Scottish Parliament, 21 February 2008

398 contributions from 80 members. The official report.

Official Report 21 February 2008

Scottish Water

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a debate on motion S3M-1386, in the name of Derek Brownlee, on the future of Scottish Water. I invite members who wish to speak to press their request-to-speak buttons now. The debate is a little undersubscribed, so anybody who would like to speak would be welcome.

Mr Brownlee has seven minutes in theory, but we are a little relaxed about the time.

Derek Brownlee (Conservative, South of Scotland)

I open the debate with some trepidation, because the last time that I spoke in the chamber on Scottish Water half a ton of wood swung loose from the ceiling and hung above my head. Thankfully for me, I survived to be present for what—if the BBC is to be believed—is an historic day, when parties that have long opposed the mutualisation of Scottish Water will take their first faltering and hesitant steps towards it. Who would have thought that Fidel Castro would retire before the Labour Party and the Scottish National Party pensioned off their ideological antipathy to mutualisation? Only two weeks ago, who would have thought that a left-wing alliance would emerge? For the Labour Party, perhaps it is a case of, "If you can't beat 'em, join 'em." I am keen to offer the Government some friendly advice. If it is preparing to support Labour's amendment, it might be worth checking whether the Labour Party proposes to do the same. I believe that I crafted a motion with which no reasonable person could disagree. As if to prove my point, only Des McNulty and Liam McArthur have sought to amend it.

The debate is not about the rights and wrongs of the service that Scottish Water provides; I make no apology for focusing on the structure and the governance model that we select for the organisation. Some might consider the debate to be dry, academic or arcane—I suppose that that is the stuff of dreams for Des McNulty—but the subject is important. Scottish Water costs taxpayers £182 million every year and we need to consider whether that expenditure is necessary. The debate is also about whether Scottish Water can obtain in a different manner the money that we all agree that it needs to invest in infrastructure.

The Scottish Conservatives' position is well known: we think that the model adopted by Welsh Water operates better for taxpayers and customers than does the model imposed on Scottish Water. However, my motion seeks consensus and does not prescribe the outcome; all that it seeks agreement to is the reasonable proposition that the Government should review the structure and, while considering the status quo, also consider a mutual model, among others.

Any change to Scottish Water's status would require fresh legislation—Alex Neil said that in the budget debates—so today's vote is not on the form that Scottish Water should take but on whether we should review the form that it could take. We all ought to agree that a review is long overdue. Whatever positions the Labour Party and the Liberal Democrats take today, the previous Government did not review Scottish Water's status—Sarah Boyack helpfully confirmed that in a parliamentary answer to me last March. The current Government had been in office for all of seven days when it ruled out changes to Scottish Water, so it could not have undertaken detailed consideration before it decided to retain the current status. As we know, the Howat review suggested that mutualisation should take place, but that was rejected out of hand last May. If we are about to see a change of heart today, we should welcome it.

As I have said, a review is not a commitment to change Scottish Water's status. If Scottish Water is best kept as it is, a review will demonstrate that. Those who are confident of their position have nothing to fear from a review. The Government cannot oppose a review on the ground that, as a matter of principle, it is against the ownership of infrastructure being outwith the public sector, because it proposes such a model for its Scottish futures trust, which will be, according to the consultation on the trust,

"a body which is private sector classified but which has a public interest ethos."

Such a body will own schools and hospitals. Surely the SNP cannot argue that private ownership is good enough for those vital public services but not for Scottish Water.

I have sympathy with much of the Labour amendment. Of course any review of Scottish Water's status and structure must take into account the regulatory regime in which Scottish Water operates. However, we must consider what the amendment means by "public ownership". After all, private companies are owned by the public, and a mutual in the purest sense—a co-operative, one might say—would be owned by the public. I worry that the Labour Party's amendment is too prescriptive. By insisting on public ownership as, I suspect, Labour would define it, Labour rejects the Welsh Water model, which works well.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

In examining the nature of public ownership, would the member care to comment on the Conservatives' position on the Trustee Savings Bank, which was owned by trustees and customers but was sold off to profit a Conservative Government?

Alex Johnstone (Conservative, North East Scotland)

To profit the taxpayer.

Derek Brownlee (Conservative, South of Scotland)

As Mr Johnstone has eloquently said—he is an eloquent man at the best of times—the Government did not receive anything; the taxpayer benefited from that move.

If Labour rejects out of hand the Welsh Water model, it rejects something that works well. Rather than cost the taxpayer money, Welsh Water reduces its customers' bills with money that it does not want to invest in infrastructure. That is a helpful model to consider. The Welsh model would not mean privatisation in the sense that Scottish Water would be sold off to private institutions, although if that were best for customers and taxpayers no responsible Government would reject it. The model would not result in what happened to the English water companies. It would create, as the SNP would have it, a private company with a public sector ethos.

It might be possible to construct a mutual in the public sector, as the Labour Party might argue, and we would have no problem with a motion that sought to explore mutualisation options. That is hardly surprising, because that is precisely what my motion permits.

Scottish Water receives £182 million each year at the expense of public spending on other areas. Borrowing is constrained by Treasury rules. If Scottish Water were a mutual in the private sector, those constraints would be removed. It is far from clear that the same could be said for a public sector mutual, but we have no objection to considering the matter further.

All parties should be able to support my motion. The Labour amendment is flawed, but I give Labour credit for the fact that it represents significant progress on Labour's previous position. Members can tackle the challenge of improving Scottish Water by supporting my motion tonight, or they can—as is apt in a debate on water—choose to bottle it.

I move,

That the Parliament calls on the Scottish Government to establish a review of the structure and operations of Scottish Water with a remit to consider whether the current model delivers best value for taxpayers and customers, to consider alternative models, including mutualisation, and to report back to the Parliament on the conclusions of the review in such time as to allow any changes to the structure of Scottish Water to be in place prior to commencement of the next spending review period in 2011.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Des McNulty has about six minutes, but we can be quite generous.

Des McNulty (Labour, Clydebank and Milngavie)

Apart from being elected and re-elected to the Scottish Parliament as the constituency member for Clydebank and Milngavie, my proudest achievement in politics—in which I was greatly assisted by my colleague Charlie Gordon—was a successful campaign against Conservative proposals to privatise the water and sewerage industry.

David McLetchie (Conservative, Edinburgh Pentlands)

Will the member give way?

Des McNulty (Labour, Clydebank and Milngavie)

Does David McLetchie not want to hear the numbers?

David McLetchie (Conservative, Edinburgh Pentlands)

Will the member reflect on the fact that the proposal was to divide water services among three publicly owned companies, which his Administration subsequently amalgamated into one publicly owned company? No privatisation proposal was on the table. That was a gross misrepresentation by you and your colleagues.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I hope that I have not misrepresented anything, Mr McLetchie.

Des McNulty (Labour, Clydebank and Milngavie)

Mr McLetchie should go back over the history and remember the eight options that were proposed, which focused on privatisation. I remind him that in the Strathclyde water referendum, 1.194 million people voted against the Tory proposals for the industry's future organisation, which represented 97 per cent of voters on a turnout of just under 73 per cent. That was a crushing reverse for the Scottish Conservative party.

The Strathclyde referendum was followed by the annihilation of Tory representation in Scotland in 1997. Although there were many reasons for the Tories' dismissal, it is fair to claim that the water referendum was a key turning point. The Scottish Conservative party has not recovered either electoral support or political credibility, so one might have expected Mr Brownlee, in whose name the motion has been lodged, to shy away from the issue on which his party was routed. Mr Brownlee reminded us that, on the previous occasion when he spoke in a water debate, he was fortunate that the beam whose roof fixing sheared did not come down on his head. The auguries on this issue are not promising for the Conservatives.

However, I am pleased that Mr Brownlee has lodged his motion, because it gives me a chance to restate the firm commitment that Labour made in its manifesto last year to retain water in public ownership; to set out what was achieved over the past few years under the previous Administration; and to identify what needs to be done under the present Administration to ensure that a publicly controlled water industry is both accountable and efficient, in the best interests of domestic and business consumers.

Gavin Brown (Conservative, Lothians)

Will the member give way?

Des McNulty (Labour, Clydebank and Milngavie)

I want to continue for a little while.

It may surprise new members to hear that the cause of mutualisation was first pressed from the Tory benches by Murdo Fraser. The idea that the most right-wing person on economic and social issues on the Conservative benches is in favour of shared ownership is implausible enough, but the idea that Mr Brownlee and Mr Johnstone are committed to walking in the footsteps of the Rochdale pioneers is even stranger. I point out to the happy-clappy bunch on the SNP benches that Fergus Ewing rivals Mr Fraser as the most right-wing member of the Parliament. I described Mr Fraser only as the most right-wing member on the Conservative benches.

The Tories are no prodigal sons, regretting and repudiating the errors of their past ways. They are deceivers who want to sugar the pill of privatisation that voters spat out so emphatically 13 years ago by embracing a peculiarly privatising version of mutualisation.

Derek Brownlee (Conservative, South of Scotland)

I welcome the fact that Mr McNulty's amendment mentions mutualisation. Does he agree with Unison that mutualisation is a smokescreen for privatisation? Is that the Labour Party's position, or does the member disagree with Unison on the issue?

Des McNulty (Labour, Clydebank and Milngavie)

I thought that I had stated my position, but I will repeat it. Many Labour members have demonstrated a strong commitment to the principles of co-operation. If mutuality offers a way forward in protecting and maintaining public control and meaningful shared ownership of any government or business organisation, Labour is naturally inclined to be sympathetic to and supportive of it. However, when mutualisation is used as a veil for the privatisation of public assets, as the Tories intend, Labour will oppose it strongly. Our position remains that the water and sewerage industry should remain firmly within the public sector. The risks and costs associated with mutualisation on the Welsh model would not be acceptable here in Scotland.

Over the past eight years, with the formation of Scottish Water, the implementation of four-year investment programmes, and the introduction of greatly improved regulatory arrangements and new responsibilities set down in legislation, significant progress has been made towards overcoming the legacy of chronic underinvestment that damaged the water and sewerage industries in Scotland under Conservative Governments in the 1980s and 1990s. Out-of-date plant such as the water works in Milngavie in my constituency have been replaced by modern, up-to-date treatment works, as part of a £500 million a year capital investment programme—the biggest such programme in the United Kingdom water and sewerage industry.

During consideration of the Water Industry (Scotland) Bill, I proposed that a sustainability duty be imposed on Scottish Water. It is vital that that duty and the role that Scottish Water must play in delivering the objectives of the water framework directive, as translated into the Water Environment and Water Services (Scotland) Act 2003, are fulfilled, especially given the emphasis that we all agree must be placed on addressing climate change.

The process of improvement on both the delivery and environmental fronts has not been entirely smooth. Mr Brownlee was a member of the Finance Committee in the previous session, which carried out a major inquiry into water and made robust recommendations. He will recall that the prospect of sharply increasing water charges triggered that investigation. However, if we compare Scottish Water with privately owned water companies elsewhere in the UK, we find that currently it has one of the lowest levels of charges for domestic customers, and soon its charges may be the lowest in the UK. That is a success for the Finance Committee, for the revised regulatory arrangements that we recommended and, to be fair, for Scottish Water.

Alex Johnstone (Conservative, North East Scotland)

Will the member take an intervention?

Des McNulty (Labour, Clydebank and Milngavie)

No, I will not.

There are issues that the industry must address: the unacceptably high level of leakages from transmission pipes, on which targets have been missed; issues relating to procurement and asset management; work on flood prevention, involving soft as well as hard engineering solutions; and the extent to which the industry is responsive to its customers. However, it is only fair that we also note the conclusions of the regulatory report that the water industry commissioner produced last year, which recorded substantial progress against industry benchmarks, in both absolute and comparative terms.

None of that will be welcome to the Conservatives, who find the urge to privatise when there is any glimmer of public sector success irresistible, especially when that success contrasts favourably with the performance of the private sector. Fortunately, Labour members do not have their ideological hang-ups. I note from the budget that the Minister for Transport, Infrastructure and Climate Change has moved on from the analysis of the Cuthberts that engrossed Mr Mather and Mr Ewing. We want to have a successful water industry. That is why Labour's amendment puts the emphasis on keeping Scottish Water under pressure to meet its delivery targets, while making clear the Government's responsibilities for overseeing good governance and the delivery of services that equal or exceed those that are available from comparable providers elsewhere. That is what the people of Scotland want, and that is what Labour wants.

I move amendment S3M-1386.1, to leave out from "calls on" to end and insert:

"supports the retention of Scottish Water under public ownership and in that context calls on the Scottish Government to keep under review the structure and operations of Scottish Water, the regulatory arrangements for the water industry to ensure that the interests of domestic and business customers are properly protected and alternative public sector models, including mutualisation, and to report back to the Parliament in due course."

Liam McArthur (Liberal Democrat, Orkney Islands)

This is a timely, if strangely undersubscribed, debate. We believe that the time is right for us to undertake a thorough review of Scottish Water, to consider whether the current model delivers best value for domestic and business customers and for taxpayers. I am encouraged that the call for such a review and for mutualisation appears to be gaining support throughout the chamber. However, as Mr Brownlee pointed out, we should not forget that when ministers published the Howat report last May, their only comment on the recommendations before burying them was to rule out any rethink on Scottish Water's structure and operations. Were it not for the recent climbdown on sportscotland, such a U-turn would almost merit the description "historic". However, given his repeated condemnation of mutualisation in recent months, I am bound to say that the decision may tax even the bottomless loyalty of Mr Neil.

Alex Neil (Scottish National Party, Central Scotland)

Does the member not think that it would be much better to have a commission rather than a review on this matter? [ Laughter. ]

Liam McArthur (Liberal Democrat, Orkney Islands)

As I said, we are testing Mr Neil's loyalty to the limit.

The call to keep the situation under review, as the Labour amendment suggests, is insufficient—not because it is too prescriptive, as Mr Brownlee said, but because it lacks urgency and clarity. I fear that it could lead to the Government finding reasons—possibly even the much-loved, "We're just a minority Government"—for not taking action. Ministers must make clear their intentions on the nature and timeframe of the review that their spin doctors have been busy telling the BBC overnight is imminent. If nothing else, abolishing council tax and introducing a fairer local income tax will mean that the present arrangements for setting water charges and billing will need to be reviewed.

On charges, I state in passing that Liberal Democrats support the extension of the current exemption for some charitable organisations and bodies that serve a public function. I invite the minister to indicate his current thinking on the issue.

In the remaining time that is available to me, I will address two important points: the timing of the review and the nature of the changes that we wish to see. It is wrong for Mr Brownlee to suggest that mutualisation has not been considered before now: it was considered in the run-up to the Water Industry (Scotland) Act 2002, which merged the three former water authorities. The 2002 act was essential to providing a more efficient, consistent and high-quality product and service. However, at the time it was clear that mutualisation could be achieved only at a prohibitive cost to the consumer.

Over the past five years, under the previous Executive, there has been record investment in Scottish Water. That has helped to address issues ranging from development constraints to the higher quality and environmental standards to which Mr McNulty referred. Scottish Water has progressed to the point where conversion into a mutual company can be achieved in a way that is beneficial both to the consumer and to the taxpayer. We must recognise that the company operates in a highly technical and competitive environment and that attracting people with the necessary skills and expertise is increasingly difficult and costly. Performance and pay invariably are benchmarked against private sector companies.

