First Minister's Question Time
Engagements
To ask the First Minister what engagements he has planned for the rest of the day. (S3F-1472)
Later today, I will have meetings to take forward the Government's programme for Scotland.
With your permission, Presiding Officer. Members of the Westminster Parliament united yesterday in sympathy with David and Samantha Cameron on the loss of their young son Ivan. I know that everyone in the chamber will wish to express their deep condolences to the whole family and the many people who have been touched by this tragic bereavement. The loss of a child is the worst thing that can happen to any parent and we can only hope that the expressions of support and solidarity for David and Samantha Cameron from across the political spectrum are of some comfort in this time of extremity.
Thank you. Members might wish to know that I have written this morning, on behalf of the Parliament, to David and Samantha Cameron.
Indeed; probably no words can express a parent's pain on the loss of a child, but the thoughts and prayers of Labour members are certainly with David Cameron and his family today.
This morning, the Royal Bank of Scotland announced the largest loss in Scottish and, indeed, British corporate history. We also discovered today that the outgoing chief executive of RBS is already, at 50 years old, drawing a pension of £650,000 per year. Does the First Minister think that that is right?
No, I do not and I do not think that the small shareholders, the bank's customers and the general public think that it is appropriate either. However, Iain Gray should note this morning's comments by the new chief executive of RBS, Stephen Hester, on that matter. When he was asked about it, he said:
"The arrangements for my predecessor's departure are part of a legal agreement that the Government—"
that is, the Westminster Government—
"was fully involved with at the time."
That is, last October.
It is, indeed, the case that Fred Goodwin's contract probably entitles him legally to that bumper pay-off, although morally surely it does not. However, the person who appointed him and who presumably put those contractual arrangements in place in the first place is Sir George Mathewson, the man whom the First Minister appointed as his key economic adviser. Is the First Minister still happy with that appointment?
First, when Sir George Mathewson was chief executive of the Royal Bank of Scotland it was, indeed, a highly profitable and successful institution. Iain Gray, or anyone else on the Labour seats, would be extremely unwise to attack Sir George Mathewson's reputation. However, let me turn to the complete misunderstanding of Fred Goodwin's departure from the post of chief executive of RBS. Stephen Hester dealt with that issue, too, this morning, saying:
"The arrangements negotiated for my predecessor with the Government on his departure are not something that I should be spending time on."
In other words, according to the new chief executive of the Royal Bank of Scotland the leaving, the arrangements for it and, presumably, the pension arrangements were part of negotiations in which the Westminster Government was directly involved. Now that Iain Gray has those facts at his disposal, would he care to rephrase his question or revise his opinions?
I do not seek to examine George Mathewson's reputation, but I think that the views that he has recently expressed bear some examination. George Mathewson is the First Minister's adviser on the economy and it was he who defended short selling—he said that the First Minister's views were "ignorant". It was he whose hedge fund made millions out of the disastrous RBS-ABN Amro deal. It was he who said that bankers should not apologise and
"I don't believe in all this sorry bit."
It was he who said that his £2.5 million bonus would
"not give you bragging rights in a Soho wine bar."
It is he who still draws a large salary from RBS. Is the First Minister really still happy with his appointment of that adviser with those views?
Iain Gray is the Opposition leader in the Parliament, so let me give him some advice. He is meant to be attacking, criticising and examining me on my record, not on Sir George Mathewson's. The names of the people who regulated the banking and financial system are Gordon Brown and Alistair Darling. If it is the case—as Stephen Hester, the new chief executive of the Royal Bank of Scotland, said this morning—that the arrangements for Sir Fred Goodwin's departure from the bank fully involved the Westminster Government, at what stage in this line of questioning will Iain Gray revisit the premise of his first question?
Let us examine the First Minister's views. The regulatory system that he criticises is the one that he previously criticised for gold plating, which he said he would replace with light-touch regulation. However, the First Minister has changed his mind. At the weekend, the First Minister's spokesman said of banking:
"The first minister believes that … a different set of values is required."
I think that the people of Scotland agree with that, but the First Minister's key economic adviser does not. George Mathewson is still defending short selling, big bonuses and obscene pay-offs. The First Minister should decide which side he is on. Is he with Sir George and the bonus bankers or the people of Scotland?
As it happens, Sir George Mathewson, to my personal knowledge, was the foremost opponent of the investment banking bonus culture spreading into retail banking.
