The next item of business is a debate on motion S4M-10353, in the name of Johann Lamont, on Scotland’s future.
14:40
Earlier this week I joined my colleagues in the Scottish Conservatives and the Scottish Liberal Democrats to pledge more powers for Scotland. The people of Scotland now know that, whatever the result of the referendum, there will be change, and that the choice is between separating completely and going off on our own, and continuing to share power with our neighbours where we believe that it is in our interests to do so.
The debate about more powers for Scotland is interesting, whether the powers come to a devolved Parliament or an independent one. The debate has been allowed to dominate Scottish politics over a period, but we should not allow it to distract us from considering the significant powers that the Scottish Parliament has. The keys to realising our ambitions for Scotland already lie in Holyrood, and the Scottish Government has the power to set priorities.
In education, we have the ability to teach, train and skill up our children and young people, so that they can take up chances to drive a new, changing economy, and we have the ability to give people who lose their jobs opportunities to retrain for their next jobs. In health, we have the means to ensure that our sick, our vulnerable and our elderly are supported and cared for with the respect and dignity that we would want, and to build a Scotland in which people’s physical and mental health is such that they can take up the opportunities that we create for them.
Too often, we spend our time in this Parliament debating what we cannot do. We do not spend enough time talking about what we can do. For some time, the Parliament has failed to be a forum for new, radical ideas about improving educational standards or closing the gap on health inequalities, and it will not be such a forum until we get past the constitutional question.
Issues to do with schools and hospitals remain a key factor in the referendum campaign. That is because people are asking themselves whether a yes vote or a no vote is best for public services. I believe that a no vote gives Scots the best of both worlds: schools and hospitals that are delivered by a Scottish Parliament that is backed by the economic security and stability of the United Kingdom, which allows us to invest in our priorities.
I am sure that my yes colleagues will argue that in an independent Scotland there will be more money to spend on the things that matter. The economics of independence have long been debated by both sides and are a key area of the campaign that we will debate again. Members of the Scottish public—the people who will come together to decide our future on 18 September—will have to choose which side to believe, whose arguments make the most sense and what fits best with their view of the future.
People often bemoan having to make a choice between competing arguments and facts. They see politicians setting out seemingly contradictory positions and appearing to argue that black is white, and they are left wondering who to believe. They cry for good, impartial information. They want to hear unbiased, unvarnished facts, which will allow them to make the key decision on behalf of their families.
Yet there might never in Scottish history have been a vote in which people have had more information. A small industry has been set up to analyse the consequences and ramifications of an imaginary world that might never happen. The key question is whether Scots would be better or worse off if they voted to leave the United Kingdom.
The fact that that is debated at all illustrates how difficult it is to pick through the assumptions and predictions. However, many people have tried to do so. Let us consider what some of the experts—the economists and the think tanks—say. The Institute for Fiscal Studies said:
“Our calculations suggest that 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 Centre for Public Policy for Regions said:
“there will be a net fiscal loss under independence, looking into the future.”
Citigroup said that, with the recent drop in oil revenues, Scotland’s fiscal deficit is now significantly above UK levels, and the Pensions Policy Institute said that a future Scottish Government would need to raise tax, cut spending or accept higher debt.
Brian Ashcroft, emeritus professor of economics at the University of Strathclyde, said:
“Scottish government outlays would rise ... That would mean additional borrowing, or a diversion of spending from investment in the people of Scotland.”
Martin Wolf CBE, the chief economics commentator for the Financial Times, said:
“To avoid the risk, it would need to lower its debts quite rapidly. This would require even greater austerity than in the UK as a whole. Given its close ties to the rest of the UK, Scotland could not get away with taxing corporations or skilled people more heavily than its neighbour. So the bulk of this extra austerity would surely fall on public spending.”
I believe that a consensus is growing among those financial experts that Scotland would be worse off and that there would be less money to spend on the things that matter. On the one side, we have professors, economists, academics and policy experts all saying the same thing—that Scotland would be worse off. On the other side, we have a group of people—Alex Salmond, Nicola Sturgeon and John Swinney—arguing the opposite. They say that they like independence, but the last thing that they will listen to is independent experts who examine their plans.
The central deceit at the heart of the nationalists’ case for independence is the belief that the land of milk and honey is possible simply with a yes vote. Do you want tax cuts? You can have them with a yes vote. Do you want better childcare? You can have it with a yes vote. A new industrial strategy? Just vote yes. Every day, the SNP’s offer grows larger and larger, suspending the rules of arithmetic with every promise and pledge.
However, here is the reality as confirmed by the leading financial experts and economists who have looked at the costs. If Scotland was to vote yes, the first Government of the newly independent country not only would not be able to deliver the litany of wonderful things that Nicola Sturgeon and her colleagues promise every day; it would not be able to deliver even what we have now.
After that litany of how poor we are all going to be, can the member tell me what the trade position of Scotland is compared with the trade position of the UK?
If the member had listened to what I said, he would know that those are the views of independent experts. We know how good SNP members are at plucking a figure out of the air, doubling it and pretending that nobody else has to do the sums. Their sums do not add up.
If Scotland was to vote yes, the Government would not be able to deliver even what we have now. Instead of improving in an independent Scotland, public services would be worse if we cut our ties with the United Kingdom.
Let us consider the figures that have been supplied by the IFS, the think tank that Alex Salmond often quotes when it suits his argument. The IFS estimates that, in 2016, if there was a yes vote, an independent Scotland would face an additional deficit of £4.7 billion. Our deficit would be twice the rate of the UK’s deficit, and it would leave an incoming Scottish Government facing three options.
First, the Scottish Government could borrow even more money to run that inflated deficit but, given the fact that borrowing costs for a newly independent Scotland would be much higher, that option would not plug the fiscal gap. Also, if we were in a currency union, we would have to get a foreign chancellor’s permission first.
Alternatively, the Scottish Government could do something that Alex Salmond has never considered before—it could ask business or the rich to pay more tax. However, given the fact that his key policies for an independent Scotland are to keep the higher tax rate at 45p and to slash corporation tax for big business, there seems little chance of that.
It is more likely that it will fall to hard-working Scots to pay for Alex Salmond’s referendum promises. If Scotland’s 2.5 million workers were asked to shoulder the additional burden equally through tax increases, it would mean an additional £1,700 tax bill for each of them. It also seems inevitable that we would face public service cuts—cuts to schools and hospitals.
Can the member guarantee that, if we stay in the UK, the Scottish budget will not be cut?
Certainly, if there is a Labour Government back in power—[Interruption.]
Order.
We know how desperately the SNP back benchers are praying for a Conservative victory in 2015. They always put their own interests ahead of those of the people of Scotland.
Rather than having to find all those cuts, just think what £4.7 billion extra to spend could do for Scotland. That sum is the equivalent of 150,000 nurses, 125,000 teachers, more than 500 primary schools, 184 secondary schools or 74 hospitals, which is more than we could ever need.
People musk ask themselves why anyone would want to do that to their country, but the proposal that the SNP Government has put to the people of Scotland is unsustainable borrowing, swingeing tax increases or deep cuts to public services—or perhaps a mixture of all three. All the experts agree that one of those three options, or a mixture of them all, is inevitable in the first budget of the Government of an independent Scottish state.
The Scottish Government’s answer to all its financial problems lies at the bottom of the North Sea, a revenue that it can uniquely predict. Ignore the experts: John Swinney’s magic calculator can make the numbers add up. However, even that illustrates the precarious footing in which the SNP Government would place the public services that we cherish.
This year’s “Government Expenditure and Revenue Scotland” figures show that oil revenues dropped by £4.5 billion in the past year. That is more than our whole education budget. Only a Government as reckless as this one—whose one and only goal is to achieve independence for its people—would risk the education of our children and the care of our sick and elderly on a commodity as volatile as oil.
We already live in a country where you cannot go to accident and emergency in Aberdeen and you would be best advised not to give birth to a child in Wishaw, but the Government would have to cut health spending dramatically on top of that.
That is outrageous.
Order.
The SNP must confront the real world. [Interruption.]
Order.
It must confront the real world—not the fantasy world it has been living in for the past two years.
The SNP—the party which sided with Thatcher; the party which said that Scotland did not mind her economics; the party which sided with the people who said that unemployment was a price worth paying—is now saying that there is no price too high for Scotland to pay for separation. A deficit more than double the rate of the UK deficit? That will be fine. Losing more than the entire education budget? A mere bagatelle. Losing thousands of nurses? Scotland can afford that.
The truth of the matter is that the nationalists think that they will liberate Scotland; instead, they will impoverish Scotland. The truth is that no one joined the SNP to improve public services; they joined to separate Scotland from the rest of the UK. They are so determined to do that they will say anything about anything else because everything is a side issue to the main event.
Scotland’s public services face two futures on September 2014: a future after a yes vote in which all the experts agree Scotland will face renewed austerity over and above what we currently face and cuts to schools and hospitals as a consequence; or we could face a different future if Scotland votes no.
We know that the best future for our schools and hospitals is one in which we can make the key decisions here at the Scottish Parliament but backed by the economic security and stability of the United Kingdom. The best future is one in which we in Scotland decide what is best for our young people’s education and our national health service, but we share the costs across 60 million people rather than 6 million. Pooling and sharing resources; spreading risk and sharing reward: that is the argument that is persuading a majority of Scots that a no vote will give us the best of both worlds.
I move,
That the Parliament recognises that the best future for Scotland is one where its devolved public services are delivered by the Scottish Parliament but backed by the security and stability of the United Kingdom; acknowledges the many financial experts, economists and think tanks that believe that Scotland would be worse off financially if it were an independent country, and agrees that the best way to ensure a high level of investment in its schools, hospitals and public services is for Scotland to stay strong in the UK, allowing it to pool and share resources with its neighbours, which means that the people of Scotland enjoy the best of both worlds.
14:54
I very much welcome this Labour debate. Johann Lamont said that a key question in the debate is whether yes or no is best for our public services. I very much agree.
The debate is very timely coming as it comes on the very same day that another senior Labour figure, the vice convener of Unison in Scotland, has declared for yes. Stephen Smellie’s backing for independence comes hard on the heels of that of Pat Kelly, senior Labour activist and former president of the Scottish Trades Union Congress, of Jamie Kerr, vice chair of Renfrewshire South Labour Party, and of Anum Quasar, the general secretary of Muslim friends of Labour Scotland.
All those people, together with people such as Alex Mosson, Charles Gray, Carol Fox and Bob Thomson, understand that independence is the best route to a fairer Scotland, and—who knows?—independence might also be the best route to a reinvigorated Labour Party. On the evidence of today, the Labour Party in Scotland badly needs to be reinvigorated.
All in all, Johann Lamont could not have picked a better moment to demonstrate how increasingly out of touch she is with her supporters, but the real reason why I welcome the debate is that it gives me—against the backdrop of building momentum for yes—a perfect opportunity to set out again the positive case for Scotland becoming an independent country.
First, I will set out the evidence that says that we can more than afford to be a successful, independent country. Johann Lamont’s speech was characterised by doom and gloom and woe, but let us just remind ourselves of the facts. An independent Scotland would be the 14th richest country of those in the Organisation for Economic Co-operation and Development and would sit four places above the UK, so instead of being worse off as the depressing Labour motion says that it would be, Scotland would be better off. We generate more output per head than Japan, France and the UK. For every one of the past 33 years we have generated more tax per person than the UK as a whole has done, and over the past five years our public finances have been stronger than the UK’s to the tune of £8.3 billion.
Given that she has said that Scotland would be the 14th richest country in the OECD, does the Deputy First Minister not feel a little bit silly for saying in the white paper that we would be the eighth richest?
The key point here is that the relative advantage of Scotland over the UK is absolutely maintained. I do not know whether the Conservatives think that it is silly to point out the inherent wealth of this country; I think that it is good to point out our inherent wealth. If they spent more time talking up Scotland rather than talking it down, maybe they would not be in the dire position that they are in.
Will the cabinet secretary take an intervention?
Not at the moment.
Scotland can be independent—of that there is not a shadow of doubt—but the question on the ballot paper is not “Can we?” but “Should we?” On Monday of this week, the Scottish Government published its draft independence bill. As Johann Lamont said, on the same day the Opposition parties made a joint statement on further devolution.
