Scottish Parliament, 22 January 2009

311 contributions from 74 members. The official report.

Official Report 22 January 2009

Scottish Parliamentary Pensions Bill: Stage 3

Alex Fergusson (None, Galloway and Upper Nithsdale)

Good morning. The first item of business is a debate on motion S3M-3029, in the name of Alasdair Morgan, on the Scottish Parliamentary Pensions Bill.

Alasdair Morgan (Scottish National Party, South of Scotland)

I am very glad to open this stage 3 debate on the Scottish Parliamentary Pensions Bill, which, hopefully, will be the final debate on the bill.

After members agreed that it was necessary to reform the 10-year old transitional arrangements under the Scotland Act 1998 and to replace both the Scottish parliamentary pensions scheme and the Scotland Act 1998 (Transitory and Transitional Provisions) (Grants to Members and Officeholders) Order 1999 to reflect various changes in United Kingdom tax and pensions law, an ad hoc committee—the Scottish Parliamentary Pension Scheme Committee—was established just before the summer recess in 2007 to report on the matter. I was honoured to be appointed as the committee convener. The committee took oral evidence from experts in the various disciplines in the pensions field. Committee members are grateful to all those who gave us the benefit of their experience on those matters.

As members know, chamber debates on the bill have been fairly brief. That reflects neither the importance of the bill nor the complexity of the matters that it addresses. Indeed, the very complexity of the subject means that it is inevitable that either a very short or a very long debate has to be held. In my view, the best use of parliamentary time is achieved if parliamentarians deal with the many complexities that are involved in any pension legislation at committee. Indeed, from the outset, members of the Scottish Parliamentary Pension Scheme Committee were clear not only that we were involved in a difficult and technical area, but that we would be subject to close scrutiny. That was only right, given the current economic climate.

Again, from the outset, we made it clear that we had a duty to provide for members and office-holders a modern, equality-proofed range of benefits. We knew that we had to meet the challenge of producing a scheme that was attractive to members and to strike a proportionate balance between the scheme benefits and the actual cost to members and—just as important—the public purse of doing that. I think that we succeeded in doing so.

The bill makes important changes to members' pension arrangements to bring them into line with current taxation and pension provisions. It also sets out arrangements for those provisions to be kept up to date as required in the future, makes changes to equality proof the scheme and incorporates requirements that relate to partners and divorce legislation.

The new scheme removes a potential tension with the Scottish Parliamentary Corporate Body by moving the administration of the fund to a board of trustees who will become responsible for its administration. It provides scheme members with greater choice on how they accrue benefits and increases the options that are available to them on retirement. It also makes special provision for serving members who are approaching the age of 75 to access certain benefits and for death benefits for scheme pensioners who are aged 75 and over.

Furthermore, the scheme permits early retirement from the age of 55 for all members—a provision that is subject to a standard percentage reduction for each year of early retirement—and removes the necessity of a member having to have 15 years service and other archaic conditions that apply to dependents' pensions.

Under the new rules, the scheme will continue to make provision for scheme members who suffer from ill-health while acknowledging that, with advances in health care, members may recover, at least in part, and therefore be able to undertake once again some kind of gainful work.

Most important, the scheme does all those things without increasing the cost to the public purse. The new scheme was costed by the scheme actuary—clearly an expert in his field—who confirmed that there were no increases in cost to the employer from the proposed changes. If scheme members want to accrue benefits more quickly or to purchase additional benefits, they may do so, but they meet the full cost themselves.

Since we last debated the bill in the chamber, a second ad hoc committee—the Scottish Parliamentary Pensions Bill Committee—was set up to consider any amendments at stage 2. Those amendments that were lodged were largely technical in nature. Albeit that the committee's public proceedings were commendably brief, I thank committee members for their work in getting up to speed on the contents of the bill.

Even if we agree to pass the bill today, we are still far from the end of the work that will be required to bring the new scheme rules successfully into force. If the bill receives royal assent next month, as I hope it will, the new scheme rules will come into force fully from 1 September. Some rules will commence earlier than that to allow the necessary preparations to be made; perhaps the most important of those rules relate to the election and appointment of trustees to administer and manage the fund and its assets. The role of the trustees is important: they will undertake a vital job on behalf of all scheme members. I hope that we can proceed to identify and elect suitable candidates as soon as possible.

In that regard, I thank the Standards, Procedures and Public Appointments Committee for its on-going work to produce the necessary changes to our standing orders that will allow that to happen. Other work is under way to rewrite the scheme booklet, provide scheme members with notification of the changes, and give each member the opportunity to state whether they want to remain at the current rate of pension accrual or move to the higher rate. Once the trustees are appointed, they will have to grapple with some staffing and contractual issues, ensure that all the arrangements are in place for the new scheme, and check that all necessary approvals have been obtained and the necessary expert advisers have been appointed. All that needs to be done by 1 September.

We have come a long way in working to produce a modern and attractive pension scheme that is fit for the 21st century and which complies with the relevant legislation from tax to equalities.

I move,

That the Parliament agrees that the Scottish Parliamentary Pensions Bill be passed.

Keith Brown (Scottish National Party, Ochil)

Like most members in the chamber, I should declare an interest, both as a current member of the scheme—and potential member of the new scheme—and as a taxpayer. I, too, highlight the point that Alasdair Morgan made about this necessary change being made at nil cost to the public purse, or at least as best the estimates can determine. As Alasdair Morgan also said, the debate is the culmination of a detailed piece of work to introduce a highly technical but necessary bill to bring the pension and grant schemes up to date.

Members of the Scottish Parliament are not alone in looking at pension provision and seeking to find cost-efficient and effective ways in which to plan for retirement, whenever that may come. In November 2008, the Pensions Act 2008 introduced measures including a duty on employers to automatically enrol all eligible workers who were not already members of a good-quality workplace pension scheme into such a scheme and to provide a minimum contribution. The 2008 act also allows for the establishment of a new scheme—currently it is known as the personal accounts scheme—which is a simple, low-cost pension savings vehicle that is aimed at those who do not have access to a workplace pension scheme. Everyone needs to plan for their retirement.

With that in mind, I turn to the work that was undertaken on the Scottish Parliamentary Pensions Bill. I thank Alasdair Morgan and the members of the Scottish Parliamentary Pension Scheme Committee for the work that went into producing the bill as introduced. Pensions have become shrouded in jargon and regulatory complexity. As the convener of the Scottish Parliamentary Pensions Bill Committee, which scrutinised the bill at stage 2, I can say that our task was made more straightforward than it could have been by the input and obvious determination of the members of the scheme committee to make the provisions of the bill practicable, workable and relatively understandable. As Alasdair Morgan hinted, a lot of the work was done prior to the public proceedings of our committee.

Before the stage 2 proceedings, the committee held an informal meeting with the bill team to give members an insight into the policy development behind the bill. Also, to aid our scrutiny, we sought explanation of and clarification on the various provisions in the bill. A couple of weeks later, with committee members having had the opportunity to chew over the information, formal consideration took place.

The only amendments at stage 2 were those that were lodged by the member in charge—in the main, they were technical and tidying-up amendments. For example, it was important to make it clear that pension credit members of the scheme are prevented from becoming remunerated trustees of the scheme. Any member who benefits financially from the scheme should not receive financial benefit as a trustee. Deeming the amendments to be eminently sensible, the committee was content to accept them.

I appreciate the point that Alasdair Morgan made in saying that, even if the bill is passed today, our work to ensure that all the new arrangements are put in place is not an at end. Like him, I thank the Standards, Procedures and Public Appointments Committee for its on-going work to produce the necessary changes to standing orders. In addition, I thank the clerks to our committee.

I am pleased to have had the opportunity to contribute to the process and to today's debate. I ask members to support the motion to pass the bill at decision time.

David Stewart (Labour, Highlands and Islands)

As a member of the Scottish Parliamentary Pensions Bill Committee, I thank the other committee members—Bill Aitken, Nicol Stephen and the convener, Keith Brown—for their contributions. Again, like other members, I thank the bill team for all its work and help in giving us briefings throughout a complex process. Sarah Robertson was the committee clerk and, as we have heard, Alasdair Morgan was the member in charge of the bill.

Some may ask why we should have a new pension scheme, but our scheme needed a radical spring clean, not least because of UK legislative changes such as the Finance Act 2004 and the Civil Partnership Act 2004. Some may also ask why we should improve pension conditions for MSPs when thousands of Scots are losing their jobs and final salary scheme pensions. However, the improvement from fiftieths to fortieths in the accrual rate for our pension scheme will be fully funded, as we heard, by increasing member contributions from 6 to 11 per cent. As we know, that figure was not a back-of-the-envelope job that was plucked from the sky; it was established by an independent Government actuary. We have heard previously that actuaries have been defined as those who found accountancy too exciting, but the actuarial profession is important.

We can argue that there are five key principles behind the Scottish Parliamentary Pensions Bill: it must be modern, equality proofed, attractive to members and cost neutral, and it must involve a pooling of risks. Clearly, the cost to the taxpayer is a key factor. In that regard, I flag up, as other members have done, that the reduction in the pension provision for new incumbents in the roles of Presiding Officer and First Minister will bring substantial savings for the taxpayer. Independent advice and evidence suggested that those savings could be more than £900,000 over a four-year period. I found the consultation on the bill to be comprehensive and enlightening, and it was important that it involved members, ex-members and experts from across the country.

I flag up two key developments in the bill: unmarried partners will be recognised in the scheme, and there will no be no loss of pension for surviving spouses who remarry or cohabit. In other words, the spouse pension will continue for life. That is a good example of a modern, caring and equitable scheme. Of course, it is similar to other schemes, such as those at Westminster or the National Assembly for Wales; those bodies were a number of years ahead of us in revising their schemes.

There are other important factors in the bill. I echo the point about trustees. It was important that we sorted out that issue. Of course, the bill will set up a new system for trustees that could well involve existing members and ex-members and which will prevent a potential conflict of interest as far as the SPCB is concerned.

Mandatory changes had to be incorporated in the bill, such as the minimum pension age of 55. That was done under the Finance Act 2004 and the Pensions Act 2004, and it will be effective from next year. It is important to flag up, too, the important new changes to pension sharing on divorce. The Welfare Reform and Pensions Act 1999 gave courts powers to split pension benefits on divorce, and the Civil Partnership Act 2004 extended that provision to civil partners. Finally, transfers into the Parliament pension scheme must be from a registered pension scheme. That is a straightforward provision, although it also now allows office-holders who are not MSPs to transfer in a sum from another registered pension scheme.

The bill provides an essential uprating of our current pension scheme and it is equitable to members, their partners and, more important, taxpayers by being cost neutral in its improvement of pension conditions for MSPs. The overall package represents a saving to taxpayers. I endorse the bill, which will be supported by Labour members.

Bill Aitken (Conservative, Glasgow)

It may be regarded as surprising that it has taken so long for the initial parliamentary pension arrangements under the Scotland Act 1998 to be revisited, but it is entirely appropriate that it should have been done. Like other members, I offer my thanks not only to the officials involved but to the members who initially dealt with this somewhat complex matter, who ultimately made the bill team's duties fairly easy.

It is important to stress that implementing those pension changes was not only desirable, but likely to be a legal necessity. The Pensions Act 2004 changed a great deal, and this bill, which I expect to be passed today, recognises the changes that took place as a result of the 2004 act. Perhaps I have raised an eyebrow occasionally at some aspects of equalities legislation, but in this case, where the pension fund will provide appropriate protection and security for surviving spouses and civil law partners, it is entirely appropriate that existing legislation should be amended.

It is worth stressing the cost neutrality of the proposals that are before members. Indeed, as David Stewart said, there will be an appreciable saving under certain headings, which should let the taxpayer see that consideration has been given to the public purse. It is unlikely that many of the beneficiaries under the fund in the years ahead will accumulate the necessary 40 years for the maximum pension—that is the nature of pension funds of this type. However, Presiding Officer, you may wish to defy my reasoning on that matter and assume the full pension. In all seriousness, I doubt whether anyone else would go in that direction.

The important point is that, under the bill's proposals, members will be able to opt for a higher pension. They will have to fund it themselves, though, and their contributions will reflect that. It is also important to stress that there must be a degree of detachment in the operation of the fund—as the one who chairs the SPCB, Presiding Officer, I am sure that you would agree with that—so the setting up of the trustees is a positive step in that direction.

The ill-health provisions in the bill are not so much imaginative as a necessary recognition of the difficulties that can arise from time to time in the course of anyone's career. The added years provision will allow members, at their expense, to ensure a wider and greater pension benefit. Again, that provision should be applauded.

Looking at the matter in a detached way when one is a beneficiary is always difficult, but the bill that is before members allows the public to recognise that, while the benefits have been increased, members have approached the matter in a detached and realistic manner and that the saving to the public purse is measurable, as are the potential benefits for beneficiaries. I have great pleasure in indicating that the Conservative party will support the motion at decision time.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I, too, thank Alasdair Morgan in particular for the great deal of work that he put into the bill and the Scottish Parliamentary Pension Scheme Committee. I also thank my fellow committee members who undertook stage 2 consideration of the bill, and the officials and advisers involved in the bill team. Clearly, a substantial amount of work was required to produce the bill and give the associated advice for a very technical and complex area.

Since the establishment of the Scottish Parliament in 1999, significant legislative changes have made a bill of this kind necessary. However, the opportunity was also taken to look at how the existing pension scheme had been working and to assess whether any improvements or flexibilities might be introduced. Members have referred to important pieces of relevant legislation, such as the Finance Act 2004, the Pensions Act 2004 and the Welfare Reform and Pensions Act 1999, which introduced pension sharing on divorce so that ex-spouses can get membership of a pension scheme in their own right or get a transfer value from the scheme. That also applies to the new status of civil partner that was introduced by the Civil Partnership Act 2004.

The Finance Act 2004, which was introduced on 6 April 2006, replaced with a single set of rules eight existing taxation regimes affecting the rights of pensioners. The bill that is before us is necessary because the transition arrangements in the Finance Act 2004 run out in April 2011. If the bill had not been introduced, there would have been uncertainty about how parts of the Scotland Act 1998 (Transitory and Transitional Provisions) (Scottish Parliamentary Pension Scheme) Order 1999 comply with the tax rules.

It was therefore right and appropriate that the Parliament acted. As far back as 17 October 2007, the Scottish Parliamentary Pension Scheme Committee published its consultation document and invited comments from all interested parties. The consultation sought views on a number of issues. Some views covered the mandatory changes brought about by the Finance Act 2004, which I have referred to, and others covered the sort of discretionary changes that other members have referred to—such as contribution limits; the maximum pension available; the amount of the tax-free lump sum on retirement; the amount of death-in-service gratuity, and so on.

The changes that will improve the scheme and make it more flexible are made at no additional cost to the taxpayer. However, some improvements, if individual MSPs want to opt in to them, will cost the MSPs quite a substantial sum. It is worth flagging that up to MSPs, because they will have to take important decisions before the scheme is introduced in September.

The report of the Scottish Parliamentary Pension Scheme Committee was published on 29 May 2008, and the proposal for a committee bill was agreed by Parliament after the debate on 26 June 2008. The report, which had the draft bill attached, is a substantial document. There are 57 pages of technical information, and a full set of explanatory notes running to 92 pages, together with a five-page supplementary set of explanatory notes.

All in all, this is a substantial, important and necessary piece of legislation. There is cross-party support in Parliament, so the bill is likely to receive widespread or unanimous support this evening at decision time. On an issue of this nature, that is appropriate. Because of the complex and detailed work that has been done, it is a good piece of legislation that deserves such a level of support.

Alasdair Morgan (Scottish National Party, South of Scotland)

The progress of the bill has shown how flexible and powerful are the Parliament's committee procedures for bills. I thank my fellow committee members for their diligence and consideration; I think that they even enjoyed parts of it. For example, in an evidence session with the scheme actuary, David McLetchie declared:

"This is a lot more entertaining than I thought it was going to be."—[Official Report, Scottish Parliamentary Pension Scheme Committee, 11 March 2008; c 68.]

At last night's Burns supper, Mr McLetchie gave the toast to the lassies, so it is perhaps appropriate that he made that comment when we were discussing the idea that women were more expensive than men. I hasten to add that that is because of women's general longevity and consequent cost to a pension scheme.

I thank again the Scottish Parliamentary Pensions Bill Committee for its scrutiny of the bill at stage 2, and the Finance Committee and Subordinate Legislation Committee for their work.

This has been a sensible use of parliamentary time in meeting the requirements of UK legislation. The one important provision that I would like to highlight again is the provision for the appointment of trustees. As David Stewart said, trustees will—as time passes—represent the full spectrum of members of the scheme. They will be tasked with a range of duties and will be equipped to take decisions to ensure the health of the scheme and to ensure best value for money.

Members may be interested to note that measures relating to the scheme will come before Westminster later this year. I expect that amending regulations will be made by the Department for Work and Pensions and that an order under section 104 of the Scotland Act 1998—and I know that all members will be familiar with that section—will be made by the Scotland Office. Those measures are primarily designed to ensure that the reserved occupational pensions regulatory regime, as currently applied to the scheme, will continue once the bill is commenced. They also seek to ensure consistency with how the equivalent Westminster pension scheme is regulated.

The proposed Westminster instruments will amend the regulatory framework that is applied to public service pension schemes. They are needed because of structural changes brought about by the bill. Many of the existing legal requirements and exemptions that are applied to public service pension schemes refer to schemes constituted by Westminster legislation. Following the bill, the rules of our scheme will be contained in an act of the Scottish Parliament, rather than, as for the existing scheme, in a Westminster instrument. The amending instruments will ensure that relevant regulatory requirements and exemptions continue to apply to our scheme.

I believe that the Westminster instruments can be made and can be in place to coincide with the rules of the new scheme coming into force. I know that members have been worried about that, so I hope that I have been able to put their minds at rest.

It is worth saying again that, all in all, the changes that the bill will bring about will produce significant savings to the public purse.

I thank the clerks and the hard-working bill team, and I commend the bill to Parliament.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Thank you—and I thank all members for keeping their speeches brief, which has given us a few extra minutes for the next debate, which is heavily subscribed.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Our next item of business is a debate on motion S3M-3257, in the name of Fiona Hyslop, on the Scottish Government's response to the annual report of the Scottish Council of Economic Advisers. This debate is oversubscribed, so I ask all members to stick strictly to their time allocations. I call Fiona Hyslop. Cabinet secretary, you have 11 minutes.

Fiona Hyslop (Scottish National Party, Lothians)

We welcome the first annual report of the Scottish Council of Economic Advisers. It is an outstanding piece of work and, as is clear from the response that we published last week, we take the recommendations and considerations seriously.

The report sets out clear strategic priorities for Scotland's economy. In normal economic conditions, advice of such weight, detail and value would be extremely helpful. In these exceptional times, however, the council's recommendations assume even more gravity in helping us to do all that we can, within the limits of our powers, to deliver for the people of Scotland.

Over the past year, we have followed the council's advice on how to achieve our targets for economic growth, productivity, emissions, participation and cohesion. We have listened carefully to the council on planning, infrastructure, education and skills, and our economic statistics. We agree with the council that, had the Scottish Government more levers under our control—such as borrowing powers—we could make an even greater contribution to economic recovery.

It remains to be seen whether the announcements that were made by the UK Government on Monday will encourage lending and get rid of the toxic assets in our banking sector. What is clear is that the banking sector and the UK economy generally both face unprecedented circumstances. For many Scots, this is the most difficult economic climate for more than a generation, and few could have forecast the severity of this downturn. However, as early as last summer, this Government developed a six-point economic recovery programme to help to reduce the worst effects of the downturn on individuals and businesses in Scotland.

I want to outline the action that we are taking to provide increased support for people who are facing hardship, and I will refer to some of the specific recommendations and considerations of the council.

