Scottish Parliament, 7 March 2002

438 contributions from 80 members. The official report.

Introduction

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

Good morning. The first item of business is a debate on motion S1M-2833, in the name of Annabel Goldie, on the Scotch whisky industry, and two amendments to the motion.

David Mundell (Conservative, South of Scotland)

On a point of order, Presiding Officer. I understand that Miss Goldie, who is to open the debate, has been slightly delayed on her way to the chamber. She will arrive very shortly.

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

In that case, I will speak very slowly. Will those members who wish to speak in the debate please press their request-to-speak buttons now? I call on Annabel Goldie to speak to and move the motion.

Annabel Goldie (Conservative, West of Scotland)

I apologise for my precipitate arrival. It is a great pleasure to take part in a debate such as this morning's. I may say that I am a dame who likes a dram and so it is good to start the morning with something as agreeable as a debate on whisky, or uisge beatha.

Whisky is good for the economy, good for tourism, good to consume and good for Scotland. I was intrigued by the historical account contained in the Scotch Whisky Association's "The History of Scotch Whisky". It notes:

"The earliest documented record of distilling in Scotland occurs as long ago as 1494, when an entry in the Exchequer Rolls listed 'Eight bolls of malt to Friar John Cor wherewith to make aqua vitae'".

Presumably, the biblical instruction to

"take a little wine for thy stomach's sake"

had been enthusiastically improved upon by the monks of 15th century Scotland, to mean "Take a little dram to stay alive." Distilling seems to have been almost the exclusive province of that early church presence—happy days indeed. Communion must have been a lively affair.

I will turn to more modren times. The Scotch Whisky Association notes:

"Scotch Whisky, in particular blended whisky, has gone from strength to strength. It has survived USA prohibition, wars and revolutions, economic depressions and recessions".

I seem to remember that it got me through the 1997 general election results. The association goes on to say that whisky maintains

"its position today as the premier international spirit of choice, extending its reach to more than 200 countries throughout the world."

It was heartening that recognition was given to the importance of the whisky industry in the early days of the Parliament, with the production of a joint document by the Scottish Executive and the Scotch Whisky Association, aptly if perhaps optimistically entitled "A Toast to the Future: working together for Scotch whisky". I could not help noticing that it was subscribed by the Minister for Enterprise, Transport and Lifelong Learning, Wendy Alexander, and by the Minister for Environment and Rural Development, Ross Finnie. Ms Alexander's signature makes it look as though she could do with a dram, while Mr Finnie's signature makes it look as though he should perhaps lay off them.

"A Toast to the Future" is a good document. I quote:

"Scotch Whisky is the best selling international spirit in the world, and that doesn't happen by accident".

That is absolutely right. The document continues:

"The Scottish Executive is well aware that the whisky industry does not operate in a vacuum. The decisions made by government can and do impact on the business community."

That, too, is absolutely right.

The document notes that the whisky industry is a major employer,

"providing direct employment to more than 11,000 people"

and

"generating indirect employment for a further 30,000 people."

It goes on:

"The Whisky industry ... Supports 1 in every 54 Scottish jobs ... Accounts for 5% of all manufacturing jobs ... Spends £1 billion a year, buying goods and services from local suppliers".

Margaret Ewing (Scottish National Party, Moray)

I have very much enjoyed Annabel Goldie's light-hearted introduction to the debate. As she knows, I represent a very important constituency in this context.

As she is speaking as a member of the Conservative party, I ask her why the Conservative Government saw fit to increase excise duty on whisky on 10 occasions during its 18 years in power, thereby reducing the wealth of the industry and, indeed, the uptake by the Government?

Annabel Goldie (Conservative, West of Scotland)

Mrs Ewing will find that, in comparison with other fiscal regimes, the Conservative Government did no more than continue a practice that was already established. Interestingly, it was a Conservative party in Government that, in 1996, took the remarkable step of reducing duty, a step that was greatly welcomed by the whisky industry. Perhaps more important, the Conservative Government made its view on tax strip stamps extremely clear, which was also welcomed by the whisky industry.

The document notes:

"Every year exports account for 90% of Scotch Whisky sales ... and in terms of added value, this makes it Scotland's number one export industry."

As a product and as a contributor to the economy, they do not come much more precious than that.

Are there any bits of grit in this amber nectar? Yes, there are. There is regulation and restricted access to many global markets:

"Of the 200 countries that currently import Scotch, some 130 operate some form of barrier to trade ... there were 25 export markets with excise structures that discriminate specifically against whisky."

Indeed, China has

"a 65% tariff on imports of Scotch whisky."

In Europe—I mention this particularly for Mrs Ewing—duty rates illustrate an institutional prejudice against spirits. That is, of course, not only unwelcome for our industry; it encourages smuggling.

I say to those of us who love the golden tincture: do not be dismayed, because help is at hand. I refer again to "A Toast to the Future". The Executive states:

"The Scottish Executive has pledged to support Scottish manufacturers where EU and UK policies have an effect on the competitiveness of Scottish industry and will take steps to ensure that the regulatory burden is kept to a sensible minimum."

The document further states:

"The Scottish Executive and the Scotch Whisky industry are committed to standing together to fight for more open markets around the world ... The Scottish Executive will continue to support the Scotch Whisky industry's case for genuine tax harmonisation in Europe."

Perhaps most intriguingly of all, the document states:

"The Scottish Executive supports the industry's case for a review of the tax regime in the UK with the aim of achieving a fair outcome for the Scotch Whisky industry."

Winnie Ewing (Scottish National Party, Highlands and Islands)

Will the member give way?

Annabel Goldie (Conservative, West of Scotland)

Will Dr Ewing forgive me? I have some points that I wish to expand upon.

All those comments in "A Toast to the Future" are immensely reassuring. The minister will, no doubt, update the chamber and, more important, the industry on those pledges and commitments. They are significant, they are certainly relevant and they are important.

That makes two matters all the more remarkable. First, I pose the question: why has the Executive lodged an amendment to delete my motion, which did nothing more than applaud the document, observe the statements made in it and call on the Executive to demonstrate how it is getting on with the implementation of the commitments and pledges? I must conclude—gloomily—that there is nothing to report.

Secondly, the haste with which the matter of tax strip stamps was removed by the Executive suggests to me that strip stamps are to be the blow that will be delivered by the Chancellor of the Exchequer's fist to this showpiece Scottish industry, over the heads of the impotent and supine Scottish Executive. Tax strip stamps do not work.

Lewis Macdonald (Labour, Aberdeen Central)

Am I to take it from Annabel Goldie's comment that she is looking to extend the powers of a devolved Scottish Parliament in that respect?

Annabel Goldie (Conservative, West of Scotland)

No. The matter is perfectly clear, at least to parties such as mine—it is perhaps remarkable in itself that we seem to have embraced devolution with greater understanding than has the Labour party. We believe that our mission is to work with our colleagues in Westminster, as part of a United Kingdom partnership, and to bring influence to bear whenever we can, based on the knowledge and expertise that we garner in this devolved Parliament. I only wish that the Executive had the courage, and perhaps the intelligence, to do likewise.

Strip stamps pose a huge potential problem. They will increase costs to the whisky industry; they will slow down production; they will create chronic cash flow problems; and they will reduce competitiveness.

The issue is bigger than whisky, however, and the minister alluded inadvertently to it. The business community is losing confidence in the Scottish Executive. That should perhaps give me comfort, but it does not, because it suggests to me that the stature of the Parliament in the business community is being impugned, and I do not like that one little bit. My question is this: does the Scottish Executive have the muscle to fight for Scottish interests?

The document opens with the statement:

"Scotch Whisky is the best selling international spirit in the world and that doesn't happen by accident".

If the Scottish Executive cannot put its money where its mouth is, there is an accident waiting to happen. The only sad feature is that the casualties will be greater than the Scottish whisky industry.

I will not comment specifically on Mr Ewing's amendment, other than to say that the points raised in it were articulated by Mrs Ewing and I have already responded to them. I am debating not reserved matters, but an entirely devolved issue—this document, produced by the Scottish Executive. My lament is that it remains a document with very little meaningful representation of the life of the industry in Scotland.

I move,

That the Parliament notes the publication of A Toast to the Future - working together for Scotch Whisky and the Scottish Executive's pledge to "support Scottish manufacturers where EU and UK policies have an effect on the competitiveness of Scottish Industry" and "take steps to ensure that the regulatory burden is kept to a sensible minimum"; further notes that Her Majesty's Government is considering applying tax stamps throughout the UK, a measure described by the Scotch Whisky Association as being "by far the greatest threat that the industry currently faces", and calls upon the Executive to demonstrate its stated commitment to the industry, to implement its stated pledge and, accordingly, to make representations to Her Majesty's Government against the introduction of tax stamps.

Lewis Macdonald (Labour, Aberdeen Central)

I congratulate Annabel Goldie on her interest in this matter and on some of her opening speech.

I begin by responding to the member's comments. She is curious to know why we do not support the terms of her motion. Yesterday I made some informal inquiries with the aim of establishing whether this is the first occasion on which a member of the Conservative and Unionist Party has lodged a motion that focuses so largely on reserved matters—it appears that it is. Given the SNP's views, Mr Ewing may welcome that, but neither Opposition party will be surprised to learn that we do not.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

Is the minister seriously suggesting that he is not in favour of doing his job, which is to make representations to Her Majesty's Government on behalf of this Parliament and people? That is exactly what the motion and the SNP amendment call for. Is the minister against that?

Lewis Macdonald (Labour, Aberdeen Central)

Mr Hamilton knows the answer to the rhetorical question that he has posed before I give it—we take very seriously our duty to make representations in the appropriate fashion. However, we do not consider it appropriate for Scottish ministers to seek to make policy on matters that are reserved to Westminster. I am surprised that the Conservatives should suggest that we go down that road.

David McLetchie (Conservative, Lothians)

Does the minister regret the publication of the document that we are debating? If the Scottish Executive makes commitments about what it will do, is not it fair that we examine those commitments and hold the Executive to account? If the Executive commits itself to making representations on behalf of the industry, should not it tell us what representations it has made?

Lewis Macdonald (Labour, Aberdeen Central)

Far from regretting the publication of the document, I regard it as taking on board precisely the issues that are our responsibility. If I have the opportunity to explore those issues further, without immediate interruption, I will explain what we have done to fulfil that responsibility.

The responsibility that I have for the alcoholic drinks industry is important to me. It gives me great pleasure to be involved in an industry that has such deep roots in Scottish soil and that is such a significant component of the Scottish and the United Kingdom economies. I intend to use the debate to reaffirm our support for and commitment to our foremost indigenous industry.

Scotch whisky production continues to represent a vital part of Scotland's manufacturing base and its importance to the wider economy cannot be overstated. Not least significant are the annual export figure of more than £2 billion pounds and the provision of employment—directly and indirectly—to one in every 54 people employed in Scotland. As has been mentioned, the location of those jobs makes them particularly vital to the Scottish economy—whether they are in rural locations, where few alternative job opportunities exist, or in areas of the central belt that have other employment problems.

The Scotch whisky industry is also an important customer for Scottish farmers, who produce the vast majority of the cereals used. I know that the links between Scottish farmers and the Scotch whisky industry are of importance to both parties. The close relationship that the industry has with suppliers such as farmers, transport operators and bottle and label producers and their interdependence make it a prime example of an industrial cluster. Therefore, it is precisely the type of modern industry that both the United Kingdom Government and the Scottish Executive seek to foster.

Although Scotch whisky makes a significant contribution to Scottish employment and is fighting hard to innovate and to develop its home and world markets, I am conscious that several issues of concern remain. Those issues have been raised today, and we have made and will continue to make representations in respect of them. The Executive is well aware that the Scotch whisky industry does not operate in a vacuum and that decisions made by Government can have an impact on the industry.

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

Will the minister give way?

Annabel Goldie (Conservative, West of Scotland)

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

I will give way in a moment.

Members will be aware that, in November last year, the House of Commons Scottish Affairs Select Committee reported on the drinks industry. We have responded to the aspects of the report that relate to devolved matters, rather than those that relate to reserved matters.

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

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

I will do so in a moment.

The Executive's response to the select committee's report is an example of its engagement in the interests of the industry and in the future of Scotch whisky. Annabel Goldie referred at length to the document that we have produced. "A Toast to the Future: working together for Scotch whisky" was produced not out of the ether, but in collaboration with the Scotch Whisky Association, which represents the industry.

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

The debate is about the proposal that tax stamps be applied throughout the UK, a measure described by the Scotch Whisky Association as being

"by far the greatest threat that the industry currently faces".

Is the association right?

Lewis Macdonald (Labour, Aberdeen Central)

Mr Ewing's timing is perfect. I intend to move on to the very subject that he raises.

Clearly, the possible introduction of tax stamps has caused the industry great concern. It is important to place the proposal in context. Spirits fraud costs HM Customs and Excise £450 million in lost duty each year, which is equivalent to 15 per cent of the UK whisky market. Spirits fraud is predominantly inward diversion fraud, by which I mean that goods entering the UK from a European Union tax warehouse do not reach the intended UK tax warehouse but are illegally diverted on to the home market.

Winnie Ewing (Scottish National Party, Highlands and Islands)

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

Not at the moment.

Despite HM Customs and Excise's recent successes, particularly in tackling beer and wine smuggling, inward diversion fraud of spirits remains a serious problem. The UK Government is obliged to consider a wide range of options for tackling the problem; clearly, the introduction of a UK tax stamp is one such option.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

In outlining the background to the open consultation that has been undertaken by Her Majesty's Government, will the minister remind us of the provisions of the Roques report—the independent investigation of the problem of spirits fraud—which recommended the introduction of a stamp tax? That recommendation is the subject of an open-ended consultation by the Treasury.

Lewis Macdonald (Labour, Aberdeen Central)

I am very aware of the content of the Roques report. The case that it makes for the advantages of a stamp tax is clear. However, such a tax would also have significant disadvantages.

Annabel Goldie (Conservative, West of Scotland)

The minister will be aware that strip stamps were introduced in the USA, Greece and Ecuador, and have been abolished because they did not work. The minister will also be aware that three European countries intended to introduce strip stamps, but did not proceed with the measure because of doubts about their efficacy. One country in which they still operate is Hungary, where they have not succeeded in eradicating illicit transactions.

Lewis Macdonald (Labour, Aberdeen Central)

I am aware of some of the international examples that Annabel Goldie cites. It is important to emphasise that the UK Government remains open-minded about the possibility of introducing tax stamps; in other words, as Brian Fitzpatrick pointed out, we are dealing with a consultation process. The UK Government and the Scottish Executive are encouraged that the industry has responded not only by highlighting the problems associated with the tax stamp proposal, but by suggesting other possible methods of dealing with the problem of spirits fraud.

Margaret Ewing (Scottish National Party, Moray)

What has changed between 1997, when the Government pleaded with Norway not to introduce tax stamps because it saw them as ineffective and as raising a barrier to trade, and this year? What major change has led the UK Government to consider the introduction of tax strips?

Lewis Macdonald (Labour, Aberdeen Central)

We all understand that the introduction of tax stamps is being considered in the context of the removal by the European Union of duty free and other tax barriers, and of losses to HM Customs and Excise through whisky and spirits fraud. The latter problem needs to be tackled. I very much welcome the commitment by the Scotch Whisky Association and the UK Government to find a way of dealing with spirits fraud. I know that HM Customs and Excise will give careful consideration to the detailed suggestions that the Scotch Whisky Association has made in response to the consultation opportunity.

As members will know, the scheduled closing date for the consultation has passed. However, in the light of the debate today we have had discussions with HM Customs and Excise and will respond following the debate. I have been keen to take interventions as far as I can, because in making our response, it is important that we are aware of the views around the chamber. We will give a response that acknowledges the interests of the Scotch whisky industry and its vital importance to the Scottish economy. We will acknowledge also the importance to the Scotch whisky industry of finding ways to tackle alcohol import fraud.

On that basis, I look forward to hearing the remainder of the debate. When I close, I will do so in a way that is designed to respond to the debate from the Executive's point of view.

I move amendment S1M-2883.2, to leave out from first "notes" to end and insert:

"welcomes the Scottish Executive's recognition of the importance of the Scotch whisky industry to the economy, the contribution that the industry makes to employment across Scotland and the Executive's commitment to work with the industry as set out in A Toast to the Future - working together for Scotch Whisky."

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

We warmly welcome Annabel Goldie's motion on a topic that I believe I can safely say we all enjoy in variable quantities. It is my pleasure to open for the SNP in the debate. My wife will have the last word later in the proceedings—the rules of natural justice apply in this debate.