Johann Lamont was right to comment on the contrast between the two. Our bill showed how Scotland, with all the confidence and powers of an independent nation, could set out our aspirations for this nation, work towards fairness in our society and remove nuclear weapons from our soil. By contrast, what the Opposition parties offered the people of Scotland was a pig in a poke: no agreement on specific powers to be devolved—not even one; no indication of a timetable; no say for the Scottish people; and no guarantee that anything whatsoever will be delivered. That is not good enough.
The only thing that will come with a guarantee of more powers is a yes vote to enable the people who live and work in Scotland to decide how this country should be run, not just in the areas that Westminster chooses to devolve but across the whole range of Government activity: taxation as well as education; welfare as well as health; and foreign affairs as well as justice. A yes vote will enable us to take responsibility for our own future and will give us the powers to address the challenges that we face and to maximise our opportunities.
Will the cabinet secretary give way?
Not at the moment.
I think that the founders of the Labour Party will have been turning in their graves as they listened to Johann Lamont, not just at her opening statement, which I will repeat just in case anyone missed it—she said, “Today, I join my partners in the Conservative Party”—but at the depressing, dismal lack of ambition in the Labour motion. It talks down Scotland—
Will the Deputy First Minister give way?
I am coming to you, Miss Goldie, so be patient.
The Labour motion talks down Scotland in virtually every line.
If Nicola Sturgeon knew about the proud history of the Labour Party, she would know that it is about solidarity and co-operation across the whole of the UK. [Interruption.]
Order.
The history of the Labour Party is about solidarity with the people of Belfast, Cardiff and Newcastle, who face the same problems that we do; it is not about separating ourselves off from them and blaming them for our problems.
I know that the proud history of the Labour Party is being betrayed by Johann Lamont day in, day out, because the only solidarity that she shows these days is solidarity with the Conservative Party.
The dismal lack—
Will the Deputy First Minister give way?
I am coming to you right now.
The dismal lack of ambition in the Labour motion is almost as bad as a comment that Annabel Goldie made at a debate that I did with her and Johann Lamont on Friday night. She told the audience what reports they thought they should read if they wanted to know “just how dependent Scotland really is”. I do not believe that Scotland is dependent, but if Annabel Goldie were right and Westminster really had reduced us to a state of dependency, surely it would be time that we did something about that. No one should revel in such a state.
In the same way, we should listen to the real lesson in the studies of the experts to whom the Labour motion refers, because they show us the risks and challenges that Scotland will face if we stay as we are and continue to follow the policies of the UK. Challenges of demography, inherited debt and public finances are products of the status quo; they are not arguments for keeping things as they are, but arguments for change. They demonstrate the necessity for this country to become independent and to find our way of addressing such challenges. With independence, Scotland would be a national economy with all the tools of other independent states. We would no longer be a region of an unbalanced and unequal UK economy, just waiting for things to be done for us and to us. Independence puts responsibility into our hands.
We have published the outlook for our public finances on independence and the years ahead, and it shows that on all key fiscal measures our finances in 2016-17 will be similar to or stronger than both the UK and the G7 countries as a whole.
Will the Deputy First Minister give way?
Not at the moment.
More than that, we have set out how policies to boost productivity, grow our population and increase participation in the labour market could boost our tax receipts by an additional £5 billion a year.
We have also proudly produced proposals to reindustrialise Scotland, something that the Labour Party might once have found it within itself to agree with and back, and we have set out how we can use policy levers to strengthen manufacturing, promote innovation and encourage trade and investment. All of those aims should be the aims and ambitions of every party in the chamber.
That is what is so dispiriting about the Labour motion. There is no alternative plan to increase employment, to grow the economy or to grow our working age population. Labour’s only solution to the challenges that we face is to leave things to Westminster and hope for the best. That is not good enough. The most high-risk approach imaginable to Scotland’s public finances is to leave the decisions on our funding to the Treasury, knowing that the chancellor and his opposite number are planning further cuts, and to leave the Barnett formula in the hands of the Treasury, knowing that senior voices in all parties want to cut Scotland’s budget by up to £4 billion.
We are offering the alternative to that. The way to secure the resources of Scotland and our public finances is through independence; to retain in Scotland the tax raised in Scotland; and to retain the benefits of our economic policies to ensure that our investment in infrastructure or childcare results in increased tax receipts and further investment, instead of disappearing into the Treasury.
The simple fact is that this is a choice between two futures: on the one hand, hope, ambition and optimism, and on the other, a dreary, dismal and depressing outlook. Independence—in other words, not relying or being dependent on Westminster—is the best way to secure the future of our economy, our public services and the people of this country. That is why I am proud to move the amendment in my name.
I move amendment S4M-10353.3, to leave out from “recognises” to end and insert:
“notes that its record of delivery under devolution demonstrates that decisions about Scotland are best taken by the people who live and work in Scotland; welcomes the Scottish Government’s recently published proposals to use the powers of an independent country to reindustrialise Scotland, to improve Scotland’s economic growth and strengthen public finances; further welcomes the publication of the proposals of the Expert Working Group on Welfare to create a fair, simple and personal welfare system in an independent Scotland; notes that the joint statement from the Scottish Labour, Scottish Conservative and Scottish Liberal Democrat parties contains no commitment to specific further powers and that any further devolution would require the agreement of the UK Government and the UK Parliament, whatever the views of the people of Scotland, in contrast to the proposed interim constitution, which would ensure that sovereignty is held by the people of Scotland, and believes that only independence guarantees Scotland the powers to create a democratic, prosperous and fairer country.”
15:04
Back in the real world, let us look at the document that Nicola Sturgeon was so keen to quote but less keen to take interventions and questions on. She boasted about how fabulous the “Outlook for Scotland’s Public Finances and the Opportunities of Independence” document is. She talked about how it proved that, on every conceivable measure, an independent Scotland would be richer and would have healthier finances than the rest of the UK. What she did not say and what that document does not say at the beginning—it says this only tucked away in a box halfway through, on page 26—is that every single scenario in the document relies on scenario 4 of the Scottish Government’s oil and gas projections.
Scenario 4 believes that we would get £6.9 billion of revenue from oil and gas in the first year of an independent Scotland, rising to £7.3 billion in the year after that. In any analysis, that is an optimistic scenario for oil and gas. It is a full £4 billion higher than the Office for Budget Responsibility’s central scenario. [Interruption.] It is funny: every time that the OBR is mentioned, we get scoffing from the Scottish National Party. Alex Neil, of all people, says, “They’re very reliable, that lot,” and Humza Yousaf shouts out loud. However, let us take a second to look at the OBR projections.
The OBR has had to reforecast just about every forecast that it has made. Why on earth would Gavin Brown put responsibility on an independent body that has managed to get the figures of his own UK Government wrong and rely on those?
Humza Yousaf absolutely walked into that. He said that we cannot rely on the OBR. Let us look at who got it right with the most recent set of oil projections. For 2012-13, the OBR was very close to the actual output. The Scottish Government—it will not like this, but it is true—was out by almost £1 billion, despite making the projection three weeks before the end of the financial year. We will take no lessons from the SNP when it comes to projections on oil, or on anything else for that matter.
Let us look at the oil figures for 2013-14. We know, as we are at the end of the financial year and have had the projections, apart from the final ones, that the OBR’s oil projections for 2013-14 were again just about right; this time, the Scottish Government was several billion pounds out in its projections. When it comes to having a track record on oil projections, the Scottish Government may scoff at the OBR, but the OBR is far better and far more successful than the Scottish Government has been so far with its projections.
Will Gavin Brown comment on the statement from the Petroleum Industry Research Associates energy group yesterday that Brent crude prices will average higher, to $115 per barrel, and on The Economist commodity price index that was produced last week? Oil prices have risen 9.5 per cent in the past year.
The issue is that, for John Swinney’s projections to come true, we need oil prices to stay high every single day of the financial year in question and in the financial years afterwards, and we need production to remain high and not to go down. The projections also rely on investment and production costs being lower than those that are projected. We need to roll a six with every roll of the dice for John Swinney’s projections on oil to come true.
I notice that John Swinney has not challenged me once on the projections that I have talked about. Every line in the “Outlook for Scotland’s Public Finances and the Opportunities of Independence” relies entirely on revenue from oil and gas being £6.9 billion in 2016-17 and £7.3 billion in the year after. As I said, the projections are far higher than the OBR’s projections; they are higher even than those of the Scottish Government’s adviser in its fiscal commission working group, Professor Andrew Hughes Hallett. He said that the revenue will be between £4.5 billion and £5 billion. Mr Swinney’s projection is therefore £2 billion above that of even his own trusted expert adviser, whom I have questioned several times about whether his estimate is reasonable. He was absolutely certain that it was. That means that Mr Swinney’s projection is a hugely optimistic estimate.
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney) rose—
I will happily give way to the cabinet secretary.
I am afraid that the member is in his last minute. I am sorry, Mr Swinney.
I apologise to the cabinet secretary. I guarantee that I will be happy to give way to Mr Swinney in my closing speech, when he can ask any questions that he likes on the figures.
The Government says that we will be better off and richer, but the only way in which it has managed to make us look wealthier than the UK is by giving a high oil projection for every single year. That is not good enough. We call on the Government to republish its projections with a central scenario that is cautious about oil instead of a scenario that is only optimistic about oil.
I move amendment S4M-10353.2, to insert at end:
“; notes that the recent Scottish Government paper, Outlook for Scotland’s Public Finances and the Opportunities of Independence, assumes for all forecasts that Scenario 4 from the May 2014 Oil and Gas Analytical Bulletin occurs; calls on the Scottish Government to republish its forecasts for the public finances with both a central scenario and a cautious scenario for oil revenues, and further calls on it to publish the estimated set-up costs for an independent Scotland, along with the estimated costs of the policy commitments made in the white paper on independence and the policy commitments made after publication of the white paper”.
15:10
Presiding Officer, I apologise for my rather flushed look this afternoon. I have been pitching a tent in the park with Johann Lamont—for wild in the park, I hesitate to confirm. If any member has not been over to the reception at wild in the park, I encourage them to do that this afternoon so that they can get a tan like mine.
In the sunshine on Monday, on top of Calton Hill, all three parties that support the United Kingdom stood united for more powers for the Scottish Parliament. [Interruption.] On cue, the nationalists do what they did on Monday: they berate us for standing together. What Monday signified was that more powers are on the way. People need to know that if they vote no in September, they are not voting for no change, but for more powers that are guaranteed.
Each of the three parties has a detailed plan to back up its commitment. The Liberal Democrat plan is for home rule in a federal United Kingdom. We want this Parliament to raise the majority of the money that it spends so that we can determine our destiny on the domestic agenda while sharing risk with the United Kingdom. [Interruption.] The nationalists cannot accept that that constitutional option is the most popular one on the table and far more popular than the independence option. That is why they deride it so much and are so afraid of it.
We want to entrench the Scottish Parliament to make it a permanent constitutional feature. The test for us is this: if the Scottish Parliament wants to do something different for the NHS, schools or universities, we can do so. If we want to cut taxes for those on lower and middle incomes, like the Liberal Democrats at Westminster, we can do so. If we want to increase investment in early learning and childcare, like my colleagues at Westminster, we can choose to do that as well. All that can be achieved while sharing risk with the United Kingdom.
We know from reports that have been published that people in Scotland will be £1,400 better off each year from Scotland staying part of the United Kingdom. That is the UK dividend, which is made up of a variety of benefits that the nationalists like to deride but which are the reality of our relationship with the United Kingdom. Maintaining high public spending here in Scotland is something that the United Kingdom can achieve with its broad shoulders. The UK can deliver that even though oil revenues are so volatile from one year to the next and halve from one year to the next. That is significant, because oil would make up such a large proportion of total Scottish income under independence. That is why oil projections are so important.
Mr Rennie talked about the UK guaranteeing the future of Scottish public spending. In her opening remarks, Johann Lamont attempted to offer a promise that an incoming Labour Government would not cut the Scottish budget. Does Mr Rennie want to gain some credibility by acknowledging that nobody in this chamber is in a position to make such a commitment on behalf of an incoming chancellor in 2015, whoever they might be?
