Scottish Parliament, 2 November 2006

567 contributions from 80 members. The official report.

Official Report 2 November 2006

Scottish Executive Budget Review

George Reid (None, Ochil)

Good morning. The first item of business is a debate on motion S2M-5063, in the name of John Swinney, on the Scottish Executive budget review.

John Swinney (Scottish National Party, North Tayside)

The Deputy Minister for Finance, Public Service Reform and Parliamentary Business and I have known each other for a long time and I wish him to take no hurt from what I am about to say, but I am more than a little disappointed that Mr Lyon is here to defend the Government's position in this debate. It is absolutely ludicrous that Tom McCabe is not here to defend the Government's position on an issue that is a result of his comments, recorded in the Official Report of the Finance Committee. It is absolutely absurd that a minister of the Scottish Executive who is paid a fortune by taxpayers does not have the decency to come to this debate to answer for the misleading way in which he has dealt with the matter or for a volte-face for which he has never properly accounted to the Parliament.

The First Minister fought the previous election on a manifesto that said he would

"Be open and transparent in government".

He said that his top priority would be

"to enhance, rather than avoid, parliamentary scrutiny".

Although we in the Scottish National Party do not always agree with the First Minister, we could have taken those words at face value and considered that the First Minister would run his Administration in line with those significant commitments to the principles of being open and willing to embrace scrutiny of Government by Parliament.

In the debate, I want to test whether the Scottish Government has honoured those principles, which the First Minister offered, in connection with the Howat review of the Scottish Executive's budget.

The Howat review was set up by ministers in 2005 to classify spending into various categories, to consider the performance and outcome of programmes and to identify those programmes that do not match partnership priorities and are not performing well. It reported in the summer—late; everything is late with the Scottish Executive—and its conclusions are now in ministers' hands.

On 7 November 2005, the Minister for Finance and Public Service Reform appeared before the Finance Committee and offered to publish the report. We did not even ask him—he offered. He said:

"I have no doubt that the committee will want to examine the outcome of the review. Following the review, I intend to publish a report in spring next year".—[Official Report, Finance Committee, 7 November 2005; c 3012.]

Spring 2006 was months ago.

However, that was no flash-in-the-pan statement. The minister came back to Parliament on 11 May this year and said to Mr Brownlee:

"The group expects to submit its report before the summer recess. I will publish the report in due course thereafter."—[Official Report, 11 May 2006; c 25563.]

Then, in response to news reports, the minister announced that he would not publish the report until the conclusion of the spending review in September 2007. The reaction from the Finance Committee's independent adviser, Professor Midwinter, was:

"It would be pointless to publish it next September after the key Spending Review decisions have been made."

He said that such action would be a

"retreat to the private government of the public finances that existed before devolution."

The contents of the Howat report, which was paid for by Scottish taxpayers and examines the spending of taxpayers' money in Scotland, are now being pursued through freedom of information legislation. Therefore, we have the further ridiculous situation of legislation that was designed to open up scrutiny of Government business and which was proposed by the current Lib Dem-Labour coalition having to be used to find out information commissioned by the Lib Dem-Labour coalition and suppressed by the Lib Dem-Labour coalition. What a perverse position the Liberal and Labour Executive has got itself into.

David Davidson (Conservative, North East Scotland)

John Swinney described a perverse situation. Does he agree that it is even more perverse that the Liberal Democrats, who went on about freedom of information in the first session, have been sent out to carry the can today?

John Swinney (Scottish National Party, North Tayside)

I never thought that I would ever feel sorry for the Deputy Minister for Finance, Public Service Reform and Parliamentary Business, but believe me, I feel very sorry for him today.

The perverse position of the Lib Dem-Labour Executive gets much worse when we start examining the justification for refusing to disclose the report. In response to my first freedom of information request, the Executive said that the report could not be disclosed in case it caused an adverse public reaction. If it is worried about causing an adverse public reaction, why does it let the First Minister out of Bute House in the morning?

Like Mr Davidson, I am amazed that Lib Dem ministers who for years pontificated in a more than self-righteous fashion about the need for open government have suddenly signed up to secret government on big issues. I wonder how many Lib Dem voters in Scotland believed that their parliamentary group in this institution would sign up to run the Scottish Government in a fashion that would make the Labour administrations in North and South Lanarkshire proud of every step that they have taken.

Despite all the questions that I have asked about the review, it is still impossible to work out what has changed ministers' minds. Why did the Minister for Finance and Public Service Reform decide one day that he would publish the report, sustain that line for months and then, when he saw the report, suddenly decide that it could not be published until after the election? I can only presume that the report constitutes a damning indictment of the Lib Dem-Labour Executive and its management of our public finances. If that is the case, the people of this country have a right to know what their Government has been doing with their money.

If the report contains shocking proposals about changes to public spending—so shocking that they might cause an adverse public reaction—surely the public have a right to know before they cast their vote at the election. Why should the Lib Dem-Labour Executive be allowed to hide away from public scrutiny of its record and why should it be able to take major decisions affecting public spending without letting the public know what awaits them?

Perhaps the reason is, as the Convention of Scottish Local Authorities has been told, that there is headroom in the budget to fund other priorities and the Government wants to keep that secret to fund the announcements that it will use to try to buy the forthcoming election. The Government has good form in that regard.

Perhaps the real reason why the report is not being published is that we have not only an invisible but an incompetent Minister for Finance and Public Service Reform who cannot get it right. If members do not believe me, they should believe sources within the Executive.

On 29 September, the day after my party leader, Nicola Sturgeon, questioned the First Minister about the review, a report in The Herald said:

"A source in the Executive later said that the report being kept confidential was standard and should have been expected, and Mr McCabe had been unwise to promise an early publication."

I presume that that comment was from one of Mr McCabe's rivals to be the next leader of the Opposition in the Scottish Parliament.

We call for the Howat report to be published and I hope that that will be the outcome of today's debate. If not, we have said that, on taking office, an SNP Government will publish the report as a matter of urgency.

Scotland will have a choice between this Labour-led Executive that operates in secret and an SNP-led Government that is open with the people. Scotland will have a choice between a Labour-led Government that has wasted a fantastic opportunity to invest in our public services and an SNP Government that will take wise decisions for all in Scotland. That choice cannot come soon enough to release Scotland from this wasteful and secretive Labour-led Executive.

I move,

That the Parliament calls on the Scottish Executive to publish the Howat review of the Executive's budget before the conclusion of Stage 1 of this year's budget process.

George Lyon (Liberal Democrat, Argyll and Bute)

I welcome Mr Swinney's concern for my well-being. In his opening remarks, he spoke about our making announcements to buy elections, but the SNP has form on that one.

Much has been made of the fact that we will publish the report of the budget review group at the same time as we publish our decisions on the 2007 spending review. Since day 1, our position has been that the report would be published. [Interruption.] That is why the Finance Committee was informed that it would be published, why on two occasions Mr McCabe confirmed that it would be published and why today we reaffirm that the report will be published along with a range of other advice that will be available to ministers who take decisions on the 2007 spending review.

Alex Neil (Scottish National Party, Central Scotland)

Will the minister take an intervention?

David Davidson (Conservative, North East Scotland)

Will the minister give way?

George Lyon (Liberal Democrat, Argyll and Bute)

I will make some progress, if members do not mind.

The subject was discussed at length during Mr McCabe's appearance at the Finance Committee on 19 September. He explained that the report was only one part of a range of advice that ministers will receive as part of the decision-making process in the run-up to the next spending review in 2007.

The budget review group was appointed to help the Executive with that spending review by attempting to provide a range of options that allowed for realignment of budgets. The options in the report are a work in progress, and that is why a number of the budget reviewers have been asked to carry out a further round of work. They will be gathering more evidence, undertaking further analysis and providing further advice that will be used by ministers in the lead-up to decisions in the 2007 spending review.

Derek Brownlee (Conservative, South of Scotland)

Will the minister clarify why ministers are apparently able to publish the advice that they receive on the Scottish National Party's spending plans but are unable to publish the advice that they receive on their own spending plans?

George Lyon (Liberal Democrat, Argyll and Bute)

Given that the SNP spending plans are calculated on the back of an envelope, that is not exactly hard to do. They do not require a lot of advice.

Officials are undertaking a wide range of other work to provide advice to inform the spending review. Publishing the report at this stage, before that further work has even begun—indeed, before publishing any other advice to ministers in connection with the spending review—and months before any decisions are taken would be neither sensible nor appropriate.

John Swinney (Scottish National Party, North Tayside)

If that is the case, why did Tom McCabe say to the Finance Committee that the report would be published in the spring of this year?

George Lyon (Liberal Democrat, Argyll and Bute)

As John Swinney well knows, the minister made it clear that that was not set in stone. He qualified the position. [ Interruption. ] Calm down.

It is now two years since the last spending review, and due to the postponement of the Westminster spending review until 2007, which has resulted in a similar delay in Scotland, at the next spending review three years will have elapsed since the last one. During that time, we will have enjoyed significant growth in public expenditure, and budgets are at a historically high level. However, the benign fiscal climate is likely to change after 2007, as any cursory examination of the current state of the United Kingdom finances will reveal. Therefore, it is important that robust advice is prepared to help ministers to make the hard choices that are likely to confront them when deciding the priorities for 2008, 2009 and 2010.

By the time that the spending review comes round, the Government's intention is to have an array of robust information available to ministers to help them to make the right choices that will ensure that services continue to improve and are sustainable in the longer term. Our ambitious futures work will support that objective by helping to assess some of the key challenges and opportunities that Scotland might face in the next 20 years or so, building on the work that is already under way in health, transport, planning, education and other areas.

Alex Neil (Scottish National Party, Central Scotland)

I thank the minister for taking an intervention and draw his attention to the loyal grins behind him from Mr McNulty. [ Interruption. ] In fact, they are now loyal hysterics. I am sure that the minister recognises the importance of parliamentary committees in the budget-setting process in the Parliament. As I am sure Mr McNulty would agree, surely it is right that if committees are to be taken seriously in the budget process, they should have access to the same information as ministers.

George Lyon (Liberal Democrat, Argyll and Bute)

That is where Mr Neil reveals his ignorance of what we are talking about. The independent budget review group's work was nothing to do with this year's budget. It concerned the spending review that will inform decisions about spend in 2008, 2009 and 2010. This year's budget process is not being informed by the budget reviewers' work. If Mr Neil reads the reviewers' exact remit, it will inform him. He should have read it before making that point.

David Davidson (Conservative, North East Scotland)

Will the minister give way?

George Lyon (Liberal Democrat, Argyll and Bute)

I have taken several interventions. I want to make some progress.

We have been reforming public services since devolution, with modernisation taking place across Scotland. Much has been achieved, and more still has to be achieved. The current Scotland-wide dialogue on reform is well under way, helping to increase the speed and widen the scope of reform, which will be important in sustaining our services in the future.

Our efficient government programme is an important part of that wide agenda. So far, we have identified £920 million of cash-release efficiency savings and £350 million of time-release gains, which will be released by 2007-08. We are continuing to work to identify further efficiency gains, which will be needed in future.

All the various strands of work, and the range of advice, including the budget review exercise, will ensure that ministers have the most robust information possible to help them to make decisions on spending in the period from 2008 to 2011.

In conclusion, the independent budget review process is not a part of this year's budget process, as the SNP motion seems to imply. It is a work in progress, along with a wide range of other work designed to provide robust information for decisions that will take effect from 2008 onwards. We have pledged to release the full suite of advice, including the budget review, when the spending decisions have been made, and we restate that commitment again today. I hope that Parliament will support our approach by rejecting the SNP motion and supporting the Executive amendment.

I move amendment S2M-5063.1, to leave out from "calls on" to end and insert:

"notes that preparation for the 2007 Spending Review, including the provision of advice to Scottish Ministers by the Budget Review Group, is ongoing and further notes the Scottish Executive's intention to publish a comprehensive suite of documents including the completed Howat review as part of the Spending Review package."

Derek Brownlee (Conservative, South of Scotland)

It is always a pleasure to debate financial matters with so many members in the chamber, and it is a particular pleasure to debate them with the Deputy Minister for Finance, Public Service Reform and Parliamentary Business. It appears that, having first suppressed the report of the Howat review, the Executive is now suppressing the Minister for Finance and Public Service Reform.

I am not entirely sure where Mr McCabe is today—his deputy might enlighten us. Perhaps he is busy hiding all the other evidence of the Government's failure to get value for the tens of billions of pounds of taxpayers' money that it spends every year, or perhaps he is in St Andrews lobbying the information commissioner and begging him not to release any of the Howat review until at least after next May. As a result we have the almost tragic situation of the deputy minister being in the firing line for the mistakes of his boss—I am sure that he had no part in them. Is it not time for the Parliament to consider outlawing the baiting of the deputy minister?

As Mr Swinney said, we should have already seen the report, had the benefit of its contents, and been able to debate it. We would have done, had Mr McCabe not changed his mind. On two separate occasions, he confirmed to me, in committee and on the floor of the chamber, that the report would be published. There was not a word about waiting until September 2007—at least until ministers had received the report.

George Lyon (Liberal Democrat, Argyll and Bute)

To be fair, we have committed to publishing the report. That is in our amendment, and there has been an on-going commitment to publish. That is what we have always said, and on both the occasions that Mr Brownlee referred to, Mr McCabe qualified the timing of the publication.