Gavin Brown (Conservative, Lothians)

Will the member give us his opinion on the Welsh Water model?

Liam McArthur (Liberal Democrat, Orkney Islands)

I am coming to that. Various mutual models are worthy of consideration. After an inauspicious start, the Welsh model has elements to recommend it. At this stage, we do not want to prejudge the review in terms of the available options. However, in order to meet the challenges that Scottish Water faces, we believe that it is not necessary to go down the route of privatisation as the Tories did south of the border. As I said in response to Mr Brown, we believe that a mutualisation model—of which there are a number—is the right way forward. Scottish Water would be owned entirely by the Scottish public and all profits would be retained for further investment in infrastructure or passed on as savings to the consumer. We would seek a legislative block on any future demutualisation or privatisation.

Given the political consensus, of sorts, that is emerging, a review is now required. However, public support for such a review will be possible only if reassurances are given that it is not about privatisation and if the benefits to the customer and taxpayer over the long term are clearly set out. I have pleasure in supporting the minor amendment in my name.

I move amendment S3M-1386.2, to insert after "mutualisation":

"but excluding privatisation".

Stewart Stevenson (Scottish National Party, Banff and Buchan)

In considering today's motion and amendments, we need to keep in mind the unique water industry model that we have in Scotland. The Tory press release of yesterday stated:

"If the Scottish Government is confident that a state-owned Scottish Water is the best option, then it has nothing to fear from a review."

We are confident and we do not fear a review. Indeed, to use a phrase that I have used before, such a review by a new Government would be normal, natural and necessary. We have, of course, examined the status of Scottish Water, and we are happy to examine it further if the motion or amendments are agreed to at decision time.

Derek Brownlee (Conservative, South of Scotland)

On 24 May, John Swinney said:

"We will not take forward the recommendation"

of the Howat report

"to turn Scottish Water into a mutual company ... Scottish Water will retain its current status. That is our clear policy position."—[Official Report, 24 May 2007; c 134.]

Jim Mather then said that Scottish Water would not move towards mutualisation under an SNP Government. Is there a U-turn?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The member should listen to what I said, which was:

"If the Scottish Government is confident that a state-owned Scottish Water is the best option, then it has nothing to fear from a review."

I repeat: we are confident and we do not fear a review.

We have a system that combines the best parts of the privatised industry in England and Wales with, of course, the strengths and ethos of a public sector organisation. The result is a publicly owned water business that is subject to tough independent economic and quality regulation. The system ensures that ministers, not special interest groups, set the strategic direction for the industry on behalf of all the people of Scotland.

David Stewart (Labour, Highlands and Islands)

On regulation, is the minister happy with Scottish Water's current leakage rate? It failed to meet its target by 44 million litres a day, which is the equivalent of 17 Olympic swimming pools.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The leakage programme started a couple of years ago. The first target was missed by some 4 per cent, which was disappointing. However, Scottish Water has made substantial progress. Indeed, it is doing substantially better on leakage than many of the privately owned companies south of the border. I agree that leakage is an area for improvement, and improvement will be achieved. The public ownership of Scottish Water is a way of ensuring that the Government can act in the customer interest on leaks, as in many other areas.

Patrick Harvie (Green, Glasgow)

I am struggling to understand the purpose of the review, given that the Government is committed to public ownership. Is not mutual ownership incompatible with public ownership? If so, what is the point of the review?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I am happy to review the status of Scottish Water because I am confident that the review will tell us that we are heading in the right direction. [ Interruption. ]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Mr Johnstone.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I am not afraid of a review and I know that others in the Parliament are not afraid of a review. I do not intend that we head towards mutualisation.

I turn to highlight a number of areas. First, average household water charges in Scotland are lower than the average in England and Wales. Furthermore, in Scotland, charges will rise by less than inflation, whereas in England and Wales they will rise by more than inflation. Secondly, in Scotland, we have a company that is delivering for its customers—Scottish Water is outperforming its regulatory settlement and rapidly improving its customer service performance. It is therefore of little surprise that, last year, Scottish Water was judged to be one of the top utilities in the UK by its peers. That is a superb achievement on which I congratulate it. We need only compare that with the situation in England and Wales, where several companies have been fined for lying about their treatment of their customers. The water industry commissioner said that "Scottish Water's achievement" in reducing its operating costs

"is unprecedented in the UK water industry."

The Government does not believe in the current model as a matter of dogma; we believe in it because it works. It is not hard to think of one or two private sector businesses that are not well run, but in Scottish Water we have a high-quality board with experience from the public and private sectors that has the right skills to take forward the organisation.

It is important that we do not take steps to undermine the progress that has been made in recent years. Scottish Water is six years old, which makes it quite a young organisation. In that time, it has made huge improvements, and it wants to make many more.

Liam McArthur (Liberal Democrat, Orkney Islands)

Will the minister give way?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I think that I am out of time.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Time allows it.

Liam McArthur (Liberal Democrat, Orkney Islands)

The minister referred to the quality of Scottish Water management and the progress that the company has made, which the Liberal Democrats do not dispute. However, in terms of attracting high-quality personnel and management going forward, does he agree that the current model constrains Scottish Water while mutualisation would set it free?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

If I may, I will make a side comment. Standard Life—of which I was a huge defender—provides an interesting example of the mutual model. Ultimately, we found that the company had to go for a stock market listing because of the mutual model constraints. I accept that there is a variety of mutual models. Nonetheless, anyone who suggests that mutualisation is a panacea should examine matters more carefully, particularly when we have a successful model that is delivering for the people of Scotland.

We have tough targets for the future and we need to give Scottish Water space to rise to the challenge. We should, of course, keep an open mind and continue to review the options, but the clear consensus is that Scottish Water is doing well. The suggestion that we should change the model is not particularly robust. I am happy to support the Labour amendment, which strikes the right balance.

Alex Fergusson (None, Galloway and Upper Nithsdale)

We move to the open debate. I ask for speeches of around four minutes, but—as I keep saying—I can be reasonably generous.

Gavin Brown (Conservative, Lothians)

The minister says that he does not fear a review of Scottish Water, but he did not commit to one. I am happy to take an intervention from him at any point. He has neither committed to a review nor given a timescale for one. Perhaps he will intervene at some point and let the chamber know when the review will take place.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Mr Brown should listen more carefully to my remarks. The Labour member who proposed the amendment seemed to hear them. I have agreed that we will support the Labour amendment.

Gavin Brown (Conservative, Lothians)

To be careful, perhaps the minister should read the Labour amendment, which calls on the Government "to keep under review" Scottish Water, as opposed to calling on the Government to constitute and hold a timescaled review.

We welcome the Government's slight change of heart. Following publication of the Howat report, it said "No, no, no" to any review or mutualisation. However, yesterday, we heard John Swinney on the radio practically running the four-minute mile along the road to Damascus, trying to find a way out of the hole in which the Government found itself.

The Labour Party is trying to take credit for getting the Government to change its position, despite the fact that, as Derek Brownlee pointed out, the Labour Party refused over a number of years to hold such a review or countenance any form of change. On 15 March 2007, Mr Brownlee asked on how many occasions the Executive had

"reviewed the current structure of Scottish Water since its creation."

The answer that he received from the then Deputy Minister for Environment and Rural Development, Sarah Boyack was, "None". He then reflected on the Executive's possible change of mind on the mutualisation of the company and asked:

"does it not seem rather odd that the Executive has not even considered changing the structure of Scottish Water?"—[Official Report, 15 March 2007; c 33317.]

Sarah Boyack answered, "No".

The party that has been absolutely consistent all the way down the line is the Scottish Conservative party. We recognise that there are issues with Scottish Water, most of which are linked to its structure. We have heard that almost 50 per cent of treated water ends up as leakage, and we have heard about the cost to the taxpayer to the tune of £182 million a year.

What we have not heard about—but what is particularly serious—is the holding back of developments throughout Scotland because of the lack of water infrastructure, particularly in West Lothian, Midlothian, Glasgow, Kilmarnock and Aberdeenshire. Ken Ross of Homes for Scotland said in 2006:

"We have a crisis. Scottish Water has failed to allocate sufficient resources to remove development constraints, they are putting housing and other projects in jeopardy at a time when we need to resolve the problems of affordability for key workers and first-time buyers."

When Stewart Maxwell was asked in September last year how many developments had been held up in the past few years, he replied:

"The ... information requested is not held centrally."—[Official Report, Written Answers, 13 September 2007; S3W-4043.]

I note in passing that The Herald was able to report in 2006 that an estimated 8,000 developments had been held up by the lack of water infrastructure in Scotland.

Mr Stevenson seemed to suggest that Scottish Water was doing extremely well in the rankings and was well regarded by its peers, but the latest Office of Water Services rankings, produced in April 2007, ranked Scottish Water 22nd out of 22 companies. I suspect that Mr Stevenson was quoting from the Scottish Water annual report as opposed to any independent assessment.

The review needs to happen quickly. Although we rule nothing out, as we have said all the way down the line our preferred model is the Welsh Water model, which has run extremely successfully since 2000. It is mutualised, and it is a company limited by guarantee. Like any co-operative society—which I would have thought the Labour Party would support—it is privately owned by its members/customers as opposed to being publicly owned by the state. That model would give Scottish Water access on the capital markets to the money that it needs to speed up infrastructure work, and it would save the taxpayer £182 million a year.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Why did Standard Life, which was a mutual company, have to cease being one?

Gavin Brown (Conservative, Lothians)

As far as I am aware, Standard Life does not produce water. That change was debated a number of years ago, and I note in passing that Mr Salmond was furious about it at the time, although he recently rightly praised Standard Life for its success in the FTSE.

Under the Welsh model, Scottish Water would have access to private capital and we would save £182 million a year. I note in closing that Welsh Water customers have each received a rebate of £20 this year, which means that they have been handed back more than £100 million since 2000.

Helen Eadie (Labour, Dunfermline East)

At the outset, I refer members to my entry in the "Register of Interests of Members of the Scottish Parliament" as a Co-operative and Labour Party sponsored member.

Derek Brownlee spoke of the beam above his head. As I sat having a coffee this morning, I heard the almighty noise of a compressor going off directly above where I was sitting. I thought of him when that happened, and we said so to the staff, who immediately started investigations. Who knows what earth-shattering things are happening today?

It is interesting that, when I left the chamber last night, members were speaking about Supporters Direct, the mutual approach to football for supporters across Scotland. This morning, we again focus our attention on a debate about mutualisation of the water industry.

Water companies are not casino chips. They have a public duty to maintain a service to customers. A public company is a precious idea—a company that earns a licence to trade through accepting public obligations as the quid pro quo for the right to make profits in the society of which it is part. There is an explicit bargain: the company keeps its public promise to deliver the goods or service that it is in business to provide, and we accept its right to make maximum profits. It is publicly held to account by shareholders and stakeholders alike for non-delivery.

Some people may say that we have allowed the public part of the equation to wither by accepting the business lobby's proposition that profit is the only aim of a company. That proposition is wrong, and doubly so for a public utility. The aim of a public company is to prosecute its business vocation, through which it then makes profits. Scottish Water should regard its duty as being to deliver abundant water.

Derek Brownlee (Conservative, South of Scotland)

I understand Helen Eadie's point, but let us consider the Welsh Water model. Its primary objective is not to maximise profits because it has no shareholders to distribute them to. It is instead

"to provide high quality water and sewerage services at least cost to its customers".

Is not that a sensible model for Scottish Water to operate under?

Helen Eadie (Labour, Dunfermline East)

If I have enough time, I will highlight the deficiencies of, and warnings about, the Welsh Water model. If, one day and for reasons that are unknown as we speak, Scottish Water as we know it had to come to an end, I would consider the Welsh Water model, but with some caution. We should have regard to the various reports and papers that have been published that provide analyses of the circumstances in which the Welsh Water mutualisation came about. One paper is especially relevant—"Welsh Water: role model or special case?" which was published by Dennis Thomas from the school of management and business at the University of Wales Aberystwyth. The abstract of that paper states:

"This paper examines the issues involved in the conversion of the Welsh Water utility into a debt-funded, not-for-profit company, owned by members and limited by guarantee. The separation of asset ownership from out-sourced service management and operations, combined with debt financing, provides a revolutionary package with implications for the restructuring of the privatized water sector in England and Wales. However, the Glas Cymru model currently remains untested and its particular features, together with the circumstances of the Welsh Water acquisition, prevent its presentation as a template for replication by other companies."

Derek Brownlee should also consider whether, given the global financial situation, this is the best time to undermine the confidence of Scottish Water.

Some say that the best structure for a water company is the mutual ownership that has been pioneered by Welsh Water—owned by its citizen consumers and with the best performance record in Europe. Some also say that Welsh Water has many problems that need to be highlighted, and the health warnings must be read carefully.

Because of how the Conservatives privatised water in England, we should not take lessons from them today. [Interruption.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

Helen Eadie (Labour, Dunfermline East)

Labour's mission has always been to fight for the public component of public companies or a plurality of ownership structures. The Conservatives' aim is to ensure that most of the water industry is run by companies for whom profit is the main aim. Some Tories accept that they have wider obligations; others are less scrupulous.

There is a difference in the forms of mutualisation that the Tories and the SNP would have us accept. Murdo Fraser's assertion—in a previous debate on the water industry and price increases—that a mutual company is free from political accountability, is simply not true. A people's company remains externally accountable to the democratically elected Government and develops systems of internal accountability to all its members. The Tories' motion on that occasion proposed that Parliament

"further believes that, as public ownership has failed customers in Scotland, the Executive should investigate models of private ownership."

In moving the motion, Murdo Fraser said:

"I read with some interest the SNP amendment, which 'calls on the Scottish Executive to consider a not-for-profit trust'. What exactly is the difference between a not-for-profit trust and a company limited by guarantee that returns any profits to its members? I am not sure that I see any difference at all. Indeed, I wonder whether the SNP is so ideologically opposed to the private sector that it cannot swallow the thought of using the words 'private company' and instead dreams up the phrase 'not-for-profit trust'."—[Official Report, 19 June 2003; c 883.]

Alex Fergusson (None, Galloway and Upper Nithsdale)

You should be closing now, Mrs Eadie.

Helen Eadie (Labour, Dunfermline East)

That shows the dividing line between Labour members, who believe in democratically accountable co-operatives, and the SNP and the Tories, who want to run their mutuals as companies with appointed trust members. Trusts were not good for the health service so why should they be good for Scottish Water? That is the heart of the matter. There are many models of co-operative structure, and I would not accept the Tory version of mutualisation. As a public asset, water must be owned by every person in Scotland, free from the threat of privatisation.

Alex Fergusson (None, Galloway and Upper Nithsdale)

You really should wind up now.

Helen Eadie (Labour, Dunfermline East)

The industry should be democratically accountable to both Government and its members.

Rob Gibson (Scottish National Party, Highlands and Islands)

It is absolutely essential that we keep under review the water services that we receive. That could be done by committees or the whole Parliament, but it should be done all the time. In the previous session, a lot of attention was paid to various aspects of how Scottish Water was working and whether its governance arrangements were in order.