I do not know whether that intervention was directed at me or at Nicola Sturgeon. The SNP makes promises for the future as if no cuts will ever be made. Of course, there is volatility in finances, but with the United Kingdom we get the broad shoulders that can deal with the volatility from one year to the next. Because an independent Scotland would be so dependent on oil revenues, the challenges would be so much greater. Therefore, what we would see—[Interruption.]
What we hear is the scoffing from members on the SNP benches about the independent OBR. They scoff because they say that the OBR is too pessimistic. Listening to the nationalists, we would think that the OBR was part of some unionist conspiracy to do down Scotland. What the nationalists ignore is that, far from being pessimistic, the OBR is optimistic, overstating the oil revenues.
Far from being too dark and despondent with its oil projections, the OBR is far too cheery; it looks far too much at the upside. That has been confirmed by Professor Andrew Hughes Hallett, who also agrees with the OBR that the SNP’s projections are far too optimistic. The professor states that there is a 30 per cent difference between his predictions and the SNP predictions. That is a mistake of £1.9 billion at least—potentially £2.4 billion—every single year for the first years of independence. That is a colossal mistake—it is a colossal overestimate. We need to recognise the problems and the challenges that we would face.
There needs to be a bit of reality on the SNP benches. I do not blame SNP members for their passion for independence. I recognise that they believe in their cause. I do not criticise them for that; I criticise them for the lack of reality and the lack of honesty about the policies and the costs of independence.
Will the member take an intervention?
The member is in his last 15 seconds.
I criticise them for the lack of honesty about the benefits of the United Kingdom—the £1,400 dividend that we get from staying part of the UK. Let us have no more scaremongering about the UK. Let us talk about the upside—the benefits of staying together.
I move amendment S4M-10353.1, to insert at end:
“; believes that every person in Scotland will be £1,400 better off each year by staying part of the UK; notes with concern the continued discrepancies between the estimates of the Scottish Government and those of a range of institutions including the Institute for Fiscal Studies and of experts including Professor Hughes-Hallet on oil revenue forecasts; further notes the refusal of the Scottish Government to provide any evidence of work carried out on the cost of setting up the systems and institutions required for independence, and believes that the Scottish Government should publish full set-up costs without further delay so that people have all of the information they require to make an informed decision on 18 September 2014”.
We are very tight for time. Mr McDonald—you have up to six minutes, please.
15:16
I guess that the most that we can say about Willie Rennie’s speech is that at least he did not get the Lego out.
Having listened to the quotations from other members, I want to read out a few quotations myself:
“Supporters of independence will always be able to cite examples of small, independent and thriving economies across Europe such as Finland, Switzerland and Norway. It would be wrong to suggest that Scotland could not be another such successful, independent country.”
David Cameron said that.
“I believe Scotland is big enough, rich enough and good enough to be an independent country”.
Ruth Davidson said that.
“The question is not whether Scotland can survive ... Of course it could”.
Alistair Darling said that.
“You’ll never hear me suggest that Scotland could not go its own way”.
Michael Moore said that.
Yet today, we essentially heard from Johann Lamont the epistle “We’re doomed if we become independent.”
Nicola Sturgeon highlighted a number of key Labour members who are backing independence for Scotland. One whom she omitted is the Labour MP for Leeds East, George Mudie, who has come out and said that Scotland should be independent. How refreshing that a Labour MP who represents an English constituency can see independence as the right choice for the nation of his birth and where he grew up. How sad and depressing that the Labour politicians who are in Scotland cannot see past their antipathy towards the SNP and recognise the possibilities that independence could bring for Scotland.
Johann Lamont made the claim that we on the SNP benches did not get into politics to improve Scotland but instead to impoverish it, which I think is a rather unfortunate slight to make. She thinks that we see independence as an end and not as a means. That demonstrates a total misunderstanding, and it also overlooks the improvements in public services that have been delivered in this Parliament.
Nobody would seek to say that there have not been improvements in Scottish public life as a result of the establishment of the devolved Parliament, but the point is that devolution can take us only so far. When we have a Westminster Government that acts against the interests of Scotland, we find ourselves having to mitigate where we can and, where we are not able to do so, having to simply thole what is wrought upon Scotland by Westminster.
Independence is not a magic wand, but it is a toolkit to improve Scotland and make it a better place. In 1997, the idea was put to Scotland that decisions about Scotland were best taken in Scotland and by the people of Scotland, on a range of areas such as health, education and justice. That was true irrespective of what the party of Government was at Westminster, because it was the Labour Party in power that delivered devolution for Scotland in those areas. It recognised that Westminster did not work for Scotland in those areas and that Scotland should take those decisions.
What we on the SNP benches seek to do is simply to extend that maxim and that principle to other areas of policy, whether it is to Trident—I was interested to hear Mr Rennie talk about all the things that we can already do in Scotland; one thing that we cannot do is rid ourselves of the abomination of nuclear weapons in Scotland, but with the powers that independence would bring, we could set that right—or to issues around welfare and fairness.
The idea that we have the best of both worlds is an interesting soundbite. However, some of our most vulnerable citizens have a degree of social protection provided to them through the fact that we continue to control our health service, here in Scotland, but when those people leave their GP surgeries and enter the clutches of Westminster welfare reform, we are, to all intents and purposes, powerless to help them. We can put in place forms of mitigation, and we have done that where we can, but we cannot address all the adverse impacts of welfare reform, such as the fact that 100,000 children will be plunged into poverty as a result of it. We can do some stuff to help those children, but we cannot do all the things that we would like to do; we cannot reverse some of the decisions that are being taken.
I welcome the expert group on welfare’s approach and in particular its comments on the carers allowance. For a long time I have campaigned for carers and in particular for the carers allowance, so it is very refreshing to see that allowance—it has been one of the forgotten benefits—looked at with great seriousness.
It does not behove the Labour Party to dismiss—as its spokesperson did at the time—that very important piece of work as a bribe. I do not agree with the idea that if we offer people something that they do not have, we are offering them a bribe. We are offering a substantial piece of policy regarding a very important group in Scottish society. Rather than deriding that as a bribe, the Westminster parties could guarantee similar increases in the carers allowance in the current system. The fact that they choose not to says everything about how the Westminster system operates in relation to those who are dependent on the welfare state.
We often hear it told that Scotland would not be considered to have a credible or serious voice in foreign policy, but foreign policy is not just about a country’s size or how loud we shout. It is about what we say, how we act and the alliances that we draw.
Will the member take an intervention?
I am afraid that I am in my last 40 seconds.
The member is in his last 30 seconds.
Nations such as Ireland and Belgium have made important contributions to United Nations peacekeeping missions. They are not major players in terms of the defence agenda or the wider international security agenda, but they play a strong peacekeeping role. If we look at how Norway played an important role in the middle east peace process through the drafting of the Oslo accord, we can see that small independent nations that use the right kind of language and behaviour in the international scene can play a credible and forceful role in foreign policy affairs. Such countries do not need to have a large population or to be one of the great military powers, which we are often told that we are a part of, that get dragged into conflicts such as Iraq—look how well that ended up.
15:23
It is a truth universally acknowledged that in this referendum campaign many voters still feel that there is a lack of dispassionate information available about the economic and fiscal position of an independent Scotland. They certainly did not get any from the cabinet secretary’s largely substance-free contribution.
The truth is that every day sees a growing body of rigorous analysis from academics, think tanks, ratings agencies and major companies, independent of either campaign, or indeed either Government, which are remarkably consistent in their views. An independent Scotland would face higher debt, a higher deficit and higher borrowing costs than we do as part of the United Kingdom. Pretty well all those reports point to higher taxes or greater cuts in public services than anything that has been required while we have been in the UK, as a direct consequence of separation.
The views on the scale of cuts in public services that we would face are pretty consistent, too. The most recent estimate, which came from the IFS, calculated that the deficit in an independent Scotland would be 5.5 per cent of GDP, which is around twice what we would face as part of the UK. That means that we would have to find £4.5 billion of cuts just to stand still. I see that Patrick Harvie is not here, but the answer to his question to Willie Rennie is that whatever challenges we face as part of the UK would be greater and more acute if we were a separate country.
The extra borrowing that Mr Swinney announced he plans to make post-independence would simply be swallowed up, and we would still be paying off teachers and nurses by the thousand. Yet those figures do not begin to include the costs of the promises that the Scottish Government has made with no idea how it will pay for them. It will need £550 million to pay pensions earlier, £1.2 billion to pay for childcare and £300 million or so for benefit changes. Let us not forget the windfalls for big business: £380 million for a corporation tax cut, up to £230 million to cut air passenger duty and £150 million a year for the energy companies so that they can end their environmental obligations and pass them back to Scottish citizens and taxpayers. Mr Swinney says that those figures do not include the diversion of oil revenues to an oil fund on day 1, but even the Government’s own white paper admits that there is no spare oil money for an oil fund.
The figures also do not include the set-up costs for a new country. The Institute of Chartered Accountants of Scotland has estimated that it will cost £700 million just to set up a tax system, which is almost exactly the figure that Mr Swinney himself estimated in his private paper to his Cabinet colleagues. All those sums will have to be cut from public spending, schools, hospitals and local services.
The member is portraying the most negative position. Does he accept that, if GDP was to grow by even 1 or 2 per cent, that would cover quite a lot of those figures?
Mr Mason has perfect timing: the way out of the problem would be to believe the Scottish Government’s forecasts, which tell us that there would suddenly be more economic growth. The Scottish Government says that our productivity will jump, our employment rate will suddenly soar, net in-migration will double and the working-age population will boom. It says that the Office for Budget Responsibility cannot forecast oil revenues, so it has thought of a number, doubled it and added a couple of billion pounds on for luck. It assumes that setting up a new country will cost us less than the building in which we now stand—maybe it will cost nothing at all.
When the Scottish Government is asked where the increases in productivity and employment will come from, it does not know. When it is asked where 24,000 net migrants a year will come from, it does not know. When it is asked what the set-up costs for Scotland will be, it tells us that it does not know. When it is asked what the currency in this country will be when there is no currency union, it tells us that it does not know and will not say.
In response to independent analysis that says that independence will mean cuts to public services, to credit agencies that tell us that we will pay more to borrow and to bodies such as the Pensions Policy Institute, which said to our Finance Committee today that independence would jeopardise the affordability of pensions, the Scottish Government has nothing to offer but a towering edifice of dodgy arithmetic, unfounded assertion and wishful thinking. To paraphrase one commentator, it would be pie in the sky, except we do not even have the ingredients for the pie.
One of my local activists summed up the independence offer perfectly when he said to me that it is a gamble funded by a lottery. This is a gamble with the highest stakes of all. It is a gamble with our schools, our hospitals, the jobs of our teachers and nurses, the education of our youngsters and the pensions of our older citizens.
Last week, we saw the news that the biggest political bet ever had been placed on the outcome of the referendum, but the truth is that the biggest political bet ever in this country is the independence prospectus itself. The stake is the future of our country and the life chances and wellbeing of our people. It is a gamble that we do not have to make, and a gamble that we should resoundingly reject come September.
15:29
It was Samuel Johnson who said:
“Our aspirations are our possibilities.”
That means that if we want to progress, we have to believe that change is possible or, to use the phrase that has been popularised by the radical independence movement—our colleagues in Yes—“another Scotland is possible”.
Today’s Labour motion suggests that the party has no aspirations—that is apparent: Labour is telling us that change is not possible and that empowerment is not possible. I contrast its motion with a number of documents that have been published in recent weeks, which envisage the possibilities of a better Scotland in the future. One is “Re-Thinking Welfare: Fair, Personal & Simple”, the second report of the expert working group on welfare, which was chaired by Martyn Evans of the Carnegie UK Trust. It sets out a vision for a fairer Scotland for the most vulnerable people in the country, with recommendations on re-establishing a link between benefits and the cost of living and an increase in the carers allowance. It also recommends that the first Government of an independent Scotland should have as its goal a living wage instead of a minimum wage.
Last week, the First Minister unveiled “Reindustrialising Scotland for the 21st Century: A Sustainable Industrial Strategy for a Modern, Independent Nation”, a document that shows that we could grow our manufacturing output by a third and suggests some practical ways to deliver that with the powers of independence—for example, through a properly funded Scottish business development bank, a simple and more effective tax system and a network of overseas offices that is designed to boost our exports.
