First Minister’s Question Time
Engagements
1. To ask the First Minister what engagements he has planned for the rest of the day. (S4F-01620)
I know that the whole chamber will wish to offer our warm congratulations to Professor Higgs on being awarded the Nobel prize for physics. [Applause.]
Later today I will meet Tim Gregory, the United Kingdom president of the Canadian company CGI, which is establishing a digital services centre of excellence in Glasgow. The announcement will see the creation of a further 250 high-value jobs in the city and reinforces Scotland as a leading destination for foreign direct investment.
Last week, the Scottish Government’s fiscal commission announced that an independent Scotland would have not just one oil fund but two, yet the First Minister’s own civil servants reported in March last year, and again in October, that an oil fund would not work unless the First Minister either raised taxes or cut spending. Which is it and when was he going to tell us?
John Swinney said it last week when he announced the fiscal commission’s findings. Let me quote exactly from Mr Swinney’s comments last week:
“It has been widely assumed that Scotland would have to run an absolute fiscal surplus before investing in a savings fund, and this has been reflected in the Scottish Government's early thinking on the subject. However, the commission is clear that there is a compelling case for starting to make early investments into an oil fund whilst in deficit so long as it is manageable and debt is on a downward path.”
That was reinforced in a letter to The Herald last Saturday. I think that Johann Lamont should probably read John Swinney’s letters to The Herald before asking her questions.
I had expected an attempt by the First Minister to blind us with science. Perhaps I should have predicted instead that he planned to deafen us with gobbledygook. That did not answer the question that I asked. To remove doubt, here is what it says in the advice that he was given last year:
“if the Scottish government had wished to establish an oil fund, it would have had to reduce public spending, increase taxation or increase public sector borrowing.”
In the reporting of this issue, the First Minister has said that events have overtaken that advice, or that the fiscal commission’s report reflects it. Can he now read out where that advice was repeated in the fiscal commission report or tell us which events have overtaken it?
Once again, just like with John Swinney’s paper that doubted the affordability of the state pension and talked of public spending cuts—we knew that the Scottish National Party members would groan because they did not expect other people to know what they said in private—we know that this Government says one thing in private and another in public. Will the First Minister now come clean with the people of Scotland? Will he raise taxes or cut spending to pay for his oil fund, and when was he going to tell us?
Let me read that incredibly scientific quote from Mr Swinney again:
“It has been widely assumed that Scotland would have to run an absolute fiscal surplus before investing in a savings fund, and this has been reflected in the Scottish Government's early thinking on the subject.”
That is a straightforward explanation to answer the question that Johann Lamont asked. I do not think that that can be described as scientific or gobbledygook. It is a straightforward suggestion that that was the early thinking.
The fiscal commission pointed out that, in marshalling Scotland’s enormous natural resources to invest in the future, there should be two oil funds—one, a stabilisation fund to take advantage of windfall gains, and two, a long-term savings fund—and it set out the criteria by which it should be done. I think that that is an entirely sensible thing to do. If we had had those funds when these resources were being mismanaged by the United Kingdom, we would be in an entirely better place. How do I know that? The former Labour Chancellor of the Exchequer, Denis Healey, said that there should have been an oil fund. He said that
“we should have invested the money in things we needed”
in terms of an oil fund
“and I had thought about an oil fund ... but it wasn’t my responsibility by then”—
it was all Margaret Thatcher’s fault.
Perhaps even more interesting is that, in The Scotsman on 21 August, Alistair Darling, when asked that very question about whether there should have been an oil fund, said:
“if we had our time over again, perhaps we should have”.
So even Alistair Darling wants to have his time over again. Well, Scotland has the opportunity over the next 40 years, and we are not going to make the same mistakes as in the past.
It was not my party that walked through the lobbies to create a Tory Government under Margaret Thatcher. [Interruption.]
Order. [Interruption.] Order!
I know that SNP members do not like to remember their history, but that is what the SNP did to Scotland and Scotland will never forgive them.
For all that chuckling nonsense from the First Minister, he ignored the central question. The one thing that the fiscal commission report makes clear is that the oil fund is not a saving scheme; it is an insurance policy against the volatility of oil prices, although it does rather sound like the kind of oil fund—[Interruption.]
Order.
The noisier the SNP members get, the more troubled they are.
