The next item of business is a debate on motion S1M-3880, in the name of Andrew Wilson, on Scottish economic growth.

After reading the weekend's press, all of us could be forgiven for thinking that we would see Angus MacKay, Tom McCabe and Wendy Alexander on the front bench today for this debate on the economy. Unfortunately, that was not to be—with all good grace to Lewis Macdonald—as those members are nowhere to be seen. Were those press reports a chimera? Was the briefing a briefing too far from Jack McConnell? Is Labour still as split as we all thought that it has been for so long?

Despite opening on a bum note, I want to broker some agreement in the debate as well as make some challenges about the economy. At the core of what I will say is a fundamental desire for a shift in the conduct of the political debate in Scotland. I will contend that all the political parties have been guilty since devolution of failing to place the economy centre stage.

All the parties, bar none, have been guilty of focusing to an extent on the symptoms of economic underperformance rather than acting on its root cause. I want that to change. The SNP has worked hard to change that attitude internally and within the wider political, economic and media agenda in Scotland. Throughout, we have been honest in accepting where we need to change our conduct and we hope that that approach has helped to open some minds in other parties and in the wider public. It is an approach that we mean to continue.

The SNP motion is an attempt to secure consensus in the Parliament. I guess that it was too much to hope that all sides would support the motion so close to an election. The motion is simple: it says that we have a problem. After four years of complacency, I am glad that the Government now accepts that. That said, the Government still has a tendency for self-congratulation and complacency at times.

Everyone agrees that the problem is getting worse. All of us who lead in whatever field we work in have a national duty to find unity of purpose in our dealings with the issue. We have to do so for the sake of the future of our country. We recognise that good people can disagree on how to tackle the problem, but we call for no more than open minds on the issue of the policy powers that we need to tackle the problem. We want and need to work with other parties on the issue.

All that I am asking for from my political opponents this morning is active thinking on some of the points that I am seeking to make. There is nothing sacred in the reserved powers that are codified in the Scotland Act 1998. All that that act did was to codify the existing powers of administrative devolution. In a host of areas, political devolution has made the financial centralism that is inherent in all of it unsustainable. Nowhere is the imperative for reform seen more starkly than in the need for reform of the economy.

There is a need for much greater competitiveness in Scotland and in the regions of the United Kingdom. I am asking today for some reasoned arguments and open minds. I am also asking for any criticisms of our case to be based on what we say rather than on demeaning and fatuous misrepresentations, which have been all too common to date.

Andrew Wilson talks of competitiveness. What will the imminent increase in national insurance contributions do for competitiveness in Scotland and in the wider UK?

We can have arguments about the overall levels of taxation, but the key point that I want to make this morning to Phil Gallie and other members is that we need to keep a close eye on our relative competitiveness within the United Kingdom, as well as on the overall competitiveness of the UK—I will move on to address that point.

At least national insurance is a tax that is applied across the board, which means that it does not reduce Scotland's relative competitiveness in the UK. We need to ensure that we undercut the growth regions in respect of the taxes that count on growth. That is a point to which I will return later in my speech.

Will the member take an intervention?

I want to move on, but I will take the member's intervention shortly.

As part of its contribution to a better debate on the subject, the SNP set out its support last week for much of what the Government is doing in this field. We might have expected an SNP press release that was headed "SNP back Labour" to have generated some coverage but, as Alf Young commented, the lack of coverage pointed to the need for both partners in the symbiotic relationship between politicians and the press to look to their conduct. Where there is agreement, perhaps there is scope to broadcast it so that we can build on the consensus and leave the arguments where they count.

Anyone who analyses the world economy knows that the broad thrust of the Government's strategy is correct, as far as it goes. We cannot compete on cheap labour and subsidies, so we must go up the value chain. The whole thrust of "A Smart, Successful Scotland" is correct and we will back it. The idea behind Scottish Development International is good. The technology institutes are a huge risk for the Government, but they are a risk that is worth taking and we will back them. Science, training and skills are all key issues. We will examine the detail of what the Government is doing—that is, of course, the job for the members of a democratic Opposition over the next few weeks before the Government replaces us in that role.

We will bring forward our own reform ideas about what more we have to do with the powers of the Parliament. The Government's approach to date has not, is not and will not be enough. In the words of an editorial in The Scotsman this week, the Government is using

"a pea-shooter firing into a hurricane".

Whichever view is taken of the Government, the evidence is clear and compelling that Scotland is not achieving its potential.

Mr Wilson is five minutes into his speech. Is the peashooter going to produce something positive by way of the Scottish National Party's proposals for the economy?

I am surprised at Miss Goldie. First, I have to outline the areas on which I agree with the Government. In an election era, I cannot get more positive than to stand up and say that I agree. I try my best. I will examine my conscience tonight, but I make every effort to be positive.

If we examine the output of the Scottish economy, we will all agree that we have had a problem over the past 30 years and that the problem is getting worse. What we have to do to win the consensus across the political spectrum is to make the case that resources for investment in our public services come out of growth and wealth creation. We cannot increase the tax on a diminishing economic base and hope to succeed—that has been the record over the past 15 years. Over the past 12 months, as the economy shrank, the picture has become particularly grave for Scotland. Our economy grew at one thirteenth of the UK rate—the wealth gap is widening.

Recently, the Government pointed out that if electronics is stripped out, the economy is fine. I suggest to the Government with the greatest of respect that that sort of spin is wholly inappropriate. Energy, water, manufacturing, engineering, textiles, chemicals and petroleum products are all still in recession. Sectors producing less than they were one year ago include financial services, metal products, food, drink and tobacco, agriculture, forestry, fishing, and mining and quarrying. All of them are major sectors and all of them have deep problems.

Andrew Wilson highlights the problems that face the Scottish economy. Does he not agree that many other small, independent nations throughout Europe face exactly the same challenges?

Mr Lyon makes a very reasonable point. It is true that European and world economies are under pressure. My response is that Scotland is under the greatest pressure. We seem to be exposed more than any other country. In the period since Labour and the Liberal Democrats came to power, Scotland's growth record has been the poorest of any European Union member state. Even the economy of Germany, which has been under massive pressures since reunification, has grown 25 per cent faster than that of Scotland and the economy of Ireland has done so by a factor of seven.

I agree that we are under pressure, but I repeat that the UK economy grew 13 times faster than the Scottish economy over the past year. We are living in a tough world, but our economic performance is much worse than it should be.

I also point to the fact that, although all the evidence is clear and compelling, what we do not know about Scotland should also worry us. We will not know until next week the detail of the monetary policy committee thinking behind its interest rate cut last week. Although we welcome that cut in interest rates, I would be surprised if its thinking were not based on the collapse in business and other investment in the UK over the past year. The situation is very grave as it affects future productivity.

We know nothing about the figures for investment in the Scottish economy, because the analysis is not available to us. However, all the anecdotal evidence suggests that the investment that is taking place is going into rationalisation and downsizing and that capital accumulation is taking place abroad.

Will the member give way?

No, thanks. I must move on.

We have very deep-seated problems. I suggest that the long-term picture, which has got worse over the past five years, is set to get much worse in the future.

If we look at what we are doing right, we can see that, in our educational performance in many fields in further and higher education, we are making a lot of investment and producing a lot of outputs. That does not suggest that the problem is qualifications in certain segments of the labour force. Although investment in that area is critical, it is not the whole answer.

We have to overcome the gravitational and magnetic pull of the economy of the south-east of the UK. We cannot continue to have a growth model in which there is one high-growth area and Scotland and the regions of England are placated with higher public spending. That is to treat the symptoms and not the root cause. It is a model that does not work. The UK is the 19^th most successful economy in the world and its ranking is falling. We need to make a change: we need to tilt the playing field in our direction and overcome the gravitational pull.

Taxes on growth are not the silver bullet, but the SNP's argument is that they are a key part of the whole. We have to encourage corporate headquarters to register in Scotland, to declare profits here and to bring their top staff here.

The bottom line is that we have to out-compete the rest of the UK. To do so, we need to get the same competitive powers that our competitors have. We have to change the culture and the way in which we conduct the debate inside the Parliament, inside Scottish politics and in general. We need to make that change because politicians need to lead the truth that no one owes Scotland its lunch and that we have to earn it by being more competitive.