On Monday, the Deputy First Minister published “The Scottish Independence Bill: A consultation on an interim constitution for Scotland”. I found reading the draft constitution an encouraging and a moving experience. In particular, the clarity of the language is inspiring. It begins with the simple statement:
“In Scotland, the people are sovereign”.
Section 3 says:
“In Scotland, the people have the sovereign right to self-determination and to choose freely the form in which their State is to be constituted and how they are to be governed.”
I have mentioned just three of the many documents that the Government and others have published, outlining a vision of the future—a vision of welfare, of the economy and of the empowerment of the people. All those documents share an ambition for Scotland. They meet that Samuel Johnson maxim about our aspirations being our possibilities.
Another Scotland is possible. That is something that the Labour Party used to believe. The motion today suggests that the Labour Party has given up on that belief, given up on ambition and given up on vision. The Labour motion has no vision for a fairer welfare system, and it has nothing to say about growing our economy or truly empowering our people. Instead, the motion talks of the security and stability of the UK. However, a UK that is paying £1 billion a week in debt interest repayments is neither secure nor stable.
The UK Government has capped welfare, with the support of the Labour Party in Westminster, showing that, in the UK, the most vulnerable face a bleak future. The motion suggests that the UK is okay. However, that welfare cap is not okay. A hundred thousand children in poverty by 2020, as the Child Poverty Action Group has predicted, is not okay. A regionally imbalanced economy in which output in London is 70 per cent higher than the UK average is not okay. Income inequality that is among the worst in the OECD is not okay, either.
If that is the best vision that Labour has to offer, the people of Scotland should have only two words to say to it: “No thanks.”
15:32
Johann Lamont has established well the case for why the best future for Scotland is one in which its devolved public services are delivered by the Scottish Parliament but are backed by the security and stability of the United Kingdom. My colleague Iain Gray has collated all the substantial evidence that states that Scotland would be £4.5 billion worse off under independence, having to find more than £4 billion just to stand still. In the time that I have got, I would like to look at the budget lines around education and how that money is spent. If I have time, I will consider the additional promises that the Government has made.
The magic number of £4.5 billion represents the money that we would need to find. It is also the drop in oil revenue between 2011-12 and 2012-13—and it is the entire schools budget.
I have spent a lot of time knocking on doors and taking part in referendum debates, and I have met a lot of undecided voters who are completely scunnered by the way in which we talk about the country’s finances. One side says that people would be £1,400 better off and the other side talks about £1,000 with independence. People are left thinking that someone is going to run up to them with bundles of £20 notes, because they do not realise that those projections are based on estimates about what the situation will be 10 or 15 years in the future. If economists cannot forecast one year ahead effectively, how can voters give any credence to such sales pitches? That is why the comparison between oil revenues and schools is such a compelling one. Here is a resource that is so volatile that a dip in its value from one year to the next is enough to wipe out the entire schools budget.
The comparison is valid only if the member is asserting that oil revenues are all that would be available to pay for schools, but that is clearly not the case in a budget.
I am merely making the point that that is how undecided voters look at the debate. They are trying to get their heads around the finances, but Mark McDonald’s side’s sums do not add up—and they do not add up to the size of the entire schools budget. That is where the size and security of the UK come in. The UK can carry that fluctuation in prices with far greater ease than an independent Scotland could.
In her amendment, the Deputy First Minister refers to the Government’s
“record of delivery under devolution”.
Let us look at the detail of that record in relation to education. Cash-terms spending on secondary schools is falling—from 2008 to 2011, it fell by £91.4 million. Real-terms spending on secondary schools is also falling—since 2007, it is down 8.6 per cent.
Teachers are feeling the pressure of having to deliver more for less. The latest Educational Institute of Scotland teacher survey, which was published just last week, contains some startling statistics: only one teacher in three is satisfied with their working life; 84 per cent of teachers had varying levels of work-related stress; and only one teacher in 10 was satisfied with their current workload. The resounding message from teachers is that they do not feel heard, do not feel valued as professionals and do not feel that they are getting the support that they require.
Meanwhile, educational inequality persists. It is at its starkest when we examine the experiences of looked-after children in Scotland. This week, the Scottish Government produced a new report on looked-after children, although members would be hard pressed to find it underneath all the other bumf on the Scottish Government website, including proposals for a new constitution. That shows once again the complete lack of the Government’s exposure of, and priorities on, the issue.
Let us look at the headline numbers. First, 85 per cent of looked-after young people left school as soon as they were old enough, in comparison with 30 per cent of all school leavers. Only 62 per cent of looked-after kids had positive destinations after school, compared with 90 per cent of all school leavers. To the Government’s credit, that is a considerable improvement on 2009-10, but there is still a long way to go.
The news on tariff scores is not so good. The average tariff score of a looked-after child in Scotland is 86, whereas it is 407 across all school leavers. That means that kids who are not in care are outperforming kids in care by a rate of five to one. That is a shocking statistic, but it is not the most damning statistic in the Government’s report, because the gap is getting bigger: the tariff scores across all kids are increasing at twice the rate of that for looked-after children.
That matters in the debate because education is an entirely devolved issue. The Scottish Government, not the dastardly Administration 400 miles down the road, sets the priorities and makes the hard choices.
Peter Peacock asked the OECD to investigate Scottish schooling back in 2004. A comprehensive and compelling report was produced in 2007 showing that we had an inequality problem in our schools. The Government has completely failed to address it. That record speaks volumes about the Government’s commitment to tackling inequality in our schools.
The education maintenance allowance is another classic example. Mike Russell boasts about the increased number of school pupils who are in receipt of the EMA, but denies that he has cut £10 million from the budget, while college students are unable to take it at all. There has been a 26 per cent cut in the EMA.
What about colleges? There has been a 37 per cent reduction in student numbers. The SNP will say that those numbers are wrong, but it fudged the statistics by redefining a full-time course. Once again, women are disproportionately affected by those changes. That is before we even get to the SNP’s childcare commitments. We and the Scottish Parliament information centre believe that those will cost £1.1 billion, and the Government will not produce the economic model that will tell us where it will find that money.
The Government needs £4.5 billion post-independence just to stand still, but it is standing still on the big issues such as educational inequality. That tells us everything that we need to know about its values and priorities. The Deputy First Minister says that we should look at the record. Well, the record on inequality is wafer thin. Why would it be any different with independence?
15:39
I always welcome the opportunity to discuss Scotland’s future—the positive case for independence, as opposed to the negative reasons to stay in the union, which we continually hear from the Opposition parties. There is always a positive idea for us to talk about: the values and priorities that an independent Scotland would have. Independence gives us the opportunity to get the full levers of power and prioritise our values in order to deliver for the people of Scotland.
The eyes of the world are on Scotland. We are the talk of the international political steamie—and rightly so, given how important the issue is for the people of Scotland. We stand between two futures: the status quo, with further austerity cuts from a Westminster Government that Scotland did not vote for, or the responsibility of having the full powers of government.
Having those powers would mean no longer playing the blame game and blaming other political parties and Governments in other places. We would have the opportunity to take on the full responsibilities that independence brings and create the type of Scotland that every member in the chamber actually wants.
We live in one of the wealthiest countries in the world, yet many of our people do not have the opportunities that they need or, worse still, live in poverty. Westminster’s austerity cuts to welfare are making their lives even more difficult, and many of our electorate have difficulty managing on the benefits that they get.
What type of Scotland do we want from independence? We can create a welfare system that supports our people back to work, makes work pay and provides a strong and decent safety net for those who are unable to work.
I welcome the fact that the Scottish Government has taken on board a number of the recommendations of its expert working group on welfare. My colleague Mark McDonald mentioned the recommendation to increase the carers allowance at the same rate as jobseekers allowance for those aged 25 or over. Another recommendation was that we re-establish the link between benefits and the cost of living, so that benefits and tax credits are increased each year in line with the consumer prices index.
Most important, we need to ensure that we have the powers to abolish the bedroom tax instead of just mitigating its effects. We can replace the current system of sanctions with one that is fairer and more personalised and positive, ending the situation in which we all have constituents coming to our offices who have been left penniless because of the current system.
That is the type of Scotland that I want to live in and that I want for the future.
I respect George Adam’s passion on those issues, but why does he not have the ambition to abolish the bedroom tax for people who are suffering under it throughout the UK? Why such poverty of ambition?
My ambition is to ensure that the people of Scotland have the opportunity to create the kind of country that we want. I want us, collectively, to be able to take our place in the world.
We would have the opportunity to make it easier for parents to get back to work by transferring the money that Westminster spends on Trident weapons to childcare: investing in weans, not weapons of mass destruction. Independence is about ensuring that we can take that money and build a Scotland in which we get people back to work where we can.
Our childcare policy is already in place. In the first budget, we will provide 600 hours of childcare to approximately half of Scotland’s two-year-olds, and by the end of the first session of an independent Parliament we will ensure that all three-year-olds, four-year-olds and vulnerable two-year-olds are entitled to 1,140 hours of childcare
Those are the things that can—and will, we believe—make a difference in people’s lives.
Independence can give us the powers to invest back into childcare money that will be raised by enabling more women to get back into work. That will transform childcare and strengthen employability and skills, enabling more people—particularly women—to get back into work.
Those are the issues that I will deal with passionately in the chamber, because they will make a difference. When we have the powers of independence we can have that debate, instead of watching the usual Westminster ping-pong competition in which it is Tory one time and Labour the next, and they constantly blame everyone else instead of taking on responsibility for government and ensuring that we can move forward.
Scotland has a democratic deficit, and Westminster will never deliver the future that we want. Although 76 per cent of Scottish MPs voted against further austerity cuts in the 2010 budget, that made no difference and the cuts went ahead; indeed, 81 per cent of Scottish MPs voted against the welfare cuts and the change in the benefits uprating system.
An old SNP councillor in Renfrewshire for 35 years, Jim Mitchell, who was a friend of mine and has now left us, used to say, “You’re powerless if you remain within the Westminster system.” Indeed, Scotland is powerless if we remain in the Westminster system, because our ambition is bigger than that, and we want so much more.
The choice in front of us is quite simple. It is between having responsibility and the power to deal with the many challenges that we have with independence for us all, so that we can create the type of country that we all want—an exciting new dawn—and the continued negativity and austerity of Westminster. As a husband, a father and, as I recently announced, a soon-to-be grandfather, I know what type of country I want for my family and for the rest of the people in Scotland. That is why I believe passionately that independence is the only way forward. Give us the powers to create the country that we all want. That is surely something that everyone in here wants for the future.
15:45
I am delighted to take part in the debate, because I whole-heartedly believe that the strongest and most stable and secure future for Scotland is one in which she remains part of the United Kingdom. As a general and positive observation about that partnership, we need only look at the current news headlines to understand why, in a global world, global influence matters. With the best will in the world, and no matter how well an independent Scotland was led, it could not replicate that influence.
There are many other reasons why Scotland is better off as part of our family of nations. One of the most compelling and obvious is that the United Kingdom allows us to pool and share resources across a population of 60 million people. Without doubt, that is the best way to ensure that Scotland continues to be able to invest in schools, hospitals and other public services.
That point is well illustrated when we look at the topic of pensions. To put it simply, the best way to ensure that our pensioners are supported is by spreading costs across these 60 million UK citizens, not just the population of 5 million in Scotland. As Scotland’s population is projected to age faster than that of the rest of the UK and the proportion of Scotland’s population of pensionable age is already greater and is projected to increase more rapidly than that of the rest of the United Kingdom, there can be no doubt that pensions will become less affordable in an independent Scotland.
I can hear the SNP back benchers chirruping their usual indignation, with the mantra, “Everything will be okay because Scotland has oil and that oil makes Scotland one of the wealthiest countries in the world.” In fact, I believe that one of the Yes Scotland billboards proclaims:
“What would you say to living in one of the world’s wealthiest nations?”
We already do—it is called the United Kingdom. As part of the United Kingdom, Scotland is already a proud and vibrant country in a strong, successful and stable union.
Will the member take an intervention?
Let me make progress.
I will comment on oil and gas, which my colleague Gavin Brown has so eloquently talked about. Oil and gas are a fantastic success story. According to Mr Swinney’s leaked memorandum, they have been essential for funding Scotland’s public services over the past 21 years. However, even with those revenues Scotland has been in deficit in all bar one of those years. They have safeguarded Scotland’s public services. The oil and gas sector is an amazing job and revenue creator and it is one of which Scotland should rightly be proud.
