Plenary, 10 Dec 2009

Meeting date: Thursday, December 10, 2009

Official Report 673KB pdf

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First Minister's Question Time

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Engagements

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2072)

Later today, I will have meetings to take forward the Government's programme for Scotland. I also intend to send a Christmas card to every member of the Scottish Parliament, as well as to many other people from across Scottish society.

On 29 October, I told the First Minister that I had written to the Chancellor of the Exchequer suggesting that he should consider accelerating capital for one more year if, and only if, the SNP sorted out the budget by, for example, reinstating the Glasgow airport rail link and the housing budget. Let us not forget that the chancellor has already accelerated £333 million. What percentage of that went directly to creating new jobs?

The accelerated capital spending was part of the recovery programme that generated 5,000 jobs across Scotland.

Iain Gray is quite right. I welcomed his conversion to accelerated capital spending on 29 October. At that stage, we had reason to be confident that the chancellor was going to assist the Scottish economy. After all, it was included in the communiqué for the joint ministerial committee on 16 September, and we had Iain Gray's support on 29 October, only for the chancellor to dump it in December. I suppose that the lesson we should take from that is that if someone is running a successful campaign, for goodness' sake, they should not get Iain Gray's support.

Of course, the First Minister could not answer the question. Perhaps that is why he could not make the case. However, Nicola Sturgeon gave the game away at the Local Government and Communities Committee. She admitted that only one fifth of the first tranche of accelerated capital—only 20p in every pound—had directly supported construction jobs. Is it not the truth that the First Minister got the money last year and he had not got a clue about how to use it?

There is a certain inflexibility in the way that Iain Gray asks his question. I answered his earlier question by pointing out that we had calculated that 5,000 jobs had been generated by the use of accelerated capital spending. I can do better than that: I can share with members the list of projects that we earmarked, given the confidence we were entitled to feel that we would get accelerated capital spending this coming year.

We identified 25 transport projects, including the M8 White Cart viaduct, the A9 Cromarty bridge refurbishment and the Glasgow subway modernisation. There were key health service projects such as the Forres health centre and the Airdrie community centre. We had general infrastructure projects such as completing the Scottish exhibition and conference centre and the Dundee waterfront. There was a range of national renewables investments such as the Fife energy manufacturing hall and the Dundee renewables port. There was also investment to build another 2,000 social rented houses in Scotland. That is the cost of a Labour chancellor who has humiliated a Labour leader by not assisting economic recovery.

The reality, of course, is that the United Kingdom is last out of the recession, but first out of the stimulus package.

Presiding Officer, I will tell you what humiliation is—it is what the First Minister did to Fiona Hyslop last week to save his skin.

In 2007, the First Minister inherited £1.5 billion of reserves from the previous Labour-led Executive. That is all gone. He cancelled the Edinburgh airport rail link, which got him another £1 billion. That is gone. That £2.5 billion, which could have built all those projects that he reeled off, is all gone. What did he do with that money?

Iain Gray's record on capital projects is not particularly auspicious. He forgot to mention the Edinburgh trams project. The people of Edinburgh would have been delighted if £500 million had been available for investment in capital projects in Edinburgh and throughout the country.

Let us deal with the capital acceleration and the total humiliation of the Labour leader in Scotland. The Labour leader was the adviser to Alistair Darling, now the Chancellor of the Exchequer. The capital acceleration was generally regarded as necessary for stimulating the economy and economic recovery. Yesterday, Alistair Darling sabotaged economic recovery in Scotland at a cost of 5,000 jobs, 2,000 homes and capital projects throughout the country. That will hang like an albatross round the neck of the Labour Party in Scotland.

The First Minister loves to remind me that I worked for Alistair Darling. He really does not have to—I know that he knows, because I used to bump into him when I was down there. That was when he was hiding in Westminster from Holyrood.

The First Minister has more money next year than ever before. The question is: what is he doing with it? Let us look at his track record. Low Moss prison: delayed. Southern general hospital: delayed. Aberdeen bypass: delayed. Borders railway: delayed. Edinburgh airport rail link: cancelled. Glasgow airport rail link: cancelled. A further £2 billion of projects have been lost because of the Scottish Futures Trust fiasco. How many jobs? Twenty-five thousand Scottish construction jobs have been destroyed. Will the First Minister admit that the real problem is that he could not build his way out of a paper bag, never mind a recession?

