The next item of business is a debate on motion S4M-10769, in the name of John Swinney, on the economic opportunities of independence. Members who wish to speak in the debate should press their request-to-speak button now.
I call John Swinney to speak to and move the motion. Mr Swinney, you have 14 minutes.
14:18
Scotland is a wealthy country, and it can be a successful independent country. As that point has been well established in the referendum debate, this afternoon’s debate is about not whether we can be independent but whether we should be, and the opportunities that independence will bring us to improve Scotland’s economy and ensure that everyone can benefit from our wealth, our resources and our ingenuity as a country. The Government believes that the powers of independence and the ability to make decisions for ourselves will give Scotland a means of growing our own economy by focusing on what matters to us: getting more people into work; improving living standards; and creating new opportunities for our young people to build their careers here.
The year 2014 will represent a year of progress for the Scottish economy. Just last month, official statistics indicated that the Scottish economy grew by 1 per cent during the first quarter of the year, which is faster than the United Kingdom’s growth of 0.8 per cent and which has led to the fastest annual growth in more than three years. Scotland’s economy has now officially moved beyond pre-recession output levels, three months ahead of the UK. Moreover, as was outlined last week in the Scottish Government chief economist’s state of the economy report, our economy has shifted from recovery to expansion mode, and this is set to be Scotland’s best year since the UK recession began. Indeed, according to yesterday’s Bank of Scotland purchasing managers index report, private sector output in Scotland expanded in July for the 22nd consecutive month, with the fastest rate of growth in six months.
Such trends have also led to an improvement in the labour market, with employment up by 76,000 over the year to around 2.6 million, and employment and economic activity now at appropriate levels of performance.
Those facts demonstrate the healthy outlook for the Scottish economy, but they also fundamentally undermine the claims that the Chancellor of the Exchequer made in November 2011 that referendum
“uncertainty is damaging investment in Scotland”.
In reality, the most recent Ernst & Young attractiveness survey of international investment reported that, during 2013, the number of international investment projects in Scotland rose by 8 per cent—the highest since 1997.
We would therefore begin life as an independent country from a strong base. Excluding North Sea oil and gas, output per head in Scotland is the third highest of any nation or region in the United Kingdom, behind only London and the south-east.
I am pleased that the finance secretary recognises the progress that the whole of the United Kingdom economy is making, but I want to take him back to his interview with Gary Robertson on the BBC last week. Has he had time since then to reflect on whether, rather than ruling all the options in and ruling all the options out, he has a stated plan B for the currency? Will he tell us that this afternoon?
I simply say to Mr Rennie that the Government has gone through a process of exploring in great detail with the fiscal commission the various options that would be available to an independent country. The fiscal commission assessed a number of options. It said that there were a number of perfectly viable options and recommended the option that it considered to be the most appropriate for Scotland. Mr Rennie should not be at all surprised that the Scottish Government chooses what we consider to be best for the people of Scotland to meet their needs and aspirations. That is exactly what we have set out.
Willie Rennie rose—
I may give way to Mr Rennie again in due course. I will make further comments about the currency.
On the fiscal commission working group, the Government has said that, if we do not get a currency union, we will walk away from the entirety of the debt. Do all the members of the fiscal commission working group, including the Nobel laureates, support that argument?
Mr Brown should just look at what the fiscal commission has said. It has said what it has said. The Scottish Government has said that, if the United Kingdom Government is going to advance an argument that is about seizing the United Kingdom’s assets and not distributing them fairly between the rest of the United Kingdom and Scotland, why on earth should an independent Scotland take on its appropriate share of the debt, which we are perfectly prepared to take on? If the United Kingdom Government is prepared to act in such a reckless fashion, that is the consequence.
We have contributed more in tax revenues per head of population than the rest of the UK has in every one of the past 33 years. We have oil and gas reserves that will last for decades and renewable energy reserves that will last for ever. We have key strengths in diverse sectors, from food and drink to life sciences and advanced manufacturing, and we have more universities in the world’s top 200 per head than any other country on the planet and the most highly educated workforce in Europe. Those are strong foundations from which an independent Scotland can emerge.
We will begin life as an independent nation in the full knowledge of the benefits that taking decisions for ourselves can bring. Central to the Scottish Government’s argument about why we should be independent is the record of the Scottish Parliament. Over the past 15 years, the Scottish Parliament has worked hard to create a fairer society and a more competitive economy. We have established the most business-friendly local taxation system in the UK, with our small business bonus scheme reducing or removing business rates for more than 92,000 business premises, and we have supported Scottish Enterprise and Highlands and Islands Enterprise at a time when the UK Government has scrapped its regional development agencies.
We have undertaken a range of initiatives to protect capital expenditure, despite cuts of 26 per cent by Westminster. We have invested to improve the fabric of the Scottish economy and the labour market, ensuring that our employment rate moved from being 2.6 percentage points below the UK rate in 1999 to 0.2 percentage points higher, as shown in the most recent figures that are available.
The ability to take certain economic decisions here in Scotland has been a strength for the country. The Scottish Government has ambitions to do more by taking a wider range of economic decisions, which will be achieved only as a consequence of independence.
All of us know that, despite Scotland’s great wealth and its huge potential, too many people in our society do not feel the benefits of that wealth. We know that other countries have been more successful in utilising all their resources and harnessing the benefit of those resources for the future. We know, too, that countries with the full powers of independent nations perform better, not just economically but in measures of social wellbeing into the bargain.
In 2011, the Organisation for Economic Co-operation and Development reported that income inequality had increased by more in the UK than in any other country in the OECD since 1975. The UK now has the highest levels of regional inequalities in the European Union. Although we have made improvements to our productivity rates relative to the UK, productivity here is still 22 per cent lower than it is in Denmark, 20 per cent lower than it is in Germany and 13 per cent lower than it is in Sweden. Our ability to use the powers of independence to create a stronger economic platform for the people of Scotland is demonstrated by the performance of other small independent countries, which shows exactly how we could strengthen the economic base of Scotland and have higher ambitions as a consequence.
If all that is true, why is it that, since January, Scotland’s unemployment figures have got worse, whereas the figures for England and Wales have improved?
In the past, I have cautioned Jenny Marra about her use of comparisons. If she looks at the annual comparisons on unemployment, which take account of issues right across the year and show the relative contribution of one year versus another, she will see that unemployment in Scotland is lower than it was 12 months ago and that employment is at a record high. How on earth can she not welcome the fact that employment in Scotland is at a record high as a consequence of the interventions of the Scottish Government and the measures that it has taken?
Independence would allow future Scottish Governments to combine powers over business investment, employment creation, taxation and welfare to secure stronger levels of economic growth, from which all the people of Scotland could benefit. It would ensure that economic policy was designed for the needs and opportunities of the Scottish economy, would provide greater flexibility in decision making and would offer an opportunity to rebalance our economy.
Our economic case for independence has at its heart a plan to improve business conditions and to reindustrialise Scotland through initiatives such as using our new tax powers to support high-value manufacturing and key sectors that are vital to the Scottish economy; boosting innovation through the establishment of an innovation agency; encouraging and motivating greater private sector investment in research and development; integrating skills and employability by bringing together job matching, employability training and career guidance; improving access to finance through a Scottish business development bank; and expanding our international presence and reach by using a network of overseas embassies that will be dedicated to boosting Scottish exports. Those are just some of the measures that the Government of an independent Scotland could take to strengthen our economic foundations.
Does the cabinet secretary support the creation of an innovation agency regardless of the result of the referendum?
I would want an innovation agency to be able to make a discernible impact on the performance of the economy by working with the Government to use the tax powers that would be available to the Government of an independent Scotland to encourage and incentivise the development of innovation policy and innovation delivery in Scotland.
I am surprised that Mr Brown is not au fait with the fact that we have already taken forward a range of innovation centre proposals that are supported through the Scottish Further and Higher Education Funding Council, Scottish Enterprise and Highlands and Islands Enterprise. Good work is already being done within our existing powers, but we are still operating at a level at which the Scottish economy gets only a quarter of the level of private sector R and D investment that the economies of comparable countries get. Therefore, we need to have the tax powers of independence to ensure that we can strengthen the operation of the Scottish economy and to encourage and motivate such investment.
The cabinet secretary mentioned taxation. Can he tell us what the corporation tax rates are in Scandinavia and Germany? Can he point to anywhere where lowering corporation tax has created full employment, as he claims that he can?
Perhaps Gordon Brown should have reflected on that point when he reduced corporation tax in the UK. Of course, Neil Findlay and Gordon Brown are notionally joined at the hip in the no campaign.
We could also seek the removal of barriers to competition such as the current air passenger duty scheme. However, although the UK parties recommended the scheme for change, they have failed to deliver that.
It is, of course, a scandal that despite Scotland’s being one of the richest countries in the world, an estimated 30,000 additional children in Scotland have been pushed into poverty in the past year—in part due to the UK Government’s welfare changes—with a further 100,000 facing that prospect if we are not empowered to change course.
Those are some of the opportunities that we have to change Scotland’s economic direction as a consequence of winning the powers of independence.
We will do all that using our currency, the pound. Today, that is what the vast majority of people in Scotland want us to do. Today’s finding from the social attitudes survey shows that 68 per cent of people want an independent Scotland to use the pound in a currency union. Far more people believe that there will be a currency union, despite the bluster of the no campaign, which we hear all about in the chamber on a daily and weekly basis. [Interruption.]
Order.
Only independence provides us with access to the levers of responsibility that will enable us to put Scotland’s economy on the right footing to tackle the long-term challenges of inequality and the need to secure greater prosperity for the people of Scotland. One of the best examples of that is the steps that the Government can take on childcare. Under devolution, we are investing a great deal in childcare, but only independence allows us to redirect to childcare in Scotland the resources that are currently invested in the Trident nuclear missile system and, crucially, to reap the rewards of that through investing what the tax system generates in the public finances of an independent Scotland. [Interruption.]
Order.
Those are some of the choices that are available to us if we are prepared to take the step of supporting independence in the referendum in September.
We have heard a great deal from the other parties about promises of further economic powers if there is a no vote in September. It will not be lost on any of us that even some of the proposals that have been set out by the UK parties were already set out by the Calman commission but have not been delivered to the people of Scotland. Why should we have any confidence that any of those powers will come to us in due course?
The people of Scotland have the opportunity in September to take responsibility into their own hands to build on this Parliament’s record of taking decisions about the future of the people of Scotland that are based on their needs and aspirations. Independence gives us the chance to link all the remaining powers that are currently being misused by Westminster and use them properly for the benefit of the people of Scotland to create the prosperous and just society that all of us want to live in.
I move,
That the Parliament agrees that Scotland can be a successful independent country and that, while Scotland is among the wealthiest nations in the world, levels of inequality are too high; recognises the improvements in Scotland’s economic performance that have resulted from transferring limited powers to the Scottish Parliament, and believes that this demonstrates that decisions about Scotland’s economy are best made in Scotland by the people of Scotland and that independence presents new opportunities to build a more secure economy because for the first time ever Scotland will have the job-creating powers and an economic policy that will put Scotland first.
14:32
This must be the cabinet secretary’s third or fourth attempt since the white paper at an economic plan for independence, so we cannot accuse him of not trying. However, with today’s effort, he really has nothing new to say—he is simply rehashing his previous failed attempts. It is rather like one of those disappointing greatest hits albums that, when we get them home, turn out to be full of old songs that were flops the first time round.
I suppose that we should be glad that today’s plan is at least held together by staples rather than a paperclip, but there are few other improvements. It largely covers policy areas where the Scottish Government already has power, such as education and training, childcare, infrastructure investment and the promotion of renewables and innovation.
The plan makes assertions about economic benefits that are evidenced by nothing except references back to the Scottish Government’s own previous documents, which make the same assertions. It includes now you see them, now you don’t policies, such as the development bank, which has been launched and relaunched on a number of occasions. It repeats figures about, for example, the economic impact of childcare—figures that do not add up and which the Government has already had to admit were simply made up without any modelling. Today, we found out that the Scottish Government also had to admit that its figures on productivity, employment rates and migration have also been made up without any economic modelling.
The plan talks about powers to incentivise growth and job creation. The cabinet secretary spoke about that at length again today, but yet again the only actual policy that the plan outlines is a 3 per cent cut in corporation tax, which it claims could create 27,000 jobs. That claim does have some modelling behind it, which was published three years ago, and I asked the Scottish Parliament information centre to have a look at it. SPICe tells us that not only are the calculations based on 2006, when the corporation tax rate was 30 per cent, but—by accident or design—the Scottish Government used the headline rate change of 3 per cent in its jobs calculation when it should in fact have used the effective rate change of 1.2 per cent, by its own calculation. To quote SPICe:
“If the effective rate change was used instead of the change in headline rate, then the number of additional foreign direct investment jobs would be 60 per cent fewer than in the Scottish Government’s analysis.”
Most of the claims in the plan have no credible figures behind them at all, and where they do have figures behind them, the Scottish Government has got its sums wrong again. We should compare those hollow promises with the 800 jobs that were secured this morning by another Ministry of Defence order for the Clyde—real jobs building real ships in the real world.
If Mr Swinney’s assertions about the benefits of independence had any credibility, surely those in the businesses that he says would benefit from the increase in economic opportunity would be convinced of his case, but they are not. Big financial companies remain unconvinced—companies such as Standard Life, which employs 5,000 people in this city, managing £254 billion of assets for a customer base 90 per cent of which is situated in the rest of the UK. It told us just last week that, after five months, it has had no answers to its concerns about independence and its preparations to move business and personnel out of Scotland continue.
Large manufacturing companies remain unconvinced, too. For example, the chief executive of the Weir Group, Keith Cochrane, recently said that material issues for the company had not been addressed and that independence would damage investment in Scotland, not help it. Companies in the energy industry, which is so beloved of the Scottish Government, remain unconvinced too—companies such as Infinis, which last week put its current wind power developments in Scotland on hold until after the referendum.
Small and medium-sized companies remain unconvinced—companies such as Endura, which I met a couple of weeks ago. It designs, makes and sells across the world top-of-the-range cycle wear from Livingston. It marries innovation, technology, R and D, design and fashion to compete in a global market. It employs women and graduates and it clothes the top touring cycle team in the world. That company does everything right, and it is adamant that a yes vote would require it to start moving operations and jobs to Europe on September 19.
