Scottish Parliament, 28 October 2010

403 contributions from 80 members. The official report.

Support for Business

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a Liberal Democrat debate on motion S3M-7273, in the name of Jeremy Purvis, on support for business.

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

First, I congratulate the Cabinet Secretary for Finance and Sustainable Growth on the birth of his new child.

Members: Hear, hear.

We are glad that he is here in the Parliament today, but this is one occasion on which he could have been excused.

In November 2009, I asked the cabinet secretary why the Scottish Government had not consulted the business community in Scotland on whether there should be a transitional relief scheme to allow the big increases in the rates bills that were being forecast as a result of the revaluation to be phased in.

Mr Swinney responded that the Scottish Government did not consult because there was no statutory duty on it to do so. That was a less than convincing case in the view of business groups in Scotland, every one of which regretted the lack of consultation on possible schemes and the lack of understanding of the concerns of businesses about the looming—and very large—increases in bills.

The tourism and hospitality sector has been hit the hardest: there has been no support at all, and no transitional scheme has been put in place. Members will recall that we debated in Parliament the need for greater support for our tourism industry, because it is one of the areas that will produce growth in the Scottish economy during the coming years.

Only six months before I asked the cabinet secretary my question, things were different. In April 2009, a Scottish Government press release stated that businesses could

“spread this year’s ... increase in business rates over three years to help companies’ cash flow and provide a ‘much-needed boost’ for the Scottish economy.”

It emphasised that the Government was acting to help businesses to cope with an increase in rates bills, and stated:

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

What was the increase that was causing so much difficulty at that time that the Government decided to act? It was a 5 per cent increase. When there was a 5 per cent increase in 2009, the Government acted, but this year, with increases of 50, 100 and 150 per cent in tax bills, the Government sits on its hands.

I made no apologies then, and I do not apologise today for bringing the issue to Parliament. I make no apologies either for trying to persuade the Government and the Conservatives to explore openly the options for transitional relief and to accept the principle that such relief should exist.

I spoke to many businesses in my constituency that are facing massive increases in their bills. It is not an academic exercise for them, and there is genuine anger. They may be happy to see businesses that are in receipt of the small business bonus exempted from paying rates, but they are angry that their situation is given no regard.

The Conservatives will no doubt criticise my party in today’s debate, but I say to them in all seriousness that simply reviewing what went wrong during that period, as their amendment demands, does not—given that it was their votes that created the problem in the first place—send a convincing message to businesses.

Derek Brownlee (Conservative, South of Scotland)

Does Jeremy Purvis accept that the votes in question took place in March, after the bills had been issued, and that there is no mechanism for anyone other than the Government to bring forward a statutory instrument to introduce transitional relief?

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

The Parliament could have acted to get the Government to do what it had previously done, which was to provide an element of support after rates bills had been issued. When that happened in 2009, for increases of 5 per cent, Mr Brownlee welcomed it, but for increases of 50, 100 and 150 per cent, he seems to think that no action should be taken. That is simply not convincing.

Gavin Brown (Conservative, Lothians)

Will the member give way?

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

I will give way later if I have time, but I am afraid that I do not have time at the moment.

The level of concern is such that, as information that the Lothian Valuation Joint Board has provided to us has confirmed, the number of appeals from businesses about the rates revaluation in 2010 has increased by 10 per cent. The number of businesses that are appealing this year has increased by 6,000 from the number that appealed following the previous revaluation.

I will interrogate those figures further. There are 214,000 properties on the rateable register, and if we strip out those that are exempted from paying rates altogether and those that are zero rated, we are left with a pool of 75,000 properties in Scotland that pay rates. Of those, 60,300 have appealed, which means that 80 per cent of all properties that are being taxed have appealed their valuation. That is an incredible situation for businesses in Scotland, and it is the context for anything that the cabinet secretary says today about the number of businesses that have gained.

The Government gives three main arguments for why a transitional scheme should not be implemented. The first is that Government would have to pay more, the second is that the public sector would potentially benefit and the third is that other businesses might have to pay more.

On the first point, it is interesting to note that the Government would have incurred costs from the scheme that was put in place last year to allow 60 per cent of the 5 per cent increase to be deferred. The Government recognised that, given that its press release stated:

“The additional costs which local authorities will incur as a result of this measure will be refunded to them by the Scottish Government.”

It accepted the principle then, so it cannot use that point as a principled argument now.

With regard to the argument that the public sector may benefit, a finance circular of 15 June last year stated:

“Every single business property in Scotland qualifies as long as it pays non-domestic rates, including public sector.”

That surely, therefore, cannot be a principled reason for not providing transitional support now.

The Government uses the third argument—that other businesses would pay more—at every opportunity; that is its principled argument. However, small businesses that receive support from the small business bonus scheme do so because 29,000 other businesses pay a supplementary increase in their rates to cross-subsidise the scheme. Other businesses pay in that case, so that point is not a principled argument against transitional support.

There are no principled arguments against transitional support, but there is a principled reason for it. Businesses that are now making the difficult choice not to invest in their business or to lose staff are facing difficulties. The Government and all parties in the Parliament know it, and we are asking the Government to act on that.

I move,

That the Parliament notes that there has been a stark increase in appeals to valuation boards over non-domestic rates following the 2010 revaluation, with approximately 30% of businesses appealing the new rates; believes that the increase in appeals reflects the fact that a lack of transitional relief has caused serious cash-flow problems for businesses and concerns that jobs will be lost; shares the view of the Aberdeen and Grampian Chamber of Commerce that small and medium-sized enterprises (SME) support is not a substitute for transitional relief for the hardest hit; notes that the Scottish Government’s net income from non-domestic rates has increased by £150 million following the revaluation, despite Scottish ministers’ claims that the revaluation is revenue neutral, and calls on the Scottish Government to work constructively with Scotland’s business community to agree and deliver a transitional rates relief scheme and to identify ways in which to improve the revaluation process for the future.

John Swinney (Scottish National Party, North Tayside)

I thank Mr Purvis warmly for his kind remarks at the start of his speech. The past seven days following the birth of Matthew have been among the happiest of my life, and I deeply appreciate the kind wishes that members on all sides of the chamber have expressed to Elizabeth and me.

I wish I had had a conversation with Mr Purvis before I left Perthshire this morning, as his assurance that consideration would have been given if I had not been here today would have been welcome; nonetheless I am here, so we may as well plough on with the debate.

This is, as Mr Purvis said, the fourth time that the Parliament has considered motions from the Liberal Democrats arguing for transitional relief on business rates. On each occasion, it was clear that the Liberal Democrats had failed to think through their proposals and, as a result, on each occasion Parliament voted against those proposals.

It is vital that our debate here is underlined by the facts. Throughout the revaluation process, we have actively encouraged businesses to appeal if they disagree with their valuation. That is the proper course of action for any individual business to take.

The evidence suggests that the number of appeals that are lodged against any revaluation is not solely linked to the existence or otherwise of a transitional relief scheme. If that was the case, I would have expected there to have been a huge surge in the number of appeals this year, but that has not happened. If transitional relief is so important, I would have expected the number of appeals to be far greater, and certainly on a par with the earlier revaluations in 1995 and 2000. However, the number of valuation appeals that have been lodged is significantly down on both the 2000 and 1995 revaluations—in fact, it is almost 40 per cent fewer than in 1995.

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

Is the cabinet secretary saying that the only comparable year for comparison is 15 years ago? What about a comparison with 2005, when there was the same process for rates with regard to poundage in Scotland? Can he confirm that the information that we have been provided with by the Lothian Joint Valuation Board is correct? It indicates that there has been a 10 per cent increase in the number of appeals compared with 2005 and that the number of properties that have appealed represents 80 per cent of all properties that are receiving a tax bill.

John Swinney (Scottish National Party, North Tayside)

I will put on the record the figures that I have in front of me, because I do not know the precise figures that Mr Purvis has got. In 1995, 102,500 appeals were lodged and in 2000 there were 82,200 appeals. In 2005, there were 57,800 appeals and in 2010 there were 60,400. Those are the figures on appeals that I have in front of me, from the information that the valuation authorities, which I stress are independent of the Government, gave to the Government yesterday.

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

Will the cabinet secretary give way?

John Swinney (Scottish National Party, North Tayside)

If Ms Jamieson will forgive me, I had better cover more ground before I take more interventions.

That is the detail on valuation appeals. I stress that the number of valuation appeals is almost 40 per cent fewer than in 1995.

The second point that I will make—a factual point—is that it is wholly misleading to claim that the 2010 revaluation has provided the Scottish Government with an extra £150 million. That is not the case and it ignores the facts, which were set out clearly in my answers to parliamentary questions. The 2009-10 income estimate is deflated by a number of appeals, dating back to the 2005 revaluation, which were settled in 2009-10. The business rates income figure in 2010-11 is inflated at this point in the cycle as the actual amount collected will be reduced as funds are used to meet successful appeals over the 2010 to 2015 revaluation cycle and payments are backdated to 1 April 2010.

Indeed, the real context for the debate around business rates is that we have made available an estimated £2.4 billion-worth of relief to reduce the rates bills of Scottish businesses over the next five years. Members have heard that figure before, but let me just quantify what it means. It represents £2.4 billion that would otherwise have been paid in tax, but which businesses now have at their disposal to invest. We should not underestimate the impact that that kind of tax break will have on the Scottish economy.

Of course, central to that relief package is the small business bonus scheme, which will save small and medium-sized enterprises in Scotland an estimated £117 million in 2010-11. Mr Purvis appears to believe that the small business bonus scheme is not worth while.

Members: No.

We get harrumphing from Mr Rumbles, the chief harrumpher of the Parliament. Of course, the Liberal Democrats have never been obviously identifiable in their enthusiasm for the small business bonus scheme. When I was negotiating budget arrangements with the Conservatives to put in place and accelerate the small business bonus scheme, were the Liberal Democrats supportive of the proposition? No, they were not, but they were certainly quick to issue leaflets in the Borders claiming the benefits of the small business bonus scheme.

Mr Purvis said in his speech that businesses were not investing, but in his recent publication “Making Scotland the most innovative and entrepreneurial economy in the world”, which is an interesting read—I read it at about 2 o’clock this morning while dealing with family matters—Mr Purvis notes that many businesses

“have simply absorbed the relief into their bottom line”,

therefore enabling them to invest in the future of their business, and that is what the small business bonus scheme is designed to do.

The small business bonus scheme has now benefited 74,000 properties in Scotland. Even more businesses are benefiting from the scheme this year. Following revaluation, the figure for properties that are potentially eligible for the small business bonus scheme has risen to 114,657.

The Government has taken difficult decisions on the business rates issue and we have delivered £2.4 billion of relief to businesses in Scotland. That is why the Parliament should support my amendment.

I move amendment S3M-7273.2, to leave out from “notes” to end and insert:

“commends the vital role that small and medium-sized enterprises (SME) play in the Scottish economy and their importance in building economic recovery; recognises that the full savings due to that sector as a result of revaluation have been passed to businesses, and recognises that the general trend of the revaluation has been to reduce the tax burden for SMEs and that the total savings for the 87,500 SME properties that saw bills fall was £124 million.”

Derek Brownlee (Conservative, South of Scotland)

I pass on my best wishes to the cabinet secretary on his new arrival.

Of course, one arrival that we await with bated breath but which has yet to make an appearance is any suggestion from the Liberal Democrats of how much their proposals would cost, or how they would be financed. I suspect that there is a very long and unpleasant gestation for that set of proposals, which we may not see for some time. The core issue, which is mentioned in the Liberal Democrats’ motion, although Mr Purvis did not mention it in his speech, is the suggestion that the revaluation is not revenue neutral. That is an important point, because if the revaluation is not revenue neutral, that would undermine confidence not only in the Government but in the business rates system in Scotland and send a very negative message about Scotland’s competitiveness.

Various claims have been made about how the £150 million has arisen. The Scottish Chambers of Commerce has taken the same view as the Liberal Democrats that it is an additional tax hike. I think that it is better to wait until we see the outcome of the appeals. If there is a record number of appeals, as the Liberal Democrats suggest, I presume that a record number of appeals would be upheld, which would reduce the liability.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

When Jim Mather came to the Ballater Business Association, we had a very interesting meeting. The other person there was Ian Hamilton Milton, the Grampian assessor. Everybody accepted that when the appeals go forward they will fail, because nobody disputes the assessor’s calculations and no other issues can be taken into account.

Derek Brownlee (Conservative, South of Scotland)

Obviously, appeals that are not based on a successful head will fail, but to suggest that every appeal will fail is a nonsense.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Most of them will fail.

Derek Brownlee (Conservative, South of Scotland)

A process has to be gone through. It is one thing for Mr Rumbles to say that most appeals will fail, but if that is his assessment, perhaps he should be determining the business rates liabilities.

John Swinney (Scottish National Party, North Tayside)

Will Mr Brownlee reflect on my point that part of the reason why the income in 2009-10 from business rates is deflated is the necessity to pay successful appeals?

Derek Brownlee (Conservative, South of Scotland)

I do not doubt that that is the case. The key issue is that, at the end of the process, we must ensure that the revaluation itself has been revenue neutral.

Iain Smith (Liberal Democrat, North East Fife)

Will the member take an intervention?

Derek Brownlee (Conservative, South of Scotland)

I am afraid that I do not have time.

It is one thing for the Government to make a policy decision to take either more or less out of business rates. That is fair enough and we can have arguments about that, but it should be done in an explicit manner and the revaluation itself must be revenue neutral.

We reiterate in our amendment that now that we are in the revaluation period, we do not think that it is appropriate to expect businesses that have expectations about one level of business rates liability to see their bills increase to subsidise the reduction of other bills. It is one thing to do that for future periods, but it is unreasonable to expect businesses that have a settled view of their liability to see it increase to pay for other businesses.

Other issues have been identified through the process. The lack of time between the liability notice for business rates being issued and the payment becoming due has caused many people to be very concerned. Unlike other areas of the tax system, an appeal against the business rates liability does not hold the liability; in most other areas, it would be held over and interest would arise. There has also been some suggestion that perhaps the revaluation has not been consistent across the country. There are issues that we need to consider and we should have a proper look at the mechanics of the system in advance of the next revaluation.

The Liberal Democrats are free, if they so wish, to make uncosted and unfunded pledges to businesses about transitional relief. However, before businesses and business groups crack open the champagne, perhaps they might want to phone the National Union of Students and ask how much weight to give to a Lib Dem manifesto promise, because the value of Liberal Democrat promises is one lesson that I think we can all agree will always be available without a tuition fee.

I move amendment S3M-7273.1, to leave out from “that there has” to end and insert:

“the level of appeals against non-domestic rating valuations following the 2010 revaluation; believes that no business should see its bill increase to fund a transitional relief scheme introduced within the revaluation period; believes that the revaluation should be revenue neutral and calls on the Scottish Government to ensure that this is the case, and calls on the Scottish Government to review the issues around the 2010 revaluation, in particular those concerning the time difference between notification of non-domestic rates liability and the liability entering into force, with a view to reforming the business rates system in Scotland.”

Andy Kerr (Labour, East Kilbride)

I add my congratulations to Mr and Mrs Swinney on the birth of baby Matthew and, in so doing, wish Mr Swinney every success for the future in dealing with the challenges ahead of him—I am familiar with those challenges.

I address the broader title of the debate, “Support for Business”. We have found out, as the Scottish electorate has found out, that during election campaigns and in opposition the SNP makes great promises about the economy. Since then we have had mind maps that could circumnavigate the world, and probably the universe, from Mr Mather, but we now find that when it comes to the SNP’s support for business, as with the rest of its manifesto, it is full of broken promises about the Scottish Futures Trust and local income tax. Of course, the SNP-Tory alliance in this Parliament has continued to ensure that those broken promises have been laid upon the doorstep of our businesses in Scotland.

