Plenary, 20 Nov 2008

Meeting date: Thursday, November 20, 2008

Official Report 719KB pdf

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Question Time

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SCOTTISH EXECUTIVE

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Finance and Sustainable Growth

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Local Income Tax (HM Revenue and Customs)

To ask the Scottish Executive whether it can confirm that HM Revenue and Customs has not been involved in the preparation of proposals by the Scottish Government on collection of the local income tax. (S3O-4890)

The United Kingdom Government has made it clear that the main channel of communication on our local income tax proposals should be with HM Treasury. I can confirm that information from HM Revenue and Customs has been used as part of that process.

I am somewhat surprised by the response from the minister, given that only last month HMRC stated categorically that it

"has not been involved in the preparation of any proposals by the devolved administration."

Will the minister tell us whom we should believe: Scotland's Mr Jolly—Alex Salmond—or the taxman?

Mr McAveety is obviously feeling injured because he was not invited to give a sterling performance on the "Children in Need" programme such as the First Minister gave on Friday evening. We on the Government benches are still laughing about it; I am sure Mr McAveety is, too.

I have little to add to my answer. The Treasury has made it clear that it wants to be the channel of communication for discussing the Government's local income tax proposals. That is the approach that we are taking, but HM Revenue and Customs has provided information as part of that process.

Last week, the First Minister confirmed that the rosy forecast of tax revenue in the local income tax plans will not be met. Last night, the cabinet secretary heard first-hand from the Scottish Chambers of Commerce that business does not want a local income tax. Today, the National Audit Office reports that the amount of tax that is due but will never be paid has doubled in a year. Given the increasing problems for the discredited local income tax, will the cabinet secretary pay heed to those respected institutions, and the First Minister, and ditch the local income tax?

The Government continues to promote the proposal for a local income tax. We will shortly set out further details on the consultation exercise, which I know will please Mr Brownlee enormously. The information will be in the public domain, and the Government will set out in due course the steps that it is taking to implement our manifesto commitment to a local income tax.

I remind Mr Brownlee—if I need to, as he was present and heard the speech as well as I did—that the chairman of the Scottish Chambers of Commerce was also critical of the council tax and referred to the lack of public support for it. Before Mr Brownlee crows too much, perhaps he should think about a more credible alternative to the despised council tax.

I can quote to the cabinet secretary what Mr Quirk said. He just said that the council tax was not popular, but people do not like paying taxes anyway.

The cabinet secretary, Mr Brownlee and I were all at the Scottish Chambers of Commerce dinner last night, and we heard the chairman, Norman Quirk, describe the Scottish National Party's proposals to introduce local income tax in the current economic climate as "positively spine-chilling". Will the cabinet secretary meet the Scottish Chambers of Commerce and others—such as the Confederation of British Industry, the Scottish Trades Union Congress and the Scottish Council for Development and Industry, which are all opposed to local income tax and believe that it will be a disaster for the Scottish economy—so that they can discuss their concerns? He could then perhaps take their advice and ditch the policy.

I keep having to warn Mr Whitton about the fruity language that he uses in parliamentary exchanges. I had to warn him about that at the Finance Committee meeting on Tuesday, and I caution him gently again today.

As always, I remain happy to discuss issues with the Scottish Chambers of Commerce, the CBI and other relevant business organisations. Mr Whitton will not be surprised to hear that I regularly see representatives of those organisations. I will, of course, discuss the local income tax with them.

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Government Funding of Local Authorities

To ask the Scottish Executive when it expects to receive proposals from the Convention of Scottish Local Authorities for amendments to the formula for distributing government funding to local authorities. (S3O-4913)

Work on the review of the distribution formula is under way jointly with COSLA. I expect the results of the review to be agreed in time to inform the next local government finance settlement, covering the period 2011 to 2013.

The cabinet secretary will recall his meeting with Orkney Islands Council and me on 28 February, at which we highlighted the serious discrepancy between the relative funding settlements for each of the main island areas. Does he agree that Orkney is underfunded in relation to its needs? Does he accept that, although a full-scale review may take a little more time, there are anomalies in the current funding arrangements that can and should be addressed in the short term?

