Scottish Parliament, 29 November 2001

502 contributions from 83 members. The official report.

Introduction

Point of Order

Michael Russell (Scottish National Party, South of Scotland)

On a point of order, Presiding Officer. I draw your attention to page 8 of today's business bulletin and to the motion in the name of Patricia Ferguson on the membership of committees. It is almost unbelievable that the motion refers to a replacement for Cathy Peattie on the Education, Culture and Sport Committee. I admire Cathy Peattie—I like Cathy Peattie. However, the motion makes an assumption about something that the chamber may or may not agree to later today. That is an abuse of the chamber and should not be permitted.

David (None, Lothians)

With respect, the motion makes no such assumption. It makes a straightforward proposal to replace one member with another. That is perfectly normal.

Local Government Elections (Proportional Representation)

David (None, Lothians)

The first item of business is an SNP debate on motion S1M-2487, in the name of Tricia Marwick, on proportional representation in local government elections, and one amendment to that motion. I invite those who want to take part in the debate to indicate their wish to do so now.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

In the spirit of consensus, openness and transparency for which I am well known, every member's researcher has received a copy of the SNP briefing paper. I hope that members read it and learn from it. It contains some good-quality information and I hope that the research produced by the SNP can be used to enhance the debate.

Michael Russell (Scottish National Party, South of Scotland)

There is no need for a debate now.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

Indeed—the point is made.

On 5 September, during the debate that followed the announcement of the Scottish Executive's legislative programme, John Swinney took Henry McLeish to task because the programme did not mention electoral reform or progress towards electoral reform. I commented that, for the Lib-Lab coalition, proportional representation is

"the issue that dare not speak its name."—[Official Report, 5 September 2001; c 2223.]

Recent events have underlined the stranglehold that Labour has on civic Scotland, from councils to the enterprise networks, health boards and all the other quangos. Iain Macwhirter of the Sunday Herald suggested that the Labour party should

"liquidate itself on the grounds that it is manifestly the source of most of the cronyism in local politics."

Not even I would go that far, but I agree with the almost universally held view that was expressed by Brian Meek, who is a columnist for The Herald and a Tory councillor. He said:

"The best way to root out the cancer of unbridled power in local authorities is to change the voting system".

I said that that view is held almost universally because, after my recent meeting with the Convention of Scottish Local Authorities, it became clear that Labour councillors are simply not prepared to accept a fair voting system for local government.

Phil Gallie (Conservative, South of Scotland)

Does the member agree that the best way for politicians to change the make-up of councils is for them to present the right policies for local areas and to win seats on their merits?

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

That is obviously why the Conservatives have so few councillors. I will come back to Phil Gallie's point later.

Why should Labour councillors accept a fair voting system in local government? The Labour MP, Jimmy Hood, warned against PR. He said, with breathtaking arrogance, that party members

"must defend democracy, and, more importantly, defend the Labour party".

There we have it: defending Labour party interests is more important than democracy. But then, SNP members always knew that.

Labour has a vested interest in retaining its entrenched power. It seems that the ability to reform the fiefdoms voluntarily is beyond even the most dedicated Labour modernisers. However, reform must come or local government in Scotland will die: controlled and directed from the centre, it will be airbrushed out of Scottish society in the same way as a minister for local government was airbrushed out of the ministerial portfolios that were announced yesterday.

Unfortunately, the Liberal Democrats hold the key to PR in the Parliament. They prop up the Labour Executive. In a blaze of publicity, they trumpeted the partnership agreement of 1999, telling us:

"We will ensure that the publication of ... McIntosh ... is followed by an immediate programme of change including progress on electoral reform."

It is appropriate to ask what progress the Liberal Democrats have made since then. We had a year-long consultation, at the end of which Kerley recommended not only the implementation of the single-transferable-vote system but that the Executive should take

"an early decision on the date of implementation of a new electoral system."

Kerley anticipated that it would have been possible to implement a new system in time for the 2002 elections, never mind the delayed 2003 elections that we now face.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Tricia Marwick said that the Liberal Democrats hold the key to PR in the Parliament. Does she accept that, as the Labour party is not convinced about PR and the Tories are adamantly opposed to it, there is no majority in the Parliament for PR, even if we were to introduce a bill tomorrow?

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

I do not agree with Mike Rumbles's premise, which I will cover later in my speech. I accept the points that he makes about the Labour party and the Conservatives, but the fact remains that the Liberal party is prepared to sell out its principles on PR.

It is clear that, after three years of consultation with literally hundreds of respondents, Kerley and Macintosh said that the STV system was best for Scotland. How much more consultation is needed? Not much, I suggest.

As I said, the Liberal Democrats hold the key, but they stood back and let the Labour party kick the PR ball into the long grass with the promise of a ministerial committee to take matters forward. That was a year and a half ago and now we have an admission that not much has happened during that period. When the Liberal Democrats were confronted with the decision whether to support the third First Minister, did Jim Wallace, the bold Liberal leader, stand up for his party and his principles? Did he stand up to demand an end to cronyism and the one-party domination that, in the words of Ken Richie of the Electoral Reform Society, encourages

"a political culture in which there is a danger of councils and councillors becoming arrogant, aloof and detached"?

Even Jim Wallace said:

"We must not underestimate the self-interested resistance from those fiefdoms which will be challenged by a fair voting system."

What hard-nosed bargain was the tough negotiator, Mr Wallace, able to extract from the new First Minster? According to The Scotsman, the bargain was that they had

"agreed that the next steps should be to agree the next steps".

He could not even negotiate a decent excuse, never mind a decent bargain. Two and a half years after the coalition promised progress on electoral reform, we find that progress actually means agreeing the next steps to agree the next steps.

According to a leaked report that appeared in The Times yesterday, Charlie Kennedy is worried that the Liberals at Westminster are perceived as Labour's poodles. However, poodles bark—sometimes—and the problem in the Scottish Parliament is that the Liberals are Labour's lapdogs: they have no bark, no bite and no backbone.

It is frustration with that utter lack of progress that forced me to lodge a bill on PR, proposing the STV system. The Fairshare campaign and the Electoral Reform Society support both my bill and the STV system. I take this opportunity to pay tribute to the many dedicated members of all political parties who work tirelessly to advance the campaign for a fair voting system, some of whom have joined us in the public gallery today.

The events of the past few weeks have shone a light into the dark corners of Labour's crony networks. The networks of influence and cronyism have begun to be exposed, from the legal firms that rent office space to the job creation schemes for Labour friends such as Esther Roberton. As the answer to a written parliamentary question lodged by David McLetchie showed, of those appointed under the public appointments system since 2000, 75 per cent who declared a party connection were members of the Labour party. It is no wonder that Angus MacKay was sacked this week—imagine a Labour minister letting that little gem into the public domain.

The Parliament can clear up Labour's midden by doing two things. First, it can support Alex Neil's bill, which would give the Parliament power to scrutinise public appointments. Secondly, it can introduce fair voting for local government elections.

It is appropriate for me to acknowledge at this point the many councillors in Scotland who want only to serve their communities and who put in long hours for little reward, beyond the satisfaction of doing their best for the communities and people whom they represent.

A fair voting system would remove the unhealthy taint that Scottish local government has unfairly earned from the worst of Labour's rotten boroughs. It would restore public confidence and public interest in local government. Because a fair voting system would eliminate the wasted-vote syndrome, it is the single biggest step that could improve turnout. STV, which uses multimember wards, would retain the member-ward link. In England and Wales, 80 per cent of wards are already multimember. Northern Ireland already has PR. Let us not have specious arguments that a one-member-one-ward system is the only suitable system for local government in Scotland.

Scott Barrie (Labour, Dunfermline West)

I will make my views on PR known later in the debate, but does Tricia Marwick accept that what she said about multimember wards in England was slightly misleading? Although most English wards have more than one councillor, the councillors are usually elected for only three years and are still elected by first past the post.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

I was making the point that, although we often hear councillors saying, "This is my ward and these are my people," multimember wards already exist. The link between the councillor and the ward should not rest solely on one councillor.

The current electoral system protects the Labour party to the extent that effective scrutiny and opposition is simply not possible. No one argues that the party that gains the majority of votes in an election should not have the majority of the seats on a council. However, it is quite unacceptable that a party that has gained only 46 per cent of the vote should have 95 per cent of the seats. In the elections for Dundee City Council and East Ayrshire Council, the SNP polled more votes than the Labour party but ended up with fewer seats.

A fair voting system in local government is now imperative. This autumn, the genie of Labour cronyism has been let out of the bottle and will not go back in. That cronyism is corrosive to democracy and poisonous to society. In the eyes of the people of Scotland, it undermines the work not only of the local authorities but of the whole political process. It is now imperative that the Parliament acts decisively and quickly. The universally agreed way to do that is to end the one-party states and destroy the fiefdoms by delivering a fair voting system for local government.

Let me turn to the fig leaf—sorry, the amendment. The amendment does not advance the case for a fair voting system but merely allows the Liberals and the Executive to pretend that something is happening. It is widely speculated that the Liberals are looking for an excuse to parachute out of the coalition so that they are free to fight the 2003 elections as though they were independent of Labour. The Liberal Democrats are complicit in engineering the lack of progress on PR to give them just that excuse. If the Liberals want to play fast and loose with their principles and with the expectations of their supporters, so be it. However, they should not expect the rest of Scotland to sit back and accept the cynicism of a party that, like its coalition partner, puts narrow party interest above the interests of Scotland's democracy.

Let me end on this note: a fair voting system for local government elections is supported by a majority of the supporters of each party in the Parliament. Contrary to Mike Rumbles's view, I believe that a majority of members in the chamber would, in a genuinely free vote, support such a system for local government in Scotland. The new First Minister, Jack McConnell, spoke about the need to deliver on the people's priorities. Fair voting is one of the people's priorities and a democratic imperative. It is time to deliver on it.

I move,

That the Parliament approves the principle of proportional representation for local government elections, as recommended in the Kerley Report.

Peter Peacock (Labour, Highlands and Islands)

I am afraid that we have seen a rather sad display from the SNP. Using generalisations, it has attempted to smear Liberal and Labour elected representatives who work throughout Scotland. The SNP tries to pretend that it has a principled support for PR. As usual, the debate has been a piece of naked opportunism in which the SNP has tried first and foremost to drive a wedge between the coalition partners—something that it has singularly failed to do so far and will continue to fail to do.

The debate has nothing to do with principled support for PR on the part of the SNP. The real agenda is helpfully revealed by the SNP briefing paper, which, as Tricia Marwick said, was circulated to all members of the Scottish Parliament. That is a commendable new form of openness, which we hope will continue regularly in future. The paper reveals:

"The SNP objectives in this debate are to:

● first, highlight why Labour are so resistant to political change"—

I will deal with that nonsense in a moment—

"● show why Liberals are untrustworthy,"—

I am sure that my friends will be delighted to deal with that in due course—and

"● ensure the SNP are identified as Scotland's democratic champions",

which is another nonsense that I will deal with in a second. Those are the real objectives for today's debate. Did anyone see the words "proportional representation" or "local government" in those objectives? No, because those words did not appear. This debate has nothing to do with PR or the SNP's principled stance. It exposes the SNP's hypocrisy, the utterly unprincipled nature of its approach to the Parliament and its contempt for the Scottish people.

However, let us look at the charges that have been set out in the objectives for the debate, as supplied by the SNP research staff. No doubt my Liberal friends will be delighted to deal with the charges that have been levelled against them. The SNP suggests that Labour is "resistant to political change". What nonsense. SNP members claim that they are somehow "Scotland's champions". What nonsense. If they are the great champions of change and of democratic processes in Scotland why, when the greatest democratic and political change of the past two centuries was being fashioned by the Scottish Constitutional Convention, did the SNP sit on the sidelines? SNP members were doing what they always do: carping, carping, carping.

When Labour and Liberal politicians were working with the grain of Scottish opinion and wider civic society through the Scottish Constitutional Convention, the SNP and its Tory cronies sat apart from the consensus in Scotland. That is what those two always do; they are old cronies sitting together. When Labour and Liberals politicians were delivering PR for this new institution, to which the SNP as a party owes its very existence, the SNP sat on the sidelines. We do not need any lectures from the SNP about political change. Members of the coalition parties have been the instigators and deliverers of political change. The SNP only ever sits on the sidelines to carp.

Andrew Welsh (Scottish National Party, Angus)

When Peter Peacock was a member of COSLA, he demanded action. Now that he is a minister and is in a position to act, all that he has done is to produce yet another review, which comes after considerable delay. That is a bit of a change. We would have expected action. The minister has not mentioned PR. If he believes in PR, why no action, given that he is in a position to do something about it?

Peter Peacock (Labour, Highlands and Islands)

I shall deal with those points in a minute.

Labour at Westminster has delivered more fundamental political and constitutional change in the past four years than we have seen in the past 200 years. Labour has delivered: a new Parliament for Scotland with PR; a new National Assembly for Wales with PR; a new Northern Ireland Assembly with PR; and a new London Assembly with PR. The regional assemblies are beginning to emerge across England. The dramatic reform of the House of Lords has ended centuries of privilege at the heart of the institutions of Government in this country. In Scotland, the Executive is delivering land reform that will empower Scottish communities.

That is a catalogue of the most fundamental and dramatic constitutional, democratic and political changes that have been seen for centuries. We have devolved power to nations, regions and to communities across the country. That has been delivered by Labour at Westminster and by the Labour-Liberal coalition in Scotland, in which the Labour and Liberal parties have worked together, just as they worked with the grain of Scottish opinion within the Scottish Constitutional Convention. The democratic champions in the SNP played no part whatever in that catalogue of action.

Michael Russell (Scottish National Party, South of Scotland)

I know that the minister was not in the Labour party during the 1997 referendum, so he might not know that, during the referendum campaign, a group of people from across Scotland worked together, including many members of the SNP. Indeed, most commentators have said that the leader of the SNP produced the most effective contribution—something that the Labour members would not mention because they were embarrassed by the contribution of Labour party members. In the interests of fairness, accuracy and generosity, does the minister accept that point? I presume that that will derail the rest of his nonsensical speech.

Peter Peacock (Labour, Highlands and Islands)

The SNP arrived on the pitch only when the game was pretty well over. The whole picture had been fashioned over many years by the Labour party, the Liberal party, the trade unions, the churches, the voluntary sector and the local authorities in Scotland working together while the SNP and the Conservatives, the old cronies, sat on the sidelines and simply carped. When the SNP arrived late in the day, it supported the consensus. Nonetheless, it was the Liberals and the Labour party that developed that consensus.

Kenneth Gibson (Scottish National Party, Glasgow)

On a point of order, Presiding Officer. Two minutes and three seconds into my speech yesterday, you chided me for not addressing the motion. We are now six minutes into Mr Peacock's speech—any chance of him talking about PR in local government?

David (None, Lothians)

You have anticipated me, Mr Gibson. I was just about to say that the discussion was getting away from the subject under debate, which is PR. Let us get back to that— [Interruption.] —and that applies to all members.

Peter Peacock (Labour, Highlands and Islands)

You have anticipated my next move, Presiding Officer. All I am trying to do is to give the historic context. The history books will show that, for the reasons that I have set out, we need no lectures from the SNP. Just as we have made progress on political and democratic change at the UK and Scottish levels, so we are committed to making progress on electoral reform in local government.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

As the minister who is responsible for local government in Scotland, can Mr Peacock tell me how many times in the past year he has met the committee that is progressing PR in local government?

Peter Peacock (Labour, Highlands and Islands)

The important thing to understand is that the workings of government—something of which the SNP has no knowledge—mean that people communicate in a variety of ways. Meetings take place, submissions are made, papers are considered and there is a range of correspondence. We are committed to making progress and progress we will make. Our amendment makes it clear that we are committed to making progress and to preparing a timetable for that progress. The amendment acknowledges the need to secure general consent and wide support for the system of electing Scottish councils. It also acknowledges the importance of the member-ward link in local government.

The SNP offers posturing and posing on this issue. While it tries to smear and denigrate the people's elected representatives in councils across the land, it is the Labour Government in Westminster and the Labour and Liberal coalition in this Parliament that have delivered radical reform and that have committed themselves to further progress. It is to this coalition that the people of Scotland need to look for the radical action that they seek. Our record shows that we deliver.

I move amendment S1M-2487.1, to leave out from "approves" to end and insert:

"notes the Scottish Executive's continuing commitment to the pledge made in its Programme for Government to make progress on electoral reform, to the principles of renewing local democracy as set out in the Kerley report, including the importance of the member/ward link in local government, to the need to secure general consent and wide support for the system of electing local councils and to producing a timetable for further progress with urgency."

Keith Harding (Conservative, Mid Scotland and Fife)

I assure the chamber—especially our cronies in the SNP—that I will be addressing the motion.

