Scottish Parliament, 15 April 2010

367 contributions from 73 members. The official report.

Supporting Business

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a debate on motion S3M-6140, in the name of Jeremy Purvis, on supporting business.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Yesterday, I asked the Cabinet Secretary for Finance and Sustainable Growth whether there should be a limit on tax increases on businesses at this time. He refused to answer the question, which was interesting, if only because it confirmed that the Scottish Government is aware that many businesses in Scotland have received tax increases of more than 100 or 150 per cent during the past week.

I start by making a point about which I hope that there is no disagreement among members. The revaluation of business rates is a necessary part of the rating system. There are debates about the rating system, but revaluation is necessary. It is an independent process, and as a result of every revaluation some businesses benefit and some lose out.

Members can also agree that every revaluation since 1985 has been accompanied by a transitional relief scheme. There are many options for such schemes, which come in many different versions. Every argument against a transitional scheme that the Conservatives and the Scottish National Party will make in the debate will have applied in every revaluation since 1985. In 1985, 1990, 1995, 2000 and 2005, the Conservatives—whether they were in government or in opposition—and the SNP supported a transitional relief scheme. In addition, they supported the discussions with the business community about transitional relief that took place in advance. We must question why the Conservatives are now in total agreement with the SNP in Parliament in being against a transitional relief scheme.

It is helpful when members of other parties publish their speeches the day before a debate. Mr Brownlee did exactly that, for the Conservatives. He has chosen to attack the Liberal Democrats rather than attack the horrendously high tax increases that will happen without transitional support. The operators of the many local businesses, hotels and petrol stations to whom I have spoken in recent weeks will make their minds up from today’s debate and the votes at 5 o’clock.

I agreed with what Mr Brownlee said in Parliament last year, when he asked the cabinet secretary:

“On the vexed issue of transitional relief for business rates, will he ensure that whatever his decision, he will minimise the distortion in the business community?”—[Official Report, 26 November 2009; c 21564.]

Hotels, petrol stations, auction marts and other businesses think that the tax increases of more than 100 per cent that they have received represent a distortion. I agree. Auction marts made their views clear yesterday, when they told us that they are operating at an economic disadvantage compared with their counterparts in England. In written evidence to the Economy, Energy and Tourism Committee, for the committee’s budget consideration, the Scottish Retail Consortium said:

“Transitional relief will be essential to retail’s recovery from the recession, which is also a pre-requisite to its role in acting as an engine of wider economic recovery.”

Let us consider the SNP and Conservatives’ arguments against any transitional support to limit the increases. They say that retail would be worse off, but the Scottish Retail Consortium disagrees—I know who I support. The Conservatives said in a press release yesterday that small businesses would

“have their rates increased to subsidise the public sector and large supermarkets”.

That is factually wrong in many regards.

There are a number of transitional scheme options. Three weeks ago, we said to the Government that it was not too late to consult the business community urgently on the options. The precedent for such consultation was set clearly in 2005. All business groupings are aware that there are a number of transitional scheme options. That is why the Confederation of British Industry’s budget submission to the Parliament called for a consultation on a transitional scheme. Businesses in the small business bonus scheme would not be affected by a transitional scheme. The 24-hour Asda store in Galashiels in my constituency, which is one of the biggest supermarkets—if not the biggest—in the south of Scotland, and whose rates bill will increase by 12 per cent this year, would not be involved in any transitional scheme anyway. However, because of the revaluation, a small hotel nearby has found that its bill lifts it out of 100 per cent relief for small businesses. The hotel will be asked to pay a bill of £11,000, in one go, from now, and without any transitional support at all. What business tax increase in one go would be fair? That is the point.

There is a precedent, which was set as recently as June last year by the Government, when it said that a 5 per cent increase in bills would hurt business. Then, the Government said:

“On 1st April 2009 most non-domestic (business) rate bills in Scotland increased by 5%. In response to the difficulties facing businesses as a result of the economic crisis, the Scottish Government and all 32 Scottish local authorities have implemented a new business rates deferral scheme for 2009-10 to minimise the impact of this increase, help cash flow and provide a ‘much-needed boost’ for the Scottish economy.”

If preventing businesses from having a 5 per cent increase was the right thing to do for all businesses, regardless of their size, is it not right to help the businesses that Government knows are facing increases of more than 100 per cent in their bills in one go? If a 5 per cent increase was crippling businesses last year, what on earth will a 100 per cent increase do to businesses this year? That has nothing to do with pitting small businesses against big ones; it is simply a recognition that key local businesses, such as hotels, which are critical to the success of economic recovery in Scotland, are facing crippling tax increases.

People will see through John Lamont, who told the Berwickshire News and East Lothian Herald that there should be transitional relief for petrol stations but will vote in Parliament against transitional relief. They will see through John Scott, who told The Press and Journal that there should be transitional relief for auction marts but will vote in Parliament against such relief. I know that Derek Brownlee will spend all his speech attacking me and the Liberal Democrats. I am sure that he will promote the leaflet that the Conservatives have issued throughout Scotland, which says:

“The SNP keep pumping out false promises ... Under an SNP Government petrol station owners have seen their business rates go up significantly, leading to higher prices at the pumps ... The SNP can do nothing about fuel taxes at Westminster but they can do something about rates in Scotland because they are in Government—why don’t they?”

Why do they not, indeed? Perhaps because the Conservatives will vote against transitional relief.

The British Hospitality Association, chambers of commerce—from the Borders to north-east Scotland—the CBI, the Scottish Retail Consortium, business organisations and individual businesses to whom I have spoken this week all know that the increases cannot be sustainable. I spoke to the people who run a key local hotel in a rural part of my constituency on Monday, who said that the 66 per cent increase in their bill will be crippling and will have an effect on jobs.

By all means let the Conservatives and the SNP attack us. Let them say that businesses can appeal, without explaining the grounds for appeal. Let them try to ignore the genuine concern about the issue. They may do all those things and defend the unacceptable; we will not do so.

I move,

That the Parliament notes the crippling increases in non-domestic rates bills in Scotland, particularly in hospitality, tourism, auction mart and petrol station businesses; further notes the increases in the Scottish Budget resulting from the 2010 UK Budget, and calls on the Scottish Government to cap 2010-11 business rates increases at 12.5%, or 5% for small businesses, while allowing those who gain under the revaluation to see the benefits immediately.

John Swinney (Scottish National Party, North Tayside)

Let me make it clear that on 10 February I announced the outcome of the 2010 business rate revaluation and an accompanying package of measures, to ensure that business in Scotland can remain competitive. As a result of that package, the support that we will provide to businesses in Scotland in 2010-11 is worth more than £700 million.

Let me explain why I think that the package that is in place is fair to and appropriate for the business community in Scotland. First, as Mr Purvis said, individual valuations of properties are carried out independently of Government by the Scottish assessors, as has been the case throughout the business rates regime. Ratepayers may challenge those valuations through an independent appeals system, but I acknowledge that there are concerns in certain cases about the levels of valuation that have been set. In those circumstances, I encourage people who are concerned about the business rates valuation assessment that has been made by the assessors to take the necessary steps to appeal those valuations.

Iain Smith (Liberal Democrat, North East Fife)

I accept that there is a right of appeal for businesses that are affected by huge increases in their rates bills. However, can the cabinet secretary tell us how long it is likely to take a business to appeal its rates and what rates bill it will have to pay in the interim, while it awaits the outcome of that appeal?

John Swinney (Scottish National Party, North Tayside)

Businesses are liable for the business rates that are set in the valuation as of 1 April. Once an appeal has been heard, if there is any adjustment to the valuation it will be backdated to 1 April. Any appropriate charge of interest will also be paid to the affected ratepayer. Obviously, the independent appeals process will seek to resolve any appeals as expeditiously as possible.

Bills will be offset by the reduced poundage rate that we have set and the extensive package of reliefs that we have put in place. For 2010-11, we have the lowest ever national rate poundage in Scotland.

Iain Smith (Liberal Democrat, North East Fife)

That is irrelevant.

John Swinney (Scottish National Party, North Tayside)

From a sedentary position, Mr Smith says that that is irrelevant—Mr Smith is talking complete rubbish, as usual. The rate poundage is absolutely fundamental to the calculation of business rates for which individuals are liable. Had we set a rate poundage using the approach that the previous Administration used for the 2005 revaluation, it would have been much higher. The lower rate is worth well over £200 million in benefits to the business community in 2010-11 alone, and every ratepayer in Scotland will benefit from that lower rate poundage.

Overall, the package of reliefs that is now available is worth more than £2.4 billion over the next five years. In 2010-11, we will be the first country in the United Kingdom to offer a dedicated renewable energy relief scheme that will offer discounts of up to 100 per cent. A key element of our relief package is the uplift and expansion of our small business bonus scheme. On 24 March, as part of the UK budget, the Chancellor of the Exchequer announced new help for small businesses south of the border. However, businesses here will still be better off by up to £3,050 this year. Not a single recipient of our small business bonus scheme would be better off under the chancellor’s proposals, which will, in any case, not come into force until October at the earliest, subject to UK legislation.

Robert Brown (Liberal Democrat, Glasgow)

I raise with the cabinet secretary the particular situation regarding areas such as Byres Road and Great Western Road in Glasgow. Those are relatively high-rated areas where the small business relief is of no use to people and where small shops face considerable difficulties because of the rise in rates resulting from the revaluation. Will the cabinet secretary have a close look at that situation?

John Swinney (Scottish National Party, North Tayside)

I am happy to do that. However, if Mr Brown’s constituents have concerns about the valuations, he should advise them to make the necessary appeals against them. That is the key thing for them to do.

If, in this debate, the Liberal Democrats had called for transitional relief, their motion might have made more sense. I will explain why. By its nature, transitional relief must be cost neutral. Under transitional relief—which is available in England but not in Wales, and which was made available in Scotland following the 2005 revaluation—businesses that gain most from the revaluation give up those gains to offset the rates bill rises for those whose bills go up the most.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Will the cabinet secretary give way?

John Swinney (Scottish National Party, North Tayside)

I have given way generously and have a lot of ground to cover. We considered carefully—

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Is there only one possible—

John Swinney (Scottish National Party, North Tayside)

If Mr Purvis gives me the opportunity to marshal my arguments, I might give way to him in a second. Perhaps if he had disciplined his other colleagues to allow me to make progress I would have been able to cover more ground.

We considered carefully whether to have a further transitional relief scheme in Scotland in 2010. We took into account the benefit to Scottish businesses of setting a lower rate poundage, which is not available to businesses south of the border, and the levels of relief in Scotland, which are significantly more generous than those south of the border. We also looked at the impact on businesses in individual sectors. The majority of businesses in Scotland have seen their business rates bills fall this year by, on average, double the amount by which bills have fallen in England, where savings were cut to fund transitional relief. Had we introduced a similar transitional relief scheme to that which was introduced in England, many businesses here would have lost out. The small and medium-sized business sector would have ended up subsidising the public sector and some key large industries by almost £75 million. That is what Mr Purvis must explain to those to whom he argues that we should support a transitional relief scheme.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

For the record, can the cabinet secretary make it clear whether only one possible transitional relief scheme is available to the Government and why the Government did not consult the business community on the options last autumn, as we asked it to do?

John Swinney (Scottish National Party, North Tayside)

I engage in a great deal of dialogue—as do my officials, on my behalf—with the business community on such questions. We have had a range of discussions and I have listened to a range of views from the business community on transitional relief, and we have come to our conclusion on the subject in the light of that.

Mr Purvis’s question—whether there is only one type of transitional relief scheme—brings me to one of the key points that I want to make about the Liberal Democrat motion. As I have said, by its nature, transitional relief should be cost neutral—that is the objective of any transitional relief scheme. What the Liberal Democrats propose is not a transitional relief scheme. The motion tries to get round the problem of cross-subsidy, but at a substantial cost to the Scottish budget. The cost of funding a 12.5 per cent cap without doing so by taking savings from people who have gained from the business rates revaluation could amount to £195 million in 2010-11 alone. Parliament must address the question of why on earth we are again presented with such uncosted propositions by the Liberal Democrats.

A difficult set of decisions must be made regarding business rates revaluation. The independent valuations have been undertaken and I encourage individuals to appeal against them if they are concerned about them. I ask Parliament to remember that the Government has provided £700 million of support for the business community through reliefs and support in the current financial year alone, which reflects our determination to ensure that the business community in Scotland remains competitive in every respect.

I move amendment S3M-6140.1, to leave out from “crippling” to end and insert:

“measures that the Scottish Government has put in place to support Scottish businesses as part of its economic recovery plan, including setting the lowest business rate poundage ever, saving businesses well over £200 million in 2010-11 alone, and putting in place a package of relief measures worth around an additional £2.4 billion over the next five years, including a new renewable relief scheme and extending the small business bonus scheme, which means that half of all businesses will receive a discounted bill this year and well over a quarter of businesses properties will pay no rates at all; recognises that the merits of a transitional relief scheme are outweighed by the disadvantages, and recognises that the measures that have been put in place, taken together, represent the most generous package of business rates support available in the United Kingdom.”

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

On a point of order, Presiding Officer. Can you give members of the Opposition parties some support regarding how the Scottish Parliament information centre is treated? On a number of occasions, requests have been made to SPICe for information on the costings of the subjects of Government statements. The Government previously said that there would be a £70 million bill for small businesses under a transitional relief scheme, but it is now saying that the bill would be £195 million. Yesterday, SPICe was told by Government officials that information that they had would be released only in due course. That was consistent with the answer to a freedom of information request that I made, when the Government used a public interest test and said that the information would be published within three months, yet information has just been revealed by the cabinet secretary that officials refused to give to SPICe yesterday. What protection are you able to provide to SPICe when it cannot get information from the Government that the Government then releases the day after?

Alex Fergusson (None, Galloway and Upper Nithsdale)

I ask Mr Purvis to write to me or e-mail me on that subject and I will look into it.

Derek Brownlee (Conservative, South of Scotland)

I congratulate the Lib Dems on bringing to Parliament a debate on supporting business. That is entirely appropriate, as the departure of the Liberal Democrats from government in Scotland has been a great support to business—and, indeed, to every other sector of Scottish society. [Interruption.] We remember their record of imposing higher business rates in Scotland than existed in the rest of the UK and of opposing small business rates reductions when they were turfed out of office. They are now changing their minds on a seemingly daily basis on what should happen about the revaluation. [Interruption.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order. We have had enough sedentary comments from the Conservatives and the Liberal Democrats for the time being.

Derek Brownlee (Conservative, South of Scotland)

Only a few weeks ago, Mr Purvis praised the transitional relief operations in Wales and warned of dire consequences if Scotland did not follow suit. The minor detail that Wales has no transitional relief scheme did not trouble Mr Purvis. Nevertheless, as he has said today, there are winners and losers from the transitional relief scheme.

Let me give members an example. There is a large Tesco store in Galashiels, which is in Mr Purvis’s constituency. He will know it well: it is where Christine Grahame holds her surgeries. I am sure that that is enough in itself to send him across the road to Asda. That Tesco store has seen its valuation rise from £1.2 million to £1.7 million, and the Asda store across the road has seen its valuation rise from £1.1 million to £1.5 million. Last month, the Lib Dems, who spent yesterday wittering on about fair taxes, demanded that Tesco’s rates rise be phased in and that every small business that sees its rates bill fall pay extra tax to fund that. Therefore, hundreds of small businesses in the Borders would pay more to help Tesco, which made a profit of £3.1 billion last year. That is what the Lib Dems call fair taxation. However, today, there is a different policy.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Mr Brownlee has calculated Tesco’s and Asda’s rates increases, as I have done. Will he confirm that the Tesco increase, which includes the car park underneath, is 13 per cent and that it would gain by 0.5 per cent by what has been proposed, and that the Asda increase is 12 per cent and that it would not gain at all under any transitional scheme? As he has been looking at the figures, will he confirm what the nearest hotels’ rates increases are?

Derek Brownlee (Conservative, South of Scotland)

Perhaps Asda would not benefit under today’s Liberal Democrat scheme, but that scheme is, of course, different from what we had two weeks ago. Under today’s scheme, the Government should cap Tesco’s rates rise, but everyone who is better off should benefit. How would that be paid for? Was not it Vince Cable who said:

“you simply can't propose cutting tax revenue unless you spell out exactly how you are going to pay for it”?

There are two very minor flaws in the Lib Dem motion. First, the Lib Dems have no idea how much their plan would cost, so they cannot be sure that the Barnett consequentials that are mentioned in their motion would cover it. Secondly, they spent yesterday afternoon fawning over the Government on the extra spending on housing, green initiatives and further education, seemingly not having noticed that the source of the largesse was the self-same consequentials that Mr Purvis wants to spend again today. Other than there being no idea about how much the plans would cost or about how they could be funded, they are as financially robust as anything else that we have heard about from the Liberal Democrats. [Interruption.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order. I am sorry to single out Mr Tavish Scott, but we have had a persistent running commentary from him since the beginning of the debate. I would be grateful if that ceased.

Derek Brownlee (Conservative, South of Scotland)

At least Mr Scott is consistent about something.

Some businesses will face rates increases as a result of revaluation. Those increases would have been much higher if the thresholds for small business reliefs had not been increased and parity with England’s poundage rate had not been insisted on.

Iain Smith (Liberal Democrat, North East Fife)

Will the member take an intervention?

Derek Brownlee (Conservative, South of Scotland)

No, I will not. I want to make progress.

