First Minister’s Question Time
Engagements
1. To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2730)
Later today I will have meetings to take forward the Government’s programme for Scotland.
Yesterday, the Cabinet Secretary for Finance and Sustainable Growth was forced to apologise to the Parliament for covering up the fact that tax-varying powers were no longer available to us. Presumably, the First Minister knew that too and also hid it. Will he, too, apologise to the Parliament?
I endorse what John Swinney said to the Parliament yesterday. He fully informed me of the situation. Therefore, I join in his apology to the Parliament for not keeping it informed of the developments.
I also support John Swinney in pointing out that—as I am sure Iain Gray must acknowledge, given that he has had time to peruse the documents—the Scottish variable rate was not in a workable condition in 2007 and that it would have taken many millions of pounds to implement it.
I am sure that Iain Gray has seen the quotation in The Times newspaper today, which says:
“It was clear to the Scottish government, both before and after 2007, that there would have to be investment in SVR to maintain the position on implementation”.
When I heard Andy Kerr yesterday, I assumed that he was still under the illusion that £50,000 was all that was required to maintain 10-month availability of the SVR. It seems from that quotation in The Times that, perhaps, there is more documentation to obtain from before 2007 to show what finance ministers really knew before the previous election.
Yesterday, we called for publication of all documentation and we have nothing to fear from that. However, the document that I perused as part of preparation for yesterday’s events was the local income tax consultation paper that the Scottish Government launched on 11 March 2008. That consultation paper makes it clear that, to collect the local income tax, the Scottish Government planned to use the system that Her Majesty’s Revenue and Customs had designed to collect the Scottish variable rate. Now the Government tells us that that system was inoperable.
I always thought that the local income tax was unfair, unwanted and unworkable. Now we know that the Scottish Government, too, knew that it was unworkable, even as it launched its plans. True to form, it covered that up as well. Will the First Minister apologise for that?
Luckily, I anticipated Iain Gray’s question, so I brought along the consultation paper on local income tax. It actually says:
“The Government does not propose to use the Scottish Variable Rate (SVR) to replace the council tax”.
That is on page 26, if Iain Gray would like to catch up on it.
I was interested in that because, yesterday, one of the Liberal Democrats quoted the second part of that sentence, which says:
“even though the SVR could, in principle, be introduced relatively quickly.”
Of course it
“could, in principle, be introduced relatively quickly”,
and the principle is the many millions of pounds for which HMRC asks in order to implement it. The revenue wanted millions of pounds to implement the SVR.
Read the next sentence.
Order, Mr Purvis.
I read a range of quotations in the newspapers. The Herald editorial today asks why John Swinney did not bring the matter to the Parliament. It is puzzled by the fact that he did not, given the obvious political capital, as it puts it, that could be made out of the failing of the past Labour-Liberal Democrat Administration. The Parliament should accept that John Swinney is the sort of person who, when he sees a difficulty and a problem, attempts to solve it, which is what he did. [Interruption.]
Order.
Others may have seen the advantages of showing Labour and the Liberal Democrats that Labour finance ministers and Liberal Democrat deputy finance ministers had not kept the SVR in a position that would assure its implementation. Of course the SVR could be implemented relatively quickly if members of the Parliament are prepared to pay a multimillion-pound bill to HMRC. I do not think that that is a good idea at present.
Of course, the second part of the paragraph that the First Minister read out, on page 26 of the consultation paper—paragraph 4—says:
“the Government believes that earlier preparations made by HMRC for the SVR at the time of devolution should provide a basis for the arrangements that will be needed to implement a local income tax.”
Presumably, the First Minister was suggesting at that point that the Government should indeed spend the many millions of pounds that it knew would be needed to make that system operable, but which it omitted to tell us about.
In a sense, this is an academic debate, because on 11 February 2009 Mr Swinney withdrew his plans to replace the council tax because, he said, there was no parliamentary majority—that is just as well, because there was no collection system either, as it turns out.
Let us talk about what the First Minister was prepared to spend. Why did he continue to spend taxpayers’ money on a staffed-up council tax abolition unit in the civil service for 18 months after the Parliament had told him to drop his local income tax? Will he apologise for that?