The debate is not about the worth and inestimable value of whisky to our economy, culture and society—we can all take that as read. The debate is about an absurd proposal that emanates from Westminster, from a gentleman from a firm of accountants, who thinks that a problem can be solved by a solution that many other countries have discarded as ineffective, inefficient and counter-productive. We really should focus on that issue in the debate.

The Deputy Minister for Enterprise, Transport and Lifelong Learning rightly mentioned that tax fraud is a problem. He referred to the particular problem of inward diversion, namely tax fraud in respect of whisky coming from the EU into the UK. Of course, the primary difficulty is that excise duty in the UK is much higher than it is in other EU states. That creates an automatic incentive to fraudsters who wish to avoid paying the higher rates of excise duty in the UK.

The real question is whether the proposal that has been prescribed by the Roques report will work. We have had the benefit of an excellent briefing from the Scotch Whisky Association. Its conclusion is that the proposal will not work for a number of reasons. First, the Scotch Whisky Association says that it is wrong to suggest that strip stamps deter fraud. Hungary has strip stamps and illicit goods still account for an estimated 15 to 20 per cent of the market. Secondly, it is said that strip stamps cannot be forged. History and practice show that Mexico had such problems with forged and stolen strip stamps that it introduced a new type of fiscal mark to be affixed to the main bottle label. Although the new mark was difficult to copy, it has failed to stop the tax evasion problem.

I turn to the impact on the industry. I spoke to the manager of one of the distilleries that produce single malt in my constituency. The manager said that the distillery simply could not afford the cost, which is estimated at around £300,000, of introducing automation to the process of applying strip stamps. I will not reveal which distillery it was, but the manager said candidly that he did not necessarily see that the distillery would be able to survive if it were burdened with that cost. Were the distillery so burdened, it would have to apply the strip by hand, because it could not justify the expenditure of introducing a process of automation.

That is surely absurd. For that reason alone, the proposal must be disregarded. The argument about cash flow costs is even more serious. The same manager to whom I spoke said that given that the whole point of the strip is to indicate that tax has been paid on a bottle of whisky, the proposal would involve—as the SWA and others have argued—pre-payment of tax by up to two years. The tax constitutes—as the Executive admits in its glossy document—66 per cent of the retail cost of each bottle, which is £5.48 a bottle. To pay that level of tax two years in advance would impose a huge additional burden.

I find it difficult to fathom why any serious and responsible Government would make such a ridiculous proposal. I am bound to reflect that if the proposal for duty to be pre-paid by two years goes ahead, we will not have a Scotch whisky industry. The industry's role will be not to produce whisky, but to bankroll the Government. The industry will become select bankers for the UK Exchequer—Gordon Brown's bank—but the Exchequer, of course, will pay the bank no interest.

I believe that it is essential, as Annabel Goldie has argued, that the Executive speaks out clearly, does not sit on the fence and makes its representations in public, not in private. Unless it does so, it cannot claim to speak on behalf of the Scotch whisky industry.

I move amendment S1M-2833.1, to insert at end:

"welcomes the raising by the Scottish Conservatives of an issue that is reserved; believes that the taxation imposed on whisky by successive UK governments has disadvantaged Scotch in the home market, where whisky is taxed at higher levels than wine or beer, and has also allowed other countries to seek to justify their own discriminatory tax regimes by reference to those in the UK; further believes that a tax stamp system would constitute a barrier to trade, would be inefficient and ineffective as a means of combating fraud and illicit trade, will cause many practical and technical problems in respect of, for example, labelling and storage and will impose substantial costs on the industry, and calls upon the Scottish Executive to demand that all powers relating to the regulation and taxation of the whisky industry be transferred to the Scottish Parliament."

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

I call George Lyon. I am sorry, that was wrong; the Liberals' choice is John Farquhar Munro.

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

I have just changed my identity, Presiding Officer.

We have had an interesting debate so far and I am glad to have the opportunity to become involved. The Scotch whisky industry is an icon in Scotland. It generates worldwide exports worth in excess of £2 billion a year. The industry's importance to Scotland's economy is undisputed; we have heard much about that this morning. The industry, which is one of the main employers in many economically fragile areas, employs 11,200 people directly and supports a further 30,000 jobs with suppliers and support services. In short, Scotch whisky supports one in every 54 jobs in Scotland. Those figures speak for themselves.

With Scotch whisky, Scotland has a rare and competitive advantage. It is accepted that Scotch whisky can be made only in Scotland, so it is truly a unique indigenous industry. As we have heard, however, the industry faces a competitive disadvantage that is enshrined in the UK excise structure.

Alex Johnstone (Conservative, North East Scotland)

Will the member express an opinion on whether Scotch whisky can be made from imported barley?

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

I am not sure whether the Scotch whisky industry imports barley to make its product, but I am sure that there is sufficient malted barley within Scotland to meet the demand.

Scotch whisky, wine and beer are in direct competition with one another, but the UK Government taxes whisky at a rate that is one and a half times higher than that for wine and beer. That offers a competitive advantage to imported competitors.

The Scottish Liberal Democrats have always called for lower duty on whisky. On 22 November 2000, the party called for the duty on imported wines to be levelled up to create a more level playing field. The current duty leads to Scotch whisky facing trade barriers in 130 of its 200 export markets. That hardly sets a glowing example overseas and it certainly does nothing to help the industry in its home market.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

I am curious about the reference to Liberal Democrat policy. Did I understand the member to say that the Liberals' solution was to increase the duty on wine so that it was as exceptionally high as the duty on whisky? Would that not merely give smugglers an incentive to smuggle wine as well as whisky, rather than instead of whisky?

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

Whether increasing the duty on imported wine would encourage more smuggling is a matter for debate, but it would certainly make a level playing field for the Scotch whisky industry, which is competing against the illegal imports.

As I said, the industry faces the potential of more strife in the form of strip stamps. The general view of the Scotch whisky producers is that strip stamps are the greatest threat that the industry faces—dramatic words, but perhaps they are justified.

The Treasury considers that strip stamps will be a solution to the alleged losses in Treasury revenue that arise through large-scale smuggling. I stress the word "alleged" because, as the Scotch Whisky Association stated, the £450 million of excise and VAT that is lost to spirit fraud each year is only an estimate. Bearing that in mind, I must ask whether strip stamps are really the answer, because the evidence appears to suggest that they are not. Countries such as the USA, Greece and Ecuador abolished strip stamps because they were ineffective. Germany, Belgium and Norway considered introducing strip stamps, but opted not to implement that system because the evidence is weighted against their use. Hungary has strip stamps, yet illicit goods still account for an estimated 15 to 20 per cent of the market.

Special machinery is required to apply strip stamps, at a potential cost of £30,000. New machinery and re-engineering costs across the industry would be likely to reach at least £10 million. The cash-flow difficulties that would be presented by strip stamps could prove insurmountable for smaller firms. At the moment, duty is paid only when spirits leave the final distribution warehouse. However, as strip stamps would be affixed at the bottling line, the duty would have to be paid up front without an assured sale. The £5.48 a bottle that the duty would cost is a massive sum to those who bottle 200 to 300 bottles a minute. The whisky industry and other distillers will not benefit from the scheme. The UK Government will benefit, therefore the UK Government should pay.

The whisky industry is taxed heavily, but in the case of the Talisker distillery on Skye, in my constituency, there is an additional tax—the distillery must contend with the burden of excessive Skye Bridge tolls, which is quite a tax.

No one denies the problem of bootlegged spirits, yet the problem was created largely by the UK Government and its Tory predecessor, which cut the service that is provided by HM Customs and Excise to such an extent that the organisation is no longer able to do its job effectively. Strip stamps treat the symptoms rather than the root cause of the problem. The imposition of stamps may well become a logistical nightmare.

I give members an example. Whisky is taxed at 66 per cent, or two thirds. I ask members to imagine someone walking into Deacon Brodies Tavern, buying three nips and lining them up on the counter—he drinks one of the nips but the other two go to the Treasury. That is terrible.

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

We move to the open part of the debate. Members can expect to have five minutes, plus extra time for interventions.

Jackie Baillie (Labour, Dumbarton)

Like other speakers, I recognise the importance of the Scotch whisky industry, not only to Scotland but to the UK. Let me be slightly parochial: the industry is also critically important to people in the Dumbarton constituency.

As we have heard, whisky is the second largest export industry in Scotland and the fifth largest in the UK. The industry employs directly more than 11,000 people in Scotland, and a staggering 30,000 people are employed in related sectors. The minister gave the examples of farmers who supply the quality cereals for use in distillation, bottle and label manufacturers, and people who are involved in providing transport services.

A report that was produced by the Fraser of Allander Institute in 1999 for Allied Domecq identified how the Scotch whisky industry compares with other industrial sectors. If I can find my papers, I will share those figures with members. [Interruption.] Here they are. The Scotch whisky industry is

"Twice as important as computer-related manufacturing

A third bigger than the oil and gas industries 12% greater than banking, insurance and finance 30% greater than mechanical engineering

A third larger than the chemical industry."

We can be in no doubt about the Scotch whisky industry's importance to the Scottish economy.

Allied Distillers is one of the largest employers in the Dumbarton constituency. It provides economic opportunities for local people in an area that faces significant levels of unemployment and disadvantage, and has a work force of 726 permanent employees in Dumbarton. The company's sales are growing steadily, its export markets are increasing and it is acquiring new brands to sit alongside household names such as Ballantine's, Teacher's and Laphroaig. It is clear to me that Allied Distillers is a cornerstone of the local economy.

I confess that I am slightly curious that the Conservatives, who have representatives in Westminster—albeit a small number, including, I believe, one member who represents a Scottish constituency—are holding a debate on a reserved matter. The subject of strip stamps is but one option on which HM Customs and Excise is consulting. We should not lose sight of the purpose of that exercise, which is to tackle the large-scale spirits fraud that results in an estimated annual revenue loss of about £450 million. The whisky industry is at one with the Westminster Government in pursuing that fraud—the industry's concerns arise from the cost of compliance and the effectiveness of the proposed use of strip stamps.

The use of strip stamps would pose real cash-flow problems. Up to about £5.48 a bottle would have to be paid up front prior to sale, which amounts to a considerable sum when it is multiplied by the millions of cases that are produced in Scotland each year. I disagree slightly with Fergus Ewing's emphasis, because we have a responsibility to tackle fraud. The more serious issue is not the cost of strip stamps but the fact that they do not work—I refer to Annabel Goldie's comments on the international experience.

I understand and fully support the industry's legitimate concerns. Therefore, I was heartened by Paul Boateng's comments when he said:

"The Government is approaching this issue with an entirely open mind and we are keen to build up as clear a picture as possible, before taking any decisions."

I remind Fergus Ewing that the consultation is on the recommendations of the independent Roques report and not on a Government proposal.

Margaret Ewing (Scottish National Party, Moray)

Does Jackie Baillie agree that the Scotch whisky industry has made innovative proposals on how to tackle the spirits fraud that we are all keen to see the end of? Are those proposals being taken into account? Perhaps the minister could respond to that point when he replies to the debate.

Jackie Baillie (Labour, Dumbarton)

I find myself in agreement with Mrs Ewing. I welcome the fact that the whisky industry is in direct discussions with HM Customs and Excise on those alternative means of achieving the same aim of reducing fraud. I hope that an acceptable way forward will be found.

It is worth reflecting on the commitment to the whisky industry that has been shown by the Labour Government at Westminster and the Labour-led Scottish Executive. At the UK level, and due to the sound economic stewardship of Gordon Brown, there has been no increase in duty on spirits in the past four budgets, and the industry has welcomed that real-terms cut of 6.2 per cent. Duty rates are 35 per cent lower in real terms than they were 21 years ago. At the European level, the UK Government is arguing that the minimum rate for spirits is too high in comparison with the minimum rate for other drinks. We want a narrowing of the duty discrimination in the EU minimum rate structure.

Winnie Ewing (Scottish National Party, Highlands and Islands)

Will the member give way on that point?

Jackie Baillie (Labour, Dumbarton)

I will continue with my speech, as I am conscious of the time.

Douglas Alexander recently made the welcome announcement that, as a result of detailed negotiations, the Indian Government will cut its import tariff by almost 300 per cent. That announcement may not have been of immediate significance to many members, but the whisky industry regards India as the market that has the greatest potential in the world.

As we have heard, the Executive, in collaboration with the Scotch Whisky Association, has published a framework document, "A Toast to the Future: working together for Scotch whisky". That represents clear recognition of the importance of the whisky industry to our economy and of the contribution that the industry makes to employment and to our local communities. I welcome the minister's commitment to pass on the terms of the debate to HM Customs and Excise. I urge the Scottish Executive to reject the strip stamps proposal.

I pay tribute to the workers in the industry, who are sometimes forgotten. I have met many of them at the Allied Distillers plant in Dumbarton and am constantly impressed by their commitment, enthusiasm and motivation. They are at the core of the success that is the Scotch whisky industry. I am conscious of the Executive's policy on alcohol. Nonetheless, I urge members who perhaps enjoy a drop of the amber nectar to keep enjoying it.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

Although I am usually keen to accept the truthfulness of Jackie Baillie's comments, she must excuse me on this occasion, for two reasons. First, to quote Douglas Alexander as any kind of independent source always causes a frisson of excitement among the Scottish National Party. Secondly, to suggest that Fergus Ewing is not against fraud—given his attitude to crime and punishment—is altogether new.

Annabel Goldie was perhaps slightly modest about her contribution to the debate. She is to be congratulated for rallying to the nationalist banner in raising the issue as a reserved matter and demanding that the Scottish Executive take a lot more seriously its responsibility for arguing Scotland's case in Westminster. The Conservative party, the SNP—as ever—and the Scotch Whisky Association all make that case. The fact that it takes an alliance of the Scotch Whisky Association and the Conservative and Unionist Party to remind the Executive that it should be fighting Scotland's corner in Westminster illustrates how far the Executive has to go.

I will concentrate on two areas. First, I will deal with why there is a need for more equal tax treatment. Secondly, I will discuss the attitude that we must take towards strip stamps. It is important that we understand the nature of the market, which has not been mentioned in the debate so far, and the ready substitution that occurs among the products of wine, beer and Scotch. Any economic analysis of the sector shows that it is very easy to move from one product to another. That is why the disproportionate tax on whisky is all the more troublesome.

It is worth remembering the importance of the export market, which is worth £2 billion every year to the Scottish economy. That represents 12 per cent of the export total. If other countries such as Japan, South Africa and Canada are using the UK tax regime as an excuse for their tax policies, things have come to a pretty pass. We are not just not standing up for the Scottish industries. We are in a worse situation—our policy is being used as a justification for the implementation of other discriminatory policies. We must combat that at an early stage.

Annabel Goldie's rebuttal of Margaret Ewing's intervention on the Tories' tax position on the matter was less than convincing. The statistic that was put to Miss Goldie was that, on 10 occasions in 18 years of Government, the Conservatives took the opportunity to raise the burden on the whisky industry. To suggest that that was okay because in 1996 there was a bit of a flutter and a change of heart does not cut it. A political party that introduced tax rises on 10 out of 18 occasions cannot present itself as the champion of the whisky industry. Perhaps Miss Goldie would like to have another go at doing that.

Annabel Goldie (Conservative, West of Scotland)

I would be immensely interested to learn just what reduction in taxation the Scottish National Party would propose.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

I am very happy to look at the historical analysis. In the period during which Annabel Goldie's party was failing to deliver on those tax cuts, the SNP—in the 1992 and 1997 general elections and the 1999 Scottish Parliament elections—proposed measures to improve efficiency and productivity and to reduce the tax burden on the Scotch whisky industry. The SNP has nothing to apologise for. We have been championing the industry. Indeed, Winnie Ewing has been championing the industry in Europe for a lot longer than most members have been in politics. She is about to tell us why.

Winnie Ewing (Scottish National Party, Highlands and Islands)

At last a member, albeit of my own party, has given way to me. In Europe, I acted for the Scottish whisky industry—practically by myself—for 24 years. The two main parties did not support what we need, which is a European Union alcohol regime that is based on alcohol content, regardless of the member state or the type of alcohol concerned.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

I have a use in the Parliament—to give way to Winnie Ewing.

We must remember that the increase in the tax rate has not increased revenues. During the period in which taxes have been increased, the revenue that comes into the Chancellor's pocket has plummeted. That suggests that the policy not only has a punitive effect on the industry, but does not even work for the Government as a method of increasing spending in other areas. As a policy, increasing the tax does not stack up.