In our amendment, we say that the Government should examine the scope to extend business rates relief within the existing yield outturns and focus on extending the existing small business and rural rate relief schemes. That would help petrol stations, hotels and post offices. Those are better solutions. They would provide real benefits within the existing business rates regime, and would not rely on additional funding from non-existent sources or increasing bills elsewhere.

All the nonsense that we have heard from the Lib Dems would have been bad enough, but there is also the stuff in yesterday’s Lib Dem manifesto about giving control over business rates to local councils. What would that do to local councils and to business rates?

Tavish Scott (Liberal Democrat, Shetland Islands)

On a point of order, Presiding Officer. In the past, you have been keen to chastise some of us for talking about issues that have nothing to do with the Parliament. What Mr Brownlee is on about has nothing to do with the Parliament.

Alex Fergusson (None, Galloway and Upper Nithsdale)

That is not a point of order. Mr Brownlee is speaking to the motion. You should wind up now, please, Mr Brownlee.

Derek Brownlee (Conservative, South of Scotland)

I am winding up.

The Lib Dem proposals would put up business rates by 69 per cent in Aberdeenshire, 110 per cent in East Dunbartonshire, 96 per cent in the Scottish Borders and 190 per cent in East Renfrewshire. If the Liberal Democrats believe that that is supporting businesses, let us hope that they never decide to oppose them.

I move amendment S3M-6140.2, to leave out from first “notes” to end and insert:

“recognises that some businesses have seen significant increases in their pre-appeal valuations as a result of revaluation and encourages those businesses to appeal their valuation where appropriate; welcomes the fact that the policy of the previous Scottish administration to levy a higher rate poundage than in England has been abandoned; welcomes the reductions in small business rates from 2008, delivered despite the opposition of some in the Parliament; does not believe that small businesses should see their rates bill increase to cross-subsidise the public sector or very large commercial organisations such as the major supermarkets; believes that any further reductions in business rate liabilities should be targeted by extending the small business rates relief and the rural rate relief scheme, and calls on the Scottish Government to assess the scope within the projected business rate income for this and future financial years to finance such an extension and to report to the Parliament the results of that assessment.”

Lewis Macdonald (Labour, Aberdeen Central)

On Friday morning, Aberdeen and Grampian Chamber of Commerce will hold a business breakfast in Aberdeen to give local businesses the chance to grill candidates from the main parties who are standing in the general election. Although the matter is clearly not reserved, the Scottish National Party’s decision to drive through rates revaluation with no transitional relief and no cap on annual increases is certain to be high on many people’s agendas, not least because it stands in sharp contrast to the approach that has been taken by the Labour Government at Westminster. The Tories’ decision to back the SNP is also certain to be of interest.

Four weeks ago, I opened for Labour in the tourism debate by highlighting the impact of the tax hike on businesses in the Scottish hospitality sector. In my constituency, for example, it seems that every single hospitality business—large and small—is being hammered. The rates bill for the Carmelite hotel has gone up from just over £33,000 to just over £66,000, which is a big hit for a small business. Copthorne hotel Aberdeen is facing a 40 per cent rates increase. Skene House (Aberdeen) Ltd, which provides hotel suites and serviced accommodation across the city, faces a valuation that is up 99 per cent. Its payable rates are up by more than 70 per cent, or nearly £100,000 a year.

When we debated tourism last month, I mentioned my meeting with Aberdeen City and Shire Hotels Association. Hotels were the first to react, but the impact goes much further. For example, the Charles Michie chemist shop on Union Street in Aberdeen is facing a rates increase of more than 18 per cent. Other local businesses that are engaged in all manner of trades—even in the motor trade, which is hard hit by the recession—face such increases.

A rising tide of anger has spread far beyond the hotel sector. Aberdeen and Grampian Chamber of Commerce has surveyed its members and is currently analysing the results of that survey. I am certain that ministers will hear from it about the deep concerns that many of its members have expressed, and I have no doubt that other chambers of commerce in other parts of Scotland will express the same concerns—unless, of course, ministers want to tell me that Aberdeen and the north-east are uniquely hard hit by the increase in business rates. I listened carefully to what John Swinney said, but he should think carefully before he brushes off those concerns by claiming that most businesses are better off. That answer will not satisfy the many businesses in Aberdeen city, Aberdeenshire and throughout Scotland that face huge increases in their rates bills for the current year.

It has been said that every other Scottish Administration has offered transitional relief to businesses. The Labour Government at Westminster has set a 12.5 per cent cap on rates increases this year and will phase in increases over five years. If ministers had formally consulted on the issue, as they ought to have done, they would have been told that transitional arrangements are exactly what businesses want.

The Tory amendment says that transitional relief should not be a priority for the Scottish Government. Like Mr Swinney, the Tories say that businesses that are hit by the tax hike should

“appeal their valuation where appropriate”,

as if somehow it is all about miscalculations by the assessors who conduct individual evaluations. That is not the issue at all, of course. Businesses can and should appeal if they have grounds to do so, but lodging an appeal against a revaluation does not allow a business to go on paying the old rate, and appeals are not at all likely to reverse the upward revaluation of large groups of businesses in regions of the country. Appeals would be the right way to go if we were talking about one or two small businesses being harder hit than their peers and competitors, but we are talking about whole groups of businesses, large and small, in whole sectors of the economy and whole regions of Scotland. The appeals route will not reverse the impact on those groups of businesses. It is not the revaluation that is fundamentally flawed; the issue is the lack of transitional support.

Ministers need to listen to what business say. For example, they should listen to what is said at the Aberdeen and Grampian Chamber of Commerce hustings meeting in Aberdeen on Friday morning. I know that Alex Johnstone will be present at that and that he will listen closely to what is said. I hope that SNP members will also listen.

Ministers should think again. They should put transitional arrangements in place now before businesses go under and jobs are lost.

Alex Fergusson (None, Galloway and Upper Nithsdale)

We come to the open debate. I ask members to stick tightly to four minutes, please.

Iain Smith (Liberal Democrat, North East Fife)

Unfortunately, two pretty dreadful speeches—from the cabinet secretary and Derek Brownlee—have been made in the debate so far. They did nothing to place the facts on the table.

Let us be frank. I challenged the cabinet secretary on the issue of appeals and on what the impact would be on businesses today. Would they have to continue to pay their bills? Lewis Macdonald rightly said that they would, but many businesses will be unable to pay their bills. Being able to appeal and perhaps being able to get money back with interest in a few years’ time will be of no comfort to businesses that will have to shed jobs today or even go under. They will be out of business before the result of the appeal comes through. That will do them no good whatsoever; it will be too little, too late.

Derek Brownlee (Conservative, South of Scotland)

If appealing would be of no comfort to businesses, why would it be of any comfort to a business whose rates bill had significantly increased simply to pay that a bit later on? How would that help it?

Iain Smith (Liberal Democrat, North East Fife)

The point that I am making—Mr Brownlee would know this if he had any understanding of how businesses’ cash flows work—is that anyone who faces a huge increase in their bill will suffer. A transitional scheme would allow the transition to work its way through, so that, by the time that the appeal came through, the full bill would not yet be being paid. Businesses would benefit from an appeal in a way that they might not benefit otherwise, because they might already be out of business.

We are not talking about a piffling amount. Hotel businesses in my constituency tell me that they would have to increase their turnover by £300,000 just to meet the increase in business rates. A small electrical appliances company in my constituency tells me that it will have to sell more than 100 more washing machines a year—that is two more machines a week—just to meet the increase in the bill. It is simply impossible to do that. Redundancies will be the result. In my constituency, small shops, which the cabinet secretary keeps telling me are being protected by the scheme, are facing increases of up to 62 per cent in their rates bills. Those businesses will suffer, but this Government is doing nothing about it.

Of course, there are alternative transitional schemes. The one to which the cabinet secretary referred, which is the traditional one, whereby those who gain most help those who lose most, is only one approach. The schemes do not have to be self-funded; the Government can put money in. We have suggested that the consequentials from Westminster’s small business rate relief scheme could be used for that purpose.

Gavin Brown (Conservative, Lothians)

Will the member give way?

Iain Smith (Liberal Democrat, North East Fife)

I have only a short time left, so I will not give way. I am coming on to attack the Conservatives for their hypocrisy in a moment.

The point is that the Government would not even consult. It would not even ask businesses what the way forward was. It would not put the information into the public domain. It still refuses to do so and will, no doubt, continue to refuse to do so after the election. It is impossible to have a proper debate on the issue, because the Government refuses to put the information out there and to consult.

The Conservatives have shown bare-faced cheek in coming to the chamber with their amendment, which bears little resemblance to the reality of history, at the same time as they are issuing leaflets in constituencies throughout Scotland that say:

“The Conservatives believe that the new rates valuation brought in under this SNP Government is unfair ... The SNP can do nothing about fuel taxes at Westminster but they can do something about rates in Scotland because they are in Government—why don’t they?”

The SNP does nothing because the Conservatives support it every time we try to make it do something about rates. The SNP does not do anything, because the Conservatives do not let it do anything, or do not make it do anything along with us. I say to the Conservatives, come on—work with us and make this SNP Government do something about a transitional scheme, which will mean fair business taxation for local businesses and will save jobs. But oh, no; the Conservatives will vote with the SNP Government today to block any attempt by this Opposition party, which I hope will be supported by the Labour Party, to make the Government see sense and bring in a transitional relief scheme, which will benefit businesses throughout Scotland.

Aileen Campbell (Scottish National Party, South of Scotland)

The first and most important thing that any of us can do to support small businesses during this recession is to be honest with them. So, for the Liberal Democrats to try to pretend that the Scottish Government is somehow in receipt of increased funding, when everyone knows that, in fact, we face the first real-terms budget cut in the history of devolution, does not in any way suggest that they are interested in supporting small businesses.

The Scottish Government, on the other hand, can and should be proud of its support for businesses of all shapes and sizes right across the country. More than 200,000 businesses in Scotland may be eligible for support under the small business bonus scheme, which has increased and expanded since it was introduced. Plenty of businesses in the South of Scotland region, which I represent, have felt the benefit of it. When I first consulted local businesses in the region about the impact of the scheme back in 2008, one local artist, whose studio had benefited from the relief, even felt moved to refer to the First Minister as the “blessed Alex Salmond” because of the difference that it had made.

Jim Hume (Liberal Democrat, South of Scotland)

I know that, like me, the South of Scotland member takes a particular interest in Clydesdale. What will she tell businesses such as the Royal Bar in Larkhall, which will face a 238 per cent increase in rates? I could give several more examples.

Aileen Campbell (Scottish National Party, South of Scotland)

As others have said, there is the opportunity to appeal in relation to such issues.

Because of the dramatically different economic situation that exists now compared with in 2007, the Scottish Government has uplifted and expanded the small business bonus scheme and rural rate relief so that an additional 3,600 Scottish business properties are eligible for relief.

There has been an independent revaluation of business rates in Scotland. The valuation is carried out by the Scottish Assessors Association, not the Scottish Government or local authorities, and the independent nature of the revaluation is entirely appropriate. Of course, the revaluation takes into account the changing nature and circumstances of businesses and, in particular, takes account of increases in turnover or expansion of the business since the previous valuation.

Even after all that, 60 per cent of businesses will be better off as a result of the exercise. That is before different reliefs have been applied or appeals have been processed. The appeals system means that any business that feels that its rates have been increased unfairly or inappropriately has the opportunity to have the decision reviewed. It is, therefore, disingenuous of the Lib Dems to quote rate increases that have not yet been through the full process and finalised.

On top of that, businesses throughout Scotland have felt the benefit of the Scottish Government’s support in other ways. I recently visited William McCafferty Butchers in Forth, in my region, which has received grants from Scottish Enterprise to replace the shop units and refresh the shop entirely. Carluke town centre is benefiting from a £500,000 injection from the town centre regeneration fund. The innovative soft play facility that that money is helping to provide will not only boost the local economy, but will increase footfall to the surrounding shops and local traders. A similar effect can be expected in Biggar, whose corn exchange is also receiving a boost from the Scottish Government fund.

Two weeks ago, I visited Irvine to see the first tranche of small businesses receive their awards from the enterprise development fund, which was established by GlaxoSmithKline to help the local community to adapt to the loss of jobs caused by its restructuring. That is the sort of responsible corporate behaviour that I am sure the Scottish Government is keen to encourage and is another glimmer of hope among the doom and gloom that Opposition parties are attempting to spread.

When the Lib Dems call for the Scottish Government to provide relief on top of the wide range of support that we have heard about in the debate, they do so knowing not only that the Scottish Government’s budget is declining but that their own UK leader has called for savage cuts to public sector spending. If further savage cuts are to be inflicted on Scotland’s budget, that will leave even less money to support not only our small businesses but our schools, hospitals, police system and every other area in which the Lib Dems in Scotland continue to call for increases in spending.

The fact is that the SNP Government is making sometimes difficult but absolutely necessary decisions to use the powers and budgets that it has to help all sectors of our economy get through the downturn and grow stronger as a result.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You must close, please.

Aileen Campbell (Scottish National Party, South of Scotland)

That will not be achieved by scaremongering and it will certainly not be achieved by savage cuts to our budget. That is why the business community needs SNP champions at all levels of government.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You must close, please.

Aileen Campbell (Scottish National Party, South of Scotland)

It is why our Parliament needs the full powers of independence to get Scotland out of the Downing Street downturn.

Mary Mulligan (Labour, Linlithgow)

I am always happy to take part in debates in this Parliament that have supporting business as their theme. However, I am not sure why the Scottish Government has allowed a situation to arise in which it very clearly is not supporting business. As Jeremy Purvis’s motion states, some hospitality and tourism, auction mart and petrol station businesses are seeing crippling increases in rates. That is even more puzzling, given that the SNP has been so swift to boast of reducing the business rate for small businesses, as Mr Swinney does in his amendment. One has to ask whether it is a cock-up or yet another example of the SNP Government talking up its support for business but letting it down by its action or, indeed, inaction.

I will give another example of the SNP Government’s support for business not living up to the rhetoric. Members will know that my constituency of Linlithgow includes the town of Bathgate. I was very proud when, after a great deal of hard work by local business people and a successful ballot, Bathgate became the first business improvement district in Scotland. That resulted in local businesses paying a levy, which was then match funded by local government and used to make improvements to the town’s environment. The improvements were designed to benefit all the businesses and were based on the businesses’ own choices. In establishing the business improvement district, Enterprising Bathgate had received a lot of support from the previous Labour-Lib Dem Scottish Executive. It was optimistic about receiving on-going support from the Scottish Government when Mr Swinney decided to visit to see what was being done. To his credit, Mr Swinney did acknowledge the progress that he saw in businesses, particularly retail establishments that had suffered from the presence of major retail developments in towns nearby.

Although other towns such as Inverness and Kirkcaldy have also become business improvement districts, the Scottish Government has not built on the initiative as might have been expected. When, after pressure from Labour following last year’s budget, the Scottish Government established the town centre regeneration fund, unbelievably, Bathgate’s bid to the fund was not successful. I and, more important, the hard-working business people of Bathgate could not understand.

Bathgate was successful in the second phase, although I have to say to the cabinet secretary that giving businesses four months to spend the money is not ideal. At the behest of the Scottish Government, Enterprising Bathgate is working up a scheme to make Bathgate the first wi-fi town in Scotland. I do not profess to understand the minutiae of the plan, but I recognise how such a scheme will help and support business. Far from being the sort of businesses that ask for subsidies or rate cuts, businesses in Bathgate have made a financial contribution to delivering common improvements that will benefit them all.

What has been the response and the support from the Scottish Government for that? Not the most enthusiastic. Because of the deal that the Government did with the Conservatives on this year’s budget, it contains no town centre regeneration fund. I am sure that Aileen Campbell will be telling the people of the South of Scotland that. I am pleased to point out to members that Labour’s general election manifesto includes a clear commitment to fund town centre regeneration.

I return to the issue of non-domestic rates.

Gavin Brown (Conservative, Lothians)

Will the member give way?

Mary Mulligan (Labour, Linlithgow)

I have only 15 seconds left.

I was surprised to read in the briefing from the auction marts that the Scottish Government has turned its back on a transitional relief scheme, which has left Scottish auction marts at a disadvantage compared with those in England. I do not understand the SNP Government’s business strategy. Do the SNP ministers have one? Let us hope that today’s debate will make them think again about how they can and should be supporting Scottish business.

Jim Hume (Liberal Democrat, South of Scotland)

There is a dark cloud coming over Scottish businesses, and I am not talking about the one coming from Iceland—it is the lack of a transitional rate relief scheme for our businesses and the huge hike in rates. It is not just we who are talking about the damage that will be done to businesses and employment; small business owners themselves are calling for a rate relief scheme.

Let us hear some of the facts that the Liberal Democrats have discovered in the South of Scotland. Newton St Boswells mart in the Borders will face an increase of 140 per cent in rates, meaning that more than £44,000 extra must be found this year. Craig Wilsons mart in Ayr faces a 38 per cent increase, equal to an extra £17,000. For a hotel in Irvine, the increase is £31,000; for a hotel in Troon, it is £33,000; for a pub in Longniddry, it is £17,000; for a pub in Dumfries, it is £16,000; and for the New Lanark Mill hotel, it is nearly £10,000. The position applies not just to auction marts and hotels, but to every kind of business. Two high street shops in Ayr face an increase of £6,000 in rates each year, and such rises are unbearable for very small businesses.

I have the details of well over 50 businesses whose owners are worried. Many of them cannot absorb the cost of increased rates. The owner of a medium-sized hotel in Galloway says that he will have to find £400 of cuts per month to pay for the rise. He says that he will try to appeal, but he has been told that it is unlikely that he will be successful. He has said:

“I will have to look at redundancies ... I will now be less likely to invest in my business”.