That is how unconvinced Scotland is of the premise that independence will create economic opportunity, and the past week can only have increased concerns. Nothing is more fundamental to economic opportunity than a stable economic base, and nothing is more fundamental to that than a stable currency. No matter how glittering an image of the opportunities of independence the cabinet secretary asks us to dream of, as long as he has no answers on currency, his whole proposition has feet of clay.
Would the member care to comment on the announcement by Alistair Darling last year on “Newsnight”, when he said:
“A sterling zone is in the interests of Scotland and the rest of the UK ... If you have independence ... of course a currency union is ... desirable”
and
“logical.”
Of course a currency union is desirable. I desire a currency union as well. That is why I will vote no next month, and that is why Alistair Darling will vote no next month.
The First Minister, writing in the Sunday press this weekend, said:
“The language of politics can be ... instructive and deeply revealing as to the motives and priorities of individuals, parties and campaigns.”
How true. So what of his language on currency?
“It is our pound and we’re keeping it, come what may.”
“No currency union, no debt.”
That is indeed deeply revealing, because it is not the language of someone whose motive is to liberate the Scottish economy. It is the language of someone threatening to take the Scottish economy hostage and blow it up if he does not get his own way. What it promises is a Scotland without its own currency, without a central bank, with no say whatsoever on monetary policy, and without any credibility with lenders. That is a recipe for impoverishment, not a plan for jobs.
The National Institute of Economic and Social Research summed up the situation coolly last week. On sterlingisation, it stated:
“This is likely to have important consequences for Scotland’s financial sector, and therefore its capacity to export financial services, its new balance of payments and general economic prosperity.”
In other words, 200,000 jobs in the financial services sector and 15 per cent of our exports would be in jeopardy, just for starters.
As long ago as December, the economist David Owen of Jefferies LLC told us that walking away from debt would raise the cost of borrowing by 5 per cent. Investment would be hit, public finances would suffer and mortgages would go up.
What is more, membership of the European Union requires a currency and a central bank, so a sterlingised Scotland would not be able to stay in the European Union—[Interruption.] Scottish National Party members may scoff, but if they can explain to me why the European Union would break with its whole history and allow in a country without a central bank or its own currency, I would be very interested to hear them.
Even the Scottish Government’s own fiscal commission dismissed the option of sterlingisation out of hand, and yet that is now the Scottish Government’s desperate fallback currency plan. Perhaps Mr Swinney should direct his boss the First Minister, rather than the rest of us, to read what the fiscal commission has said. If the First Minister had read it, he would not describe the option as “quite attractive”.
The most irresponsible thing about the currency car crash is that the potential victims are not the banks and businesses of Scotland but ordinary Scots. They will not be able to make the higher mortgage payments, move their money out of Scotland to somewhere else or up sticks and follow jobs if companies relocate them.
I believe—I say it again—that Scotland’s best economic prospects lie in the currency union with the rest of the United Kingdom and with the Bank of England as lender of last resort, just as I believe that our best platform for economic success and full employment is a single energy market; a UK-wide financial services industry; a home market of 63 million people with open unfettered borders across our countries; continuing membership of the European Union but not the euro; MOD contracts such as the one for aircraft carriers and the one that we heard about this morning; and access to UK-wide research funding for all our universities.
Those are things that we have; only independence places them in jeopardy. That is why I lodged the amendment and why we should vote positively, proudly and resoundingly no on September 18.
I move amendment S4M-10769.1, to leave out from “can be” to end and insert:
“benefits from being part of the UK currency union, which is one of the oldest, strongest and most successful in history; considers that keeping the pound and the current arrangement within the UK economic and political union is in the best interests of Scotland and that the only way to keep the pound on present terms is to vote to stay in the UK; believes that Scotland benefits from being part of the deeply integrated UK economy, which is the third largest economy in Europe and the sixth largest in the world; considers that being part of the large and diverse UK economy provides strength and stability to Scotland’s finances; believes that, as part of the UK economic union, Scotland is afforded protection from unexpected economic and financial shocks; considers that Scottish businesses have unfettered access to a domestic market 10 times the size of Scotland’s population and that it is imperative that this remains the case; believes that Scotland benefits from being part of an integrated economic union and that the pooling of tax income ensures that public spending in one part of the UK is not exclusively dependent on the taxes raised in that area, meaning that, if one part of the UK is disproportionately impacted on by an economic downturn or slow growth, public services in that area are not forced to assume all of its impact, and considers that the best future for Scotland is for a Scottish Parliament with more powers and enhanced accountability within a strengthened union”.
14:43
I begin on the issue of currency, specifically with regard to my intervention on the cabinet secretary during his opening remarks. The official Scottish Government position, as set out by Mr Swinney yet again last week, is that if we do not get a currency union we will simply walk away from the entirety of the debt. It is one thing for a politician to be a bit reckless and say something like that, but it is quite another for economists to say it. The question that I put to Mr Swinney in my intervention was very specific: do all members of the fiscal commission working group, including its two Nobel laureates, support that particular argument?
We know that the fiscal commission working group has recommended a currency union, but that was not the question that I asked. Does the working group support the Scottish Government’s assertion that Scotland could simply walk away from the entirety of the debt were there not to be a currency union? I have read the fiscal commission working group’s reports and published statements, and the minutes of its meetings, and I have not been able to trace anywhere a specific comment from the group saying that all its members think that that assertion is a logical, intelligent or even correct thing to say or do.
I understand—at least it was reported in the press at the weekend—that the chair of the fiscal commission working group will give a keynote speech on Monday of next week. I ask the cabinet secretary again whether, in that keynote speech, or even before it, the Scottish Government will publicly make a firm statement that every member of its working group supports its argument. If they do not support it, the Government is standing pretty much by itself. Economists have pointed out that the Government’s position is not logical. Even economists who support independence cannot support that particular assertion and claim by the Scottish Government. If the Government cannot make that firm statement, its position on currency is even weaker than it has appeared to be over the past couple of weeks.
I move on to the substantive part of the Government motion and the economic growth that the Government says that it will be able to achieve were we to separate. There is a gaping hole in the Scottish Government’s position, which is that it has been unable to say at all which big-ticket industries are not coming to Scotland now because of the constitutional set-up but will suddenly all come to Scotland if we are independent. What big-ticket industries are being held back by our being part of the United Kingdom and are desperate for Scotland to become independent? What actual hard policies—not soundbites or claims—will be brought in that we could not already introduce and which will make a stratospheric difference?
Mr Brown is probing to find out what industries are not coming to Scotland. His colleague the chancellor told us that various industries would not come because we were having a referendum debate, but he was proved comprehensively to be speaking nonsense as a consequence of the performance of our economy. Therefore, why does Mr Brown not accept that the “Outlook for Scotland’s Public Finances and the Opportunities of Independence” as well as the economic levers paper and the white paper, which were published in November, contain all the details and material that he is looking for?
Unfortunately, I have read the white paper, the reindustrialisation of Scotland paper and the 10 greatest hits paper that came out this morning. I have read every piece of paper that the Scottish Government has produced and the answers are not there.
It is all there.
The answers are not there. Let me give a simple illustration. [Interruption.]
Order, Mr Swinney.
If the cabinet secretary wishes to make an intervention, I am happy to take one.
Mr Brown has reeled off all the documents that he has read, so why does he not just report to Parliament on their contents so that Parliament can hear about that rather than simply repeat a speech that supports his narrative in the debate? Let us deal with the material that the Government has published in all those documents to support the arguments that we have set out.
It is a bit rich to accuse me of repeating a speech—mine is not a repetition and at least I write my own speeches.
The cabinet secretary asked for the detail, so I will focus on that. The Government says that it will have a Scottish business development bank. The cabinet secretary announced that a year and a half ago, when we were told, “We’re going to do this come what may.” It was reannounced in the budget in September last year and then quietly dropped in March this year, only to resurface a couple of months later as a big idea on what we are going to do. The Government has no credibility on that particular issue.
We have heard about corporation tax, on which no modelling has been done since 2011. The Government has completely ignored the actual corporation tax of the United Kingdom.
Oh, come on.
If that has been done since 2011, I am sure that the cabinet secretary can tell us. The Government says that it will take 20 years for its headline figures to work and it assumes zero response from the rest of the United Kingdom to Scotland reducing its corporation tax.
The Government’s credibility is withering by the day. It has no answer on currency. All of its financial projections rely on high oil income, every single year of independence. The Government tells us that the high years are actually conservative estimates. It has no real plan for economic growth; it has a group of soundbites that are not convincing the Parliament and which I do not believe will convince the people of Scotland.
I move amendment S4M-10769.1.1, to insert at end:
“; notes that, in May 2014, the Scottish Government published Outlook for Scotland’s Public Finances, in which it claimed that an independent Scotland could be £5 billion a year better off as a result of increases in productivity, employment rate and population, and calls on the Scottish Government to release the details of the modelling and workings on which this claim was based, particularly the detail of policies that would lead to increases in productivity, employment rate and population”.
14:49
I welcome the debate. Over the recent recess, I have been out knocking doors—as I suspect we all have—and speaking to many people across the area that I represent. I have been keen to make the point that all accept that Scotland could be an independent country. As the cabinet secretary said, that is now universally accepted. Surely no member who is present would suggest that Scotland could not be an independent country.
We know that the Prime Minister has said that it would be wrong to suggest that Scotland could not be a successful independent country and that Ruth Davidson, the leader of the Scottish Tories, has said the same thing. Alistair Darling has also said the same thing, although he seemed somewhat unwilling to get to that place in a recent debate. Michael Moore has said the same thing. Indeed, the permanent secretary to the Treasury, Nick Macpherson has said:
“If there is a yes vote, Scotland will still be a prosperous economy”.
Of course, they have said that because it reflects what others are saying. The Financial Times has said that Scotland is richer than the rest of the UK and in the top 20 countries globally in terms of gross domestic product per head. Standard & Poor’s has said that, even excluding North Sea output, Scotland would qualify for its highest economic assessment. The head of the Institute for Fiscal Studies, which is often cited in debates in the Parliament, has said:
“The statement that this is a rich and successful economy is one that I entirely agree with.”—[Official Report, Economy, Energy and Tourism Committee, 5 March 2014; c 4072.]
There is other evidence out there.
When Jamie Hepburn is knocking on doors in his constituency, do constituents ask him what his plan B on the currency is and is he able to answer the question?
It might surprise Mr Rennie to find that currency is not an issue that comes up that often when I knock the doors. [Interruption.] I see that Mr Brown is laughing. I suspect that I have knocked rather more doors than he has over the past few weeks.
The question is not so much whether we could be an independent country but whether we should. I will explore some of the points that come up on some of the doors, because I will go on to talk about some of the people with whom I engage in the constituency.
A message I have heard much of from the no campaign in recent times is that we are in the best of both worlds with a strong Scottish Parliament and the strength and security of the UK, so let us examine the no campaign’s best of both worlds, because that can mean something only if it means something to people on the ground.
As part of the UK, we are in a society in which the wealthiest 10 per cent of households own 900 times the wealth of the least wealthy 10 per cent. The UK is one of the most heavily indebted nations in the world. With the exception of Italy, it has had the weakest economic performance of any G7 nation.
The UK also has one of the most regionally unbalanced economies in the world. I do not need to remind Mr Rennie, who has stepped away from his desk, that at the end of last year, his colleague Vince Cable, who is himself a London MP, described London as
“a giant suction machine draining the life out of the rest of the country”,
even though there is no sign that he or his Government will do anything about it.
Will Jamie Hepburn give way?
Not at the moment; I have a lot to say today.
I also question the idea of the best of both worlds. How do those who are struggling to find work or those who are in work but do not have enough to get by—those who worry that their hopes and ambitions for their children will not be achieved and those who look to the future with some uncertainty—relate to the idea of the best of both worlds?
How can members argue that we are better together and in the best of both worlds when the chancellor is committed to an additional £25 billion of cuts to public spending if his party is re-elected in 2015? How can Labour members argue that we are better together or in the best of both worlds—
Will Jamie Hepburn give way?
No, I will not.
How can Labour members argue that we are better together or in the best of both worlds when, like the Tories, their party has said that it is wedded to austerity if it is elected in 2015? Ed Miliband said that Labour will cut spending.
How can we be better together and in the best of both worlds when Oxfam recently set out that the UK’s five richest families now own more wealth than the poorest 20 per cent of the population?
How can we be better together and in the best of both worlds when a UK Government that we did not choose is imposing a welfare reform agenda that is resulting in 100,000 more children living in poverty and driving thousands of families in Scotland to food banks?
Will Jamie Hepburn give way?
No. I have a lot to say today, so I will not give way.
We know that if we remain part of the UK, cuts are ahead. We know about the austerity agenda and the disinvestment that is planned for the national health service down south, which will reduce the amount that we have to spend on devolved areas. The Labour Party in Wales understands that position. Mark Drakeford, the Labour Minister for Health and Social Services, has said:
“That is what the fundamental problem is here: we have a Westminster Government that believes in shrinking the state, which believes in doing less through the public realm, and passes less money down to us in order to be able to do it.”—[Record of Proceedings, National Assembly for Wales, 17 June 2014.]
Will the member give way?
No. I am in my last minute.
That truth for the Welsh Assembly Government is true for us here. That is the future that we face if there is a no vote. With less to spend on public services, that will damage our economy.
Independence gives us the chance to move our economy forward, to give more people more opportunities in Scotland so that we can match the performance of other similar-sized independent countries in terms of productivity, population growth and employment. We will generate £5 billion in extra tax revenues within the next 15 years, to say nothing of the fairer and more prosperous society.
The Scottish Government has pledged to do things such as transform childcare with its radical proposals, establish a fair work commission to ensure that work pays and helps to improve working lives, and support Scottish industry with an industrial strategy to strengthen, boost and promote our existing base. Those are some of the opportunities that we will have with independence. Those are some of the opportunities that we will have if Scotland votes yes in just over a month’s time.
14:55
Jamie Hepburn should get out a bit more if he thinks that people are not talking about the currency.