Why is it that we have a Chancellor of the Exchequer who opposes tax harmonisation in Europe yet argues for tax harmonisation in the UK? Why do we have a chancellor who is in favour of tax competition across Europe yet imposes a centrist model on the UK economy? As promotion of the economy is somewhere approaching fifth in the Labour party's pecking order, the minister will have to answer the contention that, of the six key areas for improving British competitiveness that the chancellor gave in his speech to the Social Market Foundation this week, only one is presently within the ambit of the minister. The chancellor knows that he needs the full range of powers with which to sort Britain's problems. We need the same powers to sort Scotland's problems.

I recognise that much work has still to be done to broker consensus among the parties. We have made our contribution by saying on which points we will agree with other parties, and I look to the Liberals Democrats, the Conservatives and Labour for open minds to what we have to say. There are issues at stake and the situation is grave. We need open minds and a change of approach if we are to deliver. That is how we will conduct the election and ourselves in the chamber. I call on all members to back the SNP motion.

I move,

That the Parliament notes with concern the long-term underperformance of the Scottish economy and the growing gap in wealth created per head between Scotland and the rest of the UK and the south east of England in particular; recognises that the symptoms of economic underperformance cannot be dealt with on a sustainable basis until the root cause of economic underperformance is addressed directly; calls for all leaders in Scottish public life to work towards a national consensus around the drive to bridge the gap between Scotland's economic performance and economic potential, and, in working towards that consensus, further recognises that differences of opinion on policy prescriptions are a healthy part of the democratic debate but calls for an open mind on all sides in respect of the range of policy options that are, and should be, available to the Scottish Executive in working towards making Scotland as competitive as its competitors.

I should like to begin in the spirit of Mr Wilson's welcome press release, rather than in that of his opening remarks today, because I want to begin with some agreement. Clearly, there are significant areas of agreement.

For example, we are agreed on the need for sustainable long-term growth in the Scottish economy. We are agreed that increased productivity is the key to such growth, and that only by generating more wealth can we pay for the public services that we want, create opportunities for all and lay the basis for sustainable development in the years ahead. A consensus within Scotland on how to achieve that growth, and sustain higher productivity, is certainly desirable. I welcome the SNP's recognition in its press release, which backs Labour, that—and I think I use its words, not mine—an enterprise strategy focused on science and skills, on global connectivity and on growing Scottish businesses provides a basis on which such a consensus can be built.

"A Smart, Successful Scotland" is that strategy for growth, but it does not stand in isolation from the wider economic and political context any more than Scotland's economy can grow in isolation from the wider world.

The political context of our enterprise strategy is the devolution settlement, which the SNP does not accept but which we see as critical to the successful delivery of our aims for sustainable future growth. The economic context is critical too, specifically the stable macroeconomic environment delivered by sound management of the UK economy.

Can the minister refer the chamber to a single power that devolution has given us that we did not have previously under the Secretary of State for Scotland that can make a difference to the growth rate of the economy?

Devolution gives us the opportunity to concentrate on growth and skills, which is precisely what we need to do. We are able to address sustainable growth precisely because we are operating in a stable macroeconomic environment, which has delivered record low levels of inflation, record low interest rates and the lowest level of unemployment in a generation. Those indicators are significant in setting the context for growth and should not be taken for granted.

The debate is not just about the relationship with the rest of the UK, as important as that is. It is also about what kind of competitive advantage we should seek and where we should position ourselves in the global economy. We are clear about how we want Scotland to compete, which is as a high-skill, high-knowledge economy. That is why "A Smart, Successful Scotland" places such emphasis on investing in people and on the links between enterprise and lifelong learning. That is also why we do not want to depend in future on inward investment alone, or to make our pitch to overseas investors as a cheaper place to do business, be that on labour costs or tax rates on business profits.

I am sure that we all agree that key to stimulating growth is investment in lifelong learning and education. Does the minister accept that even after the increases that have been announced in the past two years, our investment in higher and further education in Scotland is a third less than that per head of our European competitors? If we are to grow, that gap must be closed.

"Life Through Learning Through Life: The Lifelong Learning Strategy for Scotland", which was launched yesterday, points us in the direction of how we should be growing that sector of the economy and ensuring that it makes a contribution to the wider economic benefit.

I shall touch briefly on corporation tax rates, because the SNP has raised the issue in the past, although I was struck by the lack of direct reference to it in Andrew Wilson's introductory remarks this morning. Perhaps more light will be shed on that in due course. It is worth noting that the UK already has lower corporation tax rates than the United States and Japan, and the level is below the European Union average. The rates are competitive on the world stage and at the same time provide the revenues that we need to sustain investment in the wider economy.

Will the minister give way?

Yes.

The minister is being very generous with his time. I agree with his comments on corporation tax, but it is one part of the whole. The point that we are making today is that our corporation tax rate is the same as the rate in the south-east of England. However the rate of growth in that part of the country is increasing exponentially faster than the growth rate in Scotland. We need to undercut our competitor regions.

I do not agree. In fact, that is precisely the flaw at the heart of SNP policy. Instead, we need to sell Scotland as a high-quality, high-value, highly productive and enterprising economy. Seeking to undercut our competitors on labour or tax costs is the wrong direction to go in.

That argument is not abstract. After all, a penny on corporation tax means £90 million in tax take for the Scottish economy. We do not need to take many pennies off that tax to remove the budgets for training and skills, research and development and business start-up and growth that Alex Neil mentioned. Some might think that that is a price worth paying for a few big inward investors—we do not agree.

The same argument applies to business rates. Although business rate poundage in Scotland is higher, many comparable rateable values are lower. One could make a legitimate argument about the balance of burdens on individual businesses. However, complaining about differential tax rates in Scotland and England while in the same breath demanding full fiscal independence makes very little sense.

We will freeze business rates from 1 April, and will be delighted if that change results in increased business investment this year, next year and beyond. However, we do not concede the point that we should never diverge from England in devolved areas, and we recognise that there are opportunity costs in every measure we take that reduces public revenues.

It is self-evident that cutting business rates, as others intend to do, will impact on public spending. To meet its pledge, the SNP will have to take £150 million out of the enterprise budget; the Tories will require to take even more. Those are legitimate choices to place before the electorate, as no doubt will be done in the next few weeks. However, no one should pretend that it is possible to reduce public revenues while increasing public investment. That simply cannot be done.

Targeted public investment is part of our strategy for growth. For example, we are seeking to support business through the intermediary technology institutes that the First Minister announced a few weeks ago. With an energy institute in Aberdeen, a life sciences institute in Dundee and an information technology institute in Glasgow, we are focusing on the real strengths of Scotland's knowledge economy. The ITIs will focus work on those issues through the investment of public money. Such an approach is jeopardised by reducing the revenues that are available to the enterprise network.

Will the minister give way?

I am afraid not.

Of course, we are also investing our tax revenues in the electronic infrastructure and the transport infrastructure to give Scottish companies a competitive edge. All those investments are part and parcel of our strategy for growth, which is designed to overcome the gap between where we are and where we want to be. We welcome support from all sides for that strategic approach.

I move amendment S1M-3880.2, to leave out from "notes" to end and insert:

"supports the Scottish Executive's aim of increasing sustainable economic growth over the long term; recognises that increasing Scotland's prosperity is essential to the fulfilment of the Executive's objectives of closing the opportunity gap, building first-class public services and ensuring sustainable development; calls for all leaders in Scottish public life to work towards a national consensus around the drive to bridge the gap between Scotland's economic performance and economic potential, and endorses the work being undertaken by the Executive to use the powers of the Parliament to help business grow and to secure a smart, successful Scotland by developing the science and skills base, improving global connections and investing in transport and communications infrastructure."

Although I do not impugn the sincerity of Mr Andrew Wilson, it is difficult to take seriously an SNP motion on the economy. I say that for three reasons. First, enterprise and the economy do not seem to be political priorities for the SNP. In almost four years of the Parliament, it has managed to call only two debates on those matters—Mr MacAskill secured a debate in 2001 and Mr Wilson called one in 2002. That is hardly indicative of a pulsating interest in those topics. In contrast, the Conservatives have secured five debates on the economy.

Secondly, in so far as the SNP takes a passing glance at these issues—no doubt fuelled by some imminent boardroom visit—its understanding of the acute problems that currently confront Scottish business seems remote. The motion has all the urgency of watching paint dry. Indeed, it is akin to looking at a haemorrhaging patient and resolving to take immediate action by forming a committee to discuss coagulation.

