Meeting of the Parliament

Meeting date: Thursday, January 27, 2011

Official Report 1083KB pdf

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Scottish Executive Question Time

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Finance and Sustainable Growth

Question 1 has not been lodged.

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Fiscal Autonomy (Economic Growth)

2. To ask the Scottish Executive whether it will specify the work published by Professors Andrew Hughes Hallett and Drew Scott that forms the basis of the First Minister’s assertion that “with economic powers we could grow the Scottish economy by an extra 1% a year.” (S3O-12810)

Professor Hughes Hallett and Professor Scott make clear in their policy forum research paper “Scotland: A New Fiscal Settlement” that the additional economic levers available under full financial responsibility would provide the opportunity to increase Scotland’s gross domestic product. Ultimately, the impact on Scotland’s economic performance would depend on our ability to put in place policies that are right for Scotland and have the greatest impact on the drivers of growth such as productivity, participation and population. I am confident that the Parliament, focusing on what is right for Scotland, would do just that.

The wild and unfounded assertion that was made by the First Minister at the Scottish National Party conference was, of course, not featured in the work of the professors—work that is also found in a doctored form in a Scottish Government publication, although not exaggerated to the same extent.

Will the cabinet secretary accept that the evidence base for a relationship between economic growth and economic performance on the one hand and fiscal devolution, autonomy and decentralisation on the other is both tenuous and contentious? It flies in the face of logic, which is that it is not who exercises a power that counts but how that power is exercised at whatever level of government. Is it not the case that there is no better illustration of that than the fact that the Chancellor of the Exchequer wishes to cut corporation tax in Scotland to encourage economic growth and jobs, and the cabinet secretary wishes to impose super-taxes on business to do the very opposite?

I suspect that the point on which I can agree with Mr McLetchie is that the issue is contentious. He certainly participates in this debate in a contentious fashion, as he does on all matters, and not in the fashion in which I, with my usual sense of consensus, do.

If we follow to its logical conclusion Mr McLetchie’s argument that it does not matter who exercises the fiscal levers, it is an argument for the United Kingdom to surrender all its fiscal independence to the European Union. The last time I looked, Mr McLetchie was a confirmed Eurosceptic who has vigorously defended the fiscal independence of the United Kingdom. If it is good enough for the fiscal independence of the United Kingdom for the chancellor to want to be able to use economic levers to deliver economic growth, why on earth should it be any different for those of us in the Parliament who have aspirations for better things for Scotland?

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Community Energy Loan Fund (Co-operatives)

3. To ask the Scottish Executive how the community energy loan fund will be used to promote co-operatives in the energy sector. (S3O-12767)

The aim of the proposed community energy loan fund is to maximise the benefits of renewable energy for communities, not only in terms of access to locally produced low-carbon energy but in terms of social cohesion and economic development. Co-operatives are one of the business models that applicants will be able to use.

Recently, I had a meeting with the co-operative-owned group Energy4All, which expressed to me concerns about restrictions on community-owned co-ops in relation to the community renewables implementation group. I therefore welcome the minister’s answer, but I ask him to clarify that groups such as Energy4All will have access to the fund. Also, will he agree to meet me and representatives of community co-ops to discuss how best to promote the use of co-operatives in the energy sector?

I am certainly willing to have that meeting, as it would build on the many other meetings that we have had across Scotland to open up the opportunities that renewables offer to build the fabric of and social cohesion within communities. As for Energy4All, our intention is that co-ops will be eligible for the fund subject to similar eligibility criteria that apply to other applicants, chief among which is that such moves demonstrate a level of benefit to the wider local community. I think that that sets the scene rather well for the conversation that I will have with Mr Kelly and Energy4All.