Iain Gray should have had a mind to look at the evidence that the Financial Services Authority gave to the House of Commons committee this week. The FSA argued—admittedly, this might be self-serving—that the reason that it did not go in for the sort of regulation that would have uncovered the malpractices taking place throughout the financial sector was political direction from above. Who on earth might have been responsible for that political direction if not the long-standing chancellor who is now Prime Minister of the United Kingdom?
I know that it is difficult for the Opposition leader to respond to information that comes up during questions, but I take it that, despite his refusal to say so at any point, Iain Gray's initial premise that Sir George Mathewson was somehow responsible for Sir Fred Goodwin's pay-off has been revised in light of the information from the new RBS chief executive, who has said that Alistair Darling and the Westminster Government were fully involved in the process. When we on this side of chamber say that we do not think that Sir Fred Goodwin's pension level is justified, we are entitled to say that. It seems passing strange that the Labour Party is adopting that position now, given that last October it was fully implicated in making the arrangements.
Prime Minister (Meetings)
Presiding Officer, I thank the First Minister and Mr Gray for their thoughtful and kind remarks about the death of little Ivan Cameron. I know that such sentiments and messages from across the political spectrum have been of great comfort to David and Samantha at this distressing time.
To ask the First Minister when he will next meet the Prime Minister. (S3F-1473)
I had a meeting with the Prime Minister yesterday on the dominating and vital subject of the proposed cuts in the budgets of Scotland, Wales and Northern Ireland the year after next. Those cuts entail serious consequences for public services, investment and jobs in this country.
I am discouraged by the First Minister's failure to answer my question, which was on when he will next meet the Prime Minister. We cannot have an endurance of the Arctic silence that prevailed for 10 months. I think that Scotland expects the First Minister to schedule another meeting as quickly as possible.
On yesterday's meeting, there is considerable confusion about what actually happened. Whitehall claims that the Scottish Government agreed to find more efficiency savings in Scotland; the First Minister's spokesman described that claim as "nonsense". Will the First Minister confirm whether the Scottish Government will, or will not, find more efficiency savings?
The point is that the Scottish Government, in common with our Welsh and Northern Irish colleagues, has efficiency savings programmes. We have a 2 per cent a year efficiency savings programme that reinvests the proceeds in local government, the health service and other front-line public services.
The Westminster Government is proposing not a series of efficiency savings, but a top-line cut in the Scottish, Welsh and Northern Irish budgets. The devolved Administrations are keen to discuss these matters and to compare notes. That is because of the view that Rhodri Morgan, the Welsh First Minister—someone who seems able to speak for Wales, despite the Labour Party's inability to speak for Scotland—has articulated on the cash balances that are lying in English foundation hospitals. He has said that there is a severe danger that the so-called efficiency savings south of the border could result in accumulated underspends in foundation hospitals. At some point, Annabel Goldie and the Conservative party will have to choose which side they are on in the debate. Will they back the Labour Party's proposed cut of £500 million in Scottish public spending or stand on the side of Scottish public services, jobs and the Scottish people?
The First Minister has been vociferous in what he has said on the impact of Labour's recession on the Scottish budget. We know that Labour's misconceived VAT cut has cost Britain £12.5 billion. By the First Minister's rule of thumb, that equates to a £1.25 billion cost for Scotland—which, by definition, is £1.25 billion that is not available to spend in Scotland. Why did the First Minister order his Westminster Scottish National Party colleagues—naturally, he was not there himself—to vote for that cut and land Scotland with a billion pound bombshell?
We have made it quite clear that we argued that a capital investment programme would have yielded twice as many jobs in the economy as the misconceived VAT cut has done. Incidentally, our calculations are not rule of thumb. We have put the prospect of a £500 million cut in Scottish public spending through the Scottish input-output model. The results are very clear and absolutely staggering: the cut would mean potential job losses in Scotland of 8,600. That outcome would be disastrous and regrettable at any time, but to do such a thing in the teeth of a recession would be not only an act of economic vandalism but totally misplaced in terms of timing and intent.
Now that the information has been conveyed to the Prime Minister and the public at large, I hope that we can have some unity across the Parliament that such a cut in Scottish public spending at this moment, as we move through a difficult and deep recession, would be misplaced and utterly disastrous.
Cabinet (Meetings)
To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1474)
The next meeting of Cabinet will discuss issues of importance to the people of Scotland.