What is happening to Scottish business at the moment is grim and menacing. Growth was stunted in 2002. The second quarter showed a rise of 0.2 per cent, and the third a rise of 0.6 per cent, and that after the first recession in 20 years. Furthermore, according to figures released today for the three months up to December 2002, we have higher unemployment than the rest of the UK. In 2002, we lost more than 7,000 jobs in manufacturing and, to date in 2003, total job losses are running at more than 2,400.

In the third quarter of 2002, the number of business start-ups showed a decrease of 22.6 per cent from the previous quarter. In 2002, the number of company insolvencies increased by 23.6 per cent. Business rates are almost 9 per cent higher than in England because of the higher Scottish business rate poundage. New regulations are piling on cost to business. According to the Institute of Directors, between 1997 and 2002, the annual cost to British business was £6 billion. Compared with when it came to power in 1997, Labour now takes nearly £2,000 a year more in tax for every man, woman and child in Britain.

That is a chronicle of economic epitaphs—a chilling thumbnail sketch of how not to create a competitive, vibrant economy.

What is the Scottish National Party's dynamic and practical response to that situation? Its response is a motion that—although it might aspire to be a record for verbosity—in 151 words offers not one specific remedy or solution to the beleaguered Scottish business community. For SNP, read, "Sorry, no proposals".

Will the member take an intervention?

And sorry, no intervention. In Mr Wilson's speech of nine minutes and 18 seconds, we had diagnosis. For one minute and 35 seconds we had two specific proposals—more corporate headquarters should come to Scotland and we need to be more competitive. Well, that is a ringing aspiration for the business community—I bet that it derives small comfort from the modesty of that proposition.

From political leaders of all parties, the business community needs some unity of purpose on an issue that is too grave for bickering of that nature. We must focus on increasing growth and we have to give credit where it is due and find some agreement. Miss Goldie's approach is not good enough.

Those words could be spoken only by somebody who has never run a business. I will tell Mr Wilson what the business community needs now: it needs genuine solutions that can be delivered under the devolved settlement.

Even the most intrepid motion reader, persevering to the end of the SNP motion, would have cause for question because, remarkably, Mr Wilson never mentions the word independence, yet that is the Scottish National Party's fundamental credo.

Is Mr Wilson, recognising that independence finds little resonance with Scottish business, a duck-and-dive devolutionist? If he is, has he told the rest of his party? However, if he is, where are his specific proposals for improving the lot of Scottish business now, under the devolution settlement?

Mr Wilson is, of course, a devolution man, except he dare not speak the name—he has to pretend the cause of independence. He knows that that is a difficult product to market.

Will the member take an intervention?

I do not have time. Mr Wilson's economic case is not helped by the Business Strategies forecast that, under devolution this year, growth in gross domestic product, if delivered, will be higher in Scotland than in the UK. So, there is no intrinsic devolution bar to higher Scottish GDP.

The third reason why it is difficult to take the motion seriously is what the Scottish National Party represents as a political entity. It is a party that has brought to debates on public expenditure all the infinite elasticity of bungee jumping. It is a party to which profit is repugnant. That is why the business community can expect no comfort from the Scottish National Party. That is why the amendment in my name excises the linguistic froth of the nationalists and offers Scottish business what it is crying out for now—specific solutions to restore competitiveness and to get business moving again, solutions deliverable now, solutions costed by the Conservatives and solutions that would help to address the very problems about which Mr Wilson purports to be so concerned.

I have pleasure in moving amendment S1M-3880.1, to leave out from "long-term" to end and insert:

"competitive disadvantage at which Scottish business is being placed as a consequence of an onerous taxation and regulatory regime aggravated by inadequate investment in transport infrastructure and calls on the Scottish Executive to reduce the business rate poundage to the same level that exists in England thereby re-establishing a uniform business rate and to pledge an additional £100 million per annum for investment in our transport infrastructure."

I apologise to colleagues for having to leave before the end of the debate because of another engagement today.

In contemplating Miss Goldie's speech, I am struck by the fact that she spends longer on her soundbites than she does on analysis of the current position of the Scottish economy. How can the Tories say what Scottish business needs? We all recall their record—one business went bust every three minutes of every working day under the Tories and they had the worst-ever record for business start-ups. By 1997, investment in manufacturing was lower than when the Tories came to power. During 18 years, they presided over the two worst recessions since 1945. In Shetland, we all remember Lord Lamont—

rose—

I have not finished yet. We all remember Lord Lamont of Lerwick spending £10 billion in the worst economic crisis caused by incompetence that the country can recall. I am very happy to give way to Miss Goldie so that she may defend that record.

I ask Mr Scott to confirm whether the Scottish Executive was happy to inherit the Tory creation of a prosperous economy upon which it frequently founds so many of its arguments for expenditure? Will Mr Scott confirm which party in government introduced uniform business rates to respond to the overwhelming plea of Scottish business?

Miss Goldie forgets that the Tories lost the election and that Scottish business—like everyone else in Scotland—voted no to the Tories, which is why they did not have one seat after the 1997 election. Their record was shown up by the electorate.

I take up Andrew Wilson's point about analysing the current position of the Scottish economy. It is entirely right to do that and the minister was right to illustrate what the Executive is doing in that regard. I share serious concern about the current situation, not just of Scotland, but of Europe and the world at this time, which is where I might differ from Mr Wilson. Any analysis of the figures that are currently available in the UK and international context is worrying, including the fact that one in five families is struggling to meet debt repayments at a time of high employment and when interest rates are at their lowest level since 1956. There is worrying financial frailty in the UK economy.

On the day when Alan Greenspan of the Federal Reserve in the United States cast doubt on the American Administration's strategy of vast tax cuts for the richest in US society, what indeed will fuel worldwide economic growth?

Therefore, it is right to consider these issues, but we should concentrate on the matters that come under the responsibility of the Scottish Parliament and what the Parliament and Government can do to promote those matters. That is where the SNP and the Liberal Democrats differ. Andrew Wilson would argue for further powers in that context. Those of us who believe in a federal United Kingdom would argue for the development of powers in that way.

I am grateful to the member for giving way with perfect timing. Given what Mr Scott has just said about the development of Liberal thinking on greater powers, we know that the Liberal Democrats have open minds. I suggest they introduce some urgency to that thinking and present some specific proposals for growth because the powers as they stand have not worked, are not working and will not work. We need to find consensus on how we grow from here.

I am always thinking urgently, but I will introduce our proposals at the time when all parties introduce theirs in the coming election campaign.

I will pick up on two areas of competitiveness, as that is the focus of the debate. The first relates to the slow business take-up of broadband connections, particularly among small and medium-sized enterprises. A study from the Federation of Small Businesses last year illustrated that 54 per cent of small businesses had modem connections, only 14 per cent were using ISDN links, only 4 per cent used broadband and 15 per cent of surveyed businesses did not even have connection to a computer.

There is a challenge to take up the advantages of e-business. That is why the Scottish Executive strategy in that area is right. That is why the enterprise network must be at the heart of that. Incidentally, I noticed that neither the SNP nor the Tories were forthcoming on their proposals for the enterprise network. I understand that the Tories plan to abolish Scottish Enterprise and Highlands and Islands Enterprise and that the SNP plans to regionalise the current structure. Those are important issues when there are others among us who believe that the enterprise network is at the heart of delivering skills. The Tories do not agree, obviously, because they plan to abolish the very body that concentrates on skills.

I place on record the fact that the Scottish Conservatives will not abolish the enterprise network.

Oh well, their policy has just changed. We look forward to discussing that further.

I was disappointed by the evidence given to the Enterprise and Lifelong Learning Committee last week that a business park in Aberdeen, fully wired for broadband telecommunications access, had been unplugged because there was not enough business interest. That is one of the challenges that the Parliament, the Executive and the Government face.

I will finish with a couple of points on renewables. It is important to pull together the commercialisation of research in our universities and the engineering skills that we have throughout Scotland. That is a particular challenge for Aberdeen and the north-east in the context of the changes that are happening in the oil and gas sector. There are considerable opportunities for Scotland as a whole.

This is an important debate. It is an opportunity to discuss such matters properly. I promise that my party will give full vent to our thoughts on the matters in the coming weeks and months. I implore Parliament today to support the Executive amendment, which is the only reasonable amendment before it.

Annabel Goldie denigrates my colleague, Andrew Wilson, for his lack of business experience. Given that her experience as a city-centre senior partner in a law firm reflects mine, and I have never considered myself a business guru, I think that that is rather rich.