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Fuel Prices

4. To ask the Scottish Government what representations ministers have made to the United Kingdom Government regarding fuel prices. (S3O-12729)

Since 2007, the Scottish Government has made regular representations to the UK Government regarding fuel prices in Scotland, most recently on 14 January, when I wrote to the Chancellor of the Exchequer to urge him to introduce a fuel duty regulator. A fuel duty regulator would ensure that some of the additional revenue that the UK Government receives from the North Sea when oil prices increase unexpectedly is used to reduce fuel duty, thus providing welcome relief to hard-pressed households and businesses. The chancellor and the Prime Minister advocated a similar scheme prior to last year’s UK general election and it is essential that they now take urgent action to tackle the issue.

I know that the cabinet secretary is aware of The Courier’s fight for fairer fuel campaign, because he has signed the accompanying petition. I, too, have signed the petition, along with my colleagues Shona Robison and Tricia Marwick and many others, and I have been told that the completion of the form that I am holding up brings the tally of signatures to more than 3,000. Given the campaign’s popularity with readers throughout Scotland and constituents’ concerns about high fuel prices, is the cabinet secretary surprised that Iain Gray, the leader of the Labour group in the Parliament, has failed to support The Courier’s campaign?

I am certainly aware of The Courier’s campaign; I read about it in my morning newspaper and have been delighted to support it. It is a very welcome intervention in the efforts to encourage a change of heart in the UK Government. I am surprised to hear that the leader of the Labour Party has not been prepared to sign the petition, given the number of hard-pressed households and businesses that I am sure would appreciate his support for The Courier’s efforts. I am also sure that the welcome and helpful way in which Mr FitzPatrick has put forward the issue in Parliament today will encourage the Labour leader to change his mind.

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Fiscal Autonomy

5. To ask the Scottish Executive whether it continues to support full fiscal autonomy for Scotland. (S3O-12790)

Yes.

I thought that the cabinet secretary might say that. I know that he is a very reasonable man and that he would like to debate these important issues on a solid factual basis. A while ago, the Scottish Government put into the public domain a document entitled “Summary of Full Financial Responsibility & Independence”. In the interests of greater clarity, does the cabinet secretary now accept that that Scottish Government paper doctored a quotation from the two professors to whom Mr McLetchie referred by adding in a reference to “revenue” that was not in the original, to suggest that it was tax-raising powers that would make the difference? Does the cabinet secretary accept that, although greater public expenditure can certainly lead to growth, there is no academic or, indeed, commonsense basis for a link between greater devolved tax-raising powers and growth? If so, is the suggestion in the Scottish Government paper of a follow-through to £18 billion in additional public spending resources not entirely spurious and misleading, never mind that the academic paper in question talks about 1 per cent over five years, not the Scottish Government’s staggering claim that 1 per cent growth every year would result in £18 billion? Does he now accept that there is no connection between fiscal decentralisation and growth and, in the interests of clarity, is he now prepared to withdraw the Scottish Government’s dodgy document?

I certainly had plenty of time to take many breaths during Mr Brown’s extensive and rather rambling question.

On the quotation to which the member refers, the Government was giving a clear explanation of the context of the arguments surrounding fiscal devolution. I have to say, though, that I am very surprised by Mr Brown’s argument about fiscal powers, because everything that I have read from the Liberal Democrats on many of these questions suggests an inherent acceptance that control over the fiscal levers helps to encourage economic growth and improvements in economic performance.

I come back to my helpful answer to Mr McLetchie on the same issue. If these things were irrelevant, the United Kingdom would have surrendered these powers to the European Union. The Liberal Democrats may have argued at times in the past for the surrender of all these powers to the European Union—Mr Rumbles looks as if he is chastising me, so perhaps I am not doing justice to the full complexity of the Liberal Democrats’ approach—but the key point is that having control of fiscal levers enables Administrations to deliver improvements in economic growth and economic performance. That point lies at the heart of the debate and it is one on which the Government is delighted to set out its arguments.