As the council has recognised, our greatest challenge will be in supporting individuals who face the risk of unemployment, which is why we are enhancing our partnership action for continuing employment initiative. Last week, I announced a range of measures to strengthen PACE, including the dedication of 80 Skills Development Scotland professionals to work alongside staff in Jobcentre Plus in supporting people who are facing redundancy. A national helpline and revamped website will go live next month, and all careers centres across Scotland will be geared up to offer tailored support to individuals. The changes that I announced have been widely welcomed and will underpin further action in the next few weeks. Tomorrow, the Scottish Further and Higher Education Funding Council will prioritise resources so that colleges can align their provision with PACE activity and ensure that it better reflects the increased demand for courses.

The funding council and Skills Development Scotland are working with ConstructionSkills to ensure that apprentices who are made redundant have the opportunity to complete appropriate and relevant training. When apprentices have accumulated Scottish credit and qualifications framework credits through their training, I expect colleges and other training providers to ensure that that is recognised and counts towards an alternative programme.

John Park (Labour, Mid Scotland and Fife)

Will the Scottish Government guarantee that apprentices in the construction sector will be able to complete their time?

Fiona Hyslop (Scottish National Party, Lothians)

I want apprentices to complete their courses. We can perhaps work collectively to ensure that apprentices who are made redundant can continue their apprenticeships in future employment. I understand that 160 apprentices have already been found alternative employment.

Issues to do with college funding also arise, as do issues to do with benefits and the UK Government. If apprentices who are made redundant are unable to find alternative employment in which to continue their apprenticeships, we have to ensure that college courses are available and that the apprentices' income does not suffer. I hope that Mr Park will accept that reassurance.

In recommendation 9 of its report, the council suggested that Jobcentre Plus powers should be devolved. Clearly, that is an issue for the longer term, but it is a suggestion with which we agree.

The council praised the partnership approach to employability that underpins initiatives such as PACE. It also recommended that we explore opportunities to work more closely with the UK Government and Jobcentre Plus. People in Scotland expect in these demanding times that public organisations and Governments of whatever political colour will pull together for the common good, which is why I met Tony McNulty, the Minister of State for Employment and Welfare Reform. We agreed that people who are out of work will receive an improved employment and skills service, and he will join me at our PACE summit in February to demonstrate our joint commitment to that. I invite the spokespeople of all parties that are represented in the chamber to attend the summit and to work with the Government to intensify our support for those who are facing up to the prospect of unemployment.

Skills Development Scotland is working with Jobcentre Plus to create a seamless service to minimise the time for which people who are affected by redundancy are out of work. Next month, we will establish one pilot office in each of the six Jobcentre Plus districts in Scotland, where people who are claiming jobseekers allowance—including those who have recently been made redundant—will be offered skills assessments and careers guidance and will be referred on to suitable skills provision.

The council of advisers has asked that we pay particular attention to the vulnerability of young people in the labour market. That is essential, if we are to avoid the creation of a lost generation of young people, such as we witnessed in the 1980s. In November, I launched 16+ learning choices, through which we will provide all our 16 and 17-year-olds with appropriate learning options. That is our alternative to compulsory schooling to the age of 18. Currently, 21 local authorities are implementing 16+ learning choices, and the programme will be rolled out throughout Scotland by the end of next year.

At the same time, we have refined individual learning accounts to provide better support for our 16 and 17-year-olds and to support workplace training. Last week, I announced further changes to ILAs to allow people—working and out of work—to participate in an even wider range of learning. I will continue to adapt our funding mechanisms to ensure that they provide the most effective support for individuals. For example, I am considering how ILA funding can support training for people who are about to be made redundant by helping them to move from being in work to being in new work by retraining, with their employer's agreement, during the 90-day redundancy period.

We also propose to invest £1.7 billion in our universities and colleges through our budget, which will help the sector to meet increased demand over the months and years ahead. The £38 million package of measures that we introduced for part-time higher education study last summer will help more people to improve their skills and job prospects during these tough economic times.

Scotland is unique in the United Kingdom in providing discretionary, grant-based funding for taught postgraduate study. However, until now, that funding has been available only to those who are on full-time courses, although 70 per cent of Scottish taught postgraduate students study part time. Later this year, I will introduce long-term improvements to those funding arrangements. Ahead of those wider changes, I announced last week that we will launch a number of pilot actions that will, for the first time, extend postgraduate funding to part-time students.

The council has recommended that we work closely with employers and has highlighted the importance of skills utilisation. Better use of the skills of Scotland's workforce is essential if we are to achieve sustainable economic growth, which is why the skills utilisation leadership group, which is made up of business and union leaders, is championing, advocating and sharing across sectors best practice in respect of how companies can make better use of the skills of their workforce in order to improve productivity.

During the summer, the Government approved a range of projects totalling around £55 million to assist employability and skills development and to build on the success of our skills interventions to help more people in Scotland to get into, and progress through, the workforce. Skills Development Scotland is currently working with sector skills councils, industry bodies and training providers to develop skills interventions that better meet the needs of individuals and employers in Scotland. We must be flexible about how we achieve an additional 15,000 training places by 2011. Some of those will be apprentices, but I know from my discussions with employers that one size does not fit all, so they want more flexible skills interventions that reflect the particular needs of their sectors.

Duncan McNeil (Labour, Greenock and Inverclyde)

Does the cabinet secretary agree with Michael Levack of the Scottish Building Federation, who said this morning that

"maintaining our skills base alone will not address the longer term need for a decision on the funding of infrastructure projects. I would like to see the Scottish Futures Trust up and running and investors being brought on board to provide the necessary funds. Until that time ... ministers should make use of available funding models such as PPP"?

Does she agree that we need to bring forward the work, not just maintain the skills?

Fiona Hyslop (Scottish National Party, Lothians)

The first projects from the Scottish Futures Trust will commence this year. I advise Duncan McNeil that £2 billion of infrastructure construction work is already taking place in schools alone. As he will know, only last week I was in Greenock to see the development of the James Watt College with part of the construction money that has been brought forward from future years. The 2008-09 money will help to keep jobs—indeed, 4,700 jobs will be supported through our bringing forward construction investments as part of our plans. I will come on to that.

Recommendations 2 and 4 of the council's report endorse our approach to key sectors. To achieve our ambition of 50 per cent growth in the tourism sector, we are addressing industry concerns about the relevance of the training provision that is available for the sector. With Scottish Enterprise, we will fund a comprehensive feasibility study to bring to life an ambition of business leaders in the sector to establish an industry-led centre of leadership in hospitality and tourism. We are also providing funding to develop a food and drink skills hub at the University of Abertay Dundee. In addition, we have made funding available to establish a financial services skills gateway to support the strategy for the financial services sector in Scotland.

At the heart of the Government's economic recovery programme is a package of accelerated capital spending. We are bringing forward investment from 2010-11 into 2009-10 and—to address Mr McNeil's question—into 2008-09. Of that money, £13 million is being invested in the college sector, some of which is to be used in 2008-09 for construction work, including the development of the James Watt College. The Government has welcomed the UK Government's pre-budget report announcement, which has enabled us to bring forward up to a further £260 million of capital investment.

The council has recommended that we increase our overall infrastructure spending, and I am pleased to say that, as we made clear in the budget bill, we plan to push ahead with £230 million of accelerated spending across Scotland in the next year. We plan to ensure that local authorities receive £90 million of that funding, much of which will be focused on new and refurbished schools, which will impact on local businesses. In addition, colleges and universities will benefit from £13 million of improvements, as I just said to Mr McNeil. That money will generate work and support 4,700 jobs in total.

Members across the chamber have a duty to work to help those who face immediate difficulties, while ensuring that Scotland emerges from the downturn stronger and more competitive in the global marketplace.

I move,

That the Parliament notes the recommendations made in the First Annual Report of the Scottish Council of Economic Advisers: December 2008 and the Scottish Government's response to those recommendations in the context of its action to help businesses and households, support jobs and investment and ensure Scotland is well positioned to take advantage of any recovery.

John Park (Labour, Mid Scotland and Fife)

I welcome the opportunity to participate in this morning's debate. It is fair to say that the initial report from the Council of Economic Advisers in December has divided opinion in Scotland. Stephen Boyd of the Scottish Trades Union Congress—a former colleague of mine who is highly respected—showed a grasp of the English language that I am unable to match when he said of the report:

"As a lesson in the banal the report is peerless. It is difficult to discern any new or innovative thinking in its 60 pages."

The equally highly respected Bill Jamieson of The Scotsman—albeit that he was coming from a different perspective—described the report as

"an outstanding exercise, compelling in its logic, impressive in its scope, cogent in its argument ... Indeed I would say it is one of the best summations for years of the problems we need to tackle in Scotland."

I am sure all members will agree that those are interesting comments.

There is undoubtedly cross-party support for the principle behind the Council of Economic Advisers. However, as always with new initiatives such as this, we must look closely at its operation and what it does. Today is about what the council has recommended and how the Government has responded to that. I am sure that it will not have escaped members' notice that the Scottish Government could not bring itself to disagree completely with any of the recommendations. Where there is disagreement, the phrase that it uses is "accept in part". In fact, the bits that the Government likes seem to be consistent with existing Scottish Government policy, while the bits that it does not like are not. That is a common thread to which I shall return later.

Our amendment highlights the importance of a formal link between the Council of Economic Advisers and the national economic forum. I shall explain to Parliament why we have raised that issue and why we want to formalise the link. The First Minister himself has made it clear on many occasions that he expects a formal link to be established between the council and the national economic forum: indeed, the Scottish Government website highlights specifically the expected relationship between the national economic forum and the Council of Economic Advisers. It states:

"The Forum will allow the Council of Economic Advisers and the Government to draw from the widest pool of opinion. We expect good ideas to flow from the Forum to those directly advising the First Minister and the Government. The Forum will provide the opportunity for issues under consideration by the Council to be discussed more widely, and for solutions to emerge amongst those organisations best placed to deliver."

Perhaps someone forgot to mention the importance of that link to the council's chair, Sir George Mathewson. At the Economy, Energy and Tourism Committee, my colleague, Lewis Macdonald, asked Sir George Mathewson whether the council engages

"with the national economic forum, which has a range of stakeholders and which Government supports?"—[Official Report, Economy, Energy and Tourism Committee, 10 December 2008; c 1374.]

In reply, Mr Mathewson said:

"We do not engage with it, but I know what its role is".

That is a worrying response on the forum, which was developed to represent the wider views of industry to the Council of Economic Advisers. I was an enthusiastic supporter of a national economic forum for a long time before I entered Parliament, but I have genuine concerns about its current size and composition. However, I am happy to leave aside those concerns in this debate because that body is an ideal way to influence Government thinking and opinion, and to build consensus on how best to meet the economic challenges that we face now and that we will face in the future.

Fiona Hyslop (Scottish National Party, Lothians)

John Park shares our interest in skills and skills utilisation. In the light of his connections with the STUC, he will be pleased to hear that Grahame Smith led one of the sessions on skills provision at the national economic forum. The member is making reasonable points about how a connection can be further developed.

John Park (Labour, Mid Scotland and Fife)

I appreciate the cabinet secretary's comments and the invitation to go to the summit on supporting people who face redundancy, which I will certainly take up.

I do not underestimate the difficulties of developing a national economic forum and making its work effective, but if it is to work it needs to have formal arrangements with the Council of Economic Advisers. I hope that the Government will consider that.

I recognise that the Council of Economic Advisers will consider vocational education opportunities later, but I am concerned that it has not already tackled that issue, given how vital skills and training are in assisting people in the current economic circumstances. The cabinet secretary has made a commitment to bring the skills strategy back to Parliament—I hope that that will happen in the near future. All the opposition parties have expressed concern about the lack of clear aims and objectives in the original strategy; we think that it was rushed out. The revised strategy is even more important for our people, businesses and country. I would appreciate the Cabinet Secretary for Education and Lifelong Learning or the Cabinet Secretary for Finance and Sustainable Growth saying when the new document is likely to come before Parliament.

Private sector partnerships with our higher and further education sectors are vital to sustainable development. We must ensure that the resources that we invest in those sectors are directed into areas that are relevant to our future economic needs. The report by the Council of Economic Advisers refers to a number of recommendations on higher education, which my colleague Claire Baker will cover in more detail. I want to highlight the importance of linking academic qualifications with vocational qualifications.

Earlier this week, I had the pleasure of visiting Ineos at Grangemouth, where I saw at first hand the work on apprenticeship training that it has undertaken and how its graduate programme works, and was impressed by what I saw. The company is attracting bright young people. Those people undertake the first two years of an apprenticeship and work towards a level 3 Scottish vocational qualification. During that period, they attend college part time and study for a higher national diploma in their chosen discipline, which enables them to enter the appropriate degree course in the third year. They work with Ineos during the recess periods and know that they have a very good chance of employment at the end of the process. They get vocational, hands-on skills and an appreciation of the environment that they will work in, and they gain valuable academic expertise that will provide them with the skills that will put them among the next generation of leaders in the company and the wider industry. They undertake a university course that is directly relevant to the needs of business and industry, and because they are paid in the first two years and work with the company during holiday periods, they are less likely to finish their studies with increasing debts. Rather, they are more likely to finish their studies with a good chance of employment.

Last week, the First Minister spoke about the 35,000 apprentices who are training in Scotland. He said that that figure compares well with the UK figures. However, in reality, we will take on around 10,500 apprentices in Scotland this year and the figure of 35,000 scans over two to four years, as people train for that length of time. Some 225,000 apprentices will be taken on at the UK level this year, so Scotland's figure does not compare well. We need almost to double the figure if we want to get close to the percentages that we need and so that Scotland does not lag behind the rest of the UK in apprenticeship training.

The report by the Council of Economic Advisers covers energy. I certainly sympathise with the points that the Conservative amendment raises: security of energy supply is one of the top priorities for business in Scotland. I am sure that many members have read the report by the Scottish Council for Development and Industry that was produced at the tail end of last year, which emphasised that new base-load capacity will be needed to keep the lights on after 2020, no matter how well Scotland generates more renewable energy and increases energy efficiency. That will be an issue.

There is wide support for a wider consideration of nuclear energy as part of the mix. The Scottish Government's position is clear: the national planning framework document's assumption is against new nuclear power generation. It states:

"The Scottish Government does not support the construction of new nuclear power stations in Scotland."

The report by the Council of Economic Advisers recommends that the Scottish Government commission a full independent assessment of the various energy options that are open to Scotland. The First Minister has stated that he believes that he will be proved right on nuclear energy, but the issue is not whether he is shown to be right on it; it is whether he is big enough to accept the findings of the independent inquiry and adapt Government policy accordingly.

I had wanted to say something about infrastructure, but I am reaching the end of my time.

I am sure that members will agree that the Council of Economic Advisers must not operate in a vacuum. The wider representative bodies of industry have experience and skills, and we must harness their expertise effectively. That is why I hope that all parties will support our amendment.

I move amendment S3M-3257.2, to insert at end:

"and calls on the Scottish Government to establish a formal link between the Council of Economic Advisers and the National Economic Forum to ensure that the work of the two bodies is coordinated to be of maximum benefit to the Scottish people."

Derek Brownlee (Conservative, South of Scotland)

When the First Minister first announced that there would be a council of economic advisers, he referred to a counterpart body in the United States that advised Governor Schwarzenegger. Perhaps the Council of Economic Advisers has had rather less success in respect of its public profile, but we can fairly say that it has, since its creation, made a positive contribution to the economic debate in Scotland, whether or not we agree with all its recommendations.

The report highlights interesting and, at times, controversial areas across the range of the Scottish Government's powers. It provides real food for thought, particularly in these difficult economic times. Unemployment is at its highest level for 12 years; job losses are mounting; Government borrowing is at record levels; official figures today are likely to confirm that Britain is in recession; and the pound is at a 25-year low against the dollar. Therefore, the scale of the economic challenge is clear, but no Scottish Government of any party could stop the recession in its tracks or reverse it—that requires action by the UK Government.

The Scottish Government can do two things: it can try to mitigate the impact of Labour's recession in the short term where it can, and it can take the right long-term decisions on education and infrastructure to put us in a strong position when we come out of recession. In that context, I note the blizzard of announcements in the cabinet secretary's opening remarks.

The report by the Council of Economic Advisers makes it clear that the scope for fiscal stimulus at UK level has been dramatically narrowed by the borrowing that Labour ran up. That is the consensus of opinion among all economists in the country and in the world, and it represents a significant addition to the debate.

On the basis that education policies have a significant impact on Scotland's economic potential in the medium to long term, it is right that the Cabinet Secretary for Education and Lifelong Learning has spoken in the debate.

Our amendment highlights the recommendation on achieving the emissions target, and calls for

"an independent assessment of the full economic costs and abatement potential of the various energy options ... which are open to Scotland."

The Scottish Government has accepted that.

The First Minister has set out what the Government thinks are the key issues: cost and carbon emissions. However, there is a third critical issue, which John Park mentioned and that is security of supply. The Conservatives do not ask that nuclear power be given special treatment; rather, we ask that it is assessed on a level playing field. Events throughout the world demonstrate that security of energy supply is vital. My colleagues will develop that issue later.

There is a broader point. If the Government is sufficiently confident about its case on nuclear power to allow an independent review, why stop there? This week, the Confederation of British Industry reiterated its demand for the mutualisation of Scottish Water. The Conservatives have long advocated such a policy, and the Liberal Democrats are now also doing so. Mutualisation could save the taxpayer a significant sum—£182 million a year—without affecting investment. We know that Des McNulty has denounced the idea as "a betrayal": only the Labour Party would think that saving the taxpayer £182 million a year was a betrayal.

Patrick Harvie (Green, Glasgow)

Will the member give way?

Derek Brownlee (Conservative, South of Scotland)

I want to make progress.

Why does the Government not instruct a review of the benefits and costs of mutualisation? Earlier this week, we were told that it would not do so because the Treasury would keep any capital receipt, but the Government is not quite right about that. First, there might not be a capital receipt because it would be mutualisation rather than privatisation. Secondly, the Treasury does not in any case automatically retain capital receipts under the current rules. The Scottish National Party could, therefore, argue that the capital receipt should come to Scotland. We are witnessing a historic first: the SNP is passing up an opportunity to pick a fight with Westminster, and on quite a significant issue.

I turn to the other amendments—members know that I am always inclined to give a fair hearing to the constructive suggestions that the Labour Party puts forward. To use John Park's terminology, we "accept in part" the Labour amendment, and we will certainly follow the rest of the debate with interest.

To say that the Lib Dem amendment is somewhat tangential to the matter that we are debating is unfair to tangents. The Elgin bypass is a worthy cause, and the A96 is an important strategic route. However, it is not the role of the Council of Economic Advisers to draw up plans for an Elgin bypass. If it is a matter of relevance for any council, Moray Council would be more appropriate. I am grateful to Alison McInnes, however, for drawing our attention to yet another Lib Dem spending demand, which we missed out of our dossier that outlines the £8.5 billion of additional spending that the Lib Dems have called for since Tavish Scott became leader. I will, of course, ensure that that omission is rectified as soon as possible. I wonder why the Lib Dem amendment highlights the Elgin bypass, rather than the Dumfries, Maybole or Selkirk bypasses. What possible reason could the Lib Dems have for selecting the Elgin bypass for special treatment? I think we all understand the reality of the situation.

The Council of Economic Advisers' report is a helpful contribution to the debate, and I hope that the council will make further contributions in the coming years to improve the quality of economic debate in Scotland. Economic policy is a crucial area of devolved politics, and we have to improve the quality of debate and the actions of every element of government: local government, the devolved Government and the UK Government. If we can improve the economic potential of the country with the help of the Council of Economic Advisers, we will make a significant contribution.