The only problem with Iain Gray's analysis is that the Scottish construction industry, although severely hit by Labour's recession, is doing better than the construction industry across the United Kingdom. Yes, I was in Westminster when Iain Gray was a Government adviser—I was opposing the illegal war in Iraq, which Iain Gray and his colleagues supported.

Today, we have the revelation from the Scottish Parliament information centre that the £500 million cut that was thanks to the refusal to give accelerated spending is now an £800 million cut. That is in a paper from SPICe today. Sooner rather than later, the Labour Party will have to face the reality of real-terms public spending cuts in Scotland that are imposed by a Labour chancellor, supported by his adviser in Scotland.

I mentioned the inflexibility of Iain Gray's questions. A document has come into my hands—found in Costa Coffee—which is apparently Iain Gray's briefing for last week's question time and which he followed almost word for word. It was written by Sarah Metcalfe. I am beginning to think that perhaps we should have Sarah Metcalfe in asking the questions and cut out the middle man. Whatever she did, it would be a lot better than the Labour adviser in Scotland.

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Secretary of State for Scotland (Meetings)

To ask the First Minister when he will next meet the Secretary of State for Scotland. (S3F-2073)

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

Yesterday, the nightmare of Labour's economic incompetence and the true extent of Labour's debt crisis were laid bare in shocking terms. Every child born in Scotland is now saddled with a Labour debt of £23,000. It just gets worse. Everyone working in Scotland who earns more than £20,000 a year will see their pay packets cut; equally, employers will be hammered by Labour's tax on jobs. Unless it is bingo, boilers or barbecues, Labour cannot be trusted on the economy.

How big will Labour's cut be in our Scottish budget and how deep will it be in our Scottish public services? Is it not time that Labour Treasury ministers appeared before the Scottish Parliament to explain the devolved consequences of the pre-budget report?

I can give Annabel Goldie an exact answer to her question. Today, SPICe published a financial scrutiny unit briefing that gives the exact figure for the change to the Scottish budget since publication of the draft budget for 2009-10: there has been a reduction of £814.4 million. That is the exact figure caused by Labour's spending squeeze in Scotland as a result of the Labour recession in Westminster.

As for the consequences of that figure, Annabel Goldie believes that we should summon Labour ministers before this Parliament. I believe that the entire Labour Party should be summoned before the Scottish people at a general election.

Unusually, I thank the SNP First Minister for his response, although it is with no pleasure that I hear about the SPICe projection of the budget cut. Given the number of people in Scotland who work in our health service, schools and other essential public services, Labour's tax on jobs will rip an estimated £200 million out of Scotland's public sector and a third of that could hit the national health service alone.

Since last April, I have repeatedly challenged the First Minister to confront reality and tell us precisely what he will do. My party has identified hundreds of millions of pounds of savings that could be made and the First Minister has disagreed with every one of our proposals. I say to the First Minister, listen up: Labour has brought us to the brink of bankruptcy; doing nothing is not an option; living in denial is not an option; and saying that all will be well in an independent Scotland is not an option—just look at Ireland. Face reality—come clean with the Scottish people and tell us where the cuts will be made and where the savings will come from.

Given the £10 billion increase in projected oil revenues over the next six years—the total estimated by the chancellor yesterday was £50 billion—I would have thought that Annabel Goldie might cast her eyes across the North Sea to Norway to see what a country can do when it has the ability to mobilise its resources.

Unlike the chancellor until yesterday, the Cabinet Secretary for Finance and Sustainable Growth in this Parliament, John Swinney—who is not accountable for the £178 billion of borrowing, because he operates within a balanced budget formula—has already proposed a budget for next year, which makes tough choices. Given Annabel Goldie's realisation of the extent of the Westminster spending squeeze, I hope that she will get behind that Scottish budget and pass it in the best interests of the Scottish economy and the Scottish people.