Derek Brownlee (Conservative, South of Scotland)

It is an odd interpretation to consider "in due course", said in May this year, to mean "in September 2007", but perhaps we should be used to the twisting of the meaning of plain language by ministers in this Executive.

As Mr McCabe has confirmed to me in response to questions on the subject, the terms of reference for the report have not changed. The report has been completed. Mr Lyon said that it was a work in progress but, under the terms of reference on which it was commissioned, the report has been completed and submitted to ministers. Does Mr Lyon deny that?

George Lyon (Liberal Democrat, Argyll and Bute)

As I said, the report has been completed, and further work is now being undertaken as a result of the options provided.

Derek Brownlee (Conservative, South of Scotland)

Mr McCabe was clear that the report had been completed under the terms of reference and that further, separate, work was now under way, but perhaps he has not enlightened his deputy. There are no obstacles to the publication of the report except those put in place by ministers.

The review group was asked to consider 2005-06. Today, the Deputy Minister for Finance, Public Service Reform and Parliamentary Business is telling us that nothing in the review—not one single piece of information—is relevant to the scrutiny of the budgets that are currently before the Parliament. Is there some mystical quality about the 2005-06 budget that renders it irrelevant to 2006-07 and 2007-08 but sufficiently useful for 2008 onwards that it was worth commissioning the external review? The situation is utterly bizarre.

During committee consideration of the budget process, my colleagues have pressed ministers on why they will not publish the Howat review. Mr Lyon's colleague, Mr Kerr, told the Health Committee that if the report was published, there would be

"a host of wild and inappropriate misunderstandings about the advice that has been given to ministers."—[Official Report, Health Committee, 24 October 2006; c 3150.]

However, it is hardly the case that there is any clarity now on what is in the report. Is Mr Kerr seriously suggesting that if the report is hidden away until next September, the entire populous will be able to reach a Zen-like state that renders them capable of understanding its true meaning?

What Patricia Ferguson told the Enterprise and Culture Committee was certainly likely to cause confusion. She said that the Howat review

"is not a commentary on what has already happened; it is meant to influence what happens in the future. I have nothing more to add."—[Official Report, Enterprise and Culture Committee, 24 October 2006; c 3349-50.]

It is a shame that she had nothing more to add, because she could have explained why something that is intended to influence what happens in the future is of no relevance to the Parliament, even though it scrutinises future spending.

Where does ministers' refusal to publish the document leave the Government? It leaves the Minister for Finance and Public Service Reform lacking in credibility, to the extent that he dare not even turn up for his own debates. It also leaves the Deputy Minister for Finance, Public Service Reform and Parliamentary Business lacking in credibility.

Alex Neil (Scottish National Party, Central Scotland)

Does the member not find it perverse that the Minister for Finance and Public Service Reform will open the next debate for the Executive, in which he will attack Liberal party policy on fiscal autonomy, while the deputy minister is here defending Labour policy on lack of information?

Derek Brownlee (Conservative, South of Scotland)

Perhaps Mr Lyon needs to negotiate better. [ Laughter. ]

I wonder how much credibility the Minister for Parliamentary Business has left, given that she said, in relation to what she described as the Executive's enthusiastic introduction of the Freedom of Information (Scotland) Act 2002, that the Executive was committed to open and transparent government. We will find out how enthusiastic it is about that act when Mr Dunion has issued his opinion on the suppression of the Howat review.

Even the Chancellor of the Exchequer, who is not known for being particularly open about anything, has said:

"we must all open our books, be fully transparent and each of us account for our actions".

Furthermore, as Mr Swinney noted, Jack McConnell said in his party's 2003 manifesto that as First Minister, he would be

"open and transparent in government".

Damaging the credibility of Executive ministers is one thing, but damaging the credibility of the Parliament and its scrutiny process is quite another. I urge ministers to consider rather more carefully than they have done to date their cavalier refusal to publish the Howat review. Given that taxpayers have paid for that report and for the spending decisions that are analysed in it, they have a right to see it before next May. I have every confidence that they will because, at some point, the Government will have to give way and, when it does, ministers will have even less credibility than they have now.

Des McNulty (Labour, Clydebank and Milngavie)

I have enjoyed some of the jokes in this morning's debate, but I want to highlight some of the background to the issue that we should be focusing on, which is the process of how we examine the Scottish Executive budget over the longer term and what needs to happen if we are to do that effectively.

Six or seven years ago, Arthur Midwinter, along with one of his colleagues at the University of Strathclyde, produced a report on the headroom that was available to the Executive to change budgets in year. It concluded that between spending reviews, there is limited scope for the Executive to make strategic shifts in its budget. The Executive can make some adjustments, but because so many resources are taken up by major services such as mainstream national health service, local government and education services, it can do so only at the margins. Although such adjustments are significant, they affect only 1 or 2 per cent of the budget; 98 to 99 per cent of the budget is specified and accounted for.

That is why spending reviews are so important. They give whoever is in government the opportunity to consider whether changes of direction should be made in major areas of spending and how that can be done. Even then, the scope for change is limited because, ultimately, no politician will say that we should shift away from providing the services that the Executive is expected to provide, whether in hospitals, schools or universities. However, spending reviews offer more scope for adjustment.

During spending reviews, long-term advance consideration needs to be given to the options that are available. That is certainly the Finance Committee's position. Early on, we were led by Arthur Midwinter in advocating the idea that we should use a zero-base budgeting approach to conduct a systematic review of how the Executive spends its money so that we can identify not just the scope that exists for change, but the direction in which it could take us. As members will recall, the Finance Committee undertook to carry out such a review, with the Executive's assistance. That was just before John Swinney joined the committee, when Alasdair Morgan was still the deputy convener. If I remember correctly, it was at that point that the minister said that he wanted to take possession of the process, and that was when the Howat review was announced.

Alasdair Morgan (Scottish National Party, South of Scotland)

Des McNulty will be aware that the description of the task that was to be undertaken stated:

"it is possible that the Scottish Parliament's Finance Committee may choose to seek evidence on the report from the reviewers."

When the review was set up, the Government seemed relaxed about the Finance Committee taking evidence from the reviewers. Why has the Government now decided against that?

Des McNulty (Labour, Clydebank and Milngavie)

All I can do is try to provide what seems to be the logical explanation. At least two factors must be taken into account. The first is that the spending review has shifted year. It was initially intended that the spending review would take place in the present budget round, which would have meant that we would have gone through it by now. However, the Westminster Government put its spending review back a year, which shifted the basis on which the original undertakings were made. A regrettable consequence of that is that the spending review is now aligned with the elections. Originally, that would not have been the case.

John Swinney (Scottish National Party, North Tayside)

rose—

Des McNulty (Labour, Clydebank and Milngavie)

Just let me finish. Secondly, I am not sure that the remit that the Howat review was given necessarily made it fit for the purpose that it might sensibly have been asked to fulfil. The Finance Committee was concerned about that at the time.

John Swinney (Scottish National Party, North Tayside)

rose—

Des McNulty (Labour, Clydebank and Milngavie)

In my view, the review was asked to combine two different tasks. On the one hand, it was an invitation to people from outside the Government to think the unthinkable. There is a place for that in government, but it could be handled differently. On the other hand, the review was to examine the Government's performance and management. The intertwining of those two aims underlies the current problem.

If the Government wants to think the unthinkable, as it has done in the past—the Wanless report and the Gershon report are examples of that—it is entirely consistent for the investigation that is carried out by external experts to be pondered on by the Government so that it can determine how it wants to respond, because some of the ideas that the independent experts suggest will not be ones that politicians would want to propose and there could be confusion that the report contained suggestions that were made by politicians. The remit for the Howat review poses that risk. That said, anything that focuses on the efficiency of how things are done and what scope exists for change might be legitimate.

John Swinney (Scottish National Party, North Tayside)

If that was a ringing endorsement of the Government's stewardship of the budget process, Mr McNulty will have to get a bit more enthusiastic about the Government.

On the substantive point that Alasdair Morgan raised, the remit of the Howat committee gave the Finance Committee an opportunity to scrutinise the review report. That suggests that the spending review is not a one-off announcement that is made in a parliamentary statement but a process that engages many other players, including various parliamentary committees. It also suggests that a lot of scrutiny and a lot of players have been carved out of the process by the Government's reinterpretation of the Howat review's remit.

Des McNulty (Labour, Clydebank and Milngavie)

That depends on whether one views the Howat review as the only aspect of the matter. I appreciate that John Swinney wants to make a political point and that he and Derek Brownlee have entertained us with some of the points that they have made, but there is a real, substantive issue: in the context of the spending review—in particular, one that is aligned with an election—how do we do what is best for Scotland? How do we ensure that we have the appropriate mechanisms for identifying the parameters of change and, at the same time, protect the integrity of the political process? I am not sure that the matter is entirely straightforward, but it does not centre on the Howat review's publication. How we take forward option appraisal in Scotland and the room that exists for different choices are issues for us all.

Derek Brownlee has mentioned the SNP's options for higher education. The financial incompetence that lies at the heart of those proposals demonstrates the need for the proposals that we make to the public to have a robust basis.

Alex Neil (Scottish National Party, Central Scotland)

We will not take any lessons from the party that has a £500 million black hole in the Glasgow housing budget.

Des McNulty makes the point about the election cycle as if that is the reason for not publishing the report, but surely it is the reason for publishing it. In a democratic society, the voters should have access to all the information to which ministers have access before they have to vote.

Des McNulty (Labour, Clydebank and Milngavie)

I have no idea what options might be in the Howat review, but I am sure that there are some that the Liberal Democrats would find unacceptable and some that the Labour Party would find unacceptable. It may even contain options that the SNP or the Conservatives would find unacceptable—who knows? There are many different ways of spending money. We have the opportunity to put our proposals to the electorate, who will make the choice. If that process gets tied up with a different kind of process, we will all end up very confused. I would not necessarily want the Howat review to be counted as the expression of my views any more than Mr Neil might want other things to be thought the expression of his views.

We must recognise that there are things that we need to do to ensure that Governments have the space to think the unthinkable. This is a good knockabout debate, but the Gershon review, the Wanless review and perhaps the Howat review—I have not seen it and do not know what it contains—represent an attempt to explore the parameters. However, if that simply becomes a political football, we will never have a sensible process.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

At first glance and on a superficial level, there appears to be some merit in the SNP motion, which requests the publication of a review into Scottish Executive expenditure. However, if we scratch beneath the surface and take into account the Minister for Finance and Public Service Reform's comments to the Finance Committee in September, it is obvious that the Howat review forms part—an integral part, but still only part—of a wide-ranging review of Government expenditure in Scotland. In isolation, the review is unlikely to provide much information or many solutions, if solutions are needed. I see the Howat review—

Jim Mather (Scottish National Party, Highlands and Islands)

He cannot see the review.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

I see it as one piece in a jigsaw, the final product of which is intended for the 2007 spending review and the Scottish budget thereafter. It has nothing to do with the current budget or the 2007-08 budget, on which debate is about to begin.

Alasdair Morgan (Scottish National Party, South of Scotland)

Will Andrew Arbuckle give way?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

I will make some progress and then I will give way.

Outside the Parliament, people will wonder what the debate is about. People in business will realise that sometimes internal reviews take place to check that delivery systems and management are as they should be. The Conservative party might recognise that point from when it was considered to be the party of business, but it might have forgotten it. Such reviews deal with the internal workings of organisations.

John Swinney (Scottish National Party, North Tayside)

Will Mr Arbuckle explain to the Parliament why he has not, since Mr McCabe appeared before the Finance Committee in November 2005, made any of those comments in public or told the minister that he ought not to publish the report when he originally said that he would publish it?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Only a few minutes ago, Mr Swinney heard the deputy minister confirm yet again that the report will be published.

John Swinney (Scottish National Party, North Tayside)

That is not what I asked.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

The answer to the question is that there is no need to do what Mr Swinney asked. The report will be published when it is ready to be published.

Outside the Parliament, people will wonder what the debate is about. All around them, they see increased investment in the public sector. They see new schools, more investment in the national health service and more cash going into better public transport and many other sectors. Those who cannot see the increased commitment to improve Scotland's infrastructure can see it in the draft budget for 2007-08, which runs to almost £31 billion, which is 50 per cent more than only five years ago. Where does that leave the dust storm that the SNP is trying to kick up this morning?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

In his eyes. [ Laughter. ]

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Far from it. If the SNP members want to bring the debate down to a knockabout, that is up to them.

The Howat review's original remit included the classification of spending into different categories—statutory spending, partnership agreement spending and other categories. How many people outside the Parliament are waiting with bated breath to know the height of the various piles of cash that arise from the review? The original remit also asked the review to consider the performance and outcomes of various programmes, looking beyond this parliamentary session. Checking how effective investment has been is the mark of a responsible Government or, indeed, business.

Alex Neil (Scottish National Party, Central Scotland)

Is Andrew Arbuckle not proud of the role that Jim Wallace, a great Liberal, played in getting freedom of information legislation through the Parliament? Is the position that he argues not contrary to every principle and word in the Freedom of Information (Scotland) Act 2002?

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

As Mr Neil recognises, the Freedom of Information (Scotland) Act 2002 is one of the many achievements that the Liberal Democrats have contributed to the Government. There is no need to invoke it, because a promise has been given that the review will be published.