That is not a good prospect if we want a flourishing economy. He goes on to say:

“Yes, the SNP Government should have consulted on a transitional rate relief scheme, and yes, the steep rise should have been phased in ... this introduction of such a hike in rate bills will have a damaging effect on this business”.

Those are not my words, but those of a hotelier in the South of Scotland.

Two hotels in the region, one in North Berwick, which employs more than 20 people, and another in Dumfries, which employs more than 40 people, are now withdrawing investment and will have to let staff go. Did they know about the rate rise? No—because there was no consultation.

The Tories should wake up to what is happening in the Ayr constituency that they hold—for now. The two high street shops there that I mentioned earlier will have to find an extra £500 a month, and their owners found out about the rise only by word of mouth. One of the shop owners said:

“I am now deciding whether or not to close my business which would mean a loss of jobs of 3 local people and also that of myself”.

That is not just tragic; it is criminal of the Government, supported—bizarrely—by the Tories.

Gavin Brown (Conservative, Lothians)

Will the member give way?

Jim Hume (Liberal Democrat, South of Scotland)

Sorry, but I have only a minute and a bit to go.

The other shop owner says that her expansion plans are now on hold, which is preventing new recruitment. She has said:

“I will not get anywhere appealing ... The rate should have been phased in”.

I return to farming—my old life. I have already mentioned St Boswells mart, which has an extra £44,000 to find, whereas its sister mart in Wooler will face no more than the English maximum rise of 12.5 per cent. We can guess where those who run the mart are considering moving their business. That is from the words of the people concerned, not my words.

We need a show of real support for Scottish businesses from SNP ministers. They are responsible, and they must introduce a transitional scheme. Or will they instead take the arrogant risk of hiding in the safety of the chamber, making damaging decisions for our economy, and then, out in the real world, promoting their saltire whitewash to try to fool the public? The public are not stupid, and the SNP needs more than the clichéed romanticism of “Braveheart” to prop it up. After tonight’s vote, we will see if they are again propped up by their Tory pals.

A transitional rate relief scheme is needed now. Otherwise, there will be no town centre regeneration, but instead an increase in town centre degeneration.

Ian McKee (Scottish National Party, Lothians)

First, I make a declaration of interests. The small self-catering property of which I am joint owner, and which is recorded in my register of interests, is in receipt of business rate relief under the small business bonus scheme.

Before us today is a motion of startling hypocrisy, even by traditional Lib Dem standards. The debate is entitled “Supporting Businesses”, yet where were the Liberal Democrats when, in the 2008 budget, John Swinney announced the most generous support for Scottish small businesses since this Parliament was created? What was their response when the cabinet secretary announced not only that the small business bonus scheme was to be introduced, as promised, but that its full implementation was to be advanced? What was their response to the suggestion that up to 120,000 small business premises would pay no business rates at all, and that a further 30,000 would benefit from reductions of between 25 per cent and 50 per cent? I will tell you.

Robert Brown (Liberal Democrat, Glasgow)

Will the member take an intervention?

Ian McKee (Scottish National Party, Lothians)

No—if Robert Brown is going to apologise, I ask him to do so in his own speech.

I will tell you. Their response was to refuse to support those measures. In true Lib Dem fashion—and along with their former coalition colleagues—they fingered their abstention buttons. Rather bizarrely, Labour members abstained from the motion that they had just successfully amended. They left it to the SNP and the Conservatives to recognise the needs of small businesses and place the reform on the statute book. Today, the Lib Dems have the nerve to portray themselves as the defenders of business.

Let us be clear about what is happening with the business rate revaluation. As Aileen Campbell so cogently explained, it is being carried out by members of the Scottish Assessors Association, a body that is, rightly, totally independent of Government. It is estimated that about 60 per cent of Scottish businesses will actually be better off as a result of revaluation. Broadly speaking, the sectors that are to gain most from revaluation are small and medium-sized businesses such as shops, pubs, offices and industrial property. It is true that some premises will be worse off, perhaps because turnover has increased or a petrol station now has a supermarket attached.

As I have said, the decisions have been made by an independent assessor, and they are open to appeal. I hear that the Scottish Assessors Association is presently conducting a dialogue with filling station owners on the methodology involved.

No one likes rates and taxes, but they have to be levied. It is important that they are levied fairly, and that is what the system achieves. It might not be perfect, but it is difficult to think of a better way.

It is instructive to consider the reaction of business leaders to business rate revaluation, and not just those who have been quoted already. Let us take Andy Willox of the Federation of Small Businesses in Scotland. On 10 February he said:

“By continuing its work to develop a fairer rates system, the Scottish Government and the Finance Secretary have shown insight and are leading the rest of the UK.”

On 5 February, John Drummond of the Scottish Grocers Federation said:

“this will secure the future of small shops which is good news for communities across Scotland.”

The motion calls for business rate increases to be capped

“at 12.5%, or 5% for small businesses”

without detriment to other businesses, as would be incurred under a traditional relief scheme—which Jim Hume has just been discussing. However, the money is simply not there. If we accept, as the business leaders whom I have just mentioned do, that regular business rate revaluation is fair and desirable, it is questionable whether direct intervention to distort the result of that revaluation is an appropriate mechanism for supporting businesses.

The Government has expanded further the small business bonus scheme to include more businesses. That is planned, proportional help, which is welcomed by businesses more warmly than electoral gimmicks of the kind that are contained in the Liberal Democrats’ sorry motion.

Wendy Alexander (Labour, Paisley North)

The Liberals should be congratulated on bringing this important debate to the chamber. The issue under scrutiny is whether the Government was right to reject a transitional relief scheme, the consequence of which is that there is no cap whatever on the additional sums that many businesses, particularly in the hospitality industry, might be expected to pay. In England, a business has the certainty that it will face a hike of no more than 12.5 per cent in any one year. However, in Scotland, the hike could be 50, 60, 70, 80 or 90 per cent; indeed, there is no limit at all.

The Government’s case against a transitional scheme, which it has helpfully laid out this morning, appears to be founded on two bases: first, that we have a low poundage in Scotland; and secondly, that moving to a transitional scheme would involve some cross-subsidy. I will deal with those two issues in the time available.

What matters to businesses is not the low poundage rate but the bill that they have to pay. I draw the chamber’s attention to the fact that last year the Scottish Government was the first ever in Scotland’s history to collect more than £2 billion from Scottish businesses. No other Administration has ever taken that amount of rates income. We should recall that that additional 5 per cent—more than double the rate of inflation—was taken from Scottish businesses at a time when they were coping with recession and a 5 per cent fall over the previous two years in the country’s national income. In taking the highest yield in cash ever—as I have said, more than double the rate of inflation—this Government certainly had some headroom to cushion the blow for the worst affected businesses if it had wished to do so.

John Swinney’s second defence this morning for why he is not prepared to consider any sort of transitional scheme—and I concur with other members that there is more than one variety of such scheme—was that he is against the principle of cross-subsidy. Frankly, I find that extraordinary. After all, his own small business bonus scheme is founded partly on a poundage supplement on all businesses, which involves cross-subsidising businesses large and small. I simply note that under this Government the cross-subsidy involved in its own small business rate relief scheme has doubled from 0.3p to 0.7p. It seems that the principle of cross-subsidy is sometimes accepted and sometimes not.

As other members have pointed out, the SNP’s rhetoric of being local champions will ring a little hollow for every tourism business that knows that it has absolutely no protection whatever and that the playing field in Scotland is now tilted against us. The situation is entirely of the Government’s making, and it should think again on the matter.

A more fundamental point is that, beyond the election rhetoric, this episode tells Scotland something about the increasingly imperious style of government that we are being subjected to in this country. This Government claimed that it would listen. Instead, it has been reduced to withholding data from SPICe, failing to consult the business community at all about this very big choice and failing to bring the issue to the Parliament. Whatever side of the debate people end up on, that is what they will remember as they reflect on this episode.

Gavin Brown (Conservative, Lothians)

A look at their time in Administration shows that the Liberal Democrats do not have a happy record of dealing with business. Moreover, they do not have a happy record of discussing taxation issues. Who can forget last year’s proposal to rip £800 million out of the heart of the Scottish budget and slash public services in order to fund their tax cut? They seem to have very short memories in that respect. Most of them were uncomfortable with the proposal at the time, and they are even more uncomfortable with it now.

The transitional scheme that the Liberal Democrats want to bring in would create more losers than winners, and most of the losers would be smaller and medium-sized enterprises while most of the winners would, as Derek Brownlee pointed out earlier, be larger enterprises, the public sector and supermarkets.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Will the member give way?

Gavin Brown (Conservative, Lothians)

Not at this stage. I also point out that no Liberal Democrat has taken any of my interventions today.

There is a more fundamental issue that we need to consider. Anyone who wants their proposals to be taken seriously needs to cost them. We have heard no suggestion from the Liberal Democrats of what this scheme would cost. On the other hand, the cabinet secretary mentioned a figure of £195 million. I have not seen that in writing, but I note that no one from the Liberal Democrats has challenged it or put forward another figure.

Let us look even closer at the proposal. According to their motion, the Liberal Democrats propose to fund the scheme from the budget’s Barnett consequentials, which, as we heard yesterday, amount to £70 million in cash terms. When the cabinet secretary outlined how that money would be spent, the Liberal Democrat speaker’s to a man welcomed all the funding. Iain Smith, for example, said:

“Additional capital expenditure is welcome, and I hope that it will help to promote new jobs.”—[Official Report, 14 April 2010; c 25254.]

Perhaps Mr Smith will tell us which of the expenditure announced yesterday he wants to claw back to fund his transitional relief scheme. Ross Finnie said:

“The cabinet secretary has made some sensible decisions. Our construction industry, which faces difficulties, will undoubtedly be helped by the additional sums ... put into the affordable housing budget.”—[Official Report, 14 April 2010; c 25252.]

Finally, Jeremy Purvis, who opened for the Liberal Democrats this morning, said in relation to yesterday’s announcement:

“The cabinet secretary made a strong case on that.”—[Official Report, 14 April 2010; c 25233.]

Yesterday, the Liberal Democrats accepted all the funding from the Barnett consequentials and the ways in which it would be spent. Today, however, they come to the chamber trying to pretend that they want to spend the money on their transitional rate relief scheme. The money can be spent only once—and it was spent yesterday. Although the Liberal Democrats welcomed every item of expenditure that was announced, they are trying to pretend today that it can be claimed again.

Just to add more measure to the strength of Mr Purvis’s argument, the Liberal Democrats yesterday also called for additional spending. Mr Purvis himself wanted more money for the Glasgow airport rail link; Ross Finnie wanted more money for Scottish Enterprise and Highlands and Islands Enterprise; and Iain Smith wanted more money for Scottish Development International and VisitScotland. The Liberal Democrat motion is an absolute shambles, and we will not be supporting it.

David Whitton (Labour, Strathkelvin and Bearsden)

As Gavin Brown has mentioned, yesterday we debated the local government finance order and the SNP Government’s economic recovery plan. We listened as Mr Swinney again defended his zero council tax increase policy and repeated that the main priority is still sustained economic growth. However, what we have heard this morning will be a sharp reality check for many Scottish businesses with regard to the true meaning of SNP rhetoric—a reality of record rate rises.

Mr Swinney has already managed to fall out with major business organisations over some of his budget decisions and now he is simply rubbing salt into the wounds. Just as business begins to come out of the recession, the SNP hits it with rates increases that are in some cases more than double with no transitional relief scheme to ease the pain.

The First Minister and Mr Swinney have shouted long and loud about fiscal stimulus. What sort of stimulus is it for businesses to land them with rate rises of the kind that we have heard about today? Mr Swinney’s solution is that they can appeal. It will come as no surprise to him to hear that four out of five firms surveyed by the Scottish Chambers of Commerce in Edinburgh alone are set to challenge their new business rates. Dr McKee might also like to note that 79 per cent of its members will appeal their new rate levels, particularly given that some firms are facing rises of more than 100 per cent. As has been mentioned, those increases will still have to be met until the appeals are heard.

Prestonfield House hotel in Edinburgh is one of the hardest hit. Owner James Thomson has been told that his rates bill will double this year. According to Mr Thomson, it means that he will have to find £17,386 for each of the hotel’s 23 rooms and suites every year until the rates are recalculated in 2015. That represents a more than £200,000 a year increase on his previous bill. Mr Thomson is right when he says:

“On the one side, the Scottish Government wants to support tourism and on the other they appear to be penalising those that are successful.”

What kind of economic strategy is that?

Not just hotels are affected. Like other MSPs, I received the briefing from the Institute of Auctioneers and Appraisers in Scotland, which is horrified at the impact that SNP policy is having on its members. As other members have said, the IAAS is asking why the SNP has not done what Labour has done in England and introduced a transitional relief scheme that would have capped any rates increases at 12.5 per cent.

As Mr Purvis noted, the IAAS said:

“We are operating at an economic disadvantage compared to our counterparts in England.”

What kind of SNP economic strategy is that? The huge increases in rates bills for some firms could result in job losses and business collapse.

If that is not enough, the thresholds for business rate relief for small businesses and rural rate relief have been raised. That means that some businesses that previously benefited will no longer qualify for relief, which will hit people who need the most support. Let us not forget that rates bills are based not only on notional rental values but on turnover—specifically turnover as at 1 April 2008, when the world was a significantly different place.

As I mentioned, the appeals system is coming under siege. In Edinburgh, the 19 staff who deal with rating valuations are suffering

“both abusive phone calls and fairly aggressive reactions”

from rate payers. That is not surprising considering the exchanges between the Liberals and the Tories this morning. The chief assessor, Joan Hewton, said:

“The disposal of appeals is proving to be a major burden on the staff, with many more appeals proceeding to formal hearing than in previous years. The cost in terms of staff time, legal costs and staff morale is concerning. It is the volume of appeals and that the litigation will probably continue for some time that is of concern.”

Mr Swinney will no doubt be supported again today by his pals, the Tories. Mr Brownlee says that there should be no help for major supermarkets—no doubt a slap in the face for those captains of industry who he claimed yesterday support Tory economic policy. However, those supermarkets create jobs. The other companies affected by this SNP policy create jobs. A blanket refusal to introduce a transitional relief scheme will cost Scotland jobs. What kind of economic policy is that?

John Swinney (Scottish National Party, North Tayside)

The debate has been characterised by arguments from the Liberal Democrats and the Labour Party that are based on the parts of the debate that create a negative proposition and by an unwillingness to contemplate any of the positive aspects. That was best exemplified by Mary Mulligan, who argued—not on the issue of business rates—that Bathgate had been singled out for harsh treatment by the town centre regeneration fund, only to reveal that, in the second round of funding, Bathgate was successful. If there ever was a contribution of completely churlish proportion, it was Mary Mulligan’s this morning—but it had many rivals.

Dr McKee made a cogent speech—

Liam McArthur (Liberal Democrat, Orkney Islands)

Just one example.

John Swinney (Scottish National Party, North Tayside)

No wonder the Liberal Democrats are laughing. I do not think they enjoyed Dr McKee’s speech one little bit because he argued that the Liberal Democrats have been completely hypocritical about support for the business community and the measures that I have taken as finance secretary over the past three years.

Jim Tolson (Liberal Democrat, Dunfermline West)

The cabinet secretary talks about hypocrisy. Is he aware that Lauriston nursery in my constituency faces a 150 per cent increase in its rates bills? The nursery’s owner, who is in the public gallery, built a brand new, green, nursery, which was recently visited by the First Minister. It is a crippling increase.

John Swinney (Scottish National Party, North Tayside)

The owner of that nursery is perfectly entitled to appeal. Mr Tolson should be prepared to knock on the doors of all the businesses in Dunfermline West that would see their business rates rise as a consequence of a transitional relief scheme. The Liberal Democrats are simply playing games with the business community of Scotland; they are suggesting that it is possible to temper the increases in business rates for some companies without any pain for others. That is a piece of utter parliamentary hypocrisy—hypocrisy that we have seen in spades from the Liberal Democrats in the debate. To compound that, Iain Smith and Mr Purvis’s motion suggest that the Liberal Democrats’ proposals could have been paid for from the consequentials from the United Kingdom budget. The Liberal Democrats have been demanding that we take forward affordable housing projects. Indeed, the Labour Party has been at the front of the queue demanding that we increase affordable housing expenditure. I delivered that yesterday, but if I heard Mr Macdonald correctly he will vote for a proposal from the Liberal Democrats that will take money away from affordable housing and give it to a business rates revaluation scheme. It is utter hypocrisy.

Lewis Macdonald (Labour, Aberdeen Central)

When John Swinney has calmed down a little, will he tell us what consultation he carried out with representatives of business organisations before he decided not to have a transitional relief scheme?

John Swinney (Scottish National Party, North Tayside)

I engaged in a number of discussions with the business community on revaluation. I have had correspondence from the business community. Representations have been made to the Government and my officials are taking those discussions forward. The Government has taken its decisions. We have introduced as part of this independent valuation process a package of support to business in Scotland that in 2010-11 will be worth more than £700 million. That makes my point about the extent to which the Opposition parties have today been prepared to argue that no one will be better off as a result of the business rates revaluation.

Wendy Alexander (Labour, Paisley North)

Will the cabinet secretary take an intervention?

John Swinney (Scottish National Party, North Tayside)

I am drawing my remarks to a close.

The Opposition parties argue that resources can be taken painlessly from businesses that benefit from revaluation and given to others. That is a poor argument to marshal in front of Parliament. I have set out the approach that the Government is taking to ensure that we deliver the support that is required.

