Scottish Parliament, 20 January 2011

319 contributions from 81 members. The official report.

Protecting Public Services

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a debate on motion S3M-7735, in the name of Patrick Harvie, on protecting public services.

Patrick Harvie (Green, Glasgow)

As the smallest party in the Parliament, the Greens quite rarely have the opportunity to bring motions to the Parliament for debate, so what topic to choose for our limited time is always a difficult decision.

This time, however, the topic was an obvious choice. Is there any other subject that we could bring to the Parliament for debate in the current context that would not be completely overshadowed by the public spending cuts? The cuts that the United Kingdom Government is imposing, to which the Scottish Government and the Scottish Parliament must respond, would dominate a debate on higher education, on housing, on poverty and inequality, on health services, and on jobs and the economy. Is there a subject that is not affected, indeed overshadowed, by that context? Every subject that we could debate is profoundly affected.

That context is the first great test of devolution. It is the first great test of whether the hopes and aspirations of the many thousands of people who campaigned long and hard for a Scottish Parliament are to be realised or ignored. People did not put in those years and decades of work to campaign for a Scottish Parliament to give members jobs. They did not campaign long and hard so that there would be a weekly First Minister’s question time on television and they would be able to get angry and rant at the telly. They did not even campaign long and hard for a Scottish Parliament simply out of a sense of national identity.

The profound reason why this Parliament exists and why we debate issues in this chamber week in and week out is a desire on the part of the Scottish people, after the scandal of the poll tax and the years of Tory cuts and privatisation, for a Parliament that would be able to defend Scotland against that right-wing agenda, should it ever come to power again.

Well, that is no longer a theory; it is a reality. The UK now has a Government that is imposing a radical right-wing agenda of cuts, for which it has no mandate and which was never in the manifestos of the Tories or the Liberals—the Government certainly has no mandate for its agenda in Scotland. The agenda is ideologically driven by many people on the right of the Tory party, who have for years been gagging for an opportunity such as they now have. It is clear that it will impact on the poorest in society. We are not “all in this together”; the Osbornes and the Cleggs will be well protected from the effects of the cuts that they are imposing on the rest of us.

Even if we set aside the Green interpretation of economics, with which most members who are present disagree, and consider the issue in conventional economic terms, it is clear that the slashing of hundreds of thousands—perhaps even a million—jobs, which will be destroyed because of the cuts in spending in the public sector and the knock-on effects in the private sector, is wildly economically risky.

The Scottish Parliament needs to oppose that agenda. If we are to do so we need not only the power but the political will to do so. The Scottish National Party often makes the case that we need more powers and more economic levers at our fingertips if we are to pursue a political agenda in the face of opposition from the UK. The Labour case currently seems to be that more powers are on their way, through the recommendations of the Calman commission on Scottish devolution and the Scotland Bill, which has Labour support at UK level. As for the Liberal Democrats and the Conservatives, they will not oppose the coalition’s agenda, because it is their agenda.

We have no idea whether the Calman powers would help. In any case it is likely to be years before we can use them. As for the SNP’s call for more powers, the Green response is that we have never successfully and creatively used the powers that we have. One such power—the first that is mentioned in the motion—is the Scottish variable rate of income tax, which was democratically endorsed by the public in a referendum, but which successive Governments have failed to maintain. I know that it would not be popular to use the SVR, but if we cannot use it now, when public services and the very principles that underlie the welfare state are under attack as they never have been, when can we use it? In November the Parliament agreed to a Labour amendment that said that the Parliament

“considers it an abuse of power for the Scottish Government to abandon the Scottish variable rate of tax ... considers it unacceptable for ministers to mislead the Parliament ... and calls on the Scottish Government to admit responsibility for the lapse of the tax varying powers”.

However, the amendment said nothing about what should be done to fix the situation. My motion therefore calls on the Scottish Government to open negotiations with the UK Government to restore the functionality of the power.

Use of the power might not be necessary. Greens have suggested other options. In the short term, raising revenue on empty properties could bring in something in the region of £75 million and removing council tax discounts for empty and second homes could add a little more to that total. Scotland is the only part of the UK that is still giving a tax break for urban blight; using that power differently would not only bring in revenue to protect services but reduce rental costs for viable businesses, which could take up those premises. In the longer term, our land value tax proposals could bring in £1.5 billion more than the council tax and business rates that they would replace, which could be used in the first instance to protect services. We would eventually have the freedom to reduce either LVT or income tax through the Scottish variable rate.

The underlying theme must be the empowerment of local councils to make their own decisions. John Swinney and his colleagues continually call for financial powers and I often sympathise with their call, but we can create these powers for ourselves if we empower local authorities. Beyond that, we could explore local authorities’ ability to borrow, which is an ability that the Scottish Government does not currently have.

During the debate many members will focus on household budgets and the cost of housing, energy, transport, food and so on. Green policies, and many policies that have taken hold across the political spectrum, would help to reduce all those costs, but that cannot happen without investment and commitment from Government. We need to have the political will to raise revenue to defend Scotland against the UK Government’s agenda. It is not just about the powers that are available; it is about having the political will to use them.

I move,

That the Parliament calls on ministers to open discussions in good faith with their UK counterparts regarding the prompt re-establishment of the democratically endorsed Scottish variable rate of income tax; believes that the UK Government's cuts agenda is ideologically driven, economically illiterate and will have a disproportionate impact on poorer people both in Scotland and in the rest of the UK; rejects the Scottish Government's decision simply to hand on these cuts to Scottish public services, with housing, energy efficiency and public transport particularly at threat; believes that the terms of the proposed council tax freeze reduce local authorities' ability to make their own democratic decisions and look at alternatives to cutting vital local services, and urges the Scottish Government to revise the draft budget to reduce these cuts by incorporating progressive ways to raise revenue at a local level within the existing powers of the Scottish Parliament to ensure that wealthier people pay more and poorer people pay less, including options such as land value tax, a hotel bed tax and reducing exemptions to the uniform business rate.

John Swinney (Scottish National Party, North Tayside)

Some elements of Mr Harvie’s speech struck a chord with me. I have much sympathy with his critique of the reductions in public expenditure. I have said in the Parliament on countless occasions—it is no secret—that the Scottish Government takes the view that the UK Government’s approach to significant reduction in public spending is being taken too far and too fast.

The issue that the Parliament must confront is that we must operate within the financial arrangements that we have at our disposal. That is a particularly acute responsibility for a finance secretary in a Government that does not command an automatic majority, because I must present to the Parliament a balanced budget and I must work with colleagues in other political parties to find a basis on which we can agree the terms and composition of the budget.

That process is under way. I presented the draft budget to the Parliament in November and the committees of the Parliament have been scrutinising it. This morning, the Finance Committee published its report on Scotland’s spending plans and draft budget 2011-12, to which the Government will respond during next Wednesday’s debate, which will mark stage 1 of the Budget (Scotland) (No 5) Bill and include debate on the committee’s consideration of the budget proposals. I look forward to setting out the Government’s thinking on another comprehensive and thoughtful report from the committee.

At the heart of what lies ahead for the Parliament in the next couple of weeks is the necessity to find common ground on which we can agree the composition of the budget and how we can deliver that budget for the benefit of the people of Scotland.

At the heart of our budget is the determination to preserve public services and deliver economic growth. As part of the proposals that we have advanced in the draft budget, we honour our commitment to pass on to the health service the consequences of the United Kingdom Government’s decisions on health expenditure. Therefore, there is a real-terms increase in health expenditure in the budget.

We have also taken decisions to protect families through the continuation of the council tax freeze and the phasing out of prescription charges. We have sustained our commitment to maintain police numbers, which has resulted in a 32-year low in crime. We also continue to invest in Scotland’s potential through investment in skills and training and the continuation of the education maintenance allowance.

All those commitments are in the budget and I use them as illustrations of the focus of the Government’s thinking. Although I sympathise with Mr Harvie’s point about the scale of reductions in public expenditure, I accept a point that Jeremy Purvis and Derek Brownlee have previously advanced that, despite the reductions in public spending, there still remains a substantial amount of public expenditure in Scotland and we have to design the most effective ways to spend it.

In the context that we face, any budget must include a balance between reductions in public expenditure and the raising of revenue. I have been clear with the Parliament about the steps that I have taken on the raising of revenue and the reductions in public spending.

I do not agree with Mr Harvie that it would be appropriate to increase the basic rate of income tax through the Scottish variable rate. The points that he made about the discussions that we had in the Parliament last November on the use of that power and the arrangements to implement it are not particularly relevant in this debate. I will appear at the Finance Committee on Tuesday to discuss those points and will be delighted to do so.

The point about the use of the Scottish variable rate is whether placing an additional tax burden on hard-working families in Scotland is the right thing to do when people already face rising VAT, very substantial increases in fuel costs and other pressures on household incomes.

Patrick Harvie (Green, Glasgow)

The point in my motion is not that the SVR ought to be used—we have not yet proposed that and have said that it may not be necessary—but that it ought to be restored so that it is available for use. Is it not for the public to decide in the election in May whether they want to vote for candidates who say that they would use it or those who say that they would not?

John Swinney (Scottish National Party, North Tayside)

It is not a question of the power being restored. The power exists in law; that is crystal clear. The issue is whether the information technology systems can enable the collection of the tax. My point, which I will reiterate to the Finance Committee on Tuesday, is that I did not inherit a system that was fit to do that.

I have considered increases in revenue and have put before the Parliament proposals for an increase in business rates on the largest retail properties as a means of raising additional revenue. As the First Minister has said to the Parliament, those who have the broadest shoulders should bear some of the burden, and I invite the Parliament to support the measures that I have set out in that respect.

This is a timely debate. It gives us the opportunity to reflect on some of the difficult choices with which I have had to wrestle as Cabinet Secretary for Finance and Sustainable Growth and which underpin the Parliament’s consideration of the budget over the next fortnight. I look forward to those discussions and I give the Parliament the assurance that is in my amendment: that we will

“work together to deliver a balanced budget that will safeguard services and strengthen economic growth for Scotland”.

I move amendment S3M-7735.2, to leave out from “ministers” to end and insert:

“all parties in the Parliament to work together to deliver a balanced budget that will safeguard services and strengthen economic growth for Scotland.”

Michael McMahon (Labour, Hamilton North and Bellshill)

Whatever differences I might have with Scottish Green Party policies, I have always recognised that their motivation is essentially optimism. Too often, I find the Greens overly idealistic and even utopian but, although I am regularly unable to agree with them, I would never criticise them for believing in a programme that is genuinely aimed at protecting what we have and bettering the lives of everyone who shares our planet. This morning, however, I fear that their idealism may have gone too far.

We have spent the past four years watching the Government pick fights at every opportunity with Westminster, being aware of documents that reveal that the Scottish Government instructed the civil service to seek divisions with Whitehall at every opportunity and looking on as day in, day out the Scottish ministers play the blame game with successive UK Governments. So it is surely the ultimate triumph of hope over experience to begin any motion in the Parliament by asking the SNP Administration to

“open discussions in good faith with their UK counterparts”.

It must surely also be the most futile request ever put to the Administration, that it disavow the reckless underfunding of council services that it implemented in pursuit of a headline-grabbing policy instead of delivering what is necessary to protect local communities and local services. It has chosen to move away from the use of council tax towards huge increases in rents and charges for services and has reduced the availability of those services as a result. The Greens are right to point that out in their motion.

Freezing the council tax is not a bad policy in itself, but coercing local authorities into agreeing to an underfunded freeze—which all the evidence clearly shows has led to reductions in services, increased charges and job losses—is horrendously bad government.

Patrick Harvie (Green, Glasgow)

I agree with the member that the freeze in council tax has been popular. Many people like it but, if we acknowledge together that it cannot last for ever—council tax cannot dwindle to nothing year after year—the only exit strategy from the freeze is for the Parliament to give councils more power and flexibility to raise taxes in the way and at the level that they see fit.

Michael McMahon (Labour, Hamilton North and Bellshill)

I will move away from the sterile debate about whether we should try to impose restrictions on local government. The Government’s aim of ensuring that the council tax does not overburden council tax payers is not, in itself, a bad thing, but we must be much more imaginative about how we enable our local authorities to deliver public services.

Through the policies that it has pursued, the Scottish Government has centralised power and taken hold of the balance in local government finances, which is now somewhere in the region of 85 per cent central funding to 15 per cent local funding. It has completely undermined the democratic policies under which local authorities should be allowed to operate, although to ask local authorities to be careful about how they use the revenue-raising mechanisms that are available to them is not in itself a bad thing.

The way in which the Scottish Government has operated in relation to local government displays the same ruinous attitude that leads to it doctoring Government reports to justify the arguments against the findings of the Calman commission. [Interruption.] The minister can harrumph all he wants from his sedentary position, but we know that he dressed up a report to make it look as though academics supported him when that was not necessarily the case. Rather than seek to work constructively with the UK Government to improve devolution through the Scotland Bill, the SNP Administration reverts to type and carps, criticises and condemns.

The main reason that I cannot accept the Green motion is that it ignores the fact that implementing the measures to increase revenue in the ways that are suggested would lead to ordinary people, who are already being hammered by the disastrous Con-Dem policies, being further adversely affected, regardless of how progressive Mr Harvie’s suggestions are.

The Greens are right to suggest that alternatives to the blunt instrument of the underfunded council tax freeze should be considered, especially to lift the heavy hand of coercion that Mr Swinney imposed on councils, but they are being impractical and imprudent and not offering a considered way out of the mistakes that are being wrought against Scotland by its Government and the UK Government, so Labour cannot, ultimately, agree with them.

I move amendment S3M-7735.4, to leave out from first “; believes” to end and insert:

“in order to ensure that the appropriate mechanism is in place for the introduction of tax-raising powers recommended by the Calman Commission on Scottish Devolution and contained in the Scotland Bill currently before the UK Parliament and believes that the Scottish Government’s continued underfunding of the council tax freeze has directly led to cuts in vital local services”.

Derek Brownlee (Conservative, South of Scotland)

Some years back, Patrick Harvie referred to me as being a progressive, although he subsequently decided to spare my blushes by not referring to me by name when he followed up that comment in a newspaper article. It is in the progressive spirit that I will be happy to move my amendment.

The ideas of protecting public services and creating jobs, to which my amendment refers, are shared across the political spectrum. We might have rather different ideas about how those are achieved, but the underlying objective is surely the same. I take issue with Patrick Harvie, however, when he refers to the “right-wing” Government because, as everyone is well aware, we have a progressive Liberal-Conservative Government, which is very different. The Government is repaying the debt that the Labour Party ran up, lifting the lower paid out of income tax and reforming the welfare state to make work pay. Those are all sensible and progressive objectives and I would have thought that most members would support them.

Patrick Harvie also referred to the prospect of millions of jobs being lost, which I must say was rather scaremongering. If we go back to the experience that this country had in the 1990s, when there was a retrenchment in public spending, although jobs were lost in the public sector, many more were created in the private sector, so overall employment levels rose. That of course had a beneficial impact in rebalancing the economy and providing a sustainable basis for providing the income tax revenues that are necessary to sustain our public services.

David Whitton (Labour, Strathkelvin and Bearsden)

My fear is that we go back to the 1980s. The UK unemployment figures that were released yesterday show youth unemployment approaching 1 million, and that is my fear about Con-Dem policies.

Derek Brownlee (Conservative, South of Scotland)

To be fair to the member, in the 1980s, we had a difficult inheritance from the previous Labour Government, so I can see why he might wish to draw parallels with the situation in which the current UK Government finds itself. I assume that the flexibility that we have developed in the labour market will lead to less of an increase in unemployment than the member fears. Certainly, the work programme that the coalition is launching hopes to ensure extra opportunities for those who might lose their jobs.

We heard in the speech from the Labour Party the oft-repeated phrase that the council tax freeze is underfunded. That was proven to be incorrect when the council tax freeze was first mooted. If I recall the figures correctly, there is £70 million of subsidy to councils compared to about £55 million that is actually necessary to fund the council tax freeze. So £70 million has been supplied every year, which means that in fact councils have had a windfall benefit through the funding of the council tax freeze. It is simply not correct to say that the freeze has been underfunded. Those who oppose the council tax freeze simply need to tell us how much more council tax people should pay, or what spending should be cut elsewhere to give more money to local authorities.

Patrick Harvie said that existing powers should be used “creatively”. I wondered what he meant by that, but he soon explained and said that he meant that taxes should increase. If I have the figures correct, he proposed £1.5 billion of extra tax for Scotland, which is about an additional £3,000 per person and which does not seem to me to be particularly progressive.

There is a simple option for Patrick Harvie and the Greens and the usual collection of self-proclaimed socialists who lecture us daily about the need to tax and spend more. They could follow the example of Hazel Blears by writing a cheque for whatever amount of tax they feel that they should pay and sending it off to HM Revenue and Customs. That cheque will be cashed, their guilt will be assuaged and another part of Labour’s debt will be repaid. There is nothing to prevent any socialist in this country from putting their money where their mouth is. The new progressive coalition Government would be happy to take money that is given voluntarily and we would not wish in any way to have any socialist in this country prevented from putting their principles, which are deeply held, into practice.

I move amendment S3M-7735.3, to leave out from “calls” to end and insert:

“believes that ensuring a strong economy is the best way to protect public services and create jobs and rejects calls to increase devolved taxes, for example by ending the council tax freeze or introducing a new non-domestic rate supplement for retailers.”

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

There is no question but that Scotland still has huge difficulties in addressing the colossal deficit that the previous UK administration left. The figure amounts to about £2,500 per person in Scotland and the interest payment alone on the structural deficit, per day, is about the same as the cost of building a primary school in Scotland. That is the context. The Green Party is freer than most in casting aspersions on other parties’ philosophies and discussing whether they have been betrayed, so we need to consider its position a little closer to home.

We cannot forget that we face significant difficulties. We must face up to them and address them properly. Many SNP members use a different tone from the language that the cabinet secretary uses. He simply says that the reductions are “too far and too fast”, but at no stage has he told the UK Government what would not be too far or too fast. However, the SNP back benchers always give the impression that there should be no reductions at all. Neither of those positions is credible, given the difficulties that we face.

Last autumn, the Liberal Democrats published proposals for £4 billion-worth of savings in the next four years by reforming or reducing the number of quangos, bringing down top pay, setting bonuses at zero, gaining efficiencies at 2.75 per cent per annum over that period and looking at some other areas. That is about working to protect front-line public services by securing better value from the public purse over the next four years, which is the approach that all parties should take.

Patrick Harvie stated that the position that the Liberal Democrats have taken as part of the UK Government is ideologically driven. He referred to a coalition Government that is doing damage and imposing difficulties on the people of Scotland. We do not have to go as far as London to find another coalition or to see what a Green minister would do, because Dublin is closer to Edinburgh than London is—it is about as far as Nottingham. So let us have a look at what John Gormley, the leader of the Irish Green Party, which is the sister party of the Green Party in Scotland—the two work closely on many issues—said on 10 December in the Dáil. He said:

“We must take swift harsh measures”,

and that local government

“must play its part by curtailing expenditure to the absolute neediest priorities”.

He said that local government would have enough resources only for “essential services”. Is that ideologically driven from that coalition?

