Scottish Parliament, 24 June 2010

341 contributions from 70 members. The official report.

Tourism

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a debate on motion S3M-6635, in the name of Iain Smith, on tourism.

Iain Smith (Liberal Democrat, North East Fife)

In this short debate, I will not waste too much of the Parliament’s time outlining the importance of tourism to Scotland’s economy. We all know that tourism is one of the key sectors in the economy. It contributes more than £4 billion and employs more than 200,000 people, which represents about 9 per cent of the workforce. In some parts of Scotland, including my constituency of North East Fife, tourism is even more significant.

We all share the common objective of sustaining and improving the tourism industry in Scotland. Indeed, figures suggest that tourism in Scotland did relatively well last year. With a combination of the homecoming marketing campaign, favourable exchange rates and the staycation phenomenon, it appears that Scotland bucked the trend by increasing visitor numbers in 2009. However, that has to be seen in the context of a steady decline in visitor numbers in the previous three years. The then chief executive of VisitScotland made the frank admission to the Economy, Energy and Tourism Committee on 28 April that

“we are not on a trajectory to achieve 50 per cent growth”.—[Official Report, Economy, Energy and Tourism Committee, 28 April 2010; c 3586.]

The truth is that, despite its many strengths, Scotland’s tourism industry is vulnerable. Figures that were released last week by the accountants PKF show that hotel occupancy in Scotland fell by 4.3 per cent in April while the rate in the rest of the United Kingdom rose by 1.9 per cent. Even more worryingly, room yields were down by 7 per cent, and Edinburgh showed a drop of more than 10 per cent.

Jim Mather (Scottish National Party, Argyll and Bute)

I wonder whether the member will concede that the ash cloud had a more dramatic effect on Scotland than it had elsewhere during that period?

Iain Smith (Liberal Democrat, North East Fife)

I was going to make that point in my next sentence.

Extraordinary factors were at play, such as the ash cloud, but the figures demonstrate that Scotland’s tourism industry is vulnerable to outside influences and that there are difficult times ahead. The world economic crisis and the fragility of the home economy do not bode well for the tourism sector. There are clear signs that business tourism, which accounts for 20 per cent of tourism expenditure, remains under significant pressure. That is a particular concern for many of our cities, which rely heavily on business tourism, and as belts are tightened we are all likely to think twice about taking that extra weekend away.

Now more than ever, Scotland’s tourism industry needs clear leadership, but what does it get? Chaos at the heart of VisitScotland and confusion at the heart of Government. At a time when “steady as she goes” might have been the wise approach, we see instead the new chair of VisitScotland grabbing the helm from the captain and steering the organisation off on what is, as yet, an unknown course.

It seems that within days of being appointed by John Swinney as the new chair of VisitScotland, Mike Cantlay decided that the strategy had to change and the chief executive had to go. I find it hard to believe that he would act in such a way unless he believed that he had the full backing of his sponsoring ministers in taking that action. It now appears that despite failing to mention it in his statement to the Parliament on 3 June or his answers to the many questions on that statement, Mr Mather was informed about the decision to dismiss Philip Riddle on 22 April. Apparently, he was too busy mind mapping Dr Cantlay to take notice.

Several questions remain unanswered. Why did Mr Mather not think that he should bring the matter to the attention of the Cabinet Secretary for Finance and Sustainable Growth? Why did the sponsoring department fail to inform ministers that it was in discussions with VisitScotland on how to go about dismissing the chief executive? What exactly is the new, significant and urgent strategic direction for VisitScotland? The tourism industry needs to know. If there are to be significant changes to the strategy and to what VisitScotland does, tourism businesses need to know what those changes will be. Decisions were apparently taken by Mike Cantlay within 22 days of his being appointed as the chair and before the first meeting of his board. Surely the tourism industry needs to be involved and should not be kept in the dark, which is where we all are at present.

I will leave the rates issue primarily to my colleague Jeremy Purvis. Suffice it to say that the list of those who support a transitional relief scheme is growing daily. It includes not just the many individual businesses that are being stung by crippling increases but organisations such as the British Hospitality Association, the chambers of commerce and even the Confederation of British Industry. Indeed, it seems that the only people who support the Scottish National Party Government’s position are Conservative members of the Scottish Parliament.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Where are they?

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Iain Smith (Liberal Democrat, North East Fife)

I conclude with a brief comment on the gathering. The Auditor General for Scotland’s report on the gathering was published the day after we lodged our motion, so we could not refer to it in the motion as we had not seen it at that point. However, I am sure that the 103 private sector organisations that are owed a total of more than £300,000 by The Gathering 2009 Ltd will be as shocked as I am by the cavalier way in which the Scottish Government appears to have thrown public money at the event. The Audit Scotland report shows that ministers did not complete robust checks of the company’s ability to repay the loan or even seek information from other bodies on the steering group.

Ministers have a duty to come to the chamber and fully explain their actions, given that £180,000 of public money was given as an interest-free loan to a company that was, even at the time, clearly not going to achieve the financial objectives that it had set itself. That is unsatisfactory. It is not how public money should be spent. Irrespective of whether the gathering was an important event, ministers have a duty to safeguard the public purse. They failed to fulfil that duty, and they must come to the chamber to explain their actions.

I move,

That the Parliament notes that tourism is among the largest contributors to the Scottish economy and is defined as a key sector; believes that the industry needs clear direction and support in order to achieve sustainable, long-term growth; deeply regrets the current crisis at the head of VisitScotland over the role of the chief executive and the lack of clarity over ministerial involvement; further notes that the hospitality and tourism sectors have been particularly affected by higher rates bills following revaluation and that Scottish businesses are almost alone in the United Kingdom in having to face these massive increases; notes the British Hospitality Association Scotland, CBI and Chambers of Commerce criticisms of the lack of a transitional rates relief scheme, and calls on the Scottish Government to work constructively with these and other business organisations across Scotland to agree and deliver such a scheme.

Jim Mather (Scottish National Party, Argyll and Bute)

The Lib Dem motion states:

“the industry needs clear direction and support in order to achieve sustainable, long-term growth”.

That is exactly what is being delivered. Increasingly, it is coming from inside the industry, with VisitScotland, EventScotland and the Government bringing the industry together in the shape of the Scottish Tourism Forum and the tourism framework for change leadership group, and with the appointment of a new chair for VisitScotland and a highly motivated, aligned and experienced board that has, in turn, attracted support and enthusiasm from an increasingly vocal and proactive group within the industry.

The new board is building on a sound transitional legacy and encouraging new, innovative approaches to destination management. VisitScotland is working with a management team that has delivered a mature alliance that includes the industry, economic development and other bodies, and the Government. Scottish Enterprise is delivering lots of valuable material in the shape of its “Listening to our Visitors” destination guides, and tourism intelligence Scotland is producing insightful documents on how to get the job done more effectively. The Scottish local authorities economic development group is heavily involved and is working collaboratively.

Everyone is coming together in the homecoming legacy. Creative Scotland, Scottish Natural Heritage, Historic Scotland and others are working together to ensure that the world-class offering that is Scotland—in terms of authenticity, attractions, assets, agile marketing and aspirations to improve quality—is all there. The homecoming legacy is now gaining immense traction. With the focus years of food and drink from 2010 through to May of next year, active Scotland in 2011, culture and creativity in 2012, natural Scotland in 2013 and homecoming again in 2014, we are building a real repertoire. No wonder that is bearing fruit in our latest results, with tourism up 2.7 per cent in 2009 against a global drop of 4 per cent.

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

We share the view that the industry should be commended for its success.

VisitScotland’s strategic direction was set by the Government in September 2007 with the review of the enterprise networks. If that strategic direction was so successful, why does the chair of the organisation believe that it needs to change, and what is the proposed change, which the Government now seems to support?

Jim Mather (Scottish National Party, Argyll and Bute)

Having appointed a board, we choose not to second-guess it. We work with the board and we see the bigger picture. In the Liberal Democrats, we have a party that will condemn what we do and condemn what we do not do. VisitScotland is working and functioning well, moving forward, building on the strengths and looking to attract more visitors to Scotland.

Iain Smith (Liberal Democrat, North East Fife)

Will the minister take an intervention.

Jim Mather (Scottish National Party, Argyll and Bute)

No. I have taken one intervention already. I have six minutes, only three of which are left.

The issue is a political party that is willing to create a sense of uncertainty and make a mountain out of a molehill. This is an operational matter for VisitScotland. I was informed by Mike Cantlay that he was in dialogue with Philip Riddle about Mr Riddle’s future, but it was recognised that that could include Mr Riddle remaining in post.

The crisis and the chaos are a figment of Lib Dem imagination. Meanwhile, we are dealing with the reality and are looking to move forward constructively, including handling the issue of businesses that have been affected by the rates revaluation. We will roll up our sleeves in this Government to work with those that have been impacted to ensure that their excellent properties gain the maximum amount of leverage. We will bring together VisitScotland and all the other agencies and allies to maximise that. Meanwhile, we are in a maelstrom of further misinformation from the Lib Dems, which ignores the fact that in the revaluation process the rate poundage went down by 15 per cent and that Scotland is delivering—

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

On a point of order, Presiding Officer.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Minister, I am afraid that I have to take a point of order from Mike Rumbles.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I am having difficulty understanding the English that Mr Mather is using. I wonder whether you could use your good offices to ask him to explain in plain English what he means to do.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Your understanding of what the minister says is not my problem, Mr Rumbles.

Jim Mather (Scottish National Party, Argyll and Bute)

I am grateful to have a native speaker in the audience.

I put it this way to Mr Rumbles: we are putting in £2.4 billion in relief over the next five years. The 60 per cent of businesses that are benefiting from the moves that we have made in Scotland are benefiting to the tune of £1,300 each compared with £600 or £700 for equivalent businesses in England, and the transitional relief in England mainly benefits London. We made those moves instead of providing transitional relief that would have hit businesses to the tune of £77 million, meaning that eight out of 10 rate payers—63 per cent of them hotels—would have been worse off or no better off, which would have been a major issue.

I will further develop that point as I move, in my closing remarks, to address how we intend, as never before, to help those who have been affected to earn their way to better outcomes and to make the most of their assets and attributes, and essentially create a situation in which VisitScotland, together with all the other allies—Scottish Natural Heritage, Historic Scotland, Creative Scotland and our local authorities—build on our ability to get to a better position, taking advantage of current exchange rates—

Iain Smith (Liberal Democrat, North East Fife)

Will the minister give way?

Jim Mather (Scottish National Party, Argyll and Bute)

I have about 24 seconds left.

Iain Smith (Liberal Democrat, North East Fife)

I hope that the minister will use them on the gathering.

Jim Mather (Scottish National Party, Argyll and Bute)

I am happy to mention the gathering. We have seen the bigger picture and engaged constructively with Audit Scotland, and we will consider its recommendations carefully. I remind Parliament that The Gathering 2009 Ltd is a private company and that we ensured that the event was the success that it was in respect of the totality of Scotland: it generated £10.4 million for Scotland’s economy—£8.8 million of that in Edinburgh—attracted visitors from across the world and helped to broadcast across the world what a great location Scotland is.

I move amendment S3M-6635.1, to leave out from “deeply regrets” to end and insert:

“welcomes the initiative of the industry to establish the Tourism Leadership Group as a positive step in working collaboratively toward growth and prosperity, and notes that extending the small business bonus scheme will mean that half of all businesses, including many tourism-related businesses, will receive a discounted bill this year and well over a quarter of business properties will pay no rates at all and that the introduction of a transitional relief scheme would increase taxes for small and medium-sized private companies by £77 million, meaning that eight out of 10 rate payers, including many in the tourism and hospitality industry, would be worse or no better off, which would be extremely damaging for Scotland in this period of fragile economic recovery.”

Alex Fergusson (None, Galloway and Upper Nithsdale)

I am slightly relaxed about time this morning, as we have a little in hand.

Gavin Brown (Conservative, Lothians)

The Liberal Democrats were right to choose tourism as a subject for debate. As Iain Smith pointed out, it is critical to Scotland.

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

So critical that none of your colleagues is in the chamber.

Gavin Brown (Conservative, Lothians)

There is one MSP from the Conservatives versus 12 from the Liberal Democrats—we wanted a fair fight, and it would have been grossly unfair if I had brought along Derek Brownlee to assist this morning. We are happy to take on 12 Liberal Democrats and the four Liberal Democrats who could not be bothered to show up for Liberal Democrat business.

David Whitton (Labour, Strathkelvin and Bearsden)

I should warn the Liberal Democrats that Gavin Brown has a black belt in tae kwon do.

Gavin Brown (Conservative, Lothians)

I do not have a clever quip in response to that comment, so I will carry on.

Tourism is a critical subject, but the way in which the Liberal Democrats have tackled it is pretty disappointing.

We face a long-term issue with tourism in this country. In 2005, under the previous Government, the tourism framework for change was set up, which involved the Government and the industry. It set an ambition of 50 per cent growth over a 10-year period. In 2010, halfway through that period, we have not seen any movement, so there is an issue, which requires all political parties, the industry and Government, in particular, to get our heads together and figure out how we achieve that step change in tourism. There is probably agreement across the chamber on that.

The Liberal Democrats have chosen to focus on two unrelated specific issues pertaining to tourism, I think in an attempt to narrow the debate. Let me deal with those two issues.

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

What about your amendment?

Gavin Brown (Conservative, Lothians)

My amendment is about furnished holiday lettings, the measure on which was, until the news about the gathering came out yesterday, probably the biggest tourism story of the week. The Conservative and Liberal Democrat Government introduced that measure, but the Liberal Democrats could not be bothered to mention the good news for Scotland in their own motion.

I turn to the two points that the Liberal Democrats have raised. I am happy to say on the record, as I have said both privately and publicly before, that I do not think that the Government has handled the issue at VisitScotland particularly well. The decision was strange. I formed the impression, from evidence that was given to the Economy, Energy and Tourism Committee, that the chief executive was doing a good job—he came across very well. In relation to the Government’s narrative on tourism, it was a strange decision. However, Mr Smith has described the situation as a crisis in tourism, which is plain wrong. Leaders in the tourism industry and people throughout Scotland will be slightly confused about Mr Smith describing the situation as a crisis.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the member take an intervention on that point?

Gavin Brown (Conservative, Lothians)

I am always happy to take an intervention from Mr Rumbles.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I can tell Mr Brown that what is a crisis in my constituency is the situation for Ballater Business Association, as highlighted by Aberdeen and Grampian Chamber of Commerce. Many of my constituents are facing huge business rates rises, which the Conservatives had the opportunity to change, yet Mr Brown voted against business rates relief for members of business associations in Ballater in my constituency and across Scotland.

Gavin Brown (Conservative, Lothians)

Mr Rumbles describes the revaluation as a crisis, so by definition he does not agree with his own front bench that the position at VisitScotland is a crisis for the industry.

On Mr Rumbles’s point about revaluation, the crux of the matter is that, if there were to be a transitional relief scheme, there would have to be a change in Government policy. That would mean one of two things, because there are only two ways to do it. It would be necessary either to take back money from the smaller industries in Scotland that gained from the revaluation—I wonder whether the Liberal Democrats are proposing to claw back money from the 60 per cent of businesses that gained—or to find the money to cover the cost of a transitional relief scheme. The Government described the cost as being £195 million. I have no view on the veracity of that figure, but I have not heard anyone else challenge it.

When the Liberal Democrats decided that there ought to be a scheme, they said that it should come from Barnett consequentials. The slight problem with their argument—as they well know—is that those Barnett consequentials were allocated to affordable housing, and every single Liberal Democrat in the chamber welcomed that expenditure. I look forward to hearing what Mr Purvis has to say on revaluation. I hope that he has a new idea and that the Liberal Democrats are not just rehashing their old ideas.

I move amendment S3M-6635.1.1, to insert at end:

“, and welcomes the UK Government’s decision not to repeal the special tax rules for furnished holiday lettings, as had been proposed by the previous administration led by Labour.”

Lewis Macdonald (Labour, Aberdeen Central)

A common theme to many of the big issues that have been raised in this debate is the need for greater transparency in the Scottish Government’s approach to many issues that affect the sector. The shocking treatment of a loyal and successful public servant has already, rightly, been raised in the chamber and at the Economy, Energy and Tourism Committee. The Government and the recently appointed chairman of VisitScotland still have many questions to answer on that topic.

The final questions that committee members asked of Philip Riddle when he was chief executive of VisitScotland were about another topic that is of huge concern to many people in the tourism sector: the Scottish Government’s decision to provide no transitional relief to hotels that have been hit by huge increases in business rates. Mr Riddle told the committee on 28 April that John Swinney had not consulted VisitScotland before making his decision to scrap transitional relief. He said that VisitScotland had been given the opportunity to provide feedback after the event and that he had taken the opportunity to make representations through Mr Mather.

Philip Riddle has not had the opportunity to tell us the outcome of the representations that he made. The chairman of VisitScotland, who gave evidence to the committee last week, did not acknowledge that such representations had been made when Marilyn Livingstone asked him about business rates. Perhaps the minister will tell us about the evidence that VisitScotland presented to him when it was still led by someone who was willing and able to reflect the concerns of the overwhelming majority of businesses in the hospitality sector.