We are not comparing like with like. The English water companies have operated for much longer. Scottish Water has been expected to do a big catch-up job in a short time. Our public sector model has achieved a lot, as the minister said.

Derek Brownlee (Conservative, South of Scotland)

I understand that Scottish Water is a relatively new organisation and that it has perhaps not had time to develop in the way the English companies have. However, in 2005, Mr Gibson asked that Scottish Water be transformed into a not-for-profit trust in the public sector. It had had even less time then. [Laughter.]

Rob Gibson (Scottish National Party, Highlands and Islands)

There is no need for the Tories to laugh. There is a good reason why the former Environment and Rural Development Committee went to Wales to look at Glas Cymru—that is the bit that is mutualised, not Welsh Water. It was a disaster as a private company. At the time, it was suggested that mutualisation would be a good thing. However, when one digs deeper, one sees that the way in which Scottish Water and the privatised companies work means that subcontractors such as United Utilities—which are not mutualised—are making the huge profits. Until we dig into that and ask whether the subcontractors are causing customer charges to be higher than they should be, we will not properly review how water services work, or should work.

I suggest to those who are calling for a review—the Tories and Labour—that we should solve some of the problems from the past. We should consider that the charging regime placed on customers perhaps £1 billion of extra costs between 2002 and 2010. I know that the Finance Committee considered that in some detail in the previous session. A review will have to deal with that in the context of the regulatory capital value accountancy system that forced it, which is a model for the privatised utilities, not public companies. Current customers in Scotland have had to pay 86p in every pound for developments that should last for 50 years. That ought to be central to any review. The model of delivery is perhaps secondary.

I am concerned that developments in places such as the Highlands, where I live, rely on there being enough workers to carry them out. Scottish Water is always saying that it needs 40 per cent of the engineering workforce each year. The competition from the London Olympics and other things makes that difficult.

At the Transport, Infrastructure and Climate Change Committee, I questioned the regulator about the way in which Scottish Water underuses its borrowing requirements. He asserted that that is because it cannot complete its capital programme on time because of other constraints. We should consider such constraints, rather than the model.

Liam McArthur (Liberal Democrat, Orkney Islands)

Earlier this week, the Finance Committee considered the spring budget revisions, which included an additional amount for Scottish Water, principally on the basis that its capital programme is progressing much more swiftly now than it did in the past.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Mr Gibson, you should start to wind up now, please.

Rob Gibson (Scottish National Party, Highlands and Islands)

I will indeed.

There has been an exemption scheme for charities, which is one of the things that we can direct the regulator to look at. It is important that we consider charging not just in terms of giving customers bonuses; they deserve lower charges as a whole. All charities, whether existing or new charities, ought to be exempt from charges. We should ask the minister and those who are talking about a review to back such moves, rather than just consider whether the model should be mutualisation.

Charlie Gordon (Labour, Glasgow Cathcart)

Members might notice that I have moved to the left during the debate, but that is only because my lectern is broken.

The Tories have form on Scotland's water. As Des McNulty said, in the mid-1990s, while the Tory Government was busy undermining, Balkanising and gerrymandering Scottish local government, it sought also to quangoise Scotland's water services as a stepping stone to privatisation. As Des McNulty said, he and I also have form on water services. As the then Strathclyde Regional Council's spokesmen, we organised the historic and successful Strathclyde water referendum. Although it did not prevent quangoisation, it certainly scared the Tory party away from privatisation. Members should never forget that the Tories cannot be trusted with Scotland's water.

I know that all that happened before Derek Brownlee's voice broke and before he ran away from the circus to join a firm of chartered accountants, so why do we still not trust him today? Take budget day for example, which brought out the beast in Brownlee—if members can conceive of such a thing. On that day, he proclaimed the demise of Scottish Labour, rather than support our fight to protect jobs in the tourism industry, as Alex Johnstone did at the Transport, Infrastructure and Climate Change Committee. Politically speaking, I am well qualified to ruminate on near-death experiences, so I say to Mr Brownlee that we know what it is like to be savaged by a dead sheep; today is his day to be skewered by an alleged corpse. Reports of Scottish Labour's death are highly exaggerated.

The original Tory-created water boards had a poor investment record because they were intended only as a stepping stone. That was certainly the case in Strathclyde, compared with the record of investment under local government. Scottish Water has improved greatly over the years, for example in relation to investment to release development constraints. I think that I can claim accurately to be the first Scottish politician to have blown the whistle on the potential damage to regeneration that development constraints were doing. I did so under the auspices of the Convention of Scottish Local Authorities in my time as leader of Glasgow City Council. The impetus for that came when Scottish Water sent every local authority in the country, in their capacity as planning authorities, a list of red, green and amber sites. The red designation meant that development could not take place for the foreseeable future. We have sorted that out.

We need to consider options to improve the effectiveness of Scottish Water, but privatisation should not be an option, not least because the people of Scotland would never stand for it. While we consider various other options, we must remain focused on the major challenges that Scottish Water still faces, such as leakages, sewage discharges, slippage in the capital programme and the disproportionate impact of even a modest increase in water charges on people on fixed incomes, such as pensioners.

Gavin Brown (Conservative, Lothians)

Will the member give us one viable option for Scottish Water that the Labour Party thinks could be taken forward?

Alasdair Morgan (Scottish National Party, South of Scotland)

You should begin to wind up now, Mr Gordon.

Charlie Gordon (Labour, Glasgow Cathcart)

I have some new ideas, but I do not intend to share them with Parliament today. Unlike the Tories, I do not go around saying, "Here's a solution. Now let's find a problem I can apply it to." On the impact of increased water charges on pensioners, the Scottish Government sets great store by the popularity of a council tax freeze. However, when people open their bills shortly, the whit-aboot factor may emerge: the cry could be, "Whit aboot water charges?" In that scenario—or indeed any other—Labour will continue to fight for the early abolition of water charges for pensioners. We would even accept Tory support for that measure, but we will still never trust the Tories on water.

Bill Kidd (Scottish National Party, Glasgow)

I start by stating an obvious fact. Water is a precious resource, without which life cannot exist. Communities overseas without access to clean water supplies are the subject of regular Oxfam-style appeals on television, in which people in affluent countries are asked to donate to the development of water supplies that are free from germs and parasites in those places. We are all aware that we get nothing for nothing. Water is a precious commodity—so much so that it should not be up for grabs. Speculators should not be allowed to get their hands on something without which none of us can live. Water is a human right, the control of which is too important to be left to market forces. Let us be under no illusions: the Welsh model of mutualisation that the Tories are proposing for Scottish Water—

David McLetchie (Conservative, Edinburgh Pentlands)

If water is a precious resource that must be in public control because it is essential to life, does that mean that the food industry has to be in public control as well?

Bill Kidd (Scottish National Party, Glasgow)

I expected a wee bit of fatuous vacuity from the Tories.

David McLetchie (Conservative, Edinburgh Pentlands)

Answer the question.

Bill Kidd (Scottish National Party, Glasgow)

I am willing to reply to it. Water is a resource without which even food cannot be produced. It must be retained within the public system or it will cease to be able to be used by anyone, including the businesses that the Tories are always looking after. The Tories should want water kept in the proper hands.

To use the Welsh model of mutualisation for Scottish Water would be no more than a de facto move to privatise water and sewerage systems in Scotland. Where is the mutual benefit within mutualisation? The only obvious source of funding for a mutual water company in Scotland is the private sector.

Derek Brownlee (Conservative, South of Scotland)

I appreciate that Welsh Water is a private sector company. On the basis of what Bill Kidd is saying, is he against the Government's proposals for a Scottish futures trust, which would also be a private sector company?

Bill Kidd (Scottish National Party, Glasgow)

I am in favour of the Government, as was stated by the minister—[ Laughter. ] Thank you. I am in favour of the Government allowing a review of all services in Scotland and considering whether better systems can be found. I am stating that there is no other, better system. [ Laughter. ]

The only obvious source of funding for a mutual water company in Scotland is the private sector. The water industry is capital intensive. Mutualisation capital funds would be sourced from financial institutions with high interest rates, which would insist that all the services that are provided by Scottish Water would be operated by private contractors with profit margins, high borrowing costs and correspondingly high charges to citizens and businesses. Further, who would control and effectively own the resources that the publicly owned Scottish Water maintains, such as Loch Katrine and the Mugdock, Craigmaddie and Bankell reservoirs?

Scottish Water, as a publicly owned body, recently funded a £120 million renovation of the Milngavie treatment works to improve the quality of drinking water for the greater Glasgow area. Would a mutualised company based on the Welsh model be willing to commit to such projects and to carry the costs, or would water charge payers face excessive prices in order to pay the borrowing costs for those works? Water and waste water are public health issues and are, by their nature, capital intensive. They must be funded by the cheapest means available in order that no one will be priced out of access to those vital resources. The Scottish Government has a duty to ensure best value in its provision of services to the people—it is their money, after all—but the Parliament's duty is to all the people. Scottish Water must be a properly regulated, publicly owned and publicly scrutinised operation that delivers a cost-effective service to the Scottish people.

The Tories' Welsh model of mutualisation is known in leading academic circles as being inherently unstable. It is dominated by large private companies with a veneer of public participation and would inevitably leave Scottish Water in private hands.

Robert Brown (Liberal Democrat, Glasgow)

This has been a brief but undoubtedly important debate. The differences between the various positions seem to have moved outwards and backwards again as the debate has progressed. I confess that the positions of Labour and the SNP are as clear as mud. There have been some interesting speeches: Helen Eadie spoke well about issues surrounding mutualisation, Charlie Gordon talked about the challenges that are faced by Scottish Water and Rob Gibson talked about the sub-contractors and the investment challenges. Those were all significant contributions to the debate.

I am disappointed that we are not clear about the Government's position on the issue. It is to review the issue, but it will not have a review. It is to report back to Parliament, but it is not clear what it is to report back to Parliament about or when it will do it. We need some clarity, particularly given the spinning that was being done by the SNP Government's machine last night. The Government was busy spending the money in the Scottish block that it thought it would save by moving towards a mutual approach. If the SNP is going to make yet another U-turn on policy, could it at least be bold about it and do it with some style? There is no doubt that John Swinney is keen to put the £182 million from the block towards the pressures on his budget, but the Government gives no impression of a coherent or thought-out approach on that or a number of other substantial policy issues.

It was touched on earlier that there is something about water that lies deep in the psyche of many nations. In Scotland, the general view is that we have too much of it, and that it should be regarded as a human right or a gift of nature—or a curse of nature, depending on the circumstances. In fact, water is to some degree a manufactured product. It is a public good, which, in the view of most people in Scotland, should be provided under the aegis and control of the state. Water costs the average household £310 a year. Despite the enormous burden of modernisation of the tremendous Victorian legacy, in 2006 Scottish Water ran the business for more than 40 per cent less than in 2002. Considerable credit for that achievement is due to the ministers in the previous Administration, who came under some brickbats on the issue.

The traditional public ownership model has limitations. In our view, the business could deliver a better service for less if it moved to a mutual model, with profits retained for future investment to the benefit of customer savings. I stress mutualisation, not privatisation.

Rob Gibson (Scottish National Party, Highlands and Islands)

Why did the member's Government resist the mutual model while it was in power, until the most recent election?

Robert Brown (Liberal Democrat, Glasgow)

That has been explained already. Everybody accepts that a change of model will take a little time to bring about. It was Councillor Christopher Mason, a Liberal Democrat, who suggested the Strathclyde Regional Council referendum that reaffirmed the public aspect of the issue. Liberal Democrats are totally opposed to the privatisation of water and would bar the possibility of any future demutualisation or privatisation in any legislation on the matter.

I shall touch on charity relief. As members know, and one or two have mentioned, the original exemption for smaller charities was extended to 2010 by Liberal Democrats in government. In my view, that was entirely justified, and the present Government should consider a further indefinite exemption. That should, there is no doubt, be examined. Perhaps the exemption should be reviewed and, if necessary, revised. There may be issues about whether the lost revenue should be recouped in some other way. However, what would be intolerable would be to impose further burdens on the most vulnerable part of the voluntary sector just as it will be threatened by service investment cuts following the pressures of the council tax freeze.

There was a sense in the pre-debate arguments that members were coming together on the issue. We should not disguise the fact that there is much basic agreement on the matter, such as the challenges to Scottish Water and the ways in which we have to move forward. Whatever the history may be, the Conservative motion provides a timescale and mechanism for moving forward and for building on Scottish Water's current successes. It closes down no options, although it should close down the option of privatisation.

Labour's amendment has all the signs of being cobbled together, perhaps to disguise the clear divisions in its ranks. To see those divisions, we need only examine past statements on Scottish Water from Lewis Macdonald on the one hand and Sam Galbraith on the other, or even some of the speeches today.

I urge support for a thorough review and would like some clarity from the minister as to what exactly the Government's position is.

Des McNulty (Labour, Clydebank and Milngavie)

A number of members have accepted that Scottish Water has made considerable progress in recent years. It has achieved the rigorous European standards on water quality while costs have been reduced by up to 5 per cent annually through major efficiency savings. Households have benefited from lower-than-inflation increases in water charges. In the current quality and standards programme cycle, which runs from 2006 to 2010, £2.446 billion—a huge amount—will be invested and plans are already in hand for the next Q and S programme, which will run from 2010 to 2014.

In that context of success, and given the requirement for stability, it makes far more sense to focus attention on delivering greater efficiency and on meeting performance targets than to set in train a review that would be focused primarily on ideologically driven options for changing the industry's structure. That is the fundamental difference between our position and the Conservatives', who want a structural review because they disagree fundamentally and in principle with the way in which Scottish Water is organised at present. They want it to be privatised; their whole record is one of wanting privatisation. We fundamentally disagree with that, as I believe other parties in Parliament do.

Patrick Harvie (Green, Glasgow)

I certainly disagree with privatisation and mutualisation. I hope that I have misinterpreted the Labour amendment and I ask Des McNulty to explain the central problem that I have with it. The amendment

"supports the retention of Scottish Water under public ownership"

but goes on to describe

"alternative public sector models, including mutualisation".

In what way is mutual ownership a public sector model?

Des McNulty (Labour, Clydebank and Milngavie)

The point that needs to be made—which was made quite well by Stewart Stevenson, the minister—is that Scottish Water has developed through an evolutionary process that has enjoyed consensus across the bulk of the Parliament and in which the emphasis has been on continued public ownership.

Public ownership of Scottish Water should continue, but the issue is not mutualisation; it is about hitting delivery targets while making clear the Government's responsibilities for ensuring good governance and delivery of services that equal or exceed those that are available from comparable providers elsewhere. That is what people want. They do not want a debate about the structure—they just want better services. That is the reality. The focus is not on reviewing the structure. The emphasis is on the Government doing its job, which is to ensure that we get the best water and sewerage services possible. The Labour Party's view that that should be achieved through the public sector is clear.

David McLetchie (Conservative, Edinburgh Pentlands)

I will clarify the difference between public ownership and mutualisation. In his opening speech, Des McNulty spoke eloquently about the Rochdale pioneers in the co-operative movement. Will he clarify whether a co-operative society or organisation is a publicly owned body—that is, owned by the state—or a private organisation that is owned by its members and customers? Is a co-operative public or private?

