure is falling?
Research and development is one of the jewels in the crown of the Scottish university and research sector. Scotland leads the way in research and development. The recent research assessment exercise proves that point. Research and development is essential. It is crucial that we commercialise that research to make a difference to jobs and the Scottish economy.
I find it rather rich that the Tories lodged a motion that refers to job losses, when between 1979 and 1997, under the Tories, unemployment doubled and twice hit the 3 million mark, which the Tories described as a price worth paying. I condemn that. We do not accept that that is ever a price worth paying. As Wendy Alexander pointed out, in 2001 total employment reached its highest ever level, the claimant count rate of unemployment fell to its lowest level for a generation, and mass youth unemployment was consigned to the past. I call on both Opposition parties to stop talking down the Scottish economy and to support our amendment.
I will mention two or three issues that have not been mentioned in the debate so far, but which present major long-term strategic challenges for the Scottish economy.
The first is the problem of long-term depopulation. We have all seen the recent forecast from the registrar general for Scotland, which shows that in the next few years, for the first time in a long time, the population will go back down below 5 million. Indeed, one long-term forecast shows that, by 2065, the population of Scotland could fall to as little as 3.8 million. That presents a number of major problems.
Is the member aware that Glenrothes, which is one of our new towns and has a fairly young population, for the first time in its history had more deaths than live births last year? Is not that a pointer for the future of Scotland?
That is indicative of the problem. We have to face up to the problems that depopulation presents. I will provide a couple of examples of the implications of depopulation. At present, we have a dependency ratio in Scotland of just more than 2:1. In other words, for every two or two and a half workers we have one dependant—a child, a pensioner or whoever. If we go down to a population of about 3.8 million by about 2065, the dependency ratio is likely to go into reverse and change from 2:1 to 1:2. In other words, for every one worker there will be two dependants. That has major implications for taxation and expenditure on social services, and will also bring other problems.
The second issue is the attraction of new industry from outside Scotland and the growth of indigenous industry. If we do not have a young population with the appropriate skill levels coming through to fill the jobs that will be available, our economy will continue to have a comparative growth rate that is well below that of the UK, and even more substantially below that of Europe. In other words, a key part of any long-term economic development strategy for Scotland must be a deliberate proactive policy to tackle depopulation. If there is one country that needs an immigration policy, it is Scotland. We need to bring people to Scotland—not just people who have left Scotland, but others who would like to live and work, set up new businesses and do research and development here.
That leads me to my third major point, which deals with a word that I have not heard much of in the debate—investment. Whether we are talking about the railway infrastructure, the roads infrastructure, manufacturing industry, research and development or whatever, the fundamental problem in Scotland is that for not only one year, two years, 20 years or 30 years, but since the turn of the last century, we have grossly underinvested in the private and public sectors. We now need a scale of investment that no one has started to contemplate. Unless we get that level and scale of investment in the private and public sectors, we will continue with relative decline in Scotland no matter what happens in any trade cycle.
Irrespective of our party and views on the constitution, let us in the Parliament be big enough to take on the key challenges of depopulation and massively increasing investment.
We move to wind-up speeches, which must be kept to their time limits.
First, I welcome Alex Neil's final comment, because investment is a major issue and is worthy of a longer debate.
Behind this debate is the spectre of the terrorist attacks of 11 September, which the minister rightly touched on, and the slowdown of the world economy, which was in progress before 11 September. The debate also has behind it the looming question of the ultimate decision on the euro. The Executive's amendment is right to talk about moving towards that decision and trying to produce the stability that goes with decisions on that particular matter. That must be an objective of macro economic policy.
Beyond that, the debate has been characterised by rich metaphor, by hotly contested statistics—and the usual reservations about them—and by the doom-mongers and harbingers of independence on the Scottish National Party benches. I found the contributions of the two Opposition parties dismal in the extreme—very high on analysis and very short on remedy.
Will the member take an intervention?
No, thank you.
The Opposition parties gave us no justification, other than assertion, for their alternative remedies.
The only substantive point that the Conservative motion makes is the alleged disincentive effect of the Scottish business rate. The burden of the non-domestic rate in Scotland is similar to what it is in England. Although the rate poundage is higher, the rateable values are lower; that is based on a smaller uplift at the time of the last revaluation.