I suppose that we should be grateful to the Scottish Government for this rehash of the white paper. One of my constituents contacted me this morning because he had got in touch with the Scottish Government and had been told that more copies of the white paper would be available in five weeks. We should be grateful.
The only new thing that we heard today is that Trident is going to pay for childcare. Last week I had a long list of all the things that Trident is going to pay for, and now I can add childcare to that list.
All that we have had today is three kinds of assertion. We have heard the misleading ones, such as how Scotland has raised more in tax revenues. That is true but, of course, we did not hear about the fact that we have more public expenditure. In the last year for which figures were available, we raised £700 more per head in tax in Scotland because of the oil, but we received £1,200 more per head in public expenditure.
Many of the assertions that have been made could be delivered now. They are not problematic; it is just that they are not being delivered.
Other assertions were made about what would happen around increased productivity, for example, but there was absolutely no detail or explanation of how that will happen. The only specific policy that we got was the folly of once again outdoing the Tories on corporation tax. Since John Swinney will soon be standing up and telling me about Gordon Brown, he should know that Labour is committed to increasing the rate of corporation tax by 1p. In spite of what his fiscal commission tells him about the folly of a tax that is 3p below the UK rate, he is hell-bent on doing it. He should look at what happened in Canada. When it made a big cut in corporation tax, business hoarded the money and there were hikes in executive pay. John Swinney should think again on that.
The reality is that John Swinney’s economic objectives and dreams depend on secure currency arrangements and sound public finances. In both those key regards, we are better off now than we would be. We already have a currency union and the benefits of a deeply integrated UK economy without borders. In a new book this week from the David Hume Institute, David Bell reminds us that GDP falls by 5 per cent because of the border effect. We should remember that 70 per cent of our exports go to England and 74 per cent of our imports come from England. In contrast, 14 per cent of UK exports come here and 8 per cent of its imports come from Scotland. That puts into context the issue of transaction costs that we keep hearing about when we are talking about the currency.
Will the member give way?
I have no time at all.
I know that the cabinet secretary has a great deal of respect for Gavin McCrone and some of the cabinet secretary’s colleagues quote him on the oil fund. I will quote Gavin McCrone—not George Osborne or Ed Balls, or anybody else. Gavin McCrone said at the Finance Committee:
“The problem that I see is that I cannot imagine a Chancellor of the Exchequer for the remainder of the United Kingdom, with no electoral responsibility for Scotland, being prepared to put taxpayers at risk in the rest of the country for the sake of Scottish debt or bank debt in Scotland.”—[Official Report, Finance Committee, 7 May 2014; c 4107.]
It seems to me to be infantilism on the part of the Scottish Government for it to say, “We have a sovereign mandate” while not recognising that other countries also have a sovereign mandate. Peter Jones made a devastating critique of that attitude in The Scotsman this morning.
At the same Finance Committee meeting, John Kay said that one of the reasons a currency union will never happen is that the Scottish Government could never accept the terms. It would be bye-bye to the cut in corporation tax and bye-bye to the £3 billion in extra borrowing that John Swinney wants in 2016.
We know what plan B is: it is sterlingisation. We were told last week in a devastating and important report that the banks would be off to England and there would be much higher rates than the higher interest rates that we would already have—and people have questioned whether that would be acceptable to the EU. Remember that 15 per cent of our exports are financial services. We have heard a lot of rhetoric today about exports, but that is the reality of a key export sector in the event of Scottish independence.
I could have spent my whole speech quoting independent experts on the fiscal situation: the Institute for Fiscal Studies, the Centre for Public Policy for Regions, Citigroup, the Pensions Policy Institute, Brian Ashcroft and Martin Wolf. I do not have time to do that, but I will quickly give two quotes. First, Angus Armstrong and Monique Ebell said:
“An independent Scotland is likely to require a more restrictive fiscal stance than proposed by the coalition government for many years.”
Secondly, Rowena Crawford and Gemma Tetlow, also of the National Institute of Economic and Social Research, have said:
“our broad conclusion—that Scotland faces a tougher long-run fiscal challenge than the UK as a whole—is robust to a variety of alternative, sensible assumptions.”
The spending commitments that are the basis of the Scottish Government’s appeal to the Scottish people are a cruel deception on the Scottish people, because the reality is that under independence in 2016 we would lose hundreds of millions of pounds right away in up-front corporation tax. The childcare money has to be up front as well—obviously we support the objective of the childcare policy—although of course Trident is paying for that, and a hundred other things as well.
Today’s paper mentions overseas embassies. We have a body called Scottish Development International, which already does all that for us, but apparently we now need to pay for 90 embassies in order to have exports abroad.
We would have the loss of the pension bonus. Remember that we get £500 million more for pensioners in pension benefits in Scotland than our population share would dictate. The demographics will accentuate that particular problem. Public sector pensions are never mentioned, but there are more public sector workers in Scotland. That is covered by the UK, but it would not be in future.
It seems to me that we will not hear very much more about the economy from the Scottish Government over the next five weeks. It will be all the warm words about how we can do this and how we will not have the Tories any more. The reality is that what we will have for the next five weeks is project wish and project scare from the yes campaign, because project jobs and project prosperity are holed beneath the water line.
15:02
I am pleased to be given the opportunity to contribute to this timely debate, as I believe that the voters who will vote on 18 September are really interested in knowing about the strengths of the Scottish economy.
For far too long, in order to keep Scots in their place and in order for Westminster to dictate what it thinks is best for Scotland, we have been led to believe that Scotland is too poor and too weak to be the strong, vibrant and growing economy for all our people that it has the potential to be.
While last Tuesday on television Alistair Darling could not bring himself to stand up for Scotland and his constituents and agree that Scotland can be independent, we know that he has said that in the past. For example, when asked in The Guardian in 2012, he said “Of course” it could. On 27 May 2011, Ruth Davidson said:
“Scotland is big enough, rich enough and good enough to be an independent country.”
The former Secretary of State for Scotland, Michael Moore, said:
“You’ll never hear me suggest that Scotland could not go its own way.”
Even Alistair Darling’s pal, Nick Macpherson, the permanent secretary to the Treasury, said that if there is a yes vote, Scotland
“will still be a prosperous”
country, as stated in the Sunday Post in 2014.
This seems to be the recurring theme of many of the speeches from the SNP benches, so perhaps we could deal with it. Does the member accept that all the people whom she quoted said those things, but they all also said that Scotland’s prospects were better as part of the United Kingdom?
I was trying to point out that while they say that Scotland could be a prosperous country, of course it should be a prosperous country.
Jenny Marra rose—
Sit down, Ms Marra—I want to continue.
Members of all the better together parties know that Scotland can be an independent country and currently it more than pays its way within the union and so has the potential to do much more and release the wealth of our resources to the benefit of all our people. Yet we still hear too many in the unionist camp say that we are too small and not capable of controlling our energy industry in particular and the oil and gas sector. I ask the better together folk, which other country has discovered oil and gas and been poorer than it was before it discovered it? Tell me that, Mr Gray.
Will Maureen Watt give me one quote in which someone who supports the case for the United Kingdom has said that Scotland is too wee, too poor and too stupid, or did she just make that up?
I have not made it up. Every time that they say we are not capable, that is the implication that they are making.
The way in which successive Westminster Governments have mismanaged the oil and gas industry is plain to see. They have not only continually underestimated and underplayed the size and benefit of the resource, but failed miserably to use the income from it to benefit the people of the UK—never mind Scotland—or to see that it would benefit future generations. The UK and Iraq are the only two countries that have not set up an oil fund for the benefit of future generations.
Scotland has 60 per cent of Europe’s oil reserves and about 40 per cent of the national gas reserves, but Sir Ian Wood’s UK review of maximising recovery said:
“clear views were expressed that fiscal instability has been a significant factor in basin under-performance.”
That is not surprising, since there have been numerous changes to the fiscal regime in the North Sea over the past decade and 14 UK oil ministers in the past 17 years—three of them in the past four years. That is hardly a situation in which energy ministers can get to know the industry and understand its long-term needs. That is why the people in Scotland are best placed to manage this resource: they know about it.
Professor John Paterson of Aberdeen university
“said he believed an independent Scottish government could offer more predictability to the industry rather than less.”
Tony Hayward, former chief executive of BP, said:
“Our industry is very good at working with whoever happens to be in power”.
Ed Daniels, chairman of Shell UK, said that it was up to the people of Scotland and that Shell UK would work with whoever.
That is why 64 per cent of all North Sea oil and gas workers are likely to vote yes. The recent 20th Aberdeen and Grampian Chambers of Commerce oil and gas survey, of June this year, said that out of 700 firms surveyed, more believed that independence would be positive, rather than negative.
So, with the value of oil still to be exploited said to have equal value to that already discovered, of course an independent Scotland has a bright future. It is very interesting that the latest edition of the Investors Chronicle stated that it believed that
“Westminster has been deliberately downplaying the potential of the UK Continental Shelf ... ahead of September's referendum on Scottish independence.”
Indeed, the Investors Chronicle said that that was undermining investment and the buying of shares in certain oil companies. That is absolutely disgraceful.
It is little wonder that each and every argument that the better together people have put forward is being batted out of the field and that Opposition members are focusing solely on currency—that is the only tool that they have left in the box and they can speak of nothing else. Yet it is absolutely clear that if the UK Government does not accept the common currency, it will no longer be a petrocurrency, and that will be detrimental to the rest of the UK.
You must close, please.
It is very clear that Scotland can be an independent country and I look forward to it being so.
15:09
I admire Maureen Watt’s passion. She clearly believes that national independence is something that she wants and Scotland deserves, and I admire and respect that. However, she defends Scotland against an allegation that has never been made—something that is a fabrication. We have never said—nobody has ever said—that Scotland is too poor, too wee and too stupid. That allegation has never been made and the fact that Maureen Watt was unable to come up with one person who has said that is clear evidence that she is defending Scotland against something that does not exist. Therefore, I believe that that passion is passion to a fault.
It is passion that is leading nationalists to believe that they should never, ever question the concept of independence, whether it is on corporation tax, on shipbuilding or on the pound. They refuse to accept that there are any weaknesses in their argument. I propose to take members who are in the chamber through some of those arguments, to try to flush some of them out.
Can Willie Rennie talk about the weaknesses in his argument?
Just the main ones.
Jim Eadie said, “Just the main ones.” I will proceed to set out the positive case for the United Kingdom because that is what Maureen Watt is also arguing—that better together should make that case. I will do that this afternoon.
My first point is on the currency, which is one of the most successful parts of the apparatus of the UK. It means that businesses here in Scotland can trade right across the UK, with limited barriers and with no transaction costs. That means that they have a great opportunity to expand their businesses. The UK parties have clearly said that if Scotland goes independent, the currency arrangement will change for three simple reasons.
First, there is the temporary nature of the currency as proposed in the white paper. Within weeks of such a shared arrangement being set up in the Czech Republic and Slovakia it collapsed, so we can see the dangers of a temporary currency.
Secondly, the one-way insurance policy that has been set out means that Scotland expects the rest of the UK to stand as a financial guarantor for an independent Scotland when RUK would have no influence over what an independent Scotland would do. Also, the favour—the insurance policy—could never be returned, because of Scotland’s being one tenth of the size of RUK, which encourages a moral hazard. Therefore the one-way insurance policy will not work.
Thirdly, there is the explicit desire to diverge the economies of the UK by having a separate and growing economy in Scotland, apparently leaving behind RUK, with aggressive policies such as a 3p cut in corporation tax and £3 billion of extra borrowing. That, too, would create extra tension in the currency, which would pose significant difficulties.
Those are solid reasons—good reasons—why we are better off together in the United Kingdom. I know that John Swinney—like his boss—never admits that he is wrong. However, he thinks that he can play a dangerous game of bluff with the UK in trying to make us believe that he is unable and unwilling, and that it is not desirable, to set out a plan B. However, people want to know the answer. Despite what Jamie Hepburn said, that issue comes up every single day when I am out on the doors. Everybody is asking about the currency and they want to know the answer, but the people in the SNP are refusing to answer the question.
My second point is on shipbuilding. Today there was an order placed for three new offshore patrol vessels to be built on the Clyde, which will guarantee 800 jobs at BAE Systems. That is one of the clear benefits of being in the UK. I was at the aircraft carrier launch at Rosyth to see one of the biggest ships that the Royal Navy has ever built and it probably—
Will Willie Rennie take an intervention?
No, I will not, just now.
Those three new offshore patrol vessels could be the last orders that the Clyde ever receives if the people on the SNP benches have their way, because the facts are clear—[Interruption.] Those people shout and bawl, but the facts are clear.
Order. Allow Mr Rennie to be heard.
No complex warships for the UK have ever been built outside the UK. On that point, I will take an intervention from Mr Swinney to see whether he has an answer to that question.
Would Mr Rennie like to confirm that he has just issued, on behalf of the UK Government—just as his chief secretary colleague did this morning—a very clear threat to the people of Scotland about the future of shipyards?
The threat is quite clear. It comes from this SNP Government because it is proposing to create a separate country, and no country that is separate from the UK has ever received an order for a complex warship. It has never happened. Mr Swinney is posing the threat to the Clyde. No one else is. He could withdraw his plans right now, but the reality is that he is more than keen to progress with them.
Will Willie Rennie give way?
Will the member give way?
The member is in his last minute.
My final point is on corporation tax. For months, we have been asking for the detailed analysis that John Swinney has apparently made behind the scenes, but is refusing to publish. What will be the cost to the public exchequer of his plans for corporation tax? He is proposing a cut of 3p more than anything that a Tory Chancellor of the Exchequer in Westminster would do, yet he refuses to set out the cost of that.
Finally, I want to praise Mr Swinney on his opening remarks, in which he praised the progress that the United Kingdom economy has made. We have an extra 130,000 jobs over four years. In fact, that is probably much more than his plans on corporation tax will ever achieve. I therefore thank him for praising a policy that he said will never work, but which has resulted in masses more jobs for Scotland.
15:15
Today’s debate has thrown into contrast the difference between the aspirational case for a yes vote and the doom and gloom of the no campaign. I will give you a wee quote from Michael Portillo. On 27 February, he said that, if there were a referendum on Europe, the UK Government
“would use the same tactics they’re using in the Scottish referendum, in other words they would try and scare people rigid about the consequences of leaving the European Union.”