This SNP debate is a poorly disguised attempt to push an electoral system that would be to the SNP's advantage. The SNP sees an opportunity to attack the embarrassing nature of Labour cronyism and Liberal Democrat willingness to do anything for coalition power. I hope that Mike Russell will not get too excited by what I am saying, as the SNP is falling into the same old trap by pushing its own interests. However, this debate is premature: we will not have PR in any form for the council elections of 2003 and we cannot bind the next Parliament's decisions.

Unlike some other parties, the Scottish Conservatives have consistently opposed any moves towards PR for local government elections. We support the current first-past-the-post system. That is not because it is always in our interest. Lately, it has not been—and it certainly has not been in our interest in local government. However, we support it because of a number of issues of principle. First past the post provides strong governance with clear accountability to a party that wins an outright majority.

Robert Brown (Liberal Democrat, Glasgow)

Will the member give way?

Keith Harding (Conservative, Mid Scotland and Fife)

The system ensures that the electors, not the politicians, choose the ruling administration. Most important, in councils it provides a direct link between the elected member and the people who elected them. PR would remove those advantages and mean that administrations were made up following backroom political deals in which the electorate had no say.

Did someone want to intervene?

Robert Brown (Liberal Democrat, Glasgow)

Yes, but it is all right.

Keith Harding (Conservative, Mid Scotland and Fife)

I apologise to Robert Brown. I did not hear.

Cronyism is the problem. We accept that there is a culture of cronyism in some parts of Scottish local government. It needs to be exposed and eradicated. That cronyism is often based on one-party-state councils. We recognise that that culture then works its way up through the system. The SNP view—that PR will solve all the problems—is simplistic in the extreme. The Liberal Democrats have gone silent on PR, as they did on cronyism, so as not to upset their coalition allies.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

Will the member give way?

Keith Harding (Conservative, Mid Scotland and Fife)

No, thank you.

PR will tackle only the symptoms of cronyism and not the underlying problem of the concentration of power in the hands of politicians—usually Labour politicians. PR might change the political balance of some councils, but it would institutionalise a system of proportional cronyism in which other parties would get a chance to share political patronage.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

Will the member give way?

Keith Harding (Conservative, Mid Scotland and Fife)

No, thank you.

Even some in the SNP acknowledge that the answer lies elsewhere. Alex Neil has introduced the Public Appointments (Parliamentary Approval) (Scotland) Bill, which would provide parliamentary scrutiny of public appointments. The bill may not be perfect, but it shows more imagination than the SNP's official policy and is worthy of consideration. We should all seek to find a way of ensuring probity in public appointments, which should be based on merit and not on political patronage.

The real answer to cronyism is to reduce the power and patronage of politicians in Scottish society. That will require fundamental change. The Scottish Tories are the only party that is campaigning for a fundamental shift in power from politicians and the institutions of the state back to the independent and autonomous institutions of civil society. Power in the hands of individuals, families, local communities, co-operatives and voluntary organisations is far more locally accountable and it is independent of the crony culture.

In contrast, PR will simply entrench the power of the state, by giving political parties a vested interest in maintaining power. If we do not have politicians at national and local level who are committed to the real devolution of power, the potential for the abuse of power will continue.

What should be done? As I said when we debated the issue last year, Labour's unfair grip on councils is often more to do with the way in which the boundaries are drawn than with a lack of support for the opposition. Councils draw up the draft boundaries, which are based on the existing ones, and those drafts are approved politically by the votes of the ruling group on each council before being passed to the Local Government Boundary Commission for Scotland. Over time, the ruling group entrenches its power, clumping large opposition majorities into a few wards and giving itself moderate but easily defended majorities. A new, fairer and more independent system for drawing up boundaries must be devised. We believe that an entirely new set of boundaries is required.

Kenneth Gibson (Scottish National Party, Glasgow)

Will the member give way?

Keith Harding (Conservative, Mid Scotland and Fife)

I am sorry, but I have not got the time. The Local Government Boundary Commission for Scotland should start from scratch rather than using the existing boundaries as a basis for change, and it should determine the first proposals for consultation.

PR for local elections could mean yet another different system and even more confusion. It would also be a danger to our well-established system of general elections, which is part of our democratic tradition and which is well liked. PR would simply lead to permanent coalition administrations through secret deals. Coalition government takes power from the electorate and concentrates it in the hands of politicians. It has led to the Liberals selling out on their principles for political power. We would also end up with a small party always in power—self-interest is the motivation for the Lib Dems as well as for the SNP.

Even the SNP's choice of a PR system is warped. Everyone recognises that the member-ward link keeps councillors responsive to the needs of their local communities and can provide the effective representation of local needs that the electorate value.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

rose—

Keith Harding (Conservative, Mid Scotland and Fife)

If Tricia Marwick will listen to what I say, I will answer the question that she wants to ask.

Effective representation is best provided by the direct election of all councillors on a first-past-the-post basis at ward level. However, if it becomes inevitable that some form of PR will be introduced after the next Scottish Parliament elections, it is vital that we retain the member-ward link. The additional member system that is used for this Parliament, although it has inherent flaws, comes close to retaining that link. To propose STV for local government is simple folly.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

A few minutes ago, Mr Harding referred to STV as the SNP's system. Does he accept that the Kerley working group—which investigated STV—the Electoral Reform Society and most commentators agree that STV is the most appropriate system, as it retains the member-ward link?

Keith Harding (Conservative, Mid Scotland and Fife)

The Liberal-Labour coalition tends to disagree with both Kerley and McIntosh on the timing of elections and we are entitled to our opinion on PR.

Before going as far as changing the system used, we could increase accountability, produce strong governance and end crony power in our cities through directly elected provosts.

Far from championing democracy for the people of Scotland, the SNP has shown today that it is out only to promote its own selfish party-political interests. In that, it is no better than Labour and its Lib-Dem coalition cronies. The PR system that the SNP proposes will institutionalise power in the hands of politicians with permanent coalition and proportional cronyism. Sharing the jobs among political cronies is not the answer to Scotland's problems. Only the Scottish Tories are prepared to challenge that on principle, rather than hope to win more seats under a new electoral system.

Real change can be made through fairer, independently drawn council ward boundaries, a review of the public appointments system, elected provosts in our cities and greater accountability for councillors. Ultimately, cronyism will end only when we claw back the powers of big Government, which is supported by the three-party, left-of-centre consensus in the Scottish Parliament. We need to devolve power from politicians and the state to Scotland's communities, families and people. The Scottish Tories alone will take on that challenge. We are the real Opposition.

Iain Smith (Liberal Democrat, North East Fife)

I will not waste much of my speech on the Conservatives, but it is clear that they have exposed their true colours today—they want to transfer power from democratically elected institutions to unelected undemocratic institutions. That is the clear agenda that was set out by David McLetchie last week and by Keith Harding today.

At First Minister's question time on 15 November, in the process of demolishing John Swinney, Jim Wallace said:

"It is probably one of the most open secrets in Scottish politics that the Liberal Democrats support proportional representation for local government."—[Official Report, 15 November 2001; c 3929.]

He went on to remind the Parliament that in September, the First Minister—it was Henry McLeish in those days—had said:

"We want to ensure that we can effectively hold to account those who take decisions, so the Kerley principles will be at the heart of our modernisation of local government."—[Official Report, 5 September 2001; c 2202.]

Let us be clear what that means. The renewing local democracy working group was set up under the chairmanship of Richard Kerley to take forward the recommendation of the McIntosh commission, which read:

"Proportional representation (PR) should be introduced for local government elections. A review should be set up immediately, to identify the most appropriate voting system for Scottish local government".

McIntosh then identified the criteria that were to be used in determining that voting system: proportionality; the councillor-ward link; fair provision for independents; allowance for geographical diversity and a close fit between council wards and natural communities.

Phil Gallie (Conservative, South of Scotland)

The member seems to be pursuing the argument that we should accept the McIntosh report and the Kerley report. On that basis, will he support the SNP motion?

Iain Smith (Liberal Democrat, North East Fife)

I support absolutely the McIntosh and Kerley recommendations. However, I want them to be delivered, which is why I shall support the Executive amendment rather than the SNP motion.

Kerley used the criteria that he had identified to examine a number of electoral systems, including first past the post, alternative vote, lists and the additional member system. The committee came down by a clear majority in favour of the single transferable vote system as best meeting the requirements of the remit that I referred to earlier, particularly in respect of proportionality and the councillor-ward link.

The case for proportional representation is overwhelming. There can be no justification for a system of elections in which one party obtains 95 per cent of the seats on only 46 per cent of the vote, as in Midlothian; 94 per cent of the seats on 49 per cent of the vote, as in Glasgow; or indeed 72 per cent of the seats on 45 per cent of the vote, as in Angus. That leads inevitably to the unaccountable one-party fiefdoms that have sadly become so common in Scotland—we risk complacency, corruption, cronyism and Charlie Gordon.

Vibrant, efficient, open and accountable local government needs effective opposition, which cannot be guaranteed under an electoral system that fails to give the voters a real choice, fails to hold elected members to account and, in effect, allows the political parties rather than the voters to choose who represents their area.

In Fife, Labour administrations have been returned on decreasing shares of the vote for years. That, coupled with the abject failure of the SNP to turn its votes into seats, the Tories being all but wiped out and the Liberal Democrats winning virtually everything in my constituency, shows that the political map of Fife does not reflect the views of the electorate.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

The member fails to mention that, in Fife, the Liberal Democrats have 27 per cent of the seats on only 21 per cent of the vote, whereas the SNP has 11 per cent of the seats on 26 per cent of the vote.

Iain Smith (Liberal Democrat, North East Fife)

That is precisely my point—the SNP seems to be unable to campaign in Fife and therefore cannot turn its votes into seats. The Liberal Democrats are effective and actually manage to get people elected under the present system.

Michael Russell (Scottish National Party, South of Scotland)

He does not understand.

Iain Smith (Liberal Democrat, North East Fife)

I understand exactly—we are much better than the SNP is at fighting elections.

The political map of Fife does not reflect the views of the electorate. It leaves Labour voters in North-East Fife without a voice on Fife Council, but similarly leaves Liberal Democrat voters without a voice in many parts of Kirkcaldy and Dunfermline.

Proportional representation is about not just ensuring that the overall balance of a council reflects the votes that are cast for each party, but ensuring that the voters have a real choice about who represents them and their area. That is why I am not surprised that, having examined the options, Kerley came down strongly in favour of STV.

STV does not ensure perfect proportionality. Estimates suggest, for example, that Labour would still have a majority in Glasgow, even with a minority of the votes. The threshold for election in a four-member ward under STV is 20 per cent of the vote, which is a significant hurdle. For pure proportionality, we would need a list or top-up system of some sort, but that would break the councillor-ward link.

In contrast to Keith Harding, I argue that STV would strengthen the councillor-ward link. It would give voters a choice—they would not have to vote for whoever their preferred political party put up, but would have a choice between candidates of the same party. Voters could therefore choose the candidate whom they think would represent them best. Those sitting members who failed to represent their constituents effectively would have to look to their laurels.

That is why, as Jim Wallace said, it is no secret that Liberal Democrats support proportional representation for local government. For Liberal Democrats, it is an issue of principle. We support PR because we believe it is right, not because it is in our own self-interest. Believe me, my Liberal Democrat colleagues in North-East Fife will not be queuing up to thank me for introducing a system under which half of them may lose their seats.

What about the SNP? I thank the SNP for sending us a copy of its briefing—it was good to be able to benchmark the quality of our own briefings against it, and I assure members that our briefings are much better. The SNP, in its exciting little document, claims that its members are somehow Scotland's democratic champions and that they are trying to break the deadlock by forcing a vote on electoral reform for local government. The SNP is doing nothing of the sort.

As we can see from the briefing for today's debate, SNP members are doing what they always do: grandstanding. It is political posturing at its most transparent. The SNP claims to support PR as a principle, yet it seems to support it only when it suits the SNP. For example, in the unlikely event that the SNP were ever to win a majority of seats in a UK election, even on a minority of votes, it would claim that as a mandate for independence.

The SNP briefing makes such claims as:

"the SNP actually won Dundee City Council in terms of the percentage of votes cast (36.3% to Labour's 36.1%)".

I make that 63.7 per cent against the SNP, which is a substantial defeat.

In the list of disproportionate results, the SNP conveniently forgets to mention Angus Council. Perhaps most telling of all, in the SNP briefing, what is top of the list under the heading "The importance of PR"? Is it fairness, or choice for the voters? No. According to the SNP, the top reason for PR is:

"It is vital for the SNP that Labour's stranglehold on councils across Scotland is broken. Labour-controlled councils would pose serious problems for an SNP administration at Holyrood. The SNP would be faced with Labour-dominated COSLA ... PR, quite simply, would remove this scenario."

There is no principle involved—just barefaced self-interest. Well, there is no need to worry—the SNP will never form a Government in Scotland.

Kenneth Gibson (Scottish National Party, Glasgow)

Neither will you.

Iain Smith (Liberal Democrat, North East Fife)

We are already in Government in Scotland.

The SNP is acting out of self-interest—the SNP members may blame Labour, but they are at it as well and that duplicity will damage the case for PR. The SNP has claimed that there is a majority in the Parliament for PR for local government, but where is the evidence? The Conservatives have said again today that they oppose PR. What has the SNP done to persuade Labour MSPs to support PR? Absolutely nothing.

As Donald Gorrie said in the debate on PR in the Parliament last year:

"We faced a similar proposition before, in the Scottish Constitutional Convention that worked towards setting up our Parliament. Liberal Democrats, a considerable number of Labour people, the trades unions, the Churches and a lot of the other bodies wanted proportional representation, but a considerable number of Labour people did not. The system was negotiated, worked through and discussed, and we ended up with a Parliament that was elected under a PR system ... The SNP pranced about outwith that convention, said it would never work and achieved nothing at all"—[Official Report, 5 October 2000; Vol 8, c 964.]

I could not have put it better myself.

David (None, Lothians)

Please wind up.

Iain Smith (Liberal Democrat, North East Fife)

It was left to the Liberal Democrats to do the hard graft and take the risks, without which there would be no Scottish Parliament; without the work of the Liberal Democrats, delivering on PR, Tricia Marwick and her cronies would not be here today.

Last week, the SNP suddenly decided that PR for local government was the most pressing issue facing the Parliament. There was a big press release from Tricia Marwick and, in his bid to become First Minister, John Swinney said:

"We could change that system today."

He continued:

"On my election as the First Minister we would usher in immediate legislation to ensure that the local elections in 2003 are held under a new system."—[Official Report, 22 November 2001, c 4159-60.]

However, it took the SNP more than a week to find the 12 members that are needed to support Tricia Marwick's proposed bill. They are signing up quicker for Margo MacDonald's bill on prostitution than they are for the PR bill.

David (None, Lothians)

Mr Smith, you are a minute over your time.

Iain Smith (Liberal Democrat, North East Fife)

I will sum up. The SNP claims that Liberal Democrats are prepared to sell their principles for a seat at the Cabinet table. The truth is that we use our seats at the Cabinet table to deliver on our principles. We have delivered on tuition fees. We have delivered on free personal care. We are delivering on freedom of information and land reform, and we will deliver on PR for local government too.

Kenneth Gibson (Scottish National Party, Glasgow)

I point out to Peter Peacock and Iain Smith that, had it not been for SNP electoral strength, there would have been no push for a Scottish Parliament in the first place. The Liberal Democrats certainly moved nowhere towards that in their generations in the political wilderness. As for Keith Harding's outlandish comment that we could change and improve local government simply by changing boundaries, I wonder how that would improve the Tories' standing in Pollok constituency, where they got 109 votes at the last election. Keith Harding is totally ignorant of PR. He said that AMS would improve the ward-member link, but councillors in Highland Council would have to represent the entire area. Iain Smith should talk to his party members about PR, because when Trish Godman and I visited Shetland and East Renfrewshire, the Liberal Democrat group in Shetland supported first past the post, but in East Renfrewshire the Liberal Democrats supported the alternative vote system, not even AV-plus. The Liberal Democrats should get their act together before they lecture everybody else.

I will talk specifically about the STV system of PR, which is about choice. As I pointed out in an intervention on Peter Peacock during the debate on the Scottish Local Government (Elections) Bill last week, in much of Scotland voters have no opportunity to cast a vote at council level, let alone a vote for their favoured party, or to see their party of choice elected. STV would increase voter choice between candidates, not just parties, and ensure that no vote was wasted. Electors would not have to consider tactical voting or supporting a candidate of dubious merit out of party loyalty, or be fatalist and assume that no one else could win the ward. Voters would not be stuck with a candidate who had been deselected from another area and selected unopposed in a smoke-filled room. The electorate, not the selectorate, would have the power. Over time, voters would weed out less-effective members, and improve the calibre of councillors and the quality of representation. There would be no hiding behind party colours, because the merit of individual representatives would be the most significant factor in peoples' being elected.