Patrick Harvie (Green, Glasgow)

Will the member take an intervention?

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

I am afraid that I do not have time, as I am in my final minute.

Patrick Harvie (Green, Glasgow)

The member asked me a question.

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

No. Let us look at what that Green minister defended. It was cutting average welfare payments by 4 per cent, which means that families in receipt of welfare payments will suffer a 7 per cent loss of income. That is far beyond anything in the worst of what Patrick Harvie can dream up about the UK coalition. In Ireland, the health budget has been slashed by €700 million. Public sector pensions have been cut by €12,000 and public sector staff have had a 10 per cent wage cut, whereas public sector workers in the United Kingdom who earn under £21,000 can have a pay increase, and I am glad that the Scottish Government has followed that. The minimum wage in Ireland is being cut by a euro, and those on the new wage will be brought into the tax net.

Finally—I hope that this allows Mr Harvie to take a slight pause in the sanctimony that we have heard from him—it is estimated that more than 130,000 low-paid people in Ireland will be brought into the tax net, when 90,000 of the lowest-paid workers in Scotland will be lifted out of income tax in April this year, because the income tax threshold in Scotland is going up, but in Ireland it is going down.

Mr Harvie’s colleague in the Irish Green Party was proud of one success, which was that corporation tax in Ireland, which is the lowest in Europe, will remain unchanged. So all the corporate evil that Mr Harvie lectures others about in the Parliament will receive the lowest tax, and his sister party in Ireland is proud of that. Let us have a look at that other coalition and see whether he wishes to use that as an example.

I move amendment S3M-7735.1, to leave out from “calls” to end and insert:

“notes that, as a result of Labour’s financial mismanagement, the UK Government inherited the largest structural deficit in Europe, which has left it paying debt interest equivalent to the cost of building one primary school a day in Scotland; recognises that there are no easy choices in the current economic climate but that the UK Government is lifting 90,000 people in Scotland on low incomes out of paying income tax altogether and has restored the pensions link with earnings to the benefit of one million Scottish pensioners; further recognises that spending on frontline public services in Scotland will be reduced by less than in England, Wales or Northern Ireland; regrets that the Scottish Government has still not published detailed spending plans beyond 2011-12 and believes that, by introducing a surprise new tax on business and failing to tackle high pay in the public sector, the Scottish Government is not making the right choices to boost Scotland’s economic recovery and support frontline public services, but welcomes the fact that the Scottish Government has abandoned its ambitions to emulate the Republic of Ireland, where the Green Party has recently voted in support of the harshest austerity budget on record.”

Alex Fergusson (None, Galloway and Upper Nithsdale)

I call Linda Fabiani.

Linda Fabiani (Scottish National Party, Central Scotland)

You caught me unawares, Presiding Officer, I am terribly sorry.

I am pleased to speak in the debate. I have a lot of sympathy with bits of the Green party motion. For example, land value taxation is worth exploring and I agree that the wealthier should pay more, which is why I am surprised that Opposition members do not agree with the supermarket levy. Considering that Sainsbury’s makes £2.5 million per hour in the UK, I do not understand why that levy is such an issue for it. I also agree that the cuts that the UK Government has imposed have a disproportionate impact on poorer people.

I am afraid, however, that there we start to differ. For example, ending the council tax freeze now, which has been funded in each of the past three years, would cost Scotland’s hard-pressed local taxpayers an extra £70 million in 2011-12 for a 3 per cent increase. I believe absolutely that the council tax freeze is good for Scotland.

Talking about taxation, I also have issues with what the Green party’s motion says on the Scottish variable rate, because if it were used, the power to vary the rate of income tax would create a regressive tax that would hit lower-paid workers the hardest. The tax bill of someone on the minimum wage, for example, would increase by 15 per cent. That is why I am surprised, as I have said previously, to see the Green party calling for that tax to be imposed. It is all very well for Patrick Harvie to say that the Greens just want the power to be there—the power is there in legislation—but they have proposed using it, despite the fact that Patrick Harvie said only in September of last year that

“a form of tax-varying power was designed that makes it very difficult, although perhaps not impossible, to justify using it.”—[Official Report, 9 September 2010; c 28401.]

In the context of taxation, the Labour amendment asks for

“the introduction of tax-raising powers recommended by the Calman Commission and contained in the Scotland Bill currently before the UK Parliament”.

I was under the impression that the purpose of the Scotland Bill Committee was to consider how the best benefit for Scotland could be achieved. It seems to me that Labour members are predetermining the outcome of that process.

We face issues. It cannot be denied that times are hard, and I believe that it is incumbent on all of us in the Parliament and in the public services to think innovatively about how the best services can be delivered and who is best placed to meet the needs of their constituencies, whether geographic or thematic. We should strive to break down the institutional barriers that stymie progress on joint working, and we should consider disposal of community assets to viable community groups that are best placed to tap their potential. I cite the campaign in East Kilbride to save the Hunter House Museum and the sterling local work of the voluntary East Kilbride Development Trust.

Across Scotland, people are working together for local benefit. I believe that every member of the Scottish Parliament should be working for national benefit in the difficult times that we are going through. I would like to see recognition across the chamber that there are some big issues that are sacrosanct and precious, and on which we should all be working together. Good work has been done in the Parliament through its committees and on its behalf by Scotland’s Futures Forum. That is the kind of work that we should be looking at and pledging that we want to achieve. That is why, for me, John Swinney’s amendment is the only one that we should be considering and working towards. It says that

“all parties in the Parliament should work to deliver a balanced budget that will safeguard services and strengthen economic growth for Scotland.”

Alex Fergusson (None, Galloway and Upper Nithsdale)

I call Mary Mulligan, if she is ready to be called.

Mary Mulligan (Labour, Linlithgow)

I am always ready, Presiding Officer.

I commend the Green party for its choices for debate this morning. I would have been just as content to take part in the debate on opportunities for young people, but better people than I will lead in that debate.

Members: No!

Let me keep my comments to the debate in hand—protecting public services in Scotland.

I agree with Patrick Harvie’s motion that

“the UK Government’s cuts agenda is ideologically driven”.

For the UK Government, the worldwide financial recession was not a disaster, but an opportunity. It is hiding behind the argument that we must balance the books to do what it wants instinctively to do, which is to reduce public services to the bare minimum. The Conservatives believe that the private sector can provide all the services that people need and that demand will set the price. They have not been in power for 12 months and already we have seen mass demonstrations on our streets because of their unfair and uncaring policies. Just this week, we have had to listen to David Cameron saying that he wants to reform the national health service when what he really wants to do is to reduce it to being the provider of last resort.

As Mr Swinney said, the UK Government’s cuts in public services are too hard, too deep and too fast to be purely a response to the financial situation. It knows that it might get only this one chance to implement them, and it is determined to do its best.

Derek Brownlee (Conservative, South of Scotland)

The member questioned the coalition Government’s commitment to the NHS in England, where it has protected NHS spending. The Opposition did not make such a pledge. Is it not the case that it is the Labour Party’s policy that it would prefer to cut the NHS rather than the deficit?

Mary Mulligan (Labour, Linlithgow)

That is absolute rubbish and Mr Brownlee knows it. Everyone knows that we must tackle the deficit, but Labour does not agree with how the UK Government is doing that.

My colleague Michael McMahon has clearly outlined Labour’s amendment, and I add my support for the call that the motion and our amendment make for discussions to ensure that this Parliament has the ability to vary the rate of income tax, although I agree with Mr McMahon that that might be easier said than done. I do not want to repeat the arguments on the issue, other than to say that apart from it being right for the Parliament to have such powers, we owe it, as Patrick Harvie said, to the people who voted for those powers in the referendum in 1997 to ensure that we are in a position to use them.

I also agree, of course, with Michael McMahon’s comments on Calman, but in my final few minutes I want to focus on public services in Scotland, for which this Parliament has responsibility. Having criticised the Conservatives for their ideology, I want to put responsibility for the cuts across Scotland where it truly belongs—at the door of the SNP Government. No one should be in any doubt that the council tax freeze has contributed to councils cutting services, reducing their scope or increasing charges for them.

Dave Thompson (Scottish National Party, Highlands and Islands)

Will the member give way?

Mary Mulligan (Labour, Linlithgow)

I am sorry, but there is not a lot of time in this morning’s debates.

I am highly aware that Mr Swinney will claim that the Scottish Government has fully funded the council tax freeze. If that is the case, why, despite the increasing allocations over the past three years, have we seen councils continually cutting services further? Was Unison not correct when it told the Local Government and Communities Committee that the council tax freeze is depriving local authorities of much-needed revenue and should be abandoned?

It is not just service users who lose out. Those who provide services will suffer, too. The Fraser of Allander institute predicted that a reduction in the Scottish budget of 14 per cent by 2014-15 would lead to up to 126,000 job losses not just in the public sector, but in the private sector that provides services alongside it. Perhaps the Conservatives still think that unemployment is a price worth paying, but I am surprised that the SNP appears to agree.

Next week, we will have the opportunity to debate the SNP Government’s budget. I know that Labour’s proposals will be based on a firm commitment to protect and, indeed, promote public services.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Michael McMahon rehearsed a very old calumny about the SNP’s inability to work with Westminster. I put on record my gratitude for the letters from a UK Government minister and from three members of the Labour Party at Westminster that I received on my recent departure from office. That shows that I, for one, was able to work with Westminster, but I know that there is nothing unique about my experience. Early in my ministerial career, I met a UK Labour minister who said that after a considerable number of years in office, I was the first Scottish minister they had met. Co-operation is the name of the game, and the SNP knows how to play it.

I want to cover just two issues in my short contribution. The Green motion contains the phrase

“rejects the Scottish Government’s decision simply to hand on these cuts to Scottish public services”

and goes on, essentially, to demand tax rises. A more “economically illiterate”—to use another phrase from the Green motion—approach would be hard to find.

Let us remind ourselves what tax powers we have, because the Calman powers, if they come at all, certainly will not be with us for years, nor would a land value tax, were we to conclude that we wanted such a thing. We can raise or lower the basic rate of income tax by 3p and we can tune the council tax, but raising taxes would not make the cuts go away. It would move them to cuts in personal incomes across Scotland, and it would not even do so in a progressive way. The council tax, in particular, hits the elderly hard. That is why we sought to build a coalition of interests in this place to replace it with a new, fair, income-determined tax.

Patrick Harvie (Green, Glasgow)

Will the member give way?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I will give way to the member if he takes 10 seconds.

Alex Fergusson (None, Galloway and Upper Nithsdale)

We have some flexibility on time, Mr Stevenson.

Patrick Harvie (Green, Glasgow)

I understand the overall question of cuts versus taxes but I believe that it is possible to take a progressive approach that means that the poor pay less and the rich pay more, and that untaxed business assets pay their share, too. If the member does not accept that, surely he must accept that if we are not willing to raise revenue, we are handing on the cuts. The numbers do not add up any other way.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

It is a question of who pays for the cuts. The cuts are the reality that the cabinet secretary and all members of this Parliament have to engage with. If we take an approach that takes money out of individuals’ pockets, we affect the whole economy, diminish the prospect of economic recovery and prolong any difficulties that arise from the cuts. I will talk about business in a moment.

We know that the Green party is essentially an anti-growth party and taking money out of ordinary peoples’ pockets would support that objective. I am not sure that it is a sure-fire election winner and, as Patrick Harvie said in his opening remarks, using the SVR is unlikely to be popular. It would certainly create difficulties.

My second point is about business rates. Again, screwing down on business would support the anti-growth agenda. If we were to tinker with business in the wrong way and unravel the huge amount of support that we have given to small business—a vigorous small business sector is the very heartbeat of our economy—we would find ourselves in difficulties.

In recent weeks, the Green party has been rehearsing the idea of introducing a tax on empty properties. Let us look at the effect that that tax has had south of the border. Properties are being demolished and roofs are being taken down, because the burden on a shrinking business with a fixed cost associated with its property leads to such behaviour. It is hardly green to destroy property that could be brought back into use at a later date. That will not improve the economy and it is not the kind of response that will help us to grow our way out of the difficulties that we are in.

This debate has been timely because we are in the run-up to next week’s stage 1 debate on the budget, but I fear that the Greens’ proposals to increase taxes are simply a road that would make things more difficult, not less.

Ross Finnie (Liberal Democrat, West of Scotland)

Patrick Harvie is right to be concerned about how we protect public services. However, as I have said in all the debates about the economy in which I have taken part during the past few months, I continue to be concerned about the premise of the base from which we seem to start such discussions. There seems to be a wish for us not to talk about the economic fundamentals of why we are here and what we are trying to address. Unless I have misunderstood, when the world’s economy crashed, we had reached the same point that we had reached in every single economic crash: the point at which values were unsustainable. This particular crash had a lot to do with property values fuelling economic and banking activity to unprecedented levels, sustained by properties that did not back the transaction.

When that happens, it is more honest for politicians to acknowledge that the totality of the economy has to readjust to match the changing circumstances. That means that the private sector will have to contract and readjust and, as a concomitant, we must accept that the public sector has to do likewise. We cannot just get out a bicycle pump and try to reinflate the economy to its previous level because, by the simple laws of supply and demand, that previous level has been shown to be unsustainable.

I find very difficult, and have found difficult, those speeches in the debate this morning and previously that assume that we can protect everything that we have because nothing has changed. That is not reality, and that is the situation that the Westminster Government is trying to address. It is certainly not sustainable for us to be spending taxpayers’ money at the rate of a primary school a day, as Jeremy Purvis pointed out, on interest payments. That is not in the best interests of sustaining and protecting public services. It cannot be described fairly as “economically illiterate” to address a structural deficit and recognise its consequences for the public purse and, more important, for the value and quality of services that are available to the public.

With all due respect to Patrick Harvie, if any speech or proposition that was made this morning was thirled to an ideology, his speech was thirled to the ideology that we can replace missing revenue by increasing taxation. I do not think that that matches the economic circumstances that we face. There is a legitimate argument about how, in changed economic circumstances, we can protect public services, but the Liberal Democrats must disagree with the proposition that we can fill the gap in its entirety by adjusting and raising all forms of taxation. That does not meet our requirements.

We face structural deficits and we need to make structural changes if we are to make a difference that will be sustainable in the longer run. That is at the heart of protecting public services. Unless we can put our finances on a course that can endure year on year, we cannot properly develop and grow public services. If we aspire to the previous illusory levels of finance, the bubble will burst yet again. I think that we are all committed to seeing that that does not happen. We do not wish to go through the pain again.

People keep telling me how disappointed they are that house prices are not rising fast enough. Why? Surely that is what took us into this trouble. Do we not understand that difficulty? It is painful for those who are in those circumstances, but we cannot go on using glib political phrases as if we can simply return to where we were three years ago and all will be well. All was not well, which is in why we are in our current predicament.

My colleague Jeremy Purvis clearly outlined alternatives that could allow us to reduce the total quantum of the public purse without directly impacting on vital front-line public services. That balance is difficult to achieve and no party will find it easy. We might agree or disagree about the elements of the situation, but our nation faces difficult financial times and we all have the same problem. Different fiscal powers and monitoring will not remove the problem. We would have had it, we have got it and we have to address it. We should not delude the public by telling them otherwise.

Gavin Brown (Conservative, Lothians)

The Green party motion before us today is somewhat unbalanced. It is a motion that stores up great anger for the United Kingdom Government and what the Greens describe as the “cuts agenda”, with no recognition of the size of the national debt or the deficit that the UK Government has been faced with. It is a structural deficit, which means that even in the good times we spent more money than we brought in in taxation, and a deficit in the current year that means that we will have to borrow more than £140 billion more than we collect in revenue.

For those who say that the process is too fast, too quick and too deep—such as the Labour Party and Scottish National Party—the question remains: what would not be too fast or too deep? At least the Green party has answered that fundamental question by saying that it would plug the gap with an increase in taxation. The other main parties continually refuse to say how they would do that. Mary Mulligan even said that everything has been done in the name of balancing the books, as if balancing the books was somehow a bad thing. I suggest that balancing the books is a pretty critical thing for the Government to do.

We are faced with a choice: either the UK Government reduces the deficit on the UK’s terms or ultimately we have the terms imposed on us by outside forces and the markets. We are spending ridiculous amounts of money on interest payments—Jeremy Purvis coined the phrase “a primary school a day” to describe the situation. If we do not reduce the deficit, it will be far more than a primary school a day. The interest payments would spike, and we would be spending even more money on interest than on public services.

Mary Mulligan (Labour, Linlithgow)

What is Gavin Brown’s view of the amount that we now have to pay in unemployment benefit because of the job losses that are a result of his Government’s policies?

Gavin Brown (Conservative, Lothians)

Mary Mulligan seems to have wiped the slate clean in May 2010 by suggesting that unemployment did not exist for the last year and a half of the Government that she supported. The rate is actually lower today than it was for a large portion of the end part of the Labour Government’s time in office. We will take no lessons from the Labour Party on that.

Let me turn to the other part of the Green motion—the idea that by simply thrusting taxes on the people of Scotland we will improve the economy and make the country better. Leaving aside the part of the motion that suggests that all the changes should be made to the “draft budget”—I do not know whether Patrick Harvie wants that to happen by stage 1 or whether he is giving the cabinet secretary the flexibility of waiting until stage 2 or stage 3 to introduce the taxes—I question seriously whether any economic analysis has been done on the proposed hotel bed tax that Patrick Harvie wants to introduce. Has he spoken to the country’s tourism businesses?

We want to encourage people to come to Scotland to improve our tourism industry. Would imposing a hotel bed tax at the drop of a hat encourage tourists to come here? When the issue was considered by the Economy, Energy and Tourism Committee two years ago, every party on the committee voted against the concept of a bed tax. I am pleased to say that that vote was endorsed by Mr Mather at the time, and the Scottish Government reaffirmed only two weeks ago that it is a poor idea for our tourism industry and our economy as a whole.

What analysis has the Green party done on the land value tax? Does it seriously propose that the tax ought to be imposed this year, as it suggests in the motion? What effect would that have on stability and the confidence of the people of Scotland? If it is to raise an extra £1.5 billion, as the Greens suggest, it would put a heavy taxation burden on the people of Scotland.

At least the Greens have suggested how they would attempt to plug the deficit. They ought to be credited for that; other parties have completely ignored the question. However, I fear that the Greens’ suggestions—particularly the proposals to impose a land value tax and throw in a hotel bed tax, too—would damage our economy and be bad in the longer term.

Michael McMahon (Labour, Hamilton North and Bellshill)

When closing speeches are made at the end of our debates, the term “interesting” is often used euphemistically to describe the course that the debate has followed. As we move closer to the election, I am sure that a more accurate description of how debates pan out will be “predictable”. We may be just far enough away from the election for this debate to have been more interesting than predictable, but there was an awful lot of the expected in what we heard rather than anything very enlightening.

I note, however, how brave and commendable it is of the Liberal Democrats to put forward an amendment and argument that remind people that they are currently in bed with the Tories and playing their part in destroying jobs and services across Scotland. What we got from the Conservatives was possibly more predictable, and it just confirmed to us all why they remain such an anathema to the Scottish electorate.