That team is dealing with a range of issues, such as the council tax freeze, which we should remember that Iain Gray was against, then he was for it and then he was against it again, as long as the basket of tax rises was capped. There is a range of things on which Iain Gray had better decide what position he intends to adopt before he gets to the election, never mind pay restraint in the public sector.
I point out to Iain Gray that it is absolutely true that if we were to implement local income tax, we would have to have a contract with the revenue so that we could proceed with implementation. A new contract would be essential to do that, but that would involve paying for a contract for a tax that is fair and which would be implemented. Iain Gray seems to suggest that we should have paid millions of pounds to introduce a tax that was not going to be implemented. If he went outside on to the streets of Edinburgh—this time not to demonstrate outside the Parliament with a no pay freeze banner, but to ask, “Should we pay many millions of pounds to the Inland Revenue for a variable rate that we’re not going to implement?”—even fewer people would support that than support the Edinburgh tram project.
No—I am asking why the First Minister has spent more than £250,000 on a local income tax that the Parliament does not want and which he will not implement.
Yesterday, we discovered that the Government had secretly stopped spending money on a tax power that the Parliament should have. Today, we find that it was secretly spending money on a tax that we do not want and which it has given up on. It is not good enough to say that the local income tax unit was working on a range of things, none of which was the thing that is in its title. In fact, the Government has spent more money on the unit since local income tax was dropped than it spent on it before the policy was dropped.
It is bad enough that this Parliament does not know what the Scottish Government is doing. The real problem is that it does not know what it is doing, either. The Government is an incompetent shambles. Will the First Minister apologise for that?
That was a true demonstration of labouring a question. I believe that John Swinney was right to apologise to Parliament yesterday for not bringing the matter to the Parliament for a decision. I join in that apology, but that does not change the underlying twofold issue. First, it is quite clear that the Scottish variable rate was not in a condition in which it could be implemented. Right up until the debate yesterday, Andy Kerr was talking about £50,000, but it is clear that it would take many millions of pounds to prepare the SVR to a state of readiness.
Secondly, the only point at which we should be prepared to pay a multimillion-pound bill is when we are going to invoke the power, which remains available to the Parliament. It does not make sense to pay the bill unless we decide to move forward and invoke the power.
Iain Gray does not seem to like my points so far. I accept the point about reporting to the Parliament, but on the principle of when we should pay multimillion-pound bills, I cite this morning’s Daily Record editorial:
“Swinney may have made the right decision back in 2007 given the costs involved and his own government's plans not to use the tax during their term in office.”
If the Daily Record believes that John Swinney probably made the right decision, we can assume that a broad swathe of Scottish society agrees.
Prime Minister (Meetings)
2. To ask the First Minister when he will next meet the Prime Minister. (S3F-2731)
I have no plans to meet the Prime Minister in the near future, although I wrote to him yesterday to ask for an urgent meeting.
Mr Swinney was first bruised and then humbled by the Parliament yesterday, quite correctly eventually conceding that he had got it wrong, made errors of judgment, and represented himself and his Government in a poor light. He apologised to Parliament. Today, the First Minister said that he knew, and he apologised to Parliament, although his demeanour was less than humble and his apology was less than convincing.
When did the First Minister know? Did he instruct Mr Swinney to engage in the cover-up? Did his Cabinet know about all this?
Mr Swinney briefed me as soon as he got the document from the permanent secretary in May 2007.
I repeat that I agreed with John Swinney’s decision not to pay a multimillion-pound bill for a tax that he was not going to use. I also accept the position that John Swinney accepted yesterday: that the Parliament was due an apology for us not informing the Parliament of that decision. As I pointed out, there was only political advantage to be gained by pointing out the decrepit state of the SVR that we inherited. The point of principle is not about political advantage. Regardless of whether it was politically advantageous, it was right and proper for the Parliament to be informed. Mr Swinney apologised yesterday, and I have apologised today. I hope that Annabel Goldie will accept that we believe that the Parliament should have been informed about a decision about the SVR.
