First Minister’s Question Time
Engagements
1. To ask the First Minister what engagements he has planned for the rest of the day. (S4F-00430)
Later today I will write to all the party leaders in the Parliament and Margo MacDonald inviting them to round-table discussions as we take forward Scotland’s referendum consultation.
We always welcome a sinner who repents and someone who pays attention to others within the chamber. I am absolutely delighted with that news. I believe that it is in the interests of the people of Scotland that we undertake that task together.
This week, of course, the First Minister unveiled the question that he wishes to ask the Scottish people in the forthcoming referendum:
“Do you agree that Scotland should be an independent country?”—[Official Report, 25 January 2012; c 5603.]
Members: Yes.
Well, we know what you think. Can the First Minister tell members what he means by “an independent country”?
Members: Oh!
I mean a country that is free to make its own decisions, which stands on its own two feet financially, which operates in co-operation with other countries in the world and which is not, on major policy issues, subjected to a policy direction such as the current attack on people with disabilities; that policy is not supported by the Scottish population.
I suppose that by independence I mean the normal status of some 200 nations across the planet.
The attacks on the disabled are coming from the Tories; they are not doing that because they are English. The First Minister must understand that the choice in this country is not between the Tories and separation; there is another approach.
The First Minister conceded this week, significantly, that in his version of independence the Bank of England would be the lender of last resort. Does that mean that John Swinney will bring his budget to not only this chamber, but the Bank of England to ask how much he has permission to borrow, what his fiscal policies should be and how much he can spend? The First Minister told us this week that he is an avowed Anglophile. Is he not taking that a bit too far?
I will take those points in turn. First, Johann Lamont’s idea that we can somehow separate out the fact that, under the current constitution, Scotland not just sometimes but much of the time gets Governments that we do not vote for, is a great mistake. One of the great advantages of the right of self-determination and independence is that people get the Government that they vote for, not the Government that somebody else votes for.
I am not quite certain that monetary policy is Johann Lamont’s best subject, but I heard her deputy leader say on the radio this morning that if Scotland had a monetary union and the Bank of England was the lender of last resort, Scotland would lose the ability to set interest rates. I have news for the Labour Party: politicians lost the ability to set interest rates on 6 May 1997, when Gordon Brown declared the Bank of England independent. It is that separation between monetary policy controlled by the monetary policy committee and the Bank of England, and fiscal policy controlled by the chancellor that perhaps Johann Lamont wants to catch up on.
Independence would mean that the Scottish finance secretary would be able to set our taxes and to govern our spending. For example, at the present moment he would be able to provide capital investment to revive the Scottish economy.
I am delighted with these questions because they are exactly the nub of the debate that will persuade people to vote for independence in the referendum.
I bow to the expertise of the ex-Royal Bank of Scotland economist, who of course was so wise and sensible that he wrote to Fred Goodwin to urge him to buy the bank that nearly broke the Royal Bank of Scotland. Perhaps some humility about our ability on the economy might be in order. The First Minister is telling us that he is content that the key decisions that will impact on people’s mortgages, savings and pensions will be made by a foreign bank with no remit to look at Scotland’s conditions and circumstances. Does he agree with his own chief economic adviser, Crawford Beveridge, that that is “not ideal”?
I am not sure that Fred Goodwin is the strongest suit of the Labour Party. After all, I did not make him Sir Fred Goodwin—that was Jack McConnell—nor did I have him as one of my economic advisers—that was Gordon Brown.
When Johann Lamont has had the chance to look at my answer to her second question, I think that she will see the answer to her third question. The Chancellor of the Exchequer does not set interest rates any more—that has not happened since 1997, when the Bank of England was declared independent. It is quite interesting that the Labour Party was keener on independence for the Bank of England than it was on independence for its country of Scotland, but we will leave that to one side.
Such an arrangement is not uncommon in the world. There are some 67 countries that are in formal or informal monetary unions. That does not mean that they are not independent countries; it just means that they are in monetary unions. It has been suggested by some ex-Labour ministers such as Lord Myners that people in England might not wish to have that currency arrangement. Let us get it right. It is not possible to stop people using a tradeable currency—that was just a myth that was spread by the chancellor’s advisers.
