Meeting of the Parliament

Meeting date: Thursday, November 3, 2016

Official Report 947KB pdf

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First Minister’s Question Time

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Engagements

To ask the First Minister what engagements she has planned for the rest of the day. (S5F-00400)

Engagements to take forward the Government’s programme for Scotland.

Later today, the Parliament will be asked to vote for an increase in council tax. We on the Conservative benches accept the need to end the council tax freeze and to increase rates for people in the very largest homes, but we think that the Scottish National Party’s plans go too far by hitting thousands of ordinary working households.

Today, trade bodies are warning that we should be wary of putting up taxes too much and adding to the pressure on families who are struggling with higher inflation while consumer confidence is fragile. Will the First Minister tell us why those trade bodies are wrong?

In every tax proposal that we have put forward, we have sought to be responsible, balanced and progressive. I remind Ruth Davidson that we put our proposals on council tax to the Scottish people in the election in May this year, which we won. In fact, the SNP scored more votes in the election than the Conservatives and the Labour Party combined, so there is a significant mandate to take forward our proposals.

Our proposals are reasonable, balanced and progressive. They increase council tax for people who live in the highest-banded housing and they deliver protection for people who are on low incomes. Of course, for the vast majority of council tax payers, the rebanding will not increase bills by a single penny.

The crucial point is that the proposals that we are putting forward, which will be voted on at 5 o’clock tonight in the chamber, will raise £100 million to help us in our mission to raise attainment in schools. Parties across the chamber frequently and rightly talk about the importance of raising attainment in schools, but we cannot talk about the desirability of the ends unless we are also prepared to vote for the means of achieving that.

Thousands of ordinary families who are living in the situation that I described will be hit by the increases. They will be noting carefully exactly what the First Minister just said and the language that she used, because it is not just council tax that is on the way up for them. We know that the Scottish Government wants to levy income tax at a higher rate than that in the rest of the United Kingdom, and it has already pushed through business rates that are above the levels in the rest of the UK.

The Deputy First Minister once said:

“This administration ... acknowledges that business rates do play a part in attracting and retaining businesses and has therefore committed to ... setting the poundage rate no higher than that set in England”.

He was right then. Why is he not right now?

I will stick with council tax for a second. Three out of four Scottish households will pay no more in council tax as a result of the rebanding on which the Parliament will vote this evening. Yes, people who live in higher-banded houses will pay more. We also propose to lift the freeze, but with a 3 per cent cap, so local authorities will have the ability to decide, within that parameter, to raise council tax if they so wish. That is right, responsible and progressive, and—crucially—the proposals gained the support of the Scottish people in an election just months ago.

On the wider issue to do with taxation, in a few weeks we will bring forward a budget for the next financial year. All those matters will be covered in our budget and the Parliament will have the opportunity, as it always does, to scrutinise and in due course to vote on our budget. I am confident about the reasonable and balanced proposals that we will bring forward.

I know that some members of the Parliament say—they have every right to argue this and will continue to do so—that we should go further. I respect that, and we will have those discussions as we go through the budget process.

However, there is hypocrisy at the heart of the Tories’ position. Week in and week out in the chamber, Ruth Davidson stands up and calls for more investment in the health service, more investment in education, more investment in policing and more investment in practically every responsibility that the Scottish Government has, yet she is not prepared to say where the money would come from. She is against modest increases in the council tax, she is against the Government’s position of not having a major income tax cut for the highest-paid people in our country and she is against modest proposals on business taxes. She comes here and says where we should spend extra money, but she does not have the gumption to say where that money should come from. That is not an acceptable or reasonable position for those who call themselves the Opposition to take.

That was absolutely zero answer for the one in eight businesses in Scotland that are paying higher taxes than they would pay south of the border—there was nothing for them.

The bottom line is that the Parliament is moving to a new phase in which economic growth will determine how much money the Scottish Government has to spend. If we tax too much, we will deter that growth and the tax receipts that we need. For Derek Mackay’s benefit, I say that that is Laffer economics.

The trouble is that the people who are watching the Parliament see parties whose only question on tax is, “How high can we go?” Why can the First Minister not see that that will only damage Scotland’s reputation as a place to do business?

