First Minister’s Question Time
Engagements
1. To ask the First Minister what engagements he has planned for the rest of the day. (S4F-01418)
Engagements to take forward the Government’s programme for Scotland.
Does the First Minister think that George Osborne has cut corporation tax enough or is he urging the Chancellor of the Exchequer to go further?
George Osborne is, of course, following the footsteps of Gordon Brown, who as chancellor cut corporation tax.
The Scottish Government has modelled the results of a corporation tax rate in Scotland 3 percentage points below that prevailing in the United Kingdom. The results of that show an additional 27,000 jobs over the medium term and an increase in Scottish gross domestic product of more than 1 per cent.
When it controls corporation tax, this Government’s policy should be to set a competitive rate and then collect the corporation tax. The policy of successive UK Governments is to set the corporation tax rate and then not collect it, which seems a strange thing to do.
That answer sounded like one of Mike Russell’s bus trips from Campbeltown.
Gordon Brown indeed said that he would cut corporation tax when it could be shown that we could afford it. The difference is that Alex Salmond says that, if we were independent now, he would cut corporation tax 3 percentage points more than George Osborne whether it makes sense or not.
However much George Osborne cuts taxes for his mates in banking, Alex Salmond would cut them further. However deep Osborne could be seen to be in the pockets of corporate greed, Alex Salmond would be that bit deeper. He says to Google, Amazon, Starbucks and anyone who wants to evade tax that they should come to Scotland because there will be less tax to evade.
If Alex Salmond would set corporation tax 3 percentage points lower than whatever rate George Osborne set, does it not follow that he would have to cut schools and hospitals deeper than George Osborne, too?
I will introduce a number of corrections for Johann Lamont.
Gordon Brown did not say that he would cut corporation tax; he cut it and then boasted about doing it, saying that it was one of the great achievements of his term as Chancellor of the Exchequer. I mention that merely because it does not put Johann Lamont in a strong position to complain about the policy of cutting corporation tax when Gordon Brown did that in office as Chancellor of the Exchequer.
Johann Lamont should have referred to my first answer. I thought that an argument whereby we would have a 3 percentage point differential in the rate of corporation tax between Scotland and the rest of the UK would be a good one for Scotland because we have analysed it and the analysis said that it would create 27,000 jobs and an increase in GDP of more than 1 per cent over the medium term.
I also said that it seemed to me that the task is to set a competitive rate of corporation tax and then collect it. I know that this will come as a surprise to Johann Lamont, but the non-collection of corporation tax across a range of companies did not start under George Osborne as chancellor; it started when the Labour Party was in government. Our policy of setting a competitive rate of corporation tax and then collecting it is substantially superior to the Labour-Tory policy of setting a rate of corporation tax and then forgetting to collect it from key companies.
I think that we have come to a pretty pass when the First Minister imagines that he is in a strong position on the issue, given that response to the question that I asked him.
If the First Minister is in a strong position, perhaps we should ask who agrees with his corporation tax policy. We know that he agrees with it and we assume, by their silence, that his back benchers also agree with it. [Interruption.] Yes—the only place where there never appears to be any debate is on the Scottish National Party back benches.
However, we know that neither Scottish business nor the unions support the First Minister’s position. The Confederation of British Industry Scotland, the Scottish Trades Union Congress and the nation’s accountants—the Institute of Chartered Accountants of Scotland—do not support it. This week, we found out that the Scottish Council for Development and Industry does not support it. Not even the chair of the yes campaign supports it.
Members will be glad to know that the First Minister does have one supporter—his tax exile Jim McColl. Does the First Minister agree with his one supporter, Jim McColl, that in an independent Scotland capital gains tax should be abolished?
I correct Johann Lamont on the SCDI report. I refer her to page 22, which points out that a low rate of corporation tax could have
“a positive effect in attracting further investment to Scotland.”
If it had a positive effect in attracting investment to Scotland and if, as the Scottish Government’s analysis suggests, it would create 27,000 jobs in Scotland and would over the medium term increase Scotland’s GDP, I presume that the Labour Party would not oppose it. The Labour Party would not seriously oppose creating 27,000 extra jobs in Scotland or increasing Scotland’s GDP. [Interruption.]
Order.
If, as the modelling shows, it is correct that those things will happen, that is a substantially good policy, especially since the Labour Chancellor of the Exchequer implemented a cut in corporation tax when he was in office.