If I heard Mr Swinney correctly, he said that transitional relief is not important. I will check the Official Report on that point, because if it is not important, why are so many of our businesses and chambers of commerce, including Lanarkshire Chamber of Commerce, writing to us about the importance of such a scheme? I understand that, except on this occasion, every previous change to the system has been supported by a transitional relief scheme.

The whole situation has been mishandled from the outset. For a start, businesses have faced enormous hikes in their rates with no caps on such increases. That has not been the case elsewhere, including in England, where the cap is 12 per cent. Businesses have also faced increases of more than 200 per cent and, indeed, were notified of those increases only weeks beforehand. There have been huge internal delays in the Scottish National Party with regard to making its position known and we are now suffering the same situation with the Scottish budget. The SNP delays and delays and then tries to rush through decisions that lack accountability and scrutiny.

As I have said, there is a five-year transitional scheme in England and the fact that, unlike with previous changes, a transitional relief scheme has not been introduced for this revaluation is having a real and damaging effect on our businesses. Indeed, the situation in my area of Lanarkshire is probably the worst in Scotland. According to Mr Swinney’s response to a parliamentary question lodged by Lewis Macdonald, the change in Lanarkshire has been of the order of £79 million. At a time when people in Lanarkshire are struggling to deal with the effects of the global economic crisis, have lost a number of major employers and are seeking to support small and large businesses in the area, the move is having a hugely detrimental effect on the area’s business community. That is simply unacceptable.

The cabinet secretary needs to explain, first, why the process was so delayed; secondly, why he refuses to listen to what many businesses are saying; and thirdly, why he thinks that it is acceptable to suggest that businesses should simply go off and challenge decisions through the appeals process. As I say, that is unacceptable in the current economic climate. The SNP has failed to publish the new rateable values in sufficient time and has failed to recognise the impact of the lack of a transitional relief scheme and, as our Liberal Democrat colleagues have pointed out in the debate, key growth sectors of our economy—including tourism, which is doing relatively well considering the global crisis—are being hammered by the Government’s decision not to have a transitional relief scheme and by increases in their rates burden of hundreds of per cent.

Although, as we know, there have been transitional relief schemes before and although the principles have been set out in previous changes, the Government has refused to take action on any capping or transitional relief measures. At a time of global economic crisis, it is, as ever, failing to support Scottish business.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Earlier in the debate, Mr Swinney called me a harrumpher. Well, I assure him that on this issue there is a great deal to harrumph about.

Bruce Crawford (Scottish National Party, Stirling)

He called you the chief harrumpher.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Indeed. I think that it is a great promotion.

John Swinney (Scottish National Party, North Tayside)

I look forward to seeing how it is spelt in the Official Report.

Ross Finnie (Liberal Democrat, West of Scotland)

Will it have one R or two?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

In my speech, I want to concentrate on local issues for me and businesses in my constituency.

In the last Liberal Democrat debate on business rates, when the Scottish Government rejected transitional relief for businesses, Jim Mather kindly accepted my invitation to meet me and the Ballater Business Association in my West Aberdeenshire and Kincardine constituency. Unfortunately Mr Mather is not in the chamber this morning, but I want to thank him for attending what was for him a really difficult meeting. He heard at first hand from businesses in Ballater their utter disbelief at the rate increases they were having to pay; he heard that, although average increases in rateable values across Grampian had been 30 per cent, the increase in Ballater was 60 per cent; he heard from one business that its rates had increased by 259 per cent; and he heard that a second-hand bookshop that had paid nothing at all last year was facing a £5,000 bill this year. He was also given the results of the Ballater Business Association’s assessment of 18 different and varied businesses, which showed that these dramatic changes were affecting them all.

The message to the minister was clear: transitional relief must be reinstated to allow businesses to deal with these changes and challenges.

Derek Brownlee (Conservative, South of Scotland)

Will the member give way?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I want to make a little bit of progress first.

As it stands, those massive increases are crippling small businesses in Ballater. The businesses were simply making a realistic and reasonable request for time to pay and time to adjust to the increases over several financial years. Unfortunately, although Jim Mather offered plenty of sympathy to the businesses in Ballater that are suffering from the SNP Government’s massive rates increases, he could offer no action at all and action is what the businesses in my constituency are requesting.

The Liberal Democrats believe that restoring transitional relief is the right thing to do. However, our motion to limit the increases to 12.5 per cent in any one year—itself a big increase—was defeated by a combination of SNP and Conservative MSPs. Quite why Conservative MSPs should want to harm businesses in that way is beyond all understanding. Perhaps Derek Brownlee might enlighten us.

Derek Brownlee (Conservative, South of Scotland)

I freely concede that Mr Rumbles knows the situation in Ballater better than I do but, after listening to the figures, I feel that there is something fundamentally wrong with the valuations. I can think of no empirical reason why the valuations in Ballater should have increased by such a scale and, as I say, it suggests that, before one even gets to a transitional relief scheme, there is a significant problem with the valuation process. Is that not an issue?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The issue in Ballater is quite clear. Ian Milton, the Grampian assessor—who, as I said earlier, came to the meeting in the town—was very helpful in that respect. Although the business association is appealing the valuations, it realises that its appeals will fail because no one is challenging the assessor’s calculations and the assessor himself made it clear that when he considers the appeals he cannot take anything else into account. As a result, all the Ballater businesses’ appeals will fail. They have been told as much. They do not disagree with the Grampian assessor’s calculations—it is the system that is wrong.

The Liberal Democrats back the campaign headed up in the north-east by the Aberdeen and Grampian Chamber of Commerce, which has calculated that although businesses in Aberdeenshire, like those in Ballater, are paying £10.4 million more this year after reliefs have been taken into account, the local authority is receiving £4.1 million less. That represents a total year-on-year hit of £15.5 million on Aberdeenshire and its businesses. Those are not my figures; they are from the Aberdeen and Grampian Chamber of Commerce.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You must close, Mr Rumbles.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Och. Right. Thank you, Presiding Officer.

The argument that the Government simply does not have the money for a transitional relief scheme simply does not wash. It has received an extra £150 million from business rates and it is using that money for other purposes. The solution is simple: transitional relief must be restored and any rates increase must be limited to 12.5 per cent in any one year. We need action, not sympathy, from the SNP Government.

Alex Fergusson (None, Galloway and Upper Nithsdale)

When I ask members to close, that does not require more harrumphing. I do so because we are running out of time.

Wendy Alexander (Labour, Paisley North)

I, too, congratulate the cabinet secretary on Matthew’s arrival.

I welcome this Liberal Democrat debate. As other members have pointed out, by common consent the feeling among Scotland’s business community is that the Scottish Government has simply mishandled the 2010 business rates revaluation and has left many Scottish businesses facing enormous hikes in their rates bills with no cap on those increases.

It has all been quite unnecessary. First, there were unnecessary delays. In England, businesses knew what their rates bills would be six months in advance; in Scotland, the Government managed to give businesses just six weeks’ notice. As others have said, the cabinet secretary has just been too busy—and that is not just a reference to the past seven days. The rates bills, the budget and the pay policy have all been left to the last minute and the emerging pattern is that there has not been the necessary attention to detail.

We want the Government to admit that the failure to introduce a transitional relief scheme was quite simply a mistake. I fully accept that the move was probably based on official advice to ministers, but it is time to say that the advice was wrong. As a consequence, the Scottish Government has put businesses on a completely unequal footing with companies based in England.

Given the time pressures, I will make three quick points and then point to a solution.

First, the absence of a transitional relief scheme in Scotland means that one in five Scottish businesses—more than 45,000 businesses in all—are facing an increase of more than 12.5 per cent in their rates bills this year. That is four times the rate of inflation.

My second point is that one has to wonder whether the Scottish Government has seen Scottish business as a soft touch in hard times. Let me deal with the point that an extra £150 million is being taken in business rates this year. We know that businesses are going to pay that additional money this year—that is a fact. The explanation that we heard from the cabinet secretary is that it is all about the bills being artificially deflated last year. I have the figures here. Last year, for the first time ever, in cash terms, the Government collected £2 billion in rates in Scotland, which was 5.3 per cent up on the previous year. In a year in which the cabinet secretary alleges that bills were artificially deflated, the Government took 5 per cent extra from businesses, which was more than double the prevailing rate of inflation.

Who was the advocate for business in the Scottish Cabinet when the Cabinet Secretary for Finance and Sustainable Growth was planning to fill the coffers with an additional 5 per cent last year and an additional 7.5 per cent, on average, this year? That is the additional amount of money that is going to be paid this year, and it completely wipes out the benefit from the small business bonus scheme.

I give credit to the Government for expanding the previous coalition Government’s small business rates relief scheme. Many businesses greatly appreciate the small business bonus scheme, and rightly so, but I simply comment on something that is hidden in the detail of the scheme, which is partly paid for by large businesses. This year, the Government is increasing the contribution that large businesses make to the scheme by 90 per cent. Large businesses will pay 90 per cent more towards the small business bonus while the Government’s own contribution is up by less than 1 per cent. Indeed, the Government is putting in a mere £74 million extra while taking another £150 million in total from that community.

I simply conclude by saying that we do indeed live in tough times, but if the Government believes that it is right to take, on average, 7.5 per cent more from Scottish business, it should say so up front and directly. It should not hide its intentions about how much extra it intends to take from business, and crucially, it should cushion the blow to the 45,000 businesses that are being asked not for 7.5 per cent extra but for more than 12.5 per cent extra.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You must close, please.

Wendy Alexander (Labour, Paisley North)

There is, of course, an easy solution—to introduce an emergency transitional relief scheme now.

Aileen Campbell (Scottish National Party, South of Scotland)

I add my warm wishes to John Swinney and his family. He should feel free to pass any baby tips my way.

If members have a sense of déjà vu this morning, they can be forgiven, because we have already debated a Lib Dem proposal for transitional relief on non-domestic rates three times this year, and the Parliament has already voted against the Lib Dem proposals three times, for good reasons. At the risk of extending that feeling of déjà vu, I repeat what I said during the second of those debates, in April:

“The first and most important thing that any of us can do to support small businesses during this recession is to be honest with them.”—[Official Report, 15 April 2010; c 23512.]

That honesty goes to the heart of the Scottish Government’s relationship with small businesses in Scotland, and that is why it has been so productive and beneficial for both sides.

The Scottish Government recognises the absolute importance of small and medium-sized enterprises to Scotland’s economy, and that is why supporting them has been a priority since day one.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Would the member say that it has been productive and beneficial to the businesses in Ballater that are facing all the rises that I mentioned?

Aileen Campbell (Scottish National Party, South of Scotland)

The actions that the Government has taken with the small business bonus has certainly been beneficial to my constituents. I have evidence to prove it.

The small business bonus scheme has had a transformative effect on the sector since its introduction. There is no question but that the support from the Scottish Government has helped more of our small businesses to get through the economic downturn than would otherwise have been the case.

I have spoken in the chamber before about the survey that I conducted in 2008 of small businesses in the South of Scotland region to assess whether they were likely to benefit from the small business bonus scheme. Mike Rumbles might be interested in that. More than 90 per cent of respondents intended to apply for support and many of them took the time to comment on how welcome the scheme was.

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

Will the member take an intervention?

Aileen Campbell (Scottish National Party, South of Scotland)

The small business bonus scheme and other initiatives, such as the reduction in the poundage rate and rural business relief, combine to form the most generous package of support that is available to small businesses anywhere in the UK. It amounts to some £2.4 billion over a five-year period. However, clearly that is not evident in the approach of the Liberal Democrats, who continue to attempt to whip up unnecessary fear and confusion among small businesses in Scotland. They appear not to have learned from our previous debates on the issue. The fact is that the majority of businesses—nearly 60 per cent—have seen their rates fall or remain the same following revaluation.

Transitional relief schemes are not free. The cost must be met from somewhere, and in the scheme that the Lib Dems propose, the businesses that would gain the most from the revaluation would be forced to give up those gains to offset the rises elsewhere. In effect, the Lib Dems’ scheme would lead to small and medium-sized businesses throughout Scotland subsidising public sector rate payers and larger businesses. Alternatively, the costs could be met from the Scottish Government’s budget, but they could be some £195 million this year alone. I do not see any mention in the Liberal Democrats’ motion of how they would fund their proposal. Do they want the smallest businesses, which have benefited from the revaluation, to lose out, or do they propose further cuts to public spending from elsewhere in the devolved budget?

Support for business does not simply have to come in the shape of rates relief, and the Scottish Government has taken many other practical steps since 2007 to provide assistance to our small business sector. Jim Mather also visited Biggar, in my region, and hosted an interactive session with representatives from small business communities in the South of Scotland region. Many of the participants spoke afterwards of how encouraged and enthused they felt, not least by the minister’s self-evident commitment to helping them to work together to grow the local economy. I have continued to keep in touch with those businesses and to help them in various ways, whether by ensuring that they have the right contacts at the local business gateway or by trying to solve seemingly small but important issues such as ensuring that loading bays are properly enforced so that deliveries can arrive on time.

There is no doubt that the economic downturn has made things difficult for small businesses, and the savage cuts to public expenditure will not help matters. If we want Scotland and its small businesses to flourish, we need far greater powers for the Parliament and the ability to manage the economy. The Scottish Government is, has been and always will be right behind our small businesses. The vast majority of Scotland’s small businesses know that. They will see through the Lib Dems’ bluster and scaremongering and they will continue to benefit from the Scottish Government’s policies.

Peter Peacock (Labour, Highlands and Islands)

I have had the joy of interacting with rating revaluations over more years than I care to remember. I was once a regional council finance convener when councils set both business and domestic rates. I was the convener of a valuation committee for a period of time and I even sat on the Scottish Valuation Advisory Council, for my sins, which was one of the high points of my 30 years in public life. Indeed, I was also involved in the matter as a minister.

Revaluations are always complex matters. The principles of business valuations are very complex indeed. There are winners, from whom we hear little, and there are losers, from whom we usually hear a great deal, understandably. This year, there are a substantial number of losers, many of whom are losing significantly.

As Derek Brownlee said, the principle of a revaluation is that it is revenue neutral. The yield remains the same but the distribution between the sectors will vary and shift. In the context of local government finance or public finance generally, coping with significant redistribution effects is a common thing. It is not at all unusual. The issues at present are clearly significant for those who are involved.

The principle of transitional relief to dampen the full effects of implementation is well established in public finance—in rating matters and in grant distribution matters more generally. The principle is simple. There is no detriment to the final outcome. The losers still lose but the full effects are mitigated, which gives them time to plan, to manage and to adjust for the change that is necessary.

The key question for a minister in any given year when the matter pops on to their desk—it is not terribly welcome when that happens—is whether the scale of the changes is sufficient to warrant a transitional relief scheme or whether the impact is so small as to warrant moving away from the well-established principle of having a transitional scheme, as Andy Kerr said. It is clear that some businesses are facing very large changes at present. In that context, it is not clear to me why the minister would reject a transitional scheme.

If the minister thought that the scale of the changes was not sufficient to warrant a scheme, that judgment is flawed, because it is clear that the scale is very significant indeed. As members have said, businesses in my region face increases of up to 200 per cent. The interaction with the wider small business scheme is a complicating factor, but there are still major issues for businesses in my region to contend with. Jeremy Purvis talked about the tourism and hospitality sector, which is a sector in which competition with businesses south of the border is important. However, south of the border, the same types of businesses are getting a transitional relief scheme. That is a significant issue.

A wider point raised in the motion and in the Conservative amendment is about reviewing the principles behind the valuation scheme. I caution substantially against rushing into that. It is a simple fact of life that no system, however we construct it, will suit everyone. I caution against the belief that a review would lead to a fairer system. That is why the principle of appeals in the system is important, but it is also why the principle of a transitional relief scheme is important. Such a scheme allows the smoothing out of the inevitable fluctuations that occur in revaluations. It helps preserve a broad consensus in our society that a difficult and turbulent system that has peaks and troughs in its effect on people can be managed fairly in the interests of all those who are involved. That is why the minister should think again about the matter—to help restore belief in the system.

