Wealthier and Fairer

– in the Scottish Parliament at 2:30 pm on 30th May 2007.

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Photo of Alex Fergusson Alex Fergusson None 2:30 pm, 30th May 2007

The next item of business is a debate on a wealthier and fairer Scotland.

Photo of John Swinney John Swinney Scottish National Party 2:35 pm, 30th May 2007

Last week, we talked about our ambition to deliver a smaller and more effective Government for Scotland. Today, I want to outline to Parliament how we can deliver a larger and faster-growing economy.

Our central purpose is to focus the Government and public services on creating a more successful country, with opportunities for the whole of Scotland to flourish through increasing sustainable economic growth. Scotland can be wealthier and fairer, which is why the Government will act to enable businesses and people to increase their wealth so that more people can share that wealth fairly.

Over the past generation, Scotland's economy has underachieved compared with the economies of similar countries and relative to the potential of our people, given our talents and resources. Scotland's growth has been unspectacular and "disappointing", according to the Secretary of State for Scotland earlier this year. Growth has certainly been poor by international standards. It has averaged 1.8 per cent over the past 30 years—around a third of the rate recorded by Ireland, which points the way with an average annual growth rate of 5.2 per cent over the past generation. Scotland's growth rate is about a quarter lower than the United Kingdom average growth rate of 2.3 per cent, and is only half the average rate for small European economies, which is 3.5 per cent.

Photo of Wendy Alexander Wendy Alexander Labour

Does the member accept that it is prejudicial to consider the past 30 years because we have outperformed our long-run average in eight of the past 10 years? Indeed, in standard-of-living terms, we have for eight of the past 10 years outperformed the Organisation for Economic Co-operation and Development average and that of the EU 15.

Photo of John Swinney John Swinney Scottish National Party

Wendy Alexander must have foreseen the points that I was about to cover. I was about to say that even over the past decade—we are told that it has been a time of unprecedented success, which I suspect is the heart of what Wendy Alexander tried to nudge me towards accepting—Scotland's economy has grown only marginally above trend, at 2.1 per cent. That compares with a far higher UK rate of 2.8 per cent and Ireland's spectacular 7.3 per cent. We should let the statistics speak for themselves.

Scotland can perform better than that, and everybody in the Scottish Parliament should focus on improving Scotland's performance. I confirm that our target for this session of Parliament is to raise Scotland's growth rate to the UK level by 2011. That means that Scotland should consistently match the UK's growth rate, not only when the UK underperforms. From 2011 onwards, it should not be a matter of Scotland seeking to catch up, but of Britain trying to keep up with Scotland.

Setting of a growth target is an important first step—it is fundamental to achieving a wealthier and fairer Scotland. We must escape the mindset that has allowed us to settle for second best in growth. Our matching UK growth will mean benefits for people in Scotland. It will mean that Scots will earn more and have more opportunities, that there will be an incentive for our most talented and most mobile people to build their lives here and that they will be more likely to do so.

In aiming to improve Scotland's economic performance, the Government will be advised by the council of economic advisers that the First Minister announced last week. That council will play a central role in providing to our Government advice on the steps that we must take to break the cycle of underperformance in the Scottish economy. From its expert and experienced perspective, it will assist us in formulating plans and proposals that will give our country a competitive edge. Before the summer recess, the First Minister will make a further statement to Parliament on the council's role and membership. It will play a significant part in the development of our economic strategy, but Parliament must also be central to the process. I hope that we can agree in Parliament in order to maximise Scotland's economic success.

I want to set out some of the Government's ideas and ambitions with respect to reducing business tax, to deregulation, infrastructure, skills and to our enterprise network, which are key blocks in building a more successful Scotland. I will listen with interest to the views that the other parties express.

A new politics is not enough on its own. It is time for a new economic approach for Scotland that is built on a shared desire to increase our nation's competitiveness. That debate will inform the development of our new economic approach, which will be set out to Parliament and published in full in the autumn. The approach will set the context for our broader economic growth strategy and the spending review; it will be built on guiding principles around which consensus can emerge in Parliament, business and the wider community.

We must give Scotland a clear competitive advantage so that we can achieve our objective of a wealthier and fairer Scotland, and we must always be mindful of the costs on business and the challenges and obstacles that those who want to go into business face. The Government will always take account of those pressures and do all that it can, within the powers that we currently have, to reduce those barriers.

I can confirm that the Government will act to make Scotland the lowest-taxed part of the United Kingdom for thousands of small and medium-sized businesses. I want to send a clear signal from Parliament today that our Scottish Government will use its responsibilities to give Scottish business a competitive tax position. We will remove the burden of business rates for many and we will reduce it for more. It is time to free our small businesses so that they can grow in order to breathe new life into high streets in towns and villages across Scotland.

I know that other members have made proposals that were similar in nature—although they have been different in character and ambition—for reductions in business rates or to incentivise businesses in communities throughout Scotland. I hope that parties across the chamber will recognise this initiative by the Government as being worthy of their support in order to develop and strengthen our economy. I will bring forward plans in full as part of the budget process in late autumn this year. With the support of parties across the chamber, many vital Scottish businesses will be paying less local tax by this time next year.

Lower tax is just one element of a package to give Scottish business a competitive advantage. To create the most conducive environment for growth, we must also be lighter and more effective in our regulation. We accept that sound and effective regulation is needed to meet our social and environmental objectives, but that must be done at the lowest cost to business. A risk-based approach and the undertaking of an extensive review of existing legislation will help to deliver that. There is a high level of political commitment from the whole Scottish Government to improve the regulatory environment for Scottish business. We will boost the competitiveness and productivity of Scottish business by stripping out unnecessary compliance costs. As an early priority, I will arrange a meeting with Professor Russell Griggs, the chair of the industry-led regulatory review group, and I will use a forthcoming meeting of the small business consultative group to discuss the next steps that the Government will take on this agenda.

Lower business tax and lighter regulation are just two important factors in determining our overall competitiveness. We must also ensure that the resources that we invest in economic growth, through our enterprise network, deliver best value and the greatest possible return. Our intention is to refocus and reform the enterprise network. Scottish Enterprise and Highlands and Islands Enterprise will continue to have the central responsibility for delivery of the Government's enterprise development strategy. We will expect Scottish Enterprise to take a much more strategic overview of the Scottish economy. We want to see it and Highlands and Islands Enterprise increasingly focusing their efforts on where they can make the most effective contribution to improving Scotland's economic growth rate. The creation of genuine added value and maximisation of the return from our interventions must be the hallmarks of all the decisions that we make.

We will also expect more streamlined delivery, with a shift in resources from the back office to the front line. VisitScotland and Transport Scotland will be more closely aligned with the enterprise structure, alongside existing core functions such as Scottish Development International. We will declutter the complex delivery networks at the local level. The landscape of government is at its most crowded with metro regions, business gateways, local enterprise companies, local economic forums and council economic development departments providing services in duplicate and, sometimes, in triplicate. We have begun discussions with Scottish Enterprise, Highlands and Islands Enterprise and Scotland's local authorities about decluttering that landscape, and we will continue those discussions over the summer. In order to strengthen that process, we will also consult the other major stakeholders in the business community over the summer before reporting back to Parliament on how we will create a more streamlined and effective local business delivery and support service.

Photo of Tom McCabe Tom McCabe Labour

Will Mr Swinney tell us what targets have been set for the number of people who would be released from that duplication in the public sector, particularly with regard to the economic development proposals that he has just announced? Is it wise to continue in isolation with regard to economic development without having a more comprehensive look at the way in which the wider public sector is organised?

Photo of John Swinney John Swinney Scottish National Party

There are many aspects of the public sector reform agenda—which, to be fair, Mr McCabe initiated when he was in Government—that we will continue to take forward. My comments today on the enterprise networks should certainly not be seen as being apart from that wider public sector reform process. In fact, my point is that the enterprise networks need to be brought more closely into the public sector reform agenda that Mr McCabe initiated in the previous Administration.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

On targets and business support, will the minister confirm that the SNP's policy remains, as stated in its manifesto, that it will work towards reducing corporation tax in stages to 20 per cent, when it has the levers to do so? The SNP opponent in my constituency proposed a grants system to offset the costs for businesses and to bring about, in effect, the support for businesses that the SNP has said for four years that it wants to provide by reducing corporation tax. Is the minister ditching that policy?

Photo of John Swinney John Swinney Scottish National Party

I have so much to say to Parliament that I did not think that I could say everything today. An earlier draft of my speech included the commitment to reduce corporation tax to 20 per cent when the powers to do so are available, but I thought that I would concentrate on the powers of Parliament as currently constituted and address the issues in which members will be most directly interested. However, I confirm that that remains the Government's position on corporation tax.

On innovation—Mr Purvis might be interested in this point—I believe that there is more that we can, and must, do to support new technology and new processes. The Liberal Democrats concentrated on this issue in the election, and I think that a number of their proposals merit further examination. However, that should not mean the creation of a brand new agency to undertake the task. There is merit in considering how we might make our investment and innovation interventions more complementary and refocus them to greater effect. Scottish companies should be able to access advice and support on innovation and investment on a one-stop basis. Overseas firms that locate in Scotland have long been able to do that—our firms should also be helped to commercialise as much as possible the cutting-edge research that is carried out in our first-class universities. Collaboration will be crucial and we are absolutely determined to intensify the co-operative working that exists between our universities and the enterprise sector. Fiona Hyslop will cover more of that in her speech.

Photo of John Swinney John Swinney Scottish National Party

In the moments that remain, I want to say a few words on infrastructure and taxation—if the Presiding Officer will indulge me for the interventions that I took. We need to align measures to improve our infrastructure with the Government's economic strategy. That means ensuring that Scottish Water plays a significant part in creating capacity where that is required to support economic growth. It also means developing a transport infrastructure that tackles congestion, improves connectivity and reduces journey times. All those projects must be delivered within a context of tight control of spending. I am concerned by current performance in respect of cost management in a number of transport projects, so I have instigated a financial review of strategic transport projects to ensure that the public purse is protected.

In addressing the "fairer" part of the agenda, I want to make two points clear to Parliament. On Monday, I had a very successful meeting with the representatives of our local authorities. I made it clear to them that the Government attaches a high premium to working collaboratively and co-operatively with local authorities through community planning partnerships. I look forward to working closely with Scotland's local authorities to develop that relationship and to deliver for council tax payers a freeze in council tax rates from next April.

I also announce to Parliament today that the Government will introduce legislation to abolish the unfair council tax. Our proposal is for a local income tax based on ability to pay, which will reduce the overall burden of local tax. The benefit of that will be felt by pensioners, families and the majority of Scots. We stood for election on a platform of abolishing the unfair council tax. We are determined to deliver that as part of our agenda to create a wealthier and a fairer Scotland.

Photo of Wendy Alexander Wendy Alexander Labour 2:49 pm, 30th May 2007

I, too, will concentrate on the "wealthier" part of today's debate. We did not hear much about the "fairer" part. Indeed, it was no credit to the parliamentary process to shoehorn into a minute's overtime issues as diverse as personal taxation, the funding mechanisms for local government and poverty alleviation, simply because they fall within John Swinney's rather hungry portfolio.

On that note, I move to the substance of today's debate. I will start with the common ground. We welcome the lighter regulation principle—as yet undefined. We welcome the principle of having a council of economic advisers and we welcome the SNP's move to cut small business rates further. The previous Executive set the pace in that through its small business rates relief scheme, which moved us to the lowest rates in the whole of the United Kingdom. I make two observations. First, it might be better, in the interests of business, to use and extend the current scheme than it would be to impose a wholly new bureaucracy on small businesses. Secondly, I urge the cabinet secretary to consider the possibility of extra relief for research and development intensive companies. He will recall that such special incentives were part of the previous Executive's plan and that they had to be put on ice due to an adverse European state-aid ruling, which has since been overturned. The plan should be revisited.