Fergus Ewing correctly identified that other countries have rejected strip stamps and that strip stamps do not deter fraud. He used the examples of Hungary and Poland. Again, we have a policy that has been proven not to work. Other countries have abandoned strip stamps because they are entirely ineffective.

Jackie Baillie told us that she was against strip stamps, but she did not mention the fact that, when her colleagues at Westminster were given the opportunity to sign Annabelle Ewing's early-day motion that said precisely that, not a single Labour member of Parliament took that opportunity. Although the Liberal Democrats put themselves forward as the champions of rural areas, not a single Liberal Democrat MP signed that early-day motion. The Labour party and the Liberal Democrats have a long way to go in terms of standing up for Scotland.

We are told that the UK Government has an open mind on the subject, as if that is a "Shock! Horror! Hold the front page!" scenario. I welcome the fact that the UK Government, for once, has an open mind, but it should be up to the Scottish Parliament to tell the UK Government to close its mind on strip stamps. The UK Government should do that by stating that it is fundamentally against strip stamps.

I received an e-mail from a distillery on Islay, which summed up the issue quite well. The manager of that distillery said that governing a country is not rocket science, but just common sense. The measures that are putting our whisky industry at a disadvantage are indicative of anything but common sense. If we support Fergus Ewing's amendment, we will have the opportunity to do something about that.

Jamie McGrigor (Conservative, Highlands and Islands)

I am delighted to be able to declare an interest in the Scotch whisky industry. The industry is incredibly important to the Highlands and Islands, where most of the distilleries are.

The whisky industry has been under threat from many sources of late. We last debated the issue on 2 May, when the threat came from the EU water framework directive. That threat has not entirely gone away, but the industry is working closely with the Scottish Environment Protection Agency to prove that the manufacture of Scotch whisky is not polluted. That should not be difficult. Many distilleries in the Highlands and Islands discharge into the River Spey, which is world famous for its salmon. Many Aberdeen Angus cattle, which produce the best beef in the world, are fed on draff, which is a distillery by-product. Like Scotch beef, Scotch whisky is an outstanding indigenous product that we in Scotland should be very grateful for.

Industries come and go, but Scotch whisky still flourishes and provides the Treasury with one of its most valuable sources of revenue. The Scottish Parliament would do well to reflect its pride in our national spirit. Whisky is uisge beatha—the water of life. It should be produced at every Scottish Parliament reception, but I regret to say that it is not. It should be an alternative to Chilean or French wine, but we are not even offered it.

If the Scottish Executive is serious about its document, "A Toast to the Future", in which it pledges to support the industry, let us have some evidence of that support and let us have it now. The Labour Government's proposal to implement strip stamps would have precisely the opposite effect. To accommodate the stamps, the UK spirits industry would have to increase its working capital by £250 million. The interest on that figure would be a minimum of £15 million per annum. The cost of adapting machinery is estimated at another £15 million. That is before we consider the cost of the strip stamps themselves and the cost of the extra security that would be needed to protect such tiny pieces of paper. Each stamp would be worth £5.48 and a bagful of them would be worth £1 million. If the strips were stolen, they could easily be used to stamp fake Scotch whisky or contraband spirits.

The minister mentioned that the Treasury estimates that £450 million of revenue is lost each year through inward diversion fraud. Inward diversion means imported drinks but, as we do not import Scotch whisky, inward diversion must refer mostly to fake Scotch whisky or other imported spirits. The Scotch whisky industry would be unfairly penalised by the proposed measure.

Mind you, Presiding Officer, Scotch whisky has been unfairly penalised ever since 1909, when a teetotal Liberal Prime Minister, by the name of David Lloyd George, tried to stop people drinking at all. He increased the tax by 35 per cent, so that he could fulfil his personal crusade. In a glass of wine at a bar, the proportion of tax is 19.3 per cent; in half a pint of beer, the proportion of tax is 16.6 per cent; but in a poor wee dram, the tax is a massive 27.4 per cent, which is a huge burden for something so tiny.

Only the Conservative party has at least recognised the unfairness by reducing the duty on Scotch whisky twice in recent times. The Government's economic advisers concede that spirits are highly price sensitive. As spirits are already taxed one and a half times more heavily than other drinks, applying strip stamps only to spirits would compound the competitive disadvantage that is already faced by the industry.

Let us consider the facts: strip stamps have been proven not to work—as Jackie Baillie rightly said—and they are easy to forge. The USA and Greece have abolished them because they do not work. Strip stamps are tremendously expensive to apply. Most important of all, the strip stamps would be a massive burden on our Scotch whisky industry.

I urge the Executive to put pressure on its UK counterpart to abandon the Treasury's dangerous proposal. The Executive must show its loyalty to the Scotch whisky industry, which flies Scotland's flag all over the world.

I end on a note of caution for the minister, which came from a little story that I found in William Ferguson's book, "Scotland: 1689 - Present". In 1725, Shawfield House in Glasgow was severely damaged by a mob. The house was looted and razed, and blood was shed, because Daniel Campbell of Shawfield, who was the MP for the Glasgow burghs, had supported the malt tax on whisky. Perhaps the minister should support the industry now.

Tackle the fraud by all means, but do it by lowering the duty on Scotch whisky, so that the fraud is less attractive. HM Customs and Excise and the spirits industry should work more closely together to target and expose the criminals who perpetrate excise fraud. Strip stamps are not the answer. I hope that the Scottish Executive will support a great Scottish industry in its time of need.

Rhona Brankin (Labour, Midlothian)

Like Jackie Baillie, I was somewhat surprised by the topic that the Conservatives chose for today's debate. Over the past two and a half years, we have become used to the SNP debating reserved matters in the chamber. The SNP is constantly picking away at the corners of the Scotland Act 1998 and has debated reserved issues as an excuse to argue for the transfer of more powers to Scotland.

Given the fact that the Conservatives did not support even devolution—let alone independence—the fact that they chose to debate a matter that is reserved to Westminster was a bit of a mystery to me. Last night, as I was pondering—

Annabel Goldie (Conservative, West of Scotland)

rose—

Rhona Brankin (Labour, Midlothian)

Let me finish what I was saying because I want to make a point about what Annabel Goldie said.

Last night, as I was pondering why the Conservatives had chosen this topic for debate, it occurred to me that the Scottish Conservatives have only one member at the Westminster Parliament. That poor chap is obviously far too busy to raise the issue in Westminster. I must confess that I was surprised by Annabel Goldie's speech. When will she apply to the SNP for a membership card? I would be interested to hear an answer from her.

Annabel Goldie (Conservative, West of Scotland)

This may seem depressingly basic and worryingly tedious, but my motion for debate is on a document that was produced by the Scottish Executive. If the document is not competent to the devolved Parliament, what is the Executive doing wasting resources and public money by producing the damn thing?

Rhona Brankin (Labour, Midlothian)

That is very disingenuous, even by Annabel Goldie's standards. If she cared to read her motion, she would see that the debate is on a lot more than the document.

Having said that, I think all members present are happy to discuss the Scotch whisky industry. There is no problem with that; we have done so on many occasions. As we all know, Scotch whisky is a world leader. It is the best-selling international spirit in the world and is a leading global brand. Scotch whisky is Scotland's No 1 export and accounts for 20 per cent of the UK's food and drink exports.

The industry provides 11,000 jobs directly and a further 30,000 jobs indirectly. As we have heard, that includes farmers, hauliers and employees of bottling plants and of labelling companies. Many colleagues have mentioned the jobs in their constituencies in different parts of Scotland. In my constituency, the Simpson Label Company Ltd in Dalkeith is the biggest labelling manufacturer in the UK. It makes 4 million whisky labels every year and provides jobs that are important for the local economy in Midlothian.

Precisely because the Government recognises the huge importance of the whisky industry to Scotland, it has developed a partnership with the industry to build on the shared agenda. The industry does not operate alone, as Government decisions have an impact on the industry. The industry itself has responsibilities, because its actions have an impact on people's lives, on the Scottish economy and on the Scottish environment.

We have heard about the industry's concerns over the possibility that producers will be required to put tax stamps across the tops of bottles. However, it is important to remember that the suggestion came not from Her Majesty's Government but from an independent review of excise duties. Duty fraud costs the Government £450 million. The purpose of the suggestion is to reduce the legitimate whisky trade's competitive disadvantage, which the whisky industry is also committed to reducing. I would be interested to hear whether the Conservatives would turn a blind eye to tax evasion and alcohol smuggling, which have so many implications for Scotland's health and finances.

I am delighted to hear the minister's commitment to consult the industry on the issue. I know that the industry has been working closely in consultation with the Government on the possible implications of the proposal. The industry has also worked closely with the Executive on the water framework directive, for which a joint working group has been set up with the Scottish Environment Protection Agency. I welcome the Executive's assurance that there will be no blanket application of abstraction controls on the whisky industry.

The whisky industry is vital to Scotland and I welcome the way in which it has behaved. Only by working in partnership with the Government can we ensure a prosperous future for the industry. The industry is far too important to be used to score petty party-political points. Frankly, that is all that the Tory motion seeks to do. Of course, the SNP is delighted to help the Tories to do that.

The vast majority of Scots understand that devolution gives Scotland the best of both worlds: the strength of the Scottish Executive to develop the Scottish economy and the strength of the UK to negotiate for Scottish interests in the wider world, as it has done recently in India on behalf of the Scotch whisky industry.

I ask members to support the Executive amendment.

Maureen Macmillan (Labour, Highlands and Islands)

The fact that I stand to speak against the Conservative motion in no way implies any lack of support for the whisky industry, which is of supreme importance to the Highlands and Islands, which I represent. The industry provides much-valued jobs in remote rural areas. The closure of a small distillery in the Highlands is the equivalent of the closure of a Motorola in the central belt. The jobs are extremely important, so I would argue strongly against any proposed legislation or regulation that would put the jobs in jeopardy.

The small, single-malt distilleries in the Highlands and Islands play an important part in community life. For example, the small Clynelish distillery at Brora produces an excellent malt, which I hope all members will sample and support. Recently, the distillery sponsored the Burns supper in Brora, which raised funds for the local scouts and guides. That is typical of what those small distilleries do. They play an important part in the tourism industry. Small distilleries are tourist honeypots, bringing visitors to small communities and so contributing to the viability of other local businesses. Distilleries also provide a market for the barley that is grown in parts of Scotland, including the Black Isle, thus providing support for Highland farmers.

The area of the Black Isle where I live is called Ferintosh. Members who know their Burns will recognise that as the name of a famous whisky. Forbes of Culloden was excused the payment of duty by the Hanoverian Government because of his support against the Jacobites. At one time, there were 40 illegal distilleries on the Black Isle and about 50 lawyers in Dingwall to defend the distillers as they were caught. Unfortunately, at the moment there is no distillery on the Black Isle, but I live in hope that the Ferintosh might be revived.

When the whisky industry recently issued a press release voicing its concerns over proposals to introduce strip stamps to prevent duty fraud, my reaction was to write to the Treasury to find out what was happening. I am surprised that Opposition members did not do the same. Jackie Baillie quoted from the letter that I received from Paul Boateng. It will do no harm to quote again from the letter. It said:

"Although Customs and Excise have already undertaken some feasibility research I have now asked them to undertake a more wide-ranging and formal consultation on the costs, benefits and practicalities of introducing such a system.

I should like to make clear that the Government is approaching the issue with an entirely open mind and that we are keen to build up as clear a picture as possible"—

Jamie McGrigor (Conservative, Highlands and Islands)

Will the member take an intervention?

Maureen Macmillan (Labour, Highlands and Islands)

Perhaps the member will wait until I have finished reading from the letter. It continues:

"through the consultation before taking any decisions ... I know too that the industry shares the Government's commitment to tackling alcohol fraud and that they have already put proposals to Customs on how they can help."

Jamie McGrigor (Conservative, Highlands and Islands)

What is the point of the Government approaching the subject with an open mind when all the evidence shows that strip stamps do not work? Why does the Government have to reinvent the wheel time and again?

Maureen Macmillan (Labour, Highlands and Islands)

I am sure that Mr McGrigor would not want the Government to approach the subject with a closed mind.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

We had 18 years of that and it did not work.

Maureen Macmillan (Labour, Highlands and Islands)

Yes.

The letter makes it clear that what we are debating is nothing more than a proposal and that other options are on the table. It is natural for the Treasury to examine ways of preventing the leakage of £450 million in unpaid duty. In spite of all the jokes about having to pay tax on whisky, we need that money for health, education and transport services. The people who complain that not enough money is being spent on education, jobs or health are those who do not want to pay tax.

As a back bencher, I have lobbied consistently in support of the whisky industry. When Sylvia Jackson and I were members of the European Committee and the European Commission was proposing sanctions on water abstraction, we lobbied hard at European level on behalf of the industry. The industry's position is to support environmental initiatives. Part of the mystique of whisky is built on the purity of the environment—people have only to look at advertisements for Glenmorangie whisky to realise how important the environment is to the industry. The whisky industry is committed to sensible environmental legislation. The Executive is pledged to a scheme that is proportionate to the degree of environmental risk and that takes users' needs into account. Too much scaremongering is going on.

As has been pointed out, the Labour Government at UK level has always supported the industry. Only last week, Douglas Alexander negotiated a huge import duty reduction in India. [Interruption.] SNP members may groan, but they should welcome that step, as India has the potential to become the biggest market in the world for whisky.

In the past four budgets, duty rates on whisky have been frozen. If we ask what the Tory record is, the answer is that it is not very good. The UK Government has argued consistently in Europe for the tax rates for wine and whisky to be equalised.

The Tory motion is built on sand. The Tories have built their case on possibilities rather than probabilities. They have ignored the excellent work that has been done by the Executive and the Labour Government to promote and protect the whisky industry. I am confident that the right balance will be found to protect the industry and to close the door on duty dodgers. I urge members to reject the Tory motion.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

I am pleased to refer to my entry in the register of interests. I am a member of Amicus. Given the subject of the debate and the fact that, in a previous life I have been a solicitor and an advocate, I declare an interest in the disproportionate support that both legs of the Scottish legal profession have given to the Scotch whisky industry over the years. Long may that continue.

The debate has been spirited—I hope that it has been fuelled only by a passionate interest. I will not support Annabel Goldie's motion. I say that with some regret, as I share many of the concerns that she outlined, but I agree with Rhona Brankin that the motion is couched in disingenuous terms and I am unsure about the motive that lies behind it. It may be simple mischief making, as that opportunity is always open to opportunist Oppositions. It may be scaremongering or a feeble attempt on the part of the Conservative party to rebuild its links with the Scotch whisky industry—or indeed, with industry in general.

It is simply not the case that Her Majesty's Government is considering the application of tax stamps. That has been made clear by my friend Jackie Baillie and by the relevant Treasury minister, Paul Boateng, on a number of occasions.

Alasdair Morgan (Scottish National Party, Galloway and Upper Nithsdale)

If the Government is not considering the application of tax stamps, what is the consultation about?

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

It is an open-ended consultation on moves that were recommended by an independent investigation. The consultation will consider industry submissions—that is why the Scotch Whisky Association has produced its submission. The association wants to be part of the consultation and to assist the Treasury in examining other measures to combat spirit fraud.

I welcome the open consultation. I am sure that the Scotch Whisky Association needs no help from the Conservative party, the nationalists or me to advocate alternatives to tax stamps.

Annabel Goldie (Conservative, West of Scotland)

I am grateful to Mr Fitzpatrick for allowing me to make a point of information. A letter that I received from the Scotch Whisky Association said:

"The Treasury announced in November that it is considering applying strip stamps to spirits".

That seems to be more than a woolly, ephemeral, putative proposal. There seems to be real apprehension in the mind of the Scotch Whisky Association. Does the association not know what it is talking about?

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

I am always slightly worried when people narrate what others have said.

The point remains that the minister concerned has made clear the Treasury's position on the open consultation, which is progressing. I accept what he has said. The consultation is open and is being conducted with, among others, the spirits industry. The consultation will explore the costs, benefits and practicalities of a tax stamp system or any alternative regime.

However, I share the concerns that Jackie Baillie raised about the implications of a tax stamp scheme for the industry and its workers. I do not believe that the scheme is an effective solution to spirit fraud.

I am sure that the Deputy Minister for Enterprise, Transport and Lifelong Learning will have close consultation with the Treasury on the matter. I am also sure that the Treasury will enlist the support of the Secretary of State for Scotland. We know that the nationalists always want to turn such important relationships into a spat rather than a solution. On this occasion, it is unfortunate that the nationalists are joined by the Conservatives—although, from the small number of members on the Conservative benches, it seems that most of them are too embarrassed to take part in the debate.