Thank you, Presiding Officer, for the letter that you have written on our behalf to Mr and Mrs Cameron. Indeed, I echo the sentiments of the First Minister and other party leaders this morning.
Stephen Hester, the new RBS boss, said this morning that the United Kingdom Government—the UK Labour Government—had agreed the details of Sir Fred Goodwin's departure from RBS. Sir Fred Goodwin is getting a pension of £650,000 every year that is paid for by the taxpayer. The figure is 140 times the size of the normal state pension. On the day when RBS announces that thousands of Scottish jobs—in which people earn a fraction of that pension money—are at risk and posts the worst losses in corporate history, and when billions more of taxpayers' money is being used to bail out Fred Goodwin's mistakes, does the First Minister think that Fred Goodwin should touch a penny of that pension?
As I have already made clear, the pension arrangements cannot be justified. I think that that is a generally held view. I am grateful to Tavish Scott for reiterating and confirming the point on the UK Government's involvement that I attempted to make to Iain Gray.
I have met Stephen Hester on two occasions to discuss the impact of the Royal Bank of Scotland's plans on the Scottish economy. No one should underrate the seriousness of the situation. Equally, it should be remembered that the core businesses of the bank that are concentrated domestically are doing well, when compared with the general financial climate. Stephen Hester made public this morning an indication that he gave me in our meetings: that the bank will stay headquartered in Scotland and that, therefore, as we anticipate and believe in the recovery, the benefits of that decision, regardless of the seriousness of the current situation, will be impacted on the Scottish economy.
People find it truly shocking that the first instinct of banking fat cats has been to arrange their bonuses and their pensions, and that a Labour Government can sign off such a scandalously sweet deal behind closed doors and then attack it in public.
Yesterday's report by the Fraser of Allander institute says that the Scottish economy will shrink by 2.6 per cent this year, that 159,000 Scottish jobs could be lost and that the overall effect of the Scottish Government's six-point plan is "negligible". There are big, clear challenges ahead, so why has the First Minister spent this week creating a new argument with London? Why do people see in the papers this morning only spin and counter-spin, when the Governments should be adopting a united front to tackling the recession? When will our First Minister change how we go about doing business?
Tavish Scott should support our articulation directly to the Prime Minister of the serious implications of a £500 million cut in the Scottish budget and the cost of 8,600 jobs. That is an issue on which he should support the Scottish Government's arguments.
Yesterday, I was not alone in pointing out the dangers of the United Kingdom Government's approach. The same position was taken by the First Minister of Northern Ireland and the First Minister for Wales, even though we all belong to different political parties. If a First Minister who represents the Democratic Unionist Party, a First Minister who represents the Labour Party and a First Minister who represents the Scottish National Party can unite to say to the UK Government that cutting public spending in the teeth of a recession is exactly the wrong thing to do, is it too much to expect the support of the leader of the Scottish Liberal Democrats?
I will take a constituency question from Margaret Curran.
Does the First Minister agree that urgent action is required to tackle the appalling level of rape convictions in Scotland, and that efforts to encourage women who have been raped to come forward have been seriously undermined by the actions of a temporary judge who, when faced with a woman who broke down because of the trauma of giving evidence and fled the court, sent her to the cells for a night? Will the First Minister join me in condemning that judge's behaviour? What action is his Government taking to tackle the level of rape convictions in Scotland and to counter the dreadful signal that has been sent to the people of Scotland?
On the first point, as the member knows, we must be extremely careful about commenting on judicial matters. However, I read about the case and was extremely concerned by what I read.
As far as the Government's approach to crimes of violence against women and to rape is concerned, the Lord Advocate has spelled out to Parliament exactly what the Government is doing in approaching the judicial system to improve Scotland's record on such matters, which is not good and so must be improved. That is what this Government intends, and is determined, to do.
Royal Bank of Scotland
To ask the First Minister what discussions the Scottish Government has had with the Royal Bank of Scotland in light of its announcement that it plans to sell off around a fifth of its business. (S3F-1481)
RBS published its results at 7 o'clock this morning and made announcements about its restructuring plan. We are now analysing the details.
Our regular and continuing contact with RBS will be of assistance to all those in Scotland who may be affected by the restructuring announcement. As I said, I have already met the new chief executive, Stephen Hester, twice to discuss those matters. Those contacts will inform the full range of Scottish Government responses. We are ready to help everyone who is affected. Our responses include the partnership action for continuing employment initiative and the setting up of a financial services task force under the Financial Services Advisory Board, the details of which the Cabinet Secretary for Finance and Sustainable Growth announced this morning.