The tiles are coming off the roof. John Swinney was not acting alone. We have just heard that he has had an accomplice since May 2007—the First Minister. The First Minister may resort to whatever rhetoric and hyperbole he likes, but he has now conceded that he orchestrated a cover-up, a collective irresponsibility, and a concerted effort to hide the truth from the Parliament and the people of Scotland. That is a shocking state of affairs.
Having admitted his culpability, will the First Minister eat fare that is foreign to him—humble pie? Will he apologise not just to the Parliament but to Scotland for this disgraceful episode?
I am Spartacus: I apologise with John Swinney to the Parliament. I think that I am now on my fourth apology.
It is a point of principle that the Parliament should have been informed. I knew about it, Mr Swinney advised me about it, I am First Minister, and I believe that it is a lesson well learned. On whether it is right and proper at this time or at any time to give many millions of pounds to the Inland Revenue for a tax power that we are not going to use, that cannot be a good decision. Of all parties, the Conservative party, which is slashing public expenditure in Scotland willy-nilly by the day, complains endlessly about waste in public spending. I presume that Annabel Goldie is not seriously saying that we should have met a multimillion-pound bill for a tax that we were not going to use. It cannot be credible to say that a Conservative or indeed any rational person would pay millions of pounds and then not use the tax.
Secretary of State for Scotland (Meetings)
3. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S3F-2732)
I have no plans for a meeting in the near future but, as with the Prime Minister, I have asked for an urgent meeting with the Secretary of State for Scotland to discuss the Conservative-Liberal Democrat version of the Calman proposals.
After all the smoke and mirrors this morning, will the First Minister, on behalf of his Government, now tell Parliament exactly what Mr Swinney apologised for—[Interruption.]
Order.
Will the First Minister, on behalf of his Government, tell the Parliament exactly what Mr Swinney apologised for, given the entire motion that the Parliament passed last night?
Mr Swinney apologised for not informing Parliament of key moments during the discussion on the Scottish variable rate and the fact that it would take many millions of pounds to make it available for early implementation.
Occasionally, ministers are in the position of not being able to inform Parliament of some things. For example, my officials and Mr Swinney’s officials have been engaged in 14 meetings with the Treasury on the Calman proposals—or a version of them. I know what is in the proposals on Calman to be published next week, and I also know what is not in them, but I am not in a position to tell Parliament because I have been asked to keep a confidence on the detail of the proposals. Sometimes, ministers are in that position but, as John Swinney acknowledged yesterday and I have acknowledged today, the information on the SVR should have been brought to Parliament so that it could make a decision on whether John Swinney was right not to spend millions of pounds on a tax power that he did not intend to use.
Parliament is asking Mr Salmond about things that he is responsible for, not other things. He has to decide how to repair the Government that he leads and for which he is responsible. Mr Salmond let his own independent budget review experts believe that
“There is no reason, in principle, why the Scottish variable rate of income tax ... could not be used”.
Mr Salmond’s Government implied in this chamber last week that it had considered whether to use the tax power from next April even though it knew that it could not. Mr Salmond’s finance secretary told Mr Harvie in that debate:
“I do not think that there is a compelling argument in favour of using the tax-varying powers at this time.”—[Official Report, 17 November 2010; c 30477.]
Why does Mr Salmond not understand that Parliament passed a motion last night condemning his Government for misleading Parliament? Will he now refer that matter to his independent advisers on the ministerial code—the former Presiding Officers?
I will consider any letters that come into me.
Let me point out to Tavish Scott that no finance minister who has announced to this Parliament that they are not using the tax-varying powers was ever in a position to implement them the following April. As we know from the documents produced yesterday, even if the 10-month trigger period had still been in operation, it would not have been possible. No minister could stand up in November and, even if the 10-month trigger period had been in operation, implement a tax change the next April. I know Tavish Scott did not appreciate that point when he was calling for a cut in the variable rate, but it has always been the case.
What we also know now—and what Mr Swinney and I should have brought to the Parliament—is that that 10-month period was not implementable. It was not implementable before 2007 and it was not implementable when Andy Kerr was Minister for Finance and Public Services and Tavish Scott was Deputy Minister for Finance and Public Services. It was not capable of being implemented except if we had been prepared to pay many millions of pounds to HMRC to bring in the system.