Let me turn to the comments of Gavin Brown and come to the defence of my colleague Mary Mulligan. When she used the phrase “balancing the books”, she did not say that that was a bad thing. She said that it is not enough to hide behind such a phrase to follow ideological preferences. That is an important point.

As I heard Mr Brown and Mr Brownlee speak, I was reminded of an anecdote that my son gave me a few weeks ago. In his place of work, a few people were sitting around, having their lunch and ruminating on the current difficulties in the economy, when one of the younger members of staff piped up, “Can you tell me who this Mary Thatcher was?” I am pretty sure that Mr Brownlee and Mr Brown were not quite the children of Thatcher, but it is clear from the way that they have expressed themselves today that they are definitely the grandchildren of Thatcher. They know exactly who she was and what her ideology was, and they are clearly attuned to it.

Even having followed the Conservatives’ ideological arguments, I was amused to hear Mr Brownlee’s defence of the council tax freeze. To claim that £70 million was in fact too much to pay for the freeze was laughable—in fact, Mr Swinney found himself in difficulty in trying not to laugh as he tried to explain that away. The reality is that there are enough reports that show the opposite. Mary Mulligan referred to the report from Unison, but there are others, including from the independent budget review group, which said that the council tax freeze is unsustainable.

Derek Brownlee (Conservative, South of Scotland)

The independent budget review did not say that the council tax freeze was underfunded. If the Labour Party is saying that the council tax freeze is a bad thing, perhaps it could tell us by how much it would like council tax to increase.

Michael McMahon (Labour, Hamilton North and Bellshill)

The member was clearly not listening to my opening comments, when I said that the policy of freezing the council tax was not, of itself, a bad thing. However, it was underfunded and it led to cuts.

That brings me to Stewart Stevenson’s points. He asked who is paying for the cuts. I can tell him who is paying for the cuts: the elderly people who are charged more for the services that they require at a local government level, the children who are losing their breakfast clubs and youth facilities, and the disabled. A whole host of people are losing services and paying for the cuts, which can be followed back to the council tax freeze and the underfunding of it.

Some old axioms are worth repeating in debates, and Patrick Harvie’s motion does that by rightly pointing out that the Scottish variable rate was democratically endorsed by the Scottish people. However, he could have gone further and recognised that devolution is also the path chosen for Scotland by its people. This Administration has wasted four years campaigning for something that this country does not want, rather than governing on behalf of Scotland to deliver what it actually wants.

Mr Harvie is right to point out that the SNP, by simply passing on the Tory-led Government’s cuts, is undermining housing, public transport and energy efficiency. However, all those were under threat before the recession because the Scottish Government has always had the wrong priorities. All talk and no action; overpromising and underdelivering—that has been the hallmark of the Scottish Government. It has been too busy being populist, putting its party interest before the public good, and generally exhibiting such incompetence that I am left to wonder why the Greens have any confidence whatsoever in the Scottish Government’s ability to act in good faith or do the right thing on any issue, let alone work with Westminster.

As others have said, there is much that can be agreed with in Patrick Harvie’s motion but, while I confirm my admiration for the Green party’s optimism, ultimately I cannot support it.

John Swinney (Scottish National Party, North Tayside)

Mr McMahon was generous to the Green party in complimenting its optimism. Being optimistic is not a charge that we could level at Mr McMahon about many things, particularly after that speech.

Mr McMahon accused me of laughing when Mr Brownlee suggested not only that the council tax freeze has been properly and fully funded but that, at stages, it has provided a windfall for local authorities. Mr McMahon must have confused for laughter the generally cheery disposition that I bring to the Parliament, which my colleagues know well. Mr Brownlee is arithmetically correct. The council tax freeze fund was set at £70 million, which represents a 3.2 per cent increase in the council tax. At different stages over the course of the past three years of the council tax freeze, inflation has not been 3.2 per cent, so Mr Brownlee’s point is absolutely correct. I wanted to put that on the record, along with a reference to my generally cheery disposition.

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

Will the cabinet secretary take an intervention?

John Swinney (Scottish National Party, North Tayside)

On the subject of cheery dispositions, who better to give way to than Mr Purvis?

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

I will ask my question with a smile on my face.

I believe that the Government has committed to a council tax freeze for the coming two years. Given where inflation stands at the moment, will £70 million be enough for that?

John Swinney (Scottish National Party, North Tayside)

As Mr Purvis knows, we have set a budget for one year. That budget is being considered by the Parliament, and those are the numbers that are before it. If Mr Purvis looks at the position over the period of the spending review, he will see that Mr Brownlee’s point is valid, and the council tax freeze remains properly funded.

I do not want to give Mr McMahon a sense that I will talk only about his speech—I will move on to others in a moment—but he accused the Government of not governing in the interests of the people. I have to assure him that I spend all my time considering how best we can take decisions to meet the aspirations and needs of the people of Scotland.

Mary Mulligan’s speech disappointed me because, in commenting on unemployment and castigating the United Kingdom Government for its economic performance, at no stage did she record the fact that unemployment is actually falling in Scotland. Yesterday, we saw that employment is at a higher level than in the rest of the UK, that economic inactivity is at a lower rate than the rest of the UK, and that unemployment in Scotland is falling, whereas it is rising in the rest of the UK. We also saw that there is economic growth in the Scottish economy. Those are positive indicators of a direction of travel that is correct and appropriate for the people of Scotland.

Michael McMahon (Labour, Hamilton North and Bellshill)

Will the cabinet secretary take an intervention?

John Swinney (Scottish National Party, North Tayside)

I give way to Mr McMahon.

Michael McMahon (Labour, Hamilton North and Bellshill)

I thank the cabinet secretary for giving me an opportunity to remind him of the comments made by the director of the Confederation of British Industry Scotland this morning, who said that the Government really should not be congratulating itself given the state of the economy and the direction in which it is travelling.

John Swinney (Scottish National Party, North Tayside)

To be honest, the comments of the director of CBI Scotland sound more appropriate as the pejorative remarks of a political opponent rather than the dispassionate comments of a business and industry leader. On the question of unemployment, there is a need for people to talk constructively about the fact that we are moving in the right direction on the economic indicators. That will be beneficial to the Scottish economy.

At the heart of the budget proposals that the Scottish Government has set out and what we have said we want to do is the protection of front-line services and the promotion of economic recovery. We recognise that those two objectives are the objectives of the people of Scotland and they want them to be undertaken for the benefit of their communities. The decisions have flown through into the budget, whether through the protection of health expenditure in our localities, which is an economic multiplier and has an economic impact in every single community in Scotland, or due to the fact that the reductions in local authority budgets have been lower than the average reductions in the public sector in Scotland, thereby protecting to an extent the resources that are available to local authorities. Those are the practical manifestations of the decisions that the Scottish Government has taken to ensure that front-line services are protected.

We have to strike a balance in our proposals between balancing the budget through spending reductions and increasing the revenue that is available to the Scottish Government. That is why I have taken the difficult decision to recommend to the Parliament the increase in business rates for the large retail sector. However, that sector can afford to contribute to the business rates pot. The increase will help us to deliver £200 million-worth of reductions through the business rate poundage, which will help us to deliver the small business bonus that is so vital to our town centres. To those who criticise the supermarket levy but also demand that we do things to support the small business community in Scotland, I simply say this: if they want us to ensure effective support for the small business community in Scotland, I encourage them to support the Government’s supermarket levy, which will deliver increased revenue and benefits to the public purse in Scotland.

Patrick Harvie (Green, Glasgow)

John Swinney began by expressing sympathy for my core argument that the UK cuts are on the wrong scale and at the wrong time, and that they are socially damaging. He described them as going too far and too fast in reducing the public debt. I argue that the UK Government is focusing too much on cuts and not enough on raising tax progressively and fairly, including from the private sector.

For decades, we have had the lie in UK politics that we can have European standards of public services and pay American levels of tax. That lie cannot last any longer. It is clear that the UK coalition wants American levels of both. I think that Scotland would rather go a different way. If we do not do that, it will raise the question, what is the Parliament here for if we are only willing to pass on the cuts? If John Swinney intends to play the role of the pre-devolution Scottish secretary, acting as the UK’s man in Edinburgh, he will be making a great mistake. He will greatly regret coming to be seen as George Osborne’s man in Edinburgh.

Michael McMahon and Stewart Stevenson both expressed understandable concern that any tax increases would hit hardest the pockets of ordinary people. That is a concern and we should take it seriously, but such tax rises are not the only choice for raising revenue. The Scotland Act 1998 gives us the power to raise revenue to fund local services. It does not say that that has to be done through the council tax or that it has to hit ordinary households the hardest. The two examples that I mentioned, which cover untaxed business assets, should be part of the mix. Even changing the council tax to add upper bands would affect only the wealthiest. We should be exploring all those options.

Derek Brownlee reminded me of one of my most serious slips of the tongue. I am not sure, but I might have been tired and emotional on the day when I described him as progressive. He reminded me of that, then he suggested that I should follow Hazel Blears’s example. Perhaps he is working to a different definition of progressive from the one that I use. He also expressed concern about the impact of tax rises, but he seems oblivious to the impact that the cuts to services will have on the poorest and most vulnerable people in society.

Jeremy Purvis talked about the scale of the deficit. I can only assume that he fully endorses the UK Government’s policy to shift the burden to individuals, for example by writing off corporate tax bills and refusing to restore progressive income tax. He was particularly keen not to have his rant about Comhaontas Glas, the Green Party in Ireland, interrupted, despite the questions that he directed at me. It is strange that he lodged an amendment that welcomes the fact that the Government is talking less about Ireland these days but then used most of his speech to talk about Ireland.

I can only assume that, in holding me to account for the actions of Comhaontas Glas, despite my having no formal links with it, he is keen to be held fully to account for all the actions of the UK coalition, or indeed for those of any political party anywhere in the world with the word “liberal” in its name. Perhaps he would like me to hold him responsible for the actions of the German Free Democratic Party, which is also in coalition with the right wing and whose popularity is in free fall. It is trying to force through tax cuts and ban the burqa—an illiberal position that it shares with the Dutch liberals the VVD, or the People’s Party for Freedom and Democracy, which is sharing Government with the racist party of Geert Wilders. Perhaps he would not like to be held to account for those actions, though.

Ross Finnie said that my speech suggested that I was thirled to an ideology. I do not think that ideology is a dirty word in politics. It has been missing from our managerial politics for far too long. The question, though, is what ideology? Is it the free-market fixation that has failed us so badly or something different, which, I think, is what Scots wanted when they set up this place? I agree entirely with Mr Finnie’s comments on the folly of chasing rising property prices, but they suggest that he should be supporting our land value tax proposals.

I remind the chamber that the cause of the deficit and the recession was market failure of historic proportions, yet the victims of the cuts will be ordinary citizens and communities. Mary Mulligan said that the right took the financial crisis as an opportunity; in fact, the left, too, should have taken it as an opportunity to challenge and overturn the failed socially and environmentally destructive and brutally unfair deregulated free market ideology that has been dominant in this country for far too long now. That opportunity could still be taken; after all, Labour and the SNP both compete for a centre-left profile. This Parliament should be capable of ensuring that Scotland’s politics forge a successful and strong left response to the current situation. Of course, parties have to compete, but they should do so by setting out progressive and constructive ideas instead of simply blaming one another for the cuts while doing nothing about them.

In my opening speech, I listed the other topics that we could have brought for debate—education, health, jobs, housing, poverty and inequality—and said that each would have been overshadowed by the cuts. However, I go further and say that each cut will restore the giant evils that Sir William Beveridge identified: want, squalor, disease, ignorance and idleness. Even if today’s language has changed, the fact is that the cuts will revive those giant evils and, indeed, will make them worse. A generation that had to cope with massive deficit and debt built up the welfare state and we should not permit the Cameron generation to use this opportunity to tear it down. If we do, we again beg the question of what we are actually here for.

Young People (Opportunities)

Trish Godman (Labour, West Renfrewshire)

The next item of business is a debate on motion S3M-7737, in the name of Robin Harper, on opportunities for young people.

Robin Harper (Green, Lothians)

It gives me great pleasure, in my last Green party debate in this chamber, to focus on opportunities for young people, although I have to say that it is a matter of regret that, nearly 12 years after this Parliament was established, so many young people are still living in poverty in Scotland. That said, since devolution, some progress has been made for our young people and there have been successes of which this Parliament can genuinely be proud.

However, I believe that the creation of a Scottish youth microcredit scheme would be an innovative and influential way of helping to tackle the poverty that continues to hold our younger generation back. Indeed, there is probably never going to be a more pressing or urgent time to give attention to that important issue.

Many of our most vulnerable young people have already fallen through the safety net. They are not in education or on a training scheme; they are struggling financially with no support or assistance because of their age; and they are unable to find a job, especially in the challenging job market that they face just now. Around 36,000 young people—or more than the entire population of Stirling—are in precisely that situation in Scotland.

Our young people’s future is now being threatened by the most regressive and severe cuts to public and welfare services that their generation will ever see. I cannot—and will not—accept that situation. Throughout my years of teaching young people and working and campaigning with and for them, I have seen that they are simply fizzing with ideas and energy, ready for their latent talents to be recognised, seeking to be supported and allowed to flourish, ready and willing to work hard, ready to play their part in society and ready to make their contribution to building a better world.

Nobel prize winner Muhammad Yunus recognised that in Bangladesh. He recognised the creative drive and latent energy in his own communities and was inspired to find new ways for people living in poverty, especially Bangladeshi women, to access affordable finance as a means of starting up small businesses and social enterprises and breaking the cycle of intergenerational poverty. The end result was Grameen Bank, of which I know many members are aware. That novel form of entrepreneurial support has spread throughout the world, including the United States, and is now coming to Scotland.

Instead of seeing a substantial and growing number of our young people languishing in unemployment, we could be providing them with the supports that they need. We could be encouraging the most vulnerable young people I have described to start up small-scale retail operations, small urban food-growing initiatives or any other entrepreneurial activities that they see as an opportunity for self-employment.

To that end, we believe that a £2 million fund—which, as even the Cabinet Secretary for Finance and Sustainable Growth will agree, is a tiny sum in the great scheme of things—half of which would come from Scottish Government funds and half of which would be matched funding from business, would provide a solid start for a Scottish youth microcredit scheme for this group of young people. The experience of Grameen Bank suggests that such microcredit schemes have a very low default rate, which means that the fund would quickly become largely self-financing and could subsequently be expanded to support older participants.

We would not be starting from scratch. Scotland has a long and proud history of entrepreneurial achievement. We have inspirational figures—many of them, including Tom Farmer, from the world of business—who have shown a real commitment to helping the younger generation, and we have projects, such as those from the Prince’s Trust and Inspiring Scotland, that have demonstrated that it can be done.

We should congratulate business chambers such as Edinburgh Chamber of Commerce on starting the young enterprise guide programme, which is aimed at 16 to 24-year-olds—and is about to celebrate its second birthday—for successfully helping numbers of young people from all over Edinburgh to get into self-employment and start their own business. We should not forget the work of the enterprise and entrepreneurial schools programmes—many of which I have visited—that have been going for many years and have had such great success in encouraging our young people’s independence and self-confidence. Finally, I warmly welcome the work done by Glasgow Caledonian University to establish a Grameen bank in Scotland and to create a team of committed academics to monitor the progress of the microfinance scheme. We need to build on that enthusiasm and the entrepreneurial foundations that have already been set in Scotland and grow from having some projects here and some there to a national scheme that can learn from the successes of the internationally proven Grameen model.

I look forward to hearing from the minister a commitment to explore ways of establishing a Scottish youth microcredit scheme and to provide affordable loans and entrepreneurial mentoring on a Grameen-type basis for vulnerable young people right across Scotland. I know that at a meeting with Muhammad Yunus last summer, the Cabinet Secretary for Finance and Sustainable Growth offered a commitment to do all that he could to support Grameen programmes in Scotland, and I give him an opportunity to restate that commitment and explore a scheme that is specifically aimed at vulnerable young people.

I am sure that members throughout the chamber agree with me that it is not just young people themselves who pay the price for a lack of opportunities; the whole of Scottish society pays the same price.

I move,

That the Parliament commends the work of Nobel Prize winner Muhammad Yunus in founding, in 1976, the Grameen Bank, which provides microfinance for people living in poverty in Bangladesh; recognises that, since its beginnings in Bangladesh, there are now Grameen-type programmes tackling poverty across 38 countries around the world and that Grameen America is now branching out to many new locations in New York, Nebraska, Washington DC and California; believes that there is an opportunity to tackle the growing problem of unemployment among 16 to 19-year-olds with the establishment of a microcredit scheme for young people in Scotland; notes that this scheme could offer loans for small business ventures to young people who are not in education, employment or training and be supported by an entrepreneurial mentoring scheme; further believes that such a scheme would build on the contribution made by Scotland’s social enterprise sector and draw on Scotland’s long history of entrepreneurial achievement, and calls on the Scottish Government to explore ways to establish a Scottish youth microcredit scheme.

Jim Mather (Scottish National Party, Argyll and Bute)

As a minister and a father, I applaud Robin Harper for his persistent and consistent view on this matter and for bringing this debate to the Parliament. After all, tackling youth unemployment is a top priority for this Government. History tells us that recession hits young people the hardest—they have been the first to lose their jobs and the last to benefit from the upturn—and that in such times, those who are furthest from the labour market, who in the best of times find it hard to get a job, get pushed back even further.

Moreover, frequent and long spells of unemployment for young people do lasting damage. In short, it can take a long time for young people to recover from a recession. Even today, some people who were affected by the recession in the 1980s are still paying a price. That is unacceptable, and we must not let it happen again. The issue is also one for the United Kingdom Government and other western Governments, given that there have been recessions in 1973 to 1975, 1980 to 1982, 1990 to 1992 and 2000, with the collapse of the internet bubble. The latest monumental manifestation struck in 2008.

We need concerted measures that learn from the likes of Minsky, who believed that our economic system is much less stable than it ought to be and that it produces much higher levels of instability than it should. We need measures that work and categorically remove the suspicion that asset bubbles, bouts of inflation, all-too-frequent recessions and subsequent stock market bounces advantage market speculators at the expense of the real economy, its competitiveness and future generations of young people. Such measures would tackle the core problem and help what we are doing with the powers at our disposal. We are putting in place a comprehensive package of employment and skills measures to tackle the symptoms and alleviate the real pressures that our young people are facing by complementing and building on an existing wide range of services and support for young people.

On the focus of the motion, the Government has a first-class track record on support for youth entrepreneurship. We start young. Our determined to succeed strategy for enterprise in education has entrepreneurial learning as a key strand of activity and £66 million in investment over the life of the Government. Delivered through the curriculum for excellence, the strategy engages directly with young people in primary 1 through to further education to ensure that they have an understanding of both the theory and practice of entrepreneurship. We have also developed a range of resources and materials that are aimed at engaging teachers and learners in developing an enthusiasm for and an understanding of private, social and co-operative enterprises to inform career choices that embrace the concept of entrepreneurialism.

We do much of our work in partnership. We have supported the work and development of the Co-operative Education Trust Scotland’s co-operate to succeed educational resources, and we have supported the Social Enterprise Academy to train teachers. We have also encouraged schools to pursue social enterprise schools status.