STV would eliminate the anomaly that ensures that Labour wins overall control of Aberdeen City Council and City of Edinburgh Council on 32 per cent of the vote, while the SNP in Midlothian gains 31 per cent of the vote and no councillors. It is not acceptable for a party to retain sole political control when it has lost the support of more than two-thirds of the electorate.

STV would mean an end to discrimination against parties that appeal across the social and geographic spectrum and in favour of those that, traditionally, have a much narrower focus and a relatively concentrated vote. Parties that are unable to contest every seat under the current system would be more able to select and field candidates, which would lead to fewer uncontested wards or wards in which voters have no opportunity to vote for their favoured party. Political parties would gain strength where they are under-represented and would benefit through an improvement in the quality of councillors where they are already successful. Hung councils would inject more co-operation and innovation into local government. Committee and executive meetings would be more meaningful, as policy would be debated and analysed thoroughly, and more councillors would be involved in the decision-making process, leading ultimately to better service delivery.

As for the ward-member link, each elector would have an equal link to several councillors and a choice of whom they wished to advocate for them. I find it amusing that some Labour councillors who squeal about ward links have often contested three or four different wards in the musical chairs game of deselection and reselection that is continually played. With the boundary changes that took place in 1995 and again in 1999, and as the result of retirements, the ward link is already tenuous. Indeed, as one Labour MSP confided, the ward link often consists of changing the election date and the name of the ward on a leaflet every three or four years.

In East Renfrewshire, there are 20 wards. Under STV there might be four wards, each with five members; each ward would cover a quarter of the council area. The council area mirrors exactly the Eastwood constituency. To argue that the link would be lost is to argue, in effect, that the constituency MSP—cuddly Ken Macintosh—cannot represent a constituency four times the size of a ward under STV. If Labour really cared about member-constituency links, it would not have abolished Scotland's European constituencies to make Scotland one giant constituency.

Mr Jack McConnell cannot buckle under the forces of Jurassic Labour, the voice of vested interest: people who care not a jot for local democracy, but who wish to save their political skins; councillors who lack the self-confidence to stand against political opponents and colleagues without the odds being heavily stacked in their favour; and MSPs who rely on the nomemklatura of councillors, their spouses, relatives and acolytes for selection.

And what about the Lib Dems? On 9 September 2000, Donald Gorrie said in The Scotsman:

"If we don't get it"— electoral reform on the statute book before the next council elections in 2002— "I believe most of my colleagues and the party in general would decide that the coalition should stop. This is my personal guess."

That optimism was sadly misplaced.

We should remind Labour members that if we had had PR at Westminster before 1979, we would have avoided 18 years of Tory misrule. Introducing the single transferable vote is best for democracy, best for local government and best for Scotland. The time for change is now.

David (None, Lothians)

I remind members that the time limit is four minutes, and that if they overrun, they simply cut out colleagues who wish to speak.

Scott Barrie (Labour, Dunfermline West)

Tricia Marwick started her speech by talking about openness, transparency and consensus, and pointed out that the SNP had provided us all with copies of its briefing paper. Unfortunately, it was eight minutes into her speech before she briefly acknowledged that the majority of local councils provide good-quality services and are run well. She descended into peppering the remainder of her speech with pejorative words like fiefdoms, cronyism and cynicism. From the start, we could have had a better debate than the one that the opening speech has caused us to degenerate into.

As a former local government employee, and someone who spent all his previous working life in local government, I know that it does the people who work in local government no good to be constantly berated. It does them no good to constantly hear words such as cronyism and fiefdom thrown around by politicians, in particular in this Parliament, and by political commentators, as if somehow everything is rotten at the core of local government. Most local government works incredibly well. Most local councillors work incredibly hard and are not remunerated for the hard work that they do.

Tricia Marwick also said that PR was a people's priority. I confess that not once when I was a councillor—and I have admitted in the chamber before that the council was elected on a very low turnout and a very low percentage of the vote—did anyone say to me that I had not been democratically elected, that I had no mandate, and that I had no validity to stand in the council chamber.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

Does not Scott Barrie agree that the right to democracy and a fair voting system is a priority for people?

Scott Barrie (Labour, Dunfermline West)

Yes, of course democracy is important. My point is that Tricia Marwick said that PR was a people's priority. All that I am saying is that not once has anyone come up to me, as a councillor in Dunfermline District Council or as an MSP, and complained about the voting system.

Mike Rumbles made the valid point that we do not know Labour's position. We know which two parties are committed firmly to electoral reform. We know which party is dead set against electoral reform. It is true that the Labour party has yet to make up its mind where it stands on the issue. However, to address a point that Kenny Gibson made, the Labour party has twice introduced electoral systems that are to its distinct disadvantage: first, the system for the Scottish Parliament, and secondly, the system for the European elections. In the latter case, it was clear that by abolishing the European constituencies we would reduce the number of Labour members.

Kenneth Gibson (Scottish National Party, Glasgow)

The individual who is now the First Minister stated publicly that Labour brought in the electoral system for this Parliament to create a glass ceiling whereby the SNP would need 50 per cent of the vote to get a majority, rather than the 40 per cent that we would need under first past the post. Does Scott Barrie accept that the reason Scotland was made one constituency for European elections was to wipe out the left in his own party, rather than to introduce more democratic accountability?

Scott Barrie (Labour, Dunfermline West)

No, I do not accept that analysis. The fact is that the SNP has berated the Labour party for being against electoral reform, but I have given two clear examples of the Labour party endorsing electoral reform when to do so has been to our disadvantage.

It is no secret that I support proportional representation. I have argued for PR within the Labour party and I will continue to do so. I agree that there are people in my party who are equally committed and are against PR; they will talk eloquently and put forward their points of view. What is important in today's debate is that we have an amendment before us that will take forward the partnership agreement, which is committed to working towards a different system for the election of local councillors. That sort of debate— [Interruption.] I hear that something is going on on the SNP benches. The motion that we have before us today is political opportunism of the worst sort. It is not about local services. It is not about a better electoral system. It is about trying to drive a wedge between two coalition partners who are working well together.

Kay Ullrich (Scottish National Party, West of Scotland)

When one canvasses at election time in the central belt, one of the most often heard comments on the doorstep is, "It's not worth my while voting. The Labour party could put up a monkey on a stick in this area and it would get elected." Election results confirm that voters know the score when it comes to the first-past-the-post system. The facts show that, in local government elections, the majority of voters are, in effect, disenfranchised.

That does not apply only to the Glasgow, Midlothian and Lanarkshire areas. I want to highlight the situation in my own stomping ground—the area that is ruled by North Ayrshire Council. Incidentally, that council is the proud current holder of the title of worst council in Scotland. What do the voters in that beautiful area get in return for their vote? At the most recent local government elections for North Ayrshire Council, Labour polled 46 per cent of the votes and received 83 per cent of the seats. In contrast, the SNP polled 31 per cent of the votes and was rewarded with a mere 6 per cent of the seats. It is no wonder that voters say that voting is not worth while.

The breakdown of seats in North Ayrshire Council is 25 for Labour, two for the SNP, two for the Tories and one independent. Opponents of PR tell us that the first-past-the-post system makes for stable government. It certainly does. Stable government in North Ayrshire means that the council decided that the 25 Labour councillors deserved a special responsibility allowance. To facilitate that remarkable coincidence, the council decided that the four service committees should have no less than two deputies each. The Labour group on the council is nothing if not inventive. What responsibility do the eight deputies have to justify over £9,000 each of taxpayers' money? They have the onerous task of chairing committee meetings when the convener cannot attend. In the past year, two deputies had to chair a committee meeting once. Given that those meetings lasted for around one hour and that the eight deputies claimed a total of £61,240, the rate for the work done was over £15,000 an hour. That is stable government, North Ayrshire style.

We should ask the good people of Largs what stable government does for them. North Ayrshire Council, in its infinite wisdom, decided eight years ago that the revenue from a seafront car park, which had previously gone into the Largs common good fund, should be diverted into the council's general coffers. It did not matter that the common good fund was established for the good of the people of Largs. What matters to the Labour council is that it has untrammelled power to do what it likes. An editorial in the Largs & Millport Weekly News said that the only way that justice could be done for Largs would be through the courts or by a change of political control in North Ayrshire. That idea that people must take their council to court to get a fair hearing is surely an indictment of local democracy in North Ayrshire.

PR in local government elections would go a long way to returning accountability, not only in North Ayrshire, but throughout Scotland. In the early 1990s, I was at a press conference during which the subject of local government reorganisation was raised. It was mentioned that Motherwell District Council and Monklands District Council were likely to be merged into one authority. I will never forget the comment from a wise old political journalist, who said, "Motherwell and Monklands—that is akin to linking Sodom with Gomorrah." We should have no more Sodoms or Gomorrahs. I urge members to support the SNP motion.

Phil Gallie (Conservative, South of Scotland)

It is always a pleasure to follow Kay Ullrich, but I take exception to one point that she made, which was that North Ayrshire Council is the worst council in Scotland. North Ayrshire is possibly not even the worst council in Ayrshire, because South Ayrshire runs it close. I also want to pick up on a couple of Kenny Gibson's comments. It is always amusing to follow Kenny, who believes in imaginary visions. When he said that the Liberals have got to get their act together, I threw up my hands and said, "Kenny, you've lost it." Enough of Kenny Gibson; let us return to the issue. I commend the minister and the Executive for standing firm and going no further at present on the issue of proportional representation. No doubt the Labour party has been under considerable pressure from the Liberals, who believe fervently in proportional representation. However, the minister and his Labour colleagues have stood firm and, for that, they deserve to be commended.

When we consider the Kerley report, we recognise that there was division in that committee. We acknowledge the points that the minister made when he talked about the changes that the Labour party has induced in our electoral and constitutional structures in recent times.

The minister used the House of Lords as an illustration. There is unfinished business there and it is not something that the Labour party has anything to boast about. However, the Labour party has made changes in proportional representation.

It is important to consider the electorate. It amazes me that, in all of today's debate, not one individual has talked at any time about the electorate—those individuals who cast their vote. They are the people who are really important. They are the people whom we should be thinking about.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

Will the member take an intervention?

Phil Gallie (Conservative, South of Scotland)

I will in a minute.

Let us consider over a period of time the changes that have been made by the Labour party. Perhaps then we could think about inducing further change. We have had change in the House of Lords; we have had change in respect of Europe; we have had change in the Scottish Parliamentary elections. Each of those changes has involved a different system of PR. We need some continuity. We need to consider the electorate and to ensure that we can clarify and not confuse.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

Do you think that it was fair on the voters of Perth and Kinross Council, who did not elect a Tory-Labour-Liberal coalition in 1999, to be landed with a coalition that is now creating so much trouble for the people in that area?

Phil Gallie (Conservative, South of Scotland)

It is absolutely diabolical that that coalition, or any coalition, is set up in that way. When people are elected, they should stand on their principles. However, time and time again, PR will forge those coalitions, such as the coalition in the Scottish Parliament. Coalitions will be forged all along the road.

Scott Barrie (Labour, Dunfermline West)

Will the member give way?

Phil Gallie (Conservative, South of Scotland)

I am sorry, I do not have time.

We have a PR system in the Scottish Parliament. I accept that the system is here and that it is unlikely to change, but I believe that one thing could be changed to ease the way for the electorate. Instead of two votes, let the electorate have one vote. Let them choose whichever party or member they feel is right for their area or constituency. That member would then go forward as the constituency member. We accept that. However, then we have the additional members coming along behind. Let those members be chosen using that one vote. Let the votes that have been apportioned across the area be counted up to determine the second, third and fourth members. That would remove an element of confusion. It is simple and it is PR. It might be some way down the road, but it is a positive thought and perhaps the minister will take it on board.

John McAllion (Labour, Dundee East)

It is always a pleasure to speak after Phil Gallie because it gives me the opportunity to say that I cannot conceive of any political circumstances in which I would ever follow him—nor should anyone else. However, I agreed with him when he stressed the importance of the electors. All four major political parties represented in the chamber are capable of pursuing their own naked self-interest at the expense of wider democracy in Scotland.

Even the saintly Liberals are capable of that. I taught history at school and remember that when Asquith commanded a huge majority in the House of Commons he completely ignored the demands of the infant Labour party—led by Keir Hardie—for proportional representation.

When the Liberals had the opportunity to introduce proportional representation, they did not take it. The SNP for a long time regarded a simple majority of seats won under first past the post as a mandate for independence, until it realised that it would never receive a simple majority of first-past-the-post seats.

Even my party—the Labour party—supported PR until it had a commanding majority in the House of Commons in 1945, when it dropped PR like a hot potato and ignored the plea from the likes of Jimmy Maxton that Labour had the chance to enshrine social democracy for ever in the British constitution by adopting proportional representation. That would have shut out not only the 18 years under Thatcher and Major but the 13 wasted Tory years before that. We have all suffered because Labour lost the nerve to introduce proportional representation at that time.

As for the Tories, what can we say about them? The phrase "turkeys voting for Christmas" does not begin to capture the Tories' mood. Sometimes, when I look at them arrayed there on their benches, the song with the words "We're here because we're here because we're here" enters my head. The Tories are here because of proportional representation. The sooner that they understand that simple reality, the sooner that we can have proportional representation for local government.

I hope that other members will participate in the debate not on the basis of party politics and insulting other parties—although I suppose that I have insulted all four major parties. In principle, I oppose first past the post as an electoral system, because I object to the essence of first past the post. It is a two-party system. It allows for only one party in government and one other major party in opposition. It does not allow for multiparty politics, which is the reality of Scotland in the 21st century.

How many small parties have come and gone because they were broken on the rocks of first past the post? I do not regret that some of them were broken. I will be a happy man if I never see the Social Democratic party again. I just wish that the people who should be members of the SDP would get out of the Labour party.

However, good parties have disappeared. The Independent Labour party broke on the back of the first-past-the-post system, as did the Communist party. A delight of the Scottish Parliament is having Robin Harper and Tommy Sheridan here, because this is a multiparty country. The people who share the views of the parties to which those members belong deserve representation in the chamber, as they do in local government.

Phil Gallie is right about the electors. Proportional representation empowers voters to vote for the party for which they want to vote. How many times have we seen the two big parties win elections under first past the post with a manifesto that says, "Vote for us, because if you don't, you will let the other side in"? Telling people not to vote positively but to vote for the lesser of two evils is utterly negative and is not the basis for democratic change. Keith Harding said that first past the post gives us strong government. I had my fill of strong government under Margaret Thatcher. If I can prevent people like her from coming to power, I will be delighted. No Government or council administration is strong if it does not have the majority support of the people whom it claims to represent. That is where strength lies in any democracy.

As for being up front about manifestos and secret deals, I was elected to the House of Commons in 1997 on a first-past-the-post manifesto that did not include independence for the Bank of England, cuts in lone parent benefits or a series of measures that were taken with the first-past-the-post majority in that Parliament without a mandate from the people. Therefore, we should not listen to the nonsense that first past the post will always be up front with the electors. It is just as capable of allowing deals to be done behind closed doors as any other system is.

I believe in the Labour party as the people's party. If we are the people's party, why do we fear the people? We should let them decide and give them the power to vote for the parties for which they want to vote. We should accept their democratic decision.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

My colleague Iain Smith was right to say that proportional representation is a matter of principle for the Liberal Democrats. It involves the principles of fairness, empowering people and empowering the voter. John McAllion has just given one of the best speeches for PR that I have heard. The issue is to do with empowering people. In a multiparty democracy, we need PR. It gives legitimacy to Governments such as ours.

As one newspaper said last week, PR is almost an article of faith for Liberal Democrats. Why is it important to people such as me? Is it because we are fascinated by the single transferable vote and multimember wards? No, of course not. Electoral reform is simply the key to reinvigorating and transforming representative democracy throughout Scotland. It is the key to reforming successfully the way in which local government operates and delivers its services to the people. We must reform not only the way in which we elect our local councils, but the way in which they are financed.

Reform is essential and the Liberal Democrats are in the vanguard of that reform. That is why, in the partnership agreement between us and the Labour party, we agreed to make progress on electoral reform, and it is why I took the opportunity to have Jack McConnell confirm, before he became our First Minister, that he was equally committed to fulfilling the terms of that agreement. In his statement following his meeting with the Liberal Democrat parliamentary party, Jack McConnell said that

"Donald Dewar and Henry McLeish accepted the principles of reform as outlined by Kerley",

and

"I will stand by their pledge."