However, in an independent Scotland, oil and gas would be a much bigger proportion of the Scottish economy than they currently are in the wider UK economy. That should ring alarm bells, because oil and gas tax revenues have been falling since 1999. The UK economy is much better able to absorb that fall. Last year, oil and gas revenues fell by more than £4 billion. Had that happened in an independent Scotland, which would be operating an estimated starting budget deficit of around 5 per cent of GDP, the consequences would have been acute. Either schools and hospitals would have had to be shut or taxes would have had to rise. However, last year that horrible dilemma did not arise. Why? Because of the economic stability that being part of the United Kingdom gives us.
Compare that with the fiscal position of an independent Scotland in 2016, when the SNP wants us to leave the UK. This month, both the independent IFS and the Treasury published detailed analyses. Those analyses conclude that an independent Scotland would face more substantial challenges than the rest of the UK. They suggest that, to continue to provide similar levels of public services over the next 20 years, we would need to increase onshore tax revenues by 13 per cent from the start of independence.
I think that people need to understand the scale of that increase. It would be equivalent to setting a 28 per cent basic rate of income tax, setting a 26 per cent standard rate of VAT and increasing the main duties on alcohol, tobacco and fuel by almost 40 per cent, or growing the economy at a rate that is by any assessment impossible. The figures do not take into account the extra borrowing that Mr Swinney announced this week, nor do they include the set-up costs that an independent Scotland would have to pay for.
That is not talking Scotland down; it is just providing facts. If providing facts means protecting Scotland from uncertainty and unanswered questions, nobody is going to stop me giving the facts.
If the Scottish Government were saying to the people of Scotland that an independent Scotland would face financial challenges, that we would lose the safety net of the United Kingdom and that there are difficulties, but that the dream is worth the risk and it would explain how it would mitigate that risk, I would have more respect for the SNP’s position. Instead, the Scottish Government is ignoring the warnings in its own leaked memo. It makes sweeping assertions, it overestimates revenues, it underestimates expenditure and it refuses to quantify other costs altogether. I do not think that that is good enough. In a debate of this magnitude, the public are entitled to a lot better than that.
I want to protect our public services in Scotland, and I want Scotland to have a vibrant, strong, stable and secure future. The partnership of the United Kingdom offers that, in striking contrast to the uncertainty that enshrouds the case for independence.
15:51
I, too, welcome this afternoon’s debate, but I express some amusement at the last part of the motion, which states that Scotland sharing its
“resources with its neighbours ... means that the people of Scotland enjoy the best of both worlds.”
That will be the five London neighbours whose aggregate income is greater than that of the 5 million UK neighbours on low incomes. Those last lines serve to confirm that whoever wrote that—whoever believes that—lives on another planet.
We will hear a lot, and have heard a lot, about numbers this afternoon. I will indulge in some later. However, the debate is about more than that. It is about eradicating the democratic deficit that inhabits our neighbouring worlds—and planets. In my book,
“the best of both worlds”
does not include—and this applies to the UK, Mr Bibby—the bedroom tax, a welfare cap, food banks and so much more. If that is the best, I would hate to see the worst.
The motion seeks to omit the real question. The real question and the real issue is to ensure that the people of and in Scotland have full sovereignty over the matters and decisions that affect their daily lives; that they—each and every one of them—choose what kind of society they want.
Continuing the planetary theme, I am afraid that the members of the Scottish Labour Party are a bit like Klingons: they cling on to the hope and the belief that if they stick with Starship Miliband, they will land as a UK Labour Government again one day.
Under every UK Labour Government, it is has been a disaster for Scotland, from the coalition of Ramsay MacDonald to the centralising Attlee to the devaluing Wilson to the winter-of-discontent Callaghan to the illegal warmongering of Blair, and then to the banking recession of Gordon Brown. Now, Labour members want to hitch themselves to the Tory party, which Churchill once said
“is not a party but a conspiracy”.
I did not believe the Tories in 1979 or 1980, and I certainly do not believe them now.
On democracy, the message to the people of Scotland is that we should no longer accept the position that only 4.1 per cent of members of the Houses of Parliament are elected—in the House of Lords, they are unelected—and appointed by the people of Scotland. The Lib Dems should be ashamed of approving that.
Real security and the stability of our world lie in our self-determination and national sovereignty.
Let us talk numbers—here are just a few key numbers. Scotland is rich, not just in its natural assets but in the assets and skills of its people, in its trading and in its reputation abroad. Let me help Ms Lamont now, referring to the question that I posed earlier in the debate. Scotland enjoyed a trade surplus of £2.8 billion in 2013, which is equal to 1.9 per cent of GDP. The UK had a trade deficit of £26.7 billion, which is 1.6 per cent of GDP. There is a consistent pattern there.
Will the member acknowledge that 70 per cent of our trade was with the rest of the United Kingdom and explain why creating any kind of barrier with our major customer would be advantageous to that trade balance?
The dream that runs through Mr Gray’s head is that we are putting up barriers. No one is suggesting that we put up barriers.
It is interesting that Scotland’s net trade surplus has grown by 318 per cent, if one compares the yearly average from 2007 to 2013 with the yearly average from 1998 to 2006. Notwithstanding what Ms Goldie said and the down time in the Elgin oilfield in 2012-13, Scotland’s current budget balance, averaged over the past five years, has been better than the UK’s. The same applies to the current fiscal balance, even allowing for the financial treatment of capital spend in 2012-13.
Scotland performs well and will do better. It is richer per head than the UK, France, Japan, Italy and the majority of independent developed countries.
The debate is not helped by some of the positions that the Westminster Government has taken, which are based on data that the Office for Budget Responsibility has produced. It is regrettable that the OBR has not taken the opportunity to engage more fully with the Scottish Government on taxation and revenue streams. If it had done so, that might have helped to destroy the view of some people that, as Alistair Darling said in 2010,
“Right from the start the Tories used the OBR not just as part of the government but as part of the Conservative Party”.
It has not helped that the OBR has confirmed that its methodologies on tax are “work-in-progress”, that is, they are not proven, and that it was
“unable to involve the Scottish Government in this stage of the process”
of making Scottish tax forecasts, for reasons of confidentiality. I wonder why.
The same can be said about the OBR’s approach to oil prices and revenues. In its economic and fiscal outlook report for March 2014, the OBR said:
“Movements in oil prices and the sterling/dollar exchange rate mean that the sterling price of oil is slightly higher than we assumed in December”.
That was confirmed this week by PIRA Energy Group and the Economist commodity price index, as I said.
Scotland is a wealthy country, but we have a democratic deficit. The best way to secure investment in our schools, hospitals and public services, and to handle the challenges, volatilities and opportunities that face our nation, is to accept that the people of Scotland are sovereign and let them create the Scotland that they want. Only independence will deliver that.
15:57
It is always a joy to follow Chic Brodie.
Devolution gives us the best of both worlds. It is the best way to ensure a future for our public services and invest in our schools and hospitals. It has also been a fantastic platform from which we in Scotland could support the expansion of our financial services and renewables, support investment in the market for our food producers and support tourism. All those sectors have grown and been strengthened under a strong Scottish Parliament that has worked in partnership with the rest of the UK. We can do all that without the division and disruption that would come from the uncosted independence plans that the SNP would take us through.
Strong devolution is about living in an interdependent world, where no one party or institution is all-powerful, and where we have to work together for the greater good. That is why we need double devolution—[Interruption.]
Do you no longer support the islands agenda, cabinet secretary?
Order. Mr Smith!
In our devolution commission we gave a commitment to support local authorities to act on housing and employability and address the areas in which our most disadvantaged communities desperately need action to tackle the market failure and problems that have come from our Tory-led Government.
It is not just about new powers. It is also about funding streams and building capacity and capability. It is about supporting our rural and island communities and giving them opportunities to do more. Stronger devolution as part of the UK is a much better future for Scotland.
Over the past seven years, the SNP could have acted on all the issues that I have mentioned, if it had wanted to do so. I think that historians will look back and question Alex Salmond’s judgment in waiting for seven and a half years to have a referendum, when he could have got going at the start of his term of office. We could have tested this issue seven and a half years ago.
Within three months of the Labour Government being elected in 1997, we had a referendum and a decision and we were able to get on with exercising power, seeking opportunities to tackle social injustice and building solidarity. That is the legacy of the Blair Government and of Donald Dewar.
Will the member give way?
No, thank you.
The decision not to act on the bedroom tax in 2013 tells us everything that we need to know about the cynicism of the SNP. The SNP could have used the powers that it had. It could have considered how to help local authorities.
As we predicted, there was a cost to that year of inaction, which left thousands in debt for the first time in their lives and meant that councils and housing associations had to divert scarce cash out of investment programmes and away from improving their housing stock in order to support their tenants. It also left a sting in the tail that councils are now having to address. Those people who paid their bills and the bedroom tax when they could ill afford it are now aggrieved, and councils are having to deal with that reality. The SNP could have done more.
Our local authorities do not have the luxury of playing with politics. They have to make decisions now, in the real world; they cannot put difficult decisions on hold. For example, social care challenges are increasing. On Monday, I spoke to a constituent who has worked as a care worker for 23 years but is on the verge of giving up because of the pressure and the lack of time that she is allowed to devote to the people for whom she cares. She believes that her hard work is not valued, and I think that she is right.
The work that Unison is doing to highlight the need to tackle inequality and the work that has been done with Renfrewshire Council show what we need to do instead of sticking with the sterile and cynical debate that the SNP would push us into. We need an urgent debate about how our local authorities provide improved quality services to the people who need them now. Local authorities need to expand their training and integrate their work on employability. They want to work at a local and a regional level with employers and colleges to deliver strategies that will work. That is what they need to do and we should be empowering them to do that, not telling them why they cannot do it or cutting back on the further education sector.
At our Scottish Labour councillors conference at the weekend, we had a fantastic set of discussions about the work that is being done now by councillors, even with the challenges that the SNP has put in their way. They are consulting communities, looking at the tough budget choices, shaping their services and getting on with implementing their manifesto commitments now, despite the centralising and underfunding agenda that they face. Fantastic work is being done in West Dunbartonshire, Falkirk, Glasgow and Edinburgh to make sure that our young people have real opportunities for training, but so much more can be done.
We need only look at the local government elections that have taken place over the past 18 months to see that that work is acknowledged by communities. They do not want their local authorities to be used as a political football; they want people to get on and do the work now. We can see the challenge that is being met by our Labour councillors. Looking at the number of seats that Labour has won in the past 18 months, we are currently running 13:1—Labour has won 13 seats in the past 18 months, whereas the SNP has won a single seat. Some of those by-elections were caused by SNP councillors resigning from their council, which tells a story that is not being debated here. At the weekend, I was delighted to speak to Lesley McDonald, a South Lanarkshire councillor who was an SNP member for 30 years but who has now joined Labour, and to welcome Neil MacIntyre, the first Labour councillor ever to be elected to serve Oban South and the Isles on Argyll and Bute Council.
Something is happening at the local level. People understand that there is a need for practical commitment to social justice and solidarity. We need to do more to support that—to get off pause and press play. Let us get on to 19 September.
16:03
Annabel Goldie said that she was giving us “facts”. That is interesting; she can obviously see into the future, if she was giving us facts in her projections and the projections of the various bodies to which she referred. She also said that the yes side is making “sweeping assertions”—implying by that, I suppose, that her “facts” were not sweeping assertions. I question the ability of any of us to know what will happen in the future. If the OBR, the IFS, the Treasury and all the rest of them are so clever and so good at forecasting the future, why did they not warn us about the recession that hit us in 2008?
In this debate, we need to look at where we are at the moment. We know the truth of the situation at the moment; we know what we have with the United Kingdom. We know that we have austerity, we know that we have come through a recession and we know that have the bedroom tax. We also know that there is more and more of that to come. Those are facts that we can be very sure of.
The Labour Party’s motion talks about Scotland being “worse off financially” if we go for independence. It basically says that we are currently, and have been for a long time, subsidy junkies. The Labour Party motion not only says that, but says that it wants us to remain subsidy junkies—were that true. I presume that Labour believes it to be true and that it is not just kidding us on. What does that say about its vision for the future?