It sounds rather like the kind of oil fund where people get a free Parker pen just for inquiring. The fact is that the First Minister does not want to admit that his oil fund will not work without tax rises or spending cuts. He does not want to admit that he has been told that, rather than setting up a Norwegian-style oil fund, Scots would be better off investing in United Kingdom bonds. That is why the issue is serious.
There is a central deceit in what the First Minister says—the people of Scotland, upon independence, are immediately expecting increased spending on services while his own independent advice says that, precisely because of independence, he would need to redirect moneys from public expenditure to a stabilisation fund. So let us have an answer: does the First Minister want tax rises to pay for his oil fund or cuts in hospitals and schools, and when was he going to tell us?
Let us start with the trip down memory lane. Actually, James Callaghan, in his autobiography, “Time and Chance”, allocated responsibility for the fall of his Government to Labour Party anti-devolutionists. I am surprised that Johann Lamont does not remember that, because she was a Labour Party anti-devolutionist at the time, so I really think that that historical script will have to be changed. If we come right up to the present day, Johann Lamont is in alliance with the Conservative Party in a campaign called better together.
On the questions on the oil fund, those matters were of course addressed in the fiscal commission report. For example, the issue of bond yields against returns from our oil fund is dealt with on page 61, which states:
“As an illustration, over the past five years yields on 10 year UK Government bonds have averaged 3.1% whilst the Norwegian Oil Fund has achieved average annual returns of 5.9%.”
Now, 5.9 per cent is greater than 3.1 per cent. I think that that deals with the point that Johann Lamont was trying to make.
The concept of a stabilisation fund is very important indeed. Let us say, for example, that the Scottish Government’s forecast of oil at $113 a barrel over the period to 2017 is not right and that the Department for Energy and Climate Change, which is forecasting maybe $130, is right. That would give a windfall gain that we did not forecast or expect, because we would have taken a modest view of the future course of oil prices. The fiscal commission sensibly pointed out that it would be sensible to put that into an oil fund so that we have a stabilisation fund in case the forecasts go the other way. I hardly think that that is a matter of great contention. It seems to me a very sensible process to propose.
The fundamental difficulty that the unionist parties have with that is clear: they want the people of Scotland to believe that having an asset whose estimated wholesale value over the next 40 years is £1.5 trillion is somehow a major encumbrance and disadvantage. It is a huge advantage for the people of Scotland—would that we had had it over the last 40 years; we are certainly going to have it over the next 40 years.
Whatever that was, it will not give anyone confidence that the First Minister has a clue about what he is talking about. His own fiscal commission said:
“It therefore requires fewer resources to be allocated to current spending, or to reducing other taxes, than would otherwise be the case.”
The First Minister is simply dishonest when he talks about a stabilisation fund—
Ms Lamont, I think that you should withdraw that.
The First Minister is not being accurate when he says that a stabilisation fund—[Interruption.]
Order.
However we describe it, the First Minister said that the stabilisation fund was about a windfall. The stabilisation fund is to address the volatility of oil over time and his own fiscal commission says so.
We know that John Swinney told the First Minister the truth about the state of the public finances in private. The First Minister wanted that hidden from the public. Now he says that, in a separate Scotland, we would have two oil funds, when he has been told in private not once but twice that that would not work without there being an impact on taxation or public spending.
Unless the First Minister is denying that that advice was given to him, he needs to explain why it is no longer relevant. When was he going to tell us? When was he going to tell us whether his choice is to raise taxes or cut public spending? The answer is never. Honesty is not something that this Government deals in. [Interruption.]
Order. Ms Lamont, I think that you should withdraw that.
I am astonished. I do not know what word we use to describe somebody saying—[Interruption.] I accept the advice of the Presiding Officer, but I have to say that I do not know what word we use to describe a Government that says one thing in private and something different in public.
The fact of the matter is that Scotland is on pause and we will not be given the full facts by this Government ahead of the referendum.
It might have been better for Johann Lamont to withdraw the comment than to try to talk her way round it.
Johann Lamont asked a precise question, so I will read out from page 4 of the fiscal commission proposal. I assure the member that this is not too scientific or complicated:
“We have however, proposed a model which takes into consideration the fiscal position that an independent Scotland is likely to inherit, and which, in principle, allows investments to be made into both a stabilisation fund and a savings fund without an automatic offsetting change to public spending or taxation.”
