Plenary, 24 Jun 1999

Meeting date: Thursday, June 24, 1999

Official Report 798KB pdf

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Open Question Time

We now move to open question time. Members who wish to ask supplementaries should be ready to press their buttons as the questions come up.

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SCOTTISH EXECUTIVE

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Economy

To ask the Scottish Executive to outline its plans for economic development and employment creation in Scotland. (S1O-91)

On many of the standard indicators, the Scottish economy is performing well. Unemployment in Scotland is falling, employment is increasing and youth and long-term unemployment are both at historically low levels. Scottish manufacturers and exporters have performed resiliently in the face of difficult trading conditions. This is a tribute to the Government's very successful management of the UK economy over the past two years. Devolution and the creation of this Parliament have given us an opportunity to consolidate our economic success, which we will do on the basis of the principles and initiatives set out in "Partnership for Scotland".

I thank the minister for that reply. Will he agree that Scottish Widows is particularly important to the Scottish economy?

Yes. In the dynamic financial services sector it is vital to the Scottish economy. It is important that members of the Scottish Parliament are seen to support enterprise when jobs and headquarters are being secured. Scottish Widows' customer base is being widened from 2 million to 15 million in the United Kingdom and more than 2,200 outlets are being opened to it. The funds under management will increase from more than £30 billion to more than £80 billion, which will mean that the financial services sector in Edinburgh will deal with more than £250 billion- worth of funds under management. That will take it to the level of Frankfurt, and will probably mean that it overtakes Frankfurt as the fifth largest financial centre that deals with new unit trusts and management funding.

Members need to be aware of the issues involved. We clearly need to ensure that we invest in our financial services sector. At the end of the day this must be an issue of paramount importance to Scotland.

Today's editorial in The Scotsman says:

"By their response to this deal . . . MSPs . . . can exercise

their responsibility to protect the public interest while simultaneously telegraphing their desire to foster further . . . success stories."

The Royal Bank of Scotland plc, Stagecoach Holdings plc, British Energy plc and Scottish Power plc are all benchmarks of success and we should never talk them down.

In recognising that the board of Scottish Widows is now a subsidiary board of Lloyds TSB Group and that control over decision making at Scottish Widows has been lost to Scotland, does Mr McLeish propose to take any action in line with the speech that the First Minister delivered at the Scottish Council Development and Industry annual conference last March? He said:

"Government should certainly be prepared to act within its powers if we find ourselves at risk of losing the headquarters of a company that is particularly important to the Scottish economy."

Mr McLeish accepted that Scottish Widows is

"particularly important to the Scottish economy."

What has happened to Scottish Widows in the past 24 hours is exactly the same as happened to General Accident, which prompted the First Minister's remarks last March. Was the First Minister right last March or is he right today?

The deal must go through a de-mutualisation process and there are certainly regulatory authority issues to be considered. I must say, though, that we must not start this Parliament off by talking down the Scottish economy or any element of it. What is important is that the alliance between Scottish Widows and Lloyds TSB means that they will have 7 per cent of the United Kingdom market of funds under management. The headquarters will be in Edinburgh. If the customer base is extended, there will be an increase in jobs.

My right honourable friend and I—sorry, I broke into Westminster speech. The First Minister and I met chief executives and chairmen of the two companies yesterday. We sought and were given assurances. We need always to put Scotland's long-term economic interests first. We must never trivialise them and talk them down. Let us support success and let us hope that that alliance turns into a big success for Scotland.

What plans has the minister for encouraging research and development, and particularly for strengthening the links between our universities and industry?

I am grateful for Keith Raffan's question because I know that he is interested in those matters.

First, the link that we have secured between lifelong learning and enterprise will mean that there is a basis for co-operation. Secondly, I want the commercialisation of science to be a top issue in the profile of the Scottish economy in the next few years. I hope to enter discussions with not only industry and higher and further education but with the new Enterprise and Lifelong Learning Committee in the Parliament to ensure that we can make products in laboratories become products of successful Scottish companies.

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Education

To ask the Scottish Executive what failures of educational provision by local authorities the creation of a statutory duty on them to raise standards in the proposed education bill is intended to redress. (S1O-86) The First Minister (Donald Dewar): Mr McLetchie will accept that if we do not compete successfully and do not continue to raise standards, we will get into difficulties. Our aim is to raise standards in all parts of Scottish education. The education bill will contain provisions that are intended to facilitate that process and I would like to think that even the Scottish Tory party will support it.

The Conservatives invented the phrase "raising standards in schools" and we achieved it during our term of office.

I draw the First Minister's attention to the remarks made yesterday by his colleague, Mr Galbraith, in response to my friend, Bill Aitken. The Minister for Children and Education said:

"Can we please put a stop to such language as sanctions, bludgeons and attacks, and to driving wedges between us and education authorities?"—[Official Report, 23 June 1999; Vol 1, c 674.]

As the First Minister will recall from his days at law school—if not, I am sure the Deputy First Minister will remind him—the essence of a duty is that it is an enforceable obligation. Accordingly, will the imposition of a statutory duty to raise standards in schools be accompanied by sanctions to force councils to toe the Government line or to meet its targets? If so, how does that square with the warm words uttered by Mr Galbraith yesterday?