Ruth Davidson is—flatly—wrong. Let us look at business rates. We have the most generous and competitive system of business rates, particularly for small businesses, of any part of the UK, and we have put forward proposals to expand our small business bonus scheme so that more small business premises across Scotland—100,000, following the expansion—will pay no business rates whatsoever. That is how we get growth going in our economy—by supporting the small businesses throughout the country that employ people and provide vital services in communities the length and breadth of Scotland.

I return to a point that I made earlier. We know what Ruth Davidson is against when it comes to taxation. She is against modest reform of the council tax and modest increases for housing in the highest council tax bands. She is against the Scottish Government’s position that it is not right to give a massive income tax cut to the highest-paid people in our society. However, we do not know what she is for when it comes to raising the extra revenue to invest in the public services that she always says need extra revenue.

In fact, when it comes to revenue raising, the only people who we know the Conservatives think should pay more are the sick in our society, because the Conservatives want to reinstate prescription charges. They want to protect the highest paid in our society and they want those who are sick and in need of prescriptions to pay the price. The Conservatives’ position is shameful, which is why the Scottish Government will continue to put forward the reasonable and progressive positions that we take across the range of tax powers that we have.

I have here the Government’s table on business poundage rates. One in eight businesses in Scotland is paying 51p in the pound, whereas it would pay 49p if it were down south. The First Minister says that she knows what I am against. I will tell all of Scotland what I am against. I am against the biggest threat to Scotland’s economy at the moment, which is the constitutional uncertainty that she has put on the table.

It is not just me who thinks that. Last week, the Royal Institution of Chartered Surveyors said that the real problem that investment and jobs in Scotland face is the First Minister’s threat of a second independence referendum. The latest Scottish property review says:

“A second independence referendum could have serious consequences”

for the market and would be

“a drag on business investment”

and development.

Here is the SNP’s plan: higher council tax, higher business rates, higher income tax and a second referendum that will damage confidence. We all want economic growth, but how will that plan deliver?

I start to wonder whether Ruth Davidson is my secret FMQs agent. Today of all days, the fact that she can stand up and talk about constitutional uncertainty beggars belief, to be frank. On that basis, there is not a lot of competence in her preparation for First Minister’s questions.

This is the day when her party’s position has just been overturned in the courts. The court has said that the Conservative Party’s intention to trigger article 50 without a vote in Parliament is illegal. For her to come and talk about constitutional uncertainty is, to be frank, beyond words.

I make it clear that the Government’s job is to make sure that we look after our public services and to bring forward proposals for tax that are reasonable, balanced and progressive and which allow us to protect public services and to support our economy to grow, particularly through our support for the smallest businesses in our country. Our job is also to stand up for this country’s interests and do everything that we can to prevent the party that Ruth Davidson is a member of from dragging Scotland out of the European Union against our will. That is the biggest risk to our economy and that is what Ruth Davidson needs to wake up to.

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Cabinet (Meeting)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S5F-00415)

Matters of importance to the people of Scotland.

Presiding Officer,

“The council tax has to go.”

Those are not my words, but the words of John Swinney, eight years ago this very month. The

“hated Council tax is totally unfair, and any tinkering with bands would not make the system any fairer.”

Those are not my words but the words of Nicola Sturgeon in 2007. Later today, this Parliament will debate the future of council tax in Scotland. Why will the First Minister not keep the manifesto promise that she made to voters to

“scrap the unfair council tax.”?

I am proposing to keep the manifesto promise that I was elected First Minister on the strength of just a few months ago in May. I repeat my comment to Ruth Davidson: the proposals that Parliament will vote on today are the proposals that were in the Scottish National Party manifesto, which were put to the Scottish people and which saw the return of this Government with more votes than the Tories and Labour combined. That is the authority and the mandate behind the proposal that we will put to Parliament.

I say again that the proposals are fair, balanced and progressive and, crucially, that they will raise £100 million of extra revenue to invest in our schools to help us to raise attainment and to close the attainment gap, which is something that I have repeatedly said is the Government’s top priority.