Des McNulty (Labour, Clydebank and Milngavie)

It is fair to say that there are significantly different public models, including community ownership, which is how the co-operative movement started out. Ultimately, the Conservatives are not credible when they talk about co-operation or mutualisation because they fundamentally disagree with both. At present, we are in favour of a public sector model—publicly owned and publicly driven. We believe that that works effectively but also that it is possible to improve it.

Let us consider the process of managing capital. On the one hand, we have Transport Scotland, an executive agency that manages the transport budget. On the other hand, we have an arms-length body in the form of Scottish Water. There are advantages to both approaches and it is perfectly reasonable for the Government or Parliament to consider how the models can learn from the best aspects of each. That is a perfectly sensible discussion to have and one that the public would expect us to have.

We are not saying that advantages and new mechanisms should not be explored. We are saying that we support the retention of Scottish Water in public ownership. The amendment says that explicitly and it is the correct position. My party and the people of Scotland support it. I hope that we will continue with it.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The intervention that we have just had from the Conservatives was interesting. It seemed to focus on the minutiae of ownership of an organisation rather than—

Alex Johnstone (Conservative, North East Scotland)

It is the key to whole thing.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

That is the point: it is not the key to the problem. The key to the problem is to ask what needs to be delivered for what public benefit. Ownership is only a mechanism that can influence that outcome. It is a sideshow to the real issue, which is whether Scottish Water is delivering for the Scottish people and whether there is more that it can do to do that.

In a sense, the ownership mechanism can be positive or negative, whatever its style. Northern Rock is an entirely different animal from the Royal Bank of Scotland: one is a failing organisation, and the other is one of the world's leading banks. They followed a similar model of ownership, so there is a clear disconnect between ownership and achievement.

I am surprised that the party of pragmatism—which the Tories claim to be—should focus on ownership rather than outcomes and what is delivered. That is the heart of the debate, and I hope that we will address it.

Derek Brownlee (Conservative, South of Scotland)

The Government's futures trust consultation document says that its starting point is pragmatic. We are agreed on that, but the futures trust would be a private company that would deliver public benefit. Why could that approach not be considered for Scottish Water?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The private sector is a critical part of our economy. If we can find ways of reducing the cost of borrowing for public projects, which is what we are trying to do with the futures trust mechanism, we should of course pursue it. I am sure that we will have the support of all who examine the numbers.

Speaking of numbers, there were almost none from the Conservatives to back up the proposition that they laid before us. One would expect the party of money to be able to provide figures, but it signally failed to do so. Des McNulty commented that mutualisation appeared to be expensive. Substantial costs would certainly be associated with the conversion to a mutual model for no clear, pragmatic benefit for Scottish Water's customers and the broader community of Scotland.

Liam McArthur referred to meters and to the charitable exemption. There is a consultation on charging, which will close next week, if I recall correctly. I hope that all members will add their tuppenceworth—or their £400 million-worth, in the Tories' case—to that consultation. The exemption is a little more limited than was suggested, in that it covers charities only while they remain in their existing premises. There are some clear discrepancies and issues that will need to be examined when we get the results of the consultation, and members can be sure that the Government will examine them.

I realise that Helen Eadie probably came to the chamber with her speech already written, but I make it absolutely clear to her that we are not supporting mutualisation.

Patrick Harvie (Green, Glasgow)

Will Stewart Stevenson give way?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I think that I am running out of time but I will let Patrick Harvie in if he is brief.

Patrick Harvie (Green, Glasgow)

I will be brief in asking why, if the Government rejects mutualisation and the Labour Party supports public ownership, we are wasting time on a review of an option that has already been rejected.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

There is an important point there: it is the Government's role to review continuously the operation of everything in government. The Labour Party amendment supports precisely that idea because it

"calls on the Scottish Government to keep"

the matter "under review". Of course we should do that. We would be roundly criticised if we did not keep matters under review, not just in relation to Scottish Water but across the public sector. I repeat that it is normal, natural and necessary to do that, so of course we will do it, in line with the Labour Party amendment.

Mutualisation is really a financial chimera that is simply a surrogate for privatisation. It is not about delivering the services that the people in Scotland want or about supporting Scottish Water and building on its success of recent years. Scottish Water has a high-quality board with a load of experience. It has the people on board to succeed. It is clear that we should keep the structure, personnel and financing of all public services under review, but that does not mean that we should take a radical shift into the sands of mutualisation.

Alex Johnstone (Conservative, North East Scotland)

It was interesting to hear the minister talk about the need for permanent revolution and continuous review. It left me wondering just how many brothers Fidel Castro has.

Des McNulty (Labour, Clydebank and Milngavie)

rose—

Alex Johnstone (Conservative, North East Scotland)

Oh yes.

Des McNulty (Labour, Clydebank and Milngavie)

Alex Johnstone may not be particularly familiar with the lexicon of Trotskyism, but permanent revolution was the approach not of Fidel Castro but of Leon Trotsky.

Alex Johnstone (Conservative, North East Scotland)

Excuse me for not knowing the history of socialism.

An interesting point about history is that, as we all know, history is written by the victors. We have been given a history lesson today by Des McNulty and other Labour members who, as victors, have been able to invent the reasons and justifications behind the referendum on the water industry that was held by Strathclyde Regional Council. They have been able to do that because they were the victors, but I warn the Labour Party that it is not winning any more. It will no longer be able to write history.

Many of us who did not want the situation that we face today opposed the process that created Scottish Water, but credit must given where it is due. Scottish Water's control of the Scottish water industry has served to bring together, and has begun to solve, some of the many problems that our water industry faced. The nature and scale of those problems dictated the direction that previous Governments took in managing Scotland's water industry. Mutualisation was perhaps considered at the start of that process, but it would have been very difficult when massive problems had to be solved and massive investment had to be directed. It is therefore only right that Derek Brownlee's motion proposes a review of the current position so that action can be taken in advance of the next spending review in 2011. That is a reasonable ask.

The reason why we need such a review is that the different political parties present the Scottish water industry and Scottish Water in different ways in order to make different claims. However, one or two of the claims that have been made today must be questioned. On the efficiency of Scottish Water and on the extent to which water bills in Scotland are competitive, in comparison with those that are issued by companies elsewhere, some members fail to take into account the fact that the taxpayer pays to Scottish Water the equivalent of about £100 per household, which does not appear in those bills. Scotland's water bills are still significantly higher than those in other places, but that fact is hidden because the money comes out of the taxpayer's pocket rather than the water buyer's pocket.

Another myth is that Scottish Water has somehow succeeded simply because it is a public company. Much of the work that has enabled Scottish Water successfully to overcome its infrastructure difficulties has been carried out by Scottish Water Solutions, which is a Scottish Water-run consortium that includes many private companies that work together to create a more efficient Scottish water industry. We are already in a position in which the private sector is working for the benefit of Scotland's water consumers.

Liam McArthur (Liberal Democrat, Orkney Islands)

Will the member take an intervention?

Alex Johnstone (Conservative, North East Scotland)

I will not take not any interventions at the moment.

We must remember that Scottish Water exists to deliver for consumers. I resent the remarks of Helen Eadie and others who suggest that only the public sector can deliver public services—

Helen Eadie (Labour, Dunfermline East)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

No, sorry.

The concept of a public service ethos has always existed within the private sector. That is a strong ethos in Scotland and across the United Kingdom. We should defend that and be proud of it. A body does not need to be a public company to provide public service.

Helen Eadie (Labour, Dunfermline East)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

Sorry, I must make progress.

The key to today's debate is what we mean by public sector or private sector. Conservatives have consistently asked for consideration to be given to running Scottish Water on a mutual model. We have done so for almost four years. We use the Welsh model as an example of mutualisation. What do we mean by mutualisation on the Welsh model? The key is whether Welsh Water is in public or private ownership. In his response to David McLetchie's question, Des McNulty suggested that the co-operative model involves public ownership, whereas I would define that same model as involving private ownership. That must be taken into account in the review. We want a broad review that will consider every possibility. Our aim is for mutualisation on the Welsh model.

Alasdair Morgan (Scottish National Party, South of Scotland)

The member must conclude.

Alex Johnstone (Conservative, North East Scotland)

I say to the Liberal Democrats that they must consider that issue as well. The Liberal Democrat amendment would eliminate the Welsh model from the review's consideration. The Liberal Democrats should reconsider their amendment before tonight's vote.

I ask for a review in the terms that are set out in the motion in the name of Derek Brownlee.

Prisons

Alasdair Morgan (Scottish National Party, South of Scotland)

The next item of business is a debate on motion S3M-1385, in the name of Bill Aitken, on prisons policy.

Bill Aitken (Conservative, Glasgow)

Over the past two weeks, Kenny MacAskill has stomped around the country bemoaning the fact that prison numbers in Scotland are at an all-time high. He is right to be concerned—indeed, all of us share his worries—but we are even more concerned by what he sees as the solution to the problem. As the motion states, the primary responsibility of any Government is to establish a justice system in which the public has confidence and which ensures a secure and safe society. Mr MacAskill's proposals would prejudice that to an unprecedented extent.

Let us be quite clear about what Mr MacAskill wants. He wants to empty the jails of those who have been sentenced to six months or less. He would remove from the prison system many of those who have been convicted for offences such as carrying a knife, house-breaking, domestic violence, reckless driving and driving while disqualified. He seeks to replace custodial sentences with community sentences, in which sentencers currently have absolutely no confidence.

Why should sentencers have any confidence in such sentences when, of the 8,404 probation orders that were made last year, 45 per cent were the subject of a breach application to the court? Of the probation orders that included a requirement for unpaid work, the rate was even higher—it was 46 per cent. Of community service orders, around one third resulted in a breach application. My experience tells me that social work departments will bend over backwards to avoid making such applications.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

Does the member accept that, although those statistics are sad and rather shameful, they are significantly better than the statistics on the amount of reoffending by those who are sent to prison for two years or less, 75 per cent of whom reoffend?

Bill Aitken (Conservative, Glasgow)

I will come to that, if Mr MacAskill will bear with me.

We have to ask how much community service is actually done, but I suspect that we will not get the answer because it will be another statistic that is not held centrally. Fines are ineffectual because of the derisory lack of fine enforcement, which results in many offenders simply not paying.

It seems that alternatives to custody fail under every aim of sentencing policy, namely to protect the public, to deter, to punish and to rehabilitate. The most worrying feature of Mr MacAskill's attitude is that no thought has been given to how so-called tough community sentences could be made to work. There has been not one iota of a suggestion or scintilla of an idea as to how the existing system, which—as Mr MacAskill admitted a moment ago—is failing so lamentably, can be made to work.

Mr MacAskill argues—he did so today—that prison is failing to some extent, and he might have a point. The recidivism rate is far too high. Of course, we can never know how much chaos, mayhem and heartache would be caused by those who are in prison if they were free to commit more crime. If Mr MacAskill has his way, we will soon find out.

We need to address the problems that exist in our prisons. There is a unanimous view that it is appalling that offenders, many of whom are in custody for drug-related crime, find it comparatively easy to access drugs in prison. If we are to rehabilitate offenders successfully, we must give them every chance by keeping them off drugs. It is an appalling indictment of the situation that there are units to which offenders can volunteer to go to ensure that they stay off drugs. There has to be a zero tolerance approach towards drug use in our institutions. If a thorough shake-up of the system is required, we should not hesitate to bring in the appropriate measures, such as closed visits and greatly increased security. We have duties to our prisoners and I suggest that ensuring that there is a drug-free environment is one of the more pressing ones.

Mr MacAskill says that the approach to rehabilitation is inadequate. Again, he has a point, and overcrowding might well contribute to that, but whose fault is overcrowding? In our manifesto, the Conservatives budgeted for the provision of a new prison facility. The Scottish National Party could have done so—Mr MacAskill could have done so in his departmental budget.

I will attempt to be helpful, as I frequently am. I refer Mr MacAskill to a statement that was made by no less than John Swinney in The Mail on Sunday last week. In responding to a similarly constructive question from Derek Brownlee on the Carter review of prison spending down south, Mr Swinney said that he has now written to the Chief Secretary to the Treasury asking for Scotland's share of the £1.2 billion of additional spend following that review. Given that Scotland's share would be about £120 million, the Government has an ideal opportunity to increase prison capacity, and it would have some change left over.

If that is not enough, perhaps it is not too late in the day for the SNP to shake off its blinkered, dogmatic prejudice towards private sector involvement in new prison provision. I accept that like-for-like comparisons can be odious from time to time, but surely it cannot be denied that the cost of running a prison in the private sector is immeasurably cheaper than the cost of the system to which the SNP seems inextricably committed.

Is it not the ultimate irony that, at a time when we have unanimously agreed increased police resources, which will inevitably result in increased police activity and, in turn, more prosecutions, the Government seems almost determined to frustrate our efforts to make Scotland a safer society? Let us be clear that the moves will have serious and damaging consequences. The Government's course is clear.

The recommendations of the Scottish Prisons Commission, which was set up by Kenny MacAskill and is headed by Henry McLeish, have been pencilled in in biro. In an astonishing statement last week, Mr McLeish said that he does not believe in prison sentences. To be frank, that prejudices the commission's report. What sort of message is that to send out?

In going down its chosen route, the SNP must appreciate the dangers of alienating much of the electorate. The Government must support the vast majority of the people and the courts to avoid crime levels soaring beyond the present, unacceptable figures.

I move,

That the Parliament acknowledges the importance of a criminal justice system in which the public has confidence and which upholds the fundamental right of the public to a secure and safe society; notes with concern the current pressure on prison capacity; believes that the courts must be supported in sentencing disposals and, where that includes custody, believes that it is the obligation of the government to ensure that adequate custodial provision exists; views with concern deficiencies in the prison regime to address drug addiction, and deplores the Scottish Government's hostility to deploying the private sector in new prison provision.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

I say at the outset that we will support the amendment in the name of Margaret Smith. I also say to members on the Labour benches that, although the vagaries of the system mean that we cannot support the Labour amendment, we have a great deal of sympathy with what is espoused in it. If Ms McNeill and Mr Martin wish to meet me later, I will be more than happy to discuss how we can tackle matters where it appears to us that there is a national problem that we need to address to ensure that our communities are safer. The desire to do that should unite us, and I am more than happy to work with them on that.

The Scottish Government is committed to a publicly owned and operated prison service. We live in Caledonia, not Utopia, and there are bad people whom we need to detain to protect our communities. However, public safety, and not private profit, must always be our priority.

Paul Martin (Labour, Glasgow Springburn)

In respect of the procurement process for the new Low Moss prison, the Cabinet Secretary for Justice said last year that there would be some delay but that it would be a delay of months rather than years. Can he confirm that that is still the position?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

Yes, it is.

Mr Aitken went on about the requirement for prisons. The Government has announced record investment in the creation of a modern, fit-for-purpose prison estate. We have committed to Addiewell, we are proceeding with Bishopbriggs, but within the Scottish Prison Service, and we are preparing for a new prison in the north-east. We have committed to three new prisons and a financial package of £120 million of capital funding a year for the Scottish Prison Service to continue the modernisation of its facilities and finally eradicate the scandal of slopping out.