Part of the reason why the Conservatives are not happy to be here is that there is no record of Conservative support for the Scotch whisky industry. It is Labour members who support the industry. The past four budgets have frozen—and therefore, in real terms, cut—duty on spirits. Whereas it was the Conservatives who put their foot on the fuel duty escalator and who created a spirit duty escalator, the Labour Government took its foot off the spirit duty escalator. I urge members to support the Executive amendment.

The amendment in the name of Mr Ewing does not deserve the support of the chamber, as he did not manage to speak to it in his speech. We got some kind of hint from Mr Hamilton as to what the nationalists mean by a spirit duty, although he did not say whether the duty is to go up or down—it is, and will remain, a secret. As ever, the nationalists have nothing to say about regulation. What do the nationalists intend to do about regulation? Does the amendment indicate, as we heard from one of their apologists recently, a desire to remove health and safety provisions?

The Executive, working in partnership with the Labour Government, will reflect the interests and aspirations of the Scotch whisky industry. It is nothing new that the Tories hardly mentioned the workers in the industry. Members should ask themselves seriously whether David Davidson, Andrew Wilson or Gordon Brown is the best person to take care of the Scotch whisky industry. I have a pretty firm view on that.

Murray Tosh (Conservative, South of Scotland)

The closing speeches will be of four minutes.

George Lyon (Liberal Democrat, Argyll and Bute)

It is clear from the passionate speeches that Scotch whisky is dear to the heart of many members. We heard that Jamie McGrigor wants free whisky at every Scottish Parliament reception. I am not sure that that is a good idea; it might undermine the quality of Jamie's speeches.

On a more serious note, the whisky industry is important to the economic well-being of many small and fragile communities, a classic example of which is Islay. That island has eight distilleries, which support 50 to 60 jobs directly and many more indirectly. Last year, the Bruichladdich distillery opened after being mothballed many years before. The whisky industry has expanded on Islay. The future of that fragile island community is linked inextricably to the fortunes of the whisky trade, which is why I am concerned about the UK Government's proposal to introduce tax stamps. As Brian Fitzpatrick said, the proposal is the subject of consultation, which is why we are having the debate. I hope that the minister will feed into the UK discussion the thoughts that have been expressed today.

The Scotch Whisky Association suggests that the introduction of tax stamps will make the industry less competitive in the marketplace against foreign competitors. If that is correct, the introduction of such a measure could have serious and damaging consequences for the economies of small and fragile communities such as Islay.

No one denies that the problem of bootlegging must be tackled. That is the fundamental point in the discussion. However, are tax stamps the answer to the problem? Jackie Baillie said that she does not believe so. The UK Government seems to have done a U-turn on the subject. In March 1997, the UK Government wrote to the Norwegian Government stating that tax stamps were likely to be inefficient and ineffective as a means of combating fraud and illicit trade.

What has changed since 1997, when the Government did not believe that tax stamps would solve the problem of bootlegging? Why is the UK Government considering a measure to tackle bootlegging, which in 1997 it believed to be unworkable? What did the independent inquiry find suddenly to substantiate the idea that the proposal is sensible and might deal with the problem of bootlegging? As we have heard, other countries, such as the USA, Greece and Ecuador abolished tax stamps because they were ineffective. Other countries considered the introduction of tax stamps but rejected the proposal as unworkable and incapable of solving the problem of bootlegging.

Rhona Brankin (Labour, Midlothian)

Will the member give way?

Murray Tosh (Conservative, South of Scotland)

No, the member is in the last minute of his speech.

George Lyon (Liberal Democrat, Argyll and Bute)

Am I?

Murray Tosh (Conservative, South of Scotland)

Yes. I gave you four minutes.

George Lyon (Liberal Democrat, Argyll and Bute)

The whisky industry is willing to work with the Government to tackle bootlegging, but the industry does not believe that tax stamps are the right way to achieve that goal. One reason why bootlegging is such a problem is the cuts in the service provided by HM Customs and Excise. The UK seems unable to deal effectively with challenges such as bootleg whisky and unsafe meat products. One answer that must be considered is the strengthening of Customs and Excise. During the past 12 months, illegal meat imports have caused irreparable damage to the rural economy by introducing foot-and-mouth disease. Last week, there was a worry that that disease had reappeared.

It is important that the matter is taken up in the right place, which is Westminster. My colleagues in Westminster are arguing the case. Alan Reid is in the forefront of the campaign to ensure that the tax stamp system is not introduced. The Scottish Executive must make known, in the strongest possible terms, the genuine concerns that have been expressed today. I am reassured that the minister takes seriously the whisky industry's concerns and, most important, the impact that the measure would have on small and fragile rural communities such as Islay. I look forward to the minister reporting back the results of his discussion with UK ministers.

Murray Tosh (Conservative, South of Scotland)

I call Margaret Ewing. She has four minutes.

Margaret Ewing (Scottish National Party, Moray)

I do not want to challenge you, Presiding Officer, but I find it strange that I have only four minutes when Labour back benchers had seven and a half minutes in the earlier part of the debate.

Murray Tosh (Conservative, South of Scotland)

It is not appropriate to dispute the time that is allocated for a speech. A period was allocated for the open debate and I called all the members who requested to speak. It is for the parties to decide how many people to put forward in that time. Members are notified in advance of the times for closing speeches; they should know what time is available.

Margaret Ewing (Scottish National Party, Moray)

I was not challenging you but merely making a comment.

Given the time of day, the debate has been interesting. I hope that Annabel Goldie's late arrival was not a result of supporting the industry too much yesterday evening.

I should declare an interest in the Scotch whisky industry: since 1987, it has been my pleasure, first as MP and now as MSP for Moray, to represent more than 50 per cent of the malt whisky distilleries in Scotland. Even in my constituency, I cannot mention my favourite malt for fear of offending the other distilleries.

As members have said, the whisky industry is an important aspect of the fabric of the community. For example, it provides employment in farming and transport. Transport is a vexed subject because it raises the issues of fuel costs, which are extremely high, and the need for improvement to the A95, which is the main whisky route. The industry also provides employment through tourism; the whisky trail brings a lot of money into bed and breakfasts and hotels.

The whisky industry is not solely a Highland issue. My colleague Alasdair Morgan is interested in Bladnoch, which is our most southerly distillery, but which despite developments is still mothballed. In the central belt, the industry provides many jobs in Shieldhall, the Vale of Leven and Kilmarnock.

I will deal with some of the comments that members have made about the SNP amendment. Apart from the opening line and the final paragraph, everything in our amendment reflects the views of the Scotch Whisky Association. In insulting the SNP, Brian Fitzpatrick insulted that association. He should sort out his neurosis.

Brian Fitzpatrick (Labour, Strathkelvin and Bearsden)

Will the member give way?

Margaret Ewing (Scottish National Party, Moray)

No. I have been given only four minutes for my speech.

From what Rhona Brankin said, it seems that devolution is only a commitment to consultation—that is ludicrous. If we were talking independence instead of discussing devolution, the Parliament would be able to legislate on the matter. Why must we go, tartan cap in hand, to Westminster to ask it to do something?

I do not want to rehearse the various statistics that members have mentioned. Many of our small distilleries face difficulties with their profit margins. I spoke to several distilleries yesterday, one of which told me that it must absorb a 7 per cent rise in costs this year. It regards the extra cost from the introduction of strip stamps as disastrous.

Will the minister tell me what information he has about the brands and businesses that are involved in fraud? A recent action by the Scotch Whisky Association against a French company uncovered 2 million bottles of fake whisky. What information is available? To defeat fraud, we must know which brands and businesses are involved.

Everyone is against fraud. Apparently, the Government is approaching the issue with an open mind, which, it seems, is to be filled with endless consultation documents in the hope that proposals will emerge—that is if the documents are not shredded.

Rhona Brankin (Labour, Midlothian)

Will the member give way?

Margaret Ewing (Scottish National Party, Moray)

No. I am in my last minute.

Over all of the years that Winnie Ewing and I have been involved in fighting battles with various Governments and the EU, the whisky industry has been most co-operative in trying to define policies and in enforcement. The industry is constantly in touch with Customs and Excise.

The industry has made it totally clear that it is opposed to strip stamps. I think that it would be wrong if we did not take on board the fact that the industry is united against that measure, which is being consulted on against all the evidence from elsewhere in the world.

In conclusion, and in the spirit of friendship that whisky always evokes, I invite everyone to come to the spirit of Speyside whisky festival on the weekend of 3 to 6 May, when they are assured of a warm Moray and Banffshire welcome. In relation to our amendment, I close by saying

"Whisky and freedom gang thegither."

Lewis Macdonald (Labour, Aberdeen Central)

Part of Annabel Goldie's motion did, indeed, refer to a devolved matter. It also referred to the framework document, "A Toast to the Future: working together for Scotch whisky", that would allow the Scotch whisky industry and the Scottish Executive to map shared goals and a common direction for the whisky industry in Scotland.

The launch of "A Toast to the Future: working together for Scotch whisky" represents acknowledgement by the Scottish Executive and the Scotch whisky industry that we need to work together to build on the success of such a unique product and to enhance opportunities for its expansion and progress for the benefit of the industry, the jobs it supports and the wider economy of Scotland. The document was sent to all MSPs, MPs and MEPs to make clear the Executive's commitment to, and support for, that generic and important Scottish manufacturing industry.

The document deals not only with issues such as duty on spirits, but with issues for which Scottish ministers have direct responsibility, such as tourism, the environment, technical innovation and problems with alcohol use and community co-operation.

We pledged to support Scottish manufacturers when EU and UK policies impacted on competitiveness and we have done that. We pledged to keep regulatory burdens to a sensible minimum and we have done that. We pledged to work with the UK Government on tax and international trade issues, where it has primary responsibility. It has been noted today that Gordon Brown has achieved real-terms reductions in duty on whisky and that Labour ministers at the Department of Trade and Industry have achieved improvement in relation to duty in countries such as India. On all those matters, there is still progress to be made; however, we work with our UK colleagues and support their efforts in making further improvements in those areas.

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

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

In a moment.

The co-operation between Governments is continuous and wide-ranging. There is a formal tripartite agreement between the DTI, the Department for Environment, Food and Rural Affairs and the Scottish Executive that deals with the subject of co-operation in support of the Scotch whisky industry. We will continue to do all that is in our power to ensure that the industry receives support.

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

I am grateful to the minister and I could not disagree with much that he has said.

However, the debate is about duty stamps. Will the minister state whether he agrees that, as a measure to combat fraud, duty stamps will not work? Will the Executive oppose duty stamps?

Lewis Macdonald (Labour, Aberdeen Central)

What I did not hear in Fergus Ewing's speech—or indeed in any speech from the Opposition—was an alternative proposal. This is an area on which we need to focus: it is clear that if a case is to be made that duty stamps or tax stamps are not the way to go, fraud must be addressed and dealt with in other ways.

Before I move on to deal with some of the specifics of that issue, I shall mention in passing that we in Scotland also have a growing white spirits industry. In a debate on whisky, it is important to acknowledge that vodka and gin production is also increasing and that Scotland is now responsible for 70 per cent of UK production of those spirits. However, it is clear that Scotch whisky has a special place.

The part of Annabel Goldie's motion that refers to a reserved matter deals with the issue that Fergus Ewing has again asked about. I think it was Margaret Ewing who asked earlier whether we had considered the Scotch Whisky Association's proposals—she mentioned that such proposals existed. We have considered those proposals and acknowledge them as a significant contribution to the debate.

"Tax stamping of spirits"—HM Customs and Excise's consultation document—includes proposals for new ways in which to trace the origin of diverted stock and for investigating tracking technologies for the same purpose. The industry has also made it clear that it acknowledges that the warehouse sector in the UK and elsewhere has a role to play in identifying and dealing with fraud. We welcome that and the responses of the Scotch Whisky Association.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

Will the minister give way?

Lewis Macdonald (Labour, Aberdeen Central)

I will take a brief intervention from Mr Hamilton.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

In the last few seconds of the minister's speech, will he answer Fergus Ewing's question differently? If he is telling us that there is no alternative at this point, will he commit to working with the Scotch Whisky Association to find one? Can he say, at least in principle, what Jackie Baillie was able to say, which was that the Executive is not in favour of strip stamps?

Lewis Macdonald (Labour, Aberdeen Central)

If Mr Hamilton had listened, he would have realised that we have not only been working with the Scotch Whisky Association, but we have taken their proposals into account.

As I said, I did not hear alternative proposals from Opposition speakers, although I listened closely to the speeches that were made from throughout the chamber. I noted the views of many speakers, including Labour and Liberal Democrat members, about the way in which the issue should be developed. It is clear to me that UK ministers are prepared to respond if alternative solutions are proposed—I share their view. It is for MPs from Scottish constituencies to express their views to the Scotland Office. For our part, we will express our view following the debate and I am grateful to members for their contributions to that process.

David Davidson (Conservative, North East Scotland)

Like the other members who have spoken, I must declare an interest in the subject—in single malts in particular.

During the debate I began to wonder whether the party in power understood why we proposed it. The Executive has ducked and dived all over the place. During Lewis Macdonald's first speech—however many minutes long it was—I found it difficult to write anything that was relevant to the debate. That said, the subject of the debate was very clear, but I do not believe that Mr Ewing was too clear in confirming to himself what the debate was about, other than to see it as another opportunity to battle to bring regulation from London to Scotland.

The document "A Toast to the Future: working together for Scotch whisky" is the basis of the debate. Annabel Goldie made it clear that that is what the debate was about and she tested what the Executive meant by the words in that document.

The basis of today's debate is the proposal on—or consultation on, as it has now become—the imposition of strip stamps on the industry. I must ask why an industry is being penalised and forced to pay for enforcement on smuggling and fraud, which is the role of Government. Lewis Macdonald wants to know what we can do as an alternative. If the Government is going to lose £460 million in duty, why does not it invest in support of HM Customs and Excise? George Lyon would like to include food in that.

Rhona Brankin (Labour, Midlothian)

Will the member take an intervention?

David Davidson (Conservative, North East Scotland)

I hope that Rhona Brankin's intervention is better than her last one.

Rhona Brankin (Labour, Midlothian)

What does Mr Davidson say to the fact that the Labour UK Government has invested heavily in appointing additional customs and excise officers in Scotland and the Conservative Government presided over a reduction in officers. Did the Conservatives increase the number of customs and excise officers in Scotland during their time in Government?

David Davidson (Conservative, North East Scotland)

Excuse me: the Labour party has been in power for five years. If Brian Fitzpatrick had done his sums properly, he would have realised that we reduced taxation. We did not just freeze it.

I come back to today's serious issue. Strip stamps will crucify the whisky industry—there are no ifs or buts about that. Jobs will be put at risk and the rural economy, which is under threat at the moment, will be at risk. The supply chain for grain is at risk.

One of my colleagues gave me a piece of advice to give to Mr Macdonald with regard to the EC water framework directive. Article 11.3(e) gives the Scottish Executive power to exempt distilleries from the framework agreement. Perhaps the minister would like to do his homework on that.

I turn to Fergus Ewing's speech. I agree that paying duty up front is highly damaging, but the issue is not just the cost of the machinery and sticking on the stamps, but the payment of duty up front. It is a stealth tax on the industry and it is not good. It is a hidden cost to an industry that has fairly high costs anyway. Such a cost is not helpful, although the Government claims that it is supportive of enterprise, job creation and sustainability.

The Scotch whisky industry is a flagship industry for Scotland and Scotch whisky is a world-renowned product. The industry cannot be moved to the southern counties just because it might be cheaper to produce whisky down there; whisky is a uniquely Scottish product. We should be doing our best to ensure that the Executive tells us what it is saying to the UK Government about issues that matter in Scotland. It is all very well for Lewis Macdonald in his two speeches to say how wonderfully the Government down south is dealing with the issue, but what we want to hear is the Executive's message in the consultations with the UK Government, not that it will work with the industry. The industry wants to know what the Executive is prepared to stand up and argue for. If the Executive is not prepared to argue the case, but is prepared simply to go with the flow, why does not it have the decency to tell us so?

Jackie Baillie made an excellent speech. I do not always agree with her, but she made a realistic and measured contribution to the debate, unlike some of her colleagues. I accept Maureen Macmillan's point about tourism and the fact that everybody refers to the places where whisky is produced in their areas. The point is that whisky is a national product; it is not made only in one distillery. There are some distilleries in my area. I am sure that the Ewings have sampled the products of most of the distilleries in their locality. I have certainly had a go at that, even though I have not visited all the distilleries.