There have been accusations in the press that the information in the Howat review will be used as part of a base budget review. My response to that is, so what? [Laughter.] Just wait. Members should calm down. Des McNulty referred to the budget adviser's favourable views on base budgets. Although few organisations in the public sector actually get round to having base budgets, there are few healthier options on the financial front. In fact, there should be a requirement on public bodies to ensure that little pockets of service that continue to eat up cash are not quietly forgotten. We need base budgets. As far as the Scottish Executive is concerned, that is especially the case if the Howat review forms part of a base budget review following a period during which there has been a massive increase in the Executive's annual expenditure. Moreover, it seems extremely likely that we will be entering a period of financial stringency, when acumen and accuracy will be required to ensure that cash is spent efficiently.

If the main purpose of the Howat review is to produce material to feed into a base budget review, I can sympathise a little with the Scottish National Party because, in my time in the Parliament, the SNP has seemed totally unable to produce any budget of its own.

John Swinney (Scottish National Party, North Tayside)

Rubbish.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

No. The review reflects nothing more than a responsible Government ensuring that public investment in projects is efficient and effective.

Alasdair Morgan (Scottish National Party, South of Scotland)

Will the member give way?

George Reid (None, Ochil)

No, he is closing.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

The debate shows that, far from gaining even a whiff of wind in its sails, the SNP is trying to huff and puff itself towards the next election six months down the line.

Mark Ballard (Green, Lothians)

We have all enjoyed the desperate wriggling by the Executive as it tries to justify the unjustifiable. It has been great stuff. The debate is not just about one report, however. Andrew Arbuckle asked what members of the public would make of the debate. It is about the fundamental principles of the Parliament, which is why I will begin by quoting them and reminding everybody of them, particularly members of the Executive parties:

"the Scottish Parliament should embody and reflect the sharing of power between the people of Scotland, the legislators and the Scottish Executive ... the Scottish Executive should be accountable to the Scottish Parliament and the Parliament and Executive should be accountable to the people of Scotland ... the Scottish Parliament should be accessible, open, responsive and develop procedures which make possible a participative approach to the development, consideration and scrutiny of policy and legislation".

That is what the debate is actually about. It is about the role of committees, which act, in effect, as the second chamber of the Parliament, with their vital role in scrutinising decisions. It is about the sharing of power and being part of the process. That means having input into decisions. Participation does not, as the minister suggested, mean releasing documents only after the decisions have been taken. There can be no participation, power sharing or accountability if that is the Executive's approach.

The attitude of George Lyon's boss was clear. In his letter to the Finance Committee prior to its meeting of 19 September, he wrote:

"However, on reflection September publication of the report will enable us to make best use of the investment we have made in the review, by thoroughly working through the advice and implications of the different options without external pressure."

Let us think about that phrase, "without external pressure". "External" means external to the Executive. Presumably, that includes the committees, the Parliament and the people of Scotland as a whole. We are talking about the approach of the Government to the legislature and the people of Scotland. At the moment, the Government does not want the report to be published because of a fear of external pressure, a fear of sharing power, a fear of accountability and a fear of participation.

I know that many members who are in the chamber now campaigned for this Parliament and tried to persuade people to vote in the referendum on it and to agree to the significant expenditure of public money on the Parliament. That was because we thought that this would be a Parliament based on principle, which would do a good job and enable the people of Scotland to have a real say in decisions on how public finances are spent. We wish to remain true to the principles of the Parliament, yet we are being told, seven years into it, that external pressure means that reports about the spending of billions of pounds of public money cannot be published or will only be published after decisions have been made, which is a disappointment to everybody who campaigned and voted for this Parliament.

The committee rooms, the debating chamber and this whole edifice mean absolutely nothing if the Executive majority chooses to ignore the principles on which the Parliament was established. The role of the legislature is to hold the Executive to account. The role of cross-party committees such as the Finance Committee is to hold the Minister for Finance and Public Service Reform and, through him, the whole Executive to account.

I am glad that we have only two choices at decision time today. We either support the SNP motion or the single, lonely amendment in the name of the Minister for Finance and Public Service Reform, which was spoken to by the Deputy Minister for Finance, Public Service Reform and Parliamentary Business, because the minister could not make it. As the legislature, we have a choice. Are we going to hold the Executive to account? Are we going to demand that the principles of the Parliament—of sharing power, of accountability, of accessible, open, responsive Government and, most of all, of participation in power—be adhered to? Are we going to ensure that the Executive is held to those principles? Are we going to do our job as a Parliament? I hope that we are. I hope that everybody is going to vote according to their conscience to hold the Executive to account. To do otherwise would not be to do our job as legislators.

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

It is always a pleasure to follow my good friend Mark Ballard in a debate and to agree 100 per cent with what he has said. To amplify the point, it is relevant to mention that the Howat review cost the taxpayer £134,306.52. If Mr Arbuckle thinks that a humorous matter, he should come and speak to my constituents, who could use that amount of money to get a house, an operation or treatment for their special-needs children.

This is a serious debate that goes to the heart of what is wrong with the Scottish Executive. Earlier, the minister tried to chastise my colleague Alex Neil for not studying the review's remit—which was rather like being savaged by a dead sheep. The experts were given a remit to consider the performance and outcomes of programmes, based on a performance assessment rating tool. They were asked to identify those Labour-Liberal programmes that do not match with the partnership agreement priorities or that are not performing well. The review is a report card for the Scottish Labour-Liberal Executive—it contains a judgment about its performance. After Mr McCabe received his report card, instead of showing it to his parents—the public, in this case—he decided to keep it secret. It is like a schoolchild being given his report card and deciding to tear it up and chuck it into the gutter on the way home, because he cannot bring himself to show his parents what the experts—the schoolmasters—have said about how well he has been doing.

All the subterfuge, bluster and irrelevance that we have heard this morning are completely irrelevant. Moreover, what Government can bind its successors anyway? The present Executive is saying what the next Executive should do. Hang on a second—is there not something missing there? The people have a little bit of a say about who their next Government will be. Perhaps the next Government will want to take its own decisions. Funny, that. It might actually be a different Government. We might have a different finance minister—one who turns up to debates.

I must move on to freedom of information, on which I will quote two of my parliamentary colleagues whom I hold in the greatest esteem. Margaret Curran said:

"The Executive enthusiastically introduced the Freedom of Information (Scotland) Bill because it is committed to ensuring that citizens have the means to call to account the people who make decisions that affect them."—[Official Report, 2 November 2005; c 20191.]

That is rousing stuff. Des McNulty said:

"we wanted to change the culture of Government acting in secret, to stop the routine withholding of information".—[Official Report, 2 November 2005; c 20207.]

What has happened to Superman Des McNulty? He has reverted to Clark Kent this morning—what a shame.

On Tuesday, Mr Swinney took his arguments to the Finance Committee, which Mr McNulty envisaged scrutinising and studying the review by now. Mr Swinney offered help to save the Labour-Liberal Executive from the error of its past ways and to try to move forward to a broader sunny fiscal upland. However, instead of supporting Mr Swinney and endorsing his proposal to take evidence from the Howat group, Mr McNulty and his colleagues—whom I hold in high regard—voted against that proposal by five votes to four.

Des McNulty (Labour, Clydebank and Milngavie)

rose—

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

Sadly, I cannot—

Murray Tosh (Conservative, West of Scotland)

Since Mr Ewing has criticised Mr McNulty, it would be reasonable for him to give way. I do not know how I will make up the time, mind you.

Des McNulty (Labour, Clydebank and Milngavie)

The Finance Committee did vote to take evidence on the review, but after it has been published.

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

I have no doubt that we will debate that next summer.

When President Reagan said that the 10 most frightening words in the English language are, "I'm from the Government and I'm here to help you," I now know what he meant.

Elaine Murray (Labour, Dumfries)

I express my condolences to the deputy minister. I know how he feels. I am sure Mr McNulty does also, having been in a similar position.

The debate concerns two issues. The first is what the Howat review was about. To my mind, it was intended to inform the spending review.

Alasdair Morgan (Scottish National Party, South of Scotland)

No.

Elaine Murray (Labour, Dumfries)

That was my understanding of the review's main purpose. Alasdair Morgan should not heckle from the floor; he should intervene or—

Alasdair Morgan (Scottish National Party, South of Scotland)

Gordon Brown is conducting the spending review in London. Has he received the Howat review?

Elaine Murray (Labour, Dumfries)

A spending review also takes place in Scotland. The comprehensive spending review here should have taken place this year, but it has been postponed until next year, because the comprehensive spending review in London has been postponed.

In the Scottish budget spending review, ministers consider what can be expanded and contracted. The Howat review's purpose was to bring in a fresh set of eyes to advise the Executive on what the sun could set on and what could be expanded.

Mark Ballard (Green, Lothians)

rose—

Elaine Murray (Labour, Dumfries)

I am sorry, but I have only about three minutes for my speech.

Bringing somebody in serves a good purpose and it is done in local authorities, too. If deciding on closure programmes is just left with a minister or a department, people will come forward with the ones that look most frightening, because they do not want to lose face or revenue.

I warned our whips that if they asked me to speak, I would not be altogether helpful, because I think that the Executive made a mistake. It was unnecessary to set a timescale of February 2006. If the review was intended to inform the spending review, setting that timescale was unwise. It would be unwise to publish a report that says some budget lines should be altered or that advises ministers to discontinue programmes when decisions are not to be taken until more than a year later. That would leave those projects in limbo, as it is not known whether the Executive will accept the Howat review's advice that they should be run down. I wish that I had picked up on that lack of wisdom at the time, but perhaps I was not paying enough attention.

It is not the case that the Executive was unaware that the UK comprehensive spending review had been postponed, because the Chief Secretary to the Treasury announced the postponement in summer 2005. When the Minister for Finance and Public Service Reform appeared before the Finance Committee a year ago, he knew of that postponement. In the quote from him that is in my prepared speech, which I am not using, he says that the spending review will take place in 2007.

Alasdair Morgan (Scottish National Party, South of Scotland)

So why did the minister say that he would publish the review?

Elaine Murray (Labour, Dumfries)

I do not know—doing so was unwise.

As Andrew Arbuckle said, the public are not desperate to see the Howat review. In post office queues and pubs, people do not say, "Oh dear, what's happened to the Howat review?" People are not terribly likely to vote on that basis. However, I say to the Minister for Finance and Public Service Reform that it was unnecessary to set himself a bear trap by saying that he would publish the report in spring. The minister conceded that if the review group asked for more time, he would consider allowing it. If the Executive has something to learn from the situation, it is that it should not make such commitments when it is unlikely to fulfil them.

Yesterday, I asked our whips whether the minister would appear, and I was told that he would. Given what a pugnacious character he normally is, I am surprised not to see him here.

Christine Grahame (Scottish National Party, South of Scotland)

The debate was too much for him.

Murray Tosh (Conservative, West of Scotland)

Order.

David Davidson (Conservative, North East Scotland)

Last week, I was invited to participate in an animal welfare debate at the University of St Andrews debating society. After about three minutes of listening to and watching George Lyon today, I felt that I should be on the phone to Advocates for Animals, because it was pitiful to watch a minister come here to represent the Government of Scotland and have nothing of note to say on a vital issue.

As Mark Ballard said, the debate is about the dignity, role and power of the Parliament. The Minister for Finance and Public Service Reform has been arrogant in failing to turn up to defend his actions and the subject has been pathetically passed on to the Liberal Democrats as fall guys, which makes me feel sorry for them, although that does not help us.

John Swinney (Scottish National Party, North Tayside)

Andrew Arbuckle and Elaine Murray said that the public are not that interested in the Howat review. Does Mr Davidson think that the public might be interested if the Howat review made recommendations that the Executive adopted to alter, damage and cut public spending programmes of which people are fond?

David Davidson (Conservative, North East Scotland)

We are all elected to Parliament to represent the interests of everybody who lives out there, who pays their taxes and who tries to access public services. If the position is such a big mystery, how is it that the justice committees receive bill after bill, financial memorandums pile up and the chief of the Scottish Prison Service told the justice committees this week that, to be frank, if he had had more information, he would probably have thought that the budget would not work? The deputy minister talked as if no changes have been made and the question is for the future, yet decisions are being made now that will set spending for the future. That is ridiculous.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Will the member take an intervention?

David Davidson (Conservative, North East Scotland)

In a moment.

Mr Arbuckle at least mentioned the Freedom of Information (Scotland) Act 2002. It is scandalous that although the Liberal Democrats shouted and screamed about that act, they are taking the hit today and saying that the act does not apply and is not relevant and that we do not need the information at this stage.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will David Davidson take an intervention?

David Davidson (Conservative, North East Scotland)

No, thank you—time is short.

Perhaps Mr Rumbles and his colleagues might reflect on freedom of information after they leave the chamber, and drop a note to everybody on whether they have even had sight of the Howat review. If they have, that would be more than the committees have had.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Come on, David—take an intervention.

David Davidson (Conservative, North East Scotland)

To be honest, I find it strange that Mr Rumbles is defending his front bench's defence of the Labour Party. That is ridiculous. [ Interruption. ]

Murray Tosh (Conservative, West of Scotland)

Order.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

rose—

David Davidson (Conservative, North East Scotland)

I give way to Mr Arbuckle, who is sitting on the front benches.

Andrew Arbuckle (Liberal Democrat, Mid Scotland and Fife)

Mr Davidson said that decisions have been made as a result of the review. What proof, if any, does he have of that? What decisions have been taken?