I agree with Mr McArthur that Orkney Islands Council does not receive as much as other island authorities in resources per capita. It is important that we go through a considered process when addressing the distribution formula for local authorities, because the issue does not affect only Orkney Islands Council. Mr McArthur will recall that at the meeting to which he referred—or perhaps slightly before that—we had constructive discussions about the financial arrangements for Orkney Islands Council. The council expressed considerable satisfaction with the resulting distribution arrangements and the financial settlement that it received for 2008-09. The Government will have further discussions on the distribution formula with Orkney Islands Council and other local authorities.

Can the cabinet secretary tell me at this stage whether local authorities such as Aberdeen City Council and Aberdeenshire Council, which are poorly funded per capita and have been for an exceptionally long time, are likely to benefit from any review of funding? In answer to a previous question on the likely outcome in respect of the local income tax, he said to a member in the chamber that local authorities such as Aberdeen City Council and Aberdeenshire Council would be allowed to retain the money that would be raised through a future local income tax. Will he confirm that central Government funding of local authorities would be adjusted as a consequence of that action and that any future formula will apply regardless of how money is raised locally?

On the first point, Mr Johnstone will appreciate that if I gave the type of commitment that he seeks in relation to two local authorities—Aberdeen City Council and Aberdeenshire Council—I would be prejudging the discussions on the distribution formula that are taking place between the Scottish Government and COSLA. I understand the views of both councils on the existing formula. Such issues will be considered as part of the review.

On the second point, I have already made it clear to Parliament that local authorities will be able to retain the local income tax that is generated in their areas. There will, of course, be a parallel channel of funding, as there is today—I refer to revenue support grant—to support funding of local authorities. The distribution formula will inform the Government's decisions on the allocations that should be made to individual local authorities.

Does the cabinet secretary agree that per capita funding is a blunt measurement of need in any community and that much more needs to be thought through in determining distribution of resources from the centre? Does he share my concern about the fact that, in the past 30 or so reviews of the distribution formula, less than 1 per cent of resources have been redistributed? Do the matrix and the information that are available to him at the moment suggest that, in this review, there will be a more radical redistribution of resources than occurred on the more than 30 previous occasions on which the formula was examined?

Mr Kerr makes a fair point. From his experience as a former finance minister, he will understand the intricacies of the local government finance formula. That may be an exaggeration, because I am not sure that anyone understands the intricacies of the formula, although Mr Kerr will understand them more than most. The calculation is not made simply on a per capita basis. A variety of indicators, including deprivation and sparsity of population, comprise the distribution formula. Any amendment of those factors would have to be considered very carefully to ensure that it did not create unintended consequences.

I assure Mr Kerr that that will be very much the thinking for the distribution formula. As to whether or not it leads to more radical change, that will be a product of the distribution review itself. I would be prejudging that process if I were to make any further comments on the matter, but I assure Mr Kerr that ministers will be happy to discuss those issues with Parliament and with other parties in trying to arrive at a financial settlement and distribution formula that must carry comprehensive support across the chamber.

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Efficiency Savings

To ask the Scottish Executive what progress it has made in achieving efficiency savings targets. (S3O-4885)

We are only six months into the first year of the 2008 to 2011 efficiency programme, so it is too early to report on progress made in the first year. We will publish the outturn report for this year in autumn 2009.

Does the cabinet secretary share my concerns that Greater Glasgow and Clyde NHS Board will have to make £42 million of budget cuts? Does he agree with me that front-line services should not be cut to meet efficiency savings targets?

There is a clear definition of what constitutes an efficiency saving. It is included in the Government's efficiency programme. What might be described as crude cuts in services can in no way pass the test for efficiency savings. Efficiency savings are driven by improvements in arrangements for delivery of services, by circumstances that allow us to encourage more cases to be handled and by improvements in the operational processes of public services.

Had I followed the advice of the Labour Party when I was setting the Government's efficiency programme, I would have had a 3 per cent efficiency savings target. The type of financial challenge that Mr Kelly is discussing in relation to Greater Glasgow and Clyde NHS Board would have been much greater if I had followed the advice of the Labour Party. It is a good job that I did not do that.

Has there been any examination of what the impact would have been—or is the cabinet secretary able to give his own assessment—had the 3 per cent cuts that were proposed by new Labour been agreed to? Does the cabinet secretary agree with me that it would have been "spine-chilling"—to use David Whitton's word—if the people who provide the services or who rely on them had to deal with a 50 per cent increase in the efficiency savings that had to be made?