I come to two of the larger policy issues relating to business taxation. Any politician who took part in the recent election campaign could not have failed to see the issue of the health and wealth of Scotland's town centres. In the heat of the campaign, the SNP claimed that its business rates scheme is the best and only way of bringing back to life our high streets. A cut in business rates will, however, do nothing for large retail units that are left empty—places that used to be Littlewoods and Arnotts—in too many of our town centres. Our town centres require a more focused agenda: powers to co-operate; powers to compel action through compulsory purchase; and dedicated financial support. We have suggested a £50 million town-centre turnaround fund. We hope that those proposals will be considered as part of the busy enterprise agenda.

I will make one other point with respect to business taxation. By far the biggest threat over the next four years to companies large and small in Scotland is the threatened local income tax. It would be payable by all employees, its collection would be enforced through the pay-as-you-earn system and it would be a uniquely Scottish administrative burden for business. Not only would Scotland become the most highly taxed part of the United Kingdom—as the Minister for Enterprise, Energy and Tourism has observed—but we would create a specific disincentive to work in Scotland. There would also be a Scottish wage-inflationary pressure and house-price inflation unique to Scotland, if the burden of taxation on housing were removed. The Scottish economy can do without that.

I turn to the meat of the cabinet secretary's speech. Today we did not hear a strategy for growth, far less a strategy for employment or for social justice. John Swinney claimed that his approach to his supersized department would be strategic, but today we heard not a strategy, but targets. We welcome the establishment of a council of economic advisers. I note that the idea is drawn from the United States, where the equivalent body does not set targets but simply forecasts, on the incredibly sensible basis that even the US economy is not immune from global forces. The SNP has yet to provide a single example from anywhere in the developed world of an equivalent body that sets targets. I am not being unambitious for Scotland; I am simply saying that there is a danger that setting targets will get in the way of having a strategy. Labour had an economic strategy for Scotland.

Photo of Wendy Alexander Wendy Alexander Labour

I will take members through it. We began by locking in stability. We moved on to the employment agenda and to raising productivity through supply-side actions—tackling skill shortages, commercialising R and D, raising innovation, strengthening Scotland's metropolitan areas and supporting key sectors such as life sciences and energy. The SNP was not with us when we put in place science and skills being supported by a new transport infrastructure, reform of the planning system and private sector involvement. Labour's strategy was embedded in the "Framework for Economic Development in Scotland" and in "A Smart, Successful Scotland".

Crucially, the strategy came first; organisational blueprints and structures came later. Strategy first, structures later—that is always the right way. Without such a strategy, the structural changes that proliferate here every day risk damaging the key linkages in the Scottish economy. Those risks are real. The progress that we have made so far has not been by chance, but by choice.

The SNP does not like to mention the labour market, perhaps because Scotland's employment rate is higher than that in the rest of the UK. It is among the highest in Europe, our population continues to grow, gross domestic product growth is at its strongest since the start of devolution and manufacturing optimism is at a 40-year high.

Photo of Christopher Harvie Christopher Harvie Scottish National Party

Are you aware that the rate of part-time employment in the United Kingdom is 25 per cent, compared with 15 per cent in Germany?

Photo of Alex Fergusson Alex Fergusson None

Just before the member answers, I advise members to address their remarks to each other through the chair.

Photo of Wendy Alexander Wendy Alexander Labour

I thank the member for his intervention, which serves to highlight why skills must be at the heart of an economic strategy. The SNP has no explanation for why Scotland has leapfrogged to the top—bar one nation—of the European employment league after decades of dismal performance, and it refuses even to acknowledge that we brought human capital and workforce development to the heart of Government and our economic strategy.

As an independent senior ex-mandarin put it this week:

"the exclusion of lifelong learning from the economic portfolio seems strange when the competitiveness of Scottish businesses depends so heavily on a highly skilled and flexible workforce."

Under the SNP, workforce development, which is the key to getting to the top of the European employment league, once again risks becoming the poor relation in the education department. What a missed opportunity for Scotland. Having created the second best-performing labour market in Europe, this should be the moment to go further.

Photo of Wendy Alexander Wendy Alexander Labour

I will do so later when I speak about Scottish Enterprise. This was to be the time to make Scotland the place where not just 250,000, but another 100,000 people went back to work and when full employment was within our reach for the first time.

In our view, Scotland's economic future depends not on targets, but on a strategy for making Scotland the skills capital of Europe—hence our promise to take a further 100,000 Scots off benefits and into work through a full employment agency. All our plans for skills academies, for 50,000 modern apprenticeships and for new advanced modern apprenticeships to make our vocational educational the best in the world, are now shelved—

Photo of Wendy Alexander Wendy Alexander Labour

Let me finish. Those plans were torn up in a ministerial announcement last week by a party and a leader who are too timid to offer a debate to defend the departmental structure that they have created.

On the enterprise network, the SNP approach is all about putting structures before strategy, as we heard once again today. We will support purposeful attempts to get rid of unnecessary bureaucracy, but we will not head for the soggy middle ground of populist posturing. I remind the cabinet secretary at this point that he has unfortunate form. As the convener of the previous Enterprise and Lifelong Learning Committee, he examined duplication between local enterprise companies and local authorities then added to it by giving us 32 extra local economic forums. Scotland's economic future is too important—[Interruption.] Would Mr Swinney like to make an intervention?

Photo of Alex Fergusson Alex Fergusson None

The member is in her last minute.

Photo of Wendy Alexander Wendy Alexander Labour

Scotland's economic future is too important to allow easy populism to infect the exercise, and the kite flying of the weekend does not bode well.

Let us not be seduced by the option of bringing all the powers back inside. After all, such an approach would have, over the years, deprived the enterprise network of the skills of George Mathewson, Crawford Beveridge, Sir Ian Wood, Jim McColl and Willie Haughey. Although each of those people is either of a different—or, indeed, of no—political persuasion, they all have contributions to make. By definition, an enterprise agency has to be fleet of foot and willing and—more important—to be able to take risks. That means that we must preserve the arm's-length principle.

Let us by all means talk, but let us also resist the one-size-fits-all solution. After all, although a meaningful dialogue is possible between Scottish Enterprise Glasgow and Glasgow's large and strategic city council, such an approach will never be right for what happens in the Highlands and Islands or in much less strategic areas.

Photo of Alex Fergusson Alex Fergusson None

You should be winding up now.

Photo of Wendy Alexander Wendy Alexander Labour

I will happily do so.

Like the cabinet secretary, I have had little opportunity to say much about the fairness agenda. Suffice it to say that the best guarantor of fairness for people of working age is a job, which is why the skills and workforce agenda should be at the heart of the Parliament. The Executive should have brought its plans to this Parliament for debate.

My final point is that, with regard to the fairness agenda and people who are not in work, I commend to the Executive our plans to relieve every pensioner in Scotland of water and sewerage charges by the end of this parliamentary session. Such a move would benefit half a million pensioners in Scotland.

There will be much to say about fairness in the months to come.

Photo of Alex Fergusson Alex Fergusson None

You should finish now, Ms Alexander.

Photo of Wendy Alexander Wendy Alexander Labour

As a starting point, the First Minister should not just provide a place for the environmental lobby on his council of economic advisors, he should also include a single representative of the working people.

Photo of Alex Fergusson Alex Fergusson None

I say to opening speakers that if they consistently overrun their time they will eliminate a back bencher from speaking.

Photo of Alex Neil Alex Neil Scottish National Party

On a point of order, Presiding Officer. With all due respect, I feel that if front benchers overrun their time, the number of back benchers who are called to speak should not be cut as a result. Instead, you should ensure that front benchers stick to their time.

Photo of Alex Fergusson Alex Fergusson None

Mr Neil makes a fair point. However, at the end of the day, it is up to me to determine the order of debate.

Photo of Derek Brownlee Derek Brownlee Conservative 3:02 pm, 30th May 2007

Whatever else we make of Wendy Alexander's speech, we can be fairly confident that, after her remarks, she will not be joining the council of economic advisers.

I thank the cabinet secretary for providing additional clarity on some of the SNP's policy initiatives, partly because we know where the Executive that it replaced stood on certain issues. For example, we know that the previous Executive's number 1 priority was, allegedly, growing the Scottish economy. In fact, not only was that its number 1 priority, it was—despite what Wendy Alexander has just said about targets—one of the very rare objectives of the previous Executive that did not have a target. Moreover, not only was there no target for economic growth, but there was no analysis of how the £200-plus billion that the previous Executive had spent had actually contributed to that growth.

That is why the Conservatives do not share the criticism expressed by Wendy Alexander and, indeed, the former First Minister that the new ministerial structure makes economic growth less of a priority. As with the previous Government, this Government will be judged not on what it says but on what it does, and it is up to it to do better than the statistics from the previous Government that the cabinet secretary reeled off. We do not necessarily agree with all the targets that the cabinet secretary has set out, but at least we have a starting point and something to measure the Executive's performance against.

Given the parameters of what the Government can do to help business, I strongly welcome the commitment to reduce the business rate burden, particularly for small businesses. I do not entirely agree with Wendy Alexander's point that such a move will not help town centres. Indeed, in many smaller towns and communities in Scotland, a reduction in business rates that focuses on small businesses will have that very effect.

The regeneration fund that Wendy Alexander talked about bears a striking similarity to an initiative that the Conservative party announced some time before the Labour Party announced its initiative. Perhaps that is just what new politics is about.

The cabinet secretary alluded to the fact that the Conservatives' and the SNP's specific proposals on business rates differ on how to deliver the intended benefit but have a similar focus, which is targeting business rate reduction on small business. I am grateful for his indication that that reduction will, with parliamentary support, come into play next year. That is strongly welcomed.

There can be no doubt that Scotland was previously at a competitive disadvantage because business rates in Scotland were higher than those in England. Even those who were responsible for imposing that higher level of business rates seem to have conceded the logic of that argument. Nicol Stephen told the Lib Dem conference in Aviemore this year that further business rate cuts would

"create a competitive advantage for Scotland and show that Scotland has a government that means business."

He just did not tell them that they would not be part of it. We will wait and see whether this Government means business, but if it can reduce business rates next year, we will be strongly supportive.

I welcome the cabinet secretary's announcement of the extensive review on deregulation. As well as expressing fine intentions, will he ensure that parliamentary time and Executive resources are provided to assist business and other groups to identify the regulations that need to be pruned, so that we can tackle the problem?

Photo of John Swinney John Swinney Scottish National Party

We must have parliamentary agreement on that issue to try to make progress. I invite members of all parties to offer suggestions regarding specific regulations that cause concern and unease. I will invite the business community to do that, too. The Government will consider such regulations and support the parliamentary process of re-examining them.

Photo of Derek Brownlee Derek Brownlee Conservative

I am grateful to Mr Swinney for making that a little bit clearer.

The cabinet secretary will know that we, too, favour the reform of Scottish Enterprise, although we might differ on the scale or nature of such reform. I do not think it appropriate, in the time that is available now, to go into detail on that. However, I think that the discussions that will be held on the detail of that reform are important.

Improving the transport infrastructure can have a major impact on economic growth, as others have suggested. That is why, at the election, we called for additional investment in transport. However, not all investment will deliver the same return. Some schemes are explicitly intended to improve the rate of economic growth, but others are for improving safety and access to remote communities.