As the First Minister is aware, the massive losses that have been announced today are due, in particular, to the poor judgment of senior management in foreign acquisitions, which has overshadowed the good work that RBS workers across Scotland have done for decades.
What is the Government doing to ensure that the good reputation not just of RBS but of the Scottish financial sector in general is protected against the folly of previous RBS senior management? Given the sector's importance to the Edinburgh economy, what reassurances has he had that the staff who are based in the city will gain from what is happening and that no losses will be suffered here?
It would be wrong to underestimate the seriousness of the job situation. There are 18,000 RBS employees in Scotland. However, as the new chief executive has said, it should be remembered that the core businesses remain the best-performing areas of the group. As I have said, the chief executive confirmed this morning that the group's headquarters will continue to be in Scotland. Every one of us has an interest in the recovery of RBS. There is no doubt that that recovery process will be protracted, but I am confident that it will happen.
The financial sector in Scotland does not consist only of our clearing banks, important though they are. More than half of it is in insurance, long-term investment, investment trusts and life offices. Members will note that last week, I had the pleasure of announcing 500 new jobs in insurance as a result of esure's investment in the great city of Glasgow.
As the First Minister is aware, the Royal Bank of Scotland headquarters at Gogarburn is in my constituency. I very much welcome the comments today about retention of the headquarters functions in Scotland. Many of my constituents work for the bank, and there is real concern that despite today's announcement, those individuals and their families are still in the dark about the future of their jobs.
Does the First Minister agree that our main focus must be on retaining as many Scottish jobs as possible? Does he accept that the Scottish Government and the Royal Bank must be proactive in working with the City of Edinburgh Council and the relevant agencies to ensure that the right support and job opportunities are in place in advance of the announcement of any further job losses in Scotland by the Royal Bank?
I associate myself with the First Minister's comments about the importance of the banking sector. There are some positives in what has been announced today, such as the news about the headquarters, core business and increased lending to businesses.
I am grateful to Margaret Smith for those comments. The work of FiSAB is proactive, as is the financial services task force that we agreed to and which is being implemented. Proactive, also, is the series of meetings that we have had with the Royal Bank of Scotland, in anticipation of the jobs implications of today's announcement.
I want to be clear that no one should underestimate the serious threat to a substantial number of Scottish jobs. Equally, the core businesses—the ones that are centred domestically—are the best-performing areas of the Royal Bank of Scotland. I welcome Margaret Smith's understanding, given her constituency interest, of the critical importance that the assurance that Gogarburn will continue to be the group headquarters of the bank has for the future of the Scottish economy.
Alcohol Abuse
To ask the First Minister what action the Scottish Government is taking to tackle alcohol abuse. (S3F-1483)
We have taken considerable steps to tackle alcohol misuse. We have rolled out test purchasing across Scotland, we have regulated to restrict alcohol displays within stores and we have tripled the investment to £120 million over the course of the spending review. We have consulted on a package of further measures to address the issue. We will announce our next steps shortly.
On 29 August 2007, the Cabinet Secretary for Justice said:
"The effects of alcohol on our city and town centres is not cost-free and those who profit from it must contribute to addressing it."
Despite recent media reports suggesting another U-turn on Government policy, will the First Minister confirm that he will continue to implement the policy announced by his cabinet secretary, which is the principle that the polluter should pay?
As I just indicated to Paul Martin, we will publish the consultation document and our proposals shortly. Every member, I think, agrees about the serious question that alcohol abuse represents for Scotland—for our health record and indeed for all Scottish communities. The difficulty for some members is that while they agree in broad and general terms that it is a huge issue to be confronted by Scottish society, they manage to find a way of opposing virtually every proposal in the consultation document.
I have been looking carefully at the Labour Party's proposals. It proposes to make challenge 21 mandatory. That is currently a voluntary scheme, but it will become mandatory this September. Labour proposes that alcohol and treatment testing orders should be made available to courts. Under the current procedures, they are already available to courts; indeed, 989 such conditions were imposed in 2006-07.