All those things reflect our commitment to deliver a modern, effective public prison service that makes a real difference in reducing reoffending and adds to the rehabilitation of offenders.

I take the opportunity to announce that we plan to scrap the law that allows children to be locked up in Scottish jails with adults. There are seriously disturbed children in our communities who need to be detained, often not just for the safety of our communities but for their own safety, but they should be detained in secure residential units with other children. They should not be placed in the adult estate, where they face entering academies of crime and where their safety is jeopardised.

We debated prison policy as recently as last September.

Bill Aitken (Conservative, Glasgow)

We are all uncomfortable with the fact that children can be kept in prisons or young offenders institutions. There is a unanimous view that that should happen only in cases at the extreme edge. However, can Mr MacAskill guarantee that the new arrangements will guarantee public safety and that violent young people will be kept in an environment that is safe both for them and for the rest of the community?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

I can give the member that assurance. I listened to the Commissioner for Children and Young People this morning. I do not know whether Mr Aitken has been to residential secure units, but I have been to several, both as the Cabinet Secretary for Justice and in the past, as a defence agent. Those places are not prisons, because they deal with children, but they are secure, and troubled youngsters are detained there under lock and key.

We set up the Prisons Commission under Henry McLeish to consider the purpose of imprisonment. I believe that we should look forward to its findings and not anticipate them. Mr Aitken seems to believe that some of the script has already been written. There is a national problem, and that is why we are prepared to work with all. We await with interest what is decided.

In the meantime, we cannot ignore the present situation, which includes continuing increases in the number of people who are imprisoned. At a time when the level of offending is decreasing, it is perverse that the number of people in prison continues to rise. For the first time in our history, the number of people detained in custody in Scotland has passed the 8,000 mark. The Scots are not inherently bad or more prone to criminality than the citizens of other countries, yet we continue to lock up twice as many offenders as Ireland and Norway.

Looking behind the numbers, we must all be concerned that a third of the offenders who go into prison have alcohol problems, more than half have drugs problems, and many have mental health problems. Recently, I visited Cornton Vale—an invitation was given to Mr Aitken, but he was otherwise detained. We were given a lecture and some information on the nature of those in the Cornton Vale estate. Some 98 per cent have an addiction problem, 80 per cent have mental health problems, 78 per cent have been the victims of abuse and 50 per cent self-harm.

Those people need to be detained, but in many instances they also need treatment and compassion. Reoffending rates show vividly that prison does nothing for those offenders. Yes, the great numbers of offenders who get short sentences have broken the law, but the sentences do not end offending; rather, they continue the cycle of crime. The figure of 14,000 receptions for sentences of less than six months does not mean that there are 14,000 individuals—it is made up of a hard core.

We cannot go on as we are. Prison is not cost free—it is substantially expensive. There comes a time when we need to invest in the good citizen and not just throw good money after bad on the bad citizen. We need to break the cycle of offending by tackling the root causes, whether they are mental health issues or drug or alcohol addiction. Building more prisons is simply not the answer. They are costly to build and expensive to run, with a cost of £40,000 per annum per prisoner. We must have prisons, but we must ensure that we use them to best effect. Those who commit less serious offences should face tough sentences to pay back their community for the harm that they have caused. Equally, those who offend because of mental health problems or drug or alcohol addiction should be treated in the community with the compassion that they deserve. That is cheaper for us and better for them.

We have a problem with the prison estate. We must ensure that it is used for those who need to be detained to protect our communities. However, we need to break the cycle of reoffending. We must punish toughly in the community and treat with compassion those who have addictions.

I move amendment S3M-1385.2, to leave out from first "with concern" to end and insert:

"that, while the offending rate has been falling, the number of people in prison currently stands at record levels and that Scotland has one of the highest imprisonment rates in the world; welcomes the McLeish Commission into Penal Policy and recognises that, in the case of serious and dangerous individuals, custody is the only appropriate punishment, and notes that the Scottish Government is committed to three new prisons and has increased investment in the prisons estate to an average of £120 million a year."

Pauline McNeill (Labour, Glasgow Kelvin)

Prison numbers have crashed through the 8,000 barrier and overcrowding is affecting prisoner regimes. Rehabilitation work, schedules and prison officers are under severe pressure. That would concentrate the mind of any Government, not just the present one. The situation has become a driving force of penal reform, as a necessity, and has been the subject of two debates in this session of Parliament. I welcome this morning's debate on the finer points of penal reform.

Every prisoner who is in prison is there because the court believed that that was the best option available to it. I do not support the notion that there are people in prison who should not be there; rather, I believe that there are people who might have been given an alternative sentence if the court had thought that that was the best option. The growth in alternative sentences in the past few years has been stark. We now have restriction of liberty orders and drug treatment and testing orders. I have argued in each of the three sessions of Parliament that the power to impose DTTOs should be extended to the summary courts, particularly for women who are involved in prostitution in Glasgow, because that is primarily a drugs problem. Labour believes in payback schemes and reparation orders. We call on the Government to rethink its stance on those orders.

In previous Administrations, Labour and the Liberal Democrats introduced the concept of restorative justice and provided a range of options as alternatives to prison. It is unclear why the SNP Administration has taken reparation orders off the agenda, as they could be another tool in the sentencing options kit.

What should we do if we cannot cope with prison numbers? The Tories would build more prisons and the SNP would empty them—those are certainly the accusations that we have heard this morning. However, neither option will do, so what is the answer? One key issue that must be addressed, perhaps by the Scottish Prisons Commission, is the repackaging of community sentencing and refocusing on how best to resource it. We must consider how to ensure that sheriffs have confidence in alternatives to prison. We think that it would be useful for the Scottish Prisons Commission to conduct a cross-party summit that involved sheriffs and others to consider the issues around community service orders.

When a judge sentences someone to jail, they do so because they believe that it is the last resort. They know that the door of the court shutting will be followed by the door of the jail shutting, with an enclosed environment and a brutal regime that will have an impact on the individual and, in many cases, the community. However, when a sheriff gives someone a community sentence, there can be huge delays. With many community sentences, when the door of the court slams behind the offender, they walk free and carry on with their life until a community sentence is available, so the sentence does not have the instant impact that it should have.

I welcome the general direction of the announcement on not imprisoning children. However, like Bill Aitken, I think that questions arise about what the Government believes should be done with violent young offenders in secure units. What will be the safety valve if we ban putting such people in prison?

Hugh Henry (Labour, Paisley South)

Does the member agree that, if we ensure that children do not go into prisons, the funding for secure units must be guaranteed and that there should be no threat to secure units?

Pauline McNeill (Labour, Glasgow Kelvin)

I agree whole-heartedly. When Hugh Henry was the Deputy Minister for Justice, he rightly ensured an increase in secure unit places.

After the prison estates review and the commitment from the previous Administration to provide at least two new prisons—which the Government claims as its own—I was concerned that the SPS attempted to sabotage what should have been a public sector bid for the Low Moss project. I welcome the Government's decision on that, but it must give more detail on how the project is progressing. We will have a serious problem if the new Low Moss prison is not on stream by 2012. I was not impressed with the previous SPS chief executive, who seemed to be rather complacent about that date. We must reduce overcrowding, so we need an urgent answer on that. We must hear from the Cabinet Secretary for Justice today how that prison is progressing.

I move amendment S3M-1385.1, to leave out from "acknowledges" to end and insert:

"notes the crucial role of the prison system in the criminal justice system and its role in dealing with a range of offenders; believes that only robust community sentences will provide a real alternative to custody for the Scottish courts and that this requires real investment in community sentences and community disposals; believes that short-term sentences are appropriate for certain types of offenders; further believes that urgent measures should be taken to provide real and appropriate alternatives to prison models for women offenders to reduce the female prison population; calls on the Scottish Government to report to the Parliament on the progress of the planned new prisons which could alleviate overcrowding in the prison estate, and further believes that sentencing policy should be clear, transparent and understood by the general public and should be driven by an underlying policy to protect the public from harm."

Margaret Smith (Liberal Democrat, Edinburgh West)

I welcome the cabinet secretary's comments about no longer placing children in adult prisons, but I echo the sentiments and concerns of colleagues who have raised issues about that. I hope that the cabinet secretary, either in his speech or in writing, will give us more information to confirm that public safety will be paramount. We all agree that the protection of our citizens and our communities must be at the heart of our penal system. However, no one could be content with the present situation, with record numbers in our prisons and a penal system that is obviously failing everybody. We might not agree on exactly how to go about improving the situation, but at least there is overlap between the parties, and certainly in the amendments, which is welcome.

The Conservatives still believe that, as long as we build more prisons, everything will be all right. Of course, those new prisons would be full of even more prisoners if we imposed the Conservatives' three-strikes-and-you're-out policy. Again, we have a bit of muddled thinking from the Conservatives. Edward Garnier, the Conservative shadow minister for home affairs, thinks that prison is hugely expensive and does not work, but Annabel Goldie insists that prison works. Bill Aitken says that the truth is somewhere in the middle. On that, as on many things, I support Bill Aitken. Some serious offenders must be locked up—that is only right—but the decisions about who those people are and for how long they are imprisoned are rightly for the judiciary. We all agree that the independence of the judiciary should not be compromised.

Liberal Democrats are determined to work with the Government and others in the Parliament and elsewhere to deliver an effective prison service and sentencing system. I look forward to meeting Henry McLeish in the next few days to discuss our thoughts on this important issue. We welcome the establishment of his commission and await its conclusions. We hope that it will consider the proposals, from us and the Government, on short-term sentences. No doubt Mr McLeish and his colleagues are now confronted with many of the familiar statistics, such as that three out of five prisoners leave prison only to reoffend or that the majority of prisoners suffer from a cocktail of deprivation and disadvantage that results from poverty, addiction, mental health conditions or an inability to read or write. The problems with which the men and women of the SPS are expected to cope go far wider than ever before and are more than simple criminal justice issues.

The convener and members of the Justice Committee recently visited Cornton Vale prison. Those of us who visit prisons surely ask ourselves how many of the people there should be there and how many could be dealt with more effectively elsewhere, not only for their benefit, but for the benefit of our communities. We are not interested in easy headlines; we want a system that works and which reduces reoffending. The Liberal Democrats believe that that is the best possible way in which to protect our communities.

Many prisoners would be better dealt with by tough community sentences. Is not it better to have a system in which offenders give something back to communities, make reparation and have their behaviour and its underlying causes challenged and, I hope, tackled, rather than pay £40,000 a year to keep them in a prison cell? I hope that the McLeish commission will examine the need for sentencers and the public to have confidence in community alternatives to custody. That means that we must find ways in which to deal with breaches more effectively than we do at present.

We must ensure that community sentences are undertaken quickly. At least dispatching offenders to jail at the end of a trial has the benefit that justice is seen to be swift. Therefore, we are interested in any proposals to quicken the process of community disposals. Community sentences are not a cheap option; we need to ensure that they are properly resourced, and that the option has at its heart the safety of our communities and our countrymen.

Short-term sentences do not work. The vast majority of people who are sent to prison with a short-term sentence come out of prison and reoffend. The comparative figures for community sentences are seductive, but they must be carefully considered. A person who receives a short prison sentence may lose their job, family and home, which means that they are more likely to reoffend on release. Andrew McLellan, Clive Fairweather and other experts tell us that, due to overcrowding in prisons and other factors, a person in prison does not have access to the skills and programmes to which they should have access to tackle their underlying behaviour or addictions. That must be changed. However, staff in facilities such as the link centre in Edinburgh prison and throughout the SPS do good work.

Scotland's prison population is reaching record levels, and we must all be concerned about that. We welcome the chance to take part in this debate and to propose options to Parliament.

I move amendment S3M-1385.2.1, to insert at end:

"recognises the need to reduce the number of low-level receptions into custody for short-term sentences by focusing on tough community sentences that pay back into the community for the harm caused; further notes the need to improve treatment for those with mental health problems and drug and alcohol addictions, thus addressing the underlying causes of offending, and calls on the Scottish Government to build on schemes which provide offenders with education and skills training for work, not crime."

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

Members have mentioned that the prison population in Scotland, at more than 8,000, is the highest that has ever been recorded here. In percentage terms, our prison population is among the highest in Europe. Is that the hallmark of a safer society or an indication of failure in our system? Prison population rates in the United States of America and Russia are around five times higher than those in Scotland, but the rates in countries such as Norway and Japan are around half of those in Scotland. Which of those societies are safer to live in?

Two thirds of all those who go to prison in Scotland reoffend within two years, and our female prison population has almost doubled in the past 10 years. That suggests that we are getting something badly wrong. The available data suggest that we are dumping people in prison who could be dealt with by other means. Last year, for example, we sent 6,000 people to prison for defaulting on fines. Most of those people were in prison for less than a fortnight. There must also be concern about the large numbers of women who end up in prison, particularly from the south-west of Scotland. Recent figures that have been made available to me suggest that 14 per cent of the entire female prison population come from that area. In her recent report, Scotland's Commissioner for Children and Young People, Kathleen Marshall, suggested that women may not be able to get access to community sentencing because of the lack of child care. Tackling that problem is not being soft on crime or criminals. We must deal appropriately with women with child care responsibilities who come into contact with the criminal justice system.

As we have heard, a person who goes to prison is more likely to return to prison than not to do so. Evidence from the south west Scotland community justice authority shows that reoffending rates for those who have been imprisoned run at 75 per cent, but those for people who have received community penalties are around 39 per cent. I think that that was mentioned.

Pauline McNeill (Labour, Glasgow Kelvin)

The reoffending rates for people who have been in prison and for those who have received community sentences are often quoted, but does the member really think that we can compare reoffending rates for people who have been appropriately sentenced in the community with those for people who have received prison sentences? Is that a fair like-for-like comparison?

Willie Coffey (Scottish National Party, Kilmarnock and Loudoun)

Such a comparison certainly gives us cause for concern. We must consider and analyse the figures rather than ignore or run away from them. Mr McLeish will probably consider that aspect of the matter in his review.

Some people have claimed that it is virtually impossible to get the jail in Scotland, but it appears that a high number of people who are not otherwise deemed to be dangerous end up in Scotland's jails. The existence of overcrowded prisons means that we may not be able to focus on serious offenders. The commission that is being chaired by Henry McLeish is considering the use of custody. It will be interesting to find out the commission's recommendations in the spring.

The community justice authorities are considering how we could increase community disposals to reduce the high number of short-term sentences. To deliver that, we must re-examine the use and quality of social inquiry reports, which may better inform and assist our sheriffs in considering sentences. Such measures represent a mature and practical approach to the problems that we face with our rising prison population.

On whether prisons should be publicly or privately run, the Government has made it clear that responsibility for the future development of the prison estate lies with the public sector, as responsibility lies with that sector when people are deprived of their liberty. That said, I am sure that prison officers in both public and private prisons deliver a high-quality professional service within the constraints of the resources at their disposal. Their dedication and commitment are first class and must be recognised.

Surely the challenge for us in Scotland is to tackle reoffending and the ensuing high prisoner numbers. We must recognise and act on the emerging trends if we are to have any realistic prospect of tackling the problems.

I am pleased to support the Government's amendment.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

Most people believe that there are people in Scottish prisons who should not be in them, but they also know that prisons house serious criminals and dangerous people who have rightly been put behind bars so that our communities and law-abiding people will be protected.