Local authorities are central to the approach. Through their efforts and with our support, there are now nearly 20,000 partnerships between schools and employers throughout Scotland. Through those partnerships, young people are increasingly understanding the relevance of their learning to the world of work. They are getting opportunities to see how French contributes to exporting, how English and maths combine to make a business case, and how team building and problem solving are essential attributes of even the smallest business. Our young people are thriving in that environment and demonstrating what many of us recognise as their innate and very Scottish entrepreneurial spirit.

The key message therefore has to be that Scotland’s new generation Y is well equipped. Young people are increasingly business savvy and information technology literate. They are able to use technology as digital native speakers. Those attributes and their desire for an ethical and environmentally sound future will make them challenging to employ, but who else can sell to and meet the needs of generation Y and who else can connect Scottish businesses to the other generation Y youngsters in the other 199 countries on the planet and their 7 billion people?

In addition, they have the obvious option of self-employment. Opportunities for people to start up in business, at whatever stage in life, can be fraught with real challenges. Access to finance has been and remains vital for people who want to start a business, and some of those who cannot get the money that they need from traditional sources—the banks—are finding things tough. Therefore, we welcome the strategic partnership between Grameen Bank and Glasgow Caledonian University and their efforts to establish a branch of Grameen Bank in the UK. It is clear that there are several issues to resolve in replicating the successes that Grameen Bank has enjoyed elsewhere, but some mainstream banks can take lessons from Banco Real in São Paulo, for example, which is blending the Grameen model with the traditional commercial banking approach.

I commend the role of the Prince’s Scottish Youth Business Trust in offering a package of support to young people throughout Scotland who are considering starting their own business and cannot secure funding elsewhere. Those people are normally aged between 18 and 25. In the past three years, the PSYBT has directly assisted more than 2,000 young people to set up some 1,850 businesses, which is a great achievement. Good initiatives are also coming forward from many other quarters as many more people locally and nationally realise that combined effort is needed and that we need a Scottish blend that works for Scotland. I will talk more about that in a moment.

We had no hesitation in addressing the specific challenges that last summer’s leavers from schools, colleges and universities faced. We invested more than £400,000 in a new entrepreneurial programme that recognises the importance of entrepreneurship to the Scottish economy. Currently, Young Enterprise Scotland and the PSYBT are working with young people to give them insights into self-employment and the basic skills and information that they need to start a business and a placement with a local entrepreneur.

Most recently, in December, I announced that there was more than £6.6 million of European funding to provide advice and support to small businesses and entrepreneurs, and to help to create more than 7,000 jobs, some of which will be targeted at young people. That approach will work alongside the business gateway to provide a tailored package of coaching and mentoring assistance to some 1,700 young people over the next three years, which will assist with harnessing the entrepreneurial spirit of young people and contribute to more young business ambassadors being profiled as role models. That should lead to sustainable increases in self-employment activity. Young entrepreneurs will act as role models and mentors and inspire the emerging future generations of young entrepreneurs.

The extended business gateway services throughout Scotland, with management transferred to local authorities, should allow more people to access not only the business gateway services but the wider economic development support that our local authorities deliver. It is important that the PSYBT continues to work closely with the business gateway to build on existing relationships and strengthen and develop services to assist more young people who wish to consider setting up in business as a viable option.

We have had very good sessions recently in which all the players have been brought together under the umbrella of the PSYBT to address how utilities, regulators, business organisations, the accountancy profession, colleges and so on can come together to get a better result. On the basis of this debate, we will go back to that approach to see what we can do. We will look at young people as a specific target audience, and specifically at utilising the skills that Robin Harper and I are passionate about and which we know can be harnessed in order to help the debate that we had yesterday about how we can internationalise Scotland and connect with future generations in many other countries.

I move amendment S3M-7737.1, to insert at end:

“building on the excellent work by the Prince’s Scottish Youth Business Trust in providing microfinance for business start-ups to 18 to 25-year-olds, the work of Glasgow Caledonian University in establishing a partnership with the Grameen Bank to develop the Grameen Caledonian Creative Lab and a Grameen Bank in Scotland and other organisations making a proactive effort and their own contributions in common cause.”

David Whitton (Labour, Strathkelvin and Bearsden)

I am delighted to take part in the debate. I find myself following Mr Harper and Mr Mather, neither of whom is returning to the Parliament in May. I hope that it is not catching.

I am pleased that we have listening in the gallery some of the young people of Scotland as we debate issues that affect them.

Reducing poverty through microfinance banking is not just for developing economies, so Labour members whole-heartedly welcome what the Nobel peace prize winner Muhammad Yunus and his Grameen Bank promote. The Labour Party has supported that for a while—Gordon Brown sat down with Muhammad Yunus to discuss plans for Africa in 2008. President Barack Obama is also a big supporter. If it is good enough for Barack Obama and Gordon Brown, it is certainly good enough for me.

We welcome the creation of the Yunus centre for social business and health at Glasgow Caledonian University. The focus there on the impact of microfinance and related issues on health and on the lives of disadvantaged communities in Glasgow and overseas is a step forward.

Last year, Muhammad Yunus mentioned coming to Scotland in July to start talks about a branch of the Grameen Bank in Scotland. He said:

“Glasgow wanted Grameen Scotland. There are big problems in the city, with thousands of families in three generations of unemployment because of the welfare system. I said to them, a social business should be created to take ten people out of welfare and if it works, repeat it, and take all people out of the welfare system. In July I will go there and start talks.”

I am pleased that the minister mentioned that those talks are progressing.

We should move away from the notion that microfinance banking is just for developing countries. It is good to see that, in 2009, the first United States branch of the Grameen Bank lent $1.5 million dollars. That lending ranged from a few hundred dollars to a few thousand dollars to nearly 600 women with small business plans in the New York City borough of Queens.

As we have heard, social enterprise is already alive and well in Scotland. Grameen street fairs, where American borrowers sell their goods, ranging from food and flowers to clothes and jewellery, are not dissimilar to farmers markets in my constituency and others throughout Scotland.

As the minister and Mr Harper mentioned, schools run social enterprise programmes, which should be encouraged. The issue is how we harness the interest that the children have in the entrepreneurial sphere and translate it into the workforce. As we heard yesterday, youth unemployment is at its highest level for a generation in the United Kingdom. Surely if youngsters cannot get jobs, they should be encouraged to create their own.

Microcredit emphasises building the capacity of micro-entrepreneurs, employment generation, building trust and giving help during difficult times. As a tool for socioeconomic development, it can be very effective, but it is not without its risks. The idea of a Scottish youth microcredit scheme is plausible, but it comes down to funding. As Mr Harper said, a mere £2 million is all that it would require, but the start-up money would need to be found to administer the loans and to employ staff to provide support.

Next week, in Edinburgh, the young enterprise guide project will hold its second annual celebration of successfully helping young people to start in business. The event at Craigmillar business incubator project will showcase the achievements of young people from all over Edinburgh who have been assisted into self-employment and in starting their own businesses. It is aimed at young people aged 16 to 24 who are not in employment, education or training, and the project is delivered by Edinburgh Chamber of Commerce in partnership with the business gateway and the Prince’s Scottish Youth Business Trust.

It is not happening just in Edinburgh; schemes operate throughout Scotland and offer positive options for young people who are facing the grim prospect of unemployment. The idea of a Scottish youth microcredit system is welcome, but someone needs to provide one-to-one support to the young people at all stages of business development from the initial generation of ideas through to business planning, funding and aftercare support.

Since July 2009, approximately 520 young people have engaged with Edinburgh Chamber of Commerce, of whom 245 have so far started a business or become self-employed with the help of the project.

Large employers, such as the much-maligned Royal Bank of Scotland, work alongside charities such as the PSYBT. The RBS group’s relationship with the PSYBT has been refocused and is now concentrated on those who are described as being hardest to reach. In 2009, 46 RBS employees provided direct support to young entrepreneurs across Scotland either as volunteer panel members or as aftercare advisers with PSYBT.

As we have heard, Scottish Enterprise also operates a microcredit programme to enable more young people to address the issues of starting or developing a business. Its microcredit provides low-cost flexible loans, as well as help and support to enable businesses to start up and develop more effectively.

All those initiatives are welcome if we are to grow Scotland’s economy and support its social enterprise sector.

I move amendment S3M-7737.2, to insert at end:

“by discussing this idea with the Scottish League of Credit Unions and the Prince’s Scottish Youth Business Trust”.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

I do not like to admit it, but it is more than a quarter of a century since I last sat in a university economics lecture. It is also over a quarter of a century since I was a young student teacher at Boroughmuir high school, where Robin Harper was a teacher of modern studies. The pupils said that they liked Robin Harper very much and that he was a terrific teacher, and that they liked best his colourful ties. Some things do not change. Likewise, some things do not change in economics. Certain principles stay very much the same: first, unemployment is bad; secondly, productivity is good; and, thirdly, individuals have the potential to be the greatest asset of any country.

Our hearts sink when we hear that the Scottish unemployment rate is rising three times faster than that in England, that the percentage of unemployed school leavers has risen by more than a percentage point in the last five years, that Scotland’s productivity rate is almost 5 per cent lower than the UK average, and that we have an education system that still, despite all its assets, fails properly to equip too many of our school leavers with the skills and knowledge that employers demand, and which pressures too many young people to go to university because there are not sufficient opportunities available for a non-university-based education. Indeed, that last point has become my party’s clarion call because it has identified the issue as being a fundamental problem that must be addressed if we are to claim that we are genuinely concerned about the economic and social advancement of Scotland. That is why I welcome the opportunity to debate Robin Harper’s motion, which has rightly identified the growing problem of unemployment among 16 to 19-year-olds.

Although I can agree with the general tone of the motion, it is our view that if we want to deliver the best possible opportunities for young people, there needs to be a more diverse range of opportunities even before they reach the age of 16. As far as we are concerned, there should be a clearly defined two-route system from 14 onwards, in which young people are able to choose the form and type of education that they would like to continue, be it largely skills based or more weighted in favour of academic pursuits. That demands that young people receive improved and much more varied advice in careers departments.

That system has been proved to be incredibly successful in countries such as Denmark and Germany. Those are countries where youth unemployment is lower than it is in Scotland, predominantly because their young people have become much better at defining their career paths and are better equipped with business skills. Nora Senior, who is vice-chairman of the Scottish Chambers of Commerce, said recently at a conference that

“there needs to be a whole-scale change to the way we talk about vocational and academic qualifications”.

I acknowledge the Scottish Government’s attempt to take that further. It is a view that has also been endorsed by Angela Knight, who is chief executive of the British Bankers Association. She rightly suggests that we will go much further if we improve the quality of the careers advice that we give to young people as early as secondary 1 and S2, so that they are given sufficient access to all the information that they need to make an informed choice.

Quite simply, if we as parliamentarians and Scots want to maximise the opportunities of our young people, it is not good enough to continue with the mediocre status quo of channelling all our children through a one-size-fits-all school system; an education, I suggest, for which they may in some cases have neither the inclination nor the aptitude to take best advantage. They have, however, other aptitudes, which would be much better utilised if they were given a different focus. The myth remains—it is a myth—that university is always a better place to be for fulfilling career aspirations.

If we want change, we must ensure that we are offering our school pupils a wider range of options at an earlier age—options that are flexible and which are backed up with the requisite support.

My colleague Gavin Brown will make comments about a Scottish youth microcredit scheme and how to engender a more entrepreneurial spirit. Any system that aspires to make entrepreneurs and wealth creators out of our young people is always worth a second look and, as Robin Harper rightly said, it is very much part of Scotland’s distinguished tradition. However, entrepreneurs need vision, they need direction and—crucially, I suggest—they need to posses the requisite skills and acumen to make the most of business.

I was interested this week to hear the Law Society of Scotland make strong recommendations that classes on legal issues, rights and responsibilities should be on offer in Scottish schools. That is a similar theme to the one that has been pursued in petition PE1354, which has been brought to the Scottish Parliament by the campaigner Stewart MacKenzie. The same can be said for classes on financial management and entrepreneurship.

That is why it is imperative that we make the changes that we have suggested in the debate. It is not enough, as the comparative evidence on microfinance suggests, to provide handouts while hoping that miracles will occur. Politicians need to show leadership.

Margaret Smith (Liberal Democrat, Edinburgh West)

The debate is welcome and we are supportive of the concept of microfinance and, indeed, of entrepreneurial education as a whole. We have heard that unemployment in Scotland has fallen by 5,000 from September to November and the labour market statistics show that employment in Scotland increased by 18,000 over the three months to November.

We all welcome those developments, but we all agree that there are still far too many young people facing unemployment in Scotland. One in five 16 to 24-year-olds is now out of work in the UK; that is the demographic that is being hit hardest by a very tough jobs market. Martina Milburn, the chief executive of the Prince’s Trust, warned that

“Britain is now perilously close to seeing one million young people struggling to find work”.

That is an immensely worrying statistic and it is a challenge to each and every one of us. Our young people are paying the price of the recession and are carrying too much of the burden.

I speak not only as a member of the Scottish Parliament and as a spokesperson on young people but, as many members know, as the mother of two new graduates who are trying to find jobs, so I know first hand from my family how difficult this period is. I also know from first-hand family experience that we have not got it right in terms of joined-up thinking to encourage our young people to go out and take the opportunities that might be available, and that the benefits system discourages young people from building their skills and from taking internships, but instead sends them home to their beds and offers them nothing in the way of business education and everything in the way of discouragement. We should ensure that at every opportunity and at every interface with every system of government, young people are encouraged to build a work ethic, to get out and build their skills and to do what they do best.

As we have come to expect, Robin Harper spoke eloquently about young people, their potential and creativity. We should be doing all that we can to support them, not grind them down.

On Monday, other Edinburgh MSPs and I heard from the director of finance at the City of Edinburgh Council about how young people are being frozen out of the jobs market in Edinburgh. Banks that traditionally took on Edinburgh school leavers are not recruiting them and more experienced older job applicants, many of whom come from the finance sector, are prepared to take entry-level jobs—school-leaver and university-graduate level jobs. We also heard how important it is that projects, such as the Capital City Partnership, continue to secure Scottish Government support. None of us in this chamber thinks that we are in anything other than difficult times and that there are difficult choices for Government. I hope that the Government, and each and every one of us, will keep young people and young unemployed people at the fronts of our minds as we make decisions over the coming weeks about the budget for this Parliament and Government.

Liberal Democrats are serious about skills and the future of Scotland and its workforce. It is not just about what is in the best interests of young people and what they deserve; it is also about what Scotland needs, given the demographic challenge that we face. I know that that aspiration is shared across the chamber, which is why we will support today’s motion that calls for the establishment of a Scottish youth microcredit scheme. We supported the idea back in 2007 when our manifesto set out our aim to be the first country in Europe to introduce microcredit schemes to support business and offer advice and training to people from low-income backgrounds to help lift them out of the cycle of deprivation.

We want to ensure that all children and young people get a fair chance at education, training and employment, but they must be offered the choice that is right for them. I agree very much with Elizabeth Smith that we should not set ourselves some random target of having 50 per cent of people go to university. The target that we should set is to give young people a choice so that they can decide what is best for them in their circumstances—their family life and experience. We must ensure that they have the choice to become entrepreneurs and to start their own businesses. Lots of good work is going on, such as the excellent young enterprise guide project in Edinburgh about which we heard earlier, and the work at Glasgow Caledonian University. We hear a lot of negativity about unemployment and the lack of employment opportunities, but that does not take away from the fact that a lot of good work is going on.

In the past couple of years, lots of good work has been done in the college sector, on which we have relied absolutely. It has flexibility and a can-do attitude, and it has worked with the partnership action for continuing employment scheme and the Government. Colleges are in our communities, working at local level and picking up on the skills that might be needed locally. It is therefore disappointing that the sector received the amount that it did from the Scottish budget. I say that genuinely without wishing to make any point to the Government other than to say that we will support it in any way we can to see whether we can make the situation more positive for Scottish colleges. They have played, and will play, a big part in our recovery.

Having spoken to constituents, I know that few things are more soul destroying than someone being given a college place and then finding that because of a lack of bursary in the college, they cannot take up the place, or that because of changes in bursaries, they have to make changes, possibly to their child care. We must take seriously that situation. We need to take away as many barriers as possible to people getting skills and training so that they can build the future that they want and deserve—a future that both they and we need. We must work to ensure that, as Scotland comes through recession, our young people are not left behind and that their skills, entrepreneurial spirit, endeavour and creativity build Scotland’s future for us. We in this chamber have to work together to do everything that we can right now to give young people the support that they need so that they are able to do just that.

Kenneth Gibson (Scottish National Party, Cunninghame North)

I welcome today’s debate and firmly believe that any measures that can help businesses to thrive and survive, and which offer our young people opportunities to realise their full potential are worth serious consideration by this chamber.

The SNP Government has a good track record on such matters and although we can always do more, and intend to do so, that record must not be overlooked. Last year, our young people achieved the best higher pass rates ever recorded and 86 per cent of them left school to move on to a positive destination, including apprenticeships, college, employment and, of course, a free university education. Further to that, the small business bonus scheme helped to protect and grow small and medium-sized businesses, thus keeping more young Scots in work. However, we must do more to ensure that all our school leavers move on to positive destinations. Children from deprived areas, those who have additional support needs and looked-after children continue to be less likely to succeed in life. We must therefore continue to focus on the problem.

As the motion makes clear, the Grameen Bank is not a new idea. The first such scheme was founded in 1976 in Bangladesh by Nobel prize laureate Professor Muhammad Yunus to help to improve lives and reduce poverty in rural villages. It proved to be hugely successful. The possibility of having such a scheme in Scotland, however, is debateable because of the legal question: can someone who is claiming welfare benefits receive a Grameen loan? There is yet to be clarification from the Department of Work and Pensions to explain what flexibility, if any, might be available for Grameen borrowers.

Despite that, the Grameen Bank Trust recently set up a partnership with Glasgow Caledonian University with the aim of extending services in Scotland. On 5 July last year, Professor Pamela Gillies and Professor Muhammad Yunus met John Swinney and the chief executives of Social Investment Scotland and Scottish Financial Enterprise. The meeting was a great success, with the cabinet secretary describing the Grameen Bank as

“a very innovative proposal which has much to offer in terms of tackling social and economic challenges.”

Professor Yunus made the valid point that

“If it works in every single country, why can’t it work in Glasgow, why can’t it work in Scotland?”

There is a comparable organisation to the Grameen Bank that goes some way towards demonstrating how successful such projects can be. The Prince’s Scottish Youth Business Trust offers finance and support to young people living in Scotland who are aged between 18 and 25, or up to 30 if they are disabled, to help them to set up and run their own business if they are unable to get funding from anyone else. The trust aims to help up to 650 new businesses a year and to provide aftercare and mentoring to more than 1,200 businesses in Scotland. As well as that, the PSYBT offers start-up grants of up to £1,000, low-interest loans of up to £5,000, development loans of up to £25,000 to help grow existing businesses that have already received PSYBT funding, and test-marketing grants of up to £250 to help carry out marketing to show viability. Organisations and projects such as that are vital to our unlocking the entrepreneurial talent that lies dormant in many of our young people, and they contribute hugely not only to the lives of the young people but to wider Scottish society. For proof of that, I recommend that members read the case studies on the PSYBT website that highlight some of the exceptional small businesses that would never have started up otherwise.

