Scottish Parliament, 31 May 2007

306 contributions from 72 members. The official report.

Official Report 31 May 2007

Rural Development Programme

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business today is a debate on the rural development programme.

Richard Lochhead (Scottish National Party, Moray)

I very much welcome the opportunity to open this debate—my first as cabinet secretary—on the new Scotland rural development programme for 2007 to 2013.

I have no doubt that developing and implementing the Scotland rural development programme will be challenging, but it will open up new and exciting opportunities for Scotland's rural communities. We have a chance to make a difference not only for the people who live and work in rural Scotland but for those who enjoy Scotland's spectacular natural beauty and cultural heritage. The Government hopes to build consensus around the programme and we aim to deliver on our manifesto commitments for rural Scotland on the back of sufficient parliamentary agreement.

As members will be aware, the debate will allow me to make announcements about the programme. I know that members and those with a key interest in rural affairs have been eagerly awaiting this information, but I will first reflect for a moment on how we got to this point.

The starting point for our deliberations over the past two weeks has been a draft programme that was produced by officials in consultation with rural stakeholders in the two years before we came to power. The cost of the draft programme has been determined by officials with stakeholder engagement. I have thought carefully about how it could be amended within the tight timescale that is available and my conclusion is that spending less than two weeks unravelling a programme that was developed over two years would be unwise and counterproductive. Although there may be a case for amendments, many of the measures in the programme are broadly supported in the chamber and throughout Scotland.

Clearly, the new Government would have preferred to have had more time to consider this broad-ranging and complex programme.

Therefore, over the coming months, I propose to do that in consultation with stakeholders and members in order to develop further our ambitions for rural Scotland.

As members will be aware, the progress of the Scotland programme was stalled for some considerable time by delays in the passage through the European Parliament of the voluntary modulation regulation. A key issue for Scotland in the negotiation of that regulation was to ensure the flexibility to have regional rates of voluntary modulation. My predecessor, Ross Finnie, worked hard to achieve that flexibility. In doing so, he had cross-party support and the widespread support of our rural communities. It is only right that Scotland has the flexibility to make its own decisions on voluntary modulation rates.

Returning to the present, I believe that the new programme will offer wide-ranging opportunities to shape a rural Scotland that delivers business competitiveness as well as environmental and other public benefits. Support will be available for land managers, businesses and communities throughout rural Scotland. We believe that that support will deliver a vibrant rural economy and thriving rural communities over the next seven years.

The term "land management contracts" will be familiar to many members. However, in order to reflect better our wider goals for the next programme, we propose that the central delivery vehicle should be rural development contracts. That will mean that the programme will do what it says on the tin—it will deliver rural development in Scotland.

The new Government has had little flexibility over the programme, given the deadline for its submission to Europe. However, the one area in which we have flexibility is funding. My officials have costed the draft programme at approximately £1.6 billion over the next seven years. Of that total, just over £1.1 billion will come from the Scottish Government and £227 million will come from the European agricultural fund for rural development, which includes compulsory modulation. Some £47 million of residual moneys from the previous programme will also be used to part-fund existing commitments. The balance of £211 million will come from voluntary modulation receipts.

How we spend those resources is not purely a Scottish decision. The European rural development regulation dictates that spending under the programme must be spread over three broad themes or axes. I will outline those axes and their minimum spends. Axis 1 is about improving the competitiveness of the agricultural and forestry sector, to which we must devote a minimum of 10 per cent of resources. Axis 2 is about improving the environment and the countryside through land management, to which we must devote a minimum of 25 per cent of rural development expenditure. Axis 3 is about improving the quality of life in rural areas and encouraging the diversification of economic activity, to which we must devote a minimum of 10 per cent of expenditure. In addition, a minimum of 5 per cent of rural development expenditure must be delivered through the LEADER programme—a fourth, horizontal axis that is designed to encourage local innovation in our rural communities.

I recognise the concerns that have been expressed about the impact of voluntary modulation on farm businesses. The Government has taken into account the comments that were provided by the rural development programme stakeholder group, which ministers met last week. As we set out in our manifesto, we believe that rates of voluntary modulation must be kept as low as possible so as not to disadvantage farm businesses. We have agreed that voluntary modulation should not be a substitute for expenditure by the Government or the European Union but should be additional to those contributions where that is essential for rural Scotland. Farmers must have confidence that they can benefit from the schemes that are funded by modulation.

Balanced against that consideration, however, is the need to ensure that we encourage farmers and other land managers to restructure their businesses, to become profitable without subsidy and to play their part in delivering environmental and wider rural benefits.

Rhona Brankin (Labour, Midlothian)

The minister says that he wants to build consensus around the programme. Indeed, he is announcing the programme today in a subject debate, which is meant to be consultative. However, I have been given the figures only this morning. Can the minister confirm that there will be consultation on the figures? Will he reassure me that the use of a subject debate is not a way of steamrollering figures through the Parliament?

Richard Lochhead (Scottish National Party, Moray)

I say to the member that the programme must be submitted to the United Kingdom Government in time for it to go to Europe. I will address the timescale for that shortly. There will be maximum consultation with members in the chamber and all our rural communities over the content and direction of the programme in the years ahead.

Members may be aware that compulsory modulation already sits at 5 per cent a year. Additional voluntary modulation is currently also 5 per cent. To deliver the programme's commitments, I propose that the voluntary modulation rate for 2007 remain at 5 per cent, rising by 3 per cent next year, to 8 per cent, and reaching 9 per cent in 2010 to 2012—4 per cent above today's rate.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

You are almost doubling the rate of voluntary modulation. With compulsory modulation, that takes the rate to almost 14 per cent, yet you said in your manifesto for the recent election that it would not be used to disadvantage Scotland's farmers. Alyn Smith, the Scottish National Party MEP, has said:

"I can see absolutely no need for voluntary modulation in Scotland".

This is a double whammy for our farmers. Is it the case that you have not got the money from Mr Swinney?

Alex Fergusson (None, Galloway and Upper Nithsdale)

Before the minister answers, I remind members to address all remarks through the chair.

Richard Lochhead (Scottish National Party, Moray)

For the reasons that I am laying out, I do not believe that this will disadvantage Scotland's farmers. That is a bit rich coming from Mike Rumbles, whose party, as part of the previous Administration, proposed that modulation rates should treble.

In summary, voluntary modulation will be 5 per cent in 2007; 8 per cent in 2008; 8.5 per cent in 2009; and 9 per cent in each year from 2010 to 2012. We must notify those rates to the UK Government tomorrow, so that it can notify them to Brussels by 12 June.

John Scott (Conservative, Ayr)

Will the minister take an intervention?

Richard Lochhead (Scottish National Party, Moray)

I am sorry, but I must move on.

Following formal notification, the rural development regulation does not allow for variation in the rates. Although I am uncomfortable with that, we expect the whole issue of modulation to be examined closely during the forthcoming common agricultural policy health check, which is expected to review modulation rates. It is important to note that existing regulations allow member states to reduce voluntary modulation rates should the EU decide to impose an increase in the compulsory element in the years ahead.

We are well aware that some stakeholders have asked for significantly higher rates of voluntary modulation, but I have been able to address their concerns without recourse to higher rates. To do that, the Government proposes to invest a further £10 million each year over the life of the programme—£70 million in total. That significant extra investment in our rural communities will allow the programme to be funded without undermining confidence in agriculture or jeopardising the sector's viability. As members will be aware, many farmers have faced significant financial pressures in recent years and, following the recent reform of the common agricultural policy, any further change must be handled carefully.

Sarah Boyack (Labour, Edinburgh Central)

Will the minister take an intervention?

Richard Lochhead (Scottish National Party, Moray)

I am sorry, but I have taken two already and I want to move on.

I also announce that I have added a new measure to the programme that will deliver a significant commitment in our manifesto. The Government has included a new measure valued at £10 million to fund a new entrants scheme for farmers. The industry needs new blood and Scotland's vital farming skills are in danger of dying out if we do nothing, given that farmers in Scotland are on average in their mid-50s and about half say that they wish to retire. We recognise that a package of measures will be required in the years ahead and I plan to meet representatives of the tenant farming forum to discuss the content of the new entrants scheme. I also intend to canvass the views of members in the chamber on the way forward.

I want to spend a few moments considering the other benefits that will derive from the programme. We believe that the programme will contribute to the delivery of the Scottish Government's strategic outcomes in a number of ways.

It is essential for the delivery of all other benefits that Scotland's primary land industries of farming and forestry are viable and that we deliver on our promise of a wealthier and fairer Scotland for groups in those industries, too. For that reason, our plans include, in addition to the new entrants scheme, a £31 million budget to aid the restructuring of agricultural businesses and £18 million for the creation and development of microenterprises. In addition, where profitability is not a viable or chosen option, £18 million will be available for diversification into new activities. We want those who are engaged in primary production to gain a share of the value that is added to their products. To that end, I have allocated £70 million in the programme for the processing and marketing of agricultural and forestry products.

A healthier Scotland means high-quality food and access to green spaces for leisure and recreation. The programme will offer £3.5 million for membership of quality assurance schemes and more than £30 million for animal health and welfare. It incorporates a challenge fund of £10.5 million to develop woods in and around our towns and a further £3.5 million for the forests for people challenge fund. The programme will support the provision of leisure, recreation and sporting facilities with up to £32 million and provide a further £12 million for the provision of tourism facilities, including accommodation. Improving access to the countryside for people is an important element of delivering a healthier Scotland, so the programme will provide more than £60 million to create and maintain access to rural Scotland.

We also want a safer and stronger Scotland. To achieve that, we aim to encourage co-operation—£16 million will be allocated to that objective. We want to ensure that those who are farming in Scotland's less favoured areas are compensated for the permanent disadvantage that they are at compared with other areas of Europe. The considerable sum of £427 million will be allocated to less favoured area support.

I am confident that the LEADER initiative will build the capacity of and strengthen our rural communities. I am therefore allocating £36 million to that initiative, which will allow innovation in our communities around Scotland to be built from the bottom up. For rural Scotland to be smarter, we need to ensure continuing skills development and there are many measures in the programme to achieve that as well.

We have allocated a total of £404 million for agri-environment payments, including £45 million for organic production. That means that we have allocated £233 million for new commitments compared with £94 million in the previous programme. Some have said that Scotland's agri-environment programme is the worst funded in Europe. However, we need to compare like with like. Scotland has a great deal of extensive livestock production on poor land and 85 per cent of our agricultural land is classified as less favoured. Our payment of £427 million for less favoured area support must be taken into account.

I believe that the moneys allocated for agri-environment, along with less favoured area support and the significant other resources that are going into farm businesses and forestry to deliver improvements in our water environment, for example through support for slurry storage and treatment, to tackle climate change, through such measures as afforestation and support for renewable energy, will contribute enormously to a greener Scotland over the next seven years. All in all, there will be a contribution of more than £700 million for a greener Scotland.

I am sure that members are impressed with the benefits that will accrue from the programme. We must do our best to minimise any delay in implementing it that may emanate from Europe in the months ahead.

In this debate a number of members representing rural communities are set to make their first speeches since their election or re-election. I look forward to hearing their contributions and to working with them and others in the years ahead to improve the quality of life in rural Scotland, to safeguard our environment and to generate greater prosperity for rural Scotland and our nation. I commend the programme to Parliament.

Rhona Brankin (Labour, Midlothian)

I welcome the opportunity to debate Scotland's rural development programme. Frankly, however, I am disgusted this morning because we are having only a subject debate, with no opportunity to take a vote. The rural development programme will be the most important tool over the next seven years for making decisions and delivering a new era for rural development. The Scottish National Party has the cheek to call itself consensual yet it is bringing to the Parliament for debate a detailed document that it has given us only this morning.

Richard Lochhead (Scottish National Party, Moray)

Will the member give way?

Rhona Brankin (Labour, Midlothian)

I will absolutely not give way. I intend to get into my stride.

If we had done to the SNP and other Opposition parties as the SNP has done, they would have hung us from the rooftops—it is arrant hypocrisy.

Of course, there was an extensive period of consultation on the programme and engagement with many individuals and organisations representing rural Scotland. Indeed, a stakeholder group was involved in the consultation for over two years. Frankly, it is an insult to them for the programme to come to the chamber with no opportunity to have a vote.

As members will know, the previous Executive led the way in Britain and Europe with land management contracts. We built in animal health improvement measures, included payments to encourage access and supported accreditation membership. The approach was, rightly, a distinctively Scottish one.

Farmers, crofters and other land managers showed huge interest. We have all seen the figures for the huge increase in the number of applications. For the rural stewardship scheme alone, the number of applications increased from 485 in 2001 to 2,917 in 2005. However, we who were in government at the time were only too aware that many had been disappointed.

I will give the case study of a farmer whose application to one of the schemes was unsuccessful. He runs a farm of almost 500 hectares in the Borders. He has a small beef herd, but his main produce is winter cereals and oil-seed rape. He is already in the countryside premium scheme, for which he planted hedges and manages species-rich grassland, mown grass for birds and water margins. Through the land management contract menu scheme, he is funded to grow wild bird cover, manage ditches and carry out animal welfare measures. He is already interested in conservation and the crossover with social measures. He runs a tourism business promoting wildlife, for which he received a national award. On top of that, he has an interest in water management.

The farmer applied to the rural stewardship scheme to get funding to plant more wild bird cover and to put in hedges and managed grass margins. The application cost £2,000, but it missed the cut-off by just a point. He has a strong interest in conservation management and an extremely productive commercial farm. He will take land out of production to introduce agri-environment measures only if he is funded to do so. He is one example of the many farmers in Scotland who are keen and willing to carry out measures to benefit the environment where the funding allows it. There are thousands like him.

In the organic sector, Scottish produce can now meet 70 per cent of the demand for indigenous organic produce, which is double the percentage before the previous Executive's organic action plan existed. When we were in government, we significantly increased the amount of finance available to enable conversion to organic. A record £11.7 million was committed in 2006, which was double the amount that had been committed the previous year. However, we knew that we had to do much more. For example, demand for organic milk outstrips supply. The annual growth in the consumption of organic food across the UK rose to 30 per cent in 2005. Indeed, the Soil Association Scotland calculated that a growth rate of 20 per cent a year is realistic. Again, many more applicants apply for funding than are successful, despite the doubling of the funding.

Many farmers and land managers were unable to access the forestry support schemes. I was only too well aware of that when I was previously the minister responsible for forestry. We face big challenges in meeting the social, economic and environmental objectives of the rural development programme. We also face big challenges in meeting the expectations of farmers, land managers and crofters who want to make that step change and we must not let them down.

I will concentrate on some of the environmental objectives that are contained in the programme. Many of them relate to international or European obligations to which Scotland is signed up. They include halting the loss of biodiversity by 2010, achieving the aims of the water framework directive and the Kyoto protocol on climate change and managing our Natura sites, which have been designated for their environmental importance. If Mr Russell replies to the debate on behalf of the new Executive, I would be interested to get some answers from him on some of those important environmental objectives, given his designation as Minister for Environment.

What the incoming Government has provided today simply fails to face up to the challenge of fulfilling the objectives, which is a big one. Many thousands of farmers, crofters and land managers are desperate to play their part in environmental improvements.

Richard Lochhead (Scottish National Party, Moray)

Will Rhona Brankin explain why she thinks that the new Government is failing when the plan that we announced today was put together by her Administration?

Rhona Brankin (Labour, Midlothian)

Absolutely, I am happy to explain. The reason is the level of voluntary modulation that Richard Lochhead has announced today, which is woefully low if it is to make a difference.

The final decision on the rate of voluntary modulation had not been taken, so we needed bold, decisive action from the Government. This is a defining moment for the new cabinet secretary. It is an opportunity to make an historic shift towards achieving our environmental objectives, making a real difference to Scotland's countryside, wildlife, habitats and carbon footprint and rewarding farmers who are interested in innovation and change. That is exactly what Labour pledged to do in its manifesto. What we have heard today is an abject failure to do that. The total budget of £1,598 million is not even enough to maintain the status quo in entry to land management schemes. There is a shortfall of £173 million even to do that, but Richard Lochhead maintains that he has found an additional £70 million of funding that has helped to keep voluntary modulation down.

I will ask Richard Lochhead and his deputy questions on two areas. First, where has the extra money come from? Has it come from within the department? If so, what other environmental objectives within the department will suffer. The cabinet secretary must answer that. Secondly, how on earth will he address the environmental objectives of the SRDP that were agreed by the stakeholder group, which includes industry representatives, over two years? How will he fulfil Scotland's commitments on improving water quality, tackling climate change and halting the loss of biodiversity? Does he accept that they are real commitments and that they must be fulfilled? If the SRDP does not do it, funds will have to come from somewhere, so where will they come from?

To be frank, I am disgusted. The SRDP is a disgrace. Stakeholders worked constructively with the previous Executive over the past two years. They were led to believe that there was likely to be a staged increase of up to 15 per cent in voluntary modulation, but they have been let down badly. I quote from Richard Lochhead's press release from last week:

"I was keen to bring together all the key interests at the earliest opportunity to discuss these vitally important issues. This will be a hallmark of the new approach this Government is taking."

The hallmark of the Government's approach to the matter is a failure to take tough decisions on our environment and countryside—decisions that many crofters, farmers and land managers want it to take. The hallmark of its approach seems to be to brief tough on the environment but fail to deliver.

The Scottish rural development programme is the biggest opportunity to make a lasting difference to rural areas in Scotland and fulfil our environmental obligations, but the Government has failed at the first hurdle.

I hope that there is somebody from the Scottish Green Party in the chamber to hear this—

Sarah Boyack (Labour, Edinburgh Central)

No, there is not.

Rhona Brankin (Labour, Midlothian)

Well, to be frank, if the Scottish Green Party supports the programme, its members should hang their heads in shame.

John Scott (Conservative, Ayr)

I declare an interest as a farmer and a member of NFU Scotland.

Before I turn to rural development funding—the key element in the debate—I will state the Conservatives' priorities for rural Scotland in the next few years, as the minister has done for the SNP. In a nutshell, we want to maintain and develop rural Scotland's primary industries, including farming, fishing, forestry and tourism, as they have historically been the main drivers of our rural economy and will remain so in future. We want to encourage new entrants into farming and create a one-stop shop to bring new blood into the industry. We share that manifesto commitment with the SNP and therefore welcome the minister's announcement on that. We want to relax planning guidelines in rural areas and support farmers, particularly through co-operation, to become price makers rather than price takers. We want to strengthen the supermarket code of conduct and introduce meaningful labelling, particularly to identify home-produced Scottish food. We want more national, regional and local control over fishing and, above all, we need to reduce the burden of red tape in all those industries—if we can.

In addition, we must further develop the delivery of local food to schools—as happens in East Ayrshire and Perthshire—hospitals and prisons. That would deliver health benefits, environmental benefits—by reducing our carbon footprint—and benefits to our local food producers.

The main subject under discussion today is funding for Scotland's rural development programme, and I acknowledge the way in which Richard Lochhead has approached the future funding of the programme, even if I share Rhona Brankin's disappointment that he was unable to produce the draft programme until 8.45 this morning. Although it may be the minister's first major decision on the future of Scottish agriculture, it is probably the most important one that he will make for many years to come—that is, assuming that he keeps the job for several years.

I will take a minute to set the scene from an historical perspective. Rural development programmes were first introduced by the EU in an attempt to start to deliver multiple benefits from land-based industries other than by encouraging food production. However, those pillar 2 schemes have regrettably been underfunded in the UK, and modulation was introduced to top-slice money from direct farm support to make up the funding gap in rural development measures. In other words, money was initially taken from farmers' headage and arable aid payments to make up the shortfall in funding caused by Government parsimony, thereby immediately putting Scottish and UK farmers at a competitive disadvantage with EU farmers. First, 5 per cent compulsory modulation was introduced. Thereafter, because funding did not match Government plans and ambitions, a further option of voluntary modulation was introduced, which is set this year at 5 per cent.