Does Boris Johnston know that the rest of the UK subsidises every single Scottish man, woman and child by—what was it Johann Lamont said—£1,600 a year? What about the UK that is supposed to spread the load, so that the richer parts help the poorer parts? Do the people in the north of England really subsidise us in Scotland? Is the Labour Party really saying that they should continue to subsidise Scotland to the tune of £1,600 per person per year?
Will Dave Thompson take an intervention?
I will, in a minute.
The First Minister of Wales believes that the rest of the UK should not do that. He wants the Barnett formula to be changed and he wants a £4,000 million annual cut to the Scottish budget. We can see where the Labour argument is going; we can begin to look into the future and realise that Labour is not advocating a future in which Scotland is subsidised by the north of England and other poorer parts of the UK—which are, by the way, suffering because of London and the south-east. Our being subsidised would not continue, were it true that we were being subsidised. However, it is not true and Labour knows that it is not true.
I can perhaps enlighten Dave Thompson on health. The north-east of England received higher health funding than Scotland in two of the past five years, so there is a redistributive effect throughout the entire United Kingdom.
Does Dr Simpson support redistribution of the alleged £1,600 subsidy per person per year to Scotland? The ultimate aim of Labour’s assertions about the rest of the UK is that everyone should receive the same amount across the whole of the UK. That is how the budget would be balanced; that is how we would have fairness in the UK.
Will Dave Thompson take another intervention?
No, thank you. If Dr Simpson does not accept that, and is saying that he wants Scotland to remain part of the UK—so that we can get higher funding than other parts of the UK—the Labour Party’s whole argument is based on a false premise.
Scotland is a very wealthy country. We have a food and drink industry that is worth £13 billion and a financial services industry that is worth £7 billion. We have a life sciences industry that is worth £3 billion, creative industries that are worth £6 billion and business services that are worth £10 billion. We have a construction industry that is worth £17 billion, a tourism industry that is worth £9 billion, chemical sciences industries that are worth £9 billion and aerospace industries that are worth £5 billion. We have a whisky industry that is worth £4.5 billion and—oh, dear me!—on top of all that, we have an oil and gas industry that is worth £1.5 trillion. We also have 10 per cent of Europe’s wave energy potential and 25 per cent of Europe’s wind and tidal energy potential.
As I say, Scotland is a very wealthy country, but its wealth is not being spread evenly across the country. Under the UK, the 10 per cent at the top have 900 times the wealth of the 10 per cent at the bottom. I want that to change; the Labour, Liberal and Tory members do not.
16:09
I intend to talk mainly about health, but I cannot resist making a further point about the concept of redistribution. I will give Dave Thompson another example: 40 per cent of inheritance tax is paid within the London region and it is distributed throughout the whole UK. It is a question of taking in money from areas that are wealthy. Scotland is now the fourth-wealthiest region in the UK. We have moved up from eighth to fourth under devolution. Why would we want to jeopardise that? If Dave Thompson does not understand the concept of redistribution, I do not have the time to teach him.
On health, the challenge for the yes campaign is to explain what possible advantages independence would have for patients. The union provides many advantages that independence would put at risk; over time, it would degrade our current advantage.
The NHS is fully devolved and has been since this Parliament came into being. It is based on a collaborative and co-operative approach that has been agreed by all five parties. We have the highly respected Scottish Medicines Consortium and our evidence-based Scottish intercollegiate guidelines network guidelines. We have higher numbers of consultants, higher numbers of nurses and higher numbers of beds. All that is underpinned by the fact that we receive more funds through the Barnett formula, as does the north-east of England, on the basis of need. When it was introduced, the Barnett formula was not based on need; it was expected to take us to even-stevens over the years. However, it has become something different.
Can Dr Simpson tell me which part of the UK gets less and is suffering because of the way things work—which he thinks is so great?
London gets less, because London is the wealthiest part of the UK. What does Dave Thompson not understand about the concept of redistribution?
The biggest challenge to Scotland’s current pre-eminence in health that would arise from independence would come about indirectly. We have five medical schools, which is far more than we require. Students from England pay substantial tuition fees for medicine and, indeed, for all other forms of higher education. That adds to the bill that Iain Gray added up. There are a few more figures that need to be added to that bill. If we become independent, we will lose £140 million in university fees, because we will not be able to charge students from other European Union countries those fees. Over time, the Howat report’s prediction that we should halve our medical student intake would come to pass, which would mean our having two fewer medical schools. We have been able to have five medical schools because we are part of the union.
Within the UK, Scotland punches massively above its weight in medical research. We win about 14 per cent of competitive research applications—I stress the word “competitive”—which results in our getting £257 million from the UK Medical Research Council.
Will Dr Simpson take an intervention?
I am sorry, but I must make some progress.
A population-based share of that funding would be only 8.3 per cent. Even the Scottish National Party must accept that that is a fact. The £83 million that the University of Edinburgh raised from UK research councils equalled a third of its overall research income. The University of Dundee received £21 million from the Scottish Further and Higher Education Funding Council out of £121 million in research funding. If we did not receive funding from the UK research councils, we would have to make up that difference. That must be added to the bill for the fantasy land that we are being presented with.
The same applies to the funding that we receive from the other 13 research councils. We also punch well above our weight in securing funding from them—we get about 13 per cent of the funding that they offer. Under independence, we might be able to afford to provide that funding, but we would not be winning research applications in competition with institutions from the rest of the UK, which would mean that, over time, the quality of our research would be likely to degrade. I have no doubt that Scotland would eventually gain entry to the EU, but any delay in EU membership could interrupt the horizon 2020 funding as well. Therefore, for research, there would only be a downside to independence.
Of course, the nationalists will promise to match that research funding, but we do not know how they would do that. The same issue would affect the funding that we receive from the Wellcome Trust and other charities that would not, following independence, fund in the same way. If members do not believe that, they should look at what happened to Eire. When Eire became independent, it lost the funding that it had received from the MRC, and the Wellcome Trust provides funding only of up to 50 per cent for projects in Eire, rather than for 100 per cent of them, as is the case in Scotland.
There are many other downsides. For example, we might well have to set up a whole raft of agencies and, for me, the biggest disappointment is that we have absolutely no costings for that. Would we have to set up a separate human tissue or organ donation organisation? Would we need a separate health professional council, a separate general medical council, a separate general dental council or a separate nursing and midwifery council? We are going to have to set up 277 agencies, and we have had no idea from the SNP or the yes campaign about what the costs are going to be. Earlier, someone from the SNP said that we are trying to sell a pig in a poke, but the yes campaign’s pig is flying through the sky. It is utterly ridiculous.
As for why we share certain things, I want to mention one of the newest innovations: proton beam therapy.
You are in your last 10 seconds, Dr Simpson.
The machines in question cost between £50 million and £100 million each; one will be in Manchester and the other will be in London. If we become independent, we might still get access to them, but it will certainly not be at marginal cost; it will be at full cost.
You should be drawing to a close.
I ask the yes campaign and, indeed, any speaker this afternoon to tell me just one advantage in health terms of a separate and independent Scotland, because I have to say that I cannot see any at all.
Thank you very much. Rob Gibson has up to six minutes.
16:16
At its heart, this debate is about how we fund top-class public services and how, according to Johann Lamont’s motion, we
“ensure a high level of investment in its schools, hospitals and public services”.
We also have amendments that are based on one-tax obsessions about oil and which ignore the opportunities and flexibility that will be available through the taxation policies that an independent Scotland could contemplate.
I want to return to the offer that the unionist parties made last Monday. In a Herald article that was headlined, “Taxing issue at heart of devolution pro-Union parties failed to address”, one of their great supporters, Ben Thomson, said:
“When people are looking for genuine vision, the pro-UK parties are in a position to offer it.”
However,
“Too often in politics, compromise is a byword for agreeing on the lowest common denominator. It would be tragic if that were the case here as the lowest common denominator proposal would only give us an extra 5p on income tax with no welfare powers or permanence to the Scottish Parliament. Our country needs so much more.”
It does, indeed, need “so much more”, and we must highlight ideas about independence and taxation that make it clear how we can support our public services. I want to mention several such ideas.
I note that, in these days of new Labour and its followers, the Jimmy Reid Foundation has produced a document entitled “Investing in the Good Society: five questions on tax and the Common Weal”, which highlights a number of measures that are carried out in a moderate way in many northern European countries. It suggests, for example, that wages should be higher, because they bring in higher taxes, and that tax evasion should be reduced. Is it easier for a small country to tackle that issue than it is for the UK? We need look only at the success of HM Revenue and Customs and ask ourselves whether we could do worse.
The Jimmy Reid Foundation paper also suggests that we should generate new taxes and income from wealth, land and property. In that respect, we should think about the current offer to devolve tax. With regard to the rural economy, which I deal with, the Scottish Affairs Committee in London has said that although we need land reform, it does not think that it can convince the UK Government that it needs to end tax evasion and stop tax havens. In fact, it argues that that is just not a possibility in the present circumstances. Labour is silent on the issues. When it talks about land reform, it is an empty coat.
The Jimmy Reid Foundation document also talks about generating greater income from Scotland’s natural resources. We need look only at how our natural energy resources have been mismanaged to realise that we can get more money from them and more tax from development of those industries—money and taxes that have been denied us under the current situation. That is why changes to reserved tax powers and the many other arguments that we have heard from the pro-union parties are never going to deliver for Scotland or give us the wealth that my colleague Dave Thompson talked about.
I am genuinely puzzled. The prospectus on which Rob Gibson stands, and the Government that he supports, would reduce the taxation that major energy companies provide. How would that get us more tax from them?
Iain Gray does not read the whole story. Ireland, which has a lower corporation tax base, is taking in far more than we are in Scotland, at this particular time.
As the First Minister said in response to the arguments of the pro-union parties, with independence, we can design
“tax and economic policy to attract and maintain HQ functions to Scotland; by implementing an industrial strategy for Scotland, by working together in a social partnership to improve wages and by tailoring policy to make the most of the huge comparative advantages we have in key growth industries.”
Those are the very industries that I talked about earlier in respect of ways in which we can raise tax in an independent Scotland.
The obsession with saying “We can’t” is based on people not being prepared to look at the opportunities that independence will open up. Pitching in the Jimmy Reid Foundation’s remarks helps us in Parliament to see that there is a better way: not better together, but better with independence.
The debate shows what a long and weary journey the unionists propose. On 18 September, we can start a voyage of opportunity with a yes vote, safe in the knowledge that Scotland has a sound economy that can be made fairer only through independence.
16:21
When I started to look at the wording of Labour’s motion, I thought that some of it was a little bit strange. Let us look at some of it.
Early on, the motion says:
“the best future for Scotland is one where its devolved public services are delivered by the Scottish Parliament”.
I presume that we all believe that devolved services should be delivered by the Scottish Parliament. The question is, which services should be devolved? I guess that there are three options: the services that we currently have should be devolved; fewer services should be devolved, with education, for example, going to Westminster, as some of the Labour people have suggested; or more powers should be devolved. If more powers should be devolved, which should they be?
The motion might have carried more weight if there had been even a suggestion about where devolution is going. I have seen billboards that have said that more powers are “guaranteed”. Exactly what kind of guarantee is that? Is it written down somewhere? Was it in the Queen’s speech? Is that just an assertion with no substance?
It seems to me that a no vote is therefore hugely uncertain for all of us. Again, there are probably three options if there is a no vote.
First, things could carry on much as at present, because folk at Westminster are fed up thinking about Scotland.
Secondly, sense could prevail down south. People could realise that they have narrowly escaped losing Scotland and could hand over substantial new powers—for example, complete home rule powers. I do not think that Willie Rennie believes in that nowadays, although his party used to. I think that that is roughly the situation in the Isle of Man, Jersey and Guernsey, which do everything themselves, except defence and foreign affairs.
I presume that the third option is people down south saying, “Scotland has had its chance. It’s time to teach it a lesson. We will cut its budget by £4 billion”—or whatever.
All those options are possibilities, but we have no idea which would prevail. I presume that there would be a debate on that within the three UK parties—or four, if we include the UK Independence Party—and a lot might depend on the 2015 Westminster election. However, Scotland’s voting no would be a complete lottery. There is no certainty and there are no guarantees.