It is pretty clear that ministers did not engage in consultation of any form with representatives of Scottish business, any more than they did with Government agencies such as VisitScotland. The price of ministers’ secret decision to scrap transitional relief is being paid by businesses throughout Scotland.

John Swinney has subsequently met representatives of chambers of commerce—as I understand it, from Dundee and Edinburgh, as well as Aberdeen—and I understand that he will meet a delegation from the Scottish Chambers of Commerce on Monday 28 June. However, he has made no concessions that would address the concerns that have been expressed. The view of the Aberdeen and Grampian Chamber of Commerce delegation, which was made public this week, is that

“the Minister has either not understood or not accepted the weight of evidence”

that it presented.

I remind Mr Mather of what the delegation said to Mr Swinney. It told him that the rates paid this year by businesses in Aberdeen city and Aberdeenshire have increased by more than £30 million, which represents a 15 per cent increase in income to the Scottish Government from businesses in that region alone. Research by Ryden into the liability of 189 hotels and guest houses in the north-east shows a 33 per cent increase in rates payable—that is the increase in rates, not valuations. Analysis by Aberdeen City and Shire Hotels Association shows that its members face an increase of more than 40 per cent in rates payable. As the Aberdeen and Grampian Chamber of Commerce told John Swinney again this week, the association’s view is that

“This will undoubtedly lead to some businesses closing or a reduction in the levels of service through having to reduce staffing levels in order to pay the additional rates.”

Those are not idle words, and this is not simply a debating point. We are talking about real jobs and businesses in the tourism sector.

I know that ministers mean it when they say that they want the sector to grow. It might well be, as Aberdeen and Grampian Chamber of Commerce thinks, that ministers have miscalculated the overall increase in income to the Government from the increase in business rates. Ministers might well have underestimated the number of small firms that would cease to qualify for small business rates relief, through the revaluation of their premises taking them above the threshold, as Iain Gray said to the First Minister a couple of weeks ago.

If ministers have miscalculated in that way, there might be room for them to introduce some degree of transitional relief—if they are willing to look again at the evidence and take the right decision. That is what tourism businesses are asking ministers to do. That is no doubt what Philip Riddle put to Jim Mather and it is no doubt what the Scottish Chambers of Commerce will put to John Swinney next week. It is the single most important thing that ministers can do to address the competitive disadvantage that Scottish tourism faces. I hope that ministers will listen to the representations and act accordingly.

I move amendment S3M-6635.2, to insert at end:

"; regrets that the combination of increased business rates and increased VAT will put Scotland’s tourism industry at a competitive disadvantage, and believes therefore that there is even greater need for the Scottish Government to adopt an approach based on greater transparency and accountability, learning the lessons of the Auditor General’s report on the Gathering as well as other recent events, and to give renewed emphasis to training and skills".

Marilyn Livingstone (Labour, Kirkcaldy)

I am pleased to contribute to the debate and to help to outline what the tourism industry needs from the Scottish Government to ensure that it plays a significant role in Scotland’s economy.

The most recent parliamentary debate on tourism took place in March. Many important issues that relate to the industry need to be addressed, such as local initiatives, which the Government must support; skills and training in the sector; business rates in the hospitality industry, which I have talked about on numerous occasions; and the need for transparency and leadership, particularly with regard to strategic direction.

My area, Fife, is a successful tourism destination, as Iain Smith said, whose appeal lies in its natural environment, particularly its award-winning coastline. Fife’s strong reputation for golf attracts visitors from international markets and elevates the area to its position as one of Scotland’s international destinations. The industry contributes more than £200 million a year to the local economy and supports more than 12,000 jobs—that represents 9 per cent of the workforce. Tourism is an important and growing sector in Fife.

If we are to achieve the national growth target of at least 50 per cent, tourism in Fife must grow from a £218 million industry to one that is worth £327 million per annum by 2015. That is a significant challenge, which the Scottish Government must help the newly formed Fife tourism partnership to achieve. If Fife is to meet the target and take advantage of tourism opportunities, such as the proposed hovercraft service from Kirkcaldy to Edinburgh and the potential for cafe culture along Kirkcaldy’s promenade, the Scottish Government must work to eliminate barriers to investment.

The minister will not be surprised that I want to talk about education, skills and training in the hospitality and tourism sector. The industry’s view is that the current system is failing. The Scottish Government must take urgent action. The further and higher education sectors have come under financial pressure and practical training has become a major challenge. I strongly urge the Scottish Government to ensure that the tourism industry is given its fair share of the 5,000 modern apprenticeships in five key sectors that the Government will announce during the coming weeks. The Scottish Government previously abandoned adult modern apprenticeships in tourism. That cannot be allowed to happen again. Such an approach would be nonsense and would deny people over 19 the opportunity to work in and bring much-needed expertise to one of Scotland’s key sectors.

The Scottish Government has dropped a rates bombshell on the sector, as Lewis Macdonald said. The industry has been hit hard and at short notice with significant increases in bills. Many businesses in the hospitality sector in Scotland face staggering increases of between 100 and 400 per cent. The hotel and hospitality industry has been badly affected. Most other businesses are valued on assessment of their premises’ notional rent value, but hotels are valued on turnover.

With government comes responsibility. The Government must not compensate for its unsustainable funding decisions by penalising the tourism industry with huge rates bills. The approach has put the sector at a huge disadvantage compared with its competitors in England, who were told months ago what their rates would be and have the benefit of transitional relief and a phased-in increase.

The tourism sector faces difficult economic circumstances. Many people are choosing not to go on holiday, because of the cost.

Jim Mather (Scottish National Party, Argyll and Bute)

If Marilyn Livingstone thinks that transitional relief should be provided, will she explain how we could have unleashed a cost of £77 million on small businesses at such a crucial time in Scotland’s recovery?

Marilyn Livingstone (Labour, Kirkcaldy)

With government comes responsibility, as I said. The Government has made unsustainable funding decisions.

The increase in rates for hotels and restaurants will lead to job losses and force many small businesses out of business. Hotels, restaurants and other businesses in the hospitality industry make a valuable contribution and must not be punished for their success. Like Lewis Macdonald, I urge the Scottish Government to revisit the situation and introduce a system of transitional rates relief.

Scotland depends on tourism to generate investment. In difficult times for the sector, local tourism businesses need openness and transparency from the Government and VisitScotland, which is the national organisation that provides strategic direction for the industry.

The uncertainty over VisitScotland’s chief executive and the board’s confidence in Philip Riddle undermines the hard work that is being done to promote tourism in regions such as Fife and creates a leadership vacuum. When giving evidence to the Economy, Energy and Tourism Committee, Dr Mike Cantlay confirmed that the board unanimously agreed on the change in strategic direction. However, the change was made without consulting the Minister for Enterprise, Energy and Tourism, the Cabinet Secretary for Finance and Sustainable Growth, the committee or anyone. The speed and the secrecy with which the decision was made without informing the Scottish Government or holding discussions with the Parliament are cause for great concern and undermine VisitScotland’s role in guiding our local tourism industries. The minister needs to answer that point.

The Scottish Government must commit to working with the industry during and beyond the current uncertainty, improve the provision of much-needed skills and encourage investment in tourism at a local level. More important, the minister must look at business rates and show confidence in and support for the sector by providing the necessary investment, and show leadership, openness and transparency in government.

Rob Gibson (Scottish National Party, Highlands and Islands)

The danger of this debate is that there has been so much hyperbole and such a lack of evidence from across the country that, if some facts are not injected into it, the picture that we will glean will be skewed.

Let us look at business rates. An additional 3,600 Scottish business properties are eligible for relief during these challenging times. Many independent hotels, bed and breakfasts, guest houses and self-catering properties qualify for the small business bonus scheme. In addition, the thresholds for the targeted rural relief that supports key services in rural communities, including hotels, have been uplifted. That relief offers many hotels bill reductions of up to 100 per cent. We need to see a whole-Scotland picture before we can decide whether the charges in relation to the north-east of Scotland, or wherever, stand.

Valuations reflect room rates, occupancy levels, and sales of food and alcohol. Overall sector rises are due to properties with increased occupancy and higher turnover. The impact varies because of location, hotel type and turnover that has changed since the last revaluation in 2005. I note that the Liberals said that only Tory MSPs would support the SNP’s position, but the Federation of Small Businesses, the Scottish Grocers Federation and the CBI supported the Government’s position in February. I inject those facts into the debate during the short time that I have available.

On 10 February, the CBI said:

“There are a number of welcome measures on non-domestic rates in this announcement, such as the enhanced rates relief for small and rural businesses and new relief to encourage renewable energy generation”,

among other things in which businesses in the countryside can take part.

Lewis Macdonald (Labour, Aberdeen Central)

Will the member take an intervention?

Rob Gibson (Scottish National Party, Highlands and Islands)

I do not have the time; I am sorry.

The previous speaker raised the issue of skills. It is a fact that investment is being made. The Burghfield House hotel school in Dornoch, which the Cabinet will visit this summer, is training more chefs and hotel staff. People 1st and the Scottish Tourism Forum say that it is still difficult to recruit trained chefs; 37 per cent of businesses that recruited chefs in 2009 found vacancies difficult to fill. However, colleges such as North Highland College have set up schools to do that training.

Marilyn Livingstone (Labour, Kirkcaldy)

Will the member give way?

Rob Gibson (Scottish National Party, Highlands and Islands)

No, I will not.

Members should recognise that such initiatives should be taken in other places, which might fill the gap. It is not down to whether the Government provides money for apprenticeships. Colleges are doing the work, and members should listen to the facts.

On rates relief, have the Liberals or anyone else asked about the basis on which that is calculated? Are we going to have a debate about the realities and whether we need to change the way in which that happens? That is my personal view, but some members need to reflect on it.

On the gathering, did the Liberal-Labour Executive look at the business case of the private company that set up the operation in the first place? The Government of the time dealt with that company as if it were a private company and took a hands-off approach. Now the members of that previous Government accuse the current Government of doing the same thing. Frankly, that is two-faced.

On the leadership changes at VisitScotland, yes, there has been a change of chair, and the board has assessed the way forward. Mike Cantlay called it a step change. I quote the wise words of my colleague Chris Harvie, who, after attempts to implicate John Swinney in the micro-management of VisitScotland, said:

“I understand the separation of notions of personnel from notions of policy, and I am aware that your position, cabinet secretary, is bound by the need to distinguish between the two and that the two should not be allowed to be confused by ministerial intervention at an inappropriate time.”—[Official Report, Economy, Energy and Tourism Committee, 16 June 2010; c 3834.]

That is not about taking a hands-off approach; it is about respecting the fact that VisitScotland is a non-parliamentary group and allowing it to measure its activities.

We have had a dose of gripe from those who proposed today’s motion; it is time that we had a dose of common sense.

David Whitton (Labour, Strathkelvin and Bearsden)

I am pleased to take part in the debate and to support the Labour amendment.

“Our plans do not require a rise in VAT. The Tory plans do.”

Those are not my words; they were said by the Liberal leader, Nick Clegg, in April, when he was on a flying visit to Glasgow—it was certainly not a staycation—to launch what his party thought was a clever poster under the heading of “Tory VAT bombshell”. The Conservatives’ response came from George Osborne, who said:

“We have no plans to increase VAT.”

Well, now we know the truth. Those leading figures in the Con-Dem Government were misleading the public. Will Mr Smith and Mr Purvis now defend the indefensible? According to today’s Scotsman, there seems to be muted support for a VAT rise among their colleagues. In typical Liberal fashion, Robert Brown and Ross Finnie are not saying; apparently, Hugh O’Donnell has no views; and Mike Pringle does not think that it is an issue—he must have missed the poster launch in Glasgow, then. Only Liam McArthur is honest enough to admit that it was not something that he had campaigned for—and no wonder. It is no use the Liberals moaning about changes at the top of VisitScotland or the SNP’s decision to not introduce a transitional rates relief scheme when their Westminster colleagues have so blatantly broken a pre-election promise and, at the same time, delivered a hammer blow to the tourism industry. Make no mistake: increasing VAT to 20 per cent is as devastating to an industry that relies on customer choice as the damage that is done by excessive rates rises. Perhaps Mr Purvis can enlighten us about what his Borders hotel owners think of the VAT rise, and what the effect will be on jobs.

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

I am delighted to be able to say that I spoke to the manager of the Tontine hotel in Peebles last night. She said that she is not concerned about the VAT rise and that the biggest impact on her staff would come from the lifting of the income tax threshold, which would be the best bonus for the industry.

The previous Labour Government regularly used PricewaterhouseCoopers for consultancy. The hospitality director at that consultancy firm described the VAT increase as having “little or no impact” on demand in the hospitality sector. That is not exactly a “hammer blow”.

David Whitton (Labour, Strathkelvin and Bearsden)

Mr Purvis will find that time alone will tell. Tavish Scott apparently believes that the Liberals got good things out of the budget. Really? He must believe that the loss of up to 100,000 jobs is a price worth paying, just as the Conservatives do.

The Liberals and the Conservatives should take a lesson from Europe. While our coalition Government at Westminster is busy making it more expensive for tourists to come here, across the continent, VAT rates are coming down in a bid to attract visitors for value-for-money holidays. France lowered VAT for restaurants from 19.6 per cent to 5.5 per cent, and Germany announced a cut in VAT on accommodation from 19 per cent to 7 per cent last January. A comparison of VAT rates in top competitor tourist destinations such as France, Spain, Italy, the United States and Australia shows that, on average, visitors to Scotland pay about 10 per cent more for accommodation and restaurants and 3.5 per cent more for entry to attractions and other venues. The rise in VAT to 20 per cent puts Scottish tourism at a clear disadvantage in a competitive global market.

“If you look at the effect of a sales tax, it’s very regressive, it hits the poorest hardest. It does, I absolutely promise you.”

Again, not my words but those of the Prime Minister, David Cameron.

Tourism should be one of our major growth industries. Events such as the Commonwealth games in Glasgow, the Ryder cup at Gleneagles and the Olympic and Paralympic games in London will provide the sector with its largest opportunity to market itself on a world stage, but the VAT increase will hit them, too.

How do we capitalise on that potential when we all know that Scotland’s tourism and hospitality sectors are facing a massive skills shortage, which Marilyn Livingstone highlighted? The issue was also highlighted by Iain Herbert, chief executive of the Scottish Tourism Forum, who says that the industry will face a skills shortage of 80,000 by 2017.

How do we make our tourism businesses more attractive to potential employees and better at retaining staff? People 1st—the sector skills council for the tourism industry—argues that we need to continue to focus on improving skills in the three priority areas of management and leadership, customer service and chef skills. I say to Mr Gibson that we will improve chef skills if we reintroduce modern apprenticeship places for those aged over 19, because it tends to be older people who want to get into that area.

Most of all, we need clear direction from VisitScotland and the Scottish Government. Instead of the secrecy surrounding the removal of Philip Riddle and funding to a loss-making venture such as the gathering, the minister needs to focus on how he can support this vital industry. Despite all the obstacles that are being put in its way, tourism can still be a winner for Scotland and a provider of good, well-paid jobs.

Joe FitzPatrick (Scottish National Party, Dundee West)

Today’s debate is an opportunity to set the record straight. From reading the motion, one would be forgiven for thinking that the tourism sector in Scotland was in disarray. Of course, that is far from the truth. In the midst of a recession, our tourism industry has just had an extremely successful year. In a year in which tourism was down by 4 per cent, Scotland was the only country in the United Kingdom to show growth in international trips, with a 25 per cent increase in visits from North America and a 43 per cent increase in visitors from outwith North America and Europe over the summer months.

The year of homecoming generated more than £50 million of additional revenue and attracted almost 100,000 additional visitors to Scotland—by anyone’s standards, that is a success of which the whole Parliament can be proud. David Smythe, chairman of the Association of Scotland’s Self-Caterers, perhaps best summed up the situation for the tourism industry when he stated:

“In an economically tricky year we were very fortunate to have Homecoming. The Programme of events and the marketing of the celebrations helped promote Scotland as a must visit destination in 2009.”

The Scottish Government is committed to growing the tourism sector in Scotland, and the announcement of the second year of homecoming was welcomed by businesses throughout Scotland. Homecoming 2014 will take place in the year that Scotland hosts the Commonwealth games and the Ryder cup and marks the 700th anniversary of the battle of Bannockburn.

The second year of homecoming is also the target year for the opening of the Victoria and Albert museum Dundee on the waterfront in my constituency, which will put Dundee at the heart of the celebrations. It is hoped that we can replicate some of the success that Bilbao has enjoyed with the Guggenheim museum. The Scottish Government’s enthusiastic support has been key to driving the project forward to ensure that we create a truly iconic building on—or perhaps in—the Tay. In order to do that, a global competition to design the museum was launched and a shortlist of six companies has been drawn up. Global interest has been stirred by the design competition and six of the world’s leading architectural practices, which have designed some of the most iconic modern buildings around the world, are bidding to take on the work. Although those companies are from across the world, they have managed to tap into the huge talent that exists in Scotland. Every single one of them is using a lot of their manpower to bring forward their designs in Scotland and across the UK, which is to be welcomed at this time of recession.