The minister told me that yesterday he had the joys of changing nappies. I suspect that changing nappies might seem less messy than fiddling about with an emergency transitional relief scheme, but I encourage him to tackle both those issues with equal gusto in the coming days.

Stuart McMillan (Scottish National Party, West of Scotland)

I, too, congratulate John and Elizabeth on the birth of Matthew. I am sure that they have many happy years ahead of them and that, in the next month or so, the changing of nappies and looking after Matthew will provide a welcome distraction from the budget.

This is the fourth time that the issue has come before the Parliament. All credit is due to the Lib Dems for their perseverance, but I have heard nothing new to indicate that the result of the vote at decision time at 5 pm will be any different from that on the previous three occasions.

Every MSP will know of businesses in their electoral area that have benefited from the SNP Government’s welcome actions. Many small business owners to whom I have spoken in recent years have benefited from the introduction of the small business bonus scheme. They were delighted that the SNP introduced the scheme, particularly given the timing. It has helped them through the recession and, in some instances, has helped their businesses to survive. Furthermore, even the Liberal Democrats should welcome the extension of the small business bonus scheme this year, which involves abolishing business rates for some businesses, halving them for others and reducing them by a quarter for others.

However, in this Parliament, the Lib Dems have not been in the business of working together—well, not with the SNP Government, anyway. They are good at coalitions, right enough, either with Labour up here or with the Tories down in Westminster. Mr Kerr spoke earlier about alliances in the Parliament, but he obviously forgot about the five Labour-Conservative local authority alliances in Scotland, including two in the West of Scotland region, in Inverclyde Council and East Dunbartonshire Council.

The motion highlights the Lib Dems’ concerns about the business rates revaluation. In a perfect world, everyone would be a winner, but we do not live in a perfect world. The Lib Dems and their Tory masters in London proved that last week by introducing savage cuts to Scotland and the rest of the United Kingdom. The Con-Dem cuts of last week will force just under half a million public sector workers on to the dole, with the private sector expected to pick up the pieces. The small business sector is the backbone of the Scottish economy, but how many small businesses here will be able to take on additional staff?

I do not know the answer to that, but I know that if the small business bonus scheme and the extension had not happened and if the rates revaluation did not benefit the small business sector, there would be fewer small businesses in Scotland. As a consequence, fewer small businesses would have the opportunity to take people on to help with the recovery from the wreckage of the tougher and deeper cuts of Mr Purvis’s party and his Tory colleagues in Westminster.

Iain Smith (Liberal Democrat, North East Fife)

I am interested in the member’s line of argument, but I cannot quite understand how it squares with the fact that a hotel in my constituency had its rates bill increased by £10,000, which means that it either had to increase turnover by £200,000 to meet that or make a member of staff redundant. Which one does the member think is likely to have happened?

Stuart McMillan (Scottish National Party, West of Scotland)

As I said, we will all suffer because of the savage cuts that were announced last week and that are coming to Scotland and the rest of the UK. That is why the small business sector in Scotland, which is the backbone of the economy, is vital.

I am conscious of time, Presiding Officer, so I will conclude. The SNP Government has an excellent record on helping businesses. It has the most generous rates relief package in the UK, with the small business bonus scheme, renewables rates relief and rural rates relief, and it has equalised the poundage rates with those in England. I would rather go to the electorate with a record of trying to help businesses in Scotland than with that of the Tory lackeys, who have introduced savage cuts in last week’s comprehensive spending review and in the emergency budget in the summer. I hope that the electorate will recognise the true Lib Dem agenda of continuing to restrict Scotland’s ambition instead of helping to choose a better way for Scotland by giving the Parliament the full powers of a normal independent nation.

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

A couple of SNP members have said that this is the fourth time that the issue has been debated in Parliament. The reason for that is that it is still a huge issue for people in our local communities and our small businesses.

Only this week, I heard from the owner of a petrol station in South Ayrshire whose rateable value has gone up from £10,000 to £31,000, which means an uplift in rates from £5,000 to £12,000. He is appealing that, but the problem is the uncertainty while he awaits the outcome of the appeal. It is difficult for him to plan for the future and he has to think about what will happen if the appeal is unsuccessful. That is not an isolated case. I have heard from other small independent garages in Muirkirk, Mauchline and Coylton. Those are local traders who at the best of times have to compete against the larger supermarkets. They are the only ones who provide filling stations in those rural communities, which, incidentally, are not deemed rural enough to qualify for some other relief schemes.

I turn to the question that I wanted to raise with the cabinet secretary earlier when he was not able to take my intervention. He mentioned the number of appeals that are under way, but does he have figures for the number of appeals that have been concluded and the number of those that have been successful? Perhaps he could give us that information in his winding-up speech. If the information is available, I would like to know how many small businesses are now no longer eligible for small business rates relief because the revaluations have taken them out of that particular block, and how many have to pay more because of the revaluation.

We have heard suggestions that transitional rates relief is not the way forward. Aileen Campbell talked about a survey that she undertook in the South of Scotland region. The last time that I looked, my constituency of Carrick, Cumnock and Doon Valley, which takes in East Ayrshire Council and South Ayrshire Council—both of which, incidentally, are run by SNP-Tory coalitions—is in the South of Scotland. I do not know whether she consulted any businesses in my area, but the Ayrshire Chamber of Commerce and Industry has done so, and it wrote to me recently about the issue. It makes the point that the one thing that would most help businesses in Ayrshire would be the introduction of

“Transitional Relief to soften the blow of this year’s rates revaluation for those businesses hardest hit”.

Aileen Campbell (Scottish National Party, South of Scotland)

Will the member take an intervention?

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

Aileen Campbell would not take an intervention from me, so I will not take one now. She has had her opportunity to speak.

The Ayrshire Chamber of Commerce and Industry also says that it wants

“An urgent review of the rating appeals process to ensure that businesses have the best possible opportunity to challenge unrealistic rating valuations.”

Two things need to be done as a way forward. Obviously, something has happened in this year’s process that has not taken account of the wider economic circumstances or the particular circumstances that businesses in some communities face. Equally, something needs to be done now to help the businesses that are struggling the most.

I first raised the issue with Mr Swinney back in March. He was good enough to respond to me quickly but, unfortunately, the response did not offer any hope other than the small business bonus and rural rates relief, which, as I outlined, does not affect some of the businesses that I am talking about. I appeal to the cabinet secretary to listen again to the people who are suffering the most. He should listen to the voice of businesses and consider introducing a transitional scheme before we have to come back to debate the issue on a fifth occasion, by which time no doubt some of the businesses that we are concerned about will no longer be in existence.

Gavin Brown (Conservative, Lothians)

I also congratulate Mr Swinney and his wife on the birth of their son and wish them all the very best in the months and years ahead.

As many speakers have said, this is the fourth time that we have discussed this important issue. Although it has been raised and analysed, what is still lacking—for the fourth time—is a credible way of funding what both the Liberal Democrats and the Labour Party are asking for. I point out to Cathy Jamieson, who made an argument about the small petrol stations in her constituency that are trying to compete with the big supermarkets, the slight irony that if there were to be a transitional relief scheme, some of the biggest winners would be those who pay the most in rates—the big supermarkets with which those small petrol stations compete.

The difficulty is that we still have no proposal. A transitional scheme is wanted, but we have heard of no way in which it could be paid for. The first time that the matter was brought to Parliament, the Liberal Democrats wanted the money for the scheme to be clawed back from the smallest businesses that were the transitional relief scheme winners.

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

Will Mr Brown give way?

Gavin Brown (Conservative, Lothians)

Mr Purvis did not take my intervention, but I will not hold it against him. I am happy to take his intervention.

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

On that basis, I am doubly grateful to Mr Brown for being so gracious.

It is interesting to note that when the Conservatives asked for a town centre regeneration fund of £60 million they did not offer an explanation of where the funding would come from. However, I will put that aside.

Is my understanding correct that, in principle, Mr Brown believes that there should have been a transitional relief scheme if the funding had been sorted?

Gavin Brown (Conservative, Lothians)

That is interesting. Mr Purvis talked about the town centre regeneration fund. The Liberal Democrats voted against it, but they were the first on the streets handing out leaflets about how they had won the policy.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Answer the question!

Gavin Brown (Conservative, Lothians)

Unlike Mr Rumbles, I will answer the question. Of course there is nothing wrong with a transitional relief scheme in principle, but as a responsible party—[Interruption.] I ask Mr Purvis to let me answer the question; he has had his chance. The reason why we voted against the Liberal Democrat proposal the first time was that it was unfunded. Although there is nothing wrong with having such a scheme in principle, I wonder whether the Liberal Democrats are serious about having one or whether it is just a way of trying to gain more than the 7 per cent share of the vote that they currently have in Scotland.

Wendy Alexander (Labour, Paisley North)

Will the member give way?

Gavin Brown (Conservative, Lothians)

Sorry, not at this time.

If the Liberal Democrats are serious about having such a scheme, they have to bring to the chamber a credible, funded proposal. The second time that they brought the proposal to the chamber, they decided that they would fund it from Barnett consequentials. However, the problem was that just the day before that debate, the Government announced that Barnett consequentials of £70 million would be spent on affordable housing, and every single Liberal Democrat and Labour Party member stood up and welcomed the fact that the entire £70 million was going to be spent on affordable housing. One cannot spend money twice, so we face the same issue again.

There is nothing wrong in principle with a transitional relief scheme, but if it is to be funded, we need to have a proposal for how that will happen. Where is the money going to come from and how on earth will the scheme be put into practice? When we have a sensible proposal, perhaps we can look at it, but it is not credible simply to demand a scheme with no funding behind it.

David Whitton (Labour, Strathkelvin and Bearsden)

This is just another case of the SNP finance and business team thinking that it knows best and refusing to listen. In his speech, Mr McMillan said that he had heard nothing new. Certainly, I have heard nothing new from the SNP speeches this morning, whether from the front bench or the back bench.

As others have said, people knew for months that there would be a business rates revaluation. Businesses in England knew as far back as October 2009 what their new rates levels would be. I recall the occasion in this chamber when Mr Swinney was asked directly when he would let Scottish business know what was happening and, more important, whether he intended to introduce a transitional relief scheme. As ever, he told us that we would have to wait and see—a familiar refrain from the cabinet secretary. Then the rates revaluation was introduced and, as we know, there was no relief scheme. That meant that large businesses across Scotland that did not qualify for the small business bonus all found themselves facing large increases in their rates burden with literally no time to ease the position.

Let me compare that with the situation south of the border, where companies had similar increases. As Mr Kerr said, those increases were capped at 12.5 per cent a year, allowing businesses to plan ahead. When we raised the matter again in the chamber, Mr Swinney’s excuse—perhaps he would prefer the word “explanation”—was that 60 per cent of small businesses were paying either no rates bill or a reduced rates bill and only 40 per cent were paying more. The rhetoric was that it was better to give assistance to small and medium-sized enterprises, with a challenge to everyone else to defy that logic. That is the line that Mr Swinney is sticking to, as we heard again this morning.

Answers to parliamentary questions put by my Labour colleagues and others reveal another story. The fact is that the SNP Government has taken in an extra £150 million or so in business rates as a result of having no transitional relief scheme. Instead of 60 per cent, or a majority, of companies being better off, which was the main reason for having no relief scheme, only 44 per cent of businesses can make that claim. The majority—56 per cent—are facing increases or, in some cases, no change. When that was raised with him, the earlier response of Mr Swinney and his colleagues was that anyone who was unhappy could use the appeals process. As Mr Purvis pointed out today, it is little wonder that the appeals process has been swamped. As we have heard, in some cases increases are running at 100, 150 and even 200 per cent.

Scottish companies are like others throughout the United Kingdom; they want to be able to plan ahead to know what their outgoings will be. The rates bill is a big part of that. Instead of having eight months or so to plan like businesses south of the border, Scottish companies had only weeks of knowing what was about to hit them with the double SNP whammy of no relief scheme to ease some of their pain.

Aileen Campbell (Scottish National Party, South of Scotland)

Will the member take an intervention?

David Whitton (Labour, Strathkelvin and Bearsden)

Sorry, I have only four minutes for my speech so I cannot.

The SNP has tried to make a virtue out of saying that the minority of companies facing an increase are paying for the majority who gain under the small business bonus scheme, which the Tories—supposedly the friends of business—are keen to support. Let us look at the numbers—they are not my numbers but come from the Scottish Parliament information centre. On the basis of the available figures, the yield from non-domestic rates income is £151.4 million higher this year than it was last year—an estimated 7.5 per cent, as Wendy Alexander said. The pay-out for the small business bonus is estimated at £84 million, which means that Mr Swinney has raided Scottish business coffers of an additional £67.4 million at just the time when business needs the most help. It is little wonder that assessors offices the length and breadth of Scotland are swamped with appeals.

We all want to be able to help Scottish business at this critical time, but the SNP’s handling of the business rates increase was a botched job and an object lesson in how not to do it. It should think again about how, even at this late stage, it could do something to help.

John Swinney (Scottish National Party, North Tayside)

Once again, I thank members for their great kindness this morning.

As always, Peter Peacock made a thoughtful contribution about some of the challenges that come from revaluation processes. He asked what the motivation was behind the Government’s stance. I cite two particular reasons why the Government decided not to have a transitional relief scheme. The first was that as a consequence of the revaluation—which was, I stress, carried out independently of Government—it was found that 60 per cent of rate payers in Scotland would be better or no worse off. That is before appeals and reliefs would reduce bills further. The majority of rate payers had the potential to be better off and, if we decided to have a transitional relief scheme, those who stood to gain from an independent revaluation process would not appreciate the benefits and would have to pay to support a transitional relief scheme for others.

Margaret Smith (Liberal Democrat, Edinburgh West)

Will the cabinet secretary give way?

John Swinney (Scottish National Party, North Tayside)

I will do so in a moment, after I have dealt with my two points.

The second issue that weighed heavily in my considerations was the Government’s decision to equal the poundage rate in England, which is another manifesto commitment that we have delivered. The rate for 2010-11 is set at 40.7p in the pound, which is 15 per cent lower than the rate for 2009-10. The calculation of the business rate poundage at that level generates a saving of £200 million for business in Scotland. Those were the key considerations in our decision not to opt for transitional relief.

Margaret Smith (Liberal Democrat, Edinburgh West)

The cabinet secretary will be aware that, some months ago, I undertook a business survey on a range of business issues. The rates revaluation was one of them. Even people who had benefited from it were in favour of transitional relief, for the sake of fairness. It is not just about what happens to individual businesses, as they are affected if other businesses around them on the high street have to shed jobs and so on.

John Swinney (Scottish National Party, North Tayside)

The member has made an interesting, if lengthy, observation. It comes back to the point that Peter Peacock fairly made, which was that we tend to hear much more from people who lose out in such situations than we hear from people who gain.

Cathy Jamieson asked me how many businesses were eligible for the small business bonus scheme pre-revaluation and post-revaluation. Pre-revaluation, 102,000 properties were potentially eligible for the scheme. Post-revaluation, the figure was 114,000—an increase of 11.8 per cent, which is particularly beneficial.

Wendy Alexander raised the issue of the business rates income rise in 2009-10. I gently point out to her that between 1999-2000 and 2006-07, under the Administration that she notionally supported at the time, the business rates income that was collected rose by 29 per cent.

Peter Peacock made the fair point that there are no simple answers. Many of the sectors about which members have expressed concern today could and would have lost out under a transitional relief scheme. I appreciate that hotels face some significant increases, but they would have faced such increases under a transitional relief scheme. There are no simple answers; anyone who pretends that there are is misleading Parliament.

Cathy Jamieson made a point about petrol stations. Currently, the bills of 52 per cent of petrol stations in Scotland are falling, before appeals and reliefs; 60 per cent are in receipt of reliefs; and 73 per cent would be worse or no better off with transitional relief. Members must follow the data before making points about the way in which the issue could be handled.

