Plenary, 30 Oct 2008

Meeting date: Thursday, October 30, 2008

Official Report 706KB pdf

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First Minister's Question Time

In the understandable absence of Iain Gray today, question 1 will be asked by Johann Lamont.

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Engagements

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-1115)

I welcome Johann Lamont to her place—I fully understand the reasons for Iain Gray's absence today.

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

We share on all sides of the chamber a commitment to seek to protect all those in Scotland who are facing the consequences of the global economic crisis. While the First Minister was down in London this week meeting the bosses of Lloyds TSB, Labour was meeting the unions that represent Scottish bank workers. Before he went to London, he said that his first priority was to protect jobs. What guarantees on jobs did he extract from the Lloyds TSB board?

I spoke to the unions that represent the bank workers before I went to meet the Lloyds TSB board. I cannot say that Lloyds TSB gave undertakings in terms of either numbers or decision making with regard to jobs in Scotland. The argument that it is putting forward is that until it goes through the merger process and the merger is complete, it is not in a position to look at the organisational structure of any merged organisation.

However, with regard to putting forward the case for Scotland, the operational excellence document to which the Cabinet Secretary for Finance and Sustainable Growth has referred goes through in great detail the substantially good reasons, in terms of quality of workforce and cost effectiveness, why the key functions of any bank—Lloyds TSB, HBOS or any other financial institution—should be located in the Scottish financial sector.

I take it from his answer that the First Minister has as yet secured no guarantees in relation to employment.

The First Minister told us that the Lloyds TSB board would be

"left in no doubt of their obligations to Scotland in terms of employment and corporate presence."

What guarantees has the First Minister extracted from the Lloyds TSB board about corporate headquarters?

My answer is the same as the one that I gave to the member's first question.

I managed to catch some of the earlier HBOS debate, and I detected enthusiasm among members on the Labour benches about the merger between Lloyds TSB and HBOS. It is clear—as has been identified from the start—that there are serious concerns about the number of jobs not just in Edinburgh but throughout Scotland. There are also serious concerns about decision making in relation to locations and about competition affecting small businesses and economic welfare in Scotland. That is why some of us have been pursuing the arguments, rather than just accepting that the process that the Labour Party supports is inevitable. It seems entirely reasonable that the job of the First Minister of Scotland—and, I hope, the job of the entire Parliament—is to defend the Scottish interest as best we can, whatever the circumstances.

I reassure Mr Salmond that he does not stand on his own in wanting to protect the interests of workers in Scotland. However, the fact is that he sought two guarantees and has secured none.

At the most recent First Minister's question time, Labour urged the First Minister to contemplate the possibility of changing his mind to protect Scottish jobs. Was the subject of the local income tax raised by him or the Lloyds TSB board at his meeting on Tuesday?

If the local income tax proposal is agreed to by the Parliament, it would benefit the vast majority of bank employees in Scotland, as it would the vast majority of the people of Scotland.

The question of guarantees is extremely interesting. Lloyds TSB indicated that it would follow what was stated in the letter of intent. That letter said that there was a focus on jobs in Scotland; that the Bank of Scotland headquarters will remain on the Mound; and that the note-issuing function will continue—in other words, that the Bank of Scotland will continue as an organisation.

However, those indications were made before the recapitalisation of the banks. Whatever our views about the best possible outcome for Scotland, is it not entirely reasonable that the major shareholder in any merged organisation, Her Majesty's Government—if you like, Alistair Darling and Gordon Brown—should make an indication as that major shareholder? Are they asking for jobs and decision making to be located in Scotland?

I am not an economist, so I will keep it simple for the First Minister. First, it would be helpful if he could answer the question about whether the local income tax was discussed at the meeting. We are talking about what he can do, rather than what he singularly failed to do at his meeting. Throughout Scotland, in these difficult times, trade unions and businesses agree that the local income tax is a serious disincentive to jobs, business and Scotland's ability to attract corporate headquarters. I would be astonished if that was not discussed at the meeting.