I will finish with a final thought in relation to the Conservative amendment. The Scottish Government would, rather than splitting the country, do better to take a more consensual view on the benefits of splitting the atom.

I move amendment S3M-3257.1, to insert at end:

"and in particular notes the commitment to an independent assessment of the full economic costs and abatement potential of the various energy options, including nuclear power, which are open to Scotland."

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

Our complaint is not with the Council of Economic Advisers, nor with its advice, but rather with the Government's action—or lack of action—in response to its report.

The purpose of the council is to work with the Government in setting the economic policies for the future. Members might have expected the Minister for Enterprise, Energy and Tourism to lead or to sum up in today's debate, as he has done in previous debates on finance and the economy. When the minister appeared before the Economy, Energy and Tourism Committee, he was asked by the convener whether he could

"give us any information about what advice the Council of Economic Advisers has given the Government?"

The minister replied:

"Sadly, that happens above my pay grade in the Government. I do not sit in on meetings of the Council of Economic Advisers, although I hear about their outcomes. However, I welcome its involvement, as there is absolutely stellar talent in it. The basic fact that it exists, let alone the fact that we receive advice and guidance from it, does Scotland great credit."—[Official Report, Economy, Energy and Tourism Committee, 5 November 2008; c 1244.]

So—the council exists, ipso facto we are better off.

There is a similar rationale for the Scottish Futures Trust: it is costing millions, it is spending nothing and it is delayed and confused—but through the sheer fact alone of its existence, we are better off.

We certainly did not oppose the Council of Economic Advisers. Such independent and qualified advice is always useful for Government—if it is on what the Government is actually doing or planning to do—and it is useful in relation to how it shapes political thought in Scotland. However, as is the case with most things the Government does, there was an underlying political aim: the hope that the council would advance the case for independence. The Government, in its response, seeks at each and every opportunity to make the case for full fiscal autonomy—to have the same powers as countries such as Iceland. The council, however, has never been asked to examine the case for independence.

As the John Lewis slogan states, the First Minister is "never knowingly undersold". Therefore, when he announced the Council of Economic Advisers by saying that it

"represents the most formidable intellectual firepower ever to have tackled Scottish economic underperformance"—[Official Report, 28 June 2007; c 1329.]

expectations were ever so slightly raised.

One might have thought that the Scottish spending review proposals, the Scottish budget, the national conversation, the Scottish economic strategy and the Government's skills strategy would all have been referred to the council for specific advice on the Government's direction of travel in the current session of Parliament, but that did not happen. The national conversation is open to everyone, as the Government repeatedly tells us. However, it is seemingly not open to the economic advisers. The council has not done anything with regard to the Government's response that has moved the debate forward.

The council's membership is hugely impressive, and we are all grateful for the involvement of the "stellar" cast of actors, as they are described. However, it appears that their script has been written for them. As has so often been the case with the Government, the action on the ground finds it difficult to keep pace with the rhetoric.

Infrastructure—in this case, the Elgin bypass—is a good example of the Government's response. It opened schools that it had nothing to do with, and takes credit for them. It has published a 10-year forward transport plan, but with cost variations of up to 40 per cent on the estimated total value. Ministers criticise the plan in their constituencies, after signing it off in the cabinet room.

Another example is the Scottish Futures Trust. In June 2007, the Cabinet Secretary for Education and Lifelong Learning said:

"the futures trust will provide a very attractive option for local authorities and I think that many are waiting with great anticipation to use it."—[Official Report, Education, Lifelong Learning and Culture Committee, 27 June 2007; c 40.]

Many are still waiting with even greater anticipation 19 months later. That wait has caused a disastrous slowdown in the pipeline of projects.

Fiona Hyslop (Scottish National Party, Lothians)

I reassure the member that there has been no slowdown in funding and support for schools. In fact, 150 schools have been refurbished and opened since May 2007, and another 100 schools will come during the current session of Parliament.

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

Those schools were planned and the funding put in place by the previous Administration. The cabinet secretary—

John Swinney (Scottish National Party, North Tayside)

That is a pathetic excuse.

Alex Fergusson (None, Galloway and Upper Nithsdale)

Order.

John Swinney (Scottish National Party, North Tayside)

Will the member give way?

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

No, I will not—if the minister calls me "pathetic" from a sedentary position, I will not give him the courtesy of giving way.

The cabinet secretary failed to persuade Parliament, so perhaps she should attempt to persuade the Scottish Council for Development and Industry. In the SCDI's 10-point plan for construction from the policy paper that it published late last year, recommendation 8 states:

"There is agreement amongst buyers and suppliers that delays and uncertainty over the establishment of the Scottish Futures Trust is holding up investment in infrastructure and damaging construction industry. We need the Scottish Government to clear up uncertainty and get on with the job of renewing our schools, hospitals and transport infrastructure."

The SCDI does not believe what the Government says, so I am not sure why any members of the public should believe it.

There is considerable merit in the advice from the Council of Economic Advisers with regard to skills and the restructuring of Scottish Enterprise. It has called for an industry-based approach, while the Scottish Government has gone for a company-based approach, by removing swathes of support for small businesses throughout Scotland. The new chair of Scottish Enterprise—the body is 40 per cent smaller than its predecessor—is being paid the same £40,000 salary as his predecessor for one and a half days' work. I assure the cabinet secretary that that will stick in the craw of many constituents of mine who will be worried about their jobs in the coming months.

I commend the Government's response on one point, with regard to how projects in infrastructure will be accounted for. The Government's response to recommendation 20 is clear with regard to—

Alex Fergusson (None, Galloway and Upper Nithsdale)

I am sorry, Mr Purvis—we have to move on. I warned all members that there was no extra time available.

Amendment S3M-3257.3 moved:

"insert at end 'notes the Council of Economic Advisers' recommendation that the Scottish Government "raises the overall level of infrastructure spending within Scotland", and believes that the Elgin bypass should be included in the Scottish Government's transport infrastructure investment plans.'"—[Jeremy Purvis.]

Keith Brown (Scottish National Party, Ochil)

As the cabinet secretary said, the council's report has been received during grave economic times. For that reason, it is timely and welcome. As the Scottish Government is currently bringing forward its economic recovery budget, the report suggests key actions to address the current economic crisis as well as the long-term challenges that we face as a country.

We have had a public debate that, in addition to concentrating on the current economic crisis, has raised questions about how much the Parliament and the Scottish Government can do; the size of the Government's budget; the extent of its powers; and the discretion—as opposed to standing obligations to spend—that it has within the budget.

The report highlights the current extent of our powers and acknowledges, in particular, the absence of borrowing and macroeconomic powers. There is a degree of relative unity among members about the gravity of the situation that we face and the need for action, and recommendation 20, which Jeremy Purvis mentioned, highlights the need to explore alternative borrowing powers outwith the current private finance initiative regime.

If it is true that we must be flexible, dynamic, innovative and bold in responding to any crisis, it is particularly true in the current economic crisis. The Parliament must show flexibility, innovation and boldness, and I suggest that the most effective thing the Parliament can do is unite behind the idea of establishing borrowing powers. I know that there are some disagreements about that among the parties, some of which say that the matter is being considered by the Calman commission, which is not yet ready to report. I understand that point, but in response I make the point that we are in a huge crisis. Given the news that we saw on television last night about further job losses and other economic indicators, it is obvious that we do not have a great deal of time to respond quickly and effectively to the crisis.

I do not think that the other parties have substantial objections to the idea or would rule out borrowing powers in principle. If we consider the other actors who have commented on the economic situation and their views on borrowing powers, it is clear that the matter should not necessarily divide the parties in the Parliament. Reform Scotland and the David Hume Institute have spoken in support of borrowing powers, while the STUC, which John Park mentioned a number of times in his opening speech, could not be clearer in its support for the establishment of borrowing powers for the Parliament. Unison and other trade unions also support the idea.

We should consider the anomalous position in which the Parliament and the Government find themselves in comparison with local authorities, which have been able to borrow for many years. In theory, their borrowing power was increased dramatically with the move to prudential borrowing and, rightly, the only limit on their potential to borrow is what they can properly service through their revenue streams, as long as they act in a prudential way.

The Northern Ireland Assembly can borrow up to between £2 billion and £2.5 billion, and even the Scottish Government, through its projects with Network Rail, can tap into borrowing powers to fund infrastructure projects for the railways. There is no logical reason why the Scottish Parliament, which is perhaps the most powerful of the devolved Parliaments and Assemblies, cannot borrow as well. Our inability to do so fundamentally limits our ability to deal with the current economic crisis.

Many people, including the economic advisers, have highlighted the need to bring forward infrastructure projects. The benefit of doing so is that it produces a long-term return to the country and the economy well into the future. Improvements to the country's infrastructure such as road bridges, rail projects, education projects or communication projects produce long-standing benefits, not least because they improve our economic situation compared with our competitors.

Borrowing powers are crucial at the best of times, but they are even more crucial at present because we need to establish new jobs and new public works. It is also the case that the economic downturn itself presents a great advantage. For example, the Cabinet Secretary for Education and Lifelong Learning recently announced £21 million of funding for a new Forth Valley College in Alloa. That college will be built during a tough time for the construction industry, so we will get it for a good price; the existing college will, I hope, then be sold when the upturn comes, so we will get the best price for it. There are opportunities, but they have to be taken quickly.

Yesterday, I lodged a motion on borrowing powers. I seek all members' support for going to the Westminster Government and asking for borrowing powers outwith any debates about fiscal autonomy, independence or further devolution. Our request would be a response to the current economic crisis, and I do not see any reason why any party in the Parliament should oppose that.

Such a move is a short-term measure that can be done fairly quickly. There are different views about whether it can be done by ministerial order or whether primary legislation is required, but whichever approach we take, we must respond quickly and imaginatively to the current crisis. Other economies throughout the world have developed quick responses, perhaps taking steps that they would not have taken before. The fact that we talk quite glibly these days about the nationalisation of the whole banking system shows how much things have changed.

I end with a plea that we try to achieve some consensus. The public would be grateful if the Parliament could establish borrowing powers that allowed us to take forward infrastructure projects. That would be a bold step towards dealing with the economic crisis.

Wendy Alexander (Labour, Paisley North)

I begin by quoting one of Scotland's most prominent entrepreneurs and economic commentators, Ian Ritchie. In the January edition of Scottish Business Insider , he wrote:

"the old Scottish economy—which was overwhelmingly dominated by giant financial institutions—has been blown to bits by the great Credit Crunch of 2008 ... Both Scottish & Newcastle and HBOS—with their centuries of proud tradition and business leadership—have gone forever.

The UK Government now owns the Royal Bank of Scotland which, alone, until recently represented well over 50 per cent of the Scottish economy."

He concluded:

"The last time our economy was in such a state was in 1945, at the end of the second World War when huge chunks of our business infrastructure had been literally blown to bits by the Nazis."

That was just last week. On Monday, RBS posted the largest corporate losses in UK history and the Scottish Chambers of Commerce offered its bleakest survey ever, and on Tuesday the share value of the new Lloyds Banking Group slumped by 30 per cent. Yesterday, Scottish unemployment rose sharply to a 10-year high, and this morning Scotland's Parliament debates the Scottish economy for the first time this year.

I have to ask what worried Scots should make of the fact that today, in the midst of the most challenging economic week for decades, the SNP declined the chance for a minister with responsibility for the Scottish economy to open the debate. We face tight credit conditions, small business finance is jeopardised, economic growth is reversed, business activity is down, household incomes are down, retail sales are down, and house prices are down. I mean no harm to Fiona Hyslop, but she has no ministerial responsibility for any of those things.

The economy, the Scottish budget, business and industry, Scottish Enterprise, Highlands and Islands Enterprise, trade and inward investment, corporate development, public services reform, deregulation, European structural funds, energy, tourism, land use, planning, climate change, building standards, transport policy, procurement, e-government and Scottish Water are all the responsibility of John Swinney and his team. Scotland is facing an unprecedented economic storm, but all three ministers with responsibility for the Scottish economy declined to open the debate.

John Swinney (Scottish National Party, North Tayside)

Will the member give way?

Wendy Alexander (Labour, Paisley North)

I will give way to the cabinet secretary, who did not want to open the debate.

John Swinney (Scottish National Party, North Tayside)

Would Wendy Alexander not have preferred me to listen to her great, six-minute oration and give a considered response at the end of the debate, to deal properly with the issues? I will be delighted to do that, and I am glad that she has taken three minutes to say precisely nothing to the Parliament.

Wendy Alexander (Labour, Paisley North)

I am told—and I will be interested in the cabinet secretary's view on this—that it was only a last-minute switch that shamed him into appearing today, but maybe he will tell us why he misinformed every other party. However, that is a matter for elsewhere.

It was so different in 2007, when John Swinney told us that the Council of Economic Advisers would

"play a significant part in the development of our economic strategy, but Parliament must also be central to the process."—[Official Report, 30 May 2007; c 194.]

These days, he and his ministerial team have to be dragged to the Parliament to account for their actions.

If the SNP thinks that I mean to shame ministers into action, I do, because they can be shamed. For months, I and others have been calling on them to publish the Scottish Government's six-point economic recovery plan in a more substantial form than a mere press release. They finally slipped it out last week. There was no press release, no debate and no leadership by the cabinet secretary, but finally, at the beginning of the Government's response to the annual report of the Council of Economic Advisers, we have the six-point plan.

As the cabinet secretary is now to sum up the debate, I ask him to answer the following questions. Why is there no meaningful discussion of the proposed local income tax from either the Council of Economic Advisers or the Government, given that it is the Scottish Government policy that is of most interest to Scottish business? Why is there no discussion of the neutering of the intermediary technology institutes? Why is there still a planned real-terms reduction in the Scottish tourism budget for this year? Why is the Government abolishing the collection of data on the performance of planning authorities in Scotland? Who will carry out the review of energy options, and when will the terms of reference be made public?

I note that a small minority of the council's recommendations relate to Fiona Hyslop's responsibilities, but the vast majority relate to John Swinney's. We must fear that the SNP is guilty of inaction and irrelevance with regard to the Scottish economy. The intermittent calls for unity by the Cabinet Secretary for Finance and Sustainable Growth—in contrast to the attacks on London that goodness knows there are still plenty of—cannot become a cover for inaction or silence in this Parliament. The country deserves better.

David McLetchie (Conservative, Edinburgh Pentlands)

We should welcome the report of the Council of Economic Advisers, which makes 22 recommendations to the Government. However, I have just discovered a hitherto unknown and secret 23 rd recommendation: "John Swinney should speak first in all parliamentary debates". That is the way to get this country out of recession.

I was interested to note in the Government's response its support for the Scottish tourism industry and homecoming 2009. I am in no doubt that homecoming will be a great success, not just because we are celebrating the 250th anniversary of Robert Burns's birth, not just because of the extensive programme of events the length and breadth of Scotland, and not just because of the seductive siren voice of that home-loving man, Shir Sean Connery, but because the third world currency with which Gordon Brown has landed us means that most Scots cannot afford to leave home in 2009. The collapse of sterling on the world's currency markets is the world's judgment on Britain's economic condition and makes Labour's attempts to present the Prime Minister as some kind of world economic saviour as a ludicrous blasphemy. So, for the time being, it is holidays at home for us and we should take this opportunity in adversity to boost our tourism industry for future years when we are not exchange rate prisoners in our own country.

The Conservative amendment focuses on the recommendation that the Government commission an independent assessment of the full economic costs and abatement potential of the various energy options open to Scotland. I am pleased that the Government has accepted that recommendation and, in particular, welcome the First Minister's statement that one of the energy options to be examined in this independent assessment will be nuclear power.

Yesterday, the Local Government and Communities Committee took evidence on the second national planning framework from Stewart Stevenson and the chief planner. As members will be aware, the framework identifies 12 national developments, including a new power station and trans-shipment hub at Hunterston and new non-nuclear base-load capacity at other existing power station sites. If the Government is serious about having an independent assessment of energy options, it must be prepared to admit the possibility of the independent assessor coming to a conclusion on energy policy that differs from the one the Government has reached. Parliament will complete its scrutiny of the national planning framework, and it will come into effect, before we learn the results of the independent assessment, never mind the Government's response to its recommendations.

A Government that has a genuinely open mind on this matter should be prepared to accept a simple modification to the national planning framework and remove the term "non-nuclear" in the reference to base-load capacity. After all, it does no violence to the planning framework to admit the possibility of the independent assessment coming to the conclusion that new nuclear capacity is necessary in Scotland to replace Hunterston and/or Torness when those stations come to the end of their operational lives.

Patrick Harvie (Green, Glasgow)

Mr McLetchie will be aware that the majority of members in the Parliament won their seat on the back of manifestos that were explicitly opposed to new nuclear capacity. Even if his independent review informs future debate or the development of NPF 3, why should it supersede the democratic mandate of the current Parliament?

David McLetchie (Conservative, Edinburgh Pentlands)

After 10 years in the Parliament, my experience is that the majority of members are invariably wrong on a whole range of issues because they do not agree with me. Indeed, the majority of members are well capable of changing their minds—and I hope that, after hearing my rational arguments, they will do so.

One would have thought that, if new non-nuclear base-load capacity qualified as a national development, new nuclear base-load capacity must also do so and that a Government with an open mind would have concluded that my suggested amendment to NPF 2 was appropriate. Sadly, this Government has not reached that conclusion, and Mr Stevenson was emphatic that the Government would not amend its framework in that way.

The only conclusion that I can draw is that the Government is certain of the outcome of the independent assessment. In that case, just who is going to conduct the independent assessment that is going to reach the conclusions of which the Government is so certain? Perhaps the Cabinet Secretary for Finance and Sustainable Growth will inform us of the identity of those wise men and women, because there are any number of wise men and women who have reached the conclusion that we need to rebuild our nuclear capacity if we are to have the remotest prospect of ensuring our energy security and achieving our emissions targets. I need refer only to the influential inquiry into energy issues conducted by the Royal Society of Edinburgh; the advice of the former chief scientific adviser to the UK Government, Sir David Kane; and the views of that great green guru, Professor James Lovelock.

In the face of that intellectual firepower, we await with interest the identity of the assessors and their credentials for judging this most important of issues. In the meantime, the Council of Economic Advisers—

Alasdair Morgan (Scottish National Party, South of Scotland)

I am afraid that the member's time is up.

David McLetchie (Conservative, Edinburgh Pentlands)

—is to be commended for reopening—

Alasdair Morgan (Scottish National Party, South of Scotland)

The member should not go on speaking after I have told him to stop.

Aileen Campbell (Scottish National Party, South of Scotland)

One of the Scottish Government's first acts after the May 2007 elections was to establish the Council of Economic Advisers in recognition of the importance of developing and growing Scotland's economy in meeting the Government's other targets, including eliminating poverty, respecting the environment and building the best possible future for our children.

Scotland's Government is not alone in seeking independent advice on how best to develop its economy. For example, the Executive Office of the President of the United States has had a Council of Economic Advisers attached to it since 1947; indeed, in recent days, it has been rebooted with fresh faces and new thinking to take forward the changes in American policy that we have all been hoping for. In 1997, Ireland established a National Competitiveness Council to advise on how to draw together a diverse range of sectors and experience to build the country's economy. Even Gordon Brown has his own—albeit not wholly independent—national economic council, which comes complete with Peter Mandelson.

The Scottish Government has not set up the council to be a talking shop; it is offering the Government real, practical and concrete advice, and the Government is responding positively to its views. The council's report is perhaps even more important in an era of economic uncertainty that is very different from the situation when it was established in May 2007. Unfortunately, we are now hearing regularly of bankruptcies and job losses. In the South of Scotland region that I represent, the haulage industry is just one area that is beginning to feel the pinch—last week, for example, the Eddie Stobart Group announced the closure of its Larkhall depot. This will be a worrying time for all the staff at the site and their families and I am sure that, through PACE, the Scottish Government will do it all it can to help them and the other businesses and industries throughout Scotland that are trying their best to survive.

