Meeting of the Parliament

Meeting date: Wednesday, June 13, 2018

Official Report 1393KB pdf

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Sustainable Growth Commission

I would appreciate it if members could change their seats quickly. We are already late in starting this debate, so timings are really tight. Please pay attention to them.

The next item of business is a debate on motion S5M-12708, in the name of Willie Rennie, on finance and the constitution. I call Willie Rennie to speak to and move the motion. You have up to seven minutes.

15:53  

Thank you, Presiding Officer. I feel sorry for Scottish National Party members. The big, long-awaited report was published in a flurry of breathless press releases and members were champing at the bit to debate it at their conference, but after the long bus journey to Aberdeen they discovered that it was not even on the agenda. However, I am generous and I am here to help. We have carved out time today so that SNP members can have their say, tell us what they really think and let off steam. It could be quite a cathartic experience.

The sustainable growth commission’s report is a substantial piece of work.

Members: Hear, hear.

The SNP members would love me to stop there, but they do not know what is coming next.

The report admits how challenging an independent Scotland’s finances would be. It is a confession. It is the best case, although not of many great choices. It is the stark reality. This is not some flimsy report that is easily dismissed. It is the words of the First Minister’s close advisers. The First Minister herself described it as a blueprint. It is a significant development and it deserves scrutiny in this Parliament.

Liberal Democrats oppose independence, and the report strengthens our case against it. The report makes points on the currency, on the volatility of small countries’ economies, on the deficit and on the years of financial pain. That financial weakness is a direct threat to our national health service—it is that serious.

Will the member take an intervention?

Not just now.

I will go through some of the evidence, which I am sure that SNP members will want to hear. In 2014, I warned that small countries’ economies are prone to greater volatility. That was denied then, but it has now been confirmed by the commission. Paragraph B8.33 of its report says:

“The greater volatility that small economies can experience also strengthens the case for fiscal conservatism”.

I warned that an independent Scotland could not demand control of the pound. That was furiously denied, but the commission has confessed—[Interruption.]

Excuse me, Mr Rennie. I understand why the subject is emotive for everyone, but I would like to hear what Mr Rennie is saying, so a bit of murmuring and less shouting would be useful.

The louder they shout, the happier I am.

Paragraph C1.5 says:

“Scotland’s government would cede effective sovereignty over monetary policy”.

I warned that oil prices were volatile, falling and could not be relied on. The commission has now admitted that. The report says that oil should not be

“depended upon for recurring annual commitments.”

I warned that Scotland could lose the annual United Kingdom Barnett dividend of about £9 billion. That was angrily refuted, but the commission now agrees. Not only would that go, but an independent Scotland would pay the UK money for years after leaving. Who has heard that before? Paragraph 3.139 says:

“The Annual Solidarity Payment is modelled at around £5 billion”.

That £5 billion would be paid to the UK, so it would be goodbye to the Barnett dividend.

I warned that there would be spending cuts. That was denied in 2014, but the commission has now admitted it. Paragraph B4.32 says:

“A 6-7% fiscal deficit is not sustainable and action will be required to reduce it to more sustainable levels.”

Figure 12-2 makes it clear that, in an independent Scotland, spending would be 1 per cent less than the gross domestic product growth rate, so GDP growth of 1 per cent or less would result in real-terms spending cuts. In the past decade, Scottish onshore GDP has shown average real growth of just 0.8 per cent per annum. The latest forecast from the Government’s Scottish Fiscal Commission, which it published last month, is that GDP growth to 2023 will run at 0.9 per cent. When we look back and forward, we see that an independent Scotland would face cuts.

According to the sustainable growth commission’s report, cuts would last for 10 years.

Will the member take an intervention?

The report says—[Interruption.] This is the Government’s report, so it should listen to the quote. Paragraph 3.201 says:

“We then anticipate a period of between five and ten years to put the public finances on a sustainable footing.”

What I have said is not just my interpretation. David Phillips from the Institute for Fiscal Studies confirmed that

“It’s a continuation of austerity.

If public spending growth is one per cent less than GDP growth, that’s austerity.”

Even independence supporters say that. Jonathon Shafi admitted that the approach would

“open the door to various forms of austerity politics”.

Ivan McKee rose—

Mr Rennie is in his last minute.

An independent country would face at least a decade of pain. It would have cuts to public services and would not have the back-up of significant oil revenues. It would have no control over its currency, and its economy would be prone to greater volatility.

Liberal Democrats are opposed to independence, and always have been. The commission confirms why we were right to oppose it in 2014 and why we are determined to stop it now. All the things that I want to achieve for Scotland—a country in which we invest in people through education and mental health services, champion science, innovation and research, take seriously our obligations to future generations and the environment, and treasure individuals’ freedoms and liberties—can be better achieved by our rejecting the nationalist case and the cuts and restrictions that it imposes on our country.

I move,

That the Parliament notes the analysis of the Sustainable Growth Commission; further notes the commission’s statements on public spending, the volatility of oil revenues, the economic volatility of small countries, Scotland’s control over the pound, and the extended period of financial pain, and believes that independence would be damaging for Scotland.

16:00  

First, let me say that the timing of this debate is very appropriate, coming as it does just hours after the shameful contempt that was shown to the devolution settlement at Westminster last night. Let us, for a moment—[Interruption.]

Members: Walk out then!

That is enough. Excuse me, Mr Mackay—[Interruption.]

It is their turn for out.

Enough, please. Mr Stevenson; that is not like you at all.

As I said, I understand that this is emotive, but it would be useful if we could all hear what contributors are saying.

Presiding Officer, the unionists may be able to shut us down at Westminster, but they will not do so in Scotland’s Parliament.

Perhaps we can spend a moment to reflect on Scotland’s current economic performance. We have had a record year for foreign direct investment, rising employment and record low unemployment, goods exports increasing by 12 per cent and the fastest growth in any part of the UK. The Royal Bank of Scotland’s purchasing managers’ index reports that, last month, private sector growth in Scotland was stronger than that in the UK as a whole. High employment, a highly educated population and innovative companies that export around the world, significant natural resources and huge renewable energy potential are just some key fundamentals of the Scottish economy.