That is on page 4 of the fiscal commission report. I think that it reflects exactly the question that Johann Lamont had to ask me—if indeed there was a question somewhere in there. That is what the fiscal commission said last week, and John Swinney wrote to the papers to point out the importance of the fiscal commission’s recommendations.
We know that this is an issue on which Alistair Darling—if he had his time over again—and Denis Healey would have liked to have done something, in terms of investing for the future. The fiscal commission report sets out clear criteria on how we can marshal Scotland’s resources and ensure that that asset is used for the benefit of this generation and future generations.
Nobody would seriously argue that the UK has handled oil well as a resource over the past 40 years. Nobody would seriously dispute that Norway, the country across the North Sea, has handled that resource much better. The fiscal commission has put forward a proposal that allows Scotland to get towards the fortunate position of Norway, as opposed to making the unremitting bungles that Westminster and successful United Kingdom chancellors have made.
Secretary of State for Scotland (Meetings)
2. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S4F-01612)
I saw him yesterday. Other than that, I have no plans for the near future.
I am not sure that we got terribly far on the matter that has just been raised, so let us try again from the beginning.
The Scottish Government is quoted in the press this morning as saying that the secret Government oil papers from last year
“have been overtaken by the expert report of the Fiscal Commission Working Group”.
Can the First Minister confirm that, in this case, “overtaken” means that the Government has just lifted the good bits and thrown away the bad bits that do not suit his separatist agenda?
The fiscal commission is part of the Council of Economic Advisers, which includes two Nobel laureates in economics and has a range of economic expertise. Nobody would seriously dispute that it has very substantial economic firepower.
When we published the report, John Swinney pointed out in a letter to the papers how our early thinking on the matter had been different. Surely the whole point of having a fiscal commission of such prestige and authority is to take the advice that it offers, which is exactly what we have done.
Ruth Davidson should, to be fair, acknowledge that the work that the fiscal commission has published is a very substantial piece of work, which sets out clear criteria about how we can handle and manage the amazing natural resource off the shores of Scotland, and do so in an extremely effective manner.
That is all very interesting. The First Minister may be interested to know that this morning I ran the Government’s secret reports from last year and the recent report of the independent fiscal commission through university cheating software. What did I find? Whole sections have been cut and pasted, including entire paragraphs on Scotland’s projected net fiscal debt, on the country’s debt interest payments and on notional borrowing costs. All the good stuff made the grade; all the bad stuff hit the bin.
This is the Alastair Campbell school of dodgy dossier writing. It seems that, when the Government reached any section in the original reports—and there were plenty—that said that an oil fund would mean higher taxes, more borrowing or lower public spending, it simply hit “delete”.
This is another case of Alex Salmond’s say-anything, do-anything and promise-anything approach to independence. Is it not the case that the First Minister has no wish to be straight with the people of Scotland but would rather try to hoodwink them into a yes vote with spun lines, half-truths and incomplete analyses?
The fiscal commission had available to it research that had been done by the civil service. Therefore, common to both reports is the analysis of what would have happened over the past 40 years if Scotland had had control of its own resources.
Common to both resources—Ruth Davidson is correct here—is the point that, under that scenario, the existing fiscal position would have been that, instead of having a share of the voluminous national debt that has been run up by the Conservative and Labour parties, Scotland would have assets of something approaching £100,000 million. There is no disagreement between the two reports on that analysis of the past.
What is interesting, of course, is that it is now accepted as a given—even Alistair Darling agrees—that it would have been a good idea to have had an oil fund. Over the past 40 years, unionist politicians were telling us what a bad idea it would be if we controlled our own natural resources. Ruth Davidson should look seriously at the fiscal commission’s proposals on that point. [Interruption.]
Order.
I have to say that I am interested and surprised that Ruth Davidson should want to cover these issues; they were part of a fascinating analysis of Ruth Davidson’s ability to count that was made by Peter Jones—a well-respected commentator who, incidentally, no one would suggest is a card-carrying member of the Scottish National Party.
In looking at the claim that oil decommissioning was part of a £30 billion or more black hole, as has been suggested by Ruth Davidson and the better together campaign, Peter Jones said:
“if this is an example of her ability to add up numbers, she should never be allowed to look at a government office, still less get inside it.
The Better Together paper confused annual current spending with one-off spending; it added one-year sums to totals that don’t occur for another 47 years, and it did some asinine double counting. In short, it added two and two and made 44. It is complete nonsense.”