I am particularly pleased by the commitment in the Government's economic recovery programme to strengthen not only PACE, as Fiona Hyslop made clear in her opening remarks, but links between Skills Development Scotland and Jobcentre Plus

"to minimise the time for which people who are affected by redundancy are out of work".

The Government is right to highlight its recovery programme at the beginning of its response to the council's report, because the strategy will help to ensure that Scotland meets the present economic challenges as best it can and emerges stronger as a result. That is one of the themes of the council's recommendations, and I welcome the fact that the Government has accepted 18 of the 22 recommendations in full and the remaining four in part.

The wide-ranging recommendations join up the different sectors and factors that affect—and are, in turn, affected by—our economy. As a member of the Education, Lifelong Learning and Culture Committee, I was particularly interested in the council's recommendations on education and skills. Perhaps controversially, the report recommends that the Government consider introducing a two-tier approach to the standard four-year honours course. The Government is right to accept the recommendation containing that proposal only in part, because it is important that we respect our higher education institutions' autonomy in this area. Any significant changes to the structure of degree courses in Scotland will need the academic community's full support.

The Scottish Government has also accepted only in part the recommendation that a range of stakeholders, including businesses and students, contribute to the funding of higher education. Access to education based on the ability to learn, not on the ability to pay, has been a long-cherished principle in Scotland, and its having re-established free education with the abolition of the graduate endowment, I can well understand the Government's reluctance to accept that recommendation.

The recommendations that the Government has accepted only in part are a small minority of the overall report, which, on the whole, is ambitious for Scotland's economy and confident about the steps that we can take to face economic difficulties.

It is not surprising that, in its response, the Government accepts all the recommendations regarding growing the powers of the Parliament and the potential difference that greater fiscal autonomy could make to the country. I welcome the growing strength of feeling in Scotland in favour of greater financial powers for the Parliament and the Government. Despite what some members have said, many people now view the fact that the Parliament does not possess the borrowing powers that our local authorities, the Northern Ireland Assembly and Network Rail take for granted as, to use Keith Brown's words, highly anomalous.

Like the Scottish Government, I want Scotland to have all the powers of a normal independent country. Despite all the challenges that it faces, we have not heard that Ireland is seeking to return to the bosom of London to cure its economic woes; nor has Norway declared itself insolvent, despite some people's predictions.

The Government has accepted many other welcome recommendations. I particularly look forward to seeing how the advice on developing the planning system is taken forward. One of the issues that constituents raise with me most regularly is the difficulty that they face getting through the planning process. Any steps that the Government can take to make the process streamlined, transparent, consistent and focused on good-quality outcomes will be warmly welcomed.

The fact that the Government has been able to respond so positively to the report of the Scottish Council of Economic Advisers demonstrates the wider ambition that it has to help Scotland flourish. Nowhere is immune to the global economic downturn but, with a Government that is prepared to listen to the sound advice of its economic advisers, Scotland can prove more resilient than it might do otherwise.

I congratulate the Government on its positive response to the report, and I am confident that future reports will continue to help strengthen and develop Scotland's economy, no matter the global circumstances in which we find ourselves.

James Kelly (Labour, Glasgow Rutherglen)

I welcome the opportunity to take part in the debate, which comes at a relevant time, given that the economy has dominated the Scottish, UK and world political scenes in recent months. There is no doubt that we find ourselves in a very difficult economic situation, which is illustrated by the 13,000 rise in unemployment figures that was announced yesterday and the recent purchasing managers index survey, which showed record drops in Scottish services activity and manufacturing output.

In reflecting on the economic situation, I recalled that, last May, I was part of a group of MSPs who visited the Royal Bank of Scotland headquarters as part of the Scottish Parliament and Business Exchange. It is really hard to believe that eight months later, RBS posted £20 billion losses and the Government now controls more than 70 per cent of it.

The effects of the economic situation are being seen in communities in our constituencies. A recent report by Experian noted that Rutherglen is likely to be one of the five towns that are worst affected by the recession. Almost at the same time that the report was published, that was shown by the closure of Woolworths on Rutherglen's Main Street. Sadly, the situation has deteriorated this week with Vion's announcement of the proposed loss of 150 jobs in the food processing plant in Cambuslang. That is unfortunate, given that Vion took over Grampian Country Foods only last June. The First Minister had a meeting with Vion—as did Richard Lochhead in October—and he said that he hoped that Vion would change the landscape. It has certainly changed the landscape in Cambuslang by proposing to put workers on the dole, which is not welcome.

I note the Council of Economic Advisers report's contribution to the economic debate, but we are more concerned about the impact of the economic situation on the ground. We do not need an economics doctorate to see the impact in Cambuslang and Rutherglen, given the "for sale" and "to let" signs that are going up in shops in the main streets. We can also see the effects in the faces of the workers at Vion who are facing potential redundancy. Those workers and their families are experiencing a really emotional and difficult time. They are looking for practical actions. They are looking to see what Jim Mather, as Minister for Enterprise, Energy and Tourism, can bring forward and what Richard Lochhead, who has responsibility for food, can do to revitalise the food processing plant. Overall, people are looking for jobs and skills to be prioritised to revitalise their communities and boost our town centres. We have to face those major issues.

The report addresses the major issue of energy, to which the Conservative amendment refers. There are big challenges for the SNP Administration, given its stated aim to bring forward plans to reduce emissions by 80 per cent by 2050. It is one thing to make such a policy commitment, but it is another to deliver it. We are all committed to boosting and encouraging renewables, but the SNP Administration has turned down a number of renewables schemes, and there is still a delay in the Beauly to Denny network. If we are really going to push renewables, the infrastructure must be in place to support that.

The Administration attempts to face both ways on the nuclear question: it is prepared to extend the lifespan of nuclear plants, but, at the same time, it says that it is not in favour of the nuclear option.

David McLetchie (Conservative, Edinburgh Pentlands)

On the subject of facing both ways on nuclear power, will the member explain why the Labour Party in this Parliament finds it so difficult to support the energy policy of Her Majesty's Government?

James Kelly (Labour, Glasgow Rutherglen)

We all want a balanced energy policy that takes energy from all sources and helps to give us stability of supply and strong base-load provision, which will ensure that we keep the lights on. Scottish Labour and UK Labour are committed to that.

The report fails to address some of the bigger issues in how we grow the economy. We need practical action to tackle the big issues and provide solutions for Scotland.

Alison McInnes (Liberal Democrat, North East Scotland)

I read with interest the Council of Economic Advisers' recommendation that

"there is a need to raise the overall level of infrastructure spending within Scotland".

A critical element of that is investment in transport infrastructure. Six weeks ago, the long-awaited strategic transport projects review was finally presented to Parliament. It is prefaced with the following:

"A safe, efficient and effective transport system is essential for Scotland and the Scottish economy ... Our economic success depends on good connections between our cities and towns ... Transport Scotland's Strategic Transport Projects Review ... supports the Scottish Government's purpose of promoting sustainable economic growth by planning the next 20 years of transport investment for Scotland's rail and trunk road networks."

Ever since the SNP took office 20 months ago, the STPR has been used as a shield to fend off questions about transport investment. Communities and local authorities have been told over and over by the Government to wait for the outcome of the STPR. So we all waited, waited and then waited a bit more as the Cabinet mulled it over.

Transport Scotland submitted its recommendations to ministers in September last year, which means that ministers had the review before them for two and a half months prior to coming to a decision. On 10 December—only six weeks ago—we were finally told of the Government's priorities for the next 20 years of trunk road investment.

Some of us might think that there are things missing from the STPR, but we are not cabinet secretaries. Unlike Mr Lochhead, we did not get the chance to argue our case for 18 months from within the Cabinet. I heard no dissent from the Cabinet when the STPR decision was reported to Parliament yet, two weeks ago, Mr Lochhead met campaigners to express his disappointment that the Elgin bypass had not been included.

Mr Brownlee asked why my amendment does not mention other bypasses. The answer is obvious: Mr Lochhead's recent actions have brought the Elgin bypass to the fore. As an Opposition MSP, my role is to hold ministers to account. If Mr Brownlee does not think that a lack of credibility is a serious issue, that is a matter for him. The behaviour in which Mr Lochhead has indulged recently not only disappoints his electorate but contributes to many people's disenchantment with politics. He cannot sit in Parliament and support the outcome of the STPR, then go home to his constituency and say that he is disappointed in it. Mind you, he is probably not as disappointed as the people of Elgin are with their MSP.

Richard Lochhead says that he will keep making the case. The case for what—inclusion in the next 20-year plan? When he campaigned for an Elgin bypass at the previous election, was he campaigning only for a bypass in 2032? Why does he think that he can have it both ways? Either he supports the Government's decision to exclude the Elgin bypass from the next 20 years of investment in our trunk roads or he supports his constituents.

Richard Lochhead claims that projects in other parts of Scotland must be looked at first, but that is not how the Government says that its strategic plan works. The SNP's transport minister has made it clear that the plan does not prioritise; it provides a wish list of projects that need to happen in the next 20 years.

Mr Brownlee referred to costs, which was pretty rich, given that the transport investment plan's price range for the 29 projects is £12 billion to £21.3 billion before VAT, which represents a staggering variance of £9 billion.

Derek Brownlee (Conservative, South of Scotland)

rose—

Alison McInnes (Liberal Democrat, North East Scotland)

I will not give way as I want to make my case.

Given the bewilderment in the past couple of weeks, I thought that we should give Richard Lochhead an early opportunity to clear up the confusion and make it clear to his constituents that he means what he says. After all, he campaigned with local people for a bypass for years—I have reminded myself of that by re-reading his press comments and parliamentary contributions, which unequivocally supported a bypass. For example, he said in a parliamentary debate:

"I will address the reasons why we must have the Elgin bypass ... The number 1 priority on which the whole community—the business community, residents and everyone else involved in the debate—agrees is that we must upgrade the transport infrastructure ... It is seen as the make-or-break issue, which is why this debate is so important.

We cannot have an A96 upgrade without ... the Elgin bypass".—[Official Report, 21 September 2006; c 27967-8.]

Tonight, Richard Lochhead has the opportunity to turn those words into action. At 5 o'clock, people in Elgin will know for certain whether he supports the Elgin bypass. He has the chance to vote for it. He can stand up for his previous promises by voting for the bypass to be put into the Government's transport plans, or he can vote against the bypass to keep his ministerial job. He cannot do both.

Christopher Harvie (Scottish National Party, Mid Scotland and Fife)

I will not dilate on how we got here—I have written enough about the UK's post-industrial economy and its descent into post-rationality.

I will respond to recommendation 8 from the Council of Economic Advisers, which urges the Scottish Government to identify

"the most cost-effective options for reducing energy demand. This should include exploring ways of delivering transformational levels of home insulation."

I am encouraged by the Scottish Government's enthusiasm for a new energy assistance package to ameliorate fuel poverty, improve energy efficiency and emphasise renewable heating systems and insulation measures as a central policy priority. I will expand on insulation measures and plead for cross-party agreement on their precedence.

Earlier this month, the Economy, Energy and Tourism Committee was confronted during its energy inquiry by six middle-aged caucasian gents representing generation and transmission companies, who told us—unsurprisingly—that we require more generation and transmission capacity. I asked what would happen if someone from a Scottish national insulation corporation told us that his outfit could reduce demand by, say, 30 per cent, by a universal mass-production-oriented house insulation campaign—might that prevent expensive generation capacity from being built and save cash for other purposes?

Space heating accounts for 50 per cent of our carbon production, so achieving economies in that area will reduce the requirement for energy provision. A co-ordinating corporation could be established quickly to combat unemployment and advance training while more elaborate generating plants of whatever type were being planned and constructed.

Such an outfit has a Tory precedent in Walter Elliot's Scottish Special Areas Housing Association of 1936, which used new techniques to expand housing in depression-hit special areas, and later became the Scottish Special Housing Association. In the 1930s, housing boosted the economy and a semi cost no more than two times the standard middle-class income—imagine that—but we are now confronted with overpriced and not particularly well-built houses that struggle to reach a European Union energy rating of C.

Construction firms are in a slump, so why not have a compact state agency—it could be called Scottish Insulation—that is empowered to organise series production and supply of the necessary technology to meet demanding deadlines? That has a Liberal precedent in the munitions directorate for Scotland during the first world war, which churned out guns and shells only months after David Lloyd George founded it in May 1915. The proposed agency could offer and organise contracts with private firms and undertake enterprise on its own when necessary.

Crucially, Scottish Insulation would represent the passive housing industry—which conserves energy—to central Government and funding bodies. I notice a gap in such representation today. Plenty of spare labour, material and expertise are going a-begging. Perhaps some finance matadors who are out of a job might do community service and work their passage back into society. Following the precedent of the SSHA in the 1930s and the North of Scotland Hydro-electric Board a decade later, our insulators could—with logos on vans, staff and big propaganda hits—do what environmental and employment lobbies want and earn new-deal-type publicity for renewable Scotland's initiatives.

Such schemes have been standard practice for decades in Scandinavia. The Conservative Government in my former German home of Baden-Württemberg—[Laughter]. That Government was Conservative, Mr McLetchie, and it adopted an SPD plan to install insulation that meant that, even with expensive German energy prices, I paid a third less for my fuel there than I paid in an equivalent flat in Scotland.

Patrick Harvie (Green, Glasgow)

Will the member give way?

Christopher Harvie (Scottish National Party, Mid Scotland and Fife)

I will continue, as I do not have long for my speech.

There is compelling logic in developing as soon as possible bilateral links with places such as Norway and—yes—Germany, where the economy has the equipment and the capacity to adapt and to train. We should remember that less than 10 per cent of our labour force now works in manufacturing industry and that housing standards in Europe are considerably higher than those in the UK.

Scottish Insulation's presence in the energy scene would at least make conventional power suppliers more responsive to the Scottish Government's energy agenda. If allowed to expand into the present developmental vacuum, it could do much to convert the dearth of housing activity into preparation and training for a wider renewables strategy.

Hugh Henry (Labour, Paisley South)

There is no doubt that, in the current climate, the public want politicians to put aside petty differences, to focus on the problems and to try to work together to produce solutions, provide assurances and give confidence in the uncertain period that we face. It is right that all parties, including mine, put aside some of the shibboleths to which we have become attached, acknowledge that others sometimes have answers to questions that are being posed, and recognise that no one party has all the answers to the problems that we face. To that end, I welcome Fiona Hyslop's offer that other parties are welcome to attend the skills summit. That is but a small first step in the Government's recognising that others should be engaged in finding a way out of the current problems. I congratulate her on that.

I urge the present Administration to recognise that, in a period of uncertainty, the last thing that business and working people across Scotland need is more uncertainty and worry. I suggest that the proposed local income tax would add significant uncertainty to businesses that already face many problems in coping with the impact of the international financial crisis. Many business organisations have already spoken on record about their worries about local income tax.

I understand the politics of what the SNP promised to gain power and of scoring points against others. However, leaving aside the arguments about whether the proposition could work, we should recognise that it would bring great uncertainty, cause tremendous turmoil and not be easy to introduce. If we are genuine about wanting to help Scottish companies—not just big companies but small and medium-sized enterprises—to ride out the problems that they face, we should be big enough to recognise that the threat of a local income tax might be enough to put some of them under or, worse, to deter people from investing in Scotland. Much as the Government aspires to replace the present system for financing local funding, it should recognise that, in the present circumstances, it would be extremely foolish not to pay attention to businesses' worries.

The Council of Economic Advisers raises the issue of planning. I agree that we should work to ensure that planning is improved, decisions are expedited and more attention is paid to sustainability. Often, planners take too long to make decisions, and sometimes those decisions seem perverse. I welcome any measures to encourage investment and speedier decision making at a local level. However, I introduce a note of caution. Often, unfettered development occurs and decisions about where investment and building should take place are made at the expense of the long-term interests of local communities. We should not fetter the right of local councillors and planning officials to consider what is best for their community. Sometimes, they must make hard decisions that involve balancing the needs of companies that want to invest, which want quick decisions, and the needs of the wider community, not just in the short term but in the long term. In my area, I have seen companies come in with all guns blazing and a full fanfare of support for the jobs that they bring, only to close and move away, leaving an empty building that blights the landscape for years to come. We should ca cannie.

Finally, if the Council of Economic Advisers is to have any influence on the Administration, it must address the issue of town centres. If we want to revitalise and protect Scotland, we must do something about our traditional town centres. We need to work across parties on investment in town centres and the decisions that can be made to combat not just out-of-town centres but the recession that is impacting on many small businesses. The last thing that we need is economic blight in town centres, which are both economic drivers for the country and important social providers for the people who live in the areas that they serve. A town centres initiative would be welcome and should be introduced soon.

Alex Johnstone (Conservative, North East Scotland)

To repeat a line that Hugh Henry used just seconds ago, economic blight is the last thing that we need, but economic blight is what we have. Unfortunately, that is the circumstance from which we must move forward.

We need to underpin economic growth for the long term. I understand that certain individuals, including even some members, believe that economic growth is not important compared with other things. I believe that we need to commit to significant levels of carbon or climate change gas reduction over the next few years, but for us to succeed as a Parliament and a country, that must go hand in hand with measures to underpin economic growth. I will not accept any argument that diverges from that position. I am prepared to commit to the idea that we must both maintain economic growth and cut emissions by 80 per cent by 2050, but I am concerned about how that can be realised.

Some of the documents that have been published recently contain one or two statements that help to crystallise the decisions that we need to make in the coming years. I offer a simple quote from the national planning framework 2 document to illustrate the fact that the Government is prepared to consider some fairly worthwhile options. On the generation of electricity, paragraph 150 states:

"Given the variable output of some renewable sources of energy, large baseload power stations will have a role to play in maintaining the stability of electricity supply for some time ahead. While important elements of Scotland's existing baseload generating capacity are scheduled to close over the next 10 years, extensions to the lives of coal-fired and nuclear power stations are possible."

I welcome the fact that the Government acknowledges that nuclear has a role to play in the near future, at least. However, I will address first the issue of coal-fired stations, which I will broaden out to include all fossil-fuelled thermal stations. NPF 2 sets out a clear case for the employment of carbon capture or clean coal technology, but when the Transport, Infrastructure and Climate Change Committee took evidence on the issue, we were interested to discover that a number of non-governmental organisations concerned with environmental matters have a significant lack of faith in the technology's ability to meet the need for Scotland to reduce its carbon dioxide emissions in the near future. Their concern is that the technology is not mature. Even if it could be retrofitted to existing or soon-to-be-built coal-fired power stations, there is a danger that we would leave ourselves with huge storage problems for captured carbon dioxide that could not be disposed of in a long-term or permanent way. Where have we heard that before?

If we genuinely need to provide base-load capacity—as I believe we do—to balance the pursuit of renewables, to which the Parliament is committed, we must be sure about how can do so without emitting carbon. The obvious answer is through nuclear generation. When we talk about power in general terms, we are always reminded that energy efficiency is worth pursuing and that there is a need for much more power than simply electricity. However, some of the policy decisions that we have made in recent years and are about to make mean that, although overall energy consumption could fall, the requirement for electricity will rise, as we travel by electric trains and begin to plug in our cars in the evening to recharge them overnight—that may just happen. We need carbon-free base-load capacity, and we need to use technology that we know works.

Scotland has already had two generations of nuclear power stations. The first generation was dirty, created large volumes of waste and gave us problems that we will be dealing with for many years to come. The second generation was much better—the stations were cleaner, more efficient and more reliable. However, in recent years we have realised that, as they become older, they are subject periodically to unexpected shutdown. That is why the Government should do more than simply commit to using our existing nuclear capacity. We need to commit—now—to the third generation of nuclear power stations in Scotland.