He also said:

"Labour and the Lib Dems remain firmly committed to progress on electoral reform, and my job is to make sure that progress is made and seen to be made. I am clear that the next steps should be taken with urgency, and I will make it a priority to deliver a timetable".

I expect that timetable to be delivered in the next few weeks, and certainly before the end of the year."

Reaching agreement among all parties for radical reforms such as the introduction of proportional representation takes time. I accept that people still need to be persuaded. In contrast to the SNP's assertions, I believe that there is not a majority in the Parliament—on a free vote—for PR. Just as we are finally making progress, the SNP has come in with a blunderbuss to finesse the issue.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

The member talks of the need to build a majority in the Parliament for PR. What have the Liberal Democrats done in the past two and a half years to build that coalition?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I am glad that Tricia Marwick asked that. We have steadily worked to try to persuade our colleagues in the Labour party, because persuasion is necessary. Tricia Marwick might not like the arithmetic, but it is a fact that the largest party in the Parliament has still to be persuaded. That persuasion continues. I am perfectly happy to wait until the rational argument succeeds.

Scott Barrie (Labour, Dunfermline West)

Mr Rumbles did not say that last week.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I certainly did say that.

I will return to the important issues. At times, we need to be blunt. I have not shied away from that. I did not shy away from it last week, when I was blunt. However, as I said, I believe that Jack McConnell came up with the goods. I expect him to come up with the goods towards the end of the year.

The SNP knows well that its motion would fall on a free vote and the SNP could set back the cause of reform if it pressed it now. It is unfortunate that in typical SNP fashion, it has decided that it would be a good idea to jump on the bandwagon.

Time is short. Keith Harding gave the Conservatives' game away. They oppose fair votes because they still believe that the only way in which they can return to UK politics is by the discredited winner-takes-all system, as they have no hope of building the consensus that is needed to work with others for the greater good. Phil Gallie even said so. He did not even want a coalition in Perth and Kinross Council under the present system. The Tories' opposition to reform should be seen for what it is: misguided self-interest.

Phil Gallie (Conservative, South of Scotland)

Will Mike Rumbles give way?

George Reid (Scottish National Party, Mid Scotland and Fife)

Mr Rumbles is in the last minute of his speech.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

We must progress reform by winning the argument with our colleagues and bringing as many people with us as possible. That is done not by lodging a parliamentary motion, but by giving those who need it a realistic and achievable timetable for winning the argument. I urge members to support the amendment.

Andrew Welsh (Scottish National Party, Angus)

We should all remember what the electoral system is about and what it is supposed to do. The debate raises matters of fundamental importance for Scotland's future. As a former Stirling councillor and provost of Angus district, I know at first hand the strengths, the importance and the benefits of our local government system.

Local government is all about local decision making, whereby citizens participate in, influence and determine decisions that affect their daily lives, according to the wishes of their communities.

Local government provides a massive range of essential daily services that affect every man, woman and child in Scotland. I deeply regret that the policies of Labour and Tory Westminster Governments have constantly undermined, undervalued and under-resourced our local government system.

Central Government now dominates capital and revenue finance and service provision. The old cliché that we do not have local government any more, we have local administration is all too sadly true. It is time to give local government back to the people and to recognise its true status and place in our society and economy. One place to start that process is to ensure a fair, representative and open electoral system that truly reflects the votes of the people of Scotland. Local government is the fundamental building block of our democracy. That is why it is important that we address the issues and return voting power to the people.

While no voting method is perfect, it is clear that some are more perfect than others. We require a voting system that strengthens the direct geographic connection between elected representatives and voters, so that the voters know exactly who is responsible and who to contact in their locality. We need a system that provides real choice and in which every vote counts towards the final result. We need a system that more truly reflects the wishes of the electors, not the politicians.

As elected representatives in a democracy, we are the servants, not the masters, of 5 million people. At all levels of government, our mandate must reflect the wishes of the people of Scotland whom we serve. The SNP proposal for a single transferable vote system based on multimember wards meets all those criteria. I want an end to the present first-past-the-post system, under which, in Glasgow, the Labour party gets 47 per cent of the vote and 94 per cent of the seats and, in North Ayrshire, 47 per cent of the votes gives Labour 83 per cent of the seats. Irrespective of which party gains, that situation cannot be right. It is a mockery of democracy, producing one-party states that invite corruption among politicians and alienation among the electorate.

Instead of weakening Scotland's local government system, we should be seeking ways to strengthen it. By returning decision-making power down to the local level, we will allow it to be more independent. That will ensure that there are sufficient powers and resources to provide top-quality, efficient daily services, which are accountable through a voting system that reflects the way the people of Scotland voted.

Labour may not want it and the Liberal Democrats may betray it today, but proportional representation will come and the sooner, the better for the good local governance of Scotland.

Helen Eadie (Labour, Dunfermline East)

A lot is said about democracy but, under PR, democracy is reduced and not increased as the PR tendency claims. We need only look at internationally to see its impact on democracy. In Germany, the Free Democrat partners switched and changed the Government, ditching the SPD without even troubling the people with a general election. For more than 20 years, the Free Democrats shared power in Germany despite never having more than 10 per cent of the vote.

That is one example of many that show how parties gain power out of all proportion to the vote that they receive. That is why the SNP and others are so keen on the system—it gives them a disproportionate share of power.

Michael Russell (Scottish National Party, South of Scotland)

Will the member take an intervention?

Helen Eadie (Labour, Dunfermline East)

Eamon De Valera campaigned for many years to get first past the post re-introduced into elections in the Irish Republic. He called it the "straight vote". Newspaper editors and other PR supporters love to say that cronyism and corruption and sleaze would all disappear under PR. That is simply not true.

Michael Russell (Scottish National Party, South of Scotland)

Will the member take an intervention?

Helen Eadie (Labour, Dunfermline East)

PR does not keep corruption at bay. There has been an appalling level of corruption in Irish local government, in particular in the authorities in and including County Dublin. By comparison, the level of corruption in Scotland has been very low, with fewer than 10 incidents in 35 years.

Michael Russell (Scottish National Party, South of Scotland)

We are supposed to be participating in a debate. Will the member give way?

George Reid (Scottish National Party, Mid Scotland and Fife)

The member is not giving way.

Helen Eadie (Labour, Dunfermline East)

Sensibly, the majority of countries understand the anti-democratic effects of PR. According to figures that were supplied by the House of Commons library, 87 democracies—a majority—use first-past-the-post systems and only 20 use various systems of PR.

Local government should be cautious, as there are other lessons to learn from the examination of international experience. Xenophobia is something about which we are all concerned. It is a threat across Europe that none of us can afford to ignore.

Michael Russell (Scottish National Party, South of Scotland)

Will the member give way?

George Reid (Scottish National Party, Mid Scotland and Fife)

The member is not giving way.

Helen Eadie (Labour, Dunfermline East)

First past the post prevents fascist parties gaining a foothold and hence credibility. It was under PR that Le Pen's Front National gained seats in France for the European Parliament in Strasbourg by overcoming the modest 5 per cent threshold. It linked up with a scattering of other right-wing extremists, which enabled it to qualify for the millions of pounds of European Economic Community largesse that was showered on political groups at that time.

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

rose—

Helen Eadie (Labour, Dunfermline East)

In Austria, the rise of the fascist leader Haider was a product of the country's proportional representation system. In the past weeks, we have read newspaper reports of the elections in Denmark—another PR country—and of the fears there about the growth of xenophobia after a swing to the right.

Donald Dewar said to me when we were chatting one day, "Helen, electoral reform is about more than voting systems." I now know what he meant.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

rose—

Helen Eadie (Labour, Dunfermline East)

This coalition Government is delivering on electoral reform in a number of different ways.

Richard Lochhead (Scottish National Party, North East Scotland)

rose—

Helen Eadie (Labour, Dunfermline East)

We are committed to a local government bill that will deliver a power of community initiative, a duty of ensuring best value and a statutory basis for community planning. In a move to improve turnout, we have introduced the Scottish Local Government (Elections) Bill to extend local government terms to four years and to give local authorities new powers to experiment with postal votes and flexible voting arrangements.

The truth about today's debate on proportional representation is that newspapers including Scotland on Sunday have an agenda, which is to get rid of Labour in Scotland and across the United Kingdom. We know what that paper is about when its headlines say:

"Electoral reform for Scottish councils could halve number under Labour Party control".

That is the real agenda. I know that that is the game and so do loyal and sensible Labour party members across Scotland.

A SNP document that was leaked yesterday said:

"It is vital for the SNP that Labour's stranglehold on councils across Scotland is broken. Labour-controlled councils would pose serious problems for an SNP administration at Holyrood."

Members will have to excuse me, as I have dropped my papers.

George Reid (Scottish National Party, Mid Scotland and Fife)

Order.

Helen Eadie (Labour, Dunfermline East)

That SNP statement gives the game away and shows the cynicism at the heart of the SNP's posturing over PR.

Over recent years, in the kingdom of Fife, at Fife-wide Labour party meetings there have been repeated votes in support of the continuance of first past the post as the voting system. The Fife Labour group and Kirkcaldy and Dunfermline East constituency Labour parties have voted in a similar way. I have organised meetings at party conferences where official support has come from the Co-operative party—as I am a sponsored member of that party, I declare an interest. As policy on the issue is debated, the Amalgamated Engineering and Electrical Union and the GMB will be influential, as they too continue to support first past the post.

I call on the people of Scotland to sit up and take an interest in this key subject and not be blinded by science. Keep it simple, keep it transparent and remember—

Bruce Crawford (Scottish National Party, Mid Scotland and Fife)

On a point of order, Presiding Officer. We are well past the end of the time that is normally allowed for speeches. Will the Deputy Presiding Officer intervene on the member?

George Reid (Scottish National Party, Mid Scotland and Fife)

I have been very generous with members. I have let speeches run to five or six minutes. I am also anxious to balance the debate. Helen Eadie can have another minute if she wishes.

Helen Eadie (Labour, Dunfermline East)

Thank you very much.

If the Government is to serve, surely it is right for it to serve in accordance with principle. Above all, we need a system that is simple and that avoids the biggest disfranchisement of all—of those who cannot read. Some people cannot understand that simple messages serve us all equally and that poverty prevents many from understanding the complex processes that politicians of today have a tendency to promote. We must stand up and fight for the least empowered in the land so that they too shall own power.

Robin Harper (Green, Lothians)

In my youth, I had the privilege to serve as full-back and captain of Elgin Academy second XV. My experience was usually one of standing on the touchline, watching the big lads batter the lights out of each other on the centre of the pitch. I hardly ever saw the ball. The first half of the debate was rather like that. I am happy that, eventually, with contributions from Kenny Gibson, Scott Barrie, Iain Smith and, in particular, from John McAllion, the ball got into play and we started to debate the real advantages of proportional representation for Scotland.

My party scored not far short of 100,000 votes in the election for the Parliament. Without proportional representation there would have been 100,000 disenfranchised voters in Scotland. Wherever I have been, whether it is Inverness, Wick, Thurso, Aberdeen or Ayr, people have come up to me, shaken my hand and said "Robin, in that election, I felt for the first time in my life that my vote counted."

Michael Russell (Scottish National Party, South of Scotland)

I thank Robin Harper for giving way—he is showing an example to others in the chamber.

Does he agree that one of the most incredible things about the previous speech was the argument not only that there should not be PR in local government but that there is something wrong with PR in national elections? The burden of Robin Harper's argument is that PR in national elections is essential. That contradicts a remarkable contribution from the previous speaker, who wants to turn the clock back.

Robin Harper (Green, Lothians)

Indeed. I would contradict the whole of Helen Eadie's speech. I have three questions for her. First, who invented the electoral system by which Germany thrives? Secondly, which country in Europe has one of the strongest and most successful economies? Thirdly, which country in Europe has a sense of political continuity and stability because of its electoral system? That political continuity has been without the ups and downs that are the result of first-past-the-post with black being white then white being black.

Helen Eadie (Labour, Dunfermline East)

Will the member give way?

Robin Harper (Green, Lothians)

No. Helen Eadie has had more than her fair share of the debate.

If we were to go to Ireland and ask anybody who has voted in local elections, we will find that they feel perfectly comfortable that they are represented on a constituency basis. They have got used to it, they understand it and they like it. Andrew Welsh said that local government should be the foundation stone of democracy. I would go further and say that community councils should be the foundation stone of democracy. We have not done nearly enough to boost the part that community councils play in the political life of the country.

America's system is based on much smaller units. I am not agreeing with what happens at the top—I am very unhappy about that, but there is a strength of local democracy there that we would do well to emulate in this country. We should not give it away—as the Tories say we should—to local interest groups, business or whoever has the loudest voice and the largest bank balance. Local democracy based on community councils should be our foundation stone.

Mike Rumbles's counsel of despair was that there is not a majority in the Parliament for PR, on a free vote, at the moment. At 6 minutes to 10, there were 15 members of the parties who are against the motion and 15 members of the party that supports it in the chamber. I had the balance of power, ladies and gentlemen. [MEMBERS: "Hooray."] I would have voted with the SNP.

John Young (Conservative, West of Scotland)

On 21 November, The Herald stated that the Liberals had accepted Jack McConnell's pledge on PR. Only Mike Rumbles has rumbled Labour on the matter. It does not matter whether Labour never gives the Liberals PR—they will continue to have the little trappings of power as part of the coalition. That should be borne in mind. One has to ask what devious plot the SNP is hatching today. What is it really putting forward? What is its hidden agenda? I am always suspicious when the SNP comes forward with something of this nature.

I am a beneficiary of PR, but I do not admire the system. In many ways, one is divorced from a specific electorate. Indeed, that is why Murray Tosh will not stand again for the Parliament and hopes instead to re-enter local government. He has told me that he has felt that divorce specifically in relation to this Parliament and so do I. In 1999, certain sections of the press said that this was the first time that PR had been used in Scotland. Wrong. It was used in Scottish educational board elections until 1929 and for Scottish university parliamentary seats until 1951. Jim Wallace said that Glasgow once had municipal wards with three councillors. That is true—in 1964 I was elected to such a ward, which had an electorate of 39,000. However, Jim Wallace implied that a PR system was in operation. That is wrong. Every year, on a rotating basis, each member stood for direct election.

Robert Brown (Liberal Democrat, Glasgow)

Does John Young accept that it is possible for more than one councillor to represent a seat without breaking the council link? That was the point of the Glasgow example.

John Young (Conservative, West of Scotland)

Robert Brown must bear in mind that the largest ward in Glasgow in 1964 had a 50,000 electorate. It was the largest ward in Britain. We do not want to go back to those days.

In 1857, Thomas Hare proposed the idea of proportional representation. He was strongly supported by John Stuart Mill. Since then, it is reckoned that around 200 different systems have been proposed, most of which are unworkable. Not long ago, the New Zealand Prime Minister said that she felt that New Zealand politics lacked stability due to the introduction of PR. The Italian Prime Minister prior to the present one said that it was high time that Italy reviewed the whole system of PR. If we want to know the reason for that we should bear in mind the joke that it is not possible to bounce a ping-pong ball in the Italian Parliament without hitting at least 20 ex-Prime Ministers.

Michael Russell (Scottish National Party, South of Scotland)

If we were to implement what I think should be called the Eadie doctrine, that we should abolish PR entirely for the Parliament, I would have to say goodbye to the member.

John Young (Conservative, West of Scotland)

I am all for democracy. I take the rough with the smooth. If I am meant to win, I will win. If I am meant to lose, I will lose. I will go by the electorate.

Michael Russell (Scottish National Party, South of Scotland)

Would John Young abolish PR?

John Young (Conservative, West of Scotland)

If the Parliament puts me in power and makes me the First Minister, I will give Mike Russell the answer.

I express long overdue thanks to Robert Brown and the SNP. About 20 years ago, I led a minority Tory administration in Glasgow for almost three years. We would never have survived the onslaught of the Labour panzer divisions if it had not been for Robert Brown, who was the sole Liberal councillor, and a number of SNP councillors.

If PR is imposed on local government, Westminster will be unable to remain in splendid isolation. However, for Glasgow it will mean no change. There will still be a massive Labour majority. The Liberals may think that they are going to make headway, but there were only three Liberal councillors—Robert Brown, Gretel Ross and Christopher Mason—in the 35 years that I was a Glasgow councillor. However, a fourth councillor, Vincent Cable, sat as a Labour councillor but is now a prominent Liberal Democrat MP.

George Reid (Scottish National Party, Mid Scotland and Fife)

The last speaker in the open debate is Stewart Stevenson.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Last, but I hope not least, Presiding Officer.

The Lib Dems have set themselves an ambitious target, which is to deliver PR in a longer time scale than the 100 years it took the Labour party to deliver a Scottish Parliament. How goes that project so far?