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Small Business Bonus Scheme

6. To ask the Scottish Government how many businesses are in receipt of business rates relief under the small business bonus scheme. (S3O-12740)

The latest figures show that the small business bonus scheme has reduced the rates burden for 74,000 properties in Scotland; of those, 63,000 paid no rates at all. In total, almost 30 per cent of all properties in Scotland benefit, with an average saving of £1,400. Since its introduction, the bonus scheme has saved Scottish businesses almost £300 million.

The cabinet secretary and I both believe that it is the flourishing of small businesses in Scotland that will drive economic growth. Does he agree with the Federation of Small Businesses not only that the small business bonus is important for the survival of small businesses but that

“it is now more important than ever that the playing field is level wherever possible”

and that his proposal for an additional business rates levy on the largest supermarkets is vital for the future survival of Scotland’s small businesses?

The supermarket levy has been well debated in Parliament and will be debated further when the Parliamentary Bureau makes provision for it to be discussed next week. The issues around the supermarket levy are very important. At a time of public expenditure constraint, there is an obligation to look at both reductions in spending and increases in revenue. I have settled on a proposal that increases revenue to the Scottish public finances, which helps to support our public services and helps us to deliver schemes such as the small business bonus scheme. I hope that Parliament will consider those points when it discusses the issue.

I am sure that the cabinet secretary will remember a question from my colleague Johann Lamont back in May 2008, when she asked whether the Scottish Executive would carry out an evaluation of the small business bonus scheme. His reply was that there was a plan to evaluate the scheme after it had been fully implemented in 2009-10. Has that evaluation been carried out? When will it be published? Does it show how many jobs have been created as a result of the small business bonus scheme?

If Mr Whitton is in dialogue with small businesses in his constituency, he will have to accept the clear point that many small businesses express to me—it is evidenced in some of the material published by the Federation of Small Businesses—that the small business bonus scheme has been an integral part of providing financial stability and support to businesses at a very difficult time economically and that it has allowed many of them to survive and to invest in their businesses. The Government will certainly be happy to evaluate the effectiveness of the small business bonus scheme, but Mr Whitton should not belittle the enormous contribution that it has made to safeguarding the interests of small businesses in Scotland.

How many small businesses are entitled to the small business bonus but are not in receipt of it?

I think that the number of businesses that are eligible for but not subscribing to the small business bonus scheme is in the order of 20,000, but I had better safeguard myself by—I have been informed that the figure is 19,300, so I was not too far off. I will ensure that that number is confirmed for Mr Brown if there is any requirement to do so.

On the latest Government estimates of the yield from business rates as we come towards the end of the current financial year, what is the latest Government estimate of whether the pot of business rates will be in surplus or in deficit? If it is due to be in net surplus, what is the figure?

The question that Mr Purvis wishes to have answered is one that can be answered only once the financial year is concluded and we see the yield from non-domestic rates in 2010-11. I explained at some length on two occasions yesterday—both in committee and in the chamber—that, although estimates can be made of that calculation, we will know the status of the non-domestic rates account only once the financial year is closed and the account has been settled. We will then formally know the starting point for the next financial year.

While I am on my feet, I should say, further to my answer to Gavin Brown’s question on the number of companies that are eligible for but not subscribing to the small business bonus scheme, that we have written to those companies to encourage them to take up the offer of that scheme. That has resulted in an increase in the uptake of reliefs in recent months.

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Former Mining Communities (Financial Support)

7. To ask the Scottish Executive what discussions the Cabinet Secretary for Finance and Sustainable Growth has had with the Minister for Housing and Communities regarding financial support to former mining communities in 2011-12. (S3O-12758)

I regularly meet ministerial colleagues to discuss how best to deliver real benefits and better outcomes for people in communities across the whole of Scotland.

The cabinet secretary will be aware that coal mining was a major industry and source of employment in my constituency. To help to deal with the loss in coalfield communities, the Coalfields Regeneration Trust was set up and has enjoyed funding support from successive Governments, allowing it, in turn, to support communities. In my constituency, organisations such as the youth football team have enjoyed support over a number of years. We get good value for money from the trust. For every £1 that is given in grant, a further £1.37 is generated from other sources, so taxpayers are getting a very good return on their investment. How will the cabinet secretary protect this vital investment in the coming year?