David Davidson (Conservative, North East Scotland)

I did not say that. I said that decisions are being made in parliamentary committees about bills from which huge spending issues arise, so the Howat review must be part of the process for the 2007 budget. That is the Howat review's relevance to the Parliament.

The truth is that parliamentary committees need to be able to take on any challenge in any way that they wish in scrutinising actions taken by the Government, its words and even its silences in the chamber. Ministers not coming to the chamber to discuss such matters of importance is an abuse of the chamber. I am afraid that funding makes the world go round. George Lyon must come clean and say that the Minister for Finance and Public Service Reform was wrong not to come to the chamber. Perhaps the First Minister ought to come here and apologise for the fiasco that has occurred.

George Lyon (Liberal Democrat, Argyll and Bute)

The Government has made a commitment to publishing the full suite of advice, including the budget review group's report, at the same time as decisions on the 2007 spending review are published. The fundamental reason why the independent budget review group was set up was to inform decisions that will be taken in the summer of 2007. It will provide information that will allow ministers to make decisions at that time about what future spend will be through to 2011. Of course the Finance Committee will scrutinise subsequent budgets in the financial years from 2008 onwards.

I turn to the criticisms that have been made. It is scandalous that David Davidson should dare to criticise the Executive in respect of the freedom of information legislation. His party was fundamentally and utterly opposed to the Freedom of Information (Scotland) Act 2002. Every Tory member voted against that bill. Let us not hear any more sanctimonious nonsense and doublespeak from the Tories. They are far from being great defenders of the Scottish Parliament; indeed, I suspect that every Tory member was against its establishment.

David Davidson (Conservative, North East Scotland)

I thank Mr Lyon for his outburst because we are now seeing him in his true colours. He believes in the Freedom of Information (Scotland) Act 2002, but he has been sent to the chamber to deny its principles.

George Lyon (Liberal Democrat, Argyll and Bute)

I am sorry, but we have always made it absolutely clear—as we have done again in our amendment—that the information in question will be published. As I have already explained, the appropriate time to do so is when decisions are taken on the 2007 spending review.

John Swinney (Scottish National Party, North Tayside)

Will the minister take an intervention?

George Lyon (Liberal Democrat, Argyll and Bute)

If Mr Swinney does not mind, I want to make some progress.

As I have explained, the independent budget review group's report is not the end of the process. The group will gather more evidence, undertake further analysis and provide further advice to be used by ministers in the lead-up to spending decisions in the summer of 2007. Mr Howat and four of his colleagues will have meetings with heads of departments and officials in which options will be tested in greater detail to ensure that they are robust and accurate. Therefore, the submission of the report does not bring the exercise to a close; it is only the beginning of a further process that must be carried out by the budget review team.

As we prepare for the tighter financial prospects of the next spending review, we must reflect on previous spending reviews. Since devolution, our resources have grown by 70 per cent, our economy has grown every year and our employment rate is among the best in Europe. We have introduced free personal care for the elderly.

John Swinney (Scottish National Party, North Tayside)

Will Mr Lyon explain why Tom McCabe did not give the Finance Committee in November 2005 all the reasons that have now been given for not publishing the report until after the spending review is complete?

George Lyon (Liberal Democrat, Argyll and Bute)

I have read the evidence that Mr McCabe gave to the Finance Committee and, as far as I can see, it was made clear that the information was being prepared with an eye on the work that would be undertaken on spending decisions during the spending review in 2007. That is the position. We have given an absolute commitment that the information will be published.

We have introduced the ban on smoking in public places and invested heavily in new schools and teachers, and pupil performance is improving. We have invested heavily in more staff and in modernising pay and conditions in the health service and we have invested in hospitals and community health centres. There are fewer premature deaths from heart disease and cancer, and overall life expectancy throughout Scotland has risen. We have done much more than that and, as we approach the spending review in 2007, it is right that work should be undertaken to provide robust and accurate information so that ministers can take hard decisions at that time.

In conclusion, it is nonsense to suggest that the Government is trying to cover up the report. We informed the Finance Committee what would happen when the independent budget review was set up and we have always said that we would publish the report. Today, we are reaffirming our commitment to publish it at the time of the spending review, when decisions are taken. Again, I ask the Parliament to reject the SNP's motion and support the Government's amendment at decision time.

Alasdair Morgan (Scottish National Party, South of Scotland)

I am glad that the Liberal Democrats are leading and closing the debate for the Government because of their association with the Freedom of Information (Scotland) Act 2002. What they have said points to the extent to which they must compromise their principles as junior partners in a coalition.

George Lyon (Liberal Democrat, Argyll and Bute)

As Alasdair Morgan is well aware, advice to ministers is protected under the Freedom of Information (Scotland) Act 2002.

Alasdair Morgan (Scottish National Party, South of Scotland)

It is up to the Government to decide what constitutes advice to ministers. The more ministers try to hide behind that smokescreen, the worse they look.

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

Would the SNP publish all advice?

Alasdair Morgan (Scottish National Party, South of Scotland)

The member for Tweeddale, Ettrick and Lauderdale should not come to the debate at such a late stage and intervene.

John Swinney (Scottish National Party, North Tayside)

Exactly. He should get on his feet and apologise.

Alasdair Morgan (Scottish National Party, South of Scotland)

John Swinney rightly criticised the Minister for Finance and Public Service Reform for not being in the chamber. However, let us be clear. He is beginning to look like damaged goods. Even the two Labour members who have spoken in his defence have been more than slightly critical of him.

John Swinney was too kind. The Liberal Democrats do not have to defend the indefensible—they should stick up for their principles. When Jim Wallace introduced the stage 1 debate on the Freedom of Information (Scotland) Bill in January 2002, he mentioned that the consultative steering group looked for

"an accountable, visible Parliament, where people were encouraged to participate fully in public debate and the policy-making process."—[Official Report, 17 January 2002; c 5453.]

People cannot participate in a policy-making process after decisions have been made. Today, Mr Lyon said that the Executive will release the full suite of information once the spending decisions have been taken. That flies in the face of how the Parliament was meant to operate.

It is not only the Minister for Finance and Public Service Reform who has been absent. Except for the two Labour members of the Finance Committee, Labour Party members have been absent for most of the debate. Where, for example, is Maureen Macmillan, who said in the stage 3 debate on the Freedom of Information (Scotland) Bill that

"the passing of the bill and its implementation ... will be used to the full to bring about that change of culture"—

the culture of openness that we have been talking about.

Perhaps Donald Gorrie got things right when he said in the same debate:

"In life, it is people who are the problem, not rules. Many people in national Government ... are brought up in a climate of secrecy".—[Official Report, 24 April 2002; c 11217-18.]

I think that we have a problem with our Minister for Finance and Public Service Reform in that respect.

On Tuesday this week, Dr Murray asked, in relation to calling people from the Howat review group in front of the Finance Committee,

"will they be able to discuss the review with us? In calling them, would we be putting them in a difficult position?"—[Official Report, Finance Committee, 31 October 2006; c 4011.]

I thought that it was the purpose of parliamentary committees—particularly the Finance Committee—to put people in a difficult position.

Elaine Murray (Labour, Dumfries)

If Mr Morgan had read the Official Report of that meeting more carefully, he would realise that my concern was that I would put Mr Howat and his colleagues in a difficult position, whereas it is the minister who should be questioned.

Alasdair Morgan (Scottish National Party, South of Scotland)

It can sometimes be difficult to put Mr McCabe under any scrutiny whatsoever.

If people are submitting a report that might contain significant options, they should be able to answer to the Finance Committee. All that I can say is God help parliamentary scrutiny. Somehow I do not think that the Finance Committee will pick up a prize for the third time in a row in the awards ceremony that will take place later this year.

We heard a rather novel argument from Mr McNulty that perhaps the Howat review was not fit for purpose. The minister is now damned on all sides—by us, the Greens and the Conservatives for the lack of transparency in not publishing this vital document, and by his own back benchers for setting up a review that was not fit for purpose.

I think that it was when he was in Elgin that Mr McCabe said that the Howat report would be published this year. Did anyone on the Lib-Lab benches say then, or subsequently, "No—you mustn't. It's only part of a jigsaw, and nobody wants it. It will undermine Government. The public don't want it so please don't publish it"? No—nobody said a word. They changed their minds only when the minister changed his mind. Fergus Ewing put his finger on it when he said that the minister changed his mind only when he saw what was in the report.

The remit of the report was to review Government policy. Is there a possibility that the policy did not quite get the glowing endorsement that Mr McCabe had hoped for when he set up the review? The jury is out, but I can see which way most people's minds are turning.

Even if we believe the Government argument and accept that the minister should not have committed to publishing the report this year, we have to acknowledge that it was not a slip of the tongue. It was not like Des Browne saying, "We will set up an inquiry," when he really meant, "Oh no we won't set up an inquiry." Rather, it was a deliberate and calculated statement. So when did Tom McCabe decide that he had made a mistake? Did his civil servants tell him that he had made a mistake? Des McNulty did not tell him that he had made a mistake. Did the First Minister tell him that he had made a mistake?

A different argument was used by Elaine Murray and Andrew Arbuckle—that the public were not clamouring for the report. Well, the public might clamour for the report if they knew what was in it and if they knew that it questioned some Government programmes to which they were significantly attached or from which they benefited. However, the public are not being told, just in case.

Let us be clear: open government does not consist of publishing documents only when they are of interest only to academic historians after the decisions have been made. Government advice—if it is Government advice—should be withheld only if there is some overriding public interest in doing so. The minister has not demonstrated that that is the case. It is quite clear that the only interest involved in withholding the document is the interest of the Labour Party. The Government stands condemned out of its own mouth.

Financial Powers (Scottish Parliament)

Murray Tosh (Conservative, West of Scotland)

The next item of business is a debate on motion S2M-5055, in the name of Jim Mather, on the financial powers of the Parliament. I advise members that we are behind the clock and that speaking times will be enforced.

Jim Mather (Scottish National Party, Highlands and Islands)

I note the absence of any Executive presence for this debate. No minister is here. We saw the Executive trying to keep the Howat review under wraps, but I had hoped that the Executive might not want to keep the most important debate in Scotland under wraps.

Many debates in this chamber end with somebody saying, "That was an interesting debate." I confidently predict that somebody today will say that about this debate. Although the motion is simple and straightforward, it is important and it has to be accepted if Scotland and this Parliament are to be credible at home and abroad. At home, we have to be credible with people who have legitimate aspirations for a much better life for themselves and their families. Abroad, we have to be credible with our ex-pats, many of whom could return; with potential customers, who need to see us being more competitive; and with competitors, who would rejoice if we were less than competitive.

Bristow Muldoon (Labour, Livingston)

Will the member give way?

Jim Mather (Scottish National Party, Highlands and Islands)

I would like to make some progress first.

More and more people are realising that it is difficult to compete and prosper when we have no economic powers. However, virtually everybody of good will realises that it would be infinitely worse if our Parliament were unwilling to debate economic powers fully and openly, or to consider all the options. If we were unwilling to do that, we would become an irrelevance and a laughing stock, and we would send out damaging signals. In other words, it is vital that the Parliament facilitates an open and honest exchange of views, encouraging the widest possible participation in the process. If we do otherwise, we will indicate our lack of willingness to learn from outside and our rejection of the need to review evidence and deliver evidence-led policy that has logic and a good track record at its core.

Wendy Alexander (Labour, Paisley North)

The member indicated a desire to learn from other countries. I wonder whether he can name a single country that has adopted fiscal autonomy.

Jim Mather (Scottish National Party, Highlands and Islands)

Navarre, the Basque Country, the Isle of Man and the Channel Islands. Scotland, uniquely, has a system that damages its people; we need to learn from those other countries. This Parliament risks being party to the unhealthy closing down of debate by vested interests that would freeze-frame Scotland at the very time when other Governments and peoples are moving forward and changing their nations for the better.

I suggest to Ms Alexander that rejecting the motion would be inconsistent with what she suggests in her book "Chasing the Tartan Tiger"—that the only obstacles to Scotland making progress are people who are not open to radical ideas. The motion should be endorsed by all who have spoken in favour of our having more powers—including Lord Vallance, Henry McLeish, Michael Portillo and many others who will be watching this debate, such as Lord Steel.

Brian Monteith (Independent, Mid Scotland and Fife)

rose—

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

rose—

Jim Mather (Scottish National Party, Highlands and Islands)

I will take an intervention from Jeremy Purvis.

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

The member mentions Lord Vallance. Does he know that Lord Vallance, as a member of the Steel commission, absolutely rejected fiscal autonomy and independence? He favoured fiscal federalism.

Jim Mather (Scottish National Party, Highlands and Islands)

Mr Purvis may have read the motion or he may not. The motion calls for a debate. I respect Lord Vallance's views and I respect Jeremy Purvis's views; I want a debate. Indeed, more than 80 per cent of the people of Scotland want this matter to be debated and voted on. Even back in August 2004, 46 per cent of the business community were patently up for the debate, with 26 per cent being neutral.

Recently, there has been a spate of reports—from Experian, David Bell, Sir Donald Mackay, Fabian Zuleeg, Professor Ronald MacDonald and Professor Brian Ashcroft. The debate is taking place outside this chamber. Very few people want to close down the debate. Well, perhaps there is one—Iain McMillan—but we have to ask him, "Who would benefit from taking a position that was blind to the experience of Ireland and Norway and which flew in the face of the needs of all aspirational Scots and all those who wish to protect jobs and increase living standards?"