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

I endorse and commend the member’s enthusiasm for tourism in his area. However, the new chairman of VisitScotland has said that there needs to be a change of strategic direction for both VisitScotland and the industry. We simply do not know what that change of direction should be. What does the member believe it should be?

Joe FitzPatrick (Scottish National Party, Dundee West)

We need to have a strategy that drives tourism forward. It is bizarre that the Liberal Democrats are saying, on the one hand, that everything is terrible so we need change and, on the other hand, that we do not need change. At the end of the day, what we have from the Liberal Democrats is a motion that talks down our industry and Scotland. We hear far too much of that.

I will return to the benefits that tourism has for Scotland and for my city in particular. The V and A in Dundee will grow and support tourism in the area. It is estimated that it will bring 130,000 visitors to Dundee every year, which will be a huge boost to the Scottish economy as well as to Dundee’s economy. It will tie into the other cultural centres of Aberdeen, Edinburgh and Glasgow and will really make Scotland a global cultural place to visit. I hope that everybody in the chamber will support that. I certainly have not heard any voices speak against it, which is a good thing.

I understand why some businesses have taken issue with the business rates revaluation, because nobody wants to pay more tax, but the revaluation is carried out by an independent assessor. To fail to implement its recommendations or to introduce transitional relief would mean that many businesses would be forced to pay more than they should. Transitional relief would work both ways: it would mean that businesses that have been assessed as paying too much would continue to pay too much, which cannot be right. We would force businesses to pay more than the independent assessor has stated they should pay. No member should be in any doubt that, by ensuring that the overall package of rates relief to businesses in the tourism sector is more generous than in any other part of the UK and by investing in projects such as the V and A in Dundee and homecoming 2009 and 2014, the Scottish Government is committed to and delivering for the tourism sector in Scotland.

Sarah Boyack (Labour, Edinburgh Central)

It is clear from the debate that the Scottish Government needs to do better on tourism. It is not the industry but the Government’s strategy that is in crisis. Tourism is hugely important to us, as colleague after colleague has stressed this morning.

For us in Edinburgh, tourism is one of our biggest industries. We are one of Europe’s most popular destinations, but we cannot afford to rest on our laurels. That is why the lessons of the gathering have to be learnt. I asked the Auditor General for Scotland to intervene and investigate last year because I was deeply disturbed by the lack of transparency in the dealings around the event, the huge cost overruns and the damage done to businesses locally. It required a series of parliamentary questions and freedom of information requests to unearth exactly what happened.

As a result of yesterday’s report, we now know that the Scottish Government knew that the gathering was in trouble when it approved a secret loan to keep it afloat. That loan became a write-off. It is clear that the Scottish Government tested neither the viability nor the robustness of the business case offered by the gathering organisers. It is now also clear that the First Minister personally engaged in a round of phone calls to try to offload the company, desperately trying to persuade somebody to take the company on and save the Scottish Government’s face.

The Auditor General’s report is damning because it identifies a lack of due process, which is fundamental in a democracy. Moreover, the Scottish Government and the City of Edinburgh Council did not have a full understanding of the position before they released information last year about the future of the company, which is absolutely galling for the 103 local businesses that were misled by those statements. They were left by the Scottish Government to fend for themselves and they found out this week that another company that has the organiser of the gathering, Lord Sempill, at its helm and which was given a loan by the Scottish Government has resurfaced to start trading again. Where is the fair treatment for private businesses?

The Auditor General is clear that lessons have to be learnt. Due diligence, clear expectations and performance indicators need to be agreed when large sums of money are being handed out. Our tourism industry deserves better. The Auditor General’s report shows us what went wrong with the gathering, a key part of homecoming, but it does not explain why the Cabinet Secretary for Education and Lifelong Learning, Mike Russell, and his boss, the First Minister, acted in such a cavalier fashion. That is important, because there are still questions to answer. I was astonished that the minister could not bring himself to apologise for the handling of the debacle. He only got round to mentioning the gathering when Iain Smith challenged him about it in the last 15 seconds of his speech.

Things are not getting easier for local businesses, because, as many colleagues have suggested, business rates are up. Hotels in Edinburgh are hit by an average of 20 per cent and cafes and shops, which are vital to our tourism industry, are also hit. When Edinburgh Chamber of Commerce and I met John Swinney, he made sympathetic noises about tax increment finance and the specific need to avoid inconsistent decisions on individual rates bills, but he did not offer any comfort on transitional relief.

SNP members, including Rob Gibson in particular, have asked for reality. The point that the minister made ignores the extra cash that the SNP Government has taken in through revaluation this year. He needs to address the point made by the Scottish Chambers of Commerce, which thinks that the figure of £60 million—the sum given in response to parliamentary questions—could be higher.

The timing of the revaluation was crucial: it happened when business was good and the values of the properties were significantly higher than they are now. Therefore, businesses face a double whammy: they are hit by rates revaluation at a point when the value of their property has plummeted, and the value of their business is not as good as it was, which means that their rates valuations are inflated. That has pushed up costs for business throughout the city. The Government is not making it easy for companies that are trying to deal with the Salmond slump.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

It is a Labour slump.

Sarah Boyack (Labour, Edinburgh Central)

There is a differential impact in Scotland, as the Government’s own figures show.

Edinburgh is now a global destination, but it has taken years of work to build us up to that. We cannot be complacent, and the last thing that we need is an incompetent approach. We need only consider what is happening locally: we are reaching the anniversary of the beginning of the waste dispute in the city—it is astonishing that it has not been settled a year on. The price is overflowing bins and rubbish in the streets for tourists to see. It is not good enough.

We need more competent, engaged leadership, nationally and locally. Edinburgh is one of Europe’s most popular destinations but there is a global recession, so everybody has to work harder. That is why it is even more important that VisitScotland has a clear focus and the Scottish Government takes clear action not only to help generate tourist visits but to help the industry survive really difficult times.

Gavin Brown (Conservative, Lothians)

It has been an interesting debate. Over the course of it, we have covered a number of issues, a few of which I will pick up on.

I will start with the subject of my amendment: the decision on the tax rules for furnished holiday lettings, which is good news for about 5,000 or so lettings throughout Scotland, many of which are in the Highlands or the south of Scotland.

Paragraph 2.85 on page 51 of the budget document says:

“The proposal inherited by the Government to repeal the special tax rules for furnished holiday lettings will not be implemented.”

The industry has been lobbying for that for some time. Unfortunately, that lobbying fell on deaf ears in the previous Labour Administration, which cited European regulations, saying that they outlawed the position, and simply refused to listen to the cogent arguments that the industry advanced.

I am pleased to say that the lobbying on behalf of the industry has achieved a successful result. There are still European regulations to work our way around but there is political will to do that, and the coalition Government in the United Kingdom will pursue the matter, which will help our industry in Scotland, as well as tourism elsewhere in the UK.

There were some interesting speeches. I will touch on one or two important ones.

Lewis Macdonald for the Labour Party argued well and advanced various pieces of evidence for a good case. However, it is one thing for the Labour Party and the Liberal Democrats to argue for a transitional rates relief scheme, but how could such a scheme be implemented? As I said in my opening speech, either money must be clawed back from the businesses that gained from the rates revaluation—about 60 per cent gained, and they are, in general, smaller businesses—or it must be paid for out of Government revenue. We have not heard from any party how it would be implemented. Mr Macdonald made a good case but, without a solution, a scheme cannot be implemented.

Lewis Macdonald also said that tourism businesses were demanding change. Some are, of course. He cited the Aberdeen Hotels Association, but hotels are not the only tourism businesses. The vast majority of our tourism businesses are extremely small businesses, many of which gained from the rates revaluation and are not arguing for any changes or for transitional relief. If somebody argues for transitional relief, they must say how it ought to be implemented.

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

Gavin Brown knows that, since last summer, I and other members have been raising the issue of the lack of consultation with the business community on transitional relief. Is he, in principle, in favour of transitional relief? If so, why has he supported the Government since last summer, given the figures that it has provided?

Gavin Brown (Conservative, Lothians)

I have no principled objection to a transitional relief scheme; it is a matter of practicality. Until a practical solution is put on the table, transitional relief is simply on the wish list from the Liberal Democrats and the Labour Party.

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

It was last summer.

Gavin Brown (Conservative, Lothians)

By “last summer”, I think that Jeremy Purvis probably means March, which was about a month before the election.

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

No, it was last year.

Gavin Brown (Conservative, Lothians)

Mr Purvis is due to speak at the end of the debate. Why does he not use that opportunity to say how a transitional relief scheme ought to be implemented to try to get members behind his proposition?

Lewis Macdonald (Labour, Aberdeen Central)

The Labour amendment highlights a number of matters, but I will draw attention to two in particular in my closing speech. One is the need for openness and transparency from the Government and its agencies in dealing with the tourism sector and the issues that affect it. The second is the need for the Scottish Government to address the competitive disadvantage that Scottish tourism businesses will face.

The decisions on VAT clearly affect tourism businesses throughout the UK. However, the decisions on transitional relief are a specifically Scottish problem. The Conservative-Liberal Administration at Westminster has inherited from Labour a transitional relief scheme that caps at 12.5 per cent the impact of rates revaluation on any business in any one year. It is essential that the Scottish Government recognise that two additional tax burdens have been imposed on tourism businesses in Scotland in the past couple of months and that those will have an impact that it is the Government’s responsibility to seek to address.

Ministers have argued, as Jim Mather did again today, that they cannot afford to provide transitional relief to hotels that have been hit hard by rates revaluation. Gavin Brown said that it was incumbent on those who look for transitional relief to suggest how that might be implemented.

Jim Mather (Scottish National Party, Argyll and Bute)

Does Lewis Macdonald realise that transitional relief would mean 63 per cent of hotels being worse off or no better off?

Lewis Macdonald (Labour, Aberdeen Central)

No, I do not accept that. The fundamental problem is that ministers are not listening. John Swinney met Aberdeen and Grampian Chamber of Commerce on 23 May. The chamber of commerce explained to him the calculations that it had made and why it had come to the view that his were flawed. He went away and examined those calculations and his officials indicated by telephone to the chamber of commerce that, fundamentally, it had got them right. However, when he wrote back to it this week, he failed to take that on board.

The chamber of commerce also put to John Swinney a specific proposal for how a transitional relief scheme might be organised. He wrote back saying that he was not prepared to support that proposal and explained the reasons why he had come to that view. The chamber of commerce’s disappointment at the rejection of that option was, I think, less than its disappointment that he did not provide an alternative option or even suggest that he was prepared to consider alternative options.

This is not a zero-sum game. As Sarah Boyack said, John Swinney indicated last month in answer to a parliamentary question that there was a £60 million increase in the revenue that is coming to the Scottish Government as a result of rates revaluation.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

It is zero sum.

Lewis Macdonald (Labour, Aberdeen Central)

If the chamber of commerce is correct, the £60 million—which John Swinney concedes as additional Government revenue from rates revaluation, even if Stewart Stevenson does not—may be an underestimate. We have seen figures from various places such as the small town of Ballater in Mike Rumbles’s constituency, which was mentioned in the debate. In Ballater, three quarters of the selected small businesses that were assessed and which previously qualified for small business rates relief no longer qualify because revaluation has put them over the threshold.

Those facts raise fundamental questions for those businesses, but they also affect the amount of money that is available to the Government. I hope that, when Mr Swinney meets the delegation from the Scottish Chambers of Commerce on Monday, he takes on board what we have said to him before and repeat today. These are not minor issues and we are not making a mountain out of a molehill; they are significant issues for many businesses.

There is no single solution, but there is a number of potential solutions if ministers are prepared to accept that they may have miscalculated and that their model may be wrong. They have certainly already accepted that they have £60 million that they did not have last year. Let them reconsider what else might be available to them. Even if they are not prepared to follow the Labour model that was established in England of a 12.5 per cent annual cap, what else can they do to limit the impact on businesses? It is open to them to consider that, and I hope that they will do so in a positive spirit on Monday.

Jim Mather (Scottish National Party, Argyll and Bute)

The debate has been characterised by massive misjudgments on the part of the Liberal Democrats. They seem to be more interested in attacking the Government than in improving and supporting the wellbeing of individual tourism businesses. Their approach does not conform to one that would make them collegiate partners in team Scotland, which is trying to optimise the tourism offering. Rather than helping to build an industry through collaboration and constructive criticism, there is a pattern among the Lib Dems of seeking to create division and seeing everything in the bleakest, blackest light. It is not the stuff of collaboration, trust and respect that leads to optimisation; rather, it is an approach that is deeply committed to the stuff of sub-optimisation.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister take an intervention?

Jim Mather (Scottish National Party, Argyll and Bute)

Let me complete the charge sheet: misinformation, an incomplete picture, divisiveness, blame and negativity. Over the five-year revaluation cycle, business rates will not rise a penny more; in fact they will rise less. In 2010-11 alone, the decision to match the English rate poundage will save business in Scotland more than £200 million.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister accept an invitation to Ballater?

Jim Mather (Scottish National Party, Argyll and Bute)

I would gladly visit Ballater.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Thank you very much—

Alasdair Morgan (Scottish National Party, South of Scotland)

Mr Rumbles, sit down.

Jim Mather (Scottish National Party, Argyll and Bute)

We have exposed a misjudgment of the mood of the tourism industry. The industry is working more closely than ever with the board, chair and management of VisitScotland to achieve a new beginning and a new vibrancy in the sector. Lots of other agencies are involved in that process. The Lib Dems have misjudged the fact that the people of Scotland are conscious of the tangible benefits that have accrued from the advantages of the business-benefit approach to rates for small businesses and, hence, are concerned about anything that could reverse those gains. The Lib Dems have misjudged the fact that people realise that the Government has to be pragmatic from time to time in seeking to protect the greater interests and reputation of Scotland.

Lewis Macdonald mentioned alternative options. We have suggested alternative options today. We will work as never before with successful businesses that have been affected, to help them to move forward.

The Lib Dems have misjudged the mood of the revalued hotels. We understand that they would all prefer lower taxes, but revaluation is a hard-wired function of a long-established independent system. Businesses know that there is an appeals process, and we encourage them to take that route. Now, Government and many other small businesses and stakeholders want to work together to help those hotels to fill their rooms and restaurants. Like Scotland, they need to earn their way to better outcomes.

Lewis Macdonald (Labour, Aberdeen Central)

Does Mr Mather accept that the issue for hotels in my constituency and, I suspect, throughout the country, is not the revaluation process or the appeals process but the absence of transitional relief—a decision that his Government took without consulting business first?

Jim Mather (Scottish National Party, Argyll and Bute)

For 63 per cent of Scottish hotels, transitional relief would either have cost them more or kept them where they are. We are interested in channelling a programme of work in which we can help businesses to achieve higher occupancy, higher revenues and greater financial resilience. I have tried the negative approach and it does not work. A positive collaborative approach and capitalising on things such as the exchange rate takes us forward in a way that those who take the divisive and hypercritical approach can only dream of. We need to move away from that divisive approach.

As David Whitton suggested, the Lib Dem approach to accountability is to avoid it. As we have seen in The Scotsman today, many Lib Dems are saying on VAT, “No comment”, “Not an issue for me” and “I didn’t campaign for it.” The Lib Dems seek to damn the Government if we do and damn us if we do not. It is a fatally flawed and divisive strategy that is designed not to improve the system but to score political points. The Government has stayed focused on what is best for its sectors, in particular tourism—it has stayed close to that sector. It has rolled up its sleeves and is willing to roll up its sleeves further in working with the tourism industry and sharing the challenges that it faces. Unlike the Lib Dems, we are primarily focused on the industry’s reputation, on Scotland’s reputation, on morale and investment in the industry and on the tangible results that will come forward.

Sarah Boyack mentioned the gathering yet again. Who carried out the initial due diligence that got the company up and running and funded? That is the key question. Cannot we look at the bigger picture and the collateral damage that could have happened to Scotland had we not taken pragmatic action? The important issue here is that we are positive about the tourism industry and we are working with it. There is a new board and a new chairman in place; we understand that they are managing operational matters and that they need to be left to manage them properly. The rates revaluation is normal in the model. Now is the time for Scotland to move together. Ours is the antithesis of an incompetent approach; it is a cohesive, collaborative and competent approach. We are all living with the legacy of Labour’s incompetent management of the economy.

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

The minister’s speech is in stark contrast to what the Economy, Energy and Tourism Committee was recently told. He said that the industry body is being led in a cohesive, competent and collegiate way, and that VisitScotland’s board and leadership are closer than ever. Why, then, was the committee informed that the chief executive will be sacked and that a strategic change of direction has to be made, without that information being published or anyone being aware of it? The Cabinet Secretary for Finance and Sustainable Growth, John Swinney, told the committee that Peter Lederer, the former chairman,

“raised no such concerns with me during his tenure as the chair of VisitScotland, and neither did any individual board members.”—[Official Report, Economy, Energy and Tourism Committee, 16 June 2010; c 3822.]

However, the new chairman informed the minister—who did not inform the cabinet secretary for a month—that it was the unanimous view of the board that it should get rid of the chief executive. If that is cohesive and collegiate, I do not want the minister to be responsible for any staff review in the Government.