I acknowledge the importance of the work that Cathie Craigie talks about and the importance of the regeneration and rehabilitation of the former coalfield areas. Support has been made available to the Coalfields Regeneration Trust through Scottish Government grant support. Representatives of the organisation met Alex Neil on 10 November at Mrs Craigie’s request. We are obviously under financial pressures in the coming financial year and will be for some years to come. Resources will be under pressure, but continuing financial support will be given to the Coalfields Regeneration Trust in 2011-12.

Given that there is such pressure on public finances, I encourage organisations such as the Coalfields Regeneration Trust to identify additional financial support for projects. There are other funding streams such as cashback for communities, which is a spin-off of the fines collected from criminals and which she may wish to explore with the Cabinet Secretary for Justice, who takes all responsibility for distribution of those resources.

Is the cabinet secretary aware of figures that were secured by our colleague Dr Eilidh Whiteford, in the House of Commons, which demonstrate that more than 2,000 miners throughout Scotland—including 52 in the Cumbernauld, Kilsyth and Kirkintilloch East Westminster constituency—died before they received compensation for chronic obstructive pulmonary disease largely as a consequence of the obfuscation and obstruction of the previous Labour Government?

That is a cause for concern. People in the mining communities and those who have been involved in mining have taken great risks on behalf of the rest of society. Those who have suffered from respiratory illness as a consequence have deserved the fairest and most prompt support in dealing with the difficulties that they have faced.

Question 8 has not been lodged.

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Bus Manufacturing Industry

9. To ask the Scottish Government what action it is taking to support the bus manufacturing industry. (S3O-12736)

The Scottish Government provides a wide range of support to manufacturing companies, including bus manufacturing companies, which is delivered through Scottish Enterprise, Highlands and Islands Enterprise, Scottish Development International, local authorities and Skills Development Scotland.

All manufacturers are eligible for business development support through the Scottish manufacturing advisory service, which has gone from success to success since its inception in 2005. Bus companies in Scotland also receive support through a number of transport initiatives, such as the Scottish green bus fund and the low-carbon vehicle incentive, which encourages bus operators to invest in more environmentally friendly buses.

The minister will be aware of the delight of Alexander Dennis Ltd, the bus manufacturer that is based in my constituency, at the recent announcement of the green bus scheme, which will see 46 of the 50 buses that will be manufactured under that scheme being made by the company in Falkirk. The workforce recognises the importance of the scheme and the fact that, proportionately, the spend on the Scottish green bus scheme is significantly greater than that on the English green bus scheme.

Given the importance of the scheme, will the minister consider whether it can run into the future to try to promote greater moves towards green buses, which have great environmental benefits and also help manufacturing industry players such as Alexander Dennis, in my constituency?

I am happy to give the member the assurance that he needs. I congratulate the member and Alexander Dennis on the work that is being done and on the way in which the member has pursued his constituency interest in this area, which is reflected in the fact that the First Minister, the Cabinet Secretary for Finance and Sustainable Growth and my predecessor in this post all visited the Alexander Dennis site.

Although we should not always compare ourselves with England, it is true that Scotland has invested around £4.4 million in its green bus scheme while England has invested around £30 million in its, which means that we have made a higher per capita investment. Our investment has produced major dividends, especially in relation to the manufacturing sector, where it has safeguarded hundreds of jobs, so I am happy to give the member the assurance that he seeks.

I add my congratulations to the minister on building on the pioneering work of the previous United Kingdom Government by establishing a green bus fund, for which we on the Labour benches campaigned relentlessly. Last year, the Scottish Government gave similar funding to Strathclyde partnership for transport, to enable it to acquire green buses. Is there funding in the draft budget to fund green buses that are operated by the public sector?