Brian Monteith (Independent, Mid Scotland and Fife)

I suggest that Gerald Warner might take that view.

I will be supporting this welcome motion, but will the member confirm that fiscal autonomy—even full fiscal autonomy—does not mean independence?

Jim Mather (Scottish National Party, Highlands and Islands)

It would be a step on the road, and I repeat to Mr Purvis that the motion is about having a debate, scrutinising all the options, considering the legitimate ones and looking objectively at problems. We ask for nothing more.

Unlike some, we want a constructive debate. We are not alone in that. The editorial of The Scotsman yesterday called for a constructive debate. Such a debate would expose the arid and damaging negativity of the fear, uncertainty and doubt that we will hear when the Labour benches are repopulated and when ministers turn up. Their attitude encourages procrastination, the loss of opportunities, the diminishing of life chances and further damage to the social fabric of this country.

Failure to engage fully in this debate is a failure of leadership—indeed, it is the antithesis of leadership. There has been a suggestion that we will be in for 30, 40 or 50 years of constitutional wrangling. Oh really? That was not the experience of, for example, tiny Montenegro, which went from a declaration of independence to United Nations recognition in 32 working days. It is also not the experience of many other countries, or of countless corporate demergers and management buyouts.

In Scotland, we start from a neat position. People here have the incentive of already owning their proportionate share of United Kingdom plc. Our demerger is therefore available with no purchase price. That is not insignificant—but, beyond that, the people do not want wrangling. They want results; they want progress; they want us to converge on the higher living standards that have been achieved elsewhere; but, more than anything, they want a debate. We have to satisfy that rational and reasonable request. That will mean a clear identification of the problem, an evaluation of all the options and an avoidance of Scotland becoming just a branch not only of the UK economy but of the United States' software industry, Irish property portfolios, Icelandic retail conglomerates, Irish airlines and Norwegian salmon farming interests.

Who else would duck a debate on strategy? No other country, no viable company and no committed public sector organisation.

I move the reasonable proposition in my name, That the Parliament recognises the need for an open, inclusive and objective debate about the financial powers that it requires to have in order to maximise accountability, efficient government, economic growth, public services, infrastructure development and good social outcomes in Scotland and further encourages the business community, the trade unions, the public sector, the voluntary sector, academia and wider civic Scotland to participate in this debate, the objective of which must be to make Scotland a more prosperous country, able to deliver social justice to its people.

Richard Baker (Labour, North East Scotland)

While the Scottish National Party tries to ensure that the Parliament endlessly debates its powers, Labour is using them to grow our economy and to deliver prosperity for our nation.

The SNP wants to debate fiscal autonomy not because it would be best for Scotland's economy but because of the SNP's desire for independence. That was made clear in Jim Mather's response to Brian Monteith. This is not a new discussion but the same old debate. The SNP supposedly wants an open and objective debate, but it has afforded just over an hour's debating time to the issue. It is no wonder that it does not want to subject its fiscal autonomy plans to any real scrutiny because, for SNP members, the debate is not about what works. They do not want an objective debate; they have already made up their minds on fiscal autonomy because they want independence. Although we welcome the debate, those are the real terms of the debate for the SNP.

Brian Adam (Scottish National Party, Aberdeen North)

Absolutely. We want independence. That is a perfectly honourable position to take. Why will the Labour Party not support a referendum and allow the people to make that choice?

Richard Baker (Labour, North East Scotland)

The people have made that choice in every Scottish election. The choice will be put before the Scottish people again at next year's elections. We will willingly take the debate to the Scottish people and look forward to doing so. Every time that the SNP's independence plans are put to a real test, the Scottish people reject them.

Those who want a genuine debate on fiscal autonomy must realise what the SNP seeks from the debate. I find it extraordinary that the Liberals want a whole new constitutional convention after just two sessions of the Parliament. I believe that people would prefer us to focus our energies on using the substantial powers of devolution.

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

Does Mr Baker recall that the Scottish Constitutional Convention recommended that a second constitutional convention should be convened after the first session of the new Scottish Parliament?

Richard Baker (Labour, North East Scotland)

My view is that it is too early to convene another convention after just two sessions of the first Parliament that we have had in 300 years.

No one should be distracted from the fact that devolution means that we already have autonomy over our budget and economic strategy. I reject the viewpoint that, without fiscal autonomy, we are somehow unaccountable for what we spend. Ministers are accountable every week in this Parliament for the budget that they spend. We know that we need to get our budget right because not to do so would have serious implications for crucial areas of public spending. We already have the power to implement our own economic strategy for Scotland.

To reject the nationalists' plans, sketchy though they are, is not to ignore the issues, which is what the Tories claim while they try to obfuscate the fact that they disagree with their think-tank's report. The case that we make is that it would be ludicrous to change the constitution for the sake of change when the current system is working for Scotland. While other countries across Europe and throughout the world have slipped in and out of recession, we have enjoyed 20 quarters of consistent growth, record levels of employment and an employment rate that is above the UK rate. Scottish gross domestic product is on course for further growth. Why should we put such progress at risk? A protracted debate on fiscal autonomy might be of interest to some economists and political commentators, but what really matters for the people of Scotland is what this Parliament does to benefit them and their families.

Those economists who argue for fiscal autonomy because they hope that it will deliver a right-wing, low-tax, low-spend Scottish economy will be sadly let down by the SNP. Despite the best efforts of Jim Mather and Fergus Ewing, the SNP still promotes costly policies such as scrapping all graduate debt, which would cost many more millions than the SNP has budgeted for. Given such policies, the SNP cannot be trusted with devolution, let alone extra powers.

What matters to the people of Scotland is not the constitution but jobs, homes and investment in their communities and public services. Working in partnership with Westminster and as part of the strong UK economy that Gordon Brown has created, we have had record levels of jobs, record levels of investment in schools and hospitals and—a crucial issue for our economy—record spending on universities and colleges.

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

Will the member give way?

Richard Baker (Labour, North East Scotland)

I would give way, but so little time has been allowed for the debate that I am unable to do so.

That record has enabled us to have an effective policy of our own that is contributing to higher levels of economic growth. That is the "union dividend" of which the First Minister is right to speak. Why should we risk that for the sake of a change whose aim is not to improve devolution or Scotland's economy but to meet the goals of a discredited and distasteful political ideology? In Labour, we prefer to act to bring greater prosperity to the people of Scotland.

Why should we have a fake debate on fiscal autonomy when we can get on with the real job of growing the economy and improving people's lives? That is what Labour has done and will continue to do.

I move amendment S2M-5055.3, to leave out from "recognises" to end and insert:

"believes that the arguments for further fiscal autonomy are being used as a cover for the debate on independence; calls on those MSPs who support a separate Scotland to give an honest explanation of what a separate Scotland would mean for our economy, and further believes that we should continue to use the powers of the Scottish Parliament to deliver better health, education, lower crime and economic growth."

Derek Brownlee (Conservative, South of Scotland)

This morning's debate is not a debate about the powers of this Parliament; it is a debate about having a debate about the powers of this Parliament. I would have thought that, although we might want to spend more than an hour and a quarter debating what the proposed additional powers might be, debating whether we ought to have a debate on that subject should be easily accomplished in the time that has been allocated today. On the face of it, the amendment in my name might appear to aim to change significantly the motion in the name of Jim Mather, but it would in fact broaden his motion. If we are to have a debate on the powers of the Parliament, we should not restrict that to merely the financial but consider the non-financial aspects as well.

We should also recognise, as my amendment does explicitly, that we can have that debate without in any way, shape or form prejudicing the integrity of the United Kingdom. I understand where the nationalists will come from when they contribute to that debate but, equally, the unionist parties in the Parliament will put forward a unionist perspective. Those of us who believe in the strength of the United Kingdom have nothing to be scared of in debating the subject. If the union is as strong as I believe it to be, it can easily withstand a vigorous debate on the subject.

The key question to consider in framing the debate is how we make the Scottish Parliament and Scottish Government more effective and more accountable. This morning's first debate will surely tell anyone who wishes to scrutinise the Scottish Government that there is a real need to make it more accountable. Perhaps the First Minister's logic is that the Government's problems of accountability are due to the incompetence of his ministers. Perhaps that is why he sees no need to debate the subject and why he has set his face against even discussing it.

I have some sympathy with part of Richard Baker's argument. We should use the powers that we have as effectively as we can and we should consider how we could use our current powers to grow the economy and to deliver improved public services. However, doing that does not preclude consideration of whether those powers are sufficient and whether they could be changed. It is ridiculous to suggest that the Scotland Act 1998 is absolutely perfect. After all, did not Donald Dewar say that devolution was a process rather than an event?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Derek Brownlee said that we should use the powers that we currently have. Can he confirm whether the Conservative party is in favour of using the existing tax-varying powers?

Derek Brownlee (Conservative, South of Scotland)

We may make our views clear in September 2007 so as not to prejudice the outcome of any current process. [ Laughter. ] After all, I am sure that Mr Rumbles, like us, would not want any wild misunderstandings.

The other reason why we should not be afraid of a debate is that debate on increased powers for the Scottish Parliament often takes place at a very abstract level. If the issue is to be taken seriously, we need to get down to specifics. Fiscal autonomy means different things to different people. If tax powers were to be devolved, we would need to look closely at the interaction between those powers and the increased complexity that might arise for individuals and businesses. None of those decisions should be made by one party or decided overnight. That is why it is entirely appropriate to seek an open and inclusive debate, as my amendment suggests.

The Lib Dems and Labour have set out their positions in their amendments and we will do so in due course. However, I see nothing for a unionist or Conservative to fear in having a debate on this subject.

I move amendment S2M-5055.1, leave out from "powers" to end and insert:

"and non-financial powers that it requires to have in order to maximise accountability, efficient government, economic growth, public services, infrastructure development and good social outcomes in Scotland and further encourages the business community, the trade unions, the public sector, the voluntary sector, academia and wider civic Scotland to participate in this debate, the objective of which must be to make Scotland a more prosperous country, able to deliver social justice to its people, and notes that a more effective and accountable devolved Scottish Parliament would strengthen the United Kingdom."

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

There is no doubting that Jim Mather is a reasonable man. In this Parliament, in December 2003, he outlined the SNP's position of wanting a debate about fiscal autonomy and the powers of the Parliament. However, he has given no explanation today of why the SNP motion is so coy on independence, which is not mentioned. It is time, as the SNP says, for a debate. However, when my party proposed a second constitutional convention as the vehicle for such a debate, the idea was rubbished by Alex Salmond. He told me that the SNP will not take part because it has its own independence convention—the convention of odds and sods of Scottish politics—and a closed mind to any alternative.

The SNP does not want a debate—it wants separation. Why does it not say that? Why does it not lodge a motion that says what it really wants? Its policy is to hold a referendum in the next session—why does it not say that? Recently we saw what happened when the independent governor of the Bank of England joined the debate about the union and the economy—the SNP jumped on him. It said that it was an outrage and a disgrace for him to open his mouth. The same party wants to set up a council of economic advisers in Scotland. Its meetings will be absolutely boring, as only those who favour separation will be asked to take part and they will be able to give only one type of advice—the advice that Mr Mather wants to hear.

However, all may not be lost—there is a chink of hope for Mr Mather. I understand that the proofs of Mr Russell's new book were returned to him with paragraphs annotated with the Salmond code. Some—not many—were annotated with "RH", for relatively harmless. A few more had "D", for dangerous. However, the book was peppered with "VD"—very dangerous. I wonder which of Mr Russell's recommendations concerned the SNP so much. Perhaps it was his recommendation of "the new union". In that new union, the British Government ruling Scotland would have only the minor powers of foreign affairs and military control. Oh yes—the Queen would also be retained. I suspect that when Mr Mather called for a debate about the constitution and the Parliament's powers, he did not expect such an enthusiastic response from the putative future SNP minister for unionist affairs. I never realised that the referendum that the SNP proposes would not consist of a single question but would be multiple choice, and that people would be asked whether they wanted independence with or without the British Army and with or without the Queen.

If the SNP is hiding its true colours this morning, is there a real debate to be had about the powers of the Parliament, financial and legislative, to which Mr Brownlee referred? The answer is yes. That will not be helped if the next decade is taken up by a debate about separation, but there should be an inclusive approach.

Maureen Watt (Scottish National Party, North East Scotland)

Does the present devolution settlement accord with the Liberal Democrat idea of fiscal federalism? If it does not, what other powers should the Parliament have to meet the criteria that the Liberals have set down?

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

The answer is no. That is why, two years ago, the Liberal Democrats established the Steel commission. As Duncan Hamilton said in The Scotsman in March, its report put

"the Lib Dems at the front of the debate with a clear position on federalism."

Liberal Democrats argue not only that the Parliament could have more powers, but that it should have them. However, we reject the stepping-stone to independence of fiscal autonomy and support the principles of fiscal federalism. Broadly, the Parliament should have tax-varying powers for the money that it spends, so that there is credibility in our debates not only about how the Parliament spends money but about how it raises it.

Credibility is sorely lacking in the SNP. Last year it put forward what it described as the most comprehensive economic reason for independence, but since the Parliament was established it has not produced one alternative budget.