I acknowledge the business community’s concerns. The Government has taken a set of decisions that are designed to reduce the cost to businesses by ensuring that we match the poundage south of the border—which was one of our manifesto commitments—and that those who benefit from the rates revaluation, which was an independent process, are able to use that benefit to invest in the future of the Scottish economy. For that reason, I hope that Parliament will support the Government’s amendment.

Alison McInnes (Liberal Democrat, North East Scotland)

My colleague Jeremy Purvis set out the case well. Liberal Democrats believe that business should be treated fairly and that the transitional scheme on which everyone relied should be reinstated. It was not fair to take it away, and it is not too late to do something about that.

No one is quibbling about the rates revaluation—everyone knows that that comes around every five years. However, businesses are rightly angry about the fact that a safety net has been whipped away without so much as a by-your-leave. The SNP’s handling of the revaluation has been botched. Instead of phasing in big rate hikes in the co-operative and consensual manner of the past, it has set companies against one another, favouring some and cold-shouldering the rest. As Wendy Alexander noted, companies were given just six weeks’ notice of the increases.

The principles of transitional relief are well established and well understood; businesses in England are benefiting from it as we speak. Previous Governments have protected companies from big rises in a year. This time there has been no protection, and many companies are struggling to cope with really crippling increases.

Obviously, there are winners and losers in any revaluation. However, in the past there has been a transition to soften the blow; businesses did not suffer the full force of rate rises in one go. This time it is different, because we have an SNP Government. Businesses across Scotland find themselves left alone to deal with huge increases in their tax bills at the very time when, having managed to weather the recession so far, they might have expected to be able to look for support from their Government. Tens of thousands of businesses are worse off as a result of the revaluation. Some have faced a 200 per cent increase in their bills. As Jeremy Purvis pointed out, 80 per cent of them have appealed.

A number of firms in the retail, hospitality, energy, mining, whisky and agricultural sectors have told the Confederation of British Industry of their deep disquiet about the Scottish Government’s decision not to place a cap on and not to phase in the bumper increases in rates bills. Many of those firms are already struggling to emerge from the recession. Aberdeen and Grampian Chamber of Commerce says that the increases are already costing jobs. We have already heard that rates in Aberdeen city and shire have gone up by £30 million.

Sadly, across my region examples abound of massive hikes in rates. There are too many to mention them all, but I will give a few examples. Inverurie’s Thainstone mart has seen its business rates soar by 71 per cent. Meldrum House hotel faces an increase of 161 per cent and Meldrum Motors faces one of 94 per cent. The hotel and hospitality sector has been particularly hard hit this time because its businesses were revalued by the Government based on their 2008 turnover, not profit. For many businesses, that was the peak year before the recession. As we have noted, to add insult to injury, many of the hotels that the Scottish Cabinet used on its summer tour of Scotland are among the worst hit.

It is not just the Liberal Democrats who are calling for the problem to be fixed. The Federation of Small Businesses, the British Hospitality Association Scotland, the CBI and the Scottish Chambers of Commerce have all criticised the lack of a transitional rates relief scheme. I know how valuable SMEs are, but that is not the whole picture. Bob Collier of the Aberdeen and Grampian Chamber of Commerce said:

“SME support is not a substitute for transitional relief for the hardest hit.”

Government—and the Tories—insult business by continually refusing to recognise the real damage that has been caused by the sudden withdrawal of transitional relief and by the endless repetition of their refrain that it is okay because businesses should appeal if there are problems. As Mike Rumbles said, that is disingenuous. The appeals system is there for a different purpose. In addition, as John Swinney indicated today, it takes up to five years for appeals to be heard and resolved.

It is utterly complacent of the Government to argue that many businesses are better off and to turn a deaf ear to those who are worst affected. For a Government that likes to talk, it has been remarkably reluctant to have a conversation about this issue.

A number of members mentioned the extra £150 million in tax take that the Government will draw down. I heard Mr Swinney’s arguments, but several excuses are always less convincing than one. I agree more with Liz Cameron, who says that a transitional scheme needs to be introduced and can be afforded.

As Cathy Jamieson said, we have returned to the issue because it is still a problem. Liberal Democrats do not apologise for that. Unlike some members, we are willing to stand up for the whole business community. I say to Gavin Brown that we have repeatedly called on the Government to work with businesses to develop an affordable relief scheme. I urge the Government to listen to the community and to think again—it is not too late.

Renewable Energy

Alasdair Morgan (Scottish National Party, South of Scotland)

The next item of business is a debate on motion S3M-7269, in the name of Liam McArthur, on renewable energy.

Liam McArthur (Liberal Democrat, Orkney Islands)

Even before the debate gets under way, it has proved to be illuminating. Through the amendments that it has attracted and some of the press coverage that we have seen in recent days, the motion has exposed the ludicrous posturing of the Scottish National Party, in particular, and of the Labour Party and the Greens on this important issue.

In his letter to the Cabinet Secretary for Finance and Sustainable Growth last week, the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, set out a way in which an additional £250 million of potential investment could be directed, over the course of the spending review period, at developing Scotland’s renewables industry to help us to achieve our ambition to create a world-class renewables powerhouse in this country. For every £1 that is drawn down from the levy surplus to be spent in Scotland on developing renewables, a proportionate level of ring-fenced funding for Scotland will be put into the green investment bank, up to a total of £250 million.

David Whitton (Labour, Strathkelvin and Bearsden)

I have a quick question for Mr McArthur. When would we get access to the money?

Liam McArthur (Liberal Democrat, Orkney Islands)

I will come on to that point later, although it would probably be a good deal quicker than would have happened had the United Kingdom Labour Party remained in power after May this year.

The mechanism takes account of future increases in the surplus, and it ensures that fossil fuel levy money will not be neutralised by cuts to the Scottish budget. Let us not forget that the Scottish Government is already spending about £32 million a year on renewable energy initiatives. Unless ministers’ plans are to stop that investment and to replace it entirely with fossil fuel levy funding, there is no reason why the funds that have been identified for Scotland through the mechanism will not be drawn down.

Instead of welcoming that genuine offer of a means to unlock the much-needed funds, instead of acknowledging the substantive and rapid progress that has been made by the new coalition Government since the election in May, and instead of committing to work constructively with UK counterparts to ensure that the full benefits are realised for Scotland, the Labour Party, the Greens, and the SNP Government in particular are standing previous promises and positions on their heads in order to attack what is a pragmatic and workable solution that would resolve the impasse and ensure that our renewables industry gains access to vital funds, on which its future depends.

The minister’s amendment calls for the immediate placing of the fossil fuel funds under the control of the Scottish Government. That clarion call from the SNP will come as something of a surprise to anyone who was present at the Energy Institute conference in Aberdeen on 22 February 2007. They might have thought that they heard the then plain old Alex Salmond MP proclaim, with customary modesty:

“I am delighted to say that I have secured a commitment from Ofgem that the £50m lying in their accounts from the fossil fuel levy will be released on request to the Scottish Executive”.

Not only was that promise not delivered in the SNP Government’s first 100 days, as it was claimed it would be, but some 1,253 days later, the now First Minister was still checking his bank statements in vain.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The claim is made that the money is “additional”. We cannot get access, without a reduction in our departmental expenditure limit, to the money that is there—the money is transferred to the green investment bank and we get it in three years’ time. It is the same money. We are paying for the money that goes in the bank with our money. Where on earth is the additionality?

Liam McArthur (Liberal Democrat, Orkney Islands)

As I have explained, unless the minister was proposing to replace any existing spend on renewables with the fossil fuel levy fund, the funding is additional, by any measure.

Mr Salmond’s blustering rant in the Daily Record this morning suggests that, over the course of 24 hours, the sceptical but still relatively pragmatic approach of Mr Swinney to the proposals has been completely overturned by the First Minister. Mr Swinney wants more detail, as did Mr Stevenson, and that is a position that I understand and respect. Mr Salmond, however, wants nothing to do with the proposals—a position that will strike many people in the industry as putting partisan politics above the interests of what is a key sector for growth in the Scottish economy. Perhaps in his speech the Minister for Transport, Infrastructure and Climate Change can shed more light on whether it is the cabinet secretary’s position or that of the First Minister that represents the Government’s approach. It cannot be both.

In comparison with the First Minister’s 1,253 days of fruitless waiting, it took the Liberal Democrat Chief Secretary to the Treasury and the Secretary of State for Energy and Climate Change just 153 days to set out how they plan to honour their commitment, in conjunction with the establishment of the widely welcomed green investment bank. More discussion on how that mechanism can work in practice will certainly be needed. I fully accept that, and it appeared that Mr Swinney does, too. A workable basis for the discussions to take place has now been created. Further consideration will be necessary regarding the details and timeframes according to which the green investment bank can fulfil its vital role in taking on the risks that the market is failing to finance, thereby catalysing further private investment in green infrastructure.

That represents decisive action on an issue on which there has been a damaging and seemingly intractable impasse for too long. Given the singular failure of the previous UK Labour Government to address the issue during its time in office, it is somewhat surprising that Labour members now seem to be content to ride on the coat tails of the SNP amendment, demanding that the funds be released immediately to the Scottish Government. Not so long ago, we were told that the funds were caught in a Treasury straitjacket from which Houdini would fail to escape.

Lewis Macdonald (Labour, Aberdeen Central)

Will the member give way?

Liam McArthur (Liberal Democrat, Orkney Islands)

I do not have time, I am afraid. Mr Macdonald can explain it in his speech.

I whole-heartedly agree that the green investment bank should be set up as soon as possible, and that it should be located in Scotland. On that point, I sincerely hope that the Scottish Government will now agree to work with the Secretary of State for Scotland, with the parties that are represented in this Parliament and with the wider group of industry and other stakeholders, in making the most compelling possible case for that to happen. I respectfully suggest that achieving that will require the bombast of Mr Salmond to be replaced by a more measured and constructive approach from Scottish ministers. It is a little rich, however, for such demands to be made by a Labour Party that has been content for so long to leave the issue in the “too difficult” box.

As for the Green amendment, it is frankly wrong. Tagged on to the SNP amendment, it departs from the view of environmental non-governmental organisations that the funds should be free from political control.

The potential for the Scottish renewables industry is huge. The worrying recent events in Argyll—the uncertainty surrounding the Skykon facility—provide a timely reminder that achieving that potential is far from inevitable. I hope that the minister will update us on the efforts that he and his colleagues are taking to address the situation at Machrihanish. As Peter Jones suggested in The Times yesterday, the developments illustrate the real problems that are created in an industry by lack of finance. That is why Danny Alexander’s proposals for the fossil fuel levy and the establishment of a green investment bank have been widely welcomed.

By the Scottish Government’s own calculations, the fossil fuel investment will help to create 4,200 direct and indirect jobs in Scotland. Already, the turbine manufacturers Gamesa and Siemens have announced, on the back of the developments, that they are to set up in the UK. We must ensure that Scotland can attract those and other such facilities. I urge Parliament to support those efforts by developing the proposals that have been made, and I have pleasure in moving the motion in my name.

I move,

That the Parliament welcomes the commitment of the UK Government to allow the Fossil Fuel Levy surplus to be deployed for its purpose of supporting renewables in Scotland by delivering £250 million of additional funding for Scotland through the green investment bank; recognises that this offer will provide substantial additional resources for Scotland, in excess of the accumulated £180 million Fossil Fuel Levy surplus, and represents significant progress in releasing these funds to Scotland; supports the early establishment of the green investment bank, and calls on the Scottish Government to signal its agreement in principle to this offer and agree to draw down the existing and future surpluses to fund spending on renewables.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Many of us are very grateful to Liam McArthur for raising this subject. The debate gives us the opportunity to hold the UK Government’s proposal on the use of the fossil fuel levy up to the light. When we do that, it is impossible not to notice the serious loopholes and fundamental flaws that riddle what is apparently a generous offer.

Mr McArthur has suggested that there is a division between the First Minister and the Cabinet Secretary for Finance and Sustainable Growth. I assure him that there is not. The division on the matter is between the proposals that have now been put forward by Liberal Democrats and their manifesto, which on page 74 speaks about

“a one-off payment in the 2011 budget.”

They said that they would

“give control of future revenues to the Scottish Government. This will likely lead to an increase in resources for Scotland of around £250 million in 2011-12.”

That offer is very distant from that which is now before us, which would mean having a three-year period during which we are denied access to the money in any meaningful way. It is our money, as a Parliament; it is our money, here in Scotland.

I hope that I can reassure Liam McArthur that we are fully engaged on the Skykon issue. There will be a meeting today involving Scottish Enterprise and Skykon.

If we postpone the money until 2013, it will be utterly irrelevant to the issues that are faced by companies, which have needs today. That is very different from the proposition that is before us. I hope that, by the close of the debate, Liam McArthur will also be able to see that; that is, assuming that he cannot see the flaws already, and is instead choosing to draw a veil over them.

Let me restate the basics of the situation. The fossil fuel levy surplus, which is money that has been raised from renewables projects in Scotland, as funded by Scots consumers, sits at £190 million. Liam McArthur might, of course, wish to amend his motion in that respect. Indeed, in only nine days, he has resiled from a figure of £500 million, which is referred to as being fossil fuel levy money in the Liberals’ press release of 20 October.

By statute, the money can be spent only on promoting renewable energy in Scotland. The money simply cannot be drawn down and spent for that purpose, however, unless the Treasury allows it to be added to the Scottish block spending limit—something that it has repeatedly failed to do. I acknowledge that, at the end of his term in office, the outgoing Chancellor of the Exchequer showed signs of movement on that issue, and we welcome that.

The motion, in common with the UK Government’s offer, pivots on the risible proposition around the interpretation of “additional”. Let us be absolutely clear: the offer from the UK Government, which has found such uncritical support on the Scottish Liberal Democrat benches, does not change the position of the previous UK Administration by one iota. In effect, the UK Government is saying that if we draw down our fossil fuel levy money and use it for our planned renewables expenditure during the next few years, it will use its corresponding savings—from reducing the Scottish block accordingly—to add to the green investment bank, which is not directly under the control of the Scottish ministers or the Scottish Parliament.

Gavin Brown (Conservative, Lothians)

How does the minister explain the enormous gulf in tone between what his Government is saying and what all the Scottish business organisations and Scottish Renewables are saying about the announcement?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Gavin Brown should be very careful in ascribing to business and Scottish Renewables support for the proposition that is before the Parliament. It is clear that there is significant concern about the timing of access to the money. We should have access to the money right now. By 2013, many of the key opportunities for the renewables industry in Scotland will have passed us by. That is key—

Gavin Brown (Conservative, Lothians)

What about the Scottish Investment Bank?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

There is a debate for members of Gavin Brown’s party to have and I hope that they will address the issues.

We might see funds in three or four years’ time. That does not help us with our immediate needs and opportunities. The green investment bank will fall far short of the minimum of £4 billion to £6 billion that is demanded by the renewables industry, which would have been expected already to have delivered major investments and benefits for Scotland’s renewables and low-carbon sector.

It is absolutely unclear to me why anyone who is outside Liam McArthur’s narrow circle should find the offer welcome. It is also hard for me to reconcile the member’s enthusiastic welcome for an offer that takes money away from the Scottish Parliament and the renewables sector with the aim that the Scottish Liberal Democrats set out in their manifesto this year, which was that the release of the money would

“lead to an increase in resources for Scotland of around £250 million in 2011-12.”

That is the commitment to which Liam McArthur signed up, but how it has changed since his colleagues took their places in the new UK Government. It has unravelled, to the extent that Liam McArthur’s motion hails as generous an offer that takes vital resources away from the Scottish Government and the Scottish Parliament and away from the needs of the renewables industry.