Ian Jenkins (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Will the member give way?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

A wee bit later.

Any project has three parts: a beginning, a middle and an end. The end is the most important. Perhaps we have seen the beginning. The Liberals say that they support PR. Mike Rumbles even says that it is a principle. Well, fancy that. They are probably in the middle—or perhaps it is a muddle—because they will not seize the initiative and build a coalition that will deliver at the end of this project.

The philosopher Joubert said:

"It is better to debate an issue without deciding it than to decide an issue without debating it."

We know which part of that the Liberals adhere to. Their aim is clearly to debate, to debate, to debate. Perhaps Mike Rumbles gave the game away when he preferred to use the word wait, which he did three times.

We may have seen a Liberal idea whose time has come and, surprisingly enough, it is PR. John McAllion referred to Asquith, and I shall refer to Lloyd George, who succeeded Asquith in power. Lloyd George started to sell peerages in the 1920s. I have a confession to make: my father's cousin bought a peerage from Lloyd George. [MEMBERS: "Shame."] Absolutely disgraceful.

Dennis Canavan (Independent, Falkirk West)

What did he pay for it?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

He paid £25,000. That was PR in the Liberal party: patronage rewarded, an idea adopted wholesale by new Labour. Let us hope that we have success in the modern PR that is being adopted by new Labour.

The PR of patronage rewarded is corruption in politics. It is time to remember why we are all here. I think that we are all democrats. It is not for riches, nor for glory, nor for personal self-aggrandisement that we should be here, but to represent a population who believe in a democracy that can deliver for them and that they can influence. That population has a fading confidence in us, to judge by the turnout at elections. We can rebuild confidence only by giving people the opportunity to elect into power the people that they vote for.

Let us remember what the word democracy means. It derives from the Greek word demos, which means the people. If we do not look to the people, trust the people and empower the people, we will lose the people.

George Reid (Scottish National Party, Mid Scotland and Fife)

We move now to wind-up speeches.

Michael McMahon (Labour, Hamilton North and Bellshill)

As someone who has supported electoral reform all my adult life, I am more than happy to be given the opportunity by this SNP debate to state my reasons for believing in the benefits of electoral reform for local government elections. Those reasons stem from a belief that an electoral system should be about good governance rather than the vested interests of parties. For me, electoral reform is a matter of principle. My principles may be different from those that Helen Eadie espouses, but they are my principles. Electoral reform is about encouraging the type of consensus that will allow us to develop good policies at whatever level those policies have to be delivered.

If we in Scotland truly want a society that operates on the basis of inclusion and co-operation, we have to begin by having debates on electoral reform that will at least take the matter forward. What we cannot have is the type of tawdry mudslinging that we have heard from the nationalists this morning, especially and unfortunately from Tricia Marwick, Stewart Stevenson and Kay Ullrich, whose comments about Motherwell and Monklands border on the slanderous.

Have we heard much today about principle from the SNP? Was there much in the SNP contributions that developed the issue of electoral reform? I believe that we have heard quite the contrary. The Scottish nationalists have said little about the opportunity for change. The creation of the Scottish Parliament has given us all a tremendous opportunity to provide a modern electoral system in local government that is fit for the 21st century and that aims to play a part in achieving progressive reform of local government.

What the SNP has done in this debate runs counter to that. Apart from a limited attempt by Kenny Gibson, SNP members, rather than outlining how we can reduce distortion in electoral results, have tried to paint a picture of sleaze. Instead of addressing the cause of disillusion with the current system, they have concentrated on their recent hobby-horse of cronyism. Not for them a coherent argument about the need to tackle disfranchisement. What they have said is an assault on local democracy itself. They have sought to portray Labour-run local authorities as places of corruption and maladministration, while ignoring the mass of good work that goes on and the talent that brings it about.

We have heard an attempt to place in the minds of the electorate the image of a Labour party that abuses the position given to it in local authorities by that same voting public. Through some weird type of reasoning, the SNP has attempted to argue Labour bad, SNP good. If this had been a proper debate about good governance, we would at least have heard an attempt to explain why we need local government reform for the sake of effective government. Instead, what we got was an argument about why we need electoral reform to reduce the power of the Labour party.

We could have discussed the type of electoral system that would best achieve the good governance that we all aspire to and that we want from local authorities run by any political party. Instead, the SNP has sought to disguise the true intention behind holding this debate. SNP members want to portray themselves as the moral guardians of local government in Scotland, but the real reason for their stance is all about power, who has it and how it is shared. Labour has it and the SNP wants it. This is not about principle but about jealousy and opportunism; it is about political winners and losers.

If the debate was about implementing the Kerley report we would have heard more—or even something—about councillors' remuneration and about achieving representation at local level. What we got was mudslinging and innuendo. What about a comparison of electoral systems? Why STV and not AMS? The McIntosh report highlighted the different systems that could be used, but it did not recommend any. Kerley recommended STV, but could not get unanimity behind his report. Different voting systems provide different answers to the questions raised by them. Have we sought any of those answers here this morning? I suggest not.

All that has happened is that the Parliament has broken down into fixed party lines. The Lib Dems have always supported the principle of electoral reform. The Tories have always opposed it. The SNP members in this Parliament would have us believe that they want PR for local government, but where the SNP is in power in local government not all members are united behind PR.

Andrew Welsh (Scottish National Party, Angus)

Would Mr McMahon care to explain that remark? I am from Angus, where the SNP is in power and supports proportional representation in principle. I do not blame the Labour Government for taking advantage of the present system. I blame it for doing nothing about it.

Michael McMahon (Labour, Hamilton North and Bellshill)

We are doing something about it. I shall come on to that later. In its discussions of the Kerley and McIntosh reports the Local Government Committee sought the opinions of local authorities from across Scotland. SNP councillors in some SNP-led areas have told us that they do not support PR. That is the point that I wanted to make. We are having this debate in the context of having made a commitment to make progress on the issue, which our coalition partners have accepted.

Michael Russell (Scottish National Party, South of Scotland)

Will Mr McMahon give way?

George Reid (Scottish National Party, Mid Scotland and Fife)

Mr McMahon is in the final minute of his speech.

Michael McMahon (Labour, Hamilton North and Bellshill)

I want us to move in that direction as quickly as possible. I have always wanted electoral reform. Believe me, being an advocate of electoral reform in the Labour party in Lanarkshire is not easy. However, when one holds that view as a matter of principle, it is easy to defend. I want greater proportionality delivered in local government elections. That would be a good thing. It might even make the SNP groups in Lanarkshire produce costed budget proposals instead of just opposing those produced by the Labour party. It might make the SNP raise its game. Electoral reform has not brought that about in the Scottish Parliament, but it might do it in local government. It might even help to reduce factionalism within party groups. Perhaps electoral reform would allow SNP members to stand in the same street in Bellshill at election times instead of leading separate camps in opposite directions from one another to deliver leaflets.

I am not convinced that one must have a majority to have stability. I believe that one can provide an enhanced level of voter choice and still maintain the link between members in geographical constituencies. Those are all principles that I could argue are to be found in the alternative vote system, which I would prefer to Kerley's STV system. I could debate all day the merits of one system over another. I could argue about the differences in principle. I am more than happy to engage in a debate on the matter within the Labour party and I live in hope that the case for electoral reform will gain support in my party. What I will not do is vote for the SNP motion today, because it is not principled and it is not worthy of support.

Bill Aitken (Conservative, Glasgow)

When she moved the motion, Tricia Marwick made some valid points. She highlighted the problem of cronyism. It goes without saying that the Labour hegemony in many parts of Scotland has been damaging in the extreme. Cronyism is endemic and there is clearly a crying need to do something about it. The question is what.

If we accept, as the vast majority of people do, that the present situation is unacceptable—and there are few who would defend the status quo—there can be no doubt that the appropriate way forward is far from clear. Let us consider the parliamentary position, for example. There is a PR system—the Executive is supervised by a Parliament that is elected through an additional member PR system. What has happened? Cronyism continues and sympathetic journalists get highly paid roles as political advisers. Contracts go to former apparatchiks and public appointments largely go to Labour placemen and placewomen. Against a background in which the Executive's activities become more like those of Glasgow City Council writ large, is there any wonder that there is cynicism?

Ian Jenkins (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Does the member agree that, if cronyism exists, the system provides for better scrutiny than Westminster ever has? Does he agree that things that happen at Westminster would not be allowed to continue here precisely because there is scrutiny brought about by PR?

Bill Aitken (Conservative, Glasgow)

My point is that cronyism continues and is clear for all to see. Dozens of examples could be highlighted.

What is the answer? The Conservatives see some attractions in the Public Appointments (Parliamentary Approval) (Scotland) Bill, but there are also disadvantages. There could be witch hunts of individuals, for example. However, a welcome degree of scrutiny is proposed in the bill.

We are also attracted by the principle of returning power to the people to some extent—Robin Harper mentioned that—although we are not, as he suggested, in favour of returning power to monied vested interests. There should be a return of power to schools, communities and the voluntary sector in particular.

What are the disadvantages of PR? First, the link between a councillor and their ward is lost. At one stage, there were seven former councillors at the debate. Four of those—John Young, Kenny Gibson, Robert Brown and I—held seats over the years against the odds. We did so largely as a result of a high level of constituency service. I will deal with the STV system, but that link would be lost under any other system.

STV gives access, but does so in a chaotic manner. Constituents are already playing one member against the other in the parliamentary system. They would do the same in local government. The top-up system is also a recipe for conflict. It is significant that no system is recommended in the well-written McIntosh report.

The most important point is that the debate is taking place in a vacuum. Nothing will happen because Labour would have made it happen by now if there had been any real intent to implement PR. The Housing (Scotland) Act 2001 is complex legislation that has been passed. The Executive-supported Protection of Wild Mammals (Scotland) Bill will go through, yet the Executive cannot find parliamentary time to put through a bill on PR. Surely that tells us something.

Robin Harper (Green, Lothians)

rose—

Bill Aitken (Conservative, Glasgow)

I do not have time to take an intervention.

If Labour had wanted PR, it would have happened. If the Liberals had a scintilla of principle, they would have forced their hand. PR could have happened if they had wanted it to happen. Last week, PR was blocked in effect by their decision to postpone elections. At the earliest, it will be another six years before the much-vaunted principle of PR—the basis upon which the coalition was established—is likely to be implemented. That may be painful for them, but boring speeches on that subject are the only thing that they have brought to the coalition and the parliamentary process. They will not progress much further.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I am confused by Bill Aitken's argument. Is he arguing that the Liberal Democrats should move even faster to get electoral reform in local government?

Bill Aitken (Conservative, Glasgow)

From the Liberal party's perspective, that party should be moving. The question of alacrity is one for the Liberal party. It is not moving and is unwilling to face the fact that the issue has not moved an inch since it started to agitate on it. This is an exercise in self-delusion at its worst. The Liberals are suffering from delusions of adequacy in thinking that they have any influence with the Executive on the issue.

George Reid (Scottish National Party, Mid Scotland and Fife)

I invite Euan Robson to wind up for the Executive.

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

I will try to bear in mind Bill Aitken's strictures on boring speeches.

The debate has been wide-ranging and interesting. I will respond to some points that were raised, but first I want to take us back to first principles and to re-emphasise the Executive's continuing commitment to its programme for government pledge to make progress on electoral reform. Our commitment to the principles of reform outlined by the Kerley group is equally important.

All of Kerley's recommendations relating to widening access, remuneration, numbers of councillors and the electoral system are important. We are proceeding with consideration of all those issues through the ministerial working group on renewing local democracy.

There is concern about whether the link between councillors and wards will be retained. Kerley recognised the tension between proportionality and the councillor-ward link and recommended STV as the best system to meet the criteria set out in the original McIntosh report. I repeat our continuing commitment to the importance of the member-ward link in local government. A link should be maintained between communities and those whom they elect.

A number of members asked about our timetable for electoral reform. Any change in the electoral system will require primary legislation and detailed input by electoral administrators to ensure that the system works. It will require a campaign so that voters are told about the system. The First Minister has made it clear that we will bring forward a timetable for further progress soon—the amendment confirms that. We are committed to getting things right—that requires us to invest time and effort so that there is proper consideration of the issues and to take full account of the views of others.

Michael Russell (Scottish National Party, South of Scotland)

I accept that legislation takes time to draft. However, the minister will recall that the Scotland Act 1998, which is complex legislation that put the Parliament in place, was drafted after Labour's victory in May 1997 and introduced in its first form in December 1997, if I remember correctly. If work was started today and the minister scribbled away with his pen, we could look forward to the introduction of legislation on the matter in the middle of next year. Will he make that commitment?

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

Mr Russell should not think that the Executive is not committed to making progress. We will make progress. He recognises that detailed and complicated legislation needs careful consideration. We must take into account the resources that are available to us. Mr Russell should not rule out the possibility of legislation. We will deliver a properly considered solution that will serve Scottish local government well by building a consensus.

I want to deal with some contributions that were made. I struggled to understand Keith Harding, who seemed to advocate a less democratic structure. He said that PR means that a small party is always in power—that is a curious point.

Keith Harding (Conservative, Mid Scotland and Fife)

The Liberal party was the small party to which I referred.

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

I am happy to accept always being in power if Mr Harding is prepared to concede it.

Iain Smith made important points about disproportionate results that a first-past-the-post system can produce. Kenny Gibson advocated the STV system and made useful points about eliminating some of the motivations and disincentives for voting under the current system. That would make predictions about council results unwise, if not impossible. Scott Barrie said that we should not denigrate the work of council staff and councillors of all political persuasions whose work often goes unsung. Kay Ullrich made some interesting points on North Ayrshire, including some about Largs car park. I apologise that I did not follow what she said.

My ministerial colleague Peter Peacock is still taking smelling salts after receiving Phil Gallie's congratulations. John McAllion made the very important point that Labour has had a historic commitment to proportional representation. He mentioned Asquith, but he did not mention Lloyd George's commitment to proportional representation, nor Gladstone's. He was right to celebrate diversity. We should celebrate the multiparty system in Scotland. The Parliament would be poorer if Robin Harper and his colleagues were not present.

I agree with Andrew Welsh, who talked eloquently about the importance of local government and the range of services that it delivers. I listened with care to Helen Eadie's comments. I say to her, "Time and tide wait for no one." As we have heard, the SNP did not participate to a great extent in the Scottish Constitutional Convention. In 1992, the SNP said that the convention was "a dead end" and, in 1995, that it was "a constitutional mouse". I recognise that the SNP made a contribution during the referendum campaign—it is important to say that. However, it is all the more astonishing that it will not attempt to build a consensus now on achieving electoral reform.

If the issue was so important for the SNP, where was Tricia Marwick's bill in the first year of the Parliament? If PR for local government was so important for the SNP, where was Tricia Marwick's bill in the second year of the Parliament?

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

Will the minister give way?

George Reid (Scottish National Party, Mid Scotland and Fife)

The minister is in his last minute, I am afraid.

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

If PR for local government was so important, where was Tricia Marwick's bill in the third year of the Parliament? We still do not have it. Perhaps she was listening to Fiona McLeod, who recently told the chamber in the debate on wildlife crime:

"I must tell the minister that that is not good enough. It is not for a member to introduce much-needed legislation."—[Official Report, 15 November 2001; c 3903.]

The fundamentals of democracy—electoral systems and elected bodies—are more important than any one political party or organisation. The partnership Government is trying to build consensus so that the electoral system for local councils achieves the widest possible degree of acceptance. The partnership Government will soon deliver the next steps on the way to that objective.

George Reid (Scottish National Party, Mid Scotland and Fife)

In view of the coming pensions debate, Mr Russell, I would be grateful if you kept your speech as tight as possible.

Michael Russell (Scottish National Party, South of Scotland)

I will, Presiding Officer.

Peter Peacock (Labour, Highlands and Islands)

That is enough.

Michael Russell (Scottish National Party, South of Scotland)

Mr Peacock will hear a little bit more.

I am glad to know that we have made substantial progress on this issue. Those of us who believe in PR for local government will go away from the debate knowing that the Deputy Minister for Parliament has just told us that we should not rule out the possibility of legislation. That is a major step forward. Mr Rumbles must be delighted that so much progress has been made so quickly.

In the debate, Michael McMahon—having sat in the chamber for two hours—asked the important question: "What is this all about?" The reality of what it is about came in two distinguished contributions—from my friend Mr Welsh and from Scott Barrie, both of whom have substantial experience of local government.

I shall come on to John McAllion's contribution in a moment. Thank you, Mr Jenkins, for pointing him out.

I think that Mr Welsh has more experience than anybody else in the chamber, apart from Mr John Young, who was in local government for most of the last century and some of the preceding one. Mr Welsh and Mr Barrie know that the issue is better local government and better response to local government. Mr Smith was also a councillor—the leader of a council.