Will the member take an intervention?
No, sorry. I have limited time, and I do not want a spurious statistical intervention of the kind that we have had during the debate.
In fairness to Annabel Goldie, she mentioned a desire to cut red tape and unnecessary burdens in small business. She is right to say that. However, there are similar statements in the manifestos and utterances of all the parties. I was struck that Annabel Goldie did not give any specific examples of the genre—not even of those that are within the control of the Scottish Parliament. I have no doubt that such examples exist, but cutting red tape is not the panacea that it is sometimes made out to be.
The SNP amendment boiled down to much the same thing. It argued—although during the debate SNP members did not—for lower business rates, which is a worthy enough objective. However, if spending levels remain the same, the lost revenue would have to be found by enormous rises in council tax or savage cuts in the services that the Scottish Executive and the partnership have worked so hard to restore after the years of Tory spending cuts up until 1999. I use that date advisedly.
I have no problem with setting a growth rate or target for the Scottish economy. That is fine. I would like to set the target of Newcastle United winning the FA cup by scoring 10 goals in the final. That is a target. However, the key point is how we achieve the target and the SNP offered nothing on that subject during the debate. Setting a target is easy; achieving it by policies that exist in the real world is something else. Because of that lack, the debate has been disappointing.
To return to Alex Neil's point, investment is a major issue, which we need to debate and examine. Governments exist in the real world. In that sphere, they have limited powers—they do not create the businesses or make the economic success. Later on in the debate, Fiona Hyslop began to make some reasonable points on the high poundage, which Tavish Scott also touched on, and the skills shortage, which is also important.
Although I, along with other members, usually have criticisms to make of Executive motions and amendments, amendment S1M-2582.2 is a relevant amendment that sets out the issue in sensible and reasonable terms and deals with Scotland's economy in the real world. That did not characterise the attempts of the Opposition parties.
The debate has been interesting, but only to the extent that it has exposed the poverty of ambition and aspiration that the unionist parties have for Scotland.
On one hand, the Executive parties have adopted the usual Panglossian position that all their policies are for the best in this best of all post-devolutionary worlds.
On the other hand, the Tories shed crocodile tears over the state of the Scottish economy, while conveniently shrugging off their responsibility for its underlying weakness after umpteen years of Tory rule from London.
In contrast, SNP members have shown once again that the SNP will not be hide-bound in its thinking and will not submit to the straitjacket of the devolution settlement, which gives the Parliament little or no meaningful control over the Scottish economy.
As the SNP has provided no specification, will Mr Ingram clarify what the phrase "business taxation regime" means? I would like to know what that involves.
The phrase means taxes on business, such as corporation tax.
There is no doubt that all the facts and figures show Scotland bumping along at the bottom of the European league table for economic growth, that Scottish economic performance consistently lags behind that of the rest of the UK and that that relative underperformance has worsened since the advent of the Labour Government in Westminster and the coalition Executive here. The net result is that a credibility gap is growing between the Executive's rhetoric and its policy outcomes.
In the past year, there have been external shocks to the system, such as a crash in the high-technology sector, the aftershock of 11 September and the foot-and-mouth crisis. We would all accept that, given Scotland's greater openness to world trade and investment, it would be affected more quickly than the rest of the UK. However, we must recognise that beneath all that is an underdeveloped economy with a long-term growth rate that leaves us trailing other small European countries with comparable populations and geographical disadvantages, such as Ireland and Finland.
Devolution and the Executive's policies have made no discernible difference to Scotland's dire business birth, growth and survival rates. It might be charitably argued that the Executive's powers in education and training, support for domestic firms, promotion of inward investment and other matters are all at the micro level and impact on the supply side of the economy, where fundamental changes take many years to accomplish. However, we cannot by any stretch of the imagination describe the Executive's strategies and plans as a step change from what we had before devolution. Rather, it appears that there are more of the same policies that signally failed to stimulate Scottish business. Business rates policy even exacerbates the problem.
We have no confidence in the Executive's ability to make a difference for Scottish business. It is unsurprising that the business community shares that view. I commend Mr Wilson's amendment to the chamber.