The offer that is before us is not in Scotland’s interests. We have expressed serious reservations and we asked for urgent clarification on vital aspects, but our questions have not yet been answered. The offer is a chimera; it is a conjuring trick, it is a con and it is a sleight of hand, which takes money that was raised in Scotland and locks it away to meet an existing UK Government commitment at some unspecified, but probably distant, future point. Rather than welcome such an offer, we, along with others who share our interest in the matter, will continue to fight for Scotland’s interests.

I move amendment S3M-7269.1, to leave out from “welcomes” to end and insert:

“notes Scotland’s massive renewable energy resources and the opportunities to turn Scotland into Europe’s clean green energy powerhouse; notes the UK Government’s proposals that would result in Scotland’s Fossil Fuel Levy fund helping to form part of a wider UK green investment bank fund that is due to be established in 2013-14; notes the lack of detail underlying that commitment and the risk that this could delay vital funding for the renewables sector in Scotland for several years, and calls urgently on the UK Government to release these funds and place them in the control of the Scottish Government and Scottish Parliament in a way that can be rapidly deployed to support Scotland’s renewable energy sector.”

Lewis Macdonald (Labour, Aberdeen Central)

It was Alistair Darling who, as Labour chancellor, announced plans to establish a green investment bank earlier this year, with £2 billion in capital to support initiatives that support a low-carbon economy. The decision of the incoming Westminster Government to follow Labour’s lead is welcome, in spite of the 1,000-day delay until 2013-14 in setting up the green investment bank and the reduced funding of only £1 billion.

Alistair Darling also committed Labour at Westminster to a review of the fossil fuel levy, in the context of the comprehensive spending review, while at the same time making available new money to support offshore wind power, because he recognised that now is the right time to consider every available means of boosting investment in the renewable energy sector. We welcome the fact that the UK Government followed that Labour lead, too, when it promised to review the fossil fuel levy in the context of the CSR. Of course, a review of a problem is not the same as a solution. It is a pity that the UK and Scottish Governments chose to hype up the promise of a review as if it represented a whole new chapter in bilateral relations. We can now see how limited the respect agenda has proved to be.

Last year, in its report on determining and delivering on Scotland’s energy future, the Economy, Energy and Tourism Committee called on the Scottish and UK Governments

“to work constructively together to see if a way can be found that will release the funds held by Ofgem in its fossil fuel levy account in a manner which will not impact on the Scottish Consolidated Fund.”

Nobody pretended that that would be easy, least of all Labour members, but we were clear that the impact on the Scottish Government’s departmental expenditure limit was the key challenge that must be met. However, George Osborne did not directly acknowledge that last week when he laid out his proposals, and nor did Liam McArthur mention the issue in his motion or in his speech: indeed, he avoided any explicit reference to the impact on DEL, which was disappointing.

The chancellor did not say, either, whether the green investment bank would have the freedom to leverage private funds, as Labour planned, or would simply be an agency that would distribute public funds. We know one thing, which is that it will not lend a penny to anyone for another three years.

Liam McArthur (Liberal Democrat, Orkney Islands)

For clarification, I say that I made it clear that part of the green investment bank’s remit would be the leveraging in of private investment and new investors into the green infrastructure.

Lewis Macdonald (Labour, Aberdeen Central)

It is just a shame that the design for doing that is not in place and is not intended to be in place for several months to come.

The fossil fuel levy is worth nearly £190 million. It has been gaining in value year on year. In that context, if investment of £250 million after 2013 is intended as a trade-off against taking the value of the levy out of the Scottish Government’s budget, that might not be as good an offer as some members would have us believe it is.

Gavin Brown (Conservative, Lothians)

Will the member take an intervention?

Lewis Macdonald (Labour, Aberdeen Central)

I am afraid that I do not have time.

We need to know what the chancellor’s proposals mean. We need to know what the consequences will be for Scotland’s devolved budget and we need to know what other trade-offs might be involved.

The Secretary of State for Scotland was asked yesterday to support calls from Labour for the green investment bank to be based in Scotland. He failed to take the opportunity to do so. He said:

“The decision on the location of the green investment bank has still to be taken.”—[Official Report, House of Commons, 27 October 2010; Vol 517, c 299.]

He said that as if the decision was someone else’s. Perhaps it is, or perhaps the UK Government’s decision on where the bank should be is linked in some way to whether there is agreement on the fossil fuel levy.

The amendment in my name calls for the green investment bank to be set up as soon as possible and for it to be part of Scotland’s financial services sector. I hope that our proposal will attract broad support in this lively debate, and I hope that all parties will find it possible to support it.

I move amendment S3M-7269.1.1, to insert at end:

“, and believes that the green investment bank should be established as soon as possible and should be based in Edinburgh.”

Patrick Harvie (Green, Glasgow)

The tone of Liam McArthur’s speech suggested that he is a little disappointed that the rest of us are not cheerleading for the Liberal-Tory Administration but are being a tad critical of it. I can only suggest that he gets used to that, because the amount of criticism that will rightly be due to the Administration during the next few months might upset him further.

In many ways, it is gratifying that the principle of renewable energy becoming an increasingly important—and, we hope, the fundamental—aspect of our energy system has gained traction right across the political spectrum. Once upon a time, not so long ago, only the Greens and a handful of environmentalists were banging the drum for renewables; now the issue is up there in some shape or form on every political party’s agenda. That is very much to be welcomed. The down side of that, I suppose, is that any issue that is recognised as important across the political spectrum can turn into a bit of a political football. What is astonishing is the low standard at which political football is currently being played in this country.

It is obvious that there are huge differences between the Green and Tory-Lib Dem approaches to many of the issues that face the country, including issues that impact on renewables. We would not be pursuing a dramatic cuts agenda. We would be imposing a financial transactions tax and we would be returning to progressive income taxation, to secure real investment in priority areas, including renewables. We would be considering the already publicly owned banks, such as the Royal Bank of Scotland, which hugely overshadow the small amount of investment that will be put into the green investment bank, and we would be looking to turn those existing public banks into green investment banks. The Lib Dem way, on the other hand, is to slash spending, not only across the board but particularly on energy efficiency schemes, ditch the party’s opposition to nuclear power and offer rhetoric on renewables investment but, objectively, less money to invest.

Let us consider the green investment bank, as Lewis Macdonald did. Previously, it was a £2 billion scheme, but now it is a £1 billion scheme. It is still a drop in the ocean compared with the capital investment that publicly owned banks are putting into other, dirtier forms of energy. There is still no detail on the bank’s operation and a great delay in the timing, as the Government amendment notes. We will see not a penny of the money this year or next year, when the public sector and the wider economy need the investment most urgently.

The fossil fuel levy is, objectively, already allocated to Scotland. We should just get it spent. If the rules prevent us from spending it now, we should change them. The two parties in front of me are running the UK Government, like it or not. They have it within their power to change the rules now and allow the fossil fuel levy to be spent immediately. Instead, money is being shuffled around. There are cuts upon cuts on the block grant and sleight of hand. Sleight of hand ought at least to be convincing, but there is no danger of Danny Alexander or Michael Moore being accepted into the Magic Circle on the basis of their performance to date.

The real agenda should be investment, not cuts. We should also be talking about public ownership and community ownership of at least a proportion of our energy generating capacity. I await with interest the Scottish Water bill from the Scottish Government to see what that can do in the way of publicly owned energy generation. An urgent transformation is needed.

We need to ditch oil and coal. Renewable energy does not cut carbon emissions; burning less of the fossil fuels does. Renewable energy will meet our need for energy once we burn less of the fossil fuels but, while the UK Government still commits to projects such as deep-water oil drilling, it will have zero credibility on the transformation of our energy system.

I move amendment S3M-7269.1.2, to insert at end:

“believes that, by cutting the money available to the green investment bank, replacing a small proportion of this cut with money already set aside for investment in Scotland and then further cutting the Scottish block grant if this money is actually spent in Scotland, the UK Government is attempting a transparent act of sleight-of-hand that the Scottish Liberal Democrats should be ashamed to support.”

Gavin Brown (Conservative, Lothians)

Many members have missed a fairly simple fact thus far: prior to the general election, moneys had lain in the fossil fuel levy account for year after year and there had been no movement at all until, shortly before the election, the chancellor at the time decided that he might consider the situation. He had not been minded to consider it in any of the years previously but, close to the general election, he was minded to consider it.

In a short space of time post the general election, the position has shifted. The coalition agreement contained a pledge to review the situation as quickly as possible. When Prime Minister David Cameron visited the Scottish Parliament, he had discussions with the Scottish Government and, last week—after a matter of mere months—an announcement was made in the comprehensive spending review.

It is perhaps not the perfect, neat and tidy solution that the Scottish Government wanted, but we must work within the Treasury’s rules—the solution is not quite as simple as Mr Patrick Harvie suggested—and the coalition Government has kept its promise. It considered the issue in a very short time and came up with a solution that comes pretty close to the ends for which the Scottish Government initially asked.

David Whitton (Labour, Strathkelvin and Bearsden)

When Gavin Brown was having his cosy chats with David Cameron and George Osborne, did he ask them whether they could release the money somewhat earlier than 2013?

Gavin Brown (Conservative, Lothians)

Mr Whitton gives me far too much credit in suggesting that I had cosy chats with the Prime Minister and the chancellor, but I will take it as a compliment, as I am sure it was intended.

The announcement was made last week in the CSR. There is a pledge to give details of how the green investment bank will operate in the spring of 2011. It is not a case of simply magicking a bank from nothing; a process must be gone through to set it up.

David Whitton suggests that the bank will not do anything until 2013. I do not know whether anything will happen before that, but there is a pledge to give all the details in the spring of 2011, which is a matter of months away. He may wish to reflect on the fact that, for many years when his party was in power, nothing happened on the issue.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I occasionally speak about my previous experience and do so again now. I was part of the team that set up Sainsbury’s Bank in 12 weeks. At the beginning of that period, we did not know the products; at the end of it, we had the first customers. Getting the licence—

Members: The Scottish Investment Bank!

Getting the licence took a single week, so why are we waiting until 2013 for a green investment bank?

Gavin Brown (Conservative, Lothians)

We have a man of magic in the chamber. All I say to Mr Stevenson is, in that case, please get involved in getting the Scottish Investment Bank up and running. If he can really pull rabbits out of hats, perhaps he can get involved in the saltire prize before 2025.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the member give way?

Gavin Brown (Conservative, Lothians)

Let me close, because I have only four minutes.

I am astonished at the Government’s negativity, which I contrast with the tone of Scottish Renewables, which asks fair and perfectly reasonable questions such as, “When will we get the detail, how will the money be distributed and on what basis will it be distributed?” It also said:

“The pledge of £250m Green Investment Bank funding ring-fenced for Scotland is welcome”.

What a pity that the Scottish Government could not ask those reasonable questions and take a similar tone to Scottish Renewables.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I quote from Scottish Renewables in today’s Daily Record:

“The next six”—

Trish Godman (Labour, West Renfrewshire)

Minister, the member is finished and I did not call your name.

Ross Finnie (Liberal Democrat, West of Scotland)

No doubt the minister has had more jobs than there are members of the Parliament.

There are two matters that we must address. First, Lewis Macdonald was right to remind us that the problem with the fossil fuel levy moneys has proved difficult. However, with respect, the Labour members are on extremely shaky ground because they failed absolutely to advance any prospect of a solution.

The problem is tricky. It concerns the way in which the Scottish consolidated fund interrelates with and is inextricably linked to the Barnett formula, which is inextricably linked to how we organise our monetary policy in the UK.

Before Mr Stevenson takes relief from that by telling us that his so-called normal independent country would be relieved of those obligations, I tell him that he would not be so relieved because he would stick to the pound and, as long as he did that, to those monetary arrangements. He cannot dive out from under the cover of those delicate, intricate and tricky negotiations. It would be much more helpful if, as Gavin Brown suggested, we had simply taken a more positive view.

Stewart Stevenson rose—

I say to the minister that standing and waving at me like a traffic policeman is unlikely to induce me to give way.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the member give way?

Ross Finnie (Liberal Democrat, West of Scotland)

On that basis, I am more generously prepared to give way.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

My politeness in not interrupting the flow is obviously agin me.

If the rules would apply to an independent Scotland inside the sterling area, they would also apply to a UK Administration inside the sterling area. Therefore, there would be exactly the same, symmetrical issue with releasing the money by any mechanism from a UK Government. I see no difference.

Ross Finnie (Liberal Democrat, West of Scotland)

I am glad that the minister has caught the point, because that is the position. That is the difficulty. It is not an easy matter than can simply be resolved.

The UK Government’s proposal is an active proposition. Of course we could consider reforming the Barnett formula and a total reform of the Scottish consolidated fund, but the UK Government has proposed a mechanism that allows the money to be used.

Mr Stevenson kept saying that we are taking money away. Let me remind him that, in the ordinary use of the English language, before someone can have something taken away, they must have it. The Scottish Government does not have the fossil fuel levy or access to it. Therefore, to pretend that everything has been taken away is a preposterous notion that is not supported by the ordinary use of the English language. The position that we all take is that we should have access to that money. We have protested about that for long enough.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the member take an intervention?

Ross Finnie (Liberal Democrat, West of Scotland)

No. Access to the money has been the problem, and the Government in Westminster has made a proposal. I deeply regret that the Government in Holyrood is not engaging with the UK Government on how that money can be delivered most efficiently and effectively.

Wendy Alexander (Labour, Paisley North)

I concur with the member that all of us should be encouraged that progress has been made, but will he acknowledge that the key issue in the development of offshore wind in the next three years in Scotland is port infrastructure? Vince Cable has committed £200 million to that and associated purposes, starting from next April. The most pressing issue in our agenda must be securing parallel investment in Scotland, starting not in 2013 but in 2011, on the timetable that was planned by both the previous and the current UK Governments. That is the most pressing issue.

Ross Finnie (Liberal Democrat, West of Scotland)

I do not deny that there is a pressing issue there, but Wendy Alexander will have to accept, although I think that she will not agree with me, that the whole profiling of capital and revenue expenditure has to be seriously amended to take account of the financial situation. There must be priorities within that.

In conclusion, the priority is to elevate the importance of both offshore development and port development, which is critical to offshore development. If we are serious about that, we should engage with a positive proposal, not whinge about it. It is regrettable that the other three parties are doing that.

Rob Gibson (Scottish National Party, Highlands and Islands)

It seems that the mother of Parliaments and Whitehall, with their great might, find it impossible to change Treasury rules in order to release a small amount of money that was raised in Scotland and is urgently required for Scotland. Members who support the Scottish National Party amendment understand that. The Scottish Government and the Scottish Parliament need the £190 million fossil fuel levy now to keep on track renewable energy developments that we have in hand. Hijacking the cash to seed-fund the green investment bank could occur only after 2013, as has been said. That move defies reality and the evidence that has been in front of the eyes of the Secretary of State for Energy and Climate Change.

The Scottish Government’s national renewables infrastructure project calls for harbour and infrastructure investment to be the top priority now, when we are suffering drastic cuts in our coffers. Chris Huhne saw that need with his own eyes on a visit to Caithness and the northern isles earlier this month, and that was underlined by his alacrity in re-announcing a £2 million grant from the Nuclear Decommissioning Authority’s regeneration fund, arising from decommissioning Dounreay, for the Scrabster harbour development package. This week, the Crown Estate announced the new sea bed lease on the inner sound between the Caithness coast and Stroma island in the Pentland Firth. Scrabster harbour is the preferred base of operations of the chosen bidder, Atlantis.

How are harbours to launch tidal and wave machines and offshore windmills and how are firms to get projects kick started to realise our huge marine energy potential? This week, the UK Government announced that £60 million for harbour development would not be available in Scotland. That underlines the fact that there is a disconnect between what is happening in the UK Government and here. Yesterday, Michael Moore had the cheek to say in the House of Commons:

“Scottish Ministers can direct Ofgem to pay an amount from the Scottish fossil fuel levy account to the Scottish Consolidated Fund, which could be used for such projects. If Scottish Ministers do that, they will benefit from our arrangements for the devolution of at least £250 million for Scotland from the green investment bank.”—[Official Report, House of Commons, 27 October 2010; Vol 517, c 295.]