Patrick Harvie (Green, Glasgow)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

No, I am sorry.

That might be the final step that we need to take on nuclear generation, because the third generation of power stations will be cleaner, safer and more efficient, and will cut our carbon emissions throughout the period to 2050, the date by which we have committed to reducing our emissions by 80 per cent. The opportunity is too good to miss. If we miss it, it will be all the more difficult to hit the 2050 target.

The Conservatives are committed to such a step. The Labour Party is moving quickly towards the position, as James Kelly's speech suggested—

Alasdair Morgan (Scottish National Party, South of Scotland)

I am sorry, your time is up.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I welcome the report of the Council of Economic Advisers. We should be grateful to the economists for giving up their time—although sometimes it would be good to hear about matters on which they disagree as well as matters on which they agree.

There was certainly agreement on productivity, in all its aspects. I am sure that most members agree strongly with the section of the report that deals with productivity, although it is clear that members of the Labour Party have big concerns about skills and training, which I am sure will feature prominently during the next few days, as we approach the climax of the budget process.

When the Cabinet Secretary for Finance and Sustainable Growth winds up the debate, it would be useful if he could reflect on the significant figures on new apprenticeships this year, which John Park mentioned—10,500 in Scotland and 225,000 in England—and tell us when the skills strategy will be brought back to the Parliament.

Infrastructure investment, which features prominently in the report, is always important but is especially important now, as a key ingredient of fiscal stimulus. We have heard much about borrowing powers from members of the Government party, but we have heard nothing about the delays that have undoubtedly occurred as a result of the hiatus between public-private partnerships and the Scottish Futures Trust. I strongly support borrowing powers for the Scottish Parliament and I hope that the Calman commission on Scottish devolution will make recommendations on borrowing and other fiscal powers for the Parliament. However, support for such a position in no way excuses the delays in bringing forward infrastructure projects. When the cabinet secretary winds up the debate, it would be good to hear why not a single project or business plan was approved and not a single contract was signed last year during the eight months from March to October inclusive. I have never had an answer to that question and I would welcome one.

Keith Brown (Scottish National Party, Ochil)

I welcome Malcolm Chisholm's support for additional borrowing powers. Does he accept that there is real urgency about the matter? Does he accept that our moving quickly on the issue would have a great impact?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

We must await the Calman recommendations. I hope that the SNP will swing behind them when they are made.

Planning features prominently in the report. I support what Wendy Alexander said about the need to continue to publish information on local authority performance. We should also get on as quickly as possible with the implementation of planning legislation, which has slipped somewhat. In the section on planning, the council made an interesting comment about financial incentives to local authorities to promote sustainable development. I would be interested to hear the cabinet secretary's comments on that—I am sorry to ask him to respond to so many points—given that in its response to the report, the Scottish Government appeared to be at least open-minded if not positive about tax increment financing. There have been discussions about funding tramline 1B, which would run to Granton, in my constituency, and is crucial for the area's development, through tax increment financing, based on regeneration of the waterfront, and it would be useful to hear the cabinet secretary's comments on that. If he has no time to give his view on the matter during his speech, I would welcome a written response.

The emissions target is crucial in the report and crucial to our policy deliberations. The two massive challenges that we face, above all, are how we get the economy out of recession and how we proceed towards achieving the 80 per cent reduction without compromise or dilution of the target. We must be entirely pragmatic and open-minded about nuclear power and we must clearly separate that issue from the nuclear weapons issue. Members who are as old as I am know that we used to connect the issues decades ago, when there were good reasons to do so. However, they are separate issues and we should strongly support the advisers' recommendation that the Scottish Government commission

"an independent assessment of the full economic costs and abatement potential of the various energy options open to Scotland."

Such an assessment would have to be genuinely independent. Concerns have been expressed that the First Minister might try to have an assessment that was slightly less than independent.

Patrick Harvie will be shocked that I am even open-minded on nuclear power, but if a radical environmentalist such as George Monbiot—there is no more radical environmentalist—can be open-minded without being enthusiastic about the matter, that is good enough for me. I hope that it will be good enough for the Scottish Government, too.

Patrick Harvie (Green, Glasgow)

I am sure that Malcolm Chisholm would not want accidentally to misrepresent George Monbiot's position. Does he acknowledge that Monbiot has set out criteria on which we should judge energy solutions and has clearly expressed the view that nuclear would fail to meet the criteria?

Malcolm Chisholm (Labour, Edinburgh North and Leith)

I am certain that nuclear is no panacea. There are great dangers in thinking that nuclear is a substitute for everything else.

We welcome the Scottish Government's emphasis on renewables, but reducing demand is also central. I highlight the report's recommendation on better insulation of the housing stock, which is crucial. My final question to the cabinet secretary is this: when will the long-awaited energy efficiency strategy be published?

Iain Smith (Liberal Democrat, North East Fife)

We have had a strange debate in a week in which we have heard some of the gravest economic news in living memory in Scotland. Yesterday, the most recent figures showed a 10 per cent rise in unemployment in Scotland and a rising trend. On Monday, that once great banking institution, the Royal Bank of Scotland, was on its knees, with the announcement of record and staggering losses. In effect, the bank has been all but nationalised. On Tuesday, the Scottish Chambers of Commerce published a business survey that showed that business confidence is at an all-time low.

The Government's chief economic adviser, who told the Council of Economic Advisers at its meeting in October that the situation in Scotland was not all gloom, advised the Government in a report in December that the situation was considerably worse. I do not blame the Government for that; it is a fact that the Scottish economy is in a worse situation than anyone expected six months ago, when the recession seemed to be developing more slowly in Scotland than in the rest of the UK. The most recent evidence suggests that in Scotland the recession is deeper and is likely to last longer.

The Scottish public might reasonably have expected the Parliament to have a full debate on the current economic crisis and what the Scottish Parliament and Scottish Government can do about it, rather than debate a report that was published weeks ago, which considers the work of a committee in the year up to last October. No one disputes that the report of the Council of Economic Advisers provides an important and helpful contribution to the debate on the Scottish economy's long-term needs, but we need to deal with the crisis that faces many of our businesses and families now. The long term is important, but, as John Maynard Keynes said, in the long term we are all dead. Most surprising is the Government's apparent lack of engagement with the Council of Economic Advisers on how to tackle the current economic situation. I agree with Derek Brownlee that there is a limit to what the Scottish Government can do, but that does not mean that we should not be trying.

Like Wendy Alexander, I welcome the Government's response to the report, in that the Government has at last published some detail on its Scottish economic recovery programme. It might have been more sensible to have had a full debate on the programme, so that we could consider it in more detail, rather than a debate on a report that makes recommendations for the slightly longer term.

I highlight aspects of the Government's response. We all welcome the proposed acceleration of capital spending, but surely the money that has been wasted on setting up the Scottish Futures Trust would have been better spent on capital projects than on a fantasy scheme.

Aileen Campbell mentioned planning. There is concern about capacity in our local authority planning departments to meet the challenges of the new planning system's implementation. There is broad support in the Parliament for the new planning system but there is a shortage of trained planners in our local authorities. That is likely to get worse as planning applications reduce as a result of the reduction of economic activity. That will mean a reduction in fees going to local authorities, which will put planning departments under even more severe financial pressure. I would be grateful if, in his closing speech, the minister would state what the Government can do to assist local authorities and ensure that they have adequate numbers of trained planners in place to deal with the situation.

The Government has announced that its inability to introduce legislation on time now extends to the proposed public services reform bill, which has been delayed until at least late May. We all know that, when the Government says late May, it probably means June. We need to know what implications the delay has for identifying the scope for removing regulatory burdens throughout the Scottish public sector, which is part of the Government's economic action plan. Perhaps we could also have some information about the implications for our creative industries, as the uncertainty about creative Scotland that has been caused by the Government's incompetence will continue for some time to come.

There is much in the council's report that can be welcomed. There is genuine across-the-board support for the opinion that the Scottish Parliament's capital borrowing powers need to be addressed. Malcolm Chisholm is right to highlight that the way to do that is through the Calman commission. Perhaps the Government will encourage its officials to work with the commission to develop proposals on how we can get capital borrowing powers, rather than blocking them from working with it. That would be a genuine and valuable response to that important issue.

As John Park highlighted, the Government's response to the council's report is to accept its recommendations but then basically say that it is already doing what the council suggests and not provide any information about changes to what it is doing to ensure that the recommendations are implemented. We must ask what the point of the council is if it will not effect change in what the Government does. When I asked George Matthewson what advice the council had given the Government on whether there needs to be a shift in emphasis in the Scottish budget to deal with the current economic crisis, he replied:

"Our consideration of those issues has been limited."—[Official Report, Economy, Energy and Tourism Committee, 10 December 2008; c 1355.]

What is the point of the Council of Economic Advisers if the Government does not ask it for advice on the economy? It does not refer its budget to the council to analyse the impact that it will have on the economy and propose alternative strategies. The minister will advise me if I have got this wrong but, as far as I can see, the Government does not even appear to have sent its economic recovery programme to the council for its—

Alasdair Morgan (Scottish National Party, South of Scotland)

I am afraid that the member's time is up.

Gavin Brown (Conservative, Lothians)

The Scottish Conservatives were positive about the setting up of the Council of Economic Advisers. Anyone who looks at its members' CVs will see quite impressive stuff. As a result, the report contains much that we agree with and commend. I have also had the privilege of hearing evidence from some of the council members to the Economy, Energy and Tourism Committee. Some of the things that Professor John Kay and entrepreneur Jim McColl had to say were impressive.

Jeremy Purvis was right to raise the issue of who writes the script. That is something to monitor but, having heard the advisers speak and having read their CVs, I would be astonished if the Government wanted to write, or was capable of writing, the script for them. They are not paid, of course, so no one can hold them to ransom in any way.

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

To some extent, the point that I was making was about what is referred to the council to consider, which has been a theme of members' comments. The council will consider only issues that the Government takes to it; that is one of the problems.

Gavin Brown (Conservative, Lothians)

That is true to some extent. However, the minutes of the Council of Economic Advisers appear on the face of it to show a discussion about some of the matters that ought to come up. To some extent, the timetable for that would be outlined by the council's chair. It is fair enough to flag the issue up, but I am not sure that it hits the nail on the head.

The debate has been interesting. I thank Professor Christopher Harvie for acknowledging several fabulous achievements of previous Conservative Governments and for going four and a half minutes without once mentioning Germany, although he fell away a bit in his final minute and a half.

Some members may have described Alison McInnes's speech as slightly off piste, but it was possibly the most commendable and far-sighted attempt ever by the Liberal Democrats to keep their deposit in Moray at the next Scottish Parliament election.

I will move on to some more serious aspects of the debate. Iain Smith was first to ask what the Council of Economic Advisers could do in the short term. It has quarterly meetings and has rightly said that it does not intend to be blown off course from considering the long-term Scottish economy, but perhaps there could have been more ad hoc meetings, particularly given some of the serious announcements and drastic days that we have had in Scotland. It may not be possible to get all the advisers together at the same time, but the Scottish Government could have emergency meetings of the council as and when necessary. I ask the minister to respond to that point.

The Government has accepted most of the recommendations—I take John Park's point that some of them were accepted in part—but it would be good to hear from the minister approximately when each will be implemented and some idea of the priorities. It may or may not be possible to implement 22 recommendations at the same time, and it would be good to hear which the Government considers to be priorities.

There are a lot of good ideas in the report. I will pick out one that the CBI has talked about for a long time: the possibility of tax increment financing, which is worth reviewing. We need to hear more on the 10-day payment terms that the Government has proposed. We are interested to find out whether they are being introduced by all public services across the board or only the Government itself. Will they be widened out to help our smaller businesses, for which cash flow is king?

The main point of the Conservative amendment is the energy review. We have pushed for it for some time, the council recommended it and the Government will now undertake it. However, I point out that the Government has taken its time over that. Although the Council of Economic Advisers' annual report came out in December and the Government responded in January, an energy review was discussed in detail at the June meeting, which was described as

"A lively and comprehensive debate".

I would love to have been a fly on the wall for that and to have seen what "lively and comprehensive" meant. The council made a clear recommendation on the need for an energy review then, but seven months passed before the Government agreed to undertake one. We would like to know when exactly the independent review will begin and what details we can have on it. David McLetchie made the point that it is important that the national planning framework not prejudge the review. Therefore, it may be sensible for the Government to remove the term "non-nuclear" from project 9 in the framework. Let us see what the review says before hard and fast decisions are taken.

The Scottish Conservatives are keen for as many initiatives as possible to be implemented to help the Scottish economy in the short term and the medium term. We fought hard for business rate cuts and the council tax freeze. We want town-centre regeneration to happen. That was a Conservative idea for a long time and it appeared—as David Whitton knows—in the Conservative manifesto before the Labour one.

Claire Baker (Labour, Mid Scotland and Fife)

Labour welcomes the opportunity for the Parliament to reflect on the work of the Council of Economic Advisers and the Government's response.

When the council was established just over a year ago, we were in different economic circumstances. The challenges that Scotland faces now are different. The Cabinet Secretary for Education and Lifelong Learning rightly focused on tackling redundancy and unemployment. We need to make serious decisions about our economy and ensure that, once we begin to emerge from these challenging times, we have the building blocks on which to capitalise. We must ensure that we have a skilled, flexible population to meet the needs of new industries and that Scotland can compete internationally at the high-skills end of the employment market.

In summing up on behalf of Labour, I will focus on the higher education aspects of the council's report before moving on to the more general debate.

Labour's amendment calls for a formal link between the Council of Economic Advisers and the national economic forum. John Park raised concerns that, so far, the council's relationship with the forum has not been particularly close. Similarly, in its recommendations on universities, the council seems to have been operating in a bit of a vacuum, too far removed from other initiatives such as the joint future thinking task force. However, those are points of detail. I appreciate that the Council of Economic Advisers is offering a strategic direction for the higher education sector to ensure that it plays a full role in contributing to our economy.

Fiona Hyslop (Scottish National Party, Lothians)

The minutes of the Council of Economic Advisers make it clear that the work of the university task force was discussed. Having been present at one of the council's meetings, I know that the council was informed about that work.

Claire Baker (Labour, Mid Scotland and Fife)

I appreciate that and I was aware of that from the minutes. My concern is that some of the council's recommendations are not clear in their understanding of how Government, the Scottish Further and Higher Education Funding Council and the universities relate to each other.

Of the three recommendations on higher education that made it into the council's annual report, the first relates to the future scale and balance of the Scottish university system. Scotland should act to expand university places and to increase the number of graduates. Such action is never more important than when going through an economic downturn on the scale of the one that we face. However, in dialogue with Government and business, universities are best placed to determine for themselves the balance that should be struck in those areas. As the Government acknowledges in its response to the report, the Government does not have the power to influence individual course decisions. That makes me ask whether the council was operating too far removed from other initiatives and from experts in the field. The council might have benefited from more engagement on the issue with the sector. However, its call for

"clarity in the strategic direction of universities"

is welcome.

The council's second recommendation on HE relates to the degree structure that is offered in Scotland. We must be cautious about restructuring degrees in Scotland. The current four-year degree has served Scotland well and continues to do so. Again, I welcome the Government's response, which highlights the diversity that already exists within the sector. However, we cannot be complacent, so the council is correct to highlight the need for a flexible system that is responsive to a changing student population and that delivers access at all ages and points of life.

The final recommendation on higher education relates to how significant additional resources might be invested in Scotland's universities. The council's analysis of the challenges that the sector faces is entirely accurate. The report states:

"squaring the budgetary circle of higher participation, higher levels and higher quality is very challenging."

The council's view chimes with those in the sector who increasingly believe that it is essential that, in the next comprehensive spending review, universities receive funds that enable them to remain competitive internationally.

We all know that universities face challenges and we need to appreciate that decisions taken elsewhere have an impact on Scotland's HE sector. In a global economic downturn, universities increasingly face the same difficulties as everyone, as well as challenges in recruiting international staff and students. The council does not mince its words on that issue. Its report states:

"higher education is a high-cost area and requires a long-term perspective."

The report also states:

"Scotland will have to be proactive if it wishes to improve its relative position, and to have a strategy to fund the additional cost."

I know that the cabinet secretary appreciates the scale of the challenge; the difficulty is that no one is reassured that we have a strategy to address the funding shortfall that universities will face in the near future.

The council correctly identifies the pressures in the system and its solution, which recognises the responsibility of all stakeholders, is a helpful contribution to the funding debate. However, the principle on which the council bases its proposal needs questioned. The minutes of the meeting that was attended by the Cabinet Secretary for Education and Lifelong Learning state:

"There was general agreement between Council members that there is a sharp contrast in the attitude and level of commitment between those students who are paying for their education and those that are not".

The council provides no evidence to support that conclusion. As the Government states in its response, students already contribute a great deal to their degree, whether in time or money. However, the council raises pertinent issues on how significant additional funding needs to be raised. If the Government wishes to engage on the issue seriously and have a public debate on the issue, consideration should be given to an independent review.

The council makes some helpful suggestions on business involvement. Much more work needs to be done on that, so I will be interested to hear the Government's response to the Scottish funding council's work with Scottish Enterprise to consider proposals for an engagement voucher scheme. I look forward to seeing greater detail on how those proposals are worked up.

Moving away from the HE-specific proposals and on to the wider debate, this morning SNP members seem to have pursued those recommendations in the report that suggest solutions that would require more powers for the Parliament. Perhaps that is not surprising, given that council members are selected by the Government. However, SNP members' contributions have been constructive and have added to the general wider debate.

The Conservative amendment and speeches from Conservative members have focused on the energy debate. I would welcome clarification from the Cabinet Secretary for Finance and Sustainable Growth as to how the Government intends to respond to the independent assessment.

Labour has sympathy with the Liberals' amendment, although the fact that it strays from the central thrust of this morning's debate is unfortunate. However, some speeches from Liberal members were more wide-ranging and raised important concerns about infrastructure investment in Scotland.

Hugh Henry made a constructive speech on the local income tax, which I hope the Government will listen to.

Labour has been consistent in raising concerns about the Scottish Government's response to the economic downturn, so we hope to see further action in the immediate future. However, the 34 recommendations that have been accepted by the Scottish Government—and the five others that have been partially accepted—represent a large amount of work, if they are fulfilled. Given the Government's record to date, with strategy after strategy delayed—I refer to the skills strategy, the strategic transport projects review, the national planning framework and the Scottish Futures Trust—I hope that the council's recommendations do not suffer the same fate. I call on members to support the Labour amendment.

John Swinney (Scottish National Party, North Tayside)

Wendy Alexander somewhat contradicted the Labour position in the debate. That position, as expressed effectively by Mr Park and Mr Kelly, essentially focused on raising issues—which, to be fair, Labour members have raised consistently for some weeks—about skills, training and apprenticeships. That is why the Government felt it appropriate that Fiona Hyslop, as cabinet secretary with responsibility for those policy areas, should open the debate. In fact, on 12 November I led a debate in Parliament on the economy. On 26 November, I made a statement to Parliament on the pre-budget report. On 3 December, I led and closed a debate on the pre-budget report. On 14 January, I opened and closed the Government's stage 1 debate on the budget bill for 2009-10, during which I made extensive comments on the Government's economic recovery programme and on the economic situation. Far be it from me to say this, but Parliament hears too much from me from time to time—that position will, I know, be widely contested on all sides of the chamber—yet I am also here to close today's debate. Indeed, I thought that I was having an out-of-body experience when I heard that I was not here to close the debate. I hope that that satisfactorily addresses Wendy Alexander's point about the decisions that the Government rightly took on how today's debate should be focused.