We have repeatedly made it clear that we want to work with teachers to reinforce and buttress their professionalism and to make progress on raising standards. That process is already under way.

Ronald Smith, the general secretary of the Educational Institute of Scotland said on television the other day:

"I would like to see positive obligations on local authorities and governments to support schools".

For that, he went on to say, the Government must

"provide the wherewithal to make it possible".

He then talked about his desire for a national educational development plan within the framework of which new ideas could be developed.

As Mr McLetchie knows, the excellence funds— to take one example—will add £377 million to education authorities' funds over this and the next two years. From 1997-98 to the end of the comprehensive spending review period, education authorities will have additional spending power of £379 per pupil. The Government is providing the wherewithal. That provides a good basis for co-operation to work towards common aims and objectives. I invite the Conservative party to take a constructive interest in that process and to move into the 21st century with us.

I notice that the First Minister did not answer the question and did not advise us whether there would be sanctions to back up the proposed statutory duty.

Moving into the 21st century, the First Minister will be aware that there were reports this morning that a number of local education authorities in England are being rapped over the knuckles by his opposite number down south for spending too much money on red tape and not enough on schools. Will the First Minister please tell us how he intends to ensure that that situation does not occur in Scotland and that additional funding is directed towards our schools and not to expanding council bureaucracy?

I find it quite extraordinary that having rapped me rather pompously over the knuckles on the grounds that I am making accusations against teachers and seeing darkness in their activities on all sides, Mr McLetchie gives us a question that clearly implies that he thinks that too much is being spent on bureaucracy and that funds are being maladministered.

I do not jump to that conclusion. I rely on local authorities, with whom I look forward to working through the inspectorate and the department, to ensure that, given their circumstances, the right balance is struck. The common aim that unites us all is the need to support children with needs, to allow them to realise their ability and to equip them to compete in future life. If we do that, rather than assume that something terrible is happening—as Mr McLetchie implied—we will get on a good deal better.

Does the First Minister agree that there is some danger in continually putting further duties on education authorities, rather than allowing them discretion to act locally? Does he agree that there is little point in local authorities dealing with education if we continually restrict their ability to act locally?

I am not aware that we are continually restricting their ability to act locally. We have increased funding and we have taken steps to ensure that it is used in the areas for which it was intended. That does not detract from the wide sweep of discretion that applies to local authorities across the range of their education budget. I repeat again that the Government has an interest—a proper interest—in ensuring that we give children the best possible chances. I think that everyone, including everyone in education authorities, shares that view.

There is no reason why we should not work in harmony to achieve those aims, but we are not helped in that by the constant accusations from the Scottish National party—which were a such a feature of the election—that the instinct of everyone in the Labour party, if they see a teacher, is to punch them on the nose. That is not the spirit in which we approach the problems of education.

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Roads Review

To ask the Scottish Executive whether it plans to give an indicative timetable for the completion of the Scottish strategic roads review and for reporting its findings to the Parliament. (S1O-93)

We are taking stock of this major review and considering the role of such roads in our integrated and sustainable approach to transport. We expect to report to Parliament after the summer recess.

Does the minister accept that an efficient modern trunk road network is critical to economic development in Scotland and a key consideration in industrial location, attracting inward investment and developing indigenous industries? Does she also accept that it is therefore critical in reducing unemployment and in tackling social exclusion?

I acknowledge the importance of the strategic trunk roads network to businesses and communities. It is important that trunk roads are used effectively and that goods can be transported around the country in good time. We need to consider ways in which to improve the effectiveness of that network. The Government has put in money, through the comprehensive spending review, to ensure that we can maintain the roads network effectively and to the proper standard, and to examine a range of measures such as taking freight off roads and encouraging it on to rail. That will ensure that we make the most

use of our strategic trunk roads network and that it works for business as well as it does for individuals.

I welcome the fact that, for the first time, we will have a road programme that is based on an integrated transport policy rather than an uncosted and unaffordable wish list such as we had under the previous Government. Will the minister undertake to consider safety and environmental factors when making decisions about road developments?

I am happy to agree. We need to take a broad look at the role of the roads network and how it fits into our integrated transport strategy. Safety issues, environmental issues, access issues, integration with the rest of the network and economic development are all important. The strategic roads review will consider those key things to ensure that we do not have a wish list of roads, but a sensible approach so that we can prioritise effectively for the good of the country.

We have been waiting a long time for the roads review and, in some cases, it has been a very long time indeed. When I was first elected to the House of Commons, I remember people in the Scottish Office talking about a motorway between Haggs and Stepps. A quarter of a century later we are still waiting. They are still talking about it and they have apparently not even decided on the line of route.

Ask a question, please.

Will the minister give an early announcement about upgrading the A80 route to a motorway rather than constructing a new motorway through the Kelvin valley?

It would be premature for me to announce an individual option from the strategic roads review before we have conducted that review. As I mentioned to Malcolm Chisholm, the key issues are to do with access, integration, safety and economy. We are investigating those things in the roads review. When Parliament returns in the autumn, we can consider those issues and decide on our priorities.

That brings open question time to an end. I know that it is early days, but both questions and answers need to be a little briefer if more members are to be called.