As for the attack on Scotland’s leading job creator—Jim McColl—if the Labour Party and the no campaign are reduced to attacking serious figures in Scottish job creation and entrepreneurship, that shows exactly why 500 businesses have signed up to the yes business campaign over the past two weeks.
The most important word there was probably “if”.
The First Minister calls to his defence his own figures, which some of us might think do not really stand up to scrutiny. The fact of the matter is that the SCDI said:
“There is no great desire to participate in a race to the lowest tax environment”.
We know that the First Minister thinks of himself as a talented economist; not only that, he likes quoting real economists, too. How many times has he told the chamber about his adviser, Joseph Stiglitz, and all the Nobel prizes that he has won? What does Joseph Stiglitz say about the policy? Just a month ago, he said:
“Some of you have been told that lowering tax rates on corporations will lead to more investment. The fact is that’s not true. It is just a gift to the corporations increasing inequality in our society.”
I agree with the Nobel prize-winning Joseph Stiglitz and the businesses, the unions and the professionals, who all say that the First Minister is wrong. Will the First Minister tell us who is right?
Members: Gordon Brown!
I cannot believe that SNP back benchers are calling in aid Gordon Brown, when I am telling the First Minister that his own economic adviser said that the policy was wrong. [Interruption.]
Order. Can we have a bit of calm, please?
Will the First Minister tell us who is right? Is it the First Minister, the ex-Royal Bank of Scotland economist and renowned adviser—nay, pen friend—to Fred Goodwin, or is it his Nobel laureate economic adviser, Professor Joseph Stiglitz, who says that he is wrong?
Johann Lamont cannot really divorce herself from Gordon Brown, because he is now the leader of the Labour no campaign, which is of course separate from the Tory-Labour no campaign led by Alistair Darling.
Joseph Stiglitz is indeed his name. He is a Nobel laureate. He is on the Council of Economic Advisers. He has pointed out that the vast disparity in income levels in the United Kingdom under the Labour Party is not an efficient way to run an economy. He is part of the fiscal commission, which recommended the post-independence sterling area. I am delighted that Johann Lamont is now going to accept the wisdom of Joseph Stiglitz and the other Nobel laureates on the commission.
The important thing about the policy is to set a competitive rate of corporation tax to benefit the Scottish economy, and then to collect it. That is a substantially better position than the position under the Labour Party—and now under George Osborne—where corporation tax is not collected. Having a competitive rate for a tax that is collected is somewhat better than having a rate of tax that is not collected.
If Gordon Brown implemented that policy, I do not think that Johann Lamont can divorce herself from it. It is good for the Scottish economy, and it is going to generate jobs and investment in Scotland, as is contained in the SCDI report. If we have based our policies on what is best for jobs, investment, growth and the Scottish people, that is why this Government is in office and why Johann Lamont’s party is over on the Opposition benches.
Secretary of State for Scotland (Meetings)
2. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S4F-01420)
No plans in the near future.
Last year, people were shocked by the Mortonhall baby ashes scandal. We now know that the issues that arose in Edinburgh have spread to Glasgow and Aberdeen. Calls from the increasing number of affected parents for a public inquiry are growing ever louder. Will the First Minister order a full public inquiry?
As Ruth Davidson knows, the position is that the Edinburgh inquiry is proceeding, and there is co-ordination from councils across Scotland to give an explanation. That is an effective way to proceed, but the cabinet secretary is always prepared to listen to positive suggestions on the matter. The inquiry in Edinburgh is proceeding, and there is confidence in how it is being conducted. Other councils have now responded sympathetically and with understanding to the concerns of parents across Scotland.
The issue is being handled sensitively. If Ruth Davidson wants to make the case for why a national public inquiry would benefit the bereaved parents, we will of course look at that. However, there is a big argument for proceeding with the inquiry in the way in which it is now being carried out, for the sake of speed, in order to give people the answers that they want and so that we can have the correct policies, which have now been released in guidelines across the country.
I appreciate the steps that have been taken, but they are increasingly being overtaken by events. The Edinburgh inquiry is indeed proceeding. There is also Lord Bonomy’s commission, although it has no direct representation from parents, despite their being promised as much. On Friday, Lord Bonomy said that parents would be able to make written submissions until 19 July. However, it has emerged this week that the independent audit of what went on in Aberdeen will not be presented until 24 September. That means that affected parents in one area of the country will have no voice in the process.