Given the range of concerns about the impact of the local income tax on jobs in Scotland, even if it is too much to contemplate the possibility that the First Minister will change his mind and drop the proposal, will he at least, as a first step, consider the plea from the Scottish Chambers of Commerce? It states:

"We believe that it is entirely unacceptable for ministers to refuse to conduct research into the direct costs to SMEs of the administration of such a tax."

The First Minister tells us that he will "strain every sinew", but that is assertion and not action. In response to the concerns about the local income tax, will he at least commission research on the impact of such a tax? Will he swallow his pride and do that little bit to establish what his local income tax would actually cost?

We know exactly what the impact of the local income tax that we propose would be on the people of Scotland, which is why the overwhelming majority of the people of Scotland support it. I remind Johann Lamont of the details. Four out of five Scots will be either better off or no worse off under the LIT proposals, which is one reason why they are so popular.

In her question, Johann Lamont ranged far and wide. She said that she is not an economist, and I fully agree with that statement. Neither is John Park a footballer, but that does not mean that we cannot answer questions. Introducing a fair tax that is based on the ability to pay, under which the vast majority of people will be better off, is not just a good thing to do but an extremely popular thing to do.

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Prime Minister (Meetings)

To ask the First Minister when he will next meet the Prime Minister. (S3F-1116)

I have no immediate plans to meet the Prime Minister.

Our First Minister's priorities are revealing. Yesterday, when he could have been in London not just to meet but to question both the Prime Minister and the Secretary of State for Scotland, his priority was to campaign in Glenrothes and put his party before his country.

As the First Minister was in Glenrothes, however, he will understand the importance of doing everything possible to drive forward the local economy including, for example, improving transport infrastructure. His colleague Tricia Marwick has supported the Scottish Conservatives' calls for the A92 around Glenrothes to be dualled on economic and safety grounds. However, I am told that the Scottish National Party candidate for the Glenrothes by-election said at a hustings this week that such a move was "not a top priority". Where there should be clarity about a key transport project in Fife, there is now total confusion. What is the First Minister's position?

My position is that the strategic transport review, indicating the billions of pounds of investment going into infrastructure projects in Scotland, will be published shortly. It will be published for the whole country and it will indicate the better financial mechanisms that will allow that infrastructure plan to be pursued.

I hope that Annabel Goldie will join me in agreeing that there is a particular question about capital investment at the moment. I hope that members of all parties agree that capital investment should be taken forward. That view has been reflected, of course, in the Scottish Government's response to the economic situation.

The lack of clarity about the capital cover for the future of this spending review's capital plans is a serious impediment to that process. From next April, everything is to come on balance sheet. I welcome that step, but I am sure that the Parliament will acknowledge that clarity on capital cover for previous off-balance-sheet finance is crucial if we are to deliver the transport infrastructure projects and the range of capital investments that are vital for the Scottish economy.

If there is confusion in the SNP on roads, confusion does not begin to describe its attitude to buses. The people of Fife depend heavily on bus services that are operated principally by a long-established family firm and by Stagecoach—a name that is more than familiar to the First Minister.

On buses, I understand that the same SNP candidate said last night:

"I hope the party's not listening. Bus companies don't work when privately owned."

Oh really? Is that the SNP's position? Is that the First Minister's position? Is it goodbye to family firms and "Sling your hook, Mr Souter"? Are the days of Stagecoach in Fife over? What is the position?

The position is that the Government gives huge support to the bus companies of Scotland to allow every old-age pensioner in the country the free bus travel to which they are entitled. Annabel Goldie does not welcome every single thing that the SNP Administration does, but I am sure that she will join me as both of us look forward to the free bus passes that we will get in the not-too-distant future, with the SNP Government's guarantee of a bus pass for every old-age pensioner in Scotland, not just for a by-election and not just in Fife, but across the country. That is wholly to be supported and welcomed.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1117)

As ever, the Cabinet will discuss issues of importance to the people of Scotland.