I hear Wendy Alexander muttering “£2 billion”.

Alasdair Morgan (Scottish National Party, South of Scotland)

Mr Swinney, I am afraid that you must conclude there.

Alison McInnes (Liberal Democrat, North East Scotland)

This has been a bad-tempered debate because those of us who want fairness are angry that those who oppose a transitional relief scheme have been more interested in covering up the damage caused to businesses than listening to the real hardship. Business leaders will have watched in dismay as Swinney, Brownlee et al paid more attention to name-calling and cheap electioneering than to the real problems outlined by my colleagues Jim Hume and Iain Smith and Labour members such as Lewis Macdonald. While Wendy Alexander’s analysis was a welcome contribution to the debate, the SNP’s contribution has been dire. Its only solution to the problem is to tell people to appeal. It is wrong for a minister to suggest that appealing is a solution without explaining the grounds of such an appeal.

During the Easter recess, I visited some local businesses that are hit hard by rates revaluation—businesses such as Deans of Huntly and Aberdeen and Northern Marts, which are based locally but are of local and national standing. I have surveyed hotels in my region and have been in contact with the Aberdeen and Grampian Chamber of Commerce. I have found out about some massive hikes in rates.

I have also learned of owners’ and managers’ fears for their businesses in light of the increases. The Liberal Democrats have used their time in the chamber this morning to give those businesses a voice in Parliament. Obviously, any revaluation has winners and losers, but in the past there has been a transitional relief scheme to soften the blow—businesses did not suffer the full force of the rate rise in one go. It is different this time around because the SNP Government has refused to put a transitional relief scheme in place. Businesses throughout Scotland find themselves left alone to deal with huge increases in their bills just when, having perhaps managed to weather the recession so far, they might expect to look for support from the Government.

Gus Stewart, a rating partner at Ryden, summed up the mood:

“It is strange that at a time when transitional relief would probably have been at its most helpful for those seeing significant increases and ratepayers already struggling in the face of a recession, that it has been removed. The Government has publicised the fact that the reduction in the uniform business rate (UBR) will itself cushion the increases, but this is the same uniform business rate as applied in England and it will have a transitional relief scheme. Scottish businesses are once again the poor relations.”

As we have already heard this morning, auction marts across Scotland are facing astronomical business rate increases and Inverurie’s Thainstone mart is the hardest hit of them all. Aberdeen and Northern Marts has seen its business rates soar 70.7 per cent to £248,400.

The president of the IAAS, John Gregor, has said:

“The Scottish Government professes to be a strong supporter of the livestock industry in Scotland. However, by not re-introducing transitional relief, they are letting the industry down and threatening its very existence.”

He went on to say that we cannot allow the livestock industry to suffocate under such charges.

Hotels have been badly hit too. Ivor Finnie, director of EDC hotels in the north-east explained to me that his rates will rise by 45.87 per cent, which represents an increase of £280,000. He said that that was

“an astronomical sum for our business and in the absence of transitional relief in my opinion, a wholly unfair increase.”

Further, Malmaison in Aberdeen, a welcome newcomer to the hotel scene, has been sent a bill for a 66 per cent increase. Agriculture and tourism are vital to Scotland’s economy, yet the Government has refused so far to lend a hand.

Jim Tolson mentioned Lauriston Nursery in Dunfermline that saw its rates rise by 150 per cent and finds itself paying more than Dunfermline Football Club. Mr Salmond was happy to have his photograph taken at the nursery last month; I wonder whether he will now be happy to vote for the introduction of a transitional relief scheme to ease the burden on Ms Crush’s business.

Alex Salmond is always quick to pronounce on economic issues that are the preserve of Westminster, but there has been an uncomfortable silence from him on business rates in Scotland, which are entirely within his power to do something about. In the First Minister’s constituency, Meldrum House hotel faces an increase of 161 per cent; Thainstone mart 71 per cent; Meldrum Motors 94 per cent; Strathburn Hotel 56 per cent; and Dean’s of Huntly 23 per cent. Those massive rises are unfair, yet the First Minister has nothing to say on the topic. The SNP’s latest public relations campaign tries to kid us that electing SNP politicians is akin to electing local champions. The businesses of Gordon do not have a local champion in their local MSP in this matter. Alex Salmond has not been heard articulating the concerns of local businesses in Inverurie, Meldrum or Huntly.

The refrain from the Government that 60 per cent of businesses will be better off is no consolation to the 40 per cent of them who are hardest hit. Jeremy Purvis, our finance spokesperson, warned the Government last year about the difficulties that this revaluation would cause and the Lib Dems have been calling for action for months. The SNP has blithely ignored those calls and turned its back on some of our most important businesses. It is not just me who thinks that; CBI Scotland director, Iain McMillan, recently said:

“We’re not happy that (finance secretary) John Swinney has rejected the business community’s advice. We’re living in times of severe economic restrictions”.

Before the revaluation in 2005, the previous Scottish Government consulted widely and introduced a transitional relief scheme to limit the increases in business rates. In 2010, the UK Government is doing that for English businesses, yet at a time of deep recession the SNP does not think that there is any need for a transitional relief scheme. I say that it is unfair to put Scottish businesses at a competitive disadvantage compared with businesses in England. It is time for the SNP Government to think again. It is not too late to introduce a transitional relief scheme to limit the increase in bills. In the end it comes down to fairness.

The Conservatives and the SNP voted down our first attempt to introduce a transitional relief scheme; today we give them another chance. I know where I stand on this matter.

Fuel Prices

Alasdair Morgan (Scottish National Party, South of Scotland)

The next item of business is a debate on motion S3M-6142, in the name of Liam McArthur, on fuel prices.

Liam McArthur (Liberal Democrat, Orkney Islands)

It has been a year since this Parliament had an opportunity to debate fuel duty and the disproportionate impact that higher fuel costs have on Scotland’s rural communities. Again, today, it is the Scottish Liberal Democrats who lead the debate.

As last week’s report by the Automobile Association highlighted, fuel costs nationwide are now at an all-time high, so this debate could not be more timely. In the AA’s report, Stromness in my constituency came out top of the pile at £1.30 per litre. That represents a 40 per cent increase over 2005 prices. Worrying though that undoubtedly is, not least because it is an upward trend that looks set to continue, the AA report rather glosses over the fact that in more remote rural parishes, and certainly in outlying islands, prices at the pumps are higher still. In effect, our remote rural and island communities face a triple whammy: higher fuel prices, longer distances and little or no public transport alternative.

Murdo Fraser (Conservative, Mid Scotland and Fife)

What is the Liberal Democrat position on the increase in fuel duty that was introduced on 1 April, announced by the Chancellor of the Exchequer, Alistair Darling? Do the Liberal Democrats support or oppose it?

Liam McArthur (Liberal Democrat, Orkney Islands)

As I understand it, Liberal Democrat MPs voted against that latest announcement by Alistair Darling. We can exchange views on voting intentions. I will come to the Tories’ voting record in just a minute.

When one considers that the average wage and household income in many remote rural and island areas is lower than it is elsewhere in the United Kingdom, the claim for a fairer deal on fuel duty becomes compelling. It is that claim that demands a response from this Parliament and a collective commitment from us to make the case and continue making the case at UK and European Union levels—wherever—until a satisfactory outcome is achieved. I recognise that the SNP’s favoured option is for a fuel regulator. As I said in last year’s debate, my concern about that option is that it fails to address the premium that is paid by people who live and work in remote rural communities. That was acknowledged by the minister’s colleague, Stewart Hosie, who has also accepted that the regulator would keep prices artificially high at times, such as we witnessed last year, when the price of oil falls back. I know that that concerns my constituents and I dare say that it concerns many who are represented by others.

I do not oppose the minister’s amendment as it asks merely that the option of a fuel regulator be looked at. It would be strange if, having urged Parliament to unite to make progress on the issue as a matter of urgency, I insisted on ruling out consideration of any potential solution, albeit in the context of the need to introduce measures as quickly as possible. That could even extend to the fuel price stabiliser, wheeled out proudly, if not entirely convincingly, by the Tories. Their proposal seems to suffer from the same shortcomings that I identified in relation to the SNP’s regulator, with the added complication that it asks us to pin our hopes on George Osborne’s being able to guesstimate an appropriate base rate for fuel—an heroic assumption, most would agree.

In last April’s debate, Alex Johnstone admitted that there were “significant similarities” between his party’s approach and that of the SNP. He went on to say in that debate:

“When fuel costs are high, it is natural that they should be even higher in remote areas”.—[Official Report, 30 April 2009; c 16930.]

Although that statement struck a rather discordant note at the time, I accept that Alex Johnstone qualified his remarks and that he did not seek to justify the disparity between the cost of fuel in rural and urban areas by comparing it with the mark-up paid by drinkers in central London for a pint of beer. Rather unadvisedly, former Labour Treasury minister John Healey tried that approach several years ago in response to a Liberal Democrat amendment to the Finance Bill that sought to introduce a rural fuel discount scheme. Not satisfied with joining forces with Labour MPs to defeat that amendment, not just in that year but on each occasion it has been tabled, Tory MPs now appear intent on deploying some of the worst possible arguments used by Labour ministers to resist such a scheme.

Charlie Gordon (Labour, Glasgow Cathcart)

In the unlikely event that the Liberal Democrats are in a coalition after the UK general election, will insistence on the measure proposed by the member be a deal breaker for his party?

Liam McArthur (Liberal Democrat, Orkney Islands)

The case for our proposal is recognised across the board and was even recognised by some of Charlie Gordon’s colleagues when we last debated the subject. On that basis alone it deserves more serious consideration than it has been given by Labour ministers to date.

According to one Tory MP in a debate in the House of Commons last May:

“One could, however, make the argument ... that people pay more for beer in London and the south-east, so the taxation system should provide a London discount.”—[Official Report, House of Commons, 13 May 2009; vol 492, c 932.]

Given the surprise and outrage caused by his comments, it is perhaps fitting that the Tory MP in question goes by the name of Mr Gauke. No doubt Mr Johnstone is thinking what I am thinking and will wish to offer Mr Gauke some suggestions as to where he might like to deposit his London discount.

The fact remains that the Tories did not support our motion last year that called for a rural fuel derogation. They went on to vote against our proposal for a transitional relief scheme that would have assisted many small rural petrol stations clobbered by the eye-watering rises that they now face in their rates bills. Now, Tory candidates claim that they want fairer fuel prices and a better deal for struggling fuel providers. That simply will not wash.

Despite the Tories’ indifference, last April, the Parliament supported our motion that committed the Scottish Government to working with its UK counterparts

“to construct a derogation under the EU energy products directive”.

Petition PE1181, which Am Pàipear in Benbecula promoted, made a similar call. However, since last year’s vote, in which they supported our motion, the vigour with which the Scottish ministers have pursued the case has been somewhat underwhelming.

When the Scottish Parliament information centre contacted Scottish Government officials last Thursday, it was told that a letter from John Swinney to the UK Government on 14 November 2008 was

“the most recent action taken by Ministers on this issue.”

I acknowledge that it has since emerged that Mr Swinney wrote again to the chancellor last month and that he received a reply on 9 April. Perhaps that is further evidence of Government officials withholding information from SPICe—after the revelation in the debate on rates. Whatever is the case, that level of activity does not convey the urgency that one might expect from the Scottish Government. That is disappointing, not least because the Scottish Government has a strong case to make. The arguments that Mr Swinney marshalled in his letter of 19 March to Alistair Darling were excellently put. As Mr Swinney said,

“securing a rural fuel derogation”—

not a fuel regulator, of course—

“could go some way to offsetting the significantly higher fuel costs in rural Scotland and put consumers and businesses in such areas on a more equal footing with those in urban regions.”

Mr Swinney cited the example of France, which has been granted permission to apply a reduced duty rate in the region of Corsica, to argue that

“a similar arrangement in Scotland could help alleviate the price pressures faced by those communities most affected by high fuel costs.”

Indeed. Likewise, Greece and Portugal have used such a derogation under EU law. Despite supporting that approach in other EU member states, UK Labour ministers believe it to be too “administratively burdensome” to implement here. I am surely not alone in being puzzled—if not a little alarmed—by the notion that the Greek civil service and tax authorities are capable of managing such administrative complexity but those in the UK are not.

Lib Dems have led the campaign for a rural fuel duty derogation for several years. At Westminster, my colleagues have developed and sought to introduce a rural fuel discount scheme, which has precedent elsewhere in Europe. The case for such a derogation is compelling and based on the principle of fairness. Unlike the proposals that other parties have made, our approach—which NFU Scotland has this week supported—addresses the overall cost and the premium that those in remote rural and island areas pay.

The costs of such a scheme are modest, but not so the potential benefits to people who live and work in rural Scotland. Less than 3 per cent of the UK’s population lives in remote rural areas, but that figure is 10 per cent in Scotland. If we do not make the case for a fuel duty derogation consistently, persistently and with renewed urgency, we cannot expect others to do so for us.

I have pleasure in moving the motion. I move,

That the Parliament notes the AA report of 8 April 2010 that indicates that the average price of petrol in the United Kingdom has reached an all-time high and is likely to rise still further; recognises the high premium over the national average paid for fuel at filling stations in remote rural and, particularly, island communities; regrets the damaging financial and social impact that this has on individuals and businesses in these areas; further regrets the lack of progress that has been made on efforts to find a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland, and calls on the Scottish Government to hold urgent discussions with the UK Government and the European Commission to construct a mechanism, under the EU energy products directive or otherwise, to reduce the fuel price differential between remote rural and island communities and urban areas of the UK.

Alasdair Morgan (Scottish National Party, South of Scotland)

If proceedings go to plan, I can allow members about a minute more than they expected.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I assure Parliament that we can make common cause on the issue with our colleagues in the Liberal party. Liam McArthur talked of a rural fuel derogation, which is a broad term that encompasses a range of possible options. Let us not become unduly fixated on how to do that—let us unite around the principle that it must be done.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

As with transitional relief?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Despite Mr Purvis’s unhelpful intervention—he appears to have forgotten that the previous debate has been completed—let us unite around the idea that duty should be reduced.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

I make a serious point to the minister. If he says that the principle is to have overall support for a derogation, why cannot the same principle of overall support apply to transitional relief for other businesses that are affected, which include rural petrol stations? Such relief would have an impact on precisely those businesses.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Mr Purvis knows that the small business bonus scheme has delivered benefit to 66,000 businesses throughout Scotland. No party and no previous Government have made the efforts that we have made to support small businesses and particularly to benefit businesses in rural areas.

I return to fuel duty. I welcome the fact that Liam McArthur has initiated the debate again, although I regret that it appears to be an annual event. We have yet to see movement by the UK Government to recognise the concerns in remote rural and island areas of Scotland about the effect of fuel duty and of high fuel prices on those communities. As I said in the debate in April last year, the issue affects the people of Cumbria, Northumbria, Cornwall, Devon, Wales and other parts of the United Kingdom. I am sure that they will be interested in what we say.

As Liam McArthur said, as a high proportion of our population lives in rural and remote areas, the effect on such communities cannot be overestimated. A disproportionate burden is placed on households and businesses, particularly in these difficult economic times.

Liam McArthur acknowledged that we have again recently engaged by letter with the UK Government. He should not imagine that our engagement is limited to an exchange of letters. We regularly meet and have telephone conversations with ministers from the UK Administration. The subject is raised on a wide range of fronts and forms part of the dialogue that ministers for a range of portfolios present in speeches and at meetings with a wide range of people.

Writing to the chancellor is of course important to put formally on the record the need to reduce the fuel price differential between urban and rural households and businesses throughout Scotland.

Liam McArthur (Liberal Democrat, Orkney Islands)

It is helpful that the minister sets out the representations that have been made, but does he accept that the direct response to SPICe from Scottish Government officials was that the letter of 14 November 2008 was the most recent representation that the Government had made on the issue?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I am certainly happy to explore why SPICe had that view, but Liam McArthur should be aware that not all correspondence between the Government and the UK Administration is necessarily or routinely put before SPICe. I am happy to ensure that members are well aware of our activity on the subject and I hope that the debate and my speech have provided clarity.

It is important to examine the evidence of the disparity in fuel pricing between rural and urban areas. Mr McArthur is of course aware that a disparity of about 10p exists between prices in Kirkwall and in Glasgow. That varies from day to day and week to week, but it endures and is of that order. Similarly, the Western Isles and the Shetlands have large burdens from the cost of fuel.

The purchase of beer was referred to. I am sure that that is more expensive in London, but it is a voluntary purchase, whereas the provision of fuel for vital rural services is not a discretionary buy for businesses or people who must travel to their work and transport themselves around. Throughout Scotland, we must all consider whether every journey is necessary. However, when the public transport options are fewer—as they inevitably are in rural areas—fewer journeys are discretionary and more are necessary, so more are affected by the high taxation regime.

The latest letter to the chancellor, which was sent on 19 March, asked him to reconsider his decision not to take corrective action through the tax system. Any derogation of whatever character—be it that proposed by the Conservatives or by us or the Liberals’ variant—would do if it delivered the result. I am not partisan about that. A derogation would make a difference and put rural areas on a more equal footing with urban areas, which would reduce the competitive barriers of high fuel prices.

The chancellor’s latest rejection has let down thousands of households and businesses in remote parts of Scotland that face high fuel costs, despite the actions—to which Liam McArthur referred, as other members no doubt will—that have been permitted throughout the European Union in places where national Administrations have made and argued the case for them. I refer, in particular, to the example of Corsica, an island that is greatly affected by high fuel prices and is now benefiting from the actions of the French Government.