Iain Smith (Liberal Democrat, North East Fife)

The leader of the opposition.

Michael Russell (Scottish National Party, South of Scotland)

Sorry, he was the leader of the opposition in a council.

Proportional representation is about providing services to the people who are in the gallery. It is about governing Scotland better, getting out of the way of the people and allowing them to choose the government of local authorities that they wish. As Mr Welsh said, it is about empowering local authorities—it is about democracy. What we have heard today has been very interesting. The Tories do not want a democratic Scotland—no change there then. Labour fears a democratic Scotland and Mr McAllion made that point eloquently. It is wrong that any party should fear democracy. Most discreditably of all, the Liberals value their perks more than a democratic Scotland. That is truly disgraceful.

The other worry that the debate has presented is that some want to give up even the small advances that have been made in proportional representation in Scotland. We knew that the Labour backwoodsmen were out there. We knew about the Hoods, the Wrays and the Donohoes, but there are also some in the chamber. Helen Eadie made a speech—I think it was a speech—in which she asked us to reverse all the progress and go back to the situation in which Labour rules everything. I am sorry, but that is not going to happen here; it is not going to happen in Scotland. We should continue to make progress.

The regret is that so little progress is being made. What we should do—Scott Barrie made this point—is point out that many good people are working in local government as officials, and indeed as councillors, but that local government is constrained and sometimes destroyed by the lack of accountability to its electors.

Kay Ullrich made an excellent speech. She and I suffer the attentions of North Ayrshire Council. In conclusion, I want to illustrate the history of North Ayrshire Council in about a minute and a half. The reality is that North Ayrshire Council is a solid Labour fiefdom in which 25 of the 30 councillors are Labour councillors. In the previous elections, Labour got only 46.9 per cent of the vote, but has 83 per cent of the seats. That situation has continued in North Ayrshire for some considerable time. It has led to there being an institutionally corrupt council. There is no doubt of that.

Let me indicate some of the highlights, or lowlights, of North Ayrshire Council. In 1994, the council scrapped its economic development committee after a falling out between rival factions in the Labour group. It was a way of punishing the convener and vice-convener of that committee. North Ayrshire now has one of the highest unemployment levels in Scotland and takes some of the least action on economic issues, because of a historic fight within the Labour group seven years ago.

In 1990-2000 the council ran up a deficit of £4.4 million. It added to that in 2000-01, slashed services—including its budget for special educational needs—and paid no attention to any representations that were made to it.

In 2000 there was the incident of the big pie dinner. At that celebrated civic event, the leader of the council was assaulted by a fellow Labour councillor, who was dragged out by two others, got up, went back in and hit him again. What happened? Was there an inquiry? Did Labour do anything about it? It was covered up entirely. Nothing whatever happened. It was just part of civic life.

Bristow Muldoon (Labour, Livingston)

Will the member give way?

Michael Russell (Scottish National Party, South of Scotland)

No, I do not want to. I want to finish my speech.

In 2001, there was another cover-up at a civic function to crown the Saltcoats queen of the sea. A councillor's wife, who was also a councillor, was not allowed on to the public platform. She was excluded by the council convener who said, "She's no frae Saltcoats".

Michael McMahon (Labour, Hamilton North and Bellshill)

Will the member give way?

Michael Russell (Scottish National Party, South of Scotland)

No, I am sorry.

There was an inquiry into the fracas. The council forbade the councillor who saw it from giving evidence to the Labour inquiry. That sort of thing goes on year on year on year.

This year, there are 25 special responsibility allowances in North Ayrshire Council for 30 councillors. Who gets those allowances? The 25 Labour councillors get them. Some of those allowances are for vice-conveners of committees. Last year, two of those vice-conveners worked for only an hour each. The cost of the SRAs was £61,240. Labour councillors in North Ayrshire Council can get more than £30,000 an hour. It is remarkable.

I see alarm and despondency among those on the Labour benches who are intelligent enough to show it. The importance of the story is that North Ayrshire Council is an exceptionally bad council. The lives of the exceptionally good members of staff who work for it are made a misery by it. The only way that we will change that is by changing the electoral system to ensure that there is vigour and determination within the council to stamp out abuses. As it is in North Ayrshire, so it is in most of Labour Scotland.

The motion is simple. It says that the Parliament believes that the time for change is now and asks members to endorse that change. There is no difficulty with any member who believes in change endorsing it. The trouble is that those who believe in change are being hampered by those who do not want it. Those who do not want it are the majority of the Labour members. They will continue to hamper change unless the Liberal Democrats, the SNP and Mr Harper, who made a most eloquent contribution, come together and speak up for the people of Scotland, in the public gallery and elsewhere, who need and want change and who have had enough of one-party states.

Scottish Transport Group Pension Scheme

George Reid (Scottish National Party, Mid Scotland and Fife)

The next item of business is a debate on motion S1M-2486, in the name of Fergus Ewing, on the Scottish Transport Group pension scheme, and one amendment to the motion.

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

The SNP is pleased to use the time available to it today to seek a fair and just settlement for thousands of men and women who were members of the Scottish Transport Group pension scheme. The issue has been raised by MSPs from all parties who have worked for the cause, but I begin by paying tribute to one MSP who, I believe, has led the campaign—Dennis Canavan. Because of the work that Dennis Canavan has done and the close working relationship that we have had, I have invited him, with the unanimous support of my party, to close the debate on behalf of the SNP.

Maureen Macmillan (Labour, Highlands and Islands)

Will Fergus Ewing mention the work that Sylvia Jackson MSP has done?

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

I have already said that I recognise that members from all parties have done work on the STG pension scheme—I acknowledge that. Every MSP has constituents whose lives have been affected.

The purpose of the debate is to achieve what I believe is justice for pensioners who have waited for far too long; its purpose is to make a difference. The purpose of the debate, which is being witnessed by many members of the action group—many pensioners who are affected—is to achieve for the pensioners something that the Scottish Parliament was set up to achieve, namely, to address a manifest and long-standing injustice, which is a mark of shame to us all and to the Westminster regime that preceded us.

I hope that all MSPs will support the motion. I drafted it with Dennis Canavan. Most important, the wording of the motion has been fully supported by the members of the Scottish Bus Group pensioners action committee. Any member who votes against the motion will reject the pensioners' case. I hope that that will not happen.

I am disappointed that the minister who now has responsibility for transport, Wendy Alexander, is not in the chamber to witness the debate, never mind to participate in it.

I will canvass the history of the Scottish Parliament's involvement in the issue so far. Last October, in a members' business debate, which was initiated by Dennis Canavan and in which I, Sylvia Jackson, Lord James Douglas-Hamilton and other members participated, we all agreed a number of things. We agreed that the delay in pay-out was unacceptable. It is 10 years since the group was privatised and its assets were sold off, and seven years since the privatisation of the pension scheme was completed. In the motion for that debate, we recorded that some 8,000 pensioners and 4,000 deferred pensioners were still waiting. In the debate, we agreed that they must

"secure the maximum possible benefit".

A record 96 MSPs supported Dennis Canavan's motion, calling for the maximum possible benefit.

The then Minister for Transport and the Environment advised us that a settlement would be achieved in the autumn. When the autumn came and went, we were advised that a settlement would be achieved this autumn. In the words of the song,

"autumn leaves lie thick and still"

and the pensioners still wait for justice.

Last October, I spoke in the debate and mentioned my constituent Alex Munro. He was a bus driver with Highland Omnibuses Ltd for 36 years. I must advise members that, sadly, Mr Munro passed away on 30 April this year. I spoke to his widow a week or so ago. We think of her today, as we think of the many who have not survived to receive the justice for which we are arguing.

The then First Minister put out a press release on 18 December. I have it here. It was issued four days before the Falkirk West by-election. Only somebody with the naivety of Candide could think that that was a coincidence. The press release appeared to offer good news to the pensioners. It appeared to offer a settlement. Many pensioners—many of whom were voting in the Falkirk West by-election—must have thought that justice had arrived at last. What did that press release from the then First Minister not tell us? It did not tell us that the amount of the surplus in the combined staff and transport operatives pension fund was not £100 million, which was the figure mentioned in the press release, but £250 million, which is two and a half times more than the figure that the then First Minister mentioned. The press release described what was on offer not as a repayment to workers of what they had contributed over the years, but as a "windfall"—that is, something to which the workers were presumably not entitled, despite the fact that they contributed to the pension fund over the years.

The Labour deal was agreed between Henry McLeish and Gordon Brown, but we know that it has the new First Minister's fingerprints on it because, when the then Minister for Transport and the Environment wound up in the debate on 25 October last year, she said that she had been working on the deal with Jack McConnell over the summer, because he was the then Minister for Finance. It is Jack's deal—Jack's shady deal. It is a deal that we must tear up and undo if the Scottish Bus Group pensioners are to receive justice.

Why is that the case? What has happened to the £250 million? Well, £46 million has gone to Gordon Brown and £104 million has gone in tax. When Mr Bill McQueen gave evidence to the Finance Committee on 26 June this year, he said that the tax was 40 per cent. Mr McQueen was wrong: it is 35 per cent. Immediately, that gives us £12.5 million extra. Will the minister say whether that money will be refunded to the pensioners? What is the amount of the combined surplus now? It was £250 million at 31 March 2000. According to a pensions expert, at 31 March 2001, it must have been £270 million. The signs are that no payments will be made until 31 March 2002. By then, just as the costs of the Scottish Parliament building are escalating, the surplus will be much larger, up to about £300 million. What does the Labour party say should happen to that extra £50 million? Will it go to Gordon Brown in a secret deal? I hope that we get the answers to some of those questions today.

I close by reminding members of remarks that were made about the matter by a columnist in the Daily Record in 1989. In an article called "Cashing in on the bus sell-off", the columnist referred to the fact that the Scottish Bus Group workers' pensions were to be sold off. He wrote:

"They've found their pension scheme—to which they paid all their contributions for years—is to be wound up and replaced by a new one.

But who is to receive the surplus from the pension scheme when it is wound up.

NOT the workforce ....

And NOT the new pension fund, either.

But the Government."

Who was that columnist? It was Gordon Brown. Do we support Gordon Brown then or do we support the shady deal now? There is no choice. I urge members to support the motion for the sake of Margaret Munro and others.

I move,

That the Parliament notes that both the Scottish Transport Group Staff Pension Fund and the Scottish Transport Group Transport Operatives Pension Scheme have still to be wound up some eight years after privatisation; further notes that the Scottish Executive promised in December 2000 that a total sum of £100 million would be distributed to the pension scheme members and that this would result in a payment of an average of about £7,000 for each member; recognises that the actual total surplus of the pension funds is considerably in excess of £100 million; believes that the level of payment proposed last December by the Scottish Executive is inadequate and should be increased, and calls upon the Scottish Executive to meet representatives of the Scottish Bus Group Pensioners' Action Committee and to make available to them all relevant information to enable them to assist the pensioners in achieving a just settlement.

Lewis Macdonald (Labour, Aberdeen Central)

I am glad to have the opportunity to address the issues around the STG pension schemes; to respond to concerns expressed by members of all parties; and to set out the progress that has been made and what must happen next.

In passing, I refer to Mr Ewing's ungallant comments about my colleague Wendy Alexander. Members from the Falkirk and Stirling areas who are interested in this debate will be well aware of potential job losses at Grangemouth and of the meetings in which Wendy Alexander has been participating with the staff, the work force, the local MSP Cathy Peattie and Alex Neil, the convener of the Enterprise and Lifelong Learning Committee. I am disappointed that Fergus Ewing was not aware of them.

In addressing the substance of the matter, I start with the ways in which the Scottish schemes differ from those south of the border. The differences are important, although the reasons for them are certainly obscure. When the pension schemes were set up many years ago, there was no expectation that the companies concerned would be privatised and that the schemes would require to be wound up. Because of that, when the schemes were established, their focus was on benefits to members, not on the procedures to be followed if the schemes came to an end. Although there were rules for winding up, they did not attract the degree of scrutiny that their consequences are receiving today.

The rules for the English schemes quite clearly stipulated that any remaining surplus should go to employees, while the rules for the Scottish schemes stipulated just as clearly that any remaining surplus should go to the employers. That is why the legal position in Scotland is quite different from that in England.

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

The minister seems to suggest that the trustees for the Scottish scheme have no discretion to pay additional benefits to members. Has he read the trust deed of 1983? If so, he must realise that that is completely untrue.

Lewis Macdonald (Labour, Aberdeen Central)

I will set out the process by which Scottish ministers have secured, from the trusts, funds that go beyond the strict legal entitlement of the pensioners. [MEMBERS: "What about equity?"] I hear Opposition members mentioning equity. Equity is precisely the reason why we took such steps.

I want to explain the English position a little further. When the English trustees set aside the rules at the time of privatisation, the case was referred to the pensions ombudsman on the grounds of the legal entitlement of members of the schemes. The ombudsman ordered that the winding-up should be reversed. He found that the National Bus Company had threatened the English trustees in a way that he described as quite improper and as intended to alter the pension schemes in the company's favour. After several subsequent court judgments, it became clear that members of the English schemes would, as a result of their legal entitlement, receive benefits approaching an average of £7,000 each. In that case, the law found that the rules that applied to the English schemes gave pensioners those entitlements.

The position in Scotland is not the same. Because the rules were different in the first place, former members of the Scottish schemes have not been deprived of any benefit to which they are legally entitled. Indeed, the National Audit Office report makes it perfectly clear that all their entitlements were fully secured. Furthermore, after privatisation and in anticipation of wind-up, enhanced payments amounting to £33 million out of the then surplus of £105 million were made to members of the Scottish schemes in March 1991. Again the National Audit Office took the view that the enhancements were generous, as they amounted to nearly one third of the surplus, which was roughly in line with the one third of the total fund that had derived from members rather than from employers' contributions.

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

Does not the minister recognise that the Scottish workers spent an additional four years making contributions? Should they receive no credit for the four years' extra contributions they made because the sell-off in Scotland happened four years later than in England? Should they be penalised because the Scottish fund performed more effectively in the gilts markets in the 1990s? Furthermore, should it be ignored that the workers accepted a modest pay rise in 1983 in exchange for the employers making massively increased contributions, which led to the fund having a greater value?

Lewis Macdonald (Labour, Aberdeen Central)

The one thing that is perfectly clear to me is that taking interventions from Mr Ewing on this matter adds nothing to the debate, but only gives him the opportunity for further grandstanding. Having heard his repetitive, lengthy and irrelevant contribution, I will address the relevant issues.

Members are aware that Scottish ministers were keen to go beyond the legal position. Without our intervention, the entire remaining surplus would have gone to the UK Exchequer. Our position is quite clear: we took that action to achieve equity and parity between Scottish and English pensioners. Through last year's direct intervention with the UK Government and through negotiations with the Treasury, Scottish ministers achieved their objective by securing agreement to an additional pay-out to former members of the STG pension scheme that provided an average pay-out that was either the same or slightly better than the average pay-out to English pension scheme members. Members received £7,000 each, which makes a total of £100 million.

The agreement has been described as "Jack's deal". Although I am sure that the First Minister is happy to be associated with the deal, the credit must also go to Sarah Boyack and the other ministers who were involved in obtaining the additional £100 million payment to Scottish pensioners.

As has been described, since then, the surplus has continued to be invested and has increased over time. In April, Gordon Brown reduced the relevant tax rate from 40 to 35 per cent. As a result, the forthcoming STG accounts for the year ending March 2001 are likely to show that the net surplus after tax has risen by approximately £18 million to around £168 million. Therefore, I am delighted to announce today that, in addition to the £100m pay-out that we have already secured, Scottish ministers have this week agreed with the Treasury that an additional £18 million should be paid to members of the scheme.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Do the minister's remarks imply that the Treasury in London—not the legal position—has determined the outcome?

Lewis Macdonald (Labour, Aberdeen Central)

Although it obviously fell on deaf ears, I have tried to explain that the legal position is clear. The political position is that the money belongs to the Treasury. What we, as Scottish ministers, have done is to persuade our colleagues to return a very substantial part of that money to Scottish pensioners. I hope that all MSPs are interested in the welfare of the potential beneficiaries; if so, there should be as little delay as possible in proceeding with the pay-outs. Beneficiaries have already waited too long.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

No—I need to make progress.

It is also worth bearing in mind the likely effects of any legal challenge, as the English experience has shown that such challenges can cause further delays for many years. As Scottish ministers, we have carried out our functions speedily. The next step that is required is for the trustees of the STG to wind up their pension schemes. Although ministers do not control that process, we are as impatient as anyone in the chamber to see progress to ensure that payments can be made. We have issued the necessary indemnities to the trustees and we have sought and received Budget Act approval to receive and pay out the surplus. As soon as the schemes are dissolved, we will begin to process ex gratia payments. Indeed, we have finalised the proposed criteria for distributing the money. We have discussed the criteria with the Transport and General Workers Union, which represented the majority of the workers concerned, and will publish them shortly. I invite members to endorse the proposals when they are made public; they are intended to be inclusive rather than exclusive.