I am delighted that Charlie Gordon and his colleagues followed the lead of Michael Matheson in campaigning for those funds to be made available. I know that Michael Matheson met my predecessor and the Cabinet Secretary for Finance and Sustainable Growth a long time ago to discuss the matter. Whoever has pushed for the policy, I think that there has been a good outcome.

I met people from SPT about an hour and a half ago and saw some evidence of its green bus initiatives, not least the fact that some of its new buses now have three-times-improved fuel consumption, which is extremely important. We are in discussion with a number of people about how such things can be taken forward in future, but that will depend on budgetary considerations.

Question 10 was not lodged.

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Renewable Energy (Skills Shortage)

11. To ask the Scottish Executive what discussions it has had to address the reported skills shortage in the renewable energy industry. (S3O-12804)

The First Minister’s Scottish energy advisory board, which is co-chaired by Professor Jim McDonald of the University of Strathclyde and has representation from the key energy companies, has taken a specific interest in the future skills demands of the energy sector, including renewables. The board has commissioned Skills Development Scotland, as a member of the group, to produce a study on Scotland’s future energy skills demand.

In addition, the skills sub-group of the forum for renewable energy development in Scotland, under the energy advisory board, is charged with delivering the skills requirements that are needed for the developing renewable energy sector. By bringing together industry and key skills bodies, the group is focused on the delivery of the skills framework for action, as set out in the renewables action plan, including actions on developing appropriate qualifications and learning provision and raising awareness of the renewables industry as a positive career choice.

Given the significant plans for onshore and offshore wind energy, does the minister agree that it would be in the long-term financial interests of Scotland for there to be a stepped increase in investment in wind turbine technicians, such as that which is already provided, on a small scale, by Carnegie College in Dunfermline?

There is a lot to build on vis-à-vis Carnegie College, and a lot is happening in the private sector, such as the work that is being done by Scottish and Southern Energy.

There is an opportunity for Mr Tolson and his Liberal Democrat colleagues, as well as members on the Tory benches, to come together with us as we debate electricity market reforms to ensure that the fabric of the low-carbon economy in Scotland is fully considered as we develop issues in the area along with his colleague, Chris Huhne.

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Local Authorities (Early Severance Schemes)

12. To ask the Scottish Executive what its position is on local authorities funding severance schemes from reductions in pay. (S3O-12774)

As independent corporate bodies, local authorities are responsible for managing their own financial affairs, including the terms and conditions of pay for their staff.

That is an interesting contrast with the answer that Mr Swinney gave me on 16 December, when he described pay cuts as an “unnecessary” tactic that was not even worth discussing.

Mr Swinney will have heard the First Minister suggest earlier today that Aberdeen City Council was seeking to avoid compulsory redundancies by promoting what Mr Salmond called “pay restraint”. Has the cabinet secretary had any discussions with the council or his Scottish National Party councillor colleagues in Aberdeen with a view to the council avoiding compulsory redundancies? If he has had such discussions, what have the outcomes been?

As Lewis Macdonald will know from the comments that I have made in Parliament over a sustained period of time, and in light of the commitment that the Government has offered and fulfilled for the past three years—which has been fully honoured—that there will be no compulsory redundancies in the public sector areas that the Government controls, I am working on the creation of a framework that will provide an assurance on the avoidance of compulsory redundancies based on the delivery of flexibility in the workforce to enable us to manage the financial constraints that we face. The priority and aspiration for the agreement that I am working to secure is to ensure that we can maintain head count as far as possible in the public sector. I assure Mr Macdonald that I am applying all energy to ensure that that comes about.

On Mr Macdonald’s specific point about Aberdeen City Council, I have of course discussed with the council the issues that have been raised publicly in the past few days. It is a matter for the council to consider, but it is important that it fully considers the approach that the Government has taken. We have said that we are working to provide an assurance that there will be no compulsory redundancies, provided that sufficient flexibility is deployed to manage the financial strain that should be evident to any independent observer of the budget challenges and choices that we face.