With the price of petrol having risen by 27 per cent in the year to March 2010, it is important that we get the early action that is needed. There has been a change in the way in which increases are phased, but there will still be increases. It is time for action. On behalf of my party, I will support the Liberals’ motion and my amendment.

I move amendment S3M-6142.2, after second “mechanism” to insert:

“, including consideration of a fair fuel regulator”.

Alex Johnstone (Conservative, North East Scotland)

It is nice to return from the recess to find that this lovely, friendly Parliament is turning into something of a bear pit. I hope that the debate does not progress in the same way as the previous one.

I welcome the fact that the Liberal Democrats have brought to the chamber a motion that allows us to talk about fuel prices, especially their impact on some of our rural and peripheral communities. Back in 1997, when we last had a Conservative Government, the UK major brand average pump price was only 61.7p per litre, according to the UK Petroleum Industry Association. As we speak, there is no shortage of places around Scotland where the price displayed on the forecourt is double that price.

Given the state of the public finances, it would be irresponsible of any member to make any commitment to reduce fuel duty at this stage, but—as has been mentioned—the UK Conservatives are consulting on the introduction of a fair fuel stabiliser. I admit that there are certain similarities between the proposal and proposals that other parties have made. The fair fuel stabiliser would ensure that the economy was less exposed to the instability of international oil markets and would keep prices at the pump more consistent. Under the proposal, fuel duty would fall when fuel prices went up. When fuel prices went down, fuel duty would rise again. The Government would save in the good times in order to help in the bad times.

The approach has a practical offer to make in relation to the road haulage industry and the costs to industries in peripheral areas that are associated with road haulage. I have talked to the industry and its representative organisations on many occasions. They indicate that the industry experiences two problems: first, the price of fuel; and secondly, the volatility of that price. If we address the volatility by creating some stability in fuel prices, we will deal with one of the problems from which the industry suffers. That is why we have approached the matter in this way.

Liam McArthur (Liberal Democrat, Orkney Islands)

Will the member take an intervention?

Alex Johnstone (Conservative, North East Scotland)

I will carry on for the moment.

I turn to the subject of business rates relief. The Scottish Conservatives have called on the Scottish Government to think again about the way in which filling stations in rural areas are subjected to business rates; I do so again today.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the member give way on that point?

Alex Johnstone (Conservative, North East Scotland)

Not at the moment.

It is wrong to ignore the distinction between independent filling stations and those that are operated by big oil companies and large supermarkets. Independent retailers have less bargaining power, and it is unfair to assume that independently run filling stations operate at the same levels of profit as their larger rivals. We believe that, in the recent revaluation, business rates assessors have not taken that factor sufficiently into account in the case of filling stations and should look at the matter again. Hopefully, that would reduce business rates for independent filling stations across Scotland. It is essential that businesses that find themselves in such a position take the opportunity to appeal urgently.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I will try again. Will the member give way on that point?

Alex Johnstone (Conservative, North East Scotland)

No, I will not.

Not much has happened in the year since the previous Liberal Democrat debate on fuel duty, which was held on 30 April 2009. During that debate, I moved an amendment that called

“on the Scottish Government to report back to the Parliament on the extent to which a fuel duty derogation for rural areas would be permissible under EU law and what impact such a derogation would have on carbon emissions and the Scottish budget.”

Regrettably, that day the SNP and—yes—the Liberal Democrats voted against the amendment, which fell. It is somehow disingenuous for the Liberal Democrats to come to the chamber today bemoaning the lack of progress that has been made on finding a measure to reduce fuel prices in rural areas when this time last year they called a halt to the process of finding a solution. If we had received the advice for which the amendment called and knew today what it was, we would be in a position to progress the matter, had we not done so earlier.

The concept of a rural fuel derogation is attractive. It is essential that we realise that rural fuel prices and fuel prices throughout Scotland are geographically regressive. People in rural areas need to use more fuel because they travel further and more often. As we know, many people in difficult circumstances must run two cars when others in less rural areas would run only one. It is, therefore, essential that we address the issue. We look forward to taking the opportunity later today to vote for a combination of the motion and amendments.

I move amendment S3M-6142.1, to leave out from “and calls” to end and insert:

“as a result of the Liberal Democrats and the Scottish National Party voting against Conservative amendment S3M-4006.1 on 30 April 2009, which called on the Scottish Government to report back to the Parliament on the extent to which a fuel duty derogation for rural areas would be permissible under EU law and what impact such a derogation would have on carbon emissions and the Scottish Government, and welcomes the commitment of a future Conservative government at Westminster in relation to the introduction of a fair fuel stabiliser.”

Charlie Gordon (Labour, Glasgow Cathcart)

We welcome the debate. This is the third spring in a row in which the Scottish Parliament has debated fuel prices. We acknowledge that high fuel prices are of long-standing concern to Scotland’s remote communities. There can be increased hardship in such communities when further spikes in fuel prices affect people who often have no public transport alternative to car use or no access to mainstream networks for domestic energy and whose other living costs are adversely affected by high distribution costs.

If we take the view that the reserved issue of fuel duty and the associated issue of value added tax, set by the UK Treasury at standard rates throughout the UK, must be derogated in some form in Scotland’s remote communities, we can consider the Tories’ fuel duty stabiliser, the SNP’s fuel duty regulator and the Liberal Democrats’ press release. The problem with the stabiliser and regulator models is that, although both are based on the principle that fuel duty should go down when the price of fuel goes up, there is no guarantee that retailers would pass on the benefits of lower duty via prices at the pump. Of course, when oil prices dropped, fuel duty would rise again. In focusing on duty, we should not ignore other, global factors, such as the current relative weakness of the pound against the US dollar.

The latest Liberal Democrat push includes Tavish Scott’s so-called Highland manifesto, in which he spoke out on the issue. Surely Angus, the Borders or, for that matter, Cornwall or the Norfolk fens are not to be ignored in the Liberals’ outpourings?

Jamie McGrigor (Conservative, Highlands and Islands)

Will the member give way?

Charlie Gordon (Labour, Glasgow Cathcart)

I have only four minutes.

Vince Cable, as well as that boy Clegg whom we always see with him, supports high fuel prices for environmental reasons. In March 2008, Norman Baker—it was his turn that week to be the Liberal Democrats’ UK shadow transport spokesman—said:

“The problem with variable fuel duty is that it would be too difficult to operate.”

However, Labour will support the Liberal Democrat motion tonight—not just because Vince Cable once gave me a Werther’s Original or because the motion will not do any harm, unlike the Tory and SNP amendments, for reasons that I have already stated, but because Labour has an open mind about finding additional, practical measures to bring permanent mitigation of high fuel costs at the pump in remote communities. We want to build on the record of the previous, Labour-led Scottish Government, which developed the rural petrol stations grant scheme that has already afforded some mitigation.

Clearly, there is an on-going role for rates relief. I am surprised the minister did not mention it because I know that the convener wrote to him after this week’s meeting of the Transport, Infrastructure and Climate Change Committee, which endorsed the Scottish Government’s proposal to seek suggestions from island communities on other possible mitigation measures. I am at one with the minister’s emphasis on practicality. There is more than one way to skin a cat, as long as the cat gets skinned in the end.

Labour will take an active interest in the process of consulting island communities for additional suggestions.

Jamie McGrigor (Conservative, Highlands and Islands)

The member is speaking about island communities. This morning, I spoke to my constituents on the Isle of Coll, where the price of petrol is £1.39 per litre.

Charlie Gordon (Labour, Glasgow Cathcart)

That is a good illustration of the problem. I have happy memories of Coll and all that I was able to assist them with when I was convener of Strathclyde Regional Council’s roads and transport committee in a previous incarnation.

We will take an active interest in the new process that focuses first on the worst-affected communities, such as Coll, and we will keep an open mind on further mitigation that is practical, permanent and at the pump. We will leave the posturing to others. There must be an election somewhere.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The fundamental problem with fuel duty for many of my constituents, particularly those in west Aberdeenshire, is that the car is a necessity, not a luxury.

At the start of the debate, the Tories had the nerve to ask whether the Liberal Democrats voted for or against the increase in fuel duty resulting from the UK budget. Just to enlighten my Conservative colleagues, I say that, in the vote on the recent budget, my Westminster colleague Robert Smith, together with 42 other Liberal Democrats, voted against the measures to increase fuel duty, while only one Conservative, the member for the Vale of York, joined them. All the other Conservative MPs either absented themselves from the vote or abstained. I thought that I should make that point to the deputy leader of the Tories.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will the member give way?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I will give way in a moment.

What I find particularly galling is the ignorance of many Conservative MPs on the issue of fuel duty. We have already heard how, last May, one Tory MP, David Gauke, compared the problems caused by fuel duty for people who live in remote and rural areas, such as my own, to those caused by the duty on beer in London. The Conservatives just do not understand that, unlike beer, fuel is a vital lifeline product for many of my constituents.

The Conservative position on rural petrol stations is equally galling. Alex Johnstone would not give way to me when he was making his speech, so I will reply to him now. Alex Johnstone cannot say that he advocates relief for our rural petrol stations when he voted against such relief as recently as three weeks ago. Alex Johnstone is standing for election to another place and he says to people in my constituency that he supports help for rural petrol stations, but he voted against it in the Parliament. We cannot have that level of hypocrisy in the Scottish Parliament. He and his Conservative colleagues voted against a Liberal Democrat amendment instructing the Scottish Government to implement a business rates relief scheme. Such hypocrisy brings politics and politicians into disrepute. When the Conservatives had the chance to help our rural petrol stations by supporting a transitional rates relief scheme, they fluffed it, and they will fluff it again in tonight’s vote. They did not have the courage of their convictions. Just because the Liberal Democrats proposed it, they decided to vote against it, hoping that no one would notice. That level of hypocrisy on the part of the Conservatives has to be seen to be believed.

We need a derogation for rural areas from the worst effects of fuel duty. The Liberal Democrats advocate that with a passion. The European Commission allows it. It already happens in France, Portugal and Greece, and it could happen here, if only the Conservatives would vote for it.

Why is the UK Government so reluctant to do it? Is it because such a derogation would affect only 3 per cent of the UK’s population? If that is the case, it is a shameful neglect of Scottish interests, as it would affect more than 10 per cent of the Scottish population. A derogation from fuel duty for our rural areas would be a real help for people who, I emphasise, need to use their cars.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Does the member believe that if we had the powers here, we would have different outcomes?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I certainly believe that if the Liberal Democrats were in power in Westminster—of course, everyone has the opportunity to vote Liberal Democrat on 6 May—we would have such opportunities. We do not need any change in powers per se to achieve that if we get the right result on 6 May.

It would be particularly helpful to my constituents in west Aberdeenshire, for whom I speak here. Out of necessity, that area has the highest level of car ownership in the country because of its difficulties with public transport.

I urge the Conservatives in particular to get real, to put petty politics behind them and to vote for a solution to rising fuel prices for our rural motorists, who have no option but to use their cars as essential tools for modern living.

Maureen Watt (Scottish National Party, North East Scotland)

This is a timely debate, given that petrol prices are at the forefront of many people’s minds because of the recent price increase. The first part of the Liberal Democrat motion has little in it that one can disagree with.

The SNP has long championed the case of people who live in rural communities where remoteness and lack of public transport make a car a necessity rather than a personal choice. With fuel duty due to rise again by 2.76p in the current financial year, it is the rural motorist who will pay the heaviest price. The situation is totally unfair, and I know that the SNP group at Westminster has tried repeatedly to change it. While the current Liberal Democrat claims of support for the SNP’s position on fuel prices are welcome, it is a shame that they have not been backed up by action when the Liberal Democrats have had the opportunity to make a difference to people who live in rural areas. The situation of Liberal Democrat elected representatives in rural Scotland is often made completely untenable by the utterances of their London-based colleagues, who construct their policies from a London perspective.

In 2009, Liberal Democrat MPs voted to increase the money that people must pay in fuel duty, but every time the SNP has tried to introduce a fuel regulator into Westminster’s budget, they have failed to support it. As ever, it is a case of the Liberal Democrats saying one thing to their electorate and ignoring it when it is time to take action.

Liam McArthur (Liberal Democrat, Orkney Islands)

I have already set out the shortcomings in the SNP’s fuel regulator, which might explain why my MP colleagues voted against it. Will the member explain why SNP MPs did not press to a vote the tax rises that were announced last September?

Maureen Watt (Scottish National Party, North East Scotland)

The member brought the debate to Parliament today, but 37 Liberal Democrat MPs voted for the UK budget, which included the fuel duty increases. Of those, 24 Liberal Democrat MPs, including some from Scotland, were not there to vote on behalf of their constituents. The hypocrisy of the Liberal Democrats in the chamber this morning is unbelievable.

It is true that a fuel duty regulator would be a welcome measure for the reasons that have been set out. It would help motorists by putting an end to the wild fluctuations in fuel prices, and it would help businesses, such as the road haulage industry and those in the fishing and farming sectors, by allowing them to plan their operating costs with some certainty. The other parties have failed to back such a regulator when given the chance, which undermines any shred of credibility that they have on fuel prices.

The latest example of that failure occurred earlier this week with the chancellor’s rejection of the Scottish Government’s call for a derogation for fuel prices in rural areas, which would recognise and mitigate the premium that remote locations pay for their fuel. Given that the Labour UK Government backed such measures for France, its opposition to implementing them here can only be described as utterly hypocritical. People in rural areas and the businesses that rely on fuel to operate deserve much better than that.

What is the difference between the SNP’s long-held fuel regulator policy and the Tories’—what do they call it?—fair fuel stabiliser? The Tories recognise that there is little difference. It is another example of the Johnnys-come-lately to sensible SNP policies.

Once again, the SNP’s consistency has been shown to be right. That is why the people of Scotland need the SNP as their champions in Westminster so long as we remain there.

Duncan McNeil (Labour, Greenock and Inverclyde)

The impact of fuel prices cannot be overestimated and the disproportionate impact on remote and rural areas has been acknowledged in the debate. Liam McArthur acknowledged that impact well.

Although it is predictable that, in a pre-election period, politicians who are not in power would seek to gain political advantage on the issue, there is no evidence to suggest that if any of those parties was in power, the situation would be radically improved any time soon.

The proposition that fuel duty is the cause of the problem and its solution is opportunistic and fundamentally dishonest. It conveniently ignores the uncertainty of currency fluctuations, crude oil costs, refining costs and distribution and marketing costs. If there is one certainty, it is that fuel is not more expensive in Shetland, Orkney or the Western Isles because of fuel duty, as the duty is the same right across the board.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Can Duncan McNeil tell me the difference in refining costs between fuel that is delivered to Stornoway and fuel that is delivered to Glasgow?

Duncan McNeil (Labour, Greenock and Inverclyde)

No, I cannot. Perhaps the minister will put the answer in SPICe if he knows it, but I cannot. The idea that distribution costs do not come into the equation is wrong. I am surprised that a transport minister would make such a frivolous intervention.

There is no doubt that people living in Shetland, Orkney or the Western Isles suffer a greater challenge when fuel prices peak. Not only the UK Government, the Scottish Government and EU institutions but the parties in this Parliament need to come together. We are all at one in recognising that, as an elected Parliament, we have a responsibility to come together and offer solutions rather than score points on the issue if we are to make progress on it in the longer term.

My purpose in taking part in the debate is of course to point out that the rising costs of fuel and the differentials in price in urban Scotland are also a bone of contention, not least in Inverclyde in my constituency, where we consistently pay above average to subsidise lower prices in other areas. Lack of competition is the issue there. That problem is recognised by the Competition Commission, which undertook a two-year inquiry into the situation and recommended a competition test, which aims to prevent one retailer from gaining a dominant position with larger stores in a local area to the detriment of consumers.

That recommendation was made to the Scottish Government six months ago and there has been no indication of progress or of a statement from the Government since then. There is an opportunity for the Government to show that it is serious about the rising costs of fuel by using its powers under planning legislation to enable the creation of local markets that would benefit consumers and, I hope, produce a level playing field that does not currently exist. To concede the possibility that the matter be dealt with under competition law—which, as we all know, is a reserved matter and, therefore, would be dealt with by the UK Government—would be a strange decision for an SNP Government.

I hope that the minister will be able to address some of the situation in his closing speech. I challenge the Scottish Government to begin formal consultation on the recommendation as soon as possible with a view to introducing a competition test under planning legislation. To do anything less would be to miss an opportunity to challenge the power of the large supermarkets. It is time for the SNP Government to do its bit to support hard-pressed motorists who are being ripped off at the petrol pumps.

Rob Gibson (Scottish National Party, Highlands and Islands)

It is always a delight to take part in debates that reflect the rural and island communities, on which this debate focuses. I am sorry that none of the rural and island members from the Labour Party has been here to take part, but I am not surprised because their position is entirely untenable.

Richard Simpson said on “Brian Taylor’s Big Debate” in Aviemore just before the SNP conference that the fuel escalator should continue. That was a central belt member speaking in the Highlands and telling us that the London Government’s fuel duty should continue to rise. In other words, it was the exact opposite of trying to find solutions, which Charlie Gordon tried to suggest today Labour wants to do.

Charlie Gordon (Labour, Glasgow Cathcart)

I pointed out that there is more than one way to skin a cat and that the mitigation that we all claim to seek will not necessarily come through changing fuel duty.

Rob Gibson (Scottish National Party, Highlands and Islands)

It sounds to me as though Labour proposes a very scabby cat, if I may say so. We need to try to deal with the 90 island communities in Scotland. England may have only about six inhabited islands, but we have areas that are severely disadvantaged. Many of them are represented by people who have been seeking solutions to the problem for a long while.