How could he keep a straight face? That is smoke and mirrors. Michael Moore pretends that he cares, but refuses to make Scotland’s money available when it is urgently needed without a penalty of equal amount to the Scottish block grant. Tell that to the people of Caithness and the enterprising board of Scrabster Harbour Trust, which is trying to facilitate the renewables revolution.

The Scottish Liberal Democrats must answer for the UK Secretary of State for Energy and Climate Change, Chris Huhne.

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

Will the member give way?

Rob Gibson (Scottish National Party, Highlands and Islands)

No. Chris Huhne snubbed the Economy, Energy and Tourism Committee when it was due to meet in public session on 5 October. He also snubbed the Cabinet Secretary for Finance and Sustainable Growth, John Swinney, all for a union jack-waving tourist visit to Caithness and the northern isles.

Iain Smith (Liberal Democrat, North East Fife)

Will the member give way?

Rob Gibson (Scottish National Party, Highlands and Islands)

I am sorry; I have no time.

There is zero respect for the Scottish Parliament in London and among Liberal Democrat MSPs. In reality, our efforts to promote renewables have been set back by more than three years. What a record for five months of Liberal Democrats in the UK coalition.

The UK green investment bank, for which I have campaigned from the off, should be set up quickly and should be based in Edinburgh. It should not be funded by looted Scottish fossil fuel levy funds that are needed at this crucial stage to keep the Scottish Government’s and the Scottish Parliament’s agreed climate change targets and renewable energy delivery on track. That is the position in the Parliament, and Stewart Stevenson’s amendment sums it up.

Duncan McNeil (Labour, Greenock and Inverclyde)

No one can doubt our massive renewables potential in Scotland in offshore wind and tidal resources and the positive impact that it could have on the Scottish economy by increasing our energy supply and creating tens of thousands of sustainable jobs in constructing turbines, building barges and jackets, and maintaining the operational infrastructure. Speedy access to significant investment in that potential is necessary. Competition is fierce throughout Europe and, indeed, within the UK.

We welcome the fact that the UK Government is going ahead with the Labour plan to create a green investment bank, which Alistair Darling announced in the 2010 budget. However, there is, of course, disappointment about the announcement that it will not be in place until 2013, with the understandable risk that the vital development funding will be delayed for several years. If we take a positive—some would say naive—view that matters will be resolved, the question is how well prepared we are in Scotland to move quickly and wisely on agreed priorities.

The national renewables infrastructure plan was commissioned by the Scottish energy advisory board, chaired by the First Minister, Alex Salmond. That work was heavily influenced by Highlands and Islands Enterprise and supported by Scottish Enterprise. The report’s task was to identify sites in Scotland that offer the greatest opportunities for development for use as construction sites. A matrix and weighting were applied to a number of sites in the selection process for investment. It is important that little weighting was given to population, skills, capability or the cost of bringing a site to the market. Given the context of today’s debate, that is surprising, to say the least.

It is significant that there was a 25 per cent weighting for proximity and geography. That is a little odd, as the east coast site that is up and running is engaged in delivering contracts for the west coast of Ireland on a commercial basis. There are no barriers to competing in that market. Of course, the consequences of that matrix and decision-making process were predictable. The Clyde area, with its population, skill base, deep-water docks and infrastructure, will lose out on the opportunity even to be considered on an equal basis to gain a foothold in the emerging renewables industry and the significant benefits that that would have in an area with higher-than-average unemployment.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Will the member take an intervention?

Duncan McNeil (Labour, Greenock and Inverclyde)

Very briefly, because there is not much time.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I agree with the general thrust of what the member says, but I point out that Hunterston is identified in the infrastructure plan—the investment costs are estimated at £65 million.

Duncan McNeil (Labour, Greenock and Inverclyde)

I will come on to that issue, on which I have some specific questions for the minister, to which I hope that he will respond.

Who would have believed that while the country was coming together to ensure that Ministry of Defence contracts from the UK Government resulted in jobs in the shipyards of the Clyde, the Scottish Government was proceeding with plans that would exclude the Clyde from participating in the renewables jobs of the future? The significant potential of the renewables industry is an opportunity for the whole of Scotland, and the Government must ensure that access to that opportunity is not hindered unfairly or weighted against.

Does the minister recognise that although proximity may be a factor, it is not as significant a factor as the infrastructure plan’s application of a 25 per cent weighting—to the detriment of the Clyde—would suggest? What will be the implications of this week’s sad news from the Machrihanish site, which has suffered another failure, despite receiving significant funding from the Scottish Government, for the west coast cluster?

In his intervention, the minister mentioned investment at Hunterston. Given the tight financial situation, is it not overly ambitious to propose a plan that would require £65 million to develop? The proposal is not viable. Will the minister review the national RIP?

Trish Godman (Labour, West Renfrewshire)

You should finish now, Mr McNeil.

Duncan McNeil (Labour, Greenock and Inverclyde)

Will he ensure that that happens before the RIP is confirmed in the national planning framework?

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

Sixteen years ago I wrote the only history of North Sea oil that has been written so far, and I view the Government’s energy efficiency action plan through those lenses. It represents an excellent step towards a sustainable society, but its very merits tend to remind one of a saying beloved of investment bankers: “This time it’s different.”

The old ghosts still walk. The first of those is social inertia. A travel survey by Stirling Council found that 82 per cent of staff drove to work by car, 1 per cent cycled and 11 per cent walked or ran, which is a third of the number of people who walk or run to work in Copenhagen. Alas, I think that the Stirling Council figures are more representative of Scotland as a whole than those of Holyrood, which are not too bad.

If we look further into the background, we find that funding for environmental research in the UK amounts to £90 million annually, whereas the bill for research on weaponry is £2.5 billion. Secondly, peak oil will soon be on us. The bulls are already talking about oil costing $100 a barrel. Within six years, I think that it will have reached $200 a barrel. We can kiss goodbye to an awful lot of mobility.

Thirdly, climate change is a fact, as the introduction to the action plan implies in the one line in which it quotes Sir Nicholas Stern. We can expect a wetter, windier Scotland and more flooding and landslides—think of the A83 or the Bervie braes and the carbon costs involved. Stopping disasters may be as important as deploying new marine generators. Two years ago, flooding cost the UK £2.7 billion. The tsunami that swept the Indian Ocean five years ago went off the scale—it cost at least 50 times that.

However, there are ways in which we in Scotland, because of our position, can benefit from such appalling setbacks. We can use them to bounce back into providing global solutions. We can expand pump storage, the efficiency of which has increased from 58 to 90 per cent, to store the irregular electricity that is produced by wind, tidal and current power. The hydro schemes that were developed by Tom Johnston and the reservoirs of Scottish Water can help to make Scotland an electric battery for Europe.

Scotland is also well placed to tap the north-east passage through the melting Arctic ice sheet, which lops 7,000km off the journey from the far east. Germany, Belgium and Holland either have densely trafficked seas or not much sea at all. Orkney and Shetland can be the new break-bulk ports. We have perhaps a quarter of Europe’s usable marine power resources, the research on which is only beginning. It is as if we have reached the stage of the steam engine in 1760, before James Watt came along.

Our disadvantages are the lack of appropriate authority, the lack of revenue streams and, above all, the lack of trained labour. That is our most immediate need. In world war one, the Clyde fitter beat the Kaiser as much as the soldier did, but that debt went unpaid and Thatcher, in Sir Alastair Morton’s words, blew the oil money on the dole. We have only a fifth of the trained personnel who are available to German industry. We need a major, well-funded technical training initiative, and we need assistance from Europe, from companies such as Sweden’s Vattenfall, Germany’s Voith or Norway’s Statoil. We need an efficient, single-door gateway—a Statoil for renewables—and we need it now.

Sarah Boyack (Labour, Edinburgh Central)

I welcome the debate and thank Liam McArthur for using Liberal Democrat time to enable us to highlight the parts of the renewable energy agenda on which there is cross-party agreement. It is important that we continue to push ahead.

Liam McArthur was right to highlight the partisanship that has been the hallmark of Alex Salmond’s time in office. We need to be able to work together. Independence is a complete distraction, which diverts us from focusing on how we can push ahead. Not all speakers have agreed with one another, but they have agreed on the need to keep pushing ahead on renewables and that a constructive approach is required.

The key issue is how we can use our political weight to ensure that the green investment bank is set up as quickly as possible and that it is based in Edinburgh. If we are to get the maximum benefit from it, those two issues must be pursued. We need clarity, and I hope that the Liberals will support our amendment, the intention of which is to maximise support across the chamber. There is a strong case for the green investment bank to be established as soon as possible and in Edinburgh. As Wendy Alexander said, we need the ports investment now, not in five years’ time.

We also need the detail. I say to my Conservative and Lib Dem colleagues that we have got as far as we have done on the green investment bank thanks to the years of toiling in the undergrowth of the Treasury by Labour ministers to ensure that the detailed arguments would be put forward effectively. We expect the coalition to continue that work. The Conservatives and the Lib Dems are in the driving seat now, so we look to them to push that case. We will do our job by pushing hard and being constructive in Parliament, but we need clarity. Hard work must continue to be done on the detail, because we cannot afford to have a hiatus in investment in renewables.

Last month, Edinburgh Chamber of Commerce hosted a fantastic renewables conference that brought together people across the investment wing and people in the renewables industry to talk about how we can move forward now. We all know that we have fantastic opportunities. We have moved on from having a modest proportion of energy generation from renewables to a position in which more than 30 per cent of it comes from renewables.

The big challenge is how we can crack marine renewables over the next decade. That does not mean doing so in a decade’s time; it means doing that work now, next year and the year after that. Infrastructure is important. We need the expertise to be used properly. That is why the siting of the green investment bank in Edinburgh represents an opportunity. Leading investors are based in Edinburgh, and Scottish and Southern Energy and Scottish Power operate here. The major fund companies, both in private equity and venture capital, are located in Edinburgh. Collaborative research and funding involving our higher education institutions in Edinburgh and Glasgow are already in place, and our experience of work between the public and private sectors is mature. That is why the green investment bank could work extremely well in Scotland. It is not a question of bringing hundreds of new investment jobs to Edinburgh; it is about using the jobs that we have and having a key number of well-qualified people who are experienced at operating at a high level who can take the process forward. We need to be able to work with investment at UK level, but there is a major opportunity for us in Edinburgh.

As Ron Hewitt, the head of Edinburgh Chamber of Commerce, said:

“we have this huge asset of renewable energy in wind and waves and a lot of very large fund managers who might be interested in supporting these activities.”

We have an opportunity here that could benefit not only Edinburgh but the Clyde area, Fife ports, Nigg and Argyll. There are infrastructure, manufacturing and offshore investment opportunities throughout Scotland. The Parliament’s united commitment must be not to let time slip. Let us all vote for the Labour amendment and add our weight to the cross-party campaign.

Mike Crockart, a Lib Dem member of Parliament in Edinburgh, has responded to Mark Lazarowicz MP’s initiative to pull us together to discuss the issue. I support Mike Crockart’s early day motion at Westminster. Let us vote for the Labour amendment here. We can disagree on the detail, but the key issue is whether we work together to keep the momentum going. The people who are now in government down south need to work with us here in Scotland. Let us all pull together and deliver the right message today.

Trish Godman (Labour, West Renfrewshire)

We move to the wind-up speeches.

Patrick Harvie (Green, Glasgow)

At one point in Stewart Stevenson’s speech, he seemed to be quoting from something described as the Liberal Democrat manifesto. Perhaps he did not get the memo from the ministry of truth that there never was such a document. All the same, he properly expressed concern over the timing and scale of investment from the UK Government.

On scale, we have been reminded that between £4 billion and £6 billion is required. That is the estimate of the industry and it is an estimate that I would endorse. Only a fraction of the cut from £2 billion to £1 billion in the green investment bank is replaced by the fossil fuel levy. We need to recognise that, objectively, whichever way we cut the deck of cards, the investment going in is a reduction on what we had been led to expect.

Gavin Brown said that the fossil fuel levy money has lain dormant in an account year after year. Sadly, it will continue to do so. That is an issue of urgency. Several members have talked about the reasons why renewable energy is an urgent area for investment and why we will not exploit the opportunities that exist unless we get the investment in place now. Wendy Alexander and Duncan McNeil made points along those lines. Wendy Alexander talked about the importance of port infrastructure and, in particular, why investment in that area is so urgent. We will miss out on the opportunities offered by marine renewables unless we get that investment in place soon.

Duncan McNeil made some hugely important points and reminded us of the need to ensure that all of Scotland can benefit from opportunities in renewables. Renewable energy could be a renewable economy opportunity, particularly in the west of Scotland. Jobs on the Clyde and elsewhere could be genuinely sustainable, rather than the economy limping from one military contract to another, going through an eternal cycle of threat and reprieve.

My amendment introduces the phrase “sleight-of-hand”. That mood seems to have caught on. Even Gavin Brown joined in when he described Stewart Stevenson as “a man of magic”. I am not sure that I would go that far. However, other members have used terms such as “conjuring trick”, “con” and “smoke and mirrors” to describe the actions of the UK Government. Sleight of hand often works by distracting the eye. We can all be pretty confident that the Lib Dem-Tory attempt to distract us all from the fact that their agenda is monumentally one of vicious cuts will fail completely over the coming months.

On the wider debate, we should be asking ourselves what renewable energy is for. Some regard it merely as a great new industry from which jobs and gross domestic product can come. It is, but it is much more than that. It is about transforming our energy system, such that we are helped to meet our carbon emission targets. However, wind turbines going round or renewable energy devices operating in the sea—whatever they end up looking like—will not in themselves cut carbon. What they will do, in that tired old phrase, is help to keep the lights on.

If we saw the renewable energy opportunity as part of the transformation of our energy system, we would be talking about real investment, including, as Chris Harvie mentioned, public sector investment and community-owned infrastructure. We would be talking about the huge amount of money that will be made in the sector and saying, “Let’s keep some of that for the common good, not just for the private sector.” It would be accompanied by investment in demand reduction, decentralisation and disinvestment in coal, oil, tar sands and nuclear—the dead-end technologies of the past.

I urge members to support all the amendments.

Jackson Carlaw (Conservative, West of Scotland)

Who would have thought that we would live to see the day? Before us this morning is an unequivocal and wholesome tribute from Scottish Liberal Democrats to the Westminster Government led by the heirs of Disraeli, Churchill and Margaret Thatcher. My colleagues and I here in Scotland, in the Scottish Parliament, will be supporting this inaugural and tangible motion of acknowledgement by our great new friends and colleagues. It draws attention directly to the fruits arising from David Cameron’s visit to the Scottish Parliament, almost within hours of becoming Prime Minister, with the then Liberal Democrat Secretary of State for Scotland. I say “then”—we wait several lifetimes and wonder at the spectacle of just one Liberal Democrat secretary of state, when, like buses, along comes a second almost without drawing breath.

While I have no trouble welcoming the motion, how uncharacteristically churlish is the minister’s amendment? Normally a man noted for being of such generous heart and spirit—a man dripping in consensual pragmatism—that he, of all ministers, should surprise us by devouring a whole bag of soor plums ahead of the debate is a disappointment beyond appropriate expression. His bed will not be an easy place for him to rest tonight, bedevilled as he will be by his conscience, and troubled as he will be at this small-minded commentary in the face of a considerable success: the agreement of Her Majesty’s Government to the surplus in the fossil fuel levy being, in the words of the Liberal Democrat motion,

“deployed for its purpose of supporting renewables in Scotland”.