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Small and Medium-sized Enterprises

13. To ask the Scottish Government what action it is taking to help protect small and medium-sized businesses from the economic downturn. (S3O-12730)

The Scottish Government is committed to maintaining a supportive business environment and to ensuring that appropriate measures are in place to protect small and medium-sized enterprises during the current economic downturn.

We have introduced a range of policies that are helping to protect small and medium-sized enterprises in Scotland. Those include continuing to match the English business poundage rate; maintaining support for the small business bonus scheme, which has reduced the rates burden for 74,000 properties in Scotland; transferring the business gateway to local authorities; investing in broadband; reducing unnecessary burdens on business; and making it easier for SMEs to access public sector contracts.

Does the minister agree that our larger retailers have a moral and civic responsibility to help to bear the burden of the Westminster-imposed cuts? Does he agree that the proposed increase in business rates for large retailers would help to ease the burden that is borne by small and medium-sized businesses? Does he agree that Labour and the Conservatives would perhaps find it easier to support those proposals had they not received more than £14 million in political donations from the Sainsbury family over the past few years?

I agree that in a time when our budgets are being slashed, we need all hands to the pump. We are trying to optimise jobs, quality of life and economic growth in all parts of Scotland. The customers of the supermarkets are feeling the pinch as their incomes and pensions are frozen or declining and the cost of VAT and fuel is going through the roof.

I was criticised yesterday for suggesting that supermarkets and the people should come together. Those companies that do that will receive a big dividend in the future. That is the thought that we are hearing from the major business thinkers with whom we are meeting in the business schools.

As far as the donations are concerned, it is always best for donors and recipients to be seen to be even-handed. The current approach will not have escaped the attention of many people in Scotland and will make them think.

Does the minister still hold to the view that we should slash corporation tax for those very same companies?

The member confuses the situation. We are a devolved Government and we aspire to have a competitive independent country with full responsibility for all our taxes and the same growth that other countries have. The people who advocate that we stay where we are and stay in our box are advocating that Scotland should continue with our trend rate of growth at 1.8 per cent per annum, when the United Kingdom achieved a growth rate of 2.3 per cent, Norway achieved 3.1 per cent and Ireland achieved 5.2 per cent. We can catch up and match them if we get economic powers. Those who deny that will be condemned by history, Mr Purvis.

Small businesses in my constituency of Cumbernauld and Kilsyth are finding it difficult to provide the service that they want to provide because of the slow broadband links in the area. The minister will know that I have written to him on the matter. As I am sure he is aware, my Cumbernauld and Kilsyth constituency is right in the centre of Scotland, with great access to road and rail but, unfortunately, we are not connected up to 21st century broadband. Will the Scottish Government and the minister commit to investigating the issue further and bringing Cumbernauld and Kilsyth up to the speeds that people who move there expect?

We indeed commit to investigating that further. We are very much linked to that. We want the “Digital Britain” vision to come to the fore and we have done everything that we can, incrementally, to make up for the shortcomings in broadband—as a UK universal service—that we were delivered under the previous UK Administration and the early days of the current one.

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Inveramsay Bridge (Congestion)

14. To ask the Scottish Executive whether funds are available to tackle congestion at the Inveramsay bridge. (S3O-12799)

The Government remains committed to resolving the issues surrounding traffic flows at the Inveramsay bridge, and Transport Scotland will treat the project as a priority for the coming year’s preparation programme.

In the run-up to the 2007 Scottish parliamentary election, local people were promised by no less than Alex Salmond that he would replace the Inveramsay bridge by the election that is due in May this year. Network Rail has confirmed that the work could be completed in four days. Why has the SNP Government failed to do it in four years?