Currently, we have a total of a 10 per cent reduction in support for Scottish farmers through modulation. However, the minister has decided to increase modulation, and he will have borne in mind the fact that the more he increases the level of voluntary modulation, the more he reduces the profitability of Scottish farmers. Indeed, the NFUS has calculated that every 5 per cent increase in modulation reduces net farm incomes by 20 per cent and, with net farm income averaging only £10,100 in 2005-06, there is a real danger that the most likely effect of significant increases in voluntary modulation will be to put farmers' businesses under further threat.

According to the Government's figures, 6,000 people have left full-time employment in farming in Scotland since 1999 and one dairy farmer in four has gone out of business in the past four years.

Farming is not an industry in robust financial health, but it appears that, in the face of that evidence, the Scottish Executive Environment and Rural Affairs Department argued for a 16 per cent rate of voluntary modulation, which could have been disastrous and would have reduced farm income by a further 44 per cent to just over £5,600. That would not have been sustainable.

Today's announcement, however, will bring about an increase of, effectively, 5 per cent in voluntary modulation, which will reduce net farm incomes by 20 per cent, bringing them down to just over £8,000. That is still too great an increase in voluntary modulation.

We all want to have a thriving, beautiful, dynamic, environmentally enhanced countryside; we all want to give ramblers the right to roam and wildlife enthusiasts the opportunity to observe the species of their choice; and we all want to support our growing tourism industry. The findings of the two public consultations on Scotland's rural development programme emphasise those demands and the need to consider ways of rolling out and developing the existing plans.

Richard Lochhead (Scottish National Party, Moray)

I welcome the member's constructive contribution to the debate, which is in sharp contrast to some previous contributions.

The member will, I am sure, be willing to work closely with the Government in the months and years ahead to ensure that farmers are able to apply successfully for much of the £1.6 billion programme, to ensure that they are increasing their profitability.

John Scott (Conservative, Ayr)

The Conservatives will work constructively with anybody on an issue-by-issue basis and will have regard to the merits of the arguments that are put forward by the Government at the time.

A thriving countryside can be achieved only if farmers and land managers are able to farm and make a living at the same time as delivering environmental enhancement. If it comes to a choice between putting food on the family's table or creating a water margin, we all know what the decision will be. That is the reality that farmers are contemplating.

Today, the minister has exercised his hard-won right, recognised by Europe, to set a rate of voluntary modulation, which, in conjunction with the existing SEERAD budgets, will deliver adequately funded agri-environment schemes and support for less favoured areas and meaningful business development measures.

An overall budget of £1.46 million for the period 2007 to 2012 would have provided 80 per cent more funding than the previous SRDP would have done and would have sustained our rural areas rather than damaging them, which is what I think that the minister risks doing today.

In its election manifesto, the SNP said that modulation would not be used to disadvantage Scottish farmers and that, prior to any decision, an SNP Government would first cost any proposed scheme following consultation with the sector. However, we have not seen much of that today—certainly not in the Parliament.

We were also told that voluntary modulation will be used only when projects cannot be funded from EU and Scottish Government sources. However, today, Richard Lochhead has set voluntary modulation at levels that, although they are not as high as the ones that were trailed, are still too high. In reality, from 2014, modulation levels will be 14 per cent. Further, as I understand it, Herr Fischler intends to increase compulsory modulation by another 1 per cent, which means that the level of modulation in 2010, 2011 and 2012 will be 15 per cent, which will reduce farm incomes significantly. The levels that have been announced are still too high.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The Scottish rural development programme for the next six years is hugely important to our farming community, our environment and our entire rural economy. I thank the minister for the 30 minutes' advance notice of his plans.

There is a huge expectation that the reform of the common agricultural policy will enable us to deliver multiple benefits across the rural economy, and the rural development programme is the basis on which those benefits are to be delivered.

Ross Finnie launched an extensive consultation on the strategic plan for the programme. That consultation ended in March last year, and a further consultation on the implementation of the strategy closed in June 2006. We have now seen the report on the consultation and, yesterday, we had the Government's response to it. The consultation process was good and the response to it was comprehensive—so far, so good.

However, today, the minister has announced the levels of modulation—or, in layman's terms, cuts—for the direct payments to our farmers that help to fund that programme. Those cuts take the level of modulation from 5 per cent to nearly double that—9 per cent—in three years' time. This is a hugely controversial issue. Indeed, it is so controversial that the SNP MEP Alyn Smith said:

"I can see absolutely no need for voluntary modulation in Scotland."

Many environmental organisations such as the RSPB have suggested that, rather than the Government's £1.6 billion, at least £1.77 billion is needed to fulfil the basic objectives of the programme and that, without that budget, crucial commitments to tackling the effects of climate change, improving water quality and addressing biodiversity issues will not be met.

Richard Lochhead (Scottish National Party, Moray)

I welcome the member to his new portfolio. Will he explain why he is attacking the Government for increasing voluntary modulation by 4 per cent over seven years when his party wanted to treble it?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

That is simply not true. As the minister knows very well, we held it at 5 per cent.

The minister says that he has listened to the rural community. That is true, but he has not acted on what people said to him.

The RSPB argues that anything less than £1.77 billion for the programme will starve Scotland's land management schemes of funding and put at risk Scotland's ability to achieve the important environmental objectives that the programme contains.

It is clear that the cabinet secretary's announcement has not achieved the objectives of many of our environmental organisations. It is also clear to me that he has decided nearly to double modulation levels, bringing them to what many people believe are unacceptable levels. He has ignored the advice that was given to him by many in the industry to leave the rate alone. I am disappointed that he has so obviously failed to persuade his Cabinet colleagues to come up with the necessary funding to achieve our environmental objectives and that he has now moved to obtain that money from the direct payments to our farmers.

What happened to the promise in the SNP's manifesto that an SNP Government would force deductions through voluntary modulation only when cash for the programme could not be found from other sources? Has Richard Lochhead hit the farming community because John Swinney has not given him enough cash?

I have not been impressed by the methods that the minister has chosen to use to trail his announcement. Last Saturday, that great north-east newspaper The Press and Journal reported that the minister had let his civil servants loose to start some rather useful hares running—the metaphor is a good one to use in an agriculture debate, I think. The Press and Journal said that the Scottish Executive's senior policy adviser had revealed proposals for compulsory cuts of up to 22 per cent on payments to our farmers to help fund the £1.5 billion rural development programme.

That is rather an old con trick if ever there was one. To suggest that our farming community would be hit by what would be massive cuts in their direct payments to fund environmental schemes hits well below the belt. Did the minister expect that threatening a modulation level of up to 22 per cent would cause the farming community to welcome a ministerial announcement of a modulation level of 14 per cent? If he thinks that no one would notice that tactic, he must think that everyone's head buttons up the back.

Richard Lochhead (Scottish National Party, Moray)

In the interests of accuracy, will the member recognise that the information that was in the public domain concerned the proposals in the plans of the previous Administration, of which the Liberal Democrats were a part?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

No, that is not the case at all. It is quite clear either that the minister should not have allowed his civil servants to give the impression that was conveyed to The Press and Journal or that he does not control his department. Either way, it is bad news for rural Scotland. What is worse for our farming community is that the cabinet secretary has clearly failed to obtain the necessary funds for his programme from the rest of his Cabinet colleagues. I only wish that John Swinney were in the chamber to listen to the debate.

It is the job of the Government to govern. It is the job of the Government to be confident enough in its proposals to bring them forward for debate in the chamber and to put them to a vote. In that regard, I heartily agree with the Labour members. The minister is feart to have a vote on his proposals. He could easily have decided to have a vote in order to see whether there is support in the chamber for his proposals, but the Government is afraid of putting the matter to a vote because it feels that it would lose that vote. I am disappointed that the cabinet secretary has been too afraid to put his proposals to the vote this evening and that, instead, we are having this subject debate. That is no way in which to conduct our affairs in relation to this important matter.

I trust that the minister will ensure that we have an opportunity to vote on his plans in the near future, although I am not sure how he will do that, as he has to get his proposals to the UK Government and then to Europe. We should have a vote on his plans. We could have had one this afternoon, but the minister did not want that. Perhaps that is because the consensus politics that the minister and his Cabinet colleagues talk about are reserved to occasions when the SNP believes that it can win a vote in the Parliament. That is how it seems to me. The SNP Government is frit of the issue.

The job of the Opposition is to hold the Government to account and that is what we are doing. On such an important issue, a subject debate without a vote is not enough. I repeat that it is the Government's job to put its proposals for the government of Scotland to the Parliament for a vote, but it has failed miserably to take that opportunity.

Rob Gibson (Scottish National Party, Highlands and Islands)

On behalf of back-bench members, I welcome the cabinet secretary's ability to produce a programme with the extra cash that he talked about. That £70 million will be welcomed throughout the country, because, based on the figures from the previous Government, everyone was predicting 21 per cent modulation. At least the present Government, unlike others, has the courtesy to come to the Parliament with the detail of the proposals, at very short notice. Some members have such short memories that they cannot remember that they never came to the Parliament to present such information.

Karen Gillon (Labour, Clydesdale)

Will the member take an intervention?

Rob Gibson (Scottish National Party, Highlands and Islands)

No. I want to continue to develop some arguments.

Jim McLaren of the NFUS, who was worried about the way in which farmers would be treated under the rural development programme, has said that 20 per cent modulation would remove 80 per cent of the viability of many farms. However, in Scotland there is a wide variety of farming and, at present, many farms have virtually no profitability. That is not because of the inadequacy of the rural development programme, but because of other factors, which a Scottish Government with a direct voice in Europe would be able to argue about.

I will mention a particular issue and then make some general points about the less favoured area support scheme. We have many excellent producers of high-quality produce who require ferries to carry their produce to the mainland. This afternoon, we will talk about scrapping tolls on the Forth and Tay bridges. I hope that that will happen, but there is a toll for all people who live on islands, which inhibits production in places such as Orkney that are otherwise highly profitable and produce excellent produce. If we do not deal with certain issues that are outside the responsibilities of the Cabinet Secretary for Rural Affairs and the Environment, the rural economy will not prosper.

John Scott (Conservative, Ayr)

Notwithstanding the member's comments, does he accept that the near doubling of voluntary modulation to 9 per cent will reduce the already meagre profit levels of hill farmers, including those in the member's area, by up to 20 per cent?

Rob Gibson (Scottish National Party, Highlands and Islands)

I accept that the general calculations are such that that is what we would expect with a modulation system, but the idea is to put money back in through the rural development fund for people to innovate and to come up with processes that will make their farms more environmentally friendly. John Scott said that if people have to choose between putting food in their mouth and installing a water drainage scheme, they must choose putting food in their mouth. The idea of the rural development programme is to move beyond that. We argue that, by putting extra money into the programme, it should be easier for people to put food in their mouth as well as think about some of the schemes that Mr Lochhead talked about.

Rhona Brankin (Labour, Midlothian)

Will the member take an intervention?

Rob Gibson (Scottish National Party, Highlands and Islands)

No, not at the moment.

We have inherited agri-environment schemes that are deemed by some non-governmental organisations to be among the worst-funded rural development programmes in the entire EU. We are having to climb out of a ditch to get on to the field to try to get our agriculture sector into a state where it is possible for us to make progress. That is our inheritance from the coalition Government that preceded the present Government and it is the issue that we must address today.

I should declare an interest as a member of the Scottish Crofting Foundation. As I alluded to earlier, we must consider carefully the way in which the LFASS works. A large amount of money is associated with the scheme, which will be reviewed in the period up to 2010. It is essential that the least favoured areas that I mentioned, such as the islands and the remote Highlands, which have a huge potential for production, for generating environmental benefit and for nature-friendly farming, are considered in and benefit from the review. I hope that the cabinet secretary, when he consults the farming and crofting communities, will find ways in which he can take those areas into account. It is essential to understand that the agriculture funds that are at our disposal include convergence funds from Europe, from which the least favoured areas in the Highlands and Islands can benefit. If possible, I would like to hear that the ministers will consider how the convergence funds can help agricultural production. That is an area in which we could make a big difference to the future of crofters and farmers in our least favoured areas.

The single farm payment system, which was, I presume, created so that we can eventually move away from having any subsidy for farming by the middle of the next decade, is already biting in relation to the production of cattle and, in particular, sheep. In areas such as Sutherland, where there are a large number of excellent sheep producers, fewer and fewer sheep are being produced under the system. That is a whole group of farmers who are losing out, and we have heard about problems for other groups, such as the dairy farmers. In the arguments about the rural development programme, we must ensure that the programme works for every part of the country—the First Minister said that the Government will take into account all parts of the country—and that we introduce means to support sheep farming in those areas.

We have not had much discussion of forestry. The national forest land scheme, which the previous Administration introduced and which we supported, must deliver woodland and forest crofts. We need more people to live in the countryside. As there is a demand for land in the countryside, we must free up that land. I hope that the Government will be able to do that under the rural development programme. The LEADER programme is a bit bureaucratic, but it involves local groups deciding on the best projects. The programme can help to free up land and so create a bigger market for farmers by having more people living locally.

I thank the ministers for creating a situation in which, at last, we can have a debate in Parliament on the issues before we go to Europe, although it is unfortunate that it is taking place only a day or so before. We have a great argument to put to Europe that Scotland is a special case and I have every faith that Richard Lochhead will lead the team that puts that argument.

David Stewart (Labour, Highlands and Islands)

As a new member, it is an honour and a privilege to make my first speech in Parliament. As a highlander who has also lived in rural Dumfriesshire, it is opportune that I am speaking in a debate about rural development. Before I proceed, I pay tribute to the former member of the Scottish Parliament for the Highlands and Islands Maureen Macmillan, who, as members know, retired before the recent election. She was dedicated and hard working and I am sure that members would like to pay tribute to her work, not just in the Highlands and Islands, but in the Parliament. [ Applause. ]

I add a belated welcome to the new Cabinet Secretary for Rural Affairs and the Environment, who is clearly an individual with dynamism and energy. I wish him well in his new role. I hope that those remarks do not damage his political career.

Richard Lochhead (Scottish National Party, Moray)

Or the member's.

David Stewart (Labour, Highlands and Islands)

Indeed—or mine. Give me a chance—I am in only my second minute.

Before I turn to rural development in the Highlands and Islands, on which I will focus, I want to say something about the Organisation for Economic Co-operation and Development conference last year in Edinburgh, which I attended and at which I met the Mexican minister for rural development, who told me about his work to help the poor in rural areas in Mexico. The Government there built and shipped in hundreds of greenhouses to develop agriculture. However, the community learned that the most productive method of state intervention was not the direct provision of greenhouses, but the development of a market for greenhouses—their construction, distribution, marketing and sales—in Mexico and the whole of South America.

If that story has a moral for the cabinet secretary, it is that he must listen to rural communities and should not assume that he knows all the answers. Even if the rural community does not know the difference between voluntary modulation and the planet Zog, it will know about dualling the A9; it will know about rolling out broadband; and it will know about ensuring full university status for the UHI Millennium Institute. I should declare an interest, as my wife works for that fine institution. I am sure that the cabinet secretary will join me in campaigning for all three of those initiatives.

Throughout Europe and, indeed, the world, rural policy is evolving. The OECD has described a "new rural paradigm", in which policies and strategies are based on place rather than sector. Policies work with local communities to identify their priorities and integrate them into a regional and national strategy, and public money is invested in ways that deliver the greatest public good in those areas. In recent years, Scotland's environmental organisations have become a formidable campaigning force. I commend RSPB Scotland, Scottish Environment LINK and others for getting their voices clearly heard in the rural debate. However, the social dimension of Scotland's rural communities has perhaps been underrepresented in the debate. I hope that the minister will reach out to those hundreds or even thousands of citizens whose work and lives are so important to sustaining vibrant and successful rural communities.

In my previous post at the Scottish Council for Voluntary Organisations, I was privileged to meet hundreds of people in the voluntary sector throughout rural Scotland. The work that they do—some of it paid, some of it unpaid—is the very lifeblood of rural Scotland, delivering services locally and building the social capital that sustains real rural communities. That does not happen by chance. It is not an inevitable by-product of economic success. The work that those people do in their communities needs to be recognised, valued and, most important, given the funding to make it sustainable.

I am sure that many people would ask, "What did the Labour Party ever do for rural development?" I would take them back to the 1940s, when Tom Johnston, the Labour Secretary of State for Scotland, nationalised hydro power, giving electricity to poor highlanders for the first time. I would take them back to 1965, when Willie Ross, the Secretary of State for Scotland, created the Highlands and Islands Development Board and turned around a massive population decline in the Highlands and Islands. I would take them back to 1999, when Tony Blair created the first national minimum wage. It was my privilege to vote for that legislation. The votes continued all night and I left at 9 am, happy that the bill had finally been passed. I have to confess that, unwashed and unshaved, crossing Westminster bridge, I was happy, although not in a self-serving, party-political way; I was glad to protect the waiter in Fort William, the bar staff in Galashiels and the security guard in Inverness.

We all know the rural development challenges that we face in rural areas: distance; remoteness; peripherality; low population density; lack of access to services; and low gross domestic product. My great personal concern is the loss of young people from remote and rural areas.

However, there are great opportunities. It is better to light one candle than forever to face the darkness. Let us build on the comparative advantage of the culture and the environment. Yes, the hills and the glens are important, but this is more about the character of the people. Rural development needs the intelligence and individuality of the people, but we need to develop the life sciences; create green jobs; build clusters of renewables; stimulate research and development; and link industry with higher education. We need to aim for more headquarters in the Highlands and Islands for enterprises that have Scotland, UK and world reach, such as Tulloch Homes and Orion Engineering Services.

The acid test of the new Scottish rural development programme will be how it delivers for our most fragile and remote rural areas and for the young, the disadvantaged and the dispossessed. They deserve the spirit of leadership and vision that lead to the creation of the HIDB and the minimum wage. Our communities look to the Parliament for action. Let us give them progress, not procrastination.

Jamie McGrigor (Conservative, Highlands and Islands)

I refer to my membership of NFU Scotland, the Scottish Rural Property and Business Association and the Scottish Crofting Foundation, as well as to my farming interest in the register of members' interests. It is thanks to that interest that I have an acute knowledge of the despair that has faced the farming industry for the past few years. I hope that the new Executive will bring about an improvement. I welcome this opportunity to debate the rural development programme, the shape of which is vital to sustaining our farming sector throughout Scotland, but particularly farmers and crofters in the more remote parts of Scotland, such as my region, the Highlands and Islands, from Campbeltown to Shetland, which I am delighted and grateful to represent again.

We need to get the rural development programme funding right so that our farming communities can survive and can help to provide a basis for employment and income for rural communities. So many things depend on farming. I hope that the new Executive will realise the importance of hill farming, particularly in sustaining rural livelihoods and the open landscape that is so important to walkers and ramblers. In "The Final Farewell to the Bens", Duncan Ban MacIntyre described that landscape as "wondrous hill country", saying:

"As these are the parts of which I've taken leave, my thousand blessings aye be theirs".

As my colleagues have mentioned, the Scottish Conservatives support the vast majority of farmers and crofters in believing that the level of voluntary modulation should be no higher than 5 per cent. Furthermore, I make the point that this is not voluntary modulation; for those who pay it, it is a compulsory clawback of the single farm payment, which constitutes more than 50 per cent of many farmers' incomes. When the minister says that he hopes that farmers will benefit from agri-environment schemes, can he guarantee that his Executive, unlike the previous one, will make it possible for farmers to get into those schemes? A great many were unable to get into schemes under what I can only refer to as the last lot. A modulation level of 5 per cent, which amounts to £1,464.9 million over the period 2007 to 2012, could provide adequate funding for a meaningful Scottish rural development programme, but at 8 or 9 per cent, it will threaten the basic financial viability of many farms and crofts.