I will give a couple of good reasons why I think that any chancellor would accept the idea of a currency union between Scotland and England. The first is to do with oil and gas. Scotland would get the revenues from our geographical share of oil and gas but, in addition, oil and gas provide £30,000 million of support for the balance of payments and therefore to the sterling area. Secondly, Scotland has international exports worth £24 billion, including £4 billion of whisky exports. Given the huge support that Scotland gives the sterling area, I believe that any chancellor would be biting off our hands to come to such a sensible arrangement.
That comes to the nub of it—the First Minister hopes and believes that that will be the case, but it will not necessarily be so. The reality is that the people of this country want to have confidence in their pensions, their mortgages and their future.
We know that Alex Salmond thinks that he has the prescription for Scotland’s ills—it is the same one that he has had for the past 40 years. In that time, the world has changed and we have changed. We have the euro, the rise of China, the devolution of Scotland and technological revolution, but in good times or bad, feast or famine, high days and holidays, he always has the same answer—separation.
Is the truth not that the Scottish National Party’s push for separation, rather than being about people’s savings, their mortgages or their pensions, is about the First Minister’s blind faith that things will be better because he says so? Why is he prepared to take unnecessary risks with people’s mortgages, their savings and their pensions in the midst of the worst global economic crisis since the 1930s? There is no good reason, because political separation will mean that we will have less economic control to serve the people of this country.
I am glad that Labour is living up to the boast that it will argue a positive case for the union.
When it comes to who is aware of developments in the modern world, the nub of the issue is that, over the past few decades, the number of independent countries in the United Nations has grown from 50 to 200. If we are talking about the tide of history, I would have thought that the tide of history was moving towards the status of independence. Since the second world war, 50 of those countries have become independent from London and, you know what, not a single one of them has applied to get back under London control.
Scotland would emerge as an independent country with the sixth highest wealth per head of the Organisation for Economic Co-operation and Development countries. That, in itself, is not the argument for independence—the argument for independence is self-determination—but given that we would be the sixth most prosperous country in the developed world, most people in Scotland will have some degree of confidence in our ability not just to survive, but to prosper as a socially just, economically progressive society.
Secretary of State for Scotland (Meetings)
2. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S4F-00417)
I wish the secretary of state a speedy recovery from his current ailment, and I hope to meet him next week to discuss the details of the Scottish Government’s consultation, “Your Scotland, Your Referendum”.
Yesterday, the First Minister finally brought a little bit of clarity to some parts of the process of the referendum. Today, I hope that we can agree that we need slightly more clarity than we have just had on a number of substantive principles upon which the people of Scotland will vote.
The First Minister repeatedly asserts that he wants independence so that the Scottish Government can have all the economic levers at its disposal, yet he has just obfuscated when answering questions on that issue. He now maintains that he wants to keep the pound—that he wants to leave the United Kingdom but remain part of the United Kingdom currency union, which means that an independent Scotland will have its interest rates set by the Bank of England. Does he accept that when the bank sets interest rates it considers the whole of the United Kingdom, but that it would be unlikely to give Scotland a second thought after independence, which would leave Scotland with less control?
If the Bank of England is so concerned for Scottish economic conditions, perhaps the Conservatives will turn their attention to the fact that, as far as I know, there is not one Scot on the monetary policy committee and only two employees in the whole of Scotland. The basis on which a monetary union is constructed is that we would have influence in the same way as is allowed by other monetary unions. We have no influence whatsoever at the present moment.
I bring Ruth Davidson back to the nub of the point. When the Labour Party, in government, decided on a policy of an independent monetary authority—a policy that was subsequently agreed to by the Conservatives—it gave away any ability of politicians to control interest rates. It has to be said that that has been a continuing trend across the developed world since that period. The idea that politicians in London control interest rates is now totally fallacious. There are many advantages for both Scotland and England in having a currency union. I point out that this is not a new idea. It has been in Scottish National Party documents for a considerable time.
The First Minister thinks that he has answered one question, but I am not sure that it was entirely the one that I asked.
