Plenary, 27 Nov 2008

Meeting date: Thursday, November 27, 2008

Official Report 719KB pdf

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First Minister's Question Time

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Engagements

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-1215)

Later today, I will have meetings to take forward the Government's programme for Scotland.

Let me say a word about the atrocity in Mumbai, which we all obviously unite to condemn. There were some indications this morning that employees of Scotland-based companies could have been caught up in the atrocity. I emphasise to members that there has been no confirmation of that. Indeed, at this stage, it may be just that some companies were unable to contact their employees because of the overnight situation.

Officials have been in contact with the Foreign and Commonwealth Office this morning, and there will be ministerial contact this afternoon. However, I know that members will appreciate that, regardless of the nationality of those caught up in the atrocity, there will almost certainly be Scottish families with close connections to the area. Scottish families will be affected, and I know that members will want to express their solidarity with those families, wherever they come from, and will unite to condemn the atrocity.

The First Minister knows that he can count on Labour members' solidarity with those who are caught up in and dealing with the atrocity.

Monday's pre-budget report was described in the media as the biggest budget statement since world war two. All eyes were on it. Is that why the Scottish National Party Government chose to publish on Monday its response to the consultation on Mr Salmond's so-called local income tax? Did the First Minister think that no one would notice?

The consultation exercise was published five hours before the pre-budget report. To be helpful to the Labour Party, we put it as the number 1 item on the Scottish Government website. The people who responded to the consultation were written to individually. However, as the Labour Party, alone among the political parties, did not make a submission to the consultation, it did not get a letter and had to read the website.

The First Minister is not normally known for his shyness. He is always happy to turn up to the opening of an envelope or, better still, one of the schools that Labour planned and built. However, when it comes to his Administration's flagship policy, he sneaks it out the back door of Bute house under the cover of darkness and the PBR. Why? Perhaps it is because so many of the organisations that replied to the consultation roundly condemned his tax: the Confederation of British Industry, the Scottish Trades Union Congress, the Institute of Directors, the Scottish Chambers of Commerce, Unison, the Federation of Small Businesses, the Chartered Institute of Public Finance and Accountancy, and the Law Society of Scotland.

Let us be fair. Some organisations supported the tax, including Dumfries and Galloway Council's SNP group, East Dunbartonshire Council's SNP group and South Lanarkshire Council's SNP group. Not all those organisations were SNP branches—the Association of Scottish Liberal Democrat Councillors was in there, too.

Will the First Minister listen to his own consultation and dump his discredited tax plan now?

Far be it from me to defend the Association of Scottish Liberal Democrat Councillors, but at least it managed to make a submission.

Iain Gray should not be too dismissive of the details of the consultation because they confirm what every single opinion poll on the matter has confirmed: overwhelming support for a local income tax that is based on the ability to pay over the discredited council tax policy of Labour and the Tories.

Was there another reason why Andy Kerr was unable to make a submission to the consultation? Perhaps it had something to do with Iain Gray's interview in The Sunday Times on 5 October:

"‘We don't have our own proposals,' he says candidly. ‘We went into the 2007 election with a proposal to try and make the council tax fairer and it didn't add up. Central to our new manifesto is a properly worked out suggestion for how we make the council tax fairer.'"

The interview also states:

"He is not prepared to give any further details of a putative scheme. ‘I've always resisted being asked to do that immediately on the back of a fag packet,' he says. ‘We made that mistake once before.'"

The First Minister really needs to read his opinion polls and consultations more carefully. He well knows that the most recent opinion poll evidence showed that a minority of Scots supported the local income tax proposal. That is almost exactly what his consultation showed: fewer than half the individual respondents were in favour of a local income tax; and only 34 per cent of the group most likely to be in work—34 to 54-year-olds—supported it, which is not surprising, as it is a tax on work.

On Monday, a Labour Chancellor of the Exchequer put £2 billion into the pockets of Scotland's working families. On the same day, the SNP Cabinet Secretary for Finance and Sustainable Growth insisted that he would go ahead with his plans to take £1.5 billion in extra income tax out of those self-same Scottish pockets. Labour has taken strong, decisive action to put money into the pockets of hard-working Scottish families and to help us weather the global economic storm.

The First Minister talked about a mistake that I said we had made. Alistair Darling made a mistake too on Monday—a mistake on whisky duty—but he fixed it in 48 hours. The First Minister is making a far more damaging mistake with his local income tax. Will he fix his mistake and drop the policy now?