We do not think that transport projects should be judged by their economic impact alone, but we should be clear on the costs and benefits of individual projects so that we can properly debate and assess their impact. If Scotland is to have confidence in this new Government with regard to transport, we need to know that a proper assessment will be carried out on each major project and on where it will fit in the Government's strategic priorities. In that context, I welcome what the cabinet secretary said about the strategic review.

We need to know, for example, not just whether the mooted improvements to the A9 would perhaps come at the expense of funding for trams in Edinburgh, but whether they would come at the expense of improvements that might be proposed for other roads, such as the A75 and the A76. We also need to know whether ministers are, in fact, merely thinking aloud. We need to know what priority the Government would give to dealing with accident black spots compared with tackling congestion. We need to understand in more detail the Government's transport strategy.

I turn briefly to two important areas of the Scottish economy on which Mr Swinney was busy over the weekend: financial services and tourism. The financial services industry is more important in Scotland in employment terms than it is in employment terms in other regions of the UK, with the exception of London and the south-east. I ask the minister to keep a close eye on what is happening with regard to the Financial Services Authority and the European Commission, because we should not take it for granted that the strong financial services sector in Scotland is guaranteed to continue.

In relation to the comments in the SNP manifesto on changing the balance of the economy between the regions of Scotland, I ask that strong consideration be given to how tourism can be improved so that we can have more regional diversity in tourism and stronger economies, particularly in our more peripheral parts.

The challenge for this Government is to move beyond talking about economic growth and help to deliver it. The previous Executive failed miserably in that challenge. If this Executive were to fail, the consequence would not just be that Jim Mather would no longer be welcome in boardrooms across Scotland; as the cabinet secretary indicated, failure would mean that Scotland as a nation would be poorer and that people in Scotland would be denied opportunities to which they are entitled. Economic growth is simply far too important an area for this Government to get it wrong.

Photo of Tavish Scott Tavish Scott Liberal Democrat 3:10 pm, 30th May 2007

No MSP or political party would disagree with the idea of making Scotland wealthier and fairer. Where the Government is making the right noises, the Liberal Democrats want to provide ideas and constructive support; where it is getting it wrong, we will provide spirited opposition.

I congratulate John Swinney on his reception in the press—I appreciate a political honeymoon when I see one. Never again will I accept the SNP moaning about its press coverage. Indeed, given that the Cabinet Secretary for Health and Wellbeing announced yesterday, on "Good Morning Scotland", a plan that had previously been announced by Andy Kerr, I look forward to welcoming my own reannouncements in due course. I recognise Mr Swinney's points on business rates and regulation, although, in a hustings that was attended by me and Jim Mather before the election, when Mr Mather was asked to name the regulations that he was going to cut, he could not even name one. Mr Swinney's invitation to us all today was an interesting illustration of how a Government that was good at talking the talk before the election now expects us to come up with the answers after the election.

I wish to concentrate on a couple of specific issues, so I will not cover the range that was touched on by Mr Swinney, Wendy Alexander and Derek Brownlee. First, in splitting higher and further education from the business portfolio, the SNP has created not joined-up government but disjointed government. I disagree fundamentally with the Tories on that. At the University of Dundee, live cells have, for the first time, been filmed dividing, which could lead to viewing and defining the moment at which cancer strikes. Pioneering microscopic techniques capture a point at which a new nerve cell is generated, providing the potential for damaged cells to be repaired or replaced. Dundee university scientists hope artificially to induce a cell to become cancerous, which could lead to techniques for preventing the disease from spreading in real life. The scientists involved have described it as a eureka moment.

Such innovation in Scotland's universities is a strand to creating a wealthier Scotland and to hitting growth-rate targets, but the test of how we build on that lies in the Government's support for the higher education sector. Failing to invest would damage the development of Scotland's high-skilled workforce, which is not only a strand of success but a strategy for success, yet the SNP, unlike the Lib Dems, did not commit to extra resources for Scotland's universities and colleges. How will the SNP's growth rate, which Mr Swinney has made clear this afternoon, be achieved without continued and sustained investment in the country's skills? Dundee university should be sustained in its areas of expertise, and that should happen throughout the higher education sector.

The Lib Dems would encourage the minister to invest in Scotland's universities the £168 million extra over three years in the spending review-to-be. That would continue the enormous progress that has been made in recent years. Mr Swinney was blunt—refreshingly so, one might argue—when he published the Howat report last week. With one exception, all the Howat recommendations are in play in Mr Swinney's spending review. Among many other cuts that Mr Swinney will have to consider, Howat wants to cut £130 million per annum from the overall lifelong learning budget. Potentially, that means fewer students at Scotland's universities and colleges, and it almost certainly means less money for universities. That is one Howat recommendation that I suggest Mr Swinney refuses.

I suggest another area in which Mr Swinney should drop a measure that, far from building Scotland, will harm the country's developing economy. All parties have wish lists, pet projects and things they want more than others. That is the stuff of politics. Mr Swinney has—rightly—made much of proper, objective, rational policy making, based on making the right decisions for the right reasons. His leader, the First Minister, has made much of building a consensus in Parliament and of creating alliances and support for policy areas and projects. On Edinburgh trams and the Edinburgh airport railway, there is consensus and support from my party, from Labour, from the Conservatives and from Margo MacDonald, who I am sure is listening, even if she is not in the chamber.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I do not know about the Greens. What can one say about them?

The First Minister cannot describe the need for consensus on the one hand and ignore it on the other. I hope that Mr Swinney will not force the Parliament to come together tomorrow night on the issue, but if the SNP does so, so be it. I have been on the receiving end of many taunts about the will of Parliament. We look forward to seeing what will happen over the next few days.

I hope that Mr Swinney will not cancel those projects, which—despite his remarks—have been subject to rigorous assessment by parliamentary committees in the past three years. I do not agree with Stewart Stevenson, who said on the BBC at lunch time today that

"costs were running out of control".

That was an inappropriate attack on Transport Scotland, on Transport Initiatives Edinburgh, and on the transport professionals who have worked on the projects during the past three to four years. I hope that the Government will state what advice Mr Stevenson—and indeed Mr Swinney—got before making that remark in public. If it was not based on official advice, why did he say it? We expect the Government to publish the exact advice and I challenge Mr Swinney to publish it immediately. It is no good inventing a justification in order to make a political decision, but I fear that the SNP is doing that.

Even if Mr Swinney does not care for my observations on the tram or the Edinburgh airport rail link—that is his right, and I fully accept his right to disagree with me absolutely—he should not discount the views of the Confederation of British Industry, individual businesses or the Edinburgh Chamber of Commerce, whose convener, Ron Hewitt, said today:

"We are concerned ... that the cancellation of either project will seriously inhibit the growth of the Scottish economy".

I hope that, on the basis of his assessment, Mr Swinney will consider that point carefully.

My colleagues will talk about different aspects of the vast range of subjects that are covered by this afternoon's debate, and particularly about the enterprise network. Those important areas have been touched on already and they will be touched on again.

I finish with Mr Swinney's own test—reducing bureaucracy; a less-cluttered institutional landscape; and the best use of finance. Those things are fair in delivering the policy objectives that many members throughout the Parliament would share. All that I would say on that is, "Don't bring political baggage to that assessment." Governments are always judged on the decisions that they make and on what they do. That is how we on the Liberal Democrat benches will judge the Administration.

Photo of Michael Matheson Michael Matheson Scottish National Party 3:17 pm, 30th May 2007

I welcome the Cabinet Secretary for Finance and Sustainable Growth to his post. I wish him well in the weeks, months and years ahead as he undertakes his role.

Although this is not my maiden speech, it is the first opportunity that I have had to address the Parliament since I was elected as the member for Falkirk West. I pay tribute to my predecessor, Dennis Canavan, who represented the Falkirk community for some 33 years, both at Westminster and in the Scottish Parliament for eight years. Following the Labour Party's decision in the lead-up to the 1999 election that Dennis Canavan was in some way not good enough to be a Labour candidate in that election, he stood twice as an independent in Falkirk West. On both occasions he was returned with a thumping majority—a painfully large majority, to my own personal expense. Those results illustrated the regard that the people of Falkirk West had for Dennis Canavan and the fact that they trusted him as their representative.

Many members will have noticed from the press that, although Dennis Canavan has retired from the Parliament, he has not given up his zest for campaigning on popular issues. As president of the Ramblers Association Scotland, he has already started to make waves on protecting the rights of walkers in Scotland. I pay personal tribute and express my thanks to him for the work that he undertook on behalf of my constituents in Falkirk West over the past 30 or so years. I wish Dennis, his partner and young Adam every best wish for the future. [Applause.]

I am not someone who has often been seen, in political terms, as a champion of the business sector in Scotland. However, I recognise that to ensure that we have the best health service and the best education service—in order to provide our young people with the opportunities that they need for the future—we must have a vibrant and dynamic economy that will deliver the wealth that it is necessary to invest in those essential public services.

The cabinet secretary outlined clearly how he intends to ensure that we reverse the underperformance of the Scottish economy. I believe that the small business bonus scheme, which he mentioned, will benefit many small businesses throughout the country. Too often, the political debate about supporting businesses is dominated by big businesses and the CBI, so the importance of big businesses to the economy is stressed. I recognise that big businesses are important to our economy, but we should not underestimate the important value that small businesses have for our local and national economies. Small businesses are at the heart of many of our local economies.

The figures that I have been provided with indicate that the Falkirk area alone will benefit from the scheme to the tune of 3,500 businesses either not paying business rates or paying a reduced level of business rates: three in every four businesses in the area will benefit from the scheme. The scheme, along with the local authority's my future's in Falkirk strategy, will benefit the local economy and ensure that we continue to grow the economy of Falkirk.

I hope that we do not underestimate the value of local authorities in ensuring that we develop dynamic local economies; the minister referred to that in his speech. I welcome the fact that dialogue has already taken place with some local authorities through the Convention of Scottish Local Authorities, but I hope that there will be an on-going dialogue that continues to refresh itself and that local authorities will have an opportunity to bring to the cabinet secretary's table their ideas on how they can improve the Scottish economy.

I have no doubt that the strategy will have clear economic benefits, but it will also bring wider benefits through the creation of more and better-paid employment and the regeneration of some of our poor town centres. Wider social benefits will come from this form of economic growth, and it is important that we find ways to measure the benefits that come from such investment in our economy. We must recognise that point and ensure that we have clear measures of the benefits, so that we can see how progress is being made as a result of the policy. I hope that the minister will outline in her closing speech how the Executive intends to measure the wider social benefits of this economic policy, so that we can ensure that we are creating not only a wealthier society but a fairer society.

Photo of John Park John Park Labour 3:23 pm, 30th May 2007

I recognise that I am very fortunate and privileged to be standing in the chamber today, representing people in a way that when I was a small boy growing up in Dunfermline I did not think I could do. I am also fortunate to be making my first speech on a topic that I feel passionate about.

I wish Mr Swinney all the best in his new role. He has a massive job, but I wish him all the best. The cabinet secretary appears to be on course to break some sort of record, given the number of maiden speeches that he has been on the receiving end of so far and will be on the receiving end of today and next week. I understand that he will give some of his colleagues in the Cabinet a turn tomorrow in the transport debate. That is nice of him.

I was a bit confused when I listened to the early part of the debate, because I thought that the Tories were advising the SNP on law and order policy. A lot of the issues that have come up are part of an agenda that is alien to me.

My speech will focus on skills. We have heard a lot about proposed measures to improve the competitiveness of business but little about the people who deliver our economic prosperity. As our economy evolves, the skills that we need to compete globally will change too. Government interventions must equip the country for the economic challenges of the future. As globalisation speeds up, we will need to recognise that the major decisions that affect Scottish jobs will be out of our hands.