If we look at what small, successful, advanced economies across the globe have that we have not, there is only one answer: independence. We have the potential to become one of the most successful countries in the world. First and foremost, the commission’s report is a report to my party, and I warmly welcome the debate that it has generated. It is, after all, about choices. It sets out how the London-centric UK economic model has failed and how we could grow our economy, tackle inequality and match the performance of the world’s most successful advanced economies. It explicitly rejects the UK Government’s austerity policies, because austerity is the price of the union—not of independence.

It is clear to those who have read the report that tackling the inherited financial position can be done with public spending rising. We should remember that the current notional deficit is the product of the current constitutional position and not of Scotland as it could be, and recognise that the UK is increasingly unequal in individual and geographic terms. With all the tools that an independent nation would have, we could improve productivity, participation and population and reduce both poverty and gender inequality. That would be the right thing to do in our own right, and would bring massive economic benefits to our nation. Having just launched the new national performance framework on Monday, we know just how important wellbeing is. The happiest nations in the world are those with the least inequality. It is clear that UK control does not suit our economic or social needs, with population being a case in point.

As Cabinet Secretary for Finance and the Constitution, I have set out how—even in devolution—three key areas could make a positive difference now against austerity, Brexit and caps on immigration. However, unionist parties keep telling us to hold on, which is holding Scotland back from what we could truly achieve. A migration policy—[Interruption.]

Excuse me, Mr Mackay. My eardrums are starting to get sore with all the nonsense that is going on between members. Please just have a bit of respect for each other and let Mr Mackay finish.

A migration policy that was designed in Scotland and for Scotland would welcome people with open arms, not throw up barriers. The UK Government’s hostile environment is failing Scotland’s economy and our public services, and I repeat the calls to the UK Government to stop damaging our economy and give us the powers to fix its mess.

Dogmatic unionism might not be able to see any upside to Scotland controlling our own fiscal policies, but this is a serious debate in which settling for more of the same is just not good enough. Every promise that has been made to Scotland has been broken. Devolution has been downgraded. Brexit is imminent against the will of our people, and our economic potential is in a fiscal straitjacket. That is the consequence of Westminster control with more to come.

Please come to a close.

There are paths that are open to Scotland to take rather than simply continuing to repeat the failing UK economic model and expecting different results.

You must come to a close.

I say to the unionists that “Too wee, too poor, too stupid” will not cut it this time. Scotland is ambitious. Scotland deserves better.

Close, please.

Scotland can be better. We will have that debate, and we are determined to win it.

I move amendment S5M-12708.4, to leave out from “notes the analysis” to end and insert:

“agrees that independence is best for Scotland’s future, and recognises that Brexit is a major threat to Scotland’s economy, society and environment.”

[Applause.]

That is enough. We are seriously pushed for time. We will end up losing speakers or having to cut their time right down.

I advise everyone in this chamber that I expect respect to be shown to the chair at all times.

16:06  

I thank the Liberal Democrats seriously for giving us at Holyrood the opportunity that was denied to SNP members at their conference at the weekend to debate the SNP’s growth commission. Is it not remarkable? They have all turned up. The SNP benches are full for this debate. How quickly they have forgotten the First Minister’s message at the weekend to stop obsessing about independence—it is the only thing that they care about and the only thing they want to come to the chamber to talk about.

There is no time this afternoon to debate the entirety of the growth commission report and I am sorry that that is the case. We cannot do justice to the whole 350 pages of what Alex Salmond’s former adviser Alex Bell described as a “political suicide note”.

There has been a lot of praise for our former colleague Andrew Wilson’s authorship of the report. Mr Wilson is indeed a credible figure and he put a lot of work into the publication. It is therefore rather unfortunate that it contains a number of schoolboy errors. One whole section has been lifted straight from a New Zealand treasury paper without any referencing. Despite the plaudits that the report has received in some quarters, it is nevertheless riddled with errors that make it a less than credible prospectus for an independent Scotland.

It is hard to know whether to be outraged or simply disappointed by the growth commission report. We should welcome the fact that the paper now represents a total repudiation of the 2014 prospectus for independence. The white paper on which that referendum was fought is now exposed as a compendium of inventions with its ludicrous overstatement of future oil revenues and the optimistic gloss that it put on public finances. It would be good to hear an apology from the SNP for its attempt to hoodwink the Scottish people just four years ago.

Let me give a few examples from the growth commission report and some quotes from better-qualified people on some of the proposals. On currency, the report proposes indefinite sterlingisation with a move towards a separate Scottish currency at some undetermined future point. The experts are clear that that is simply not workable.

Jeremy Peat, the former chief economist at RBS, said in 2014 that using sterling outwith a currency union would be

“wholly implausible, dangerous and highly unlikely to be optimal”.

Paul Krugman, the Nobel prize-winning economist, called sterlingisation very dangerous. There has even been criticism from within the SNP’s ranks, with the former MP George Kerevan, who fancies himself as a bit of an economics expert, stating that sterlingisation would lead to an independence campaign

“covering the same sterile ground as the last time”

and slamming Andrew Wilson as “dangerously naive”.

Further, the SNP’s favourite economist, Richard Murphy, said that the growth commission’s currency plan was “devastating” and gave five reasons why it would fail.

It is not only on currency that the report falls short. The proposals for public finances involve accepting “Government Expenditure and Revenue Scotland” figures as the starting point for an independent Scotland, which would create austerity max—austerity on a scale that this country has never seen. It would mean £27 billion-worth of austerity over 10 years, meaning massive tax rises and spending cuts.

Will the member take an intervention?

Mr Fraser is in his last seconds.

That is exactly why so many on the left—many of whom were part of the yes campaign in 2014—have rejected the growth commission’s proposals. Further, let us never again hear a member of the SNP bleating about austerity, because what the SNP is proposing is many times worse than anything that we have seen in the past.

We propose a simple addendum to the Liberal Democrat motion today, making just one point: we do not want a second independence referendum. It is not wanted by the Scottish people—not now and not in the near future. It would divide the country as the country was divided in 2014.

You must close.

This debate, and the publication of the growth commission report, are a distraction from the Government’s responsibility to get on with the day job.

Mr Fraser, you must close.

We know that it is the only thing that the SNP cares about, but the Government needs to get back to the business of government and stop talking about independence.

I move amendment S5M-12708.1, to insert at end:

“, and urges the Scottish Government to rule out a second independence referendum, in line with the views of the majority of Scottish people.”

16:11  

I start by thanking Andrew Wilson and the co-author of the report, Derek Mackay, for laying bare the fact that independence would be a disaster for Scotland. The reality is that it was not a growth commission but a cuts commission. Its proposals would pile pain on to Scotland’s communities and bring the country to its knees.