I agree with the First Minister that new protections have to be put in place, but parents are asking for answers about what happened to their children, and the commission is not designed to provide that. In light of the new information, the only way to get what everybody in the Parliament wants, which is justice for the affected families across Scotland, is a full public inquiry. Will the First Minister please reconsider?
I will correct a couple of things that Ruth Davidson said. The Bonomy review’s purpose is to get proper procedures in place, which we think is the overwhelming priority. Procedures should be put in place now that should have been but were not in place in some local authority areas. There should be no delay in correcting that position.
I do not think that Ruth Davidson is correct about parental representation for the Bonomy review. I can give her information about that—she should be aware of it. That review is not the same thing as the investigation that is taking place in Edinburgh or the measures that might take place elsewhere. Those investigations are intended to look at the past and find out exactly what happened.
There is a role for what Lord Bonomy is doing, which is to correct the position right now to ensure that, in the future, procedures are correctly applied, and not to wait for the inquiry to recommend that, because it is pretty clear on the basis of the evidence that exists what the correct procedures should be. That should be done. We will by all means look at the arguments on the nature of the inquiry, but there is a substantial advantage in proceeding as quickly as we are doing and meeting the concerns of parents and the wider community.
Jenny Marra has a constituency supplementary.
The First Minister will be aware of reports that police staff without the appropriate qualifications have been taking fingerprints in Dundee and Arbroath. Has he had reports of that happening anywhere else in Scotland? Will he reassure people in my region that the review will be conducted as swiftly and as thoroughly as possible, as there is a grave danger that evidence could be dismissed in serious cases because of that breach of protocol?
Yes, I can provide that reassurance. The review will be conducted as swiftly as possible, and any lessons that are learned from it will be applied across the country. I hope that Jenny Marra will accept that reassurance.
Neil Findlay has a supplementary question.
BAM Construction and Balfour Beatty are contractors that are bidding to build the new Edinburgh sick kids hospital. Those two companies have been up to their necks in the blacklisting of more than 3,000 United Kingdom and 500 Scottish construction workers. Will the First Minister use his influence with those companies to get them to own up to what they have done, apologise to those involved and agree to pay compensation for ruined lives and careers? Does he agree that, if those companies do not do that, they should not be awarded any public sector contracts?
I do not know whether the member is familiar with the points that I made at the Scottish Trades Union Congress conference, but I am happy to send him a copy of the remarks. I addressed in particular what we believe that the Government can do in terms of public sector contracts to ensure that blacklisting is eradicated from the Scottish labour market.
Cabinet (Meetings)
3. To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S4F-01416)
Issues of importance to the people of Scotland.
Scottish National Party MSPs say that they are prepared to back the closure of their local court in return for a new justice centre for their area. The courts at Cupar, Peebles, Dingwall, Arbroath, Stonehaven and Rothesay have histories that stretch back 500 years. With only 12 days before the Parliament decides those courts’ future, will the First Minister tell those back benchers when and where the new justice centres will be built?
SNP MSPs, including constituency representatives, are making strong representations on behalf of their constituents, as we would expect them to. If the Liberal Democrats had employed that approach, perhaps they would have more constituency members than they have.
I expected some sort of explanation about the new justice centres, but nothing was forthcoming. It is ridiculous that the First Minister does not have worked-out plans for the justice centres. He cannot give us even one single date and one location for those justice centres, which his back benchers say will come. He already has a justice centre in Cupar, but he plans to shut it down. He already has one, but that is what he will do.
Last week, we heard from the Scottish Court Service that more courts could close before any justice centres are built. This week, the Law Society of Scotland spoke out.
The clock is ticking. There are 12 days for SNP members of the Justice Committee to make a big decision on whether to back their Government or back their community—whether to back 500 years of local service against the Government’s cavalier and chaotic approach. Would it not be safer for SNP members to stand up for their communities and reject the First Minister’s court closures?
Or alternatively, should they represent their constituents and look for the most effective way to ensure justice across Scotland?
I know that Willie Rennie lives in a world in which the public expenditure restrictions imposed by his colleagues at Westminster in conjunction with the Tories do not exist and that he likes to believe that public services in Scotland should somehow be immune from Westminster cutbacks, but there is nobody in Scotland who does not understand the position. That is exactly why the Liberal Democrats used to have a football team in the Parliament and now have a subs bench.