As I said to Ruth Davidson, I respect that there are voices in the Parliament—the Greens in particular have credibility on this issue; indeed, they have more credibility perhaps than other parties have—that want us to go further. [Interruption.] As I have said, I am happy to continue the discussion about progressive reform of local tax. However, the vote at 5 o’clock tonight is not a political game; it is a vote with real implications. The vote is to decide whether we implement these responsible changes to council tax and deliver £100 million extra revenue for schools.

I understand why the Tories will vote against the plans, because the Tories do not believe in progressive taxation. They do not believe, as we have just heard, in raising extra revenue for public services. What I think the public will struggle to understand is if the names of Labour MSPs at any point tonight appear in the same voting column as the Conservatives. That would be inexplicable.

The First Minister seems to have forgotten that she lost her majority in May—[Interruption.] I know, I know—[Interruption.]. Wait a wee minute. Here is the thing: in 2011, she won a majority in this chamber with a promise to scrap the council tax. It seems that she has a mandate only when it suits her. The truth is that the First Minister has broken her promise to voters. When the measures are voted on later today, the SNP wants to just “tinker with the bands”. Those are Nicola Sturgeon’s words, and she admitted that that

“would not make the system any fairer”.

This proposal is not big enough and it is not bold enough. Under the SNP’s plan, families living in the homes that are worth the least will be as badly off as they are today. Under Labour’s plans, families in band A properties would pay less than they do today. New independent research shows that, under the SNP’s plans, people in band A will still pay four times more tax as a proportion of their home than the richest people in band H. Labour would scrap the unfair council tax and introduce a fairer system so that 80 per cent of households would pay less. Why will she not support that?

I know that Kezia Dugdale spent the past few days campaigning in an election on the other side of the pond—we would be on the same side for that, incidentally—but let me remind her that her party lost its position as the official Opposition in this chamber in the recent election. The proposals that the SNP put forward in that election attracted more votes than the Conservative and Labour proposals combined—that is the reality. That is why we will put forward our proposals tonight for fair and progressive changes that will raise £100 million for our schools.

It is decision time for Labour, because people will look to see which column Labour MSPs’ names end up in tonight. Will they end up in the column of fair and progressive change with more money for our schools, or will they end up in the same column as the Conservatives, who do not believe in progressive taxation and who do not want to protect our public services? It really is decision time for Labour and I look forward to seeing which way it falls.

The First Minister regularly comes to the chamber and crows about the extra £100 million that she is going to spend on schools. What she fails to tell members is that she ripped out £500 million last year from our schools and local public services. We have yet to hear how many more hundreds of millions of pounds she is going to strip from our local services in this year’s budget.

Here is the thing: I believe in investing in education and I believe in the redistribution of wealth, but funding for local services should be redistributed locally. The national Government should have the guts to use its own tax powers to close the gap between the richest and the poorest kids. The bottom line is that the First Minister does not have to pass on Tory austerity; she can make different choices to protect our local services. Is it not the case that the only way to stop the cuts is to back Labour’s tax plans?

If we strip all of that away—because we could debate back and forth about the truth or otherwise of what Kezia Dugdale said—the simple fact of the matter is that at 5 o’clock tonight there will be £100 million for schools on the table. It will be available for schools at the press of a button. We have heard from Ruth Davidson that the Tories will vote against £100 million for our schools. The question is, will Labour line up with the Conservatives tonight, or will Labour vote with the Government for progressive changes to council tax that will deliver £100 million for our schools? People will be watching—we will wait and see what Labour decides to do.

The First Minister might be aware of the tragic case in my constituency of Sean McKenna, whose body was found last week after he had been missing for almost three weeks. I pay tribute to Sean’s family for their bravery during this incredibly difficult time, and to the Coatbridge police and many hundreds of local people who dedicated their time to helping in the search for Sean. What support is available to the families of missing persons, and what procedures are in place for police to co-ordinate large-scale civilian searches?

I am of course aware of the tragic case of Sean McKenna and I take this opportunity to offer my sincere condolences to his family and friends.