Jim Mather (Scottish National Party, Highlands and Islands)

Will the member give way?

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

I am afraid that I do not have time.

The SNP has not presented costed policies on pensions or higher education, but only recently the shadow minister for social justice said that there should be no border raids by English sick people coming to our hospitals. Mr Mather wants credibility, but for that he must start at home.

I move amendment S2M-5055.2, to leave out from "recognises" to end and insert:

"believes that the Scottish Parliament needs significant new powers that follow federal principles; calls for a significant increase in the taxation powers of the Parliament in order to improve competitiveness and accountability, increase transparency, encourage more efficient allocation of resources and allow the Parliament to have greater fiscal levers to influence the direction of the Scottish economy; notes that full fiscal autonomy does not exist in any developed economy in the world and rejects the argument for such autonomy as a cloak for independence which would damage Scotland and our economy; calls for the establishment of a second constitutional convention during the next session of the Parliament to improve the home rule settlement in order to deliver real benefits to the people of Scotland; calls on all political parties and civic Scotland to participate in the new convention; believes that the new convention should also consider the case for additional legislative powers for Scotland and new procedures to improve joint working between the Scottish and UK Parliaments, and calls for the new legislative and fiscal powers of the Scottish Parliament to be enshrined in a written constitution for the United Kingdom."

Brian Adam (Scottish National Party, Aberdeen North)

I am delighted that the Liberal Democrats and the Conservatives have engaged in the debate and have made use of the fact that an open motion is before us that allows members whose views are different from those of the SNP to feel comfortable about doing that. However, I am really disappointed that a young man, with a young family, who is clearly committed to Scotland, sees nothing better for the future than the status quo. That is a deeply conservative position, of which many of the forebears of those who are involved in the Labour movement would be deeply ashamed.

Richard Baker (Labour, North East Scotland)

What is wrong with sticking with the status quo when it delivers a strong Scotland that has consistent economic growth, provides jobs and has record investment in public services?

Brian Adam (Scottish National Party, Aberdeen North)

I understand that economic growth is a high priority for the Government. Scotland had average annual growth of 1.8 per cent over the 25-year period from 1979 to 2004, but UK average annual growth was 2.3 per cent. That is the benefit of being in the union—the union dividend is that Scotland loses out. Small European Union countries had an average annual growth rate of 3.1 per cent, and Ireland had a growth rate of 5.2 per cent. I would much rather be in the position of small European Union countries such as Ireland than in Scotland's position within the United Kingdom, or even in the position of the United Kingdom as a whole. Success lies elsewhere. The deeply conservative position that new Labour has adopted is holding our country back.

Mr Baker is a young man who is clearly committed to Scotland; he has stood for election and has contributed here. However, I accept his position if he does not want to make progress for his country.

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

The member mentioned competitiveness, and Mr Mather often quotes the world competitiveness scoreboard. Can the member explain why Scotland is above the Czech Republic, Catalonia, France, Spain, the Slovak Republic, Hungary, Portugal, Slovenia, Lombardy and Italy on that independent scoreboard?

Brian Adam (Scottish National Party, Aberdeen North)

The relative position is important. Whereas the countries to which Mr Purvis refers are making progress, Scotland's relative position is in continual decline, because we have no real powers to make changes. That is the union dividend.

Margo MacDonald (Independent, Lothians)

Is it only about the money? Should not something about the soul of Scotland be encompassed in today's motion?

Brian Adam (Scottish National Party, Aberdeen North)

I am more than happy to recognise that there is more to life than money, but today's debate is about how we create a country that is prosperous so that we can deliver the social justice that most members want. I recognise that as a country we have an identifiable culture that needs to be supported, but today's debate is about fiscal independence.

Brian Adam (Scottish National Party, Aberdeen North)

It is about independence—it provides us with an opportunity to debate fiscal autonomy.

We have a totally distorted economy. We have some major world-class businesses, but we do not have the same range of businesses that exists elsewhere in the world. We have giants such as the Royal Bank of Scotland and HBOS; medium-sized companies such as Scottish and Southern Energy, Scottish Power and Scottish and Newcastle; growing businesses such as our bus companies FirstGroup and Stagecoach; and significant relatively new companies such as the Wood Group, the Abbot Group and Production Services Network. However, we do not have the same range of companies that one would find in a normal economy in a normal country. That is why we need to have levers of power over our fiscal environment that will enable us to make the economy grow.

Frances Curran (SSP, West of Scotland)

I am all in favour of having a public debate on extending the powers of the Parliament. The Parliament's complete lack of powers and how it will become a grown-up Parliament should be a matter of public debate. We have Mickey Mouse powers that are not much better than the powers of the average regional council of the past. Those who are running scared of having more financial powers should recall that the average US state has 10 times more economic power than the Scottish Parliament. It has tax-raising powers and the power to set a minimum wage, keeps the vast majority of its taxes and pays back money to the central Government. Catalunya and the Basque Country in Spain have control of 90 per cent of the taxes that they raise. The powers that they have—not just economically, but politically—go as far as possible, short of independence, whereas we get a block grant.

The motion is pretty wishy-washy. In a week in which 51 per cent of Scotland's population has indicated that it supports independence, a parliamentary debate about fiscal autonomy and financial powers is yesterday's news. I cannae see thousands of people taking to the streets with banners demanding more fiscal powers. If we are to mobilise public support in debate, we have to make it clear that independence is about not just economics, but political power.

If I were a cynic—which I am not; I am an idealist—I would say that the motion is much more about courting a coalition with the Liberal Democrats and Brian Monteith. Indeed, if David Cameron gets his way, the nationalists might even seek a coalition with the Tory benches. I simply cannot believe the poverty of the terms of the motion.

Let us have a debate on the Parliament's powers; let us discuss having control of our own resources such as North sea gas and oil to ensure that that wealth is not sucked out of Scotland; and let us talk about the imposition of nuclear power stations and the way in which our taxes have been used to fund a war that most Scots oppose. Let us do all that, because those are the issues that will inspire and mobilise people to get into halls and debate Scotland's future. I hope that—in fact, I am confident that—the independence convention will start that debate in this country.

The Scottish Socialist Party is in favour of an independent socialist Scotland. However, at the moment, it appears that the SNP is running away from that debate. Independence is its main policy; it should come out fighting on it. I am not the nationalists' electoral organiser and I am not suggesting what the SNP's election strategy should be, but this motion is very timid. We should build on the fact that a majority of people support independence. Yes, we should raise our own taxes; control economic ownership; be able to set the minimum wage in this country; and have control over welfare and other benefits. We should emulate countries such as Norway, Finland and Sweden, which have the best welfare provision and the lowest levels of child poverty. As only independence will allow us to redistribute wealth, we should inspire the country to take part in that debate in the run-up to next election and put the Executive benches on the defensive.

David McLetchie (Conservative, Edinburgh Pentlands)

Once again, the SNP has trotted out Mr Mather as the siren voice of soft porn nationalism, seeking to seduce us into a debate on the Parliament's financial powers when, in fact, his colleagues have no intention whatever of conducting the debate in the terms of the motion.

Frances Curran is absolutely right: this motion is SNP-lite. On the face of it, the blustering bravehearts have been transformed into wee, cowran, tim'rous beasties—but is it a ploy, or is it for real?

Jim Mather (Scottish National Party, Highlands and Islands)

Will the member give way?

David McLetchie (Conservative, Edinburgh Pentlands)

Mr Mather will get his chance.

The key question for the SNP is: what powers, short of those of an independent sovereign country, is it prepared to settle for? Is it prepared to accept that some powers and responsibilities should remain with the British state? If the answer from Mr Mather and the rest of the SNP is, "No—it's independence and nothing less", Mr Mather is floating a false prospectus. He does not want an

"open ... and objective debate on the financial powers"

of a devolved Parliament within the United Kingdom; instead, he wants to debate independence.

Jim Mather (Scottish National Party, Highlands and Islands)

What we want is progress, progress, progress. As for the nationalists being fearties, I wonder whether Mr McLetchie sees the great irony in the fact that while Ian Paisley and Gerry Adams are making common cause about corporation tax in Northern Ireland, the Liberal Democrat and Labour benches are unwilling even to have a proper debate on those and other issues.

David McLetchie (Conservative, Edinburgh Pentlands)

I do not think that Ian Paisley and Gerry Adams would agree that Northern Ireland should be extracted from the UK, which is, of course, the SNP's core principle with regard to Scotland.

The debate on the Parliament's financial powers is plagued by lack of precision in the language in which it is conducted, so I want to be clear: a country cannot have fiscal autonomy unless it is independent. No other country, province or state in the world that is part of a larger sovereign nation levies all the taxes within its borders and then contributes a share to a common pool of finance service.

Jim Mather (Scottish National Party, Highlands and Islands)

What about the Isle of Man?

David McLetchie (Conservative, Edinburgh Pentlands)

That is a constitutional anomaly. Does the SNP really aspire to make Scotland like the Isle of Man? If so, I find that pathetic. For a start, I am not aware that the Isle of Man is in the United Nations, which I believe is another SNP aspiration.

No Parliament that is wholly responsible for raising all taxes will willingly surrender to another body the right to determine how a major part of those taxes are spent. A debate on fiscal autonomy is a debate on independence—and nothing less.

For all unionists, the real debate should be about fiscal federalism—or, if one prefers, fiscal devolution. The UK now has a quasi-federal system of government in which powers and responsibilities are attributed between the national UK Government and subordinate bodies such as this Parliament and the Assemblies in Northern Ireland and Wales. One finds the same division of responsibilities in more fully fledged and long-standing federal systems such as those in the United States, Canada, Germany and Australia. US states and Canadian provinces have greater powers to raise taxes to finance expenditure than we have. However, in other cases—such as the German Länder, whose financial system is similar to ours—those financial powers are not so great. As a result, in any discussion about a federal system of government in the UK, it is quite legitimate to debate whether we should have more or fewer tax-raising powers. One might well conclude from that debate that we should have more powers. However, as Derek Brownlee pointed out, none of that does violence to the concept of the UK any more than it would do violence to the concept of Canada or Germany as sovereign states.

It is worth observing that, even in the federal states or provinces that have more financial responsibility than we have, the taxes that they raise do not cover their total expenditure. In all such systems, the federal Government still has to give the states or provinces substantial grants. In that respect, if we did not have a Barnett formula, we would have to invent one.

Gordon Jackson (Labour, Glasgow Govan)

Years ago, at election time, I met a prominent nationalist who was giving out leaflets. He was very unhappy. He did not like that fact that the leaflet promoted the idea that, under independence, Scotland would be economically far better off—not because he did not necessarily believe in it, but because that was not the reason why he was a nationalist. For him, it was a matter of principle; he wanted an independent Scotland, better off or not. It was what Margo MacDonald called the soul of Scotland argument.

I disagreed with his viewpoint, because I felt that it was wrong-headed and showed a lack of understanding of Scotland and the union. However, I respected it, because it was—and remains—an honest nationalist position.

Margo MacDonald (Independent, Lothians)

Will the member explain what he means a little more? Why does he think that it is wrong-headed to have a soulful connection to independence but not to unionism?

Gordon Jackson (Labour, Glasgow Govan)

I do not think that there is anything wrong with having such a connection. I felt that the view was wrong-headed because it did not make good political sense. However, as I said, I respected it.

The problem is that such a position did not work for the nationalists, and they are now trying to move on from that honest nationalist stance to put forward what I would call a dishonest economic argument. Jim Mather is trying to persuade us that Scotland would be better off if it left the union. That is what this debate is about, and it is simply not true.

I object to the motion in two very obvious ways. First, it calls for an "objective debate". David McLetchie and others are right to point out that this debate is not honest or objective; it is about putting forward a preordained agenda to take Scotland out of the UK and all that goes with that.

Jim Mather (Scottish National Party, Highlands and Islands)

Will the member give way?

Gordon Jackson (Labour, Glasgow Govan)

No; in a debate such as this, I do not have time to give way.

Linked to that, Jim Mather's motion sets out an aspiration

"to make Scotland a more prosperous country"

with more "social justice". Of course, by definition, we all want that. However, it is inaccurate to suggest that moving towards independence will make Scotland better off.

In saying that, I am not being anti-Scottish. I believe in having a soul for Scotland, so to speak. It is not even to say that we could not run our own affairs: of course we could. What I want is pro-Scottish and is best for the country.

I will give an example from close to home. Many people fought long and hard to ensure that shipbuilding survived on the Clyde. We have achieved that. When we go to the BAE Systems yard the mood is more optimistic, among both management and men, than it has been in many a long day. There is work for the foreseeable future and there are new apprentices, new equipment and new life. What does that come from? It comes from a UK Government placing orders, which, for obvious reasons, cannot be placed elsewhere. Any honest person knows that those yards could not survive and compete in a cheap labour market without those orders. If the SNP takes Scotland where it wants to take it, the yards that we have fought for will close.

An industrialist, speaking from the comfort of silicon valley, said this week that if we had more fiscal power a by-product would be "recession"—that word might be theoretical for someone who lives where he lives, but for the people at the front line it is not a theory but a fear.

If people want independence for emotional reasons—for reasons of the soul—so be it, but please, Jim Mather, do not pretend that it will make us better off.

Christine Grahame (Scottish National Party, South of Scotland)

I make it clear to Gordon Jackson that I am a head-and-heart nationalist. I am proud to be one and have been one for 35 years and more.