It is welcome to have converts, as my colleague Maureen Watt said, but we must understand the chancellor’s argument about this issue a little more. He says in his letter to John Swinney on 9 April:

“I understand that fuel prices are typically higher than the UK average in remote or rural parts of the country, including the Highlands and Islands of Scotland, but this is not the result of the fuel duty regime, rather it is the product of market forces”.

Right. My contention at the Transport, Infrastructure and Climate Change Committee has been that market forces have failed. It is not a question of being able to have competition between two different petrol stations on islands, because the same supplier takes the fuel to the islands. Competition does not work, so we have to intervene by some means to ensure that market forces are dealt with.

I have suggested that we consider bulk buying by local councils in such areas. I proposed that for the Highland Council area, but John Laing, the councillor in charge of the council’s transport, environmental and community services committee, said that it would be too complicated. Well, I am sorry. It is an idea that people on islands want to be implemented. As the cabinet secretary is looking for ideas, I hope that that might be considered because, in certain areas, we must ensure that local petrol stations are supplied at competitive prices. If there has been a disadvantage of 10p in terms of fuel duty, that has not helped either, but intervening on the market is an important part of the solution.

The Transport, Infrastructure and Climate Change Committee threw out—or closed, we should say—a petition from the Western Isles because the Labour members and the Green convener considered that the wording of it was such that it could be closed because the cabinet secretary and the Government had been asked for their responses. I am sorry to say that it was closed despite the Liberal and two SNP committee members voting against that and for keeping the subject live.

If this debate is anything, it is a means to keep the issue alive and ensure that we find solutions. If there is good will, the first part of our approach must be to consider the proposed fuel duty regulator. We have had all the arguments about that.

If we are going to be four-square on the matter, the Liberal Democrat members from the Highlands and Islands in the UK Parliament have to stand on their feet and fight for this. So often, when it comes to a vote, they are not present. Yes, Sir Robert Smith has been present and Alan Reid was there for one of the most recent votes, but where were Charles Kennedy, Viscount Thurso, Alistair Carmichael and Danny Alexander? They were not there to vote. A regulator is precisely the kind of matter on which it is important for us to speak with one voice but, when it comes to the bit, the Liberal Democrats do not back us up. Their abstentions throughout the process have not helped, and although we wish to support their motion in principle, we look for more guts from them in the future.

Murdo Fraser (Conservative, Mid Scotland and Fife)

The debate has been better tempered than the one that started the morning—at least, so far—perhaps because we are missing the running commentary from a sedentary position of Mr Tavish Scott, who has no doubt gone off to hone his witticisms for First Minister’s question time. We will find out shortly whether it was worth it, although from past experience I fear that we will be disappointed again.

We are grateful to the Liberal Democrats for giving us the opportunity to discuss the important issue of fuel prices. Many of us have been horrified to see the rising prices at the pump in the past few weeks, with prices of at least £1.20 a litre in many rural areas, and in some places much more. As was pointed out earlier, that has a major impact in rural areas where there is no realistic and affordable public transport alternative and the motor car is a necessity of modern life.

It is interesting that the Liberal Democrats have concentrated on

“a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland”.

Perhaps surprisingly, there was no mention in Mr McArthur’s opening remarks of Alistair Darling’s fuel duty hike, although Mr Rumbles subsequently referred to it. I am glad that he did, because I am genuinely confused about the Liberal Democrat position on fuel duty taxation. I had the misfortune to watch “The Politics Show” on BBC Scotland on 21 March and I enjoyed the sight of somebody called Nick Clegg, who is apparently the leader of the Liberal Democrats at Westminster, being asked to confirm the Liberal Democrat position on the fuel duty rise. He confirmed that Liberal Democrat policy was not to seek to reverse the increase.

Moments later on the same programme, we heard an interview with somebody called Danny Alexander, who apparently holds the elevated title of Mr Clegg’s chief of staff. Mr Alexander said:

“I don’t think that the Government should be pressing ahead with trying to increase fuel duty yet again in April with prices going up so far and so fast over the past few weeks.”

Glenn Campbell asked Mr Alexander:

“Do you want the Chancellor to postpone or cancel the planned increase from April 1st?”

Danny Alexander replied:

“Yes, I do.”

When it was put to Mr Alexander that that contradicted what his boss Mr Clegg had said a few moments before, he was left floundering and embarrassed. [Interruption.] Perhaps the Liberal Democrats who are here today could confirm the Liberal Democrat position on the rise, instead of shouting at me from their seats. Are they on Mr Clegg’s side or Mr Alexander’s side? The two are far apart.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

If the deputy leader of the Conservative party had listened to the debate, he would know that I have already said that 43 Liberal Democrat MPs voted against the budget increases in fuel duty. We do not want to see them. It is quite different from Nick Clegg turning around and saying, “Well, we voted against it.” It is a completely consistent approach from our MPs.

Murdo Fraser (Conservative, Mid Scotland and Fife)

If that was supposed to provide clarity in the debate, it was an absolute joke. None of us is any the wiser as to the Liberal Democrat position. Nick Clegg says, “We can’t reverse it.” Danny Alexander says, “Yes, we can.” For goodness’ sake, let them make up their minds.

For our part, the Conservatives are clear that measures need to be taken to help to protect those who live in rural Scotland, in particular, from the impact of rising fuel prices. As Alex Johnstone pointed out, we have said that we will consult on the introduction of a fair fuel stabiliser to help to keep prices at the pump more consistent. Our proposal was warmly supported by Edmund King, the president of the AA, who said:

“It is right that political parties are addressing the problem of fuel duty now we have record prices at the pumps.”

A major advantage of our proposed fair fuel stabiliser is that, unlike with the Liberal Democrats’ proposal, there is no doubt about its legality. As we have heard, both today and in earlier debates on the subject, there are questions about the legality of having a derogation in different parts of Scotland. Surely we should concentrate on what we know we can do rather than on what might be possible. It is a pity that, in the year that has passed since our previous debate on the issue, the Liberal Democrats are no further forward on trying to convince us about the legal position on a derogation. They would have been more convincing in this morning’s debate if they had done that.

Another dimension to the debate about fuel that has become particularly acute in recent weeks is the business rates that are paid by filling stations in rural areas. That, too, was mentioned earlier. Just before the recess, the transport minister, Mr Stevenson, told me in the chamber that we have lost a third of the rural petrol stations in Scotland in the past 10 years.

Alasdair Morgan (Scottish National Party, South of Scotland)

The member should wind up.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Many more are going to close, and the Government must take some action on the matter.

Charlie Gordon (Labour, Glasgow Cathcart)

It has been a reasonably good debate. As I said, this is the third year in a row that we have discussed the subject. Let us hope that we make some practical progress before this time next year.

Liam McArthur posed the issues fairly well and in a fairly balanced way. It is the generic issue of mitigation—or, if you will, derogation—that was the focus of the serious aspects of the debate. Stewart Stevenson, my usually conscientious adversary, departed from his standards later in the debate, in his intervention on Duncan McNeil about refining costs. A recent SPICe briefing on the issue for the Public Petitions Committee identifies refining costs as one of five principal factors in the problem. Perhaps the minister was trying to make a more obscure point—that has been known on his part—but he can clear that up when he sums up.

I will own up. I like Alex Johnstone of the Tories too, and not just because, like me, he is a transport spokesperson. There was something about him this morning that seemed to infuriate Mike Rumbles. I thought that Maureen Watt rather phoned it in. Duncan McNeil made the interesting suggestion that land use and planning might be one possible route for bringing additional mitigation to bear.

I will be scrupulously fair to Rob Gibson, who reiterated the point that he made in the Transport, Infrastructure and Climate Change Committee earlier this week that local market failure is at work, which is a distinct issue from that of fuel duty itself. He made an interesting practical suggestion about bulk buying, but he came dangerously close to misleading the Parliament about what was decided by the committee earlier this week. Although we technically closed down a petition, that does not mean that the committee closed down the issue—far from it. Sadly, the convener of the committee is no longer present, but I quote from his letter of 14 April to John Swinney about what was decided in committee:

“The Committee has now concluded its consideration of Petition PE1181”—

incidentally, the committee considered the petition three times—

“but will continue to maintain an interest in the issue of high fuel prices in rural and island communities. I would be grateful if you could undertake to inform the Committee, on an ongoing basis, of any significant developments on this subject.”

It is not helpful, either, to cast aspersions about the nature of constituencies that members represent. I make no apology for being a constituency MSP for Scotland’s largest city, but I am also Labour’s transport spokesperson. I think the issue is important, and that is why I am here.

I hope that, when we have another debate on the subject next year, we will be able to say honestly to people who are adversely affected by the problem, “In the past year, we have made real progress with additional mitigation.”

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The debate has had running through it a strand of agreement on the definition of the problem. I do not think that anyone has suggested that there are not problems in rural areas. That at least gives us a consistent basis on which to argue about what some of the solutions might be.

Agreement on the solutions is perhaps less widespread, but there is a consistent thread. Alex Johnstone highlighted the fact that, in 1997, the price of fuel was 61p a litre. As I look round the chamber, I think that I may be the only member present who remembers when it was half a crown a gallon.

Charlie Gordon (Labour, Glasgow Cathcart)

I remember when lager was half a crown a pint.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Mr Gordon should not pretend that he is the same age as me and that he remembers that—it seems somewhat unlikely.

The fair fuel stabiliser that the Tories have proposed at least has the merit of providing an opportunity for discussion and debate. I note that Murdo Fraser said that there would be consultation on that idea. Ultimately, we should coalesce around whatever can be shown to work. That is the important thing.

Alex Johnstone mentioned that, according to road haulage interests, in essence the problem is the price of fuel and the volatility of that price. It is likely that we all agree on that. He highlighted the fact that independent filling stations have less buying power. That is where Duncan McNeil failed to grasp the nettle in relation to rural areas when he spoke about possible amendments to the planning system to increase competition. On many of our islands and in many of our remote communities, the issue is not competition. There is simply not the volume to support multiple outlets, and there never will be.

Duncan McNeil (Labour, Greenock and Inverclyde)

I fully accept that. I made it clear that I was making a plea for the situation that urban communities face to be addressed. When will the Scottish Government respond to the Competition Commission’s recommendation? Does the Scottish Government intend to progress it through planning legislation rather than competition legislation?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I will come to that in a minute, but I want to finish my remarks on what Alex Johnstone had to say. We did indeed vote against the Conservative amendment to the Liberal Democrat motion for the debate to which he referred on the basis that, as Liam McArthur described, it appeared to move the issue from centre stage.

I thought that Charlie Gordon was rather unwise to talk about the weakness of the pound making a significant contribution to high prices when the weakness of the pound is, of course, a reflection of the weakness of the economy over which the Labour Government has presided. We accept that there are global difficulties, but relative differences affect relative valuations of currencies. The pound has sunk against the dollar. That tells us that, in relative terms, the UK Administration has been less effective in engaging with the world’s economic problems.

Charlie Gordon talked about my role as transport minister. It is a great pleasure to stand before members as the UK’s longest-serving transport minister. There is a sense of déjà vu—we have had the reference to skinning a cat on previous occasions.

Mike Rumbles correctly made the important point that in rural areas, the purchase of fuel for cars and for goods transport is a necessity and not the luxury that the purchase of beer might be.

Reference has been made to the correspondence between John Swinney and Alistair Darling. I will quote from Alistair Darling’s letter of 9 April, in which he said:

“different fuel duty rates for some parts of the country would be administratively burdensome both for fuel sellers and for the Government.”

I do not think that that shows a willingness to engage constructively to solve the problem of rural fuel prices, as has been done elsewhere in the European Union. It can be done: if the Greeks can do it, I hope that the UK Government can do it.

I turn briefly to the competition issue that Duncan McNeil raised. One of the great difficulties of saying when planning permission is granted that a filling station may be operated only by, for the sake of argument, Shell, because BP runs all the other filling stations in the area, is that that would reduce the economic value of Shell’s investment, because it would be forbidden from selling the filling station to another operator. In saying that, one would make development less likely. However, if one is blind to the company that makes a planning application—that is a principle of the current planning system—there is nothing to stop the planning permission being transferred to someone else. That would be the case even if account were taken of the company that made the application.

It is important to understand that refining costs are the same, wherever in Scotland fuel is sold.

It has been a good debate, in which we have been united in defining the problem in a similar way. Rural areas of Scotland have substantially higher fuel prices than urban areas do. I hope that the debate has illuminated some of the issues and opportunities that exist, and that all members will unite with political colleagues in other jurisdictions in their efforts to remedy the situation.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

On behalf of my constituents who, like those of Liam McArthur and other members, face crippling prices, I thank colleagues for what has been a relatively thoughtful and consensual debate.

Some thought-provoking speeches have been made in a truly constructive spirit. I accept that Duncan McNeil’s points on planning at least bear some examination. Such work lies before us. I note and am grateful for Charlie Gordon’s conciliatory remarks, in which he looked forward to how we might make progress on the issue in future.

As all members have said, the price of fuel has a huge impact. For my constituents, it affects everything from the price of a tube of toothpaste to the price of a fence post. It affects the cost of public services and our ability to deliver them. It affects crofting, agriculture and tourism. What drives people who care about the issue is that its effect comes right down to the price of a pensioner’s supermarket basket of messages, to which it adds. It affects people on the lowest incomes.

I want to make specific reference to my constituency. Setting aside the context of the problems that are faced across the board in the UK, we face the challenge that the continuing decommissioning of Dounreay presents us with of putting in place suitably high-quality replacement employment opportunities. In that regard, the crippling price of fuel militates strongly against the best efforts of Government, its agencies and individuals who care about the issue.

I will paint in the background scene to the problems that we face. The taking out of the post bus service on the north coast is an issue that members and the minister have heard me talk about on many occasions. That illustrates the fact that public transport is not available to replace the use of cars, which is essential. Sadly, we still see rural petrol stations closing. The one at Helmsdale stands empty and unused. Those factors form part of the background to the situation.

I accept that prices are very high in Liam McArthur’s constituency and on the island of Coll, but in Thurso unleaded fuel costs £1.29 a litre and prices in Caithness vary between £1.24 and £1.29 a litre. In my constituency, distance is a huge issue. In the context of Scotland’s land mass, the distances that my constituents have to travel to filling stations to fill up with the motor fuel that is essential to them and without which they cannot function are among the biggest in the country. They are paying an extra tax because of the fuel that they have to use to go and fill up.

As members will know, my colleague in Westminster, John Thurso, brought forward a paper that illustrates and fleshes out what Liam McArthur’s motion speaks about—an area-based derogation. The paper is detailed and is now a matter of record in Westminster.

Alex Johnstone (Conservative, North East Scotland)

On the subject of an area-based derogation, I notice that there is a reference in the motion to

“a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland”.

Will the member enlighten us as to where the boundaries between such areas would exist and which areas he hopes would benefit from such a scheme?

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Of course, that would have to be decided as the scheme was introduced, but the boundaries would surely be based on the areas of greatest need. That crystallises something of the difference that lies at the heart of what we are debating. As a party, we are unashamedly saying that any scheme should be area based and should target the people who face the most crippling prices. I accept that other parties are making other suggestions, but there is a difference between the broad-brush approach that would affect the whole of Scotland and the more directly targeted approach. However, it is right and proper that we should debate the issue, and I welcome the fact that we are talking about it today.

When John Thurso was a member of the Treasury Select Committee, he put it to the then Chancellor of the Exchequer that such a derogation should be looked at. He received a flat refusal, but for the record I say that the Treasury has accepted more recently that it should at least be considered. We will see what comes back from that.

As Liam McArthur has said, derogation works in an EU context. France uses such a scheme for the island of Corsica, and in EU law it is absolutely workable. To that extent, we say that we should just pick up something that is proven to work and look at how we could introduce it in Scotland. To that end, I have written to the EU to ask for the details of how derogations are applied in parts of the EU. I await the reply with the greatest of interest.

It is my considered view that a mark of a civilised society is how it treats its disadvantaged members. I put it to the chamber that my constituents are being greatly disadvantaged by prices that they simply cannot afford for what is a necessity of life. The question is whether the Government will simply allow outlying communities to wither and die—I sincerely hope that it will not—or whether it will show imaginative support that will allow future generations to live, work and rear families in my constituency.

We have a workable scheme. I accept that there will be a debate with other parties about their schemes, but at least there will be that debate. I believe that we have a recognition throughout the chamber today of the severe nature of the problem that my constituents face. I hope that we can all coalesce around my colleague Liam McArthur’s excellent motion.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I suspend the sitting for two minutes.

11:38 Meeting suspended.

11:40 On resuming—

Scottish Information Commissioner (Court Case)

Elaine Murray (Labour, Dumfries)

1. To ask the Scottish Executive what its position is on the use of public money in its appeal to the Court of Session regarding the Scottish Information Commissioner’s access to Government documents. (S3O-10092)

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

The Scottish Government is asking the court to clarify the responsibilities of public bodies under the Freedom of Information (Scotland) Act 2002. That is consistent with the Scottish Government’s support for the proper functioning of freedom of information in Scotland and is an appropriate use of public money.

Elaine Murray (Labour, Dumfries)

In November last year, one of my researchers requested, under FOI, information relating to a ministerial visit to my constituency. Despite the advice of the Scottish Information Commissioner on how to make his request, he became embroiled in a bizarre exchange of correspondence with the minister’s private secretary in which increased focus was demanded before information could be released. It now transpires that others, including the commissioner himself, have had similar experiences.

The minister’s party voted for the Freedom of Information (Scotland) Act 2002, and the Scottish Government’s website states that it is committed to open government and freedom of information. Why, then, is the minister’s Government trying to thwart the intentions of that act by not releasing information that would previously have been released by other Administrations?