The Scottish Executive's own figures show that the average net farm income in 2005-06 was £10,100. LFA specialist sheep farms and LFA mixed cattle and sheep farms saw their incomes fall particularly sharply. Only a rise in sheep and cattle prices at markets will save the day in farming, but an 8 or 9 per cent clawback tax, which rises to 14 per cent when we take the European element as well, could mean a fall of about 60 per cent in those tiny incomes. That will be too much.

The Scottish Conservatives have long supported agri-environment schemes, as we recognise that farmers and crofters are the guardians of the countryside, but any further increases in voluntary modulation will simply increase the great financial pressure on them.

Rhona Brankin (Labour, Midlothian)

Will the member take an intervention?

Jamie McGrigor (Conservative, Highlands and Islands)

Not at the moment—I do not have time.

Will the minister address a number of specific points that have been raised with me by farming and crofting constituents who want a much better and more effective SRDP than has been the case until now? How many new entrants were there for the rural stewardship scheme this year? What assessment has the Executive made of the effectiveness of the rural stewardship scheme, and what plans does it have to reduce the bureaucracy of the scheme? Why have there been no new land management contracts this year? What happened to the money previously allocated for them, and, for that matter, the money that normally would have gone into environmental grants? Will environmentally sensitive area scheme members continue to be automatically entered into the RSS or the equivalent scheme, which they have had in the past, after 10 years?

The SNP has talked a lot about the need to get young people into farming—the Conservatives agree with that absolutely. I wonder whether the minister has any specific proposals for working with the industry to widen the training opportunities for young people in agriculture. It is vital that we not only attract young people into agriculture but ensure that they are well trained. The pool of trained young farm workers became desperately shallow under the previous Executive. How will the minister refill that pool?

I welcome some of what the minister said, and in particular the fact that the voluntary modulation rate is at least not going up to 15 per cent. I continue to think that 5 per cent is high enough, however, and I hope that the minister might review the rate and make it lower than the 8 or 9 per cent that he is suggesting.

Christine Grahame (Scottish National Party, South of Scotland)

I recognise the expertise of the many farmers in the chamber, and I will let others bandy about the detailed arithmetic. I commend the cabinet secretary for making the best of the bad ingredients that he has inherited. He has been in Government for only a few weeks, not eight years.

Mike Rumbles was bleating about consultation. This subject is indeed about consultation, not coalition—Mike seems still to be in a coalition with the Labour Party. I remind Rhona Brankin that Labour lost the election. She should accept that with at least a modicum of grace, which was not evident in the tone of her speech, unlike that of her colleague, Mr David Stewart. There—that was the consensual beginning to my speech.

"Voluntary modulation" is not an expression to trip easily off the tongue. I asked Robin Harper for a definition of it, and what he said was imaginative, but unrepeatable. It is, however, a serious issue for farmers.

I will now address what Mike Rumbles said—it is so handy that he is sitting just in front of me. Naughty Mr Rumbles only took little bits out of our manifesto when he was talking about voluntary modulation. In fact, we start by saying:

"Voluntary modulation will not be used to disadvantage Scotland's farmers."

As I understand the issue, we are moving away from giving subsidies directly to farmers and are putting the funds into a pot of other money that is accessible by farmers for rural development. We are not endeavouring to disadvantage farmers; we are shifting the emphasis.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will Christine Grahame take an intervention?

Christine Grahame (Scottish National Party, South of Scotland)

The bait has struck.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Christine Grahame shows ignorance in her understanding of the system. As Jamie McGrigor rightly pointed out, it is about direct payments to farmers, and only some farmers will be able to take advantage of the agri-environment schemes.

Christine Grahame (Scottish National Party, South of Scotland)

The member is arrogant as usual. I certainly understand the principle that is in operation. I will let others argue about the percentages, but the principle is that the money remains in the sector.

What bothers me is that today's farmers must not just be experts in their profession, but also accountants and economists. They need rigour not just for winter winds and spring storms, but for all the jargon and technospeak and for the blizzard of EU regulations. I will therefore broaden my speech into that area, whereas other members have kept to the narrow focus of voluntary modulation.

There is the mire of planning regulations, and there is the might of the supermarket sweep. Our manifesto contains programmes to deliver a shift of emphasis, with lighter effective regulation. That does not mean regulations for regulations' sake, but cutting red tape. For every regulation that comes in, another one must get thrown in the shredder. To achieve that, we in the Parliament have to work to give Scotland a stronger voice in Europe. We must not be left outside the door when fishing and farming are being discussed. We should have our ministers inside, making representations for the industries on which so many communities throughout the South of Scotland region depend, ranging from East Lothian vegetable growers, Eyemouth prawn fishermen and Borders hill farmers to Galloway dairy farmers.

Local planning regulations often work against farmers who wish to develop their farms. Many cases cross my desk in which local development is being inhibited. There are good things that we can do under planning regulations, however. For instance, if a supermarket wants to come into an area, we can include in the regulations a requirement for the supermarket to purchase locally; otherwise, they do not get to build. That is one direct intervention that could help our farmers.

I recognise the efforts that John Scott and other members have made on buying local, fresh Scottish produce. We have raised that issue in the chamber before in Executive debates and in members' business debates, and we made representations on the matter to the Scottish Parliamentary Corporate Body. Apparently, we cannot have Scottish food in the Scottish Parliament, because the contracts are drawn up in such a way that the cheapest source must be used, and the cost of food miles works out cheapest.

However, it is possible to draw up other sorts of contract that do not breach EU regulations. That is called creative contracting. It is about sustainability. That has been achieved in Orkney, which was mentioned earlier. Orkney Islands Council contracts locally because that sustains local communities. The National Assembly for Wales has the Welsh national health service buying Welsh produce. Ironically, Welsh produce is being brought up to Scottish hospitals. What have we been doing in here for eight years? We have been sitting on our hands, allowing that to happen.

Sarah Boyack (Labour, Edinburgh Central)

Will the member take an intervention on that point?

Christine Grahame (Scottish National Party, South of Scotland)

No, thank you. The Parliament could set a similar example. We should extend farmers' markets. I have visited John Scott's stall, and he produces wonderful lamb—there is a plug for him. Farmers markets are an excellent initiative, but they do not go far enough.

I have already talked about the possibility of granting planning permission to the big boys—the supermarkets—only on a certain basis. Labelling is also extremely important. People think that, if they buy a chicken with "Produced in Scotland" on the packaging, it is a Scottish chicken, whereas it is not in fact a Scottish chicken. It could be a Pakistani or Indian chicken that has been processed in Scotland. That is what is wrong. We need labelling that is clear to people so that, when they buy something labelled as Scottish produce, they know that it was on the hoof in Scotland. I am glad that I am making members smile.

I listened to Jamie McGrigor's romantic description of the landscape. How true it was.

Brian Adam (Scottish National Party, Aberdeen North)

Does the member agree that the minister ought to consider the example of a scheme that currently runs in Ireland, whereby one of the big supermarket chains displays shamrocks against all the items that are sourced in Ireland? Could we not do the same here, with saltires?

Christine Grahame (Scottish National Party, South of Scotland)

Yes. I also commend the SNP's campaign of about 20 years ago to buy Scottish produce. We led the way in that.

As I was saying, Jamie McGrigor was correct to suggest that it is farmers who create our landscape, whether it is the bleak, dramatic mountains, the green sweep of the Borders hills or the black and white dappling of the herds in the Galloway fields. Farmers make those areas brilliant tourist destinations, and we should assist them.

On a final, consensual note, I think that Rhona Brankin and I must know the same Borders farmer. He got a grant to do up his two old cottages through European funding, and he used local joiners, who provided a high-quality finish. The cottages are now open 365 days a year for bird-watching, and that brings money into the community and the farm. Let us have more such examples. There—I thought that I would be consensual at the end.

Rhoda Grant (Labour, Highlands and Islands)

I congratulate Richard Lochhead and welcome him to his new post.

I will concentrate on how we support communities in remote and rural areas. Crofting and small-scale farming are essential in underpinning many rural communities in the Highlands and Islands. I cannot speak about crofting without first paying tribute to the work that was done by Maureen Macmillan and Alasdair Morrison. They both worked hard for their crofting constituents. They ensured that their views were heard in the Parliament and acted on under the Crofting Reform etc Act 2007. They were both committed to land reform and were instrumental in pushing forward that progressive agenda.

The reason why those two members were passionate about crofting is that it has helped to sustain communities in the Highlands and Islands. Before discussing how we can continue to support crofting and farming at the edge, I will highlight the benefits of doing so. Crofting assures a supply of affordable housing for the crofters. In remote and rural areas, providing affordable housing is a challenge. In more urban areas, the system of planning consents can ensure that developers provide 25 per cent of developments as affordable housing. That is not an option in rural areas.

The crofters building grants and loans scheme gives crofters access to affordable homes. It is instrumental in getting people to stay in their communities. We need to consider new and imaginative ways to continue to tackle the lack of affordable housing, but we cannot ignore the contribution that crofting makes in rural areas. We must also consider new planning guidelines to make it easier for farming families to build homes on their farmland. That enables farmers' children to take over farms so that their parents can retire, but remain in the family home.

By keeping people in farming communities, we sustain local services. Children attend the local schools and provide the critical mass necessary to keep those schools open. The same applies to other public services, so general practices, libraries and bin collections will all be available as close as possible to communities. By keeping people in those communities, we support local shops and businesses, and that leads to more sustainable employment.

We all gain from vibrant rural communities. We assume that rural areas are natural wildernesses, but that is not the case, because such areas have been managed by farmers and crofters for generations. The roads and services that are provided for those communities ensure that the area is open for those of us who dwell in towns and cities to visit and appreciate. As I travel around the Highlands and Islands, I am frequently awestruck by the beauty of the area; it is a huge privilege to represent the most beautiful area in the country. That scenery attracts tourism, which also sustains the communities.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

On the issue of the heart of our communities, the member was correct to mention schools. Does she also agree that the Assynt centre and Caladh Sona in Sutherland, which are centres for the elderly, should be kept open and that we should encourage Highland Council to ensure that that happens?

Rhoda Grant (Labour, Highlands and Islands)

Indeed we should. I am sure that Jamie Stone is aware that the Labour Party took a stand and was the only party that was united in fighting the closures that Highland Council proposed.

The areas that I represent are the lungs of our country and are important to the global climate. Farming and forestry in particular have a role to play.

We need to consider how we use agricultural subsidies. I have always found it obscene that owners of large farms with good land and access to markets receive the same support as farmers and crofters working in difficult conditions who are remote from markets. The less favoured area support scheme has proportionately benefited larger producers. Although I welcome the fact that that has been rectified to an extent, we have a long way to go. I am hugely disappointed that, although Richard Lochhead said that 85 per cent of Scotland is classified as a less favoured area, he did not say how he will use the funding available to look after small communities in remote and rural areas.

Large farming businesses should receive the same business support as businesses in other industries unless they are providing community good. Those producing at the edge should receive recognition for the social and environmental benefits that they provide.

The rural development plan needs to use modulation to address the following points. It needs to provide an incentive to promote environmental benefits. We need a new environmentally sensitive area scheme. That scheme was hugely popular, especially in Shetland, and led to better practice and headage reduction.

We need to fund expertise to help small producers find local markets. A good example of that is the good for Ewe project in Wester Loch Ewe. Such projects, which bring together small producers, have environmental, health and economic benefits.

We need to consider how services are delivered in these communities. I mentioned housing, but we have to identify ways to ensure that all services are provided.

We need to consider ways to encourage the production of biomass and biofuels, which offer huge untapped benefits in areas where farming is less productive. For example, it is easier to get a hazel harvest from less productive land. We need to explore all the possibilities.

We must encourage diversification in farming, but in doing so must acknowledge the contribution made by crofting and farming in remote and rural communities to our wider environment. We must ensure that the support that we provide brings wider benefits and that it ensures the survival of our remote and rural communities.

Aileen Campbell (Scottish National Party, South of Scotland)

I congratulate the cabinet secretary on engaging promptly with stakeholders who are concerned about the future and current state of our rural communities. I hope that that listening approach of taking on board concerns and opinions will continue to be the hallmark of the way in which the Executive proceeds. I particularly welcome the comments on the new entrants scheme and the commitment to bringing new blood into the industry.

The reason that I have chosen to make my maiden speech in this debate is that rural issues and agriculture are close to my heart. I am the daughter of a tenant farmer and represent the largely rural south of Scotland. I will take great notice of today's words and future action.

Farming is not an easy occupation. Indeed, to call it simply an occupation does a disservice to that valuable way of life, which is being eroded by mounting bureaucracy, paperwork, red tape and legislation.

Members who represent rural constituencies and regions will no doubt be aware of the NFU manifesto, which noted that 2,281 pieces of European Community legislation covering agriculture were in force, with a further 568 pieces of legislation on the environment. On top of us are rules covering food hygiene, employment law and animal safety.

In addition to those rules, quangos hold a Big Brother-like control over the industry. Agencies such as the Scottish Environment Protection Agency have grown in authority, placing another noose around agriculture's neck. I hope that the minister's actions echo the words of John Swinney and that he looks to rein in the power of such bodies as part of the useful process of slimming down Government.

We must remember that farmers are primarily food producers. We are a country blessed with the finest food and products and possess a worldwide reputation for quality. It is unbelievable that we do not use that in our best interests, as Christine Grahame was right to note. Our schools and hospitals are providing food that is purchased cheaply to save costs, but the reality is that those decisions cost us dearly.

We need to be more aware of the impact that our decision to buy strawberries in winter has on the environment. I am not suggesting that we completely remove consumer choice, but we need to raise awareness of what we produce in Scotland and how foods are produced. As part of a joined-up approach to addressing the health and well-being of our nation, we have to raise awareness of how locally produced foods can help our nation become healthier.

We need look only to our neighbours in Finland, who reversed their appalling health trends by using the rich source of nutritious berries growing right on their doorstep. That example of how a small country can affect positively the health of the nation using local produce should not escape the attention of our new Executive. We are in real need of action on this, because there have only ever been warm words.

I went to a rural primary school surrounded by fields of potatoes, but we were served potato waffles and frozen chips. The situation has changed little. I trust that in 2007 we will finally take action to reverse years of neglecting our local producers in favour of the cheapest option. That is why I urge the Executive to examine the possibility of using what is on our doorstep and helping our farmers by using their produce to feed the mouths of the next generation of consumers.

It is up to us as parliamentarians to set an example and promote, where possible, producers in our constituencies and regions. I plug the Clyde valley, the garden of Scotland, which produces the finest tomatoes. In that case—and, I am sure, in many others—the label "Grown in Scotland" truly is the mark of quality.

I am sure that the Executive will be interested in a conversation that I had with a Clydesdale farmer I met at the Lesmahagow show. He is involved with the Royal Highland Education Trust and he is keen to see the expansion of many of its initiatives, such as farmers visiting schools and school pupils visiting farms. I agree that if such initiatives were expanded they could be a useful tool in educating youngsters about where their food comes from.

Furthermore, I hope that the Executive shares my thoughts about placing Scotland on the international stage. Scotland's food has an excellent reputation and its quality shines through. In my opinion, the marketing of it has let the industry down. We should follow the Irish example, as Brian Adam suggested. Ireland markets its produce well and participates in international conferences and exhibitions much more prominently than Scotland does. I am confident that the new cabinet secretary and minister will be more than capable of releasing that untapped potential.

There is more to rural development than farming and food. I hope that the announcements made today and the future course that the new rural team takes will kick-start a rural renaissance that values local over global and acknowledges that co-operation in all areas, strands and avenues is the way to take our rural communities forward.

One example of co-operation in progress is the Biggar eco forum, which is making an ambitious attempt to make Biggar the first carbon-neutral community in Scotland. I visited the forum in May and was impressed by its emphasis on raising environmental issues, highlighting ways to reduce CO2 output and attempting to create a viable, sustainable rural economy with the support of local businesses, schools and churches. I hope that the minister will join me in congratulating those responsible for the initiative and perhaps even pay the forum a visit.

We all understand that a multifaceted approach to the development of the rural economy is needed to ensure its viability. I have concentrated on farming, food and local issues that have been raised with me, but I could have spoken about so much more. I am pleased about the proactive way in which the new Executive is setting about tackling these issues and look forward to assessing its progress and actions in future.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I congratulate the cabinet secretary on his appointment and the previous speaker on an elegant contribution, which is perhaps a taste of what we shall hear in the future.

For the majority of the 20th century, the Highlands and the Highland way of life ailed from that most debilitating of diseases: depopulation. Decade after decade, our young were forced to leave the hills where they were raised, which was our great grief in the Highlands.

However, in my constituency, the building of the UK Government's first fast reactor at Dounreay in the 1950s was a change of epic proportions. Suddenly there was high-quality, long-term employment in one of Scotland's most remote areas. For the first time in hundreds of years, local people could stay and work in their beloved homeland. Today, for instance, if one drives the length of Strath Halladale from Forsinard to the north coast, one cannot help but notice the number of working crofts and the amount of healthy livestock. That is in contrast to the gaunt ruins of long-abandoned croft houses in other straths further from Dounreay.

It was and is Dounreay that underpins that most happy of combinations in the Highland economy—the mixture of quality, paid employment in steady jobs and sustainable agriculture that benefits both the people and the environment. Dounreay has underpinned a way of life in the north that no previous employer or industry ever did. Dounreay kept the lights on, not least at the cheery window of human habitation.

As members know, however, we face a less certain future in the north. As decommissioning at Dounreay accelerates, the jobs that once seemed safe look far less certain. If there was one big issue in the north of my constituency during the election, that was it. People are worried about their futures and their children's futures. The issue of replacement quality employment based on existing skills is crucial.

Work has been done by the socioeconomic forum, the Nuclear Decommissioning Authority has funding in place, and the previous Scottish Executive pledged financial assistance both directly and via the enterprise network. In my first speech in this session of Parliament, I urge the new Scottish Government and the Cabinet Secretary for Rural Affairs and the Environment to show the same commitment as their predecessors to the far north and its challenges and opportunities as decommissioning proceeds. Let us not mince our words in this debate. If we get this wrong, we could once again face the evil spectre of depopulation. I ask the new Scottish Government to honour the previous commitments and work with—not against—the UK Government in doing what must be done to offer my constituents hope and a future in the north.

A first test for the cabinet secretary and the new Scottish Government is this: will the new Scottish Government honour the pledge that was made by the then minister, Allan Wilson, in my members' business debate last year? He said that there would be direct involvement by civil servants in the socioeconomic forum's future deliberations and work. That is on the record in the Official Report. We know that that promise was made. We need to know that the Government will keep that promise. We in the north Highlands are watching and waiting.

I turn to another issue of rural development, which has the same underpinning of quality employment and agriculture. We need to know what the new Scottish Government is saying about the southern end of my constituency, and in particular what it is saying about the impasse that prevails at Nigg. I wrote to Jim Mather about that last week. Members who were here in the previous session of Parliament will be only too familiar with the issue. The time has come for the new Scottish Government to become directly involved in sorting out this ludicrous situation. It is as simple as that.

One man—Mr John Nightingale of Cromarty house in Cromarty—owns part of the Nigg yard, including the graving dock, which is one of the deepest, finest and best-equipped in Europe and possibly in the world. The present owners want to sell it, but all potential sales are being stymied by the sheer intransigence of Mr John Nightingale.