As Mr Brown will be aware, I produced an efficient government programme that I felt contained a reasonable level of achievement for all aspects of public services. If I had gone for a 3 per cent efficiency target, it would have increased the scale of the programme by 50 per cent and would have made the challenge ever greater. That would have come on top of the fact that the health service—which is getting a greater financial settlement under this Government than it would have the Labour Party been returned to office—would, like every service apart from education, have had its budget increased only by the rate of inflation under Labour's proposals at the last election. This Government has delivered a settlement for the health service that goes higher than that.

Two myths have been propagated by the minister in the one response. What he said was factually inaccurate both with regard to what Wendy Alexander proposed and to cash-releasing and time-releasing savings. The proposals were radically different, considering the 2 per cent cash-releasing savings that the Government is proposing. It is also a myth that the national health service would not have found and got the funds that it required.

That said, I come to my question. Will the cabinet secretary guarantee and assure Parliament that when any organisation—NHS, local authority or quango—submits its proposals for efficiency savings, it will set out in detail its response to the Government's criteria thereby providing a full explanation as to the so-called efficiency savings that it is making, so that the Parliament and the public may rest assured that the efficiencies are not in fact cuts? I seek a simple assurance. Does the cabinet secretary expect every public body to respond according to the criteria that were set out by the Government?

I am fascinated by Mr Kerr's correction of my alleged "two myths". I remember the 3 per cent efficiency savings speech very well. It was the hungry caterpillar speech, and I will never forget that day. My recollection of that entire period is imbued with it. It was clearly said in that speech that the target would be 3 per cent efficiency savings. Allow me to put that on the record.

I am sorry to go over old ground, Presiding Officer, but Mr Kerr knows as well as I do that the former First Minister made it clear that, under the Labour Party's spending plans before the election, the only service that would get an above-inflation increase in funding was education. Everyone else would have "to cut their cloth"—I think that that was the phrase. I put that, too, on the record.

I turn to the other points that Mr Kerr raised. He asked me to make it clear that organisations must adhere to the criteria that have been set. The criteria have been published, so they can be scrutinised by MSPs and by the public. We have also published efficiency plans in relation to the efficiency proposals that are coming forward from different elements and organisations of Government. As I said in my answer to Mr Kelly, members will be able to scrutinise the outturn report when it is published in the autumn of 2009.

I remind members of our new-found, very amicable agreement. I would be grateful if members could keep questions as short as possible—they should not ask multiple questions. Of course, we expect ministers to follow suit in their answers.

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Edinburgh Airport (Public Transport Access)

To ask the Scottish Executive what progress has been made on improving public transport access to Edinburgh airport since 2007. (S3O-4921)

The Scottish Government has committed £500 million to the Edinburgh tram project, which will connect Edinburgh city and the airport. In addition, a new railway station will be constructed in the Gogar area that will integrate with the tram network for onward connections to Edinburgh airport. Together, those initiatives will provide a high-quality public transport link to the airport.

It is now 14 months since the transport minister called a halt to the direct rail link to Edinburgh airport and promised instead a tram-rail interchange in the Gogar area. When will the location of the interchange be announced? What discussions have taken place with stakeholders in west Edinburgh about public transport access? Can he confirm that the Royal Highland and Agricultural Society of Scotland is involved in those discussions, given the impact of the recent changes in relation to the airport?

I welcome the continuing commitment to the tram.

Decisions on the location of the Gogar station are at an advanced stage. We have talked with a range of stakeholders and are working closely with TIE Ltd on the project.

I have had discussions with the Royal Highland and Agricultural Society of Scotland on a range of issues, although I am not sure that there is a relationship with the issue that the member raises—the society has not raised it with me. However, if the society has concerns, I will be happy to hear them and to put people's minds at rest.

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New Schools

To ask the Scottish Executive how many schools it envisages will be built under the Scottish Futures Trust in this parliamentary session. (S3O-4866)

I told Parliament last month that I expect that the Scottish Futures Trust will first be used in the commissioning of a new school building project during 2009. It is already discussing with the school estate strategy working group how the trust can best support the delivery of our and local authorities' joint aspirations to improve the school estate.