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

I have no knowledge of the “bizarre” exchange or the ministerial visit to which Elaine Murray refers. However, I can say that the Scottish Government has dealt with more than 1,600 requests in 2009, and in most cases we provided some or all of the information that was requested. Less than 5 per cent of our decisions on requests are appealed, and we rejected only a very small proportion of requests as invalid. Therefore, we have a strong record on freedom of information. We recognise the principles and are putting them into practice.

The court action, which is of course sub judice, will have the advantage of clarifying the law in an area in which there are some uncertainties and may therefore bring about savings in future in the conduct of meeting our duties under the freedom of information legislation.

Domestic Heating (Older People)

Helen Eadie (Labour, Dunfermline East)

2. To ask the Scottish Executive what assistance is available for older people with intermittently working heating systems. (S3O-10069)

Alex Neil (Scottish National Party, Central Scotland)

Every household can apply for help under the energy assistance package. As well as getting advice on saving energy, people can ask for a check of whether they are getting all the pension credits and tax credits to which they are entitled, their electricity supplier can check whether they can get a cheaper tariff or a cheaper payment method, and some people will be eligible for free insulation.

If the heating system is working and the standard assessment procedure rating is less than 55, the householder may be eligible for stage 4 of the energy assistance package. If the system is working and the SAP rating is 55 or above, the dwelling is not eligible for stage 4 of the EAP unless the system is condemned as unsafe. I would advise householders with a heating system that they believe is working intermittently to seek appropriate advice from a gas safe registered engineer.

Helen Eadie (Labour, Dunfermline East)

The minister will be interested to learn, following my raising of this matter with him recently, that my 90-year-old constituent is still left, in one of the coldest winters that we have had in recent times, to endure the unpredictability of whether her boiler will work or not. Is she to be left, as many others have been left, simply to freeze while less than half of the Scottish National Party’s fuel poverty budget has been spent? Whatever way the minister spins the statistics, the fact is that central heating systems have collapsed under the Government’s scheme. There were 3,528 applications from Fife under the energy assistance package, but only 263 people have had central heating installed.

Alex Neil (Scottish National Party, Central Scotland)

I deplore the disinformation and misinformation that the Labour Party is putting out about the energy assistance package. The reality is that the energy assistance package is designed to help people in fuel poverty—rich retired bankers do not qualify for a central heating system under our scheme. When the statistics are published, I believe that we will be able to demonstrate that we have spent the budget and achieved our targets. Indeed, last year, when the official statistics on the central heating programme for private housing were published, they showed that we had a record unmatched by Labour at any time in the previous 10 years.

John Scott (Conservative, Ayr)

The minister will recall from our recent correspondence that I raised with him the possibility of making people with chronic illnesses, such as cancer, eligible for enhanced measures under the energy assistance package, and that he advised me that he had asked the Scottish fuel poverty forum to consider the matter. What progress has been made with that? The move would be extremely positive and would be welcomed by many households in which someone suffers from chronic illness and which are in danger of sliding into fuel poverty.

Alex Neil (Scottish National Party, Central Scotland)

John Scott asks an extremely valid question. As he said, I have asked the Scottish fuel poverty forum to examine the issue of chronically ill people who are living in fuel poverty. I am advised that it expects to report to me within the next few weeks, and I will study its recommendations carefully, because we are empathetic to the points that John Scott and others have made.

Energy-efficient Behaviour (Education)

Christopher Harvie (Scottish National Party, Mid Scotland and Fife)

3. To ask the Scottish Executive what measures are being undertaken to train primary and secondary school children about energy-efficient behaviour and provide them with a general understanding of scarce resources and fuel poverty. (S3O-10112)

Michael Russell (Scottish National Party, South of Scotland)

The curriculum for excellence puts a strong emphasis on developing responsible global citizens and includes specific outcomes on energy sources and sustainability at every stage. Pupils also benefit greatly from participating in the hugely successful Scottish Government-funded and world-leading eco-schools Scotland programme, in which more than 97 per cent of local authority education establishments are registered, and make use of the global footprint resource to understand and act on energy use. A range of resources are available through Learning and Teaching Scotland and other partners, and schools regularly use energy as a context for enabling young people to make informed, ethical choices.

Christopher Harvie (Scottish National Party, Mid Scotland and Fife)

Is any specific support available to organise small school workshops or courses to further the understanding of energy efficiency and renewable energy and to exhibit and publicise installations and achievements that result from such workshops?

Michael Russell (Scottish National Party, South of Scotland)

As I have said, energy is a specific topic in the eco-schools programme. Through that, schools assess the impact of energy use and demonstrate plans to improve efficiency. Some of the eco-schools that I have visited have working wind turbines; others experiment with a variety of energy generation sources.

The Government funds two school renewable development officers to work with local authorities to promote and support the increased uptake of sustainable energy measures in schools, specifically microrenewables and any accompanying energy efficiency measures.

The global footprint resource is available to all schools and should lead to innovation in schools on energy matters. In addition, many schools receive funding directly through Mr Lochhead’s department’s climate challenge fund, and many wider community projects include the participation of local schools in the climate challenge fund. In all those regards, and many others, the point that Professor Harvie raises, which is a good one, is being met.

Sarah Boyack (Labour, Edinburgh Central)

Has the Scottish Government yet set a target to implement its manifesto commitment that every school would have a renewable device fitted? How many schools have had renewable devices installed since the Scottish National Party came to power?

Michael Russell (Scottish National Party, South of Scotland)

We learned the lesson of not being target driven. [Laughter.] It has been an important lesson to learn, considering the failure of the previous Administration to meet any of its education targets. [Interruption.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Michael Russell (Scottish National Party, South of Scotland)

I like to view these things in a green and organic way. I am sure that the member would agree with that approach, as I know that she is green and organic herself and has those enthusiasms.

We are making good progress. Many schools are innovating in this area and are installing new generation sources, from photovoltaic panels to wind energy, and many more will do so in the years ahead.

Healthy Eating

Aileen Campbell (Scottish National Party, South of Scotland)

4. To ask the Scottish Government what steps it is taking to encourage people to eat five portions of fruit and vegetables per day. (S3O-10103)

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

We currently have a number of initiatives under way to encourage people to eat a healthier diet and to increase the provision of fresh fruit and vegetables in local convenience stores.

Aileen Campbell (Scottish National Party, South of Scotland)

Does the cabinet secretary agree that, despite the study in the Journal of the National Cancer Institute, which found little evidence of a link between eating fruit and vegetables and reducing cancer, eating healthy, locally grown produce, such as the apples in the Clyde valley, whose trees will soon be in blossom, has a range of benefits, not only for health but for the environment and the economy, and that we should continue to encourage folk to keep eating their five a day?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I am aware of the study that Aileen Campbell refers to but, in spite of that study, the Scottish Government still recommends that people should eat five portions of fruit and vegetables a day. Eating a healthy and balanced diet, including fruit and vegetables—such as Clyde valley apples—can offer many health benefits, which is why we strongly encourage people to do so.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Has the cabinet secretary had discussions with education colleagues about ways of encouraging schoolchildren to grow and eat their own food at school, which can be great fun for all concerned, as well as being healthy?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I have many discussions with my education colleagues. Jamie Stone makes a good point. I am aware of some schools that encourage children to grow their own produce, which not only educates them about how healthy food is grown but encourages them to adopt a healthy diet. I am sure that we would be delighted to have further discussions with all interested parties to see how we could encourage that further.

Crown Estate

Peter Peacock (Labour, Highlands and Islands)

5. To ask the Scottish Executive what its assessment is of the conclusions of the Treasury Committee’s eighth report of session 2009-10, “The management of the Crown Estate”, in relation to the management and development of Scottish waters. (S3O-10095)

Richard Lochhead (Scottish National Party, Moray)

I welcome the Treasury Committee’s acknowledgement of the frustration in Scotland with the extent to which current arrangements for the Crown Estate commissioners take account of Scottish interests. Building on the Treasury Committee’s recommendations and working constructively with the Crown Estate, we will be seeking to ensure that full weight is given to Scottish interests.

Peter Peacock (Labour, Highlands and Islands)

As the minister says, the committee’s report is extremely interesting. Does the minister share my view that it is important that the Crown Estate commissioners study it and consider its implications and, in the short term, engage meaningfully with local authorities and others in Scotland to consider how the potential resources and revenue from offshore renewables developments can be shared with Scottish communities? Does the Scottish Government have any plans to discuss the report with the Crown Estate commissioners?

Richard Lochhead (Scottish National Party, Moray)

We share the member’s sentiments and hope that the Crown Estate takes forward some of the actions that he suggests. I assure the member that Scottish ministers are actively considering our options and are paying close attention to some of the recommendations in the report. We have no doubt that the people of Scotland, this Parliament and our local authorities would much rather that the Crown Estate was accountable to the Scottish Parliament than elsewhere.

Rob Gibson (Scottish National Party, Highlands and Islands)

What sums of money have the Crown Estate commissioners extracted from Scottish harbours and coastal waters to convey to the Treasury since the Scottish Parliament’s recall in 1999?

Richard Lochhead (Scottish National Party, Moray)

That is a fair question that concerns an issue in which the Scottish Parliament should take a close interest. Given that, since devolution, the Crown Estate has contributed to the United Kingdom Treasury £1.8 billion, of which we estimate the Scottish contribution to be £100 million, and given the widespread view that there is little visible benefit from that £100 million that has flowed to Westminster from Scotland’s seabeds and land that is under the control of the Crown Estate, we should pay attention to some of the changes to the current arrangements that are being proposed by many commentators and the Treasury Committee.

Jamie McGrigor (Conservative, Highlands and Islands)

Does the minister agree that the Crown Estate’s decisions to reduce rents for Scottish shellfish producers by an average of 15 per cent from January 2010 and introduce new leases for the more attractive period of 25 years rather than 15 years will provide a boost for our aquaculture sector?

Richard Lochhead (Scottish National Party, Moray)

I welcome any step in the right direction by the Crown Estate. Of course, over the past few years, we have seen a more constructive dialogue between the Crown Estate, the various sectors, the Scottish Parliament and the Scottish Government. However, there is a widespread belief that there is a long way to go in that regard, and I am sure that the sectors to which the member refers would much rather that the rent that is being paid flowed to the Scottish Government or local authorities and did not leave Scotland and go elsewhere.

Insulin Pumps

Bill Butler (Labour, Glasgow Anniesland)

6. To ask the Scottish Executive when it will make public each national health service board’s planned investment for the next three to five years in insulin pumps and the associated structured education. (S3O-10065)

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

All the geographical NHS boards have now provided us with details of their plans for investment in insulin pump therapy and structured education up to March 2013. Those will be included as a table in the revised diabetes action plan, which we expect will be published shortly. That will give a Scotland-wide picture of planned investment, against which we will be able to measure progress.

Bill Butler (Labour, Glasgow Anniesland)

I recently made representations on behalf of a constituent in respect of securing an insulin pump, which proved a long and at times tortuous process. The experience indicated to me that there is a disparity in pump provision across Scotland. For example, Greater Glasgow and Clyde NHS Board had comparatively few people on pumps, compared with other boards. Given that, will the Scottish Government find ways to incentivise health boards to deliver insulin pump services? Has the cabinet secretary considered ring fencing budgets for intensive insulin treatments, including insulin pumps?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I thank Bill Butler for his interest in the matter, which is of course a matter for NHS boards. Boards have increased investment and must decide how to use that investment to best meet the needs of local communities.

The issue is important and Bill Butler is right to say that there is a disparity in the provision of insulin pumps across the country. We are not doing as well as we should do in that regard, which is why in the first instance we asked boards to provide information on planned investment over the next few years. It is also why we will monitor the matter on an on-going and board-by-board basis. The diabetes survey monitoring group will be asked to record the information—including the age group of people who are on insulin pumps—in future.

I ask Bill Butler to accept that we take the issue seriously and I expect members who have an interest in it to look carefully at progress, as the Government will certainly do.

Further Education Colleges

John Park (Labour, Mid Scotland and Fife)

7. To ask the Scottish Executive what support it is giving to further education colleges to meet Scotland’s skills needs. (S3O-10094)

Keith Brown (Scottish National Party, Ochil)

Even in these difficult times we have increased college sector funding in 2010-11 by no less than 6.9 per cent—a rise of 4.6 per cent above inflation. Decisions on the funding of individual colleges are a matter for the Scottish Further and Higher Education Funding Council.

John Park (Labour, Mid Scotland and Fife)

The minister might be aware of the situation that faces Carnegie College in Fife in relation to its ability to meet the needs of business and students during the next academic year. Given the vital role that the college will play in providing the skills that Scotland will need for the new aircraft carriers, the new Forth crossing and renewable energy opportunities in the Forth estuary, I would appreciate it if the minister looked into the issue and agreed to meet the college, to explore concerns and try to find a way forward.

Keith Brown (Scottish National Party, Ochil)

John Park is right to identify a serious issue, which we are taking seriously not just in relation to Carnegie College but throughout Scotland. I have been asked by the Cabinet Secretary for Education and Lifelong Learning and the Cabinet Secretary for Finance and Sustainable Growth to oversee a task group that is considering the issue.

I have spoken to the principal of Carnegie College and have agreed to meet him—although I await his formal invitation. Our problems are the budget cuts and the increase in demand for college courses. Our contribution to that is to pay a higher proportion of our budget towards colleges than has been paid by any previous Administration and to increase student support, as a number of members, including Claire Baker, asked us to do. I think that Carnegie College found out yesterday that it will have a 15.6 per cent increase in student support funding this year. We are doing our bit; our problem is the pressure that Labour’s recession has put on our budgets and the college sector.

Oral Health (Children)

Paul Martin (Labour, Glasgow Springburn)

8. To ask the Scottish Executive what steps it is taking to improve oral health in children. (S3O-10082)

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

Since 2005, the Scottish Government has been working on a number of ways to tackle poor oral health in children. We have launched a number of Government-funded successful projects across Scotland, from healthy eating schemes in primary and secondary schools to the comprehensive childsmile programme.

Paul Martin (Labour, Glasgow Springburn)

A young person in my constituency recently had 10 tooth extractions, which is unacceptable, and there are many other such cases throughout Scotland. What action has been taken to inform parents, to ensure that they take responsibility for their children’s oral health? What action is taken to deal with parents who do not accept the message that they must ensure that their children have good oral health?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

A range of education and awareness programmes make clear to parents their responsibility for looking after their children’s health in general—and for the purposes of this question, their children’s oral health in particular. The childsmile school programme is important in ensuring that all children have access to preventive care interventions in primary 1 and 2. The programme is operating successfully in schools throughout Scotland.

Although I would never downplay the seriousness of constituency cases such as that which Paul Martin has just raised, the figures throughout Scotland give us optimism that children’s oral health is improving. In 2008, almost 60 per cent of primary 1 children were found to have no obvious dental decay, which is the best result for that age group in Scotland since records began. There is a considerable amount of work still to do, but I am encouraged by the fact that we are going in the right direction.

Alex Fergusson (None, Galloway and Upper Nithsdale)

That concludes general questions. Before we move to the next item of business, Parliament will wish to note that I have written to the consul general for Poland, asking that he pass on the condolences of the entire Parliament to the Polish people, both here and in Poland, following the tragic plane crash in Smolensk last week.

Engagements

Iain Gray (Labour, East Lothian)

1. To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2320)

Alex Salmond (Scottish National Party, Gordon)

My engagements for today will now be taken up by the emergency and contingency committees dealing with the volcanic ash issue that is causing disruption to airspace across the United Kingdom. Following a volcanic eruption in Iceland, an ash plume has entered UK and Scandinavian airspace overnight. At 4 o’clock this morning, the National Air Traffic Service took the decision to cancel all Scottish flights due to safety concerns, and that cancellation will be in force until further notice. At 12 noon, the rest of the United Kingdom has followed suit, and that cancellation will also be in force until further notice. The Scottish Government’s resilience room was activated at 5.45 this morning, and officials from a variety of policy areas have been meeting since then. I convened the Cabinet sub-committee at 11 o’clock this morning, and a further sub-committee meeting will be convened at 3 o’clock.

The current situation is that airports are closed. An update will be provided at 6 o’clock this evening. The Scottish Ambulance Service has advised that guidance provided by the aviation authorities is that no aircraft should fly above 5,000ft. All aircraft that are flying are flying under visual rules only. The ambulance service, supported by the Ministry of Defence and the Maritime and Coastguard Agency, will, as far as possible, continue to undertake missions where patients are in a life-threatening condition. Any missions in respect of non-life-threatening conditions are being deferred to ensure that the resources are utilised effectively. However, where that is not possible due to cloud or visibility restrictions, the patients must be cared for in the locality, and territorial national health service boards are ready to support that. Helicopter flights to the North Sea have also been suspended.

The quantity of ash that has been emitted is still unknown, as is the height to which the ash has been elevated. The meteorological forecasts indicate that the ash may be present over the United Kingdom today, tomorrow and perhaps into the weekend. Contingency travel plans are being put in place to keep the population and essential air travel moving across these islands, and emergency plans are being developed to deal with health service issues—in particular, cases in which patients must be transferred. The indications from the Scottish Environment Protection Agency’s monitoring across the country are that there is no immediate threat to air quality at ground level. Forecasts and reports are being issued on an hourly basis.

A statement and briefing will be offered to the spokespeople of the Opposition parties at 5 o’clock this evening, after the next Cabinet sub-committee meeting.