I hope that members agree that, despite the absence of any legal entitlement, we have secured a substantial pay-out of £118 million. Although our role in the issue is currently limited, we have taken every available step as swiftly as possible. It is now for others, specifically the trustees, to make progress with their responsibilities and to wind up the pension scheme. We are impatient for that to happen and will continue to press the trustees to ensure that it does.

I mentioned the criteria by which the money will be distributed. We are aware that many people outside the unions who are already involved are keen to understand what lies ahead and the process that will be followed. Therefore, I intend that my officials will meet and brief representatives of the affected trade unions, groups such as the Scottish Bus Group pensioners action committee, other groups that represent pensioners across Scotland and any MSPs who wish to attend, to clarify the process of distributing the funds. That meeting will be held as quickly as possible; indeed, we intend to make arrangements before Christmas.

We are now ready to progress the distribution. All that we require, and have required for several months, is the winding up of the schemes by the trustees. The moment that we achieve that, we will begin making the payments that I have described.

I move amendment S1M-2486.1, to leave out from "both" to end and insert:

"Scottish Ministers have secured from HM Treasury a substantial pay out for Scottish Transport Group Pension Scheme former members despite the absence of any legal entitlement; further notes that any change to the amount to be distributed to former members is a matter for HM Treasury, and finally notes that the key remaining step is the winding up of the pension scheme, which is a matter for the scheme's trustees."

James (Conservative, Lothians)

As I handled the bill that brought about the privatisation, it is only fair that I should give Parliament my recollection of what happened.

I recall receiving advice in 1996 that the legal complexities were such that the matter could not be determined immediately, as I had wanted. My thinking was and still is that the matter should be dealt with as quickly as possible. The privatisation—like all other privatisations—was governed by Treasury rules, under which the pensioners were to receive a full pension, with any surplus being returned to the Treasury. It followed that, if there were a deficit, it would be made up by the Government. The Scottish Transport Group (Pension Schemes) Order 1996, which came into force on 14 August 1996, provided for the winding up of the two Scottish Transport Group pension schemes, as part of the eventual dissolution of the Scottish Transport Group, under the Transport (Scotland) Act 1989. Alternative pension arrangements were then made for existing and former employees, leaving the pension schemes concerned to be wound up. Any surplus funds or deficit were eventually to go to the Scottish Transport Group, to be dealt with in the order that dissolved that body. When the Scottish Transport Group was wound up, any surplus funds were to be paid into the consolidated fund, hence the money would be returned to the Exchequer. That was the position then, under the Treasury rules, and it has been the position of successive Governments.

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

Will Lord James address the point that the minister has not addressed and confirm that the trust deed that governs the purposes of the trust—namely the employers and the pensioners—confers upon the trustees discretion to increase the benefits? Will he also confirm that the trustees have not fully exercised that discretion and that, had they done so, the people in the public gallery and 14,000 others in Scotland would be receiving substantially more, even if his exposition of the legal position is correct?

James (Conservative, Lothians)

The trustees' evidence just before the general election in 1997 was that the complexities were so great that they could not resolve the matter. At the time, they were concerned about judicial review. Both the Labour Government and the previous Government have been bound by the Treasury rules. Bill McQueen, a senior official of the Scottish Executive, told the Finance Committee on 26 June:

"the expectation when the bus companies were privatised was that surplus assets would return to the UK Exchequer."—[Official Report, Finance Committee, 26 June 2001; c 1378.]

The minister has made a ministerial decision to pay an ex gratia sum of, on average, £7,000 or £8,000 each—it may even be larger than that. What is important is the settlement for pensioners south of the border. The settlement in Scotland should be at least as good as that, if not better, and I support the minister's decision. It is imperative that the Executive makes strong representations to the trustees to wind up the pension funds, so that the subsequent dissolution order can be brought to the Parliament, which would benefit the pensioners.

Andrew Wilson (Scottish National Party, Central Scotland)

In the same evidence to the Finance Committee, the officials made it clear that it was within the minister's gift to give all the surplus back to the pensioners and that there was no constraint on a political decision to give money directly to the pensioners.

James (Conservative, Lothians)

With the greatest of respect, I have to disagree on that point. It is not in the power of the minister or the Labour Administration—as it was not in the power of the former Secretary of State for Scotland in the previous Government—to overrule Treasury rules, although Gordon Brown may have written something different when he was in Opposition. If he chooses to use his discretion to change those rules, that is another matter. However, we do not have the power, under the Scotland Act 1998, to override Treasury rules. We are bound by them. The minister has made a ministerial decision that, over and above the legal entitlement, there should be an ex gratia payment. That is an appropriate decision, in view of the settlement that took place south of the border.

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

rose—

James (Conservative, Lothians)

Fergus Ewing must excuse me. I have only a minute left.

I would not have been prepared to tolerate an excessively prolonged delay. It is extraordinary that the matter has yet to be brought to a satisfactory conclusion. The maximum pressure should be brought to bear on the trustees to make certain that they fulfil their professional duties. If trustees take on a difficult task, they should be prepared to fulfil it. I hope that the minister will ensure that the situation is resolved rapidly. The argument that certain complexities existed that had to be surmounted had some weight after four years, but I do not think that it weighs heavily after eight years.

Clearly, the matter must be brought to a conclusion as quickly as possible, and I wish the minister every good fortune in achieving that purpose. We intend to support the Executive's amendment.

George Reid (Scottish National Party, Mid Scotland and Fife)

This was always going to be a short debate so, although there have been important exchanges between the front-bench members, there will be time for only three speeches in open debate. They must not be longer than three minutes each.

Nora Radcliffe (Liberal Democrat, Gordon)

I was tempted to begin by turning to the Conservative members and saying, "Here's another fine mess you've gotten us into," as the whole saga dates back to the Transport (Scotland) Act 1989, in which the Tories privatised the Scottish Bus Group.

Following privatisation, the legislation and disposal programme that was presented to the UK Parliament specified that any remaining surplus from the company's pension schemes, after they were transferred and wound up, must be paid to the consolidated fund—the Treasury. The agreement to wind up the pension fund was reached in consultation with workers. The surplus has been invested and will probably be in excess of £250 million on wind up.

The Scottish Transport Group pension schemes were entirely separate from the National Bus Company pension schemes in England. In England, where the pensions ombudsman found that the trustees had acted incorrectly, there was a long-running legal dispute that was halted by the incoming Labour Government in 1997. The English situation was resolved in 1999, when John Prescott finally agreed to pay £300 million to the bus employees' superannuation trust and £55.77 million to the national bus pension fund to allow the situation to be corrected. There was an out-of-court settlement and £350 million went to 54,000 members, which worked out at an average payment of £7,000.

There have been no court proceedings in Scotland to date, and there is no evidence that the trustees of the Scottish scheme acted improperly. Section 14 of the Transport (Scotland) Act 1989 allows any surplus remaining in the Scottish Transport Group pension schemes to be paid in accordance with a specific dissolution order to wind up the Scottish Transport Group, which the Scottish Executive will introduce once a number of complex and detailed legal matters have been sorted out with both the Treasury and the Scottish Transport Group.

To arrive at a resolution of the situation and wind up the STG, the Scottish Executive has negotiated a deal with the Treasury that will deliver benefits described as equivalent to those received from the winding up of the English pension schemes. The pensioners received enhanced benefits on transfer and are now to receive an ex gratia payment. The pensioners are unhappy with the deal because it does not deliver what they feel to be their full entitlement from the scheme. Although the sum that each of them will get is roughly equivalent to the sum that their English colleagues received, the total does not represent the full amount of the surplus that reverted to the Treasury. Although natural justice is on their side, the deal is well beyond any legal entitlement that the pensioners have to the surplus. The legal position involved the entire surplus reverting to the Treasury.

The report that was commissioned for the National Audit Office in 1993 and the failure of individual members to convince the pensions ombudsman that there was a basis for a claim on the surplus highlight the potential difficulty in mounting a legal challenge. If there was a legal challenge in Scotland, it could lead to further delay. A dissolution order could not be introduced until the court proceedings were settled, which could be a long, drawn-out process. Until a dissolution order is passed by the Parliament, the pensioners will not receive the additional benefits.

Delay in winding up the scheme is an issue for most pensioners. First, until the scheme is wound up, staff must be retained and paid from the remaining funds in the scheme. Secondly, as has been said, many pensioners are elderly and require their enhanced benefits at the earliest opportunity. The Scottish Executive is doing its best to make progress on the issue as quickly as possible.

The pensioners and their supporters are to be commended for their concerted campaigning. Without their persistence, it is unlikely that the £100 million share of the surplus would have been secured. The Scottish Executive also deserves credit for the work that it did to secure the deal. The moral argument remains that the entire fund should be paid to the workers who benefited from the scheme. Any further payment, however, is reliant on the agreement of the Treasury. It seems that the moral argument has been won, but there is no legal leg to stand on. Perhaps the only way to prise the remainder of the surplus out of the Treasury would be to shame the Labour Government in Westminster into making good John Prescott's assertion that no Labour Government would pillage workers' pension funds. As Fergus Ewing pointed out, Gordon Brown made similar statements.

The extra amount that has been announced today is welcome and I hope that it will amount to the balance of the surplus.

George Reid (Scottish National Party, Mid Scotland and Fife)

I call Dr Sylvia Jackson and remind members that speeches must not exceed three minutes.

Sylvia Jackson (Labour, Stirling)

I welcome the former STG employees who are in the gallery today. I also welcome the debate and hope that we will now move closer to bringing a dissolution order to the Scottish Parliament and starting the long-awaited ex gratia payments to the pensioners, the deferred pensioners and the transfers.

I also welcome Fergus Ewing to the campaign but have to inform him, as there seems to be no mention of the matter in his recent press releases, that a good number of Labour MSPs have been involved in the issue for a considerable time—since long before his involvement began.

We cannot get away from the fact that this issue has been dragging on for too long—for well over a year. Dennis Canavan and I first became involved with the former employees at a meeting in Stirling. At that time, the pensioners were aware of the developments down south and of the fact that National Bus Company employees had taken their case to court to get the surplus funds. Since those early meetings, a number of meetings have been held, in Perth, Kirkcaldy and Inverness. They have all been well attended and have involved MSPs such as Cathy Peattie, Kate MacLean, Marilyn Livingstone, Maureen Macmillan and Fergus Ewing, as well as Dennis Canavan and me. That is not to mention members working behind the scenes in the Parliament.

While Labour MSPs have been pressing from the back benches for an equitable and quick settlement to the issue, the Labour Transport and General Workers Union group, of which I am a member and Cathy Jamieson is the chair, has been active in exerting pressure in the Scottish Parliament and with ministers at Westminster. The contribution of the TGWU, particularly recently, should not be underestimated. The TGWU is concerned not only with the big issue of how much of the surplus should be paid out but with the equally important points around the distribution of the payments.

One of the main problems with this issue has been the difficulty surrounding gaining up-to-date information not only about what is happening down south but about the delays in the process and why the dissolution order was not brought forward earlier. Although it is not directly comparable, the National Bus Company court settlement was used by the Executive as the basis for allocating an average of £7,000 per person as an ex gratia payment. It has been suggested that whereas members of the National Bus Company scheme had a legitimate basis for a claim, the members of the STG scheme did not. I am unsure about that, but it is clear that a long court case is the last thing pensioners need.

What is the present position? The lawyers who are supporting the action group accept that a dissolution order to release the funds must be laid before the Parliament. They also accept that, as a result of the budget, the tax must be paid at the lower level of 35 per cent. Allowing for growth, that leaves a surplus of around £170 million, which is what the TGWU is calling for.

In light of the action group's continuing concerns, I ask the new minister to agree to a meeting with the action group to explain the exact position on its concerns. I am pleased that he has agreed to a meeting.

George Reid (Scottish National Party, Mid Scotland and Fife)

You must come to a close.

Sylvia Jackson (Labour, Stirling)

I ask the minister to take a personal interest in this issue. It is important that, if necessary, he intervene directly in the discussions with the access group. The dissolution order must come quickly in order to get the payments to the pensioners.

Michael Matheson (Scottish National Party, Central Scotland)

Fergus Ewing called for a fair and just settlement for the thousands of pensioners who have been affected by the way in which this matter has been handled. I had hoped that, since a new minister has responsibility for transport, this debate would bring about some changes to the provision that has been made for the pensioners. I had hoped that the Executive would take this opportunity to right a wrong that has been done to the pensioners and that it would do the right thing by the pensioners, who are the innocent party in this affair. Instead, we have an Executive amendment that starts off with ministers congratulating themselves on what they have been able to achieve before going on to say that there is an

"absence of any legal entitlement".

During today's debate, members have pointed out that, in Scotland, there has been no legal challenge. I note that Murray Sinclair, giving evidence to the Finance Committee, stated quite clearly that

"It is within the competence of Scottish ministers"—[Official Report, Finance Committee, 26 June 2001; c 1383.]

to act on the issue. It is strange that ministers should choose not to exert their authority.

If the Treasury rules that present us with the problem were made by the Conservative Government, why is the new Labour Government content to continue to enforce them? They should be applying pressure to change the rules. The minister has announced an extra £18 million. It is in addition to the £250 million surplus that exists because of the change in the Treasury rules. The pensioners are entitled to that money. Broadly, the pensioners will receive only 40 per cent of the present level of surplus. How would any member of the Scottish Parliament feel if the Government creamed the surplus off our pension fund and sent that money to an already bloated Treasury? [Applause.]

George Reid (Scottish National Party, Mid Scotland and Fife)

Order. I do not want to be rude to our friends in the public gallery, but this is a meeting of Parliament, not a public meeting, and members of the public are not allowed to applaud.

Michael Matheson (Scottish National Party, Central Scotland)

The people who are suffering the most are those who invested in the pension scheme. We can all talk about the technicalities and ask why there has been no legal challenge and so on but the reality is that pensioners, many of them dependent on their pension, are suffering. Indeed, many have passed away and will not benefit from the pension scheme.

I ask the minister to consider the possibility of making interim payments, particularly to pensioners who are in ill health and may not benefit from the surplus. I ask the minister—not his officials—to meet the action group, take a personal interest and try to find a way of making progress on this issue.

I also ask the minister to tell the Treasury that the Scottish pensioners will not accept any settlement that is less than that of their English counterparts. They got 60 per cent of the surplus and the Scottish pensioners should get the same.

Cathy Peattie (Labour, Falkirk East)

This is an important issue. I am sorry that Fergus Ewing has tried to make it a political issue because, as Sylvia Jackson pointed out, there has been cross-party support all the way down the line. I praise Dennis Canavan and Sylvia Jackson for their work but I particularly praise all the folk in the gallery who have worked hard and have campaigned for what I believe is their right. My constituents and other pensioners and their families have waited long enough. They have been patient and their patience has been sorely tried.

I urge the minister to do all she can to make progress on the issue. If she has to lean on the trustees to wind up the company, she should do that. She should give a commitment to meet the pensioners and ensure that the two relevant groups are represented on the working groups that will consider disbursement of the money.

The main problems around this issue have been to do with misinformation and a lack of communication and information. At the meetings that I have attended, people have never been clear about who is responsible for what, what decisions have been made, whether meetings had been minuted and so on. Pensioners need an answer. This issue should have been resolved by last Christmas. Can it be done by this Christmas? If not, can it be done by some time in the next year?

George Reid (Scottish National Party, Mid Scotland and Fife)

We come to closing speeches, which must also be kept to time.

Donald Gorrie (Liberal Democrat, Central Scotland)

A good campaign has been waged on this complicated issue. As several members said, our purpose must be to get the maximum possible benefit for the pensioners, but there is disagreement over the tactics to be used in achieving that end.

Some good points have been made during the debate. In particular, the minister must get personally involved, along with his officials, in doing everything possible that the Government and the Parliament in Scotland can do. His additional £18 million is certainly welcome, but we should explore whether more money is available, either in the form of interest that has been accruing or from other sources.

The key point is that the campaign, and the involvement of MSPs, has put pressure on Scottish MPs at Westminster. This is a Treasury issue. Although it seems outrageous that the money legally belongs to the Treasury, that is the system—and it shows why the system needs to be examined. At Westminster, we have well-paid MPs—and ministers—who must get stuck into this issue and make UK ministers deliver on the promises they made. If we work with them and put pressure on them, we can achieve as good a deal as possible for the pensioners.