The report acknowledges the reality of the GERS statistics and the fact that we have a £10 billion deficit—the difference between what we spend and what we take in in tax. It says that it would take 10 years of cuts in order to reduce that deficit to 3 per cent of GDP.

Will the member take an intervention?

No, thank you.

The reality of that is that public services would be decimated. The SNP cannot deny that.

There is a supreme irony in the fact that the Liberal Democrats have brought this debate to the chamber, because it is a debate that the SNP does not want. There is absolutely no mention—[Laughter.]

Okay, that is enough. [Interruption.] Mr Arthur, that is enough.

They might be all packed behind Derek Mackay today to be cheerleaders for independence, but, at the conference in Aberdeen, they were as quiet as mice.

Will the member take an intervention?

No thank you, Mr Mackay. Why do you not go back to Aberdeen and start the debate that you did not have the conference?

The reality is that the SNP did not want to expose the divisions that exist in the party over independence. There are those who would have an independence referendum every week and there are those who want to shut their eyes and ignore the facts of the cuts commission report.

As they do the navel gazing on independence, they turn away from the reality of what is going on in the country and ignore the core issues. Any MSP who is worth their salt knows that the main issue that is raised with MSPs is the national health service. Constituents are not able to get appointments in time and some are not able to get general practitioner appointments.

Labour is budgeting for much less than we spend on the NHS. That is what its manifesto says.

Mr Stewart, please be quiet.

Although the Scottish Government makes assertions on housing, the reality is that there are 150,000 people on council house waiting lists. There are people not far from this Parliament sleeping homeless on the street. What a scandal! Yet the people on the SNP benches would rather discuss independence.

Will the member take an intervention?

Mr Kelly is coming to a close.

I can tell Mr Mackay that what is needed is a real debate and a real plan to transform the fundamental issues and to grow the wages that are stagnating in Scotland, but we did not hear any mention of the living wage in the cuts commission report. Perhaps that is because the Government did not even discuss it with the trade unions. There is no social justice at the heart of that report.

Scotland does not want another referendum. It is time to bin the cuts commission report and the idea of a second referendum. It is time for a radical rethink. Let us stop the cuts and invest in our communities.

I move amendment S5M-12708.2, to insert at end:

“; regrets that the growth commission did not seek the advice or opinion of trades unions on its plans, which it considers would mean a decade of unprecedented austerity with no control over the value of wages, rent and mortgages; notes that the economic and social transformation Scotland urgently needs will not come from another referendum on leaving the UK, and believes that this will only come from Labour’s plans to tackle poverty and inequality, extend public ownership and redistribute power.”

Can I have some quiet, please? I may as well warn you all right now that speakers will probably have to have time taken from them because of all the unintended interventions. I call Patrick Harvie to speak to and move amendment S5M-12708.3.

16:16  

I am sorry, Presiding Officer. I did not realise that we were playing today’s debate for laughs. I came here to debate and to challenge the SNP’s growth commission. We do so even in the context of a warning from the Liberal Democrats about an extended period of economic pain—from the political party that put the Conservatives into power and helped begin the austerity project.

My reaction to the growth commission has to begin with the long-standing Green critique of growth economics itself—the idea of everlasting growth in a finite world and a fragile ecosystem that is already under extreme pressure. Even while it lasts, growth alone tells us nothing about how fairly wealth is being shared in our economy or how unfairly the social and environmental burdens fall.

I contrast that with some of the words in the national performance framework, launched this week, as Derek Mackay mentioned. The First Minister, in launching it, quoted the famous words of Bobby Kennedy, that growth alone

“measures everything ... except that which makes life worthwhile.”

The performance framework places emphasis on wellbeing, equality, health, human rights and the quality of our environment, but it still places economic growth at the core, and the growth commission fails to go even as far as the NPF. There is a clear mismatch between those two ideas of the economy—a contradiction that lies at the heart of SNP economic policy.

Even aside from the absence of Green economics in the growth commission report, other serious concerns remain. During 2014, we set out our reasons why we thought that a currency union was an unconvincing proposal for an independent Scotland. It would have left a complete lack of monetary and macroeconomic control. To say that sterlingisation gives rise to the same concerns would be an understatement. It is even possible that sterlingisation itself would prevent the kind of economic agenda that would allow Scotland to meet the commission’s own tests for beginning the move toward an independent currency.

For anyone supporting independence out of a fetish for flags, that kind of issue might be of little concern. I have never been one of those people. For the Greens, if independence meant a version of conventional economic policy decided here instead of in London, we would have little interest. No, independence must, if it is to be a compelling proposition, be a project of economic transformation to a more equal, more ecological and more humane economy as we embrace the post-oil age. That is the agenda that the Greens have set out, and it contrasts with what the growth commission has published.

Will the member give way?

I do not have time; I have only four minutes.

We will continue to set out that agenda, even before independence. The demand for a specific net-zero carbon target in the Climate Change (Emissions Reduction Targets) (Scotland) Bill is one current example of the determination to achieve transformation that Scotland must show, right now, to assure our future direction of travel.

I welcome the publication of the growth commission report, not as a proposition to fall in line behind, but as an invitation to contest the ideas that it contains—ideas that need to be contested.

Finally, I was surprised and disappointed to see a motion from the Liberal Democrats that is headed “Finance and the Constitution” but which says nothing—not a single word—about the most immediate and urgent financial and constitutional threat to Scotland. The Liberal Democrats say that they want to oppose Brexit and all the self-destructive chaos that it is bringing—but there is not one word about it. That is why my amendment ends with a recognition of the positive economic, social and environmental policies that Scotland could be putting into practice as a full, independent member of the international community and the European Union.

I move amendment S5M-12708.3, to leave out from “Sustainable Growth Commission” to end and insert,

“SNP’s Sustainable Growth Commission; further notes concerns that the commission’s report relies heavily on a flawed economic model that places GDP growth ahead of broader measures to increase Scotland’s prosperity; further notes the Scottish Green Party’s publication, Jobs in Scotland’s New Economy, which argued that, by focussing on delivering low-carbon improvements across the energy, land-use and industrial sectors, Scotland could create over 200,000 new green jobs, and recognises that similarly-sized small countries are successfully implementing progressive economic, social and environmental policies that Scotland could match as a full independent member of the international community and the EU.”