There have been some positive moves for the economy and tourism in Scotland as a result of the United Kingdom budget. It was a tough budget, but the scrapping of the increase in tax on furnished lets is good news, as is the consideration of pilots for rural fuel discount and rural tourism. The income tax threshold increase will lift 100,000 low earners out of tax altogether and will help 2 million people on basic-rate incomes. That is more money in people’s pockets and for the Scottish economy, which is critical for our domestic tourism and hospitality business.

Jim Mather (Scottish National Party, Argyll and Bute)

Now that he has access to the UK Government, will Jeremy Purvis take to his colleagues the message from France and Germany about preferential rates of VAT for tourism businesses?

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

I will take no lectures from a minister under whose Administration businesses face a 100 per cent increase in their tax bills. Is that the most authoritative position from which to ask me to make representations to the Treasury? If he gets his own house in order, lessons can be provided.

Let us address tax specifically. Last year, the minister believed that a 5 per cent increase in rates bills would be burdensome for business. Last year, the Government said:

“For those businesses that still have to pay rates, we are acting today to offer them vital breathing space in these tough economic times.”

That refers to a 5 per cent increase, and a decision to allow businesses to defer their rates increases. The Government believed that a 5 per cent increase would be harmful for the economy. It continued:

“Spreading the cost will improve cash flows this year and so help businesses through the current economic challenges so that they can be better placed to take advantage of the upturn when conditions begin to improve.”

However, now—shortly afterwards—the Government does not believe that a 42 per cent increase, a 59 per cent increase, a 43 per cent increase or a 120 per cent increase for Malmaison in Aberdeen, for the Radisson in Glasgow, for the Apex in Dundee, for the Townhouse in Melrose or the Dryburgh Abbey in the Borders places any burden on those businesses.

Jim Mather (Scottish National Party, Argyll and Bute)

Will the member take an intervention?

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

If I have time later, I will give way to the minister.

It is right that Parliament should continue to hold the Government to account for the decisions that it takes.

We have heard assertions from the minister on transitional relief. We have found out that communications between him and the cabinet secretary have been less than perfect over the past few weeks, so perhaps the minister does not know that John Swinney wrote to me after our previous debate to confirm that a number of transitional relief options could be introduced. However, only one has been put forward by the Government. Gavin Brown believes that I, single-handedly, should design the transitional relief scheme rather than hold the Government to account for it.

Everything that the ministers have said has given the impression that businesses in Scotland are paying less in rates, but as answers to parliamentary questions from my colleague Alison McInnes and me show, the latest forecast for the yield from business taxation in Scotland for 2010-11 is £180 million higher than it was when this Government came into office in 2007. We are talking about a £180 million game, not a zero-sum game. That is the increase in revenue from business rates under the SNP Administration, which believes that no support should be provided to businesses that face increases of up to 100 per cent. We waited and waited. Finally, the minister said that the Government would help; he said that he would roll up his sleeves to support the companies that face such massive increases, but rolling up his sleeves and telling them to appeal is not the best action that he can take.

We make no apologies for raising the issues of rates and the leadership and strategic direction of VisitScotland. The Government set the strategic direction of VisitScotland in September 2007 in a statement by the Cabinet Secretary for Finance and Sustainable Growth. We have now been told that it is the unanimous view of the board that that strategic direction needs to be changed, but the Government has given us no indication of what the new strategic direction should be. If there is to be a change of strategic direction as well as of chief executive, the Government should publish a new tourism strategy for Parliament to scrutinise. Let us see it, discuss it and, with the participation of the industry, decide on the way forward. At the moment, the leadership of VisitScotland is in chaos. That needs to be put right. Many businesses face increases in rates of up to 100 per cent, but the Government is simply wringing its hands instead of rolling up its sleeves and acting, which is not good enough.

Free Personal Care

Alasdair Morgan (Scottish National Party, South of Scotland)

The next item of business is a debate on motion S3M-6633, in the name of Ross Finnie, on free personal care for the elderly.

Ross Finnie (Liberal Democrat, West of Scotland)

Liberal Democrats were very proud to play a prominent role in the introduction of free personal care, which we did as part of the previous coalition Government with the Labour Party. It was a landmark social reform, which is why I am pleased to address the motion.

The motion is predicated on a view that is strongly held by Liberal Democrats—which I think is shared by everyone in the Parliament—that older people in our society are an asset, not a liability, and that as their requirement for care and support increases, the mark of a civilised and compassionate society is to commit to their care and to face up to the challenges that are presented by demographic change and fiscal consolidation.

The motion’s objectives are threefold. First, it seeks to allow the Parliament to reaffirm its commitment for the long term to free personal care. Secondly, it seeks to acknowledge that the policy is uneven in its delivery, so more work needs to be done on that, and that there needs to be greater collaboration among local authorities, the health boards and the Government to ensure that all elements of free personal care—which is a thoroughgoing policy—are delivered uniformly throughout the country. Thirdly, it seeks to recognise that in facing up to the demographic and fiscal challenges, there are—to borrow from Lord Sutherland—no sacred cows when it comes to reviewing and re-engineering how free personal care is delivered. I had intended that third point to be implicit in our motion; we are content to make it more explicit, so I am happy to accept the amendments of the Government and the Conservative party.

Free personal care is a policy that is of huge importance to older people in Scotland: between 9,500 and 10,000 people in care homes in Scotland receive free personal care and—more important—the number of people whom the policy has enabled to remain in their own homes is getting on for 45,000. Those figures are hugely significant not just in terms of the care that is offered, but in terms of the totality of the care services that we can provide to our elderly people in the community. Those services are hugely important.

We know that free personal care has not been easy to deliver, as the three reports on the issue have shown. The Government asked Lord Sutherland, one of the policy’s originators, to look into its delivery. He made recommendations that were accepted by the Government and endorsed by the Parliament, but there is some evidence to suggest that not all of them have yet been fully implemented, which is a cause for concern. In particular, one of Lord Sutherland’s recommendations was that we should establish clear national priorities and outcomes. That recommendation has not yet been fully put in place, which makes it difficult for us to establish the necessary measurement techniques that will allow us to assess and evaluate whether some aspects of the policy are being implemented. I hope that the Government will address that issue.

Lord Sutherland’s work was followed by the Audit Scotland report which, by and large, endorsed Lord Sutherland’s recommendations. It highlighted the need to clarify ambiguities, the need for consistency in the application of guidance and the need to set substantive outcome measures to evaluate the effectiveness of the policy, which reinforces my earlier point. Most recently, we had the University of Edinburgh’s report “Older People, Public Policy and the Impact of Devolution in Scotland”.

All that work has indicated that it is imperative that we retain free personal care as a crucial part of our policy framework. I acknowledge that the Government’s document “Reshaping Care for Older People” will play a critical role in our ability to deliver on the policy. As Lord Sutherland pointed out, free personal care accounts for only one tenth of all the care that we provide for the elderly. If we are to address the cost of that to society, we must take an holistic view of the provision of care for our older people, which is why I commend the Government for its work on reshaping care. I do not necessarily agree with every jot and tittle of what is proposed, but in attempting to take an holistic view of how we provide such care and how we can re-engineer much of that provision so that we drive down costs and therefore make it possible for us to sustain the delivery of free personal care, the Government is performing an urgent task.

That is the motion’s purpose. Given the way in which the amendments are set out, at 5 o’clock this evening I hope to obtain absolute endorsement of the principle of free personal care for the longer term, and an acknowledgement that sustaining that policy will require a lot of hard work to be done on how we deliver it and on how we will drive costs out of that delivery.

I move,

That the Parliament believes that free personal and nursing care for the elderly has widespread support and continues to deliver real benefits for tens of thousands of Scotland’s most vulnerable older people, allowing them the dignity and independence of growing old in the comfort of their homes; recognises that budget constraints and demographic change present challenges for Scotland’s social care and health services, but, in order to protect the elderly, reaffirms its commitment to free personal and nursing care for the long term so that Scotland’s elderly population can continue to receive the care to which it is entitled.

Shona Robison (Scottish National Party, Dundee East)

I welcome this debate on free personal and nursing care. It provides us with an important opportunity to reflect on the original policy aims and to consider how they fit in the current environment.

Let me be clear from the outset: the Scottish Government remains absolutely committed to free personal and nursing care and has reiterated that commitment on a number of occasions. Only last week, the First Minister reaffirmed our commitment to this important policy in reply to a question by Murdo Fraser during First Minister’s question time. The reason for our commitment is that the policy delivers real benefits and better outcomes to more than 50,000 older vulnerable people throughout Scotland.

We remain committed to the policy despite the budget announcements by the Chancellor of the Exchequer. It was always going to be challenging to continue to deliver on the policy, and after Tuesday’s budget it has become even more challenging, but it is a challenge to which the Scottish Government is determined to rise.

As Ross Finnie said, the policy is one of the great achievements of the Scottish Parliament, but its proper administration and funding have been one of the great achievements of this Government, with £40 million investment to stabilise the policy and a clear framework and set of eligibility criteria having been established.

As everyone, I am sure, is aware, the value of providing free personal and nursing care has been questioned in certain circles as a result of budgetary pressures. Lord Sutherland made it clear in his independent review in 2008 that the policy was sustainable at that time for the next five years. However, he also concluded that we need to adapt the policy to address demographic changes in the medium and longer terms, and that changes are necessary to ensure the sustainability of the policy. That is why the Scottish Government is actively working with local government, the national health service and the voluntary sector to agree what we need to do now to shape the future of health and social care as part of the “Reshaping Care for Older People” programme, and thereby to ensure that the free personal and nursing care is sustainable into the future.

At local level, much is happening across Scotland to reshape and modernise care services to make them more outcomes focused, more personalised and more responsive. Since April this year, we have undertaken a process of public engagement to consider how best to address the challenges of an ageing population and diminishing public funding. We are currently asking people across Scotland to consider the future care demands and needs of older people, and we will listen to what people have to say in that consultation. That engagement has been commissioned by the ministerial strategic group for health and community care, which I chair and whose members are NHS chairs and senior local authority councillors.

I stressed during a debate on reshaping care for older people in October last year that

“We, as parliamentarians, must work together to put down a marker of the Scottish Parliament’s”

continuing

“will on how best to provide care for older people that is sustainable, deliverable, appropriate and fair.”—[Official Report, 28 October 2009; c 20544.]

We must have a care system that takes account of not just personal care but all social and health care.

How we organise, integrate and deliver all social services and the health service is a substantive point for debate. It might well be that better integration could produce a more efficient service without jeopardising the care that is given to older people. We are looking at that, and on that basis I am happy to support the thrust of the Conservative amendment.

Mary Scanlon (Conservative, Highlands and Islands)

In terms of efficiency and the background of the financial challenges that we face, is it reasonable and fair that councils pay 80 per cent more for a placement in a council home than they do to place someone in the independent or voluntary sector?

Shona Robison (Scottish National Party, Dundee East)

As I have said to Mary Scanlon on a number of occasions in the chamber, those are all things that we should consider as part of the agenda in reshaping older people’s care. What is the role of the independent sector, whether in the provision of care homes or care at home? What is the role of local authority services in the same context? We must ensure that we have the right fit of services, with the right skills to provide the services that people need.

Published expenditure figures for 2007-08 show that total spend on free personal and nursing care was £358 million, which was less than 8 per cent of all health and social care spend on people over 65. As Ross Finnie said, it is important to put in context the spend on the free personal and nursing care policy. It is too simple to imagine that removing a popular and landmark policy such as free personal care would achieve major budgetary savings. Indeed, it might have the opposite effect by pushing up the number of people who seek to remain in hospital beds free of charge because they cannot immediately find the money to pay for their care-at-home packages.

Furthermore, if Parliament is looking to achieve greater leeway in the budgets, I remind members that the review that was chaired by Lord Sutherland also recognised the long-standing imbalance between Scotland and the UK’s finances going back to when the policy was introduced. That is, of course, the issue of the savings that were made by the United Kingdom Government by removing the payment of attendance allowance to Scottish self-funders in residential care, which is currently saving the UK taxpayer around £35 million a year. I hope that the Parliament will support a call for the UK coalition Government, under the respect agenda, to take a fresh look at that imbalance.

In conclusion, let me reiterate that, as long-term advocates of the policy of free personal care, we remain committed to its principles and long-term success. It is a policy that gives help and peace of mind to thousands of people at a time in their lives when they need it most. I am happy to move the amendment in my name.

I move amendment S3M-6633.1, to insert at end:

“, and welcomes the wide-ranging Reshaping Care for Older People programme, which is developing innovative and practical ideas for change to meet the needs of Scotland’s population that are sustainable, deliverable and fair.”

Murdo Fraser (Conservative, Mid Scotland and Fife)

I start by thanking our friends in the Liberal Democrats for giving us the opportunity to debate this important subject, and I congratulate Ross Finnie on his magisterial opening speech.

The Scottish Conservatives are proud of the policy of free personal care, which was introduced with our support in 2002. Free personal care means that, regardless of income, capital assets or marital status, all those who are assessed as needing personal nursing care will have it paid for for them. It is an important policy, not just because it protects those who have worked hard all their lives, acquired property and saved for their retirement in order that they can protect themselves and pass money on to their families, but because it protects the dignity and independence of our older citizens, to whom we owe so much.

It is worth mentioning as an aside that the policy of free personal care is one area in which we in Scotland do things differently from our counterparts south of the border. That applies to the Conservative party as much as it does to others. Free personal care is a policy that we support but which is not supported by our UK counterparts, and it is therefore one of a number of areas of difference between us. Cynics might suggest that, unlike our colleagues south of the border, the Scottish Conservatives support personal care while, unlike us, our colleagues in England and Wales have success in winning elections—but I would not want to make that point.

I am sure that all of us from our constituency mailbags can remember having been contacted by elderly people, or perhaps their relatives, who are in a state of real distress at having to sell family homes to fund expensive long-term care. The introduction of free personal care has not solved those problems entirely, as food and lodging costs still have to be paid and can be extremely expensive, but a major contribution has nevertheless been made to removing what was often a heartbreaking situation for many families.

That is not to say that the policy is without its challenges. Free personal care is an expensive policy to implement, and it is becoming more so. As we have heard, the major driver for that will be demographic changes. The fact that people are living longer is a good thing, but it comes at a cost. In his independent review of free personal and nursing care in April 2008, Lord Sutherland found that, although the cost of the policy was anticipated to be £136 million in 2006 rising to £227 million in 2022, in reality the total bill was £256 million in 2006 and it was estimated that it would rise to £813 million in 2031. No one can deny that there are serious financial challenges ahead.

Notwithstanding all that I have said about costs, the Scottish Conservatives value the policy, and for that reason we are pleased to support the terms of the Liberal Democrat motion. However, if the policy is to be affordable in the long term, we will have to find savings elsewhere to help to pay for it, which is the point that is addressed in my amendment.

We have to find more savings within administrative costs throughout the NHS in order to protect front-line services. The Audit Scotland report on locum doctors that came out last week gave a very good example of where savings can be found, when it identified £6 million that health boards could find quite easily if they were to operate more efficiently.

On free personal care, Lord Sutherland suggested a single budget for health and social care and a common commissioning policy to eliminate duplication. That reflects a measure for which the Scottish Conservatives have been calling for years. It was also the unanimous recommendation of this Parliament’s Health and Community Care Committee when it looked at the issue as far back as 2000. It would represent a way of doing things differently and would result in a transfer of social care budgets from local authorities to the NHS or possibly to some other body. However, we believe that we need to consider that seriously if we are to free up the savings that are required. That is the point of our amendment.

The Scottish Conservatives are proud to support free personal care, and we support the Liberal Democrat motion. However, if the policy is to be affordable in the longer term, we need to find savings. For that reason, I have pleasure in moving the amendment in my name.

I move amendment S3M-6633.2, to insert at end:

“; urges the Scottish Government to continue to identify savings in administrative costs that can be reinvested in frontline services, and, in this context, calls on the Scottish Government to give serious consideration to the proposal from Lord Sutherland to merge health and social care budgets.”

Jackie Baillie (Labour, Dumbarton)

Like others, I welcome the opportunity to debate free personal care, and I welcome the unanimity of opinion that has broken out in the chamber, particularly between Murdo Fraser and Ross Finnie—I am sure that we will see more of that in the future.

I start from the premise that a society is judged by how it treats its young people, its older people and its most vulnerable. I spent some of my early years in Hong Kong, where I witnessed a culture where the old were revered and valued for their knowledge and experience. That has shaped my view of older people and my belief that we should treat them with dignity and respect.

Regrettably, all too often we think of older people in terms of challenges—for example, the challenge of an ageing population and all that that means for public policy, and the challenge of providing the care that older people require. In some areas, older people are treated almost as the passive recipients of care and are given little choice or control. We need to stand all of that on its head because, after all, only one in 10 older people needs on-going care and, in the 65 to 74 age group, the figure is only three in 100. We are living longer, thanks to advances in medicine, and it is incumbent on us to think through how we can best and most effectively provide care for the growing numbers of older people in the future.

I am proud that it was the previous Labour and Liberal Democrat Scottish Executive that introduced the policy of free personal care. It was Henry McLeish, as First Minister, who drove that policy forward and made it one of the defining features of his Administration and, some would say, of devolution.