A highly skilled and mobile workforce will be essential to our ability to meet that challenge while ensuring that Scotland is fairer and wealthier. I have seen at first hand the difference that developing new skills can make to people's lives. Learning a new skill can not only give people a boost in their current employment, but allow them to face the job market with confidence should the worst happen.

I started my electrical fitter apprenticeship at Rosyth dockyard at the age of 15. In times gone by, Rosyth was, like many workplaces, a place where people could say that they had jobs for life. A combination of the ending of the cold war and a perverse and wholly political decision to award the Trident submarine refitting contract to Devonport dockyard in 1993 meant that the future for Rosyth was particularly bleak then. Thankfully, the trade unions and workforce rose to the challenge of making the yard competitive and have given the workforce that is there now a future to look forward to. However, the loss of the Trident contract meant that redundancies were inevitable and a generation of workers would have to find employment that was relevant to their skills or retrain to compete in an increasingly competitive job market.

Fortunately, hundreds of workers from Rosyth found employment in different sectors of the economy. That did not happen by accident. It happened because the right bits of government were joined up, and that is why I am concerned about the uncoupling of lifelong learning from enterprise. I fail to see how disconnecting the outputs of our further and higher education sectors from the priorities of the Scottish labour market will boost Scotland's performance.

I often bump into my former workmates. Some work in the public sector, some work in the finance sector and some work offshore, but each has a story to tell about their own personal journey. The one thing that connects those journeys is the learning experiences that people have had and the confidence that they gave them.

When thinking about this speech, I listened to the First Minister's statement last week. He said that he could see himself and Gordon Brown marching together on certain issues. The new politics must have been alive and kicking in the early 1990s, because the First Minister and our future Prime Minister marched together in the campaign to bring the Trident submarine refitting contract to Rosyth—I am genuinely surprised that he has not mentioned that before.

I was interested to hear the First Minister's announcement and John Swinney's comments today on the establishment of a council of economic advisers. Patrick Harvie's suggestion to have experts who understand social and environmental issues on that council was excellent. I also suggest, as Wendy Alexander did, that the workplace be represented on the council of economic advisers in the form of trade unions. Partnerships in the private sector between trade unions and employers have delivered big contracts and secured Scottish jobs at companies such as Diageo and Rolls-Royce. There is a wealth of knowledge in the trade union movement on how fair employment practices and 21st century industrial relations can help us to meet the productivity challenge. I hope that the First Minister and the cabinet secretary agree with me that it is vital that we harness and liberate that expertise.

In the spirit of the old politics, the Labour Party is happy to take the blame for the unprecedented level of macroeconomic stability that we enjoy in the UK just now. There is no doubt that the UK is a good place to do business; all international indicators point to the UK—and Scotland as part of the UK—as being a good place to do business. However, there appears to be consensus in the Parliament today, as there seemed to be last week, on a reduction in business rates to boost economic performance. By all means, let us empower businesses to do what they do best, but let us also recognise that, for Scotland to compete globally, we require businesses to work together and take long-term decisions.

Our levels of research and development in Scotland are extremely poor: they are a third of the OECD average and we invest a fifth of what companies invest in Finland. Any reduction in business rates should be related to clear investment strategies on energy, employee development and R and D. It is only fair that we reward the businesses that are prepared to invest in their respective industries' futures, their people and Scotland's future. We politicians should think carefully about how we achieve that, because our people are definitely the key.

Photo of Bob Doris Bob Doris Scottish National Party 3:30 pm, 30th May 2007

The idea of a wealthier and fairer nation is surely one on which all of us can agree. We might have different perspectives on how we can best create wealth for our nation and what constitutes the best way to spend to achieve fairness in society, but we should all warmly welcome the tying together of the ideas of wealth and fairness as a foundation on which to build cross-party consensus.

I am greatly encouraged by that underpinning of social values and by their going hand in hand with wealth creation. The former First Minister's approach to helping the people of Malawi won praise across the traditional political divide, because we all recognise that wealth creation comes with the responsibility of helping people who have been left behind by society, whether locally, nationally or, in the case of Malawi, globally.

It was revealed earlier this year that in 2006 more than 1,900 people who were seen in Scottish hospitals were diagnosed with malnutrition. In a modern society that is simply unacceptable. As our society becomes wealthier, such figures must be monitored closely. When necessary, we must use society's wealth to assist in curing society's ills. That is why it is vital that nutritious free school meals should be available to all our children, beginning with the early years in primary school. Their introduction would bring a positive lifestyle change, with consequent massive long-term health benefits. I am proud that our Government is keen to do that.

In 1979, one in eight children lived in poverty. Today, the figure is one in four, which is a scandal—that is almost 250,000 children. In total, more than 900,000 people in our nation are living in poverty. Our nation has not only a responsibility to help them but a direct economic self-interest. People in poverty must also be seen as potential wealth creators. They are a massive, untapped, wasted and often alienated resource.

Education is rightly seen as a route out of poverty for many people. Our new Government's aspiration to extend free child care for three and four-year-olds by 50 per cent, its aspiration to ensure that there are fully qualified nursery teachers in our nurseries and our intention to reduce class sizes dramatically for the early years of primary school will not only provide a positive social platform but put in place the building blocks of future economic prosperity.

There are many other examples of how we can make society fairer. The policy of abolishing the unfair council tax and introducing a local income tax that actually takes account of people's ability to pay has substantial support in the chamber and, I believe, overwhelming support in our country. I hope that the Parliament will not let society down on that—and, in particular, that it will not let our pensioners down.

I welcome our Government's ideas on significantly reducing business rates for small businesses. If implemented, that policy could lead to boards being removed from shop windows throughout Scotland. It could breathe new life into our villages, towns and cities. In Glasgow, which I represent, small businesses will warmly welcome that move. There, 15,000 small businesses will pay no business rates at all, and another 3,800 will benefit from a significant reduction in rates.

The results of excluding fairness from wealth creation are clear, nowhere more so than in Glasgow, which suffers from the lowest life expectancy in the UK—and it is lower than in most parts of Europe. The numbers of economically inactive adults and of young men who are not in employment, education or training are woefully high. In Scotland, 13.9 per cent of people can be described as income deprived; for Glasgow, that figure is almost 25 per cent, or one in four. In my home constituency of Maryhill, 51.4 per cent of children are in families that claim benefits. That is double the national average, which is an absolute outrage.

Traditional working-class communities in Glasgow feel under threat. Many people see bulldozers on the horizon, with no guarantee that their community will be kept intact. Such unfairness only increases the social alienation that many feel. It is little surprise that antisocial behaviour finds a breeding ground in such circumstances. I give Maryhill in Glasgow, where I stay, a commitment to defend those communities and others throughout the city that need help, rather than being demolished out of existence. They must be treated with respect, which I strongly believe previous Governments categorically failed to do.

Glasgow has many deep-seated issues that have been present for more than a generation. It should be the engine room of the Scottish economy. A legacy of neglect might have taken its toll, but with appropriate investment from a Government that takes into account its special circumstances, combined with a fresh approach from Glasgow City Council, Glasgow will be able to flourish once more. I hope that that will include a successful bid to host the Commonwealth games in 2014.

Photo of Elizabeth Smith Elizabeth Smith Conservative 3:36 pm, 30th May 2007

When it comes to the creation of wealth in this country, no policy could be more important than the education of our young people. It is a theme that is close to my heart and on which I am grateful to make my first speech in the chamber.

There is no doubt that Scottish education can rightly claim many distinguished achievements in its long history, for which we have been admired throughout the world. However, the Parliament should be in no doubt about the concern among today's employers that in some areas we are failing to live up to that reputation, given our inability to produce a workforce that is adequately skilled to cope with the demands of the 21st century.

In particular, it is deeply worrying that the CBI, in its recent manifesto for the elections, highlighted the fact that it is now commonplace for the Scottish business community to spend an unacceptably high percentage of its £2 billion annual training budget on what is, in effect, remedial education—I use its term—rather than on new skills and on ensuring that Scotland is better able to compete on the international stage. The reality is that the basic levels of reading, writing and arithmetic of too many of our school leavers is simply not good enough, and is often accompanied by a lack of awareness and understanding of the world of enterprise.

In my view, three things need to happen, and they must be an urgent priority for this session of Parliament. First, we must get away from the policies that are driven by artificial targets and focus on quantitative rather than qualitative measurements of academic standards. Governments that insist on dictating the numbers of students who will end up with graduate-level qualifications do no service to our young people or our economy as a whole. University entrance should be based on merit alone, certainly not on some pie-in-the-sky percentage that is dreamt up by civil servants or ministers.

Secondly, there is the related need to provide youngsters who wish to pursue a vocation or apprenticeship rather than a degree with the facility to do so from the age of 14. Far too many Scottish pupils feel trapped in school, where the pursuit of an academic career is of neither interest nor relevance to their aspirations. Subsequently, too many of them get into trouble. They become disaffected and lose confidence and, most important, lose out on the opportunity to earn an income and the adult responsibilities that go with it. There are sufficient problems with discipline in schools already without our adding to them with more disaffected young people who do not want to be there.

Thirdly, there needs to be much greater consistency in educational standards throughout Scotland—a problem identified by Her Majesty's chief inspector of education as one of the main reasons why too many young people are leaving school short of the basic skills that are required in any workplace. Local government must play its part in responding to that concern and it must refuse to accept the lowest common denominator when it comes to education policy.

Scotland was once renowned for its industry and enterprise. It can be again, but to achieve that, tough decisions will have to be made in the Parliament, especially those that focus on the pursuit of excellence rather than on misplaced and expensive political correctness, which rewards too many of our youngsters with nothing other than mediocrity and negativity.

Photo of Stuart McMillan Stuart McMillan Scottish National Party 3:40 pm, 30th May 2007

I speak today as the first member of my family to have entered the murky world of politics. Thankfully, they are still talking to me. The support that I have received from my family and friends has been steadfast, and for that I will be eternally grateful. My only sadness is that my father is no longer with us to see me making my maiden speech.

The debate on whether Scotland should be independent will continue even after independence has been achieved. I welcome an honest and open debate about Scottish independence. However, today's debate is about Scotland being wealthier and fairer.

I want to highlight issues that could make Scotland a wealthier and fairer nation for everyone. Scotland's devolved status clearly limits the improvements that we can make. However, people should not doubt that the new Scottish Government will continue to improve the lives of the people of Scotland. Today's debate should be welcomed by everyone in this Parliament.

I stay in Inverclyde, and I am sure that the 1,700 small businesses in the area would welcome the introduction of the small business bonus scheme, under which 1,300 small businesses in the area would pay no rates at all and the other 400 would pay less than they currently do. That would be a massive boost to those companies and the local economy. If those savings were reinvested by those companies, as some of them undoubtedly would be, how many more jobs and opportunities could be created?

Being wealthier and fairer covers many aspects of life, not just small business. A fairer method of paying for local services, with the scrapping of the unfair council tax and its replacement by a local income tax, will also improve the lives of many people. I am sure that that will be debated long after today's debate is over.

Education is a third and extremely important aspect of being wealthier and fairer. Wealth does not necessarily mean only financial benefits. A wealthy nation is a well-educated nation. The new Scottish Government must ensure that all children have access to a world-class education system. An education system that offers boundless opportunities for every child entering the school gates will repay Scotland a thousandfold. I am delighted to say that, in Scotland, I am not alone in that belief.