I will speak to the terms of the motion and address whether, without increased financial powers, we can improve social inclusion and reduce poverty in Scotland. We are discussing the matter seven years after the creation of this Parliament, in which good people all round the chamber support the eradication of child poverty and bringing people up to better standards of living.

Dealing with health matters is often a poverty issue, dealing with the failure to achieve at school is often a poverty issue and dealing with low-level crime is often a poverty issue. Can the Parliament, whoever is in power, really tackle those issues without greater financial powers? It is probably a truism to say that poverty is a complex, multifaceted problem; the same is true of its solutions. The issue for the Parliament is whether we have the tools to provide those solutions.

I will mention some aspects of the problem. I have taken the facts from figures published by the Joseph Rowntree Foundation and the Child Poverty Action Group, which have acted as my databases. Forty per cent of Scottish households have an income of £20,000 or less; 18 per cent have an income between £10,000 and £5,000; and 3 per cent exist on £3,000. As for individuals, three quarters of Scots have an annual income of £20,000 or less; nearly a quarter have an income of £10,000 to £5,000; and 20 per cent live on £5,000 or less. That is the reality for people. Those figures come from the Joseph Rowntree Foundation.

What does that mean for Scotland's people and their health? One in four of our children lives in poverty and the figure is three times higher if someone is from a single-parent family. We all want poverty to be eradicated, but how can we achieve that with what we have in our hands now?

We have all moved on as MSPs in the past seven years and we know what we are dealing with. I say to Richard Baker that the number of working-age adults without dependant children who are in income poverty in Scotland has increased from 300,000 to 400,000 since the mid-1990s.

Wendy Alexander (Labour, Paisley North)

Does Christine Grahame acknowledge that there is no restriction of any kind on how the Scottish Executive spends the entire £25 billion that is available to it, whether the money is spent on tackling poverty or on anything else? In the SNP's most recent budget—of course, we get such figures from the SNP only when the oil price is high—it acknowledges a non-oil deficit in excess of £10 billion this year.

Christine Grahame (Scottish National Party, South of Scotland)

We cannot begin to deal with the issues in Scotland while we are not in the position to deal with tax and benefits, which are at the basis of most poverty issues, but we have to deal with the social fallout.

Seven of the Child Poverty Action Group's 10 ten steps to a society that is free of child poverty relate to reserved matters. If we listen to people who tell us about the difficulty that they have in moving out of poverty, they inevitably refer to the benefits trap and not having access to education because they do not have funding for transport. We want to deal with all those issues. There is something dishonest in the arguments we hear today that suggest that the SNP's proposal is simply a camouflage for independence. Of course it is not: none of us in the SNP has ever said anything other than that we want independence. I am opening up for consideration the question whether anyone in the chamber seriously believes that we can tackle child poverty and the poverty of low-income families without having our hands on the real tools of tax, benefits and the ability to provide decent, well-paid jobs.

Patrick Harvie (Green, Glasgow)

I begin on a wee note of sympathy for the Scottish National Party. It seems, given the initial howls from members of the parties in the Executive, that the SNP is damned if it lodges a motion with words such as "autonomy" and "independence" in its title and damned if it does not. I welcome the motion, which calls for an open and inclusive debate. That is a far cry from the words of Mr McConnell, who seemed to imply that we should close down debate on the existing settlement for years—perhaps even for decades.

Jim Mather is right: years after the political decision was made by the Scottish public to create this Parliament, the debate is going on outside Parliament about how to fund the institutions of Scottish governance. I am sure that members will be aware of the many recent publications on the subject. It would be absurd if Parliament, which should be the foremost institution of Scottish public life—I think that it is confidently growing into that role—was to decline to take part in the debate. The SNP motion is in some senses a self-fulfilling one: it calls for a debate and, lo, it begins.

My small criticism is about an aspect of the motion that might merely be an oversight. Although the SNP seeks an inclusive debate, it has included in the motion a specific policy goal that not all parties can sign up to. Greens believe that, as Edward Abbey wrote, maximising economic

"Growth for the sake of growth is the ideology of the cancer cell."

In the wake of the Stern warnings on climate change, we should be willing now more than ever to face up to the reality that chasing the myth of everlasting economic growth on a planet of finite resources will do for us in the end.

However, the commitment in the motion to maximising growth is merely one aspect of the debate that is being called for, so on this occasion I will overlook it to support the substance of the motion, which is the proposal that we should all—unionist or nationalist; pro-independence or pro-devolution—be willing to engage in the debate rather than defer it, as Mr McConnell has suggested, perhaps for many years.

As for Mr Baker's amendment to the effect

"that we should continue to use the powers of the Scottish Parliament"

to benefit the people of Scotland, as long as we are limited to those powers, who could disagree? We should indeed use them to improve the lives of people in Scotland. I could even support Mr Baker's appeal for those of us who support independence to give an honest explanation—although I might be bolder and call it a vision—of what an independent Scotland would mean. I could support that appeal if I did not think that we were already doing that.

Greens have certainly been clear that our support for independence is not motivated by flag or by patriotic fervour, nor is it based on the events of hundreds of years ago or the politics of identity. It is grounded on the belief that a country the size of Scotland is, if it is independent, more capable of rising to the one overriding challenge that faces all Governments in the 21st century, which is to find prosperity and quality of life after carbon, after cheap energy and without continuing to fritter away the world's ecological capital. Sadly, Mr Baker is still proposing a narrower vision of a Government that must exist by the permission of another and live by handout.

Richard Baker (Labour, North East Scotland)

Will the member take an intervention?

Patrick Harvie (Green, Glasgow)

I am sorry—I do not have time.

Perhaps the most depressing aspect of Richard Baker's amendment is that he is not, even as a committed devolutionist, willing to debate openly the future of this institution.

The Conservative and Liberal amendments have much to commend them, but Mr Brownlee struck the progressive tone more successfully in his speech than did Mr Purvis in his. Mr Purvis rounded only on the SNP, despite the fact that the Labour amendment seeks to close down the debate.

The choice is before us on independence as well as on fiscal powers. Greens will make the case in the coming months, as will other parties, but it is depressing that the Labour Party asks us to close down debate on important issues that face Scotland.

John Swinburne (SSCUP, Central Scotland)

I have always believed in the principle of fiscal autonomy, but I came to the first debate this morning with an open mind. However, after hearing the Executive's illogical statements about the Howat review of the Executive's budget, I am more convinced than ever that we must have full control of tax raising and expenditure in Scotland and be free from the cold and controlling hand of Westminster.

Many members of Parliament in England accuse us of receiving an unfair share of the country's wealth through the Barnett formula: nothing could be further from the truth. Richard Baker's assertion that fiscal autonomy would be a short cut to independence is well wide of the mark. The Scottish Senior Citizens Unity Party is in favour of Scotland's remaining within the union, but with full fiscal autonomy, which would make us far more able to institute an all-out attack on poverty in all its forms in Scotland.

The eradication of pensioner poverty would be our number 1 priority. Pensioners are utterly neglected and some 21 per cent of us live in poverty. That is not my statistic, but the Government's. In the 21st century, in the fifth most successful economy in the world, the fact that we have pensioner poverty is an abysmal disaster and it is unacceptable. It is unfortunate that not many members of the Government are in the chamber to hear me say that.

Contrary to what Gordon Jackson said, it would be possible for Scotland to enjoy fiscal autonomy while remaining in the union; indeed, fiscal autonomy would be the biggest possible setback to the campaign for all-out independence, because if we controlled our finances there would be no need for independence and the independence campaign would belong on the periphery of reality. If we remained in the union and big departments such as the war department—

Gordon Jackson (Labour, Glasgow Govan)

The war department?

John Swinburne (SSCUP, Central Scotland)

Well—whatever we want to call it. We could draw up a contract with the department: it could do what it liked on the military side of things and we could settle our share of the bill by demanding an exorbitant rent for the use of Faslane. That would balance things out.

When Westminster realises that fiscal autonomy for Scotland would be the biggest possible setback to the independence campaign, we will achieve fiscal autonomy. Until that happens, we are stuck with what we have got and we must put up with poor pensions, child poverty and all the rest of it. It would be nice to address those issues off our own bats, in our own country and without outside interference.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

In about six months we will celebrate the 300 th anniversary of the treaty of union between Scotland and England. The next elections to the Scottish Parliament will take place within days of that anniversary and it seems that the pre-election campaign is shaping up to be a contest about the future of Scotland, with calls for further devolution and more responsibilities for the Scottish Parliament on one side and calls for independence on the other.

All the evidence from the Scottish public suggests that there is a certain amount of dissatisfaction with the current devolution settlement. There is a groundswell of public opinion that Parliament does not yet have sufficient powers to enable it to do its job properly and that the current situation, in which Parliament is entirely reliant on handouts from Westminster, is unsustainable. If the Scottish Parliament is to mature, it needs greater responsibility for its finances. We have an immature budget process in which the Minister for Finance and Public Service Reform announces spending plans during the budget debate but does not identify any means of raising the money—or part of it—because he is not required to do so.

Liberal Democrats call for a significant increase in the taxation powers and responsibilities of the Scottish Parliament—the report of the Steel commission leads the way in that regard. We need greater fiscal levers if we are to influence the direction of the Scottish economy, further improve competitiveness and accountability and allocate resources more efficiently.

Jim Mather wants a debate on financial powers, but during his speech he admitted that increased financial powers would be

"a step on the road"

to independence.

Richard Baker said that we should use the powers that we have, but is the Labour Party willing to use Parliament's tax-varying power? It has steadfastly refused to do so.

Richard Baker (Labour, North East Scotland)

That approach was agreed by my party and Mike Rumbles's party; it is in the partnership agreement.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

It was put there by the Labour Party.

Like Richard Baker, Derek Brownlee said that we should use the powers that we have, but he refused to say whether the Conservative party would be willing to use Parliament's tax-varying powers. That is because the Conservatives cannot make up their minds and are completely divided on the issue. After all, it has taken seven and a half years for them to come round to accepting the existence of the Scottish Parliament.

Margo MacDonald (Independent, Lothians)

Will the member give way?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I am sorry—I do not have time.

Brian Adam was right to point out how conservative the Labour Party's position is. The Labour Party is the only party in Scotland that is stuck in the "no change" groove.

Only by giving Parliament serious and mature tax-varying powers and through willingness to use them can we ensure responsibility in Government. The Liberal Democrats believe that the Scottish people want a mature and more financially responsible Parliament. The Scottish people want their representatives—us—to spend their money wisely and to take responsibility for raising most of that money. We therefore need to reform the Scotland Act 1998 and allow Scotland's Parliament the proper financial powers to effect real change.

Our first First Minister, Donald Dewar, often said that devolution is a process, not an event. I urge members to support the Liberal Democrat amendment at decision time.

Bill Aitken (Conservative, Glasgow)

Jim Mather put what appeared to be a reasonable case reasonably, but as I listened to him I wondered what lay behind his speech. Gordon Jackson was correct when he said that people in Scotland regard the SNP as a party of independence. I do not agree with the SNP on independence, but to believe in independence is to take a perfectly honourable position, which is worthy of respect.

However, if there is not quite a conspiracy of silence on the SNP benches, there is a deliberate tactic to play down the independence issue. Alex Neil will no doubt frighten the horses in his summing-up speech, but every SNP member who has spoken has avoided the issue like the plague.

Margo MacDonald (Independent, Lothians)

Will the member give way?

Bill Aitken (Conservative, Glasgow)

I am sorry, but I have only four minutes.

I compare and contrast the dry fiscal reasonableness of Jim Mather and Fergus Ewing with the high-spending philosophy of Linda Fabiani and Christine Grahame. It is inevitable that I must agree with Richard Baker to some extent: the SNP is the party of high spend.

In anticipation that support for the independence argument might be canvassed during the debate and because I was wondering whether there might be something of which I was not aware, I did some research. I logged on to the SNP's website, where a series of questions are posed. The first question, "Why independence?" is followed by the heading, "Why Scotland needs to become independent". The answer is:

"There are currently no items in this folder."

I then wondered what the SNP says about finance. Under the heading "What Independence will mean for your finances", the website states:

"There are currently no items in this folder."

I went on to Scotland's oil and how that will impact on the economy. The website told me that

"Scotland is very well placed to be a powerhouse economy, with a wealth of natural resource and an educated workforce",

but under that, it states that

"There are currently no items in this folder."

Under the heading "How Scotland can become independent"—yes; members have got it—it states:

"There are currently no items in this folder."

Scotland will not become independent, because the people of Scotland are not going to cast away all the benefits of a union that has stood them in such good stead for hundreds of years.

Some members made interesting speeches. I have a lot of respect for Jim Mather—he knows what he is talking about when it comes to money, until he gets on to the independence kick, although he was certainly not for doing that today. However, in response to an intervention, he gave the show away when he more or less admitted that the context of the motion was a gradualist approach to independence. Frankly, that is not acceptable.

Several issues have been raised on which there are questions that must be answered. The Conservatives have never taken the view that the Scotland Act 1998 is preserved in aspic or set in tablets of stone. Of course devolution is a dynamic process and must be examined. At the end of the day, the decision may well be that no change will be made, but that does not prevent us from having the discussion and argument.

It is the small things that give members away. Jeremy Purvis's amendment talks about home rule being adjusted

"to deliver real benefits to the people of Scotland".