The issues involved are complex—various statements have been made about what the law is and is not. We must accept that a considerable amount of money, over and above their meagre legal entitlement, which was zero, has been got for the pensioners. I am sure that if we work together we can get more. I hope that we can achieve that and that the minister will make a personal contribution to that effort. We all know that if a minister—along with his department—takes a personal interest in a matter, much more is likely to be done. I urge the minister to take note of the debate and to act accordingly.

James (Conservative, Lothians)

It is clear that the electorate expects the Scottish Parliament to deliver efficient government. The prolonged delay over the Scottish Transport Group pension fund schemes is becoming a serious embarrassment. Sylvia Jackson, Michael Matheson, Cathy Peattie and Donald Gorrie stressed the point that the matter must be dealt with as quickly as possible.

It was extremely annoying that the trustees could not deal with the matter before the 1997 general election. The further delay, which may take up to eight years, can not be legitimately defended on any reasonable grounds. Eight years down the road from privatisation, both actual and deferred pensioners are being denied what is rightfully owed to them, which is, I believe, an average amount in the region of £7,000, or possibly a bit more.

About 12,000 people are involved: 8,000 pensioners and 4,000 deferred pensioners. They include former bus drivers, conductors, engineers, cleaners, ferry crew and office staff. Some of them invested their entire working lives in public transport. Some of them live off modest pensions and, to be frank, a lump sum of £7,000 or more could make an enormous difference to them.

Whatever the complexities of the matter, it has been delayed for far too long. I urge the minister to ensure that this untidy state of affairs is cleared up and dealt with speedily and professionally. The principle is clear and unmistakable: the pensioners concerned should receive entitlements that are every bit as good as those received by their counterparts in England. I urge the minister to make absolutely certain that he obtains 100 per cent support from the First Minister in his fight to ensure that Scottish pensioners get their entitlement.

Lewis Macdonald (Labour, Aberdeen Central)

I will start by addressing the question of ministerial discretion and Government rules, which a number of members have raised during the debate.

The Scottish ministers took a decision, on the ground of equity, to seek ex gratia payments and thereby to make pay-outs to members of the pension scheme. Taking that initiative lay within our discretion and, in so doing, we secured the agreement of the Treasury—the legal owners of the fund—after long and complicated negotiations. That action secured the £100 million that was agreed and announced a year ago. We have repeated that process over the past few days and have secured further ex gratia payments of £18 million.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

Given the shortness of the debate, I must press on and answer the points that have been made.

It has been said that the payments amount to 40 per cent of the total surplus. Let me remind members that one third of the surplus was already paid out some years ago. Therefore, as soon as we have the opportunity to do so, and as soon as the trustees complete their role, we intend to pay out an amount that will be equal to or greater than the share of the surplus that was paid out south of the border. The amount will also be more per head than is available to English pensioners.

We intervened directly with the UK Government to secure an outcome for Scottish Transport Group pensioners that would be as least as good as that which was secured by their English counterparts. The £100 million was calculated on that basis. That amount was agreed on the basis that the average sum for each pensioner in Scotland would be at least equivalent to the average sum for pensioners in England. In addition, as members know from today's announcement, £18 million has been negotiated, which is on top of the entitlements and enhancements that were secured in previous years.

The Executive has recognised the arguments for equity. On the basis of those arguments, we have taken a political initiative to secure the funding. To do that, we have carried out each stage of the process that was within our power as quickly as it was possible to do so. Following the recent approval to receive the surplus from the Scottish Transport Group, as provided by the Budget (Scotland) Act 2001 (Amendment) Order 2001, we now require the trustees to wind up the business and the pension schemes.

Andrew Wilson (Scottish National Party, Central Scotland)

My question concerns a simple factual point. The Executive has received Treasury approval to receive the surplus. Precisely how much is that surplus at the current date?

Lewis Macdonald (Labour, Aberdeen Central)

I indicated in my opening remarks that the pension scheme surplus is expected to increase by £18 million by the end of the financial year. That £18 million is the additional sum that we intend to disburse to pensioners.

We are currently waiting for the trustees to wind up the pension schemes. Until they do that, nothing more can be done in terms of paying the money out. Although it would be nice to make interim payments at the earliest possible date, we clearly cannot pay out the money until we have received it. We do not control the process of winding up the schemes, but we continue to maintain pressure on the trustees to carry out their responsibility by bringing the schemes to an end so that the money can be transferred to us and distributed to the pensioners.

We have finalised our proposed criteria, which will be published shortly. The criteria have been discussed in detail with the Transport and General Workers Union. The TGWU, which represents more than 90 per cent of those involved, has expressed its support for the criteria. On that basis, we believe that the criteria are sound, but we await one or two further comments before making them public. When we do so, I think that the pensioners will see that the process that has been put in place is appropriate and suitable.

An opportunity to follow and understand that process will be made available to members of the trade unions involved, members of the action committees and others. That briefing will be arranged shortly. I give Sylvia Jackson my assurance that Wendy Alexander and I will keep a close eye on how the matter proceeds. We will ensure that there is no further delay in the process. Today, I call on the trustees to complete their process so that we can carry out ours.

George Reid (Scottish National Party, Mid Scotland and Fife)

I call Dennis Canavan to wind up the debate. You have until 12:30 precisely.

Dennis Canavan (Independent, Falkirk West)

I am grateful to the Scottish National Party for the opportunity to reply to the debate and was pleased to add my name to Fergus Ewing's motion, which deserves cross-party support. In view of the minister's announcement, I do not know why on earth the Executive could not support the motion. I pay tribute to all MSPs who have been active in the campaign, including Sylvia Jackson, Cathy Peattie and Maureen Macmillan, all of whom have attended meetings, along with me, at various venues.

All members who have taken part in the debate are generally agreed that Scottish Transport Group pensioners have been waiting far too long for justice. Fergus Ewing referred to my earlier motion—S1M-1096—calling for urgent action

"to secure the maximum possible benefit for the pensioners from the Pension Funds surplus".

A total of 96 MSPs supported the motion. When it was debated during a members' business debate, nobody spoke against it.

I welcome the fact that the minister has improved the offer somewhat, but the question now is: does the additional £18 million offered by the minister today amount to maximum benefit for the pensioners. I welcome the improved offer, but I do not think that it measures up to maximum benefit.

Earlier this year, the Finance Act 2001 reduced the taxation rate from 40 per cent to 35 per cent. I put it to the minister that that seems to be where at least some of the money for this improved offer is coming from.

In December last year, it was announced that £100 million would be available for ex gratia payments; and in June this year, a Scottish Executive official told the Finance Committee that the gross surplus was

"likely to be of the order of £250 million."—[Official Report, Finance Committee, 26 June 2001; c 1377.]

So far, not a single penny has been paid out to the pensioners.

The Executive amendment implies that the delay is the fault of the trustees, who have responsibility for winding up the pension funds. That sounds to me like an attempt by the Executive to pass the buck. The trustees initially pleaded that they would require indemnity before parting with the money. The Executive granted indemnity to the trustees after gaining the approval of the Parliament's Finance Committee. That was more than five months ago—but the trustees are still holding on to the money. Why? Why cannot the Scottish Executive put more pressure on the trustees to hand over the money? And why, in the first instance, did the trustees seek indemnity? Do they perhaps have a guilty conscience about the way in which they have handled the pension funds? Are they afraid of litigation because they did not take adequate steps to ensure that the total surplus was used for the benefit of the pensioners?

The Executive amendment claims that the former members of the pension scheme have no legal entitlement—but that claim has never been tested in the courts.

Lewis Macdonald (Labour, Aberdeen Central)

Mr Canavan asks a perfectly reasonable question about the delay over indemnity. The delay prior to 4 September arose partly from the death of one of the trustees. The indemnity was to named trustees, so clearly that caused some delay. The delay since 4 September does indeed relate to trustees' concerns about their legal position. I am not in a position to speak for them, but it is clearly a responsibility of all trustees of pension funds to ensure that they have proper legal cover before they take any action. I am keen that they should take action quickly and that their legal advice should lead them to that conclusion without any further delay.

Dennis Canavan (Independent, Falkirk West)

I am grateful to the minister for that explanation, and I am very sorry indeed to hear about the death of one of the trustees. However, I urge the minister to put more pressure on the trustees to deliver.

The Executive may be being rather arrogant and complacent in stating in its amendment that the former members of the pension scheme have no legal entitlement whatsoever. As I was saying, the claim has never been tested in the courts. I know that some of the pensioners are considering legal action and have already taken preliminary legal advice. However, legal action can be a lengthy and expensive business. Such action should not be necessary if the Scottish Executive and the UK Government take urgent political action now to increase the amount on offer and to expedite the payments to pensioners.

In a previous incarnation, our new First Minister was the Minister for Finance. I presume that he helped to negotiate the deal with the Treasury. The new First Minister is on record as saying that he wants to introduce a new era of open, accountable government under his leadership. In which case, why did he sell the pensioners short by settling for £100 million in the first instance? Did he know then that the total gross surplus was expected to be of the order of £250 million? Did he accept the spurious argument that because the National Bus Company pensioners south of the border are to receive on average payments of £7,000 each, the average payment to the Scottish Transport Group pensioners should be the same? That is how the initial figure of £100 million was arrived at. There are 14,000 pensioners, including deferred pensioners, in Scotland. If we multiply an average payment of £7,000 by 14,000, we get £98 million, which is near enough the magic figure of £100 million—the sum that was offered.

Lewis Macdonald (Labour, Aberdeen Central)

Mr Canavan is absolutely right in his arithmetic. I can confirm that achieving that degree of equity for individuals was the basis of the calculation. Had the rules in Scotland been the same as the rules in England, the position would have been quite different and that surplus would have belonged to the members. According to our best legal judgment on the matter, it did not belong to the members. As Mr Canavan has said, that is yet to be tested. Given the comments made by other colleagues, I do not believe that testing that at this stage would be in the interests of the pensioners.

Dennis Canavan (Independent, Falkirk West)

The minister is now qualifying his earlier statement as well as the wording of the amendment. The amendment states categorically that the former members of the pension scheme do not have "any legal entitlement". The minister is now saying that that is simply the legal advice that the Executive has received. I can tell the minister that the pensioners and former members of the pension scheme have received legal advice to the contrary and that the matter may yet be tested in the courts.

As I was saying, no one can argue that £7,000 multiplied by 14,000 pensioners comes to about £100 million. I will give the Executive—or those who conducted the negotiations—nine out of 10 for arithmetic, but nought out of 10 for logic. The truth is that the surplus per capita in the Scottish Transport Group pension scheme is considerably greater than the surplus per capita in the National Bus Company scheme. Even more interest has accumulated since last year. Even if the Inland Revenue insisted on taxing the surplus at 35 per cent, that would leave at least £170 million available for ex gratia payments, rather than the £118 million that is now on the table.

I would like the minister to tell us as soon as possible how the sum of £118 million was calculated. Can he give us full details of that? Can he tell us how much of the surplus will go to the Treasury, either by way of taxation or by way of payment of some remainder of the surplus? The Executive amendment claims that any change in the sum of money to be distributed is a matter for HM Treasury. That is another example of passing the buck. It is a matter for negotiation between the Scottish Executive and the Treasury. The Scottish Executive must tell the Treasury that even the improved offer is inadequate. The Scottish Executive must stop passing the buck and it must act now.

The pensioners have been waiting far too long already. We are talking about men and women who were employed as bus drivers, ferry crew, cleaners, engineers and clerical staff. They invested their working lives in Scottish transport services and they invested their contributions in a pension fund that was supposed to be for their benefit in their retirement rather than for the benefit of a rapacious Treasury.

The motion before us today would help to win a fair deal for those people, and therefore deserves the support of every member of this Parliament of whatever political party. I appeal to Labour party members in particular. The Labour party was born out of the trade union movement to fight for justice for working people and their families. Here we have a case of working people who are seeking full justice in their retirement. They are or were members of trade unions, such as the T&G Scotland, which rightly is concerned and wants to ensure that its members and former members receive a fairer deal. I call on all members to reject the amendment and support the motion. It is a cry for justice—justice that is long overdue.

David (None, Lothians)

That concludes the debate. The vote on this issue will, of course, take place at decision time at 5 o'clock.

Points of Order

Fiona Hyslop (Scottish National Party, Lothians)

On a point of order, Presiding Officer. There is a motion lodged for debate today—S1M-2495—on behalf of the Parliamentary Bureau. I advise the Presiding Officer that the Parliamentary Bureau has not met to discuss, nor has it consulted on, the motion. Would it be in order for the motion to be re-presented at a later date in order to do two things? First, the motion could be dealt with after the vote for Deputy Presiding Officer to avoid any perceived presumption of the election as Deputy Presiding Officer of any member of the chamber and secondly, it could be approved by all four members of the Parliamentary Bureau.

I have a second, more substantive, point of order. Can the Presiding Officer confirm that the role of Presiding Officers is to be independent representatives of this Parliament, and that there is no place for any member of the Executive to instruct members of this Parliament how they should vote in the secret ballot?

David (None, Lothians)

There are two quite separate issues. On the first point, I have received notification that motion S1M-2495, to which Fiona Hyslop referred, has been withdrawn. Therefore what happens later is a matter for the Parliamentary Bureau.

I wish to say a word about the second issue. The standing orders make it quite clear that the three Presiding Officers cannot all be from the same party. That is clearly part of our constitution. In the event that any one party had a majority in the chamber, it could not control the chair. That is a very important principle in our proceedings.

The ballot is secret, as I said yesterday, and every member has an equal vote in a secret ballot. Discussions that take place in private meetings of party groups are absolutely nothing to do with the chair. Anyone can indicate their preference for any particular candidate in those meetings if they wish to do so. It is absolutely nothing to do with the chamber.

I will say a word about the roles of Presiding Officer and Deputy Presiding Officer, because they are not always understood outside Parliament. The Presiding Officer is under an obligation to withdraw from party politics in Scotland. That has happened. The Deputy Presiding Officers have a much more difficult job, because when they are in the chair they share total independence, and they share the service of the Parliament when they represent it abroad, but otherwise, when they are in the chamber, they have the same freedom as every other member to continue to act as a member of a political party. I must say that both Patricia Ferguson and George Reid adopted a self-denying ordinance such that they have not participated in blatantly partisan issues in the chamber. That was widely appreciated, and I am sure that it will be followed by whoever is elected. [Applause.]

The second point is not really a point of order for me. What goes on inside party meetings is nothing to do with the chair.

Robert Brown (Liberal Democrat, Glasgow)

On a point of order, Presiding Officer. I seek clarification that the positions of Presiding Officer and Deputy Presiding Officer are parliamentary appointments, rather than party appointments, and that they are not subject to party nominations.

David (None, Lothians)

Absolutely. That is why there is a secret ballot of members. Clearly, nobody can instruct any member how to vote. That is perfectly obvious by the unique nature of the election that we are about to have. May I proceed to it?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

Further to that point of order—I am sorry to labour the point, but it is a matter of great concern to the Parliament, Presiding Officer—if it came to your attention that any nominee had been put up by a party leader, and that members of that party had been instructed to vote for that nominee, would you be concerned?

David (None, Lothians)

I am about to announce the nominations and I tell members that no party leader has nominated a candidate for the election. That is all that matters.

Deputy Presiding Officer

David (None, Lothians)

We will settle down to the election. I have received two valid nominations for the position of Deputy Presiding Officer. In alphabetical order, they are Cathy Peattie—who was nominated by Janis Hughes and Mr Kenneth Macintosh—and Mr Murray Tosh, who was nominated by Michael Russell and Tavish Scott.

The election will proceed in accordance with rule 11.9 of the standing orders. Members should wait in their seats until I indicate to them that they should collect their ballot papers from the back of the chamber. Two tables have been set aside for that purpose. The table on my left should be used by members whose surnames begin with the letters A to M, but not Mc or Mac. [Laughter.] I queried that, but it is simply to keep the numbers even. The table on the right should be used by members whose surnames begin with Mc, Mac or the letters N to Z. I hope that that is clear.

Members should give their names to the clerk, who will hand them a ballot paper. They should then proceed to one of the two voting booths, where they should vote by marking an X on the ballot paper. Before they return to their seats, members should put their folded ballot papers in the ballot box, which will be situated in the well of the chamber.

Each candidate may nominate one scrutineer to monitor counting of the votes. I ask the candidates to ensure that the name of the scrutineer is notified to the clerks at the tables at the back of the chamber when they collect their ballot papers. I will announce the names of the scrutineers and invite them to the vote-counting table in the well of the chamber at the end of the voting period. The clerks will count the votes on the table and in full view of members.

The period for the election of Deputy Presiding Officer is now open. Will members, starting from the front benches, proceed to the back to collect their ballot papers?

Members voted by secret ballot.