The SNP is committed to unlocking the potential of our young people. Under our Administration, we are seeing more young people than ever move into training, employment and further and higher education, and we must build on our record. There are tough times ahead for the people of Scotland as Westminster cuts hit home. I hope and believe that innovative schemes, such as the PSYBT and the Grameen Bank, in partnership with the Scottish Government, can and will help to cushion the blow from the recession and secure employment for even more of our young people. The powers and resources of an independent Scotland would also help.

Claire Baker (Labour, Mid Scotland and Fife)

I am pleased to take part in this morning’s debate. Robin Harper has always brought to this chamber complete commitment and a genuine desire to make Scotland a better place. His proposals to improve access to finance for young people who are looking to set up their own businesses, co-operatives or community initiatives are worthy of further consideration.

As David Whitton outlined, in government Labour was at the forefront of promoting the Grameen Bank as part of the UK’s international development work. We agree that further exploration of microcredit schemes for young people is to be welcomed and encouraged in Scotland.

Young people are facing challenging times. Communities throughout Scotland are feeling the effects of tough economic times, but that is particularly acute when someone is just starting out in adult life with fewer life and employment skills to fall back on and when guidance and support are needed. Without opportunity, all that can be denied or rejected. Any models or initiatives that provide opportunities or options for young people are worthy of our consideration. We must do all that within the context of some of the more positive work that already happens in Scotland. Our amendment and the minister’s highlight some of that work.

We face challenges. In Fife, there has been a worrying 57 per cent rise in long-term youth unemployment. The problem is even more concentrated in Glenrothes, Methil and Leven, which together have the highest number of young people out of work in Fife. We have given a commitment to create a Scottish future jobs fund. More than 250 young people in Fife benefited from the future jobs fund. I met young people based at Rathbone training centre in Glenrothes who are benefiting hugely from the scheme and are extremely positive about the impact that it is having on their lives and future employability. We must do all that we can to provide such opportunities.

The availability of microcredit offers an alternative option for young people to create new enterprises. However, as Robin Harper’s motion recognises, that must be done with support and mentoring. There is still some way for Scotland to go for it to be a truly enterprising culture that is open and attractive to more people from all kinds of communities. It is about instilling confidence and about understanding success, risk and—increasingly—social responsibility and community investment. Those values and attributes will encourage young people into enterprise.

Although Fife has some worrying youth unemployment figures, it is in Fife that I have recently seen some excellent work in raising young people’s aspirations and confidence. Last year, Caskieberran primary school in Glenrothes was the only primary school engaging in Young Enterprise Scotland. The school worked with Lomond Homes, and it is to the credit of Alan Seath of Lomond Homes that a strong relationship was created, in which both partners devoted time and energy to the project. Alan Seath—the Alan Sugar of Caskieberran primary—provided mentoring, support and real business insight.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Who has he fired?

Claire Baker (Labour, Mid Scotland and Fife)

He hires them; he does not fire them. They are only primary school children.

Last year, the pupils made jewellery. This year, they grew into TEAM—“to entertain and motivate”. Caskieberran was the first primary school in Scotland to take part in an exciting enterprise project when it worked on behalf of Tree of Knowledge to organise a corporate event. The event, which took place last Friday at the Balbirnie House hotel in Markinch, was excellent and professionally organised. It was fascinating to talk to the teachers, who described it as being unlike any other event that they have been involved in at the school. They described school projects as being extremely planned and controlled, in contrast to the world of business or corporate event planning, which they had been thrown into with a team of 11-year-olds. The project provided excitement, uncertainty, flexibility and responsiveness in business planning that they could never have provided to the pupils as a school. It was engagement with business that brought them to that experience. I was really impressed with the scale of the challenge that the school took on and in which it succeeded. The teachers talked of the tremendous increase in confidence of the young people. They learned skills in the project that they might never otherwise have had the opportunity to learn. I am confident that in a few years, some of them will be looking for microcredit.

I highlight another example of sheer entrepreneurial spirit and spark: Fife Youth Radio. I first met its participants a few months ago when I visited their studio on the day that they launched. They put me on the spot and asked me which record I wanted them to play. It is on such occasions that we realise how old we are. Fife Youth Radio is an online radio station. The skills that the young people are learning are significant and transferable. What is so impressive about Fife Youth Radio is the level of responsibility, self-motivation and ownership that it has given the young people who are involved. They have taken part in training that is run by Young Scot and the BBC and they are entering a major partnership deal with O2. Their approach to the project has been entrepreneurial, and their partners have fostered that approach by providing leadership training and mentoring.

The work of Fife Youth Radio shows huge initiative. I want to ensure that the energy, skills and enthusiasm that its participants have gained in the project and that young people have gained in other projects throughout Scotland are given the opportunity to flourish in the social enterprise and/or business sector. We should all work together to explore schemes or initiatives that can help young people to realise what their business dream is and to make it happen.

Jamie Hepburn (Scottish National Party, Central Scotland)

I rise to speak fairly sure in the knowledge that my main qualification in the eyes of the SNP whips is that I am the second-youngest member of the Parliament, although that probably does not qualify me as young in the eyes of most of Scotland’s young people. If Aileen Campbell had been available she would probably have been the first port of call for the party whips. Nonetheless I am happy to contribute to the debate. [Interruption.] I am not sure what the kerfuffle was among the Liberal Democrat members. They seem to be rather excited about something.

I echo Jim Mather’s point about the impact on young people in times of economic difficulty, which is why it is important to have a debate such as this. The Government has a strong record of support for opportunities for young people. I will return to that, if I have time. The ideas in the motion are in the context of the Grameen Bank. I confess that I was not really aware of its work in detail, although I was aware of its existence. It was only in preparing for the debate that I learned a little bit more about it.

Since its inception in the 1970s, the initiative has loaned more than $10 billion to more than 8 million borrowers, the vast majority of them being women and people who live in poor rural villages in the developing world.

The word “grameen” can mean rural or village. In the context of the Grameen Bank, it embodies ideas of community and co-operation, and recognises the mutual dependency and mutual benefits that we must all share if we want to succeed and build better societies.

The Grameen Bank model has been successfully adapted to poverty reduction initiatives in 38 countries around the world. It lends small amounts at affordable interest rates for projects that allow individuals and communities to make a living for themselves. It provides an alternative to loan sharks and a source of funding in circumstances in which the more traditional banks refuse to lend. The threat of loan sharks and the lack of support from traditional banks are undoubtedly faced by many households, businesses and—as the motion states—young people in Scotland today.

Scotland has a long and proud tradition of sensible and sustainable lending practices, whether through the network of credit unions around the country—as Mr Whitton’s amendment rightly noted—or in the legacy of our savings banks, which are now represented proudly but, sadly, uniquely by the Airdrie Savings Bank, which we have acknowledged in the Parliament in recent months.

Nevertheless, it is well worth exploring how the specific Grameen model can be adapted to Scotland. There is much to look forward to in the work of the Grameen Caledonian creative lab that has been established at Glasgow Caledonian University. Like Robin Harper, I welcome that work. Last year, the Cabinet Secretary for Finance and Sustainable Growth met Professor Yunus and the principal of the university to discuss how the project can be taken forward. I am sure that we will hear more about the Scottish Government’s support for the initiative from the minister at the end of the debate. I hope that that gives Green members some comfort that their desire to see Scotland’s young people supported in accessible and innovative ways is shared by others.

I turn to some examples of support for young people that have been delivered by the Scottish Government. Responding to the difficult economic times that we are in, in June last year Keith Brown, the then Minister for Skills and Lifelong Learning, announced a special package to support young people moving from school into the employment market. It included 800 vocational pathway opportunities for 16 and 17-year-olds; a £1,000 incentive for up to 2,000 employers to offer modern apprenticeships to young people; 750 graduate placements over the next three years; 1,000 volunteering opportunities; and access to 5,000 all-age modern apprenticeships. In 2009-10, nearly 87 per cent of school leavers went on to positive destinations such as employment or further education.

Liz Smith made the point that higher education may not be the be-all and end-all. School leavers who go to university in Scotland now benefit from the restoration of free higher education by the Scottish Government. Thousands of graduates benefit from that decision, and 20,000 part-time students each academic year are benefiting from a new £500 grant. The Scottish Government has prioritised opportunities for young people that parties in other parts of the United Kingdom seek to deny to future generations.

We should welcome new ideas, such as those that were suggested by Robin Harper. The ability of the Parliament and the Scottish Government to leverage finance and to find new funding for schemes such as microfinance and Grameen Bank projects is limited by the terms of the current devolution settlement. If we really want to raise the vision and aspirations of our young people, perhaps we should start by aspiring to be a Parliament that has the normal powers of the countries that are cited in Robin Harper’s motion, not the least of which is Bangladesh, which I recall has been traduced in the past by prominent Scottish unionists. Those normal powers are, of course, the powers of independence.

Hugh O'Donnell (Liberal Democrat, Central Scotland)

This has been a relatively consensual debate. That does not reflect the fact that we are getting closer to 5 May, but it does reflect the consensus in the Parliament in relation to the role of organisations such as the Grameen Bank. Members have spoken fulsomely about the quality of life that the bank has brought to people in Bangladesh, the United States and other places where it is located. Like others, I would like to see the continued development of the project in Scotland.

It is clear that many members have a much firmer grasp of the subject than I do. I was a little worried by Elizabeth Smith’s speech, because I thought for a moment that she had forgotten that we were not having an education debate, but her points were well made.

A legitimate concern, which Margaret Smith reflected, is about the tendency—it is not quite dictatorial—to push kids up one path at the age of 13 or 14. We have the opportunity to give them at that age at least an informed choice about whether the academic world is for them or whether they are more inclined to travel down the path of an apprenticeship or something that is more practical and vocational. As Margaret Smith said, politicians tend to make arbitrary statements in this place and other places about what is best.

In this consensual debate, we have not yet touched on one issue that has an impact not just on all our young people but particularly on our young people from deprived communities. As I represent large chunks of Lanarkshire, I am acutely aware of the challenges that are faced by communities in Lanarkshire and across the central belt, some of which are the most deprived and vulnerable.

I will stick with the theme of opportunity. I am convinced that people in such communities lack the opportunity to have hope—to look beyond the horizons of the communities in which they find themselves and to realise that things can and should be better. One mechanism for providing that opportunity, outwith the structured way in which we run education, is volunteering.

If we are to offer opportunities to potential entrepreneurs or mini-Alan Sugars—I do not know whether I like that thought, but there you go; perhaps we could use other role models such as Tom Hunter or Tom Farmer—we need to find a mechanism for showing people that they can look beyond the horizon. I have no doubt that the entrepreneurs whom we all know about did not think, “I’m going to be an entrepreneur.” Many of them thought, “I’m going to keep bread on the table,” or “I’m going to get myself something to do that brings money into my pocket.” The more abstract concept has been retrospectively attached to such people and was not present in their minds.

Volunteering in all its senses has a huge role in widening horizons, raising aspiration and providing opportunity. Margaret Smith touched on the fact that the Governments in Westminster and here need to have a conversation if we are to grow participation in volunteering, because the development of a volunteering spirit and attitude clashes with the strictures of the rules of the Department for Work and Pensions.

Margaret Smith (Liberal Democrat, Edinburgh West)

Will Hugh O’Donnell take an intervention?

Hugh O'Donnell (Liberal Democrat, Central Scotland)

I always worry about taking an intervention from my colleague Margaret Smith.

Trish Godman (Labour, West Renfrewshire)

Hugh O’Donnell can take a quick intervention, after which he should conclude.

Margaret Smith (Liberal Democrat, Edinburgh West)

One great aspect of volunteering that involves a large time commitment is that it helps to build a work ethic as well as skills. Those qualities are utterly transferable to people trying to get jobs. If the DWP and others do not understand that, they are not doing their jobs properly.

Hugh O'Donnell (Liberal Democrat, Central Scotland)

I would not dare to disagree with that or with much else that Margaret Smith says.

When the Scottish Government considers the issues that I and others have talked about, I draw its attention to deeper involvement by Scotland in the European voluntary service, which the European Union provides and supports with funds. That brings an international element to volunteering.

Gavin Brown (Conservative, Lothians)

Robin Harper might just be on to something. His motion is positive. He used the word “innovative” to describe the proposal, which it is. It is also highly practical. I like the fact that it is designed to solve a specific, difficult and intractable problem. The motion is specific because it focuses on 16 to 19-year-olds, who have suffered disproportionately in the recession. Anything that could improve the lot of our young people must be explored, as Robin Harper’s motion says. It has been good to hear that everybody across the chamber is open-minded about the suggestion and thinks that it is definitely worthy of being taken forward.

Before considering the proposal’s strengths and commenting on it, I will say that the Conservatives concur with what Jim Mather and David Whitton said about the PSYBT, which is an excellent organisation. A couple of years ago, I read that Tom Hunter had said that if the PSYBT did not exist, it would have to be invented. That is absolutely right.

One reason why the timing of Robin Harper’s proposal is appropriate is that, in the current climate, a gap exists in the market because of the financial crisis. Many banks and other institutions are reluctant to lend and certainly to lend on the criteria on which they used to lend. Even some viable running businesses are finding it difficult to obtain credit, overdrafts and access to the facilities that they need. Those difficulties are magnified for young people who have no track record in business and who might not have access to other funds. A gap exists in the market in general and in particular for the people with whom Robin Harper hopes to connect in his motion.

There is a specific group of people who have no money and no access to capital or savings—all that they have is a terrific idea that could make money, put bread on the table and do far more than that. For such people, the suggestion of a Scottish youth microcredit scheme is strong.

As everybody has said—the motion also makes the point—it would be important to ensure that repayment rates were as high as they have been in other countries and to combine the funding with the suggested mentoring. In many cases, funds alone would be insufficient to ensure that a business thrived and succeeded—they would have to go hand in hand with mentoring.

We have talked about microcredit and small businesses, but it is important that mentors do not teach businesses to think small or in micro terms. Some businesses might end up only ever being small, but some might end up as gems. Duncan Bannatyne, who is a multimillionaire and who of course appears on “Dragons’ Den”, started his entrepreneurial career as a young man simply by delivering newspapers to far more houses in his area than had previously received them. That entrepreneurial spirit, which was crafted at a pretty young age, along with a load of other attributes, led to his being a success. It is important that mentors do not think small, even though the initial sums will be small.

My time is practically up. The idea is good and should be explored. With the consensus in the chamber today, I have no doubt that it will be explored.

David Whitton (Labour, Strathkelvin and Bearsden)

I am interested to hear that Duncan Bannatyne started his business by selling newspapers. I had my own newspaper delivery business when I was 18. Perhaps I should have stuck at it—who knows what would have happened?

In his opening speech, Mr Harper said that this was his last Green debate in the chamber. I do not often have the chance to debate with him, so I take the opportunity to pay tribute to his contribution—some would say his colourful contribution—to this place since 1999.

I interviewed Mr Harper at Boroughmuir high school when I worked for a political TV programme. As we stood in the playground trying to get the interview done, it was clear that his pupils regarded him as a kind of Scottish Mr Chips—a description that I hope he will accept in the spirit in which it is given. His on-going interest in the welfare not only of his pupils but all young Scots is a fitting tribute to his work as a parliamentarian—the first Green to be elected to a Parliament in the UK. His choice of topic for debate today is typical of the man.

We can all accept that the success of the Grameen Bank has inspired the world, but we also have to recognise that it has proved difficult to replicate its success. In nations with lower population densities, meeting the operating costs of retail branches that serve nearby customers has proven considerably more challenging. Let us face it: subsidies from donors and Government are scarce and uncertain. In order to reach large numbers of poor people—or, indeed, the growing number of our unemployed 16 to 19-year-olds—microfinance must pay for itself. That could prove difficult in the current economic climate.

In Scotland, we also have the issue of welfare benefits. Obtaining a loan to start up a business can have all types of ramifications for benefit claims. That area needs to be developed further. In that regard, I have some sympathy with Margaret Smith’s intervention on her colleague, Mr O’Donnell.

Community-supported lending is not new. From the pre-war tenement support groups to the credit unions that we see throughout Scotland today, there is a rich history of social enterprise. There are already schemes throughout Scotland that offer loans for small business ventures to young people who are not in education, employment or training. Those schemes also offer supported entrepreneurial mentoring. Perhaps we should concentrate more on growing schemes that are already in existence. We have talked a lot about the Prince’s Scottish Youth Business Trust. Since its inception in 1989, the PSYBT has helped more than 12,000 individuals to start more than 10,000 businesses, of which more than 80 per cent continue to trade after their first year in business and 60 per cent are still trading after three years. This year, the PSYBT launched an innovation fund, which is still in its pilot stage. The fund aims to help 18 to 25-year-olds—I know that that group falls partly outwith the age bracket that Mr Harper is talking about—who have an innovative concept or product to secure funding to take their idea to the next stage.

There are other schemes, such as the Shell LiveWIRE scheme, which is the UK’s biggest online community for young entrepreneurs aged 16 to 30 who are starting up or running their own business. The scheme offers new start-ups free online business advice and support, and funding and networking opportunities. Shell LiveWIRE is one of the company’s social investment programmes. Since 1982, it has helped more than 600,000 young people in the UK to explore starting their own business. It offers an independent service with no costs or strings attached.

Developing future entrepreneurs through a peer-led support service with user-generated content seems to be the way forward. I firmly support my colleague Claire Baker’s view, which we heard earlier, that we should start such support not at secondary but primary school level—Caskieberran primary school in Glenrothes is an example. We should concentrate not only on young entrepreneurs but teen entrepreneurs or pre-teen entrepreneurs. A good example is the young man from Edinburgh, Fraser Doherty, who has spoken in the Parliament. After being taught to make jam using his Granny’s secret recipe at the age of 14, he has built a business that now supplies all the UK’s major supermarkets with his SuperJam.

Alasdair Morgan (Scottish National Party, South of Scotland)

Wind up, please.

David Whitton (Labour, Strathkelvin and Bearsden)

I will, Presiding Officer.

Fraser Doherty is the kind of example that we need to look at. Let us concentrate on the talent that we have. Last year, a number of entrepreneurs gave £10 million to the Airdrie Savings Bank. Would it not be great if they were to donate even half as much to get the Harper Grameen Bank started?

Angela Constance (Scottish National Party, Livingston)

I am very much aware that Robin Harper has an infectious enthusiasm for young people. I have had the privilege of witnessing him interact with young people in schools in and around Livingston. I am glad to support his motion today. As other speakers have said, he is a very colourful character. The motion is typical of his imagination, his flair and his commitment to young people the length and breadth of Scotland.

Recession hits young people the hardest. Unemployment can do long-term damage to the young; it scars individuals and communities. We must learn the lessons of previous recessions and ensure that never again is a generation of young people written off. That means that we must support young people, recognising that they all have different ambitions and needs, as Margaret Smith and Hugh O’Donnell stated. For some young people, that is about helping them to create and grow their own business. Self-employment is the lifeblood of our economy. It is hugely important in the current economic climate when the jobs simply are not there. In supporting the motion, the Government will explore ways of establishing a Scottish youth microcredit scheme.