If a respected commentator, who is not suspected of being a member of the SNP, says that—using terms that I would never use—about Ruth Davidson, I feel that we must question the point that she makes.
Peter Jones ended his analysis with a great lesson:
“Meantime, Better Together needs to learn ... this nonsense commits a cardinal political sin—insulting the intelligence of the voters”.
Perhaps the better together campaign should stop insulting the intelligence of Scotland by telling us that oil of massive quantities and massive wealth is a liability to Scotland, while it tries to hang on to it for Westminster.
National Health Service Workers (Wage Rise)
3. To ask the First Minister whether the Scottish Government plans to implement a wage rise for NHS workers in Scotland. (S4F-01622)
Yes, we do. The announcement last week from Jeremy Hunt that he plans to block the pay rise to national health service staff for 2014-15 is nothing short of bad faith. To try to steal the pay rise back from workers’ hands risks destabilising the NHS across the United Kingdom and damaging morale. Therefore, the Scottish Government has no intention of following Jeremy Hunt and will use Scotland’s independence from Westminster on the health service to block that move.
However, I have to say that, as long as our budget remains tied to Westminster, the UK Government’s damaging approach could further drive down Scotland’s budget in the future.
The First Minister has sanctioned a pay rise of up to 4 per cent for the top managers in the NHS. Can nurses in the NHS in Scotland expect a pay rise of the same degree?
Rhoda Grant should examine the reality behind that. [Interruption.] It is important. On the pay increase of 1 per cent for 2013-14, which was effected from 1 April this year, we made additional payments to low-paid staff to ensure that everyone earning below £21,000 received an increase of £250. For senior managers, there was a cap at £80,000. That is what we have done in terms of equity within the pay scales of the health service, and it has been strongly supported by the health service unions.
Rhoda Grant should reflect on the fact that we are able to say that we will not go in the direction that Jeremy Hunt has, because Scotland has independence of thought and action on the health service—albeit that we may be constrained by future finances and dragged down by the Barnett formula. I am very worried about this.
Last week Andy Burnham, the Labour shadow secretary of state for health, said:
“I am talking quite passionately about getting English ... MPs back up the road and ... sitting down with ... Richard [Simpson] and Rhoda [Grant] and others and saying, let’s get health policies that can be consistent across England, Scotland and Wales. Wouldn’t that be a good thing, pulling in the same direction as opposed to pulling our separate ways?”
I doubt that there is a health worker in Scotland who is not glad that we have autonomy over the health service and can avoid having a breach of faith being imposed by a Westminster Government.
Specialist Crime Division
4. To ask the First Minister, in light of the specialist crime division’s responsibilities for organised crime, counter terrorism and intelligence, what its role will be in relation to the National Crime Agency, which sets the United Kingdom’s overall operational agenda for tackling these matters. (S4F-01616)
Police Scotland’s specialist crime division has wide-ranging national responsibilities and works closely with the local police divisions. I expect it to work closely with the National Crime Agency. The National Crime Agency can conduct operational activity in Scotland only if authorised by the Lord Advocate. Any activity within Scotland would be in support of Police Scotland operations to tackle serious and organised crime. Police Scotland will work closely with the NCA to make best use of resources to complement and support our operational activity to tackle criminality as it affects Scottish communities.
I thank the First Minister for his reply, from which I take some comfort that the operational independence of Police Scotland through the specialist crime division is not compromised. In the light of the referendum next year, have there been discussions about the relationship between the rest of the UK and Scotland post-independence in combating, for example, international terrorism?
The Deputy First Minister reflected those points at the Foreign Affairs Committee on 28 January this year. She said:
“In terms of security and intelligence I would envisage Scotland having independent domestic intelligence machinery in Scotland sitting alongside our police service but working very closely—given our sharing an island with the rest of the UK.”
We as a Government are keen to discuss what a future post-independence relationship with the UK Government would look like, but, as yet, UK ministers have not been willing to engage with us on this and many other subjects.
What progress is being made on the Scottish crime campus, which is being built in my constituency, given that it is a key part of the Scottish Government’s strategy to tackle serious and organised crime? When is it due to open and how many jobs will it bring?
I expect the Gartcosh crime campus to be operational early next year. I am pleased to say that it is on time and on budget. Once complete, it will be for each partner located there to recruit any staff they need. Many staff will be moving from existing locations. It is worth noting that the project has provided employment for 350 contractors. The work currently under way is supporting 43 apprentices, including six brand-new apprentices. I am sure that the whole chamber welcomes that.