In the chamber in April, the First Minister spoke about the Human Fertilisation and Embryology Bill. This week, Cardinal Keith O'Brien said that the proposals in the bill were akin to "Nazi-style experiments", and he said that it was behaviour

"last seen under the Nazis".

Does the First Minister think that that is the right sort of language to use?

I do not believe that the First Minister has responsibility for what Cardinal O'Brien has said. I give the First Minister the opportunity not to respond to that if he so chooses.

I have made my own comments on the Human Fertilisation and Embryology Bill. It is a matter of personal conscience. I am sure that members would at no stage deny Scotland's cardinal or any other person the right of free speech.

I should caution you, Mr Scott, that your further questions should be on a subject for which the First Minister has direct responsibility.

I quite agree that free speech is a pillar of our society, but I do not think that a First Minister of any persuasion should equivocate on such language. The debate is extremely important, but the last thing that it needs is extreme language.

The First Minister's Government is investing—as previous Governments were right to do—in building Scotland's life sciences industry. It is one of Scotland's priority industries, and it gets millions of pounds of support from his Government. Equivocation is not an option when language about Nazis could put Scottish jobs at risk. What steps is he taking to put right the damage that might be done?

When it comes to choosing how to treat an extremely serious issue, I do not think that Tavish Scott has given a good example at today's question time. The life sciences industry is extremely important for Scotland. We have indicated our support for it across a range of activities. That is what I am responsible for as First Minister of Scotland, and we will continue to discharge that responsibility.

I will take a constituency question from Dr Elaine Murray.

The First Minister might be aware that last Friday Shasun Pharma Solutions Ltd announced its intention to close its plant at Newbie, in Annan, with the potential loss of 86 highly skilled jobs. What will he do to assist the efforts of Scottish Development International and Scottish Enterprise to find a buyer for the site and retain valuable jobs and a facility for life sciences research and development in Annan?

The full facilities of SDI and the arrangements for helping people with skills and retraining will be deployed in Annan, as they are being deployed in my constituency at the moment—I suspect that they will be required in a range of constituencies throughout Scotland in the current economic circumstances. Annan will get the same priority from SDI and other agencies. If the constituency member wants to discuss the matter with the Cabinet Secretary for Finance and Sustainable Growth or the Minister for Enterprise, Energy and Tourism, we will be pleased to set up a meeting.

We have another constituency question, from Angela Constance.

Is the First Minister aware that Cable & Wireless has made a share acquisition of Thus, a leading telecommunications company that provides more than 200 highly skilled jobs in my constituency? There will be redundancies of Thus employees only, which greatly disadvantages the Livingston constituency. What representations will the First Minister make to protect jobs in my constituency in the current economic climate?

I have already made representations on the matter during the past few months, as the issue emerged. Jim Mather, the Minister for Enterprise, Energy and Tourism, has been making representations as well. It is clearly a matter of serious concern to the workforce. There have been indications from Cable & Wireless that some suggestions about job losses are wide of the mark. We have sought, and will continue, to make representations. In all circumstances, ministers in this Government will act in the interest of the workforce and the Scottish economy.

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Capital Investment Projects

To ask the First Minister what effect the global financial downturn will have on major capital investment projects in Scotland. (S3F-1121)

We will continue to make substantial investment in public capital programmes across Scotland. In March we announced our £35 billion infrastructure investment programme for the next 10 years, including £14,000 million over the current spending period to March 2011. Last week, the Inverclyde Council schools project, with an investment value of £80 million, was signed. That project and the many projects currently under construction show that investment is moving forward in Scotland. In addition, in August I announced the acceleration of £100 million spending on the affordable housing investment programme, which will act as a valuable stimulus to the economy in these difficult times.

Does the First Minister agree that the return to Scotland of £120 million of fossil fuel levy money, with no financial strings attached and no compensatory clawback elsewhere, would allow the Government to use that extra finance to initiate a capital investment programme of renewable energy projects? [Interruption.] Such projects would not only help hard-pressed Scottish businesses and preserve Scottish jobs but reduce our dependence on energy generated from fossil fuels.