16:20  

Throughout the debate, sedentary members have suggested that it is only ever the unionist parties that reference independence. I want to take that suggestion head on because, to be frank, I am not having it.

The governing party’s calculations of the appropriate time to push the button on a second independence referendum starve the oxygen from nearly every other public policy issue. That is why Opposition parties have to have debates like the one that we have just had on mental health, on the treatment and waiting time guarantees, on farm payments and on the attainment gap. Independence and the calculations around indyref 2 are the centre of gravity of, and suck all the oxygen from, every other debate in this Parliament. Yes, we will keep raising the issue and insist that the Government takes it off the table once and for all and gets on with the business of service delivery.

Will the member give way?

I do not have time.

I will say a word about the tone of those on the Government benches. The laughter and derisory comments may give the Government and SNP members some comfort, but it absolutely repels people on the margins of this debate around the country. SNP members will lose as a result, and I am glad of that. I am glad of the growth commission; I never thought that I would say that.

Will the member take an intervention?

I am not going to take an intervention; I do not have time.

I am glad of the growth commission report because, after all the years in which it has been talked about and mythologised in hushed, reverential tones, when it was finally published, it was revealed within hours as the unforced tactical error that it has been shown to be. It has fundamentally holed any economic case for independence below the water line—so I thank God for it.

The yes campaign mythologised the growth commission; it was there to win over us pesky no voters who were still clinging to our facts. There we were, getting it right. We were worried about the commission and we thought, “What have they got up their sleeves?” However, when the report was finally published, I thought, “Goodness. Wow. It is not ‘What have they got up their sleeves?’ but ‘Is that it?’”

It took a little while for incisive analysis to come forward. Some usually ardently pro-UK journalists talked about interesting comparisons with Hong Kong and New Zealand and that must have lit the touchpaper, because guns were suddenly drawn in the yes camp. One reason is that the left in the indy camp did not like the report, and we have just heard some reasons why from Patrick Harvie; it represents austerity on steroids. The highly respected think tank the Institute for Fiscal Studies pointed rightly to the fact that austerity is classified—

Will the member give way?

I will not take an intervention.

Austerity is classified as when public spending gets 1 per cent below GDP. By the growth commission’s own assumptions, it would by necessity have to dip 3 per cent below GDP, such is the admission of the economic case—or lack thereof—for an independent Scotland.

It is no wonder that there was no mention of it at the SNP conference. It is astonishing that the Government, with its amendment, seeks to delete the motion, including that the Parliament “notes the ... Growth Commission”. If the Government wins the day this afternoon, we will not even know from the parliamentary records that the growth commission existed, such is its embarrassment at what the commission has revealed.

Last week, a social attitudes survey revealed that 59 per cent of our fellow countrymen feel strongly British. That warms my pro-UK heart because, finally, that might loosen the constitutional knot that has stifled debate on any public policy. Keith Brown may believe that he has a mandate from his election for indyref 2. We will fight that every step of the way; Liberal Democrats will oppose it at every stage of the constitutional process. I am an internationalist, and I believe in political unions when we are geographically close to people and when we share their values. The best days of the United Kingdom still lie ahead of us.

Thank you. I encourage members to keep it down a little bit. You were chatting incessantly over the member.

I can see members who are to contribute asking how long they will have. I am afraid that the tail-end speakers will probably get less than their four minutes, just because of the length of time that it is taking to get through the contributions.

Because of that lot.

That is enough, Mr Findlay.

16:25  

Before I came into this Parliament, I worked in business and travelled the world, and I spent a lot of time living in small, independent countries. I always used to ask myself why it was that those countries had it so much better than we do. They had a higher standard of living and less inequality. They had far fewer natural resources and far fewer qualified people than we have, with five of the top 200 universities in the world being in Scotland.

The growth commission report provides the answer. It explains empirically that, over the last 25 years, those small countries have had growth rates of 0.7 per cent on average per year higher than larger equivalents. It also explains the reasons for that. It explains the global trends that drive the advantage in trade terms towards countries of that size.

Will the member take an intervention?

No, I am too busy.

It explains why countries of that size are more efficient and more effective at managing themselves, growing their economies and providing efficient public services. [Interruption.] That is absolutely true.

The growth commission also shows the path forward—how Scotland can get from where we are now, suffering under the union, towards the situation that those small countries enjoy. It lays out the 50 recommendations that we need to follow. It shows the path for growth through the increase in population, in participation and inclusion in the workforce, and in productivity.

It shows what we can do now, what we can do with more powers under devolution and what we can do with the full powers of independence. It shows that path forward, from where we are now to where we need to be to realise the full potential of this country of ours.

Let us be very clear: the growth commission report rejects austerity. It talks about plans to grow public spending by 0.5 per cent, growing public spending by 5 per cent in real terms over 10 years. Compare and contrast 5 per cent growth in real-terms public sector spending with what we have seen over the last 10 years of true Tory austerity—a cut of 9 per cent. Minus 9 per cent is austerity; plus 5 per cent is the opposite of austerity. Let us get that clear right from the start.

The report is also very clear that it calls for cross-partisan working—across parties, society, industry and everybody who is involved—to ensure that we realise the potential of this country. It is very important that all the parties here realise that and understand what it means.

The reality is that we have seen no alternatives coming forward from anybody else on how to deal with Scotland’s situation and move it forward—nothing at all. On the one side, we have Tory austerity and more of the same—a power grab that takes powers away from Scotland, limiting our ability to do what we need to do. We have that wrapped in the union flag. No, thank you.

On the Labour side, very few of whom have bothered to stay to talk about the future of Scotland and its economy, we have “Waiting for Corbyn”. I will tell you something: I have been waiting 40 years for a Labour Party that is going to do something to fix the economy and move us forward, and I am not going to wait another 40 years, because in 40 years I will be deid and so will you, and we are not going to see anything.

I realised a number of years ago that the only way forward was through independence for Scotland and that is why I am standing here today. Where we are going with the growth commission report is the future. The debate is happening here, it is happening on the yes side, it is happening with people who are undecided and it is happening across civic society in Scotland. That will continue because the reality is that we know where we are going. The growth commission report is the future. It is how we are going to take Scotland forward. We know it.