Police Scotland has standard operating procedures for the co-ordination of, and participation in, civilian searches. In such distressing circumstances, it is heartening to see the very many volunteers from local communities who are willing to give up their time to offer assistance in the search for a missing person. It is important that Police Scotland continues to operate its own procedures and—as it will always do for a range of different issues—keep those procedures under review.

I am sure that we all want to thank the volunteers who assisted and, once again, offer our condolences to the family of Sean McKenna at this unimaginably difficult time.

Is the First Minister aware that the unelected health board in Lanarkshire removed orthopaedic and trauma services from Monklands general hospital on Monday this week, ignoring the vote of this Parliament and the local campaign against the cut? Does she find that acceptable, and can she explain why that has not been called in by her Government as a major service change ?

I am genuinely not sure whether Elaine Smith was in the chamber yesterday for the statement by the Cabinet Secretary for Health and Sport on that and other health matters. The change that has been made thus far is a temporary change and it has been made in the interests of patient safety. The full change, if it was to go ahead, would require to go through all the processes that are normally the case for changes of this nature. The health secretary said yesterday that, in this case, the final decision will come to her for approval—Elaine Smith used the terminology “calling in”. The health secretary made that clear yesterday, and I hope that the member will welcome that.

I learned just last night that Murray & Burrell, a family building firm in Galashiels, in my constituency, that was established in 1928 has gone into administration. Today, 35 tradesmen and office staff and two apprentices are redundant. There is also a substantial knock-on effect on at least 15 subcontractors and more than 25 suppliers, all local.

I understand that the Scottish Building Federation, and the Construction Industry Training Board, with regard to the apprentices, are already involved, but has the Government instructed partnership action for continuing employment? I also advise that the role of the Royal Bank of Scotland in the demise of this local company appears to be central and that, once I have the full details, I will pursue the matter further.

I share the member’s concern regarding developments in respect of Murray & Burrell and the potential impact on employees and their families, and the surrounding area. The Cabinet Secretary for Economy, Jobs and Fair Work will be happy to discuss this further with the member and to include in those discussions the issue of RBS that she raises. I can confirm, though, that our agencies will do whatever can be done to minimise any negative impact. I have already instructed our agency Scottish Enterprise to make contact immediately to see what assistance can be offered. Our PACE team is also making contact to offer support for affected employees.

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Cabinet (Meetings)

To ask the First Minister when the Cabinet will next meet. (S5F-00407)

The Cabinet will next meet on Tuesday.

There is and has been for a long time a very strong case for real, fundamental reform of local taxation. As the cross-party commission on local tax reform agreed, the present system of council tax must end. I regret the fact that the Scottish National Party no longer supports that view, but we have been willing to work with the Government on the modest adjustments that we can support, even if we cannot do so without voicing any criticism.

Tonight’s vote on changing the bands is one area where we can agree so, whatever else happens in tonight’s vote, the Greens will vote for the measure. The FM knows that we will not be alone in doing so, yet the Cabinet Secretary for Finance and the Constitution has been warning people today what would happen if the change was not agreed to. The media is reporting that the SNP may not even back its own policy proposal at the end of the day.

A minority Government must sometimes accept modest criticisms. We have been clear at every step that we are expressing our criticisms without putting the reforms in any danger. Does the First Minister remain committed to her party’s proposal to change council tax bands? Will she be voting for it, as we will, tonight?

I think that I have made clear in my exchanges with the other leaders my support for the proposition that the Scottish Government has put forward—indeed, the proposition that won support in the election. However, we will go further than that this evening.

The amendment that has been lodged, in Derek Mackay’s name, to the motion on the Scottish statutory instrument that we will vote on at 5 o’clock, respects the issue of local democracy and acknowledges, as I have acknowledged previously in the chamber, the desire for further discussions about further reform. I have made it clear—I think also in previous exchanges with Patrick Harvie in the chamber—that we are open to discussions, over the course of this session of Parliament, about further reform that is progressive and fair and enshrines the principle of local democracy. I make that view very clear again today.