I will start with some of the members' requests, because I appreciate that, particularly in economically tough times, all members are anxious to have access to those members of the Administration who are responsible for the matters that concern them. Despite my somewhat busy job, I am delighted to agree to meet Rhona Brankin to talk about what is happening in her part of the world. As David Davidson said, I was happy to meet him to talk about what is happening in the Peterhead economy.
I say to everyone that, if they were in my shoes, they too might think twice about acceding to every request to establish another task force. There is no point in reorganising Scottish Enterprise or in appointing regional directors if we then parachute in over them and try to do their jobs for them. The Motorola task force is convened by local partners that the Executive funds.
Will the member give way?
No. I am very short of time. I will move on the third specific point that John Scott raised. As he said, he wrote to me in November. I have made inquiries in my department about his letters. The first letter that raised with me directly the possibility of non-responses was posted on 20 December. As members will appreciate, it did not arrive until between Christmas and the new year. I saw it at the beginning of this week and I have asked my department to give me a full response. I say to John Scott, please do not assume that the answer will be to accede to task forces in every part of the country.
Will the member give way?
No. I took a lot of interventions earlier that left me with no time. I will move on quickly.
Annabel Goldie opened the debate by saying, rightly, that the debate allows us to highlight collectively what the Scottish Parliament could do for Scottish business. On that point, I make a plea to all members that we do not scaremonger on the matter of business rates. That is the matter that is raised in the Conservative motion. We all know that, before the Scottish Parliament was created, a number of scare stories were told. One story was that business rates would go back to local control. That has not happened. The second story was that the rates burden in Scotland would rocket. That is not true. The rates burden has not risen by anything more than real terms. The third story was that the rates burden in Scotland would be faster rising than in the United Kingdom. That is not true. The final story was that we would penalise small business. That is also not true. Let us not scaremonger about rates.
When I come to the SNP—goodness me—the central charge that was made by Andrew Wilson and Duncan Hamilton was that I am unambitious or—worse—hands-off. I have to say that even my greatest critic would not regard me as being hands-off. When Adam Ingram said that the problem is that we do not control the Scottish economy, he gave away the critical issue. That is not true. We have heard no programme and no ideas from the SNP, but that has nothing to do with us. It is the coalition parties that are trying to set the right course, in good times and in bad, to concentrate on innovation, science, skills and productivity. That is the way in which we will build a smart, successful Scotland.
That may be done by Scottish apprenticeships, by the Scottish university for industry—available for learning anytime, anywhere—or by the first all-age careers service in Britain. It may be done by getting our ideas out of our labs and into our businesses, the proof-of-concept fund, the Scottish Institute for Enterprise, the first-ever science strategy for Scotland, and the redesign of Locate in Scotland and Scottish Development International. We are not only attracting business into Scotland, we are helping to market Scottish science and skills overseas. We have redesigned regional selective assistance—the major instrument of industrial intervention in Scotland. Already, over 100 spin-out companies have been set up as a result of that redesign.
Our ambition is not about vague promises or new targets; it is not to leave the Scottish economy to the market, as we saw under the Tories, nor is it to set new targets, as the SNP says. The issue is to have a series of policies that get skills right, put the infrastructure in place, build on our research strengths and support entrepreneurship. Our only chance is neither to retreat from change nor to ignore it, but to recognise that the economic success of Scotland will be man-made. It will be based on our brainpower, creativity and entrepreneurship. That is the way to get Scotland growing again. Fiscal tinkering or financial scaremongering will produce no short cuts. The issue is to invest in the science and skills of our people.
All members are invited to be part of that project, in their local areas and in the Parliament. On that basis, everybody would welcome more debates on the Scottish economy.
I am interested in how the minister closed her speech. I am always willing to give her the benefit of the doubt; indeed, sometimes even more than that. However, the remarks that she made in closing mirror the language that appeared in a Scottish Executive document on the knowledge economy cross-cutting initiative that was produced by one of her predecessors.
Unfortunately, there have been many reports and initiatives, but nothing has happened. We do not see the change. I am not asking the minister to retreat from change, but to demonstrate what has changed. Unfortunately, that appears to be very little. This has been an important opportunity to debate the economy. Unfortunately, if we distilled what has been said for those looking at us from outside the chamber, we would find that very little has been said about the Scottish economy.