The dock and the yard have proved their great worth in the past. Like Dounreay, the yard has provided vital local employment since the 1970s. It, too, has underpinned a Highland way of life and, one could argue, a rural and agricultural way of life. It can offer work in the future, not least in maintenance work, the decommissioning of oil structures, and renewables fabrication. However, it is evident that the present logjam is precluding possible contracts. The soon-to-happen decommissioning of the BP Miller production platform, which was built at Nigg, is an example. Nigg would be the preferred location for the decommissioning work. For the work not to happen there for the reasons that I outlined would be a national disgrace. It is time for the Scottish Government to become directly involved, almost certainly by facilitating compulsory purchase.

Rob Gibson (Scottish National Party, Highlands and Islands)

Will the member take an intervention?

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I am in my last minute.

Trish Godman (Labour, West Renfrewshire)

Mr Stone, you can take the intervention if you like.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I think that I am within my last minute.

Trish Godman (Labour, West Renfrewshire)

I will let you take the intervention if you want.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Certainly.

Rob Gibson (Scottish National Party, Highlands and Islands)

Does the member agree that, during the past eight years, the coalition Government did nothing about the situation at Nigg? Although it is a priority, it is the case that the minister gave an answer towards the end of the previous session of Parliament by saying that he would start to take an interest. It is all very well for the member to stand up and say that the matter is a priority, but he should tell us why he did not say that before.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

It is a pity that the member was not here in the first session of Parliament and was not listening in the second session. As members know, I have raised the issue repeatedly. Was I not on my feet in the chamber years ago saying, "Why doesn't the Ministry of Defence give the yard some naval contracts?" Other members remember that—of course they do.

It is entirely unacceptable that, in the 21st century, one unco-operative landowner can hold the future employment of so many to ransom. Could he even be party to summoning back the spectre that I mentioned?

The role of Government in rural development is crucial. It should be the same, whether one lives in Perthshire, Banff and Buchan or the far north. I have repeatedly raised the issue of the Nigg yard over the years—colleagues who have been with me in previous sessions of Parliament know that only too well—and I make no apology for the fact that I shall continue to raise it.

Peter Peacock (Labour, Highlands and Islands)

I begin my contribution to the new session of Parliament by reflecting back on the 35 years for which I have lived in the Highlands and Islands. I have seen dramatic changes in the circumstances of the region during that period. Of course, the Highlands and Islands form the largest single rural area not just in Scotland but in the United Kingdom. I will look forward briefly to some of the challenges and opportunities that face the region in the future.

In those 35 years—for 25 of which, I hate to say, I have been in elected office in that part of the world—I have seen truly remarkable changes and a reshaping of the way in which rural life in the Highlands and Islands operates. It is only in the past 35 years that we have seen the Highlands and Islands emerge from 200 years of continuous decline. David Stewart, Rhona Brankin and Jamie Stone mentioned that.

In 1965, an enlightened Labour Government—we have had many of those in this country—created the Highlands and Islands Development Board because at that time it was not certain that the Highlands and Islands were not in terminal decline. If we look back at the records from that time, we see that it was very much an open question whether the Highlands and Islands would exist as an economy in the future. The Labour Government took the great opportunity and created the Highlands and Islands Development Board.

As Jamie Stone said, the 200 years of decline saw huge out-migration of people from the region. Economic prospects contracted year on year rather than expanding. The area was characterised by poverty wages, appalling housing conditions, and a debilitating land ownership system that kept people down. Many people lost their confidence and their entrepreneurial spirit as a consequence. Crofting was seen as a basic subsistence existence in poverty. There were chronically poor internal and external communications both within the region and between the region and other parts of Scotland, the UK, and indeed the wider Europe. There was little local appreciation of the value of the magnificent natural environment that the Highlands and Islands possess.

The landscape was exploited by Victorian owners at one point, but that continued into modern times for the purposes of shooting. Huge tracts of land were turned over to monoculture as new forests grew on otherwise unused land. Perhaps most debilitating of all, there was virtually no respect in the Highlands and Islands for the indigenous culture and language of the region. Indeed, Gaelic was seen to hold people back in that part of the world rather than to help them to get on. Not so long ago, if a child spoke Gaelic in their primary or secondary school, they were belted for having done so.

Only 40 years ago, the Highlands and Islands were still seen as a place to get out of in order to get on, and yet just 40 years later the region has become the place to be in Scotland, in the UK and perhaps in the rest of Europe. The population is growing significantly not just in Inverness, which is booming, but in many other communities. The population of Skye is growing for the fourth decade in a row. There is virtually full employment in the Highlands and Islands, which was unheard of in the past. There is a rapidly expanding economy.

Jamie McGrigor (Conservative, Highlands and Islands)

I understand the picture that the member is trying to paint. I agree with it to a certain extent in the area surrounding Inverness, but does he agree that in other parts of the Highlands and Islands—the more far-flung areas—the picture is not the same?

Peter Peacock (Labour, Highlands and Islands)

We should not underestimate the population growth in many communities throughout the Highlands and Islands, but when I discuss the challenges that remain, I will deal with Jamie McGrigor's point.

The Highlands and Islands are experiencing a housing boom such as we have never seen before. Housing conditions are dramatically improved on those in the past. Far from being seen as a basic and poor subsistence form of existence, crofting is now seen as the potential cornerstone of achieving greater biodiversity and a sustainable agriculture in the future. We have new bridges and causeways, new ferry services and new air routes, which are opening up the region and improving internal and external communications.

We have a natural environment that the local population and the rest of Scotland's population value highly and which is a prime driver for economic activity.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Will the member take an intervention?

Peter Peacock (Labour, Highlands and Islands)

I will happily take Jamie Stone's intervention if the Presiding Officer will indulge me at the end of my time.

Jamie Stone (Liberal Democrat, Caithness, Sutherland and Easter Ross)

The member mentioned crofting. Does he agree that the minister will have to tackle the raw market forces that prevail in the sale of crofts, which are pricing out ordinary local people?

Peter Peacock (Labour, Highlands and Islands)

There are challenges. The previous Administration established a committee of inquiry to look into aspects of crofting, including that dimension.

As I said, the natural environment in the Highlands and Islands is hugely valued and is a prime driver of economic activity. We have new colleges throughout the Highlands and Islands that are part of the UHI network, which allows young people to stay in our region like never before. Community after community now owns and is taking control of its land, which results in new economic opportunities. I could go on—the transformation is huge.

Young people are now taught through the medium of their indigenous language, Gaelic, not belted for speaking it. A new pride is being expressed in culture—in music, dance and literature. The cultural sector is vibrant. The year 2007 is the Scottish year of Highland culture. In 40 years, the Highlands and Islands have turned from a basket-case into a showcase of what can be done in rural development. The HIDB and all its efforts have sat at the heart of that over the years. Investment has been sustained.

That story of transformation is by no means over. Many challenges of the sort that Jamie McGrigor mentioned have still to be overcome. Challenges remain in housing and with low wages. In all the ways in which we progress, the environment and environmental management will be the key to the success of the Highlands and Islands. In that context, the new rural development programme has a huge role to play in continuing the momentum.

In the background, CAP reform is driving some change but, as we all know, CAP reform moves at a glacial pace. It needs to move faster. The cabinet secretary had an opportunity to accelerate the pace of that change, to increase the available funding significantly and to give new impetus to diversification in the rural economy. That would continue the transformation and the transition from subsidised production to such matters as greater biodiversity; more environmentally sustainable agriculture; supporting high nature value farming, crofting and forestry; increasing countryside access, interpretation, leisure and tourism opportunities; and managing Natura sites more effectively.

Many opportunities that are arising could have been taken to bring about more economic cohesion in the Highlands and Islands and between that region and the rest of the UK but, far from having achieved greater acceleration, the cabinet secretary has betrayed many of our rural development and environmental needs. From what Mike Rumbles and John Scott said, we know that farmers will feel cheated by today's announcement. The cabinet secretary has managed to fall between two stools: he has not achieved the absolute necessity of meeting new environmental and rural development objectives and he has not supported farmers sufficiently.

The absent Greens have aided and abetted in that betrayal. Where are they? They could not even bother to turn up to one of the most important debates of the four-year session of Parliament about the future of environmental support and the countryside.

Trish Godman (Labour, West Renfrewshire)

You should finish now, Mr Peacock.

Peter Peacock (Labour, Highlands and Islands)

The SNP has duped the Greens, who have been taken in and spat out at a moment's convenience for the SNP.

Richard Lochhead does not have a good track record on environmental issues. He had a great chance today to show that—

Trish Godman (Labour, West Renfrewshire)

Mr Peacock, you really should be finished.

Peter Peacock (Labour, Highlands and Islands)

I will finish. Richard Lochhead's record of siding with producers over environmental and scientific interests has been reconfirmed today. That is a disappointing start and rural Scotland will be deeply offended by what has happened.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Having represented the region of Glasgow in a former life, I have never before spoken in a debate with a rural dimension. It therefore gives me great pleasure to do so today.

The recently liberated constituency of Cunninghame North has many small mainland rural communities, from Meigle to Gateside, and other rural communities are on the islands of Arran and the Cumbraes. It also includes small towns of varying character, such as Beith and Dalry. Perhaps they do not fit the Scottish Executive definition of what is rural, but they nevertheless face many of the same challenges as do rural communities.

I welcome the cabinet secretary's introduction of the debate and the positive speeches by many members throughout the chamber—particularly that of David Stewart, which was in marked contrast to that of his front-bench colleague Rhona Brankin and the latter part of his Highland colleague Peter Peacock's speech. Unlike Peter Peacock, I think that the cabinet secretary did exceptionally well to cover the ground that he did in the time that was available. I am convinced, as I am sure everyone else is, that he will later cover all the points that he could not cover in the allotted time today. I also welcome Aileen Campbell's highlighting of the SNP's commitment to reduce the burden of regulation and bureaucracy on rural Scotland.

Of course, many aspects have not been covered, and I will touch on them. The cabinet secretary mentioned in passing tourism, which is fundamental to rural Scotland's economic development. Scotland's beauty and splendour are unmatched. In my constituency, Arran, which is called Scotland in miniature, is a sight to behold. I am pleased that the cabinet secretary has visited Arran several times.

The Parliament must do more to enhance tourism, which can be seen as a double-edged sword. Jobs in tourism are often low paid, low skilled and seasonal, despite the amount of money that tourism generates for the Scottish economy. We need to work more on bringing more people to our beautiful country.

Affordable housing is of great importance to members of all political persuasions and I am pleased that it came to prominence in the election campaign. On Monday, I will meet the Housing Initiative for Arran Residents, which highlights the fact that Arran has the highest level of homelessness per capita in Scotland. That is because housing in Arran is exceptionally expensive, so local people who have low wages cannot compete with people from other parts of Scotland and further afield to purchase property. We must work seriously throughout the Parliament to find ways to make housing much more available to people—otherwise, as several members have said, our young people will continue to leach out of our rural communities.

Several members, including Rob Gibson, touched on transport, which is fundamental. It is difficult for profitable farms to compete when one considers the level of road, rail and ferry charges. I look forward to finding out whether the road-equivalent tariff will make a significant difference to that.

Viability is vital throughout rural Scotland, which is why the Parliament should not take its eye off post offices. I was pleased to hear John Swinney's statement about post offices, but we must do everything that we can to ensure that we do not lose the universal service obligation. A post office in my constituency at Kilmory in Arran closed earlier this year and I understand that 16 of the 23 post offices in my constituency are under long-term threat.

Several members have mentioned renewable energy. We should think about not just biomass and biofuels, but solar and geothermic energy. I am pleased that the Executive will support non-land-based renewable energy to the tune of some £10 million. That is welcome.

Clyde Muirshiel regional park is one of the most beautiful areas of my constituency. It touches on several constituencies, including that of the Deputy Presiding Officer. The last thing that I want is industrial development in an area of such beauty when other parts of Scotland and my constituency offer the opportunity for renewable energy development.

Emergency medical services are important to Scotland. The emergency medical retrieval service on the west coast has been run for three years—it was supposed to form a 12-month pilot project—and provides life-saving assistance voluntarily to people in island and rural communities. We must enhance the £1 million a year that is required to continue that service.

I welcome David Stewart's comments about the voluntary sector. In small communities, it is difficult not only to provide the diversity of the voluntary sector but to have a voluntary sector. We must look into that. The Local Government Committee looked into the matter in the first session of the Parliament, but it is time to move on.

The £18 million support for the creation and development of microenterprises is extremely welcome, as is the support for diversification out of agriculture or forestry. Obviously, people from a farming tradition want to continue to work in that tradition, but we must, if possible, allow them to have opportunities to move into other areas.

I want to touch on farm incomes, which have been discussed. In the financial years 2004-05 to 2005-06, net farm incomes fell by 27 per cent, from £13,840 to £10,110—two Conservative members have already mentioned that figure. Dairy farming incomes fell by 20 per cent, income from specialist sheep farming in LFAs fell by 53 per cent, and income from lowland cattle and sheep farming fell by 54.2 per cent in a single year. One could argue that that is an indictment of the previous Executive, but the figures also mean that the increase in voluntary modulation, which has been kept to 4 per cent, is much more welcome than it would have been if it had been much higher.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The member highlighted the real problem that farmers face and then welcomed the announcement that has been made, which means, according to the NFUS, that 20 per cent of farmers' incomes will be cut. Does the member welcome that?

Kenneth Gibson (Scottish National Party, Cunninghame North)

Mr Rumbles should have waited until I had finished. I was trying to say that I welcome the fact that the reduction has been kept to 4 per cent as opposed to the increase that he and colleagues in his party would have liked. I also welcome the £70 million of new money that the cabinet secretary has announced and the £10 million for the entrants scheme for farmers.

Labour members have presented a dichotomy. They have asked where the £70 million will come from, but also argued that an extra £173 million should be injected into the sector. Rural development is a difficult issue for the new Executive, given the figures that the previous Executive has handed to it, but it is doing a sterling job so far. Long may that work continue.

Elaine Murray (Labour, Dumfries)

I, too, congratulate Richard Lochhead and Michael Russell on their appointments to their new posts. Like other members, I thought that we would have a wide-ranging subject debate on rural development; I did not realise that the debate would be a Trojan horse for an Executive announcement on the SRDP. I intend to continue in the same vein as many colleagues and consider particular issues.

How we can maintain sustainable and vibrant rural communities is an extremely important issue for many rural industries in the south of Scotland, such as farming, forestry and tourism. Peter Peacock referred to the problems of the Highlands and Islands 40 years ago. Unfortunately, rural areas in the south of Scotland, such as Dumfries and Galloway, still have similar problems. We are still struggling with a number of challenges. We still have a declining population, an older demographic profile and difficulties with retaining indigenous young people and attracting other younger people to live and work in the region. Sometimes, we have difficulties with recruiting people with particular skills or from particular professions; we have problems with filling vacancies in teaching, social work and certain health professions. However, rather than simply complain about the Highlands and Islands getting everything, as people in the south of Scotland sometimes do, I want to learn from what has happened there and find out how we can apply lessons in the south of Scotland to build up our rural communities.

I want to concentrate on thriving rural communities, which is the fifth key outcome to be identified in the Scottish Executive rural development programme. It is not clear how thriving rural communities are to be achieved through the SRDP, but several factors can, of course, contribute.

Towns and villages are central to the success of the economy of all rural areas. The role of cities as dynamos that drive the economies of their surrounding regions has been widely recognised; indeed, their role was part of Scottish Enterprise's city regions strategy. However, we must recognise that, on a smaller scale, county towns such as Dumfries and smaller towns and villages drive their local economies and that any strategy that is aimed at promoting sustainable rural development must promote sustainable towns and villages in rural areas. That is why the regeneration of rural towns and villages is extremely important.

We need a strategy that assists and empowers communities to regenerate town and village centres. In a debate last week, I referred to Labour's manifesto proposal that the Scottish Executive establish town centre trusts that will bring together national agencies and local interests, and will have powers of compulsory purchase and be able to set up business improvement districts. I also referred to the proposal to set up a town centre turnaround fund to help to finance schemes that the trusts propose. I urge the Executive to consider those proposals because, other than extending the previous Executive's small business rates relief scheme, the current Administration seems to have no proposals to help communities to participate in the renovation of their towns and villages. Other parties have made proposals for regenerating town centres. We must have a debate about how that should be done.

I do not think that there will be any problem with achieving consensus and getting agreement from the Cabinet Secretary for Rural Affairs and the Environment on the second issue. To help young people to stay in rural communities and bring others into them, there must be access to further and higher education opportunities, not just for the young, but for older people who wish to refresh their skills or develop new skills. That is why the Crichton campus in Dumfries has been a trail-blazer. As well as celebrating the university of the west of Scotland's commitment to expanding its provision in Dumfries and welcoming the relocation of Dumfries and Galloway College to a new building on the same site, we must persevere with trying to change the University of Glasgow's decision to suspend its intake of undergraduates. The commitment to the liberal arts course must be maintained. Jim Hume has lodged a motion on the issue. We must continue to work across the parties to change the mind of the funding council and the University of Glasgow to reverse the decision that has been taken.

The Crichton is home to the centre for research into regional development, which is a collaborative three-year project that involves the University of Glasgow and the University of Paisley. It undertakes research into the four key sectors in the south of Scotland—agriculture and food, tourism and heritage, forestry, and renewable energy. Development of the Crichton, additional full-time undergraduate places and support for research are an essential part of creating thriving rural businesses and communities well beyond the town of Dumfries.

Finally, I want to address the availability of affordable private and rented housing in rural areas, which is as pressing an issue in rural communities as it is in urban areas. Around 5,000 people in Dumfries and Galloway are on the housing associations' waiting lists. They are trying to get rented accommodation not only in towns such as Dumfries, but in smaller communities. Affordable housing in our rural and urban communities is essential. The Administration wants to abolish Communities Scotland, but Communities Scotland has been instrumental in providing considerable funding—£13 million was provided to Dumfries and Galloway last year. If the Administration gets rid of Communities Scotland, how does it intend to address the important issue of affordable housing in rural communities?

Jamie Hepburn (Scottish National Party, Central Scotland)

Given that I was born and bred in Glasgow, it may seem odd that I have chosen to make my first speech in the chamber in a debate on rural development. I cannot boast that I come from the same rural background that my friend and colleague Aileen Campbell and many other members come from or that I have had the same idyllic upbringing, but I have been given the honour of representing Central Scotland. Most people think of that region as a fairly urbanised part of the world, but there are many rural communities in it. I will draw on local examples on which the new Government can focus its efforts to assist rural development.

First, however, I congratulate Richard Lochhead and Mike Russell on being appointed to their respective Government posts. I also congratulate our new Government on making rural development one of the first issues to be considered and debated in the chamber.

There is much to commend in the cabinet secretary's speech and in the policies that the SNP presented at the election. Rural communities are important to Scotland, and they will welcome this debate and the broad plans that the cabinet secretary set out in his speech. In particular, they will welcome the £1.6 billion investment that has been committed to the rural development programme and the commitments to assist the rural economy. Only yesterday we had a debate about making Scotland a wealthier and fairer place. Part of our commitment to doing that must be that our rural communities will be part of the process. The less favoured area support scheme and rural development contracts will go some way towards achieving that, as will the scheme to assist new entrants into farming.

Improving rural transport links is an important part of the process. I am sure that everyone in the chamber shares my eagerness to hear an early announcement on the upgrading of the A9, which is a vital artery for all Scotland. Dualling the A9 will bring tremendous social and economic benefits to the nation; in particular, it will give a great boost to those rural communities along the road's route in mid and Highland Scotland.

Although I would welcome improvements to the A9, we must also pay attention to local roads, which are equally important to rural Scotland. I am aware that roads are not the specific responsibility of the Cabinet Secretary for Rural Affairs and the Environment—indeed, local roads are not even the responsibility of the Executive; they are the responsibility of our local authorities. However, I wonder what steps the new Government might take to encourage our local authorities to improve our rural roads network.