I hope that Annabel Goldie, unlike Iain Gray, has more influence over her Westminster colleagues and that she will get behind the claim and argument of this Government—and lo! even of the Calman commission—that the Government should have access to borrowing so that we can mobilise more capital spending and sustain more jobs across Scotland.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-2074)

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

The sum of £11 billion in the chancellor's pre-budget report is marked down as "efficiency savings". It shows the depths of crisis brought upon this country by Labour that there is £1.5 trillion of consumer debt, banks are not regulated properly and public sector spending is based on a property price bubble that Labour claimed would never end.

An Audit Scotland report on NHS boards, which was published this morning, makes sober reading. On efficiency, the report says that it will be difficult for some boards

"to achieve the required level of savings without any negative impact on the services they provide."

Does the First Minister agree with Audit Scotland?

I agree with Audit Scotland when it praises the financial performance of the NHS in Scotland and says that most of the key targets were met. We should congratulate the national health service and its staff throughout Scotland on achieving that.

No one pretends that, given the financial clouds emanating from Westminster, budget decisions will be anything other than extremely difficult. That is why I hope that the Liberal Democrats will get behind John Swinney's financial proposals, which, of course, protect the NHS in Scotland.

It would be much easier to get behind those proposals if Mr Salmond would answer the specific question that Audit Scotland put to him this morning.

With tough times in the health service, the priority must surely be for nurses and doctors to be in post and for services to be kept open. However, health boards themselves have released new figures under the Freedom of Information (Scotland) Act 2002, which show that more than 2,100 people in the Scottish health service get paid more than £100,000 per year—they make a total of more than £300 million every year, £30 million of which is in bonuses. Will the First Minister guarantee that those very well-paid people—not the nurses, carers and cleaners, who earn a fraction of that money—will shoulder the burden? Would that not be a fair way to protect front-line services?

To protect workers in the health service we had better not follow the proposals from the Liberal Democrats in London, which, of course, would hit the pay of key workers across the national health service.

Let us look at the Audit Scotland report, which found that the national health service in Scotland has a good record on efficiency savings. It exceeded its target last year and achieved savings of £300 million against a target of £215 million. The big difference in terms of the efficiency targets of this Government, whether in the national health service or across the public services, is that every single penny of those efficiency savings achieved by the national health service is reinvested in front-line care in Scotland. That is the key difference and that is why we should have the support of Tavish Scott.

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Pre-budget Report

To ask the First Minister what impact the pre-budget report will have on Scotland. (S3F-2093)

As we have heard—there seems to be a general majority throughout the chamber on this—the pre-budget report is deeply damaging for Scotland, with the Scottish departmental expenditure limit budget set to fall by 1.6 per cent in real terms next year.

The weight of opinion among economists and the International Monetary Fund is that it is still too early for Governments to withdraw their support for the economy. The Chancellor of the Exchequer acknowledged that yesterday. Yet, despite £50 billion in North Sea revenue flowing to the United Kingdom Exchequer over the next six years, the UK is the only developed economy that has entirely withdrawn its fiscal stimulus package.

By ignoring the sustained requests to bring forward further capital spending, as we have heard—the Labour Party will have to get used to that—the PBR will cost 5,000 jobs across Scotland.

Combined with the £500 million cuts—we now know that the figure is £800 million, thanks to this morning's SPICe briefing—that the chancellor has already imposed on our budget, the PBR puts in jeopardy the progress that has been made in economic recovery and threatens to undermine the fragile signs of recovery across the Scottish economy. Sooner rather than later, the Labour Party, collectively and individually, will have to take responsibility for the looming crisis in the Scottish economy and the failure to support recovery.

I am not sure that we need one, but I call Linda Fabiani to ask her supplementary question.

As the First Minister said, North Sea oil revenues are projected to reach up to £50 billion from this year to 2014. Does he agree that the £9.5 billion increase in that projection strengthens the case for capital acceleration, as called for by the Government and the Opposition in this Parliament? Does he agree that the chancellor's intransigence and Scottish Labour's ineffectiveness is indeed holding back Scotland's economic recovery?