Alistair Darling's somersaults on the whisky tax do not give us much confidence that the pre-budget report was carefully worked out. I welcome the about-turn on the whisky tax, because it might forecast about-turns on other aspects of policy. Iain Gray had better get used to the figure of £500 million. That is the cut—the Labour cut—that is coming to Scottish councils, the Scottish Government and the Scottish people. We are not talking about efficiency savings that councils get to retain for the first time or which health boards can reinvest in front-line services; we are talking about direct cuts in spending coming down the line from the Labour Party. He and his team had better get used to that figure—the £500 million bombshell—because it will haunt each and every Labour MSP from now until the general election.

That £500 million—it may well be less than that, as we know—

Oh!

Order.

—follows naturally from the belt tightening that will happen throughout the United Kingdom, and Scotland must take its share of that. However, the First Minister's local income tax proposals would take £900 million out of the budget in Scotland for no reason whatever.

The First Minister told us his engagements for the rest of the day. We read that his finance secretary will meet the big six business organisations of Scotland this afternoon. They will tell him that no one wants the local income tax. They will plead with him not to make Scotland the highest-taxed part of the United Kingdom.

This is a seminal moment for the First Minister. Will he step in, overrule his finance secretary and do what is right for Scotland's economy and working families, or will he continue to put his own party interests before the national interest? Is he First Minister for Scotland, or First Minister for the SNP alone?

I will tell Iain Gray who wants a system that is based on the ability to pay: the people of Scotland.

Iain Gray says that he is not quite sure whether the figure is £500 million or not, so I will make a deal with him. I will tell him why we believe that it is £500 million: the Barnett consequentials of the cut in expenditure by Darling, Brown and Murphy are £380 million; and the latest jiggery-pokery with the health budget adds another £129 million. I understand that those figures have been confirmed by David Bell, the adviser to the Finance Committee. That is the £0.5 billion cut that is coming from the Labour Party. Perhaps when Iain Gray gets the time to think about it, he can consult further with Andy Kerr and tell us what he thinks the figure is next week.

There is a tax giveaway next year, followed by spending cuts in 2010. That is a move from John Maynard Keynes to Milton Friedman, with no intervening period whatsoever. It is new Labour to hard labour, and Iain Gray had better get used to it, because it will undermine and hole below the waterline his entire political attack. In a phrase, "You're sunk."

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Prime Minister (Meetings)

To ask the First Minister when he will next meet the Prime Minister. (S3F-1216)

I have no plans to meet the Prime Minister in the near future, but I will be delighted to ask for an urgent meeting with him to find out whether he can estimate the figure for the cuts and say whether it is £500 million or some other amount.

Iain Gray is absolutely right to condemn the SNP's local income tax. Unfortunately for Iain Gray, however, he is the man with no plan; he is stuck in the past with the local government finance status quo.

The First Minister's tax on jobs—that is what the local income tax is—is based on three things: a growing economy; a tax rate of 3p in the pound; and a £281 million subsidy. However, we know from this week's devastating and bleak news that those assumptions have been smashed to smithereens. The black hole has more than doubled in size. Can he tell us where he will find the money to plug that bigger black hole of £300 million? If he cannot—I would be astonished if he could—I ask him to come clean: how much will the new tax rate really be? How much higher will it be than 3p in the pound?

I direct Annabel Goldie to the pre-budget report, and I remind her that the implementation date for the local income tax is 2011-12, not 2010-11. That is significant, because the pre-budget report gives a significant increase in projected taxation revenue for that year.

You do not believe that, do you?

David McLetchie says that I should not believe that. It is probably true that Alistair Darling is the Eddie the Eagle of tax forecasters at the moment, but that is precisely the premise of Mr McLetchie's leader's question, so I am answering it on that basis.

There are two other factors to consider: the impact of the recession on projected council tax revenue; and the council tax rebate—the help that should come from Westminster. Will Annabel Goldie confirm the comments of David Mundell, who said that the Conservative party had no plans to obstruct the implementation of a fairer tax system by withholding Scotland's money?

The First Minister is either deluding himself or conning the public, because even in his own Government, no one has disputed the existence of the burgeoning black hole. For the First Minister's sums to add up, a 25 per cent increase in income tax revenues would be needed in just one year. That is not going to happen—it is total self-delusion.