As many speakers, including Margaret Smith, Kenny Gibson and David Whitton, acknowledged, the crucial issue in establishing Grameen in the UK is that of resolving problems and interactions with the welfare benefits system. We have to rid the system of any disincentives. We have to recognise that, in supporting young people to transform themselves from a state of dependency to one of independence—a notion that I fully support—transitional funding will be needed. I hope that the Conservatives and Liberal Democrats will take that forward with their Government in London—the UK Government. In the very near future, along with Nicola Sturgeon and Alex Neil, I will meet Lord Freud to discuss a number of welfare reform issues.

As Jim Mather said in his opening speech, this Government remains committed to tackling youth unemployment. We have the immediate and pressing challenges that are associated with the recession. Youth unemployment in Scotland is currently at 17.9 per cent. Although the figure is lower than that for the United Kingdom, it remains too high. We are talking about the lives and futures of some 70,000 individuals. I accept Claire Baker’s point that the rate of young unemployment is much higher in some of our communities.

We remain focused on the more fundamental change that is needed to tackle the unacceptable and endemic problem of youth unemployment. Although there is no silver bullet, collaboration between public, private and voluntary sectors is essential if we are to reach out to more young people who face particular barriers in their life to ensure that they, too, get their fair share of Scotland’s economic growth.

I am confident that this Government has a robust and clear plan, the aim of which is to support young people to make more successful transitions to adulthood and the world of work. In essence, this is about our substantial investment in skills: £120 million for new training opportunities, of which £60 million is focused on modern apprenticeships.

Mr Mather described the great work that is being done in schools, whether through the curriculum for excellence or determined to succeed. Unlike Elizabeth Smith, I prefer to think that our cup is half full as opposed to half empty.

Of course, our further education colleges promote entrepreneurship, too. They do that at a fundamental level through their hands-on approach to vocational training. Only last week, I had the privilege of visiting Adam Smith College in Fife to help to launch the education into enterprise scheme. The programme will support 1,000 college students on higher education courses to take up work placements with small and medium-sized businesses and third sector organisations.

Alasdair Morgan (Scottish National Party, South of Scotland)

The minister needs to wind up.

Angela Constance (Scottish National Party, Livingston)

I will conclude, Presiding Officer.

There are many good things that I have not had time to mention, including the retention of the education maintenance allowance and our commitment to free higher education and training.

I have listened with interest to comments on funding for student support. This Government has invested record levels in student support—

Alasdair Morgan (Scottish National Party, South of Scotland)

I really must press you to close, minister.

Angela Constance (Scottish National Party, Livingston)

We are always open to suggestions on how to improve the lives of students the length and breadth of Scotland.

Robin Harper (Green, Lothians)

This has been a good debate. I will try to say a few words about everything that members have said.

I thank Jim Mather for giving us a comprehensive introduction to everything that is happening at present, especially at the Government’s behest. However, if we add up the sums that various people have mentioned, we find that we are spending close to £100 million on the issue of young people and employment, so £2 million for a Grameen start-up would not be excessive.

It is important that I make a couple of general points. For me, the excitement of Grameen banking is that it is about not just finance but trust and people working together—it is a social and community thing that will give social capital and social cohesiveness to any area of Scotland in which it is introduced.

I thank David Whitton for his kind remarks; I remember clearly the special day at Boroughmuir to which he referred. However, I resist any suggestion that we are already doing enough things and that we just need to develop them. We cannot do enough. Any new idea must be tested and taken forward along with everything else.

Almost every member who spoke mentioned the importance of harnessing young people’s potential, which is critical. It is important to pick up on one or two points about the educational system. I thank Liz Smith for mentioning those halcyon days at Boroughmuir. I was interested to hear her comments on the approaches that are taken to young people in German and Danish education. They go along with the idea of parity of esteem for every child in our schools, which means parity of esteem for career paths.

We should not use an examination system to divide the children in our schools into those who are successful—the fifth and sixth year students who go on to university and gather in a hall for prize givings at which loads of books and little silver cups are given out to everyone—and the so-called fourth-year leavers, whom we should rather see as people who are going into jobs, seizing opportunities and going to colleges. Over the past 15 years, the work that the colleges are doing with young people has changed out of sight; those young people are now leaving with confidence and skills. We and our secondary education system must acknowledge that that is a good career path. That is the parity of esteem that the curriculum for excellence will deliver.

Last week I was at Broughton high school, so I would like for a moment to mention the effect of the cuts. The educational system must bear a share of the cuts, but the Government must be conscious of the fact that cuts are now biting so deeply into the budgets of some of our secondary schools that they will have difficulty delivering the curriculum for excellence, which is the basis of what we are talking about today—having our children leave schools competent, confident, with empathy and with the ability to assess risks, so that they can lead successful lives. Margaret Smith raised that issue. I greatly appreciated her remarks.

I thank Gavin Brown for his clear analysis of the situation and support for the motion. His remarks reminded me that, as well as mentioning Tom Farmer, I should have mentioned Tom Hunter, because he has made a significant contribution in the area.

Claire Baker spoke about primary education in Fife. I have heard about the event at the Balbirnie House hotel that she mentioned, which is an extremely exciting development. However, although we are doing a lot of wonderful work in our schools and colleges to equip young people to be successful entrepreneurs, there is still a problem. I equate it to the situation of school councils. People are elected to school councils, go through all the processes and learn about democracy, but nothing happens, because they do not have a budget to spend. We must back up what we do. If we are to have young entrepreneurs and if children are to be taught how to be entrepreneurs—

Alex Fergusson (None, Galloway and Upper Nithsdale)

Mr Harper, I must ask you to close.

Robin Harper (Green, Lothians)

I thank everyone for their agreement. I will vote for all the amendments and my motion. I thank members for a very nice debate.

Roads Maintenance (Salt and Grit)

John Lamont (Conservative, Roxburgh and Berwickshire)

1. To ask the Scottish Executive how it is managing the supplies of salt and grit. (S3O-12703)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Through the Scottish salt group, Transport Scotland is monitoring the level of supplies across Scotland and providing support to local roads authorities from the strategic salt stock. The Scottish Government does not formally manage the supply of salt. It is for individual authorities to determine the supply that is needed to maintain their roads.

John Lamont (Conservative, Roxburgh and Berwickshire)

Although the recent severe weather has eased in recent days, Scottish Borders Council remains concerned that it may not receive the grit and salt that it has on order to see it through the rest of the winter. Can the minister confirm that the Scottish Government will do what it can to ensure that Scottish Borders Council receives those supplies and that there will be no intervention by the Scottish Government to ration supplies?

Keith Brown (Scottish National Party, Ochil)

As I have already pointed out, it is not for the Government to determine supplies between councils and those from whom they order salt, but I can confirm that, as requested by Scottish Borders Council over the winter period so far, the Scottish Government has made 3,000 tonnes of salt available to the council, which has enough resilience to cover at least seven days. We were happy to help out; that is what the Scottish salt group was formed to do. The action has helped Scottish Borders Council. The request was made and it was met in full. I think that most of the delivery—around 100 lorry loads of salt—has been made to the council. We were happy to do that. It is worth mentioning that we have more salt in stock or on order now than we have used so far this winter, which means that we are in a better position than many authorities in other countries.

Nigel Don (Scottish National Party, North East Scotland)

It is all very well having the salt and grit, but if there is no machinery to spread it around it is not much use. Recently, at a meeting in Glen Shee, I discovered that Aberdeenshire Council’s new machine to clear roads in the area broke down more or less when the starting button was pushed; the gearbox was described as finishing up in a million pieces. I was told that the only replacement gearbox was in Germany and had to shipped in, with considerable delay. I am not arguing that everything should be the same, but does the minister agree that there should be some standardisation in the equipment that is used across the country? As a matter of resilience, will he look at what local authorities buy and use?

Keith Brown (Scottish National Party, Ochil)

It must be pointed out that it is for local authorities to make their own orders. Nigel Don is correct to say that increased resilience can be achieved if we work closely with councils. The discussions that we have following the current severe winter will indicate whether standardisation is the correct route to take. Presiding Officer, you will not be surprised to hear that I am no expert on gearboxes for gritters, but the Scottish Government has made the offer—which Aberdeenshire Council has taken up in some circumstances—to help the council when trunk road gritters are not being used for trunk roads. We will be happy to do that in future.

Devolved Taxes and Charges (Forecasts)

Derek Brownlee (Conservative, South of Scotland)

2. To ask the Scottish Government how frequently the forecast income from devolved taxes and charges is monitored and how accurate published forecasts have been. (S3O-12695)

John Swinney (Scottish National Party, North Tayside)

The Scottish Government regularly monitors forecast income from business rates and council tax and from charges that it sets, such as prescription charges. Every effort is made to ensure that any published forecasts are as accurate as possible, based on the data that are available when the forecast is made.

Derek Brownlee (Conservative, South of Scotland)

It was illuminating to find out that monitoring takes place “regularly”, without any further explanation of how frequent that might be. Would it not help the Government’s case for having access to greater fiscal powers if it were rather more transparent about the powers that it already has? Would it not be more useful to all of us if we had access to rather more frequent updates of forecast revenues? Can the cabinet secretary confirm the current position on the expected yield from non-domestic rates income for 2010-11, compared with the figure that was predicted in the draft budget?

John Swinney (Scottish National Party, North Tayside)

I am surprised that Mr Brownlee believes that there is a requirement for more transparency—this Administration is very transparent with all the information that we have available to us. We regularly publish extensive financial information, which I know Mr Brownlee looks at carefully.

Every year, we publish an estimate of the non-domestic rates income that has been collected. Clearly, at different stages of the year, depending on the thousands of payments that individual companies make, it is difficult to provide a reliable estimate—and one that could not be misinterpreted. I fear to say to Mr Brownlee that information of this type can sometimes be misinterpreted and misconstrued by the forces of darkness—and we would not want that ever to happen with any such information.

Chief Medical Officer (Annual Report 2009)

Sandra White (Scottish National Party, Glasgow)

3. To ask the Scottish Government what action it is taking in response to the annual report of the Chief Medical Officer for Scotland 2009, in particular regarding the promotion of a salutogenic asset-based approach to future health creation. (S3O-12692)

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

We are taking a range of actions to respond to the chief medical officer’s 2009 report, from action plans on tuberculosis and hepatitis C to the development of drug and alcohol partnerships.

With regard to promoting assets-based approaches to health creation, we are taking a number of actions with a range of partners, including through the eight equally well test sites, through support for the formation of an assets alliance, and by contributing to a European Union project on health assets.

Sandra White (Scottish National Party, Glasgow)

I thank the cabinet secretary for that comprehensive response. The chief medical officer’s report cites many examples of the roles of healthy living centres in empowering communities and promoting health and wellbeing. Is the cabinet secretary aware of the difficulties that some HLCs are experiencing with funding, particularly in Partick, in relation to the work of the area’s community health and care partnership? Would it be possible for the cabinet secretary to contact Greater Glasgow and Clyde Health Board and Glasgow City Council regarding the issue? Can the cabinet secretary inform us exactly what powers and support can be given to HLCs in the future?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

The member will be aware that the Scottish Government, in recognition of the important role that healthy living centres can play, provided more than £3 million of support for those centres by way of transition funding between 2008 and 2010. That was explicitly in recognition of the challenges that they faced moving from Big Lottery funding to sustainability.

We have always adhered to the principle that, in the longer term, funding decisions about healthy living centres properly lie with local agencies. We have encouraged local agencies to work closely with healthy living centres and to discuss their longer-term sustainability.

In relation to Partick in particular, the member will be interested to know two things. First, of the £3 million that I have mentioned, Partick received £130,000 in transitional funding. Secondly, I understand that NHS Greater Glasgow and Clyde has recently confirmed that it is supporting the Partick centre financially up to the end of this financial year. That follows a meeting between the health board and the healthy living centre yesterday. A further meeting between the board and the centre is due to be held on 1 February to discuss options for 2011-12. That is positive news, and I know that Sandra White will wish to be kept updated on further progress.

Small and Medium-sized Enterprises (Support)

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 4 is from Linda Fabiani.

Linda Fabiani (Scottish National Party, Central Scotland)

I am sorry—there has been a mistake, Presiding Officer.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You are down to ask question 4.

Linda Fabiani (Scottish National Party, Central Scotland)

Oh—I think it is the second time today that I have had to apologise to you, Presiding Officer. I must be coming down with something.

Alex Fergusson (None, Galloway and Upper Nithsdale)

So question 4 is withdrawn, I think. I will therefore call question 5, from Peter Peacock.

Linda Fabiani (Scottish National Party, Central Scotland)

No—I do have the question.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Right—Linda Fabiani, then.

4.

Linda Fabiani (Scottish National Party, Central Scotland)

I will start all over again.

To ask the Scottish Government how it supports small and medium-sized enterprises. (S3O-12674)

Jim Mather (Scottish National Party, Argyll and Bute)

The Scottish Government recognises the vital contribution that small and medium-sized enterprises make to our economy. We are firmly committed to maintaining a supportive business environment and to ensuring that appropriate measures are in place both to stimulate start-ups and to grow existing SMEs.

We have introduced a range of policies that will improve the business environment for SMEs, such as the small business bonus scheme, which reduces rates for tens of thousands of businesses; the transfer of business gateway to local authorities; investment in broadband; reducing unnecessary burdens on business; and making it easier for SMEs to access public sector contracts. We recently announced £6.6 million from the European structural funds programme to provide advice and support to small businesses and entrepreneurs and to help create more than 7,000 jobs.

Linda Fabiani (Scottish National Party, Central Scotland)

I thank the minister for that very detailed answer. I acknowledge that the latest official statistics show that the number of businesses in Scotland has risen during the first three years of a Scottish National Party Government. Does the minister agree with the Scottish Trades Union Congress and the Federation of Small Businesses that the proposed supermarket levy is an appropriate measure—especially given supermarket profits—to help rebalance the relationship between out-of-town shopping centres and town-centre locations?

Jim Mather (Scottish National Party, Argyll and Bute)

We can add to those organisations the Scottish Grocers Federation and the Scottish Licensed Trade Association. This is an opportunity for the supermarkets to align with the people of Scotland—their customers, who are suffering uncertainty in the jobs market, whose incomes are frozen and whose pensions are down, with VAT on fuel and other difficulties also to consider.

There is a growing opinion in this regard from business schools and thinkers, who are discussing the idea of businesses moving towards a concept of shared value, whereby they seek to reward not just their shareholders but their customers, their employees, their suppliers, their communities and, in the long term, the taxpayer. That redefinition of profit would allow the businesses that we are discussing to move forward and to do even better in the future.

Lewis Macdonald (Labour, Aberdeen Central)

Does Mr Mather recall John Swinney’s written answer to me of 7 October 2010, in which he confirmed that 129,773 small businesses qualified for the small business bonus in 2009-10, as compared with only 114,620 that are eligible today? How does he explain that to the 15,000 small businesses that no longer qualify for rates relief, following rates revaluation?

Jim Mather (Scottish National Party, Argyll and Bute)

I always look to Labour to find the glass half full. Scotland is moving forward, and the support from the FSB has been absolutely fulsome. We will continue to move forward in conjunction with all the businesses of Scotland.

UK Consumer Protection Bodies (Reform)

Peter Peacock (Labour, Highlands and Islands)

5. To ask the Scottish Executive what action it is taking and what progress is being made in examining the United Kingdom Government’s proposals for the reform of UK consumer protection bodies; what devolved implications there are for Scotland and its consumers, and when it will report its findings on the proposals. (S3O-12661)

Jim Mather (Scottish National Party, Argyll and Bute)

Those are reserved matters, as the member will know. Although the UK Government proposals will have implications for Scotland, the policy detail is not yet fully defined. We invited key Scottish stakeholders to form a working group to consider how we might optimise future arrangements in Scotland and influence decisions in Whitehall. I expect the group’s report in February.

Peter Peacock (Labour, Highlands and Islands)

I am grateful to the minister with regard to that plan, and I am grateful for the work that he indicates is being done. I understand that the UK Government is entirely open to there being an outcome in Scotland that is different from that for the rest of the UK. I urge the minister to make early proposals to the UK Government to influence its forthcoming consultation on the future of Consumer Focus Scotland and to work with other parties across the Parliament to try to secure a consensus on the various options and build on the common ground that I believe will exist between members on the issue.

Jim Mather (Scottish National Party, Argyll and Bute)

That was a constructive contribution from the member, and my answer is yes to all of that. I reinforce the message that we are maintaining close contact with the UK Government. We view this as an opportunity to create a model that provides a best solution for Scotland. The more voices that are involved in that, the better.

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

Will the minister take up with his UK counterparts the need for manufacturers to publish details of known faults with their products and for consumer organisations to take into account the variety of ways in which customers now choose to complain about products and services, notably via internet postings?

Jim Mather (Scottish National Party, Argyll and Bute)

We are entering a new era, following the financial services crash, in which people are looking to manufacturers and all businesses to be much more aligned with customers and their wellbeing. I will make a point of doing as the member asks.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question 6 is from Joe FitzPatrick.

It appears that Mr FitzPatrick is not in the chamber, which I think is very regrettable. I will therefore call question 7, from Ken Macintosh.

NHS Greater Glasgow and Clyde (Change Fund)

Kenneth Macintosh (Labour, Eastwood)

7. To ask the Scottish Executive what discussions are being held with carers and carers organisations to ensure their involvement in the planning and delivery of the change fund in the NHS Greater Glasgow and Clyde area. (S3O-12652)

Shona Robison (Scottish National Party, Dundee East)

Guidance to local health, housing and social care partnerships on accessing the reshaping care change fund was issued on 23 December. The guidance asks all partnerships, including those in the NHS Greater Glasgow and Clyde area, to submit local change plans to the Scottish Government by 28 February. It sets a clear expectation on partnerships to include carers and carers organisations, as well as other third and independent sector partners, in preparing and agreeing their change plans.

Kenneth Macintosh (Labour, Eastwood)

I am sure that the minister is aware of the anxiety among carers and carers organisations about the cuts that are proposed for local government. She will also be aware of the difference that access to the change fund would make to organisations and centres such as the one that is run by the Princess Royal Trust for Carers in East Renfrewshire.

It is essential that carers and carers organisations are involved in the reshaping of older people’s services, not just at operational level but at strategic level. What steps is the Government taking to ensure that such organisations are involved every step of the way, including in NHS Greater Glasgow and Clyde?

Shona Robison (Scottish National Party, Dundee East)

The Scottish Government has provided more funding for carers during the past four years than was provided previously. I hope that the member acknowledges that. We have provided support in a number of ways. For example, much of the carers information strategy money has gone directly to support local carers centres and carers organisations. That direct support to carers has been much appreciated by carers organisations.

I regularly meet carers organisations at national level and I made it clear to local partnerships that I wanted carers to be around the table at an early stage, while plans on the change fund were being drawn up. Carers organisations welcomed that, and I expect local partnerships to go forward on that basis.

COSLA (Meetings)

Duncan McNeil (Labour, Greenock and Inverclyde)

8. To ask the Scottish Executive when it last met the Convention of Scottish Local Authorities leadership. (S3O-12654)

John Swinney (Scottish National Party, North Tayside)

I last met COSLA’s leadership last week.