Can we now assume, then, that the cabinet secretary expects each local authority in Scotland to bring forward proposals for new schools? Will he encourage councils such as Fife Council, in my region, to bring forward a new school at Taybridgehead, which the Liberal Democrats promised but never delivered?

Many local authorities throughout Scotland are already bringing forward proposals for school buildings. Some projects were initiated under the previous Administration and the Government is taking them forward. Other school building projects are within local authorities' capital programmes and have been provided with the resources that the Scottish Government has made available. In the current financial year, local authorities received a 13 per cent increase in their capital budgets.

There is plenty of initiative on the part of local authorities and they want to be involved in school building. I am working closely with the Cabinet Secretary for Education and Lifelong Learning to ensure that the school estate strategy working group and the Scottish Futures Trust are closely aligned in delivering improvements to the school estate.

Will the schools that will be built under the Scottish Futures Trust have automatic freedom of access to school lets? If so, that would be a massive improvement for communities that at the moment find themselves locked out of schools that have been built under the private finance initiative and public-private partnerships.

One of the purposes behind any new school estate development would be to encourage greater community use of, and involvement in, the facilities. The Government very much favours that approach and I will certainly ensure that Mr Paterson's aspirations are fully considered in our work to develop the school estate.

Are councils still able to bring forward PPP proposals and to request level-playing-field support for school programmes?

A number of school projects are being taken forward just now; indeed, the other day, we signed off a project in Inverclyde that has level-playing-field support. That approach to school building remains intact and will be taken by the Government in the projects that remain outstanding under the commitments made by the previous Administration.

Is the cabinet secretary aware that work on five of the new primary schools that are being built in Aberdeen has stopped? As he knows, the development is being progressed under the non-profit-distributing model. Will ministers offer Aberdeen City Council the additional bridging finance that its private sector partners will need to resume the work without further delay?

Mr Macdonald will be familiar with the structure of the Aberdeen City Council contract. It is the responsibility of the special purpose vehicle that has been set up to attract finance and manage the project to secure any financial arrangements and ensure the project's continuity following the financial problems experienced by Landsbanki.

The council has been in touch with me on the matter. Indeed, this week, its leader set out for me in correspondence the interim proposals that the council is taking forward. I think that it is acting responsibly and effectively on this matter and, as with all issues related to the council, I am willing to assist where I practically can. However, I reiterate that the solution to this issue and the responsibility for creating financial continuity lie with the council's special purpose vehicle. We should be looking first of all to it to put in place the finance to continue the project. I know that that work is under way in the council.

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Highland Council (Meetings)

To ask the Scottish Executive when it last met Highland Council and what issues were discussed. (S3O-4905)

The Scottish Government is in regular contact with Highland Council on a range of issues.

As the cabinet secretary is well aware, Highland Council has an excellent network of first-class healthy living centres, including the groundbreaking janny's hoose project, which was recently praised by the First Minister. However, the centre is due to close next month as a result of funding problems. Will the cabinet secretary speak urgently to all the public agencies involved in order to provide a lifeline to that project, which is an example of best practice in regeneration and health inequality work?

I am not familiar with all the details of the case that Mr Stewart has highlighted, but I will of course have it fully investigated and ensure that the issues are considered. That said, I am pretty certain that the centre is one of a set of projects whose financial support was extended by the Deputy First Minister after this Administration came to power. Centres of this type, which fulfil our responsibility to encourage our fellow citizens to lead healthier lives, play an important role across the range of our public services.

As I said, I will investigate the points that Mr Stewart has raised, and I am sure that if any appropriate action can be taken, ministers will take it.

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Small and Medium-sized Businesses (Bank Support)

To ask the Scottish Executive how it will promote the urgent need for banks to give additional flexible support to small and medium-sized businesses. (S3O-4930)

The Scottish Government is committed to doing everything within its power to encourage investment in and development of the Scottish economy and to help the business and banking communities. The Cabinet Secretary for Finance and Sustainable Growth wrote earlier this month to all the main clearing banks urging them to do more to assist our small and medium-sized businesses in the provision of affordable finance by utilising all available resources, including the United Kingdom-wide small firms loan guarantee scheme, the option of invoice discounting and support that is accessible through the European Investment Bank.