I want to make two specific points about the debate. We must recognise two matters: first, that there is a fundamental need for economic growth; and, secondly, that there is a need for political consensus around that. As other members have said, it is quite clear that nobody owes us a living. We are a small nation on the periphery of Europe and we need to punch our weight. We have not been doing so, and we have lagged behind as a consequence. As a result, we are paying the price in lowered living standards. We owe it not just to ourselves but to future generations to resolve that problem.

That leads me to my second point, on the creation of a cross-party consensus. There are historical lessons. Ireland and Finland have been referred to, not just by me but by other members. We must recognise that their structural difficulties, which were substantial and, arguably, far greater than the ones that we face, were addressed on the basis of national consensus built on political consensus. We must recognise that the matter will not be dealt with by one political party or in one term of Government. It needs longer-term action and it needs consensus across the board. We cannot continue to reflect the UK stop-start attitude, which got us into such difficulties and gave us the problems that we had in the latter part of the 20^th century. A Labour Government came in to change what had been done by a Tory Government, and being replaced by another Government fundamentally undermined us.

We must recognise that economic growth will be delivered by members of the Scottish business community, large and small. It is for politicians to allow them to get on with running their businesses, not to lecture them or tell them how to run them. However, Government must provide the framework to allow those businesses to prosper and to achieve their full potential.

That leads me to the role of the state and the Government, whose remit falls in key areas. Education and infrastructure are two examples. I have made it clear in previous debates that it is not an employer's responsibility to ensure that their employees can read and write—sadly we have those difficulties in the present day. It is the Government's job to ensure that the work force is job ready—employers can give specific training, but addressing that problem is a state responsibility.

The points that Tavish Scott made about telecoms are also true. The difficulty is that we must have a national strategy. An attempt to leave market forces to deal with telecoms will not work. We must ensure that, in areas of Scotland, there is state intervention—

Will Mr MacAskill give way?

I am sorry, but I am now into the final minute of my speech. I do not think that I would disagree with Tavish Scott in any way, but we must have intervention by the state in telecoms.

We must recognise that transport is important.

Nationalisation!

It is a matter of getting our work force to their jobs and our goods to their markets. David McLetchie may shout, "Nationalisation!" but the fact is that privatisation of the railways was a failure that everyone in this country is paying for. It was brought about by a Tory Government and has brought misery to commuters, freight and the Scottish business sector in its entirety.

We must recognise that it is the job of the state to deal with those matters. That means that we must be proactive. We need transport authorities that can regulate the buses to ensure that we do not have the idiocy that we had in the City of Edinburgh, which resulted in the company that Mr McLetchie's firm supported losing £4.2 million. That is hardly a raving business success. We must ensure that we can get access to the markets, which means having influence and control over our rail network. Today, we have even found out that the Strategic Rail Authority is trying to instruct ScotRail to cut its services. It is time to take charge of our own railways.

I support the motion.

I welcome the recent SNP conversion to our policy for a smart, successful Scotland. It has taken nearly four years, but at last the SNP has admitted that its economic policies have been based on false, out-of-date premises that simply do not work in the kind of world that we now find ourselves in. We must acknowledge that conversion.

The Irish economy used to be the holy grail for the nationalists, but suddenly they have realised—apart from Kenny MacAskill—that exporting the Irish economy to Scotland is not the way forward. We could all have told them that a few years ago. Here are a few facts about the Irish economy that the SNP does not tell people. According to figures released on 31 January, national economic output has fallen in Ireland for the first time in 16 years. With growth falling in the third quartile of 2002, it is looking doubtful whether the increase in growth will top 2 per cent. The growth rate is plummeting compared with the 10 per cent growth rate of two years ago. Profit repatriation by multinational companies has soared to 41 per cent, while incomes available to Irish people have fallen.

The troubles in the Irish economy are interesting, but I think that Rhona Brankin should focus on the troubles in the Scottish economy, which are exponentially worse than those in Ireland. We cannot import everything from Ireland, but I would really like to have had the problems that the Irish have had over the past 10 years, when their economy has grown at eight times the rate of the Scottish economy. Should not we be learning from their successes rather than demeaning them in times of trouble?

I thank Andrew Wilson for that speech, but it is important to recognise that the difficulties that are being experienced by many small nations in the global recession are not peculiar to Scotland. In fact, they are being experienced by many other small nations in the world, such as Ireland.

I want to highlight the difference between us and the Irish. Their January unemployment figures are the highest that they have been for three years. Inflation in Ireland is now twice the European average and, in recent months, €3 million of savings and cuts have been made in education, health and other areas. Let us contrast that with the management of the economy in the UK and in Scotland. With a UK Labour Government, interest rates in Scotland are 4 per cent, inflation is under 2 per cent and unemployment is at its lowest for a generation.

I began by welcoming the SNP conversion to our strategy for a smart, successful Scotland, but it is not a real conversion. At the heart of the SNP economic strategy there is a huge black hole, and that hole is skills training. To finance their business tax cuts, the nationalists have come up with the election gimmick of taking £150 million out of the Scottish Enterprise skills and training budget, at a time of emerging skill shortages in Scotland.

That is the fundamental difference. Our strategy for a smart, successful Scotland puts lifelong learning at the heart of our competitiveness. If we are to compete in a global marketplace against other advanced nations, we simply must invest in our infrastructure and, most important, in our people. It is simply not good enough to build a whole economic policy on business tax cuts. If different rates of business taxation made such a difference, why has not Northern Ireland been denuded of business? It is because running a successful business is about a lot more than cuts in business taxes.

What have we learned from the SNP's new economic policy? Lesson 1 is that independence is no defence against global recession. Lesson 2 is that cutting business rates is no defence against global recession. Lesson 3 is that the best defence at a time of global recession is to be part of a larger economy, as Scotland is part of the UK economy. Interest rates are at 4 per cent, inflation is under 2 per cent and unemployment is at its lowest for a generation.

We face serious challenges to our economy here in Scotland, as do many other nations in the world. The SNP's new economic policy has a huge black hole in it, and the SNP has now joined forces with the Tory party. It is a policy for a stupid, unsuccessful Scotland. How does Andrew Wilson think that we can build a consensus around that? I ask members to support the Executive amendment.

After listening to that speech, I shall try to raise the tone of the debate. First, I suggest that Rhona Brankin reads the SNP manifesto from 1999, where we envisaged the establishment of Scottish Development International and promised the establishment of what we called "Come to Scotland", which the Executive has called VisitScotland. We also said that we wanted to make Scotland the science capital of Europe and that we wanted to use the powers of this Parliament to maximum effect for the Scottish economy. It is not a case of us being converted to Labour policy. Labour has simply stolen our policy. Let us rise above that.

An unemployed worker in Ayrshire, or one of the Boots workers who faces the prospect of redundancy in the next couple of years, listening to this debate will want to know what the Scottish Parliament and the Scottish Executive will do for them. We are all signed up to the long-term strategy. We recognise the need to invest in science and skills as a way forward for Scotland. However, we also recognise the fact that we face short-term difficulty. One of the questions that the Parliament should address this morning is what we can do in the short term—until we realise the benefits of the long-term strategy—to improve job prospects for people in Scotland. I shall make several suggestions, which I hope the Executive will consider seriously.

First, there is an enormous latent demand in the building sector that is not being met either because of a lack of proper skills or because of a lack of appropriate land availability. One of the immediate things that the Executive can do to remove the barriers to growth in construction is to address the problem of the vested interests that run the Construction Industry Training Board in the UK and to ensure that we can go beyond the expansion of modern apprenticeships in construction skills. I would like the minister to address the fact that the expansion of modern apprenticeships in construction skills is not driven by employment-based traineeships, which is a problem. If that situation can be addressed, we will go a long way towards creating new jobs in the short term in the construction industry.

Secondly, there are problems with land availability and planning. I am currently dealing with a case in Ayrshire. The situation is nonsensical. A small, isolated piece of land that had planning permission for five houses no longer has planning permission because some bureaucrat in the council has decided that it has been rezoned. The land cannot be rezoned for anything other than housing, as it is too small for agriculture and is cut off by roads on each side. That is typical of what is happening the length and breadth of Scotland. Our planning laws are being implemented so restrictively that they are acting as a definite barrier to growth. We need to do something about that urgently.