It is holding back economic recovery. There is an interesting statistic relating to Linda Fabiani's question. At the same time that the chancellor uprated by £10 billion his estimates on oil revenues over the next five years, he downrated the capital support required for the financial sector to £10 billion. In other words, the £10 billion of capital support for the financial sector is more than compensated for by the increase in—not the total of—oil-generated revenues. That is exactly why, as I said to Annabel Goldie, more and more people in Scotland will cast their eyes across the North Sea to what the Norwegian economy is doing with the capital asset that is securing prosperity for future generations of people in Norway.

The Treasury has been unable—or, more likely, unwilling—to publish details of spending for Scotland beyond 2010-11. However, it is helpful that pages 108 to 111 of the pre-budget report spell out how, if Labour won the election, it would implement £12 billion of cuts by 2012-13. The cuts range from £118 million from concessionary fares schemes to £500 million from the NHS. Given that the Treasury cannot spell out the Barnett consequentials for the Scottish Government, will the Scottish Government ensure that the figures are calculated and made available to inform members before we debate the pre-budget report next week?

There should be the maximum information to allow members who attend the debate to see the consequences. As Derek Brownlee well knows, John McLaren and other economists in Scotland have projected the likely fiscal framework, which the chancellor refuses to reveal. When I brought those forecasts to the chamber on 10 September, Andy Kerr described them as "fictional forecasts". I see him nod—he still believes that the forecasts are fictional. If they are so fictional, why is the chancellor so unwilling to spell out the figures?

The First Minister is aware that yesterday's pre-budget report was hugely disappointing for Dundee's computer games sector. The head of Dundee's largest games company described it as a "missed opportunity" to bolster the industry and create hundreds of jobs. Does the First Minister agree that the report was a missed opportunity and that the lack of a level playing field with the likes of France and Canada will hamper growth and could threaten jobs in an industry that is important in Scotland and Dundee? Does—

Briefly, please.

Does the First Minister agree that the pre-budget report is another example of why it is increasingly important that we complete the Parliament's powers?

I agree with Joe FitzPatrick.

Ah.

Order.

Well, it is disappointing that the chancellor did not listen to the games industry, given that "Digital Britain"—which, if we remember, the United Kingdom Government commissioned—says that providing tax relief for that industry is important. We will continue to make the case to the chancellor until he recognises the problem. We will also continue to support our world-class games industry. That support includes Monday's announcement of £2.4 million from the Scottish Further and Higher Education Funding Council and the European regional development fund, which was good news.

One aspect of the pre-budget report is that changes to research and development rules to remove the intellectual property ownership requirement for small and medium-sized enterprises mean that it should be easier for games companies to claim tax credits on their development spend. However, it is disappointing that, although the requirement to support this vital industry was identified in "Digital Britain", the chancellor did not require the tax changes to be made to ensure that the industry flourishes and succeeds.

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Greenhouse Gas Emissions

To ask the First Minister what progress the Scottish Government has made toward its target of reducing greenhouse gas emissions by 42 per cent by 2020. (S3F-2079)

I thank Cathy Peattie for her question, which comes at a pertinent time. I acknowledge her presence at the event at the Falkirk wheel earlier this week.

The latest figures on greenhouse gas emissions, which were published on 8 September, show that emissions in 2007 were 19.2 per cent below our baseline. As the member knows, the Scottish Government has since 2007 made significant progress on meeting the challenges and opportunities that climate change poses, not least with the Climate Change (Scotland) Act 2009, which is the most ambitious climate change legislation in the world and which the Parliament passed unanimously, with the strong support of business and civic society. The implementation of that is set out in detail in the climate change delivery plan.

Scotland's leadership on climate change has been noted throughout the world and sends a powerful message to Copenhagen. Scottish ministers will relay that message in person.

What progress has the Scottish Government made on implementing the public duty? When will it produce a public engagement strategy and offer council tax reductions?

Our public engagement strategy is encapsulated in the work of the delivery plan and of the 2020 delivery group. I know that Cathy Peattie welcomes them—I saw her nodding vigorously at the event in Falkirk earlier this week.

The Parliament should take enormous pride in the 2009 act and it is clear that we are making the most rapid progress in the world on implementation.