Britain already faces a tax bombshell from Labour. Now Scotland is going to get an additional tartan tax bombshell from the SNP. There we have it—Brown and Salmond, the architects of insolvency. Gordon Brown has broken Britain's economy. Why does Alex Salmond want to shatter Scotland's? Will he drop the proposed tax on work and cut council tax instead?

Annabel Goldie should know that the pre-budget report actually projects an 18 per cent increase in income tax revenue over that year. If she goes with the pre-budget report figures, she must be able to analyse them and should not deduct a year from her forecast.

Let us be clear. Annabel Goldie and her press officer's statements assume that the withholding of council tax benefit will continue under the next Government. Is she assuming that the Labour Party will still be in Government, or that any party at Westminster will defy the clearly expressed will of the Scottish Parliament on the matter? Clarity on that subject would be useful.

I know that imitation is the sincerest form of flattery. Given that David Cameron stood in the House of Commons on Monday and extolled the virtues of a council tax freeze, saying that such a freeze was important in restoring the economy, will Annabel Goldie follow the line of her leader at Westminster and compliment and continue to support the Government when we give help to hard-pressed families?

Questions should be to the First Minister, not from him.

There is nothing like a late convert to the cause. I distinctly recall challenging the First Minister, in the chamber, on council tax. I asked, "Is a freeze enough?" and he said, "No." Let us hear how he is going to cut council tax.

Of course the freeze is not enough. That is why we are working so hard to help hard-pressed families and businesses with the range of things that John Swinney announced. Let us remember that we need a council tax freeze because of the 40 per cent increase in council tax under the Tories and, over 10 years, a further 60 per cent increase. Labour and the Tories are an unholy alliance—they are the unheavenly twins of the council tax. Annabel Goldie lacks credibility on the issue.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1217)

The next meeting of the Cabinet will discuss issues of importance to the people of Scotland.

The Cabinet Secretary for Finance and Sustainable Growth's budget statement yesterday contained 2,000 words. How many new proposals did the Government reveal?

The six-point plan has a range of new proposals to help the Scottish economy at this particular moment. The range of proposals includes, for example, the acceleration of housing investment long before it was thought of by the Government at Westminster, and detailed proposals across the Scottish Government's range of activities. That is effective action to combat the downturn in Downing Street, effective action to help Scottish families, and effective action from John Swinney on the Scottish economy.

That was certainly a new definition of "new". The £25 million for council housing was announced in April and the £100 million for housing was announced in August—of course, we now know that only £9 million of that is already committed. We have heard it all before. The list is not new and it has not changed. It is all out of date.

At such a time, the test of a Government is its plan B—its ideas and its competence in dealing with change. We need change to deal with unemployment, which is up by 13,000, change to deal with mortgage lending, which is down by 20 per cent, and change to deal with the tens of thousands of banking jobs that the United Kingdom Government put at risk over HBOS.

What will it take for the First Minister to grasp his budget and change it to respond to the urgent needs that Scotland faces right now? How much worse does it need to get?

Tavish Scott is out of date on that and so much more. The next tranche of £9 million of housing investment was announced this very morning. He needs to catch up. [Interruption.] Of course, that is in addition to the genuine acceleration of regional development money during the period—the acceleration of the rural development programme.

When Tavish Scott was busy opposing the budget last spring, did he countenance the fact that measures in it such as the council tax freeze—which I think he opposed—and the benefit to small business through the small business programme were exactly the sort of measures that anticipated the downturn in the economy? [Interruption.] I see Mike Rumbles rumbling. I say to Mr Rumbles that there must be a reason why Scottish consumer spending is holding up better than consumer spending in the rest of the United Kingdom. Might that be something to do with the council tax freeze in Scotland, rather than the council tax increases that Liberal Democrats voted for?

As Tavish Scott has been asked a question, I will give him a final supplementary.

From what I remember, the council tax policy was announced in 2006. At that time not even Prophet Salmond would have been able to work out that a recession was going to happen. The country wants to hear what he is going to do now, not what he did two years ago, so let us have some answers.

I have never underestimated the capacity of a Labour Government to make a mess of the economy. I should also point out that my question was addressed not to Tavish Scott but to Mike Rumbles—the lost leader sitting beside him.

My question to the Liberal Democrats remains: given what we now know, will they oppose the council tax freeze for next year or will they try once again to tax hard-working families in Scotland? [Interruption.]

Order.