Andrew Wilson has covered the issue of reducing business rates. That urgent measure is desperately needed to create a more even playing field between ourselves and the south of England.

Thirdly, there is an issue in relation to commercialisation. There is an underlying assumption that we need to wait for five or 10 years for that policy to work. Last week, I spoke to a company that specialises in, and has a successful track record in, the commercialisation of science throughout the United Kingdom. It told me that it has identified 60 projects that it could get up and running in the next two years, but that it cannot do so because of the slowness of decision making in our universities. I say to the Executive: for God's sake, do not just lie back and wait for Gordon Brown's budget—get some action today, so that we can be seen to be doing something about the Scottish economy pending the achievement of our independence in the period ahead.

The problem with the SNP's approach to improving the performance of the Scottish economy is that it talks constantly about extending the powers of the Parliament as if that, in itself, would magically increase our prosperity. What it does not address is the much more important and difficult question of what the SNP would do with those new powers if it had them. That is the question that the Scottish National Party is desperate to avoid, as that is where the theory falls down.

That is perhaps why Andrew Wilson was so vague on his policy prescriptions beyond telling us how much he agreed with the Scottish Executive. That admission—which was underlined by Alex Neil, whose only quibble with Executive policy was who thought of it first—exposes the fact that the Scottish National Party offers a change of country but not a genuine change of policy. It offers only a more extreme version of the tax-and-waste strategy that is currently being pursued by Gordon Brown, and which is enthusiastically backed by the Labour-Liberal Executive in Scotland.

The motion seeks to broker agreement across the chamber about where the country needs to be. We will bring our election ideas to the election, not to the Parliament. Why does not the Conservative party have the grace to back a strategy that can unify people rather than leave people disillusioned by politicians' failure to take a lead in this country?

Andrew Wilson's approach is an admission of defeat and of a poverty of ideas. It is interesting to hear of the SNP's latest strategy to reduce business rates. The SNP thought of that a month ago, but the Conservatives have been advocating that in the Parliament for the best part of two years. That is the fundamental difference between the two parties.

Reference has been made to Ireland and the need to match the level of economic growth there, which has long been a favourite topic of the SNP. However, the truth is that the SNP has no wish to emulate the Irish approach, which is based on charging lower taxes and constraining growth in Government spending. For SNP members to talk about adopting such a strategy is political deception of the worst kind.

Members of all parties want a dynamic economy combined with generous provision for public services. However, that is a policy circle that the Scottish National Party simply cannot square. Its answer to every problem in Scotland is to blame the Treasury and to call for ever-higher public expenditure, and to disparage—week after week, month after month—the contribution that the private sector can make to our overall prosperity and to partnership working and the development of our public services. No clear explanation is ever given of how all the SNP's spending commitments are to be met.

What is clear is the fact that an independent Scotland, run by the SNP, would be a high-tax country similar to one of the party's favourite Scandinavian models, Sweden—a country in which public spending accounted for 56 per cent of the gross domestic product in 2000 and which has one of the highest levels of taxation in the world. That is not much of a model. Despite what Mr Gordon Brown and the SNP might imagine, there is a real growth penalty in increasing public spending above the rate of growth in the economy as a whole. Recent research by the Organisation for Economic Co-operation and Development—with which Andrew Wilson will be familiar—has shown that a 1 per cent increase in the tax take is associated with a growth penalty of around a 0.6 per cent to 0.7 per cent reduction in GDP. No wonder that is the outcome of such a failed strategy.

There is no policy prescription in the motion beyond the vague wish that we should all get together to improve Scotland's economic performance. The Conservatives are not ashamed to say where we differ from other parties, and we will not be ashamed to say that in the coming weeks. We believe that a reduction in business rates, a reduction in regulation and a switch of resources from the present distribution of the enterprise budget to the improvement of Scotland's transport infrastructure are significant contributions that the Parliament and the Executive could make to the prosperity of Scotland. We will have no hesitation in continuing boldly to advocate those much-needed prescriptions.

We are all coming from a common view, in that we all want the Scottish economic growth rate to rise. We also recognise the fact that, over the past 20 or 30 years, that growth rate has not been as healthy as we would have wished it to be. The issue, then, is about what prescriptions the Government can or should make to influence the growth rate and to contribute to its rise. I will address some of the approaches that are advocated by members of other parties later, and will begin by considering the approach that has been taken by the Scottish Executive.

Back in September, the First Minister made it clear that the stimulation of economic growth would be central to the policies of the Scottish Executive. There are three planks to that: to accelerate Scotland's rate of economic growth; to provide opportunities to all and close the opportunity gap; and to ensure that economic development is sustainable in the medium to longer term. In driving towards those goals, we need to recognise—as Rhona Brankin recognised—the stability of economic growth that the UK Government has provided for us. We have had low interest rates, low inflation levels, high employment levels and low unemployment levels—the lowest levels of unemployment that we have seen for a whole generation.

On the issue of low unemployment, research from the University of Sheffield and the University of Warwick shows that the real level of unemployment is well over 300,000, not the figure of 100,000 that is given in official statistics.

Without referring to those specific figures, I acknowledge the fact that even the International Labour Organisation figures are well below the levels that we inherited from the previous Conservative Government. They are also well below the levels that we have seen in Scotland for a considerable time.

In the UK and in Scotland, our stable economic base provides us with the opportunity to resist some of the international challenges that our economy faces. Alex Neil raised the potential job losses that people face. I can give an example from my own constituency of Government policies that have helped to see people through economic difficulties. Major closures at Motorola and NEC resulted in thousands of job losses. Two years later, with the intervention of the Government and the strength of the Scottish economy, unemployment in my constituency currently stands at 3.1 per cent, which is exactly the same level at which it stood before the closures to which I referred.

Mr Muldoon is generous with his time. He referred to the stability of our economic context. Will he reflect on the fact that, since Labour came to power in 1999, our growth rate has been one third of our long-term trend rate, which is dreadful? Is he aware of Calgacus's statement to his troops about the Romans in Scotland, which was that they made a desert and called it peace? What the Executive calls stability is actually contraction.

A higher number of people are in employment now than we have seen for a generation and interest rates are low.

I have another example of success—let us talk about successes in Scotland. At the weekend, I read in the Sunday Herald that the second highest concentration of banking in Europe at the moment is not in Denmark, Ireland, or Sweden but in Scotland. Scotland comes ahead of France, Switzerland, Spain, Germany and many other large countries. Let us examine some of the successes as well as some of the problems that the Scottish economy has.

Undoubtedly the Scottish economy needs to diversify and we need to improve our growth rate. I welcome Mr Wilson's acknowledgement that the smart, successful Scotland strategy is the correct one for us to follow.

I will concentrate on one aspect of that strategy. I welcome in particular the Executive's investment in our transport infrastructure. The Conservatives' position on that matter is ludicrous because their party presided over economic decline in Scotland for 18 years and presided over the decline of our transport infrastructure for many years.

Will Mr Muldoon give way?

No. I am over my time.

Mr Muldoon is over his time.

Because of the interventions I have taken, I have not had the opportunity to comment in detail on the SNP's contribution to the debate. I would welcome a mature debate about our economic future and how we use our powers to enhance the Scottish growth rate, but let us have a debate about using those powers to enhance Scotland's prosperity rather than another arid constitutional debate.

Economic growth is not just an abstract that allows economic or financial gurus to trade statistics; fundamentally, it is about what drives the agenda for investment in building a better nation for people. We should escape the arid arguments of the past and build a consensus for the future. We cannot tackle poverty unless we grow a high-wage, high-skill economy in which we can all share.

It is obvious that the size and growth of the economy affects Governments' ability to raise revenue, which in turn affects the amount that is available for public services. However, to acknowledge that truism simply at British state level is to fail to acknowledge the responsibilities that we have in Scotland to grow the economy to fund the future that I am sure we all desperately want for our children. Those who fail to address the issue of the powers that are needed for economic growth in Scotland are the ones who are wearing the constitutional blinkers.

I listened carefully to what the minister said. He concentrated on competition from the perspective of quality. For those of us who have worked in the private sector—and not in legal practice, I might add—quality is one aspect of competition, but to base a competition strategy purely and simply on quality is to ignore the other factors. Cost most definitely is another aspect of competition. We all know that we do not want to compete on a low-wage, low-skills basis, because that is not the future for Scotland. If competition is not based on the cost aspect, on what other aspect is it based? We must ensure that we can drive down the costs for businesses, but we can do that only if we have real economic powers for the Scottish Parliament.