A great deal of comment has been made about the role of the Council of Economic Advisers, which has been generally welcomed across the parties. Labour's amendment focuses on the relationship between the national economic forum and the Council of Economic Advisers. Labour puts forward a very reasonable position. The chairman of the Council of Economic Advisers, Sir George Mathewson, has attended the national economic forum. If members have practical suggestions on how we could arrange for the Council of Economic Advisers and the national economic forum to be presented with each other's output and thoughts, the Government will be happy to explore those proposals.

The Council of Economic Advisers has considered the current economic situation. The council receives information from the Government's chief economic adviser at each of its meetings. The Government's response to the council's annual report also provides information on the Government's economic recovery programme, which was fully discussed at last Friday's meeting of the Council of Economic Advisers.

We all accept that we are operating in a situation where the challenge in the economy is much greater than was envisaged 12 months ago. As a consequence, the Government has taken a series of actions in its economic recovery programme that are designed to assist recovery. At the heart of that—as Iain Smith quite fairly said—is the programme of accelerated capital expenditure. I simply point out to Parliament that, if we want that accelerated capital expenditure to go ahead in financial year 2009-10, Parliament will need to endorse the Government's budget next Wednesday. The expenditure can be deployed only if the Government's budget is approved.

Approval of our budget is important to the provision of support for employment. Mr Kelly made fair comment about the situation at Vion, where the Government is providing support to the employees who face the prospect of redundancy, as we do in all such circumstances through the PACE initiative. I welcome the comments that Hugh Henry and John Park made about the Cabinet Secretary for Education and Lifelong Learning's invitation to Opposition spokespeople to attend the PACE summit—which, if my memory serves me right, is in February—to take part in wider discussions. We accept that all shades of opinion in Parliament must be satisfied with the arrangements that we have in place to support people who face redundancy and require retraining—those arrangements must command confidence across the parliamentary spectrum—and I hope that that invitation will be taken up by Opposition members.

I said that skills and training dominated many of the speeches of Labour members. We recognise the importance of investing in skills and training. In its apprenticeship report of January 2008, the UK Government stated that there were 250,000 people in training in England. Over the next three years to 2011, it wants to increase that figure to 400,000. Our target is to have 50,000 people in training by 2011, which represents a significantly greater proportion of the population than the figure for the rest of the UK.

John Park (Labour, Mid Scotland and Fife)

In November 2007, John Denham, the Secretary of State for Innovation, Universities and Skills, announced that the UK training and skills target for the period 2008 to 2011 was 7.5 million people. In September 2007, the Cabinet Secretary for Education and Lifelong Learning announced that the target for Scotland was 50,000. I would not say that those were comparable figures.

John Swinney (Scottish National Party, North Tayside)

Those figures are most definitely not comparable. I think that Iain Gray mentioned the 7.5 million figure last week, which is just preposterous. The figures that I have given are a good indication of the Government's commitment on skills and training. We remain happy to engage on the issue, and I look forward to further discussions with colleagues in the Labour Party about such matters later today.

Hugh Henry advanced the argument for initiatives to support town centres. We all acknowledge that the range of closures that are taking place is serious, as the Conservatives identified. The Government will give the matter serious consideration.

Hugh Henry also mentioned planning. I agreed with almost all of his speech—he will know which bit of it I did not agree with. I fully agree that we must have more efficiency in planning, but that is not an argument for unfettered development. There will be some bad developments that need to be opposed; I just think that they should be opposed efficiently so that the process is not dragged out for a long time. We must encourage efficiency in the planning system. Iain Smith made a number of fair points about the resourcing of planning departments, which are under great strain because of the reduction in planning fees and the effect that that has on local authorities' financial circumstances. The Government engages with our local authority colleagues on such matters.

Like Mr Brownlee, Mr Gavin Brown and Mr Johnstone, Mr McLetchie made a number of comments on that part of the Conservatives' amendment that deals with nuclear power. The energy study, which is being tendered, will be independent. It will be overseen by a sub-group of the Council of Economic Advisers chaired by Professor John Kay, and it will be discussed by the Council of Economic Advisers. Essentially, Mr McLetchie invited the Government to prejudge the outcome of that independent review by changing our approach to the national planning framework. Our position on the NPF is well advertised. [Interruption.] Unbelievably, Mr McLetchie is asking us to prejudge that report.

My final comments are on borrowing powers and fiscal flexibility. Malcolm Chisholm raised the issue of tax increment financing, which I assure him the Government is happy to consider. I am delighted to welcome the growing consensus among members of all parties on borrowing powers. We are coming up against some of the practicalities of the limitations of the Parliament's financial powers, which will become ever more apparent when the international financial reporting standards are introduced in April 2009. The Government is determined to ensure that we take forward that debate. I do not agree with Iain Smith that we must give additional support to the Calman commission, which is financially supported by the UK Government. As Mr Smith knows, I am an opponent of duplication and additional resources—

Iain Smith (Liberal Democrat, North East Fife)

Will the minister take a brief intervention?

John Swinney (Scottish National Party, North Tayside)

I must close in 10 seconds.

It is important that the debate on borrowing powers is articulated. The Government will be vigorous in making that debate, and I am sure that it will persuade even the sceptical Mr Purvis on the front bench.

Question Time — Scottish Executive — General Questions

Brian Adam (Scottish National Party, Aberdeen North)

To ask the Scottish Executive what it is doing to support jobs in the oil and gas industry. (S3O-5626)

Jim Mather (Scottish National Party, Argyll and Bute)

Scottish Enterprise, through its energy team, and Scottish Development International provide specific business support and development activity and work in partnership with others, including local authorities and the Scottish Government. They offer support in a number of different ways, including supply-chain development and trade missions.

Scottish Enterprise keeps in close contact with the industry to assess current conditions and to offer additional help, where possible. It is developing a number of initiatives to help to counter the downturn, which include an advanced initiative for the development of an offshore decommissioning supply chain and increased access to specialist support.

In addition, we continue to support the work of OPITO—the oil and gas academy. We are committed to working with it and with Cogent to ensure that we have a skills and qualifications system that is responsive to the needs of employers.

Brian Adam (Scottish National Party, Aberdeen North)

What is the value of the oil and gas sector to the Scottish economy? What further actions are available to the Government to maximise the recovery of oil and gas reserves and to protect supplies and jobs, in addition to full participation in the joint industry-Government body pilot?

Jim Mather (Scottish National Party, Argyll and Bute)

That is a question of considerable importance. There are 150,000 direct or indirect jobs in the industry and North Sea revenues for this year are anticipated to be about £13.2 billion, which is £3.3 billion above the 2008 budget forecast of Her Majesty's Treasury.

Enhanced oil recovery is an extremely lively issue. The industry is proving itself to be more and more inventive and capable. We have addressed the issue both through the pilot and in the session that we held with the industry in Aberdeen in June.

John Park (Labour, Mid Scotland and Fife)

I support the development of the oil and gas academy and the role that it will play in ensuring that more jobs come through, but I am sure that the minister will recognise that the oil and gas sector faces huge skills issues because of the age profile of the workforce. Does he intend to develop any initiatives to improve the situation? For example, will he consider providing more modern apprenticeships in that sector?

Jim Mather (Scottish National Party, Argyll and Bute)

Additional support is being provided through the determined to succeed programme. OPITO will continue to play a significant role. We will ensure that we continue to be involved in such work. The partnership in local schools is designed to excite local youngsters about the possibilities of a career in oil and gas in Scotland.

Alex Johnstone (Conservative, North East Scotland)

Will the minister briefly outline what action the Government is taking to continue to lobby the Westminster Government to avoid increases in the tax and regulatory burden on the North Sea? Will he give a commitment that his party, which predicates its long-term economic policy on the resources that are extracted from the North Sea basin, will not increase that burden at any time in the future, which would affect the economy of the north-east and undermine jobs and skills?

Jim Mather (Scottish National Party, Argyll and Bute)

I will deal with the second point first. The Government is committed to always being competitive; that is a by-product of our ethos and our principles and can be taken as a given.

In addition, we continue to lobby the United Kingdom Government directly and when we sit down with it as part of the pilot. We understand that MPs have launched an inquiry at Westminster into the state of the North Sea oil and gas industry in an attempt to underline the continuing need for UK Government support.

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

To ask the Scottish Executive how many businesses have received Government support for loans since September 2008. (S3O-5612)

Jim Mather (Scottish National Party, Argyll and Bute)

The main form of Government loan funding available to businesses in Scotland was the small firms loan guarantee scheme, which was administered by the United Kingdom Government but which received active encouragement through Scottish Enterprise and the business gateway. Information on the number of businesses that have received such support since September 2008 is a matter for the Department for Business, Enterprise and Regulatory Reform. The scheme has now been extended and was relaunched last week as the enterprise finance guarantee, which is a £1.3 billion UK-wide initiative.

The Scottish Government offers interest-free loans to SMEs for capital investment in energy efficiency and small-scale renewables technologies through the energy saving Scotland small business loans scheme. Figures from DBERR tell us that the total value of small firms loan guarantee loans that were disbursed to businesses in Scotland between September and December 2008 was £6.1 million.

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

The minister will be aware that securing debt finance, particularly for small businesses, is of paramount importance in the current economic situation. He will also be aware that the Welsh Assembly Government, through Finance Wales, has a system to work with European Union structural funds to provide debt finance for small businesses in Wales. Why has the Scottish Government not put in place a similar scheme in Scotland, where it has the power to do so? Such a scheme, which the Government has been considering since September, would have offered support for businesses in Scotland to make them more competitive.

Jim Mather (Scottish National Party, Argyll and Bute)

We have a balanced approach. Regional selective assistance and the venture fund support Scottish business. I find it a bit rich that the member suggests that we take his advice, given that he has not supported the incremental introduction this year of the small business bonus scheme and he now plans an £800 million cut. His debits and credits are going in the wrong direction.

Mary Scanlon (Conservative, Highlands and Islands)

To ask the Scottish Executive for what reasons the Elgin bypass and the trunk link road in Inverness were not deemed to be priorities for inclusion in the strategic transport projects review. (S3O-5602)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We have included a link between the A9 and the A96 in the STPR as it delivers national benefits and has a positive investment return. In their present form, proposals for connecting the A82 to the A9 and for a bypass at Elgin provide poor investment returns.

The Government continues to engage the appropriate councils and Highlands and Islands transport partnership on roads issues in Inverness and Elgin. If a positive business case for alternative proposals can be produced, we shall discuss which body should assume responsibility for progressing any project that might follow.

Mary Scanlon (Conservative, Highlands and Islands)

A positive business case was made by HITRANS, which identified significant economic benefits from an Elgin bypass. The First Minister, ministers Richard Lochhead and Fergus Ewing, and local Scottish National Party MSPs all promised the Elgin bypass and the Inverness trunk link road. Will the transport minister admit that those promises were not costed? Will he apologise to the people of Moray and Highland, who were misled?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The local member, Richard Lochhead, has been assiduous in pursuing the issues associated with the Elgin bypass. He has facilitated a meeting with local interests that will take place shortly; it will be the third meeting that he has had on the subject.

In May 2007, a Scottish transport appraisal guidance report from Moray Council on the Elgin bypass highlighted poor value for money. Similarly, in May 2008, HITRANS and Highlands and Islands Enterprise found that there was a poor case for a bypass. One of the reasons for that, which is unique to Elgin, is that a high proportion of the people travelling to Elgin are not travelling through Elgin but are going there because it is a significant economic centre.

I am confident that we can work with local interests to develop new proposals that can, hopefully, give a return for the investment that would have to be made from the public purse.

Dave Thompson (Scottish National Party, Highlands and Islands)

Following the welcome confirmation from the Highland Council budget leader, Liberal David Alston, that there is £119 million of council capital and developer contributions in the council's budget for 2009 to 2015, will the minister confirm that there is now no obstacle to the council pressing ahead immediately with the western section of the Inverness trunk link road?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

I very much welcome the endorsement by the new administration in Highland Council of the provision that was made by the previous, SNP administration for the finance for the link road. We have made our substantial contribution to that project by making the link between the A9 and the A96 a national priority. I hope that the Liberal members of Highland Council do not use their policy of cutting infrastructure investment by £800 million a year as an excuse for not making progress.

Alison McInnes (Liberal Democrat, North East Scotland)

I refer to the transport minister's comments to Mary Scanlon. Surely he is not suggesting that local authorities have become responsible for the shortcomings in the trunk road network.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

Traffic in Elgin is divided into through traffic and local traffic—40 per cent of the traffic that goes to Elgin is local traffic. There is a substantial local traffic issue. That is precisely why there is constructive engagement between officials, HITRANS and the council. It is why I welcome the active, energetic support of the local member to ensure that all the complexities of the issue are brought to the fore and form part of the decision making going forward.

Peter Peacock (Labour, Highlands and Islands)

Will the minister confirm that the strategic transport projects review was approved by the Cabinet? Will he further concede, as a matter of principle, that a new line is required for trunk roads through Inverness and around Elgin?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

We are providing a new trunk road at Inverness linking the A96 and the A9, we are making substantial investments in dualling the A96 to the east to Nairn, and we are making substantial investments in the railway to Inverness. In the national projects that it identifies, the STPR makes a once-in-a-lifetime contribution to Inverness.

Further projects will have local significance, and we will continue to work energetically with local interests to ensure that we understand the costs, who has to pay them and the timetable on which the projects can be progressed. We welcome the financial provision from Highland Council for the remaining part that would link the A82 to the A9. I hope that the council sustains its previous commitment on that.

Derek Brownlee (Conservative, South of Scotland)

To ask the Scottish Government what measures it proposes to improve the cash flow to small businesses. (S3O-5621)

Jim Mather (Scottish National Party, Argyll and Bute)

The Scottish Government economic recovery programme contains a number of measures that could improve cash flow to small businesses. For example, a 10-day prompt payment target has been introduced; the small business bonus scheme will be extended from April 2009; and we are opening up opportunities for more small and medium-sized businesses to win Government contracts, with the launch of a new online contracts portal.

In addition, a range of other measures will contribute to improved business cash flow: the availability of European Investment Bank resources for SMEs; the real help with finance package, which was announced on 14 January and which could provide up to £22 billion-worth of support to United Kingdom businesses; and the time to pay programme from Her Majesty's Revenue and Customs, which is tailored to meet the needs of businesses that are experiencing cash flow problems.

We are commissioning a survey to examine the impact of the credit crunch on small firms throughout Scotland, which will help us to continue to offer the right support to business.

Derek Brownlee (Conservative, South of Scotland)

Many of those measures are welcome but, even in good economic times, otherwise profitable businesses can fall due to cash flow problems. Will the Government consider a cross-departmental review of every interaction between businesses and the Scottish Government or its agencies to see whether there are other opportunities to improve cash flow, either by allowing payments to the Government to be deferred or delayed or by speeding up payments from the Government?

Jim Mather (Scottish National Party, Argyll and Bute)

I welcome that constructive suggestion, which is compatible with what we have been doing to date. I will explore it with some interest and will talk to the member directly about it.

Aileen Campbell (Scottish National Party, South of Scotland)

Does the minister share my concern that haulage companies are a type of small business that is particularly hard hit at present? Will he assure my constituents in the South of Scotland who have been affected by the recent closure of the Eddie Stobart Ltd depot in Larkhall that the partnership action for continuing employment team will offer them as much support as possible to quickly find alternative employment?

Jim Mather (Scottish National Party, Argyll and Bute)

Yes, indeed. The member will be aware that we are transferring 80 staff from Skills Development Scotland to ensure that the PACE team can maintain its responsiveness and effectiveness. I trust that that will happen in the case of Eddie Stobart.

Des McNulty (Labour, Clydebank and Milngavie)

To ask the Scottish Executive whether it will admit community transport operators and people on the lower rate of disability living allowance to the national concessionary travel scheme. (S3O-5585)

Stewart Stevenson (Scottish National Party, Banff and Buchan)

The Scotland-wide free bus travel scheme for older and disabled people already includes community transport services, which are locally registered services. The review of the scheme is nearing completion and has been considering how the scheme could be improved.

Des McNulty (Labour, Clydebank and Milngavie)

I hope that the minister is aware of the views of the providers and users of community transport in Buckie, along with the views of similar people throughout Scotland who support Charlie Gordon's proposed bill on bus regulation, and the views of people in disability groups, especially those that represent people with learning and mental health disabilities. Why, when the minister provided such strong support for the inclusion of community transport and people on the lower rate of disability living allowance when he was in opposition, is he not prepared to take the issue forward in government?

Stewart Stevenson (Scottish National Party, Banff and Buchan)

On 15 December, I met some of the charities that are involved in the issue to hear their case. I am fully engaged in the matter. Considerable complexities are involved. I have asked for a special study on the community transport services aspect of the question. I expect to move forward shortly with the broad review that we are undertaking. We expect to publish the review report in the next couple of months.

Michael Matheson (Scottish National Party, Falkirk West)

To ask the Scottish Executive when it last met representatives of the Scottish Commission for the Regulation of Care and what was discussed. (S3O-5644)

Shona Robison (Scottish National Party, Dundee East)

Officials and I regularly meet the convener, chief executive and senior management of the care commission to discuss a range of issues relating to its functions. Officials last met the care commission on 3 December. Subjects on the agenda included the commission's performance in quarter 2 of 2008-09 and its health care associated infection plan.

Michael Matheson (Scottish National Party, Falkirk West)

The minister will be aware that I have raised concerns about a care agency in my constituency that went into administration without having directly contacted Falkirk Council to advise that it could no longer meet the care needs of its clients. Given that such agencies provide care and support to vulnerable and dependent individuals, does the minister agree that they should be required to give reasonable notice when they can no longer meet those care needs? Will she take forward the issue with the care commission to see how regulation on the issue can be improved?

Shona Robison (Scottish National Party, Dundee East)

The care agency to which the member refers was already operating in December 2003 when the care commission began regulating care home services. Special provisions applied in those circumstances and financial checks were not done on providers that were in business at the time. That is a significant factor in the case that he cites.

Of course, local authorities' contractual arrangements with providers should require them to provide an assurance on their ability to provide the contracted service in future. That said, the issue that Michael Matheson raises is relevant.

The care commission has much practical day-to-day experience in the operation of the procedures for giving notice of closure. The need for early warning of closure, about which Michael Matheson is concerned, will feature in my discussions with the care commission at our next regular meeting in March.

David Whitton (Labour, Strathkelvin and Bearsden)

To ask the Scottish Executive how it will respond to concerns raised by the Scottish Federation of Housing Associations that housing associations are "desperately struggling to meet demand". (S3O-5595)

Stewart Maxwell (Scottish National Party, West of Scotland)

The Deputy First Minister met senior representatives of the SFHA earlier this month and I addressed an SFHA event earlier this week. We share the SFHA's concerns about the current economic climate. That is why, at last week's themed questions, I announced that housing associations would be in receipt of the highest levels of funding yet seen. This year, we provided £531 million to support the supply of affordable housing; next year, we will provide £644 million. We are also discussing with the SFHA how we can secure the best possible return for our investment in order to maximise the supply of new homes.

David Whitton (Labour, Strathkelvin and Bearsden)

At the end of this month, Hillhead Housing Association in Kirkintilloch in my constituency will commence a welcome 26-unit scheme, which is phase 2 of a 4-phase project. However, the association now has to comply with Scottish planning policy 6, which sets out Government policy on carbon emissions from new homes. The provisions in SPP 6 are adding £5,000 to the cost of each unit. One arm of Government is insisting on compliance with SPP 6 while another will not fund compliance. What additional support will the minister provide to housing associations to enable them to comply with SPP 6? If he will not provide such support, phase 4, which is a 34-unit scheme, will not go ahead.