I do not doubt Paul Martin's seriousness and commitment to the issue but perhaps he can prevail on some of his colleagues. If we, as a Parliament and a society, are jointly to address Scotland's battle with alcohol, for goodness' sake, will they start supporting the measures that are being put forward instead of finding any reason to oppose them?
The First Minister will be aware that Scotland's problem with alcohol has been allowed to develop over decades. The most recent figures demonstrate that previous Government policy on the issue has failed to tackle the problem effectively. Given the scale of the problem, will the First Minister outline the annual cost of alcohol misuse in financial terms to our national health service and justice system?
This issue has to be considered in terms that are much broader than just financial terms. The financial cost can be estimated at £2.25 billion a year in the extra services required, but the problems for society go well beyond any financial estimate.
I am proud of measures that the Government has been trying—in particular, the expenditure in the financial review, in these difficult times, to confront this problem. I am sure that our measures will be supported in the chamber.
I hope that people will acknowledge the evidence from trials in, for example, Michael Matheson's constituency. The trials indicate that agreed restrictions on the sale of alcohol to people under the age of 21 have produced substantial and sustained effects on criminality and disorderly behaviour. There is substantial evidence that such measures can make a contribution. However, many people in the chamber found themselves unable even to support the measures.
The First Minister is perfectly correct to highlight the difficulties that are caused by Scotland's relationship with alcohol. However, does not the First Minister agree that, before bringing in any further ideas—many of which, I say frankly, have been unworkable—it would be much preferable to ensure that the existing law is exercised to its fullest extent, ensuring that prosecutions are brought against those who sell drink to underage people, those who enter licensed premises when drunk, and those who are on licensed premises when drunk? The present levels of prosecution and conviction are derisory.
Bill Aitken should have listened to my first answer to Paul Martin, when I pointed out the significant steps that have been taken to enforce the law on underage purchase through the rolling out of test purchasing. In fact, 1,134 off-sales were tested between February 2008 and January of this year. That was a substantial effort, which I am sure that even Bill Aitken will find it in his heart to support.
No amount of flannel can disguise the fact that the Conservative party, in its approach to the consultation—although it made a submission, unlike some others—has somehow contrived to oppose a range of measures that would undoubtedly make a substantial contribution to tackling what we all agree is a question for Scottish society.
Identity Cards
To ask the First Minister whether the Scottish Government remains opposed to the United Kingdom Government's ID card scheme. (S3F-1488)
The Scottish Government remains opposed to the UK Government's ID card scheme. The Scottish Parliament debated this issue on 19 November 2008, and we indicated our opinion by voting for the UK Government to cancel its ID card scheme. The result was:
"For 69, Against 0, Abstentions 38."—[Official Report, 19 November 2008; c 12544.]
The costs are currently estimated as more than £5 billion. In my opinion, the UK Government would be better advised to use that money to protect vital public services instead of cutting £5 billion from public sector budgets in 2010-11.
I am extremely grateful for the First Minister's reassurance, but actions speak louder than words. Will the First Minister explain to the chamber why the Cabinet Secretary for Justice is asking Parliament to cede to Westminster the power to legislate for data sharing by Scottish Government bodies with Westminster Government bodies; why that substantial power will be at the discretion of UK Government ministers, without the involvement of this Parliament; and whether his ministers have yet sought guarantees from the UK Government that such orders under the Coroners and Justice Bill cannot be used for the ID card scheme?
As has been indicated to Robert Brown a number of times, the provision would give UK ministers the power to enable, but not enforce, the sharing of information by bodies, by laying an order that the relevant Parliament must approve. As the cabinet secretary said in his letter to the convener of the Justice Committee on 21 February, ministers would be in a position to decline to participate in any proposed information gateway.
I would say two things to Robert Brown. The sharing of information is not, in itself, a bad thing. In plenty of ways, the sharing of information in the public sector can bring about better outcomes in society. Nor should it be thought that the Coroners and Justice Bill, in itself, is a bad thing. After all, one of its provisions is to allow fatal accident inquiries to hear the causes and investigate the deaths of Scottish servicemen on active service overseas—something that is supported throughout the chamber.
I assure Robert Brown that we absolutely oppose the introduction of an identity card scheme. We believe that the expenditure on it is misapplied and that the questions for civil liberty remain unanswered. We are therefore examining every provision in the Coroners and Justice Bill, and if it provides any loopholes by which the UK Government could implement by the back door, he can be assured that the justice secretary will take the required action.
Meeting suspended until 14:15.
On resuming—