Air Services (Highlands and Islands Airports)
4. To ask the First Minister what economic value the Scottish Government places on services from Highlands and Islands airports to hub airports with worldwide connections. (S4F-01423)
Maintaining capacity on services from Highland and Islands airports with worldwide connections is essential for that area’s economic development. The effect of the United Kingdom Government’s air passenger duty has been amply demonstrated by Flybe’s recent announcement of the sale of its slots at Gatwick. The chairman of Flybe, Jim French, said:
“with the absence of a regional aviation strategy and the government’s penalistic and ludicrous policy of charging Air Passenger Duty (APD) on both legs of a domestic flight, I’m afraid it’s inevitable that high frequency services from the UK’s regions will ultimately be squeezed out”.
That is a significant warning statement, and it underlines the absolute necessity for air passenger duty to be devolved to the Scottish Parliament.
Does the First Minister recall that, in 2008, air services from Inverness to Heathrow were ended? In light of that, is it not important to say that
“Protecting the links from Inverness to Gatwick is now even more essential”?
Of course, those are not my words but those of the local MP, Danny Alexander, in 2008. Is it not rank hypocrisy that the local MP had one opinion in 2008 but has done nothing in government to support air services from Inverness?
Well, we should remember the context: Danny Alexander is a Liberal Democrat, so adopting two positions at the same time might itself be party policy. It is a rather invidious position to be in to be the Chief Secretary to the Treasury and the local member for Inverness and to be responsible for the very air passenger duty that is threatening services from Inverness while complaining about it and posing as their defender. Perhaps if we agree on devolving air passenger duty to this Parliament as a policy that benefits the Scottish economy, Danny Alexander will be relieved of the difficulty of having to be the Treasury’s man in Inverness while pretending to be Inverness’s man in the Treasury.
Will the First Minister hold talks with the UK Government, Flybe and easyJet, which now has the flights from Inverness airport? Will he look at having a public service obligation on routes to Gatwick airport? Will he also speak to the airlines about connectivity from the islands through to Gatwick, which used to be booked through one operator and will now require to be booked through two?
Talks are going on between the Minister for Transport and Veterans and the airport carriers at present. The member should direct her attention to what Flybe has said and the extent of studies across Scottish airports and carriers, which are looking at the differential impact that air passenger duty is having on Scottish flights. That is the key to and source of the difficulty. I hope that the member will join the Government in calling for APD to be devolved to this Parliament so that we can produce an airport and passenger policy that benefits the Scottish economy as opposed to threatening vital services.
Public Sector Early-Departure Schemes
5. To ask the First Minister what the Scottish Government’s response is to Audit Scotland’s report, “Managing early departures from the Scottish public sector”, which states that the public sector is spending £280 million a year on early departure schemes. (S4F-01432)
The report goes on to note the effective savings that have been made by the voluntary service arrangements conducted by the Scottish Government. Under the funding pressure from Westminster, it is inevitable that there will be reductions in the number of those working in the Scottish public service. Our policy of no compulsory redundancies is the right one, not just because it treats people who are in that position humanely and with respect but because it gives security to those who remain in the public sector. The policy is supported by our unions and pursued by the Government, and it is not available elsewhere in these islands.
I thank the First Minister for his response, but I am not sure whether he agrees that Audit Scotland is right to criticise the extensive use of early exit packages. Does he at least share my unease about the concerns raised with me by civilian staff in the newly created Police Scotland that a pool of money has been allocated to provide for exit packages for a tranche of senior police officers in order to reduce their numbers through enhanced redundancy settlements? As it is not unheard of for senior officers in the police and fire and rescue services to take exit packages only to return in the same or similar capacity, will the First Minister today give the Parliament a commitment that if and when senior police officers take golden goodbyes, they will not thereafter be able to say a golden “’Ello, ’ello, ’ello” to new and similar jobs in Police Scotland?
I can give an absolute assurance that the police and fire services in Scotland will be managed rather more effectively than many Labour local authorities have been, in terms of exactly the things that the member is speaking about.
I do not think that the member should be allowed to set the Audit Scotland report in the context in which he set it. For example, on page 4, Audit Scotland said:
“Early retirements and voluntary redundancies, for example, can be a useful way of avoiding the delays and costs of compulsory redundancies ... Once the initial outlay has been recouped, they can provide significant savings for organisations.”