Higher Education (Economic and Social Research Council Report)
5. To ask the First Minister what the Scottish Government’s response is to the findings of the Economic and Social Research Council regarding higher education. (S4F-01628)
Since we took office in 2007, the percentage of 18-year-olds from the most disadvantaged backgrounds at university has increased from the 8.1 per cent that we inherited from Labour to 13 per cent for the academic year 2013-14. That is progress but, as the findings of the Economic and Social Research Council show, much more needs to be done.
That is why we brought in the Post-16 Education (Scotland) Act 2013, which was passed in June and which gives widening access the force of law, requiring universities in Scotland to bring more students from poorer backgrounds through the university experience. It is why we are also providing £10 million of support for 2,089 additional funded places at universities in 2013-14: 727 for widening access; 1,020 for students coming from college; and 342 for sectors likely to have the greatest academic impact.
The report clearly says:
“The abolition of the graduate endowment in Scotland ... has not led to increased representation of students from more socially deprived backgrounds in universities.”
The First Minister has presided over the worst student support packages, the worst widening access records and the highest drop-out rates on these isles. If he truly believes that education in Scotland is based on the ability to learn and not the ability to pay, why cannot poor kids get into his universities?
It is Kezia Dugdale’s party, the one that she supports, that wants to reimpose tuition fees on the students of Scotland. I have accepted that progress is not fast enough, which is why we are proposing further measures, but to take the figure from 8.1 to 13 per cent over our term of office is at least a right move forward. I know that it is not her personal responsibility, but perhaps Kezia Dugdale should give some thought to how her colleagues on the front bench could have allowed the figure to fall as low as 8 per cent in 2007.
One of our measures is the Post-16 Education (Scotland) Act 2013, and I have explained how we believe that it will be instrumental in widening access. If memory serves me correctly, the Labour Party voted against that bill, so what is the point of Kezia Dugdale asking her question, having voted against one of the measures that we hope will improve the situation?
I offer a warning of what happens when tuition fees are imposed. As we know—and we should be celebrating this—the number of Scots accepted into Scottish universities for 2013-14 has risen to a record 27,990. That is an increase of 2 per cent compared with this time last year. In England this year there was a slight increase in the number of students going to university under the fees situation, but the figure remains almost 20,000 below the pre-fee level. The figure is 20,000 less than it was before the imposition of the £9,000 tuition fee. Does Kezia Dugdale believe that, among those 20,000 students who are no longer going to university in England, it is the well-off students who are not going to university? Believe me, it is the people from disadvantaged backgrounds who are being excluded from university in England, under the very measures that Kezia Dugdale and her party would like to impose on the Scottish people.
2014 Commonwealth Games (Ticket Allocations)
6. To ask the First Minister what discussions the Scottish Government has had with the organisers of the 2014 Commonwealth Games regarding ticket allocations. (S4F-01623)
The Scottish Government is working closely with the Glasgow 2014 organising committee, which has developed a ticket allocation policy. I am delighted that the games are, and can claim to be, the most affordable Commonwealth games ever. They are the first to offer half-price concessions for children under 16 and for the over-60s, and the demand for tickets, as Liz Smith knows, has been absolutely fantastic, with more than 2.3 million requests for around 1 million tickets.
I thank the First Minister for that reply and I agree that it is good news about the size of the demand. During the London Olympics and Paralympics, 125,000 tickets were made available for young people to see different sports events completely free. Judging by today’s excitement as the Queen’s baton route in Scotland has been unveiled, a large number of Scottish youngsters would greatly appreciate the same opportunity for the Commonwealth Games. Is it the First Minister’s understanding that such an opportunity will be provided by the games’ organisers and that it will include allocations for Scotland’s most vulnerable children?
The latest measures to ensure that that happens will be announced very shortly by the games organisers but I hope that Liz Smith will agree that the announcements that have been made to date have taken account of not just where the London Olympics had successes, but where there were some early failures with regard to attendance at certain venues. Those issues have been taken into account when considering affordability and the ticket allocation process, so that we can learn the lessons and, I hope, do things even better.
Liz Smith is quite right to raise the issue and I assure members that the matter is being addressed by the games organisers. As they roll out their announcements, I believe that Liz Smith will see some of her hopes realised.