Effectively, two amendments to the SSI are on offer to parties this evening. There is the one from Andy Wightman, which talks about the principle of local democracy, and there is the one from Derek Mackay, which talks about the principle of local democracy but also, crucially, does what Andy Wightman’s amendment does not do and talks about the principles of progressivity and fairness. That is the one that I hope the chamber will vote for.

I can understand why the Tories would prefer to vote for the former amendment, but I hope that other members see that we should unite behind voting for something that talks about local democracy, fairness and the progressive principle, and then unite behind getting £100 million into our schools. Let us remember that that is the key benefit of what we will vote for.

The Green amendment deletes nothing from the Government’s proposals. It changes nothing in what will happen if the bands are changed and the revenue is raised; it only adds modest criticisms that are widely shared.

The First Minister is keen to remind us all that people will be watching and will struggle to understand some of the consequences if the proposal falls. However, the only way in which the SNP’s proposal on council tax bands can fall is if it decides to let it fall. It would be astonishing and—to paraphrase the First Minister—people would struggle to understand if the First Minister and her colleagues lined up with the only other party that supports the discredited council tax and failed to back the First Minister’s own policy. Is wounded pride really worth £100 million?

I will take responsibility for how SNP MSPs vote this evening. The point that I am making is that there is a choice of two amendments. One talks about the principle of local democracy, which is fair enough—that is the position that Andy Wightman has put forward—and the other accepts that position on local democracy but goes on to talk about fairness and progressive taxation. That is the choice that members have with regard to the amendments.

I know that the words “progressive” and “fair” are not in Andy Wightman’s amendment, which makes it easier for the Tories to back it—I understand that; but there is an opportunity for there to be a genuine progressive alliance behind the Government’s amendment, which genuinely talks about local democracy, fairness and progressive taxation. I say again that we are absolutely confident in the proposals that we have put forward, but we are also signalling a willingness to talk to other parties across the chamber to further the discussion about progressive taxation. I hope that we can get to that position tonight, and I hope that we will vote for sensible changes that deliver £100 million for our schools.

There are a number of further supplementaries. If members and the First Minister are brief, we will get through all of them.

Does the First Minister agree that it is an outrage that disabled people who phone a Department for Work and Pensions hotline to appeal against benefit sanctions are charged more than millionaires who query tax bills are? Will she back calls to end that Tory telephone tax?

A good case has been made for that. It is clear that people who are on benefits, particularly those who receive disability benefits and, indeed, those who receive working tax credits and the universal credit, are seeing reductions and cuts to their benefits from decisions that the United Kingdom Government has made. It compounds that injustice if people are charged money for having to phone up if they need help or advice. That case has been made. The issue is clearly one for the UK Government, and I hope that it will take the right decision.

In light of recent revelations about Gartnavel general hospital’s operating theatres, is the First Minister satisfied with the Scottish Government’s handling of our national health service?

Yes, I am satisfied with that. However, as I said in the chamber last week, although our NHS is performing well, it faces challenges, and the job of the Government is to support it in meeting those challenges.

On the Gartnavel issue, we have in place in Scotland a robust inspection system that is designed to ensure that if there are deficiencies in any aspect of how a hospital is run—its cleanliness in particular—those deficiencies are identified, highlighted and rectified. That will happen in this case, and that is what happens generally with the inspection regime that we have in place.

Following this morning’s very welcome High Court decision that there should be a parliamentary vote on Brexit, will the Scottish Government actively oppose the UK Government’s intended appeal when it reaches the UK Supreme Court?

We will look at the judgment very carefully and, yes, we will actively consider whether there is a case for the Scottish Government to become a participant in that case.

I do not think that the judgment this morning is a huge surprise to anybody who has followed the case, but it is hugely significant and underlines the total chaos and confusion at the heart of the UK Government. We should remember that its refusal to allow a vote in the House of Commons is not some matter of high constitutional principle; it is because it does not have a coherent position and knows that if it takes its case to the House of Commons, that will be exposed.

The job of this Government is to protect Scotland’s interests. Scotland voted to remain in the European Union and my job, therefore, is to protect our place in Europe and the single market as far as I possibly can. Scottish National Party MPs in the House of Commons will certainly not vote for anything that undermines the will or the interests of the Scottish people.