The only virtue of the minister’s amendment—this was canny of him—was to put down a marker to his own First Minister. The text of the motion does not spell it out, but it is true that those funds are for the development of renewable energy. The minister was no doubt alarmed—spooked even, given the season—that the sophistry of his boss might mean that the meaning of “renewables” could be extended to include renewable policies, and that the money could be diverted to renew a national conversation, the failed local income tax or any one of the many abandoned policies of this Administration, now in the winter of its days. Therefore, I commend him at least for slapping down firmly the craven ambitions of his colleagues, putting them in their place and making it clear that he is completely in tune with the Westminster Government’s intention that the surplus should be used to develop renewable energy opportunities in Scotland. I see Mr Neil bursting to intervene.

Alex Neil (Scottish National Party, Central Scotland)

Does the member agree that the fossil fuel levy would be far more valuable if the same amount of money did not have to be deducted from another budget if we take it up?

Jackson Carlaw (Conservative, West of Scotland)

It is a shame that Mr Neil was not here to hear the excellent contribution from my colleague Gavin Brown. As he said, this is not a perfect neat and tidy solution. However, it is progress, and it is far faster than any progress on the saltire prize, the Scottish Investment Bank, the Scottish Futures Trust and even the great future that we are now told to expect for Scottish Water, about which I expect we will hear very little between now and next May. This from the minister who told us that he personally was responsible for getting Sainsbury’s Bank up and running within 12 days, when I have a firm recollection that it was in fact Delia Smith who cooked up that recipe.

I commend to the minister Ross Finnie’s contribution. Mr Finnie dealt directly with the issue of immediacy. I commend, too, Liam McArthur for the way in which he dealt with the various amendments. I greatly enjoyed Lewis Macdonald’s contribution—his extolling of the virtues of the death-bed leadership qualities of Alistair Darling was a tour de force in suppressed laughter at his own well-received joke. Labour did nothing yet said plenty, and it was plenty of nothing, plenty late in the day. That said, I am happy to indicate that we will support Mr Macdonald’s amendment, if not the substance of the amendment that he seeks to amend.

I have come to the conclusion that, at heart, Patrick Harvie is a kind soul. I keep hoping that at some point he will lodge a motion or an amendment to which I and my colleagues feel we can lend our support, but it just never happens. He is always so angry—his glass is always half empty. He needs to follow current trends in the world’s climate and chill.

In essence, the decision tonight will be between those who welcome something that will benefit Scotland and those who do not. The progressives in the chamber will welcome this progress and vote for the motion.

David Whitton (Labour, Strathkelvin and Bearsden)

I welcome the opportunity to take part in the debate and to follow Jackson Carlaw. He says that Labour has done nothing but, if I heard him correctly, we have done something: we have persuaded him to support our amendment. It is also kind of him to take time out of his very busy schedule to be with us today—

Members: Hear, hear!

If newspaper reports are to be believed, he might have been expected to be doing something somewhere else.

It is interesting to note the collective heat that the debate has engendered—if members will excuse the pun. There has been enough heat in the debate to power the chamber for some time. It has also been interesting to note the contrast in the relationship between those on the Conservative benches and those on the Liberal Democrat benches between this debate and the previous debate on transitional rates relief. Instead of daggers drawn, they are now all pals together.

Apparently, it has been said elsewhere that at Westminster Lib Dem MPs are acting as not just a human shield for the Tory-led Con-Dem Government but a nuclear shelter. That might not be acceptable in a fossil fuel debate, but the Lib Dems are certainly providing plenty of shelter today, outnumbering the two lonely Tories by four to one.

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

Following the member’s line of thought, how does he explain the Labour Party opposing the SNP in the previous debate but supporting it in this one?

David Whitton (Labour, Strathkelvin and Bearsden)

As someone who represents a constituency where we have Labour and Tories running the council, I am used to such alliances.

Mr Finnie said that the minister has had more jobs than there are members of the Scottish Parliament. To come to Mr Stevenson’s defence, I can safely say that he has certainly had more jobs than there are Liberal Democrat members.

As Mr Carlaw said, we welcome the fact that the Tories are going ahead with Labour’s plan for a green investment bank. Whatever he may think, it was announced in March by Alistair Darling, and it is also worth noting that Labour intended to put £2 billion into the bank, not just the £1 billion that is currently proposed. As ever, Labour had more ambition and ideas for the UK than the Conservatives have.

One consequence of the change of Administration at Westminster is that, sadly, Tory and Liberal ministers now make the decisions. As we have heard from Gavin Brown and Liam McArthur, they now have access to the corridors of power, which they did not have before. What good is that doing Scotland? As Lewis Macdonald and Mr Gibson both commented, yesterday at Westminster the current Secretary of State for Scotland, Michael Moore, who is fast becoming the Con-Dems’ man in Scotland rather than Scotland’s man in the Cabinet, refused to support Labour’s call for a green investment bank to be established here in Scotland, and more particularly here in Edinburgh. Perhaps Mr Brown can have a word in the ear of Prime Minister Cameron. Who knows? It may be to the Tories’ electoral advantage here in Scotland. They can hardly do any worse than they are doing just now.

My colleague Sarah Boyack laid out strong reasons why the green investment bank should be based here in Scotland’s capital city, in a country that will also be the centre of the UK’s renewables industry. Much was made of how long we will have to wait for the green bank to release funds. I remind the chamber that our own Economy, Energy and Tourism Committee said in its report that it wants everyone

“to work constructively together to see if a way can be found that will release the funds held by Ofgem in its fossil fuel levy account in a manner which will not impact on the Scottish Consolidated Fund.”

That was the unanimous view of the committee. Perhaps its convener, Iain Smith, will tell us what the impact will be, if he agrees that there will be an impact, and whether he acknowledges that his party is now accepting less than his committee demanded last year. The same question also goes to Mr Brown.

In conclusion, I urge the chamber to support our amendment.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

This has been an interesting debate, if not a particularly consensual one. I will try to respond to points that have been raised, but I say at the outset that I have heard nothing to alter our perception that the UK Government’s proposal on the fossil fuel levy is nothing but a bad and very late deal. As such, it is not appropriate.

Scottish Water has been mentioned a couple of times. I am working hard on the future for Scottish Water, and we will be excitingly engaged in that in the future.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Excitingly engaged?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

It is always exciting when I am involved.

Ross Finnie made an interesting contribution. He actually said—I am going to check the Official Report—that it is not our money. The reality is that I have a statutory instrument on the matter signed by Allan Wilson in 2005 and another from 2002 that clearly indicate that the powers to collect and attribute the money lie here. Under the proposals in front of us, control is to be taken away and given to others.

Ross Finnie (Liberal Democrat, West of Scotland)

Will the minister take an intervention?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I simply do not have time.

Gavin Brown quoted Scottish Renewables. Perhaps he should read more carefully what has been said elsewhere. In today’s Daily Record, Scottish Renewables says:

“It would be a massive missed opportunity if this money cannot be freed up”

to support Scotland’s renewables sector over the next six to 12 months. No contribution to the debate has suggested that we are even faintly near that. Indeed, on the Liberal Democrats’ position, today’s Daily Record leading article states:

“It is a bad deal and the Lib Dems’ brassneck in defending it, as they will at Holyrood today”—

the newspaper is correct on that—

“is breathtaking.”

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

If I understand the minister correctly, he is saying that the money should be Barnett consequentialled. The only area to be protected for Barnett consequentials in this spending review is health. Not one penny of that money has been committed for renewables under the Government’s own preferred method.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I am really quite baffled by the introduction of Barnett consequentials to the debate. This is our money. It has been taken away from the control of the Scottish Government and this Parliament and put elsewhere. There is no new money. Absolutely fundamentally, and leaving aside questions of ownership and disposition, the critical thing is that it is being delayed by three years, in particular comparison with what the Liberal Democrats stated before the election. I do not know whether that was in the Liberal Democrat manifesto, but it was certainly in a document for the election, and on page 74 the Liberals said that in 2011-12—

Duncan McNeil (Labour, Greenock and Inverclyde)

Will the minister take an intervention?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I will.

Duncan McNeil (Labour, Greenock and Inverclyde)

If we had the money, would the minister seriously spend £65 million on the development of Hunterston? What do we need to do to ensure that the west coast cluster is viable?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The £65 million is the total project cost, not the Government’s cost. It is also worth making the point that there is a cluster approach that will ensure that we look at the opportunities. I give that assurance to the member, and we will hear more about it at a later stage because he makes an important and relevant point that it is correct to draw to our attention.

Sarah Boyack says that independence is a distraction, but forgive me if I take a fundamentally different view. If we could take independent control of the money, we could decide how to spend it, notwithstanding the issues of being in the sterling area or not, which are entirely a red herring that we need not concern ourselves with.

I say to Jackson Carlaw that soor plooms are one of the traditional Scottish sweets, and I am happy to sook them to boost my energy levels at any other time—if only we could suck the money out of the coffers of Ofgem so that we could refresh the economy of Scotland.

Sarah Boyack (Labour, Edinburgh Central)

Will the minister give way?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I am now 30 seconds from the end. I am sorry but I simply cannot.

It is absolutely vital that the money is made available to Scotland immediately and in a way that is additional. It will enable us to start making investments in Liberal areas right across Scotland—Scrabster harbour, Orkney, Shetland and Kishorn. Liberal voters will be looking at the behaviour of their MSPs in denying them access to the money with some grave concern indeed.

Iain Smith (Liberal Democrat, North East Fife)

This has been an interesting but rather disappointing debate because of the very unconstructive approach that has been taken by all parties in the chamber apart from the Liberal Democrats and, on this occasion, the Conservatives. It is extremely disappointing—

David Whitton (Labour, Strathkelvin and Bearsden)

Will the member give way?

Iain Smith (Liberal Democrat, North East Fife)

Give me a minute to get started. I will address some of the reasons why I think that the debate has been so disappointing, and the member should feel free to interject once I get going.

I say to the minister that I do not take, never have taken and never will take my view on political events from the leader writer of the Daily Record or from any other newspaper. It is for us, as politicians, to make the judgments that we think are right for Scotland, not to follow the headlines of the day in the popular newspapers. It is sad that so many members, for far too long, have decided that the headlines in the Daily Record are more important than getting things right for Scotland.

The minister made a number of points and I will pick up on some of those. He talked about the issue of when the funding will be made available. A number of members have mentioned the fact that the green investment bank will not be up and running until 2013, but I am afraid that that is not necessarily the case. The departmental funding for the green investment bank will not be available until 2013—that is certainly the case—but the green investment bank will also receive funding from the sale of assets, which may be available at an earlier date. We do not know when those sales of assets will happen or when that money will be available, but it could be available even in the next financial year. The money could be available at an earlier date, so to argue consistently that 2013 is the date is just wrong.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Is that an announcement that we are now going to see delivery of the Liberal Democrat manifesto pledge and that we will get the money in the immediate next year?

Iain Smith (Liberal Democrat, North East Fife)

I will not take lessons from the SNP on the delivery of promises. I will not take lessons from the SNP on anything in the energy field, as its record of delivery is appalling. The energy efficiency action plan, which was commissioned by the previous Government in 2005, was delivered only a couple of weeks ago—it has taken the Government five years to deliver it. The saltire prize was meant to be available in 2013, but that could now be 2014, 2015, 2016 or even 2017—it might not be delivered even in the lifetime of the next Parliament. As for the Scottish Investment Bank, we will wait and see on that one. I will not take lessons from the SNP on the delivery of promises.

Let me be perfectly clear. Lewis Macdonald talked about the committee calling on the Scottish Government and the UK Government to work constructively together to find a method of releasing the funds that are held by Ofgem in its fossil fuel levy account. This is a method of releasing that money. Someone who worked for Sainsbury’s would recognise it as a buy one get one free offer. If we spend £1 million from our existing budget on renewable energy projects, we will get £1 million in additional money guaranteed for Scotland to be spent on renewable energy projects. That is a good deal for Scotland.

Lewis Macdonald (Labour, Aberdeen Central)

Will the member confirm that that £1 million would be deducted from the Scottish consolidated fund and that the scheme, therefore, does not meet the objectives that the committee agreed?

Alex Fergusson (None, Galloway and Upper Nithsdale)

You have 40 seconds, Mr Smith.

Iain Smith (Liberal Democrat, North East Fife)

The committee said that it should not impact on the Scottish consolidated fund and it will not impact on it because that money—£32 million in the current budget—is already being spent on renewable energy. That will generate £32 million of additional funding through the green investment bank with the drawing down of £32 million from the fossil fuel levy. That is additional money for Scotland, which it does not have at present. The scheme will provide equivalent funds from the fossil fuel levy and will not impact on the Scottish consolidated fund. That is the reality of the situation and something that members must learn. Instead of carping about it and trying to make cheap political points or engaging in political posturing, we should engage with the UK Government on how we can get on with it and get the money drawn down sooner than 2013. Let us also engage with the UK Government on the location of the green investment bank. We support Sarah Boyack’s amendment, although we cannot support the amendment that it seeks to amend. There should be a unanimous call, from across the chamber, for the green investment bank to be based in Scotland.

The green investment bank is a good deal for Scotland. It will do something that the Labour Party never did in 13 years in government and that the SNP has failed to achieve in three and a half years in government—it will give Scotland access to the fossil fuel levy money to invest in our renewable energy infrastructure now and over the next few months. I ask Patrick Harvie how something can be cut when it does not exist. His amendment talks about the money that is available to the green investment bank being cut, but it does not exist at the moment. It is £1 billion of new Government money plus additional money from the sale of assets such as our shares in the banks.

I commend the motion to the Parliament.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Thank you, Mr Smith. Your time keeping is much better than mine.

Public Expenditure Reduction

David McLetchie (Conservative, Edinburgh Pentlands)

1. To ask the Scottish Executive what level of reduction in public expenditure in Scotland for which it is responsible it would not consider to be “too far too fast” given the financial situation inherited by Her Majesty’s Government. (S3O-11715)

John Swinney (Scottish National Party, North Tayside)

The cuts that are planned by the coalition Government are, as Mr McLetchie says, too fast and too deep. Next year alone, our overall budget will fall by £1.3 billion in cash terms, including a fall of £800 million in the capital budget. Those cuts to our capital budget threaten 12,000 jobs. I accept that the management of the public finances by the previous United Kingdom Government means that a substantial period of fiscal adjustment is now unavoidable. However, that should be achieved by promoting economic growth, which will create jobs, increase tax receipts and reduce welfare spending. In contrast, the austerity measures that have been proposed by the coalition risk undermining the economic recovery, increasing unemployment and doing further damage to the public finances. As we argued in the joint declaration by the devolved Administrations, the cuts should be scaled back and phased in over a longer period of time. That emphasises the urgent need for Scotland to have the same financial and economic powers as other nations, so that we can grow our economy and revenues and protect our vital public services and fairness in our society.

David McLetchie (Conservative, Edinburgh Pentlands)

The cabinet secretary tells us that the cuts should be scaled back, but he omits to tell us what that scaling should be, showing a reluctance to provide a straight answer to that type of question that the Scottish National Party shares with the Labour Party. Perhaps I can help him out. The Scottish Government has just published a report in which it claims to have made a total of £1.47 billion-worth of cash-releasing efficiency savings in just two years. Amazingly, while Mr Swinney was slashing, burning, hacking and cutting at public spending over the past two years, nobody noticed—the world did not come to an end and our public services did not grind to a halt. The amount, in cash terms, that Her Majesty’s Government is asking the Scottish Government to save over the next four years is less than the amount of cash that Mr Swinney claims to have saved in the past two years. Will he explain why a future Scottish Government cannot carry on, over the next four years, doing exactly what he has done over the past two years, thereby extricating us from the financial mess that we inherited from Labour?

John Swinney (Scottish National Party, North Tayside)

I agree with Mr McLetchie that the coalition Government inherited a financial mess from the Labour Party.