Will the member take an intervention?
Not at this point. Mr Gibson is crafting a speech out of interventions.
We are all very interested in Ireland and I have expressed my interest in Scandinavian countries, but when we come to debate the Scottish economy, must we spend half the debate discussing Ireland? The minister must instead use her time to tell us what we will be doing and what will happen in Scotland.
Choosing the fastest growing economy in Europe as our benchmark might be a good idea. Would not the member and the Conservative party add more to the debate if they agreed with us that doubling the underlying trend rate of growth would be a good idea? We can then debate how to get there.
I do not have a problem with setting targets—and setting ambitious targets. What worries me is when there is no substance behind them. The only thing that we have heard about the SNP's policies is that it will tax businesses. That is what Mr Ingram said, and it is the only substantive remark that was made during the debate.
Our Liberal colleagues, meanwhile, tried to keep their heads down, because they are critical of the UK Government's handling of the economy at Westminster but feel unable to say much here.
Will the member give way?
I must take an intervention from Rhona Brankin, in her newly designated role as Deputy Minister for Interventions. [Laughter.]
It will certainly make a difference if it means that we get a response to interventions.
Would the member accept that, under the Conservatives, between 1979 and 1997, unemployment doubled and twice hit 3 million? Does the member agree with the Conservative spokesman who said that that was a price worth paying?
I will take no lectures on that. I know that Rhona Brankin is not that interested in whether people lose their jobs, because when we have debated fox hunting in the chamber, she and her colleagues have said that those affected will get jobs in the textile industry. Had she looked, she would know that that industry no longer exists in the Borders.
I am sure that Tavish Scott was up this morning to hear Helen Liddell on "Good Morning Scotland", when she announced that the referendum on the euro would not take place within the lifetime of the current Scottish Parliament. If that is the case, I hope that we will spend less time discussing the euro.
Do Mr Mundell and the Conservatives agree that we cannot possibly address the issue of Scotland's underlying economic problems when the coalition is so divided? In their brief for this debate the Liberal Democrats say that they
"are the only party committed to investing in future prosperity through prioritising resources for skills and learning."
and that they
"will reform Labour red tape".
Surely the coalition cannot work while it is split on such key issues. Would Mr Mundell agree with a statement of the Liberals that
"Small nations have an advantage in this fast moving world as they can be light on their feet and are more cohesive."
Surely that is an argument for independence.
As we will see in the forthcoming vote on whether there should be a full public inquiry into foot-and-mouth disease, the Liberal Democrats are committed to the Liberal Democrats. Their position here is quite different from the one that they are espousing at Westminster.
Alex Neil made some important points. Depopulation, particularly in rural areas, will have to be addressed. The investment issues that he mentioned are also important.
Apart from her diatribe against the Tories, I agreed with Pauline McNeill when she raised the important issue of telecommunications and digital infrastructure. If Jim Wallace comes to the south of Scotland he will find that, despite the announcement of numerous initiatives, nobody is connected to those networks. We have to cut through the bureaucracy of delivering those so-called improvements and ensure that people are connected not just to the rest of Scotland, but to the outside world. That simply has not happened.
Order. There is far too much extraneous noise. It is discourteous to the member who is speaking. You have a further minute and a half, Mr Mundell.
Thank you, Presiding Officer.
Rhona Brankin made the point that it is important to encourage businesses such as PPL Therapeutics. That is very much the way forward for Scotland.
However, during the whole debate, only the Conservatives have made substantive proposals that would assist Scotland in moving forward. We have proposed restoring the rate poundage similarity with England. We have made proposals in relation to the aggregates tax.
Will Mr Mundell give way?
Mr Mundell is in the final minute of his speech, Mr Ewing.
Saved!
An intervention from Fergus Ewing would have been worse than anything.
Could you also wind up, Mr Mundell?
I shall do so, Presiding Officer.
The Conservatives put the Scottish economy at the heart of our vision for Scotland. Mr McConnell said yesterday that he wanted to build a strong economy, but today, as yesterday, we did not hear a single thing about how that will be achieved.