There is serious pressure on prison capacity in Scotland. I have spoken previously in the chamber about the significant number of people who are serving prison sentences for misdemeanours such as fine defaulting—Margaret Smith, Pauline McNeill and other members mentioned them, too. I do not think that those people should be in prison. They should make reparations to the taxpayer in their communities. They should not cost us money as a result of being locked up inappropriately. Seeking more effective non-custodial punishments for such misdemeanours should be a priority for the Cabinet Secretary for Justice, albeit that proper custodial provision for serious offenders should always be available. Keeping the public safe is the Government's first duty and a main function of prisons. The Scottish people have the right to expect that everything possible will be done to minimise the risk from serious violent or dangerous offenders and to expect the Government to give sufficient priority to that, but members of the public think that the system is frequently not working and they are losing confidence.

There is a role for the open prison system in rehabilitating offenders, although there are problems with it. The system is breaking down in assessing people who find themselves in it and in assessing when a prisoner is fit and trustworthy enough to make unescorted visits from prison. Robert Foye's absconding from Castle Huntly open prison and his subsequent rape of one of my constituents in August last year is a case in point. My constituents in Cumbernauld and Kilsyth think that the system is not working, and they are losing confidence fast. How can they believe that the Cabinet Secretary for Justice and the Government are giving sufficient priority to minimising the risks from serious or violent offenders when such a crime has been perpetrated on their doorstep by someone who had been sentenced for a serious act of violence against an officer of the law? What message does that send to people? What respect do we have for our justice system and our law officers when that person can be allowed out of prison with seeming consent? There can be no excuse for a system that does not result in the proper custodial provision that its prisoners require and which the public expect. The safety of the public must be paramount.

The frequent movement of prisoners, the difficulty in achieving continuity in respect of those who manage offenders and the varying availability of facilities and capacity to address educational, health and other needs of prisoners are obstacles to the punishment and rehabilitation of prisoners. There is a pressing need to take a long, hard look at the prison estate and to ask whether it meets the needs of the modern justice system, prisoners and the community, as well as rehabilitation needs and the need for links between communities and prisoners.

The Government must ensure that there are secure prison environments for the most dangerous long-term prisoners and that its prison estate has adequate provision. In short, a balance must be struck. We must provide for those who require to be imprisoned and ensure the safety and security that the public deserve.

David McLetchie (Conservative, Edinburgh Pentlands)

I struggle to think of any other area of the public sector in which 95 per cent of resources are devoted to men and 5 per cent are devoted to women, and in respect of which the publication of such statistics would not provoke scandalised cries of outrage about discrimination, demands for investigations and inquiries by the Equality and Human Rights Commission and other bodies of that ilk, and a feminist uprising throughout Scotland.

However, the fact that 95 per cent of the prison population is male and only 5 per cent is female is cause for complaint not about inequalities, but that the proportion of female prisoners is too high. One would expect the make-up of the prison population to reflect the proportions in which men and women commit crimes that merit imprisonment, but that is not the case. The most recent figures show that, overall, 16 per cent—not 5 per cent—of convicted criminals are female. Women commit 12 per cent of crimes of violence, more than 8 per cent of homicides and serious assaults, and 21 per cent of crimes of dishonesty. If women make up only 5 per cent of the prison population, it would appear that our judges, in passing sentences in individual cases, are already less willing to jail convicted women. Notwithstanding that, the present Government's policy, and that of its predecessor, is to deplore the fact that as much as 5 per cent of the prison population is female, to lament the increase in the number of women in prison, and to seek a reduction in that figure as an act of policy. What nonsense.

Pauline McNeill (Labour, Glasgow Kelvin)

Will the member take an intervention?

David McLetchie (Conservative, Edinburgh Pentlands)

By all means; let us hear more nonsense.

Pauline McNeill (Labour, Glasgow Kelvin)

I am quite alarmed at David McLetchie's view. Many sheriffs say that they are concerned about the women that come before them and they think that prison is the wrong place for them. Perhaps the member should take a different perspective.

David McLetchie (Conservative, Edinburgh Pentlands)

I take a different perspective, and I will tell the member why.

We can all visualise the statue of justice: it is a woman bearing a sword in her right hand and scales in the other. In many depictions, she is blindfold, not because justice should be blind to the truth—far from it—but to illustrate the principle that the law must be administered without fear or favour, and without reference to the rank, wealth, race, colour, religion, sexual orientation, and, yes, gender of the accused. That is a fundamental principle of our justice system, which we discard at our peril.

Nigel Don (Scottish National Party, North East Scotland)

Will the member give way?

David McLetchie (Conservative, Edinburgh Pentlands)

No.

If a person is found guilty of a crime that would merit a sentence of imprisonment for a man, it should merit a sentence of imprisonment for a woman. It is as simple as that.

I keep hearing how many women prisoners are victims of abuse and exploitation, drug addicts and the like, and that that is in some way an explanation for their conduct and a justification for non-imprisonment. However, our jails are full of men who could point to equally depressing personal histories, so I find that rationalisation to be deeply unconvincing.

Our justice system works on the basis of free will, of people knowing the difference between right and wrong, and of them being culpable and punishable for actions that they have undertaken freely or recklessly. That should be the case irrespective of the gender of the guilty person. The idea that some female criminals should somehow escape imprisonment as one of the range of punishments that is available to our courts is nonsense, and a total betrayal of one of the fundamental principles of our justice system. It is to the shame of the Cabinet Secretary for Justice, the present Administration and its predecessor, that they pander to such nonsense. We on this side of the chamber will have none of it.

Robert Brown (Liberal Democrat, Glasgow)

I have seldom seen David McLetchie so passionate, but he is being passionate about a cul-de-sac up which we ought not to go. There are more significant issues to be dealt with than the line that Mr McLetchie encourages us to take. Therefore, I move from women to children and welcome the cabinet secretary's announcements on the ending of detention for children. We are dealing with numbers in the 20s, and it is eminently possible to deal with the issue within the confines of the current estate.

There is a fairly stark difference between the Conservative motion and the major alternative that is being offered by the Government and Liberal Democrat amendment. My goodness—we know where we are with the Tories; they believe in prisons. Despite all evidence to the contrary, they believe that prisons deter and reform people. They want more of them and, despite the fact that Scotland already has more people in prison than any other country has, the Tories want more people, including more women, to be put in prison.

However, it is an imperfect world. In their haste to roll over for a few crumbs from the SNP Government's table, the Tories agreed to a reduction in prison funding to pay for more policemen. There is some doubt about where that leaves the Tories now; perhaps they will enlighten us during the debate.

No one in the chamber seriously suggests that dangerous prisoners who have been convicted of serious crimes should not be locked up for the protection of the public. The issue is about those at the lower end of the scale, where some consideration of why they have offended and what can be done about them is in the public interest. We know that a high percentage of those who come before the children's panel at the age of five as a result of parental abuse and neglect end up coming before the court at the age of 17 or 18 for criminal or antisocial behaviour. We know that 70 per cent of prisoners have some form of mental health problem, 50 per cent have a drugs problem, one third have an alcohol problem on admission, and substantial numbers have learning and literacy difficulties. We also know that the average cost of a prison place is around £40,000 per year per prisoner. We must at least ask whether the public get good value for that money.

From those statistics, it is possible to identify a general picture of the high cost to the public of short-term prison sentences that do not and, because of their shortness, could not succeed in rehabilitating the prisoner. They certainly give limited protection to the public for the period of detention, but that is relatively short, and the prisoners have to come out at some relatively near point in the future, possibly with tensions that have not been dealt with.

Bill Aitken (Conservative, Glasgow)

Which of the following short-term prisoners should not receive a custodial sentence: the knife carrier; the wife beater; the person who drives whilst drunk and disqualified; or the shoplifter who has done it 50 times?

Robert Brown (Liberal Democrat, Glasgow)

I will not get into that sort of debate, because that is not the issue. At the end of the day, prisoners who are serving short-term sentences have to come out in a short period of time. We need to consider the contributory factors to criminality in our fractured society and decide what we want to do to reduce crime and get better benefit from the public's money.

The Prison Reform Trust recently produced a report, based on interviews with Scottish prison staff, which estimated that up to 2,250 prisoners out of 7,000-odd have a technical learning difficulty or require some additional support with learning. Scandalously, the report also said that few procedures were in place to identify and deal with such issues in prison, and that little information arrives with the prisoner, despite the need for a social inquiry report before prison sentences are handed out.

I lodged a motion in the Parliament on that issue, which was signed by no fewer than 34 members from all parties, including Mary Scanlon. I hope that the minister will say whether he is in a position to take the issue forward. The protection of the public will be dealt with by changing the behaviour of the person who has come before the courts, and by dealing with some of the reasons why people are aggressive and take to alcohol.

I have been sparing in my praise of this Government's actions in the past, but establishing the McLeish commission is worth while. Its report will give the measured support to progressive and effective penal policies that, regrettably, the Conservative motion does not give.

Nigel Don (Scottish National Party, North East Scotland)

Once again, I find myself coming relatively low down the batting order in a very interesting debate and wondering what is left to say. I will start with some basic principles that have not yet been articulated but which underpin much of what has been said.

When I studied the subject, I found three reasons why we punish offenders. The first was stated to be retribution. It gives us a sense of justice, or an eye for an eye and a tooth for a tooth. If someone thinks something is good for me, I want them to find out what it feels like. That leads to the second reason, which is deterrence. At this point, I dive into the prison debate and ask whether there is any evidence that the possibility of going to prison deters people from doing criminal things. For the people who are in the chamber at the moment, it might, but I respectfully suggest that, for the people who end up in prison, it is not an issue. Prison as a deterrent is not worth any further discussion.

The third reason for punishment, and for imprisonment in particular, is that it should protect the public. We have said quite a lot about that point. Surely the most convincing reason for locking anyone up is that there is no safe place other than prison for the offender to be, given their history of interaction with the public. If we could hold on to that idea, we could halve our prison population.

It is the other half that we should consider—what happens when somebody goes into prison when they do not need to? It costs us a great deal of money. I suspect that the sum is dropping slightly; the walls are not getting any more expensive and more people are going in, so I guess that the figure of £40,000 is coming down, for all the wrong reasons.

When someone goes into prison, it must harm their children and their dependants. Prisoners are very likely to lose their accommodation, their job and contact with family. We know all that, so I will not rehearse it. They also suffer deterioration in mental and physical health and they are likely to be introduced to drugs, if they have not met them before, and the criminal culture, if they were not already part of it.

Who is in prison? We have many more folk in prison than certain European countries, and we must ask ourselves why. I am sure that Henry McLeish and his colleagues are doing so.

I will pick up on various points made by members. I must agree with Pauline McNeill that people are in prison because judges and sheriffs think that they should be there. We in Parliament should not challenge what justices, judges and sheriffs are doing. If they feel that people should go to prison, that is because they do not see a credible alternative. I am with all those who say that we must work to ensure that there are credible alternatives. Until those who give the sentences believe in the credibility of the alternatives, nothing will change.

Having said that, I also agree that people should not be imprisoned for defaulting on a fine. That costs us a huge amount of money. There is no value in sending someone to prison for fine default.

Paul Martin (Labour, Glasgow Springburn)

Can Nigel Don say how many fine defaulters are in prison?

Nigel Don (Scottish National Party, North East Scotland)

No, I cannot. I would rather stick to principles than facts. I accept that the number is not huge, but the point is that if someone is not going to pay their fine, they should not have been given it in the first place. The basic principle is that we need to have alternative disposals, so that sheriffs and judges can hand down disposals that are credible, effective and enforceable and which will keep people for whom prison is wrong out of prison.

Lewis Macdonald (Labour, Aberdeen Central)

My constituents in the Seaton area of Aberdeen know why prisons matter. They know who it is who commits most of the housebreaking and petty thefts in their neighbourhood. They know when he is up in court and how long he will serve when the sentence is handed down. They know when he is coming out of prison and they check that their doors are locked and that the kids have not left anything valuable lying outside.

Prisons matter to those constituents of mine because prisons give them respite, not from the crimes of a serious criminal but from the crimes of a persistent repeat offender. Seaton is no different in that respect from communities throughout the land. Prisons matter because the public require protection from those who break the law and because the victims of crime rightly demand that the perpetrators should be punished.

Crimes are committed daily in Aberdeen, as they are in every city. Courts deal with offenders week in, week out, and some of them are sent to jail. Aberdeen prison has often been the most overcrowded in the land, not because more crimes that justify imprisonment are committed in Aberdeen but because the prison is an old, cramped, Victorian building that is not fit for purpose in the 21st century.

The decision to replace Craiginches with a modern purpose-built prison ought to be welcome, but its intended replacement is not in Aberdeen. Instead, SNP ministers announced in the summer that a new prison is to be built in Peterhead to serve both as a serious sex offenders prison for the whole of Scotland and as the local prison for the north-east, including Aberdeen.

Elected representatives of all parties on Aberdeen prison visiting committee believe that Aberdeen should continue to have a community prison. They have not argued that the existing prison should be retained, but they have asked ministers to consider providing at least a remand unit in the city, so that prisoners who have not yet been convicted are not held in a prison that houses serious sex offenders and is 40 miles away by road from Aberdeen sheriff court. I am sorry to say that they received neither a direct answer from ministers nor any response to their request for a meeting with ministers.

Remand prisoners need to appear in court for their cases to be considered and they often need to appear more than once. It is surely fundamental to prudent prison estate management that ministers should seek to place prisoners who are on remand as near as possible to the court in which they will appear, to avoid the on-going cost of transporting them many times further than is now the case.

Aberdeen prison visiting committee has not asked ministers for a commitment to a new prison in Aberdeen, although there is a case for putting a prison where prisoners' family members can have access to it, in the interests of the rehabilitation of the prisoners. The members of the committee have not even asked ministers for a commitment to a new remand centre in Aberdeen. They have simply asked the Cabinet Secretary for Justice and the First Minister to meet them to discuss their concerns, and they have asked ministers to support a feasibility study to consider whether there is an economic case for the Scottish Prison Service to invest in a modern, purpose-built remand centre in Aberdeen.

Ministers should meet those with knowledge and experience of the issues in Aberdeen and they should agree to consider the case for a remand centre in the absence of a prison in Scotland's third city. That does not seem to me to be too much to ask.

Mike Pringle (Liberal Democrat, Edinburgh South)

Prison reform is an important and emotive issue and I welcome today's debate. Like other members, I welcome the minister's statement with regard to children.

As members including the minister and Robert Brown have said, proportionally Scotland has one of the largest prison populations in the world. Despite that, reoffending rates continue to rise. As it stands, the system is ineffectual and expensive and there are widespread problems with drugs and overcrowding. Sixty per cent of those who enter prison reoffend within two years. Her Majesty's chief inspector of prisons, Dr McLellan, has consistently warned that overcrowding is making it impossible for those who work in prisons to contribute as well as they might to the reduction of reoffending.

We are long since past the stage when it could be said that the people of Scotland are best served by the current system. If we are to move forward, as the Scottish Liberal Democrats have always maintained, the culture of our prison system must change to incorporate further community sentencing for minor offences and thus cut reoffending. The statistics speak for themselves: more then 20 per cent fewer criminals who are given community sentences reoffend.