Does the minister share my concerns that good local businesses, such as Vantana, which makes blinds in my constituency, are being additionally penalised in these difficult times by the withdrawal of credit facilities, a reduction in overdrafts and increasing interest rates on loan repayments, which is all the more harsh, given that local businesses are requesting only flexibility, not a free lunch?

I recognise that situation. We are looking for an early return to reasonable and competitive rates and terms and conditions, and to establish a situation in which the banks and companies across Scotland recognise their mutual interest in delivering long-term, viable businesses with more people in work. We are working assiduously to achieve that end, and are in dialogue with the Financial Services Advisory Board and Scottish Financial Enterprise.

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Derelict and Disused Land

To ask the Scottish Executive what action it is taking to encourage local authorities to bring derelict and disused land back into productive use. (S3O-4908)

The Scottish Government has allocated £36.6 million for this year and the next two years through the vacant and derelict land fund to the five local authorities with the greatest concentrations of such land in close proximity to some of our most deprived communities—that is, Glasgow, North Lanarkshire, South Lanarkshire, Dundee and Highland. National planning policy also encourages the reuse of previously developed land in preference to greenfield land.

I am not sure whether the minister has had time to see the landshare campaign that is being run on television by Hugh Fearnley-Whittingstall, who is encouraging institutions that hold disused or underused land to make it available for local communities to produce their own food, which reduces the environmental impact of food production, reduces costs to householders and communities, and reconnects communities with an understanding of where their food comes from. Will the minister encourage local authorities and the rest of the public sector to join that campaign and to recognise that land that is held by the public sector can be put to good, productive use by communities?

I rarely watch television, but I spotted Hugh Fearnley-Whittingstall doing pioneering work by putting an old British Gas site to productive use. I view the initiative in the same light as I view the Norwegian Government's corporate social responsibility bill, which is currently going through the Norwegian Parliament and seeks to make corporate social responsibility an integral part of the way in which businesses operate.

I am happy to further augment and support the initiative that Patrick Harvie mentions, and I make a commitment to him that we will raise the issue in our discussions with businesses and communities, in line with George Kerevan's wonderful article in today's Scotsman.

I appreciate the support that can be given through the vacant and derelict land fund, but I find it difficult to understand why it is confined to the five local authorities that the minister mentioned. In West Dunbartonshire, which I represent, and in Inverclyde, which Duncan McNeil represents, there are substantial amounts of vacant and derelict land from the industrial past that could be reclaimed and which are identical to the areas of land in Glasgow and North Lanarkshire that the minister talked about. I ask the minister to re-examine which authorities come under the scheme. As a matter of fairness, the situation should be reviewed.

Our approach is designed to have the biggest possible impact. The five areas that I mentioned contain 80 per cent of all the vacant and derelict land that is located in Scotland's 15 per cent most deprived data zones. I suggest to the member that success in those areas could breed further success, and that we should see where our approach takes us.

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Infrastructure Investment Projects

To ask the Scottish Government how many Scottish Government infrastructure investment projects are being accelerated for early delivery. (S3O-4918)

A very significant capital investment programme, amounting to £35 billion over the next 10 years, is set out in our 2008 infrastructure investment plan. Despite the economic circumstances, we are progressing that programme and accelerating activity in a number of ways. For example, we have already announced the fast tracking of our affordable housing investment programme, which will bring forward £100 million of spending this year and next year.

Earlier this week, the First Minister announced that the key design contracts for the Edinburgh to Glasgow rail improvements programme were being tendered earlier than anticipated. That will bring forward the next stage of the programme, which is worth up to £1 billion, and increase the rail capacity between Glasgow and Edinburgh. Similarly, the hub initiative, which will deliver a range of local projects, including general practitioner surgeries, is now being prioritised by the Scottish Futures Trust for early delivery.

Last week, we announced funding for two pathfinder projects in the south-east and north of Scotland. We were also able to confirm that the Scottish Futures Trust will be involved in commissioning its first schools project next year. That compares favourably with the more than two years that it took for the first schools project to be commissioned by the previous Administration using a private finance initiative/public-private partnership scheme.

The cabinet secretary cited the example of a railway project in Scotland being accelerated. The financial close for the Borders railway procurement project is scheduled for December 2010. Will he please bring that forward by a year?

The Government has made clear its commitment to the Borders railway. We have set out the timescale within which we will bring it forward, and if there is an opportunity to accelerate things, we will do so.