Duncan McNeil (Labour, Greenock and Inverclyde)

I hope that when the cabinet secretary met COSLA last week he was able to make the strongest representation with regard to the agreement between the Scottish Government, COSLA and Scottish Enterprise on the funding of urban regeneration companies. The agreement should be honoured.

The collapse of the agreement has resulted in Riverside Inverclyde, my local URC, facing a 70 per cent cut, which threatens Inverclyde’s future economic prosperity. Will the cabinet secretary intervene to ensure that Inverclyde, which he has accepted is less resilient than other areas to the current public spending cuts, receives its due share of funding? Will he ensure that Riverside Inverclyde is allowed to continue its valuable regeneration work in my constituency?

John Swinney (Scottish National Party, North Tayside)

I quite understand the issue that Mr McNeil raises. He does not need me to remind him that there are challenges in the public finances. There has been joint working between Scottish Enterprise and local government on all those questions and I am sure that discussions will continue. I assure Mr McNeil that the work of URCs is substantially supported by Government and contributes to the regeneration of many communities in our country.

Supporters Direct (Meetings)

Bill Butler (Labour, Glasgow Anniesland)

9. To ask the Scottish Executive when it last met Supporters Direct. (S3O-12634)

Shona Robison (Scottish National Party, Dundee East)

My officials last met Supporters Direct Scotland on 2 July 2010.

Bill Butler (Labour, Glasgow Anniesland)

The minister will be aware that a recent poll for Supporters Direct showed an overwhelming groundswell of support among fans for bigger, not smaller, leagues and for supporter representation in Scottish Football Association structures, both of which aspirations chime with the recommendations of the McLeish review. Given the debate on league reconstruction that is raging in Scottish football, can the minister inform the Parliament and football fans throughout Scotland of the Scottish Government’s position on those important matters?

Shona Robison (Scottish National Party, Dundee East)

I very much value the role that Supporters Direct Scotland has played during the past three years. I also very much support an enhanced role for supporters in football clubs.

On the proposals for league reconstruction, what is important is that the clubs come to a position that they can agree on, to take Scottish football forward. I am not sure whether the intervention of politicians in such matters would add anything to the debate.

Engagements

Iain Gray (Labour, East Lothian)

1. To ask the First Minister what engagements he has planned for the rest of the day. (S3F-2838)

Alex Salmond (Scottish National Party, Gordon)

I have been speaking to Jorge Calvet, the chairman of Gamesa, which is the world’s third-largest manufacturer of wind turbines. In half an hour’s time, Señor Calvet will announce that Gamesa intends to establish a research and development centre in Glasgow, creating 130 jobs. Furthermore, he will announce that the company will sign memoranda of understanding with Scottish Enterprise, Forth Ports and Dundee City Council for its intention to establish a manufacturing, organisation and maintenance base in Dundee. I know that the whole Parliament will welcome that benefit to the Scottish economy.

Iain Gray (Labour, East Lothian)

The Scottish Government was caught red handed this week doctoring evidence on Scotland’s economic future. It took from an academic paper the quotation that I have here but changed the words so that it means something else. Will the First Minister tell the Parliament who doctored that evidence and on whose authority it was done?

Alex Salmond (Scottish National Party, Gordon)

If Iain Gray is going to hold pieces of paper up, he should get bigger writing so that people can see what they say.

That was Iain Gray’s first question since last September that could be related to the Scottish economy. Basically, it boiled down to his objection to the insertion of a square bracket explaining what fiscal devolution means—that is,

“[the proportion of revenue and expenditure devolved]”.

When I studied punctuation and parenthesis, I was told that a square bracket was where one put a point of explanation. However, if Iain Gray’s objection to getting real economic powers for the Parliament and for Scotland boils down to his objection—following Wendy Alexander’s lead—to a square bracket, the Labour Party has finally come to the end of its role.

Iain Gray (Labour, East Lothian)

No. When I studied English at school, if one took a quotation and changed the words in it, it was not a quotation any more. The First Minister cannot just dismiss the point. The Scottish Government used that doctored evidence in its draft budget and published it in its policy paper on financing Scotland. It was the centrepiece of Alex Salmond’s speech to his Scottish National Party conference, but it is simply not true. Will he now admit that it is simply not true?

Alex Salmond (Scottish National Party, Gordon)

The quotation is from Professor Andy Hughes Hallett and Professor Drew Scott and, of course, they stand by their analysis that fiscal devolution means

“the impact of devolving both spending and tax powers”.

If the authors of the quotation agree with the Scottish Government that that is an acceptable description of what fiscal devolution means—I repeat for Iain Gray’s information that it means Scotland having power over its spending and its ability to raise revenue—why on earth is Iain Gray objecting to it?

The substance of the argument is as follows: the Scotland Bill Committee, which is dominated by the unionist parties, refused to examine the Scotland Bill’s tax proposals because it knows that there is a deflationary bias that would cost Scotland either £8 billion, according to the Scottish Government, or £700 million, according to the Scotland Office.

The unionist Scotland Office and the independence-seeking Scottish Government agree that the proposals in the bill, if applied over the past 10 years, would have cost Scotland many hundreds of millions, if not billions, of pounds of revenue. The only disagreement is by how much Scotland would have been disadvantaged, so how on earth can a committee justify not examining something that it is meant to scrutinise and which could be of great damage to the Scottish economy? When we should all be seeking to benefit employment in Scotland, how can Iain Gray come along and ask me about a square bracket?

Iain Gray (Labour, East Lothian)

The committee examined the evidence, and it was found wanting. The First Minister told us this week that, as a boy soprano, he had a range of four octaves. I was impressed—Pavarotti could manage only two and a half, although I believe that Julie Andrews has four octaves, too. However, that is nothing compared to how far the First Minister will stretch the truth to try to make his case for independence. The First Minister told the SNP conference:

“We know thanks to the work of Andrew Hughes Hallett and Drew Scott that with economic powers we could grow the Scottish economy ... 1 per cent a year.”

However, the professors did not say that and they still do not say that. It is not true. Did the First Minister misspeak, or did he mislead his own party?

Alex Salmond (Scottish National Party, Gordon)

I am sure that the whole Parliament is mystified by Iain Gray, as we are week on week, but I suppose that the great mystery is why someone with his magnetic personality has yet to be invited on to “Desert Island Discs”. I have been thinking and wondering what Iain Gray’s selection would be if he ever got invited on to that programme. How about “London Calling” by The Clash or “That’ll Be the Day” by Buddy Holly? I point out to Iain Gray that, if Professor Hughes Hallett and Professor Scott are correct and we get a 1.3 per cent increase in gross domestic product, that means that we have a 1.3 percent increase in Scottish overall wealth every year, after getting economic and financial powers.

It is fascinating that Iain Gray seems to believe that the committee has been examining the Scotland Bill, when that is about the only subject that Wendy Alexander refuses to talk about. Time after time, Professors Scott and Hughes Hallett said, “Can we comment on our evidence?” but Wendy Alexander, the convener of the committee, did not want to talk about it. Why not? Because it has a deflationary bias that will cost every person in Scotland money. That is why the Labour Party does not want to talk about proposed legislation that it intends to support. In contrast, economic powers will bring Scotland wealth and prosperity.

Iain Gray (Labour, East Lothian)

Frankly, the longer the First Minister spends on a desert island, the better for Scotland. Leadership is a question of character, trust and judgment. If you take a piece of disputed research and then doctor it to mean something else, and you then embellish it and multiply the figures to suit your argument, how can you be trusted? If you then base your vision of Scotland’s future on that edifice of nonsense, what does that say about your judgment? And when you are caught out, if you will not put your hands up and admit it, what does that say about your character? Will the First Minister now republish his budget and take that doctored evidence out?

Alex Salmond (Scottish National Party, Gordon)

Let us deal with three points. First, Professors Hughes Hallett and Scott, the authors of the analysis, said in The Scotsman on 19 January 2011 that their figures

“were based on the impact of devolving both spending and tax powers.”

That is fiscal devolution, fiscal autonomy, fiscal responsibility or independence over the economy as we understand it. Secondly, the argument that some members in the Labour-Tory alliance on the Scotland Bill Committee have made—I recognise one of them, David McLetchie, sitting over there—was that Professor Feld did not argue about the devolving of both revenue and expenditure. The trouble is that David McLetchie and the committee cited only a part of the quote from Professor Feld’s evidence. I have the full quote before me. It goes on to say, and I quote, without square brackets:

“Decentralisation of taxes and spending leads to a more efficient public sector and it enhances economic performance.”

Enhancing economic performance is increasing economic growth and increasing economic growth is increasing prosperity for the Scottish people. If we can increase economic growth, as Professor Hughes Hallett and Drew Scott argue, we increase wealth and prosperity and employment in Scotland. If we are led by the unionist parties into the Tory trap of reduced Scottish spending that will result from the deflationary bias in the Scotland Bill proposals, we will face 10 to 15 years of progressive cutbacks in Scotland. That is why, when it comes to making a decision, people will vote for growth and real powers for this Parliament and this country.

Prime Minister (Meetings)

Annabel Goldie (Conservative, West of Scotland)

2. To ask the First Minister when he will next meet the Prime Minister. (S3F-2839)

Alex Salmond (Scottish National Party, Gordon)

I have no plans to meet the Prime Minister in the near future.

Annabel Goldie (Conservative, West of Scotland)

A quarter of a million people in Scotland are employed in the retail sector. That is one in nine of the Scottish workforce. Many shops are also vital outlets for Scottish food. The First Minister knows that because, when Sainsbury’s announced 1,300 new jobs in Scotland, he described it as—this is not a doctored quote—

“a significant boost to the economy.”

Now, however, many shops the length and breadth of Scotland face the Salmond super-tax, which threatens jobs and investment. How many jobs will be lost? Why is he giving out the message that in Scotland, if you grow your business, create more jobs and are a success, the Scottish National Party will punish you with a Salmond super-tax?

Alex Salmond (Scottish National Party, Gordon)

When we face difficult, tight economic conditions and when Annabel Goldie’s party’s Government at Westminster has introduced a £1,300 million cutback in our ability to spend, it is entirely reasonable for us to look for efficient ways to raise revenue so that we can protect public services and invest in things that we believe are vital for job creation.

As Annabel Goldie knows—we discussed the matter as recently as last week—we put forward a proposal for the small business bonus scheme. That was opposed by the Liberal Democrats and the Labour Party, but we managed to get it through, and we have retained and expanded the small business bonus scheme through the session. The scheme cost £140 million. It benefits 80,000 small businesses in Scotland, which pay no business rates or ones that are heavily reduced, and it is a vital engine of job creation and growth.

I say to Annabel Goldie that if we want to maintain the small business bonus scheme and to protect public services, it is entirely reasonable to ask those with the broadest shoulders to pay their fair share of tax.

Annabel Goldie (Conservative, West of Scotland)

I want to help all businesses, which is why my party made possible the provision of help with business rates bills to small businesses. The £30 million that the First Minister says might be raised by his proposal could be found four times over by dealing with the high levels of absenteeism in the public sector.

When it comes to his super-tax, the First Minister is sending out a message that it just does not pay to be a business success in Scotland. Whatever happened to the legendary SNP prawn cocktail offensive on business? Now the SNP is just being offensive to business. Never have so many prawns died in vain.

If the First Minister really cares about Scottish business and Scottish jobs and really wants to secure the Scottish recovery, he should put the kibosh on his tax on jobs. Will he scrap his Salmond super-tax and will he do that now?

Alex Salmond (Scottish National Party, Gordon)

Annabel Goldie quotes Michael Heseltine. Instead, I will quote Colin Borland of the Federation of Small Businesses, who said:

“three quarters of our members feel that it’s time for the largest out of town supermarkets—who benefit from free parking and other amenities that our members don’t enjoy—to start paying their fair share”.

I will also quote Stephen Boyd of the Scottish Trades Union Congress, who said:

“Let’s hope that the Parliament will pass this measure and quickly move on to discussing those aspects of economic development that really can make a difference to Scotland’s workers”.

The Scottish Licensed Trade Association said:

“The Scottish Government has identified a fair and reasonable way to raise money in this very difficult economic climate.”

I do not claim that the Conservatives are inconsistent. On every possible occasion and at every possible opportunity, they will back big business, but we have put forward a proposal that we believe is fair. It is right for the economic times that we are in, when we must raise additional revenue, and it will help to rebalance the burden on business between the high street and the out-of-town supermarkets. If it was not going to raise £30 million, there would not be the degree of opposition from the big retailers that we have seen. It is designed to raise money to protect public services, to finance the small business bonus, and to help to finance the council tax freeze. If Annabel Goldie and the Conservative Party want to delete it, they will have to specify what issues beyond their vague commitments they are going to raise, tell us how they are going to raise the money, and tell small business and the people of this country why they, instead of those who have the broadest shoulders, should have to pay.

Secretary of State for Scotland (Meetings)

Tavish Scott (Liberal Democrat, Shetland Islands)

3. To ask the First Minister when he will next meet the Secretary of State for Scotland. (S3F-2840)

Alex Salmond (Scottish National Party, Gordon)

I have no plans to meet the secretary of state in the near future.

Tavish Scott (Liberal Democrat, Shetland Islands)

Next week, the Parliament will debate the budget. I accept that choices will have to be made to allow any new spending. A year ago, I asked the First Minister about high pay in the public sector. What progress has his Government made since then?

Alex Salmond (Scottish National Party, Gordon)

We have made substantial progress. We have announced proposals to introduce severe wage restraint in the public sector because we believe that that is part of the contract to maintain employment, but we will protect those who are on the lowest incomes in the public sector. That is the right way to proceed, and it is part of the Government’s social contract with our employees and those of the national health service and other agencies, and with the people of Scotland.

Tavish Scott (Liberal Democrat, Shetland Islands)

A year ago, the First Minister told me that high pay had already been dealt with. We asked the same 160 public sector organisations how much they are spending to pay staff more than £100,000 per year. They told us that last year they spent £281 million and this year they are spending £334 million, so spending on high pay has gone up by £53 million in one year. I am puzzled because, although the SNP Government’s pay policy promised punitive action on high pay, spending is rising quickly. Does the First Minister still believe, as he has just said, that those who have the broadest shoulders should carry the biggest burden?

Alex Salmond (Scottish National Party, Gordon)

Yes, I do. That is why we propose a pay freeze for those who are earning more than £21,000 a year in the public sector.

The basis of the Government’s approach has been to substantially reduce administrative expenditure in the public sector. The member has seen the budget proposals that do that dramatically. The basis of the Government’s approach is also to heavily restrict bonuses in the public sector, hence our argument in relation to consultants in the health service. We have led the field on that issue against an unwilling Westminster Government and against the extremely slow progress of the present Westminster Government. Anyone who looks at John Swinney’s record as finance secretary can see that he has proposed that those who have the broadest shoulders should bear the biggest burden. He has done that with the intention of protecting employment in the public sector. Our dearest wish is that, if we can get the flexibilities that will be required and acceptance of the pay settlement, our policy of no compulsory redundancies can be maintained. That is something of which the Government is very proud indeed.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I will take a supplementary question from Frank McAveety.

Frank McAveety (Labour, Glasgow Shettleston)

I welcome the First Minister’s comments about jobs, economic growth and fairness. Does he think that it is right and fair to slash the budgets of urban regeneration companies across Scotland? Will he ask his enterprise minister to intervene to prevent the 46 per cent cut in the budget that is available to Clyde Gateway in the east end of Glasgow, which will jeopardise the opportunity to bring jobs and industries to a number of vacant sites in one of our most economically disadvantaged communities? When did the east end of Glasgow become the area with the broadest shoulders in Scotland?

Alex Salmond (Scottish National Party, Gordon)

As Frank McAveety should well know, the budget for Clyde Gateway is £18.1 million for 2011-12. That is a substantial commitment that will allow Clyde Gateway to deliver the priority projects that it has established for 2011-12.

As Frank McAveety also knows, and as has been generally acknowledged, we are incredibly supportive of the Commonwealth games project. It will be a fantastic development for Glasgow and a fantastic adventure for Scotland as a whole. The overwhelming majority of the people of Glasgow appreciate that commitment from the people of Scotland and the Scottish Government. I am sure that those same constituents would want their representatives occasionally to reflect that endorsement of a substantial investment of hundreds of millions of pounds in Glasgow.

Paternity Leave

Ian McKee (Scottish National Party, Lothians)

4. To ask the First Minister what the expected economic impact in Scotland would be of the United Kingdom Government’s proposal to allow fathers to take up to 10 months’ paternity leave. (S3F-2856)

Alex Salmond (Scottish National Party, Gordon)

There would be an economic impact, but we welcome the UK Government’s proposals on enabling fathers to share the care of their children. Scotland is leading the way on addressing inequalities between men and women and on improving support for families, especially during the early years of a child’s life, when it can make such a key difference.

Ian McKee (Scottish National Party, Lothians)

I thank the First Minister for his answer and share his welcome for the proposed arrangements, which will allow fathers to bond more closely with their children in the important early years of life. Does he agree that any possible short-term increased cost or loss of productivity caused by the policy would be more than offset by the improved social and educational consequences of allowing both parents to play an active part in their child’s upbringing?

Alex Salmond (Scottish National Party, Gordon)

The estimates for economic impact were based on a 4.8 per cent take-up and suggested that 1 per cent of small businesses would be affected on that basis. The estimates were produced by the previous Westminster Government and are shared by the current Westminster Government.

I accept Ian McKee’s point that there is substantial evidence on the importance of parental support and attachment in child development and wellbeing. We know, too, that the impact of parental neglect on a child can be extremely damaging and permanent. Supporting parents is therefore one of the cornerstones of the early years framework, and I agree that maximising positive paternal time with young children will pay dividends in the future. I think that there is political unanimity that that substantial enhancement and investment in the future makes the measure worth supporting.

Renewable Energy (China)

Elaine Murray (Labour, Dumfries)

5. To ask the First Minister what contribution the Scottish Government made to securing the recent renewable energy deal with China involving Shanghai Huanuan Boiler & Vessel/Cochran and W2E Engineering Ltd. (S3F-2853)

Alex Salmond (Scottish National Party, Gordon)

Neither the Chinese Government nor the Scottish Government was directly involved in the commercial agreement, but Scottish Development International provided its normal investment support.

Elaine Murray (Labour, Dumfries)

Is the First Minister in a position to advise us what the deal means for the two companies’ subsidiaries in Dumfriesshire? Cochran Ltd last week appeared to be unaware of the deal and has submitted a petition to Dumfries sheriff court to request that Waste2Energy Engineering Ltd be wound up, claiming that a bill worth several thousands of pounds owed in connection with the Scotgen Dumfries plant has not been paid. The First Minister was keen to claim some publicity around the deal at the beginning of last week. In connection with that publicity, can he assure us that the deal means jobs in the Annan area and money coming into Dumfriesshire?

Alex Salmond (Scottish National Party, Gordon)

I am aware that there has been some confusion locally about the extent of the involvement of Cochran Ltd in the agreement. The origin of the confusion is the use of the SHBV brand name in China, where it is SHBV Cochran. Cochran Ltd itself is not a signatory to the agreement, although it is a potential beneficiary of the deal—a fact confirmed by SHBV in a press statement on 13 January, which I will be happy to send to the member.