The point that Mr McLetchie slides past in his question is one that he regularly raises with Parliament about the additional burdens that are placed on our public services as a consequence of things such as changes in demography, increasing health care needs and increasing demands on council services—he is wont to raise such issues with me frequently when I appear before the Local Government and Communities Committee. Our cash-releasing efficiencies programme has delivered the capability to achieve more from an increasing sum of money from public finances. Mr McLetchie is now asking us to cope with all that increased demand and increased pressure in the context of a sharply declining real-terms budget—a budget that is declining much more sharply than was ever proposed or was ever the case under the previous Labour Administration. That is the difference between the two situations to which Mr McLetchie refers.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I accept entirely that this is an important subject, but for a question to take that long and for an answer to be equally long is just not on. I am afraid that I am unable to allow any supplementary questions on the issue.

Inveramsay Bridge

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

2. To ask the Scottish Executive whether it will fulfil its commitment to replace the Inveramsay bridge during its current term of office. (S3O-11670)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The Government has made a commitment to deliver a new Inveramsay bridge as part of wider upgrades to the A96. Inveramsay has long been a serious hindrance to local people and acts as a block to development. Transport Scotland has now received the feasibility study into options to upgrade the bridge, which it is considering. In the light of that, I have asked Transport Scotland to complete its consideration of the options as soon as possible and to seek out opportunities to support the economic and social needs of communities along the A96, including Moray.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Now that the minister has received the study, after three and a half years of inaction, will he outline in detail what funding he has allocated to the project to fulfil the Government’s commitment to complete the project within this term of its office?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

It is passing strange that Mr Rumbles chooses to raise this subject, given the previous inertia and lack of attention to the needs of the users of the A96 and, specifically, the Inveramsay bridge. It is only due to the actions of the Administration that is now in office, along with the active and committed engagement of the local member, that we are seeing the kind of progress that is taking place. Mr Rumbles really ought to look at the progress that is being made, at the benefits that we seek to deliver and, particularly in these difficult times, at the acceleration of work on this that I have asked to take place.

Nanette Milne (Conservative, North East Scotland)

The minister will be aware that I have been urging action on the Inveramsay bridge for a number of years. He will also be aware that the height restrictions that were recently imposed on the bridge are forcing vehicles over 14ft 6in to divert via Colpy, which is impacting adversely on the local agricultural community. That not only has an impact on the local economy but leads to increased vehicle emissions.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question, please.

Nanette Milne (Conservative, North East Scotland)

Will the minister give serious priority to the Inveramsay bridge? When might work be expected to start?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We are giving the bridge priority. We recognise the issues for freight traffic due to the change in the way in which heights are measured and are actively engaged in that matter.

Maureen Watt (Scottish National Party, North East Scotland)

Does the minister agree that, after 10 years of Liberal Democrats being in government in this place and 30 years of them representing the Gordon constituency in Westminster, it is only now, under the Scottish National Party Government, that Inveramsay bridge has featured in any transport plan and that action is being taken to address one of the most notorious bottlenecks in the north-east of Scotland?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Absolutely.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 3 was not lodged.

Carbon Trust (Agricultural Sector)

John Farquhar Munro (Liberal Democrat, Ross, Skye and Inverness West)

4. To ask the Scottish Executive what specific support the Carbon Trust gives the agricultural sector in terms of advice or loans. (S3O-11666)

Richard Lochhead (Scottish National Party, Moray)

Through the Scottish Government’s funding support, the Carbon Trust offers energy site surveys to Scottish businesses with an annual spend of £50,000 and over, including those in the agriculture sector. We also support the Carbon Trust’s industrial energy efficiency accelerator, which works with many energy intensive sectors, including animal feeds and dairy.

John Farquhar Munro (Liberal Democrat, Ross, Skye and Inverness West)

The minister will be aware that anaerobic digestion represents a particularly attractive technology for the Scottish agricultural sector. The process not only provides farmers with a way of disposing of organic waste but also allows for the production of green energy and usable byproducts such as fertiliser. Given the recognised advantages of this green and practical technology, what action is the Scottish Government taking to help rural land managers throughout Scotland to take advantage of it?

Richard Lochhead (Scottish National Party, Moray)

The member raises a good issue, which is the contribution that our farmers and those in the agriculture sector can make to greening Scotland, reducing our emissions and securing business benefits from that.

I assure the member that many initiatives are under way to help the agriculture sector to take advantage of energy efficiency measures, ways of lowering their emissions and waste management processes, including anaerobic digestion. The rural development programme offers some kind of support for that kind of initiative, and we are also considering new ways in which loans can be made available to the agriculture sector in order to get some of those measures under way.

Bervie Braes

Nigel Don (Scottish National Party, North East Scotland)

5. To ask the Scottish Government what support it is providing to protect the Bervie braes from future landslips. (S3O-11681)

John Swinney (Scottish National Party, North Tayside)

The Scottish Government agreed on 19 March 2010 to provide a £2 million contribution to Aberdeenshire Council for slope remediation work on the Bervie braes. It is a now matter for Aberdeenshire Council to take forward.

Nigel Don (Scottish National Party, North East Scotland)

For the record, I should make it clear that I am talking about the Bervie braes in Stonehaven—there are others.

The minister will be aware of the issues surrounding consent from residents that is required for the Bervie braes work, and that that has the potential to hold up the project past April 2011. Can he confirm that, if the project is delayed, Scottish Government funding will still be available at a future date?

John Swinney (Scottish National Party, North Tayside)

I assure Mr Don that the Government will work very co-operatively with Aberdeenshire Council on this matter and that, if issues arise out of an impact on the timescale of the sort that Mr Don raises, the Government will work co-operatively and effectively with Aberdeenshire Council to resolve them.

I hope that, given the seriousness of the issue, and the speed with which the Government acted to address the concerns of the members of the public in Stonehaven whom I met when I visited the site, progress can be made as timeously as possible to ensure that stability is applied to the Bervie braes.

Alex Johnstone (Conservative, North East Scotland)

Given that the project will be jointly funded by the Scottish Government and Aberdeenshire Council, will the minister take into account any difficulties that the council might have under the current funding round, to ensure that that is not an obstacle in the way of the work that is to be carried out?

John Swinney (Scottish National Party, North Tayside)

Mr Johnstone will appreciate that the only way in which we can proceed on this matter is through co-operative activity between Aberdeenshire Council and the Scottish Government. That has been my approach, and I appreciate that it has been reciprocated by Aberdeenshire Council.

Under the funding arrangement that is in place, the council must contribute funds according to the terms that I have set out. We will, of course, engage with the council, but I reiterate the point of principle that the council must contribute in the fashion that I have set out.

“The role of boards” (Audit Scotland Report)

John Wilson (Scottish National Party, Central Scotland)

6. To ask the Scottish Executive what lessons have been learnt from Audit Scotland’s report on the role of boards. (S3O-11703)

John Swinney (Scottish National Party, North Tayside)

The Scottish Government welcomes Audit Scotland’s report. We continue to look for ways of further strengthening the relationship between the Scottish Government and public bodies as we take forward our public services reform agenda.

John Wilson (Scottish National Party, Central Scotland)

In the key messages section of its report, Audit Scotland says that it accepts that the Scottish Government has made progress with its public sector reform agenda. However, it goes on to say:

“Chief executives and their boards have parallel lines of accountability and this can cause confusion over who leads the organisation”.

How does the cabinet secretary intend to deal with that issue?

John Swinney (Scottish National Party, North Tayside)

The question is important because it recognises that public bodies have to have clear direction and leadership. In some circumstances, that will flow directly from ministerial letters of guidance or direction, which boards must respond to in a constructive and positive way. I am confident that we have in place strong arrangements for ministers to make clear to public bodies and senior managers, in their line management responsibility to boards, what is expected of them. However, if any improvements are required to ensure that there is clarity in the leadership of public bodies, the Government will, of course, act in that fashion.

Broadband Services

Jim Tolson (Liberal Democrat, Dunfermline West)

7. To ask the Scottish Executive when it last met United Kingdom Government ministers to discuss the provision of broadband services in Scotland. (S3O-11675)

John Swinney (Scottish National Party, North Tayside)

The last meeting between Scottish ministers and UK ministers on the subject of broadband provision in Scotland was on 22 February 2010, when the Minister for Enterprise, Energy and Tourism met Stephen Timms, the then UK Minister for Digital Britain.

Following the Scottish Government’s successful bid to the UK Government for inclusion of the Highlands and Islands as one of the four UK rural market testing pilots for superfast broadband, as announced by the Chancellor of the Exchequer on 20 October 2010, a further meeting is now being sought with relevant UK ministers. That meeting will focus on the next steps for the deployment of the pilot and will discuss more generally the support that may be available for improved broadband access throughout Scotland.

Jim Tolson (Liberal Democrat, Dunfermline West)

I am glad to hear that, although there have been no meetings with the present UK Government ministers, such meetings are planned.

Although the situation in the Highlands and Islands is important, the failure to provide a good service is adversely affecting local businesses in constituencies such as mine, Dunfermline West, with those people who work from home being particularly poorly served at the moment. What is the minister planning to do in those discussions with UK ministers to help home workers who are striving to help the Scottish economy?

John Swinney (Scottish National Party, North Tayside)

Jim Tolson raises an important point about home workers, which my visit to Vertex in Dingwall the other week clearly illustrated to me. There are many home workers in the company who use information technology and broadband communications to take part in various activities.

As part of the Government’s agenda for connectivity, on which the Minister for Culture and External Affairs published some material the other week, we will engage in dialogue with the UK Government and service providers to maximise the capability of broadband use in Scotland. It is a significant contributor to our country’s economic potential, and the home-working sector offers an opportunity into the bargain.

Aileen Campbell (Scottish National Party, South of Scotland)

Is the cabinet secretary aware that in my region, the South of Scotland, many residents suffer from poor internet connections? Although it is welcome that the area that Treasury chief Danny Alexander represents will now benefit from superfast broadband, David Mundell and Michael Moore at the Scotland Office have not been quite so successful in gaining improvements for the South of Scotland. Will the minister outline how the Scottish Government will help rural communities in the south that are not part of the project to gain better internet connections?

John Swinney (Scottish National Party, North Tayside)

There have already been three interventions by different Administrations in Scotland to address some of those questions. First, our predecessors put in place the exchange activate programme to install broadband capacity in many rural exchanges, which would otherwise not have happened. Secondly, this Administration has used that deal to expand the capability of many of those exchanges and to increase capacity, as service usage has far outstripped expectations.

Thirdly, we have put in place resources to ensure that people in hard-to-reach locations are able to access a broadband service. The Scottish Government has done a great deal over the years to expand broadband capability. For the roll-out of the next generation of broadband we need an approach that guarantees that rural areas, such as those that my colleague Aileen Campbell represents, and Perthshire and Angus, which I represent, can access broadband services in an efficient and effective way so that there is no digital exclusion in Scotland. We will pursue that approach with providers and the UK Government.

Gourock to Dunoon Ferry Service Tender

David Stewart (Labour, Highlands and Islands)

8. To ask the Scottish Executive what the timetable is for the tendering of the Gourock to Dunoon ferry service. (S3O-11755)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Ministers are currently considering the tender and contract documents for the Gourock to Dunoon ferry service. When the documentation is finalised, the timetable for the remaining stages of the procurement process will be announced.

David Stewart (Labour, Highlands and Islands)

The minister will be well aware that in accordance with article 18 of the European Union procedural regulations, the Scottish Government was required to launch a public tender for the route before 2009. The subsequent public service contract should start before June 2011. Will the Government comply with that timetable? If not, is the minister aware that that will cause widespread disappointment in Argyll and Bute and beyond?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We are continuing to work with the European Commission on that very important service but, fundamentally, we seek to deliver for the people of the Cowal peninsula and Dunoon a service that carries both vehicles and passengers. Every part of our effort is directed at ensuring that we give it the best possible opportunity.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 9 has been withdrawn.

Glasgow City Council (Meetings)

Sandra White (Scottish National Party, Glasgow)

10. To ask the Scottish Government when it last met representatives of Glasgow City Council and what was discussed. (S3O-11701)

John Swinney (Scottish National Party, North Tayside)

Scottish Government officials regularly meet representatives of councils, including Glasgow City Council, to discuss a range of issues.

Sandra White (Scottish National Party, Glasgow)

Is the cabinet secretary aware of the situation in Glasgow with regard to free personal care and care home admissions? Targets are being set to remove people from free personal nursing care and reduce admissions to care homes, which is resulting in the most vulnerable people suffering, and in some cases languishing in hospital.

John Swinney (Scottish National Party, North Tayside)

It is clear that individual assessments must be made about the appropriate care arrangements for every person who is judged to require such assistance, and a range of statutory functions must be followed. If Sandra White is concerned about the way in which those issues have been addressed in relation to particular individuals, I respectfully suggest that she raises her concerns with Glasgow City Council, which should address them.

Engagements

Iain Gray (Labour, East Lothian)

1. To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2637)

Alex Salmond (Scottish National Party, Gordon)

Later today I have engagements to take forward the Government’s programme for Scotland.

Iain Gray (Labour, East Lothian)

The Cabinet Secretary for Education and Lifelong Learning said yesterday that he was “deeply sorry” that the SNP has thrown hundreds of newly qualified teachers on to the scrap heap. Will the First Minister now do likewise and apologise?

Alex Salmond (Scottish National Party, Gordon)

Given the extraordinarily poor record whereby, as we know, two thirds of the fall in teacher numbers in the last year has been in Labour-controlled authorities in Scotland, despite the fact that there are not that many Labour-controlled authorities in Scotland, I think that there should be shame across the Labour benches at that dramatic statistic.

Iain Gray (Labour, East Lothian)

Clearly, the First Minister does not share his Cabinet Secretary for Education and Lifelong Learning’s shame about the situation, which he said causes him “difficulty”, “heartache” and “sleepless nights”.

At yesterday’s meeting of the Education, Lifelong Learning and Culture Committee, Ken Macintosh referred to Allison Baird, a newly qualified primary teacher. Of her entire class, only four teachers have found jobs: one in Scotland, one in Spain, one in Kuwait and one in Abu Dhabi. Spain, Kuwait and Abu Dhabi—the arc of desperation for new teachers.

Allison’s e-mail says at the top:

“I’d love to be there myself”—

she means at the committee—

“however I am lucky enough to have 2 hours work today.”

What is the First Minister’s advice to Allison? Should she also get on a plane to the middle east?

Alex Salmond (Scottish National Party, Gordon)

A range of people in society, including young qualified teachers, face a hugely difficult situation. There are 575 teachers in Scotland claiming jobseekers allowance. In my opinion—and, I hope, in the opinion of the chamber—that is 575 too many. The figure is lower than the 665 teachers who were in that position last year. If we compare the figure for teachers claiming jobseekers allowance with the figures for other countries in these islands, we find that there are fewer in the workforce in Scotland, as there are 10.9 per thousand in Scotland compared with 14.5 per thousand in England, 20.8 per thousand in Wales and 41.6 per thousand in Northern Ireland, on comparable figures.

I know that the Labour Party would like the whole country to engage in collective amnesia about the financial position into which it brought this country, but those comparable figures from across the United Kingdom, combined with the dramatic statistic that two thirds of the decline in teacher numbers in Scotland comes from Labour-controlled local authorities or authorities in which Labour is participating in the administration, show that both at UK level and at local government level this is not the best subject for Iain Gray to ask a question on.

Iain Gray (Labour, East Lothian)

My question was about the situation in Scotland. There is a pretty simple equation here in Scotland. The First Minister promised Scotland that he would maintain teacher numbers, but he has cut 3,000 teaching jobs, and that was in the good times when his budget was rising by about £1 billion every year.

As those 3,000 teaching jobs have gone, there are 2,900 newly qualified teachers who cannot find permanent jobs. It is not rocket science to see what has happened.

Allison Baird says that when she applies for jobs she is unsuccessful because there are often 300, 400, 500, 600 or 700 applicants. Mike Russell said yesterday:

“it will be impossible to protect teacher numbers going forward”.

Can the First Minister tell us how many more teachers he plans to cut in the future?