I think that we had a wee example of that in what Willie Rennie was attempting to do a moment ago.
On oil, which Maureen Watt talked about, what was it that Lord Healy said on 19 May this year?
“We did underplay the value of oil to the country because of the threat of nationalism”.
So, we have had our economy underplayed by unionists for many years. A lot of those arguments were used against a yes vote in the devolution referendum. It is just unfortunate that Labour has now jumped on the unionist bandwagon.
I had no intention of talking about the currency in my speech—I was going to talk about the economic opportunities of independence—but before I move on to the meat of the debate, I want to deal with sterling, because many of the unionists are obsessed with it and think that it is going to be the deal breaker.
On 31 July, Avinash Persaud, emeritus professor of Gresham College, chairman of Intelligence Capital and a former global head of currency research at J P Morgan said:
“Truth is usually the first casualty of political battles ... but 25 years in currency markets tell me that the No campaign’s argument that Scotland cannot keep the pound is false.”
He went on to say:
“Moreover, assuming Scotland continues to run a healthy external balance of payments, courtesy of 90 per cent of the UK’s oil and gas being in Scottish waters and other foreign currency earners like whisky and tourism, sterling liquidity will likely flow from the rest of the UK to Scotland. Scotland will be a net lender to England.”
Malcolm Chisholm quoted from the Finance Committee, but what did Professor Andrew Hughes Hallett actually say? He said:
“Given independence ... Scotland gets to add tax powers to the existing monetary set up. She would therefore be unambiguously better off: more policy instruments to serve the same targets—instruments that can now be designed to fit Scotland's specific needs, rather than the UK average.”
He added:
“Facing a tight general election in 2015, it is hard to believe that the UK government would in fact choose to deny a currency union when the consequences would be to make their own constituency worse off, while Scotland was made better off. People don’t usually voluntarily choose to shoot themselves in the foot.”
Did anyone give either written or verbal evidence to the Finance Committee to support the Scottish Government’s position that, if there were no currency union, it could simply walk away from the entirety of the debt?
That is exactly what Professor David Simpson said. Indeed, Dr Jim Cuthbert said that Scotland should be compensated by the UK for all the money that has been taken out of Scotland over many years.
The Cabinet Secretary for Finance, Employment and Sustainable Growth explored the economic opportunities that would open up to an independent Scotland, but unionist MSPs can say only what we cannot do, or hypothesise about how it would all probably end in disaster. Far better—they say—to let Westminster keep calling the shots and for us not to take responsibility for Scotland’s future into our own hands.
I have always been puzzled by the fact that many members in this chamber seem to be so unsure of their ability and that of their colleagues that they do not wish to have vested in this Parliament the powers to make Scotland a fairer and more prosperous society. With independence, the ability to make our own choices and decisions in the national interest would become the norm for Scotland, instead of our remaining shackled to a political union with Westminster where different priorities and policies and vested interested are entrenched.
Independence would improve Scotland’s economy by providing greater prosperity for businesses and citizens. I will run through some of those improvements. By moving economic decision making to Scotland, we would have greater control of policy making in crucial areas including taxation, employment, immigration, exports and industrial policy, which would provide more opportunities and improve our finances. We could improve the tax system by making it more efficient and effective, and by making it support key growth sectors. We could also collect a fair amount of taxes to fund stronger public services, thereby increasing our prosperity, as was set out in the Mirrlees review.
There would be opportunities for participation in company structures; improvement of labour relations can improve productivity and economic output. Indeed, productivity can thereby be improved by up to 10 per cent, as Scandinavia has shown. We would have a national convention on employment and labour relations to shape a new policy and to have a fresh start. We would have employee representation on boards to allow workers to contribute effectively, alongside management.
Independence for Scotland would ensure that we control immigration. The great success of the union in the 50 years since the war was to have net immigration of 2 million Scots. In 1900, Scotland had the same population as the Netherlands. The Netherlands now has a population of 16.1 million. That shows the difference in our economic prospects over those years.
International students contribute £779 million annually. If we allow more people to come and study here, more would want to stay and build our economy.
By diversifying manufacturing and investing more in research, Scotland could build on its industrial base. During the 10 years of Tony Blair, 37 per cent of all manufacturing employment in that industrial base was lost in Scotland—53 per cent was lost in Ayrshire. A Scottish Government would provide greater support for that process than Westminster. Examples of industrial development could include developing the Clyde for renewables activities similar to those that are undertaken at Belfast docks, development of new offshore technologies in the oil sector for international export, and specialisation in Scotland’s strengths in chemicals, computing, life sciences and so on.
We need to have full economic powers to develop an ambitious industrial policy and to reverse decades of relative decline under Westminster mismanagement. A yes vote would mean that business would have the full support of a global trading and investment network, there would be greater opportunities to support Scottish small and medium-sized enterprises that want to enter export markets, and there would be a focus on promoting the unique strengths of Scottish business in key sectors.
In addition, an increase in productivity would help to reduce inequality and the low-wage society, which does not provide the optimal environment for growth.
You must close.
We must tackle inequality in the same way that countries such as Norway, Sweden and Denmark have so successfully done.
I had so much more to say, but I was derailed by the sterling argument. Thank you for your patience, Presiding Officer.
You are welcome.
15:22
Central to the white paper is a plan to create what the Scottish Government refers to as one of “the most competitive” business environments in Europe. Central to that aim is Mr Swinney’s belief—I see that he is just leaving the chamber—in cutting corporation tax. He believes that it would create full employment, as companies flocked to Scotland’s low-tax economy. He wants to cut corporate taxes to 3 per cent below whatever level the UK sets. If he does that, a few things could happen. First, if Scotland cut tax and that attracted foreign investment—I dispute whether that would happen, but let us imagine that it did—does he not think that England and Wales would follow immediately, thereby wiping out his so-called competitive advantage? We would then be back to square 1 and all that he would have achieved would be a reduction of £350 million in cash for public services.
In those circumstances, what does Mr Swinney propose? According to the white paper, he would cut another 3 per cent below the rest of the UK and then the cycle would start all over again, which would be followed by a subsequent race to the bottom on wages and on terms and conditions, too.
Trickle-down economics has failed across the globe, yet it is an experiment that the Scottish Government would want to repeat in an independent Scotland. I fear that Mr Swinney has been reading too many of Mike Russell’s books. If that approach is such a great wheeze, why are the Germans, the French, the Scandinavians and others not doing it, too? Germany’s corporation tax rate is 30 per cent, and in Norway the rate is 28 per cent. Why are they not taking that action? Even Professor Stiglitz, who is Alex Salmond’s economic adviser, said of this policy:
“It is just a gift to the corporations increasing inequality in our society.”
James Daunt, the head of Waterstone’s Booksellers, said:
“It’s a dash to the bottom and it is insanity because personally I think schools and hospitals are rather good things. Somebody has to pay for them.”
Will Neil Findlay reflect on the fact that the previous Labour Government gave a 10p corporation tax rate to life sciences companies that placed their research, innovation and intellectual property in the United Kingdom? Is that something that the Labour Government should not have done? Does he regret that decision?
No one is arguing that we should not adjust taxes at certain times in the economic cycle. We are arguing that taxes should be consistent throughout the UK, in order to avoid tax competition.
Will Neil Findlay take an intervention?
No, thank you.
Does the cabinet secretary reject the comments of Professor Stiglitz and James Daunt? Does he know something that they do not know? Can he point to anywhere in the world where lowering corporate taxes has created full employment, as he says it will?
Of course, the cabinet secretary is also confident that an independent Scotland will become a member of the European Union. Is he aware that Scotland would, as a new member state, have to adhere to the deficit limit of 3 per cent of GDP, and that the Institute of Financial Services says that our deficit would be 5 per cent?
What about the currency? Let us for a second drift off into an imaginary world in which the cabinet secretary gets his way and we have a currency union. Mr Swinney has accepted that that would mean a loss of sovereignty. Does he also accept that it would hand control of and influence over interest rates, borrowing, regulation and all other areas that affect the currency to what would by then be the central bank of another country—that is, the Bank of England? Does he accept that the chancellor for the rest of the UK would control that? Does he accept that we would have no politicians at Westminster, and that the rest of the UK would sign off our budget and would want a say on our tax rates, benefits rates and more, in return for agreement to use the pound?
Will Neil Findlay take an intervention?
No, thank you.
What type of independence would that be? Why would anyone want to sign up to it? Jim Sillars was right when he said that the policy is “stupidity on stilts”. Has the cabinet secretary learned nothing from the eurozone crisis? Does he not know that the attempt at economic union without political union has been disastrous for working people in Greece, Portugal, Spain and other countries?
We have a choice on 18 September. We can keep the pound, avoid the mess that a sterling zone would bring and avoid having our budget, tax rates, benefit rates and financial regulation signed off by the chancellor of another country, or we can have the nonsense on stilts of a currency union. We can keep the Barnett formula and UK-wide redistribution whereby Scotland gets a greater share of public spending or, under independence, we can scrap the formula.
We can have progressive taxation, with a 50p rate for people who earn £150,000, or we can cut taxes and public services while rewarding big business. There was no mention of the 50p tax rate from Mr Hepburn, although it is something that he and other members who regard themselves as the Scottish National Party’s left should support. We never hear a word from them on any of that.
We can have a bankers’ bonus tax to fund youth employment, or we can let the bankers keep their eye-watering bonuses, as Mr Swinney would do. We can use procurement rules to ensure that contractors pay the living wage and end zero-hours contracts, or we can see the SNP vote down such measures again. We can use existing services, or we can spend hundreds of millions setting up a host of new agencies. Members should remember that it cost £180 million to centralise the police service. Surely the estimate of £200 million to set up a whole new state is pie in the sky.
Those are the choices that we will have on 18 September. I trust the Scottish people to make the right choice and vote no. That will be a no for change.
15:28
There is no doubt at all that Scotland will be a successful and prosperous country after independence, and I suggest that each and every member of a unionist party agrees with that, although unionist party members persist in talking down Scotland’s economic prospects, as we have heard them do this afternoon. I urge those members to abandon their “too poor and too stupid” arguments, which are not only dishonest, but are offensive to everyone in Scotland, and I ask them instead to consider this question: after independence, will they recognise the sovereignty of the Scottish people, or will they continue to dig their political graves with their tongues?
Will Mike MacKenzie give way?
No, thanks.
Since 2007, the Scottish Government has shown what can be achieved with good economic stewardship. In the economic race, we have competed more favourably than any other part of the UK except London, and we have done so without full economic powers—indeed, we have done so without any fiscal powers and with both arms and a leg tied behind us and hopping on one foot. All the while, Mr Swinney has maintained a balanced budget.
I am quite puzzled. Has Mike MacKenzie stolen Jamie Hepburn and Maureen Watt’s speeches?
Great minds think alike.
The question is whether we can maintain and, indeed, improve on this economic performance after independence. I believe that yes, we can, because having had a taste of good government, the Scottish people will accept nothing less. Yes, we can, because we in Scotland understand our economy’s unique challenges and opportunities better than anyone else, and for the first time we will have the full powers that are required to improve the situation. Yes, we can, because the Opposition parties in the chamber will be freed from the need to take orders from London and will have the opportunity genuinely to put their shoulders to the wheel and to abandon bad politics in favour of good economics.
In any case, it is not the often-quoted headline statistics that are the only matter of economic importance; the sharing of that wealth is also crucial. Although an independent Scotland has been ranked 14 by the OECD, this does not feel like a wealthy country to most people. Scotland’s enormous wealth is not being shared equally, and that inequality is itself a drag factor on our economy, limiting demand and the success of our businesses. Inequality is a challenge that we will be able to address properly after independence, so I hope that instead of denying that poverty exists, the Opposition parties will join us in our endeavour to make Scotland a fairer as well as a more prosperous country.
There is also the question of what we do with that wealth to improve our quality of life. It is no coincidence that Orkney and Shetland, the only parts of the UK with oil funds, also happen to score very highly in UK quality-of-life surveys. That suggests that public rather than private goods contribute more to quality of life than the Westminster mindset can imagine. Devolution of 100 per cent of the Crown Estate revenues, which will fall to us after independence, will be significant in tackling the regional inequality that many of Scotland’s island communities have faced for many generations.
The only economic argument that is left in the unionist arsenal is the sharing of risk, and that somehow bigger is better. However, we have just experienced the worst economic crisis since the great depression, and being big did not save the banks, the UK or the United States. Indeed, many small countries including Norway and Denmark did not experience the crisis at all. As for sharing of risk, we all know how that works: the poor are made to pay for the failures of the rich. Indeed, that is happening right now. That is how that so-called insurance policy has always worked, but it is not a policy that has ever served Scotland well.
Three chapters of the white paper “Scotland’s Future” are devoted to the economy. The plan is well thought out and credible, and it is informed by the thinking of the Council of Economic Advisers, which is by a long stretch the most formidable array of economic talent in the UK. In contrast, the no campaign has no plan beyond project fear; we have certainly not heard an economic plan from the no people this afternoon. Project fear is a plan that is offensive to many Scots, who are sick of being patronised in that way by unionist politicians.
With good political, economic and financial leadership, the scales are tipped heavily in favour of Scotland’s prosperity and economic success after independence.
15:35
There are 36 days until the pig-in-a-poke referendum—until Scotland is asked to have a leap in the dark, and Scots are asked to vote on the basis of assertion that is backed up with no evidence, on the basis of bluster from the First Minister, and on the basis that, if we vote yes, everything will be all right on the night.
People want answers, because they are being asked to make a fundamental decision that will affect every man and woman in Scotland, their children and grandchildren, and generations to come. If we get that decision wrong, we cannot go back and say, “We made a mistake—we have changed our mind.” We will be stuck with the consequences for ever. It is therefore right that we are having a debate on the economic and job implications of independence.
We have heard about what will happen in the defence industry. We know that there are worries in the financial services industries and that other companies are seriously considering what they will do if Scotland decides to separate from the United Kingdom.
It is right that we should also look at what will happen to prices and the money that we have to spend. For example, we know that companies that operate on both sides of the border in Ireland, such as Tesco, charge more for the same goods in the Republic of Ireland than they charge for those goods in the north of Ireland.