I take Ms Hyslop's point, but her party has described certain parliamentary powers. In what way and to what degree does the SNP propose to drive down the tax burden on business with powers other than those that the Scottish Parliament already has?

We must consider business rates under devolution—my colleague Andrew Wilson spelled that out—but we must also acknowledge that 70 per cent of the Scottish people want financial independence for the Scottish Parliament. It is not a crazy economic analysis, but one that is sensible and has public support.

I would like to take on David McLetchie's point. He gave a narrow-minded, doom-laden analysis of public investment, which was that public investment inhibits economic growth. However, we must remember that economic growth supports greater public investment. For every £1 billion in the economy, the Government can raise an extra £400 million in revenue. To me, one of the starkest statistics in the whole debate is that if Scotland had matched the modest growth of the UK since Labour came to power, there would have been £2 billion more to invest in the public purse. Had we copied the Irish growth rates, there would have been £30 billion more.

rose—

Does Mr Monteith know what that means? It means that we would have invested in child care to allow women to get back to work and get better-paid employment; and it would have meant that in West Lothian, instead of waiting for a start date for the Bathgate to Airdrie line, such a line would be being built and would be opening up Scotland's infrastructure. We would be ensuring that we had a growth consensus.

Under devolution, there is a disincentive to taking on the growth agenda because, even if the smart, successful Scotland strategy was successful, the profits and benefits would not come directly to the Scottish Parliament, because they would go to Westminster in a greater tax take. If we were relying on performance-related pay, the Scottish Government would be giving money back to the public.

I say to Rhona Brankin that it is no good saying that, in a global downturn, we are better shielded by a greater union with England. That is counterproductive for the Executive. It reinforces how bad successive Tory and Labour Governments have been for the economy and means that the Scottish Government is not facing up to its responsibilities.

I detect in the minister's amendment some movement towards an open mind, to allow the factors and powers that we need to control to be identified. What business wants is not just political will from one party but political will and leadership from all parties. If we learn anything from any of our European competitors, it is that they succeed when they have a national consensus on growth. We have the opportunity to do that—please grasp it and support our motion.

I never thought that it would be appropriate to do so, but given recent interventions, perhaps I should declare my membership of the Faculty of Advocates, and intimate that I do not particularly want to intrude in a fight between Standard Life and the Law Society of Scotland. I suspect that that might be dangerous territory.

I have always been a self-propelling business. If I worked, I ate and could spend; if I did not work, I did not earn. I suspect that most country solicitors have a keen awareness of their clients' needs and demands. Sometimes I think that being a constituency MSP is a bit like being a country solicitor.

I hoped that we might have seen in the debate some of what Andrew Wilson promised in part of his motion. Given that May is on the horizon, I suspect that that was probably too ambitious; it could not be sustained in what I think were supposed to be the helpful and supportive contributions from those sitting behind Mr Wilson.

We should try to focus on where we disagree and where we agree—if not now or in the run-up to May, then thereafter. Therefore, I emphasise that I welcome what Andrew Wilson said in support of the smart, successful Scotland strategy. To be honest, I do not care where good ideas come from as long as they are moved on and put into practice. That should be the watchword for all of us, because the challenge of what we do under devolution is whether we add value or subtract value. Both are possible, and no one should argue otherwise. I suggest that we can do that through the policy drivers that are available to us. Andrew Wilson said that we can do only one thing. I hope that we all agree that we can do many things around the key policy drivers in the areas of health, skills, training, and higher and further education.

I suggest that there is unlikely to be much agreement about the figures on employment, unemployment and the like. I say to Alex Neil that I welcome the fact that, in my constituency, unemployment is currently at 2.5 per cent. People used to say that such a rate was impossible to sustain and that there was a natural rate of unemployment. I agree with Alex Neil that the low unemployment figures can mask other problems. I am conscious of the fact that, in some parts of my constituency, there are high-value-added, high-income, graduate jobs. The percentage of graduates in my constituency is higher than in any other part of the United Kingdom. However, there are people who are carrying out jobs that do not challenge them enough and do not pay them enough. At the same time, employers tell me that there are people whom they cannot employ because to call them employable is a bit of a joke. Some people show up for interviews with six gold earrings and a shell suit and think that, somehow, they are going to be given a job. That is because no one has ever taken the time to support them, to assist them into an understanding of what they need to do to get a job and to tell them what training is available. We can address those problems.

The real problem with the SNP's motion lies in the mystical, magical section in the middle. To understand what the SNP thinks the underlying problem is, we have to stop listening to Andrew Wilson, who wants to be nicey-nicey in the chamber, and start listening to Mr MacAskill, who preaches the SNP's gospel truth, which is, of course, the love that dare not speak its name, not even in the motion. I could have subscribed wholly to the aims of the motion if Andrew Wilson had had the courage to say what it is that he wants to speak about. I thought that SNP members would speak about independence today, because it is quite clear that that is what the middle part of the motion is about. However, for some odd reason Andrew Wilson did not mention it. Could it be because the Confederation of British Industry, the Federation of Small Businesses and the Scottish Trades Union Congress are listening that he would rather whisper about it then tiptoe off quietly?

Rubbish.

Mr Wilson says from a sedentary position that I am speaking rubbish. Let us have an open debate, but let us also have some honesty. Because that is lacking, I cannot support the motion, although I support some of the warm words and prescriptions that it contains.

After Brian Fitzpatrick's comments, I wondered whether I should remove my earrings before speaking. However, I will not do so, as I quite like them.

I do not often agree with Brian Fitzpatrick, but I agreed with him when he said that it does not matter where good ideas come from—what matters is that they are developed. That is absolutely correct. The problem is that good ideas that relate to dealing with symptoms will do nothing to address the core problem of the Scottish economy, which is low growth. As Andrew Wilson said, we have a shrinking economy—even according to the Executive's figures, the economy grew by only a miserable 0.1 per cent in the past year.

Of course, that has a direct impact on our ability to invest in our services and in the communities where we live and work. I will relate that to the city of Dundee. Every £1 billion that we could raise in the economy would give us another £400 million in revenues to invest. A sluggish economy means higher unemployment—in parts of Dundee, more than 7 per cent of males are unemployed. It also means low wages—the Dundee weekly average wage is even lower than the Scottish average.

A debate on the economy is not an abstract or arid constitutional debate. The issue impacts directly on the fortunes of cities such as Dundee. Dundee's traditionally large manufacturing base has been hit hard by inappropriate monetary policy. Dundee has huge potential in new industries such as the digital media and biosciences. It has a higher output per capita than Scotland and the UK. However, it also has a declining population, numerous factory closures and large areas of deprivation with poor health records and a life expectancy that is lower than the Scottish average.

I believe that only by tackling the underlying cause of our economic malaise—low growth—will we be able to tackle the problems that the Dundee economy and the Scottish economy face. Low growth is bad for Scottish living standards. Of course, in order to tackle that problem, we need the powers to do so, which we do not have. This Parliament has only 8 per cent control over the economic levers. Compare that with other devolved institutions: the Parliament in Catalonia has 33 per cent control and the one in Quebec has 80 per cent control. We need to be able to tackle the problems in the Scottish economy with home-grown solutions, not solutions designed for someone else's problems.

Higher growth delivers a higher tax take and less dependency, which is the SNP's objective. We know that that will be good for the people of Dundee and for the people of Scotland.

We would all agree that Andrew Wilson's call for a debate on Scotland's economic performance is legitimate and that we all need to work towards a consensus on what the solutions might be. A good number of members have made suggestions in that regard. Unfortunately, Andrew Wilson undermined his position when he declared that giving more powers to the Scottish Parliament was the only solution to all Scotland's economic ills. That destroyed any prospect of consensus about his motion. He provided no evidence to show why what he suggests would work in Scotland. It would be interesting to see whether giving more powers to the Scottish Parliament would solve the many well-documented problems that the Scottish economy faces.

Notwithstanding what Mr Lyon has just said, the Liberal Democrats' position seems to be—from what Tavish Scott said—that, in the election, they will suggest greater powers for the Scottish Parliament, which is in line with what I am saying. When specifically will we get those commitments and what might they be?

Like everyone else, Mr Wilson will just have to wait and see what we will say in the election campaign. I am sure that he will not be disappointed. It would be interesting to hear what the SNP would do with the extra powers, which is the fundamental question.