According to a response to a parliamentary question, in the past decade, Highlands and Islands Enterprise has given £3.5 million to the arms industry, £2.5 million of which was given in the past three years, and Scottish Enterprise has given £15 million. Does the First Minister agree that such expenditure is not some people’s idea of a progressive Scotland? Moreover, will she agree to have the enterprise agencies revisit the recipients of that money to give them advice on how to diversify from destructive activities to endeavours that have a more positive benefit for the Highlands and Islands of Scotland, Scotland itself and, indeed, humanity?

I think that John Finnie and I will agree on much about the general issue of ethics in the arms trade and the need for weapons not to be misused, as many feel that they are in Saudi Arabia for attacks on the Yemeni people.

However, John Finnie’s particular point is at risk of misrepresenting—though not deliberately—the position of our enterprise agencies. The funding that Scottish Enterprise has provided supports companies in diversifying and developing non-military applications for technology as well as, of course, supporting employment opportunities in Scotland. The role of our enterprise agencies is to support employment, economic growth and economic opportunities, but we will always ensure that that is done in line with our wider principles and values. That is the case in this particular area as it is in many other areas.

On Monday, a family came to my constituency surgery. In March, the father, George Ballantyne, an 83-year-old resident from Corstorphine, had a fall and was taken to Liberton hospital. After exemplary care and some adaptations to his home, he was declared fit to go home in early June. On three occasions, he was advised to get ready to go the next morning, only for the care package to fall through. Last night, George spent his 150th night in Liberton hospital after being declared fit to go home. Given that the health secretary said two years ago that this Government was committed to eradicating delayed discharge, will the First Minister explain to George and his family why he is still in hospital?

The member has raised an important issue. The Government is, of course, committed to eradicating delayed discharges, and we are making progress towards that aim. The reason why we have integrated health and social care services is to try to ensure that individuals do not fall through the gaps in the system, which is what appears, from what Alex Cole-Hamilton has said, to be happening in this case.

What Alex Cole-Hamilton has outlined certainly sounds to me like an unacceptable situation for an individual. The health secretary has indicated to me that she is aware of the case, is looking into it and will be writing to Mr Cole-Hamilton about it. We want to make sure that we have in place a system in which people get the right care in the right place at the right time. We are making progress towards that, but it is reforms such as the integration of health and social care that will allow us to make further progress in the months and years to come.

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Migrants’ Contribution to Scotland

To ask the First Minister what analysis the Scottish Government has conducted into the contribution that migrants make to Scotland. (S5F-00430)

Last week, the Government published two analytical reports on the contribution that migrants make to Scotland. We now have robust evidence on their contribution to our economy and society; we also know that the majority of those who come to Scotland are highly qualified young people who are economically active and that European migrants, in particular, make a positive contribution to the public purse. I welcome those findings, as we know that many sectors of our economy are reliant on migrant labour. I also take this opportunity to say again that we truly value the contribution of all migrants to Scotland and welcome all those who choose to make their lives here.

I welcome the findings, which should help to challenge head on some of the prejudices that sadly still prevail about migrants living and working in our society. How will the First Minister work to ensure that Scotland remains a welcoming place for those who wish to live and work here following the United Kingdom’s vote to leave the European Union?

We have made it crystal clear on many occasions that the 180,000 or so EU nationals who have chosen to make their home in Scotland continue to be welcome here, and I think that that sentiment is shared right across the chamber.

Their contribution to this country is valued, and the position that has been taken not just by this Government but across the political spectrum in Scotland stands in contrast to the unwelcoming and unpleasant rhetoric about migrants that we increasingly hear from the UK Government.

This Government continues to explore all options that are open to us to protect Scotland’s interests in Europe. Later this month, Mike Russell will chair a focus group to listen to and gather information on the impact that the EU referendum result is having on EU nationals, and we will continue to press the UK Government to guarantee, without further delay, the residency status of fellow EU nationals who have made Scotland their home. Frankly, I continue to be appalled daily that that guarantee has not been given and that we have a UK Government that still seems content to use EU nationals as bargaining chips in a wider negotiation.