Although the Scottish ministers will carry that message to Copenhagen, I think that most people know full well in their heart of hearts that it would have been better if they could have done that as a full part of a delegation at the intergovernmental meeting. For the life of me, I cannot understand why the United Kingdom Government was not prepared to accede to that simple request. Nonetheless, the 2009 act, which is world leading, and the implementation, which is world leading, will stand Scotland well as an exemplar for the rest of humanity of what we can achieve to fight climate change.

I think that everyone acknowledges that setting targets is the easy bit—taking the action will be far more challenging. Is the First Minister aware of the UK Committee on Climate Change's report, "Meeting the UK aviation target: options for reducing emissions to 2050", which was published this week? The report makes it very clear that unrestricted aviation growth will make our climate change targets physically unreachable. What proposals does the Scottish Government intend to make to restrict aviation growth?

As Patrick Harvie well knows, because he campaigned successfully on the issue during the passage of the Climate Change (Scotland) Bill, aviation is included in the Scottish Government and Parliament's targets. In other words, unlike the position elsewhere, emissions from aviation are part of the targets that we are required to meet. That is a significant difference from legislation in other Parliaments, and something else of which we should be proud.

Given that the Scottish Government proposed an emissions reduction target of 34 per cent when it introduced the Climate Change (Scotland) Bill but the Parliament adopted a 42 per cent target, how does the First Minister intend to meet the gap with new initiatives? Has he launched new initiatives in the past six months?

I launched them earlier this week—I have just referred to the 2020 delivery group, which was launched in Falkirk.

I know that Sarah Boyack is a strong supporter of renewable energy and a considerable sceptic on nuclear energy, so I am disappointed that she did not acknowledge that since the Government took office it has consented to 25 major renewable energy projects in Scotland, which is a dramatic advance on anything that had gone before. In an atmosphere in which the entire Parliament can take pride in the legislation that we have passed, for goodness' sake let us project Scotland as being unified on the issue. We might disagree about other things, but on our climate change objectives and our campaign for implementation, all members of the Parliament can take legitimate pride in what we are doing.

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Literacy Commission

To ask the First Minister whether the Scottish Government plans to implement all of the recommendations of the literacy commission. (S3F-2083)

The Scottish Government is committed to improving literacy for everyone in Scotland. The new curriculum—curriculum for excellence—has literacy at its heart and, for the first time, we are introducing specific qualifications in literacy and numeracy in secondary school.

I welcome the literacy commission's constructive contribution. The new Cabinet Secretary for Education and Lifelong Learning will consider the commission's recommendations in detail and he will respond to every one of them.

I am sure that the First Minister shares my concern at the commission's suggestion that almost a million Scots do not have basic literacy skills. The report highlighted that socioeconomic problems are the main underlying cause of poor basic literacy and that programmes are needed to address those problems. What plans does the Government have to set up pilot schemes to address socioeconomic issues, as was recommended in the report? Will the First Minister give the Parliament a timeframe for urgent action by the cabinet secretary on that crucial issue?

I think the member will find that the cabinet secretary has exactly those matters in mind. The correlation that was identified between illiteracy and areas of disadvantage in Scotland was one of the strongest aspects of the report.

As the commission noted, the examples and international criteria that we are using to evaluate Scottish performance are based on studies that took place in 2006 and 2007. Although studies show a slippage in Scottish performance in relative terms from 2003, when the previous studies were done, a number of studies of the position in Organisation for Economic Co-operation and Development countries show that the Scottish position is still above average. I say that not because there should be the slightest complacency about the figures, but because if we are to attack the problem of illiteracy and ensure that numeracy is the entitlement of every Scottish child we should not start from a position in which we berate the achievements of our children and teachers throughout Scotland. We should start without any complacency at all, recognise the improvement that requires to be made and address the issues together, as I am certain the new cabinet secretary is prepared to do.

T-h-e c-a-t s-a-t. Will the new Cabinet Secretary for Education and Lifelong Learning reintroduce synthetic phonics into the teaching of reading? He will find that it is much easier to get people to read then.

The new cabinet secretary, who has always been a keen supporter and admirer of Margo MacDonald, says that it is in place across Scottish education at present. He has also indicated to me that he is prepared to meet her on the issue to inform her of the developments that are taking place and consider her ideas for new developments that could improve the position further.

Meeting suspended until 14:15.

On resuming—