Today, we have brought to the attention of the Parliament a problem that affects a Scottish industry, but there are ways to solve it. A clear message is coming from the chamber and the industry that strip stamps will not work and there is evidence from abroad that they do not work. They do not stop the problems of fraud and smuggling. It is the responsibility of the Government to deal with those problems. Setting up a new unit and investing in it to get back some of the lost millions of tax pounds would be a good use of taxpayers' money, from which we would see a return. That return would be the continuation and strengthening of an industry that we know and love. If there is going to be a big market in India—as everyone says there will—we must develop the product and be able to produce it. We must take every step that we can to ensure that we have an unfettered industry that can get on with what it does best.

Murray Tosh (Conservative, South of Scotland)

I thank Mr Davidson for saving some time.

Community Care

Murray Tosh (Conservative, South of Scotland)

The next item of business is a debate on motion S1M-2839, in the name of Mary Scanlon, on community care, and one amendment to that motion. I invite members who wish to speak in the debate to press their request-to-speak buttons now. So that everybody is quite clear about speaking times, 10 minutes will be provided for the opening speech.

Mary Scanlon (Conservative, Highlands and Islands)

I am pleased to debate the motion today, given the historic and unanimous decision of the Parliament to implement free personal care for the elderly. We need now to show that same unity of spirit and commitment in order to ensure that all those who are eligible for free personal care are given an assessment of needs and eligibility; that all elderly people are treated equally, which the Regulation of Care (Scotland) Act 2001 will help to achieve; that care provision is funded equally and that the funds that are allocated for the care of the elderly are used for that purpose. I hope that the debate will help to address those issues.

We are all familiar with the figures for bedblocking, or delayed discharge. The latest figure is that there are 3,138 delayed discharges. Since the start of the Parliament, the figure has almost doubled. More than 3,000 people are receiving inappropriate care in a hospital setting when they have been assessed as needing care in the community. Of course, some of the figures relate to the elderly, but bedblocking also applies to people who have mental illnesses and to the disabled. The average cost of a care home place is about £300 per week and that of an acute hospital bed is about £1,000 a week. Therefore, if only 1,400 patients were given the care packages that they need, that would free up beds to allow more people to have operations and treatments, reduce waiting lists and free up £1 million to be spent more appropriately on national health service care.

We cannot even blame the Scottish Executive for not addressing the problem of bedblocking and councils' inability to fund care in the community. Since the start of the Parliament, £54 million has been allocated to that purpose. According to the Minister for Health and Community Care's press release this week,

"Previous initiatives to tackle delayed discharge have simply not delivered".

According to the care development group, grant-aided expenditure for the home-based elderly and services for the elderly in care homes was £603 million, but budgeted expenditure throughout local authorities equalled £540 million. In other words, £63 million that was allocated for the elderly was diverted to other council budgets.

We have often been told—including by Sir Stewart Sutherland at the Health and Community Care Committee—that money is diverted to children's services. Given the imminent implementation of free personal care for the elderly and the undoubted unmet need and eligibility for care, surely it is time to examine whether children's services are adequately funded. The Convention of Scottish Local Authorities stated recently that 50 per cent more is spent on children's services than is earmarked for them. I am not making any judgments—I do not know enough about those services. However, if free personal care is to work, we must examine children's services and other social work services to determine whether they are adequately funded, so that the budget for care of the elderly is not raided year on year to supplement other services that receive inadequate funding.

This week, another £20 million was—despite the failures of the past—given to local authorities to alleviate bedblocking. However, this time, the £20 million comes with the threat of the hit squad. I now realise why there are two Deputy Ministers for Health and Community Care—Mrs Nice Guy Mary and Big Shug from Paisley. They are heading up the bovver boys hit squad. I say to Hugh Henry that if the hit squad works, I will support him.

Let us examine the current state of services and their ability to deliver free personal care. For example, 100 residential care homes closed last year. According to the Executive's community care statistics, the number of residents in residential homes has fallen by more than 1,000 since 1998; the number of beds in residential homes has fallen by 946 since 1997; the number of people receiving home care fell by more than 11,000 between 1998 and 2000; the number of people seen by health visitors has fallen by 49,800 since 1997; the number of clients seen by district nurses has fallen by 13,300 since 1999; and more than 2,500 fewer elderly people attended day centres between 1997 and 1998. I ask the ministers how we can promise to deliver free personal care at home when the service has been slashed in recent years.

We then come to funding. Any mention of the independent sector is often dismissed as putting profits before care. Today, I will concentrate on the examples of the Salvation Army and the Church of Scotland.

The Salvation Army was running eventide homes long before much of the provision that we have today existed. On Monday evening, I visited the excellent facility at Davidson House in Edinburgh and was given the following figures, which relate to the situation even after the new settlement from 1 April. The cost to the Salvation Army of providing care is £334 per week per person and payment to it as a result of the settlement will be £304. The Salvation Army will therefore subsidise by £30 a week each person who depends on council contributions for care. The Salvation Army's subsidy comes from door-to-door collections, moneys that are raised by its bands and other fundraising activities. That money could be used to help missing persons and homeless people or to develop other services. If the not-for-profit sector cannot manage to finance care, how can we expect other voluntary and private sector organisations to do so?

Hugh Henry (Labour, Paisley South)

Mary Scanlon has described a long-standing problem that the Scottish Executive is addressing. Will she take a minute or two to describe what the previous Conservative Government did to support the sector to which she refers?

Mary Scanlon (Conservative, Highlands and Islands)

The Conservatives put the whole sector in place and listened to it. The Labour party was originally against that. The Parliament is unanimous in wanting free personal care. Rather than to score political points, I initiated the debate because I feel strongly that if we address the issues, free personal care will be the success that people expect it to be on 1 July. If we do not address them, we will all have failed.

As we prepare to implement free personal care, can we justify funding a place in a local authority home by £83 a week more than we fund a place with the Salvation Army or the Church of Scotland? Using the budget for care in the community, we could place far more people in the independent sector—council places cost £83 a week more per person.

In a similar vein, I spoke this morning with a Church of Scotland representative, who confirmed that the church has losses of £3.4 million a year or, more accurately, that the church provides £3.4 million in subsidy to run its 34 residential homes. The representative said that even after the new settlement in the next financial year, the church's losses are likely only to be cut from £3.4 million to £2 million. That subsidy is and has been taken from the church's reserves, but they will eventually run out. I ask the minister whether we should ask why—in a modern, caring Scotland—we expect organisations such as the Church of Scotland and the Salvation Army to subsidise from their funds long-term care for the elderly, when council homes have no such worries.

Self-funding clients or patients often pay more for the same care. Is that justified when the regulations and the quality standards are the same? Is it equitable for patients to receive the same services in relation to accommodation, food, laundry and so on and yet pay different amounts? That needs urgently to be addressed. Is it fair, just or acceptable that a different pricing structure from that for council patients applies to self-funding patients?

I will end with a quotation:

"I support the greater diversity of provision and more freedoms for local services to improve care for patients and seek a new common purpose shared across health sectors with a relentless focus on better health outcomes and less inequality".

I am sure that ministers and Labour members fully agree with that statement, because it is from a speech by Tony Blair.

I move,

That the Parliament notes the unequal funding support between local authority and independently run care homes; regrets the exceptionally high levels of delayed discharge within Scotland's hospitals; believes that the action plan to tackle delayed discharge will not solve the problem until health and social work budgets are unified, and urges the Scottish Executive to implement the recommendation of the Royal Commission chaired by Sir Stewart Sutherland to unify these budgets within a single organisation and put in place systems to ensure that funds allocated for community care are actually spent on such services.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

The main thrust of the Conservatives' motion, which Mary Scanlon chose wisely to ignore, is that delayed discharge problems cannot be solved without full implementation of a supposed organisational recommendation of the Sutherland report. I remind members what Sir Stewart Sutherland said on pages 84 to 86 of his report:

"The Government's proposals ... are attractive in that they seek to work with the grain of current organisational structures, and do not threaten the upheaval and disruption of a wholesale reorganisation."

That is precisely the approach that we are adopting. Sir Stewart also said:

"We welcome the proposed legislation which would enable budget pooling to take place in a way that is not currently possible."

That is precisely what we did in the recent Community Care and Health (Scotland) Bill. The new power to delegate functions and pool budgets will create, in effect, a single budget in a single host organisation.

Shona Robison (Scottish National Party, North East Scotland)

Will the minister give way?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

In a moment. I have much to get through.

We do not support—neither did the Health and Community Care Committee—enforced delegation of functions from local authorities to the national health service. That support is the Conservatives' position, as described at the Health and Community Care Committee a few weeks ago, although Mary Scanlon wisely chose not to mention that today. That position is a curious interpretation of jointness, but we are not in the business of derailing joint working through such an approach.

We want a genuine partnership to which both parties can commit and we want results, not restructuring. However, we have gone further than the full range of permissive joint-working powers in England by insisting on joint resourcing and joint management for all community care services, beginning this year with older people's services. At minimum, agencies must by April 2003 have aligned budgets and joint management for older people's services. They must by 1 April 2002 set out the budgets that are to be included and the management arrangements that are to apply. While we are taking action to make joint working work, the Conservatives are determined to talk it down. That is the core message of their motion.

The motion refers to three other issues: care homes, delayed discharge and local government expenditure. We have made an unprecedented financial contribution to care homes and we have ensured that a tripartite group was established to address long-standing funding problems. Last autumn, we announced an immediate investment of £17.5 million to deliver an instant £10 a week for care home owners. That helped to kick-start talks that led to a recommended fee increase to which all have signed up.

From 1 April, we will invest another £24 million. In addition, we will honour a commitment to backdate to July last year one third of the increase that was identified by the review group. That represents another £11 million, which brings to £35 million the total that we will invest from 1 April this year. The overall Executive commitment to care home owners since last July stands at more than £50 million. That is but one important strand of the biggest-ever investment in older people's care services.

Murdo Fraser (Conservative, Mid Scotland and Fife)

rose—

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Shona Robison was first to ask to intervene. I will take Murdo Fraser's intervention later.

Shona Robison (Scottish National Party, North East Scotland)

The Executive's action plan suggests that only one local authority and NHS partnership will have pooled budgets. Does the minister agree that that is inadequate?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Aligned budgets can achieve a great deal. West Lothian, which is a bit ahead of the game, has had an aligned budget for some time. As a result, it has reduced its delayed discharges by 60 per cent. We should not underestimate what aligned budgets can achieve although, in due course, many others will want to move on to pooled budgets.

Another strand to our investment in services for older people deals with delayed discharges—most of the people who are affected by that are older. We are the first Administration to count those figures, which means that the comparison that Mary Scanlon made with 1999 was nonsense. We believe in transparency and we want to know the facts as a foundation for action. The true figure for delayed discharges is just over 2,000, because everyone accepts that people should be counted at the six-week point.

We are ring-fencing new money for delayed discharges to ensure that the local authority and NHS board partnerships spend the money on people coming out of hospital—particularly those in the acute sector and those who have been delayed for the longest time. We have identified deliverable improvements that are to be made in each area and we are putting in place additional and robust arrangements for monitoring performance. We will ensure that that money is used only for delayed discharge. That is why, although we are releasing £5 million immediately to kick-start action, we will issue the rest of the money only when we are sure that the targets have been set and that they are achievable. We will certainly take action if partnerships fail to perform.

Mary Scanlon (Conservative, Highlands and Islands)

Will the minister give way?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I do not have time.

Our first main target can hardly be clearer. By April 2003, we expect to show evidence that 1,000 extra people who have experienced delayed discharge have moved into more appropriate forms of care. The key to that is care being delivered in the most appropriate setting and in many cases, that means home. Mary Scanlon should remember that when she quotes figures for places in residential care. In many cases, support at the pre-admission stage through rapid response teams and other preventive initiatives will mean that some older people do not need to go into hospital in the first place.

I have only one more minute, so I must address the last part of the motion on ensuring that funds that are allocated for community care are actually spent on such services. There have been problems in relation to services for older people. As Mary Scanlon reminded us, those problems were highlighted by the care development group report. However, let us consider the funding streams: £24 million for care homes—money that will be targeted specifically on care home fees; £20 million to deal exclusively with the problem of delayed discharge; and let us not forget the ring-fenced £250 million over two years for free personal and nursing care.

We should also remember a fourth funding stream. One hundred million pounds was announced in October 2000 and we should remember in particular the £24 million this year, rising to £48 million in April 2003, for rapid response teams, intensive home support, more short breaks and shopping and maintenance services. That money is being distributed on the basis of outcome agreements, which means that it, too, will be spent on older people's services. Therefore, we are once again taking action while others talk of structural upheaval. This is the biggest ever investment in older people's care services and we shall ensure that it is spent on improving the lives of older people throughout Scotland.

I move amendment S1M-2839.1, to leave out from "notes" to end and insert:

"acknowledges the progress that is being made towards joint resourcing and joint management of older people's services; looks forward to further developments in the Joint Future agenda; welcomes the provision of significant extra resources for dealing with the problems of delayed discharge and care home fees, and recognises that such resources are part of the biggest ever investment in care services for older people."

Shona Robison (Scottish National Party, North East Scotland)

I begin by referring to the poll produced yesterday by Help the Aged and Scottish Gas, which highlights the widespread age discrimination within society and within our public institutions—including the health service. At the beginning of a debate that is, in essence, about the care and treatment of our older people, it is important to say that, despite the existence of awful terms such as bedblocking, we must reassure older people that the core of our desire to resolve the problem is the need to provide the best and the most appropriate care for older people. This is not about portraying older people as a burden on society.

I became a community care manager back in 1997. If at that time someone had asked me to write an analysis of the problem of blocked beds, it would not have been dissimilar to the analysis of the problem in the Executive's action plan.

Five years ago, the problems were as clear as they are today: a lack of funding for local authorities to place people in residential and nursing homes; a contraction of the number of care home places available; a lack of staff to carry out assessments; and well-established institutional barriers between the NHS and local authorities. All those problems have led to an increasing number of elderly people being inappropriately trapped in acute hospital beds. This is not rocket science. If the same, growing problem was so apparent to all and sundry five years ago, why has it taken five years to even begin to do something about it? The pace of getting to grips with the problem has been ridiculously slow.

The problem has now reached crisis point, with one in 10 NHS beds blocked to those needing medical treatment. As I have said, the Executive's analysis of the problem, as contained in the action plan, is sound—albeit that it tends to underplay the role of the reduction of care home beds and the inadequacy of community care services in creating the crisis. However, the action plan is poor on solutions.

Many of the action points are vague, with yet more references to better partnership, stronger liaison, more co-ordination, and a review of this and a review of that. All of that is worthy, but it is the same language that we have seen time and again. It is time to stop asking for change. It is time to break down the barriers between local authorities and the NHS and to tell them what must and will be delivered—because a laissez-faire attitude will not deliver the change that the Executive has rightly identified in its own action plan as being required.

For example, we are told that

"A review of the funding regime between Local Authorities and NHS Boards around the care of older people needs undertaken to consolidate and accelerate the Joint Future agenda."

Excuse me for saying so, but I thought that that was already under way. It sometimes appears to me—and I am sure to others—that it is easier to analyse the problem than to take action.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I want to make it absolutely clear—as I did in my speech—that we are taking decisive action in a new way on the distribution of money. Plans will be required and the money will be handed over only once those plans have been approved. There will be strict monitoring of the money. The review that has been referred to is, of course, something else. What we are doing will make big inroads; but if it does not solve all the problems, it may be that other options will have to be considered. However, the money will make a big difference.

Shona Robison (Scottish National Party, North East Scotland)

I am not taking issue with that; I am taking issue with the pace of change, which is far too slow.

The action plan reveals that joint agreed discharge policies and protocols are not in place, that there is no national model agreement or framework, that only one local authority and NHS partnership will have pooled budgets and—to cap it all—that neither the NHS nor local authorities share the Executive's view of the importance of setting up a system to deal with bedblocking. That is an admission of lack of progress.

After all the debates about bedblocking in this chamber and after all the reports written by numerous working groups, I would have thought that we would have made more progress than we have. The key service providers do not even agree the basics of establishing a system to deal with the problems. That has to be changed.

Let me be clear: we welcome the additional £20 million that has been announced for delayed discharge, but it smacks of crisis management and short termism, with the stated ambition being to reduce the number of blocked beds to 2,000 by next April. That ambition is limited by any stretch of the imagination. We must raise our sights.

A number of things must be done. We agree with the need for new models of care, which the SNP has been advocating for some time now. First, there is a need to expand rehabilitation services, giving people more support to leave hospital and better preparing them to return home. Secondly, we need more intermediate care beds—to stop elderly people being admitted to acute beds in the first place and to be able to move them out sooner. Thirdly, we need to resolve the issue of resource transfer. We must ensure that there are resources to establish adequate community care services. If we are honest, we will admit that those services are not there. I say to Mary Scanlon that the policy was established under a Conservative Government. It was established to fail, and we are suffering the repercussions now.