For example, the A803, which stretches from Glasgow through Kilsyth to Falkirk, is a vital artery for many rural communities in Central Scotland. People who live on that route have to contend with a volume of traffic for which the road was not designed. I have heard of many accidents on that road in Queenzieburn, outside Kilsyth, which is a small village of about 300 people. That is one example of a rural road that is not fit for purpose and I look for guidance from ministers on how they envisage making improvements, not just through flagship schemes such as the A9 upgrade, which are all good and welcome, but to the likes of the A803.

I have heard many complaints about public transport in rural Central Scotland. One particular bone of contention has been the poor bus services in rural communities. For instance, Kilsyth is badly served by buses to the Monklands hospital. As do all those who campaigned against the closure of the accident and emergency department at that hospital, I look forward to next week's statement by the Cabinet Secretary for Health and Wellbeing. However, the expected and welcome decision to save Monklands A and E will serve only to highlight how vital it will be for the rural communities that are served by the hospital to be adequately linked to it. I seek the minister's guidance on how the new Government intends to encourage improvements to rural Scotland's public transport network.

Rural development is a matter of national urgency and I welcome the new SNP Government's commitment to treating it as such.

Jim Hume (Liberal Democrat, South of Scotland)

First, I have to declare an interest, as I am also a farmer and a member of the NFUS. I also congratulate Mr Lochhead and Mr Russell on their recent appointments.

This is my maiden speech, so I assume that members will be gentle with me—although probably not for too long. It is my new duty to shadow the Minister for Environment, Mike Russell, and I look forward to it with great pleasure. Mike Russell's shadow is certainly very impressive.

Christine Grahame (Scottish National Party, South of Scotland)

I do not know what that means.

Jim Hume (Liberal Democrat, South of Scotland)

I am sure that Christine Grahame will work it out.

I concur with Elaine Murray on the importance of the Crichton campus to the rural area of south Scotland, and I will work hard to persuade the University of Glasgow to continue its partnership work there. I know that that will have cross-party support.

I wonder at the absence of the Greens today; perhaps they have given up altogether.

I was a bit surprised to hear Rhona Brankin say that she is totally disgusted with the level of finance that is being put into the rural development programme, because Labour wanted more money taken away from the pillar 2 agri-environment budget in December 2005, when Mr Blair gave away £60 million from the Scottish budget and got nothing in return. Perhaps Mr Brown will reverse that decision when he bargains for the benefit of the environment in Scotland in future.

I welcome the new entrants scheme, which I hope is not a populist scheme. I want to see how it will make a difference to new entrants coming into agriculture.

I would like to think that the Government will consider assessing and regionalising funds, which my party proposed just before the election. That would ensure that there was no great movement of funds from one area to another.

I also welcome the recognition of the importance of the LFASS, given Scotland's difficult geography, topography and climate. LFASS payments are preventing upland clearances the like of which we have not seen since the Highland clearances and, as the Deputy Presiding Officer knows, the less well-documented Galloway clearances. I would like a guarantee that modulated funds will be recycled within farming to deliver the rural development plan, as promised in the SNP manifesto.

Delivery will have to be quick, as Mr Lochhead knows, but I hope that it will not be rushed. I plead with the Government not to gamble with the rural industries, which are often bundled together as if they are only one industry. Our central belt MSPs do not talk about urban industry in the singular, so we should recognise the amount of different work that is done in the countryside. The result of that work often ends up on members' plates or in their glasses of whisky in the plush members' bar—I am not looking at anyone in particular, although I hope that that whisky was distilled from Scottish malting barley and that the Scotch Whisky Association is listening.

Some members have talked about the importance of good environmental delivery for Scotland as if it is separate from traditional agriculture and rural economic activities. Ever since the last ice age crept north from our shores—I am sorry that John Farquhar Munro is not here to concur—Scotland's land has been well managed by farmers to produce food. The landscape has also been managed: no hedge or tree would exist in Scotland, and neither would the most biodiverse pasture land in Europe, without the careful management of our land. Those would not exist if people did not deliver them.

I know that not all members have experienced hands-on work in the countryside in our variable climate and terrain, or have even come into direct contact with farming activity. I have, and I know that we live in an environment not of subsistence farming but of economic farming. We live in a capitalist world and, as there are no members of the Scottish Socialist Party in the chamber, I say as a warning to all that we must have profitable farming and economic activity in the countryside to deliver the kind of countryside that we are used to having and that we want in the future. It does not happen by itself.

Kenneth Gibson (Scottish National Party, Cunninghame North)

The member talked about the profitability of the rural sector and how he wants to develop rural Scotland. Which parts of the rural development programme would he cut to reduce expenditure by the £150 million by which his party would like to reduce it?

Jim Hume (Liberal Democrat, South of Scotland)

I thank the member very much for intervening on my maiden speech. As we only received the programme 15 minutes before we came into the chamber, it is difficult to go into detail.

We need people on the ground who are making money and delivering our environmental agenda. We need a countryside that can help to deliver the climate change agenda through new crops to replace traditional fossil fuels, and a countryside that can support rural communities, give good free access and feed our nation. Perhaps in the near future the Government will support the use of local fresh foods by our public agencies instead of simply buying the absolute cheapest, as many members have said with regard to the East Ayrshire Council project.

I worry when I hear members presuming that agricultural funds will disappear during the next round. I hope that, in the near future, Mr Lochhead will negotiate well for us at EU level to ensure that Scotland gets its fair share of EU funds in the coming mid-term review of the CAP. I also hope that he will join our campaigns to review the unfair restrictions on the size of farmers' co-operatives and on the establishment of a private sector-led Scottish food and drink marketing and promotion body to put the Scottish food and drink industries at the forefront of competitive valued-added produce not just in Europe but in the world.

I look forward to this Government delivering the rural agenda for farming, the environment and the future sustainability of Scotland and our planet.

Nanette Milne (Conservative, North East Scotland)

I rise with some trepidation to make my first speech in a debate on rural affairs and the environment. For most of my adult life, I have been involved with medical matters. For the past four years in the Parliament, I held the all-absorbing health portfolio, so I am now well out of my comfort zone and am faced with learning the complexities of agriculture and the language that goes with it. I know about the SEERAD, and I am familiar with LFAs. I know the issues that face nitrate vulnerable zones. LEADER is more complicated. LMCs are no longer local medical committees, or even local management councils. If I were to hazard a guess about what LAGs are, I know that I would be wrong. Despite frequent contact with farmers in the north-east, I still have a lot to learn about the intricacies of agriculture, but I can already see that, when it comes to bureaucracy, the national health service does not get a look-in.

I congratulate the cabinet secretary on his new position. I am looking forward to shadowing the Minister for Environment, once I know the details of his role. I will co-operate with him where possible, and agree to differ where not. I got to know the Cabinet Secretary for Rural Affairs and the Environment during my first three years in the Parliament, as a fellow list member for North East Scotland, before he won the Moray by-election. I must now watch what I say to him, as my niece is one of his constituents; not only that, she is also his next-door neighbour. I am not sure whether that constitutes an interest, but it is worth flagging up.

My colleague John Scott spelled out our priorities for rural Scotland in the next few years and indicated the importance that we attach to maintaining and developing its primary industries of farming, fishing, forestry and tourism. He stressed the importance of attracting new blood into farming and the need to reduce, where possible, the burden of red tape that is increasingly crippling the industry and driving people away from it. He also dealt with the detail of funding for the rural development programme.

I reiterate that the cabinet secretary faces a crucial decision in the next couple of weeks, when he sets the voluntary modulation rate for Scotland. The levels that he has proposed today, which involve a gradual increase from 5 to 9 per cent over three years, will be an enormous disappointment to the farming community, much of which is already struggling to make ends meet. If he had kept voluntary modulation low—at the current 5 per cent level, which many consider to be enough to sustain our rural areas—he would have had the Conservatives' full support. However, as John Scott said, we welcome his scheme for new entrants to the industry.

I will dwell for a few moments on the importance of sustaining our indigenous food production—an issue on which John Scott touched. In the past few years, there have been enormous pressures on dairy farming in particular, with milk production running at an unsustainable loss while supermarkets increase their profits from its sale. Every week we hear of farmers selling their dairy herds, and before long we may depend on imported milk for our breakfast cereal and cups of tea. I worry that something similar may happen in other sectors, as farms amalgamate and diversify and farmers retire or leave the industry. When I first carried out a survey of Gordon farmers, in 2002, I wrote to more than 800 people. By 2006, that number had almost halved, to 450. That happened at a time when it was recognised that food production locally not only benefits producers but is good for our health and the environment. I heartily endorse the words of Aileen Campbell, who focused on that issue in her excellent maiden speech.

Freshly produced food that is not processed or full of chemicals to preserve it and extend its shelf-life is of known benefit to health. We know the importance to our health of eating plentiful fruit and vegetables and we know how much better they taste when eaten fresh. We live in an age of serious health problems resulting from obesity that is due to bad eating habits. Type 2 diabetes is affecting more and more people at a young age and increasingly is costing the health service dear, as it faces the consequences. It has never been more important to get more local food into our schools and other institutions, such as hospitals, and even prisons, and to instil good eating habits in our children and young people.

From an environmental standpoint, food grown locally means less transportation. Local produce that is eaten in season means fewer of the air miles that come from importing food, which helps to combat climate change and, at the same time, helps the local economy.

Although everyone recognises the importance of indigenous food production and the benefits of providing local food for our children and other sections of society, there is no co-ordinated plan to deliver that agenda. It is not part of the health or education remits and it is not covered by rural affairs. I suggest to ministers that joined-up thinking is needed. The Government should have responsibility for local food delivery, to bring all-round benefits to our health, the environment and our local economy. We are willing to sit down with ministers to discuss how to take forward that agenda and co-operate in trying to find a way to deliver local produce locally.

The debate has had to cover many complex issues. I for one would have benefited from having significantly more time than we were given to absorb the detail of the Government's proposals. On the whole, we have had a good debate on the rural development programme. There has been a good airing of the many issues that face our already hard-pressed farming communities, which are crucial to our rural economy and our health and well-being. I wish the new cabinet secretary and his team well in making the difficult decisions that they will have to make, but sadly I am not convinced that today's decision on voluntary modulation reflects the SNP's rural manifesto commitment to make it possible for farmers to make a living at the same time as delivering environmental enhancement by using voluntary modulation only

"where programmes cannot be funded from EU and Scottish government sources."

Sarah Boyack (Labour, Edinburgh Central)

I welcome the new front-bench team. We have crossed swords in the past and I look forward to our doing so in the future. I welcome the fact that the cabinet secretary picked this issue as one of the first to be debated by his team in the new session. It is clear that we need to find a way forward for Scotland's rural communities. There has been consultation on the rural development plan. As the cabinet secretary made clear, the SNP does not start with a blank sheet. A lot of work has been done and communities have expectations.

It is crucial that, over the next few years, the rural development plan is funded properly, so that the different types of rural communities and industries—land managers, people involved in the agri-environment and the forestry community—are given proper support. More support is needed for the organic sector and crofting. Neither the documentation that was presented to us first thing this morning nor the cabinet secretary's speech convinced us that enough money is on the table to deliver on people's aspirations. We estimate that the Executive is at least £170 million short. We would like to know where the further £70 million that has been announced will come from—is it new or is it recycled from somewhere else in the department?

Last week, there was a great deal of spinning, so we had low expectations of this debate. I would like Mike Russell in his concluding remarks to indicate how the cabinet secretary gained such a clear expectation of where the previous Administration intended to go in the future, given that the Liberal Democrat manifesto made no reference to voluntary modulation levels and the Labour manifesto made absolutely clear that we would move levels up towards 15 per cent over time. I would like to know where the cabinet secretary got the detail of his remarks.

If the Government is not prepared to make the right decisions on modulation and new investment, our rural communities will face a problem. That is why we made absolutely clear in our manifesto where the money would come from and how we would spent it to support rural communities. We need to ensure that there is economic development and job creation and that there are good wages across our rural communities. That is why Scottish Enterprise and Highlands and Islands Enterprise have a crucial role in supporting sustainable economic development in those communities.

We support rural diversification, with strong rural communities.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Will the member give way?

Sarah Boyack (Labour, Edinburgh Central)

Not yet.

We have talked about Scotland's landscape, which needs to be looked after. The First Minister spoke about the issue last week. Our environment exists not by accident, but because of the historical work of farmers, land managers, crofters and rural communities. The test for today is whether money will be available to enable them to do that work in the future.

We believe that today is a missed opportunity. In the past two weeks there has been a huge amount of talk about consensus. I remind the new ministerial team that one of the last debates in the previous session was on organic farming. We managed to achieve almost universal agreement on the need for a more radical approach and for more support for the organic action plan. There is already huge consumer support and a huge market for organics. Although progress has been made, we need to make more, as there is much more for us to do. I was particularly disappointed by the fact that the cabinet secretary's opening speech contained hardly a mention of organics, given his strong support for them in the previous session. The Soil Association briefing that we have received exposes the inadequacies in the current system. Some farmers who want to move to agri-environment schemes, to contribute and to enjoy the economic success that will come from that, compete with no expectation of success and lose out totally, whereas others are guaranteed support because of historical production. Today was our chance to change those ground rules and to get better ones for Scotland, but ministers have failed that test at their first attempt.

In the previous session of Parliament, there was consistent support for increased organic support. The Scottish rural development plan offered the chance to give better and new support to meet the needs of Scotland's rural communities and our environment. Today's statement was unambitious and light on detail and missed the opportunity to shift investment significantly.

There were other gaps in the cabinet secretary's speech.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Will the member—I almost called her the minister—take an intervention?

Sarah Boyack (Labour, Edinburgh Central)

If it is brief.

Kenneth Gibson (Scottish National Party, Cunninghame North)

The member talked about the extra £173 million that she feels should go into the rural development budget. Will she tell us from which budgets she would take that £173 million?

Sarah Boyack (Labour, Edinburgh Central)

That is the whole point about voluntary modulation.

The cabinet secretary's speech missed an opportunity.

John Scott (Conservative, Ayr)

Will the member give way?

Sarah Boyack (Labour, Edinburgh Central)

No, I want to move on.

Several members have spoken passionately and correctly about the need to direct public sector procurement to support our farming communities. There was no reference to that by the cabinet secretary, although it was one of the key areas of debate in the run-up to this new session of Parliament. If we are to support rural development, we have to go beyond the historical patterns of Government subsidy. We have to use Government expenditure, not just in the rural and environment budgets but throughout Government, to take a more radical approach to supporting our farming industries and rural communities, so that schools, hospitals, local authorities and the whole public sector spend their money on fresh, local produce.

We need to hear from the Executive how it will make that happen. We heard lots of rhetoric before the election. If we read all the manifestos, we find that we all support that idea, but there was not a word about it today from the cabinet secretary. I would like to hear in Mike Russell's winding-up speech how the Executive will do that. What support is there for farmers co-ops, which are one of the key ways of enabling small farming sectors to compete fairly on a level playing field? I am deeply disappointed that that was not mentioned. We know from the East Ayrshire project what can be done to meet European Union rules. Why was that not in the opening statement? It is a big missed opportunity, given the huge cross-party support for the policy.

Members have heard from the Labour benches our clear support for rural communities, as well as an acknowledgement of the need for diverse investment. We heard from David Stewart about a vision of vibrant and strong rural economies and from Rhoda Grant about the crucial importance of maintaining and increasing support to some of our most fragile island and crofting communities, which need grants to support and maintain their population and to manage their land in an environmentally friendly way.

I was deeply disappointed that there were few references to our crofting communities, given that today offered a big chance to set a new way forward on the basis of past SNP support. That point was reinforced by Peter Peacock, who made a powerful argument about the need to continue to accelerate support for agri-environment schemes, not to call a halt to them and miss an opportunity.

Elaine Murray spoke about the importance of higher education infrastructure and training, which I suspect the whole chamber supports, but, again, it was absent from the cabinet secretary's speech. The Crichton campus, UHI Millennium Institute and all the further education colleges are crucial if we are to have the jobs that we need in our rural communities in the next few years.

Today, we have seen the Liberal Democrats retreat on the rural environment. There was a lack of support for the use of increased voluntary modulation and new support for environmental schemes for agriculture. As the Liberal Democrat manifesto faced both ways, perhaps that is not surprising.

Also disappointing was the continued lack of appearance of the Green party—

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the member take an intervention?

Sarah Boyack (Labour, Edinburgh Central)

No, I have moved on to talk about the Green party, although I have in front of me the Liberal Democrat manifesto, which lacks the detail to which I refer.

The Greens played a constructive role in the previous session of Parliament, both in the chamber and in committee. Perhaps they are absent because they are simply embarrassed to be associated with today's ministerial speech and the missed opportunity for Scotland's rural environment. We heard a speech that was light on detail—there was ludicrous spinning in advance of today's debate—and the SNP has avoided at all costs any vote in the chamber on its plans. That is not acceptable for the future. There is not even a small motion that we could amend to set a tone or policy context for today's debate. The only reason we knew what today's debate was about was because of spinning by the minister through the media. We would like ministers to treat this Parliament with a little more respect.

We on the Labour benches commit that over the coming months and years we will hound the Government on the detail of its policies. We want to know where its £70 million comes from, how the £170 million gap will be filled and what parts of the agri-environment process will suffer. We want to hear from the SNP a commitment to ensure that all our rural communities will be properly supported, including our fragile crofting communities in the rural parts of Scotland that will not be helped by today's announcement.

An opportunity has been missed to offer integrated support to rural Scotland. We need support for all our rural communities. We need more support for the industries that were absent from the cabinet secretary's speech, such as forestry and woodland industries, which are crucial to biomass development, our construction industry and climate change. There has not been enough detail from the minister today. In the coming months, we will chase him in the chamber and committee to find out that detail.

Michael Russell (Scottish National Party, South of Scotland)

I start by thanking those members who wished Richard Lochhead and me every good fortune in our new roles. Most speakers did so, albeit briefly, but we take what we can get and I am grateful to them all.

I point out to the Presiding Officer that this is my maiden speech in this chamber. However, having spoken in the Scottish Parliament before, I cannot describe this speech as a maiden, so perhaps I will have to describe it and the speeches of Rhoda Grant and Kenny Gibson as dowager speeches in this place.

Today's debate has been good in parts. I welcome the strong and positive speeches and I hope to work closely with Jim Hume, Nanette Milne and Sarah Boyack to work on the issues that can and will unite us. I am happy to make that pledge now, and I will continue to make it. I hope that it will be taken up and that we will work together on it. However, I will address some of the more unfortunate contributions to the debate before I go on to the good parts.

I start with Mike Rumbles. I was slightly surprised by his speech—

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

No, he was not.

Michael Russell (Scottish National Party, South of Scotland)

Yes, I was. I am a person of great optimism—I thought that he might have changed. Then I realised that he was indeed the old Mike Rumbles. He was against the Government when he was in the Government and he is still against the Government even though he is not now in it, so I do not take his speech seriously and I never will take him seriously on the basis of today's performance.

I must address in more detail the contribution of somebody I now know as Disgusted of Midlothian, who is sitting beside Disappointed of Central Edinburgh. Indeed, she is Doubly Disgusted of Midlothian, because when our team comes to the chamber with a programme worth £1.6 billion that offers an enormous amount—I will speak about the programme in a moment—do we hear a word of welcome from Disgusted of Midlothian? We do not. Do we hear any appreciation of the programme that she was involved in drawing up? We do not. She is simply disgusted—that was her first and last word in a deeply disappointing speech.

Not even Richard Lochhead—I go further; not even John Swinney—could have drawn up the programme in a fortnight. This programme that I hold in my hand is Rhona Brankin's and Ross Finnie's programme. We had to work solidly on the programme in the past fortnight to ensure that we could talk about it in the chamber and then send it to Europe, not in a week or a fortnight, but tomorrow. The chamber should congratulate Richard Lochhead on his work on the programme. Bizarrely—politics is clearly still a bizarre world in Scotland—the person who drew up, costed and set the budget for the programme now complains that all three are deeply defective. What a strange, bizarre attitude to take.