The people of Scotland are increasingly coming to realise that—[Interruption.] Murdo Fraser is laughing, but what is scaring him witless as he sits there is that, for the first time ever, polls show that the majority of people in Scotland realise that they would be better off under independence than they are under the union. That is the fact and that is where we are going. We know that it is coming. The people of Scotland know that it is coming. That is the future. Get yourself on the right side of history for once.

Thank you very much. Before I call Alexander Burnett, I will say that Neil Bibby and Stuart Macmillan will have three rather than four minutes. Mr Burnett, you have four minutes.

16:29  

Thank you, Presiding Officer, and I also thank Willie Rennie for bringing this important topic to the chamber today.

As much as the SNP likes to think that the growth commission’s report is an optimistic case for independence, the only thing that it is good for is for giving us a blueprint of why the SNP is out of touch with Scotland.

Where to begin? I have only four minutes in which to make a dent in the ridiculousness of the report, so let us get into it. As an MSP from the north-east of Scotland, I was interested to see what the commission had to say on the oil and gas industry. I was surprised that it had something to say, considering that the Government has failed to support the industry over the past four years.

The UK Government has provided more than £1 billion of support, but the SNP’s token of the transitional training fund has provided little relief to the people who have been affected by the oil crash. I note that the growth commission says that its projections are not based on reliance on the oil and gas industry, so I worry about how the commission expects to support the sector, if we were to leave the UK. There is much discussion of tax revenues and projections, but no specifics on how the commission would support the industry.

That is not the only thing on which the commission has provided little detail. In fact, there is no mention of the minimum wage, the living wage, the benefits cap, food banks, fuel poverty, the earnings limit and inheritance tax bands, and there is absolutely no mention of any policy on the national health service. It will come as no surprise, particularly to constituents of mine in Aberdeenshire West, that the SNP has given no thought to the NHS.

My constituents will also not be surprised to hear that the SNP will offer tax incentives to people who choose to come and live in an independent Scotland, but that there is no mention of what the people who are already living and working here will pay.

A Government should be able to attract individuals to our country and to project an image that is favourable to investors, and separation is not the answer.

Will Alexander Burnett take an intervention on that point?

I will not be taking any interventions. If the SNP wanted to debate the issue, it could do so in its own time, rather than force the Liberal Democrats to bring the matter to the chamber.

I am disappointed that, instead of answering questions on how to improve investment and productivity and boost our economy, the SNP has responded by setting up three new commissions, six new strategies, four new reviews, one new strategy review and one new standing council—15 in total—which only add to an already cluttered landscape. As the Fraser of Allander institute has said, that leads to

“confusion, a lack of alignment, duplication and weakened accountability.”

If the SNP were to focus more on the issues at hand, perhaps it would not be trying to use leaving the UK as the answer to all its problems, because it is not, and even the Government’s statistics show that. We trade nearly four times as much with the rest of the UK as we do with the European Union. With more people coming to Scotland from the rest of the UK than come from overseas, it would be irresponsible to separate from our own nation. I ask this of the SNP Government: focus on Scotland, now.

16:32  

As others have said, it is interesting that the Scottish Liberal Democrats have chosen to use their debating time in the chamber to discuss the report. It is not only interesting but deeply telling. When a report is put on the back burner for months and, when it is finally put into the public domain, it is published over a bank holiday weekend, we have to ask why. That is not because the SNP has reacquainted itself with the day job; it is because the SNP’s growth commission has left the party’s case for independence exposed.

It is no wonder that there are concerns about the report. As the Institute for Fiscal Studies has made perfectly clear, it marks a “continuation of austerity”—not an escape or an alternative, but a “continuation”. Let us look at why.

First, on currency, the report states:

“The Commission recommends that the currency of an independent Scotland should remain the pound sterling for a possibly extended transition period.”

That means an independent Scotland using what would become the currency of a foreign country for an extended period. That would mean having no control over money supply or interest rates, and no power to issue debts to finance investment or growth. The move would come with severe costs. For instance, according to Professor MacDonald of the Adam Smith business school, pegging a new currency to the pound would require currency reserves of anything between £30 billion and £300 billion.

On public spending, the commission proposes a decade of cuts. It also proposes that an independent Scotland would pay an annual solidarity payment to the UK that is bigger than Scotland’s education and justice budgets combined.

As the Labour amendment states, the SNP has not engaged with Scotland’s trade unions on the report. That is evident from reading the document and seeing the scale of the cuts.

Will the member take an intervention on that point?

Mr Mackay did not take any interventions.

The growth commission has much to say about the costs of Brexit. Brexit comes with costs for Scotland and the UK—of that there is no doubt—but the report has precious little to say about the costs to Scotland of leaving the UK. Leaving a 40-year-old union is a big challenge, but so is leaving the 300-year-old union of which Scotland has been an integral part for generations, and it is time that the SNP was up front about that.

The alternative to Tory austerity is not more austerity; it is an end to austerity altogether and a radical shift to a new kind of economy that mobilises the talents and resources of our whole country. We want an investment-led economy in which we stop neglecting our infrastructure, our people and our industries, and prioritise sustainable and inclusive growth; in which businesses play by the rules, and the rights of workers and trade unions are respected; and in which public services are run in the public interest; and in which we reassert the importance of public ownership and co-operative ownership so that there is democratic control of the Royal Mail and our railways. We want an economy that works for the many and not the few.

The change that this country needs is a UK Labour Government that is committed to ending austerity and to the economic and social transformation of Scotland and the UK. That is why I will vote for the Labour amendment today and for our vision of a better and fairer future for our country.

16:35  

I thank the Lib Dems for bringing this important debate to the chamber today. Their timing is impeccable.

I will never demur from my belief that the only way that our nation can even begin to reach its potential is by being an independent country.

The Lib Dems, in their various guises, have for many years campaigned for federalism, which has been rejected repeatedly at the ballot box. However, they did not go away and change their policy. Why should they, if they believe so strongly in it?

On devolution, perhaps Willie Rennie in his summing up can explain why members of his party abstained—or, in Wera Hobhouse’s case, voted both ways—in the House of Commons last night when they had a chance to try to protect the powers of the Scottish Parliament in the face of the hard Brexit that might be coming our way. Perhaps he can explain why his federal colleagues, some of whom are Scottish MPs, decided to sidle up to the Brexit legislation that will limit this Parliament’s powers for up to seven years, even though Mr Rennie and three of his colleagues in the Scottish Parliament voted to protect those powers very recently.