The example of Quebec has come up in a couple of recent independence debates that I have been at. In Quebec, there have been two no votes, and the uncertainty has gone on. At the very least, a yes vote would deliver certainty. We would all know exactly where we were and would get on with it. By contrast, after a no vote, uncertainty would continue, and that would be hugely damaging for investment and jobs.
Will the member acknowledge at least that the people in Quebec have rejected independence and another referendum and that the Government, which was quite popular, had its vote decimated because it was threatening another referendum? The people there are saying no to a neverendum, as the people of Scotland will.
The people of Quebec and of every other nation, province or anything have the right to make their own decisions, but my point is that if people vote no, uncertainty continues. If we want certainty, the only way to have it is with a yes vote.
Another phrase in the Labour Party’s motion talks about the UK being secure and stable. Is that an assertion or is there any evidence for that? Is there any evidence that the UK is strong and stable? The UK is clearly neither militarily nor economically strong on the world stage any more. What country with £1.5 trillion of debt, which is increasing year by year, could be called strong or stable?
Japan.
I think that Japan has a few problems as well, including a population problem.
The motion also talks about pooling and sharing resources. To be fair, what the motion actually says is that we are allowed “to pool and share” resources, not that that is actually happening. Are Labour members going to tell me that people in the east end of Glasgow, who in the winter have to choose between eating and heating, in some way benefit from the pooling and sharing of resources? When rich companies and individuals pay little or no tax and pay expensive advisers so that they can pay even less tax, how is that pooling or sharing resources?
Of course we should care about poorer people in Newcastle or Liverpool, or, for that matter, in Lisbon or Paris. However, how does it help a poor person in Glasgow to know that they are in the same boat as their counterpart down south? That is pooling poverty; it is not pooling resources. If we say to someone in my constituency who is in dire straits, “Yes, we could help you to have a better life, a proper minimum wage and better housing, but we need to hold you back in poverty because we can’t also help all the other poor people in England and all around the world,” how does that help anybody? Are we or are we not the Scottish Parliament? Does that not mean that we should be doing our best for the people of Scotland? Surely it does not mean that we deliberately hold back the people of Scotland because we cannot help everybody else around the world.
Will the member give way?
I am sorry, but I am in my last minute and running out of time.
It is possible to argue that the left in England might benefit from Scottish independence. Tony Benn and Tariq Ali disagreed on that point. The weekend after Tony Benn died, Tariq Ali was in Glasgow and was part of a fascinating interview on Radio Scotland, which I heard. Basically, his argument is that if Scotland becomes independent, we will have the opportunity to set an example to the rest of the UK and show how a socially just country can operate within the British Isles, which could be a beacon and an example to the rest of the UK.
I welcome the fact that we have had this debate. I am disappointed that the Labour Party wants to hold back the people of Scotland from a better future but I am delighted to support the Government’s amendment.
We now move to closing speeches. I find myself once again reminding members that those who have taken part in the debate should be in the chamber for the closing speeches.
16:28
We on the other side of the independence debate are often accused of being negative, despondent, running down Scotland and not believing in the ability of the Scottish people to do more. However, what we have heard in speech after speech from the SNP side of the chamber is a tirade of negativity about the United Kingdom. For example, I just heard John Mason talking about a lottery, a debt and pooling poverty. How much more negative can you get? To believe that drawing a line on the map will somehow automatically deal with the problems that he described is naivety in the extreme; I thought better of John Mason.
I like to be positive about the UK and those who have shared a platform with me will have heard me talk about the many positive reasons for Scotland staying in the UK. Actually, I am a convert to having the referendum because I think that there have been some benefits from our being able to explore the strengths and weaknesses of our nation and being able to look at things that we often take for granted.
I will give members three positive reasons for staying in the UK. The first is the shared currency: the single currency and the single market mean that we can trade right across the United Kingdom with limited barriers. Somebody who is doing business in Auchtermuchty can trade with somebody in Launceston in the south-west without limitations.
Secondly, we have an energy market that means that 30 million consumers across the UK can help us drive forward our renewable ambitions in Scotland and keep energy bills lower than they would otherwise be. We have an energy union that benefits everybody across these islands.
Thirdly, we have a research union that means that the brilliant researchers in our Scottish universities—four or five of the top 200 universities in the world are here in Scotland—get 50 per cent more funding as a result of our pooling arrangements with the research councils across the UK.
I think that those are positive reasons for staying in the UK. I know that they are positive, because the nationalists tell us that those are the things about the UK that they want to keep. The longer this campaign goes on, the more things they discover that are good about the UK. I wish sometimes that the campaign would go on forever and then the nationalists might eventually be convinced of the absolute benefit of the UK. However, I fear that the campaign has been going on for too long already.
The fundamental problem is that Willie Rennie—and, often, his colleagues on the no side—mistakes independence for isolationism. Independence is about choosing how we enter into relationships with other countries; it is about how we co-operate with other countries on terms that suit us and them.
The impression that is created is that every other country around the world, including the rest of the UK, will automatically agree to the nationalists’ every demand. The benefit of the UK means that we are locked in. We have a guarantee that the good things about the UK are guaranteed to remain. Mark McDonald’s option means that those things are not guaranteed. The nationalists cannot demand of others the things that we have just now. All the great benefits of the UK would be under threat as a result of Mark McDonald’s proposition.
I have to commend Mark McDonald for his work on carers—I genuinely think that he has done some great work on carers—but I am sure that he will be disappointed by the white paper’s approach to welfare. I have heard him many times in the chamber condemn the UK Government for the £2.5 billion apparent cut in the welfare budget, but I have had a good look at the welfare proposals in the white paper and there is not one more penny for welfare. Not one more penny will be spent on welfare in the first year of an independent Scotland—so much for this evil UK Government imposing wickedness on Scotland. If the SNP cared that much about the issue, it would be increasing the welfare budget; it would not, in what would be the first year of independence, be keeping it exactly the same as the budget that Iain Duncan Smith is proposing.
Rob Gibson’s speech was interesting because he showed an ability to face in many different ways at once. He talked about achieving the Scandinavian model of services on American tax levels. That is the kind of speech that he made. He went on to praise the Irish corporation tax levels. If he had his way, corporation tax would be not just cut by 3p, but halved. I find that bizarre. I am not quite sure what the Jimmy Reid Foundation would make of it, because I am sure that it does not endorse cutting corporation tax in half, as Ireland has done. I look forward to the next meeting of the Jimmy Reid Foundation and seeing what it has to say about Rob Gibson’s ideal of a socialist Scotland.
Joan McAlpine’s speech was also interesting. She talked about Samuel Johnson and said that all we need is belief. If we could solve all the problems in the world with belief, we would be in a much better place, but the world is a little bit more complex than that. Of course we have to be optimistic and to believe that we can change things, but we have to look at the reality. The one thing that is depressing about the SNP’s offer on independence is that it is refusing point blank to set out what the first few years of independence would be like. We do not have any idea about the set-up costs for independence. In fact, the SNP is refusing to give any answers, saying that it is too difficult to answer the question.
You need to bring your remarks to a close, Mr Rennie.
It is able to answer every single other question on the up side, but it will never answer any difficult question.
16:34
I will return to the Scottish Government’s finance paper, which was published just a few short weeks ago. In referring to it in her opening speech, the Deputy First Minister said that the SNP would grow the economy in an independent Scotland and that it has set out policies in the finance paper to show how it would grow the economy. The paper does nothing of the sort. It and the Scottish Government’s press release claim that we would get an extra £5 billion a year in revenues by 2029-30, with £2.4 billion from increasing productivity by 2.5 per cent every single year instead of by 2.2 per cent. That does not say how the economy will be grown. All that that says is that if productivity is increased by 2.5 per cent every year between now and 2029, we would anticipate to get £2.4 billion extra a year. The white paper does not demonstrate at all how we might do that.
The Scottish Government says that we would get an extra £1.3 billion per year by increasing the employment rate by 3.3 per cent, but it does not demonstrate how it would increase the employment rate by 3.3 per cent. It simply states that if it achieved that increase we would get an extra £1.3 billion.
The same could be said about the Scottish Government’s comments on immigration. It does not explain how it will increase immigration; it simply says that if we had higher immigration, we would get an extra £1.5 billion a year.
It adds those numbers together to get a nice £5 billion figure, but it does not explain how it will do those things; it simply says that if those things happened, we might get an extra £5 billion a year by 2029-30. It is about time that the Scottish Government explained how it intends to do those things. Does it have any ideas or suggestions about how it will do them, or are we relying, once again, on pure assertion?
Willie Rennie talked in his closing speech about set-up and transition costings, which are important, too, as they are something else that the Scottish Government has shied away from on more than one occasion. An entire chapter in the white paper—pages 337 to 351—is dedicated to transition, but it does not have a single costing about how that might be done or the actual costs of setting up various bodies and departments. The official written position of the Scottish Government, as per the white paper, is left blank.
Are we to assume that the set-up and transition costs would be nil? The cabinet secretary says that it would be too difficult to tell us what transition costs would be and the First Minister, in a statement to the press, said that £250 million sounds about right. I do not know which one is the official Scottish Government position, but the amount certainly will not be £250 million.
There is a duty and obligation on the Scottish Government to do its best to let us know its best estimate of what set-up and transition costs would be. The reason that £250 million simply is not credible is as follows. Page 146 of the draft budget for 2014-15 has a budget line for implementation of the Scotland Act 2012, which the Scottish Government and the SNP say is a marginal act that does very little to give Scotland greater powers. Over the course of three years, the implementation of what they describe as a marginal act will cost £53.5 million, according to the Scottish Government’s own figures. According to Audit Scotland, which took its figures from the Scottish Government’s financial memorandum, the set-up cost of Police Scotland, which has turned eight police bodies into one, will be £147 million between 2011-12 and 2014-15. Between the setting up of Police Scotland and the implementation of the Scotland Act 2012, we are at the best part of £200 million. That is why it is simply not credible to suggest that the set-up costs for an entire country would be in the region of £250 million.
That is why we deserve answers from the Scottish Government on this critical question. John Swinney, in his leaked paper, said clearly:
“Undoubtedly there will be a cost associated with setting up and running the necessary institutions and in some cases these are likely to be significant ... Work is currently underway in Finance ... to build a comprehensive overview of the Institutions, costs and staff numbers which I will draw together and provide an update to Cabinet on in June.”
If that was the right thing to do two years ago, I ask the Scottish Government why it is not the right thing to do now. Why are we not being given transition costs?
In closing, I reiterate what we said at the very start of the debate. We call on the Scottish Government to republish its financial paper with a cautious central estimate for oil, not just the optimistic estimate. We ask again that the Scottish Government publishes transition and set-up costs.
16:40
Mr Rennie made a strange remark for somebody who is supposed to be an advocate of devolution and, as he would have it in today’s debate, an advocate of further devolution or double devolution, as Sarah Boyack characterised it. I look forward to finding out what double devolution happens to be.
Mr Rennie said that the Government’s position is in essence that we think that we can draw a line on a map and our problems will be sorted. If Mr Rennie takes that view and thinks that that is not how our policies should proceed, why on earth is this Parliament here? Why do we have responsibility for health? Because the line has been drawn on the map and we have control, we are able to do things differently on health in Scotland, and I do not think that any of us in this Parliament disagrees that we should be doing things differently on health. None of us would want to go down the healthcare policy route that the UK Government is embarking on.
The difficulty for Mr Swinney is that he is saying that by separating off and not pooling our resources any more, we will suddenly be able to solve all the problems that his colleagues have highlighted today. I believe that local decisions are good decisions, but partnership is also a good thing. He seems to ignore that.
Annabel Goldie’s applause shows where that was roundly endorsed.
That brings me on to the next issue that I want to raise, which is the bedroom tax. A line has been drawn on the map and we have addressed the implications of the bedroom tax in Scotland. Mr Rennie even voted for the budget to support that. [Interruption.] If Ms Marra wants to make an intervention rather than mutter, we will have an intervention. If she is just muttering, we will leave her to mutter in the corner.
Back to Mr Rennie, who voted for the budget on the basis that we had tackled a number of issues, one of which was the bedroom tax. That was also supported by my muttering colleagues in the Labour Party into the bargain.