Given that that is the case, I must highlight an issue that is of great importance to the community in which I live. The previous Liberal Democrat-run local authority proposed plans to invest in the fabric of Inverclyde schools. I am sure that I am correct when I say that most people were happy that those plans were produced, as Inverclyde schools had been bereft of funding for many years because of the decisions of the previous administration. However, the plans have proved to be explosive, not only because of the public-private partnership/private finance initiative funding element, but because of the reduction in the number of schools from eight to five. The proposals also mean that the new schools will have fewer facilities than the schools they replace and that the largest school will be built on the smallest site. Further, costs have risen from £80 million to £200 million. As if that is not bad enough, I must also point out that the inability of the new schools to cope with their school rolls will result in secondary school pupils being educated in huts.

I am sure that members agree that the points that I have just highlighted—and they are only the tip of the iceberg—are disappointing and require further scrutiny before the plans are accepted as being the way forward. It is, therefore, astounding that the previous Labour and Liberal Democrat Scottish Executive agreed to the proposals in April 2006. Public opinion is still massively against the proposals, and it is incumbent on the new council to engineer new proposals. It is also incumbent on MSPs representing Inverclyde to highlight the failings of the proposals to the new Scottish Government ministers.

Scotland needs a wealthier and fairer way forward for everyone. The damning statistics from Inverclyde prove why that is vital for future generations: 39 per cent of the Inverclyde population is economically inactive; 17 per cent of the working-age population claims income support; 22 per cent of people have a long-term illness, health problem or disability; and 21 per cent of children live in a household in which no one is in employment. Further, in 2001, 38 per cent of adults had no qualifications.

Scotland has a long way to go to improve the lives of everyone who lives here. Areas such as Inverclyde can only benefit from a new approach and new policies. I am sure that the new Scottish Government will act accordingly and will step up to the mark to make Scotland wealthier and fairer.

Photo of David Whitton David Whitton Labour 3:45 pm, 30th May 2007

In addressing the subjects of wealth and fairness in my first speech, it is important to put into context what they mean in the constituency of Strathkelvin and Bearsden, which I have the privilege to represent.

I am not sure where Mr Brownlee lives, but for many people in my area life has been good under Labour in the past 10 years. Of Scotland's 32 local authorities, the East Dunbartonshire Council area is the least deprived. The following statistics refer to that council area, which includes my Scottish Parliament seat. Our local population is just over 105,000. Some 83 per cent of the working age population are in employment, which is significantly above the Scottish average of 75 per cent, and employment in the area has grown by 13 per cent since 1994. Claimant count unemployment is 1.5 per cent, which is lower than for Scotland as a whole. Life expectancy is almost 80 for women and 76 for men.

However, is that the whole picture? As elsewhere in Scotland, there are parts of the constituency where poverty is a problem, where a child's life choices and life chances are not as good as those of others, and where people struggle to make ends meet. Those are areas such as Hillhead in Kirkintilloch, Twechar and Auchinairn. It is bad enough to be poor when all around are in the same circumstance, but it is soul-destroying to be poor and to live in an area surrounded by affluence. That is why I am committed to campaigning for social justice, not just for my constituents but for anyone else living in Scotland who is denied an equal opportunity to make something of themselves.

That is one thing that I learned from working alongside the Parliament's first First Minister, Donald Dewar. Although he was from a privileged middle-class background, Donald was passionate about improving the circumstances of those whom he represented in Glasgow Anniesland, which contains the Drumchapel housing estate where life expectancy for men and women is around 10 years shorter than for those in my constituency.

That is why I listened carefully when our new First Minister said last week that the second part of his economic priority was

"not just to grow the Scottish economy but to allow all of our citizens to benefit from the wealth."

We in Labour were already doing that in the last session of Parliament, and I welcome the fact that the new Government wants to continue our good work. With employment levels at a record high and unemployment at a record low in Scotland, it will do well to match our record of achievement. Be that as it may, the First Minister may be surprised to hear it, but he will have my full support in trying to achieve his goal.

The First Minister went on to say that "Economic regeneration may not be achieved in the lifetime of the Parliament"—[Official Report, 23 May 2007; c 61.], but in Strathkelvin and Bearsden a real start has been made thanks to the community regeneration fund that supports regeneration outcome agreements through community planning partnerships. I have already mentioned some of the areas of urban deprivation in the constituency, and the ROAs focus on two of them—Hillhead in Kirkintilloch and Twechar village. Both were identified in 2004 as among the 15 per cent most deprived areas in Scotland.

To help local people to do something to help themselves, the previous Scottish Executive committed £150 million for community regeneration work. Almost £300,000 was committed to projects in East Dunbartonshire. The investment—a three-year programme—had as its focuses support for targeted regeneration activity, support for people-based regeneration and improving the understanding of regeneration activity. In both Hillhead and Twechar, the need for jobs and training was identified, alongside physical projects such as the building of new housing and community facilities. Transport was another key feature. The community transport project helped to develop links with existing transport providers, both private and public, to develop a more effective service in areas with low car ownership—the two areas in question suffer from that.

Such has been the success in Twechar in particular that it was lifted out of the 15 per cent most deprived areas when the new Scottish index was published last year—money well spent. However, with that small success there comes a problem, as Twechar may not now be eligible for future funding, and in any case the original ROAs were for only three years and run out next year. If the new Government is to be fair in helping those who are without wealth to create some, I urge the minister or his deputy to examine urgently the current community regeneration fund allocation.

Planning for such community ventures relies on a sensible timeframe. The people in Hillhead and Twechar demonstrate that, given the right support, they can bring life back to their communities. Another commitment to a three or five-year programme would make all the difference. If the cabinet secretary or his deputy would care to come and see the area for themselves the next time one of them is on a whistle-stop tour of Scotland, I would be more than happy to arrange a visit.

I pay tribute to my predecessor in Strathkelvin and Bearsden, Dr Jean Turner. She made her own little bit of history by being elected as a health campaigner who was protesting at plans to reorganise the medical map of Glasgow and the effect on Stobhill hospital, where £100 million is being spent on a new day hospital, thanks to the former Executive. I may have taken the seat from her, but health issues and the fate of hospitals remain on the political agenda, and her part in ensuring that should be acknowledged.

Strathkelvin and Bearsden has a long history of protest. The Romans were among our first economic migrants. They arrived in AD143 and built the Antonine wall to keep protesters out. The name of my home-town, Kirkintilloch, derives from the Celtic "Caerpentaloch", and means the fort at the head of the ridge. It refers to a Roman fort in what is now Peel Park, which is a mere 400yd or so from the street where I live.

In the Strathkelvin and Bearsden of the 21st century, the Antonine is still there, but it is now the name of a pub at Townhead on the High Street, where the only battle involving the Celts—I believe that it is now pronounced "selts", not "kelts"—is on television in a football match. The Romans would certainly be pleased to settle in the Strathkelvin and Bearsden of today. However, important issues face the constituency. How to bring wealth, fairness and social justice to areas that need them is at the top of my priority list, and I hope that I can persuade the minister that it should be at the top of his list, too.

We in Labour never forget that we are the party of the people. We are the party of social justice. Another great Labour leader, the late John Smith, who once represented part of my constituency at Westminster, said that the purpose of politics is to serve. I intend to do my best to serve the people of Strathkelvin and Bearsden in this Parliament.

Photo of Hugh O'Donnell Hugh O'Donnell Liberal Democrat 3:52 pm, 30th May 2007

I welcome the opportunity to make my maiden speech on such an important matter. I thank the Executive for bringing the issue to the Parliament, especially as it is particularly relevant to my region of Central Scotland.

I am also grateful that the Executive has chosen to make life a little easier for me as a new member by having the same cabinet secretary speak as has spoken when I have previously been in the chamber. At this rate, we will be on first-name terms by Christmas. However, I guess that a multitasking minister is appropriate, given the promise and the commitment to slim down government.

I say in fairness that, in initiating the debate, the Executive has made the connection between budgets, the economy, finance and fairness for our communities. As we all know, the priorities and the allocation of budgets dictate the Parliament's success, which the people of Scotland will watch closely.

Much that members have said has been about inputs. I will focus a little on outputs—the fairness aspect of the debate. The Executive's position would have impressed me more if it had had more substance. The rhetoric is all very well, but what constituents in Central Scotland—and throughout Scotland—want to know is what practical steps the Executive will take to improve the quality of their lives and to make their lives feel a little fairer.

Since last week, we have heard nice mouth music from the Executive about several subjects, but I am not sure whether those words amount to much more than the fairy story that we heard from Wendy Alexander last week. Until we have the Executive's solid legislative programme to consider and debate, those words will be about as believable as a fairy story.

Like many members, I am keen to hear how the minister's fine words will translate into the actions that we need to take to defeat the substantial pockets of multiple deprivation throughout Central Scotland. Not a single word have I heard from the Executive about how it will tackle the following facts about my region. Of the zones of health deprivation, 23 per cent are in Lanarkshire, which had the biggest increase in that figure in Scotland last year. Of the educationally deprived zones, 21 per cent are in North Lanarkshire. There is no doubt that picking a fight with Westminster over £23 million in attendance allowance money may be worth while, but only if the Executive wins and if we can be sure that the money will be used to improve services and not just to shore up undecided and undeclared spending plans. Perhaps then we will learn how the 16.7 per cent of the population in East Ayrshire that is income-deprived will be helped out of poverty, how North Lanarkshire will be helped to rise away from having 9 per cent of the most deprived communities in Scotland, and how the Executive will stop deprived communities throughout Scotland suffering more than twice the crime rates of more prosperous areas.

Sadly, my maiden speech could have descended into a litany of statistics to do with zones of deprivation in Central Scotland and in other parts of Scotland. Zones of deprivation, as statisticians—God, that was not easy to say—are wont to call them, are not pieces of paper or figures on someone's computer; we are talking about people's lives. I will not be satisfied until the Executive's solid plans on how it will make those lives better are brought before the chamber for us to debate.

Photo of Ian McKee Ian McKee Scottish National Party 3:56 pm, 30th May 2007

I thank the parliamentary staff and members of all parties for doing so much to help me, a new member, adjust to life at Holyrood. It is much appreciated.

The outside world has long associated the people of Scotland with two positive characteristics. We are seen as people who prize the spirit of entrepreneurship—the endeavour of individuals such as Andrew Carnegie to do well in the world through their drive and hard work. We are also associated with a strong sense of fairness—that no one should be held back or favourably advanced simply on account of their birth or social status. As Burns said:

"A Man's a Man for a' that", although I am not sure that, when he wrote

"Ye see yon birkie ca'd, a lord,

Wha struts, and stares, and a' that", he had the likes of such a modest character as George Foulkes in mind.

So it is relevant to debate a wealthier and fairer Scotland. In that context, I welcome the support that the minister confirmed for small businesses, which are the engine-room of our economy.

It is a sad fact that Scotland has, over recent years, given a less favourable impression to the outside world. Our economic growth has disappointed and there are fewer business start-ups. We lead Europe in poverty and ill-health statistics. The reason why the average Shettleston man does not worry about his pension is that he will die before he reaches pensionable age, and the gap between rich and poor is not narrowing, but getting wider.

It is not only possible to become both wealthier and fairer, it is essential. There are two main reasons for that. First, if we live in a society in which the disparity between the rich and the poor becomes very great, society itself will break down, to the disadvantage of all. Secondly, the people of Scotland are potentially our most valuable asset. If we do not help them all to reach their full potential, we will lessen the chances of all of us becoming wealthier.