As Margaret Smith said, we must ensure that such disposals are well resourced and immediate. Willie Coffey referred to the problem of women with families doing community service. I suggest that that shows that more resources are needed.

Obviously, such a change will not happen overnight, and more research is required in some areas. Among the possibilities that must be explored further is the notion of weekend prisons, where people are deprived of their leisure time to complete useful work projects in the community. The scheme could be used for the offenders to whom Cathie Craigie referred. As Nigel Don said, those offenders are not a threat to society, so why are they in prison? They should not be there. A pilot scheme in England and Wales met with some success but struggled to be cost effective. That barrier must be overcome if the idea is to be developed further.

There are numerous examples of effective systems from abroad. Indeed, in this month's Holyrood magazine, Keith Simpson, the head of restorative justice at Sacro, pointed to Finland as a valuable example of a country where community sentences, backed up by strong deferred prison terms, have proved effective.

As I would expect, the Conservative motion, without saying so explicitly, implicitly presupposes the maintenance of the current prevalence of custodial sentences. The Conservatives have talked a lot about early release—a policy that the previous Conservative Government at Westminster introduced—as well as the shortage of prison places with respect to current demand. I am concerned that such an approach offers no answers to the problems that are inherent in Scotland's prison system. Rather than being an attempt to examine the viable options, it represents simply a failed status quo. However, I agree with Bill Aitken that we must tackle the problem of drugs entering prisons.

The core of the problem is self-evident. As my colleague Margaret Smith said, Edward Garnier, the Conservative shadow minister for home affairs at Westminster, concedes that imprisoning criminals

"is hugely expensive and not working."

I began by welcoming a debate on prison reform and will close by saying that it is reform that is required, not the maintenance of the failing status quo. Our reactive and overly custodial-based sentencing system is what has got us here. What is required is a proactive system that concentrates on cutting reoffending. The cabinet secretary used the word "compassion" several times; perhaps we all need to show a bit more of that. I support the Executive's amendment and our amendment to it.

Paul Martin (Labour, Glasgow Springburn)

The amendment in the name of Pauline McNeill makes our position very clear. We differ from Nigel Don in that we believe that prison acts as a deterrent and plays a crucial role in ensuring that the perpetrators of crime are aware that prison sentences are always an option. As Bill Aitken said, community disposals, which are alternatives to prison, should be robust measures and carefully audited to ensure that they are not seen as a soft option for the perpetrator.

Some members might not relate this issue to today's debate, but we are clear that victims of crime must be considered in this discussion. I offer a constructive criticism of the current Government: much of what we have heard from it so far has supported the perpetrators, but we want to ensure that the victims of crime are also supported.

Robert Brown (Liberal Democrat, Glasgow)

Does Paul Martin accept that to best protect the public we must stop people's disposition to commit crimes in the first place and therefore deter them through reforming and rehabilitating their attitudes?

Paul Martin (Labour, Glasgow Springburn)

Robert Brown will admit that following that philosophy is easier said than done, although what he says is a serious challenge to us all. We on the Labour benches are clear that we must put victims at the forefront of many of our strategies. We did that in partnership with our Liberal Democrat colleagues and delivered for victims. I ask the McLeish commission to take seriously the views of the various victims organisations throughout Scotland.

Of course we support rehabilitation and alternatives to custody; that has always been the case. Most of us in the chamber support that philosophy. However, we need to acknowledge that our communities need to be protected from the individuals in our communities who pose a serious threat. We will not support the scrapping of short-term sentences. We will not release 600 housebreakers, 1,600 individuals who have been convicted of common assault or 60 who have been convicted of serious assault. I ask the minister in his summing-up to confirm that those statistics are correct and I challenge him to make it clear that he will be releasing those individuals if he scraps short-term sentences.

Nigel Don referred to the need for sheriffs to be free to make disposals. However, it would require legislation to deliver that philosophy. The early actions document that the SNP produced as part of its manifesto process said that an SNP Government would deliver a criminal justice bill, which would give us the very opportunity that Nigel Don mentioned. If the minister is serious about delivering alternatives to custody and opportunities for rehabilitation, why will it take over two years for him to deliver the criminal justice bill that he said would be an early action of the Scottish Government? The minister needs to answer that question and he needs to say where the money is. He said that he would make available £35 million to deal with rehabilitation. Again, he needs to make his position clear. I ask members to support the amendment in the name of Pauline McNeill.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

This has been a useful and worthwhile debate. A great deal unites us in the chamber, notwithstanding Mr Martin's best efforts. It is clear from the speeches of Labour and Liberal Democrat members that there is a great deal of consensus on how we can work together to tackle a national problem. Mr Martin is right that we have to provide resources and put victims first. Indeed, on Monday I was in Glasgow—although not in Mr Martin's consistency—to visit Victim Support Scotland. All that is valid, but we cannot go on as we are.

Pauline McNeill is right that we have to ensure that those who sentence have faith in the community sentences available—our judiciary does not hand down sentences out of relish for putting people away. We have to ensure that communities feel that community sentences are working and that the judiciary feels that it has sentencing options available.

Bill Aitken (Conservative, Glasgow)

I seek to be helpful. Will the cabinet secretary share with us his thoughts about how such community sentences can be made to work more effectively? The problem is that sentencers and the community have no confidence in the sentences.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

I will gladly move on to address that point. In response to Ms McNeill's point about reparation orders, I say that the reason why we decided to dispense with such orders was that they were not being used. We recognise that options have to be available to sheriffs, but when sheriffs do not use them, we should dispense with them. We are more than happy to meet members and discuss that matter, as well as family contact centres. We want to ensure that there is payback—whether through a formal reparation order, community service, probation or whatever else. Such matters can be worked out and, as I said, the door is open to try to do so. We accept Pauline McNeill's point.

On Low Moss, the delay that came about from the nonsensical, absurd system that saw millions of pounds—

Pauline McNeill (Labour, Glasgow Kelvin)

When will Low Moss be open to prisoners?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

The position remains the same as before; we are on track to meet the appointed date, but with a slight delay because of what we had to do. I am more than happy to return to the matter with the member. I give her an assurance that I am as anxious as she is to make sure that Low Moss is available to ease the pressure on our prison estate.

We heard from Willie Coffey, Cathie Craigie, Robert Brown and others who recognise that we have to have tough community punishments. It is perverse that, when somebody in our community is injured by a crime being inflicted on them, the agony is compounded by taxpayers having to pay for the criminal to have free bed and board and television. Because of the nature of our system, we cannot even give them any work. It is much better that they should be put out there to do some work in the community to repay through the sweat of their brow the damage that they have done. That is what our communities want. [Interruption.] Cathy Craigie is right to challenge me—I tell her that I am not criticising her in any way. It is up to us to deliver what our communities want.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

Will the minister give way?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

I am sorry; I want to make some movement in my speech. I do not seek to put words in the member's mouth and I accept that it is the Opposition's legitimate role to challenge the Government. We can work together to tackle that perverse situation that I described.

I will deal with the Conservatives. Mr Aitken and I have discussed today's subject, whether over a pint in Babbity Bowster or in the chamber. I accept his points and know where he is coming from. However, I was somewhat scandalised by Mr McLetchie's position. It showed cant, hypocrisy and a total lack of humanity, which is what we might expect from him.

As the old saying goes, let he who is without sin cast the first stone. I will give some examples. A gentleman who was sentenced to serve four years for perjury and perverting the course of justice was released after two years spent in open prison, including in an open prison called HMP North Sea Camp. I speak of Jeffrey Archer and I do not remember scandalised Tories speaking out against that. Jonathan Aitken received 18 months for perjury but was released after serving only seven months, much of which was spent in the open estate. The situation was compounded by his being released on an electronic tagging order to serve the balance of two months. Again, I do not remember the Tories being outraged. But oh dear me, when it comes to the wee lassie of heroin-addicted parents from Pennywell or Penilee, the Tories will detain her, if need be, until the day she goes to meet her maker. As everyone in the chamber acknowledges, some people are a danger to our communities and we have to protect those communities.

David McLetchie (Conservative, Edinburgh Pentlands)

Will the minister take an intervention?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

I am sorry; I am in my last minute. It is unacceptable that the Tories fail to show the same compassion to the heroin-addicted girl from Pennywell or Penilee that they show to the cad and bounder who was caught with his fingers in the cookie jar and then rehabilitated and welcomed back to the club. We will always treat with compassion the wee lassie who was neglected by her ma, abused by her da and separated from her gran—the only one who ever loved her—and who is more likely to hang herself in Cornton Vale than to harm anyone else if she were released. We recognise how such people need to be treated. The cant and hypocrisy from the Tories is outrageous.

John Lamont (Conservative, Roxburgh and Berwickshire)

I welcome the change in the Cabinet Secretary for Justice's approach. It appeared to me that, so far this year, Mr MacAskill has been using justice debates to pick constitutional battles with Westminster in an attempt to hype up the tension between the Labour Government in London and the SNP Administration in Edinburgh. However, when I watched the television earlier this week, I realised that the constitutional battle for this week would not be justice related but would instead be about the Scottish Government's—or, more particularly, Alex Salmond's—territorial claims to the great border town of Berwick-upon-Tweed. Although I would always warmly welcome the people of Berwick to my Berwickshire constituency, I remind the Government that it should be getting on with the job of governing Scotland rather than picking constitutional fights, seeking to push Scotland's border southwards and promoting the First Minister's empire-building agenda.

The debate has been useful for a number of reasons, not least because it has given us the opportunity to consider the failure of the previous Administration's policy on prisons and to highlight the issues that the new Government must tackle.

We believe that prison should serve four functions in our society: to protect the public; to deter; to punish; and to reform criminals. I am sure that most members—at least, those of us who are Conservatives—agree that the most important of those four functions is protection of the public from the crimes that are committed by the minority.

However, as Pauline McNeill, Margaret Smith and others have pointed out, the role of the Scottish Government should be not to decide sentencing policy but to support the courts in making sentencing disposals and to ensure that adequate provision exists to allow those disposals to be implemented. The judiciary must be allowed to maintain its independence, and judges and sheriffs should be left in charge of sentencing.

I am concerned that that view is not necessarily shared by the SNP Government. For example, the SNP and others have stated that women do not belong in prison, but we must face up to the fact that half of the prisoners in Cornton Vale are there because they committed a violent crime. As David McLetchie said, to single them out for special, kid-glove treatment just because they are women is wrong. A crime is a crime, regardless of the sex of the offender.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

Will the member take an intervention?

John Lamont (Conservative, Roxburgh and Berwickshire)

I want to make some progress; I am very short of time.

It is also important to remember that, according to the Government's figures, the average daily female prison population is only 5 per cent of the total average daily population of prisoners and young offenders.

That is not to say that I disagree with the idea that some people should not be in prison. We have long argued that fine defaulters of either sex should not go to prison and that their fines should be deducted from their pay or the benefits that they receive.

The Scottish Conservatives have a zero tolerance approach to drugs in prison, as Bill Aitken said. A proactive programme is needed in every jail, whereby agencies work with addicts both while they are in prison and when they get out. Prisoners who want to get off drugs should be given help and encouragement to do so. We welcome the Government's new policy on tackling drugs, but we hope that it will also penetrate the misuse of drugs in our jails.

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

Does the member accept that, as Lewis Macdonald said, if our dedicated prison staff are to do what they are qualified to do, which is to work with people to address addiction problems and underlying problems such as dyslexia and low levels of literacy and numeracy, they must be able to concentrate on those people? That means that they cannot simply be asked to provide control of prisoners for a day or two, a week or two or a month or two. If we are to allow SPS staff to fulfil their core functions, we must stop putting low-level offenders in prison for short periods of time. It is by enabling our excellent qualified prison staff to deliver what is necessary that we will tackle heroin abuse.

John Lamont (Conservative, Roxburgh and Berwickshire)

The Government's agenda appears to be focused on the criminal rather than the victim. We need to face the harsh reality that people who go into prison often come out with a drug habit or develop a worse drug habit than they had when they went in. Until the Government of the day, regardless of its political persuasion, tackles that problem, we will not address the core problem behind the rising crime rates in Scotland.

Nigel Don (Scottish National Party, North East Scotland)

Will the member take an intervention?

John Lamont (Conservative, Roxburgh and Berwickshire)

I want to make some progress; I am very short of time.

We welcome the Government's new drugs policy, but we are concerned that it will not do enough to tackle drug misuse in prisons.

Robust measures must be applied to everyone who supplies drugs to prisoners. Visiting privileges should be withdrawn and, in persistent cases, criminal charges brought. In short, a carrot-and-stick approach must be used to help those prisoners who wish to be helped and to deal responsibly with those who break the rules.

The vital first step must be the comprehensive application of drug treatment and testing orders to every prisoner when they are admitted to prison and at regular intervals thereafter. If we do not know the extent of the problem, we cannot hope to address it. If a prisoner refuses to comply, they must be treated as if they were dependent on drugs and their privileges must be ended. The benefits to society will be great if we find the political will to take on that task. It will result in lower rates of reoffending, less crime and a safer prison environment, and—given that so much crime in Scotland is fuelled by drugs—will be good for addicts, for families and for society as a whole.

It is clear that the Scottish Government is more interested in emptying Scottish jails than in protecting the public. When it comes to tackling crime, the public want prisoners to be in prison rather than out in the community. However, the SNP seems to want prisoners to be out in the community, given its policy of ensuring that people who get sentences of six months or less receive their punishment in the community. The Government should learn lessons from the mistakes of the previous Administration. It should steer clear of sentencing policy and, if necessary, should continue to build more prisons to accommodate our criminals and to keep the people of Scotland safe. I support the motion in Bill Aitken's name.

Question Time — Scottish Executive — General Questions

Richard Baker (Labour, North East Scotland)

To ask the Scottish Executive what impact it considers that the funding settlement for local authorities will have on the delivery of key local public services. (S3O-2297)

John Swinney (Scottish National Party, North Tayside)

The funding settlement involves record levels of investment. It gives local authorities incentives to achieve better value for money and the freedom to spend their resources as they decide to meet local needs and circumstances. I expect that to result in better-targeted and better-quality local public services.

Richard Baker (Labour, North East Scotland)

The cabinet secretary's answer will raise eyebrows in Aberdeen. If, as he has stated, the funding settlement is good for Aberdeen City Council and will fully cover inflation, why are his colleagues in Aberdeen pushing through £27 million of budget cuts to key local facilities for young people and key services for older and vulnerable people? That is not scaremongering—people in Aberdeen face budget cuts of £27 million. What will the cabinet secretary do to ensure that they do not lose out badly because of the actions of his Government nationally and of his colleagues locally in Aberdeen?

John Swinney (Scottish National Party, North Tayside)

The Government has given record levels of funding to local authorities. It has increased Aberdeen City Council's revenue funding for the forthcoming financial year by 5.2 per cent, even though it received from the United Kingdom Government only a 0.5 per cent increase in its budget. As a result of the funding arrangements for the Scottish Parliament—which Mr Baker supports—I cannot distribute resources that I do not have. In the context of a 0.5 per cent increase in the Scottish Government's budget, through our decision to give Aberdeen City Council an increase in funding of 5.2 per cent we have made a formidable contribution to the provision of public services in the city. I would have thought that rather than girning about that, Mr Baker would be applauding the Government for the financial support that it has given to Aberdeen.