If Mr Swinney had considered it important to use the variable rate at any time over the past three and a half years, the way to do that would have been to pay many millions of pounds to HMRC. He was not going to use the rate; therefore, he decided that it was not a good idea to waste millions of pounds of Scottish taxpayers’ money.
The First Minister will be aware of press reports that the Ministry of Defence is considering closing RAF Leuchars in North East Fife instead of RAF Lossiemouth. Does the First Minister agree that it is totally unacceptable for the MOD to play one off against the other? Does he agree that RAF Leuchars and RAF Lossiemouth both play vital but distinct roles in the United Kingdom’s defence, to say nothing of the respective economic and social importance of the bases to the communities where they are located?
Quickly, please.
Will the First Minister give me an assurance that he will support the campaign to save RAF Leuchars with the same vigour and commitment that he has shown to the campaign to save RAF Lossiemouth? Will the First Minister—
I am sorry, but I must ask the First Minister to reply. We do not have time, Mr Smith.
I agree with the substance of the question. I agree that this looks like a pretty shabby divide-and-rule tactic from the MOD. We should not allow ourselves to be divided and ruled.
As Iain Smith knows, the document that was signed and endorsed by all four of the party leaders in Scotland contained support not just for the north-east air bases, but for RAF Leuchars. Now that it seems that RAF Kinloss is destined for closure, one third of the air capacity in Scotland is to be removed. That seems, to me, more than enough of a sacrifice for Scotland to make in the defence review. Therefore, the Parliament should unite in making it clear to the MOD and to anyone else that it is not acceptable to close RAF Lossiemouth and that it is not acceptable to close RAF Leuchars. We should not allow ourselves to be divided and ruled.
Fuel Poverty
4. To ask the First Minister what action the Scottish Government is taking to tackle fuel poverty. (S3F-2742)
We are providing targeted support to tackle fuel poverty through the energy assistance package and the home insulation scheme. The energy assistance package helped more than 67,000 households in its first year and is on target to top 100,000 this year. We delivered 11,500 measures such as boilers and full central heating systems, and we are on target to do the same this year. We are also reducing the cost of heating for many other households with insulation being delivered through the home insulation scheme, and we are providing benefit and tax checks so that households can maximise their incomes. Sandra White will be aware, however, as I am aware, that substantial increases in the cost of energy can overcome even the significant measures that we are taking.
I welcome the help that is being given to people by the Government and echo what the First Minister says regarding fuel prices. I am sure that he shares my frustration that the biggest factors affecting fuel poverty—which he has already referred to—are energy price rises and welfare, both of which are reserved to Westminster, and that rises in energy prices and cuts in benefits will result in more people living in poverty in Scotland. Does the First Minister also agree that removing moneys from the most vulnerable will lead to many more being at risk of fuel poverty and that Westminster’s too-far, too-fast approach to cuts will have a devastating effect on the very people we should be protecting?
I share Sandra White’s frustration that not all the levers that influence fuel poverty are at the control of the Scottish Government and about how that affects our ability as a Government to meet our 2016 target of eradicating fuel poverty.
Despite our efforts to continually improve the energy efficiency of the housing stock, there was a 20 per cent rise in fuel prices between July 2008 and July 2009, which far outstripped the rise in household incomes. That is the context in which we have to judge the cuts to welfare announced by the coalition Government and indeed the spending cuts imposed generally by the Government in Westminster. The substantial analysis from respected authorities is that on the basis of what we have seen of the welfare cuts programme so far, those in the poorest income deciles will suffer most and hardest.
Police Officers
5. To ask the First Minister what the Scottish Government’s reaction is to the recent report by PricewaterhouseCoopers that states that the number of front-line police officers will drop by 2,000. (S3F-2735)
I suppose relief, in the sense that when I examined the report, as I am sure that Richard Baker did, I found that PricewaterhouseCoopers was assuming a real-terms cut in police funding of 9 per cent in the coming year. Luckily, we have managed to negotiate with the Convention of Scottish Local Authorities—or at least all the political parties in COSLA with the exception of Labour—a totally different settlement of 2.6 per cent revenue for local government and a guarantee of 2.6 per cent for police budgets.