The First Minister has been telling media organisations—not just in this country but elsewhere—that the pound could be a transition currency, as was the case in Australia, when it became independent. If that is the First Minister’s transition plan, what is his ultimate banknote of choice? Is it the euro, which is much loved by him and the SNP, or is he perhaps planning his own currency—the Salmond shilling?
The First Minister asserts that an independent Scotland would not be forced to join the euro as an accession country, although the weight of legal opinion states otherwise. He asserts that the Bank of England would act as a lender of last resort for Scotland, although it would be, for us, the bank of a foreign nation. On this vital issue, the First Minister is all over the place. He twists and turns according to his audience.
For almost 40 years, the First Minister has campaigned on independence, but he leaves dangerous uncertainty on the issues that matter. Is it not the truth that the First Minister has no plans to assume the full levers of financial power, because either of the options that are flitted between involve significant control by either Europe or London, with even less influence than we have now?
The bit about transition is what Ruth Davidson fixes on in her own mind, but she is perfectly correct to say that Australia was part of the sterling area after it became an independent country. It is also perfectly correct for me to say that, in the world of 200 nations, 67 of them are in either currency unions or formal currency arrangements. That does not mean that they are not independent countries; what it means is that, in terms of economic policy, they have decided to enter a monetary union or a currency arrangement. I look forward to the Conservative Party touring those 67 countries and telling them that they are not really independent because they have decided that having a currency union is the best economic policy. The two positions that she states are totally fallacious.
Independence would give us control over our fiscal policy. It would allow us to set our spending and taxation priorities. For example, we might not wish to pursue the Conservatives’ misguided attack on people in Scotland who have disabilities. We might decide that we want to make the Scottish economy more competitive in order to attract even more international investment. Above all, we would have the great advantage of having access to Scotland’s natural resources, which, for the past 30 years, has been denied to us by successive Conservative and Labour Governments that have used the cash instead to bankroll successive Tory and Labour Chancellors of the Exchequer. Control over our taxation, our spending and Scotland’s natural resources looks to me like an attractive, independent proposition for the people of Scotland.
Further to Mark McDonald’s question of last week, does the First Minister have any updated information on the sister company to Sangs, Calanike, which is headquartered in Kirkintilloch, in my constituency?
The Minister for Energy, Enterprise and Tourism, Fergus Ewing, spoke to AIB Group (UK) last Thursday and will meet it next week to discuss the concerns that have been raised by Mr McDonald about both Sangs and Calanike. Mr Ewing has also discussed the situation with the administrator, Zolfo Cooper, to ensure that every avenue is being explored to keep the businesses operating. In all this, our chief and abiding concern, which we share with the constituency members who have expressed concern, is to keep jobs and businesses in these challenging economic times.
Cabinet (Meetings)
3. To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S4F-00419)
At the next meeting of the Cabinet, we will discuss issues of importance to the people of Scotland.
The First Minister published his budget in September. Since then, the United Kingdom Government has changed its plans and added extra money to the Scottish block. Since September, when he published his budget, how much extra money has the Scottish Government received?
The original budget plans were to reduce Scotland’s capital direct budget over the next four years by 36 per cent. Under the revised plans, that reduction has become 32 per cent. In successive questions, Willie Rennie has pointed to that 4 per cent difference and asked what the Scottish Government is doing with the great funding boost that we have received. I suggest to Willie Rennie that, although most people would regard a cut of 32 per cent as better than a cut of 36 per cent, it is still a cut of a third of our capital budget that we would like to have the power to reverse.
For the second week running, I have asked the First Minister a basic question about financial control in his Government and he has not known the answer. He should not need to look across into Mr Swinney’s eyes for the answer. The Scottish Parliament financial scrutiny unit has provided a note that sets out that he has an extra £400 million available this year and next year.
There have been 63,000 e-mails from college students, and the National Union of Students this week told the First Minister that his college cuts hit
“the poorest people in some of the poorest communities”.
I cannot understand why he is being so stubborn. We have discussed the matter before, many times. His cut is £40 million, but he has 10 times that available. Will he agree to look again at the budget and see whether he can do the right thing for Scottish colleges?
I will separate out the three parts of Willie Rennie’s question.
First, he refers to an extra £400 million, but the cut of which £400 million is being replaced is £3,000 million, which still leaves a shortfall of £2.6 billion.