There is no doubt that free personal care is greatly valued by those who receive it. We on this side of the chamber are clear in our view that free personal care should remain.

That said, we would all acknowledge that free personal care is but one part of a much wider system of health and social care that is provided for our older people. I welcome the work that the Scottish Government has started with the Convention of Scottish Local Authorities and the NHS to reshape the care of older people. That work is at an early stage and elements of the different workstreams are out for consultation. However, one workstream, on the future funding of care, is not yet in the public domain although, in the context of tightening financial budgets, it is, perhaps, the most significant piece of work that we need to engage in. I invite the minister to state, when she sums up, that she will give us an opportunity to debate the options around that issue. I specifically ask her to allow us to do so in the context of our budget deliberations, which will start in the autumn.

There is a postcode lottery of care across Scotland, with local authorities having different levels of charging for the same service, different criteria on which to assess eligibility for a service and even different thresholds for income disregard. It is simply not fair for someone in one local authority area to pay 10 times more than someone pays in the same circumstances in a neighbouring local authority for exactly the same service.

I believe that there are a number of key principles on which we should base any future system of social care for older people. First, there should be fairness and equity. Wherever someone lives in Scotland, they should have the best possible quality of service, and people whose circumstances are the same should pay the same. That would deal with the situation of people who live in neighbouring authorities paying different charges, as is the case in Argyll and Bute Council and West Dunbartonshire Council, and in Moray Council and Aberdeenshire Council. Labour is absolutely committed to ending the postcode lottery that currently exists in relation to the care of our older people.

Secondly, we should acknowledge that prevention is better than cure. It is much better to provide the support that enables older people to remain in their own homes than it is to fund admissions to hospital, which are costly not only to the NHS but to the individuals and families involved. I have seen older people being admitted to hospital after a fall at home that was caused because they have had to wait months for a necessary aid or adaptation to their home that would have prevented the fall in the first place. We need to get better at ensuring that we get the balance right and move, where possible, towards prevention.

Shona Robison (Scottish National Party, Dundee East)

Will the member give way?

Jackie Baillie (Labour, Dumbarton)

I am not sure whether I have time. Do I, Presiding Officer?

Trish Godman (Labour, West Renfrewshire)

You do.

Shona Robison (Scottish National Party, Dundee East)

On getting the balance right, does Jackie Baillie accept the need for MSPs of all parties to support local changes that will shift the balance of resource, including the closure of some beds in acute hospitals to fund community services?

Jackie Baillie (Labour, Dumbarton)

I have no problem with ensuring that prevention is properly resourced and that we shift the balance of care. However, I will not sign up to the Scottish National Party’s programme of cuts to the NHS, which is going on as we speak.

Thirdly, we need to start thinking differently about our older people and begin to regard them as a resource, not a burden. Their experience should be harnessed for the benefit of local communities, and we need to help them to help themselves to keep fit and healthy, so that the need for formal care is delayed. Further, we need to support those who care for them on an informal basis. It is a matter of much regret that carers assessments, for example, have not been taken up across Scotland.

I welcome the opportunity to send a strong signal about Labour’s continuing commitment to free personal care for older people, one of our flagship policies, which we share with the Liberal Democrats. The policy has been a welcome addition to the system of social care provision, but the debate needs to widen. The Parliament needs to consider how we provide for the growing number of older people, how we fund their care and how we can deliver a policy that is sustainable.

Christine Grahame (Scottish National Party, South of Scotland)

I congratulate the Liberal Democrats on using their limited debating time to allow us to debate this motion.

In March 1999, when the report on long-term care of the elderly that recommended that personal care, wherever delivered, should not be charged for came out, I was a green back bencher. On reading the report, I phoned Sir Stewart Sutherland—as I did, in those days—and that autumn visited him in his office in Old College to discuss how his recommendation could be implemented. My boldness matched my naivety. However, some now consider that the Parliament, though bold, was also naive when it introduced that policy in 2002.

Again, I commend the Liberal Democrats for their conduct during the period from 1999 to 2002. I am well aware that they were the coalition members who drove the policy through—if I recall correctly, the minister with responsibility for health at the time, Susan Deacon, was not in favour of a universal scheme and would have preferred there to be some form of means testing.

Implementing free personal care for people aged 65 and over, particularly in an era when the shift is from hospital and residential homes to people’s own homes, was, in principle, the right thing to do, because that care is just another facet of the universality of our health service.

As others have said, the implementation of the policy has not been without flaws, and David McLetchie has quite rightly campaigned to end the situation whereby his constituents are charged for food preparation, which was also charged for in the Scottish Borders. In April 2009, the Government introduced legislation to try to end that invidious practice and, in September 2009, guidance on a common eligibility framework and a consistent approach to waiting lists was introduced, in an attempt to close loopholes that councils were busy trying to open up.

Currently, 47,000 Scots receive free personal care at home and 9,000 long-stay residents in care homes also benefit from the policy because they are self-funders. Given that the number of elderly people is always increasing, cost will always be the main issue. However, as a Parliament, we have choices to make, and the right choice is to protect the most vulnerable in society.

The bill will rise, and I agree with the comments made by other members about merging social work and health budgets, where possible, to enable us to deliver services and aids and adaptations in a sensible fashion that avoids duplication; that is an issue to which the Health and Sport Committee returns regularly.

The issue of the lost attendance allowance has become imperative. On 15 May 2008, Conservatives, Liberal Democrats, Greens and independents backed a Government motion that said that Parliament

“notes Lord Sutherland's clear conclusion that the UK Government should not have withdrawn the attendance allowance funding in respect of self-funding clients in care homes, currently valued at over £30 million a year, and urges the Scottish Government to pursue vigorously with UK Ministers the reinstatement of this funding while longer-term work to re-assess all funding streams relevant to the care of older people in Scotland takes place.”

It is ridiculous that we are still losing £40 million per annum in attendance allowance that could be put back into systems for the care of our elderly.

I note the individual members who supported the reinstatement of attendance allowance. Malcolm Chisholm said:

“I agree with the cabinet secretary on the specific attendance allowance issue”.—[Official Report, 7 May 2008; c 8293.]

Alison McInnes—whom I will quote as she is in the chamber today—said:

“The UK Government was wrong to withhold the attendance allowance. It is surely time for UK ministers to acknowledge that and pay up.”—[Official Report, 15 May 2008; c 8720.]

We should go with that calling card, now that we have a Conservative-Liberal Democrat Government at Westminster.

When our Liberal Democrat Secretary of State for Scotland, Michael Moore, visited the Parliament, I raised the issue with him. I said to him that I hope that he is Scotland’s man in the Cabinet, not—to use the old phrase—the Cabinet’s man in Scotland. He should put his money where his mouth is and say to the Chancellor of the Exchequer, “Here is the respect agenda for Scotland: we will deliver respect for the elderly not just through words, but by getting the attendance allowance back and putting it towards the care of Scotland’s elderly.”

I hope that there is movement on the issue. I am glad that the Liberal Democrats and Conservatives agree with free personal care for the elderly, on which Scotland led the way. We should ask ourselves what would have happened to attendance allowance if free personal care had been introduced in England. It would have been kept and ploughed back into care for the elderly there, so we should have justice for the Scottish elderly here.

Helen Eadie (Labour, Dunfermline East)

Our debate today takes place against a background of budget cuts that are—and will continue to be—the severest that we have witnessed for decades. That is a crisis for the NHS in 2010, and it will be more far-reaching still because there are higher public expectations and more programmes, and the NHS is much larger.

Our political leaders will have a natural inclination to ignore the unpleasant realities to come, but if we are to reduce the human and social cost, it is essential to face up to those. The funding crisis is likely to lead to a covert rise in yet more waiting times. As we know, there are currently waiting lists to get into homes, which is rationing by stealth. The information revolution and more explicit quality standards will raise that crisis for the NHS to near the top of the political Richter scale.

Our policy is not shaped in a vacuum and we have a duty to keep an eye on policy that is developing in other parts of the UK. However, I am proud that a Labour-led Scottish Government in coalition with the Liberal Democrats developed the policy to establish free personal care for the elderly, which has been in place since the first session of the current Scottish Parliament.

I am also proud that 62 years ago, Labour’s great Aneurin Bevan established the NHS to end the unfairness of people with the greatest needs facing the highest costs and the people who had the least being in danger of going without having their needs met at all.

Today, our challenge is that the same unfairness exists in social care. If someone happens to develop dementia in old age, rather than cancer or heart disease, they are yet to find the “freedom from fear” that the NHS promised all those years ago. Free personal care for the elderly is—as Ross Finnie said at the start of the debate—a landmark social policy, but we must remove the postcode lottery of care provision throughout Scotland.

There are now 36 per cent more old and vulnerable people receiving free personal care in their own home than there were five years ago, but we have much to do. Scottish Labour plans a policy of continual review and improvement, and it is welcome news that the other parties have reaffirmed their commitment today to continue the policy no matter what happens.

Many critics, some of whom appear to have wanted our policy to fail, have raised concerns about the sustainability of such a package and the limitations of our Scottish model. They have argued that elderly people in many parts of Scotland have experienced delays before receiving their care as local authorities struggled with competing demands on their resources. In looking to the future, we must learn all the positive lessons from the experience that we have gathered from implementing the policy, while acknowledging all the concerns.

However, we need to keep an eye on what has happened at Westminster. With the election of a Con-Dem coalition Government, voters across Scotland have much to worry about. Just two years ago, David Cameron wrote a manifesto in which he proposed that the NHS would be drained of funds as money flowed into subsidising private health care. Will Nick Clegg follow that? Will the Scottish Liberal Democrats follow the example of their leader at Westminster?

Who can trust the Tories? Scotland knows that it cannot trust the Tories, and the wounds from the previous period of Tory Government are still raw and run deep in the history of our towns and villages. However, the much bigger question for voters now is whether they can trust any Lib Dem in the UK or in Scotland.

There are radical thinkers in the Liberal Democrats whose ideas include breaking up the NHS and funding health through social insurance as opposed to general taxation. They advocate that the state should cease to manage the NHS on a daily basis.

Margaret Smith (Liberal Democrat, Edinburgh West)

Does Helen Eadie accept that coalitions sometimes do the right thing? It was thanks to the Liberal Democrats in coalition with the Labour Party that Labour did the right thing on free personal care, because Susan Deacon, Sam Galbraith and various other Labour figures fought tooth and nail against the former Health and Community Care Committee, which I chaired at the time.

Helen Eadie (Labour, Dunfermline East)

Labour has always done the right thing through the ages, something which the Liberal Democrats cannot hold up their hands and claim to have done.

Those radical Liberal Democrats have said all that while claiming that during the past three decades their party has mislaid its traditional economic liberalism, partly due to its association with Thatcherism, and allowed itself to be captured by what they call “soggy socialism and corporatism”. They say that the

“new challenge is to what extent we can utilise choice, competition, consumer power and the private sector to deliver a better deal for those on low incomes, as well as for those who can fend for themselves”.

That is what the Liberals are saying at their party conferences, and what the Scottish Liberal Democrats are signed up to.

Some of the contributors—not all of whom agreed on the details—included Vince Cable, the then shadow chancellor, Mark Oaten, the then shadow home secretary, Ed Davey and all the other celebrities in the Liberal Democrat party.

The Liberal Democrats must tell us the extent to which they subscribe to those policy proposals, because we need to know. The Liberal Democrats’ long-standing commitment to free personal care does not preclude people paying for services; its health spokespeople are on the record as saying that that is the way forward.

The Liberal Democrats support the stakeholder model, which is intended to preserve and enhance equity by making it impossible to queue jump and by guaranteeing a core package of services for all. However, according to John Chisholm, the former chairman of the British Medical Association general practitioners committee, the mixed funding stream with top-up packages that the stakeholder model creates undermines the fundamental values of the NHS.

We need answers from the Liberal Democrats on the extent to which they will distance themselves from Nick Clegg, and I hope that we will elicit those from them today.

Sandra White (Scottish National Party, Glasgow)

I remind Helen Eadie that her party told the Scottish people that they should vote Labour to keep the Tories out. They voted Labour, and they got a Tory Government, so the Labour Party has some explaining to do.

I congratulate Ross Finnie on his contribution, which was moving and sincere. As convener of the cross-party group on older people, I, like others, was delighted when the legislation on free personal and nursing care was passed. The cross-party group was very involved in the legislation as it went through the various stages, and I saw it as democracy in action on the part of Lord Sutherland and others.

Without free personal care, particularly at home, an increasing number of elderly people would be forced to move into care homes. Not only does that deprive them of their home comforts, but the cost of care homes is greater than that of home care. It is estimated that home care costs £5,754 per person per year, whereas care homes cost around £23,000 per person per year. Despite what some members may say—and have said—free personal and nursing care, particularly at home, saves money in the long term by reducing the cost to the NHS and to the whole country.

I will expand on the issue, and give an example of what I am trying to get at. Without free personal and nursing care, older people may put off receiving treatment, which increases their chance of having accidents or of health conditions worsening. That would only add to the £1.4 billion price tag for unplanned emergency hospital admissions, 31 per cent of which—the largest percentage—is already spent on older people’s care. In the long term, free personal nursing care saves Scotland and its NHS money, and I certainly do not believe people’s claims that caring for older people is too costly. Yes, we have to be realistic but, as Ross Finnie so eloquently put it in his speech, what kind of society are we if we cannot look after our older people?

As members have acknowledged, there have been problems with the delivery of free personal and nursing care, not least because of how some—though, I point out, not all—local authorities have interpreted the provision of services, in particular food preparation. I welcome the Scottish Government’s move to introduce secondary legislation to clarify that issue because, as other members have made clear, free personal and nursing care cannot be subject to a postcode lottery. Clarity is also needed on entitlement, and a common framework must be implemented to ensure that people throughout the country are not affected by yet another postcode lottery. Local authorities must get together on all those issues and move towards implementing a system in which everyone in the country, no matter where they live, receives the same free personal care.

The withdrawal of the attendance allowance from Scottish pensioners, which Christine Grahame went into in great detail, is scandalous and, indeed, discriminatory. My mother and father, others’ mothers and fathers, relatives and so on worked and paid their taxes all their lives, but these pensioners are now being told that because they have benefited from the Scottish Parliament’s progressiveness—and we all agree that free personal and nursing care has proved to be a fantastic way forward and that it is wonderful that people can now stay in their own homes, be more comfortable, be nearer their relatives and so on—they will not be able to access that money. People can call that whatever they like, but I believe that it is discriminatory and that those older people are being penalised just because they are Scottish pensioners. If it had happened in any other country in the world, the Government would be taken to court, and I sincerely hope that the issue will be raised in the new partnership—I think that that is what we are calling it; it is not yet a concordat—between the Scottish Government and the new Government in Westminster. The issue desperately needs to be clarified. The money has been taken away from Scottish pensioners just because they are Scottish and because the Scottish Government is progressive in its approach to health, and we need to get it back.

A tenth of our older people rely on free personal and nursing care. Although, as members have pointed out, certain areas need to be reviewed, clarified or simplified, under no circumstances should such provision be reduced.

Marlyn Glen (Labour, North East Scotland)

I am pleased to take part in this debate on free personal care for the elderly. The policy, which was begun under the previous Labour-led Scottish Executive, is highly valued by elderly people and their carers, and Labour wishes to see it continue. Indeed, we stand by our belief that we should never forget the most vulnerable in our society, and free personal care was at the vanguard of turning our values into law. As we consider the policy’s future, it is important that we strongly recommit to it.

The Scottish Government says that it is

“urging Scots to consider future care for older people alongside climate change and the economy as one of the country’s top priorities”

and that

“If current models of care are sustained, the present care budget of £4.5 billion will need to rise by £1.1 billion by 2016 and £3.5 billion by 2031.”

As the minister has also talked about working

“In partnership with Scotland’s local authorities”

I asked Dundee City Council, which is run by an SNP minority administration, whether it had made any estimates of the cost of maintaining the current level of provision of free personal and nursing care over, say, the next five or six years based on population projections. It replied:

“Not as yet. They are currently being developed as part of an estimate of demographic pressures.”

It appears that so far the partnership with local authorities does not extend to the Scottish Government’s ability to ensure that it has information such as that for its reshaping care for older people consultation.

Shona Robison (Scottish National Party, Dundee East)

Will the member—

Marlyn Glen (Labour, North East Scotland)

Perhaps the minister will let me continue.

Of course, Dundee, with its ageing population, faces the same demographic pressures as all other Scottish councils. Dundee’s population is projected to be 142,000 in 2013, with almost 27,000 aged 65 or over. Although the population is forecast to decrease to 137,000 by 2028, the number aged over 65 is predicted to rise to almost 32,000, an increase of about 5,000. Unfortunately, there is no corresponding increase in healthy life expectancy, or the number of years that a person might expect to enjoy good health. In fact, for men and women in Dundee, the disparity is above the Scottish average. Although, as we have heard, the majority of older people will never have contact with the care system, we must get it right for those who do, and the Scottish Government must engage constructively with the UK Government through the review of social care in England to secure the long-term sustainability of free personal care in Scotland.