Rhona Brankin (Labour, Midlothian)

Will the minister give way?

Michael Russell (Scottish National Party, South of Scotland)

No, I will not at this moment.

Another reality is that not a single thing has been cut out of the programme and not a single penny has been taken away.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister take an intervention?

Michael Russell (Scottish National Party, South of Scotland)

No, I will not.

I was about to say that it is unalloyed good news that nothing has come out of the programme; in fact, we have added to it. The new entrants scheme has been added and the resources have been increased. It is unfortunate that every word we heard from Rhona Brankin was based on something that was not true. That is to be regretted deeply, and it is not the way in which we should go forward in the chamber—and we have to go forward.

Rhona Brankin (Labour, Midlothian)

The minister makes a very serious allegation. Does Mike Russell accept that the levels of voluntary modulation were not set finally by the previous Executive? We would have set a voluntary modulation level that made a real difference to the environment, which the minister has yet to mention.

Michael Russell (Scottish National Party, South of Scotland)

As Ms Brankin knows, the truth of the matter is that the rural development programme was complete and costed—there was no proposal for her to add a single penny to it. The programme that we are discussing is the programme that she would have brought to the Parliament, so to say anything else is nonsensical.

We have unalloyed good news about the programme and about the level of voluntary modulation, which should be welcomed. If the Opposition spokespeople were less curmudgeonly, they would welcome it.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister take an intervention?

Michael Russell (Scottish National Party, South of Scotland)

I will not—I am sorry.

Before I focus on that unalloyed good news and on how we will move forward, I congratulate those members who have made maiden speeches in the debate. It is obvious that the SNP's new entrants scheme is working exceptionally well. I am happy to accept the invitation to go to Biggar. It is obvious, too, that some members of Labour's new entrants scheme are also working well. In particular, I commend David Stewart for a thoughtful and intriguing speech. Mr Peacock's speech would have been intriguing, had he not fallen into his old ministerial ways towards the end of it.

I want to focus on the environment and the rural development programme. Mr Lochhead was clear in laying out his commitment across his wide-ranging responsibilities. As the Minister for Environment, I reiterate that commitment and, indeed, go further. Later today, I will have my first formal meeting with Scottish Environment LINK. From now on, I hope to meet as many as possible of the organisations and individuals who are passionate about our country, its land, its landscape and its people, and who devote themselves, day in and day out, to ensuring that that land—that small part of our planet—has a sustainable, environmentally sound and ecologically rich future.

Rhoda Grant (Labour, Highlands and Islands)

Will the minister give way?

Michael Russell (Scottish National Party, South of Scotland)

Not at the moment, thank you.

I intend to learn from them, to work with them and to support them. I want to have a productive dialogue with them, and I will do everything I can to address their concerns, for their concerns are my concerns, this Government's concerns and the Parliament's concerns. We have a duty and a responsibility to ensure that we in Scotland answer the urgent demands of climate change, environmental degradation and the daily threat to Scottish biodiversity. The rural development programme contains part of the solution.

We will answer the demands that are made of us as people—as human beings who inhabit our landscape. There has been a common theme to the debate: our landscape is inhabited by people, and we must work with, engage with, inspire, encourage and inform them so that they can be part of the solutions to the problems that we face. Our theme will be people and place in harmony.

Of course, we have a big opportunity, because now is a good time for a fresh start. In modern times, it has been the fate of Scotland for its future, its prosperity and its environmental needs to be constantly in thrall to political forces beyond its borders. The creation of the Scottish Parliament was an attempt, at least in part, to address the frustrations of the democratic deficit and to meet the aspirations of the Scottish people.

If the electorate said a single thing to the Parliament in the recent election, it was that we must do better. There is a desire for us to push forward towards bigger and better horizons. The people of Scotland are hungry for change. In this country, we are witnessing a resurgence of national pride. It is not triumphalist—it is a calm and relaxed national self-belief that is underpinned by a belief in our land and landscape and in people and place.

There are practical reasons for optimism. The rural development programme is strong and progressive, even if it still needs some fine tuning by a new Government.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Will the minister take an intervention?

Michael Russell (Scottish National Party, South of Scotland)

No—I must finish.

The programme directly address issues that relate to all of us, but which relate, in particular, to the 21 per cent of the Scottish population who live outwith our towns and cities. Those rural communities are a vital part of our national life and identity. We must all work together to help them to thrive. They can do so only if they have the right services, the right economy and the right infrastructure. The Government's five strategic outcomes all apply to rural areas just as much as they apply to urban areas, and all of them will benefit rural Scotland as much as they will benefit any other part of Scotland.

The new rural development programme will give us the opportunity to direct resources in line with our key priorities and outcomes, which will affect and enhance the lives of people in Scotland. Whether through social and economic benefits that will help to maintain our rural communities or through environmental measures to mitigate climate change, the programme is an opportunity that we need to grasp and build on. We will do precisely that—we will build on good practice and bring in new ideas. I commend ideas that are already in the pipeline, such as the Forestry Commission's efforts to make land available for sustainable housing.

Today's debate is both an end and a beginning: it is an end to a process to which we as a Government were not party, but on which we have had the resolve to consult, ponder and conclude; and it is a beginning, because it is the first step in meeting our objectives of having a flourishing agriculture sector, successful forest industries, a strong business base in rural Scotland, a comprehensive agri-environment strategy, a protected and renewed Scottish environment, vibrant rural communities, rejuvenated crofting, and a partnership with every interested organisation and individual. Our invitation today is that we want every member of the Parliament to be part of that partnership.

Question Time — Scottish Executive — General Questions

James Kelly (Labour, Glasgow Rutherglen)

To ask the Scottish Executive how reducing carbon emissions to protect Scotland's environment can be achieved when responsibilities for climate change and the environment have been allocated to separate ministerial portfolios. (S3O-52)

John Swinney (Scottish National Party, North Tayside)

The finance and sustainable growth portfolio covers the policy areas responsible for most—some 75 per cent—of Scotland's emissions. Bringing together climate change, energy, transport, infrastructure, business, planning and building standards, as the portfolio does, will help to join up efforts to reduce emissions in those key areas and to move Scotland towards a low-carbon economy.

Climate change is clearly of major environmental significance—in fact, it represents the most significant threat to the world's environment—but for Scotland to demonstrate its commitment to tackling that threat, every ministerial portfolio needs to take action. By considering climate change alongside the core building blocks of our economy, we will drive that action.

James Kelly (Labour, Glasgow Rutherglen)

It is clear that one of the Executive's main challenges is to identify and implement production from energy sources that will bridge the 40 per cent gap in our energy supply that is currently filled by nuclear power. The Hunterston station alone currently produces 8TWh of energy. Once it ceases production, the equivalent of thousands of onshore wind farms throughout Scotland will be required to fill the resulting energy gap.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Ask a question, please.

James Kelly (Labour, Glasgow Rutherglen)

The Scottish National Party manifesto included a commitment on community energy plans. Does the cabinet secretary accept that that will slow down the implementation of wind farms, which are required to secure Scotland's future energy supply?

John Swinney (Scottish National Party, North Tayside)

I think that Mr Kelly has convinced himself of something that is not the case. As Mr Mather will adequately demonstrate in this afternoon's ministerial statement on energy, there is no prospect of an energy gap in Scotland. Mr Kelly would be well advised to listen carefully to what Mr Mather says about how the Government intends to deal with forward planning on energy matters.

There is a planning process that must be gone through to determine the outcome of wind farm applications and it would be inappropriate of me to comment on individual elements of that process, but, in general, the Government is absolutely determined to pursue a broadly based energy strategy that will involve encouragement for a wide range of energy sources. Mr Mather will have many interesting and substantial things to say about that this afternoon.

Patrick Harvie (Green, Glasgow)

We might just as well ask ourselves how the previous Executive thought it could tackle climate change by separating responsibility for transport from responsibility for emissions. Now that responsibility for transport and responsibility for climate change have been joined up, does the cabinet secretary remain committed to the SNP policy of carbon offsetting for transport infrastructure projects? Does he accept the limitations of many commercial offset schemes? If he is to pursue a policy of carbon offsetting, does he agree that offset schemes, as well as infrastructure, should be independently assessed for carbon emissions?

John Swinney (Scottish National Party, North Tayside)

Mr Harvie is aware that the Government has made a commitment to introduce a climate change bill, which will include ambitious targets for carbon reduction by 2050—the targets will be more ambitious than those of the previous Administration. We must take a range of measures to ensure that we can achieve those objectives, which is why, as I made clear in my answer to Mr Kelly, we have brought together a number of policy areas in which difficulties are created—I am thinking in particular of transport's relationship with climate change. The Government will put forward a programme, which will include an approach to carbon offset and a range of other measures, to ensure that we can achieve our objectives.

The Government is committed to independent verification of its approach to carbon reduction. Independent verification will feature in announcements that are made in the context of the proposed climate change bill.

Tricia Marwick (Scottish National Party, Central Fife)

Does the cabinet secretary agree that the Tullis Russell biomass project in my constituency will reduce Scotland's carbon emissions by 20 per cent and contribute 6 per cent towards Scotland's renewable energy targets? Is he aware that the previous Liberal-Labour Executive refused to support the project? Will he encourage the First Minister and ministers who will meet Tullis Russell today to give the company the financial support it needs to help the environment and save 550 jobs?

John Swinney (Scottish National Party, North Tayside)

It is a particular pleasure to respond to a question from Tricia Marwick in her capacity as the member for Central Fife in the governing party's seats. I wish her well and congratulate her on her achievement in the election.

The Government supports initiatives such as the one that Tullis Russell has developed. There is enormous capacity in Scotland for the development of biomass activity. In my constituency I have experience of the pace of such developments under the previous Administration, and I reassure Tricia Marwick that the Government will give priority to biomass initiatives.

Tricia Marwick knows that I am a prudent and careful man when it comes to spending public money. Decisions on finance will be taken appropriately by the Government, and the Parliament will be kept informed of such matters.

Richard Baker (Labour, North East Scotland)

To ask the Scottish Executive when it will make improvements at the Haudagain roundabout in Aberdeen to reduce traffic congestion. (S3O-33)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The north-east Scotland transport partnership is working with Transport Scotland and Aberdeen City Council on a second, more detailed, appraisal through Scottish transport appraisal guidance—STAG—to identify improvements to the A90 and A96 Haudagain junction. The work is closely linked to the regeneration of Middlefield and will include in-depth economic and environmental assessment of options. The aim is to produce a full business case, to enable Transport Scotland—the trunk roads authority—to make a decision on implementation. We expect the appraisal to be complete by the autumn.

Richard Baker (Labour, North East Scotland)

I am sure that the minister is aware that I and other members pressed his predecessor on the urgent need for improvements at the Haudagain roundabout. The proposals for improvements to reduce the severe congestion in the area are welcome, but does he agree that we need a timetable for their implementation? Might further options for improvement be considered? Given that time is crucial, when can we expect the improvements to be in place?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The second STAG appraisal is going on and disruption of that activity might lead to further delays, which the member's question makes clear he is anxious to avoid. The Haudagain roundabout in Aberdeen is important and represents a major constriction on traffic flows in the city, so we are anxious to make best speed in resolving the problem. We must address the issue well in advance of the coming into operation of the Aberdeen western peripheral route.

Roseanna Cunningham (Scottish National Party, Perth)

To ask the Scottish Executive whether consideration will be given to reviewing the current arrangements for the rescue of persons from moving water. (S3O-3)

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

Responsibility for the co-ordination of land-based and inland water search and rescue rests with the police, given their duty to protect life and property. That responsibility is undertaken in partnership with others, such as the fire and rescue services and the Maritime and Coastguard Agency.

Roseanna Cunningham (Scottish National Party, Perth)

The situation that the minister describes is not borne out in practice. The phrase, "persons trapped in moving water" is used by the fire service to describe drowning incidents, of which there are an increasing number, including in the River Tay at Perth.

Is the minister aware that no emergency service is specifically charged with the duty to carry out such rescues, which has resulted in inconsistent practice in Scotland and the threat of disciplinary action against officers who carry out rescues? In the circumstances, will he agree that that situation cannot continue, for the sake of community and individual safety, and in fairness to fire officers who carry out those rescues?

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

The police are ultimately responsible for search and rescue activity and work with fire and rescue services. The Fire (Additional Function) (Scotland) Order 2005 passed to fire and rescue services responsibility for serious flooding incidents.

I think that Roseanna Cunningham's question was triggered by an act of bravery by a firefighter who rescued a 20-year-old woman from drowning in the River Tay. We want to record the courage of Tam Brown, who put his life at risk and rescued the young lady, saving her life. However, from my experience as a former mountain rescue team member, I know that it is ultimately the responsibility of everyone involved in rescue activity first to consider their personal safety.

I am pleased to report that £550,000 has been allocated to the provision of equipment that firefighters need to secure their personal safety when carrying out rescues in water.

Ross Finnie (Liberal Democrat, West of Scotland)

To ask the Scottish Executive whether it agrees with NHS Greater Glasgow and Clyde's review group that anaesthetic and unscheduled medical care services should be withdrawn from the Vale of Leven hospital and instead provided at the Royal Alexandra hospital in Paisley. (S3O-24)

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

As Ross Finnie knows, NHS Greater Glasgow and Clyde has made a commitment to review service needs throughout the Clyde area. He also knows that no decision has been taken on what services should be provided in future at the Vale of Leven hospital. The board is pursuing a programme of work that will lead to formal proposals for the future delivery of health services to the people in West Dunbartonshire. If the proposals imply material changes to existing services, they will need to be subject to full public consultation. In addition, I have made it clear that I will insist on independent scrutiny of the proposals. I am considering the form that such independent scrutiny will take and I will make an announcement on the matter soon.

If, after public consultation, an NHS board makes proposals for significant service change, the proposals will come to me for a final decision. I have made it clear that in considering such proposals I will operate a presumption against centralisation of services. That does not mean that there will be no changes to health services; it means that NHS boards that propose changes will have to persuade me that their case is robust and that they have considered all possible alternatives and given due weight to patient need and public opinion.

Ross Finnie (Liberal Democrat, West of Scotland)

That answer might loosely be interpreted as a maybe.

I accept that independent scrutiny could play a role in designing the type of service to be provided, but no independent scrutiny seems required to reach the conclusion that a proposal to move services to Paisley would be in any way acceptable to people in the Vale of Leven, given the geography of the area and the lack of public transport.

Will the cabinet secretary give a commitment to rule out any suggestion that the Royal Alexandra hospital in Paisley is an alternative location for services to the Vale of Leven? Will she also assure us that she will insist that NHS Greater Glasgow and Clyde's consideration include proposals for a north-of-the-river solution for the provision of scheduled services in the Vale of Leven, as members of all parties have requested?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I am tempted to say that it is amazing how the transition to opposition has changed the member's mind. I am mindful of my formal role in the process: the final decision will be mine, so I will not comment in detail at this stage on what the board's final proposals might be. I can and absolutely will make clear what tests I expect any board to pass before I will approve proposals for significant service changes. Those tests are full and meaningful public consultation, independent scrutiny and a clear presumption against centralisation. Such a course is in the interests of patients and the wider public, and I think that it is the right one to take.

Jackie Baillie (Labour, Dumbarton)

I welcome all converts to a north-of-the-river solution. The cabinet secretary will be aware of the community engagement group that has been formed by NHS Greater Glasgow and Clyde and tasked with considering the future of services at the Vale of Leven hospital. Is she aware that the group believes that it was not allowed to participate fully, that its views were ignored and that information was deliberately withheld from it? Does she agree that that is an appalling example of community engagement, and will she ensure that that forms part of her process of independent scrutiny of the health board's proposals?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I thank Jackie Baillie for her question and look forward to meeting her next month to discuss the issues in more detail. I assure her absolutely that I will take the quality of community engagement and the quality of public consultation into account in reaching a final decision on any board proposal for health service change.

Jackson Carlaw (Conservative, West of Scotland)

Does the cabinet secretary accept that, given the plethora of SNP literature with which the Vale of Leven hospital community was awash during the election campaign—all of it positively brimming with pledges to reverse any damaging decisions that were reached—this all seems a bit thin? People locally are looking for a more robust response. Will she give a commitment that NHS Greater Glasgow and Clyde will be directed now to retain these key services locally?

Nicola Sturgeon (Scottish National Party, Glasgow Govan)

I understand and appreciate the strength of feeling about the issue in West Dunbartonshire. I pay great tribute to my colleagues—particularly those who now lead the council in that area—for standing up for services there. I say again that I will operate a presumption against centralisation. It would be irresponsible for any minister to rule out any change to health services in any circumstances, but any board that comes to me for approval for significant service changes will have to pass very strict tests, and I have laid out today what those tests are.

Gavin Brown (Conservative, Lothians)

To ask the Scottish Executive when it will instigate a tiered reduction in non-domestic rates. (S3O-11)

Jim Mather (Scottish National Party, Argyll and Bute)

We will make clear our proposals for removing and reducing business rates for small businesses in Scotland following the comprehensive spending review.

Gavin Brown (Conservative, Lothians)

If the target that the cabinet secretary set out yesterday is not met—let us say that the process takes longer to implement than we were advised yesterday—will the minister commit to backdating the rate reductions?

Jim Mather (Scottish National Party, Argyll and Bute)

We go forward with optimism. Backdating proposals when systems are in place is unlikely. We will bring forward the proposals and seek consensus. The chamber must recognise the importance of building consensus here, as there is consensus in the business world that this measure should be implemented. It is important for Scotland. UK interest rates are heading towards 6 per cent and beyond, and the impact that that will have on consumer spending could be grave. The rate of growth here has been perennially low, so I am looking to members to help us give the boost that is needed, conscious of the need to level the playing field and put Scotland in a more competitive place.

Alex Fergusson (None, Galloway and Upper Nithsdale)

If we can have a brief answer, we have just got time for question 7.

Lewis Macdonald (Labour, Aberdeen Central)

To ask the Scottish Executive what discussions it has had with management and unions at Remploy regarding the company's future plans in Aberdeen and elsewhere in Scotland. (S3O-60)

Jim Mather (Scottish National Party, Argyll and Bute)

Remploy and its future plans are a matter for the UK Government, which has lead responsibility for the employment of disabled people.

Lewis Macdonald (Labour, Aberdeen Central)

I understand the nature of that answer and do not dispute the point that Jim Mather correctly makes, but the Scottish ministers and the agencies that are accountable to them place a significant number of contracts for the type of work that is undertaken by Remploy factories. I urge the minister to agree that ministers will meet the management and unions at Remploy to discuss what the agencies that are accountable to the Scottish ministers can do to keep open the option for disabled people of access to supported, as well as mainstream, employment.

Jim Mather (Scottish National Party, Argyll and Bute)

I share the member's concern, but it would be wrong to buffet the Parliament for the fact that the employment of disabled people is reserved to the UK Government. The Department for Work and Pensions has particular responsibility for the issue.

However, Scottish Enterprise, acting on behalf of ministers, has agreed to meet Remploy's Scottish restructuring project manager to offer advice and assistance, as appropriate.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Before we begin First Minister's question time, I am sure the whole Parliament will join me in expressing our sadness at the death of the first lady of Malawi, Mrs Ethel Mutharika, who died last Monday. With the Parliament's permission, I intend to write to President Mutharika to offer our condolences.

First Minister's Question Time

Jack McConnell (Labour, Motherwell and Wishaw)

To ask the First Minister when the Cabinet will next meet. (S3F-1)

Alex Salmond (Scottish National Party, Gordon)

I thank Jack McConnell for not asking me when I last met the Prime Minister. The Cabinet will meet next Tuesday and every Tuesday until further notice.