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Anti-poverty Agenda

To ask the First Minister, after the launch of "Achieving Our Potential", the Scottish Government's framework on tackling poverty and income inequality, what plans there are to work with the United Kingdom Government on the anti-poverty agenda. (S3F-1240)

Following the launch of "Achieving Our Potential", we will continue and build on the work that we are engaged in with the UK Government on the anti-poverty agenda. Today, the Cabinet Secretary for Education and Lifelong Learning is meeting the UK Minister of State for Employment and Welfare Reform to discuss the welfare reform proposals from the Department for Work and Pensions. We are pushing the UK Government to recognise the different circumstances in Scotland and are far from convinced that placing additional conditions on vulnerable people who are in receipt of benefits will either help to get them back into sustainable work or tackle poverty in Scotland in the current economic conditions.

I know that income maximisation is a key part of the Scottish Government's framework for tackling poverty, and its new energy assistance package to tackle fuel poverty includes at stage 2 a good-quality benefits and tax credits check to ensure such maximisation. However, I am worried that, in cash terms, the UK Government is not as committed as the Scottish Government is to tackling fuel poverty. Will the First Minister commit to working with the UK Government on this matter and to ensuring that Scotland gets every single penny of the renewables obligations and carbon emission reduction targets cash that it is due?

Yes, we will continue to work with the UK Government on this important issue.

I saw quizzical looks on some Labour MSPs' faces when Bob Doris mentioned cuts in the fuel poverty budget elsewhere. The fact is that buried in the pre-budget report is a slashing of the fuel poverty programme. As a percentage of resources committed to fuel poverty, the Scottish contribution in 2008-09 is 14 per cent of the warm front budget; according to current projections here and in the UK, by 2010-11 the contribution will have risen to 28 per cent because of the slashing of fuel poverty programmes in the pre-budget report.

Go down to the House of Commons and tell them that.

Lord Foulkes, please be quiet.

Does the First Minister think that it helps the battle against poverty and inequality for 40 per cent to be cut from the budgets of a large number of well-established projects in north Edinburgh that are supported by the Scottish Government's fairer Scotland fund? At a meeting of local activists that I attended this morning, one well-respected activist said that the work and developments of 30 years had been undone in just 18 months. Will the First Minister speak urgently to his colleagues in the SNP coalition administration in the City of Edinburgh Council so that they take action to stop that carnage?

The fairer Scotland fund amounts to £435 million over the three-year period. Moreover, for the first time, we have direct funding for third sector organisations.

I draw Malcolm Chisholm's attention to a quote about the pressures on local government. Yesterday, a representative of local government spoke about the financial pressures that it is currently under—the squeeze, as it has been called. A prominent leader of local government, looking at the pre-budget report, said:

"It means rises in bills for council taxpayers and leaves huge pressure on services".

That was Margaret Eaton, the chairman of the Local Government Association in England.

Last week, the Education, Lifelong Learning and Culture Committee heard evidence on the measure to provide free school meals for middle-class families, which we will debate later. The Minister for Children and Early Years was asked how many additional children would be lifted out of poverty by the measure. He asked his official to reply, and the official said:

"We will need to do some more number crunching and to get back to the member on the issue."—[Official Report, Education, Lifelong Learning and Culture Committee, 19 November 2008; c 1691.]

Will the Government publish a clear demonstration of how the £40 million policy will lift additional children out of poverty?

Yes, we will. The pilot exercise shows that the policy will lift additional children out of poverty. The policy is not—as the member so disparagingly puts it—for middle-class families; it will increase the uptake of free school meals among those who are entitled to them because it will remove the stigma. I do not know how much understanding the member has of working-class families, but he should look at the pilot study and the increase in the uptake of free school meals and stop trying to take food out of the mouths of children in Scotland.

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Child Protection

To ask the First Minister how the Scottish Government intends to respond to official figures showing an increase in child protection referrals, including for unborn babies. (S3F-1237)

The increase in child protection referrals is a sign that more children who are at risk of harm are receiving the help and support that they need before a crisis is reached. Midwives are increasingly important in supporting vulnerable pregnant women and their unborn babies and in referring vulnerable newborns forward for multi-agency discussion. Additional support is then provided for the mother and child, as necessary.

We are developing an early years early- intervention framework for pre-conception to age eight, which we intend to publish imminently. The framework will shift services away from crisis intervention to prevention and early intervention. The aim is to identify risks as early as possible and to put in place effective supports and interventions to improve outcomes from pregnancy onwards. The framework will also set out the role of intensive family support services for those children and families who face a particularly high risk.