Just as Richard Baker celebrated the 1,000 additional police on the streets of Scotland, I know that he will now join me in saying, “Thank goodness this Government was able to negotiate with COSLA a totally different situation from the PricewaterhouseCoopers report.”
I note that the Daily Record leader to which the First Minister referred earlier was actually headlined “SNP guilty as charged”. Given the First Minister’s confidence on police numbers, despite the fact that forces are being asked to maintain numbers while having their Government grant cut by £31 million and are cutting thousands of civilian staff posts, can I assume that he will have no difficulty in agreeing to my request that a new independent police numbers projection study be published, to allow effective planning for forces beyond the end of the next financial year? Will he agree to that request?
Here was I thinking that the Labour Party was against consultancies, as I am told by Iain Gray every week—I will come back to that in a second, because it is pertinent to the question.
However, we should all remember that Richard Baker has form on these issues. Two years ago, he said that the SNP Government would never achieve our target of 1,000 additional police officers on the streets of Scotland. He was even more negative than Iain Gray, who said that it would take us 13 years to achieve the target. When we achieved the target, Richard Baker, far from congratulating us on achieving it and the lowest crime rate in Scotland for 32 years, said that it would not last into the future. Today, when we have an agreement with all the political parties in COSLA—except the Labour Party thus far—to help the COSLA budget to maintain police numbers at their record level, Richard Baker cites a consultancy report that projects a 9 per cent fall in police income, instead of the deal that we negotiated with COSLA.
The PricewaterhouseCoopers paper goes on to say that the police are delivering an effective service and will require restructuring, and that PricewaterhouseCoopers has already done work of that sort with some large United Kingdom forces. PricewaterhouseCoopers was doing a report, but it seemed to me that it was also touting for consultancy business.
Irish Economy
6. To ask the First Minister what lessons the Scottish Government considers can be learnt from the current economic situation in Ireland. (S3F-2746)
The first and overpowering one is to regulate the banks properly. [Interruption.]
Order.
The Republic of Ireland is not the only country that did not manage to regulate its banks. Other countries, such as the United Kingdom, did not do that, nor indeed did the most powerful country in the world, the United States of America.
I know David McLetchie well. I also rather liked the tone of the Chancellor of the Exchequer’s remarks in the House of Commons earlier this week, that Ireland is our strongest, closest neighbour. I am sure that everyone in this chamber will want to support the people of Ireland as they address these difficult economic and financial challenges.
I am sure that the people of Ireland are relieved that they do not have a First Minister like Alex Salmond to tackle those challenges.
At First Minister’s question time only two years ago, the First Minister claimed that it was the “independent status” of Ireland that had
“caused the revival in the economy of that nation.”
He told us that we should all
“go to Dublin ... and learn some lessons about how to run an economy successfully.”—[Official Report, 21 February 2008; c 6221.]
The recent events in Ireland are a graphic illustration of just how wrong Alex Salmond can be. He can be no more wrong than on his party’s policy of adopting the euro, which has exposed so-called independence in Europe as the contradiction in terms that it always was. Does he agree that Scotland’s interests are best served by keeping the pound and by an interest rate policy that is made in Britain rather than one that is dictated by Brussels?
I do not agree with David McLetchie’s analysis of the euro area. Let us consider the fall in output over the recession period. In the euro area as a whole, the fall in output over the recession was just over 5 per cent; in the United Kingdom, it was 6.5 per cent. On the recovery over the euro area as a whole, output in the euro area is now down to 3.1 per cent below the peak of output; the UK figure is still at 3.9 per cent. David McLetchie should look at the balance of statistics.
On the first part of David McLetchie’s question, I, like many other people, hugely admired Ireland’s progress in coming from 30 per cent below UK wealth per head to 20 per cent above it. I thought that that was a significant achievement, and I was not the only commentator who felt that they should praise the people of Ireland for that achievement. In an article in The Times in February 2006, George Osborne said:
“Ireland stands as a shining example of the art of the possible in ... economic policymaking”.
He said that the Irish
“have much to teach us, if only we are willing to learn.”
12:32
Meeting suspended until 14:15.
14:15
On resuming—