Despite the fact that free personal care is a highly important issue in its own right—according to the Scottish Government, it is on a par with climate change—the online material for the reshaping care for older people consultation compares unfavourably with that for other consultations on the Government’s website. At the moment, there is only one 12-page leaflet. In comparison, the Scottish Government’s consultation documents on proposed public records legislation run to 26 pages—

Shona Robison (Scottish National Party, Dundee East)

Will the member give way?

Marlyn Glen (Labour, North East Scotland)

I ask the minister to let me finish my point.

The Scottish ferries review runs to 76 pages and the consultation on the proposed tobacco display and sale regulations runs to 64 pages. As I say, despite its obvious—and agreed—importance, the reshaping care for older people consultation can muster only 12 pages; clearly there is room for much greater detail. The programme’s thrust is to shift the emphasis from acute provision to a preventive re-enabling model.

Shona Robison (Scottish National Party, Dundee East)

Will the member give way?

Marlyn Glen (Labour, North East Scotland)

No, thanks.

Although that seems like the right direction, the consultation must be fair and thorough.

It is interesting to view the contents of the short booklet available on the website in the light of comments from the Royal College of Nursing Scotland, which has referred to the

“lack of publicly available evidence”,

the fact that

“little coherent information is ... available both at national and board level”

and the need for

“access to accurate, up-to-date and transparent evidence on the current situation”.

If we are to redesign services in the best way possible and continue this flagship policy of free personal care, there must be clear and full information to allow proper engagement.

Mary Scanlon (Conservative, Highlands and Islands)

I, too, thank our friends the Lib Dems for using their time to debate free personal care and acknowledge the cross-party commitment to the policy.

During the passage of Community Care and Health (Scotland) Bill, the Conservatives stated that a long-term approach to funding free personal care was essential. Indeed, that has been highlighted in the briefing that we have all received from Age Scotland. With the new coalition Government at Westminster, we have an opportunity to engage constructively in finding ways of funding long-term care for the elderly.

In preparation for the debate, I looked back at my speech in the stage 3 debate on the Community Care and Health (Scotland) Bill, which had been taken through the committee stages under Margaret Smith’s able convenership of the Health and Community Care Committee. I noted then that, instead of the

“single body for budget holding and planning and commissioning community care services”—[Official Report, 6 February 2002; c 6099.]

that the committee had recommended, we got “aligned and pooled budgets”. I also remember that all witnesses bar one were in favour of a single budget, although there was no agreement on which organisation would hold it. That confirms the basis of Murdo Fraser’s amendment in this debate.

The Community Care and Health (Scotland) Act 2002 also introduced direct payments for the elderly, which were welcomed as bringing more accountability, freedom and choice into the provision of care. However, many carers have found councils less than willing to assist them with this service. As a result, the council becomes the monopoly provider of home care services, with no alternative available to people who feel that the service is not what has been promised.

Secondly, the act promised that elderly people cared for at home or in care homes would receive regular six-monthly assessments, which are essential in ensuring that the care package is updated to address the individual’s on-going needs. I know from many constituency cases that some people have been on the same care package for years, whether it is home care or residential care, with no further assessments being carried out, despite the fact that their general condition and mobility have deteriorated considerably.

During committee proceedings at the time, we constantly discussed the issue of having one type of care home for the elderly, and were assured that that would be the case. There were to be integrated care homes that would take care of people’s residential and nursing needs, with no need to move elderly people to another place for nursing care. However, that has not happened. Instead, we have three types of care homes for the elderly: residential, nursing and integrated. The result is that elderly people remain in residential care homes when they really need nursing care, and the appropriate level of care is not given at the time of need. Further, many care homes provide nursing care but are paid for providing a lower level of care. In Inverness recently, a woman who is a nurse visited her mother in a residential care home and had to point out to staff that her mother had had a stroke. That was because there were no nursing staff there. That highlights the situation, which was not what the Parliament intended. I trust that the minister will examine that.

As I said earlier in an intervention, in the current financial situation we must surely consider the cost of placements in care homes. From a freedom of information inquiry last year, I learned that Highland Council—which today will vote on care homes, as I am sure Jamie Stone will point out—pays 80 per cent more for a person in a council home than it does for someone in a home in the voluntary or the independent sector.

Dave Thompson (Scottish National Party, Highlands and Islands)

Will the member give way?

Mary Scanlon (Conservative, Highlands and Islands)

Let me finish.

Argyll and Bute Council pays £357 for someone in the independent or the voluntary sector compared with £817 for a person in a council home. In Dundee, the figure is £454 for the independent sector and £826 for council homes. The fact is that all care homes must meet identical quality standards. Under the current funding arrangements, for every five people who are funded in the independent sector, only three can be cared for in council homes from the same budget. Given the demographics that we face, we must be honest and fair and consider that issue.

Then we have the self-funders. Given that every person who is in a care service receives an identical level of care, should not the payments for their care be identical? Those who are self-funding can pay twice the amount that the council pays for care of another resident, which surely is not fair or reasonable. That has resulted in many families of people who are self-funding complaining that they are subsidising the care of others.

As Jackie Baillie said, given the rising number of people who are in need of free personal care, more emphasis must be put on preventive care. That is a good point that we should not lose sight of. Access to chiropody services, shorter waiting lists for assessment and access to aids are all essential.

I seek clarity from the minister, either in her winding-up speech or in a letter, on the issue of notional capital. What is the time period for disposing of the family home and the use of that financial asset to pay for care?

I support the motion and the amendment in the name of Murdo Fraser.

Richard Simpson (Labour, Mid Scotland and Fife)

The debate has been largely consensual. As Ross Finnie said, the starting point is that older people are an asset, not a liability. That is a fundamental point of which we must not lose sight. The demographics mean that we are faced with increasing longevity and substantial increases in the number of the very old, although it is interesting that those who are over 85 tend to have fewer long-term conditions and can be fairly fit—if we get to 85, we have a chance of living well beyond that. One problem is that healthy living has not increased in the same way that longevity has. We are faced with the major challenge of an elderly population with significant long-term conditions. Many members have referred to the need for effective prevention of emergency admissions, which are expensive and not good for the patient or individual.

The figures are clear: 9,500 people receive free personal and nursing care in a care home and 45,000 receive care at home. The budget figures are also clear and show that all that accounts for only 8 per cent of the total care budget, which is a point that is not recognised in England. Although the cost will rise, it is not likely to rise as a percentage of the total care budget. In England, the latest discussion document, which came out last year, indicated that the average cost of care for those over 65 is about £30,000 a year. There is a debate on the issue in England, and a consensus on at least two points. First, there is consensus that there is a problem and that the current situation is not equitable, sustainable or fair. Secondly, there is consensus in the opposition to the uniformity and consensus in Scotland, where all parties support free care. We have a clear dividing line between the Scottish Parliament and the English parties.

As those parties debate the way forward, there should be an opportunity to revisit the issue of the attendance allowance, to which Christine Grahame and Sandra White referred. Taking the totality of care, it is clear that including that funding to us would be helpful.

Under the Liberal Democrat and Labour Administration that drove forward the free personal care policy—Henry McLeish was the First Minister who was committed to it—we endeavoured to introduce the joint future programme. That was an attempt at the grass roots to introduce unified budgets for health and social care. However, the programme has gone very slowly. The minister might advise us as to whether the joint future programme is continuing, as I have no idea. In Perth and Kinross, which was the pilot area, it took 18 months even to agree the salaries of two individuals—one from health and one from social work—to do the same job. The willingness to make progress on that has been very poor.

When change is driven hard from the centre, as happened with delayed discharges, a particular problem with that interface can be eliminated. Local authorities did not gain from taking people out of hospital—it was a cost on the local authority, so why would they ever do so? However, by driving change from the centre, we have been able almost to eliminate delayed discharges, although it is regrettable that the Government’s promise to keep the rate at zero has not been kept. The figure rises to about 100 at the worst times every year.

As Helen Eadie said, the history of free personal care started with Bevan’s introduction of the NHS. We should not forget that the NHS included long-term care until the 1980s, when almost all long-stay wards were closed and the nursing element was devolved to local authority and private nursing homes. That is when the enormous discrimination began to arise. Someone who was dying of cancer went into a hospice or hospital, but someone who had dementia, for example, had to meet their own costs. We can do without that sort of discrimination, which Irene Oldfather has referred to repeatedly in debates on the issue.

In Scotland, all parties are in favour of free personal care. We need to develop that partnership. Government, local authorities, the voluntary sector, users, carers and the wider public must all be involved in the debate as we proceed. We certainly need to squeeze out inefficiencies and shift the care from the acute to the preventive. However, in reality, the threshold for care in the community is rising. People need to have more and more severe conditions to get care, which is the exact opposite of what we need to do.

We do not need unilateral action of the sort taken by SNP-led Stirling Council, which tried to close fairly modern care homes, although that was stopped by a public campaign. The council has cancelled support for the Independent Living Association Forth Valley and instead looked at direct payments, but without consulting the two other local authorities that are involved. It failed to repay the meal preparation charges and was one of the last councils to abolish them. I congratulate the Government on correcting that important measure, and I am sorry that it took so long for us to do it.

The elderly are a substantial and largely untapped resource and must be engaged positively on the issue of free personal care. We have consensus, we have had a largely reasonable debate and we need to keep our joint resolve. The Labour Party is committed to continuing free personal and nursing care.

Shona Robison (Scottish National Party, Dundee East)

This has been a stimulating and mainly consensual debate, with one or two notable exceptions—the usual suspects. It has served the purpose of giving the Parliament a further opportunity to have a continuing, long-term and comprehensive discussion. It does not end here; there will be other opportunities to continue the discussion and, to reassure Jackie Baillie, I tell her that we will return to Parliament with more detailed and specific proposals in an overall package of transformation for future discussion.

I will address some of the points that have been made in the debate. Ross Finnie talked about clear national priorities and outcomes. We have gone a long way to achieving those through the clear eligibility framework, for the first time with minimum standards. That was required because different local authorities were interpreting the legislation in differing ways. Murdo Fraser talked about the single budget in commissioning. I gave a clear steer in my opening speech that all those things are being considered actively as we think about how to take forward the interface between health and social care.

Christine Grahame and Sandra White made some forceful points about the attendance allowance. What is important here is not just the fact that it is not fair and we should get our money back—although that is obviously the case—but how we could then integrate and use that attendance allowance resource as part of the financial backdrop to how social care services are delivered. As we saw during the previous UK Government’s debate on the future of social care and its interrelation with the benefits system, not having direct control over that is frustrating and a real impediment because, whatever action the UK Government takes and whatever changes it makes to the benefits system, or indeed the pensions system, that will impact directly on social care in Scotland. We need to ensure that the two parts of the system are joined up and that we take the opportunities to join them up in Scotland. We do not yet know the direction of travel of the new coalition Government in that arena but, under the respect agenda, we expect as a minimum that the needs of the Scottish population and Scotland’s older people will be taken into account at an early stage.

I am not sure what point Marlyn Glen was trying to make. We have good national and local statistics about the demographic changes. She seemed critical of the size of the consultation document, which is a bit like spinning on the head of a pin. We are holding meetings on reshaping older people’s care the length and breadth of Scotland. If we had laid out clearly that we had already made our decision about what we wanted to do, no doubt the criticism would have been, “What’s the point of a consultation when you’ve already made your mind up?” We are having a good consultation and the number of people turning up at the meetings speaks for itself. There has been really good engagement with older people, which I am pleased about.

Marlyn Glen (Labour, North East Scotland)

To clarify the point that I was making, it was RCN Scotland that called for more information. I was concerned about the lack of information that Dundee City Council seemed to have when forward planning is clearly needed.

Shona Robison (Scottish National Party, Dundee East)

I have had numerous discussions with Dundee City Council and I do not share the member’s perspective. The council knows well what the local demographic challenges are. We have engaged closely with Age Scotland, which has been one of the key voluntary sector bodies involved in the consultation. It signed up to the direction of travel, which I am sure remains the case.

I hope that I have been able to reassure Mary Scanlon that we are looking at the whole system, but I will write to her about the notional capital issue. I welcome Richard Simpson’s sudden conversion to supporting the return of the attendance allowance; it is just a pity that he did not support it in the past eight years of the policy’s delivery when he had the opportunity to do that at UK Government level, but we welcome support from whichever part of the chamber it comes.

We have made genuine progress on delayed discharge. We returned to the zero standard in April and there has been a huge improvement since the end of 2006, when 650-plus people were caught up in a hospital environment that they did not need to be in. I hope that Richard Simpson recognises the huge progress that we have made.

Free personal care was born out of a strong sense of social justice aligned with cross-party support and consensus that we have seen again today. I am keen that we do not lose sight of the principles that are enshrined in the act and the great successes that we have achieved so far with that cross-party consensus. However, each and every member in the chamber has a responsibility to embrace the reshaping and modernising of care services locally and not to stand in the way of essential service redesign, whether that is establishing a reablement home care service or a shift in the balance of care from acute sector beds to community-based services. We cannot support the theory of the policy but not the practical effect in the community. On that basis, I hope that we can all stand together and ensure that we can really and truly deliver for the older people of Scotland.

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

In making the final speech in the debate, I thank everyone who has contributed to it, including my good friend Helen Eadie, whose contribution I enjoyed.

I am proud that the Parliament and all the parties are able to coalesce around what Ross Finnie referred to as a “landmark social reform”. In the early days of the discussion about free personal care between the Labour and Liberal Democrat parties, I remember going to a reception in Parliament hall and meeting Henry McLeish, who said to me in an up-front way, “Yes, we will deliver this policy.” Indeed he did and credit should be given to him. As to the arguments that might or might not have taken place in the Labour Party, that is for another day.

Ross Finnie said and Richard Simpson quoted him, as I will too, that

“older people in our society are an asset, not a liability”.

That is exactly the right view to take when delivering the policy. It is no accident that this policy, and our doing something different from what happens south of the border, is one of the reasons why devolution is as liked and accepted as it is among the older people in our country.

Ross Finnie and many others referred to the unevenness in distribution of free personal care and that remains a key issue for us to tackle. Almost 10,000 people are in receipt of free personal care and a much greater number—45,000 people or thereabouts—receive care at home. Lord Sutherland challenged us to put in place clear national priorities and outcomes and, as Ross Finnie said, it is arguable whether they are in place. Again, that is work that we must complete. Ross Finnie concluded his speech by asking how we can drive cost out of delivery. That is another question for us all.

Dave Thompson (Scottish National Party, Highlands and Islands)

The member will be aware that Lib Dem-led Highland Council is today proposing to privatise five of its care homes. As Mary Scanlon pointed out, that will save money. However, it will be at the expense of the lowest-paid care workers, whose wages, pensions and sick pay will be cut by 30 per cent. Is he happy about that?

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

I anticipated that intervention from Dave Thompson. I believe two things. First, we have to trust local authorities to do their best and, in the case of Highland Council, I have no reason to think that it is not trying to do its best in an extremely difficult financial situation. Secondly, it does not always behove MSPs to wag their finger at another democratically elected body that is trying to do its best in a tricky situation, not just for councils and the Scottish Parliament, but for the whole country.

Murdo Fraser made the point, which Mary Scanlon echoed, that functions could be transferred from social work services to the NHS or another body. The Liberal Democrats support the Conservative amendment—we are not against it—but something similar to the furore that surrounded the removal of water and sewerage services from local authority control would occur if hands were laid on the social work aspect. Moving the function to A N Other body but not the NHS would surely just duplicate the costs that are incurred at present.

In her intervention on Shona Robison, Mary Scanlon referred for the first time in the debate to the fact that a council placement costs more than a placement in the private sector. I suppose that that is connected with the intervention that David Thompson just made.

Jackie Baillie’s most important point was that costs vary between local authorities. Ross Finnie referred to that difference in costs, which has been called a postcode lottery. Jackie Baillie asked the minister to agree to a debate—probably later this year—on the possible funding mechanisms, which goes back to Murdo Fraser’s point.

Shona Robison (Scottish National Party, Dundee East)

In the important debate on funding, can I take it that—under the respect agenda—the Liberal Democrats support our negotiations with the UK Government about the return of the attendance allowance moneys?

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

Christine Grahame put her point eloquently at the meeting between committee conveners and the Secretary of State for Scotland, Michael Moore. From his answer, I have no reason to think that he will not consider the matter and do what he can. However, we must bear it in mind—as I said in response to David Thompson’s intervention—that money is not available in large quantities. I think that Christine Grahame would agree that Michael Moore’s response was helpful.

Christine Grahame gave us an accurate potted history, but I must take issue with the notion that she was ever a green back bencher. When she first appeared in 1999, she was a fully formed battleship firing—

Members: Oh!

I am so sorry. I withdraw my outrageous remark.

In the same tone, I point out to my good friend Helen Eadie that Nye Bevan introduced what Mr Beveridge had designed in his report and, of course, we all know which party Mr Beveridge belonged to—he was a good Liberal.

Helen Eadie referred to elderly people staying in their own homes, which set me thinking. I will digress and make a new point in the debate. In all my time as an MSP, I have tracked the voluntary sector’s involvement and its contribution to our society in Scotland. That sector could make a further contribution. In looking after elderly people in their own homes or in whatever form of amalgamated home we eventually agree on—that relates to Mary Scanlon’s speech—the voluntary sector has a role to play. When we debate the subject again, I hope that the minister will consider carefully the potential of releasing and using the voluntary sector, which gains a great sense of achievement from its work. Building in a form of recognition would be extremely useful.