Will Mr Swinney take an intervention?
I will develop my point first. That says to me that there is a different policy position and attitude here in Scotland and that we want to resolve problems in this Parliament and take a different direction from the rest of the United Kingdom. We should be able to do that on all the issues that concern us as a Parliament. We are able to do it with health. We were eventually able to find the money and, through successful negotiation on the part of the Deputy First Minister, get there on the bedroom tax. Why should we not be able to do that on a whole range of other issues?
On the face of it, I agree with much of what Mr Swinney is saying in that we did support his budget on the basis of the action that we agreed that he would take against the bedroom tax. However, I cannot miss this opportunity to ask him why we are now three months past the point at which he agreed that he would have dealt with the bedroom tax, made the money available to local government and made sure that no one was paying the tax, yet he still has not put the system in place.
As usual, Mr Gray walks into the brick wall that I put in front of him. The reason why we cannot put all the provisions through the Parliament is that we are waiting for Westminster to allow us to do so. That is the nub of the problem, Mr Gray.
Will Mr Swinney give way?
Of course, if Mr Gray wants to slap into another brick wall; here we go.
I sat in Mr Swinney’s office and we agreed an alternative way in which the outcome that we both want could be achieved. If he prefers the constitutional grievance to helping poor tenants who are suffering under the bedroom tax, that is his choice.
There is not a single local authority in the country that is limited in its ability to tackle the bedroom tax today. A legislative process has to be completed and we are dependent on Westminster for that. I assured Mr Gray that we would abolish the bedroom tax in Scotland by a route that is reliable and dependable, and that is precisely what this Government is going to do.
That brings me to one of the points that Joan McAlpine raised when she questioned the notion that has been running through this debate about the offer of security and stability in the United Kingdom. It is a similar issue to that of the bedroom tax because, on the information that is available to the Government now through the publications of the Child Poverty Action Group, it is estimated that, as a consequence of UK welfare reform, the number of children in poverty in Scotland will increase by 100,000, undoing what has been achieved over a number of years to remove children from poverty. According to the better together argument, we should just shrug our shoulders and say, “Well, that’s the price of the union.” That is what we get for having those issues determined by Westminster.
For me, the argument is about whether we are prepared simply to sit in this Parliament and debate these issues or whether we are going to acquire the powers to do something about them. To borrow a phrase from Rob Gibson’s speech, we need to tackle the obsession with what we cannot do, which is the obsession of the UK parties in this debate. Scotland is capable of resolving these issues and determining a better future.
Iain Gray and Gavin Brown have set out arguments about the papers that we have produced and have said that we have not evidenced what measures we would take to try to improve economic performance. I will set out a few of them. We have set out that we would use the tax powers that come with independence to support innovation and encourage and incentivise tax credits for research and development in order to ensure that we can create higher-value employment and economic opportunities in Scotland. We have said that we would provide more effective capital allowances to encourage investment in manufacturing companies where there is a lack of activity in the UK perspective. We have set out the approach that we would take on encouraging new export initiatives to support small companies to get active in the international markets. We have set out our proposals for the reintroduction of post-study work visas to encourage trained people from around the world to live here in Scotland.
Of course, all those measures fit into the projections that we set out as a Government about the improved economic opportunity that would come about.
Why has the cabinet secretary set out only one oil scenario, on which his entire financial paper rests?
I do not know what papers Mr Brown is reading, but there are six oil scenarios on page 13 of the oil and gas bulletin, which I have in front of me. Can Mr Brown not read and get up to the level of elementary contributions to the parliamentary debate?
On the point that I was making to Mr Gray and Mr Brown about economic improvements, a 3.3 per cent increase in Scotland’s employment rate could boost Scottish tax receipts by £1.3 billion. In the period from January to March 2014, we increased Scotland’s employment rate by 3.5 percentage points, compared to that period four years previously.
Mr Gray was poking fun at us about population numbers. The 10-year average increase in net migration into Scotland is 22,000. The Government’s projections are based on 24,000. That is a modest enhancement of the existing net migration into Scotland. Is Mr Gray not following the debate in that respect?
Richard Simpson said that my colleagues had not set out any advantages for health that would arise as a consequence of independence. I will give him one clear example. If a UK Government decides to continue to slash public expenditure—well, it is not a question of if it decides to do so, because the Labour Party, the Conservatives and the Liberals are all signed up to austerity to slash public expenditure in the UK. What will that do? As a consequence of the Barnett formula, it will reduce the block grant in Scotland and put further pressure on health and education. That is the price of staying in the United Kingdom.
We need to get out of austerity and we need to use the resources of Scotland for the maximum benefit of the people of our country.
16:49
This has been a warm afternoon, and some contributions have certainly benefited from the heat.
Both before and since I came here in 2011, I have often reflected on the question that will finally be answered by the Scottish people in September. One of the most fascinating things that I have found is the need that is felt by those who support independence to explain to themselves and particularly to those of us who are saying no thanks why we hold the view that we do.
As Nicola Sturgeon set out in her opening speech—she repeated the same old lines—the nationalists tell us that it must be because we do not understand the issues and have not thought enough about independence. It must be because anyone who believes in the UK must be a Tory, because someone else in London has told them to do so or simply because we are all too feart. I am sorry to disappoint, but none of that is the truth.
In any debate, it is useful to examine the other side’s arguments and try to understand why people disagree with us rather than to caricature their position or abuse them for holding it. I do not think that we will ever have a better example of caricaturing others’ positions than the speech from Chic Brodie. It said that nationalists want Scotland to be a normal country and that that means that we must be independent. However, Scotland is already a normal country and can choose to continue to be a normal country that works together with its closest neighbours.
Neither side of the campaign has a monopoly on normal people who support its view. Mothers and carers who support the union over independence are normal and, indeed, all the polls tell us that they are the majority.
I oppose independence fundamentally because I do not believe that it will be in the best interests of Scotland, the rest of the UK or, specifically, the people whom I am in politics to try to represent. I suspect that many people who take the opposite view from mine do so for identical reasons. They have the same motivation but reach the opposite conclusion. That is where the political debate should be.
The case that Labour has put before the Parliament and the issues that are highlighted in Johann Lamont’s motion take us to the fundamentals: whether ordinary people will be better or worse off. That should not be based solely on an economic analysis, but it is the territory where politicians most usefully assist the public who, after all, will be the decision makers in the matter.
The debate needs to be returned to the issues of substance rather than simply a case of imagining answers to questions that were never asked, building up straw men, as Mark McDonald did, using slogans and making promises without price tags.
There are real and serious questions that those who promote independence have completely failed to answer, most notably on the currency, but also on Europe, public finances and jobs. Annabel Goldie made the point that asking those questions is not negative and denying that they are important or asserting that definitive answers have already been given when they have not is just not helpful.
When the questions are denied or diverted, it leads the rest of us to the conclusion that, for some, independence is desirable whether or not it makes Scotland a better place. It suggests that many of the things that are advanced as reasons for independence are not actually reasons at all. Instead, independence is the reason for the policies that the Government promotes.
I understand that nationalism might not be the starting point of everyone who supports a yes vote, but I suspect that it is still a major driver for many in the SNP. Scotland free no matter what and no matter the cost is a view that I find fundamentally unattractive.
That leads me to the worry that, when it comes to the detail, too many of the policies are not properly worked out and to the concern that some on the yes side will say anything to get over the line in September.
We have seen more of that this afternoon. The Trident funding pledge prize that has become a part of every one of these debates must go today to George Adam, who told us that what was apparently announced as a self-funding childcare policy is now to be funded by cutting Trident.
I will turn to some of the other issues that have been raised. Members such as Kezia Dugdale, Richard Simpson and Sarah Boyack set out their concerns about public services should Scotland decide to end devolution and the basis on which we pool and share our resources across the whole United Kingdom.
Labour members have argued that Scotland can enjoy the best of both worlds, with a strong Scottish Parliament focused on the defence and improvement of our public services while being backed up by the strength and security of being part of a partnership with England, Wales and Northern Ireland.
Drew Smith accuses others of empty slogans but has just trotted out “best of both worlds” and “pooling and sharing resources”. Exactly which worlds do the people in Scotland who live in poverty and are at the sharp end of welfare reform have the best of both of?
No one denies that slogans can be helpful in politics. The problem is when somebody’s politics are only a slogan.
The evidence that we have heard from many of the experts who have looked at Scotland’s public finances tells us two things. First, an independent Scotland would begin from a worse financial position than the rest of the UK, and secondly, if our existing public services are to be maintained—never mind the many promises that have been made on how much better everything else will be—we will either need to make cuts or raise taxes, or both.
The IFS has stated:
“Our calculations suggest that 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 CPPR has said:
“There will be a net fiscal loss under independence, looking into the future.”
Citigroup has stated:
“with the recent drop in oil revenues, Scotland's fiscal deficit is now significantly above UK levels.”
The Pensions Policy Institute has said that a future Scottish Government would need to raise tax, cut spending or accept higher borrowing.
Johann Lamont was right to say that there is an arithmetic and credibility gap: first, between the Scottish Government’s claims about the public finances in an independent Scotland and most of the other independent assessments, and secondly, between the promises that are made that would entail more spending and the money that is to be raised to pay for them. There are no credible costings for a radical expansion of welfare benefits or childcare, and—allegedly—no work has been done at all on calculating the expense of setting up the institutions of a new country.
At the same time, the Government has pledged that there will be no rises in personal taxation and that there will be cuts in corporation tax. On the latter policy, the Scottish Government’s own much-admired Professor Stiglitz has said:
“Some of you have been told that lowering tax rates on corporations will lead to more investment. The fact is that’s not true. It is just a gift to the corporations increasing inequality in our society.”
I would prefer to hear a lecture on redistribution from Joseph Stiglitz, rather than the one by Dave Thompson that we heard earlier.
Today, Labour has sought to debate the risks to our public services that we believe exist because of the Government’s failure to present a case for independence that adds up. The experts are saying that our fiscal position will be worse because of independence and that taxes will have to go up or services will need to be cut.
We know that there will be set-up costs associated with independence and that there are costs associated with the policy promises that the Scottish Government is still making, and yet we are told that everything will be better, that more money will be spent and that we will pay for it by cutting taxes for big business.
It is difficult to believe what the SNP is saying. Since its line appears to be, “Say anything”, it is easy to deduce that SNP members do not believe it themselves. If we take them at their word, the only commonsense conclusion is that the costs will have to be paid elsewhere: in schools, hospitals or other public services.
Following the most recent downgrading of oil revenue estimates, the independent experts are predicting a bigger fiscal gap in the first year of independence. I have heard nothing this afternoon that explains why all those independent experts are maliciously making those estimates. It is extraordinary.
There are many points to be debated with regard to the pros and cons of independence, and there are a variety of interesting legal arguments to pore over. There are those, such as Joan McAlpine, who will be fascinated and excited by the business of drafting a constitution, and those who are already with the Scottish Government who passionately believe that Scotland should be free, no matter what and no matter what the costs are. However, there are many more who are looking for a real debate about what independence would mean for them, their families, their jobs, their local hospital and the school that their child attends.
As Parliament approaches its summer recess, Labour will continue to seek to convince others of our view that Scotland is better off in the UK, working with others and pooling and sharing our resources. We will put the positive case for partnership and argue that we can have the best of both worlds. We will do so for simple reasons that can be understood even by those who disagree with us.
We do not need to spend time worrying about how to put a currency union back together when we have one at present, or about how to get back into the EU when we have the most preferential terms of membership already. We do not need to worry about asking the Bank of England to be our lender of last resort when taxpayers throughout the UK have already stood behind the Scottish banks.
We do not need to agonise over how to create a new social union when we can already stand with other progressive people in London, Belfast and Cardiff and argue for the real political changes that we want to see in Scotland and in Britain. As Iain Gray spelled out, we do not need to put at risk our public services on a prospectus that simply does not add up.
We can do something better than that. We can decide for ourselves to work together with others rather than to break free of them. We can self-determine to be willing partners in a union. If that union has faults, we have helped to make them, but if it can be made better, we can resolve to do that.
It is for those reasons that Scottish Labour is urging Scotland to vote no in September. I urge Parliament to support the motion in the name of Johann Lamont.
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