Such was my enthusiasm to answer Ian McKee, I almost started too early.

The member puts his finger on a hugely important issue. The Office of Gas and Electricity Markets money, which is sitting in a bank account in London and was raised by contributions in Scotland to the fossil fuel levy, is funding to which we can have access. It is unfortunate that the Treasury's current position is that the money would be deducted from the departmental expenditure limit, which means that Scotland would get no advantage from that revenue.

However, I am delighted to say that, for the first time in recorded political history, I have the support of the former Labour minister Brian Wilson, who of course was an energy minister and understands the topic, in pursuing what could be vital and valuable investment for Scotland. I hope that the Parliament can put aside party interest, as Brian Wilson has managed to do, and unite in seeking access to that £120 million for renewables investment. We need look no further than just across the Forth to Tullis Russell in Markinch for a great example of how we can harness the natural resources of Scotland to increase the competitiveness of Scottish industry. There, Government investment of £8 million is helping to build a biomass generator, securing the future of a great, 200-year-old Scottish company and securing 550 jobs in the paper mill workforce and new jobs in the new generator. Would that the chamber united to get that £120 million so that we could see such projects throughout the country.

Let us seamlessly travel back across the Forth. The First Minister will be aware of my constituency interest in the new Forth crossing, which is likely to cost in the region of £3 billion to £4 billion, and how it might be financed. The Government has obviously ruled out a private finance initiative and tolls, and there has been a lack of real progress on the Scottish Futures Trust.

I appreciate that the First Minister has been looking far and wide for the necessary funding, including looking at middle eastern sovereign funds.

Come to a question, please.

Given the global financial downturn and the fluctuations in oil prices, will the First Minister give assurances about how, when and where the necessary funding will be secured to deliver the new bridge?

As we promised, we will set out the funding mechanisms for the new Forth crossing in a statement from the appropriate minister before the end of the year. At least under this Administration, in sharp contrast to the eight wasted years of the previous Administration, a decision has been made to proceed with the Forth crossing—something that the previous Administration was singularly unable to do.

Given that the First Minister and his back bencher could not get their question and answer together, will he end what the Confederation of British Industry Scotland describes as the "current hiatus" by finally telling us today what the Scottish Futures Trust will do and how it will do it to provide some relief to Scotland's hard-pressed construction industry?

The Scottish Futures Trust adds value and gives more competitive terms to the public sector in Scotland in pursuing the billions of pounds of investment programme. David Whitton was clearly not paying too much attention when I answered Annabel Goldie. The only difficulty and delay in Scotland's capital programme, apart from the financial crisis that is besetting us all, is the inability so far to get clarification from the Treasury on key questions about capital cover.

Given that both the chancellor and Prime Minister have—rightly—responded to the need for a Keynesian expansion in capital investment, perhaps the member can prevail on his friend the chancellor, and I will prevail on my friend the Prime Minister, to spell out the capital cover so that we can get on with the job of building things across Scotland to help combat economic recession.

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NHS Boards (Elections)

To ask the First Minister whether the Scottish Government will guarantee that any costs associated with its plans for direct elections to national health service boards will not impact on front-line patient care. (S3F-1132)

The estimated costs of pilot elections to health boards are in our forward plan to be funded centrally from the health directorates' budget in 2010-11.

NHS Highland has had to cut £36 million from its budget to stay out of the red. Some of that is a direct result of the SNP Government's policies. On top of that, the health board has to find £600,000 for car parking charges and to fund elections, as the Government is not stepping in to do that. What can the First Minister say to first-class clinicians who are being asked to make cuts in areas that

"were previously thought to be ‘scary' or ‘untouchable'"?

In what areas does he recommend that they make cuts?