Secondly, our capital injection into colleges is extremely good. For example, I have here figures for college student funding support. When we took office, it was £69.6 million, whereas the planned spending in the next two years is £84.2 million. That seems a very strong result in these difficult economic times.
Thirdly, Willie Rennie criticises me for having colleagues here from whom to take such key specialist advice as that which the Cabinet Secretary for Finance, Employment and Sustainable Growth offers me on many occasions. I am sure that Willie Rennie would love to be in the position of being able to look round and get advice from lots of colleagues.
Benefit Reforms (Impact on Child Poverty)
4. To ask the First Minister what the Scottish Government’s response is to the Secretary of State for Work and Pensions’ statement that the United Kingdom Government’s proposed benefit reforms will not lead to an increase in child poverty in Scotland. (S4F-00420)
The Department for Work and Pensions’ own assessment of the impact of the proposed upper limit on benefits suggests that 7,000 to 8,000 children in Scotland will be adversely affected by that proposal alone.
The most up-to-date figures for 2009-10 from the DWP place the number of children in poverty in Scotland at 20 per cent—far, far too high. Although it is the lowest level since devolution, the number is very high and the Cabinet Secretary for Health, Wellbeing and Cities Strategy is seeking a meeting with Iain Duncan Smith as soon as possible to seek assurances that, as a result of the proposals, the trend of a declining percentage of child poverty will not be put into reverse.
I thank the First Minister for a very full response. Of course, the Scotland Office minister David Mundell was unable to answer the question when asked on several occasions in an interview earlier this week, even though it is his Government that is imposing the cuts. Does the First Minister agree that, if a UK Government cannot even answer such questions, the power to make decisions on such an important issue should rest with this Scottish Parliament? In particular, does he agree that child benefit, with an uptake of 96 per cent, should remain a universal benefit?
There are a few things in that question. I have here a transcript of the junior minister at the Scotland Office being interviewed on 24 January 2012 on “Good Morning Scotland”. I will put it in the Scottish Parliament information centre so that every member of this Parliament has the opportunity to read the junior minister being asked seven times the question that Christine Grahame has just mentioned. I make the point that if the people who are proposing a policy are not aware of the impact that it will have or the number of children who will be affected, that might be a good reason for their not proposing the policy.
On Christine Grahame’s question, I was looking at the comments of Martin Sime, chief executive of the Scottish Council for Voluntary Organisations, when he gave evidence in the Parliament and again in the press this very morning:
“The UK government’s welfare reform programme is going to have a dramatic impact on some of the poorest people in Scotland. For many voluntary organisations, cutting welfare at a time of rising demand is simply wrong, but the content and purpose of some of the specific proposals reflects neither the values nor needs of Scotland ... We could, and should, be doing things differently.”
I agree with Martin Sime, and I think that this Parliament should have the ability to legislate on such matters.
Scotland is not making the progress on tackling child poverty that either the First Minister or I would want to see, but I look forward to the Government’s report on its child poverty strategy in March.
On the broad issue of the anti-poverty strategy, “Achieving Our Potential” was published in 2008 and since then we have had recession, budgets, spending reviews and cuts. A lot has changed between 2008 and 2012. Will the First Minister therefore commit to looking again at the approach—not necessarily a root-and-branch review, but some consultation and a refresh—to ensure that the priorities of the tackling poverty board and the Government are still right and that the policies are still achievable and, indeed, on track?
Yes, I commit to bringing forward further consultation and papers on the matter.
I hope that Drew Smith will understand when I tell him seriously that this Government’s ability to continue the welcome reduction—it is not enough, but it is still welcome—that we have seen in the percentage of children and families in poverty in Scotland is at best severely constrained by the current changes in welfare benefits and at worst will be put into reverse, not just in Scotland but across these islands? If Drew Smith accepts that proposition, is that not an argument for why that particular policy direction should be under the control of this Parliament, where the views, expressions and feelings of the Scottish people on such matters prevail, rather than left in the hands of ministers who do not even know the effect of their own policies?