Finally, from Helen Eadie’s many years of worthwhile service on the Subordinate Legislation Committee, I should have thought that she had learned to trust me, of all Liberal Democrats, at any rate.

Members: Oh?

I hear doubt expressed from a sedentary position.

Marlyn Glen’s speech was the last in the open debate. From what she said, I make the point—which has been made—that the rest of the UK, where the political parties cannot agree what to do, has much to learn from what we in Scotland have done. We should transmit that message loud and clear across the border. Murdo Fraser is probably correct—the English Conservatives have much to learn from the Scottish Conservatives in how to go about things.

I will draw attention to two closing speeches.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Very quickly, please.

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

Mary Scanlon’s points about nursing and residential homes and about the lady with a stroke were well made. We need to sort that out. Finally, Richard Simpson made the point that elderly people may be living longer but they have long-term conditions, which has cost consequences. That is all meat to the debate that lies before us.

Pyrolysis

Elaine Smith (Labour, Coatbridge and Chryston)

1. To ask the Scottish Executive whether it supports pyrolysis incineration. (S3O-11069)

Roseanna Cunningham (Scottish National Party, Perth)

It is not for the Scottish Government to support any individual technology. Any technology that is used to treat waste materials must comply with standards that the Scottish Environment Protection Agency sets, to protect human health and the environment.

Elaine Smith (Labour, Coatbridge and Chryston)

I thank the minister for her not unexpected response. Is she aware that thousands of people in my constituency oppose plans to build a new pyrolysis incinerator in Coatbridge because they believe that the technology is untested and that any new pyrolysis plant would have an adverse effect on people’s health and the environment? Will the Government make a statement to the Parliament on the recently published zero waste plan, which would allow members to ask questions about issues such as local environmental justice? Does the minister agree that the new environmental targets would be best achieved by Government provision of waste facilities rather than by allowing private companies to profit to the detriment, sometimes, of our communities?

Roseanna Cunningham (Scottish National Party, Perth)

Elaine Smith knows that the Cabinet Secretary for Rural Affairs and the Environment has spoken about zero waste in the chamber and will no doubt continue to do so. She will have every opportunity to continue to ask her questions.

I advise Elaine Smith that many members deal with issues that relate to waste and incineration in their constituencies. The difficulties that she has experienced in her constituency are not unusual. I am somewhat surprised that, at a time of massive public sector cuts—with all their implications for future Scottish budgets—the Labour Party again demands an increase in public sector expenditure, which is in effect what Elaine Smith asked for. Is that to be Labour Party policy? At a time of public sector cuts, will the Labour Party continue to demand an increase in public sector expenditure? That is absurd.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 2 was withdrawn.

Council Tax Freeze

Sarah Boyack (Labour, Edinburgh Central)

3. To ask the Scottish Executive what assessment it has made of the impact of the council tax freeze on local authority budgets. (S3O-11036)

John Swinney (Scottish National Party, North Tayside)

The council tax freeze has been fully funded by the Scottish Government since its introduction in 2008-09. To meet the commitment, we have provided councils with extra income that is equivalent to an annual increase of more than 3 per cent.

Sarah Boyack (Labour, Edinburgh Central)

I alert the cabinet secretary to my concern about my constituents’ experiences. The less well-off must bear the brunt of the cuts that stretched councils must make, whereas those who are better off benefit from council tax savings. I am particularly concerned about council house tenants in Edinburgh whose rents have increased by almost 20 per cent since 2007—from £57.98 a week to £69.55 a week. Is it right that council house tenants, many of whom have minimum-wage jobs, are being asked to pay an extra £11.57 a week, while better-off people benefit disproportionately from the council tax freeze?

John Swinney (Scottish National Party, North Tayside)

Local authority rents are entirely a matter for individual authorities. As for the effect of the council tax freeze on the tenants to whom Sarah Boyack referred, if they are eligible to pay the council tax, they will pay it at a reduced level from that which it would have reached if we had allowed it to increase in the fashion that the Labour Party would have preferred.

As for individuals’ eligibility to pay council tax, the council tax benefit regime is in place. If individuals wish to establish whether their income justifies their receiving council tax benefit, I encourage them to take up that opportunity, which is available through the advice that the City of Edinburgh Council and other authorities provide.

Joe FitzPatrick (Scottish National Party, Dundee West)

From its introduction, the council tax increased by 100 per cent under the Conservative and Labour parties. Throughout that period, double-digit increases were not uncommon. I put aside those particularly high increases, but how much more would the average family in Dundee have been expected to pay if council tax had increased by a comparatively modest 3 per cent each year since 2007?

John Swinney (Scottish National Party, North Tayside)

Mr FitzPatrick is correct to point out that council tax increased by a very significant amount under the previous Labour-Liberal Democrat, Labour and Conservative Governments. This Government has frozen the council tax at the level at which it was when we came into office in 2007-08. If the council tax had increased by 3 per cent each year since 2007, a band D householder in the city of Dundee would have paid a cumulative total of £212 more in council tax payments.

Air Conditioning Systems (Inspection and Maintenance)

Richard Simpson (Labour, Mid Scotland and Fife)

4. To ask the Scottish Executive what discussions it has had with local authorities and other bodies regarding the inspection and maintenance of air conditioning systems. (S3O-11068)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Article 9 of the European Union directive on the energy performance of buildings was introduced in Scotland in January 2009. The directive requires inspection, but not maintenance, of air conditioning systems. Prior to its implementation, officials held several informal meetings with local authority building standards managers. In addition, the Scottish Government engaged with professional bodies that considered that their members could undertake air conditioning inspection work. Currently, we have a protocol with five such bodies for inspection work.

Richard Simpson (Labour, Mid Scotland and Fife)

The minister will be aware of the fact that commercial properties are responsible for 20 per cent of the United Kingdom’s energy consumption and carbon emissions. The EU directive requires inspection prior to 4 January 2011. Air conditioning specialists in my constituency tell me that the rate of inspections is currently less than 5 per cent, due to underfunded and overloaded trading standards officers. Full compliance with the directive would achieve an estimated 930,000 metric tonnes of carbon savings over the next 10 years. Does the minister agree that we need to up our rates of inspection and maintenance? Will he undertake to discuss with trading standards officials the ways in which we can increase the number of inspections of air conditioning units or to explore whether other bodies could also be used to carry out inspections?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The member should be aware that the directive applies to systems with an output of in excess of 250,000kWh. There are 50 such installations throughout Scotland. I have no reason to believe that inspection of those installations will not be completed by 4 January 2011.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 5 was not lodged.

Council Tax Freeze

Michael McMahon (Labour, Hamilton North and Bellshill)

6. To ask the Scottish Executive whether it remains its intention to extend the council tax freeze in 2011-12. (S3O-11058)

John Swinney (Scottish National Party, North Tayside)

The council tax freeze has provided welcome relief to hard-pressed households across Scotland. We intend to continue to provide that relief in 2011-12. We will discuss the issue with our local government partners as part of the spending review.

Michael McMahon (Labour, Hamilton North and Bellshill)

When the con act was set up a few years ago, the calculation was that £70 million per year would suffice to address the council tax increases that might otherwise have occurred. In the interim, there was a recession, which caused a reduction in incomes for local authorities that was never addressed or readdressed by the con act. This year, the trade union Unison has calculated that the recession had the impact of reducing local authority budgets by £300 million, causing 3,000 job losses. Can the cabinet secretary confirm that he intends to redress that?

John Swinney (Scottish National Party, North Tayside)

It is important to separate two issues. The first is the level of support that the Government puts in place to enable the freezing of the council tax. It is impossible to take any view other than that the Government has fully funded the freeze in council tax. In some years, we have provided resources additional to the gross domestic product deflator that was set by Her Majesty’s Treasury in relation to expected levels of council tax increase.

There are other issues that relate to the impact of the recession. I do not dispute that the recession has had an effect on local authority income; it has affected the economy in a variety of ways. The Government has been taking a series of measures—for which we would welcome the Labour Party’s support—to encourage economic recovery and to ensure that we are able to build our way out of the economic difficulties. We are working co-operatively with our local authority partners to do that. I welcome the fact that many local authorities have taken steps to improve economic performance in their localities, given the difficult economic circumstances that we have faced in the past two years.

Care Leavers

Des McNulty (Labour, Clydebank and Milngavie)

7. To ask the Scottish Executive what steps it is taking to provide enhanced opportunities and more support for care leavers. (S3O-11061)

Adam Ingram (Scottish National Party, South of Scotland)

The Scottish Government is committed to ensuring that care leavers have the support to access the same opportunities that those in their communities who have not been looked after have. We are ensuring that our major change programmes, especially 16-plus learning choices, prioritise the needs of looked-after young people and care leavers.

Des McNulty (Labour, Clydebank and Milngavie)

The statistics make clear that too many care leavers suffer from educational underattainment and lack employability skills. We fall far short of best practice in the Scandinavian countries, for example. Can anything be done to improve joined-up thinking between the different agencies that deal with those young people? Will the minister consider giving care leavers who leave local authority care at the age of 16 or 17 to try out living on their own and an independent life the right to return to local authority care if that does not work out for them? Some children are getting lost after 16 as a result of trying to do things themselves.

Adam Ingram (Scottish National Party, South of Scotland)

We are well aware of the vulnerability of care leavers, especially at a time of economic fragility. As the member indicated, the latest stats show a fall in the number of care leavers in positive destinations. The Scottish Government has taken a number of steps on the back of that. I have written to all local authority chief executives to remind them of their responsibilities to care leavers. On 31 August, I will host a summit, along with the Association of Directors of Social Work, to discuss roles and responsibilities with all heads of children’s services. On 17 June, my colleague Keith Brown, the Minister for Skills and Lifelong Learning, announced a specific set of measures to assist care leavers, as part of a summer leavers task force. Those measures include an incentive of £1,000 for up to 2,000 employers to offer a modern apprenticeship to young people who face specific barriers.

We have taken a number of other steps that I would be happy to discuss with Des McNulty. I agree with his final point about allowing young care leavers to come back when they need to.

St Ninian’s High School (Catchment)

Kenneth Macintosh (Labour, Eastwood)

8. To ask the Scottish Executive what action it is taking to help East Renfrewshire Council address on-going difficulties over the catchment area for St Ninian’s high school. (S3O-11057)

Michael Russell (Scottish National Party, South of Scotland)

The catchment area for St Ninian’s high school and any proposed changes to it are matters for East Renfrewshire Council. It would be inappropriate for the Scottish Government to intervene. However, I understand that East Renfrewshire Council has established a working group to consider the issue. I will be interested to learn the outcomes of its deliberations in due course.

Kenneth Macintosh (Labour, Eastwood)

The cabinet secretary will be aware that the phenomenal success of St Ninian’s in its 25 years has created a demand for places that it is difficult, if not impossible, for the local authority to manage. Does he agree that that is an unfair situation for parents and that it creates unnecessary and unwanted anxiety in local families? Is he aware of an application to build 200 new houses not in East Renfrewshire, but in Glasgow? Does he agree that building such houses without putting in place a solution would be irresponsible? Can he assure me that the Scottish Executive will reject the application until a solution is found?

Michael Russell (Scottish National Party, South of Scotland)

I will at no stage regret the fact that any school in Scotland is excellent. However, the member raises an important issue. From time to time, there is pressure on all schools. Building in the environment and catchment area of a school can increase that pressure. Negotiation and collaboration are required between all the agencies involved. I will keep a careful eye on the situation.

Language Skills (Five-year-olds)

Robert Brown (Liberal Democrat, Glasgow)

9. To ask the Scottish Executive whether it is satisfied with the language skills of five-year-olds starting school. (S3O-11076)

Michael Russell (Scottish National Party, South of Scotland)

We want all children and young people to be able to gain as much as possible from the opportunities that the curriculum for excellence can provide. The Scottish Government is satisfied that an appropriate framework is in place to ensure that every child gets the support that they need to develop their language skills.

Robert Brown (Liberal Democrat, Glasgow)

Is the minister aware that the I CAN organisation estimated some time ago that 53 per cent of five-year-olds starting school in Scotland do not have good enough language skills to access the primary 1 curriculum? Is he concerned that speech and language therapy services are overstretched? More particularly, is he aware of the systematic approach that the communication, help and awareness team in NHS Forth Valley takes to the issue in nursery schools? Has he evaluated that, and is he in a position to consider Government support for such projects throughout the country?

Michael Russell (Scottish National Party, South of Scotland)

I am aware of a range of good practice. I find the figure that the member quoted somewhat questionable. Language skills are, of course, the underpinning skills that children need to move on. I am addressing the issue of literacy and numeracy, including the assessment of language skills, baseline assessment, and the way in which we address learning difficulties, particularly reading difficulties. All of those are rolled into two things—the approach that we take to the curriculum for excellence and, of course, the priority that we give to literacy and numeracy. I pay tribute to the work of the literacy commission in that regard, because literacy is a lifelong issue. If we can tackle in the earliest years issues of literacy and possible difficulties with acquiring language and reading skills, that will pay huge dividends in future years.

I hope that the member will watch this space, because a great deal of work and thinking are going on regarding the matter.

Christine Grahame (Scottish National Party, South of Scotland)

I refer the cabinet secretary to the Health and Sport Committee’s 2009 report on child and adolescent mental health and wellbeing, and in particular to the evidence from speech therapists on the impact of communication skills on the socialisation skills of our very young children. Will he look at our recommendations, particularly on training to help nursery staff to identify any communication difficulties in their charges as early as possible?

Michael Russell (Scottish National Party, South of Scotland)

I certainly believe that early intervention is the key to a great deal of what we are trying to achieve collectively as a Parliament and as a nation. We had a successful event yesterday called the children’s summit in which we brought together those who are involved in early intervention and early years provision to ensure that we keep our focus on those areas so that we can continue to improve the life chances of every child in Scotland. The good point that the member makes will be borne in mind during that process.

Abdelbaset Ali Mohmed al-Megrahi

George (Labour, Lothians)

10. To ask the Scottish Executive what recent discussions it has had with officials in Libya concerning the situation of Abdelbaset Ali Mohmed al-Megrahi. (S3O-11043)

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

There has been only routine contact between Scottish Government officials and Libyan Government officials relating to the supervision of Mr al-Megrahi’s licence under section 3 of the Prisoners and Criminal Proceedings (Scotland) Act 1993.

George (Labour, Lothians)

Does the cabinet secretary accept that it is now more than 10 months since he agreed to release Mr al-Megrahi on compassionate grounds on the basis that he had less than three months to live? How long will it be before the cabinet secretary admits that he made a mistake?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

Mr al-Megrahi is terminally ill. I hope that, when he dies, it offers some closure to victims, families and those concerned with the Lockerbie tragedy, wherever they reside. Doubtless it may even offer some satisfaction to some, perhaps even including Lord Foulkes.

Christine Grahame (Scottish National Party, South of Scotland)

On closure, will the cabinet secretary continue to press the United Kingdom coalition to hold a public inquiry into the Lockerbie bombing so that the concerns about the safety of Mr Megrahi’s conviction that were identified by the Scottish Criminal Cases Review Commission can at last be publicly tested?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

The Government has always made it clear that we will be more than happy to co-operate with any authority and jurisdiction that is capable of carrying out some investigation. There are clearly matters that cause concern to many, whether within Scotland or elsewhere. The Government remains open to providing whatever information we can and co-operating with whoever, whether it is the UK or indeed the United Nations.

Bill Aitken (Conservative, Glasgow)

Does the Cabinet Secretary for Justice agree that Lord Foulkes cannot be accused of hyperbole on this occasion in that the original prognosis in respect of Mr Megrahi was made in July last year, which is rapidly coming up to one year ago? Surely the cabinet secretary must accept that that is a clear indication that the original decision was wrong and that it remains wrong to this day. Will he not admit that, in this episode, over which there has been so much trouble, his judgment has been shown to be sadly lacking?

Alex Fergusson (None, Galloway and Upper Nithsdale)

Please respond as briefly as possible, cabinet secretary.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

As I said at the time, I stand by the decision that was made.

Engagements

Iain Gray (Labour, East Lothian)

1. To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2496)

Alex Salmond (Scottish National Party, Gordon)

I have a range of engagements to carry forward the Government’s programme for Scotland.

Iain Gray (Labour, East Lothian)

The Tories’ savage budget will hit Scotland hard. [Laughter.]

David McLetchie (Conservative, Edinburgh Pentlands)

Labour cuts.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Iain Gray (Labour, East Lothian)

I assure colleagues opposite that they are the only ones who are laughing.

Nicola Sturgeon was right to complain that the VAT bombshell in the budget will cost our national health service £26.5 million, but she could do something: she could get Alex Salmond to cancel his rates revaluation, which will also cost our NHS millions—£1 million in Grampian alone. That has been done in Northern Ireland. Will the First Minister do it here?