The member should reflect on the balance of what the Audit Scotland report had to say about that. He should also reflect on the range of cases—cases that I could quote to him—in which the practices and policies of some of his colleagues in local government have been brought seriously into question.
When I asked the Cabinet Secretary for Finance, Employment and Sustainable Growth yesterday why the Scottish Government was spending 10 times as much on pushing people out of the door as it is on trying to find people employment, he gave in his defence the same excuse that the First Minister has just given: the Scottish Government has a policy of no compulsory redundancies and, furthermore, uses compromise agreements only in a minority of cases. Labour’s freedom of information requests on the subject reveal that, since Mr Salmond came to power, the Scottish Government has spent £10 million on compulsory redundancies and £45 million on compromise agreements. Can the First Minister explain that?
As Ken Macintosh knows, we introduced a no compulsory redundancies policy over the past two or three years, progressively across central Government in Scotland. Is the Labour Party saying that it would not have a no compulsory redundancies policy? If so, it had better tell the public sector unions, which are firmly in favour of the policy.
Ken Macintosh should also compare the public service in Scotland with the service in the rest of the United Kingdom. Public service numbers are down less in Scotland than they are across the UK, because of the sensitivity with which we handle the policy.
It is right and proper to have a policy of no compulsory redundancies. If Ken Macintosh, as the Labour Party spokesman who looks after the welfare of public sector employees, would have compulsory redundancies, let him say so. Our policy meets the requirements of the public services in Scotland and is much more in tune with what the Scottish people demand than anything that Ken Macintosh could come up with.
Higher Education Funding
6. To ask the First Minister what the Scottish Government’s response is to the opinions expressed in the briefing paper, “The funding of higher education in Scotland, the UK and internationally”. (S4F-01414)
We welcome contributions to the debate. In that light, I am sure that Ms Smith will have noticed this morning’s contribution from Universities Scotland. Universities Scotland has published legal advice from solicitors Anderson Strathern on university fees post-independence, which explains why, under European Union law, it could be permissible to continue to charge students from the rest of the United Kingdom tuition fees. That shows that a real debate is going on in Scotland. This Government has delivered free education in the face of the naysayers who said that it could not be done. We are confident that we will continue to deliver free education in an independent Scotland.
In light of the legal advice that Universities Scotland published this morning, will the First Minister confirm exactly which groups of students would and would not pay fees in an independent Scotland? Will he say whether the Scottish Government has received legal advice that confirms that the European Parliament would agree to any exemptions from current EU law on the matter?
I do not think that Liz Smith has got her European authorities correct, as far as the European Commission, the European Parliament and the European Court of Justice are concerned.
I would have thought that Liz Smith would have bothered to read the legal advice that was published this morning. It is unfortunate that her question has been somewhat overtaken by events, but the art of asking questions is to adapt to changing conditions in the debate that is going on. I would have thought that Liz Smith would have welcomed legal advice from Universities Scotland that shows that, based on equity and residence, the policy of free education could be pursued in an independent Scotland.
Of course, to have a policy of free education, you first have to want education to be free. The other unionist coalition that is emerging in the Parliament between the Conservatives, the Liberal Democrats and the Labour Party is that each of those parties wants to impose tuition fees on the students of Scotland. The first requirement is to have a Government like this one, which believes in free education and therefore spells out why that free education policy will continue to be pursued in an independent Scotland.
Perhaps the art of answering a question is actually to give an answer.
I have read that legal opinion, and it does not give the unequivocal answer that the First Minister seems to suggest. Could he tell us whether, if it is correct and if he accepts it, it means that European Union students will now qualify—sorry, will no longer qualify—for free tuition and could in fact be charged for university tuition in Scotland?
I think that Hugh Henry should have a bit more practice in asking questions before he criticises the answers.
I know that this is inconvenient for the Labour Party, the Tories and the Liberal Democrats, the parties that want to impose tuition fees on the students of Scotland—[Interruption.] I see Johann Lamont shaking her head, but she said on 17 December last year that tuition fees were “the most obvious option”. What is “the most obvious option” if it is not an attempt to impose tuition fees on the students of Scotland?
The legal advice today and the firm resolve of this Government to base our policy on residence and equity give assurance that, as long as this Government is in power, there will be no tuition fees imposed on the students of Scotland and education will be based on the ability to learn, not the ability to pay.