I am sure that, as some of us do, George Lyon speaks to Charles Kennedy. Would George Lyon like to share with Andrew Wilson details of the work that the Liberal Democrats at Westminster do in their shadow budget each and every time a budget is announced? Perhaps George Lyon could discuss with Mr Kennedy the paucity of such work from the Conservatives and the SNP—four years and no work.

I agree with that point. On many occasions, I have said to Andrew Wilson that we are still awaiting his first shadow budget. I expect that we will wait in vain for one in the next four years, which he will also spend in opposition.

As I said, it would be interesting to see whether giving more powers to the Scottish Parliament would solve the many well-documented problems that the Scottish economy faces. Currently, the downturn in the world economic situation is causing weak demand in virtually every country. That is hitting the Scottish economy hard. Would more powers insulate us from that? I think not.

It is surprising that no one has mentioned the fact that our strong currency is one of the reasons why our exports are uncompetitive. A strong currency hits hard at our manufacturing and primary sectors. Would more powers solve that problem? No. Indeed, if Andrew Wilson had his way and we were separated from the rest of the UK, the problem would be even worse—as a small oil-based economy, Scotland would have a strong currency, which would cause major problems for the rest of our industries. Tavish Scott and I were in Norway earlier in the year and saw that that was one of their fundamental concerns.

Our narrow economic base and our over-reliance on the electronics sector are further problems that would not be solved by our having more powers. We need to upskill our work force and to become more entrepreneurial. We must ensure that Scotland's industry moves up the value chain through the commercialisation of research in our universities. That is imperative. Do we need more powers to deliver those objectives? No. We have the powers to do so. If we examine the notion that all small independent countries must be doing better than Scotland, what do we find?

Will the member give way?

We find, according to the Eurostat figures, that euro zone growth in the third quarter was 0.3 per cent while Scotland's was 0.6 per cent, Belgium's was 0.4 per cent, Denmark's was minus 0.7 per cent, Finland's was 0.5 per cent and Norway's was minus 0.2 per cent. The notion that a small independent county automatically enjoys growth is utter nonsense.

Has Mr Lyon sat down because he has finished speaking or because he is giving way?

I was giving way, but Fiona Hyslop can sit down again if she likes.

That was probably just wishful thinking on my part. [MEMBERS: "Aw."] I am sorry, that was unkind.

Would George Lyon acknowledge that, in the past 30 years, small European economies have significantly outgrown larger European economies? The larger economies have grown at only 2.6 per cent a year while the smaller ones have grown at 3.2 per cent a year. In Europe, in many ways, small is beautiful.

The example of Ireland from independence in 1921 through to 1986 can be considered. The figures would not support the member's proposition at all.

I want to make some headway. The Scottish economy faces huge challenges, but the constitutional argument is a complete distraction from the serious issues that businesses in Scotland face. Andrew Wilson's glib soundbites that more tools in the box are the answer to our economic woes find little support from company boardrooms in Scotland. Businesses' priorities are clear. They want more investment in our transport infrastructure, better connectivity in Scotland and more investment in our skills base. They support the commercialisation of research in our universities; they want Scotland to move away from its over-reliance on screwdriver jobs and to move up the value chain. Most important, they want to widen our economic base, the narrowness of which is one of Scotland's fundamental problems.

It is clear that the biggest challenge lies in encouraging Scots to become more enterprising, more willing to take risks and more willing to set up their own businesses. Business recognises that challenge, which is huge. Even Andrew Wilson would acknowledge that there are no easy answers in that respect.

I have talked about the priorities of business and the coalition. There are huge challenges that cannot be solved overnight. There are no easy and glib answers to our fundamental economic problems. We will turn around our economy and ensure success only by sticking with the coalition's long-term strategy, as outlined in "A Smart, Successful Scotland".

Today, there has been a wonderful SNP, Labour and Liberal love-in, which I never thought that I would live to see. I cannot understand why the SNP proposed the debate. It seems to have totally given up on the idea that it is in opposition. Oppositions are about testing what Governments do, but I have never seen Lewis Macdonald having such an easy ride. Despite the fact that Andrew Wilson was on his feet for so long, we are still waiting to find out on what policy basis the debate was proposed.

We all agree that there are major problems in the Scottish economy. Fiona Hyslop said that more public spending is needed. Does she not understand that that has nothing to do with growth rates? There is already almost 20 per cent more public spending per head in Scotland. Kenny MacAskill nicely highlighted a difference. State intervention was his one contribution to the economy debate. That is where the SNP seems to come from. It fails to realise that, although the state has a role in the economy—we all agree that it does—that role is to provide highly skilled people for employment and to deal with the infrastructure for which it is responsible.

Everything comes down to one word that the SNP has not mentioned: profit. Profit is not a dirty word. I accept that taxation was mentioned.

Will the member take an intervention?

Not yet.

If profits are taxed, there is a choice about what that money will be spent on. The money must benefit many things, but it cannot be spent before it is made, as my colleague David McLetchie said. Growth and profit are needed, so that there can be taxes and public services, but those things cannot be out of kilter. There is a fine balance, but that has not been recognised today.

Will the member take an intervention?

Not yet.

Andrew Wilson asked whether we would agree with him, but we have not been told what he wants us to agree to. We want to hear the policy lines. Alex Neil, who is no longer in the chamber and has been remarkably subdued today, echoed what Andrew Wilson said about rates relief. Will Mr Wilson tell us exactly what the rates relief package would be, how much the SNP would be prepared to put into it and where the money would come from? All I can hear is a long silence.

The member has given way—I love it when interventions are invited rather than given. The SNP's policies are clear. We want business rates below the prevailing United Kingdom level. The motion shows that we seek to put the economy at the heart of the debate. Perhaps finding agreement was too much to hope for. The question deserves to be put back to David Davidson. As far as I can tell from the Conservatives' amendment, their proposal to reduce business rates will cost in excess of a quarter of a billion pounds. Where will that money come from?

We have made our policy clear. We heard lies from the Liberals today about our policy on Scottish Enterprise. We have said clearly and publicly over the past two weeks that £260 million from the enterprise budget should go into rates relief for business and infrastructure spending. That is what business wants.

Will Mr Davidson take an intervention?

Not at the moment. We have stated our policy clearly. It is nonsensical for members to take odd comments for discussion by odd individual members—

Odd individual members?

However, that is what SNP members have done this morning.

The debate should have involved the SNP stating honestly what it thinks we should address and how we should address it—perhaps the SNP could have asked us to join in. Brian Fitzpatrick made a good speech—it was honest and open—and I commend him for it. He is right. What is the point of members being asked to come to the chamber to debate the subject at the SNP's request—it called the debate in its time—if we have to listen to nothing? The SNP must spell out what it wants support for so that we can decide whether we agree with it and so that the public can have some faith in what is going on.

I look forward to hearing what Lewis Macdonald will come up with in his response. I suspect that we will hear much of what I heard on Monday morning at the Confederation of British Industry breakfast that we did together.

The fact of life is that the Government does not produce wealth. Government has a role in releasing business potential and creating an environment that encourages wealth and entrepreneurial activity. We have not heard from the SNP whether it wants a state-run economy or a marketplace, or whether it believes that there should be a mix. Will there be partnership between the public and private sectors? That is decidedly unclear from what the SNP has been saying over the past few weeks. To the SNP, it is always somebody else's fault; it is always nicer somewhere else. However, now that Ireland is perhaps dropping off and Sweden is dropping off, which country will be the SNP's next victim to use as evidence?

The debate has been a missed opportunity to spell out matters on which the parties might be able to agree. We agree that we need to improve the skills base in Scotland and we agree where the skills shortages are. We also agree that improvements must be made to the infrastructure, even though we might not have exactly the same priorities. We must spell out for the Scottish people the different means of delivering the successful economy that the Conservatives certainly believe in.

From the Executive's point of view, the objective is clear: an economy that is based on competitive advantages. The advantages will be a highly skilled and flexible work force, a culture of enterprise and support for innovation. Those are the only ways in which to bring our productivity levels up to and beyond those that obtain elsewhere and to achieve sustained economic growth. I hope that we can build a consensus around our strategy for a smart, successful Scotland, although it is clear from the debate that that will be easier in some aspects of policy than in others.