The Scottish Government has a carer strategy for Scotland that has a particular focus on young carers. Can the First Minister assure me that the detrimental impact of the Welfare Reform Bill will be monitored to ensure that that most vulnerable group of young people in Scotland is properly supported?
Yes, I can. The majority of members of the Parliament who united just before Christmas to express concern about the direction of aspects of the welfare reform process require that we do that monitoring, and that reports and consultations are brought to the Parliament so that we can understand the full effects of the proposed legislation. I repeat the argument that it would be a good idea to be able to not just monitor those effects, but have the power to prevent them.
Local Authorities (Fitness for Purpose)
5. To ask the First Minister whether the Scottish Government considers any local authority to be not fit for purpose. (S4F-00421)
Local authorities deliver vital and valued services for the people of Scotland. I recognise the commitment of their employees who work hard to provide those services in our communities.
Yesterday, the Budget (Scotland) Bill passed stage 1. Despite the United Kingdom funding cuts, it confirms that, over the three years from 2012 to 2015—the spending review period—local government’s revenue funding budget is to be maintained. Its share of the overall budget will be higher in each year of the settlement than it was in 2007-08, when this Government took office.
I was going to thank the First Minister for his answer, but it did not reflect my question. I will ask him a supplementary question, which he might be able to answer.
Does the First Minister agree with Alex Neil’s view that North Lanarkshire Council is not fit for purpose, that it is overstaffed, that social workers refuse to help people, and that staff badger people who are on low incomes? Alternatively, does he agree with Audit Scotland, which reported that North Lanarkshire Council is a high-performing council that has
“Good strategic direction, with good leadership and clear vision”?
Does he agree with the trade unions in North Lanarkshire that Alex Neil’s comments
“do little for the morale of thousands of low-paid, loyal, dedicated and hard-working public servants.”
Will he therefore ask his cabinet secretary to apologise for insulting those employees? Will he offer his own apology to those North Lanarkshire Council staff who are rightly offended by Alex Neil’s gratuitous attack on them?
No, because luckily I read The Herald of 21 January—
Where is Alex Neil?
Alex Neil is liaising with some of our friends in the north of England to try to do something about a Westminster Government fast rail project that does not seem to be going to get beyond the midlands for the next 20 years.
I read in The Herald that Alex Neil said:
“Any sensible person knows my comments were directed at the Labour leadership ... not the workers for whom I have the highest respect.”
Clearly, when he referred to sensible people, that did not include Michael McMahon.
Scotch Whisky (Overseas Promotion)
6. To ask the First Minister what steps the Scottish Government is taking to promote Scotch whisky overseas. (S4F-00423) [Interruption.]
Ms McMahon, please be quiet.
Having secured geographical indication protection for Scotch whisky in China more than a year ago, the first international product to receive such legal protection, I personally launched the Scotland food and drink strategy for Asia in China in December. China is an emerging Scotch whisky market with massive growth potential. Direct exports soared to £62.3 million in the 12 months to November 2011. Worldwide, whisky exports reached a record high of £3.45 billion in 2010.
I thank the First Minister for his response and welcome the success of Scotland’s thriving whisky industry. Does the First Minister not find it pathetic that certain news reports on Sunday claimed that Foreign Secretary William Hague was briefing against the use of whisky in embassies when Scotland becomes independent?
Second only to the story about pinching the pandas, that was the most ludicrous scare story so far to be concocted by United Kingdom Government ministers. There has been a lot of competition and I presume that it is all part of the Prime Minister’s positive case for the union.
The international whisky industry will survive whisky not being served at UK embassy receptions. However, looking into the issue, I have discovered some interesting detail. Scottish Development International is judged to be one of the most successful international development agencies in the world and Scotland is recorded as having the best record for international investment by Channel 4’s FactCheck blog, among many other observers.
When Scottish Development International holds receptions that promote whisky in our international embassies, we are charged up to £3,000 a time for the privilege, but when UK Trade and Investment holds receptions, it is charged nothing at all. I confess that I was lax in not knowing that at any time over the past four years. We should remind William Hague of that old Andy Stewart ditty:
“How nice it would be if the whisky was free
And the”
embassies were
“filled up to the brim.”
12:30
Meeting suspended.
14:15
On resuming—