Iain Gray (Labour, East Lothian)

I thank the First Minister for that update. Clearly, the whole chamber will support the Government in its efforts to deal with the problem that has developed.

This week, the Justice Committee stood up for knife crime victims throughout Scotland in backing Labour’s policy of carry a knife, go to jail. The number of knife murders in Scotland is more than double the number in the rest of the United Kingdom. Will the First Minister finally listen to the victims and to our communities? Will he respect the Justice Committee of the Parliament?

Alex Salmond (Scottish National Party, Gordon)

The Parliament will have the opportunity to decide on the issue as a full Parliament. Of course I respect the seriousness of an issue that affects the livelihoods and lives of many people, but I do not respect the wish to play party politics with it.

I am not at all sure what the Labour Party is suggesting. I have seen the amendment in question, but I also have copies of the various petitions that the Labour Party has brought forward. The first said:

“Carry a Knife, Go to Jail”.

That petition called for a minimum sentence for knife criminals. The second petition changed that; the proposal became a mandatory sentence for knife criminals in Scotland. The amendment that the Justice Committee considered argued that there should be a sentence unless there were exceptional circumstances. The Labour Party’s story varies north and south of the border, the wording of its petitions has changed, and at every stage it seems to be more concerned with politicking on a serious matter of public safety than with respecting the voices of those who work to make our communities safer.

Iain Gray (Labour, East Lothian)

Tens of thousands have supported Labour’s carry a knife, go to jail campaign and petitioned the Parliament. They are clear about what they want: they want those who have been convicted of carrying a knife to be sure that they will go to jail. The amendment to the Criminal Justice and Licensing (Scotland) Bill is clear, and following the Justice Committee’s meeting this week, it has been included in that bill. Will the First Minister respect that decision, or does he intend to try to remove that amendment from the bill when it comes to the chamber?

Alex Salmond (Scottish National Party, Gordon)

The Parliament will decide on that matter, and I am sure that Iain Gray will want to respect its views. When the full Parliament discusses the issue, members will remember that the average length of custodial sentence for carrying an offensive weapon has more than doubled from 2005-06, that the percentage of those who are given a custodial sentence of more than six months has doubled, and that the number of persons who are convicted and given a custodial sentence has increased by almost 40 per cent. Those are the facts and that is the reality behind how the Government has dealt with the serious issue of knife crime, as opposed to the previous Administration’s record of inaction.

Iain Gray (Labour, East Lothian)

It is a fact that only 70 per cent of convicted knife criminals go to jail. That is bad enough, but it is worse that Alex Salmond wants to end six-month sentences and get the percentage of convicted knife criminals who do not go to jail up to 90 per cent. Only one in 10 convicted knife criminals would face a jail sentence. The Justice Committee rejected that, too.

Alex Salmond has been around Scotland saying that Scotland needs local champions to articulate community concerns. We know that he loves to articulate at great length and at even greater volume, but exactly which community in Scotland is telling him that it wants to see knife criminals released on to its streets?

Alex Salmond (Scottish National Party, Gordon)

It is absolutely right that the Scottish National Party should offer community champions to the people of Scotland, just as it is right that communities throughout Scotland are celebrating the fact that there are 1,000 more police officers on the streets and in the communities of Scotland, as opposed to the zero record under the Labour Party and its offer of no extra police officers at the previous election. The communities of Scotland are celebrating the lowest level of recorded crime for a generation. [Interruption.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Alex Salmond (Scottish National Party, Gordon)

They are also celebrating the fact that they have a justice policy and a Government that takes action on policing and solving crime, as opposed to the inaction of the previous Administration.

While I have been going round Scotland and celebrating with community champions who articulate the voices of communities, Iain Gray has been launching a manifesto. The English version of that manifesto does not propose the action that he has proposed in the chamber. Why did the Labour Party, when it was in government, not propose such a policy? Why should we be persuaded by Labour members’ arguments today if they cannot even persuade Gordon Brown that they are on the right course?

Iain Gray (Labour, East Lothian)

I think that the First Minister rather missed the point that knife murders are running at double the rate in Scotland that they are in England. That is why we need special action here in Scotland. There is not much point having those 1,000 extra police officers if, when they arrest and convict knife criminals, the First Minister lets those criminals out.

John Muir, whose son was murdered; Kelly McGhee, whose brother was killed; Christine Halley, whose son died at the hands of a knife criminal—Alex Salmond is not their champion.

Whether it is Alex Salmond on knife criminals, Nicola Sturgeon on a benefit fraudster or Kenny MacAskill on the Lockerbie bomber, the SNP is all too ready to champion those who commit the crimes, not those who suffer the consequences. When the time comes and the bill comes before the chamber, will the First Minister choose to champion the criminals or our communities?

Alex Salmond (Scottish National Party, Gordon)

Let us listen to the people who are actually working with this issue, as opposed to trying to make an issue work for them politically. At the Public Petitions Committee knife crime debate, Detective Chief Superintendent John Carnochan of the violence reduction unit opposed mandatory sentences by saying:

“I have been a cop for 34 years. If I thought that it would work to give people four years in the jail the first time they are caught carrying a knife, I would be your man”.

He went on to say that jail does not work and that we need early intervention and to reduce access to alcohol and knives. The people who are dealing with these issues in Scotland and making our communities safer back the Government’s approach to them.

Iain Gray talks about England and Wales. The sentences for knife crime in Scotland are higher than they are in England and Wales. He thinks that the people of England will accept that they do not have a problem with knife crime. Of course they have a problem with knife crime, but what they will not accept is a Labour Party that is saying something different in opposition from what it was prepared to do in office; which says something different north and south of the border because it thinks that it suits it politically; which seeks to persuade this Parliament when it cannot even persuade the Prime Minister, who wanted no extra police in Scotland, as opposed to the 1,000 extra who were delivered; and which talks about law and order and public services when the Chancellor of the Exchequer—a Scottish Labour MP—is promising the people of this country cuts in public services that will be deeper and tougher than those of Margaret Thatcher.

When the Labour Party starts to back our police and our public services, Iain Gray can come to this chamber with a shred of credibility. If he ever gets any consistency in his policies, he will be fit to be First Minister, instead of not being fit to be an Opposition leader.

Prime Minister (Meetings)

Annabel Goldie (Conservative, West of Scotland)

2. To ask the First Minister when he will next meet the Prime Minister—the current one, that is. (S3F-2321)

Alex Salmond (Scottish National Party, Gordon)

I would have loved to have met the Prime Minister this evening, but I understand that he will be otherwise engaged. I have no plans to meet the current Prime Minister in the near future.

Annabel Goldie (Conservative, West of Scotland)

Earlier this week, Nicola Sturgeon, the Cabinet Secretary for Health and Wellbeing, said that progress on the national health service in Scotland is threatened by what she described as

“the cuts agendas of the London parties”.

The Conservative party has confirmed that a Conservative Government at Westminster will increase NHS funding in real terms every year. Will the First Minister give the same pledge to Scotland? Will he confirm that in his next budget he will also increase NHS spending in Scotland in real terms?

Alex Salmond (Scottish National Party, Gordon)

I will continue to protect the national health service and other front-line services in Scotland. However, the Conservative party and all the London parties will now have to face the reality of what their spokesmen are suggesting and what they are trying not to reveal in this election campaign. In addition to the dramatic cuts in public spending that the Labour Party is proposing, the Conservatives want to cut earlier and, indeed, they are planning a special cut—a Cameron cut—in Scottish public spending. Therefore, if the London parties in this election campaign are making forecasts—and implicit in their assumptions are reductions in public spending of 10 to 15 per cent over the next few years and of much greater than that over the next 15 years—it will be difficult for any MSP representing those parties in this Parliament to say that they are the defender of public services when the budgets being pursued by Westminster threaten to cut Scotland’s public services faster and deeper.

Annabel Goldie (Conservative, West of Scotland)

I asked a specific question about the health service, and I failed to get a specific response. We now know the truth about the SNP: it is more nats, more cuts. It is utterly disgraceful that the First Minister is unable to give a pledge to protect the Scottish NHS. He might want to play politics in the chamber, but he cannot play fast and loose with our NHS patients. I ask him once again: in light of the Conservative pledge on the health budget, will the First Minister increase Scottish NHS funding?

Alex Salmond (Scottish National Party, Gordon)

Yes—I gave the answer the first time. Yes, we will, because we will continue to protect front-line services in Scotland. As we have defended the health service this year, we will defend it to the utmost extent throughout the next few years, and indeed over the many years in which the SNP will be in government.

Annabel Goldie chose not to pick up the key point that the spokesman for her party, David Cameron, and her shadow chancellor, have been making over the past two weeks: the revelation that, in addition to the billions of pounds of cuts that are to be “tougher and deeper” than those of Margaret Thatcher, according to the Chancellor of the Exchequer, the Conservative party is planning cuts that are earlier and deeper. In that context, with the London parties competing to make cuts that are tougher and deeper, how can Annabel Goldie come to this or any other chamber and tell us that she is intent on defending the national health service? If public spending is cut, that threatens vital services in Scotland. When the Tories accept the reality and join the rest of us in really defending Scottish public services, they will have an ounce of credibility with regard to the health service in Scotland.

Cabinet (Meetings)

Tavish Scott (Liberal Democrat, Shetland Islands)

3. To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-2322)

Alex Salmond (Scottish National Party, Gordon)

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

Tavish Scott (Liberal Democrat, Shetland Islands)

Today in Parliament an event will highlight the Cancer Research UK relay for life, an inspirational demonstration by many Scots of their commitment to cancer relief. The Shetland representative cannot attend the event, because his Loganair flight has been cancelled as plumes of volcanic ash drift across northern Europe. What steps is the Government taking to reinforce the advice that passengers should not travel to Scotland’s airports and should instead contact their airlines? What steps is the Government taking to assess the impact on transport and to help forms of transport other than air to take up the burden?

Alex Salmond (Scottish National Party, Gordon)

I gave a statement to Parliament in an answer a few minutes ago. We are considering particular contingencies for emergency flights. Tavish Scott will be aware that an emergency patient could not be transferred from the northern isles today. Contingencies have been made to ensure proper treatment. There is a possibility—it has been used already at least in the case of one patient—of flying by helicopter under 5,000ft, using visible means only. That option will be deployed on a case-by-case basis, for dealing with emergency cases.

Regarding transport across these islands, contingencies are being worked on with regard to how long the aircraft and airport ban is likely to stay in place. We have substantial additional capacity for north-south travel on the railways, but the longer the situation pertains, the more difficult it will be to sustain transport, not just from the islands but across these islands in terms of the volumes that presently apply. As far as Tavish Scott’s representative is concerned, John Swinney will be glad to give a briefing after the second Cabinet sub-committee meeting this afternoon.

Tavish Scott (Liberal Democrat, Shetland Islands)

I am grateful for that. I will pursue a couple of those points. Air transport is clearly the service that has been hardest hit, but there will be implications for other transport modes today and over the coming days. Has the Government contacted Highlands and Islands Airports Ltd? What steps are being taken to extend airport opening hours and to allow flights to catch up and aircraft to be repositioned once airspace is clear? Has the UK Border Agency been asked to take special steps should flights from overseas arrive in quick succession, once airports reopen? Are there any indications of disruption to mail delivery across Scotland, without Royal Mail flights? Edinburgh airport has a large mail operation. Have Network Rail and ScotRail been contacted to ensure that weekend engineering works are kept to a minimum so that people can use the trains with confidence? The challenge for Government is surely to clear the in-tray and to do all that it can to assist people at this time.

Alex Salmond (Scottish National Party, Gordon)

That is exactly what we have been doing today. All the issues that Tavish Scott has mentioned are being dealt with in the Cabinet sub-committee and by our officials on an on-going basis.

Picking up on one such issue, I point out that there is capacity for 20,000 additional places a day on existing north-south rail services. In comparison, roughly 57,000 people fly from Scottish airports but, of course, not all of them are going from north to south. We are looking at that additional capacity in the railways as well as examining additional capacity from extra bus services.

I will seek to update Tavish Scott on the detail of the measures that are being taken. I am very sympathetic and sensitive to the particular issues with regard to island transport in the northern isles, the Western Isles and other islands in Scotland and the fact that essential, not discretionary, services are jeopardised when airports are closed.

That said, I am sure that, like everyone else, Tavish Scott understands that safety must be paramount in evaluating when airports can be reopened. Aircraft cannot fly unless there is absolute satisfaction about the safety of the mode of transport. We hope that by this afternoon we will have a better evaluation of the likely timescales that we are working to. However, Mr Scott must accept that the issue is extremely difficult at the moment.

Lastly, I reiterate that according to the information that we have to date, which appears pretty solid, the present atmospheric conditions make it unlikely that ash will descend below 5,000ft and there is no immediate danger to ambient air quality in Scotland. The situation is being kept under strict hourly monitoring and, again, if circumstances change, I will ensure that Tavish Scott is updated.

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

Will the First Minister join me in expressing condolences to the family of the workman who died this week while working on Stewarton viaduct in my constituency? He will recall that consideration is being given to the proposal for the Crown Office and Procurator Fiscal Office to have powers over all fatal accidents in Scotland, including those related to rail services. Will he ask the Cabinet Secretary for Justice to raise the issue with the UK Government and request that this fatality and others related to rail services are brought within the scope of fatal accident inquiry legislation?

Alex Salmond (Scottish National Party, Gordon)

I—and I am sure the whole chamber—join the member in expressing those condolences. I will arrange for the Cabinet Secretary for Justice to address with Willie Coffey the detail of his specific points. There is an argument to be made here, and we would obviously want the facility of fatal accident inquiries, which provide flexibility in the examination of fatalities, to be as widely available as possible. As I said, I will get the cabinet secretary to consult the member on the detail of his proposal.

Wendy Alexander (Labour, Paisley North)

The First Minister will be aware that earlier this week BASF Ciba in my constituency announced 232 planned redundancies. I welcome the Minister for Enterprise, Energy and Tourism’s recent visit to the site and am sure that the Government will want to ensure that all possible assistance is offered to those affected by the redundancies. However, the First Minister might also be aware that Scottish Enterprise is currently undertaking a study into the site’s economic future. Will he ensure that that study is published when it is completed later this summer?

Alex Salmond (Scottish National Party, Gordon)

As the member knows, the Minister for Enterprise, Energy and Tourism visited the site on Monday. Everything is being done to maintain employment both on the site and in the company, and I will consult the minister on the nature of the study in question and seek to accede to the member’s request.

As the member knows, I was able last week to make a very positive jobs announcement in Renfrewshire and I am very aware of the challenges that that community and other such communities in Scotland are facing. However, everything will be done, including mobilising the partnership action for continuing employment team that has been successful in other areas and other issues, to find continuing employment for the people affected by this announcement. As I said, I will discuss with the Minister for Enterprise, Energy and Tourism whether we can accede to the member’s specific request for the report to be published.

Anti-English Sentiment

Ian McKee (Scottish National Party, Lothians)

4. To ask the First Minister what the Scottish Government’s response is to the report from the University of Edinburgh’s department of sociology, published in the Journal of Ethnic and Migration Studies, that finds that anti-English sentiment expressed toward undergraduates from England has the potential to weaken the capacity for Scotland to retain highly skilled graduates from that country. (S3F-2329)

Alex Salmond (Scottish National Party, Gordon)

We should be careful before we accept a characterisation of Scots’ attitudes towards our neighbours on the basis of one report, and still less on newspaper articles on that report. The recent press articles are based on interviews carried out in 2005 with some 80 graduates who completed their undergraduate course at Edinburgh University in 2000. It is therefore hardly representative of Scottish society today.

We are proud of our reputation as a welcoming nation for students from any country and background, grateful for the contribution they make and keen that our own students can benefit from the opportunities that are offered by a diverse student population. The attraction of Scotland is reflected in the numbers of international students choosing to come here—about 40,000 overall. Looking specifically at English entrants to higher education in Scotland in 2008-09—the latest data that are available—the number has increased by almost 6 per cent since the previous year.

In a race equality statement published in December 2008, we are clear that we want a Scotland where people from all backgrounds—irrespective of race, faith, belief and place of birth—feel respected, have a sense of belonging and are confident that they can achieve their full potential in our country.

Ian McKee (Scottish National Party, Lothians)

I am grateful to the First Minister for his answer and for confirming that Scotland welcomes and values the contribution of students from England and other countries to the academic, cultural and social life of Scotland. Indeed, if I may declare an interest, I am one such immigrant and have experienced nothing but positive support since coming to this country many years ago. Does the First Minister agree that the key to successful assimilation of newcomers in any nation is a sense of national self-confidence and purpose among all citizens, and that the more Scotland is able to control its own future, the more likely we are to progress towards that goal?

Alex Salmond (Scottish National Party, Gordon)

I agree with that. I would also agree that Scots have a long history and tradition of extending a warm welcome to migrants coming to Scotland to work, study and live. The Scottish Government welcomes the contribution that everyone makes to the economic and cultural life of Scotland and we remain committed to an independent Scotland in which Scots from all backgrounds feel respected and have a sense of belonging.

I am grateful to Ian McKee for raising the issue, particularly because I noticed that the co-author of the report, Ross Bond, wrote to The Scotsman yesterday about the media coverage, which he saw as a misrepresentation. He criticised The Scotsman for encouraging

“the very conclusions we”—

the authors of the report—

“took pains to avoid”.

It is right and proper that Ian McKee raised the issue because we should take every opportunity in this national Parliament to emphasise the nature and characteristics of what is best in Scotland and our attitude to people coming from overseas, and indeed to make the connection between Scottish self-respect and Scottish self-government. We should all respect our internationalist, outgoing attitude.