Stewart Maxwell (Scottish National Party, West of Scotland)

As I said, next year we will supply the highest level of funding to housing associations that we have ever seen in the lifetime of the Parliament. We have also accelerated £120 million of funding. Indeed, our accelerated funding is almost one third of all the capital expenditure that the Scottish Government is bringing forward. The figure is also roughly twice as much, pro rata, as what is being made available in England. If the member wishes to write to me with the detail of Hillhead Housing Association's difficulties, I will be more than happy to consider the matter and respond to him in writing.

Alex Fergusson (None, Galloway and Upper Nithsdale)

I am sure that members will wish to join me in welcoming a number of speakers and parliamentary presidents to the gallery today. They are Mr John O'Donoghue, Ceann Comhairle of the Dáil Éireann; Stephen Rodan, Speaker of the House of Keys, Isle of Man; Mr Inge Lønning, President of the Norwegian Lagting; Stephen Peters, Speaker of the Legislative Assembly of Ontario; and Michael Polley, Speaker of the House of Assembly of the Parliament of Tasmania. Gentlemen, you are all extremely welcome. [ Applause. ]

First Minister's Question Time

Iain Gray (Labour, East Lothian)

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-1375)

Alex Salmond (Scottish National Party, Gordon)

I have engagements to take forward the Government's programme for Scotland.

I join the Presiding Officer in welcoming our distinguished guests. I am also delighted to announce to members that today we are consenting to Npower Renewables' Siadar wave array project—one of the largest wave installations in the world—in the Western Isles. That is a sign that, even in these tough economic times, there is strength and resilience in the economy, of which renewable energy is certainly an example. All of us in the chamber should welcome such announcements.

Iain Gray (Labour, East Lothian)

Tomorrow, the Parliament will host the knife crime summit that our Public Petitions Committee has organised. The summit is a response to the 15,000 people who signed the petition organised by John Muir, who lost his son, Damian, in a senseless knife attack. The petition called for mandatory jail sentences for knife crime. Last June, the First Minister said that he was considering that measure and others, and that a criminal justice bill would be forthcoming. The document "Revitalising Justice: Proposals to Modernise and Improve the Criminal Justice System" lists what the proposed bill will contain. It does not mention knife crime once. Why not?

Alex Salmond (Scottish National Party, Gordon)

Because the matter is still under consideration by the Cabinet Secretary for Justice. Obviously, the proposed criminal justice bill will give not just the Government but every member a chance to bring forward amendments to address a range of issues in the justice system.

I accept the seriousness of the issue and the tragedy of individual cases. Knife crime is a serious problem in Scotland, as is the spread of guns and other weapons. I know that everybody in the chamber will want to address those matters.

However, we should put one thing in context, which is that we have in Scotland just now not only the highest number of police officers in our history but the lowest levels of recorded crime for 25 years.

Iain Gray (Labour, East Lothian)

Those statistics are true and welcome, but we should not close our eyes to the fact that Scotland's murder rate remains one of the highest in Europe—it is significantly higher than that of, for example, England and Wales—and that half those murders are knife related. A response to that should be up-front and centre, and rapid. The problem is that waiting will sound too much like an excuse to the knife crime summit tomorrow.

The First Minister does not have to wait for further legislation. In April 2007, the Parliament legislated to control by licence the sale of non-domestic knives. The First Minister's Government has never implemented that measure. It says that it might do so in September, by which time it will have waited for two and a half years. Why does the First Minister not simply order his Cabinet Secretary for Justice to go to the knife crime summit tomorrow and say that he will stop dithering and start controlling knives?

Alex Salmond (Scottish National Party, Gordon)

When we introduce legislation, we must ensure that it is enforceable and does the things that it is intended to do. Iain Gray is entirely wrong to suggest that no initiatives are taking place, whether on violence or on knife crime in Scotland. The work that is being done by the violence reduction unit, particularly in Strathclyde, is achieving substantial results, as is work against gang culture across Scotland. In asking an understandable question about the particulars of legislation that we will all have to consider soon, let us not in any sense demean the efforts that are taking place right now across our communities to get to grips with these long-standing evils in Scottish society.

Iain Gray (Labour, East Lothian)

I do not demean the efforts that are taking place in Scotland's communities; I argue that they should be matched by urgency and action by this Government. Of course legislation has to be implemented properly, but is the First Minister saying that his Government requires two and a half years to do that?

The truth is this: no one needs to carry a knife on our streets, and everyone who does so has the potential to use their knife. Mr Muir learned that lesson in the hardest way imaginable when he lost his son; so did Mrs Paton, whose 17-year-old son Adam was stabbed to death in Montrose. We owe it to them to learn the lesson, too.

At the very minimum, when someone is charged with knife crime, even for the first time, they should wait for their trial on remand or at least under supervision, with an electronic tag or a curfew, for example. I think that most Scots would agree with me. Does the First Minister also agree? If he does, will he act now to make that happen?

Alex Salmond (Scottish National Party, Gordon)

We will be bringing forward our proposals on knife crime. Clearly and obviously, many prosecutions take place in Scotland on knife crime at the moment. Legislation has to be correct in its definition and its implications.

Is not Iain Gray suggesting that he is ignoring the efforts that are being made? If someone asks a series of questions that suggest that legislation—important though that is—is only the method for tackling knife crime in society, they ignore the substantial work that is being done right now. One of the reasons why that substantial work is possible, of course, is that we have a record number of police in our communities. They are there to implement the violence reduction schemes that are working so well.

Iain Gray (Labour, East Lothian)

I say once again that I do not decry others' efforts to address knife crime; I question the urgency of the efforts of the First Minister and his Government. We will have a criminal justice bill that ignores knife crime, and we have a law to control knife sales that the Government cannot get round to using.

Of course knife crime is prosecuted, but here is the thing: 81 per cent of knife criminals—four out of five—who go to jail get a sentence of six months or less. However, the First Minister wants to abolish sentences of six months or less. Every single year, that will leave around 850 convicted knife criminals on our streets—on every high street in the country—free to carry, free to cut and potentially free to kill. Is that really the First Minister's message to Mr Muir, Mrs Paton and the victims of knife crime?

Alex Salmond (Scottish National Party, Gordon)

My message to the victims of crime is that this Government has put record numbers of police on to Scotland's streets to ensure that our communities are safe. The sentencing commission—something else that is coming forward from this Government—is designed precisely to tackle public concern about the length of sentences. People who commit violence should get long sentences, just as those who are part—as the Cabinet Secretary for Justice says—of the flotsam and jetsam of society should not be on short sentences in jail. That is exactly the move forward in the justice system that this Government is making.

I am interested in the distinction that Iain Gray makes, as if the effective action of police officers in our communities is nothing to do with the Government. I point out to him that, if it were not for this Government—supported by some other members in this chamber—which put the resources into the police service around Scotland, those officers would not exist to implement violence reduction methods. When it comes to supporting the police in Scotland in the coming budget, Iain Gray better remember that abstention is not enough.

Annabel Goldie (Conservative, West of Scotland)

To ask the First Minister when he will next meet the Prime Minister. (S3F-1376)

Alex Salmond (Scottish National Party, Gordon)

I was going to say that I have no plans to meet the Prime Minister in the near future, but I suppose that, in a sense, I will be meeting him this Sunday in the Sunday Post .

Annabel Goldie (Conservative, West of Scotland)

Yesterday, my colleague David Mundell launched a private member's bill at Westminster to make our Scottish bank-notes acceptable everywhere in the United Kingdom. Today, my colleague David McLetchie—the Scottish Conservatives' chief whip—will lodge a motion in this Parliament to back David Mundell's move. Will the First Minister sign up to the campaign?

Alex Salmond (Scottish National Party, Gordon)

Scottish bank-notes are promisory notes and should be accepted by everyone throughout the country. I have campaigned on that issue.

On the precise definitions of legal tender, it would be wise to get an understanding and an assurance from the Treasury that it will not discriminate against Scottish banks in the issuing of notes. If that assurance is gained, the legal tender argument would be one way in which to enforce the acceptability of Scottish notes throughout the country.

Annabel Goldie (Conservative, West of Scotland)

On the face of it, that is a welcome endorsement. However, as is so often the case with the First Minister, it is, sadly, a hollow one because the SNP wants to ditch the pound and embrace the euro. Under the SNP, we could spend our Scottish bank-notes in Brighton but not in Banff and Buchan. Under the SNP, we could spend our Scottish bank-notes in Carlisle but would have to get rid of them before coming over the border to Kirkcudbright. Alex Salmond would exile all Scottish bank-notes and make them a foreign currency here in Scotland. Is it not the truth that the First Minister's smiling support for our Scottish bank-notes is a load of hypocrisy? He is the man who, given half a chance, would sign their death warrant in Scotland as the SNP rushes to join the euro.

Alex Salmond (Scottish National Party, Gordon)

I was smiling because I knew the answer to that question even before Annabel Goldie asked it. Before the Parliament came into existence, I went to see Monsieur Lamfalussy, of the European Monetary Institute, on that very issue and argued that it would be perfectly possible, because of the traditional banking practice that was established in the statute of the European Central Bank and respect for it, to have Scottish euro notes. Does Annabel Goldie know what Monsieur Lamfalussy said? He said "Oui." That means yes.

Annabel Goldie (Conservative, West of Scotland)

The Scottish Parliament information centre confirmed this morning that the Lisbon treaty does not permit a regionally branded euro note. Even if it did, would that not say it all about Alex Salmond? Rather than keep the pound and our Scottish bank-notes, he would settle for some centralised euro note with a bit of regional branding—probably his own face. [ Laughter. ] I was going to say, "Or perhaps a haggis," but perhaps some people would not know the difference.

Alex Salmond (Scottish National Party, Gordon)

I would settle for my cartoon in "The Broons", but I would not for a second speculate which D C Thomson character Annabel Goldie would represent.

On the substantive issue, I point out that there are provisions in the statute of the European Central Bank about ECB notes that are legal tender. There is also an explanation of traditional banking practices. That is why, way back in the mid-1990s, we went to argue the case for having Scottish euro bank-notes in the same way that we have Scottish sterling bank-notes. I hope that all of us will not just unite behind the acceptability of the traditional practices in Scottish banking, but welcome the wonderful new series of notes to celebrate the year of homecoming that has been issued by the Clydesdale Bank in Scotland.

Tavish Scott (Liberal Democrat, Shetland Islands)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1377)

Alex Salmond (Scottish National Party, Gordon)

The next meeting of the Cabinet will discuss issues of importance to the people of Scotland.

Tavish Scott (Liberal Democrat, Shetland Islands)

My question is about traditional banking. Today, in Glasgow, Derek Simpson of the union Unite is wringing his hands over the Lloyds TSB job losses. Does the First Minister regret the irony of the fact that a union that backed the Labour Government's enforced takeover of HBOS by Lloyds TSB is now campaigning on those job losses? As those banking jobs add to yesterday's unemployment figures, does the First Minister support Parliament's work to get straight answers from banking bosses who have destroyed their businesses and Scotland's reputation for financial probity and expertise?

Alex Salmond (Scottish National Party, Gordon)

On the serious issue of the threat to financial sector jobs, I again met the senior management of Lloyds TSB this week to explore the range of announcements that it may make. No one would disguise the fact that there is a serious situation. Tavish Scott and I have debated the matter over the past few months, and we both believe that the best outcome for Scotland would be HBOS remaining an independent organisation, but we should welcome a number of things that Lloyds TSB has said. First, there are the terms of the Scottish board, which is chaired by Archie Kane. Susan Rice's appointment as chief executive is a positive step and, probably, as confirmed at the meeting on Tuesday, the announcement that the insurance business of the merged bank will be centred in Scotland is also a positive announcement. That does not take away from the fact that there is a thread of rationalisation and that there are implications for jobs throughout the financial sector as a result of destabilisation. However, given that the shareholders have decided the issue, we should welcome the positive aspects of announcements that are made.

Tavish Scott (Liberal Democrat, Shetland Islands)

Tens of billions of pounds of public sector pension funds have been hit hard by banking losses. The First Minister could bring together the people who control those pension funds in Scotland to speak with one voice. Does he agree that doing so would provide a substantial lever to get an explanation from the bankers? People are angry that the bankers have made monkeys out of the Government. Some £37 billion has gone from the taxpayer to the banks, and money has gone out of the door in bonuses to bankers in Northern Rock this week. People cannot believe the stupidity of the bankers who let Bernard Madoff get away with a $50 billion fraud. How could the Royal Bank of Scotland ask shareholders for £12 billion in a rights issue, knowing that there might be an £8 billion loss as a result of bad investment decisions?

Enron people were investigated and some were jailed. Should there be an investigation now? Who would carry it out? Do not we need steady, careful and considered decision making on banking boards and an end to their gambling with money that is not theirs and to their trading shares that they do not own? Should not we taxpayers, who are paying for the debacle, put people of quality on to those boards until the insipid and culpable regulation of banks catches up with the world that we, the people, are really in? The First Minister can bring together the voices of hundreds of thousands of people and the clout of tens of millions of shares to get the answers and action that people want. Will he make that happen?

Alex Salmond (Scottish National Party, Gordon)

I think that the committees of the Parliament should conduct an investigation into the deplorable practices across the banking sector, with one proviso. When they invite before them key figures in the banking and financial industry to ask them legitimate questions, they should also invite the regulators who allowed things to happen and the Government ministers who were in charge of policy over long years. As long as the committees of the Parliament consider matters in the round in such an inquiry, rather than concentrating only on the disgraceful practices in the financial sector that are being exposed, I support their ability to do that job. The inability of regulators to regulate and of policy makers in Westminster to recognise and realise what was happening should be considered in a rounded inquiry that considers the matter as a whole.

Alex Fergusson (None, Galloway and Upper Nithsdale)

James Kelly has a constituency question.

James Kelly (Labour, Glasgow Rutherglen)

The First Minister will be aware of the loss of 150 jobs at the Vion factory in Cambuslang, which is a devastating blow to all concerned. What action is the Scottish Government taking to alleviate the concerns of the workers there and their families? Does he agree that the priority of the Scottish budget should be to boost jobs and skills and thereby provide investment in areas such as Cambuslang?

Alex Salmond (Scottish National Party, Gordon)

I have already met the senior management of Vion to look for assurances on the future of not only the Cambuslang plant, but the many other Scottish plants. As the constituency member knows, the redundancies in question were in response to the loss of an order from Marks and Spencer, which affected a number of plants across the group.

The member will welcome the increased emphasis that we are putting on the partnership action for continuing employment—PACE—initiative in order not only to deal with redundancy situations, but to anticipate where early intervention can have helpful results. A good example is provided by Cumbernauld, of course, where many jobs were saved last year. The work of PACE should be supported by the Parliament, as should be the Government's early action to enable early access to funding from the European social fund and the European regional development fund, which will help employability and skills, particularly in areas that are afflicted by redundancies, such as Cambuslang this week.

Jamie Hepburn (Scottish National Party, Central Scotland)

To ask the First Minister whether the Scottish Government has undertaken any early consideration of the Association of Chief Police Officers in Scotland's proposal that juries should be dispensed with in the most complex or lengthy of cases. (S3F-1383)

Alex Salmond (Scottish National Party, Gordon)

The proposal by the Association of Chief Police Officers in Scotland was one of 59 responses that the Government received in response to its consultation paper, "The Modern Jury in Scottish Criminal Trials", which was published on 18 September. All the responses have been independently analysed, and next week ministers will receive the report of the analysis, which will be published by the end of January. We want to weigh all the evidence before we reach a decision on any reforms to the current system.

Jamie Hepburn (Scottish National Party, Central Scotland)

Does the First Minister agree that trial by jury is one of the most fundamental aspects of the judicial system in Scotland? Can he assure us that if the Scottish system should ever change, the Scottish Government will ensure that individuals would be denied the right to trial before a jury of their peers only in the most exceptional or extraordinary of circumstances?

Alex Salmond (Scottish National Party, Gordon)

That is a fair summary. The consultation paper states:

"The Government wishes to open up these issues for debate. It does not wish to advance—at least at this point—any firm proposals for dispensing with jury trials. It believes there may be a case for the use, in the very longest trials, of additional, substitute jurors; and it invites views on the principle of this and also on some of the practical implications."

There were firm proposals in the consultation document—for example, on raising the upper age limit for jurors from 65 to 70, and reducing the exemption period from five to three years. Those are the sort of measures that would carry general support, but the Government will carefully consider the submissions before coming to a conclusion on the more controversial aspects.

Robert Brown (Liberal Democrat, Glasgow)

Does the First Minister agree that it is the height of arrogance to believe that juries cannot understand certain things, which should be left to the experts? Does he agree that any proposals in that area should focus on ways in which information could be made more accessible and understandable to juries? Will he confirm that the role of the jury will be kept central in all trials in Scotland involving serious crimes?

Alex Salmond (Scottish National Party, Gordon)

The role of the jury is central. The argument does not rest on the arrogant—as Robert Brown puts it, and it certainly would be in that realm—assumption that jurors are not capable of understanding complex cases. The argument rests on addressing the imposition on people who serve on juries in cases that can stretch for many months, given what that does to their livelihoods and lifestyles. The firm proposals that were made in the consultation document try to address those very practical issues. It is obvious that that will not be done lightly—the matter will certainly come to the chamber for further debate, and the Government will consider the submissions carefully before coming to a conclusion.

Richard Baker (Labour, North East Scotland)

The consultation examines the issue of recompensing jurors. Does the First Minister agree that jurors should be adequately recompensed for their vital contribution? The Scottish Government's consultation specifically invites views on the Irish model, in which there is no recompense for jury service at all.

Alex Salmond (Scottish National Party, Gordon)

At present, there is recompense for jurors in the Scottish system, but the consultation document argues that although the current system fulfils many of its purposes well, certain parts would benefit from modernisation. They include increasing the size of the juror pool—that is, increasing the number of people who are available for jury service. They also include addressing the list of excusals, the way in which people—I was going to say MSPs, but I am not sure about that—can opt out of jury service and whether that is fair to everyone, and the issue of juror compensation. If we did not think that there was an issue about juror compensation, it would not have been included in the consultation document, which examines ways in which we can modernise the system.

Alex Salmond (Scottish National Party, Gordon)

The costs of establishing creative Scotland will be set out in the financial memorandum, which will be presented to Parliament alongside the public services reform bill. We will make an announcement to Parliament regarding the costs shortly.

Pauline McNeill (Labour, Glasgow Kelvin)

How will the First Minister restore confidence among the arts community in relation to the formation of creative Scotland? How will he resolve the allegations that have been made by 400-odd artists that there has been a lack of clarity and transparency in the process?

Until 11.26 this morning, no meeting had been arranged with the Scottish Artists Union, and two weeks ago the minister in charge could not say which body will distribute funds to the arts in Scotland. Is it not time for the First Minister to get a grip of the bill? I ask him, in doing so, not to reduce the issue to a merger in the public services reform bill but to introduce a standalone bill as soon as possible so that the Parliament can focus on how to make the change a success.

Alex Salmond (Scottish National Party, Gordon)

Putting the bills together is the quickest way to deal with the matter. As I understand the position, there is general support across the Parliament for the principle of the merger. The issue under discussion is how any transition costs might affect pledges to artists.

I take it from the formulation of Pauline McNeill's question that a meeting is arranged. I think that she should just accept that a meeting has been arranged and welcome that. The other thing that she should welcome is the guarantee that the Government has given that no money that has been budgeted to provide grants to artists will be used for transition costs. I would have thought that that would reassure people throughout the artistic community.

If I was one of those nasty, politicking folks, which I am trying so hard not to be, I might contrast our position with that described in a written answer from Pauline McNeill's colleague, the then minister Patricia Ferguson, who said:

"I do not anticipate any costs involved in the establishment of Creative Scotland that will require specific funding in addition to the general administrative costs of the Scottish Arts Council and Scottish Screen".—[Official Report, Written Answers, 14 November 2006; S2W-29736.]