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Brexit and the Scottish Financial Services Sector

To ask the First Minister what the Scottish Government’s response is to the University of Strathclyde paper, “Brexit and the Scottish Financial Services Sector”. (S5F-00429)

The University of Strathclyde paper draws attention to the serious impact that Brexit will have on the financial sector in Scotland. It says:

“If the UK does make it much more difficult to bring in skilled people from other countries, it will undermine one of the UK and Scotland’s main attractions for internationally mobile businesses and activities.”

Since that paper was published, there has been new evidence of the damage that a hard Brexit will cause. Yesterday, a leading think tank warned of a 60 per cent reduction in United Kingdom trade and services with European Economic Area countries if a hard Brexit is pursued.

The Scottish Government will continue to work with the financial services sector and we will continue to consider all possible steps to ensure our continuing relationship with the European Union and the single market. Part of what we will do in that regard relates to my answer to the previous question: we will distance ourselves completely from the UK Government’s damaging anti-immigration rhetoric.

The financial services sector in Scotland is indeed vital to our economy, accounting for approximately 10 per cent of our onshore gross domestic product. That is exactly why I am asking the First Minister to follow the report’s guidance, which concludes that Brexit

“does not take us to a case for Scottish independence”.

Those words are not mine, but the conclusion of the report.

The argument against independence is also highlighted by a report by Scottish Financial Enterprise, which says that 90 per cent of Scotland’s financial trade is with the rest of the UK.

The SNP has issued its consultation paper on a second independence referendum, but it has failed yet again to explain what currency it proposes to use. Would it look to keep the pound? Would it adopt the euro? Would it create a new Scottish pound? That fundamental confusion is creating significantly more uncertainty for the financial sector than Brexit is.

If the First Minister will not listen to us, will she listen to the guidance of the University of Strathclyde report and the financial community and scrap her plans for an independence referendum? In the real world, the question of independence does not transcend everything else.

For a Tory to lead with the chin on currency right now is almost as inept as Ruth Davidson standing up and talking about constitutional uncertainty on the day that her own Government has been overruled in the courts on the triggering of article 50.

My objective is clear and it is one that I hope that all members in the chamber can get behind, whatever our disagreements on the constitution. I want to keep Scotland’s economy, including our financial services sector, in the single market. I am seeking to try to find a way to do that, and for the life of me I cannot understand why the Conservatives, who before the referendum expressed support for the single market, find it so hard to support us in doing that now.

We will continue to act in the best interests of Scotland and the Scottish economy. Members should be in no doubt that the alternative to that is for Scotland, including our financial services sector, to be taken over the hard-Brexit cliff edge by the UK Government. That would be disastrous for our economy generally and for our financial services in particular.

Last night, Boris Johnson eventually said something that I could almost agree with: he said that Brexit is likely to be a “Titanic success”. That is probably the truest thing that he has said in a long time.

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Living Wage

To ask the First Minister what the Scottish Government’s response is to the new living wage rate. (S5F-00411)

I welcome the new living wage rate of £8.45 an hour, which I announced on Monday. It will benefit thousands of Scottish workers and help ensure that people’s basic wage meets the real cost of living. More than 630 employers are now accredited living wage employers and, of all the countries in the UK, we have the highest proportion of employees who are paid the living wage or more. I encourage all employers to recognise the benefits of paying the real living wage and to consider signing up as accredited employers. Although there is much progress, we still have work to do and we are determined that we will do it.

I very much welcome the increase in the real living wage in Scotland and across the UK. However, although there has been significant progress in the public sector, one in five workers—principally in the private sector—are earning less than the living wage, so I share the First Minister’s ambition that we must do more. One of the levers that the First Minister has is the Scottish business pledge, but take-up of that pledge is low. It is disappointing that only 0.2 per cent of Scotland’s firms are taking part, and the take-up is worst in accommodation and food services, where pay is often lower than in other sectors. What action will the First Minister take to improve the take-up of the business pledge, particularly in those low-paid sectors, and to increase the living wage for more workers across Scotland?