I have worked most of my professional life as a general practitioner in Wester Hailes, an area of Edinburgh that is home to some of the nicest people one can hope to meet, although many live in extremely adverse conditions. I also served on the Lord Provost of Edinburgh's commission on social exclusion, which investigated social exclusion in the capital, so I will now concentrate on factors that influence fairness. Unfortunately, the total reform of the tax and benefits system, which is a major requirement of addressing unfairness, will not be the Parliament's responsibility until Scotland is an independent nation. However, today's pledge to abolish the unfair council tax is a start. Do not underestimate the cost of poverty to those who are affected by it. Poor people pay much more for their fuel, their credit, their insurance and, often, their food. Even enabling them to spend and borrow on the same terms as the rest of us would do a lot to produce a fairer society.

Most of our public institutions are utterly middle class in their orientation. For example, in the on-going debate about hospital waiting lists, almost everyone seems to have accepted that someone who has not turned up for an appointment should forfeit all sympathy and should not be able to complain about their subsequent treatment. But what if they are one of the many who have been so failed by our education system that they cannot read their appointment card or do not know how to use a calendar? What if their life is impossibly chaotic? It is often such people, whose needs are greater than others', whom we put to the back of the queue. Middle-class folk who can work the system benefit from it, even if their need is not so great. The same principle is true in education and other public services.

If we really want to produce a fairer society, we must genuinely target resources to where the need is greatest, not where the voices are louder. We must devise services that are appropriate to those who need them rather than to those who provide them, and we must support them. For example, Wester Hailes has three times the rate of mental illness that is experienced by more fortunate communities, yet the local walk-in health agency—a vital support service for those who have mental health problems—this year faces a 30 per cent cut in funding.

Change will not be easy. No one really likes change, and a redistribution of resources will meet with ferocious opposition. However, if we do not grasp this nettle, our vision of a fairer and more prosperous Scotland will never be achieved.

Photo of James Kelly James Kelly Labour 4:01 pm, 30th May 2007

I am proud to make my first speech as the newly elected Labour MSP for the Glasgow Rutherglen constituency, which covers Rutherglen, Cambuslang, Toryglen and King's Park. Like many new members, I have been bombarded with mail from helpful and interested organisations that are trying to guide me in my early days in the Parliament, urging me to take up certain causes. However, the cause that is closest to my heart is to represent my constituents with diligence and a good conscience, working on behalf of all my constituents, not just those who voted for me.

I come to the chamber fired with a belief in social justice and a belief in the need for a strong Scottish economy that will provide good quality jobs and a platform from which people throughout Scotland can move forward. The areas that today's debate covers, under the heading "Wealthier and Fairer", are relevant to my constituency, where good progress has been made in recent years to build wealth and create more fairness. Since the opening of the Scottish Parliament in 1999, 216,000 extra jobs have been created and we have seen the introduction of the minimum wage. In 1997, 85,000 people were earning less than £2.50 an hour, yet all those people have now been lifted out of poverty. Those measures—which were introduced by the UK Government and backed up by the then Scottish Executive—have done a lot to build the Scottish economy and to create wealth and fairness.

Another example of driving the economy forward that will affect my constituency is the M74 project. That is a key driver that will create an estimated 12,000 jobs throughout Glasgow and the West of Scotland. I note the cabinet secretary's announcement of a review of transport projects, and I hope that the M74 project will not be affected.

In considering the big issues in wealth and fairness, the growth of the Scottish economy is the one that sticks out. The financial services sector, which supports 108,000 jobs directly and 90,000 jobs indirectly, has achieved growth of 36 per cent in the past five years and is still growing. The new Administration that has taken power should note that any sense of instability or unpredictability would undermine that growth, particularly since much of that business is generated from outwith Scotland.

I firmly believe that we need to move forward in the 21st century by trying to create full employment. From that point of view, I support the creation of a full employment agency tasked with moving Scotland towards full employment and creating jobs for all.

It is important that we tie that in with education. We need a strong emphasis on science and on languages. Scotland has one scientist for every 100 people. That is a proud tradition on which we should build. However, we must not forget those parts of our society and country that have not moved forward in recent years. We must legislate to help disadvantaged young people and do what we can to improve those who fall into the NEET category. I believe that raising the school leaving age to 18 and the introduction of skills academies would do something in that regard.

An international perspective is also important. From that point of view, the Executive should continue to encourage fair trade so that we support enterprise and fairness not just in our country, but throughout the international arena. In that regard, I welcome the campaign to secure Fairtrade town status for Cambuslang.

I believe that there are some flaws in the SNP's plans, not least its plan for a local income tax. Such a tax would raise the tax burden, which would be

"naive in a knowledge economy".

Those are not my words, but those of the SNP's then enterprise spokesman, Jim Mather.

Some of the Executive's thinking around abolishing bridge tolls and not committing to new trams is confused. No amount of sprinkling fiscal fairy dust can iron out those problems.

I believe that the way forward is to create a fair and wealthy Scotland. This is the country that invented the television through John Logie Baird and the telephone through Alexander Graham Bell. Let us in the 21st century build an arena for trail-blazers like our forefathers Bell and Baird. Let us make this chamber an engine room for the politics of progress. In that regard, the Labour Party's priority will be to blaze the trail for policies that will create a successful Scotland where the economy flourishes hand in hand with fairness and justice.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 4:08 pm, 30th May 2007

I congratulate all new members who are making their maiden speeches today. The speeches have been impressive from all parts of the chamber. I recall undertaking, with nerves, a similar burden four years ago, so I congratulate them all and wish them well in the coming parliamentary session.

I am pleased that this, my first speech in the new session, should be on education, skills, training and learning. Our economy will not function or grow without a supply of educated, skilled, enterprising and entrepreneurial workers. Our public services will not provide the level of service that we expect and work towards without a qualified, highly trained and motivated workforce. In short, we cannot have a sustainable and growing economy or efficient public services without an ever increasing standard of education.

It was profoundly disappointing that only a passing reference to education was included in the First Minister's statement on the priorities for Government. His half-hour statement included four sections on Scotland's international position, but not a single section on education, skills or training. It contained three sections on carbon capture, but not one on ensuring that we have the right direction and drive for higher and further education and that our schools are working with our colleges. It is also disappointing that there is a paucity of focus on this crucial issue in the SNP's manifesto.

I am glad that the Cabinet Secretary for Education and Lifelong Learning will wind up the debate, but this is the second debate in two weeks on the subject of efficient public services, reorganisation and structure. Over the coming weeks we will have debates on rural development, bridge tolls, justice, accident and emergency services and sex offenders. All are valid and important subjects, but it would be helpful to debate the issue that is core to the future success of Scotland and should be the driving ambition of the new Government—education, learning and skills. The new Cabinet Secretary for Education and Lifelong Learning says that that is coming. I am glad that that is the case and hope that we will soon have the opportunity to debate the issue.

It has been an honour to serve the people of Tweeddale, Ettrick and Lauderdale in the Parliament, and I am privileged to have been re-elected to serve my constituents for a further four years. One of the great joys of my first term was working with students, the local community, Heriot-Watt University and Borders College in the successful campaign for the retention of the Netherdale campus in Galashiels and for its development into what will become a world-class learning centre. Effectively, it will be a university college of the Borders, incorporating Scotland's centre of excellence for textiles, fashion and design. I know that the Cabinet Secretary for Education and Lifelong Learning knows the campus well, having studied there. She will recognise the commitment that has been made and the great potential for rural areas to have world-class education facilities. Across Scotland our priorities for the economy cannot be only financial and structural, but must be centred on our greatest resource—our people.

Our competitors are investing in infrastructure. They create competitive tax regimes and have marketing agencies promoting their country and brands. What sets us apart from them, and must do so even more in the future, is our education system. It was disappointing that the Cabinet Secretary for Finance and Sustainable Growth devoted more time last week to saying that the reduction in ministerial salaries will net £500,000 of savings for the public purse than on giving a commitment to provide the £168 million that universities in Scotland require to ensure that they retain a competitive edge. I ask the new Cabinet Secretary for Education and Lifelong Learning to give a commitment today that that funding will be included in the spending review. She has not yet made such a commitment, but I hope that she will do so in her winding-up speech. That will be a signal that the new Government will make research and learning central to its economic strategy and to a creative economy in Scotland.

In its manifesto the SNP made two statements with regard to higher education funding. First, it said that it would end the graduate endowment, end loans to students and repay student debt. Secondly, it committed an additional £10 million to cutting-edge research. The higher education budget in Scotland is £1.9 billion; £10 million extra for research over four years is a drop in the ocean. On student finance, the SNP manifesto is opaque. I would be grateful if the Cabinet Secretary for Education and Lifelong Learning would confirm whether the proposal to clear student loan debt in Scotland extends to English graduates who studied at an English university and are now living in Scotland. Will the pledge end if a graduate resident in Scotland moves out of Scotland—will such a graduate have to repay their loans? At the start of the new term this year, students in Scotland need to know the answers to those questions and to be given a direction.

We support the ending of the graduate endowment and an increase in bursary support for students with less opportunity. We stated that in a costed manifesto, but the new Cabinet Secretary for Education and Lifelong Learning must make a clear statement on the issue. I have reread her speech of September 2006, in which she said that the annual cost of replacing the student loans scheme would be £100 million. However, she is aware that the overall burden of debt is £1.7 billion. We will be interested to see how she deals with that challenge.

We are justifiably proud of our role in further and higher education in Scotland and in the role that it plays in the economy. In October 2005 the Chinese minister of education visited Edinburgh to see the Scottish education system. He remarked then that more than 5 million students start university in China each year—equivalent to almost the whole population of this country. India, where I met Government and further education leaders at the same time as the Chinese minister was in Scotland, is on a similar scale, with similar ambitions. For us to carry on improving as the world leader in education and to improve our competitiveness we need a clear statement—not soon, but now—on what the SNP will provide for higher education. A funding commitment for our universities is expected and deserved by students, the sector and the Scottish economy.

Photo of Alex Neil Alex Neil Scottish National Party 4:14 pm, 30th May 2007

I pay tribute to all the maiden speakers from every side of the chamber—the calibre of their contributions proves that this chamber is more than equal to Westminster and indeed can surpass it—but perhaps some of them need a gentle reminder that, having made their speeches, they are supposed to wait to hear the rest of us.

I welcome John Swinney's challenge to everybody in Scotland, not just those in government, but the trade unions, the business sector, local authorities—our whole society—to try to meet the challenge of increased economic growth and the well-being that comes with it between now and 2011. I have no doubt that closing the eternal gap between the growth rate of Scotland and that of the rest of the UK is the right priority for Scotland and our people—not just to make us wealthier, but to create a fairer society.

To close the gap, we need to increase our long-term growth trend by one third. As John Swinney said, the long-term trend for the UK is 2.8 per cent whereas the long-term trend for Scotland over the past 30 years has been 2.1 per cent. That gap of 0.7 per cent might not seem a lot, but it is a lot and it represents one third of our 2.1 per cent rate to date. Closing the gap is a major challenge, but it is one that we should accept and welcome.

Photo of Wendy Alexander Wendy Alexander Labour

In the interests of clarity, will the member describe what the current gap is between UK and Scottish growth—in the most recent quarter, or indeed year?

Photo of Alex Neil Alex Neil Scottish National Party

Right across every year and every quarter from the past 30 years—

Photo of Alex Neil Alex Neil Scottish National Party

I ask the member to let me answer—this is not the caterpillar she is talking to. On most occasions when we have come close to the UK growth rate, it has been because the UK rate has decreased, not because Scotland's rate has gone up.

I accept the importance of education in the debate—I presume that that is why the Cabinet Secretary for Education and Lifelong Learning will wind up for the Executive—but we can help to close the gap with new initiatives and strategies from the new Government in three priority areas.