Jack McConnell (Labour, Motherwell and Wishaw)

I say to the First Minister that it is time—it is time for clarity. This afternoon, Parliament will vote to continue the new railway development that will link Edinburgh's airport with the rest of Scotland. Will the First Minister accept that decision and proceed with the airport rail link with no further prevarication? Yes or no?

Alex Salmond (Scottish National Party, Gordon)

We are not convinced by the Edinburgh airport rail link project and we will bring a full financial assessment of it to Parliament at an early opportunity.

Jack McConnell will know that

"As part of"

the

"perfectly normal constitutional arrangements, except in certain circumstances, the Scottish Executive is not necessarily bound by resolutions or motions passed by the Scottish Parliament."

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Alex Salmond (Scottish National Party, Gordon)

I was quoting directly the late Donald Dewar from 4 October 1999.

Jack McConnell (Labour, Motherwell and Wishaw)

With all due respect, the First Minister did not answer the question. I am happy to try another.

This afternoon, Parliament will also vote to continue the introduction of a 21st century public transport system for our capital city. Will the First Minister accept that decision and proceed with the capital city's trams without further delay? Yes or no?

Alex Salmond (Scottish National Party, Gordon)

We think that there are better ways to fulfil this capital city's need for a 21 st century transport system. We are concerned about cost overrun in capital projects, which is why we will bring forward assessments for Parliament.

We have not completed the assessment of the tram system yet. However, for the chamber's information, we have completed one on the Alloa railway link, which is a very important project that was first announced by Jack McConnell's Government and was estimated to cost £35 million. The last estimate, given to Parliament on 16 March 2006, was of a maximum cost of £70 million. Our latest estimate—as of today—with the project almost completed, means that we are working on the assumption of a cost of £83 million.

I point out to Jack McConnell that TIE Ltd, which is the organisation in charge of delivering the Edinburgh trams, is, of course, also in charge of delivering the Stirling-Alloa-Kincardine railway line.

Jack McConnell (Labour, Motherwell and Wishaw)

The First Minister will learn not to blame his civil servants and other organisations when he cannot answer questions. I ask these questions for a reason. The Scottish National Party said earlier, in May:

"Our view is as a government, if we decide not to fund it, that would be that. It's simply a matter of government deciding how to spend the money. It doesn't have to come back to parliament for approval."

After nearly 200 hours of parliamentary time, two years of parliamentary scrutiny and a firm decision of this Parliament when the First Minister was elsewhere, that is not good enough.

We have had a week of spinning from the SNP. Last Wednesday, we were told that there would be a ban on ship-to-ship oil transfers, but by Thursday morning it was not so sure. At the weekend, we heard about a freeze on council tax, but on Monday Mr Swinney was not so sure. On Tuesday, the SNP was going to dual the A9, but on Wednesday it was not so sure. On Wednesday, it was going to cancel the rail link from the airport to the rest of Scotland and cancel the trams in Edinburgh, but today it is—again—not so sure. We used to think that the SNP had a plan for its first 100 days, but now we know that it is not so sure.

I say to the First Minister that delays cost money, will put off investment and will damage not only Edinburgh but the whole of Scotland. It is time—

Alex Fergusson (None, Galloway and Upper Nithsdale)

Ask a question, please.

Jack McConnell (Labour, Motherwell and Wishaw)

Will the First Minister promise to respect Scotland's Parliament and to put Scotland first? Will he promise to build the railway and the trams?

Alex Salmond (Scottish National Party, Gordon)

Goodness—Jack's questions are longer than his answers used to be. I saw a quote from him a couple of days ago saying that we had not done much in the month that I had been in power. As I was elected by the Parliament only two weeks ago, I am hoping to achieve a lot in the next two weeks. However, I remind Jack McConnell that, in the past two weeks, we have introduced proposals—which were supported by the Labour Party mid-statement, if I remember rightly—to abolish tolls on the Tay and Forth bridges.

As the Cabinet Secretary for Health and Wellbeing has said, we are working on proposals to save the accident and emergency units at Monklands and Ayr; I hope for support from the Labour Party when those proposals come to Parliament.

We are introducing and working on new measures for tackling sex crime in Scotland, and I know that we will get support from the Conservative party on those measures. We are determined to freeze the discredited council tax in Scotland and are working with local authorities to do so. We have, with the support of the Scottish Green Party, ruled out new nuclear power stations in Scotland and have ruled in clean coal generation in Scotland. We are also working very hard to save the revolutionary Peterhead project from the indecision of the Department of Trade and Industry. All in all, that is not bad for the first two weeks.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Jack McConnell can have one more question, if he is as brief as possible.

Jack McConnell (Labour, Motherwell and Wishaw)

I was not planning to ask more than three questions, but I must ask the question again because the First Minister has not answered it. The issue today is funding of trains from Edinburgh airport to the rest of Scotland and the trams for our capital city. Will the First Minister promise to respect the will of Parliament, accept its decisions and build a transport infrastructure for the 21 st century?

Alex Salmond (Scottish National Party, Gordon)

I say gently to Jack that, if he wanted that to be the issue, he should not have started talking about all the other things, as well.

I read a quotation from the late Donald Dewar, which sets out the constitutional position. I will also say something serious to Jack McConnell about who is responsible for the financial competence and delivery of projects. We have delivery organisations of one kind or another but, ultimately, the Government and, in this situation, Parliament are responsible for infrastructure projects being delivered on time and on budget. That has not been this Parliament's experience.

In the Parliament's first four years, the overruns of the major infrastructure project that we are currently occupying probably caused more damage to Parliament's reputation than anything else that could be imagined. As First Minister, I am determined that that will not happen with other infrastructure projects, which is why we will bring to Parliament a proper financial assessment.

Annabel Goldie (Conservative, West of Scotland)

To ask the First Minister when he will next meet the Prime Minister and what issues they will discuss. (S3F-2)

Alex Salmond (Scottish National Party, Gordon)

He never phones, he never writes.

However, I have been congratulated by a variety of other people, ranging from Her Majesty the Queen to the Rev Ian Paisley. I will have to be satisfied with that. I also had a friendly and constructive phone call from David Cameron. He was phoning from Greece, so I have not yet returned the call as I am trying to save the Government money.

Annabel Goldie (Conservative, West of Scotland)

I understand that it takes two to tango and that the First Minister's Downing Street dance partner is nothing if not coquettish. However, most people are astonished that, although Her Majesty the Queen can travel to Edinburgh to meet Mr Salmond, Mr Blair is not big enough to even acknowledge the democratically elected First Minister of Scotland.

One thistle that needs to be grasped is the question of local government finance. I am aware that the First Minister wants to inflict a national tax increase on Scottish earners that, apart from being a burden on families and a nightmare for employers, will drive a coach and horses through the idea of local autonomy and local democracy. Furthermore, let us not forget that a £1 billion shortfall will hit our councils every year. Can he tell me when, even approximately—in the unlikely event that the First Minister gets that proposal through Parliament—the new system will hit Scotland?

Alex Salmond (Scottish National Party, Gordon)

I understand that the issue of local income tax is not one on which we have policies in common, but I hope that that will not affect our ability to work on other policy areas on which we have common views.

The case for a local income tax is that it is based intrinsically on ability to pay—the central feature of justification for any taxation system. Annabel Goldie would acknowledge that that is not necessarily the case with the council tax. I suspect that the difference between us is that she believes that we can amend the current unjust and iniquitous system, whereas I believe that we need a new, fairer and better system called the local income tax.

Annabel Goldie (Conservative, West of Scotland)

I thought that the new politics would mean that the new First Minister would, unlike his predecessor, actually answer the questions that he was asked, but already there has been a bit of a disappointing wobble.

I asked him when his new system would hit us. Let us face it: it is obviously four or five years away, at best. In the meantime, many of our older citizens are being clobbered each month by the current levels of council tax.

Does the First Minister agree that the Conservative party's proposal to cut in half the council tax bills for households whose occupants are aged 65 and over will bring immediate and welcome relief to those pensioners? Is he prepared, like his colleague, Alex Neil, to look favourably on that proposal?

Alex Salmond (Scottish National Party, Gordon)

Legislation will come in the first half of this parliamentary session and implementation of that legislation will, according to the will of parliament, come in the second half of the session.

I agree that we need immediate action, which is why we are working on the council tax freeze, which will bring relief to all council tax payers. The difficulty that I have with the Conservatives' suggestion is that it would not differentiate between rich pensioners—some of whom have quite substantial incomes—and poorer pensioners. There would be no differentiation in terms of their bills apart from in respect of the housing component which—as we know—is not necessarily related to ability to pay. For example, I am quite certain that Her Majesty the Queen, whom we mentioned earlier, would not want 50 per cent relief on Balmoral, but would think that there are more deserving cases around the country in terms of basing taxation on the ability to pay.

Nicol Stephen (Liberal Democrat, Aberdeen South)

To ask the First Minister when he will next meet the Secretary of State for Scotland and what issues he intends to discuss. (S3F-3)

Alex Salmond (Scottish National Party, Gordon)

I have had a telephone call from the Secretary of State for Scotland. It was a cordial call of congratulations, during which he offered co-operation on a range of issues. I hope to contact him soon to talk about the elections in Scotland, the procedures and how best we can have a more thorough and independent inquiry into that matter.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I do not often quote Stewart Stevenson, but I wonder whether the First Minister heard him on the BBC this morning describing the policy of dualling the A9 as

"a long-term objective, without any price commitment on it".

So—a policy that was announced on Tuesday has become a long-term objective by Thursday. Is that to be true of other Scottish National Party policies?

I can think of no issue more important for Scotland's future than education. The Liberal Democrats are committed to reducing class sizes in Scotland, with fully costed and detailed proposals to recruit 1,000 extra teachers and to build 250 new schools. What is the SNP's target date for delivering on its pledge to reduce class sizes in Scotland? How many extra teachers will the Executive recruit and how many new classrooms will be needed?

Alex Salmond (Scottish National Party, Gordon)

An announcement on that subject will be made in Parliament on 20 June. I remind Nicol Stephen of the range of policy initiatives on education that the SNP intends to introduce. He rightly draws attention to the reduction of class sizes to a maximum of 18 in primaries 1 to 3, which is a hugely important policy on which I hope we can work together, given the overwhelming international evidence that early intervention has fantastic results for children's development.

We should also consider the 50 per cent increase in free nursery education for three and four-year-olds, the commitment to provide a fully qualified nursery teacher for every nursery child in Scotland and the additional fund of £10 million to help those who have particular learning challenges, such as autism and dyslexia. That funding is particularly important. I hope that we can work together on that range of vital initiatives for the Scottish education system.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I am prepared to work with any of the parties in Parliament to deliver action on those issues. It is time for urgent action to reduce school class sizes by, for example, increasing the number of teachers in our schools and the number of teachers in training. We already have the answer to my earlier question in the joint analysis of the party manifestos—including the SNP's—by the University of Strathclyde and the University of Glasgow. That analysis confirms what we knew from the SNP manifesto, which is that it has no figure for extra teachers, no plans for extra classrooms and no date for delivery of smaller class sizes in Scotland. Will the First Minister give us the figures now, or is that another of his policies that turns out on Thursday to be just a long-term objective?

Alex Salmond (Scottish National Party, Gordon)

In the tradition of friendliness and co-operation, I point out that the analysis that Nicol Stephen mentions is not the best place for him to rest because—if my memory serves me correctly—it allocated to the Liberal Democrats 20 or 30 more uncosted commitments than it allocated to the Scottish National Party. However, rather than re-fight the arguments that we had during the election campaign, let us take the opportunity to say in Parliament right now that, on a range of policies—early intervention in education, reduction of class sizes, consideration of how to help children with real learning difficulties—there is not all that much between the Scottish National Party and the Scottish Liberal Democrats. For one reason or another, in coalition in the previous Government, Nicol Stephen and his colleagues could not deliver on those aspirations and, for one reason or another, we are not in coalition now. However, in this consensus Parliament, we can still work together to deliver on the commitments that we have in common.

Alex Fergusson (None, Galloway and Upper Nithsdale)

There are two constituency questions.

Angela Constance (Scottish National Party, Livingston)

Does the First Minister share my concern about the lorry drivers at the Tesco distribution centre in my constituency of Livingston, who are disputing the downgrading of their terms and conditions of employment? With the announcement that 70 of the drivers will be sacked, widespread industrial action is now likely. Will the First Minister advise what may be done to encourage a negotiated settlement to avert further hardship to the Tesco lorry drivers and their families, and to avoid further industrial disruption?

Alex Salmond (Scottish National Party, Gordon)

Parliament does not control industrial disputes, but Angela Constance's question and my answer will represent the views of the overwhelming majority of members. I deprecate the sacking of people during an industrial dispute and I am sure that members will agree that it is far, far better for the parties in the industrial dispute to get back round the table to settle their differences without the element of confrontation and bitterness that is developing in the Tesco dispute with the lorry drivers.

Pauline McNeill (Labour, Glasgow Kelvin)

The First Minister will be aware of yesterday's announcement from the financial services firm Resolution, which is one of the largest employers in my constituency, that it will transfer more than 1,500 staff to the Capita group, and of the immediate transfer of 500 jobs from Glasgow to India. In view of that, what will the new Executive do to assist the people who will lose their jobs? How will the Executive stop the further outsourcing of jobs abroad? Does the Executive have the answers for workers who are concerned for their jobs? How will the Executive secure the future of Glasgow's successful financial sector, which is currently leading the way in the world?

Alex Salmond (Scottish National Party, Gordon)

Pauline McNeill's final point should be stressed. We have an extremely successful financial sector in Scotland, funds through which have doubled over the past 10 years. I know that the Cabinet Secretary for Finance and Sustainable Growth spoke to Pauline yesterday about the immediate situation and the help that Scottish Enterprise can give to displaced workers. We acknowledge the seriousness of Resolution's announcement and the impact that it will have on individuals and families, which is why Scottish Enterprise is willing to work with workers who lose their jobs.

On the general position, the strategy for the Scottish economy must be to have a serious competitive edge for not just the financial sector but for many of our industries. That is exactly why everyone in the chamber should consider closely the huge success of the Irish financial sector—although we do not have the immediate powers to replicate that success, other than with small business. Over the same period during which the Scottish financial sector has doubled, the Irish financial sector has tripled. One aspect behind that success has been Ireland's ability to deliver an enhanced competitive position through progressive reductions in corporation tax.

Bob Doris (Scottish National Party, Glasgow)

To ask the First Minister whether extending the provision of good-quality, local social rented housing will be a priority for the new Scottish Government. (S3F-20)

Alex Salmond (Scottish National Party, Gordon)

Yes. We look forward to working with members and parties across Parliament to develop proposals for extending provision of Scotland's social housing. That will contribute to our overarching aim of creating a wealthier, healthier and more successful country.

Bob Doris (Scottish National Party, Glasgow)

I inform the First Minister that the guarantees that were given to the former tenants of Maryhill's Butney area back in 2001 by Glasgow City Council and, subsequently, by Glasgow Housing Association, which promised them new local housing within two years of their old homes being demolished, remain unmet. Will the First Minister monitor the situation—significant further demolitions of social rented housing within Maryhill and across north Glasgow are planned—in order to ensure that, as opposed to broken promises, good-quality social housing is delivered? That would respect local communities.

Alex Salmond (Scottish National Party, Gordon)

There was indeed a promise, the timescale in which has not been kept. Nonetheless, there remains the promise to replace housing in Glasgow that is demolished by Glasgow City Council and the Glasgow Housing Association. The programme is set to deliver 6,000 houses throughout the city. The city council has reaffirmed that it is committed to directing that programme to areas where there are most demolitions. At the local level, programmes for replacement housing are agreed between Glasgow Housing Association and the other housing associations that are involved. The number of houses to be replaced needs to reflect the likely needs and demand in any given area. However, the Cabinet Secretary for Health and Wellbeing will take time to review the progress that is being made on delivering the promises that were made to the tenants of Glasgow.

Johann Lamont (Labour, Glasgow Pollok)

The First Minister might be aware that some members of his party believe that the previous Scottish Executive policy of community ownership of social housing was privatisation. Does he agree with that, or does he acknowledge the critical role of housing associations and housing co-operatives, such as those in my constituency, in creating safe, sustainable and thriving communities? If he agrees with me, will he ensure that the already identified record massive levels of investment in social rented housing that have been made through Communities Scotland and through working with local authorities, will be sustained without disruption or delay for communities and tenants? Will he assure us that calls for review are not calls for a standstill? Our communities deserve better.

Alex Salmond (Scottish National Party, Gordon)

It is obviously difficult to pick up the exact words sometimes, but I said:

"to review the progress that is being made on the delivery of the promises that were made to the tenants of Glasgow."

Glasgow City Council has reassured us that it is still committed to delivering the number of houses that was promised. There are some doubts, as Johann Lamont will know, about the timescale for delivery. The aim of the investigation and review that I am suggesting is to review how the promises that were made to the tenants of Glasgow are being kept.

For the record, the Scottish National Party has always been committed to local housing associations.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

To ask the First Minister what assessment the Scottish Executive has made of the consequences for the environment, economic development and traffic congestion of cancelling the Edinburgh tram scheme. (S3F-17)

Alex Salmond (Scottish National Party, Gordon)

A full review will be presented to Parliament. The consequences will depend on the alternatives. The alternatives that this party favours are guided busways on much of the tram alignment between Edinburgh airport and Haymarket; incentives for the use of hybrid fuel buses, which would reduce emissions; incentives to improve through-ticketing; real-time information at all Edinburgh bus stops; completion of the planned park-and-ride sites around the city, which are proving increasingly successful; and further bus-priority measures on the routes that are to be served by those park-and-ride facilities.

We believe that those measures offer a real alternative to the current trams proposal. However, the undertaking that we gave to hold a financial review and to give a presentation to Parliament stands. I hope that, out of that informed discussion and debate, we can seek agreement across the Parliament.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Given the First Minister's doubts about the tram scheme and his admiration for the economic policies of the Republic of Ireland, will he pay a visit to Dublin in the near future to see how the tram system there has, over a short period, reduced congestion, significantly promoted economic development and proved so popular that a major expansion is already under way? Does not he realise that the Edinburgh and Leith tram is the best option for the environment and for getting people out of their cars; that the scheme is essential for development of the waterfront in my constituency; and that it is being progressed through fixed-price contracts, under which the contractor bears the financial risk?

Nobody is a greater fan or user of buses than I am, but does not the First Minister know that Princes Street, with a current level of 320 buses per hour, is fast approaching the saturation level of 400 buses per hour, and that only an integrated bus and tram network can stop Edinburgh and Leith from grinding to a halt in the years to come?

Alex Salmond (Scottish National Party, Gordon)

I look forward to Malcolm Chisholm's trenchant views being expressed in the debate when we bring the financial consequences and appraisal to Parliament. It will be interesting to see whether his view on fixed-price contracts is justified by the financial analysis that is being called for and carried out now.

As far as a visit to Dublin is concerned, I am delighted to tell Malcolm Chisholm that the likely continuing Taoiseach, Bertie Ahern, has invited me to do exactly that. I have accepted, and I promise Malcolm that I will look closely at the tram network when I am there.

Liam McArthur (Liberal Democrat, Orkney Islands)

To ask the First Minister what steps the Scottish Executive will take to ensure that the development of Scotland's wave and tidal energy industry is not undermined by the United Kingdom Government's energy white paper. (S3F-4)

Alex Salmond (Scottish National Party, Gordon)

As the members knows, I have already placed on record my determination to see Scotland become a global centre for marine renewables. In doing that, I am happy to acknowledge the substantial contribution that was made by the previous Deputy First Minister, Nicol Stephen. Over the next two years, the world-class wave and tidal energy test facilities in Liam McArthur's constituency will play host to several full-scale machines, supported by Scottish Government funding.