Significant numbers and types of companies have already signed up to the business pledge, but we continue to encourage more companies across Scotland to do so. Whatever our disagreements in this chamber, I hope that all MSPs will join us in encouraging companies to do the right thing by signing up to the business pledge and to the progressive business practices that are encapsulated in that pledge.

The most significant lever that we use, specifically in relation to the living wage, is the living wage accreditation campaign. We now have more than 600 employers signed up to that. Of course, there will be many employers across the country who pay the living wage but are not yet accredited and I encourage them to get accredited. We have set a target of having 1,000 employers signed up to the accreditation campaign by this time next year and all MSPs can help us to ensure that we reach that target.

I want to take the opportunity to thank the Poverty Alliance for the great work that it does in leading the accreditation campaign for us.

We have made progress in the public sector and in the private sector, but 20 per cent of people across the country are still not paid the living wage, which is why we must all work hard to encourage companies to do the right thing. I will end on a crucial point for any business listening to this answer and, perhaps understandably, worrying about whether it can afford to pay the living wage. The living wage is not only good for workers; all the evidence says that paying the living wage helps companies as well. It helps to increase their productivity, reduce their absenteeism and improve their bottom line, so it is a win-win situation and we should all get behind the campaign to ensure that everybody gets paid the living wage.

Does the First Minister agree with me that the way to ensure true financial security and to lift people out of poverty is to have a strong and stable economy that provides good, secure and reliable jobs, and that such an economy is undermined both by making Scotland the highest taxed part of the UK and by the on-going threat of another separation referendum?

These Tories are obsessed with independence, for goodness’ sake.

I agree with Mr Kerr about the importance of a strong and stable economy, which is why I so deprecate the Brexit vandalism of the Tory UK Government. I also think that it is really important—as we have been doing in a sensible discussion about the living wage—that we focus on the financial security of individuals and of families across the country. The Scottish Government is focused on doing that principally through our support for the living wage, but one of the things running counter to all our efforts is the policies of the UK Government, which are about working tax credits being cut, benefits being cut and support through universal credit and the work allowance being cut. Before the Tory members come here and lecture this Government, perhaps they should pick up the phone to their own colleagues in London and tell them to get behind the efforts to improve economic stability and the living standards of families across the country.

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ScotRail Services

To ask the First Minister, further to ScotRail being fined £483,000 for failing to meet performance standards, when services will improve. (S5F-00424)

The ScotRail franchise contains the toughest quality regime in the United Kingdom to drive up passenger standards. Our service quality regime checks more than 30 customer facilities and services across trains and stations in Scotland every four weeks. Inspectors patrol the network daily, pushing up ScotRail’s quality, meaning that our passenger satisfaction figures sit some 7 per cent ahead of the British average.

The recent fine shows that further improvements need to be made in service delivery. Transport Scotland has requested remedial action plans from ScotRail to focus on improving performance in the necessary areas.

MSPs have seen the flimsy document entitled “ScotRail Improvement Plan”, which has more pictures in it than detail. How can the First Minister expect the public to know what ScotRail’s improvement plans actually are if the whole plan is still to be published? It has not been published yet. Ministers are hiding behind commercial confidentiality, which is simply not good enough. The Minister for Transport and the Islands needs to publish the full plan, with any really commercially sensitive information redacted. We need some openness and transparency here.

It strikes me that the member cannot have it both ways: he cannot come and ask a question about hefty fines for ScotRail not meeting its performance targets and then say that the Scottish Government is not taking the issue seriously.

There is no hiding behind any commercial confidentiality. The performance requirements for ScotRail are contained in the franchise. At this stage, it is not meeting the requirement to have 91 out of 100 trains arriving at their destinations within the industry-recognised punctuality measures. The figure is sitting at around 89 trains per 100. That is why the Minister for Transport and the Islands has insisted on an improvement plan.

We will continue to monitor ScotRail’s performance against that plan on a weekly basis, because the travelling public deserve to know that their trains will run effectively, efficiently and on time. We are determined to work through the contract to ensure that that is the case. Ultimately, if ScotRail does not meet its performance requirements, we have the option of terminating the contract early. That is very much an option that we keep on the table.