First, we must give higher priority to affordable housing and the expansion of the construction sector in Scotland. There are huge opportunities in the construction sector—not just in Scotland, but in preparation for the London Olympics and in many other major projects throughout the UK. There is no doubt that there is a major skills shortage in Scotland. The industry estimates that we are about 27,000 people short of the number we will need in the building trade over the next few years to meet the demands of the investment programme in the private and public sectors. One way we can close the growth gap is to take whatever action is needed to boost the construction sector and affordable housing in particular, which needs to be put much higher up the list of priorities for this Parliament in future years.

The second major priority area is youth unemployment. One of the great targets Gordon Brown set when he took office was to eliminate youth unemployment. I draw members' attention to a very informative treatise published this month by the Labour MP Frank Field, in which he points out that youth unemployment is on the rise again, that much of the money spent on programmes such as the new deal has ended up as wasted money and that the programmes have put young people on a carousel—on a scheme, off a scheme, back on a scheme—rather than equipped them with the skills they need to find permanent and fulfilling employment. Major decisions are yet to be made about the future of the careers service, the modern apprenticeship scheme, the new deal in Scotland and the challenge of NEETs. They, too, are key areas in which a big difference can be made.

The final priority is, as John Park pointed out, research and development. We are trying to be smart, successful Scotland in the knowledge economy, but one Finnish company—Nokia—spends three times as much on research and development as the whole of Scottish industry put together. Sorting out that issue and getting private sector spend on R and D up to UK levels would take us a long way towards closing the growth gap.

I make those suggestions in a constructive spirit; I believe that we are right to make growth the number 1 priority and to set the target of closing the growth gap once and for all over the next four years.

Photo of John Lamont John Lamont Conservative 4:20 pm, 30th May 2007

As this is my maiden speech, I want to express my grateful thanks to my constituents for returning me as their MSP. It is an honour and a privilege to be elected to represent the historic constituency of Roxburgh and Berwickshire, which I and other members often refer to as R and B. However, I must say that the abbreviation can give rise to some confusion among some of my younger constituents, who think that I represent American soul or hip-hop music in the Scottish Parliament.

My constituency is as diverse as it is beautiful, stretching from the North sea coast, where the Berwickshire fishing industry is based, down through the Berwickshire merse and the historic Borders towns of Duns, Coldstream, Kelso and Jedburgh, through the central Borders villages around St Boswells and southwards to Hawick and Newcastleton. I am proud to be the standard-bearer for my home area in the Scottish Parliament and I will work as hard as I can to represent the views of all my constituents, however they voted.

I also thank my predecessor, Euan Robson, for his service in the Scottish Parliament on behalf of the constituency. I wish him and his family well for the future.

The Borders has a fine tradition of parliamentary representation and political upset. At Westminster, we were represented for many years by Lord Steel of Aikwood, who became the first Presiding Officer of this Parliament, and latterly by Lord Kirkwood of Kirkhope. As members will no doubt know, neither of these noble men is of my political persuasion. To find someone who is, we need to go back to 1974, when Michael Ancram was briefly the Conservative MP for Berwickshire, and then further back, to 1965—42 years ago—to when Commander Donaldson was the last Conservative MP for the county of Roxburghshire. I am sure that some of my Liberal MSP colleagues sitting on my left hope that I will not last 42 years, but as I am the third youngest member of this Parliament and the youngest in the Conservative group, I think that time might be on my side.

I want to discuss the issue under debate—the creation of wealth—in the context of the rural economy, which is, of course, relevant to my constituency. In today's relatively comfortable urban world, it is all too easy to forget that nearly 90 per cent of Scotland's land mass is rural. Indeed, it is particularly easy to do so if one works in the central belt, where the increasing absence of green fields gives the opposite impression. However, if we think carefully about it, we can clearly see that the famous symbols of Scotland—our whisky, our salmon, Scotch beef, our tartans and wool, bagpipes and haggis—have a strong identity with traditional rural areas. Whole communities have grown up behind the celebrated status of such products and, if we do not support them, we are in danger of destroying rural communities and livelihoods.

In the Borders, the traditional industries of farming and textiles have been in decline for many years. The wages are among the lowest in Scotland, there are empty shops on every high street and economic growth is lower than average. We have been unable to attract and retain new businesses and investment. As many rural communities, including the Borders, have poor trunk roads, inadequate bus services and no direct rail links to the major financial and industrial centres of Scotland, I look forward to hearing that the new Administration will prioritise plans to upgrade the A7, the A68 and the A1, all of which are major routes through my constituency.

We also need to offer young families the services that they would expect in urban Scotland: good schools, dentists, hospitals and local shops. That is why it is unacceptable that so many people in the Borders have been unable to find a national health service dentist and that so many of our cottage and community hospitals were closed by the previous Administration. It is also why we must oppose the Westminster Government's plans to close more rural post offices.

Without proper infrastructure investment in roads, schools, hospitals, post offices and water resources—and without thinking of the basics that communities need in order to flourish—we are in danger of breaking rural communities so that they have no sense of community at all.

Overall, we need a business environment that encourages new enterprise and productivity. We welcome the SNP's manifesto commitment to improve the business environment in Scotland. We welcome especially the proposals to work with us in cutting business rates. I was pleased to hear that the new Executive will follow through on its manifesto commitments to reduce regulations and conduct a thorough review of Scottish Enterprise. My constituents and I hope that the new SNP Administration will put the rural economy at the top of its agenda for the next four years.

Again I express my thanks and gratitude to my constituents for sending me here. I promise to do everything in my power to be of service to them.

Photo of Irene Oldfather Irene Oldfather Labour 4:26 pm, 30th May 2007

First, I wish Mr Swinney well. As convener and deputy convener of the European and External Relations Committee in the previous session, we managed to achieve a great deal of consensus on some challenging issues. I hope that that augurs well for the future.

I welcome the opportunity presented by this debate to apprise the new cabinet secretary of some of the challenges and opportunities that we face in regenerating the Ayrshire economy, particularly that of North Ayrshire, and making the area wealthier and fairer.

Since the 1970s, North Ayrshire has experienced a decline in traditional industries—ICI, Garnock steel mills and Volvo—which has resulted in the area having a fragile economy, but we are making progress and gradually and incrementally moving in the right direction. Indeed, I am delighted to report to the chamber that when I checked the area's unemployment figures today—Iain Gray will be surprised by this—I found that for the first time in the lifetime of the Scottish Parliament, I believe, unemployment has dropped to below the Scottish national average. Mr Swinney is said to be a fast worker, but I do not think that even he can take the credit for that.

Photo of Irene Oldfather Irene Oldfather Labour

He can always try.

It is important to build on and sustain the initiatives that we developed in diversifying, first, from manufacturing to electronics, then from electronics to other sectors. We began that work to regenerate the local economy. I will give more detail later, but we are working on aerospace clusters at Prestwick airport and looking for niche markets in tourism. We have of course the Burns year of homecoming and a huge increase in passenger transport at Prestwick airport because of the route development fund.

The minister will understand that, given the organisational changes that he announced today, we need reassurances that the headway made this month in the stubborn unemployment figures will not be lost.

Photo of John Scott John Scott Conservative

I thank the member for giving way. She referred to Prestwick airport in my constituency. Does she agree that what would most help the Ayrshire economy would be a 20-minute rail service between Ayr and Glasgow?

Photo of Irene Oldfather Irene Oldfather Labour

Mr Scott has anticipated what I was about to say about the importance of good transport infrastructure to the Ayrshire economy. The Ayr to Glasgow rail link is certainly part of that. I am sure that he agrees that good parking provision at railway stations is also important. We have difficulties with that at some of our stations, such as Kilwinning and Irvine. I look forward to working in partnership with others to try to resolve that.

I shall say a few words about transport infrastructure and its importance to the economy of Cunninghame South. Thanks to record investment, the M77 has been upgraded, which has greatly improved connectivity for commuters from Ayrshire through to Glasgow city centre and beyond. Similarly, the upgrade of the three towns bypass has widened access to the road network for people who live, work and do business in North Ayrshire. The next, crucial, step in improving that connectivity will be the upgrading of the A737, to ensure that we have an integrated and fit for purpose road network that connects North Ayrshire to the commercial centres of Scotland. I hope that the minister can give me a commitment on that.

The minister will no doubt be aware of the importance of the route development fund and the part it has played in encouraging passenger activity through Prestwick airport. It has had a massive impact because it has given tourists access to Ayrshire—and brought the associated revenue—and because it has brought business travellers from throughout Scotland into Ayrshire. In view of the proposals to create an aerospace engineering hub, confidence in the local aerospace industry has soared. It is therefore crucial that we continue to support the route development fund. I look forward to hearing what the minister proposes to do on that.

I am too short of time to mention all the initiatives that I would like the minister to implement, but I shall say a few words about the Irvine Bay Urban Regeneration Company, which was established to provide a catalyst for further inward investment. My office has spoken today to officials at the company. The company is in its early stages. It has a management team in place, it has published an action plan and it is in the process of attracting further support, but it is looking for assurances from the new Scottish Executive that there will not be a stop-go funding approach and that there will be a long-term funding commitment.

I draw the minister's attention to the fact that the fragile Ayrshire economy will receive a further blow with the rundown of Hunterston, which could lead to thousands of job losses. I would welcome the minister's views on how strategic planning might avert that rundown undermining the progress that is being made in the Ayrshire economy.

Photo of Liam McArthur Liam McArthur Liberal Democrat 4:32 pm, 30th May 2007

I, too, congratulate all those who have made their maiden speeches—I empathise with them. I thought that they all conducted themselves extremely well. I reassure John Lamont that age discrimination does not feature when we choose which constituencies to target.

We have heard much today, and over recent weeks, about the new politics in Scotland. Those of us who are of a betting persuasion—possibly even the First Minister himself—could be running a sweepstake on how many times the new politics will be referred to in any given debate or at question time. So far, establishing precisely what the new politics will deliver has eluded us, although it appears to have resulted in John Swinney earning the nickname "midwife of maiden speeches". By the looks of things, it is not just the Cabinet that is being slimmed down; the new politics appears to have ushered in debates without motions. I hope that that is not a precursor to parliamentary questions without answers. I suppose we will have to wait until midday tomorrow to find out.

As a number of members have said, no one can argue with the aspiration of creating a Scotland that is wealthier and fairer. On the basis of today's debate, I dare say that there will even be cross-party agreement on many of the ways in which we go about achieving that. Certainly, the detail that the cabinet secretary was able to provide on his intentions was welcome. I appreciate that the proposals will take some time to develop, but welcome the cabinet secretary's invitation to the Liberal Democrats and others to work on taking that detail forward.

As Tavish Scott said, the Liberal Democrats are proud of our record in government, in which growing the economy sustainably over the long term was established as the number 1 priority. That focused record investment on education, on skills and training, on transport and electronic infrastructure—I make a passing reference to broadband, which I do not think has been mentioned by other members—on reducing business rates and on encouraging business growth. It is no coincidence that we have seen sustained growth in our gross domestic product figures over recent years—often, as Wendy Alexander made clear, at higher levels than historic trends.

It is also no coincidence—as we have heard on a number of occasions from a number of members—that employment has been at historically high levels and unemployment has been at historically low levels. I note Alex Neil's point about the construction sector, which has performed well and enjoyed significant growth. The modern apprenticeships scheme has been successful in achieving the 30,000 target. It is clear that there are issues about quality, about maintaining that level and about pressing on, but it would be wrong to draw a veil over that success.

Education featured in the comments of Jeremy Purvis, Elizabeth Smith and others. More can be done, and skills, research and cutting-edge technologies will remain key to achieving our objectives in that area. It is therefore disappointing that the SNP Government has decoupled enterprise from lifelong learning in the structure of government and, as Jeremy Purvis said, has failed to make a commitment to invest in universities and colleges. However, I look forward to hearing what Fiona Hyslop says in her winding-up speech.