Our support for the sector is already ahead of the rest of the United Kingdom. We will, with the industry, be considering the white paper proposals for marine energy. We will make our views known to the UK Government but, if necessary, we will continue to provide separate support schemes for Scotland, because—as the member will understand—the support that we are providing in Scotland is substantially greater than that indicated by the energy white paper.

Liam McArthur (Liberal Democrat, Orkney Islands)

As the First Minister said, my constituency is home to world-class test facilities for wave and tidal energy, thanks—as he said—to the support from the previous Executive. I refer to the efforts not just of Nicol Stephen but of Jim Wallace. As a result, Orkney now boasts a cluster of businesses carrying out leading-edge work in marine energy and other renewables. If, however, Orkney's exceptional wave and tidal resources are to be harnessed for Orkney's and Scotland's benefit, a high-capacity grid connection to Orkney is vital. What assurances can the First Minister give that his Government will give strong support to a marine interconnector from the northern isles to the key centres of energy demand?

Alex Salmond (Scottish National Party, Gordon)

That is a good question. The point that we would make is that interconnectors are vital for a number of island communities in order to mobilise their energy resources. As Liam McArthur well knows, those matters are in the province of the Office of Gas and Electricity Markets, the energy regulator. As he also knows, there are a number of substantial issues that not just island communities but northern and central Scotland have with Ofgem in terms of prohibitive charges for connecting to the grid. I believe that this is an issue of huge importance—not just for Liam McArthur's constituency, but all round Scotland in terms of our energy potential. I hope that members will unite in taking an unanswerable case to Ofgem that to realise our energy potential we must have the ability to deliver energy at reasonable prices to the areas of consumer demand.

Margo MacDonald (Independent, Lothians)

On a point of order, Presiding Officer. I did not want to interrupt the first First Minister's questions, but the First Minister did invoke the will of Parliament in two different respects. I would like from you, if possible, a definitive ruling on the rule of Parliament and how it refers to any actions that are undertaken by the Executive, should the Executive disagree with the expressed will of Parliament. I do not think that it is correct to say that the late Donald Dewar set that in stone.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I thank Margo MacDonald for that point of order. Given the issue involved, I hope that she will forgive me if on this occasion I do not give an immediate reply. I will think about it and come back to you later in the day if I may.

That brings us to the end of First Minister's questions. Before I suspend the meeting, I remind all members—although I am sure that I do not have to—that there is a camera in the room and that we are about to meet for a complete Parliament photograph. If members remain in the chamber, it will all be over as fast as possible.

UK Energy White Paper

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good afternoon. The next item of business is a statement by Jim Mather on the United Kingdom energy white paper and Scotland. The minister will take questions at the end of his statement, so there should be no interventions during it.

Jim Mather (Scottish National Party, Argyll and Bute)

I am pleased to have the opportunity to make a statement on the UK energy white paper. It is important to be clear about a number of issues. We need to be clear whether the proposals that will have a specific impact on Scotland will be helpful in meeting our environmental and economic objectives; and we need to be clear about the issues on which we will seek to persuade the UK Government on the need for a change of approach, the issues on which we will use our own powers in different ways to achieve more for Scotland, and the issues on which we will use our own powers to complement UK measures.

First, let me reflect on our overarching objectives. There are some key goals for energy policy on which we all need to agree. Those include the need to reduce carbon emissions and so tackle climate change; the need to ensure security of energy supplies by fostering a vibrant, diverse and competitive energy sector that is rooted here in Scotland; and the need to deliver energy at a price that is affordable for individuals and businesses, so that we ensure that energy policy allows the energy sector to continue to make its vital contribution to economic growth.

Those goals are entirely consistent with our overarching core purpose of perpetually strengthening the economy, brand and social fabric of Scotland. In achieving those goals, we can and must exploit the opportunities that are offered by Scotland's abundant natural energy resources and related expertise, but we must do so in a way that respects and protects Scotland's environment. I believe that colleagues—and, indeed, the UK Government—will agree that those objectives are reasonable and balanced. Where we may have different views is on how the objectives should be delivered and the steps that Government should take to ensure their delivery.

The UK Government has been conducting its energy review for some 18 months now. Last week's energy white paper is the result of that lengthy deliberation. However, I suggest that the delayed energy white paper fails on many counts.

The white paper's commitment to combating climate change is clear and welcome. In due course, we will introduce our own climate change bill for Scotland, which will set targets that will provide the context for the whole policy spectrum, in particular in energy, transport and energy efficiency. We know that our emissions reduction targets are ambitious, but putting climate change at the heart of our core economic decision making will give us the best basis for meeting those challenges. By introducing a climate change bill in the Scottish Parliament, we will set a clear long-term statutory framework so that businesses, organisations and individuals can invest in low-carbon technologies with certainty. Climate change is a global issue requiring collective action. I look forward to constructive work with every party in the chamber so that Scotland can take and retain a global lead.

By way of contrast, the UK Government's big idea for combating climate change—nuclear power—is the hole in the middle of the white paper. The white paper is now without its intended nuclear core because, as members will be aware, the courts have backed Greenpeace and forced the UK Government to consult properly on the future role of nuclear power. We will respond to that by making it clear that we do not want and do not need nuclear power in Scotland. If an application for a new nuclear power station were to be submitted, the issue would be for Scottish ministers to decide. We would be obliged to consider the application but—given our policy position, our generating capacity, our multiplicity of energy resources and our strong alternative strategies—it would be unlikely to find favour with this Administration. In any case, we are confident that no operator could justify such an application to its shareholders or customers.

The UK white paper recognises that other options are open to Scotland and the rest of the UK, but we believe that it underplays their potential. We do not believe that there is an energy gap that only nuclear can fill. Scotland has other resources that we are determined to exploit. Those resources are so abundant that we should be planning for export and for offshore grids instead of giving into the negativity about Scotland's burgeoning energy sector. Those resources can provide the base-load and diversity that security of supply demands. We can have clean energy from fossil fuels. We can have more renewable energy from diverse sources and the means to maximise energy output from a given energy source through combined heat and power plants. Those are concrete opportunities.

The opportunity for harnessing clean energy from fossil fuels must be better understood, including here in Scotland. We can continue to use gas and coal if we can capture and store the carbon dioxide that would otherwise be released into the atmosphere.

Although carbon capture presents an enormous opportunity both for the environment and for the UK in exporting advanced technology, the UK Government has fallen at the first hurdle. For a start, we have had a drip feed of announcements. Support has been promised, but the details are to be set out later. Now, with the publication of this white paper, we are being told that the criteria against which projects will be judged will be set out in November, with decisions made after that. Given what has happened to the Peterhead Miller field project, such a slow response appears already to have cost Scotland and the UK. Alistair Darling's announcement that the competition for UK's carbon capture and storage project will begin in November 2007 has resulted in the withdrawal of BP, the key partner in the consortium.

In February, the Secretary of State for Scotland and the energy minister gave the clear impression that a decision would be taken this year. Now we find that it is a decision about taking a decision. Both know full well that, given the obligations and costs relating to decommissioning, BP needed to have that decision this summer. As a result, we face the loss of or a further delay in a real and technically viable CCS project, in which two of Europe's largest companies are ready and willing to invest hundreds of millions of pounds. This is simply a case of bureaucratic timetables ignoring commercial reality.

The project would give Scotland a world lead in CCS technologies because, unlike most other projects, it seeks to extract CO2 pre-combustion. It would make use of the infrastructure and expertise that is Scotland's North Sea oil legacy and would generate sufficient low-carbon electricity to supply 750,000 homes and store 1.8 million tonnes of carbon every year. That is roughly equivalent to the CO2 savings achieved by all of Scotland's wind farms.

Since the white paper announcement, the First Minister and I have worked to bring the Peterhead project back on track. The First Minister has spoken and written to Alistair Darling, pressing for a change in the UK Government's position, and I very much hope that Mr Darling will respond to our constructive ideas. I assure the chamber that we are continuing to match the admirable best efforts of Aberdeenshire Council to secure the implementation of this crucial project.

The white paper is silent on another matter that will affect the viability both of our coal-fired stations and of our renewables capacity—the regulatory framework within which our generating companies operate. Liberalised markets have brought benefits to the consumer. For example, competition between suppliers and their ability to buy from a range of generators has had a beneficial effect on prices, even if that effect has recently been masked by the price of inputs such as gas. However, the approach taken by the Office of Gas and Electricity Markets to transmission charges has not been helpful.

Renewable energy sources are, by their very nature, often distant from the markets that they need to serve, yet the transmission charging regime actively works against the development of those resources. Moreover, I am talking not just about renewables generators. Given that a power station in central Scotland pays £25 million more than similar power stations in Yorkshire, it is clear that transmission charging threatens future investment in clean coal technologies. Overall the current transmission charging regime heavily penalises Scottish generators, resulting in additional charges of about £100 million per annum for the 10,000MW generated in Scotland. Indeed, Scottish companies have told us that transmission charges in Scotland are six times higher than those in England and Wales.

I hope that the UK Government will think again and ensure that Ofgem takes more account of climate change objectives and, as a result, sets charging regimes that support rather than work against environmental objectives. The First Minister has committed to work with companies here in Scotland to achieve that end. If it appears necessary, we will press the UK government to change Ofgem's remit to ensure that more account is taken of medium-term investment needs and the case for investment in renewable technologies. Such steps are necessary if Scotland and the UK are to get maximum benefit from the white paper's other proposals, particularly those with regard to the prospects for renewable energy.

Nevertheless, the white paper contains welcome proposals for easing access to the electricity grid and I hope that the proposed review can be carried out swiftly and effectively. In addition, the restructuring of support for renewable energy takes us in a helpful direction.

Studies have shown that our demand for heat and electricity can be met several times over by the power of the wind, waves and tides, by our forestry resources and by our long-established hydro stations. It is vital that support for those technologies is sufficient, proportionate and effective.

The early advances in renewables capacity have relied almost entirely on onshore wind. The contribution from that technology is and will continue to be important. We want to see more projects, but they should be good ones and not projects anywhere and at any price to the environment.

We need to look beyond the next few years and take a more strategic view of support structures. The principle that emerging technologies need more assistance is enshrined in Scottish renewables legislation, which allows increased support for wave and tidal power. I acknowledge the actions of the previous Administration in going down that route. It is interesting to see that the UK Government is now ready to take similar steps.

It is right and strategically sound to promote as diverse a range as possible of renewables technologies. It is right that the returns that are available under the renewables obligation mechanism should be redistributed away from competitive, lower-cost technologies and towards offshore wind, biomass, wave and tidal power. I believe that such changes can benefit the renewables sector and are capable of leading to increases in renewable output. However, the devil is in the detail and we will monitor developments closely.

I am not convinced that the measures that are aimed at supporting wave and tidal power are sufficient. There is a sizeable gap between what the UK Government is proposing and what is currently available for wave and tidal power under the renewables obligation in Scotland. That gap might be bridged by the provision of capital support on a large scale, but the white paper is short of detail on that aspect. Once that is clear, whether the same or similar changes are made to Scotland's renewables legislation will be a question for this Parliament.

Those potential changes need to be considered alongside our own strategic priorities and vision for renewables development in Scotland—a vision that includes not only marine and tidal energy but biomass and offshore wind power. I intend to listen carefully to the views of our own stakeholders before making any decisions or recommendations.

I also welcome the white paper's acknowledgment of the importance of renewable heat. There is a lack of firm proposals for action, but I accept that we are all not far past the starting blocks here. I know that Executive officials have been working hard with stakeholders to examine how we promote renewable heat and I believe that this is an area where we can make genuine progress and a real difference in Scotland.

We must not focus exclusively on generating heat and power. We all know that we can be more efficient in our use of energy. We support the steps set out in the white paper that impact on Scotland. Essentially, those are the requirements that are placed on the utility companies, regulation in relation to consumer products and the carbon reduction commitment for large commercial organisations. We have our own powers and measures sitting alongside, such as the opportunity to use building standards to improve energy efficiency further and the ability to provide advice to business, the public sector and individuals on changing their practices and behaviour.

Energy policy must be a coherent whole, embracing power and heat; new technologies for generation and reduced consumption; and sustainable growth and community benefit and engagement. That is why we will set out our own approach to energy, the actions that we will take here in Scotland and the issues on which we need dialogue with the UK Government. Many have called for an energy policy for Scotland. We will work with all interested parties to develop that. We will start by bringing together voices from across the energy sector—including users—to establish a single unifying goal for the sector that is in line with the core purpose of this Government. Those voices will have the opportunity to work with the Government to identify potential, to identify inhibitors and constraints and to work together to move forward in line with our national goal.

There are things to welcome in the white paper, but there are also proposals for nuclear power that have no place in Scotland. There are also disappointments, such as the lack of commitment—indeed, the lack of energy—in taking forward issues such as carbon capture, especially given the promises that have been broken, the timescales that have been extended and the options to go the extra mile and take advantage of legislation that have been ignored.

I look forward to working with the people of Scotland, with the energy industry and with the Parliament to achieve a more ambitious approach and an optimal outcome for Scotland.

Iain Gray (Labour, East Lothian)

I thank the minister for making a copy of his statement available in advance.

This is the first statement to Parliament on energy, although the First Minister had a fair bit to say about it in his statement last week. Mr Mather outlined his vision for the future of energy in Scotland last week in a conference speech that was later categorised in the press as a "gaffe". Much of what has been said has been bluster about rejecting nuclear new-build applications that have not been received, so a slightly more cautious and measured approach today is welcome.

I have three questions. First, the minister said that he wants Scotland to plan for export, but Scotland currently exports 20 per cent of the electricity that is generated here to the wider UK market. Last week, Mr Mather referred to that as surplus and seemed to believe that it was a safety cushion that allowed him to be cavalier about security of supply. In fact, it is an existing export industry, creating wealth, jobs and skills just like any other export industry. Is that existing export industry in the Scottish energy market expendable or not?

Secondly, given that onshore wind is the only mature renewable energy generating technology available now and providing commercial electricity to the grid, as Mr Mather admitted in his statement, and given that it has the capacity to expand, which he said that he desired, will he tell us whether the Scottish National Party still supports a cap on onshore wind generation and new projects having to wait on community energy plans before they can move forward?

Thirdly, as the SNP intends that Scotland will depend significantly on existing nuclear generation of electricity until at least 2023 and as the management of radioactive waste is a devolved responsibility, will the Administration continue as co-sponsor with the UK Government of the expert-led process through the Committee on Radioactive Waste Management? Alternatively, will it implement SNP policy of above-ground, on-site storage of all radioactive waste, and if so, when?

Jim Mather (Scottish National Party, Argyll and Bute)

On the plans for export, we have a surplus now, and we intend to have a bigger surplus in future. We also intend to export more—20 per cent is just a start. I notice that Scottish Power is investing £1 billion in building new networks in the next five to seven years and looking to facilitate 6GW of renewables through the new infrastructure. That will include £250 million being spent on ensuring that it is better able to export yet more. We expect more and more from the renewables and clean technologies that Scotland will take forward.

We reject Mr Gray's assumptions about our potential. When we consider clean coal, offshore wind and other technologies, we see that there is plenty of scope. We will consider new onshore projects when there is merit, community support and community benefit and when they are right for Scotland and the goals that we have set.

I reject Mr Gray's assumptions on nuclear power and nuclear waste. We will ensure that, whatever happens, Scotland is protected to the nth degree—that will be the case in every situation. We have a proposal that sees us at a new beginning in Scotland that is akin to the personal computer and the oil and gas revolutions happening simultaneously with Scottish involvement. The moneys will reside in Scotland if we have the will and energy to grasp the opportunities. I appeal to the Parliament: if we take these opportunities on board, we can become the renewable energy capital of the world, not just exporting energy and reinventing new industries but taking them to the world as technologies and Scottish expertise for years to come.

Alex Johnstone (Conservative, North East Scotland)

I thank the minister for advance sight of his statement. Although there are things in it that he and I will never agree on, there is much that I am prepared to concur with. My questions relate to a number of the areas on which we may have common interest.

First, the minister mentioned the effect that the Government has had on the carbon capture project at Peterhead, with BP withdrawing from it. That is an example of the damage that dithering can do if ever there was one. However, will the SNP Administration undertake not to use that as a political pawn but to work hand in hand with the Government in the south to ensure that the mistakes that have been made can be undone and that it will not be used as a wedge to drive between our two countries?

My second question also relates to previous activity. Many members will be aware that the Conservatives and a certain John Swinney, who is sitting fairly close to the minister, have called repeatedly over the years for national strategic guidance on the placing of onshore wind farms, as we believe that such guidance would do much to alleviate the controversies that have arisen throughout much of Scotland on the issue. Is the Administration prepared to commit, finally, to ensuring that Scotland's Government gives national strategic guidance?

Finally, another area of common ground that we have had in the past is the firm belief that if we are to increase efficiency and have a smaller carbon footprint in Scotland, it would be valuable to increase domestic production, home energy efficiency and the use of microrenewables and to extend those technologies into light industry. The Conservative manifesto included proposals for an eco-bonus scheme, which would increase grant aid for such developments. Will the Executive undertake to work with us to ensure that that scheme comes to fruition?

Jim Mather (Scottish National Party, Argyll and Bute)

On the point about the proposed carbon capture plant becoming a political pawn, we will work hand in hand, but robustly, with the UK Government. As I said in my statement, the First Minister and I took the issue back to Alistair Darling, pressing for change and asking him to consider other options. I hope that he will respond constructively. As with any corporate interests, Scotland's best interests require solid and robust, not soft, engagement. We will represent Scotland's interests and we will look for Mr Johnstone's support as we make progress on that.

Strategic guidance on onshore wind farms in Scotland will be produced. We will consider the Conservatives' suggestions on reducing the carbon footprint. I am personally committed to seeing what we can do through decentralisation of generation, which can give rural communities an edge in what they can do and produce locally using locally generated energy. The example of Gigha is always in my mind, as the local community there generates £160,000 of profit a year, in spite of the fact that they sell energy at wholesale prices to the grid and buy it back at retail prices. When the situation is organised properly, the potential will be even greater.

Liam McArthur (Liberal Democrat, Orkney Islands)

I, too, thank the minister for the advance copy of his statement and congratulate him on bringing the issue to the Parliament. He will acknowledge my constituency interest and he has already acknowledged, as did the First Minister earlier, my party's commitment to the development of a renewables powerhouse in Scotland. I welcome much of what the minister said in his statement, although it was short on detail. I endorse his comments on nuclear power and the current system of transmission charges. Likewise, I endorse his call for Ofgem's remit to be amended to take more account of environmental factors.

Like Iain Gray and Alex Johnstone, I have three main questions. First, the minister talked of confidence, stability and certainty in the energy sector and went on to say that the devil will be in the detail. I suggest that the devil may be in the blanket moratorium that his party proposes in relation to the proven technology of onshore wind. Will he clarify when he intends to commence the SNP's year-long moratorium on onshore wind farm developments and say what impact he expects that to have on existing projects that are going through the planning process? If he still intends that the moratorium will be put in place, how will he build the confidence of the renewables industry in Scotland so that it can grow and deliver an alternative to nuclear power?

Secondly, the minister rightly drew attention to the cost of the delays in the DTI taking decisions about the carbon capture project in the north-east. Similar concerns have been raised with me by the marine energy sector in relation to the DTI's marine energy fund. Will he undertake to continue to raise concerns with his DTI counterparts about the need to commit that vital investment?

Finally, although, as I said, the statement was short on detail, will the minister indicate what his ambition is for renewable electricity generation? The previous Executive set and was on course to achieve ambitious targets. Liberal Democrats advocate a 100 per cent target by 2050. Will the minister lend his support to that target?