It is fantastic that the previous Administration did not think that there would be any costs at all. I contrast that with the reassurance that the current Administration has already given that no grants to artists will be cut as a result of the inevitable transition costs.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

Can the First Minister confirm that, under current plans, creative Scotland will not be the lead body in disbursing future arts funding but that Scottish Enterprise will have that responsibility? Would it not have saved valuable time and scarce funding, and prevented a total collapse of morale in Scotland's creative community, if that decision, no matter how controversial it is, had been made during the passage of the original bill?

Alex Salmond (Scottish National Party, Gordon)

The bill and its provisions will be brought forward, but I have to say that, in a year that has seen the flourishing of the arts across Scotland, with magnificent new events being planned the length and breadth of the country, and at a time when our national galleries and great national collections are looking forward to a renewed and revitalised future with record levels of investment, it is extraordinary that Ted Brocklebank, with his enormous knowledge of these matters, should talk about demoralisation. We are seeing a renaissance, and he should recognise that.

Alex Salmond (Scottish National Party, Gordon)

We are keeping those matters under review, as we promised during the debate on 21 February last year. At present, Scottish Water is performing well as a publicly owned corporation. It is delivering services to customers at performance levels beyond the targets agreed with Government.

Gavin Brown (Conservative, Lothians)

I thank the First Minister for that holding answer. Given that £182 million of public money is involved each year, the Conservatives believe that a formal, independent review is required. Stewart Stevenson, the Minister for Transport, Infrastructure and Climate Change, has said:

"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." —[Official Report, 21 February 2008; c 6161.]

Was he right to say that?

Alex Salmond (Scottish National Party, Gordon)

The position is being kept under constant review, as we promised. I inform the member of some of the things that we are reviewing at present. We note with interest, and make comparisons between, the water charges for consumers in Scotland and what is happening south of the border. We notice that Scottish Water had the lowest increase of any water authority in the United Kingdom in the current financial year, and that the average household charge for Scottish Water is £310, compared with an average of £330 south of the border. We notice that Scottish Water is committed to, and will undertake, record investment of £2.5 billion over the next few years, which I understand is directly sustaining 6,000 jobs in the Scottish construction industry.

We also notice that, in its analysis of Scottish Water's efficiency gains, the Water Industry Commission for Scotland said:

"Scottish Water's achievement is unprecedented in the UK water industry."

As we pledged last year, we are keeping these matters under proper and constant review. However, I will say this: in giving value for money to consumers and the economy, the performance of this public corporation is rather better than that of mutualised or privatised bodies elsewhere. The parties in this chamber who want to sell off Scottish Water better answer if they think their model will perform better than this publicly run corporation.

Question Time — Scottish Executive — Rural Affairs and the Environment

Richard Lochhead (Scottish National Party, Moray)

The Scottish Government has provided local authorities with record levels of funding over the period 2008-10. In line with the concordat, the majority of the funding, including the former strategic waste fund, is now provided by means of a block grant.

In December 2008, the Scottish Government announced a further £17.9 million of zero waste fund money, as part of a three-year funding programme, for local authorities to invest in infrastructure to divert more waste from landfill.

Margaret Smith (Liberal Democrat, Edinburgh West)

Will the minister join me in congratulating the City of Edinburgh Council on raising its recycling rate above 30 per cent this year? The council is ambitious in this regard and wants to improve on its performance.

I seek the minister's support in considering how we can help councils to meet their targets. Will he commit to examining the current system, under which waste from schools and community and charitable organisations is categorised as chargeable trade waste? That seems to act as a disincentive to schools and other organisations that are enthusiastic about participating in increasing recycling as much as possible.

Richard Lochhead (Scottish National Party, Moray)

I would not wish any obstacles to be placed in the way of enthusiasm for recycling among schools and other public organisations. I will be happy to investigate that concern further and to seek clarification on it. If we have to take action, we will consider that. I thank Margaret Smith for bringing the matter to my attention.

I am happy to congratulate the City of Edinburgh Council for its progress in its recycling statistics, and I pay tribute to those involved in all the hard work that was, no doubt, behind that progress. I hope that the council continues it in the years ahead.

Elaine Murray (Labour, Dumfries)

The Scottish Environment Protection Agency's "Waste Data Digest 8" states that, although the 30 per cent national target for recycling and composting was, by the end of last year, "likely to be achieved", achieving further targets "will be challenging." Does the cabinet secretary believe that the Scottish Government's national target of

"70% by the end of 2025"

can be achieved without setting targets for individual local authorities?

Richard Lochhead (Scottish National Party, Moray)

Yes—I believe that the targets can be achieved. There is huge enthusiasm throughout Scotland to achieve such ambitious targets for the sake of the environment. Elaine Murray suggests that they are "challenging" targets: they certainly are, but I believe that Scotland is ready to meet them. As I said in my previous answer to Margaret Smith, we are making resources available. There are exciting and ambitious plans to increase rates of recycling in many local authority areas—we have already heard about the action that the City of Edinburgh Council has been taking.

Alasdair Morgan (Scottish National Party, South of Scotland)

Question 2 is withdrawn.

Bill Butler (Labour, Glasgow Anniesland)

To ask the Scottish Executive what discussions it has had with the staff of Forestry Commission Scotland and their trade unions over the future of Scotland's forests. (S3O-5561)

Michael Russell (Scottish National Party, South of Scotland)

I met representatives of Forestry Commission trade unions on 4 November 2008, when we published a consultation paper on the forestry provisions in the Climate Change (Scotland) Bill. I have met union members since then at a number of consultation events. To help all staff consider the possible implications of those provisions, senior officials in Forestry Commission Scotland have organised staff meetings in Edinburgh, Stirling, Inverness, Perth, Aviemore, Oban, Dumfries and Stranraer. I have also met staff at other meetings.

Bill Butler (Labour, Glasgow Anniesland)

The minister will be aware that his Government's proposals for the future of Scotland's forests have caused deep unease in Parliament and, more important, they have caused great anxiety among Forestry Commission staff. I have just come from a meeting with staff who are in the trade unions, at which I heard their concerns at first hand. Is the minister aware that the Forestry Commission trade unions have offered an alternative to meeting the Scottish Government's climate change commitments that does not require the handing over of more than 25 per cent of Scotland's national forest estate to the private sector in a 75-year lease—which is, in effect, back-door privatisation? Will he give a commitment today to respond positively to the unions' proposals, in order to ensure that the jobs remain firmly in the public sector?

Michael Russell (Scottish National Party, South of Scotland)

No—I will not give that commitment, and I will tell Bill Butler why. I have not seen the proposals, and it would be very foolish of me to commit to proposals that I have not seen. However, I have said repeatedly to everybody involved in the consultation—particularly to those who are willing to listen and debate, which includes a number of people in the forestry sector but very few from the Labour or Liberal seats in Parliament—that I am entirely open to other ideas. Indeed, I have said repeatedly that a monopoly of wisdom on the issue does not lie in any one place and that the proposals can be improved.

I stress again that there is no threat to jobs and that there is a triple jobs guarantee, which I gave at the meeting on 4 November 2008 and have given at every discussion since. I have also made it as clear as I can that the prospect of spending up to £200 million on forestry-related activity in Scotland will produce more jobs, not fewer. Perhaps Mr Butler would like to reflect on the salient fact that more than 1,000 Forestry Commission jobs were lost in the past 10 years, which is of course when Mr Butler's party and the Liberal Democrats—who have been active in the campaign but appear nowhere today—were the parties in power. They cost Scotland 1,000 Forestry Commission jobs. I want to increase the number of forestry jobs in rural Scotland.

Alex Johnstone (Conservative, North East Scotland)

The minister may be aware that I am broadly supportive of his proposals to lease part of the forestry land in order to raise resources, but can he tell me what other efforts have been made to explore alternative funding streams that may release the same resources? In particular, is there an option to look at carbon trading mechanisms, which could bring resources into Scottish forestry to be used to expand the planting rate?

Michael Russell (Scottish National Party, South of Scotland)

There are a number of possible options. However, one of the great difficulties that the Scottish Government and the Scottish Parliament have is that—bizarrely, in the world of democracy—the Government cannot borrow. It is also a Government that does not have full tax powers at its command. The classic means by which we could increase the amount of planting in Scotland, which would include tax incentives and mechanisms to support the price of timber—which might include borrowing to undertake activity such as we are talking about, given that it is an early investment in tackling climate change— are not available to this Government. We must therefore be inventive about how we increase the planting rate. We must raise the rate—which is at about 4,000 hectares a year—to 10,000 hectares a year, and we should try to take it higher than that. I am trying to find a way to do that and am open to any and all suggestions.

If the suggestion of carbon trading were to be brought forward during the consultation period, I would look at it seriously. However, I must stress to members across the chamber that doing nothing is not an option, and that the worst option of all is to create anxiety through the scaremongering that we have seen, rather than addressing the issue honestly. There are members in the chamber whose behaviour has been disgraceful.

Alasdair Morgan (Scottish National Party, South of Scotland)

Question 4 was not lodged.

Richard Lochhead (Scottish National Party, Moray)

The climate challenge fund has received 225 formal expressions of interest. So far, 82 of those have been developed into full applications and considered by the independent grants panel, and 56 have been successful in receiving funding.

Malcolm Chisholm (Labour, Edinburgh North and Leith)

Will the minister join me in congratulating the active Leith project and the north Edinburgh community climate change initiative on their success in the latest round of the fund? Does he agree that community grass-roots action, as demonstrated by both those initiatives, is vital in the battle against climate change? Will he do everything he can to promote the fund and to ensure that there are no underspends, so that carbon savings can be achieved in communities across Scotland?

Richard Lochhead (Scottish National Party, Moray)

I answer yes to all Malcolm Chisholm's questions. I very much welcome his warm response to the impact that the climate challenge fund, which has attracted cross-party support, is having and I join him in congratulating the active Leith project which is, as he said, being funded by the challenge fund. I agree that grass-roots action to tackle climate change and global warming is an important way forward, which is one of the reasons why the fund is proving to be successful. We will make every effort to make it even more successful and to ensure that the resources end up in the hands of grass-roots organisations the length and breadth of Scotland.

Shirley-Anne Somerville (Scottish National Party, Lothians)

I add my congratulations to the two schemes that have been mentioned and I draw to the minister's attention another scheme that was successful in the last funding round, which is the piper scheme in west Edinburgh. There is, however, a difficulty in that we need to know the actual carbon reduction that is achieved through each successful project. What has been done to measure the significant impact that the schemes can have not just on invigorating our local communities, but on the climate change agenda as a whole?

Richard Lochhead (Scottish National Party, Moray)

There is guidance in place for projects. One of the criteria that are taken into account is the need to ensure that projects will reduce the carbon footprints of their communities. The Government and the whole country are paying a lot of attention to the question of how we can best measure reductions in carbon footprints in the years ahead.

The funding scheme is successful, and the independent grants panel is persuaded that the projects that are coming forward are ambitious and will reduce the carbon footprints of many of our communities.

Patrick Harvie (Green, Glasgow)

I welcome the comments of the minister and other members, as they demonstrate once again that so many of the Scottish National Party's best ideas come through negotiation with the Scottish Green Party.

How does the minister intend to build on the climate challenge fund so that communities across Scotland—including those that do not yet enjoy a high level of community activism and proactive community efforts—can not only produce carbon savings but benefit from the cost reductions that arise from initiatives such as the free insulation programmes that have been funded by the climate challenge fund? We need to roll those initiatives out across Scotland.

Richard Lochhead (Scottish National Party, Moray)

We welcome the support of the Greens for this initiative. A lot of effort is being made across the country to make communities aware of the kind of funding streams that are available to reduce Scotland's carbon footprint. Of course, the climate challenge fund is aimed at grass-roots activity, as we have just been discussing.

At the beginning of the week, in my role as cabinet secretary, I attended a rural development funding seminar in Elgin along with around 100 or 150 people from rural communities. I can tell Mr Harvie that the climate challenge fund was also on their agendas. A number of similar events are taking place across Scotland, many of which are led by local authorities. Of course, the support of local authorities is necessary if we are to get the message out about exactly what is available. I commend Moray Council and every other council that is engaged in similar work.

Alasdair Morgan (Scottish National Party, South of Scotland)

Question 6 is not lodged.

Alison McInnes (Liberal Democrat, North East Scotland)

To ask the Scottish Executive what action it is taking to ensure that the rural Aberdeenshire LEADER programme is properly resourced. (S3O-5608)

Richard Lochhead (Scottish National Party, Moray)

I have approved the award of £3.36 million to the rural Aberdeenshire local action group from the LEADER fund. The group bid for £3.46 million. The total of the bids that was received was far in excess of the funding that was available, but the Aberdeenshire bid was commendably strong.

Alison McInnes (Liberal Democrat, North East Scotland)

The cabinet secretary will be aware of the concerns that Aberdeenshire Council has expressed on this matter.

Originally, Scottish Enterprise allocated £1 million for Aberdeenshire for the duration of the programme. However, people are concerned about the fact that the level of funding from the rural action group is now only £1 million for the whole of Scotland. Will the cabinet secretary comment on that?

Richard Lochhead (Scottish National Party, Moray)

As Alison McInnes said, the Scottish Enterprise matched funding is about that amount. Of course, if good projects are forthcoming from our rural local authorities, they can bid for cash to be made available to them from Scottish Enterprise.

Kenneth Macintosh (Labour, Eastwood)

To ask the Scottish Executive what action its rural directorate is taking to promote environmental awareness through further development of the eco-schools programme. (S3O-5581)

Richard Lochhead (Scottish National Party, Moray)

As Ken Macintosh will know, the eco-schools programme in Scotland is one of the most successful in the world, and the Scottish Government continues to develop it. Since May 2007, 353 schools have been awarded green flags, which brings the total number of Scottish schools with green flag status to 744. On current trends, we expect to see Scotland's 1000 th green flag school by 2010.

We are continuing to broaden the reach of the programme by funding a secondary schools development officer from the education and rural budgets.

Kenneth Macintosh (Labour, Eastwood)

Does the minister agree that we must build on the success of this phenomenally successful programme? Would he consider improving the Scottish Government's contribution by, for example, collecting information on energy efficiency standards in our schools, by requiring schools to source their electricity from renewable sources and by encouraging greater use of microgeneration in our schools?

Michael Russell (Scottish National Party, South of Scotland)

Of course I would encourage schools to make greater use of microgeneration. At the risk of bringing the issue too close to home, I know that my wife's school is using a solar panel and is interested in taking the idea even further. However, there are a range of routes by which such material can come to schools. For example, there have been some interesting innovations by power companies that are assisting schools.

I agree that the eco-schools programme has to be driven forward by enthusiastic schools. I do not think it needs more and more layers of bureaucracy—I want the schools themselves to set their priorities. However, I would be very surprised if there were more than a few eco-schools that are not keen on new developments in microgeneration, so I would encourage that to happen. I am quite sure that that will be part of the programme as it evolves. Ken Macintosh will know that the programme is constantly developing, and that new topics come in every year.

Nanette Milne (Conservative, North East Scotland)

I recently visited the Haddo forest school, which is run by the Woodland Trust and Aberdeenshire Council. I was extremely impressed by the many life skills that the pupils are learning in ways that really stimulate their enthusiasm. Does the minister agree that such programmes are equally valuable in developing environmental awareness in our young people and is he willing to promote such schemes in tandem with the eco-schools initiative?

Michael Russell (Scottish National Party, South of Scotland)

I entirely agree that it is not an either/or situation—there are several good initiatives. The eco-schools initiative is specifically designed to involve not only the school, but the whole community. The forest schools movement, which is also successful, has been well supported by the Forestry Commission and other organisations and is involved in transferring a unique range of skills to young people and teachers. I want to encourage many different initiatives and to make it clear that involvement in environmental education, gaining knowledge of the environment and having a much more active relationship with the environment are no longer an option in education, but are part of the main stream.

Richard Lochhead (Scottish National Party, Moray)

Consultation responses on the review of the Scottish Agricultural Wages Board were published on Tuesday 20 January 2009.

Richard Simpson (Labour, Mid Scotland and Fife)

That is the most rapid response to a question that I have heard from a Government. Does the minister agree that any response by the Government should be based not on the scale of the responses, but on the merits of the case, particularly recognising the low density and geographically disparate distribution of workers in the industry?

Does the Government agree that the International Labour Organization convention 99, and article 2 of the Council of Europe's social charter, which calls for

"additional .. holidays or reduced ... hours for workers engaged in dangerous or unhealthy occupations",

apply to that group of workers? If so, does the Government accept that the Scottish Agricultural Wages Board is the most effective mechanism for regulating and setting agriculture workers' terms and conditions?

Richard Lochhead (Scottish National Party, Moray)

We received 44 responses to the consultation and opinion was divided among them, so it was not easy to get a clear message from the exercise. Many of the issues that Dr Simpson raises were included in the responses that we received, and we treat those points seriously. We are reviewing the Scottish Agricultural Wages Board because it dates back to 1949. Members will agree that, in this day and age, it makes sense to review a body that was set up so long ago. Since then, we have had the advent of the minimum wage and the working time directive. I assure the member that we will be conscious of the impact on workers' conditions as we reach a decision, but we must take into account a range of factors and we will do so.

John Scott (Conservative, Ayr)

Does the cabinet secretary agree that, with the establishment of a national minimum wage, it is simply no longer tenable for the agriculture industry alone to be burdened with the decrees of a body such as the Scottish Agricultural Wages Board, which is now actively preventing young men and women from taking up or being given jobs on the land? Will he therefore consider abolishing that quango, which is in truth unnecessary and unfit for purpose?

Richard Lochhead (Scottish National Party, Moray)

Although we have not reached a decision, we are taking into account the fact that the agriculture sector is the only sector that has a body for wages regulation. We are also considering its impact on attracting young people into the industry. Several farmers and others in the agriculture sector have made that point to us. Young people have expressed the view that the lack of wage bands means that it is not easy for them to get a first job on a farm. We have not reached a decision, but we are taking into account all those factors. I am sure that members will agree that, given the division of opinion, we should ensure that we take the right decision.

Alasdair Morgan (Scottish National Party, South of Scotland)

Question 10 is not lodged. We will move to themed questions on justice and law officers.

John Scott (Conservative, Ayr)

On a point of order, Presiding Officer. You will be aware that three questions were not lodged in the rural affairs and environment themed question time and that one was withdrawn, which means that only six questions have been asked on the subject. Many members—myself included—would have been happy to ask questions, but have been denied that by other members who have, apparently, not taken the trouble to lodge questions. Will you reflect on that problem and let me know whether something can be done about it?

Alasdair Morgan (Scottish National Party, South of Scotland)

We are aware of the problem, but we are not necessarily in control of what members do. I apologise for not lodging my question because I found out that I was going to be in the chair and would therefore be unable to call myself. I point out, however, that the entire question time was taken up with questions to the relevant ministers; therefore we have not lost out in that sense.

Justice and Law Officers

Gavin Brown (Conservative, Lothians)

To ask the Scottish Executive how many people charged with assault to injury have received a direct measure since 1 April 2008. (S3O-5603)

Gavin Brown (Conservative, Lothians)

From quick arithmetic, it appears that about four people a day are given a direct measure for assault to injury, which shows a disconnect between the deeds and words of the Government. We heard just today from the First Minister that people who commit violence should get long sentences. Assault to injury is clearly a crime of violence, so what action is the Government taking to ensure that violent criminals do not receive direct measures?

Joe FitzPatrick (Scottish National Party, Dundee West)

Does the Solicitor General believe that the introduction of summary justice reform will free up police to spend more time on the beat making our streets safer?

David McLetchie (Conservative, Edinburgh Pentlands)

To ask the Scottish Executive what steps have been taken to ensure that the investigation of serious fraud in Scotland can be carried out effectively. (S3O-5596)