I am sure that NHS Highland and NHS boards across Scotland will be severely relieved that the efficiency savings of 3 per cent suggested by the former Labour Party leader, which would have put NHS Highland in the position of having to find £54.9 million, were not carried into policy. They will also be relieved that the Labour Party manifesto, which was supported by Rhoda Grant and which said that there would be no allocations beyond Barnett consequentials for the health service in Scotland and that funding would all go to education, was not put into practice either. I am sure that they will be puzzled to see that Rhoda Grant now seems to have turned against the abolition of car parking charges, which the Labour Party urged us to abolish for a long time.

In facing the pressures that affect every area of the public sector, people will be relieved that the finance allocated to the national health service in Scotland will be pursued to record levels over the next three years, in contrast to what would have happened if the Labour Party had remained in government.

Does the First Minister agree that a cost of the current system of unelected health boards is the lack of accountability to the public that they serve, which is felt most acutely when hospitals are feared to be under threat?

In the Sunday Herald a few days ago, Dave Watson, the Scottish organiser of Unison, said:

"Health boards have always been opposed to the introduction of democracy in the NHS but it's the right thing to do. It's a cultural thing—they just don't get it."

There is resistance to the idea of democratisation of the health boards from some members of the existing structure. However, I agree with Dave Watson that it is the right thing to do, and I think that it will bring benefits to patients and the people of Scotland.

Is the First Minister aware that, even before any more money is taken from front-line services to pay for direct elections, mental health patients in the Highlands already have to wait up to four years and seven months to see a psychologist? How long does he think that a mental health patient should or can wait to see a psychologist? Is four years and seven months acceptable?

No, it is not, which is why I have said before to the member that we are considering bringing mental health within the waiting time guarantee. We want to deal with the situation that she describes so well. In turn, I am sure that she will concede that, with regard to the performance of the NHS, waiting times across the subjects that are covered by the guarantee have been moving towards record lows. Each and every one of us should be grateful for the efforts of the workers in the NHS who have made that possible.

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Local Income Tax

To ask the First Minister what progress the Scottish Government is making in developing its plans for a local income tax. (S3F-1140)

The Scottish Government is committed to abolishing the unfair council tax. We are analysing the many substantive and important responses that members of the public and organisations—including the Liberal Democrats—have submitted. We shall release those responses, and an analysis of them, by the end of the year, and outline how the Government intends to take forward its proposals. We look forward to working with the Liberal Democrats and others across the chamber to bring forward that important legislation in 2009.

I believe that I speak for many people across Scotland in welcoming the progress that is being made towards abolishing the unfair and regressive council tax. I have been greatly encouraged to hear that the Scottish Government is coming around to the Liberal Democrats' way of thinking on a truly local LIT that protects students and allows councils to retain powers on both sides of their balance sheet.

Does the First Minister also agree with the Liberal Democrats that those who enjoy a high income from dividends should contribute their fair share to local government expenditure? Can he give us any details today of how the Government will be developing proposals to achieve that?

The areas that Alison McInnes has identified are the areas that the Government is looking at to strengthen our proposals and to get wider parliamentary assent for them.

Alison McInnes phrased her question in a valuable way, as she reminded the chamber and, therefore, the people of Scotland, that the introduction of the local income tax means the abolition of the unfair council tax. The reason why the council tax is the most hated form of taxation, certainly since the poll tax, is quite clear: after its introduction, it was increased by 40 per cent in the Tory years and by a further 60 per cent in the 10 years following 1997. It doubled in the Tory and Labour years; that is why it is unpopular. The fact that it is unfair is exactly why the abolition of that hated tax is so welcomed by the people of Scotland.

In light of that response, can the First Minister tell us why his Government decided this week to publish no estimates of any kind of the cost to Scottish business of the local income tax? Is it because the Government will make no estimates or is it simply because it refuses to publish them?

No, we will bring forward estimates as we bring forward the timetable for the legislation. That is what happens with every bill that comes before the Parliament. I know that Wendy Alexander does not approve of the local income tax, but I also know that there is substantial public support for it. I am sure that she would expect all estimates that are attached to the bill to be brought forward in a timely response to the consultation exercise, in time for the introduction of the legislation.

Meeting suspended until 14:15.

On resuming—