I am not taking issue with the Executive's intentions as outlined in the action plan, which I think are broadly in line with our own thoughts. What I am taking issue with is the lack of progress and the slow pace of change. I want to see far more intervention on the part of the Executive to make things happen. At the next debate on community care in the chamber, I want to hear from the Executive what progress has been made on the issues discussed here today, and not what the problems are, which we all know very well already.

Margaret Smith (Liberal Democrat, Edinburgh West)

I welcome the opportunity to speak in yet another community care debate. It remains an important issue with several facets, as we have heard already.

I believe that the Executive has a good story to tell on the investment that it is putting into the area and on the importance that community care now has on the national political agenda. The Executive has acknowledged many of the difficulties in the system and is now committed to tackling them on a number of fronts.

Mary Scanlon's motion is on the need for partnership in community care. It focuses on three key areas—care home fees, delayed discharge and joint working.

Most members will have been aware for some time of the problems in the care home sector. Members of the Health and Community Care Committee became more aware of discrepancies between the public and independent care home sectors when we worked on the Regulation of Care (Scotland) Act 2001.

Indeed, during the bill's passage last year, Dr Richard Simpson raised that issue in an amendment. Historically, councils might have been able to argue strongly that they provided a better service with better-trained staff. However, with the passing of the regulation of care act and the introduction of national care standards, we are trying to level the playing field for everyone who provides care home facilities. There is now no justification for the kind of funding gap that other members have alluded to or for the continuing need for subsidy, particularly for the voluntary sector.

During discussions on the regulation of care bill, there was real concern about the level of fees that bodies would be expected to pay. However, the main financial question was the bill's impact on service providers through increased training and fabric and infrastructure costs and changes. Although many providers raised that point, particularly in the voluntary sector, it had to be set against the historic level of discrepancy. Hugh Henry and Shona Robison are right. The situation has not arisen overnight; it has been building for two decades.

We are keen to ensure that the burdens placed on care home operators and local authorities are not so great as to threaten the current number of beds. Care homes are closing down, and there are particular local reasons for that. For example, in Lothian, the care home sector is experiencing real problems because of the cost of property and the employment market.

Although it is clear that a discrepancy still exists and that much more work needs to be done on that matter, I welcome the fact that negotiations with care homes have been settled successfully, with the Executive and COSLA providing a further £27 million. It means that, since last July, the Executive has spent £50 million on finding a solution to the problem. Care home owners will now see a substantial increase in the level of fees of anything up to a further £38 a week. It is also important to note that a tripartite group involving the Executive, COSLA and the independent sector will be set up to ensure continuing dialogue on this. Furthermore, the Executive has agreed that, from April 2003, the level of care home fees recommended by the review group will be met in full.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Does the member accept that, even with the new funding package, it is likely that bodies such as the Church of Scotland will still have to consider closing down nursing homes and reducing the number of available beds?

Margaret Smith (Liberal Democrat, Edinburgh West)

Financial difficulties will undoubtedly continue. However, the Executive is committed to meeting the gap in full by 2003 and the Executive and COSLA have committed themselves to continuing discussions and to addressing the issue in a new spirit of partnership. I hope that the Church of Scotland and other bodies will acknowledge that there is now a mechanism to allow them to discuss the problem and to find a way out of it. That partnership is critical, not just for the costs of care, but for the provision of quality services and for ensuring that the links that Shona Robison mentioned between the acute sector, community care, people's homes and the care home sector exist. All the partners involved must speak to each other.

As a result, I particularly welcome Joe Campbell's comments in the press last week that Scottish Care would work closely with the authorities to assist hospitals with the blocked beds crisis. Although delayed discharge is not a new problem, it is a difficult one, and I welcome the minister's announcement of an extra £20 million package for local authorities and the NHS to tackle it. As the minister pointed out, each area of the country will be asked to come up with detailed plans for the money, which will be tested against the area's ability to reduce the impact of delayed discharge and to deliver effective care packages for the 300 people who have been waiting for a year or more.

The issue is all about tackling the problem of having 2,000 people in the wrong place and getting the wrong kind of care. That situation is wrong for them, the health service, the taxpayer and the system as a whole. If one in 10 hospital beds is—for want of a better word—blocked, that has a major impact on all aspects of the service from accident and emergency right through to waiting times.

I agree with Malcolm Chisholm. Initially, the Health and Community Care Committee saw the arguments for one body developing joint working. However, when we came to consider the Community Care and Health (Scotland) Bill, we felt that there was flexibility in the system that the Executive has since introduced. We also realised that the Executive will take action if joint working is not implemented voluntarily. With that new focus on delivery, outputs and monitoring what councils and health boards are doing in those areas, the committee—and I—were happy to allow joint working to proceed in that manner.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

Mary Scanlon's motion not only lacks vision, it shows a lack of understanding of the real world of community care in Scotland today. I am at a loss to understand where Mary has been for the past few years. She was a member of the Health and Community Care Committee when the committee considered the Community Care and Health (Scotland) Bill, the Regulation of Care (Scotland) Bill and during the committee's own inquiry into community care in Scotland.

The unification of budgets into a single organisation was not—and is not—a favoured option by all who provide care. Instead, partnership working and pooled budgets are favoured. As the committee discovered during some of its visits, those measures provide scope for innovative work that delivers quality provision for our older citizens.

Let me address the Tory claim that there is unequal funding support between local authority and independently-run care homes. Before anyone says anything, I should declare an interest as a member of the public sector trade union Unison. For many years, I represented local authority Unison members, whose terms and conditions are determined by collective bargaining at a Scottish level. Although those employees do not have the highest hourly pay, they have an occupational sick pay scheme, a pension scheme, access to training and the opportunity to join a trade union and freely express views without fear of dismissal. Unfortunately, many staff employed in the independent sector do not have such employment conditions.

Ben Wallace (Conservative, North East Scotland)

Will the member give way?

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

No, I will not. Until there is evidence that respect for staff in the independent sector matches that for staff employed by local authorities, we should resist the one-sided cry for parity. We must open the books, agree the level of profit, demonstrate partnership and enter into meaningful service level agreements with agreed outcomes for older people. We must not use our older people as pawns.

Mary Scanlon (Conservative, Highlands and Islands)

Does the member agree that if the voluntary and independent sectors—including the examples that I have mentioned of the Church of Scotland and the Salvation Army—were given the same funding as local authorities, they could pay their staff at council levels? That is the inequity.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

In the real world, the discussions involved Scottish Care, which does not include anyone from the independent sector in its membership. The member should not try to pull the wool over our eyes and say that the issue concerns only the independent sector; it is fundamentally about the private sector. [Interruption.] Yes, it is—Mary Scanlon's motion is all about the private sector.

Mary Scanlon (Conservative, Highlands and Islands)

It is about care for the elderly.

Murray Tosh (Conservative, South of Scotland)

Order.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

If the private sector wants to be honest with us, it can let us see its books. Mary Scanlon should not fudge the issue and hide behind the claim that the issue is all about care for the elderly.

The Tories conveniently forget that they were the instigators of community care.

Mary Scanlon (Conservative, Highlands and Islands)

The Labour party has been in power for five years.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

Mary Scanlon should wait a minute. This situation is historical. The Tories forget that they never funded community care fully and that they encouraged the unplanned growth of the independent sector. We are now trying to resolve the difficulties that we inherited from them and their cronies.

The Tories also created bedblocking.

Ben Wallace (Conservative, North East Scotland)

Will the member give way?

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

No. Sit down.

The Tories have the cheek to condemn the action that the Executive has taken from day one to work in partnership with all those involved in providing care. The joint working to address blocked beds is beginning to make a difference. In Ayrshire and Arran, health, local authority and home care providers in the independent sector are working in partnership to reduce the number of blocked beds. A rapid response team is working with health service staff in the acute and primary care hospitals. The staff are from a varied group of employers, but they have the common aim of ensuring that patients are discharged appropriately, with the assistance necessary to prevent readmission.

At the other end, protocols have been agreed to address the need for admission. GPs, district nurses, home helps, occupational therapists and social workers work in partnership—something that the Tories know nothing about—to sustain older people in their own homes, thereby preventing admission. They do not need restructured organisations to deliver services. We need to allow the staff to get on with the job and to support them as they deliver quality services to our older people.

In case the Tories still suffer from amnesia, the Executive has provided much investment, financially and in delivering quality services to older people. Lest the Tories forget, we have also introduced fully funded free personal care. The Tories choose to consider all of that as unimportant. The least that they could do is be honest and recognise the improvements that have been made in care in the community. I support the amendment in Malcolm Chisholm's name.

Sandra White (Scottish National Party, Glasgow)

How do I follow that? I do not want to get into a slagging match with any party; I just want to get the best deal possible for the elderly. The onus is on the Executive to deliver care for the elderly.

I am the convener of the cross-party group on older people, age and aging. I congratulate Donald Gorrie on his appointment as depute convener of the group—I am sure that he will do a good job. As the convener of the group I have a particular interest in community care and care of the elderly. Everyone in the Parliament should have an interest, as hopefully we will all grow old and receive the care that the Parliament supports.

Various parties have bandied about the subject of community care. I take issue with what Labour members have said. The contribution of the previous speaker in particular was not helpful to the amendment or to Labour's cause. We do not need such speeches in the Parliament, especially when we are discussing care for the elderly.

Yesterday, at the cross-party group's annual general meeting, we had an interesting speaker from Ireland, Sylvia Meehan, who is the president of the Irish senior citizens parliament. Throughout her life she has championed equality, not for just women, but for elderly people. She talked about how Ireland is dealing with care and help for the elderly and is making elderly people more independent. She mentioned joined-up thinking between health services, hospitals and communities, so that elderly people can live their lives in relative security, in the knowledge that they have health services on their doorstep. I found that interesting. She also mentioned a helpline for elderly people.

What emerged from her speech and from a discussion that I had with her later was that the Irish Government funds all of that, without quibbles. The Irish senior citizens parliament was pushing forward its ideals and the Government was listening. As we all know, Ireland is an independent nation. Is that why it has a different approach? It did not need to wait for permission from another Government to implement its proposals. That may tell us something about the difference between Ireland—an independent nation—and Scotland, which has devolution.

The SNP, along with other parties, has campaigned throughout for the full implementation of the Sutherland report. We will continue to do so, and to monitor any backsliding by the Executive on the implementation of free personal care. Sutherland enshrined the values of free personal care, for example that older people are an important part of society. Our approach to long-term care should be to enable older people to lead fulfilling lives, not only in care homes, as was mentioned before by Margaret Jamieson, but in their own homes, with personal care to back that up. That is an important point. The funding system for long-term care—which is what Mary Scanlon's motion is about—should provide opportunities for older people to lead their lives the way they want to. As politicians, we should listen to that.

It is important that there is unified and joint working. We should not keep quibbling about which local authority should be responsible. Older people—and I—do not care how it is done. We just want the money to be made available and for the health boards, local authorities and the Parliament to work together to ensure that care is delivered, regardless of whether it is delivered through a partnership—the buzzword—or whether it is unified. We must have joined-up working. As politicians, we have a duty to everyone in Scotland to ensure that every section of our society is treated fairly. We must ensure that personal care and unified budgeting are implemented as quickly as possible.

Murdo Fraser (Conservative, Mid Scotland and Fife)

On Monday, I met representatives of the Alyth and district Alzheimer's carers group—a group of people who care for elderly relatives with dementia. Many are elderly themselves, and live with a spouse who is unable to feed themselves, bathe, go to the toilet or even get in or out of bed. In many ways, the caring is a labour of love. It would be an easy option for those carers to put their loved one into full-time care, but they would rather care for them themselves in their home, and will go on doing so for as long as they are able. I was encouraged to hear the minister praise people who care in the home and say that that is a model to be encouraged.

Time does not permit me to recount individual stories, but the carers in Alyth and district are clear that they are inadequately supported by the social services. What they are looking for is quite simple: respite day care, together with residential respite care for the occasional weekend, and a week or two a year to have a holiday. For those who are literally devoting their lives to the task of caring, that does not seem too much to ask. However, the services are just not there. What respite residential care is available is often many miles away, entailing a long journey to visit relatives.

The irony of the situation is that, by caring in the home, those carers are saving the taxpayer thousands that would have been spent annually on residential care. They want to care at home, and will continue to do so for as long as they can, but without support some have no alternative but to give up. The burden then falls on the taxpayer. Even if we disregard the human cost and consider the matter purely in cash terms, it makes no economic sense to reduce services to carers. Services are not only failing to improve, they are reducing.

The situation in Perth and Kinross is covered in the recent Scottish Health Advisory Service report, of which I have a copy. In Perth and Kinross, under the care together project, primary care, health and social work have come together. The Conservatives warmly endorse that approach as a step in the right direction. However, there are still many problems to resolve. The SHAS report makes disturbing reading. It says:

"Specialist services for older people have recently been reduced at Perth Royal Infirmary as a result of financial pressures. Six assessment and rehabilitation beds were closed. We found over half of the remaining beds occupied by people whose discharge was delayed either by a lack of an available bed in a nursing home or by lack of funding. An unacceptable number of people still remain in a delayed discharge situation, some of whom have been in hospital for over 12 months waiting for discharge."

That confirms the points made by my colleague Mary Scanlon. The report goes on:

"In Pitlochry, where NHS continuing care beds have closed, older people are moving out of their community away from friends and family as there are no nursing home beds available locally."

Referring to the situation in Blairgowrie, the report says that there will be a reduction in the number of beds, so

"there will be no NHS continuing care for the frail elderly."

I could go on and read further from the report, but that gives a flavour. There will be a reduction in the number of beds throughout the area, while bedblocking will reduce still further the beds that are available. That is the reality in Perth and Kinross.

We have heard a lot from the Executive about how the situation is improving. If the minister were to come with me and speak to people on the ground, he would find that that is not the impression that the people in Alyth are getting. We hear self-congratulatory talk from the minister, but the carers of Alyth know that the situation is not improving. The Scottish Health Advisory Service report says that the situation is not improving; everyone knows that it is not improving, apart from the Executive. People look back to the days of the Conservative Government and see that services were better under a Conservative Government. Under the Labour-Liberal Democrat coalition, services are being withdrawn and beds are being blocked. Despite its self-congratulatory amendment to the motion, the Executive is failing Scotland on health and community care. I support Mary Scanlon's motion.

Des McNulty (Labour, Clydebank and Milngavie)

Judged by the Swinney test, Shona Robison's contribution to the debate got nul points, like the Norwegian entry in the Eurovision song contest. If she was supposed to mention independence, independence, independence, she failed to do so. However, battling Sandra White managed to mention it, so I suppose that one out of two is quite good.

It is interesting to note that, in the area of elderly care, where a number of technical and resource issues need to be addressed seriously, the SNP's response is to talk about constitutional change. The SNP would rather talk about what happens elsewhere than about the substance of the issue. We need to talk about the substance of the issue and how we are going to make progress. It is not enough simply to say that the pace of change is not fast enough. We have to ask how change can be secured more effectively. That is where the debate should lie and that is what we must discuss.

I welcome the fact that the Conservatives have brought the matter to the debating chamber, because it allows us to address some important issues. However, it is pretty dishonest of them to hide behind the Salvation Army and the Church of Scotland, when their concern is, in reality, about the private residential home sector and companies such as Westminster Health Care, Four Seasons Health Care, Southern Cross Healthcare Services and Ashbourne, which have put their fees up time after time.

Mary Scanlon (Conservative, Highlands and Islands)

I used the example of the Church of Scotland because it has 34 homes in Scotland. Does Des McNulty not feel that that is relevant? If the not-for-profit sector cannot survive, how does he expect the rest of the voluntary and independent sector, which have no such reserves, to survive?

Des McNulty (Labour, Clydebank and Milngavie)

I am happy to talk about the not-for-profit sector, but the Conservatives need to make it absolutely clear that their specific concern has consistently been how the private sector can expand. There is a real issue about how private sector companies are operating in elderly care. Margaret Jamieson mentioned the driving down of wages. One of the private sector's biggest complaints about the present scheme is that private companies might have to pay minimum wages. That just underlines the way in which things have operated in the past.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Does Des McNulty accept that private care home owners and operators, many of whom are individuals—rather than large companies—who live in the homes themselves, would be delighted to give their staff better terms and conditions, but that they simply cannot afford to do so under the present settlement?