As I said, the Scottish Government is committed to the project, which has been in the strategic transport projects review since 2009. The bridge was surveyed by Network Rail in October 2010 and the outcomes of the survey have been passed to Transport Scotland. The outcome of Transport Scotland’s deliberations will be announced in early course.

Mr Rumbles mentioned the local constituency member, who has been assiduous in trying to push forward the issue and whom I very recently advised of progress on the matter. That progress and the investment so far are timely. In fact, the process has gone at almost lightning speed compared with the eight years for which Mike Rumbles supported a Labour-Lib Dem Administration that did precisely nothing, or even the 28 years for which there has been Liberal representation in the Gordon area and during which the issue has not moved along at all. The simple fact is that, even with the £800 million capital cut from the Con-Dem Administration in London, we will proceed with the project. That underlines the point that a promise from the SNP is a real promise, unlike one from the Lib Dems.

Mr Rumbles took the words out of my mouth regarding the pledge that the First Minister made in 2007. Local people and businesses are getting really fed up. For far too long, they have been waiting for action to address the issues with the Inveramsay bridge. Given that there are fewer than 100 days to go until the Holyrood elections, will the minister keep the pledge and announce a timetable for work to begin?

I have already said that announcements on Transport Scotland’s deliberations on the Network Rail survey will be made in early course. I wonder whether Nanette Milne can say exactly how that process is helped by taking £800 million out of the capital programme. Despite that cut, we will make progress and we have already done so, which is in stark contrast to previous Administrations.

Question 15 has been withdrawn.

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Unemployment (North East Scotland)

16. To ask the Scottish Executive what measures it is financing to tackle unemployment in North East Scotland. (S3O-12763)

The Scottish Government is working hard to create and protect jobs and to help those who are unemployed to get back into work across all areas of Scotland. A substantial acceleration of capital investment and front-loading of European funding has helped to support jobs, and we continue to prioritise investment to help to provide people with the skills and training opportunities that will help them to find sustained employment. Data from Skills Development Scotland show that, between April and December 2010, around £10 million was invested to support more than 3,600 starts across the modern apprenticeship, training for work and get ready for work training programmes in the north-east.

Yesterday, Labour said that the budget ought to be about jobs. That is certainly what is needed in the north-east, where there are threatened compulsory redundancies at Aberdeen City Council, where unemployment is hitting one in 10 in far too many areas in Dundee, and, crucially, where the affordable housing investment budget is less than half what it was four years ago in real terms. How is the minister planning to use his powers to mitigate the effects of that unemployment?

The member paints a picture, certain elements of which we recognise. However, from the Dundee standpoint, we are now seeing the £70 million waterfront project, there is the Victoria and Albert at Dundee project, and Aberdeen, Montrose and Dundee are poised to capitalise on their port facilities as regards renewables. Looking at the complete picture, unemployment in the north-east is three percentage points lower than the national average, and just this week it was reported that Aberdeen is best placed to lead the United Kingdom economy into recovery.

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FirstBus Services (West Lothian)

17. To ask the Scottish Executive what discussions it has had with FirstBus regarding services in West Lothian. (S3O-12780)

The Scottish Government’s senior bus development advisor met representatives of FirstBus on 23 September 2010 and 16 December 2010 to discuss its services in West Lothian.

This month in my constituency, FirstBus has reduced the frequency of the X1 service, which is an express service from Armadale to Edinburgh. That coincides with the opening of the Airdrie to Bathgate rail link and, I hope, with the opening of the new Armadale rail station in February. Does the minister think that that is just a coincidence—although both services are run by First—and how does he propose to ensure that there is real competition in public transport for the benefit of passengers?

I imagine that the route to which Mary Mulligan referred is one of those that the Competition Commission considered when FirstGroup applied to withdraw services to which it had committed in a previous undertaking. The Competition Commission said that it was satisfied that there was no reasonable prospect of the routes becoming profitable. That decision was taken not by this Government but by the Competition Commission.