We also know what the people who know the retail market best have already said. We know that the chief executive of Sainsbury’s has said:
“we and other retailers will take a view of what the cost structure is ... there’s no doubt Scotland is a more costly country in which to run a ... retail business.”
The chief executive of Morrisons has said:
“the burden of the cost structure on business, that would potentially have to be passed through to consumer pricing, because why should the English and Welsh consumer subsidise this increased cost of doing business in Scotland?”
They are not the only ones who say such things; others say much the same.
The third element, of course, is the currency. I understand why Kenny Gibson does not want to talk about the currency and why the SNP wants to get off that debate. That is because it has no answers. However, the currency affects every single thing that we do. It affects how we buy our groceries and our house and how we pay our rent. It affects us when we buy goods and services, wherever that is, and it affects us when we go on holiday, wherever that is. It impacts on every single aspect of our lives, but we do not know for certain what currency we would use with independence. Alex Salmond can give us his opinion and make assertions, but he cannot give us a guarantee about the currency that we would use.
Can Hugh Henry tell me what the no side believes the currency should be if Scotland votes yes?
I do not believe that Scotland will vote yes, so why should I speculate? However, if Kenny Gibson is correct in his assertion that Scotland will vote yes, perhaps he should listen to some others in the nationalist ranks. Perhaps he should listen to some of his colleagues in the yes campaign, because it is fundamentally split from top to bottom. The Scottish socialists, who were founder members of the yes campaign, tell us that we should have a Scottish currency. The Scottish Green Party and Dennis Canavan, who is the chair of the yes campaign, tell us that we should have a separate currency. However, Alex Salmond is ignoring every single one of them.
It is not just members of those organisations who say that Scotland should have a separate currency. There are members of the Scottish National Party, including in the Cabinet, who say the same.
Rubbish.
“Rubbish,” says Paul Whitehouse.
Members: Wheelhouse.
Wheelhouse.
I will not go into what Mike Russell said about abandoning social democracy, decimating the welfare state, dropping taxes, issuing vouchers for education—[Interruption.]
Mr Russell.
I will merely concentrate on what Mike Russell said about a separate currency. Mr Wheelhouse said that my claim was rubbish, but Mike Russell said:
“Control of its own currency is a country’s most potent economic weapon. It allows governments to control the money supply, interest rates and exchange rates, all of which can have a profound and relatively rapid impact on our economic growth and international competitiveness.”
Therefore, it is not rubbish to say that members of the SNP have such beliefs. Mr Russell went on to say:
“There are simply no other methods by which the economy can be fine tuned and geared to meet the ever-changing and accelerating challenges of the information age.”
As he so eloquently put it,
“A country without its own currency is a country not only without a steering wheel, but also without brakes and an accelerator.”
Will you draw to a close, please?
The nationalists’ camp is split and they are worried that Alex Salmond is leading them to doom, so we can understand why long-standing nationalists such as Jim Sillars are so profoundly unhappy that they have been led up the garden path by a Scottish National Party that cannot deliver.
On a point of order, Presiding Officer. Can you advise me whether it is in order for the chief spokesperson of the Government to be absent from a debate on the economy that it has brought forward for what is now the fourth speech in succession? Is it in order for no member of the economy team to be here for that time, or is it just the case that a lack of courtesy is being shown to the chamber?
That is not a point of order, but you have put your point on the record.
15:42
For too long now, we have seen a major imbalance between the economies of Scotland, Wales, Northern Ireland and the regions of England and the economy of the south-east of England. Indeed, the south-east of England accounts for more than half of the annual economic output of the UK, and eight out of 10 jobs that are created in the UK are in London.
Historically, Scotland has lost thousands of young people to the south every year, and that risk remains even though our jobs market is better in comparison with the jobs market in most other areas of the UK. Currently, that unstable situation is out of our hands, and it inevitably creates a drag on attempts to improve our economy.
We know that Scotland’s public finances are stronger than those of the UK. Since 1980, on average, we have run a public sector surplus. If we had been in charge of our own economy in that time, there is every chance that, according to the “Scotland Means Business” report that was prepared earlier this year by Biggar Economics, our public finances
“would still be benefitting from a significant cumulative surplus”.
Another factor that we must take into account is the frankly appalling level of inequality in the UK. The UK is ranked 26th out of 29 advanced countries for inequality. That is clearly quite an alarming figure, but one that is perhaps unsurprising given the increasing poverty that exists thanks to Westminster’s economic initiatives. I will give an example. The low-paid lose out year after year as a result of Westminster’s refusal to peg rises in the minimum wage to inflation.
To give a comparison, in 2010-11 Scotland ranked 16th out of 29 for inequality. Given our high levels of GDP, our strong public finances and the fact that, for example, Scotland’s output per head is 10 per cent above the UK average, not to mention our oil and renewable energy resources, Scotland is one of the wealthiest countries in the world. The economic opportunities that would be afforded to us by independence would provide the choices to make inroads in reducing inequality and to build a fairer society. We would be able to peg minimum wages to ensure that the lowest paid are not cast further adrift, and we would, of course, take charge of our own welfare system, which would mean that we would never have negative and unproductive measures such as the bedroom tax imposed on those who can least afford it.
Let us not forget that Westminster still wants to make many more spending cuts and that independence is the only guarantee that we can choose not to impose those cuts. If Scotland was in charge of its own economy, we would design an economic policy tailored to Scotland and to our society’s needs that would benefit all sectors and ages in this country. We can transform our childcare system by providing the same number of hours of pre-primary education childcare as children receive in primary school at present.
Will the member give way?
The economic knock-on effect will be that more parents, and women in particular, will have greater choices and career prospects, thus increasing both jobs and tax revenue.
Will the member give way?
Ms Marra, I do not think that the member is giving way.
If the number of women in work increased by just 6 per cent, tax revenues would rise by about £700 million.
For those who are studying, we will certainly continue our policy of free education for Scottish students who study in this country, thus minimising the amount of debt that Scottish students have when they embark upon their careers. For those who come here to study, we will have the opportunity in an independent Scotland to examine the reintroduction of the post-study work visa, which Westminster abolished without considering Scotland’s economic needs.
Independence would put the Scottish welfare system back in Scottish hands. Cutting the bedroom tax would put roughly £50 a month back into the hands of more than 80,000 households. Every penny counts at a time when many of our poorest people are increasingly relying on food banks, and Westminster’s planned roll-out of universal credit is only going to make matters worse. By ensuring that the most vulnerable of our society have the financial support that they need, our economy will be stable from the ground up.
The ability to provide a fair and stable pension is another opportunity that independence provides. The UK has one of the worst records of state pension provision in Europe. As with the welfare system, Westminster ignores Scotland’s differing needs in terms of life expectancy. Indeed, it is more than likely that the state pension age will be raised to 70 if we remain part of the United Kingdom. The Scottish Government intends to increase the state pension by at least 2.5 per cent for the first independent Scottish Parliament. That is a start; Scottish pensioners will no longer be left alone to struggle to make ends meet.
We would also finally have the ability to set up an energy fund for future generations, a step that successive UK Governments have never taken due to the lack of long-term vision at Westminster. Scotland has over 60 per cent of oil reserves of all of the EU, not to mention the second biggest gas reserves, and companies in the energy industry are planning to invest more than £100 billion in the years to come. Having our economy in our own hands would protect the oil and gas industries from unexpected tax hikes by Westminster. An independent Scotland would provide stability and the environment to encourage long-term investment in oil and gas. Over the past few years energy bills have constantly risen for consumers and businesses alike. Independence can help us get the choices to stop and reverse that trend.
Taking control of our own tax system would allow us to encourage business and investment. Unlike the very limited tax powers being suggested by Opposition parties, an independent Scotland’s tax regime would mean that Scotland could choose to cut business rates, making it an attractive country for companies to retain their headquarters in and improving the opportunities for career progression—that logic speaks for itself.
In Midlothian North in my constituency—
I am afraid that you must come to a close, please.
Clearly, independence will bring us the opportunities that we need to ensure that our economy is stable and competitive while providing a solid foundation so that the most vulnerable are not left behind. Independence gives us the means to ensure that Scotland’s economy is run by Scottish voices for the betterment of the Scottish people.
15:48
I say at the start that I thought that, when Mr Findlay was talking about books, he was about to tell us that he got an economics book for his holidays but he has not coloured it in yet.
It was Bill Clinton’s team of advisers who said that the key to winning his first election was the slogan, “It’s the economy, stupid.” Just as that provided the basis for his victory, so will it be the basis for securing Scotland’s independence. Several events show that we are on the way but that we can and will do even more.
Last week, under the stewardship of Murdo Fraser in the Economy, Energy and Tourism Committee, we met senior people involved in social enterprises, of which there are now 509 in Glasgow alone and in which Scotland is one of the global leaders. That same day, in the evening, I hosted a reception on crowd funding, where we learned that the participation of small investors and clients in that process means that Edinburgh and Glasgow are now hot on the heels of London. Both situations, among many others, demonstrate the wielding of economic strength and power and the opportunities that arise from the people and the grass roots.
As has been mentioned, the chief economist’s report last week highlighted the strengthening of the Scottish economy, as did the Bank of Scotland report yesterday. Because of the stewardship of the finances, 2014 will be the strongest year of growth since 2007, despite the constraints of budgets. However, we can still—and we must—do more to achieve a fairer, more equal and more participative Scotland when it comes to jobs and incomes.
Great though the increasing economic contribution of the grass roots is, larger companies, be they in life sciences, renewable energy, manufacturing or tourism, combine to confront the myths that are proposed to dispel Scotland’s great economic opportunities.
The first myth is on currency. I will deal with it briefly. In 2013, Scotland was recognised by authoritative financial sources as potentially one of the richest countries in the world. In that year, Scotland had a trade surplus of £2.8 billion and the rest of the UK had a trade deficit of £29.5 billion. Over the past 30 years, Scotland’s average net fiscal balance has consistently been better than that of the rest of the UK, as has its current budget balance. A refusal to do a deal on sterling union would be just one contributory factor to the decline of sterling for the rest of the UK.
I turn to the second myth. As Maureen Watt mentioned, oil and gas is of course a significant contributor to Scotland’s economic opportunities. The Chief Secretary to the Treasury keeps chanting his mantra that oil is declining, so let us turn the question around. If that is the case, it will, in the unlikely event of a no vote, then apply to a continuing UK Government. In 2011-12 UK net borrowings were £120 billion, or £131.5 billion if we strip out Scotland’s offshore contribution. In 2011-12 the figure was £149 billion, and in 2009-10 it was £164 billion, applying the same criteria. That scenario may be unlikely, but in the face of the myth of declining oil those parties should tell us where they would make savage cuts or increase taxes to shore up the currency and to decimate the debt.
Will the member take an intervention?
No—I cannot just now.
We certainly know where those cuts would fall, and it would not be on the bankers’ bonuses.
Of course, UK ministers know that oil is not declining: witness Mr Cameron’s clandestine visit to the vast Clair ridge oilfield just two weeks ago, the exploration off Tiree and the cover-up of oil production—I stress the word “production”—30 years ago under production licence PL262 in the lower Clyde and Atlantic margins, in the early 1980s. That cover-up has been acknowledged by Michael Heseltine.
The UK Government continues to perpetuate those myths and others because it knows that Scotland’s contribution from food and drink, general exports and oil is required to reduce UK borrowings in an attempt to balance its books.
With the rest of the UK being without Scotland and then pulling out of Europe, I will encourage my children, along with other young people who sought jobs in London and the south-east, to consider coming home, and those who are being trained and skilled here to stay home. We have an opportunity to build a solid Scottish economy based on the economic strategy, which embraces the strong sectors that I have mentioned, and that will allow us to increase our working population and compete on employment and productivity. Young people, more apprenticeships, skills development and a situation in which more women are in management and in the workplace will underpin the economic strategy.
During the recess, I had the opportunity to meet innovators and businesspeople from China, Norway and elsewhere who are attracted to invest in Scotland because they see and sense the economic opportunities that exist here. In 2006-07 8 per cent of inward investment jobs in the UK came to Scotland; in 2010-11 it was 19 per cent; and in 2011-12 it was 18 per cent.
The member must come to a conclusion.
I began by quoting a former US president, and I will end by quoting the current president. Not only can Scotland be a successful independent country, it will be a successful independent country—“Yes, we can”, and yes, we will.
15:55
I will begin by paraphrasing Winston Churchill. He said that it is always a challenge on such occasions to have to follow a really great speaker. Fortunately today I have only to follow Chic Brodie.
Like many other members in the debate, Mr Brodie spoke about the issue of currency. That issue is important, because currency is at the heart of how we take our economy forward.
Nothing typifies the weakness of the SNP’s case better than its stance on currency. We know that the SNP stance is that there should be a currency union with the rest of the UK post independence, but that stance is not shared by many other people who are involved in the yes campaign, such as Patrick Harvie, Jim Sillars, Colin Fox and even the campaign’s chair Dennis Canavan.
Mr Swinney and his colleagues continually assert that there will of course be a currency union between Scotland and the rest of the UK after a yes vote because that is manifestly in the rest of the UK’s interests. However, that view is not taken by the leadership of the three major Westminster parties or by the people of the rest of the UK, who in successive opinion polls have said that they do not want to share their currency with an independent Scotland.
Nor is it the view of a whole range of experts. When the Parliament’s Economy, Energy and Tourism Committee took evidence on the issue in the spring, we heard from experts including Sir John Gieve, former deputy governor of the Bank of England; Professor Ronald MacDonald of the University of Glasgow; Dr Monique Ebell of NIESR; Professor David Bell of the University of Stirling; and the currency expert Dr Angus Armstrong. They were all quite clear in their view that a currency union as proposed by the SNP would not be in the interests of the rest of the UK.
I know that the committee also heard from Professor Anton Muscatelli of the University of Glasgow, who, in fairness, takes a different view. However, he was very much a lone voice among those who gave evidence. The weight of expert opinion is contrary to what the SNP claims, and yet its members still assert those claims as fact.
That leaves us with the question of plan B. The First Minister seems to be hinting that the preferred alternative to currency union is sterlingisation: using sterling without a formal currency union. However, as an expert report pointed out last week, that would be disastrous for the financial services sector in Scotland and would leave us without a lender of last resort.
