Meeting of the Parliament

Meeting date: Tuesday, September 24, 2013

Official Report 772KB pdf

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Topical Question Time

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Pensions Costs (Independence)

1. To ask the Scottish Government what the main cost implications are of the policies outlined in “Pensions in an Independent Scotland”. (S4T-00454)

The financial implications of the policy commitments that are made in “Pensions in an Independent Scotland” are set out in annex B to that paper. The cost of delaying the United Kingdom Government’s planned increase in state pension age to 67 from 2026 will depend on the specific recommendations of the expert commission proposed to be established in the first year of an independent Parliament. I remind members that independence is the only way to ensure that the future of state pension age in Scotland is determined according to specific Scottish circumstances and not imposed by Westminster regardless of Scottish circumstances.

I remind members that, according to the most recent figures for gross domestic product per head, an independent Scotland would be the eighth richest country in the Organisation for Economic Co-operation and Development and well able to afford a high-quality pension system.

Helpfully, I have annex B to the document in front of me. What would be the cost of setting up a separate Scottish pensions regulator?

As I assume Gavin Brown knows, an independent Scotland would not only have to take a share of the liabilities of the UK but would be entitled to a share of its assets. The paper sets out in some detail how we would seek to work with the Pensions Regulator in a transitional way, while of course intending to set up a separate Scottish regulator to oversee pensions to ensure that people in Scotland get access to good-quality protection for their pensions.

The problem for those on the no side of the argument is that they fail to recognise that, right now in the UK—including in Scotland—there is a pensions crisis, caused by many years of bad decision making by successive Westminster Governments. I know that Gavin Brown’s party is not specifically responsible for Gordon Brown’s raid on the pensions industry, but the benefit of independence is to ensure that we get the decision-making powers here in Scotland to ensure that not only can we continue to pay people’s pensions in full and on time, as set out in the paper, but we can take decisions that protect people for the future and ensure that we have a decent pension system for generations to come.

That was a rather long and, if I may say so, rehearsed answer to a fairly simple question: what would be the cost of a separate Scottish pensions regulator? The cabinet secretary pointed me specifically to annex B. I have annex B in front of me and the answer is not there, so I ask her again: what would be the cost of setting up a separate Scottish pensions regulator?

As Gavin Brown is aware, right now the Pensions Regulator covers not only Scotland but the rest of the UK. We would negotiate with the regulator for a transition that would lead to the establishment of a separate, Scottish regulator. The costs of that would be covered and would be negotiated in the context of the transition. Gavin Brown ignores the fact that, right now, people in Scotland contribute to the cost of UK bodies. Such bodies are not provided free gratis by the UK Government; the cost of all these things is met through Scottish taxpayers’ money. We want to ensure that we in Scotland have the ability to use Scottish taxpayers’ money to provide the kind of pensions and protections for pensions for our older people that people in Scotland have a right to expect—protections and assurance that they do not currently have in the UK.

I am not sure that that answer was any clearer than the previous one.

The Scottish Government sets out 30 policy proposals in annex A and claims that four of them are costed in annex B, to which the cabinet secretary referred. By my reckoning, only one proposal has any numbers or costings attached to it. Does the cabinet secretary think that for the Scottish Government to be taken seriously it is acceptable that only one of the 30 proposals that it has published is costed?

If Gavin Brown goes through the proposals, he will see that they cover a range of things, including doing what UK Governments currently fail to do and giving people access to the information that they need if they are to plan their pensions for the longer term. Our sensible recommendations mean that we can plan properly for a decent pension system, in which not just this generation but future generations can have confidence.

The spending implications of the paper are set out in annex B. I am proud that, for example, the Scottish Government, unlike the UK Government, wants to maintain savings credit. The current UK Government wants to take savings credit away from older people, which would affect the lowest-paid pensioners in Scotland.

We have produced a comprehensive paper, which sets out how we can do things better in an independent Scotland, not just on the state pension but on public and private pensions. If Gavin Brown had the ambition to have a decent system, instead of meekly accepting UK Governments’ cuts to and erosion of people’s pensions, he might engage with the paper, as opposed to offering the kind of nonsense that we have just heard from him.

Can the cabinet secretary confirm that, according to the Office for National Statistics, which is a more reliable and robust source of data than the Office for Budget Responsibility, Scotland’s older population is growing more slowly than the UK’s and our dependency ratio—the number of children and pensioners per 1,000 members of the working population—will increase at a lower rate, at least until 2030, which means that pensions are not only affordable but sustainable in an independent Scotland?

Like most countries in the western world, Scotland has an ageing population—I actually think that we bemoan that far too much when it is, in fact, a good thing. In any case, those who try to perpetuate the myth that Scotland’s population is somehow uniquely ageing or ageing faster than that of the rest of the UK are simply wrong. According to the figures, between 2010 and 2035 the number of people at state pension age will increase by 28 per cent in the UK and 26 per cent in Scotland. Let us put this in context and have some accurate facts and figures in this debate instead of the figures that the parties on the other sides of the chamber want to put forward.