Alex Salmond (Scottish National Party, Gordon)

No. A business rates system must be subject to revaluation, otherwise we could not sustain a rateable system. As Iain Gray knows from previous discussions, the substantial majority of businesses throughout Scotland will be no worse or better off as a result of the rates revaluation. Our system of rates, through the variety of packages of aid and reliefs that we offer in Scotland, is superior to that anywhere else in these islands. If, in addition to it, Iain Gray wants us to introduce a further scheme, as was suggested by the Liberal Democrats a few weeks ago, he had better identify where the public funds would come from.

Iain Gray (Labour, East Lothian)

If the rates revaluation system is income neutral, as the First Minister told me two weeks ago, the measure that I propose would help the NHS and would not cost him anything at all.

What about our games industry? The budget cancelled Labour’s tax break for the industry. The Scottish National Party says that that will cost 200 jobs in Dundee, and I think that it is right, but let us not just complain—let us actually do something for a change. John Swinney told us yesterday that he has £300 million in the bank. We can take £5 million of that—equivalent to the tax break—and find a way to support the games industry anyway. Let us save those 200 jobs, despite the Tories and the Liberals. Will the First Minister do that?

Alex Salmond (Scottish National Party, Gordon)

I will first correct Iain Gray on business rates. What I told him a few weeks ago is that revaluation is essentially a neutral process. What that does not take account of is the additional move that the Scottish Government made to reduce the rateable poundage by 15 per cent and bring it down, for the first time in history as far as I know, into line with the rateable poundage for England and Wales. That is a cost of £200 million in addition to all the other reliefs that are available. I am sure that Iain Gray would not want to ignore the fact that reducing the rateable poundage helps every business and, indeed, every public sector organisation, including the health service in Scotland.

As far as the games industry is concerned, I deeply regret that the Government in Westminster has chosen to cancel the proposed tax relief and I agree that it is a short-sighted decision. I think that the centre of the games industry in Scotland is a jewel in the crown of Scottish industry; it is fantastic for the city of Dundee and I cannot see that it is sensible to jeopardise that performance. I thought that the Independent Game Developers Association—TIGA—the representative body for the games industry, put forward a powerful case for why that particular tax concession, or another tax concession, if one can be identified, could substantially help to generate jobs, employment and, therefore, revenue over the medium term.

Iain Gray says that we should act on the games industry. It might be instructive to look at what the industry itself is saying about the setback in the budget. Richard Wilson, the head of TIGA, which is an excellent trade body, says that the Scottish Government should have tax-raising powers, so that it can protect the games industry and introduce such a tax incentive. If the games industry is calling for that, when on earth will the Labour Party realise that we must have fiscal responsibility so that we can boost our industry?

Iain Gray (Labour, East Lothian)

The First Minister is an awful lot better at explaining what he cannot do than he is at explaining what he can do and why he chooses not to do it.

What does someone have to do to get help from the Scottish Government? They have to put on a kilt and call themselves a clan chief. Then they can have a secret, interest-free loan, with no questions asked. Here is the best bit: they do not even need to pay it back; they just need to promise the First Minister a photo opportunity in a beaver hat and name their price. What do the NHS, the games industry and businesses that are not The Gathering 2009 Ltd have to do to get action from the First Minister?

Alex Salmond (Scottish National Party, Gordon)

Given Iain Gray’s passionate concern for the tourism industry in Scotland, I know that he will not want to ignore that the gathering event generated £8 million in revenue for our tourism industry in the city of Edinburgh and £10 million across Scotland.

No doubt that is what the Auditor General for Scotland, Robert Black, was thinking of yesterday when he told the Public Audit Committee, in relation to the decision to award the loan:

“clearly time was not on anyone’s side by the summer of last year, because the event was committed and was about to proceed. The Scottish Government”

took

“the not unreasonable view that in order to allow the event to proceed it should assist the short-term cash flow problems of the company delivering the event.”

I have no doubt that the Auditor General made that remark in response to questions from the committee because he realised that it would have been a bad thing for jobs in Scotland and a blow to the tourism industry in Scotland to cancel an event that turned out to generate £10 million for the Scottish economy. If Iain Gray wants to complain retrospectively about the decision, it behoves him to explain to the visitor and tourism industry in Scotland where it would have got the £10 million that the Labour Party wanted to deny it.

Iain Gray (Labour, East Lothian)

I do not expect that the First Minister wants to ignore the fact that Edinburgh businesses appeared on the news last night, explaining how they had had to make people redundant because of the mishandling of the event by his Government. I hear nothing from him about what he will do to help them.

Audit Scotland’s report, “The Gathering 2009”, shows that the First Minister can take action when it matters. It shows that he spent a month cold calling everyone he could think of, to try to get them to buy up his bad debts on the clan gathering.

One phone call today could cancel the small business bombshell and help the NHS. One more call could put £5 million of support into our games industry in Dundee. Those are the kind of calls that a real First Minister makes. I will even lend him my phone. Will he make the calls?

Alex Salmond (Scottish National Party, Gordon)

Iain Gray’s phone is not the best prop that we have seen at First Minister’s question time.

I point out to Iain Gray that the reason for the attempt to find someone to take over the gathering event was precisely to help the small businesses about which he says that he is concerned. I do not quite follow his argument. If he is concerned about those businesses, why does he criticise the attempt to have the gathering taken over? His position makes no logical sense whatsoever.

Iain Gray should, at some stage, face the reality of what was published this week about the finances affecting the health service and every other public authority in Scotland on page 16 of the budget report. It shows that £83 billion of cuts by 2014-15 are planned by the coalition Government at Westminster. It also shows for the first time that £52 billion, or two thirds of the proposed cuts were embedded in the Labour Party’s plans. Jobs will be lost in Scotland as a result of the coalition Government’s cutbacks, and the loss of two out of three of those jobs will be the result of the destruction of this country’s finances by the Labour Party. For every £3 million that is cut from every public service in Scotland, including the NHS, £2 million is the responsibility of the Labour Party. It is no good whatsoever—Iain Gray being a one-party, one-man political cycle—to cause the problem, destroy the country’s public finances and then to blame everyone else for the consequences.

Secretary of State for Scotland (Meetings)

Annabel Goldie (Conservative, West of Scotland)

2. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S3F-2497)

Alex Salmond (Scottish National Party, Gordon)

I have no plans to meet the Secretary of State in the near future.

Annabel Goldie (Conservative, West of Scotland)

The First Minister has always demonstrated a casual and arrogant attitude to taxpayers’ money. Time and again I have challenged him to be more responsible with the public’s cash, and time and again he has rejected my advice, which is why the Conservatives have forced the Government to be more open with the taxpayer. Unfortunately, that was not the case as far as the gathering was concerned, and taxpayers certainly deserve some honesty today.

We know from the devastating Audit Scotland report that the Scottish Government made a secret loan of £180,000 to a company that is now in liquidation. When did the First Minister find out about that secret, interest-free loan? Did he authorise it? Was it his idea? If it was kept secret from him, does he now back the actions of his then Minister for Culture, External Affairs and the Constitution, Michael Russell? Was the loan even legal? Will he now apologise to the taxpayer for the whole sorry mess?

Alex Salmond (Scottish National Party, Gordon)

As was pointed out in the Audit Scotland report, we awarded support for the company under section 23 of the National Heritage (Scotland) Act 1985, so support for such events is legal.

The figures of £10 million for Scotland and £8 million for the boost in tourism revenue come from an independent assessment of the gathering’s impact on tourism. If Annabel Goldie wants to argue that officials were wrong to recommend the loan to the Minister for Culture, External Affairs and the Constitution and that he was wrong to decide to go ahead with the loan—to answer her question directly, I knew about it at the time—she will have to explain why she did not want the event to proceed. The loan was necessary if the event was to proceed because the company had cash flow difficulties and, without it, the event would not have gone ahead. If the event had not gone ahead, Scottish tourism would be £10 million worse off. Why on earth does Annabel Goldie think that it was such an unambiguously bad thing to ensure that an event that attracted so many visitors should go ahead?

Annabel Goldie (Conservative, West of Scotland)

The homecoming and the gathering were good ideas with good aims, but a laudable concept does not justify the Scottish Government playing fast and loose with taxpayers’ money. Let us look at who has lost out because of the mess: the police, the ambulance service, more than 100 small businesses and the taxpayer.

Quite frankly, the whole thing stinks, because the First Minister will not come clean about the secret loan. He says that he knew about it, but he will not say when he knew about it. He says that it was legal, but he will not give details of the legal advice that the Government received. He did not tell the steering group, he carried out no financial checks, but he still pumped in taxpayers’ cash. Why such a casual and arrogant attitude to the taxpayer? Will he come clean today? Will he tell the Parliament whether his Government has made any other secret loans to any other organisations?

Alex Salmond (Scottish National Party, Gordon)

Annabel Goldie should have listened to the answer to the first question before she blundered ahead with the second. I specified the act under which support was granted. I also confirmed that I knew about the loan. Of course, officials also told EventScotland, which chaired the steering group that Annabel Goldie referred to, about the loan. The culture minister approved the loan. Without the loan, the event would not have proceeded, which is presumably why, in evidence to the Public Audit Committee on 23 June, the Auditor General supported the fact that the loan was given.

I think that it is justified to support events that without any question generated substantial revenue and therefore jobs for the tourism industry of Scotland.

If Annabel Goldie is suggesting that I had some connection with the directors of The Gathering 2009 Ltd, I gently remind her that Lord Sempill—if my memory serves me correctly—once stood as a Conservative party candidate.

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-2498)

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)

The gathering issue is about the financial behaviour and accountability of the First Minister’s Government. Can the First Minister confirm that The Gathering 2009 Ltd went bust with debts exceeding £0.75 million? Can he tell the Parliament how many Scottish businesses, including a major catering company in Perth, are still owed money? Some told me this morning that they have had to lay people off. Why, in particular, did the First Minister give the impression—or allow the impression to be given—to all the Scottish companies that were putting money into the event that their investment was safe and that his Government would pick up the tab?

Alex Salmond (Scottish National Party, Gordon)

I am not quite sure whether the argument is that the Scottish Government should have picked up the tab or that it should not have supported the event financially.

On the particular issue that is under discussion—the loan that was offered to and accepted by The Gathering 2009 Ltd, and approved quite properly under the relevant legislation—I point out to Tavish Scott that if the gathering had not proceeded and if the loan had not been offered, none of the revenue that was collected for the event would have come into the company, although substantial expense had already been made at that stage. Believe me, it would have been a bad thing for not just the economy of Scotland and Edinburgh, but companies across Scotland and Edinburgh, if the event had not proceeded. Those who criticise the offer of a loan to The Gathering 2009 Ltd had better come to terms with the fact, as Robert Black did in evidence yesterday, that in the circumstances at this time last year, that was perfectly proper and a “not unreasonable” thing to do.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Tavish Scott. Try again.

Tavish Scott (Liberal Democrat, Shetland Islands)

Mr Salmond just never answers a question. I asked three simple questions, but he does not want to answer any of them. Let me try some other questions. When Mr Salmond’s Scottish National Party Government authorised the £180,000, did ministers know that The Gathering 2009 Ltd was on the verge of bankruptcy? Did ministers ask whether the company was trading from an insolvent position? Does the First Minister recognise that that is a criminal offence? Does he recognise that any private business trading insolvently would be investigated by the tax man and could face legal proceedings? Does he accept that many Scottish businesses that are still owed money want a full regulatory investigation into not only The Gathering 2009 Ltd, but the conduct of his Government? Will he ensure that that happens, or will he obstruct an independent investigation?

Alex Salmond (Scottish National Party, Gordon)

I will take those questions in order. The loan to The Gathering 2009 Ltd was to address the fact that World Pay was holding a similar sum of gathering revenue that had been collected. Those were the specifics of the financial reason for offering the loan to help with the cash flow position.

If Tavish Scott had examined the Auditor General’s report, he would have seen that the reason for the financial failure of The Gathering 2009 Ltd was that it did not generate the anticipated revenue over the weekend that was in its forecasts. By definition, how on earth could we have known, before it had not gathered in the forecast revenue, that the company would become insolvent? That is why, no doubt, Robert Black said what he said yesterday—that it was a “not unreasonable” thing to do.

The Auditor General for Scotland is the independent investigator. When, after an independent investigation, the Auditor General—the independent authority—says to the Public Audit Committee:

“time was not on anyone’s side by the summer of last year ... the event was committed and was about to proceed. The Scottish Government”

took

“the not unreasonable view that in order to allow the event to proceed it should assist the short-term cash flow problems of the company”,

why on earth can the Liberal Democrats and Tavish Scott not accept the results of that independent investigation?

Alex Fergusson (None, Galloway and Upper Nithsdale)

Tavish Scott, you have one more chance.

Tavish Scott (Liberal Democrat, Shetland Islands)

The First Minister is right about the public sector and Audit Scotland, but not about the private businesses throughout Scotland that are still in debt. Will he block an investigation by an independent regulatory body—HM Revenue and Customs or the Department for Business, Innovation and Skills in Whitehall—into why those private businesses are still in debt?

Alex Salmond (Scottish National Party, Gordon)

The body that the Parliament established many years ago to look at and investigate independently points of public interest in finances is called Audit Scotland. When the Auditor General goes to a parliamentary committee and makes the comments that I have quoted a number of times, why will the people who called for that investigation not accept the results?

Tavish Scott (Liberal Democrat, Shetland Islands)

He knows why.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

He should answer the question.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order, gentlemen.

Alex Salmond (Scottish National Party, Gordon)

Having a third attempt at a question does not mean that the third question will be any better than the first two. The remarkable aspect of the story is that the Liberal Democrats called for the Audit Scotland investigation. Now, having had the results of Robert Black’s investigation and having heard his comments yesterday, why can they not accept the verdict, response and detail of that Audit Scotland report?

Emergency Budget

Kenneth Gibson (Scottish National Party, Cunninghame North)

4. To ask the First Minister what the implications of the emergency budget are for Scotland. (S3F-2499)

Alex Salmond (Scottish National Party, Gordon)

The United Kingdom emergency budget statement outlined the stark reality of the UK public finances left by the previous UK Government and, therefore, the sobering outlook for public spending and taxation.

Throughout Scotland, the impact of Tuesday’s announcements will be significant and will have implications for many years to come. The tax rises that the chancellor announced will impose costs on every household in Scotland, with the VAT increase alone forecast to cost an average household £380 per annum.

At the same time, we face huge constraint in public spending for at least the next four years and probably much longer. The exact implications for Scotland will not be known until the autumn spending review, but the scale of the challenge is shown by the chancellor’s indications for real-terms reductions in non-protected Whitehall budgets of 25 per cent over the next four years.

In my view, and that of the Scottish Government, cutting back faster and deeper than previously planned, with the additional £32 billion of spending cuts on top of the £52 billion that the previous Labour Government planned, puts economic recovery and jobs at risk. The position that we now face clearly highlights the urgent need for Scotland to take greater financial responsibility to give us the levers in order to grow the economy and best protect our vital front-line services.

Kenneth Gibson (Scottish National Party, Cunninghame North)

The latest “Government Expenditure and Revenue Scotland” report shows us to be in a much stronger fiscal position than the UK as a whole, with a budget surplus of £3.5 billion over the past four years, compared with a UK deficit of £72.3 billion. Does the First Minister agree not only that Scotland is in a position to accept greater fiscal responsibility by way of a few modest powers reluctantly conceded by London some time in the future, but that the time is now right for Scotland to have full control of all its resources, including oil and all taxation and spending—that it is now time for independence? [Applause.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Alex Salmond (Scottish National Party, Gordon)

It is remarkable that there are parties in the Parliament that seem disappointed at the statistical analysis of GERS, which shows that the budget balance in Scotland is positive for the fourth successive year—a positive balance of £1.3 billion in 2008-09, which gives a total of £3.5 billion over the four-year period—at a time when the UK built up a deficit of £72.3 billion.

It would be sensible for people across the chamber to reflect on the fact that that is a position that everyone in Scotland should welcome and should feel satisfied and pleased about, although it points up the fact that we do not get the benefit of those massive resources because that budget surplus flowed straight from Scotland to the UK Treasury in London.

Cancelled NHS Operations (Statistics)

Helen Eadie (Labour, Dunfermline East)

5. To ask the First Minister whether the Scottish Government is satisfied that published figures on the number of cancelled national health service operations provide an accurate picture. (S3F-2510)

Alex Salmond (Scottish National Party, Gordon)

Some 98.5 per cent of all NHS procedures take place as planned. Data on the number of cancelled operations by the national health service show that in 2008-09, from a total of 1,159,145 hospital stays, some 15,913 operations were cancelled, which is a rate of 1.37 per cent. That is the same rate as in Labour’s final year in office. What has changed over that period, I am proud to say, is that the number of procedures that were carried out in NHS Scotland in 2008-09 was more than 800,000, which is the highest total since devolution and an increase of almost 40,000 since 2006.

Helen Eadie (Labour, Dunfermline East)

Is the First Minister aware that, according to my local health board, more than six times as many operations were cancelled by hospitals in the NHS Fife area than were cancelled through patients not attending, yet only a fraction of those show up in the Scottish Government’s official figures, which count only patients who have already been admitted? Will he give an assurance that all the 20,000-plus operations in the past three and a half years that have been cancelled by hospitals throughout Scotland, including some 4,000 operations in Fife, will not be swept under the carpet? Will he end this hidden waiting list?