Des McNulty (Labour, Clydebank and Milngavie)

Companies should pay their staff appropriate wages and should charge realistic fees, but profit taking and the whole process of bidding and bargaining in the sector must be examined. Ministers who are responsible for administering budgets in that area must consider those matters properly.

Elderly care is an important issue. Balance must be achieved between what is spent on residential care, what is spent on support for people in their homes and what is spent on the wide variety of other services that people require. Judged on that full range of services and how things have been improved, Labour's record is absolutely outstanding. The initiatives that have been introduced to support—

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will Des McNulty give way?

Des McNulty (Labour, Clydebank and Milngavie)

I have already taken two interventions.

The supporting people initiative will be introduced next year, and work has been done on housing benefit and on providing aids and adaptations to support people in their homes. The integration of social work services with housing services to provide better support for elderly people is also being developed. What is the Tories' response to that? They want to separate out the system of joint working and move it all into the NHS.

I am one of the few members in the chamber who have experience of being in local government and of being a member of a health board. Considerable progress has been made in developing the joint working agenda and it is important that that development continues. Joint arrangements do not require only pooled budgets. We also need joint working so that people can take on responsibilities for each other's services, so that those services fuse together in a seamless way to support individuals who require a variety of services.

Shona Robison (Scottish National Party, North East Scotland)

Will Des McNulty give way?

Des McNulty (Labour, Clydebank and Milngavie)

I have already taken two interventions.

It is important to develop the joint working agenda further. A lot of professional work is going on in the sector and there has also been a lot of consultation with older people themselves to examine how services can be improved. I just wonder whether the posturing on the SNP and Tory benches adds one iota to the development of that agenda. I think that, unfortunately, it does not, but Labour members are doing a lot of work and a lot of new resources are being put into the area—far more than were ever put in during the 18 years when the Tories were in power. The difference between what is happening now and what happened then is like the difference between chalk and cheese.

Donald Gorrie (Liberal Democrat, Central Scotland)

We have come a long way, and I found the minister's speech encouraging. When I first started pursuing the issue of what was then called bedblocking, not all that long ago at Westminster, the Government could not provide any figures. My colleague Michael Moore MP and I had to write to all the health boards and get the figures from them, which was quite easy to do. The Government did not really recognise that there was a problem. We have come a long way, but the problem seems to have grown and we are not yet dealing with it satisfactorily.

Getting accurate information, especially about money, can be a problem. The Health and Community Care Committee commented on that problem. I was encouraged by Malcolm Chisholm's remarks—if I understood him correctly—about not ring-fencing but monitoring how well people were achieving results and giving them more money if they achieved them. That is a vital issue. We must ensure that the number of delayed discharges decreases to zero.

Mary Scanlon (Conservative, Highlands and Islands)

Figures from the information and statistics division of the Common Services Agency confirm that, in August 1998, 1,500 beds were blocked. In October 2001, 3,138 beds were blocked. That is more than double the number of blocked beds in 1998.

Donald Gorrie (Liberal Democrat, Central Scotland)

That is clearly a matter for concern. I deserve a little bit of credit for at least getting some figures started at Westminster. Before that, people did not have any figures at all.

I want to concentrate on carers. All the discussion so far has been about homes, which are very important, but using carers better can help to keep people out of homes. Carers must be members of the team that deals with people who are being discharged from hospital. If they are ignored, a vital resource is kept out. The whole carers enterprise is seriously underfunded by local authorities and by the Executive. COSLA estimates that there is a £20 million shortfall in funding.

Carers do not get the support that they want. Glasgow City Council has, very honestly, admitted in a report that carers assessments and reviews are not yet routinely part of social work practice in Glasgow. Carers are vital members of the team and deserve more support than they get. They should be involved in the team effort to get people out of hospital, because many people do not need to be in a residential or nursing home at all if they can be properly cared for at home. That is an important aspect of the debate, which the minister should consider carefully.

Adam Ingram (Scottish National Party, South of Scotland)

Delayed discharge and shortage of nursing home places are symptoms of a more fundamental problem that is not being addressed properly by public policy, never mind by the NHS or community care services. That is the aging of our population and our inability to keep healthy in old age.

Our health service is designed to get us through to old age, but it is proving deficient in staving off afflictions that are associated with getting old—in particular, mental health problems such as dementia that are far from inevitable consequences of aging. Despite community care planning and care management, there is evidence that the needs of older people with mental health problems are not being met and that they do not have access to the range of health and social care services that exist for physically frail older people or for younger adults with mental health problems.

The integration of health and social services in service planning and delivery for geriatric and general medical services and for services for older people with mental health problems is fundamental if we are to address adequately the needs of our senior citizens. It is axiomatic that joint working is a must, as it enables agencies to provide a level and quality of provision that they may not have the capacity to attain on their own and it encourages coherence and consistency.

It is deeply depressing that we still have not cracked basic systems failures. Instead of concentrating on how to keep older people healthy and out of institutions—whether hospitals or nursing homes—we are debating how best to solve the problem of too few hospital beds by dumping people into care beds in nursing homes. In fact, we appear to be going in completely the wrong direction. Supply of home care services is falling while demand for places in nursing homes appears to be rising considerably. That is unsustainable and the trends need to be reversed.

Nursing homes are not the answer to the long-term care question, given the problems associated with the care that is provided in those homes: variable nutritional standards, inappropriate prescribing and lack of continuity in respect of nursing staff, for example.

We need to develop early intervention programmes to keep people out of hospitals and nursing homes. Why do fewer than 40 per cent of general practitioners have specialist training in older people's needs, when most of the people who they see are older people? Why are NHS boards not developing health promotion to raise awareness of early symptoms of dementia? Why are the boards not developing an ethos of early referral to specialists or fully funded anti-cholinesterase services that are not dependent on postcodes to stave off the onset of Alzheimer's disease? Why is evidence-based treatment not being implemented?

We need to break out of the sterile debate that we have had this morning. Developing and delivering health care services for the elderly should be our top priority.

Murray Tosh (Conservative, South of Scotland)

As we have a little time in hand, I will allow Mike Rumbles to speak briefly.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Thank you, Presiding Officer. I did not intend to speak in the debate—I came here to listen to the arguments—but I have been moved to speak after the exchange of views between Labour and Conservative members on the differences between the independent sector and the public sector.

There should be equity in delivery between the public sector and the independent sector. Differentiation in the system is not a sustainable position. The Regulation of Care (Scotland) Act 2001 is in force and national standards are coming through. I do not understand why a slanging match took place earlier; nor do I understand the points that Margaret Jamieson and Des McNulty in particular made. If pay to the independent sector is not at the same level as pay to the local authority sector, it is no wonder that the same standards cannot be reached. There must be equity in provision.

Murray Tosh (Conservative, South of Scotland)

That takes us slightly early to the closing round of speeches. In theory, Margaret Smith is entitled to four minutes, but I could allow her up to five minutes.

Margaret Smith (Liberal Democrat, Edinburgh West)

The debate has been interesting and quite a lot of ground has been covered. There has been a general welcome for the settlement of negotiations on care home fees. The way forward is for all the different sectors to talk and work together to ensure that we deliver the best possible care for older people, as Sandra White—I think—said. There are a number of mechanisms and paths by which we can do that, which change locally throughout the country. In some areas there are no care homes, while in others—Lothian, for example—there is a problem not just in paying staff but in getting staff, as unemployment in Edinburgh is about 2 per cent. We need partnerships. I hope that some problems in respect of care home staff will be consigned to the past. That issue must be discussed. I agree with Mike Rumbles. Differentiation in how we treat staff in care homes or in care standards has to be consigned to history. That too must be discussed.

Shona Robison is right to ask for action. On bedblocking, the £20 million package announced in the past few days and the action plan on bedblocking show that the Executive is serious not only about putting investment into that important issue, but about taking action. It is heartening to hear the minister talk about the need to see plans of how people will achieve aims and what we want to see on the ground. The people that members represent are sick and tired of hearing announcements that money has been made available by ministers who have the best intentions, but not finding differences on the ground. The Parliament and the Executive must make improvements in monitoring what is happening to money that goes into the system to ensure that it delivers what we all want. The ring fencing and monitoring of money is a step forward.

There has been substantial extra investment in community care services by the Executive—£100 million in October 2000, £48 million for community services as part of the response to the Sutherland report and free personal care for the elderly. On the BBC's recent NHS day, it was said that that was what people throughout Britain want. The elderly people of Scotland have free personal care as a result of the Liberal Democrat-Labour coalition working together and as a result of the Parliament deciding that that was a priority. We must ensure that it is delivered properly on 1 July.

There are new rights to individual assessments for carers. Murdo Fraser and Donald Gorrie were right to focus on carers. In cash terms, we get from Scotland's carers the equivalent of half of the Executive health budget. They do a phenomenal amount of work. We acknowledge their part as partners in care and we are starting to move in the right direction in respect of individual assessments, for example. We can do further work on respite care, albeit that investment has gone into that too.

The Community Care and Health (Scotland) Bill will improve matters in a range of ways, one of which is joint working. Again, outcomes are important. We do not want wholesale reorganisation; we want to give people on the ground who know their areas the flexibility to come up with solutions to suit their areas. However, it is right to try to have aligned budgets and ministerial approaches that insist on people working together. We are moving forward in that respect and taking action to make joint working work.

Mary Scanlon (Conservative, Highlands and Islands)

Given what the member said on pooled and aligned budgets, does she share my concern that it is the money in those budgets and how it is spent that counts? Does she share my concern that £63 million earmarked for care of the elderly is diverted to other budgets?

Margaret Smith (Liberal Democrat, Edinburgh West)

The member is right. The Sutherland report and the Health and Community Care Committee's report have identified that, in the past, money has not necessarily been spent where it was meant to have been spent. Members from all parties acknowledge that that is not a sustainable situation. Part of that recognition comes from what the minister said earlier about the monitoring and ring fencing of some of the money that is now being allocated.

One reason that members of the Heath and Community Care Committee felt able to accept the Community Care and Health (Scotland) Bill was that it sent the message that, if councils and local health boards do not work together and fail to deliver, the Executive will send in the heavy squad—whether it be Malcolm Chisholm, Hugh Henry or Mary Scanlon—and ensure that they deliver. That represents a great sea change in what we are doing. We are giving people on the ground the flexibility to do what needs to be done in their local areas while making them aware that a clear steer is coming from the Executive and the Parliament that action is required now.

The Regulation of Care (Scotland) Act 2001 introduced new national care standards in all our care homes and a new agreement on care home fees. I hope that we will be able to address some of the historical problems that have existed over two decades, irrespective of who caused them or who was in power. The important thing—the point that Sandra White made—is to determine how we can deliver the best care for Scotland's elderly. We can do that only by working in partnership with all the component parts of the network of care, including the public, the private and the voluntary sectors and all members in this chamber.

David (None, Lothians)

My predecessor in the chair was generous in his allocation of time; however, I ask members not to presume too much on that generosity.

Nicola Sturgeon (Scottish National Party, Glasgow)

It was lovely to see Des McNulty trying to be animated. It is a pity that The Scotsman 's sketch writer had left the gallery before he stood up to speak. Des should keep trying. As he was speaking, I found myself asking why, if everything in the garden is so rosy, there are 3,000 blocked beds in Scotland. The record that he described as outstanding is the same Labour record that, on Tuesday, Malcolm Chisholm described as failing to deliver. Des McNulty should try harder to get on message before he treats us all to his animated speeches.

I say to the Tories that, if the situation were not so serious, it would be slightly amusing to sit here and listen to members of a party that underfunded community care for years when it was in power—the party that set up care in the community to fail—suddenly saying that the issue is a priority. Mary Scanlon talked about local councils not spending up to the limit of their grant-aided expenditure. She is right to say that that is wrong and cannot be defended. However, is she prepared to accept what the Tories spent years in Government denying—that the funding of local authorities is inadequate? The cake that local authorities are being asked to allocate is too small, which is why GAE limits in older people's services are not being reached. Some honesty about the reasons for the problem would be more appropriate than criticism of local decision makers for circumstances that are outwith their control. The Tories' problem is that they have absolutely no credibility on this issue or on any issue concerning the national health service. People's memories are not that short.

Ben Wallace (Conservative, North East Scotland)

rose—

Nicola Sturgeon (Scottish National Party, Glasgow)

I will not take an intervention now. Perhaps later.

The Scottish Executive's memory may not be short, but it is certainly selective. The action plan to tackle bedblocking, which was published on Tuesday, provides a reasonable analysis of the problem of delayed discharges. However, the report does not face up to some of the factors that are contributing to the problem. For example, it does not mention the fact that the number of residential care home places has fallen since 1999. It does not mention the fact that there are fewer care homes in Scotland than there were in 1999 or that nearly 5,000 fewer clients receive a local authority home care service than did in 1999.

The problem is that there is a lack of capacity in the sector, just as there is a lack of capacity in the national health service. We need more residential places for people who cannot return home. We need more intermediate services for people who need support before returning home—the action plan at least acknowledges that. As Adam Ingram, who raised some fundamental points, said, we need more early intervention and better rehabilitation services.

What does the action plan offer us on any of those issues? On page 10, under the heading "Action", it offers us a statement of fact:

"Local authority and NHS partnerships need to be more co-ordinated."

Yes, I think that we all agree with that. It then offers us two reviews. Reviews seem to be the Scottish Executive's favourite solution. There is nothing inherently bad about reviews, but when they are simply a fig leaf to cover a lack of action, we have a real problem. The paucity of ideas in the action plan underlines the Executive's lack of ambition. The action plan promises to reduce delayed discharges by 1,000. That will leave us with 2,000 blocked beds in the national health service—a considerably higher figure proportionately than is the case south of the border.

The problem cannot be solved until the Scottish Executive gets to grips with the underlying problem, which is the lack of capacity. In general, the NHS has shrunk, first under the Tories and now under Labour. No wonder that it is failing so many people. Reviews and hit squads—even hit squads headed by fearsome chaps such as Malcolm Chisholm and Hugh Henry—will not make a difference other than at the margins if that fundamental, underlying problem is not acknowledged.

Finally, I shall address the issue of pooled budgets, going back to my theme of the Executive's lack of ambition. Malcolm Chisholm said that aligned budgets were the minimum that local authorities and NHS partnerships were expected to achieve by April 2003. The action plan suggests that all but one local authority and NHS partnership will opt for the minimum. I do not think that the minimum is good enough. I think that, as Shona Robison said, it is time to speed up the pace of change. The people who are suffering are the old, whom the system is failing. As the minister admitted last week, previous initiatives to tackle delayed discharge have not worked. The real fear is that, unless the Executive stops tinkering at the edges and turns its attention to tackling the underlying problems, that will continue to be the case.

Hugh Henry (Labour, Paisley South)

I congratulate Mary Scanlon on making what was, for a Conservative, a positive contribution to the debate. However, she is to some extent constrained by the history and politics of her party. Unfortunately, that came out in the debate.

It is clear from all the speeches that we have heard today that there is a recognition that the Executive is putting an unprecedented level of investment into this sector of care and that positive things are happening. Although Shona Robison and Nicola Sturgeon may not be happy about the pace of change, there is a recognition that we are moving forward and have acknowledged the problem.

Mary Scanlon raised a peculiar point. She asked how we could justify the fact that more funding is given to local authority homes than is given to the independent sector. She went on to say that, in many care homes, self-funders often pay more than those whose places are bought by local authorities do. In a sense, the logic of purchasing in the private sector—people bulk buying and using their combined resources to get a better deal—is the logic of the free market. I find it peculiar that Mary Scanlon cannot recognise that as the logic of a system that she claims so vociferously to support.

Mary Scanlon (Conservative, Highlands and Islands)

After 1 July, when free personal care is implemented, will the Executive continue to support different pricing strategies for the accommodation and hotel costs of, on one hand, those who are self-funding and, on the other, those who are assisted by the council?

Hugh Henry (Labour, Paisley South)

We will continue to do what we have said that we will do, which is to put a huge level of investment into free personal care and to support the better pricing of care home fees. We will continue to support the right of individuals to negotiate the packages that are most appropriate to their circumstances. We will also continue to support the freedom of local authorities to negotiate at a local level prices that are appropriate to them. We are not dictating and we are not centralising; we are giving financial support where it is appropriate.

Shona Robison (Scottish National Party, North East Scotland)

Will the minister give way?

Hugh Henry (Labour, Paisley South)

Not just yet.