We have James Kelly’s amendment from the parallel universe in which he lives. We have the weakest Tory Prime Minister on record, but Labour is still behind the Tories in the opinion polls. People attacked Michael Foot when he was leader of the Labour Party. I am sorry to break it to James Kelly, but Jeremy Corbyn is not even a poor man’s Michael Foot.

We saw Labour’s capitulation last night in the House of Commons, when they effectively gave the Tories free rein to do what they want to this Parliament and to Scotland. They are leaving Scotland to the excesses of even more people going to food banks, even more people struggling because of universal credit and the discredited personal independence payments, even more people being affected by the rape clause, and even more skilled migrants being blocked from coming here to work in our health service and in the farming, fish processing and tourism sectors. James Kelly and his colleagues will therefore have a lot of explaining to do now and in the future when our unemployment rate starts to go up, when the cost of living starts to increase and when the demands on the Scottish Government start to increase despite the cuts from Westminster being ever present. Perhaps James Kelly can answer how his amendment will be delivered when he sums up.

We also have Murdo Fraser’s amendment, which is from the party that did not want devolution in the first place. If ever an example were needed, the events that we have seen under the Tory Administration in Westminster since 2010 have shown that the nasty party is well and truly back. They have the so-called cuddly Scottish Tories to provide the human shield for the vindictive policies that emanate from Downing Street, and the extreme right wingers Johnson, Gove and Rees-Mogg are dangling a weak Prime Minister like a marionette dancing to the hard Brexit tune.

This should be a wake-up call to the people of Scotland that Westminster does not respect Scotland. It never has and it never will. The fact that a Tory MP shouted that suicide should be an option when Ian Blackford MP asked the House of Commons’ Speaker what options were available, should tell Scotland everything that we need to know about the nasty and vindictive Tory elite that is based in Westminster and which, unfortunately, is available across the UK.

That is why I will back the finance secretary’s amendment tonight. Anything less would be doing Scotland a disservice, and would fail to recognise that when Scotland becomes independent we—the people of this nation—will make it the country that we want it to be.

I thank Neil Bibby and Stuart McMillan for getting us back on time.

16:39  

I am grateful to the Liberal Democrats for bringing the SNP’s growth commission report to Parliament for debate. It is right that we debate Scotland’s constitutional and economic future.

However, I have been absolutely bowled over by the brass neck of Willie Rennie in lodging his motion. It talks about

“the extended period of financial pain”.

That is something that the Lib Dems know a great deal about, as other speakers have mentioned. The Lib Dems are the junior architects of the round of “financial pain” that we have endured since 2010. Their ideologically driven austerity has seen child poverty in Scotland and the rest of the UK rise, and their Westminster coalition Government implemented an agenda of cuts to public services of which about 80 per cent of the damage was felt by women, so I am in no mood to take seriously Mr Rennie’s lectures on austerity.

Although much of Mr Rennie’s criticism of the growth commission is not incorrect, his conclusion is wrong, and the Greens will not support his motion or, as a result, the Conservatives’ amendment.

I will touch on the Labour amendment, which I find interesting. Labour is right to criticise the fact that the list of contributors to the commission, which is allegedly on sustainable growth, did not include a single trade union. One could say that the client list of Charlotte Street Partners would be delighted with the result of the document.

The Scottish Trades Union Congress was in the commission’s engagement strategy. I was a member of the commission, and much of the work that the trade unions would, I am sure, want to see on productivity and participation are in the growth commission. The thoughts of trade unionism can be seen in the growth commission.

No, they cannot. The fact is that not a single trade union was invited to contribute to the document on the same terms as the Confederation of British Industry Scotland or the Institute of Directors. That is a failing on the SNP’s part.

Labour’s criticism of the reheated neoliberal economics at the heart of the growth commission mirrors much of what the Greens have said, but the amendment in James Kelly’s name is wrong to say that economic and social transformation cannot be achieved through a referendum on independence. It is certainly wrong to say that only Labour’s plans would bring about that transformation. We heard the same in 2014—that we should vote no because a Labour Government was just over the horizon and would undo the damage that the Tories had inflicted on Scotland. That failed to materialise in 2015 and 2017; it does not look likely to materialise any time soon.

The situation is even worse with Brexit. The economic analysis that was commissioned by a committee of this Parliament found that we are set to lose 80,000 jobs and that average wages will drop by £2,000 as a result of a hard Brexit. That makes Labour’s capitulation to the Tories’ hard Brexit utterly shameful.

The Labour amendment also fails to understand why independence is so necessary for Scotland. We do not want to put our future in own hands simply because of Tory Governments since 2010. We believe in independence because of the UK’s structural long-term failure to act in Scotland’s interests, and because of the potential that independence has to bring about the social and economic transformation that the Greens—and many Labour people—want.

It is precisely because of the potential for transformation through independence that the Greens consider that the SNP’s growth commission has failed to offer either a compelling case for independence or an economic plan that meets Scotland’s needs. Scotland needs independence to break with the failed GDP-growth-obsessed crisis capitalism of the UK; to break with its dependence on and subservience to the financial sector in the City of London; to recognise the urgency of climate science and transition rapidly from an oil and gas industry that is bringing the world to its knees, while it sheds jobs here in Scotland; and to build an economy that supports a renewed social contract that will transform our society into one that our communities deserve.

The Green amendment mentions “Jobs in Scotland’s New Economy: A report commissioned by the Scottish Green MSPs”, which presents a vision for a jobs-rich future for Scotland, if we invest rapidly in the transition from fossil fuels to sustainable industries.

We do not consider that we—or any other party—have all the answers, but the vision that we contribute to the debate is one in which a Scotland that has all the powers of an independent nation is fully committed to an economy of quality jobs, underpinned by strong workers’ rights and vibrant trade unions. We consider that Scotland’s interests will be best served if we take a different path and are brave enough to do things differently, beyond simply settling for independence. However, the very first step is to put our future in our hands, and the Greens will proudly vote for that today.

16:43  

Andrew Wilson, the author of the SNP’s cuts commission, is a former RBS banker and now a corporate lobbyist with Charlotte Street Partners, which is one of the most powerful and well-connected lobbying companies in Scotland. It is important to know that because we can then begin to understand the philosophy behind his report.

Wilson and his fellow commissioners, who unanimously signed off the growth commission report, have penned a blueprint for independence that has a commitment—fully endorsed by Derek Mackay and Shirley-Anne Somerville—to ultra-free market neoliberalism engrained in it.