In relation to bus services in West Lothian more generally, we have given record levels of funding to local authorities, including passing across responsibility for the bus route development grant, which is now mainstreamed into local authority funding. Decisions are best made by local authorities in conjunction with the providers. If a case can be made to the provider that it can make a profit, not least given the changes to the rail infrastructure that Mary Mulligan mentioned, I am sure that the matter can be taken forward by the parties involved.

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Non-domestic Rates (Large Retail Supplement)

18. To ask the Scottish Government what its position is on asking large retailers to pay a small increase in business rates. (S3O-12738)

In light of the £1.3 billion budget reduction that we are having to address, tough decisions have had to be made to produce a balanced budget.

Household and family budgets are already tight, and the UK Government’s VAT rise will stretch them even further—indeed, it will cost Scotland around £1 billion. I strongly believe that we should not raise household taxation by increasing council tax, which is why I intend to freeze the council tax for an unprecedented fourth year in 2011-12.

I believe that increasing business rates for a small number of the largest businesses in the retail sector is fair in the challenging circumstances that we all face. The money raised can be used to support front-line public services.

I am not surprised by the Tories’ opposition to the proposal, and I am never surprised by anything that the Lib Dems do these days, but many people are utterly shocked that the Labour Party has chosen to abandon its support of working people in favour of their rich bosses. I invite the cabinet secretary to agree that any alleged link between that abandonment and the several large donations to the Labour Party from Tesco, Asda and Lord Sainsbury, who—what do you know—just happens to own Sainsbury’s supermarkets, must surely be entirely coincidental.

The major issue that we have to address here—the one that I set out to Parliament yesterday—is that we are required to produce a balanced budget. When the Government sets out areas in which we can, and should, increase revenue, but other parties disagree, we must have a mature and responsible discussion about how to address the consequences of that. I am perfectly prepared to have that discussion to ensure that we set out financial provisions that meet the expectations of the people of Scotland, in the context of the swingeing reductions in public expenditure with which we must deal.

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Scottish Water (Severe Weather)

19. To ask the Scottish Executive what discussions it has had with Scottish Water regarding the recent severe weather. (S3O-12778)

Regular contact has taken place with Scottish Water to assess the impact of the severe weather on customers.

I am sure that the cabinet secretary is aware that some constituents, such as mine in Glasgow Kelvin, were without water for 10 days in the Christmas and new year period. My constituents were unclear about the priority that they as customers had, and they had no drinking water until I contacted Scottish Water on hogmanay. Will the cabinet secretary raise that matter with Scottish Water? I accept that the period was difficult, but it is unacceptable for any Scottish Water customer to be without drinking water or water in their house for such a time. Customers are certainly entitled to know what priority they have. I would be grateful for an answer.

Pauline McNeill raises a fair and reasonable point on her constituents’ behalf. I have had a similar experience in my constituency. On Tuesday evening, I was in Blair Atholl for a meeting with Scottish Water and local residents who had a similar experience to that which she recounted.

I will make two points. What I am about to say is an explanation and is by no means an excuse. During the severe weather, Scottish Water received about seven times the number of calls that it ordinarily receives. That is an inevitable consequence of severe weather, so Scottish Water must be prepared for it. It is clear that members of the public did not receive the service that the organisation should be equipped to deliver in call handling, which left the public uncertain about their position.

As the call handling was not effective enough, that affected the identification of clusters of problems, which lead to a decision about distributing bottled water, of which the supply is abundant—500,000 litres are available for use in such circumstances at any given time. Such decisions could have been taken more quickly, so that members of Parliament were not required to intervene.

I encountered in my constituency the problem that more understanding is needed of where Scottish Water’s responsibilities start and stop. Members of the public do not understand that well. That is not to criticise them; I just do not think that people are aware of that factor, but they need to be, because it can have a detrimental effect on the supply of water to their households.

I hope that that answer helps Pauline McNeill. I would be delighted to address any other issues from her constituents on the question, because I recognise that the public did not receive an appropriate service.