Mr Purvis has made another demand for me to change my financial programme and increase commitments earlier in the session than I can justify. At the same time, he wants me to make £800 million of spending cuts every single year. I simply ask him to get the story straight when he presses the Government to take action.

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Strategic Transport Projects Review

To ask the Scottish Executive what progress has been made in respect of the strategic transport projects review. (S3O-4873)

The strategic transport projects review is currently in the process of concluding, and ministers are considering the emerging findings. It is expected that there will be an announcement on the outcome of the review later this year.

The minister is aware of the cross-party support in the chamber for the Glasgow crossrail project and the strong backing for that project from local authorities and business. He also knows that completing the short link between Scotland's historically separated rail networks would deliver a more efficient and competitive railway, which would in turn promote a wide range of social, economic and environmental benefits throughout Scotland. In light of the overwhelming financial advantage of a project that a recent range of assessments judged would result in a benefit cost ratio of well over 2.0, will the minister and his Government support the authorisation of that key rail link in its strategic transport projects review?

The member will know about the substantial support that we are giving to railways in Glasgow. The Glasgow crossrail proposals were worked up by Strathclyde Passenger Transport, which responded to previous feedback by breaking it down into bite-sized chunks, which I welcome. I am sure that the member will, like everyone else, listen with great interest when we make our strategic transport projects review announcement later this year.

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Local Government Efficiency Savings

To ask the Scottish Government whether it intends to review the 2 per cent efficiency savings target set for local government. (S3O-4895)

The Government does not intend to change the 2 per cent efficiency target. We are only six months into the 2008 to 2011 efficiency programme, which is a key part of public service delivery for the 2007 spending review period.

During a committee evidence-taking session, the cabinet secretary informed me that he expected the number of people who are employed in the public sector to be reduced over the funding period. At a time of rising unemployment, his Government's stated policy is to do all that it can to maximise jobs in the Scottish economy. What action has he taken to ensure that job losses are prevented in the public sector?

It is clear that individual public authorities must make judgments about the number of staff they require to deliver the public services that the public expect within the financial resources that the Government makes available to them. In coming to that judgment, authorities must consider the delivery of the efficiency programme, which I mentioned in my answer to Mr Kelly. A significant number of specific criteria have to be addressed before any savings can be defined as efficiency savings. Ensuring that public sector employment is at an appropriate level will rest with all public authorities, including the Scottish Government.

I point out to Mr McNeil that Scotland enjoys a significant amount of public sector employment. I look to all public servants to contribute to encouraging and supporting the development of the Scottish economy at this difficult time. Many authorities are responding positively to that challenge.

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Tourism (Fife)

To ask the Scottish Executive what support it is giving to tourism in Fife. (S3O-4923)

Fife is marketed by VisitScotland using the fantastic assets that Fife can offer its visitors, which include golf, touring, walking and other outdoor pursuits, food and drink, nature, local events, festivals, history and heritage—the list goes on and on. Those great assets are promoted across the United Kingdom and overseas by VisitScotland in a number of ways, such as through websites, in print, by direct mail and in public relations activity. Some of those measures focus entirely on Fife—for example, the kingdom of Fife visitor guide and the dedicated VisitFife website—while others feature Fife as part of the wider promotion of Scotland.

Does the minister agree that, as Scotland's ancient capital, as the final resting place of 11 kings and queens, including King Robert the Bruce, as Andrew Carnegie's birthplace, and for a whole host of other reasons, Dunfermline does not get its fair share of support to highlight its importance to the national and international tourism market? Will he join me to help right that wrong?

Given the passion that the member brought to his question and the provenance of Dunfermline, I suggest that Dunfermline and Fife will do exceedingly well. The year of homecoming will point many people—not only those called Bruce—towards a visit to Dunfermline.

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Expo 2010 Funding

To ask the Scottish Executive, in light of the current economic climate, whether it will reinstate funding in order to give Scotland a higher profile at expo 2010 in Shanghai. (S3O-4891)

I agree with Mr McCabe that the Shanghai expo will be an exciting opportunity for Scotland to showcase the scope of our creative talent to the world, and I firmly intend that Scotland will be well represented. The Scottish Government's decision not to pledge £500,000 to the United Kingdom Government for the expo is based on an important principle: it is part of the Foreign and Commonwealth Office's role to represent Scotland at the expo, along with the other countries of the UK, and not only when the Scottish Government provides earmarked funds. However, we have offered to discuss with the Foreign and Commonwealth Office the possibility of providing funding for specific further opportunities to showcase Scotland within the Shanghai expo programme.