Scotland can more than afford a decent pension system. I repeat the point that I made in my opening response: an independent Scotland would be the eighth richest country in the OECD. The question is whether we are going to access our country’s wealth to provide decent pensions for our older people. That, in my view, is the benefit of being an independent country in charge of its own affairs.

In May, the First Minister told me that an independent Scotland would not try to secure any opt-out from European Union pension regulation. However, in August, he told The Sunday Post that the reverse was true and that he would seek a derogation. Will the Deputy First Minister clarify which of those conflicting options is true? What is she doing to secure the best outcome?

I suggest that Ken Macintosh reads the pensions document and the extensive material that it contains on the European cross-border directive, because it sets out the commonsense position that it would be in the interests of not just the Scottish Government but, overwhelmingly, the UK Government to have sensible transitional arrangements in place. Those on the other side of this argument who say that that would not be possible have to confront the fact that that would be as much of a problem for the UK Government as it would be for the Scottish Government, given that cross-border schemes, by definition, relate to both sides of the border. The paper not only sets out in detail that commonsense position but repeats the call that we have made before and which echoes the call made by the Institute of Chartered Accountants in Scotland for the UK Government to enter into sensible discussions now with the Scottish Government and the European Commission to ensure that we can reach an agreement on this matter, which is something that I imagine everyone in the chamber would welcome.

Given that we might expect this and future Governments to make some progress on life expectancy in the next 20 years and that Ireland, for example, has a pension age of 68, is it possible that her expert group might report back with a higher pension age?

That would be unlikely to the point of inconceivable, given the current lag in life expectancy in Scotland. As a former health secretary, I bow to no one in the view that we should be doing everything possible not just to improve life expectancy in Scotland but to narrow the gap in life expectancy between different parts of Scotland and between Scotland and other parts of the UK. However, as everyone knows, these things take time, and the question for Mr Rennie’s party, the Conservatives and particularly for Labour, which left office with a commitment to a pension age of 67 in 2035 but now finds itself parroting the Tory-Liberal policy, is this: why should people in Scotland, who contribute the same to pensions, get less out because of a lower life expectancy? With independence, we will be able to look at this issue through an expert commission and set proposals for the appropriate rate of increase of pension age in Scotland instead of having an increase imposed on us by Westminster, regardless of the circumstances that we in Scotland find ourselves in.

On that very point, did the Scottish Government not attempt to suggest yesterday that an earlier retirement age could be afforded without providing any evidence of how that would be paid for? How can the Deputy First Minister determine that something is affordable without knowing what it would cost? Specifically on the £6 billion figure that has been quoted by experts and which the Deputy First Minister has described as exaggerated, how does she know that a figure is exaggerated if she has no figure in mind?

First of all, we base our comments on the affordability of pensions on what we know in the here and now, and we know that, right now, pensions are more affordable in Scotland than they are in the UK and that they take up a smaller proportion of our national wealth.

I do not think that this should challenge anyone in the chamber, but it stands to reason that if I am saying that we need an expert commission to look at the appropriate pace of the increase in the retirement age beyond 66, the precise cost of that will depend on the specific recommendations that are made—in other words, the number of years the increase in retirement age beyond 66 is delayed by.

I say with the greatest respect that the credibility problem for Labour on this issue is massive. The other day, I saw comments from Alistair Darling criticising the Scottish Government for not wanting, or for having grave reservations about, an increase in the retirement age to 67 by 2026. When Alistair Darling was Chancellor of the Exchequer, he supported a policy that would not have raised the retirement age to 67 until 2035. When did the policy change? When did Labour start simply parroting the policy of the Tories?

It is not simply that Labour defended the Tory right to make such decisions for Scotland; Labour is now meekly accepting whatever the Tories say the decisions should be. That is being met with dismay throughout the country. The sooner Labour finds the ability to speak with its own voice on these issues, the better for everybody.

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Supply Teachers (Shortage)

2. To ask the Scottish Government what steps it is taking to address the shortage of supply teachers. (S4T-00457)

I welcome Kezia Dugdale to her new role. It is the first time that we have met in the chamber, and I hope that we will have a positive exchange for the benefit of Scotland’s children and learners.

Some local authorities are experiencing challenges in relation to supply teachers. There are three issues. First, more new teachers are securing full-time contracts, so there are fewer available for supply. Secondly, the level of teacher unemployment in Scotland is lower than it has been since 2005. Thirdly, there is the impact of the 2011 pay agreement. We have taken steps to address all those issues. We have increased the number of student teachers by 300 in 2012 and by a further 370 in 2013, and I will continue to monitor the situation on an annual basis. The Educational Institute of Scotland is currently balloting its members on a pay offer that will improve pay for teachers who undertake supply work.