The report is a committed to current economic orthodoxy. There is no attempt to address external ownership of the Scottish economy. There is nothing on tax reform and nothing on challenging or controlling the hoarding of wealth by the few at the expense of the many. The report was written precisely to lure in the people who are on Charlotte Street Partners’ corporate client list—that is who it is aimed at. It contains a pick and mix of policies from other countries, and plagiarised reports are presented as a blueprint for a Conservative economy.

The report advocates a Scotland of fiscal restraint: a country of reduced and reducing public spending, whose interest rates and monetary policy are set by another state. It sells us a view of the world that countries with low public expenditure are doing better than Scotland is doing as part of the UK, but it is talking about a Scotland that would no longer benefit from the Barnett formula, a Scotland where public investment would reduce year on year and a Scotland which, if it was accepted back into the EU, would be subjected to a 3 per cent deficit limit as well as a solidarity payment. All the while, it would have no control over interest rates or monetary policy, and the currency would be controlled by the chancellor of a foreign state in whose Parliament we would have no political representation or influence.

That is not what motivated many people to pound the streets for the yes campaign in 2014, who are rightly infuriated by the report’s adherence to a failed economic model that inevitably and purposely increases inequality. That is a betrayal of many of the people who supported the yes movement in 2014. As The Herald columnist lain Macwhirter said,

“Nicola Sturgeon, who was always thought of as a dedicated left-winger”—

mebbes aye, mebbes naw—

“has found herself defending a document that reads in places like one of George Osborne’s Budget speeches.”

Robin McAlpine of the Common Weal said:

“the commitment to a deficit reduction programme, an incredibly low public debt ceiling and a commitment to peg public spending below the rate of GDP growth already has a name—it’s called Austerity.”

Those are not my words; they are the words of commentators who believed that the SNP was a party of the progressive left. The report lays bare the fact that it is not.

The cuts commission seeks to emulate countries such as Finland, New Zealand and Sweden, but it completely fails to acknowledge the social, economic and political history and culture of those states, which have higher trade union densities and higher taxes on the wealthy, and where unions are active partners in the economy. The SNP ignores all that. Instead, it wants to recreate a low-tax, low-spend model. It is not interested in advancing serious economic change. The only change that the SNP wants to see is a change in the colour of a passport or in a line on a map.

How on earth could we maintain a strong welfare state, afford pensions and the NHS and fund modern public services if public spending grew at 1 per cent less than growth in GDP? In recent years, the SNP has sought to attract working-class voters by offering them a vision of independence that is very different from what is offered by the current UK Tory Government. The report suggests that the SNP has completely abandoned them in favour of the Sir Angus Grossarts of this world.

The choice in Scottish politics is now between more cuts and austerity with the SNP or the Tories, and a Labour Scotland that will deliver progressive policies; invest £20 billion in a Scottish investment bank worthy of the name; encourage domestic ownership of industry; crack down on corporate tax avoidance; and deliver progressive taxation and a living wage of £10 per hour. Socialism and nationalism are very different political philosophies; the commission’s report makes that even clearer.

16:48  

I was going to thank the Liberal Democrats for making their time available to hold this afternoon’s enlightening debate, which I think has shown Holyrood in its best light, but I will allow the Official Report to speak for itself.

Amid the noise, I have been able to pick out three themes in the debate. The first is that the core recommendation of the growth commission is fatally flawed. The use by an independent Scotland of the currency of what would be a foreign power would be ruinous for the economy and would be dangerous for political stability. Sterlingisation, which is the commission’s core idea, is a terrible idea. It is implausible, it is unworkable and it is dangerously naive. It was rejected in 2013 by the SNP’s own fiscal commission. More recently, it was condemned by former SNP MP George Kerevan. It has been busted as a credible option by economists as diverse as Anton Muscatelli, Paul Krugman, Richard Murphy and Ronald MacDonald. It would not be a recipe for independence; it would make Scotland more dependent on a monetary policy that would be set elsewhere—not elsewhere in the same state but elsewhere in what would become the capital city of a foreign power. That is the core idea of the growth commission. No wonder Alex Bell described it as a “political suicide note”.

That is the first theme, which is flawed and holed below the waterline.

The second theme that has come from the growth commission is more valuable, and I thank it for that. The principal purpose of the growth commission has been to expose and reconfirm just how threadbare the 2013 independence white paper was. As Murdo Fraser described, it was a “compendium of inventions”—not just on the currency but on oil. Alex Salmond talked of “a second oil boom”; Nicola Sturgeon talked of “a second energy bonanza” and the “boom years ahead”; and John Swinney talked of a “massive oil boom”. Only now—four years on—does the growth commission finally concede how desperately misleading all those comments were. It says that windfalls

“should be treated as windfalls and not depended upon for recurring annual commitments.”

Yes—indeed.

On pensions, all the uncosted fairytale promises of the white paper have been torn up, jettisoned and dumped. The same is true for welfare, with U-turn after U-turn after U-turn.

The same is true for transition costs. [Interruption.] SNP members do not want to listen to this. On transition costs, the white paper was silent and Nicola Sturgeon was hopeless on Channel 4 just the other day. The growth commission is risible on the matter. It says that it will cost £450 million to set up a new state. We are to believe that the information technology to deliver common agricultural policy payments in Scotland and the creation of a new Scottish social security agency will somehow be more expensive than setting up a new state from scratch. We needed not a fresh blueprint for independence but an apology from Derek Mackay and the troops who are assembled behind him for hoodwinking the Scottish people with a risible white paper in 2013.

The third and final theme that has emerged from the high-quality debate that we have all so much enjoyed is perhaps the most important. Independence would make everyone in Scotland poorer. Independence would mean austerity on steroids. Debt would take 96 years to pay off. There would be £27 billion-worth of cuts in the first decade alone. Business would flee. The economy would tank. Independence would mean even slower growth that we have under Derek Mackay’s economy, and even higher taxes than we have under Nicola Sturgeon’s SNP Government now. Independence would be a disaster for Scotland. We said no; we were right, and we meant it.

16:52  

First, I will respond to some of the points that have been made during the debate and make the case that the best future for Scotland is an independent one. It is always a pleasure to make the case for Scottish independence, even though it is talked about much more often by Opposition parties than it is by the SNP.