There are 115,000 people directly employed in the financial services sector in Scotland at present. How many of those jobs would be retained if we went down that route?
The First Minister says:
“It is our pound, and we are keeping it.”—[Official Report, 7 August 2014; c 33160.]
We have also heard him say that the pound is an asset of the UK that we are entitled to retain and that, if Scotland is denied a share, we do not need to take on any of the liabilities.
That demonstrates a fundamental misunderstanding. A currency is not an asset but a means of exchange issued by an institution—in this case, by the Bank of England. If the people in Scotland vote to leave the United Kingdom, they vote to leave its institutions behind. We might be entitled to a share of their asset value, but the claim that we retain a right to the Bank of England after a yes vote is as absurd as saying that we retain a right to other institutions such as the House of Commons, the House of Lords and the Ministry of Defence.
Mr Fraser is normally used to proving himself right through wit. This time he has shown himself to be only half right. Who does he think will carry out the negotiations on a currency union? He seems to attribute the decision to the UK Government, when in fact it rests with the board of the Bank of England.
That is a bizarre intervention from Mr Brodie. The negotiations will take place between two sovereign Governments, which will of course be answerable to their electorates.
As I have already said, the latest poll says that 60 per cent of the population of the rest of the UK do not want to countenance a currency union with an independent Scotland.
What would Scotland walking away from a share of the UK debt actually mean? Writing in this weekend’s Scotland on Sunday, Bill Jamieson put it better than I ever could:
“It would be an act of national financial suicide, branding Scotland as an untrustworthy borrower and wreaking havoc with our claims to fiscal probity.”
Angus Armstrong addressed that point when he appeared before the Economy, Energy and Tourism Committee, and he made it clear that there were two substantial downsides to Scotland defaulting on a share of UK debt. First, there would be an impact on borrowing costs. International investors would regard an independent country that had just repudiated its debt share as a poor risk, and the consequence would be much higher borrowing costs in Scotland than at present, which would be a real financial burden on businesses and ordinary families across the land.
Secondly, in the words of Angus Armstrong,
“The precedent that that would set for the rest of Europe would be extraordinary—any part could unilaterally have a referendum on independence and have no debt. There are a lot of places in Europe that would like to do that. People have to think about the broader consequence of that.”—[Official Report, Economy, Energy and Tourism Committee, 5 March 2014; c 4071.]
Dr Armstrong was absolutely right to highlight that concern. Members must imagine the consequences for debt-laden countries such as Italy or Spain if a precedent was established that parts of them could vote to leave without taking any debt with them and then presumably think that they could waltz into EU membership without difficulty. Nothing would be more likely to provoke a veto on Scottish accession to the EU.
I am sure that those are the arguments that weighed heavily with the fiscal commission when its members failed to support the Scottish Government’s stance on the issue—although we await with interest Mr Beveridge’s answers to those questions when he makes his speech on Monday.
The fact is that the SNP stance on currency is a total shambles. Members do not just have to take my word for it—they should listen to what the SNP’s former deputy leader Jim Sillars has said. I have a lot of sympathy for the view that the logical position is that an independent country should have its own currency, perhaps with a currency board arrangement with the rest of the UK. However, that is not what is on offer. Instead, we are being offered something impractical, unworkable and increasingly incredible.
All this matters, because people need to know the currency in which their wages will be paid, in which they will pay their mortgages and in which businesses will make their loan repayments. We need to hear from the Scottish Government what its preferred alternative to currency union is. Until it tells us that, its economic plans are totally without credibility.
16:01
On 18 September, the Scottish people will be given a chance to vote and to answer the question: should Scotland be an independent nation? The yes camp have made a very positive case for why Scotland should indeed be an independent nation. The other camp—the better together camp—have just given us a bunch of fear stories and a negative assessment of the opportunities of independence. The better together campaign always leaves me with a question, which is one that I would ask the Scottish people who are still undecided to ask themselves: better for whom? We are not better together for the people who are affected by the bedroom tax or for those who are using food banks, and certainly not for those who are experiencing the indignity of work capability assessments.
Will the member take an intervention?
No, thank you.
What I question most is how we can possibly be better together in a country whose overriding economic trend is towards wider inequality, which means a lack of social mobility, low wages, low productivity and an economic model that will lead to a less prosperous country.
Will the member take an intervention?
No, thank you.
On 14 July this year, the BBC radio programme “Analysis” broadcast an episode called “The End of the Pay Rise?” The information on the programme states:
“Something strange has been happening in the British economy. For over six years now, wages have fallen for most of us, which is unprecedented in British modern history. And despite the return of economic growth, wages ... have not picked up.
What has happened? And crucially is this a long term problem—is this the end of the pay rise?”
There were many contributors to the programme, including Paul Johnson, director of the Institute for Fiscal Studies, who is not someone whom I would normally quote in the chamber. The programme explored the direction in which the UK is going on wages and the prospects for people on low wages in our economy.
It is not just the BBC and its “Analysis” programme that have raised concerns. The Chartered Institute of Personnel and Development, the professional human resources body in the UK and internationally, published a document in its series “Megatrends—The trends shaping work and working lives”, the title of which asks the same question: “Have we seen the end of the pay rise?” The summary of key findings makes worrying reading for people living in the UK. It states:
“Since January 2009, average weekly earnings (excluding bonuses) have fallen by 8 per cent”.
It continues:
“This pattern is widespread across the workforce, affecting men and women, public and private sectors, all parts of the UK and most industries. The drop in real earnings has been slightly greater at the top of the earnings distribution than at the bottom.”
The situation is even worse for self-employed people, who have seen an even bigger drop in real-terms average earnings of, sometimes, between 20 and 30 per cent in the three years to 2010-11.
The “Analysis” programme and the CIPD document show that, if we continue with the US model of a low-wage, low-productivity economy—that is the direction in which most of the economic experts tell us the UK is heading at the moment—we will end up in the position of the US. Between 2008 and 2012, average earnings fell in real terms in many OECD countries. In fact, in five of those for which there are data—
Will Clare Adamson give way?
No, thank you.
In the USA, real earnings for median, full-time workers were no higher in 2013 than they were in 1979. If we continue on the road to a low-productivity, low-wage economy and inequality in the UK, we will end up in the position of the US. I ask the question again: better together for whom? It is not better together for ordinary workers who live and work in the UK.
Some of the analysis and the CIPD study ask who the changes have most affected across the OECD countries, which is really interesting. Researchers asked employees whether, if they compare their current situation with that in January 2009, they have experienced a change in their salary. It is no surprise to learn that those who have experienced an increase in salary include workers in Denmark, the Netherlands, Finland, Norway and Sweden—those small northern European countries with similar prospects to Scotland as an independent nation, which continue to buck the trend of economics, reduce inequality and develop a model that can go forward.
At the cultural conference that we held in the Parliament this weekend, Simon Anholt of the University of East Anglia presented an interesting table of analysis about how good a country is. Despite some of the disparaging comments from better together representatives about some of our neighbours, such as Ireland and Iceland, the good country index, which measures not what a country does at home but the greater good that it does in the wider world, is topped by the Republic of Ireland. Again, it is not surprising that Finland, Switzerland, the Netherlands and Denmark are in the top five. Our country can aspire to have a similar level of inequality, a similar progressive economic model and a similarly prosperous future to those countries.
16:08
Nobody here has been arguing that Scotland could not be an independent country. The only people I have ever heard saying that Scotland could be too poor, too weak or too unsuccessful are members of the SNP. Nobody I have ever heard on the unionist side has ever said that.
The success of the Scottish economy under separation is perhaps more questionable, and the questions exist because of the lack of answers from the yes side. People are not getting the answers that they want, but, as the cabinet secretary himself said, the question is whether Scotland should be independent or whether it would be more successful with a devolved Parliament that had increased powers within the United Kingdom. The arguments that the yes side is still putting forward are the assertions of the Scottish Government, with all the uncertainty that it seems to be unable to resolve.
I have spent many, many hours on the doorsteps of residents of Dumfries and Galloway over what feels like the past several months and have listened to their views. There are some who remain undecided, but they tell me that they are not getting enough information about how separation, or independence, would work. They are not getting the answers that they seek about what would actually happen, and they are not interested in being told that page 110 or whatever of “Scotland’s Future: Your Guide to an Independent Scotland” will explain it all. They want straightforward answers about questions of currency, about how all the aspirations in the white paper will be paid for and about what the effects will be on the local economy.
The effect on the local economy is important to people in my constituency because of our links with Carlisle and Cumbria. Those links are important to us economically and socially.
Carlisle is by a long way our nearest city. We have much greater connectivity with Carlisle than we have with any city in Scotland. My constituents use Carlisle for leisure, shopping, access to the rail network and work. There is a whole barrage of reasons why people do not want to be separated from Carlisle. People who live in the east of my constituency access medical services in Carlisle. Some businesses in Gretna, for example, operate on both sides of the border. Many of the tourists who visit Dumfries and Galloway come from northern England and the Midlands, and those areas are targeted in local tourism campaigns because they are such a strong source of visitors. It is hardly surprising therefore that the links across the border are so important to my constituents, and they are why I believe that a substantial majority of my constituents will vote no on 18 September. There is no way that those links would be improved under independence.
Devolution, however, offers further opportunities. Members might not be aware of the UK House of Commons Communities and Local Government Select Committee, which last month published an interesting paper on the potential for devolution in England, and specifically on fiscal devolution, with additional tax-varying and spending powers given to cities and the city regions that have been created through local authorities working together. Some limited examples are already functioning through the city deal, but what the select committee is proposing goes much further.
The select committee is composed of Labour, Conservative and Liberal Democrat MPs, and those MPs are urging the implementation of their proposals during the next Westminster parliamentary session, starting next year. I hope that their parties are listening.
The member is talking about devolution. What does she say to Professor Peter McGregor who told the Finance Committee that Labour’s devolution proposals would mean that taxes in Scotland would be higher than in England—Mr Findlay would not let me ask him about that—and would cost the Scottish economy £4.6 billion a year and 75,000 jobs? The only way to avert that would be to reduce the wages of public sector workers. The member can look that up on the Finance Committee’s website.
I wish I had not taken than intervention; it was just a diversion from what I am trying to argue for my constituents.
I know that MSPs such as Kenneth Gibson think that what is happening in England is completely irrelevant, but it could be extremely important to the south of Scotland as long as we remain part of the United Kingdom.
Additional power is already being devolved to Scotland in 2016, as we all know, and all three main UK parties have agreed that further powers will be devolved.
Will the member take an intervention?
No I will not; the previous one went on for far too long.
There are differences between the parties’ proposals, as expected, but power should not be transferred from Westminster to consolidate power in Holyrood. The SNP Government does not seem to understand that. We, too, should be considering how powers can be further devolved more locally. It is in such devolution of more power that there is an opportunity for Dumfries and Galloway to work with the authorities in Carlisle and Cumbria to develop the regional economy. I consider that to be a huge opportunity for the Solway basin, but it cannot happen if both sides are in separate countries. Even if there was no physical border, that sort of collaboration could not take place.
We know that one of the consequences of devolution in the south of Scotland is that cross-border working has not taken place to the same extent that it did prior to 1999. That cross-border co-operation needs to be reinstated if we are to take forward the city of Carlisle region, which Dumfries and Galloway is part of. Devolution on both sides of the border would offer that opportunity, but separation will not—it will kill it stone dead. If we have separation, Dumfries and Galloway will remain a forgotten corner of Scotland, cut off from Carlisle and with no strong links to any Scottish city.
As I have said on several occasions, if the people of Scotland vote yes, I will respect that decision—and I will. However, I will have serious reservations about the effects on my constituents. I genuinely cannot see how separating from the rest of the United Kingdom, and Carlisle and Cumbria in particular, can be of any economic benefit to Dumfriesshire. I make no apology for being parochial in my contribution because I was elected to represent the interests of my constituents, and it is my firm belief that separation from our closest neighbours in Carlisle and Cumbria cannot be in their interests. That is the reason why my constituents will vote a resounding no on 18 September.
16:14
:Like Elaine Murray, I am going to be a bit of a parochialist, but I am also going to be an internationalist.
The people in my constituency earn their living in a variety of ways. Fishing is a long-running industry. Over the years, my constituency has been the site of the biggest whaling port in the world, and people travelled from there to the other end of the world. Today we have Europe’s biggest whitefish port—we are significant in the pelagic industries. Many of my constituents work off shore in the oil and gas industry and are getting increasingly involved in the offshore renewables industry. Agriculture is a very significant industry. We deliver the finest beef in the world—not only to Scotland but beyond, to around the world. We also have significant engineering interests. How are those various interests served by the present arrangements, and could they be better served in an independent Scotland?
We in Scotland have the longest coastline of any country in Europe. In fact, to give everyone a sense of how long it is, I point out that China’s coastline is only 50 per cent longer than Scotland’s. We are essentially a country with extensive and important maritime interests.
When one has maritime interests, one requires the ability to defend those interests. Do the present arrangements provide for adequate defence? We heard that there are going to be three new small vessels to protect the UK’s coastal interests. Where are they to be based? Here is a picture of the total number of vessels in the Royal Navy protecting our maritime interests that are based in Scotland.
That is not just a theoretical debating point. The Kuznetsov, the biggest capital ship in the Russian navy, was built in Odessa in the late 1980s, weighing nearly 60,000 tonnes, with squadrons of Sukhoi Su-27s and Antonov 41s, helicopters, surface-to-air missiles, seven varieties of radar for detecting threats to its integrity and 2,000 sailors on board. In January this year, it was moored so close in off my constituency’s coast that, even with my eyes, with hypermetropia, myopia, presbyopia, low-light myopia and astigmatism—only one sight defect to go and I will have the full set—I could see it. It was legally moored in the Moray Firth, outside the 12-mile limit, but inside our area of economic interest of 200 miles. I could see beyond it—further out—the Beatrice oil platform. That is how close in it was—we could all see it.
How did the Royal Navy know that the Kuznetsov was there? Well, the Russian sailors have caught up with the modern world and one of them advertised the presence of the Kuznetsov via Twitter. On the case at once—believe me—the Ministry of Defence spotted it and dispatched a vessel to protect our maritime interests. In only 38 hours, it got there to see what was going on.