Dave Thompson (Scottish National Party, Highlands and Islands)

Although Highland Council has frozen council tax, it has increased spending in many areas—it has provided an extra £1 million for street cleaning and litter picking, for example—despite the scaremongering of local Liberals and members of the Labour Party.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Question, please.

Dave Thompson (Scottish National Party, Highlands and Islands)

Does the cabinet secretary agree that that shows that the removal of ring fencing has been a resounding success? Is he planning to extend it?

John Swinney (Scottish National Party, North Tayside)

Local authorities have been given a great deal of flexibility in how they can use their resources. We have eliminated a formidable amount of needless bureaucracy and given local authorities the ability to invest in local services. When I look around the country, I am impressed by the extent to which local authorities have seized the opportunity to invest in public services, to develop new public services and to enhance the way in which we support members of the public. I am glad that Mr Thompson recognises Highland Council's achievements in extending the range of services that it provides. Those achievements are common to a range of councils throughout Scotland.

Nanette Milne (Conservative, North East Scotland)

I must take issue with Mr Swinney, given that, per head of population, Aberdeen City Council has been given the poorest financial settlement in Scotland. What advice can he give to the many voluntary organisations in Aberdeen, such as the Cyrenians, that will have to let down many vulnerable people who depend on their services because the council has had to make significant cuts to their funding streams? What has Aberdeen done to deserve its place at the bottom of the heap?

John Swinney (Scottish National Party, North Tayside)

The financial settlement that the Government has given to Aberdeen City Council is far in excess of the percentage increase in funding that this Administration received from the UK Government, so the criticism that we have not given the council a more-than-generous settlement cannot be levelled at us.

Local authorities are getting an increasing share of the total Scottish Government budget and we have given them the ability to retain the efficiency savings that they make. We have relaxed ring fencing and have given local authorities more money. It is the responsibility of local authorities to take those opportunities and to configure their finances such that they can invest in public services. There are numerous examples around the country of that having taken place.

This might not go down universally well in the chamber, but nonetheless I point out to Nanette Milne that Aberdeen City Council received a higher increase in its budget than Glasgow City Council did. I am sure that that will not be popular among all members. The Government is taking steps to ensure that we support Aberdeen City Council properly.

The Labour Party mutters and moans about the funding settlement for Aberdeen, but what was it doing while it was in office for eight years? The funding settlement for Aberdeen was atrocious under the Labour Government. This Government has started to repair the damage.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

To ask the Scottish Executive what representations it has received on the abolition of the cultural co-ordinators scheme. (S3O-2302)

Linda Fabiani (Scottish National Party, Central Scotland)

Since we announced our decision to phase out ring-fenced funding for the cultural co-ordinators in schools programme by 2010-11, we have received written representations from 18 individuals: four representatives of cultural organisations; four members of the Scottish Parliament; representatives of seven local authorities; and three private individuals.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I will not embarrass the minister by reminding her of what the Scottish Arts Council said about the matter in the e-mails that were reported in The Herald on Monday, but surely she realises that not just the Scottish Arts Council but many local arts organisations are enthusiastic about cultural co-ordinators. Indeed, many national bodies are enthusiastic, as was illustrated in the evidence from the National Theatre of Scotland at yesterday's meeting of the Education, Lifelong Learning and Culture Committee.

Why does the minister not leave decisions about the funding of cultural co-ordinators to the Scottish Arts Council, which is best placed to make such decisions? On a related matter, why has she decided to cut in real terms by almost 10 per cent the Scottish Arts Council's budget over the next 10 years? I ask her please not just to refer to an increase in the culture budget as a whole, because I am sure that she realises that the Scottish Arts Council is at the heart of that budget.

Linda Fabiani (Scottish National Party, Central Scotland)

This minister is not easily embarrassed. It is a bit rich of members of the previous Administration to talk about leaving decisions to the Scottish Arts Council, when the previous Administration thought it necessary to be prescriptive and to introduce restricted and ring-fenced funding for cultural co-ordinators because it did not trust the arts bodies, artists or local authorities to do what they are accountable for doing.

I tell members what I understand about the cultural co-ordinators scheme. Because the previous Administration did not put the scheme in place properly, there is no way of measuring output and there is no record of additional staff or cultural benefit, as there should be in a proper accountable breakdown.

I have faith in the ability of our arts bodies, our artists and our local authorities to carry out what is best for cultural provision in all areas of Scotland.

Jim Hume (Liberal Democrat, South of Scotland)

To ask the Scottish Executive what it is doing to improve public transport in rural areas. (S3O-2263)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Since 1998, the rural transport fund has provided substantial resources to local authorities to help to introduce new or improved public transport services, and to community transport projects in rural areas where there are no public transport services or where such services are very limited. In total, almost £70 million has been made available.

The RTF ends on 31 March. From 1 April, we will provide local government with record levels of funding over the period to 2011. Local authorities will be responsible for arranging local transport services, including rural transport services, in line with local needs and spending priorities, from the substantial resources made available to them.

Jim Hume (Liberal Democrat, South of Scotland)

The Organisation for Economic Co-operation and Development's report "OECD Rural Policy Reviews: Scotland, UK - Assessment and Recommendations", which was launched yesterday, highlighted the discrepancy in funding in Scotland and observed that the Highlands and Islands have been favoured with public spending, whereas in the south of Scotland social exclusion is "a particularly serious problem". Transport is part of that problem.

The south west of Scotland transport partnership in Dumfries and Galloway proposes to increase fares by more than 60 per cent. The daily fare on a bus route that people use for work will increase from £5 to £8, which is unaffordable. Will the minister say what the Government will do to address social exclusion, particularly in the context of transport and the SWESTRANS issue?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I recently met SWESTRANS to discuss a range of subjects to do with transport in the south-west. The issue to which the member referred was not raised with me, so I concluded that the partnership is happy with its relationship with its local council, from whom it derives funding. SWESTRANS should be able to draw on the additional funding that has been made available to Dumfries and Galloway Council to deliver services in response to local needs.

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

To ask the Scottish Executive how many vehicular accidents on the A87 and A887 were reported to the police in December 2007 and January 2008, and how those compare with figures for December 2006 and January 2007. (S3O-2262)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Complete data on the number of road accidents that occurred on the A87 and A887 in December 2007 and January 2008 have not yet been returned to the Scottish Government by the Northern Constabulary. I am happy to write to the member with the requested information, when it becomes available. Provisional information is expected in the next four weeks.

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

I am sure that the minister agrees that the dangerous road conditions on the A87 and the A887 require more than just a parliamentary question, but I asked the question because I have not received a reply from his office to my request for a meeting—maybe a reply will come.

At least 27 accidents have happened on the roads, and locally the number is thought to be nearer to 40. I drive that stretch of road weekly—

Alex Fergusson (None, Galloway and Upper Nithsdale)

Ask a question, please.

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

Yes, sir.

I do not know whether the problem is a lack of maintenance or the new brine treatment, but the road is much more dangerous and if nothing is done there could be a fatal accident in winter. What does the minister's department intend to do to address an obvious problem?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I have figures for December 2006 to January 2007—a year ago—which suggest that there were one serious and eight slight accidents on the A87 and that no accident was recorded for the A887. I am uncertain whether those figures are at odds with the figure of 27 to which the member referred, but I will be happy to hear from him if he thinks that our numbers are inadequate.

We put on the roads a mixture of 40 per cent brine and dry salt. Modern research shows that that is the most effective way of ensuring that we keep our roads clear. Until I hear to the contrary, we are likely to continue with the new way of distributing brine mixed with salt on our roads.

Aileen Campbell (Scottish National Party, South of Scotland)

To ask the Scottish Executive what steps it is taking to tackle rising numbers of personal bankruptcies and home repossessions. (S3O-2274)

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

The Scottish Government is committed to providing access to debt relief to Scots who are unable to pay their debts. However, we must balance that by ensuring that there are effective and appropriate diligences for creditors to enforce payment from people who can afford to pay. We are also committed to ensuring that people are not losing their home or being forced into bankruptcy for relatively small debts if there are reasonable alternatives.

Aileen Campbell (Scottish National Party, South of Scotland)

Store cards and unsecured personal loans that charge extortionate rates of interest are a source of personal debt that can rapidly spiral out of control. Does the minister agree that we could tackle such issues much more effectively if regulatory power were devolved to the Scottish Parliament?

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

I think that members of all parties are concerned about the excessive rates of interest that are sometimes charged by providers of store cards or other credit card facilities. Some interest rates are around 30 per cent, which seems excessive. I agree with the member that more progress could be made if such matters were devolved to this place. In the meantime, I hope that people will make informed choices and become aware of the interest rates that institutions will charge before they incur serious debt.

Irene Oldfather (Labour, Cunninghame South)

To ask the Scottish Executive what importance it places on good road and rail links for the economic regeneration of Ayrshire. (S3O-2330)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We recognise the important role of effective road and rail links in supporting Ayrshire's economic regeneration. Our current programme includes a range of interventions on Ayrshire's railways and trunk roads to improve journey times, capacity and reliability. We will consider future transport investment requirements through the strategic transport projects review, which will report to ministers in summer.

Irene Oldfather (Labour, Cunninghame South)

The minister will recall that in a written answer, he advised me that upgrading of the A737 had basically been kicked into touch. The proposed transshipment container terminal at Hunterston has been dropped and the route development fund, which supported Prestwick airport, will go. What action will the Government take to put connectivity between Ayrshire and the rest of Scotland at the top of the agenda, to allow appropriate economic regeneration?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The member might need to be reminded of my answer to S3W-8711, which was that the A737 would form part of the strategic transport projects review. I assure her that it will. The review concerns the biggest programme of work that there has been in the life of the Parliament. Like people in other parts of Scotland, the people of Ayrshire are entitled to have their needs considered. Please accept that they shall be.

John Scott (Conservative, Ayr)

The minister will agree about the pressing need to improve road links between Ayrshire and the M74. Other Ayrshire MSPs share that aspiration, whose realisation Ayrshire residents and the local business community would widely welcome. Will he consider taking steps to upgrade the A70 to trunk road status under section 5(2) of the Roads (Scotland) Act 1984? Will that be part of the strategic review that he mentioned?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We have no immediate plans to extend the trunk road network. In the meantime, the A70 is a local road, so the local council can invest in it if it feels that that is appropriate. Of course, we are examining transport corridors and all modes of transport as part of the strategic transport projects review. I am sure that we will find appropriate responses in that.

Kenneth Gibson (Scottish National Party, Cunninghame North)

The minister will recall from meeting several organisations in my constituency on 22 August last year that North Ayrshire Council, Scottish Enterprise Ayrshire and others have made it clear that the way to regenerate my constituency, and the most significant investment, would be to construct the Dalry bypass. Will he use his influence to press for the construction of that bypass at the earliest possible date as part of the review?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The Government's central purpose is to improve Scotland's economy and we recognise that investment in transport infrastructure is a necessary part of that. That is why we are undertaking a wide-ranging review. Ministers will receive the report of the strategic transport projects review this summer. Every part of Scotland is represented in the review's work and I am sure that we will see progress on many projects throughout Scotland.

Alasdair Allan (Scottish National Party, Western Isles)

To ask the Scottish Government what its position is in respect of community buy-outs of government-owned land. (S3O-2272)

John Swinney (Scottish National Party, North Tayside)

We support the idea of community ownership of assets as a way of helping to sustain communities and giving them a greater say in their future. The matter is complex, and owning assets must be considered carefully to determine whether it represents the best way of delivering positive change for all communities. It is for each part of government to assess properly all the options when looking to dispose of assets.

Alasdair Allan (Scottish National Party, Western Isles)

The Government is aware of considerable community interest in a community buy-out in Seilebost, Scarista and Luskentyre in South Harris. Is the Government willing to meet representatives of those communities, which are keen to bring to South Harris—if possible—the many benefits that other areas have enjoyed following community buy-outs?

John Swinney (Scottish National Party, North Tayside)

Officials and ministers are certainly willing to meet the community groups concerned. The prospects of areas that have secured ownership of their land have been radically transformed and such communities have new opportunities. The Government would support such an approach and would be happy to facilitate further discussions.

Alex Fergusson (None, Galloway and Upper Nithsdale)

There is time to take question 8 briefly.

Tricia Marwick (Scottish National Party, Central Fife)

To ask the Scottish Government what plans it has to address antisocial behaviour by restricting inappropriate advertising of alcohol in and around retail premises. (S3O-2284)

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

The Government will not shy away from taking tough action to deal with alcohol misuse and the antisocial behaviour that it inflicts on Scotland's communities. We will set out a clear long-term approach for tackling alcohol misuse and consult on our proposals for action later this year.

I have already made it clear that we want to crack down on irresponsible off-sales promotions that mean that it is cheaper for our youngsters to get drunk than it is for them to go to the cinema or to play a game of five-a-side. However, that is only one part of the picture. At this stage, we are not ruling anything either in or out of our long-term strategy.

Tricia Marwick (Scottish National Party, Central Fife)

Does the cabinet secretary agree that advertising such as the booze busters line by R S McColl in many of our communities is unacceptable? Will he issue guidance to licensing boards indicating that such advertising is completely unacceptable and that action needs to be taken?

Kenny MacAskill (Scottish National Party, Edinburgh East and Musselburgh)

The right to sell alcohol is not a God-given right; it is given on the basis that the seller accepts various responsibilities. We expect licensing boards to enforce responsible promotion. I accept that responsible promotion is not limited to how alcohol is priced or promoted within the store and extends to how it is marketed outwith the store. The member has made an appropriate point that we are happy to take on board.

First Minister's Question Time

Alex Fergusson (None, Galloway and Upper Nithsdale)

I am delighted to inform the chamber that His Excellency Iztok Mirošič, the Slovenian ambassador to the United Kingdom, has joined us in the Presiding Officer's gallery for First Minister's question time. Ambassador, I welcome you warmly. [ Applause. ]

Wendy Alexander (Labour, Paisley North)

Presiding Officer, I associate myself with the welcome that you have offered to our guest today.

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-00516)

Alex Salmond (Scottish National Party, Gordon)

Later today I will have meetings to take forward the Government's programme for Scotland. In joining in the welcome for the Slovenian ambassador, I point out that Slovenia is a small, independent country that is leading Europe as the current President of the Council of Ministers.

Wendy Alexander (Labour, Paisley North)

What advice would the First Minister give to Aberdeen's Richmond Fellowship, which cares for those with mental illness and is being robbed of £360,000 due to cuts by the SNP-led Aberdeen City Council?

Alex Salmond (Scottish National Party, Gordon)

Nicol Stephen is pointing out that Aberdeen City Council is Liberal led, although the SNP is part of the governing coalition. The council has been through a number of permutations in recent years, but everyone agrees that it is now much better than it was when it was Labour led, in the dim and distant past.

Aberdeen City Council faces a number of funding challenges, as do other councils across Scotland. Like every other council in Scotland, over the next three years it will receive increases well above the inflation rate and well above the rate of increases to the Scottish budget. For the first time in a generation, the share of local government expenditure is rising as a share of Scottish expenditure.