I am glad that the cabinet secretary agrees with me on the importance of the exhibition, which could be pivotal in Scotland's engagement with one of the most important economies in the entire world. However, I hope that there will be no unnecessary picking of fights with the Westminster Government. We are all aware of the Foreign and Commonwealth Office's responsibilities, but I am asking this Scottish Government to put Scotland first, put fights with Westminster aside and invest in giving us a higher profile during the exhibition in Shanghai, which is taking place at an extremely important time.

I know, from Mr McCabe's period in government, that he has a long-standing interest in developing business connections with China. I applaud him for that. He knows the respect that I have for his work in that area.

We have to consider the issue, but not within the context of fights with Westminster, which are not what the Government is about in this respect. The important point is to recognise the financial responsibilities of respective organisations within the UK Government. If it is appropriate for ministers in the UK Government to have responsibility for foreign and Commonwealth activities, they should also have responsibility for the promotion of every component part of the UK. That principle underpins, for example, the duty of VisitBritain to promote every single part of the UK. In a venture of the type that Mr McCabe mentions, it is the responsibility of the Foreign and Commonwealth Office to act in a similar fashion. However, I assure Mr McCabe that the Government will interact constructively with the UK Government on this question, as we do on many other questions.

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Business Support (North-east Scotland)

To ask the Scottish Government what action ministers are taking to support businesses in the north-east, given the current financial climate. (S3O-4931)

As indicated in my previous response, the Scottish Government is committed to doing everything within its power to encourage investment in and development of the Scottish economy, and to help businesses across Scotland, including those in the north-east. The Scottish Government's economic recovery plan is fully in line with our economic strategy and our continuing commitment to achieving our purpose of increasing sustainable economic growth. Firms across Scotland can already access advice on cash flow and business efficiency from the business gateway website and, where appropriate, direct from Scottish Enterprise and Highlands and Islands Enterprise. We fully appreciate the heightened importance of ensuring that the right advice is readily available to firms during these difficult times.

Tomorrow, I shall be at the annual general meeting of the north-east branch of the Federation of Small Businesses. Can the minister give me guidance on what the Government is doing specifically for small businesses in that area?

The full delivery of the small business bonus scheme will come into play this year and in 2009, delivering an extra £50 million to the small business community, which very much welcomed the bonus last year. This year, 120,000 small businesses will be totally taken out of the business rates net, and 30,000 small businesses with a rateable value of up to £15,000 will benefit to the tune of a 25 or 50 per cent reduction. On top of that, we now have public contracts Scotland, which is a very much improved procurement portal that I advise all FSB members to look at. It will ensure that small businesses have a level playing field and an even chance of bidding for public sector business. That applies to the north-east as well as to every other part of Scotland.

We have a little time in hand, so I will take a final question, which is from Richard Baker.

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Union Terrace Gardens

To ask the Scottish Executive what discussions it has held with Scottish Enterprise Grampian on proposals for a feasibility study into the potential redevelopment of the Union Terrace gardens in Aberdeen. (S3O-4869)

There have been no discussions between the Scottish Government and Scottish Enterprise over proposals for a feasibility study into the potential redevelopment of the Union Terrace gardens in Aberdeen.

Can the minister pursue the issue of the timescale for such a study with Scottish Enterprise Grampian, given the impact that significant delay could have on the Peacock visual arts centre project, which has already received support and pledges of funding? What information will the minister seek on the options in the consultations on the proposals for this vital development for Aberdeen?

I anticipate that the review and update of previous studies will, in fact, address all those points. I look forward to a situation where a collegiate approach can be taken between those who seek to develop Union Terrace gardens and the Peacock visual arts centre project, which I expect to be a by-product of the exercise.

Can the minister give guidance on how the rest of the finance that would be required for such a grand project might be made available and whether Sir Ian Wood has given any indication that he has received further private sector support for the project?

I anticipate that the significant contribution from Sir Ian Wood will spur the civic pride of other Aberdonian corporates and the Aberdeen diaspora. I look forward to that developing over time.