Because I am, indeed, new to this role, before coming here today I looked over the other occasions on which the issue had come to the chamber. The cabinet secretary has constantly reminded us in the chamber that he is “monitoring” the situation and that it is “under regular review”. Can he, therefore, tell us which local authorities are facing shortages of supply and in what subjects? What specifically is he doing to help local authorities that are struggling to put teachers in front of classes full of children?

It is a matter for each individual education authority to address the teacher supply issue. The freedom of information publication that the BBC used last week pointed to South Ayrshire Council’s difficulty in finding English teachers for my old school, Marr college. That is a problem for South Ayrshire Council to address through manpower planning of one sort or another. The job of Government is to ensure that there is a sufficient supply of teachers coming through but not an oversupply because, as the member will know if she has looked back on the issue, an issue that we have had to address again and again is the difficulty of teacher unemployment. We have tried to bring the supply of teachers into balance.

There will always be areas and subjects in which there is a difficulty in providing enough recruits. In the circumstances, we ensure that the recruitment process of universities is targeted to those shortage subjects. Indeed, there will be a further report on teacher workforce planning in December so that we can ensure that those subjects are being addressed.

I thank the cabinet secretary for his answer, but I am not sure that it will bring much comfort to those in Moray Council who describe the problems of getting supply teachers as “chaotic”. I encourage the cabinet secretary to look closely at what is happening in Moray at the moment.

The cabinet secretary mentioned the pay ballot that the EIS is currently undertaking. Will his offer to supply teachers stand if the EIS members reject the McCormac process in the ballot?

I remind the member that it is not my offer to supply teachers. The method of agreeing terms and conditions and salaries in the teaching workforce is tripartite. It is an agreement between the unions, local government employers and the Government. The offer was agreed by all three, and the changes that were made in 2011 were agreed by all three, including—this is an important point—the EIS, which accepted the change to the terms and conditions of supply teachers. There is now a new offer on the table, which I hope will be accepted. I am not going to try to influence the ballot by going into detail, but I think that, in the circumstances, the offer is the right one. It has been agreed by the parties and it is now up to the members of the union to decide whether they want to take it.

It is important that Moray Council and other councils undertake robust workforce planning, ensure that their workforce is available across the board and, where there are shortages, fill the positions. They must also ensure that they employ enough teachers. That is an extremely important issue. We have heard some siren voices in one or two local authorities talking about teacher numbers. We have a national agreement on teacher numbers with the Convention of Scottish Local Authorities. It is obvious that we need to have that number of teachers, and we should continue to have them.

Does the cabinet secretary welcome the recent figures that show that teacher unemployment is at its lowest in eight years? What are the reasons for that?

I very much welcome the fact that the August claimant count figures were the lowest in education since that series of records began in 2005. There were difficulties with teacher unemployment from 2008 until 2010. As I have said previously in the chamber, I strongly believe that that was a result of artificially high and unsustainable teacher numbers in 2006-07. We took the difficult decision that we had to move on from that. We have made a shared commitment to local government to maintain teacher numbers in line with pupil numbers. Those actions have enabled us to rebalance teacher employment at a more sustainable level.

Members should remember that in Scotland we have a unique offer of probation in teaching that means that everyone who qualifies as a teacher is entitled to a year in the classroom as a probationer. We have more new teachers—that is, post-probationers—in employment: 75 per cent of post-probationary teachers were in permanent or temporary employment in publicly funded schools in September 2012, which was an increase from 66 per cent in 2011. There is always flexibility, because there always need to be teachers who are available to take up posts as they become available during the year.

Over the past 12 months, the number of teachers who claim jobseekers allowance has fallen by 29 per cent. It is much, much lower than the level in the rest of these islands. In August 2013, the figure for the number of jobseekers allowance claimants in education per 1,000 was 51.8 per cent in Northern Ireland, 15.1 per cent in Wales, 10.9 per cent in England and 4.7 per cent in Scotland. It is quite clear that we have focused strongly on ensuring that young teachers get into jobs, and we will continue to do so.

In remote rural areas, the availability of supply teachers, particularly in specialist subjects, is a reasonable concern, particularly for continuity of learning and university entrance. Could more be done through distance and e-learning, videoconferencing and, where appropriate—I appreciate that this is not always possible—travel to another school?

I also welcome Mary Scanlon to her new role—there has been quite a reshuffle in the education ranks over the summer.

Mary Scanlon raises a good point. There is always the potential for imagination to be used in finding solutions to such difficulties. I have been to some schools in remote areas that depend on distance and e-learning to provide a range of subjects. It may not be the best or most permanent solution, but imagination is needed where difficulties are experienced, and I commend all education authorities, all schools and all headteachers who employ it.