That is surely a tacit admission that the Executive, of which Mr Purvis's party is part, has manifestly failed. That amendment is certainly not acceptable. The only amendment that makes sense is Derek Brownlee's, which states that the argument should take place in a reasoned manner but stresses that under absolutely no circumstances should that process be seen as doing anything other than strengthening the union.

Wendy Alexander (Labour, Paisley North)

As this is an SNP debate six months before an election, the SNP should, as a minimum, have clarified what Scotland's principal Opposition party believes about the future financing of Scotland. It is somewhat bizarre that, after touting fiscal autonomy as its flagship policy for more than five years, the SNP cannot even bring itself to mention it in the motion or to tell us how it will work. To be fair to the SNP, by definition, every single independent country raises and spends its own taxes—they all have fiscal autonomy. However, as others have said, no devolved or federal nation has adopted fiscal autonomy to finance its constituent parts. Why? It is because the very reason for being part of a larger state is to share risk, resources and revenues. When I asked Jim Mather for examples of fiscal autonomy, he cited Navarre, the Basque Country, Montenegro and the Channel Islands. Those are hardly the fastest-growing parts of their respective states, but let us leave that aside. All those jurisdictions have fiscal decentralisation and share risk, resources and revenues with the centre; none has fiscal autonomy.

Jim Mather (Scottish National Party, Highlands and Islands)

There is an article by somebody who is very close to home in today's edition of The Scotsman calling for efficient government. Most people realise that efficient government can be achieved only when there is a closely linked virtuous circle between wise spending and Government revenues. How will we get efficient government in Scotland in the fiscal vacuum that Wendy Alexander wishes to create for it?

Wendy Alexander (Labour, Paisley North)

We get efficiency by good government and good politics.

Let me return to fiscal autonomy. As Brian Adam made clear, fiscal autonomy is a financing system for independence. As David McLetchie pointed out, that is why we cannot find a single paragraph on the SNP's website about how its flagship policy will work. The debate has been important in that the only conclusion that one can draw from it is that fiscal autonomy is officially dead as an SNP flagship policy. Members heard it here first: fiscal autonomy is dead and has been consigned to the cluttered graveyard of discarded dead economic policies.

Fiscal autonomy is going the way of the oil fund, which was the SNP's centrepiece in 2003, but which is no more and did not even rate a mention in the budget discussion this year. In 1999, we had the penny for Scotland, which is gone but perhaps not forgotten. In 1997, the SNP tried to balance the books by claiming that an independent Scotland would inherit none of the national debt. All those policies are discredited and dead and all of them have been ditched because of their lack of plausibility.

The SNP knows that the Scots do not want to hand over all their public services, including the entire health, education and police services, to the mercy of a financing system about which the SNP cannot even provide a motion, never mind a one-page guide. That is not serious politics. We speak today not in some seminar room; this is a Parliament with a responsibility to the people to sustain their livelihoods and preserve their services. The people of Scotland deserve better. Let us forget the deception and start providing some detail.

Alex Neil (Scottish National Party, Central Scotland)

The debate has been interesting and we have learned some things: we have learned that Bill Aitken does not know how to use the internet and that Wendy Alexander has not read the motion. The words "fiscal autonomy" do not appear in the motion—we talk about "fiscal powers". I will make it absolutely clear to Gordon Jackson, so that there is no dubiety whatever: I am a heart-and-soul nationalist; I am a cultural nationalist; I am a political nationalist; I am an economic nationalist; and I am a moral nationalist.

Bristow Muldoon (Labour, Livingston)

Will the member take an intervention?

Alex Neil (Scottish National Party, Central Scotland)

I will, in a minute.

I want my country to be able to say that we are not participating in an illegal war in Iraq or anywhere else. I want my country to be able to say that we are not having Trident or son of Trident. I do not want to say to the people of England, as the First Minister did, "The reason we want to stey in the union wi you is so that we can dump our nuclear waste on English soil." I will let in Bristow Muldoon, but before I do, I congratulate him on his new appointment as an attack dog. Let us find out—is he is a Rottweiler or is he a poodle?

Bristow Muldoon (Labour, Livingston)

I thank Mr Neil for his good grace in giving way. He declared himself to be an economic nationalist. Given that the SNP stands on a policy of separatism, will Mr Neil set out what currency an independent Scotland would have if the SNP lost a referendum on the euro and which way he would vote in such a referendum?

Alex Neil (Scottish National Party, Central Scotland)

All I can say is that Bristow Muldoon is the only poodle whose hair disnae curl. The answer to the question is easy-peasy. Our position is very clear: when Scotland becomes independent, and during that process, we will retain the pound sterling. If, after independence, the Scottish people want Scotland to go into the euro, that will be a matter for the Scottish people. Why cannot the Labour Party trust the people? It is their decision.

What is interesting about the question and, indeed, what is interesting about all the speeches that we have heard from the unionist parties this morning, is that they have all forgotten about the much bigger union of which we are a member. We are no longer just a member of the union with Britain; we are also supposed to be part of the European Union. How is it logical and sensible for Ireland to be a nation state member, and for Austria, Portugal, Luxembourg, Sweden and all the other successful small countries to be members of the EU but not for Scotland to be a member? There is no answer to that question.

I say to the attack dogs—to the poodles, because the Rottweiler, Duncan McNeil, has left the chamber—that what matters is the European dimension. That is what makes independence not just desirable but absolutely essential. What we are dealing with this morning is the non-settled will of the Scottish people because it is clear from the poll that was published yesterday that they no longer regard devolution as their settled will.

Brian Monteith (Independent, Mid Scotland and Fife)

Is not it illogical to want independence from Westminster but not independence from Brussels, where some 70 to 80 per cent of the laws of our land are framed and passed?

Alex Neil (Scottish National Party, Central Scotland)

It is precisely because of the transfer of power from London to Brussels that we should relocate our external representation from London to Brussels. We do not hear the Irish saying that they are going to give up their independence and let London represent them in Brussels. Wee Ireland—whose population was about half the size of Scotland's at one time—has done much more in the European Union than big Britain has ever done.

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

rose—

Alex Neil (Scottish National Party, Central Scotland)

I will let Jeremy Purvis in. His main criticism of our proposed council of economic advisers is that it would be "boring". All I can say is that Jeremy will recognise boring when he sees it. [ Laughter. ]

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

My question is about Mr Mather's virtuous circle, which I am sure Mr Neil supports. Is the virtuous circle to transfer control from London to Brussels? I thought that the SNP wanted control here, in Edinburgh.

Alex Neil (Scottish National Party, Central Scotland)

That was a devastating intervention—absolutely devastating. The reality is that, over the past 40 years, power has shifted from London to Brussels. There is no reserved power in Westminster that could not be better exercised from Holyrood.

I agree with the first point that Richard Baker made in his speech. The main issues are jobs, housing and the standard of living. That is why we need independence. The economic consequences of the union have been disastrous for too many of our people. Let us compare child poverty in Scotland, where a quarter of our children are living in poverty despite all the resources that we have, with Denmark—a country that has practically no resources—where the figure is less than 2 per cent. Let us consider also the level of pensioner poverty in countries such as Finland, Norway and Austria. It is minuscule. Compare that to the fact that a fifth of our pensioners live on or near the poverty line.

We have had 10 years of a Labour Government—it calls itself a Labour Government—yet, according to all the recent reports, the distribution of income and wealth in this country is getting more unfair and the level of poverty is rising all the time.

Wendy Alexander (Labour, Paisley North)

Will the member give way?

Alex Neil (Scottish National Party, Central Scotland)

I will let Wendy Alexander in. Let me tell members about Wendy Alexander, in case they did not see her on "Newsnight" the other night. At 11 o'clock, she came on saying that, if we have independence, there will be 10 years of disruption and chaos.

George Reid (None, Ochil)

Very briefly, Mr Neil.

Alex Neil (Scottish National Party, Central Scotland)

At 5 past 11, it was up to 20 years. By quarter past 11, it was up to 60 years.

George Reid (None, Ochil)

You have 30 seconds, Mr Neil.

Alex Neil (Scottish National Party, Central Scotland)

All I can say is that I am glad that BBC2 does not have adverts. By the end of the adverts, it would have been up to 100 years. [ Laughter. ]

George Reid (None, Ochil)

We close there.

Wendy Alexander (Labour, Paisley North)

On a point of order, Presiding Officer. The member accepted my intervention but then did not let me make my point.

George Reid (None, Ochil)

I am sorry, but I did not hear that. We will return to that once we have consulted.

Question Time — Scottish Executive — General Questions

Frances Curran (SSP, West of Scotland)

To ask the Scottish Executive what impact the recent votes against stock transfer in Stirling and Renfrewshire will have on the Scottish Executive's stock transfer policy. (S2O-10930)

Malcolm Chisholm (Labour, Edinburgh North and Leith)

The Stirling and Renfrewshire ballot results were very disappointing. The packages that were put before tenants would have delivered significant new housing investment and rent stability. Despite those setbacks, transfer will remain a key means for some councils to improve housing in their areas. Tenants in the Highland Council area are currently voting on a transfer proposal and tenants in Inverclyde will have an opportunity to vote shortly.

Tenants in four areas—Glasgow, the Borders, Dumfries and Galloway and the Western Isles—have already transferred to community ownership, and substantial new investment is now being delivered on the ground, as Audit Scotland has made clear. The transfer in Argyll and Bute is due to be completed shortly.

Frances Curran (SSP, West of Scotland)

I wonder how many more ballot defeats the Executive needs before it gets the message that the privatisation of council housing is unacceptable to tenants. Will the minister demand that Gordon Brown release the almost £500 million that is currently sitting in a Westminster bank account, which should be spent on housing investment but which Gordon Brown will not give to tenants because he does not like the way in which they voted?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

It is shameful that Frances Curran is, once again, calling the process privatisation. There are many housing associations throughout Scotland in which tenants have a central role. The ballot that is taking place in the Highland Council area is a good case in point, as it is not just about transferring stock to a housing association. There will be six local committees, each of which will have a tenant majority.

Over and above that, as Frances Curran knows, housing associations are non-profit-making organisations. One of the major obstacles that we have faced in the ballots is the fact that Frances Curran and other people are going round telling people that the process is privatisation. Let me make it clear to tenants in Highland and in Inverclyde that it is not; it is community ownership, new opportunities for tenant involvement and new opportunities for greater investment and stable rents in the years to come.

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

Is it not the case that everybody but the minister knows that the Government's flagship policy of wholesale stock transfer is dead in the water? The minister, once again, blames misinformation campaigns. Does he not accept that the debacle of the Glasgow housing stock transfer and the Government's failure to deliver second-stage transfer to Glasgow tenants has led to other tenants who are faced with a ballot not trusting the minister and the Government to deliver on their promises? Even Margaret Curran recognises that. Will the minister take the opportunity today to give a timescale for the second-stage stock transfer in Glasgow?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Tricia Marwick knows fine well that second-stage transfer is not an issue in the ballot in Highland and that it will not be an issue in the ballot in Inverclyde. Indeed, it was not an issue in any other ballot in Scotland. It is, again, misleading tenants to suggest that the challenges and difficulties of second-stage transfer are in any way relevant to the choices that they face.

The investment that is taking place in Glasgow is more than double the investment that was made each year before the stock transfer. That investment is being made in Glasgow notwithstanding the difficulties with second-stage transfer and we are determined that progress will be made. The joint team report will be published within the next month and will map a way forward on the issue.

Dave Petrie (Conservative, Highlands and Islands)

What advice would the minister offer such councils regarding the servicing of their debt and the carrying out of essential repairs within reasonable rent limits?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Councils have a choice. No one is forcing councils to go down the route of community ownership. If they are able to meet their investment levels while keeping rents at a stable level, they can choose to do that. However, the fact is that community ownership is by far the best option for many councils, as it allows the debt to be written off. In the case of Highland Council, for example, the 41p in the pound that is currently being spent on the repayment of debt could be freed up to promote more investment and keep rents stable. Councils have a choice. We are not against councils investing directly in their stock if they choose to do that, but it is important that we have the option of community ownership for councils that can benefit from it.

Margo MacDonald (Independent, Lothians)

I wonder whether the minister would care to retract his statement that the debacle in Glasgow has had no effect on the other referenda on the matter. It was a pertinent factor in people in Edinburgh rejecting the new style of ownership. Will the minister explain why, when there is so much proof that people's instincts and experience caution them against moving outwith council control, the Executive insists on pursuing that approach? It is a matter for the people as much as the politicians.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Tenants have a choice and a vote and nobody is trying to take those away. If Margo MacDonald had listened carefully to what I said to Tricia Marwick, she would know that I said that it is misleading tenants to suggest that second-stage transfer is in any way relevant to the choice that they face. I was not saying that perceptions about that do not influence some tenants—I know that research has been done on the matter in Edinburgh. That is clear in Edinburgh, but the fact is that the second-stage transfer process is unique to Glasgow.

The extra investment has gone in, both in Glasgow and in the other local authority areas where there have been transfers. If tenants in Highland and Inverclyde vote yes, they will have massively increased investment and stable rents in the years to come.

Wendy Alexander (Labour, Paisley North)

To ask the Scottish Executive whether the Minister for Health and Community Care will consider a visit to Renfrew, given the Executive's recent announcement of further resources for NHS Greater Glasgow and Clyde to support the building of new health centres in Renfrew and Barrhead. (S2O-10894)