How would such things have been done better elsewhere? Ireland has eight vessels around its coast. It has just increased the number from seven to eight vessels, and they are distributed around the rather shorter coastline of that smaller, less economically powerful country. Ireland also has a couple of aircraft, which could have gone out and sniffed and hovered over the top and seen what was going on. Our Nimrods are history—unreplaced. The Kuznetsov is also an aircraft carrier and, as I said, it has aircraft on it, which is slightly different from the UK situation.
Our other interests include agriculture. Our farmers get the lowest support of any country in Europe, not because money was not provided by the European Union to help farmers in more disadvantaged areas but because the UK Government kept that money, which came to the UK only because of the special circumstances of agriculture in Scotland, where 85 per cent of our land has less favoured area status, while south of the border 15 per cent of the land has less favoured area status. We suffer in agriculture because we are part of the current union. We could do so much better.
Fishing—if only I had an hour or two on that subject. We have seen our fishing industry suffer every time the UK represents fishing in Europe, because the priorities of the Scottish fishing industry are not the priorities of the United Kingdom.
Were we representing ourselves—even if our own minister occasionally got to speak in Europe—we would do better. An independent Scotland would certainly do better beyond peradventure.
We have heard a lot about currency, which is important, but even more important is our economy. The currency is secondary to our economy. If we do not get our economy right and we do not have a Government that represents our economy’s interests, my constituents will continue to suffer the effects of the United Kingdom. It is time we had independence, so that my constituents and people across Scotland can be properly supported in their economic endeavours.
Thank you. Before we move on, I remind members that the use of props is not allowed in the chamber. There are many reasons for this; one is that the official report cannot record proceedings properly if props are used.
16:20
I have listened with interest to the debate and I suggest that a more appropriate title might be “The economic uncertainties of independence”. With just 36 days left until the independence referendum, the people of Scotland lack key information on how independence would work. They lack information about the currency, start-up costs, pensions and taxation. Far from being an opportunity, it appears to be a leap into the unknown.
I will focus my speech on the two major issues of currency and taxation. It has been made clear that a currency union, the preferred option of this Government, is off the table. No matter how many times Alex Salmond repeats, “It’s Scotland’s pound”, that will not change the fact that if the rest of the UK does not want a currency union with Scotland we cannot force it into one. Even if a currency union was on offer it would effectively mean handing the key fiscal levers of the economy over to the central bank of another country, while losing our political union and influence.
Sterlingisation is an even less attractive option. No one is denying that Scotland could use the pound, but without a currency union we would be left without a lender of last resort. That is just not credible. According to the National Institute for Economic and Social Research, sterlingisation would have a knock-on effect on Scotland’s financial sector, creating a financial border whereby banks would be forced to move their head offices to the country in which the central bank was located. Financial sector exports generate 9 per cent of Scottish GDP, so that would be a huge loss to our economy.
It is perplexing that the party that pushed for this independence referendum—a party established in 1934 to fight for Scottish independence—seems to be fighting so hard against a Scottish currency. Instead it proposes a currency union while stripping away the political union that makes our currency union work.
Without a clear plan on currency there is no opportunity, only uncertainty: uncertainty for Scottish businesses, uncertainty for Scottish banks and uncertainty for the Scottish people. In effect, there are no answers, no credibility—no thanks.
The plan, or lack thereof, on taxation is even more worrying. When I asked Mr Swinney last week whether taxes would need to increase to pay for things promised with a yes vote, he replied:
“the answer is no: taxes will not have to go up to pay for independence.”—[Official Report, 7 August 2014; c 33153.]
However, David Philips, the Institute for Fiscal Studies economist, tells us:
“an independent Scotland could expect to be running a deficit of around 5% of GDP in 2016-17, which would be larger than that facing the UK as a whole, and would necessitate tax rises or spending cuts.”
The Institute for Fiscal Studies told the Finance Committee on 5 March that UK Government departments will face a 17.1 per cent cut in their budgets in the period up to 2019. What is Margaret McDougall’s view on that? What will be the impact on Scotland?
I was not party to that conversation so I will not comment on it.
Professor Jo Armstrong of the Centre for Public Policy for Regions told the Economy, Energy and Tourism Committee:
“There are opportunities but ... we either increase taxes ... or cut spending, given that we have a fiscal deficit and, potentially, limits on how much additional borrowing we can make”.—[Official Report, Economy, Energy and Tourism Committee, 5 March 2014; c 4079.]
However, there are no signs of any tax increases or spending cuts in the YESNP’s plans; instead we are promised tax cuts and spending increases. Therefore, I ask the same question that I asked last week: how are we paying for increased spending?
The money saved from scrapping Trident must have been spent at least 10 times over by now. We know that oil and gas are finite and volatile—Citigroup has stated that, with the recent drop in oil revenues, Scotland’s fiscal deficit is now significantly above UK levels.
This is fantasy economics. Cuts are being proposed in private while the SNP still maintains publicly that it will be all right on the night—just vote yes. However, impartial expert bodies such as the IFS tell us that we would need to make cuts almost immediately.
Is it any surprise that the latest polling shows support for no at 55 per cent while support for yes is at 35 per cent? [Interruption.]
Order, please.
People are rejecting the separatist agenda and seeing the opportunities of devolution because we have 300 years of shared experience, shared history and joint endeavour.
Scotland can stand up and lead the UK, not stand up to leave it. Our economic, social and political union offers us strength and security, while devolution means that we can forge our way forward, with more powers coming with the Scotland Act 2012 and even more after a no vote.
Scotland does not need independence to stand on its own two feet; we already do that. I do not want to break away from my brothers and sisters in the rest of the UK; I want to tackle inequality and injustice wherever they arise. On 18 September, I will be voting to strengthen our ties, not to cut them.
16:27
This has been a lengthy debate with some interesting contributions. Ultimately, however, the debate is between those who value opportunities and rise to challenges and those for whom the glass is always half empty, even when it is crystal clear—as is now widely acknowledged—that Scotland can be a successful independent country.
A small country such as Scotland has an abundance of opportunity laid out before it. We need to ensure that we take advantage of it. One example of how we could do that is set out in the Scottish Government’s “A Jobs Plan for an Independent Scotland”. The plan builds on the white paper and sets out how we can make Scotland’s wealth work to create jobs and opportunities.
It is clear that Scotland would, as an independent member state of the EU, have a number of priorities that differ from those of the UK. We already have different priorities from Westminster in many areas including fishing, farming and energy, to which my colleague Stewart Stevenson has already referred.
Independence will allow Scotland to replicate the approach of small states such as Denmark, Ireland and others in relation to approaching negotiations in the EU effectively, by forming alliances when and with whom it suits us to do so, sometimes working with the rest of the UK and sometimes working with others, whether that be on fishing, on farming or even on arrest warrants or student visas.
The first report of the fiscal commission—
Will Roderick Campbell take an intervention?
No. I am sorry, but I am going to press on.
The fiscal commission’s report has been much referred to in comments on currency. What I found impressive in the report was the conclusion that, under the union, in terms of economic growth, Scotland has underperformed relative to the UK as a whole and relative to other small countries including Austria, Denmark, Sweden, Ireland and Portugal. Also, in the 30-year period to 2007, we have had an annual percentage growth of 2.3 per cent, compared with 2.8 per cent for the UK as a whole. That growth rate has been broadly similar since then.
However, in the longer term, as the fiscal commission reports, growth depends on productivity. In that respect, the UK record remains poor. Although Scotland has closed the relative gap with RUK, we remain behind key competitors such as the United States of America, Germany and France, which John Swinney referred to. I recognise, of course, that we need to make it clear that we need to have the right balance of growth so that we have growth that reduces inequality.
Historically, we have also had a lack of growth in population—as Kenny Gibson mentioned—particularly compared with RUK. That lack of growth has seemed to change in recent years and we know, of course, that a modest increase in the number of people—particularly young people—staying in Scotland each year could have a significant impact not only on dependency ratios but on growth itself.
We also know that although Professor Stiglitz might not be a fan of reducing corporation tax, he concludes that countries that are more unequal do not do as well as, do not grow as well as, and are less stable than those that are more equal.
In the debate today, speakers including Jamie Hepburn have talked eloquently of the nature of inequality in Scotland. Although I accept that there is no guarantee that an independent Scotland will be a more equal society, I think that there is every prospect that it will be. Indeed, some of the no campaigners seem to be positively fearful of that possibility.
Independence gives us a unique opportunity to change the kind of society that we are. On Saturday, I met a voter in my constituency who will be voting yes because he wants to see a revolution in Scotland’s health record which, in his view, would have a knock-on economic effect. He believes that—leaving aside the impact of the privatisation of the NHS down south—independence offers opportunities that the status quo simply does not offer.
When we speak of the risks of independence, let us also remember the letter to the Financial Times last week from Jim Spowart and others, which said that those who seek to evaluate risk in the financial sector must take account of the far more significant risk that is posed to financial services by the prospect of a UK exit from the EU.
We should also never forget the key mantra of the Westminster Government in this referendum campaign: “No pre-negotiation”. Of course, that fits very nicely with the agenda of raising doubts and uncertainty as a key campaigning tool, which we have heard in the chamber today. Of course, a position of there being no pre-negotiation means that there can be no definitive answers on many key issues. However, it is on the currency issue alone that the Westminster Government decided to make its position known—supposedly in a spirit of giving the facts to the Scottish people on this very important issue. Of course, that is not pre-negotiation. Rather, that is what Westminster says, and obviously, if it says it, it is right. What is right that the Opposition parties will fight to the death following a yes vote in order to ensure a currency union, because that is best for Scotland. We can only assume that that is why we have heard nothing from them about a plan B in the event of a yes vote. [Interruption.]
I am sorry, Mr Campbell.
I must say that I would be grateful if members on all sides of the chamber would listen to the speeches that are being made.
Earlier, there was a reference to currency bluffs. However, it was Henry McLeish—not a supporter of the SNP—who said that the currency bluff
“is entirely political and of course consistent with the unionist campaign.”
The people of Scotland have a lot to weigh up over the next few weeks. They have time to reflect on where opportunities arise. I am sure that members in this part of the chamber and thousands of activists around Scotland will continue to make the case for the opportunities of independence.
We turn to the closing speeches. Gavin Brown has six minutes or so.
16:32
The attitude of the Scottish Government to the referendum and, indeed, its governance in general was encapsulated in one minor exchange at the start of the debate. It was not an exchange that is central to the debate, but it demonstrates the approach of this Government. Jenny Marra asked the cabinet secretary why unemployment is currently higher in Scotland than it is in the rest of the UK. When it is lower in Scotland, the Scottish Government releases press release after press release and holds press conferences about it, and it is at the start of every speech that the First Minister or the cabinet secretary makes. However, when unemployment is higher in Scotland, it is something that ought to be ignored. It is something not to be taken too seriously and it is just a “blip” in the figures. If the figures support the Government’s case, they are the most important figures on the planet, but anything that attacks or weakens its arguments in any way whatever ought to be completely ignored and is totally irrelevant.
We have had some bizarre admissions in this debate.
I am a bit bewildered by Mr Brown’s remark, given that, every month, the Government issues a press release about the labour market statistics, regardless of what they say. That happens every single month, so I do not understand the point that he has just made.
Allow me to assist the cabinet secretary. In a month in which unemployment is lower in Scotland, the most important figure to look at is the headline unemployment figure. If it happens to be higher in Scotland in that particular month, it is something that is buried away at the bottom of the press release and is one of the less important aspects of the economy.
Let us return to the central aspects of the debate. [Interruption.] If Mr Swinney wants to speak, I will take an intervention from him at any time. He does not have to shout from the sidelines.
The Scottish Government’s key argument is that we need to vote for independence to stop austerity. It genuinely tried to claim that, were we to be independent, there would be no cuts in public spending, no tax increases—indeed, there would be tax cuts—and welfare spending would increase. In addition, people would be able to retire at a younger age and, at the same time, there would be an oil fund.
The Institute for Fiscal Studies, which has been quoted by SNP member after SNP member to support their case, said that if an independent Scotland wants sustainable public finances it would have to have greater spending cuts and/or tax increases on top of every single one that is planned by Westminster. We would therefore have a greater fiscal deficit than the rest of the UK not just in year 1 of independence, but for each year thereafter. SNP members are shaking their heads. If they want to stand up and show me an independent, well-respected expert who has suggested that we would have a smaller deficit than the rest of the UK, I will happily take that intervention.
The Scottish Government claims that everything would be fine with economic growth, were we to separate. I posed a question at the start of the debate: what industries would suddenly start coming to Scotland because we had become independent? We have heard about none. Perhaps Mr Brodie will enlighten us at this late stage.
I intend to do so. Will Gavin Brown give his reaction to today’s announcement by Aker Solutions that it will invest £150 million to move into new premises in Dyce, and agree to a lease of up to 35 years, with the potential to create hundreds of jobs in the energy market?
I am not convinced that that intervention enlightened me or anyone else. I do not think that Aker Solutions is coming to Scotland because we might become independent; I would have thought that the company is coming anyway. However, given the state of the polls, it may think that we might not become independent.
The Scottish Government cannot suggest which industries would suddenly come to an independent Scotland, it cannot suggest which industries are being deeply held back by being part of the UK and, when it comes down to the hard policies that it intends to bring in that we do not already know about, it does not have any. Furthermore, we already have the powers to develop some of the policies that it has proposed.
We lodged some simple freedom of information requests after the Scottish Government’s previous report on the economy. Following that report, the headline of the Scottish Government’s press release was “£5 billion increase in revenues by 2029”. The Government said that it could use the powers of independence to generate that tax revenue. Therefore, we asked whether it could show us the modelling on the employment increases, the productivity improvements and the increased migration on which that figure was based. However, the Government had done no modelling. Indeed, it said that it was satisfied that it did not have the information requested. The £5 billion figure cannot be taken seriously. The same is true of most of what was in the so-called top 10 reasons to become independent.
The cabinet secretary has said that if the Scottish Government does not get a currency union, it will walk away from all the debt. Do all the members of the fiscal commission working group support that stance and that argument? If so, will the fiscal commission confirm that this evening, or will the chair confirm it in his speech on Monday? I hope that the cabinet secretary will address that issue.