Mike Rumbles talked about some of the comments that had been made in the debate and said that differentiation was not sustainable. I thought that that was the very point that Des McNulty and Margaret Jamieson had made—in future, there should be no differentiation. If the Executive is putting in substantial additional resources, we should be quite clear in saying that we expect not just stability in the market, but the provision of better training opportunities and better opportunities for staff in the community care sector. I took from the debate not an attack on the care home sector per se, but a plea for differentiation to be addressed and for our money to be used to provide not simply additional profit, but better care and services in general.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister take an intervention?

Hugh Henry (Labour, Paisley South)

Not just now.

Murdo Fraser rightly spoke about the needs of carers, but the name Walter Mitty came to mind when he said that services were better under the Tories. The Conservatives did not address the needs of carers. Between 1999 and 2004, the resources available to support carers will have quadrupled; from 2000-01, the Executive doubled the resources that are annually available to local authorities for supporting carers to about £10 million a year. From this year, we are providing new resources to local authorities so that they can provide more short breaks for carers and the people whom they look after. Those are the facts.

In the debate, members have recognised that the Executive has been moving and putting in additional resources. As Malcolm Chisholm indicated, Mary Scanlon seemed to ignore the motion, which she lodged. The fact that she paid so little attention to it makes it difficult to reply to the debate. What come out from her contribution was that the Conservatives continue to want to centralise. That view is shared by Scottish National Party members. They want power to be taken away from local authorities and to be centralised.

Shona Robison (Scottish National Party, North East Scotland)

Will the minister give way?

David (None, Lothians)

No.

Hugh Henry (Labour, Paisley South)

Presumably, they want it centralised in an unelected local body.

Shona Robison (Scottish National Party, North East Scotland)

Will the minister give way?

David (None, Lothians)

No.

Shona Robison (Scottish National Party, North East Scotland)

rose—

David (None, Lothians)

Order. The minister is in the last minute of his speech.

Hugh Henry (Labour, Paisley South)

The Conservatives want to centralise—that is part of the continuing Tory obsession with reorganisation and upheaval. We saw what that did to the health service and we saw what it did to local authorities.

We invested £17.5 million on care homes last July. We will invest a further £24 million from 1 April. We will spend a total of £35 million from April. Our commitment to care homes now stands at more than £50 million from last July. Malcolm Chisholm mentioned the £250 million that we are spending on free personal care. We are also spending £20 million on delayed discharge. It is clear from our actions that the Executive is committed to supporting the generation of people who struggled to set up the national health service. We are repaying our debt to older people and we are acting on our promises.

Ben Wallace (Conservative, North East Scotland)

We can always tell when a policy starts to go decidedly wrong, not just by the outcomes, which Labour members have of course completely ignored today, but by the way in which the party in power tries to rectify such failings.

The indications that something is wrong have been clear for a considerable time. I do not have to go over what Mary Scanlon said in her opening speech about how the outcomes for elderly people who require care are getting worse, not better. It is blatantly obvious to anyone, especially those for whom community care is intended, that what the Labour Executive and its Liberal partners have achieved is the doubling of blocked beds, numerous residential nursing home closures and a fall in the quality of care.

It is not only those results that give a clue to the current mess in which we find ourselves, but the method of policy management that we now see. The Minister for Health and Community Care's ad hoc dollops of cash and panic initiative units, which are designed to manipulate outcomes rather than to address causes, are the clearest indication that the policy needs further improvement. We in the Conservative party make no apologies for lodging a motion that seeks to bring about that improvement.

The wrangle between Scottish Care, charities and the Scottish Executive must be considered as one of the best examples of why the public lose confidence in politicians. In the past year, when the Minister for Health and Community Care and COSLA were fighting, more and more patients were being neglected and more and more care homes were closing. Is not the point that we are here to put the patients first?

A few weeks ago, Lord Sutherland expressed to me his concerns about the refusal of the Scottish Executive to go further on pooling budgets. Increasing the division between purchaser and provider will only lead to a semi-failure of Lord Sutherland's report.

Des McNulty (Labour, Clydebank and Milngavie)

Will the member take an intervention?

Ben Wallace (Conservative, North East Scotland)

I will come to Des McNulty later. I do not have time to take interventions when summing up.

Lord Sutherland believes that the Scottish Executive's failure to pool budgets will be taken advantage of by the UK Government, which would like the commission's report to be shelved altogether.

In response to Mary Scanlon, Malcolm Chisholm made some interesting points. He did not mention the earlier £30 million that he released to try to solve bedblocking. The result of that initiative was an increase in bedblocking. The minister certainly made no further mention of the fact that the care development group identified a gap between grant from central Government and local authority spending. In September last year, he scoffed at us when we highlighted that issue, which he claimed was not really a problem. However, the care development group that he established has now produced figures that bear out our claim.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Did Ben Wallace not hear the last part of my speech, in which I indicated that the £24 million for care home fees, the £20 million for dealing with delayed discharges, the £250 million for free personal nursing care and the £100 million from 5 October 2000 will all go out on a new basis, to ensure that every penny of that money is spent on older people's services?

Ben Wallace (Conservative, North East Scotland)

I could have asked for a better prompt.

I will now make clear why we support the introduction of pooled budgets, rather than the Executive's idea of having half the money ring-fenced in the short or long term and governed by central diktat. Those are half-hearted attempts to get the benefit that we believe pooled budgets would provide. Either we devolve the money to the people who commission the care or we do not. We need to put in place the correct procedures to ensure that the purchaser and the provider of that care do not act in their self-interest. Everything that the Executive is doing is half-hearted. There will be an attempt to ring-fence money for two years. The Executive's reports show that most local authorities have little intention of implementing some of the safeguards that it requires.

Shona Robison and Sandra White made some good points about putting the patient first. Nicola Sturgeon said, in effect, that the motion was not worth the paper that it is printed on because we lodged it. I should enlighten her: there would be no community care were it not for the Scottish Conservatives and the Conservative party more generally. Community care and the internal market, which involves people purchasing care on behalf of the patient rather than on behalf of their colleagues, exist because of previous Conservative Governments. In his report, Lord Sutherland builds on the internal market, rather than dismantling it. However, when the internal market was introduced, both the Labour party and the SNP fought against it.

Des McNulty and Margaret Jamieson made the point that pay and conditions are better in local authority homes. I am sure that many homes in the independent sector would like to offer their staff better conditions. Where will the Executive find the money to enable them to do that? Clearly, Margaret Jamieson has not read the Accounts Commission report "Care in the Balance", which found that, despite the good conditions, better pay and better training courses that are available to staff working in local authority homes, the absenteeism rate in some homes stood at nearly 60 per cent of the working year. If staff in local authority homes have such good working conditions, why are they skiving off or doing something else?

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

rose—

Ben Wallace (Conservative, North East Scotland)

I will tell Margaret Jamieson why—because management and the safeguards that have been put in place are inadequate.

Des McNulty (Labour, Clydebank and Milngavie)

Will the member take an intervention?

Ben Wallace (Conservative, North East Scotland)

The issue is more about the Scottish Executive being afraid to stand up to its Labour colleagues in local authorities than it is about implementing care for the elderly, which is what the Conservatives are all about.

I am not surprised that the usual suspects, such as Margaret Jamieson, shout "Profiteers!" She was obviously delighted to include the Salvation Army and the Church of Scotland in that charge. She also let the real issue slip: "It's about private!" she cried across the chamber. It is about Unison and it is about the private sector, which so galls Margaret Jamieson that she would put her dislike of it before the elderly, for whom outcomes under the Executive have become worse rather than better.

Des McNulty (Labour, Clydebank and Milngavie)

Come on, take an intervention.

Ben Wallace (Conservative, North East Scotland)

Okay, let us have an intervention from Des McNulty; that will be all right.

Des McNulty (Labour, Clydebank and Milngavie)

It is interesting to listen to Ben Wallace talking about this issue. I did not hear him say anything when the care home providers took action against elderly people last year and withdrew services. Where was Ben Wallace then? What did he say? He purports to speak on behalf of elderly people, but he is actually talking about care home owners, for whom he stands.

Ben Wallace (Conservative, North East Scotland)

I am talking on behalf of elderly people, because if the care homes had closed down and gone bankrupt, there would be no beds for elderly people. That is the reality Labour has had to wake up to—many Labour local authorities find plenty of money to fill their own homes, but no money to fill the private residential homes that have empty beds. The NHS ultimately picks up the tab and its waiting lists and times are suffering because of that. However, that is supposedly because of 18 years of so-called Tory underinvestment.

Des McNulty said that there was a lack of initiative from Tory members. The last piece of legislation on community care to be introduced by a Labour Government was in 1970. That legislation said that the onus would be on the disabled person to make their own assessment of caring needs. That was it.

Margaret Jamieson (Labour, Kilmarnock and Loudoun)

Will the member take an intervention?

David (None, Lothians)

No, he is in his last minute.

Ben Wallace (Conservative, North East Scotland)

In the 18 years of Conservative Government, we saw nothing from the Labour party except the Griffiths report opposed, the Wagner report opposed and the National Health Service and Community Care Act 1990 opposed. As a result, we are now in a position in which the Labour party tries to champion community care, but will not stand up to its local authorities, which are not ensuring that the money is spent on the elderly, as it should be.

We welcome the announcement that the funds will go some way towards meeting the increased home fees and to alleviating problems. It is regrettable that the safeguards needed are still missing and that such a crisis has developed. When we design our health policies for the future, we must remember that what counts is the patient, not the ideology, the establishment or Unison. If we do, we will be able to produce a less partisan and more mature option for health care in Scotland.

Business Motion

David (None, Lothians)

We come to motion S1M-2850, in the name of Patricia Ferguson, which sets out the business programme.

Motion moved,

That the Parliament agrees the following programme of business—

(a) the following revision to the Business Programme agreed on 28 February 2002 Thursday 7 March 2002 after Executive Debate on the Homelessness Task Force, insert followed by Scottish Parliamentary Corporate Body Motion

(b) the following programme of business— Wednesday 13 March 2002

2.30 pm Time for Reflection followed by Parliamentary Bureau Motions followed by Procedures Committee Debate on its 2nd Report 2002: Substitution on Committees of the Scottish Parliament followed by Standards Committee Debate on its 8th Report 2001: Report on the Investigation of Unauthorised Disclosures followed by Justice 1 Committee Debate on its 8th Report 2001: Report on Legal Aid Inquiry followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business Thursday 14 March 2002

9.30 am Scottish National Party Business followed by Business Motion

2.30 pm Question Time

3.10 pm First Minister's Question Time

3.30 pm Stage 1 Debate on the Scottish Qualifications Authority Bill followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business Wednesday 20 March 2002

1.45 pm Time for Reflection followed by Parliamentary Bureau Motions followed by Ministerial Statement followed by Stage 1 Debate on the Land Reform (Scotland) Bill followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business Thursday 21 March 2002

9.30 am Ministerial Statement followed by Parliamentary Bureau Motions followed by Stage 3 Debate on the Scottish Public Sector Ombudsman Bill followed by Business Motion

2.30 pm Question Time

3.10 pm First Minister's Question Time

3.30 pm Executive Business followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business and (c) that Stage 2 of the Education (Disability Strategies and Pupils' Records) (Scotland) Bill be completed by 29 March 2002.— [Patricia Ferguson.]

Motion agreed to.

David (None, Lothians)

Before we begin question time, I am sure that members would like to welcome the large number of international visitors who are with us in the distinguished visitors gallery: the Speakers of the Parliaments of Serbia and Montenegro, and legislators from the two Houses of the Canadian Parliament. [Applause.]

I also inform members that the First Minister is unwell today, and that his questions will be taken by the Deputy First Minister.

Question Time — SCOTTISH EXECUTIVE

David (None, Lothians)

Question 1 has been withdrawn, because the member whose question it is is also unwell.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

To ask the Scottish Executive what transport projects would go ahead if the additional notional allocation of £84 million in the transport budget, outlined in the report "Is Enough Being Spent on Transport in Scotland?", were made available. (S1O-4833)

Lewis Macdonald (Labour, Aberdeen Central)

The figure that is quoted is hypothetical. The Scottish Executive transport budget continues to increase year on year in real terms.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Is the minister aware that spending per capita on transport has increased both in Wales since the establishment of the National Assembly and in Northern Ireland's domain? Is the minister aware that any further decline in per capita transport expenditure in Scotland, as adumbrated by the ministers' own transport adviser, Professor David Begg, will, especially in rural areas such as those beyond Aberdeen, further fuel the public's deep cynicism about the Executive's intention?

Is the minister aware that people are sick and tired of the dithering and dancing of the Executive, which is not making real progress on the ground? We do not need more studies; we need the people's priority, which is transport.

Lewis Macdonald (Labour, Aberdeen Central)

It is a great shame that Mr Stevenson has not read David Begg's report, to which he refers. Had he done so, he would be aware that Professor Begg does not suggest that there has been a decline in transport expenditure in Scotland. Quite the contrary: Professor Begg recognises that the task of comparing transport spend per head across different parts of the country is difficult. [Interruption.] Mr Stevenson may be pointing to the piece of paper in his hand, but I am afraid that that is no substitute for actually reading the report.

Bristow Muldoon (Labour, Livingston)

Does the minister agree that it would be a welcome development if the members in this Parliament who whinge about budget priorities produced some priorities of their own?

Lewis Macdonald (Labour, Aberdeen Central)

One of the great mysteries that face all of us who are engaged with transport spend is finding out what the Scottish National Party's transport priorities actually are. If that is the party to which Bristow Muldoon referred, I am sure that there will be opportunities to explore the matter further in the future.

At the time of the strategic roads review, the SNP's then transport spokesman, Kenny MacAskill—who has once again become the party's transport spokesman—said that all roads were a priority. That is clearly a bottomless-pit commitment, but the SNP will no doubt tell us how it intends to fund it in due course.

Scott Barrie (Labour, Dunfermline West)

To ask the Scottish Executive what action it is taking in order to ensure that beaches meet European standards. (S1O-4810)

Allan Wilson (Labour, Cunninghame North)

The Scottish Executive is committed to achieving compliance with European standards for all Scottish bathing waters. A massive programme of investment by Scotland's water authorities is already in place. On 26 February, we designated nine Scottish bathing waters as sensitive areas, which will require the most stringent level of treatment to be applied.

Achieving compliance is not, however, merely a matter of investment in sewerage and sewage treatment. We are sponsoring a major programme of research into all forms of potential pollution at bathing waters, including the particularly difficult issue of diffuse pollution.

To achieve that, we have, together with stakeholders, been preparing a strategy that will address the range of pollution threats to our bathing waters and outline the solutions to be applied in a concerted effort to meet standards. That strategy will be available shortly and I will be pleased to give Mr Barrie a copy.

Scott Barrie (Labour, Dunfermline West)

I thank the minister for that very comprehensive answer. As the minister will know, the only three beaches in Scotland that attract blue flag status are in my home area of Fife. That is a tribute to both Fife Council and East of Scotland Water.

Will the strategy that the minister has announced today be accompanied by increased resources, to allow other local authorities and Scottish Water to bring beaches up to the standards that we enjoy in Fife?

Allan Wilson (Labour, Cunninghame North)

In most years, Fife's beaches do relatively well. There may have been a lack of investment in the past, but that is certainly not the case now. Over the period 1999 to 2006, water authorities will spend in excess of £3 billion.

There are other, more complex reasons for the diffuse pollution that affects bathing water quality. Those reasons include sewage, industrial points, source pollution, urban diffuse pollution, agricultural pollution and, of course, the public. Our strategy will address those issues.

Fiona McLeod (Scottish National Party, West of Scotland)

Has the independent bathing waters panel been involved in compiling the strategy to which the minister referred? When will the panel next meet? I understand that it has not met since 1998. Why did the Government, at that time, turn down the panel's recommendation that two beaches in my constituency of the West of Scotland—Helensburgh and Largs—should be designated for bathing water quality standards?

Allan Wilson (Labour, Cunninghame North)

Commission officials are surprised by how many, rather than how few, beaches are designated. A range of stakeholders is involved in the development of the strategy: the Scottish Environment Protection Agency, water authorities, farmers and others. Four major points—risk assessment, the balance of nutrient spreading, water margin management and the audit of farmyard drainage—will all feature strongly in the strategy when it is produced. I will be happy to give Fiona McLeod a copy of the strategy when it has been written.

David (None, Lothians)

John Scott would like a copy as well.

John Scott (Conservative, Ayr)

I would. Presumably you will also allow me to ask a question, Presiding Officer.

The minister will be aware that, despite the best efforts of West of Scotland Water, Ayr south beach has failed to achieve a mandatory bathing water pass in each of the past four years. I am aware that various surveys of pollution sources have been conducted, but thus far the situation has not been resolved. Can anything further be done to address this problem, or will the new strategy address it?