Why are we having the debate now? The cat has been let out the bag. In an article in The Scotsman yesterday, Alex Cole-Hamilton admitted that the prospect of the growth commission’s conclusions caused

“shudders of ... anxiety and nervous glances”

among the unionist parties. In short, they are scared stiff of a debate about the positive and inclusive vision for Scotland. So they should be, because let us look at things as they stand: foreign direct investment is at a record level and supporting 6,400 jobs; exports are increasing much faster than they are in the rest of the UK; RBS projects that growth in Scotland will outpace growth in the UK; employment in Scotland is at record levels; and apprentice targets are being met. As Ivan McKee said, there is record confidence in the prospects of the economy of an independent Scotland. That is what the unionists are so scared of.

It was telling that none of the main spokespersons for the Opposition parties wanted to take any interventions. Alex Cole-Hamilton, like Jo Swinson, now takes an ultra-unionist position. Jo Swinson has said that she has pleaded with the Tory Prime Minister not to take any cognisance of the democratic mandate of the Scottish Parliament. A Lib Dem saying that the UK Government should take no cognisance of the Scottish Parliament’s decisions is shocking.

There was not a word about Brexit during the Liberal Democrat contributions. Members should look at the Daily Record today. Everybody knows that withdrawal from the EU is the number 1 risk to the economy. There was not a word from the supposedly EU-supporting Lib Dems about the prospects of Brexit.

Murdo Fraser’s contribution was a back-to-the-future one. Some people might remember “The New Statesman” programme from the 1980s. A certain character called Alan B’Stard, who was, of course, an ultra-right-wing Conservative, was the star of that programme. I just wonder whether we have a whole bunch of B’Stards here today in the chamber.

On the issue of engagement, we had a discussion about city deals in the Parliament’s Local Government and Communities Committee today, which the UK Government did not turn up to. I have just heard that David Mundell has once again been in touch with the Scottish Parliament to say that he will not appear before the Justice Committee tomorrow. So much for engagement from the Conservatives.

I am sorry to have to say this about him, but James Kelly took no interventions, made no suggestions and had nothing positive to say.

Will the cabinet secretary give way?

No, I will not.

It is worth remembering that the Labour Party ushered in austerity for Scotland. We all know that the last words of the Labour Government were that there was no money left.

There was, of course, much to support in what Patrick Harvie and Ross Greer of the Greens said about the sustainable growth commission. We have different ideas on that, and we are perfectly willing to engage in a proper debate. I have said that I am more than happy to discuss with other parts of the yes movement, including the Green Party, their proposals for continued growth in Scotland. That seeks to elevate the debate from the depressing Brexit-dominated nightmare that we face under the Conservative Party, especially after the votes in the House of Commons in the past couple of days.

It is quite clear that the unionist parties are, as Alex Cole-Hamilton said, riven by

“shudders of ... anxiety and nervous glances”.

Well they might be, because the Scottish Government, the Scottish National Party and this country are united. It might interest members to know that, just this afternoon, the SNP has attracted 1,000 new members. That says to me that people in Scotland have seen the way that Westminster fails to take into account, and can never properly take into account, the views of the people of Scotland. The country and the SNP are united behind trying to get a better future for Scotland, and it is increasingly evident that the support for that is widespread. I am perfectly happy to take on debates. We are ready and Scotland is increasingly ready for independence for Scotland.

16:57  

The debate has been constructive, with many considered and thoughtful contributions, including from that great SNP thinker, Keith Brown. However, he must learn to read the whole of Alex Cole-Hamilton’s sentences rather than just the first half of them.

There have been many great contributions, including from Derek Mackay, who rejected UK austerity. Apparently, it is not enough for him: the SNP wants even more austerity.

Murdo Fraser quite rightly said that the growth commission’s report is a “repudiation” of the 2014 white paper, which was “a compendium of inventions”.

I thought that Tom Arthur was rather unfair. In the middle of the debate, he bellowed, “We’re doomed.” Even I did not describe the growth commission like that.

I seriously, genuinely and in a heartfelt way say that I am grateful that SNP members have stayed for the whole of the debate. I am really touched that they wanted to listen to my contribution at the end of it.

The SNP’s amendment is fascinating. It would delete references to many things in our motion. I can accept that the SNP might not agree with everything in the motion, but it would even delete the reference to its own growth commission, such is the embarrassment about what the growth commission has said.

The Greens’ amendment highlights many of the divisions in the nationalist movement. If the Greens really believe what they say—I do not doubt that they do—they will vote against the SNP’s amendment because if it is agreed to, the Green amendment will fall. If they have the courage of their convictions, they need to vote against the Government amendment, otherwise their words will mean absolutely nothing.

Ivan McKee was not comparing like with like when he looked back at public spending. Under SNP rule, there would have been a 2 per cent real-terms cut in public spending over the past period. There would have been an increase in cuts under the SNP—he needs to be more accurate about that.

People at the heart of the yes campaign are furious that the growth commission has confessed. They are upset that they will not be able to get away with what they told people the last time. It is not about principle for them; it is about votes. Former senior MP George Kerevan warned that the commission risked “robbing” the next independence campaign of working-class support. Jonathon Shafi said that it would be a “very hard sell” to voters. Colin Fox was alarmed and said that the commission

“risked driving hundreds of thousands of former Yes voters into the hands of Jeremy Corbyn.”

They are right to be concerned that the yes campaign will haemorrhage votes, because we now have the truth about independence from the growth commission.

Several members mentioned Brexit, and others cannot criticise the Liberal Democrats on Brexit. We are forthright about our opposition to Brexit. If only SNP members would have the courage to back the people’s vote so that we could reverse the damage to our economy. Perhaps there is some common ground with the nationalists on that, but I cannot understand why those very same nationalists believe that there will be no economic shock from withdrawing from the United Kingdom economic and political union, especially when our integration with the UK economy is even greater than that with the EU economy. To complain about the economic shock from EU withdrawal while denying that there would be an economic shock from UK withdrawal defies logic. The growth commission report would have been stronger if it had admitted that.

We used to be told repeatedly that we would be better off under independence, but now we find that we would be stumping up billions of pounds for the UK for years after independence. It is just like Nigel Farage promised. We will end up in the same situation with the SNP: the future of the NHS would be undermined by the weakness of the Scottish finances in an independent Scotland. To be clear: to save the NHS, we need to remain in the United Kingdom. That is the best future for our country.