16:39
The point on unemployment is that when the unemployment figures look good for Scotland, Mr Swinney and the SNP Government take all the credit. However, when the unemployment figures look bad and worse for Scotland, Mr Swinney turns that into an argument for Scotland to separate from the rest of the United Kingdom. That shows the shallowness of the SNP’s whole case for independence, because come rain, hail or shine their answer to every question is to separate the country from the rest of the United Kingdom.
The nationalists wanted an independent Scotland during Attlee’s reforming Government in 1945. They wanted an independent Government when—[Interruption.] Mike Russell may laugh, but the point came up this afternoon. The nationalists wanted independence when our Labour Government was raising two-thirds of children in the United Kingdom out of absolute poverty. Power is about what we do with it, not where it is wielded.
I am intrigued by Ms Marra’s argument that it is not about where power is located. Why, then, was the Labour Party an advocate for there being a Scottish Parliament that gives us the ability to determine policy choices differently from people in the rest of the United Kingdom? Why is that appropriate for education, for example, but not for welfare?
Mr Swinney seems to think that all power needs to be wielded in Edinburgh. The Labour Party, as he well knows—[Interruption.] Let me answer. The Labour Party believes in the principle of subsidiarity, whereby power is wielded at the most appropriate level, be it the European Union, Westminster, Holyrood or local government. [Interruption.]
Order, please.
This afternoon’s debate has very much reflected the mood of the past week. The case for breaking up the union has completely fallen apart. It is a case of the emperor’s new clothes. The SNP’s failure to answer key questions has left it naked and panicking—[Interruption.] That has been the tenor of the debate.
Ms Marra, may I stop you for a moment?
This debate has thus far been conducted with respect on all sides. I hope that that will continue until the end of the debate.
I appreciate that I did not create a pretty picture, Presiding Officer.
We heard from SNP members a list of assertions, on which many were not prepared to be challenged. That is true of Jamie Hepburn, Colin Beattie and Clare Adamson. Kenny Gibson also made a series of assertions without offering any evidence.
Such assertions are becoming more shrill and fanciful by the day. When Maureen Watt announced at a conference that I attended that ferries would go faster in an independent Scotland, I thought that she was joking—[Interruption.]
Order, please.
Willie Rennie was right. Passion and nationalism are completely obscuring reality among the SNP members, as has been patently clear to anyone who has been listening to the debate this afternoon.
I read “A Jobs Plan for an Independent Scotland”, which John Swinney has re-released. I was drawn to page 24, which refers to five proposals that are set out in “Reindustrialising Scotland for the 21st Century: A Sustainable Industrial Strategy for a Modern, Independent Nation”. I was intrigued by the five points. The first is:
“Establishing a Scottish Innovation Agency”.
The exchanges between Gavin Brown and John Swinney established that that could easily be done right now.
The second proposal is that an independent Scotland would deliver
“tax credits for R&D expenditure”.
There are already tax credit arrangements in the UK for R and D.
The third proposal is:
“Establishing a Scottish Business Development Bank”.
That is presented as a new proposal to reinvigorate the economy, but of course it is not new. The pledge has appeared, disappeared and reappeared over the past couple of years.
The fourth proposal is:
“Ensuring a legal framework which protects and supports intellectual property rights;
That is another proposal that would bolster our economy. However, I know that Mike Russell told a senior intellectual property lawyer in this country that the SNP has not the first idea about how it will establish an intellectual property system when Scotland comes out of the gold-plated patent arrangements that we enjoy as part of the United Kingdom.
If Jenny Marra has evidence that I said that in the way that she said that I said it, she should bring it forward. If she does not have that evidence she should withdraw her comment. It is not a remark that I have ever made. I am, of course, always willing to discuss such matters with lawyers and others.
I understand that Mike Russell has said that the SNP does not yet have a plan to establish an intellectual property system in Scotland. If he has such a plan, I will be happy to hear it now—[Interruption.]
No name was given—
Clearly—[Interruption.]
Order, please.
On a point of order, Presiding Officer. I think that, if an assertion is made and no name is attached to it, it is incumbent on the member to bring that name forward, and I will contact the person to find out what was said. [Interruption.]
Order, please.
Everyone in the chamber will agree that the actual plan for the system is much more important to the voters of Scotland than any name.
The fifth proposal is:
“Investing in the world class research of Scotland’s Universities and Research Institutes”.
On a recent visit to the University of Dundee, Alistair Darling and I spoke to some of Scotland’s most senior life sciences researchers, who said that it would be the mother of all disasters for their research funding if Scotland were to leave the United Kingdom. As for the final proposal, which is to set
“incentives to attract the best researchers from across the world”,
the researchers whom we spoke to also told us that the best researchers want funding and a critical mass of research relationships across the UK. The plan is simply a mix of things that can be done now, things that already exist and quite fanciful pledges.
Like Malcolm Chisholm, I was intrigued when I heard more about the spending plans for the Trident trillions. The Scottish Government estimates that it would cost £200 million to set up a new Scottish state, which I think is quite a modest estimate. If I am not mistaken, however, that would be the Trident money gone. In last week’s debate on Trident, the SNP pledged to spend the money on a convention on defence, on health, on education and on creating alternative jobs at Faslane. Today, it has pledged to spend the money on childcare. There seems to be no end to this pot of money. I think that, again, the clothes have fallen off that pledge.
Turning to tax—[Interruption.] I am happy to take an intervention from Ms Adamson if she wishes to offer one.
Is better together simply content to continue to spend billions of pounds on Trident?
Clare Adamson will know that I have long campaigned against nuclear weapons—[Interruption.] If I could finish my point—[Interruption.]
Order, please.
I want to get rid of them all over the world, but Ms Adamson might also know—[Interruption.] If members will let me speak—[Interruption.]
Order.
Ms Adamson might also know that I think that the SNP’s pledge to get rid of Trident is an absolute fallacy. When in the event of a yes vote it comes to negotiations between Alex Salmond and the British Government, it will be the first thing to fall off Alex Salmond’s agenda—and there are senior people in Yes Scotland who agree with me on that. [Interruption.]
Order, please.
The people of Scotland have a right to expect better from their Government than the situation into which we have been led. There are just over four weeks until a referendum that proposes to end one of the world’s oldest economic unions. The pound in our pocket is nothing to do with identity. It is not about posturing. It is, in essence, a contract—a sign of trust and a trade that is made that ensures that a person will receive value for their labour. In the derogation of their duty and their failure to come up with a plan B on currency, the SNP and Alex Salmond have broken their contract with the people of Scotland in front of the world.
Please draw to a close, Ms Marra.
I will do so, Presiding Officer.
This unholy mess is not fit for Scotland. We must say clearly to all those who are listening that the SNP’s rank incompetence is not Scotland’s, and that after 18 September we must all work together to make it good.
Thank you. I call Michael Russell to wind up the debate. Cabinet secretary, you have until 5 o’clock.
16:49
Let me give the chamber a revelation: I think that on the evidence of this afternoon’s debate there are no votes in this chamber that are up for grabs in the referendum and that it is pretty clear that there are no undecideds on these benches.
However, there might be some undecideds watching at home. I suspect that they might well have turned off by now, particularly after Jenny Marra’s speech, but if they are still watching I suggest to them that, if they are trying to come to a judgment on the basis of this debate—there are people in the gallery who might want to make such a judgment—they should do so on the basis of what has been the positive view and what has been the negative view.
Look at the positive view that all my colleagues in the chamber have expressed and at the endless, destructive negativity that we have heard from Labour, the Liberals and the Tories.
I will start with the clearest view of the currency issue. As ever, the First Minister got it right in the chamber last week. I will repeat his exact words. He said:
“It is our pound, and we are keeping it.”
There are no ifs and no buts. That is the guarantee. That is plan A to Z. For the benefit of those who are still trying to frighten people out of what is theirs—people such as Mr Henry, who asserted that Scots will not be able to buy food or go on holiday after independence, and Mr Fraser, who tellingly referred—
Will the cabinet secretary take an intervention?
No, I will not. I am sorry; one contribution from Mr Henry in an afternoon is more than enough.
Mr Fraser referred to the currency belonging to someone else, which was very interesting. I will repeat what the First Minister said so that there can be no doubt. He said:
“It is our pound, and we are keeping it.”—[Official Report, 7 August 2014; c 33159.]
On a point of order, Presiding Officer. Mr Russell has just made a statement in which he attributed words to me that I did not say. Is it in order for members to fabricate words that were not said during the debate and attribute them to other members? [Interruption.]
Order, please. What members say in their speeches is entirely up to them. It is not for me to decide what they should and should not say. However, the Official Report undoubtedly shows every word that has been said in the chamber.
I am sure that Mr Henry will reflect on that when he looks at what he has said about me and my writings. I am sure that he will think about that carefully. Mr Henry’s words speak for themselves, as does his depressing demeanour.
The debate has been one of great contrasts. I go back to positivity and negativity. My friend Mr Swinney talked about ambition, achievement, resources, potential and raising the eyes of Scotland to what can be achieved. In my area of special interest, he talked about the need for transformative childcare and the world-leading position of Scottish higher education. What was the result? [Interruption.]
Order, please.
The result was that, 10 minutes in, Mr Rennie gave the knee-jerk plan B its first outing. Mr Brown then leapt back in. Project fear was in there working hard.
The other side of the unionist coin then showed itself. It was quite stunning. Alex Johnstone chuntered on from a sedentary position about the fact that everything that was mentioned was a product of the wonderful union, but he was interrupted by Jenny Marra, who said that everything was the result of the failed SNP. There we have it: that is a contrast. Labour hates the SNP more than anybody else, and the Tories love the union more than anything else. Neither of those is a prescription for a safe future.
Believing that a Labour Government will remove weapons of mass destruction is also not a prescription for a safe future. There is no evidence for that whatsoever. How else are we to get rid of weapons of mass destruction, except by independence? That is the reality.
It was telling that, when Mr Swinney mentioned Trident and what we need to do, the reaction from Labour and the Tories and even from the sole Lib Dem who was there was derision. They want to put bombs before bairns and Trident before teachers. That is their shame.
Let me carry on.
Will the cabinet secretary take an intervention?
No, I will not take an intervention. I am sorry.
The reality of the debate was shown clearly. It was about that negative view. Nothing could be done. We had to ask what that was about. Maureen Watt got it 100 per cent right. She analysed the debate early on. The great fear that exists in project fear is the could-should-must progression. If any member on the Labour benches could admit that Scotland could be independent—I will come to Elaine Murray in a moment, as she did that momentarily—the whole fantasy will collapse.
The reason why it collapses is that that leads to the argument that Scotland should be independent, which is the argument that my colleagues made this afternoon. It goes a step further to the argument that Scotland must be independent.
The biggest illustration of that was given by Malcolm Chisholm. Yet again, I was saddened by a speech by Malcolm Chisholm. I have admiration and time for Malcolm Chisholm; he is laughing, but I do. I do not think that he and I differ very much in some of the things that we want to see, but here is the difference. [Interruption.]
Order.
Labour members want to laugh at this, because it is beginning to strike home.
The difference is that I and my colleagues have a plan for how to achieve those things. We know how poverty can be eliminated in Scotland. We know—
Will the minister give way?
No—I want to finish my point.
I know that it is annoying to Iain Gray, but the truth of the matter is that it is possible to have a plan to change Scotland and to do those things. We can set out with those intentions and we can work hard to meet them, or we can—as Labour members would have us do—simply keep our fingers crossed that we get a Labour Government that could possibly pursue the things that they want to see in Scotland rather than the things that Ed Balls and Miliband want to see south of the border. I say to Malcolm Chisholm that that is not a plan: that is keeping your fingers crossed and putting party before principle.
The cabinet secretary may have a plan, but the whole point of all the Labour speeches has been to point out that it is not a plan that can be delivered without an economic foundation. Before he gives us any more claptrap about the negativity of Labour members, will he reflect on the fact that by far the biggest and most disgraceful scare of the referendum campaign is what the yes side is saying about the NHS? [Interruption.]
Order! Order!
How interesting. Mr Chisholm is being wildly applauded by Jackson Carlaw, who—
Sit down, Mr Russell.
That is quite enough. There is far too much heckling and far too much noise. The minister is speaking, so allow him to do so. This is a Parliament; it is not a public meeting or a hustings. There are people in Scotland who are listening to the debate. Make it worthy of them.
Why was Jackson Carlaw—the person who got so agitated about the issue of the NHS last week—applauding so much? Because we have hit the nail on the head. If the financial power lies outside Scotland, the decision on the priorities of Scotland and how to deliver those priorities will always lie outside Scotland, too. For every £100 by which expenditure is reduced south of the border through privatisation of the health service—privatisation that was started by Labour—£10 is lost from the Scottish budget.
Will the cabinet secretary give way?
No.
For every £100 that is removed from public expenditure through privatisation of higher education south of the border, we lose £10. That is the reality. That is the nub of the debate. We can choose to make our decisions in Scotland, to take our responsibilities in Scotland and to have opportunities in Scotland, or we can always dance to someone else’s tune.
Malcolm Chisholm wants to see the progress in Scotland that I want to see. I repeat what I said earlier: the SNP has the plan to do that. It puts its confidence—[Interruption.] We can hear the Tories laughing; we can always hear the Tories laughing when the people of Scotland want to progress.
Here is the choice: we can say to the people of Scotland, “Take responsibility, and then you will have the opportunity to change this country for the better”; or we can tell them to listen to those who will not accept the reality and who will always keep their fingers crossed that England votes the same way that they do. Those voices will always disappoint and let down the people of Scotland. That has got to stop.
The lesson this afternoon is entirely clear: there is a jobs plan for an independent Scotland, there is a finance plan for an independent Scotland, there is a currency plan for an independent Scotland and there is a plan to make an independent Scotland the country that it could and should be. The people who stand in the way of that are this unholy alliance between Labour and the Tories.
You need to finish, cabinet secretary.
They are the people who have plenty of ambition for their political parties and none for their country. [Applause.]
Order.
That concludes the debate on the economic opportunities of independence.
Before we come to decision time, I am sure that members will wish to join me in welcoming to the gallery His Excellency Dr Peter Ammon, the ambassador of the Federal Republic of Germany. [Applause.]
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