I hope that that early years strategy will be forthcoming. Ministers have been saying "soon" for several months. I hope that it will be published before Christmas.

What modelling work is the Government undertaking to project the number of children who will be the subject of child protection referrals in the future? What plans does the Government have to resource and put in place the much-needed services that will support those children now and prevent further increases in the future?

That information informs the framework, which will, indeed, be published soon.

I welcome the fact that, although the overall number of child protection referrals has gone up substantially this year to 12,400, the number of children who have been placed on the child protection register has fallen by 10 per cent. It is reasonable to argue that the fall in the number of children who have been placed on the child protection register provides early evidence that early interventions are starting to have a positive impact on the lives of vulnerable children. I know that, given her interest in the matter, Karen Whitefield will welcome that.

Does the First Minister share the concerns that were expressed today by Alan Baird, the president of the Association of Directors of Social Work in Scotland, that the vilification of social workers in some sections of the press, following the Baby P case in London, is undermining front-line social services staff? Does he acknowledge the need for not just social workers, but all professionals who work with children and families to focus on the welfare of the child at all times, notwithstanding the different approaches to child protection that are taken north and south of the border?

Yes, I do. A tragedy such as the Baby P case always makes people, rightly, want to focus on the unacceptability of the case. However, when people identify the faults and failings that took place, it is important that they are careful not to generalise about the entire workforce in the social work sector. Those who work in child protection in Scotland do a fantastic job. They are highly qualified and motivated professionals, and they should not be the subject of a general attack because of an individual incident—tragic though it was—in one council area.

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Forestry

To ask the First Minister what recent discussions the Scottish Government has had on the future of the forestry sector. (S3F-1219)

The Minister for Environment met leading forest industry representatives earlier this month to discuss the impact of the current economic situation on the sector. The Forestry Commission Scotland is now working with the industry to agree a range of measures to help ease the pressure on hard-pressed businesses. Those measures will be announced shortly.

The Scottish Conservatives have long argued that the private sector has a big part to play in ensuring that Scotland has a dynamic forestry sector. Therefore, we welcome the Government's plans to consider leasing off around 25 per cent of forests. That said, we recognise the legitimate concerns that exist among Forestry Commission staff in Scotland. Will the First Minister state clearly today that, if his Government goes ahead with the proposal, he will guarantee that there will be no compulsory redundancies, that the terms and conditions of transferred workers will remain the same, and that current arrangements for access to Scotland's forests will remain in force?

Yes. That is what the Minister for Environment is working towards.

Jamie McGrigor has put his finger on what people's concerns might be. However, if it is possible to protect access, employment and training rights and to generate significant and badly needed investment in the forestry sector, those would surely be good things to do. The purpose of the consultation is to ascertain what can be done in that regard and to get people's opinions in. Jamie McGrigor has identified the key issues that people must be reassured about if the policy is to move forward.

In the current economic climate, how can giving away the most commercially successful parts of our forests be good news for skilled jobs and our fragile rural communities? Is this not all about short-term cash for the Government at the expense of access, biodiversity and vital income for the next 18 Scottish Governments?

This is not the selling-off of anything; it is an attempt to get more investment, with guarantees, into the forestry sector, which badly needs it.

I do not know whether Sarah Boyack has had time to read the full pre-budget report documents. If she reads them, she will see that

"Departments are also working to achieve efficiencies on other Government assets",

and that

"a study of the Forestry Commission's portfolio in England is being launched to examine options for delivery of public value from the estate in the long term".

Before there is scaremongering from the Labour Party on this issue, Sarah Boyack should address not only the £500 million of cuts and the slashing of the fuel poverty programme but what the pre-budget report has to say about English forestry.

On a point of order, Presiding Officer. According to the standing orders, members are required to be courteous to one another in the chamber. I and other back benchers believe that it is completely discourteous for front benchers to dominate a session that is supposed to be a calling to account of front benchers by the back-bench members of the Parliament.

Presiding Officer, I suggest that you enlist the services of some back benchers to discuss with you and the party managers and leaders how we might best recalibrate the question time sessions in the interests of all members.

I do not accept that the issue is a matter of courtesy; I think that it is a matter of procedure. As I intimated last week, I am considering the procedure, and I will continue to do so.

Meeting suspended until 14:15.

On resuming—