We are rolling out our strategy for the medium to long term, while delivering the things that matter to business now. Our strategy is not based on promoting Scotland as a cheaper place in which to do business, although we certainly compete already on those terms; it is based on science and skills. Driving down costs is fine—any business will seek to do that—but undercutting the competition is not the primary basis on which Scotland will compete in the wider world.

I recognise the difficulties that sectors of the Scottish economy have faced in the recent past and the impact of global economic conditions on many of our exporters. We were hit particularly hard in the last reported quarter by the restructuring of the electronics sector, which has become so important to the wider economy in recent years.

Of course, I regret last week's announcement by Boots of its intention to close its manufacturing plant in Airdrie over the next two years. Our immediate priority in that case is to ensure that everything possible is done to assist the people who are likely to lose their jobs. Job losses are always regrettable, but, compared with a few short years ago, the Lanarkshire economy and labour market is now buoyant. As Bristow Muldoon said in reference to West Lothian, those who are affected can, with the right support, move quickly into other jobs or training.

Alex Neil raised some important points, but I disagree profoundly with his attempt to talk down the importance to the Scottish economy of increased employment. Today's labour market figures show that the number of jobs increased by 47,000 in the last quarter of 2002. Not just on the claimant count, but on the International Labour Organisation count, unemployment is down to just above 150,000, which means that unemployment in Scotland is lower than unemployment in London. I would not suggest for a moment that the gain in jobs is a ground for complacency, but I reject the suggestion that employment, interest rate and inflation levels are irrelevant to economic growth.

I was born and brought up in Lanarkshire and I have lived there for most of my life—I love that part of the world—but the description of its economy as buoyant underlines the complacency that is at the heart of the Government's approach. The reality for many people in Lanarkshire and throughout Scotland is unemployment, underemployment and low incomes, on which measures Lanarkshire is well behind its competitor regions. Unless the Executive acknowledges that reality, we have no chance of finding a solution.

The reality is that levels of employment are much higher than they were in the recent past and that levels of unemployment are much lower. We are not complacent. If Mr Wilson were serious about building a consensus, he would recognise, acknowledge and support the achievements that have been made in those areas in recent years.

Annabel Goldie and other members have accused Andrew Wilson of underachievement, but he is to be congratulated on the conversion of Mr MacAskill—consensus Kenny is a new experience for the Parliament and a significant achievement. Part of Mr MacAskill's consensual approach is his enthusiasm for a Government strategy to extend the electronic infrastructure. Such a strategy is already in place and is designed precisely to address the inability of the market to deliver full coverage to rural areas. We have invested £200 million in rolling out broadband and an additional £24 million for the pathfinder projects, as was announced in December.

I am fascinated by the minister's statement about the expansion of connectivity into rural areas. At meetings in my constituency, I encounter enormous frustration about the difficulties of access in rural areas. The Government has not put together a cohesive strategy that will link the disparate elements and provide an all-Scotland solution.

On the contrary, as I just said, we have put in place a strategy and, in the past few weeks, we have extended that strategy through the provision of a further £24 million of investment. We are making similar investments in transport.

David McLetchie conceded that his party would cut the Scottish Enterprise network's budget and Andrew Wilson appeared to cast doubt on his party's plans in that regard. Perhaps Adam Ingram will tell us what his plans on business rates would cost the network and what he would cut to pay for them. Would it be Careers Scotland, Futureskills Scotland, the intermediary technology institutes, the proof-of-concept fund, Scottish Development International, the Scottish co-investment fund, the new business growth fund or the modern apprenticeships that we have heard so much about? The business community is entitled to know which of those measures the other parties intend to sacrifice. No doubt we will find out, if not today, at least in the next few weeks.

We welcome the debate and the drive for consensus, which we have led. We have no interest in arguing about the source of good ideas; we want good ideas and we will apply them with whatever support we can obtain. Our focus is on implementing our policies and strategies and on the effectiveness of those policies in boosting the Scottish economy.

We are also focused on using our present powers. We do not see any purpose in being distracted by arguments about powers that the Parliament does not possess. We are not prepared to jeopardise any part of our strategy in pursuit of quick headlines, but we are keen to ensure that our strategy is applied fully. We have a coherent, focused and balanced set of policies for achieving economic growth in Scotland in the years ahead. We will work to increase our policies' impact in partnership with business and any political party that chooses to support us in our objectives.

Occasional observers of these debates and even some of the participants would be forgiven for experiencing a certain amount of déjà vu today. From the SNP benches, the case for the expansion of the Parliament's economic and financial powers to stimulate economic growth and to release our potential as a nation has again been presented with vigour and clarity, despite the cloth ears of the Tories. From the not-so-serried ranks of the unionists, we have had the usual sneering, scornful rejection of anything other than the status quo—witness the contributions from Annabel Goldie, Rhona Brankin and others.

To be fair, other members have raised the tenor of the debate, so I shall deal with some of the points that were raised. The Deputy Minister for Enterprise, Transport and Lifelong Learning claims that cutting business taxes will have a negative impact on public revenues. Cutting taxes stimulates economic activity, expanding the tax base and increasing revenues. That has been the experience of a host of small European countries over the past 10 years. Greece, Ireland, Finland, Denmark, Portugal and Sweden have cut corporation taxes by half, but corporation tax take has increased by 87 per cent in those countries.

Will the member give way?

No, I will not give way.

Tavish Scott, who I am sorry is no longer in the chamber, indicated that the development of Liberal Democrat thinking on transferring powers to the Parliament related to a federal future, although George Lyon directly contradicted that. Perhaps the Liberals will tell us whether they will be pushing for such powers as part of their negotiating position with future coalition partners. The Scottish public are entitled to know the Liberals' position before the elections.

I wonder whether the member can help with a genuine point of information. Andrew Wilson said that the SNP recognises that the symptoms of economic underperformance cannot be dealt with until the root cause is addressed directly. Is he referring to independence? If so, the consensus that he calls for is based on a false premise. If we are to have open, honest and perhaps on-our-feet debate, we should not seek to build it on a false consensus. We should recognise that there are differences, which are part of democratic politics, and we should have the debate.

We are arguing for more powers for the Scottish Parliament. Different parties might take different positions on the powers that are required. I reiterate that the SNP is in favour of independence and of assuming all the independent powers that Chancellor Brown currently exercises.

More seasoned and discerning observers of these debates will notice that areas of agreement and even consensus are emerging in our analysis and in policy prescription. We can all agree on measures designed to develop the skills base of our work force, to internationalise our business and to increase research and development and innovation, especially in the knowledge economy. All those measures are necessary to improve productivity and to increase competitiveness. However, we should also be aware that they will not be sufficient to achieve the step change in competitiveness that we need to boost our long-term growth rate to the UK level, never mind to the level of other small European countries.

It is a step forward that the minister is now prepared to accept publicly that low growth is the fundamental problem, even if he and his colleagues remain in denial about the fact that the only way in which to effect the necessary changes involves the Parliament's assumption of the fiscal powers that the Chancellor of the Exchequer currently exercises.

The member has made it clear where he is coming from—he wants more powers. I ask him to name all the powers that he wants. What is it that the member is campaigning for?

We want the Scottish Parliament to have all the fiscal powers that the Chancellor of the Exchequer exercises.

I want to move on. Contrary to what Labour propaganda would have us believe, Gordon Brown has not turned round the Scottish economy, which is neither strong nor stable in comparison with the economies of our competitors. We have consistently had lower growth and higher unemployment than the British average. We have also had much lower population growth than England has had. That low population growth has turned into absolute decline. Those are hard, incontrovertible facts.

The Scottish economy is not stable; it is not in a state of equilibrium. That has been the case for decades and the fact that it continues to be the case is evidenced by the constant drain of capital and labour out of this country, mostly as a result of the huge pulling power of London and the south-east of England. We can educate and train our people as much as we like but, if we fail to generate our own economic magnetism by exercising the full fiscal powers of an independent Parliament, the self-perpetuating spiral of decline will remain unchecked and our best and brightest people will continue to leave us. At the moment, 10 per cent of Scottish graduates from Scottish universities get their first job outside Scotland. That is where our entrepreneurs go. We still produce entrepreneurs, but they have to go elsewhere to fulfil their ambitions.

There are few policy levers that can give us the step change in competitiveness that we need to break out of our decline. Winning the power to set and change our tax rates across the whole economy is the key to turning round our historic underperformance under Westminster rule. The sooner we all sign up to that goal, the sooner we will be able to get on with the job.