I say to Elaine Murray that Chinese direct investment in Scotland is undoubtedly a good thing. There are companies in Scotland that would not be trading at the moment without that investment. The agreements that were announced at the beginning of last week will be of immense benefit to many workers in Scotland, not least at the Grangemouth refinery, and to many industries in Scotland, not least the whisky and salmon industries. Countries in surplus, such as China, must be encouraged to invest directly in our economy. That developing relationship should carry the support of every single member of this Parliament.

Fish Discards

John Scott (Conservative, Ayr)

6. To ask the First Minister what action the Scottish Government is taking to eliminate the discarding of fish. (S3F-2846)

Alex Salmond (Scottish National Party, Gordon)

John Scott is right to raise the issue. Across Europe, fishermen are forced to discard—and have been for generations—perfectly good fish back into the sea, although they are dead. That is a waste of a perfectly good and healthy food and a vital economic resource.

As John Scott knows, the Scottish Government has been working with fishermen and other stakeholders, and we are leading the way in efforts to reduce the discarding of fish. This year, our innovative catch quota system was the largest in Europe, and it is one of a number of measures that we are taking to reduce discards.

Reducing discards will continue to be a priority for the Government, along with returning full powers over fisheries back to Scotland. I know that many members support our action against discards, just as many members across the chamber are vehemently critical of the common fisheries policy.

John Scott (Conservative, Ayr)

Most right-thinking people are outraged by discarding—indeed, none more so than the fishermen who are fighting for their livelihoods. Some 41 boats have been tied up this year, yet they are forced to implement this dreadful practice.

The First Minister will be aware of fishermen’s unease with the catch quota approach that his Government has taken, but he will also be aware that the United Kingdom Government has called for an end to discarding coupled with more decentralised decision making, which will be vital to achieving that. In the light of that, will the Scottish Government redouble its efforts to work with UK ministers, European officials and, crucially, Scotland’s fishermen to develop other ways of reducing discards, in addition to catch quotas, and so end discarding for good?

Alex Salmond (Scottish National Party, Gordon)

If we are to end discarding, it will require fishermen to be allowed to land what they catch. The catch quota system is designed to enhance quota to allow that to take place. The catch quota system is extremely popular and has been oversubscribed several times, with many applications for places in the scheme. It is vital that the enhancement of quota is sufficient to allow the catch quota system to operate fully.

I am sure that John Scott will acknowledge—I looked it up when I saw his question—that I made my first speech about discarding in a debate on a motion in the House of Commons in December 1988. It has been a long-term campaign by me and just about every other fishing MP to see the obscenity of discarding removed from fisheries policy. I hope that he will agree that the catch quota system must be allowed the opportunity to provide part of the answer.

Maureen Watt (Scottish National Party, North East Scotland)

Does the First Minister share my view that the only way for the Scottish Government to have a real voice when it comes to the common fisheries policy and the progression of innovative policies on discards and maintaining healthy fish stocks is for Scotland to become a full independent member of the European Union?

Alex Salmond (Scottish National Party, Gordon)

Yes, I do. There are two aspects of the common fisheries policy that I will never be able to understand. We have been discussing one of them: discarding is an obscenity and it should be removed. The other is that, under the common fisheries policy, landlocked member states—many of which, no doubt, Iain Gray has insulted from time to time—have more say in deciding fisheries policy than the nation of Scotland, which has a vast proportion of the territorial waters in the European Union. That is why only an independent Scotland will have a seat at the top table and be able to defend the rights of our fishing and rural communities.

Liam McArthur (Liberal Democrat, Orkney Islands)

Although I share the First Minister’s concerns about the extent of discards and indeed his criticisms of the common fisheries policy, he will be aware of the criticisms that were levelled at the catch quota approach this week. Bertie Armstrong, the leader of the Scottish Fishermen’s Federation, described the approach as a perfect control measure for enforcing a system of management that is broken. In that context, what would the First Minister say to those Scottish white-fish skippers who have already registered with producer organisations south of the border and those who are contemplating doing so as a result of concerns about the approach that is being taken to catch quotas and, indeed, conservation credits?

Alex Salmond (Scottish National Party, Gordon)

I say two things to Liam McArthur. First, it is clear that the catch quota system is extremely popular, as applications to the system have been substantially oversubscribed. He should not give the impression that the Scottish Fishermen’s Federation is against the principle of catch quotas, because it has made it clear on many occasions that it is not. The concern is whether the enhanced quota will allow the catch quota system to operate properly. That is exactly what Richard Lochhead and his officials are dealing with at present.

I remember that the member’s leader once had to resign from a Government over the common fisheries policy. Although I share the concerns about it, if people are critical of the common fisheries policy, as Liam McArthur and I have been, they must consider two things. First, they must put forward proposals to mitigate the impact that the CFP has had and keeps on having on our fishing communities. The catch quota system, which will enhance the quota that is available to Scotland as well as to individual fishermen, is an attempt to do that.

Secondly, it is not a policy just to criticise the common fisheries policy; there must be an alternative—a different style and system of managing this resource. That is why I have always believed that national management of resources is perfectly compatible with European policy. That is what we should seek as a Parliament if we are to take best advantage of our position as one of the countries with the most plentiful fishing in the whole European continent.

Margo MacDonald (Independent, Lothians)

I normally refer to fish with a twist of lemon and a shake of black pepper, but, if I am allowed to intervene in this debate, I suggest that there is an alternative to the suggestion that Maureen Watt made. If Alex Salmond has been trying since 1988 to make sense of the common fisheries policy, does he not draw from that some sort of lesson that maybe we should just get out of the European Union altogether?

Alex Salmond (Scottish National Party, Gordon)

I do not draw that conclusion. I would rather just change the common fisheries policy and allow us control of our own resources on fish and other things. However, I do agree with Margo MacDonald that the common fisheries policy is rather like the Schleswig-Holstein question in European history: only three people ever understood it—one is mad, one is dead and I have forgotten.

12:31 Meeting suspended until 14:15.

14:15 On resuming—

Marine Special Areas of Conservation

Alasdair Allan (Scottish National Party, Western Isles)

1. To ask the Scottish Government what infraction proceedings are associated with failure to meet European Commission policies regarding the designation of marine special areas of conservation. (S3O-12670)

Roseanna Cunningham (Scottish National Party, Perth)

Failure to comply with the habitats directive requirement to designate special areas of conservation can result in the European Commission commencing infraction proceedings. That can lead to a European Court of Justice ruling for failing to comply with the obligations. Not complying with such a ruling can result in a significant fine.

Alasdair Allan (Scottish National Party, Western Isles)

Is the minister aware of my opposition to the proposed marine special area of conservation designation in east Mingulay? What representations will the Scottish Government make to the European Commission about the inadequacy of the consultation process around such designations for which European Union law provides?

Roseanna Cunningham (Scottish National Party, Perth)

I am more than aware of the member’s concerns about the designations. We are under a legal obligation to designate special areas of conservation, and that designation must be based on the scientific evidence alone. There is little prospect of a change in EU law on the matter. Nevertheless, we are committed to working with local stakeholders to minimise any impacts of designation, should it go ahead. It is at that point, when one is working out the management measures, that socioeconomic factors can be brought into play. I am conscious of the fact that the announcement of the designation of special areas of conservation such as the one that the member mentions creates a great deal of concern, especially in rural peripheral communities.

“Low Carbon Scotland: Public Engagement Strategy” (Timetable)

Cathy Peattie (Labour, Falkirk East)

2. To ask the Scottish Executive when it will publish a timetable for the implementation of the actions for 2011 laid out in its publication, Low Carbon Scotland: Public Engagement Strategy. (S3O-12662)

Roseanna Cunningham (Scottish National Party, Perth)

Those actions will be carried out throughout the year, many of them as a continuous process and others via specific events. A number are already under way. The delivery plan will be subject to annual evaluation and updating.

Cathy Peattie (Labour, Falkirk East)

I felt that the public engagement strategy was an important provision of the Climate Change (Scotland) Act 2009; therefore, I was disappointed that the strategy was launched just before the bells. The voluntary sector and Stop Climate Chaos Scotland say that the strategy is very poor and that the Government is failing Scotland. How does the Government expect to reach the ambitious targets that were laid down in the 2009 act unless it wins the hearts and minds of the public, the private sector and the communities in Scotland? Is this yet another delaying tactic?

Roseanna Cunningham (Scottish National Party, Perth)

The member expresses her concern but then quotes other people. I would be interested to know whether the member has actually read the public engagement strategy. The strategy is extremely important, as it is something on which we will base our delivery plans as we work through the process. I look forward to a dynamic discussion about how we can engage the public; I am very concerned about that, because some messages seem to get over more easily than others. It would be helpful if members with bright ideas were to communicate them to us instead of carping on the sidelines.

Alasdair Allan (Scottish National Party, Western Isles)

When we think of the public in terms of public engagement strategies, we usually think of individuals and families, but I presume that it also includes senior business figures and large organisations. How much work will the public engagement process undertake with the business community and how much support does it already have in that group?

Roseanna Cunningham (Scottish National Party, Perth)

The strategy contains strong links with the private sector, which will be vital in helping us to achieve our targets both through its direct actions and through its adaptations. It is extremely important that we keep the private sector on board. Engagement with the business community is a key part of wider public engagement. It is important because that community will be critical in developing and promoting Scotland’s transition to a low-carbon economy—as will every single one of us.

Elaine Smith (Labour, Coatbridge and Chryston)

The minister might think about engaging with the public in my constituency and agreeing with the thousands of my constituents who oppose the proposed pyrolysis incinerator in Coatbridge, because such incinerators can undermine efforts to reduce carbon emissions by discouraging recycling and other more innovative green solutions.

Roseanna Cunningham (Scottish National Party, Perth)

I hope that Elaine Smith will communicate further with me with regard to the specific issue that she has raised. Engagement with the public means that we will often have to deal with issues that might, on the surface, appear contradictory but from which we cannot run away. The issue that the member mentions might be one of those issues. I look forward to Elaine Smith contacting me directly on her specific concerns.

Salmon Farming

Maureen Watt (Scottish National Party, North East Scotland)

3. To ask the Scottish Executive whether it considers that a successful farmed salmon industry is an important part of the economy. (S3O-12690)

Roseanna Cunningham (Scottish National Party, Perth)

Yes. Salmon aquaculture is a success story for Scotland and continues to play a key role in our economic recovery, providing high-quality and secure jobs in many rural and coastal communities in Scotland’s Highlands and Islands.

The farmed salmon industry in Scotland was estimated to have a farm-gate value of £412 million in 2009—a 23 per cent increase on the previous year. It also produced about 144,000 tonnes—that figure is up 12 per cent on the previous year. That is a huge success story, in any language.

Maureen Watt (Scottish National Party, North East Scotland)

The minister is aware of the comments apparently made recently by the United Kingdom Government’s minister with responsibility for fisheries, Richard Benyon, attacking the farmed salmon industry. Does the minister believe that such comments are deeply unhelpful and does she agree that Mr Benyon should publicly retract his criticism of the industry, especially since there is now huge potential in the Chinese market?

Roseanna Cunningham (Scottish National Party, Perth)

It would be fair to say that we were disappointed with Richard Benyon’s comments, particularly because they were based on some factual mistakes. As we know, the reputation of farmed Scottish salmon is that it is a high-quality healthy product, and that the industry is fully regulated. I suspect that Mr Benyon’s comments were born of a lesser understanding of the issues of aquaculture than we might be accustomed to in Scotland, given that it is an extremely small part of the English economic make-up.

We need to address the issue. I am writing to Richard Benyon to remind him of the importance of the salmon industry in Scotland, and I understand that the Scottish farmed salmon industry intends to invite him to visit Scottish farms and see them for himself.

Jamie McGrigor (Conservative, Highlands and Islands)

The Highlands’ share of the Scottish salmon farming industry is some £58 million, in terms of rural employment. What is the minister doing to encourage other forms of fish farming in Scotland?

Roseanna Cunningham (Scottish National Party, Perth)

Aquaculture, in the broadest sense, includes far more than simply farmed salmon. We have a healthy and growing shellfish sector, which is important with regard to the areas that Jamie McGrigor is talking about. There are also interesting moves in terms of halibut, which have been successful in the areas in which they have been undertaken. We are keen that the industry should grow into other areas. However, there is no doubt that farmed salmon is by far the largest component of aquaculture in Scotland, which is why it gets such a great amount of publicity.

Sewage Treatment Works (Bothwell Road)

Tom McCabe (Labour, Hamilton South)

4. To ask the Scottish Executive what action it can take to ensure the elimination of the noxious odours that emit from the sewage treatment works at Bothwell Road in Hamilton. (S3O-12650)

Roseanna Cunningham (Scottish National Party, Perth)

Scottish Water advises me that it has not received any complaints about odours at the sewage treatment works at Bothwell Road in Hamilton and that no odour nuisance was present when the waste water treatment team leader visited earlier this week. I have asked Scottish Water to contact Mr McCabe directly to discuss the situation in more detail and to arrange any further investigations. I understand that that might already have happened.

Tom McCabe (Labour, Hamilton South)

I appreciate the minister’s offer, and I will take it up. We have already arranged a telephone conference.

The odour is an intermittent problem that depends on weather conditions, but it generates a fair degree of concern among residents.

Roseanna Cunningham (Scottish National Party, Perth)

I fully appreciate the difficulty—I experienced the same difficulty with a particular area in my constituency and I suspect that similar issues are known to other members. I am pursuing the history of complaints in respect of the matter.

Scottish Water has through its programmes made improvements to the waste water treatment works at Hamilton. Between 2006 and 2010, it invested about £580,000 in the plant and it expects, between 2010 and 2015, to invest a further £3.3 million, so there might still be hope for the member in that.

Local Food Producers (Large Retailers)

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

5. To ask the Scottish Government what progress it has made in encouraging large food retailers to offer outlets in their stores to local food producers. (S3O-12671)

Roseanna Cunningham (Scottish National Party, Perth)

The Scottish Government engages on an on-going basis with retailers on a host of issues relating to Scotland’s food and drink supply chain through the Scottish grocery retailers forum. Retailers have also signed up to the retailers charter, which commits them to working in partnership with Scotland’s food and drink industry. That is reaping dividends, with major retailers stocking many more Scottish products in their stores and working closely with local suppliers. In fact, this evening, Asda will launch its supplier development programme, which involves Asda working with 10 local suppliers to better understand the supply chain and grow their businesses.

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

Is the minister satisfied that adequate arrangements are in place to help consumers identify Scottish and more locally produced produce? If not, will she work with the retail sector to ensure that the locality labelling arrangements for Scottish produce are improved, not just in large retailers, but online and in local food stores?

Roseanna Cunningham (Scottish National Party, Perth)

The member will know that the Scottish Government has actively pursued the issue. It is part of what we have tried to do through the national food and drink policy. It is important for niche suppliers to get the kind of designation that the member talks about, but that is not always as easy as it might seem on paper and a lot of work has to be done.

A lot of work has already been done. We work closely with the retail industry through the retail forum and the retail charter, and with the wider food industry, to ensure that appropriate information is provided for consumers to help them identify the origin of products. We will continue with that engagement, because I suppose that it is one of those issues on which we will never have a full stop and be able to say that it is sorted.

John Scott (Conservative, Ayr)

The minister will be aware that progress has been slow in local authorities, prisons and other institutions on the uptake of the use of local food and the initiative that Andy Kerr, the then health minister, launched in 2004. What further progress has been made on the issue, given the obvious benefits to child health and towards meeting climate change targets?

Roseanna Cunningham (Scottish National Party, Perth)

There continue to be procurement issues, of which the member will be well aware. We continue to pursue that aspect because, from the perspective of the food and drink industry and the consumer, it is of great benefit if the big institutional providers can use local produce wherever possible. However, as the member knows, that is not as easy as simply saying it, and we must continue to work hard to try to achieve it.

Jim Hume (Liberal Democrat, South of Scotland)

In response to John Scott, the minister mentioned procurement issues, but East Ayrshire Council and other councils have been exemplars in their sourcing of local food. East Lothian Council sources 100 per cent of its food from the local area. The food budget for local authorities alone is about £58 million per year. Through lodging freedom of information requests, I have found that local authorities spend only 3.5 per cent of their food budget on sourcing food locally. Does the minister agree that we should not hide behind European Union procurement rules, as that is not a real issue, given that it has been addressed by local authorities in Scotland and by countries in the EU such as Italy?

Roseanna Cunningham (Scottish National Party, Perth)

It is a little unfair to talk about hiding behind procurement rules. Every local authority will be considering the issue. Those local authorities that provide exemplars ought to be lauded, and I do not want not to do that. East Ayrshire Council and East Lothian Council—which I have visited, so I know about the work that it has been doing—must be congratulated and the rest of the local authorities in Scotland need to follow their good example. Pressure can be brought to bear on local authorities from many different angles, not just from the top down; pressure from the bottom up is very important, too.

Waste and Recycling (Cold Weather)

Nicol Stephen (Liberal Democrat, Aberdeen South)

6. To ask the Scottish Executive what advice it has issued to residents whose household waste and recycling was not collected and whose recycling centres were overflowing during the recent cold weather conditions. (S3O-12717)

Roseanna Cunningham (Scottish National Party, Perth)

The situation was different from local authority to local authority but, in general, those local authorities most affected by the severe weather conditions focused on dealing with the backlog of residual waste collections and advised householders to store recyclate or to take it to recycling centres when it was practical and safe to do so. The Scottish Government issued similar advice through a press release on 27 December.

In a number of cases, local authorities put in place contingency arrangements and set up temporary collection points. In all cases, local authorities worked very hard to cope with the unprecedented conditions that they faced and have caught up with the backlogs that were created over December.

Nicol Stephen (Liberal Democrat, Aberdeen South)

Is the minister aware that some residents had to wait many weeks for their normal household waste collection and that some recycling centres, including the one in my constituency at Asda’s Bridge of Dee store in Aberdeen, which I witnessed for myself, were so overflowing with uncollected waste that they clearly represented a health hazard?

What action will ministers take to learn important lessons from the serious problems of this winter; to better co-ordinate the activities of councils, especially when machinery and vehicles break down; and to provide additional emergency resources and support whenever that is necessary to ensure that those serious problems are not repeated?

Roseanna Cunningham (Scottish National Party, Perth)

I am sure that the member will bring forward proposals during the budget process to identify the money that he thinks is required to support such arrangements and to indicate where it will come from.

The fact is that local authorities are responsible for dealing with the issues in their areas and, in my view, they have done their best in extremely difficult circumstances. Some authorities’ collection crews worked over weekends, while some authorities relaxed the rules on households presenting excess bags of rubbish and provided large skips into which householders could place waste.

In general, as the member well knows, it is not the function of the Scottish Government to oversee the work of local authorities, but there are mechanisms for addressing local authority performance. I hope that if the member is making complaints, he has, in the first instance, made them through his local authority’s complaints procedure.

Public Bodies (Reform) Bill (Forestry)

George (Labour, Lothians)

7. To ask the Scottish Executive what consultation it has had with the United Kingdom Government regarding the provisions for forestry in the Public Bodies (Reform) Bill. (S3O-12639)