Historically, Scotland has not had the right levels of investment in research and development. Alex Neil made that point well. Traditionally, we have performed very poorly. The Liberal Democrats believe that an investment and innovation agency should be established. Such an agency would bring together current R and D, proof of concept, incubator, venture capital and equity support from the Government and it would follow best practice in places such as Finland. I note that John Swinney has drawn attention to the Liberal Democrats' track record of developing ideas in that area. I give a commitment to work with him in taking them forward.

World-class infrastructure and transport are also crucial. As we heard, the SNP's stated intention to abandon key transport projects such as trams and the Edinburgh airport rail link will be devastating not just to the economy of Edinburgh but, given the city's importance, to the overall Scottish economy.

We welcome what the cabinet secretary said about lower business rates. Ian McKee, Derek Brownlee and Michael Matheson alluded to the importance of reducing business rates still further. That is important to the economy as a whole, but particularly to smaller towns. I think that ministers will enjoy widespread support for the measure, not just in the Parliament but beyond it.

There has been a lot of debate on Scottish Enterprise. I say simply that Scottish Enterprise—despite its problems—Highlands and Islands Enterprise and Scottish Development International have all played important roles in delivering Scotland's economic performance. Indeed, they are seen by our international competitors as case studies in the roles that they perform—HIE in delivering economic development in dispersed rural areas, and SDI in promoting and sustaining inward investment and helping domestic companies to internationalise. The fairness component was to some extent the Cinderella of the debate. As with the cabinet secretary's portfolio, the debate may have bitten off more than it could chew, but I acknowledge the thoughtful contributions of Bob Doris, John Park and a couple of others who focused on fairness.

I am sure that John Swinney is aware that he will get our support in taking forward the detail of his proposals on the council tax when they come before the chamber.

Despite the lack of a motion, the debate has been constructive and worth while. The cabinet secretary set out his thinking on a number of areas and members of all parties will be keen to take up the invitation to work on the detail. However, the Government remains silent about its intentions in too many areas, not least transport. I am cautious about adding to Mr Swinney's workload by inviting him to lead yet another debate—although there are probably a few maiden speeches that he has not yet heard—but I encourage him and his ministerial team to provide clarity on that point during the coming weeks.

Photo of Gavin Brown Gavin Brown Conservative 4:39 pm, 30th May 2007

Let us put some emotion and passion into the debate. Whatever happens in the Parliament during the next four years, there is one message that has to go out loud and clear. It is a message that comes out from the Scottish Conservatives and a message that must come out from the Executive and the Parliament—Scotland is open for business.

We welcome some of the ideas that Mr Swinney and his team have put forward. As Derek Brownlee suggested, we agree with the idea of cutting and reducing business rates the length and breadth of the country and we agree with the idea of cutting much of the red tape and regulation that hold business back. However, we disagree with the Executive's transport policy, which we think needs to be developed much more quickly and fully. The transport policy is all over the place. We also disagree with the idea of a local income tax. Wendy Alexander rightly said that such a tax would put a greater burden on our businesses and would make life more difficult for hard-working families throughout the country.

An SNP member—I did not catch who—said that he hoped that we would not let our pensioners down. I would like to put forward one of the proposals from the Conservative manifesto: a 50 per cent cut in council tax for pensioners throughout Scotland. That sentiment was echoed by Alex Neil—I thank him for his comments about that last week.

Photo of Alex Neil Alex Neil Scottish National Party

I have never argued for a 50 per cent cut.

Photo of Gavin Brown Gavin Brown Conservative

I am afraid that the video camera does not lie.

We think that the cut should be implemented right away. Other members found it difficult to argue against that proposal. The SNP has admitted that it will take at least two years for it to do anything on local income tax. In the interim, will it commit to supporting us in giving pensioners a 50 per cent discount?

We welcome the debate for a number of reasons. Almost everything that we do in this country depends on the economy. We must not forget that jobs, the fulfilment of our people and the money that we spend on public services such as our schools, hospitals and police forces depend on the wealth that is created by our small, medium and large businesses.

We often see in the newspapers politicians visiting places where the money is spent, but we rarely see politicians visiting the places where the wealth is created. There needs to be much more integration between the Parliament and the businesses that create the wealth day in, day out.

Another reason, which has not been mentioned, why the economy is so crucial is the global competition that we face, which will only get fiercer. Other powerhouses across Europe and the rest of the world are investing in education and are making it easier to do business in their country.

We must follow suit, otherwise not only will we not keep up, but we will fall further and further behind.

I will address a couple of points that have been made with which I disagree. I was disappointed to hear that Labour thinks that when we cut business rates the money that is saved ought to be tied into some sort of research and development fund. It ought to be up to the companies to decide what they do when their business rates are cut. We should not impose on them how they ought to spend any money that is saved, because businesses can spend money far more wisely than we can.

I also disagree with a comment made by Mr Tavish Scott. He outlined an excellent innovation at the University of Dundee, but I find it difficult to accept that such innovation could not happen in the future simply because two areas are in different portfolios. There ought to be some kind of moratorium on discussing the size of John Swinney's portfolio—at least for the next couple of weeks. We should see how things develop before we comment on the matter further.

On the specific proposals, we agree entirely with the cut in business rates, which could help at least 120,000 companies throughout Scotland. As John Lamont said, it could help to get back into business some of the empty shops in the high street. We are very much in favour of that proposal.

As Derek Brownlee said, we are also in favour of cutting red tape and having fewer regulations. I appreciated the intervention on Mr Brownlee and what was said about consideration being given to such mechanisms as sunset clauses on regulations. We should also have a presumption against the gold plating of European regulations. We should ask every time whether a regulation makes it easier or more difficult to do business in Scotland.

We do not like the transport policies that we have heard so far. No matter how strong our economy is and no matter how developed we have become technologically, goods, services and people have to move from A to B. We need to have a clear and consistent transport policy in place. I think that the issue was debated at length in the previous session. One of the biggest gripes of business in Scotland and the rest of the UK is the stop-start mentality of funding for public transport projects. We need to end that mentality.

My colleague Liz Smith talked about the investment that we need to make in education to compete on a global level, which John Park and Jeremy Purvis also mentioned. There is a lack of alignment between people's educational experiences and the skills that they need when they get into the workplace to try to make a contribution.

All that is underpinned by the need for a slight culture shift to a more positive attitude towards business and making life easier for business. Not only does that need to happen at the Executive level, it needs to cascade down to local government and other agencies. It is time to champion the values of enterprise and for us all to say that Scotland is open for business.

Photo of Iain Gray Iain Gray Labour 4:45 pm, 30th May 2007

I add my congratulations to all those members who made maiden speeches today. There were literally too many to mention—there were nine by my count—and their thoughtful but pretty diverse contributions can reassure us that we will not spend all our time on the mushy ground of consensus in the debates that are to come.

This was a good choice for a debate in which to make a maiden speech because, of all the subject debates that the Executive has initiated, it goes to the heart of what matters most to Scotland. Its title, "Wealthier and Fairer", is perhaps a bit like motherhood and apple pie—as Tavish Scott said, who would be against it?—but it takes us to the greatest challenge that we face, which is how we can continue to grow our economy in the face of globalisation and increasing competition from the emerging economies of the world while sustaining and increasing prosperity and opportunity for all.

We cannot do that by throwing up barriers to trade because, in every part of the world, those barriers are coming down. In every part of the world, developing economies are revealing themselves as opportunity markets for our goods and services, not simply threats to our economic future. We cannot do it by competing on low wages, nor should we even consider doing so. We certainly cannot do it with fiscal fairy dust. We can succeed in the face of the challenge only by supporting, investing in and harnessing the ideas, imagination and skills of Scotland's people and creating the conditions in which those ideas and skills can flourish fully.

Throughout the debate, there has been general agreement across the chamber that we need to pursue that strategy, so I will address a couple of the specifics. I reiterate that, as Wendy Alexander made clear, we welcome the reduction in business rates that is proposed for small businesses and business start-ups. Indeed, we were committed to extending the existing small business rate relief scheme to the tune of £30 million. However, although rate reduction was presented as a panacea for town centres on several occasions in the debate, we believe that additional resources are required to take action in our town centres.

We think—and here I disagree with Gavin Brown—that it is a missed opportunity not to use business rate relief to create virtuous cycles by incentivising research and development, increasing training and raising energy efficiency. That would provide a link with the Government's stated objectives on wealth creation, fairness and energy use. It would be a tax cut with several purposes.

Photo of Alex Neil Alex Neil Scottish National Party

I ask Iain Gray to clarify Labour's policy. Would any reduction on business rates be dependent on a business undertaking R and D or saving energy, or would the Labour Party have a reduction in business rates without those conditions?

Photo of Iain Gray Iain Gray Labour

Our commitment to an extension of the existing rate relief scheme was clear, but we were also committed to using such a business tax reduction to incentivise the things that I described.

There is a policy contradiction at the heart of the SNP's tax plans. Although it trumpets the reduction in tax on business, it plans to raise taxation on the income that is earned by those who work in those businesses and who make them succeed. We know that the Minister for Enterprise, Energy and Tourism believes that that is "naive"; to us, it seems simply perverse.

A number of members pointed out that the link between today's two topics of wealth and fairness is jobs—higher-quality, higher-skill and higher-return jobs. Education and skills are the engines of Scotland's economic growth. Building the capacity of our people and harnessing their endeavour will secure our future. That approach is demonstrably correct and it is working. Scotland is already the highest-skilled part of the UK. In 1997, 23 per cent of the workforce was educated to degree level; now the figure is 31 per cent. Ten years ago, 69 per cent of the workforce qualified to level 2; now the figure is 77 per cent. In 1997, there were a couple of thousand apprenticeships in Scotland; now there are 34,000.

People's skills have been harnessed. There are 250,000 more Scots in work now than there were 10 years ago, with many more graduates staying in Scotland and working and creating wealth here. After generations of decline, Scotland's population is growing again. We have seen the results of that. Output from the financial services sector is up by 90 per cent and income from tourism, which did not really get a mention in the debate, has risen by 20 per cent in five years following a period of stagnation. Life sciences now contribute £1 billion to our economy. There has been a 12 per cent increase in the number of innovation-active Scottish companies.

None of that happened by accident. It happened through investment in skills, education, innovation and initiatives such as the fresh talent initiative and the new deal, which have unleashed the talent and imagination of our people. Like Jeremy Purvis, I trust and hope that the fact that the Cabinet Secretary for Education and Lifelong Learning is closing the debate means that the Government agrees with that. I hope that she will present to us the Government's proposals for developing the area of skills. It is an area that needs constant attention and where we need constantly to raise our game. We cannot pause now while we strategise or wait to appoint advisers.

If we were on the Government benches, we would be debating concrete proposals today to build Scotland's skills base, to increase opportunity and to get more Scots into work. Subject debates such as this one are okay, but it is a full employment agency that would drive economic growth, given the political will to make that aspiration a reality. That would mean 15,000 more apprenticeships, or skills academies in every part of Scotland. That could widen opportunities, particularly for those who do not have them now, and it could raise—in quality and esteem—the skills that both small and large Scottish businesses need now. Even Liz Smith agreed with that in some way.

We ask ministers to give us a vote on those commitments, and we will support them. We can win that vote, and we can get behind the potential of our people. We can let Scotland's people make Scotland wealthier and fairer. It's time—decision time.

Photo of Alex Fergusson Alex Fergusson None

Not quite, in fact—but it will be soon.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 4:53 pm, 30th May 2007

I, too, congratulate all those who have made their first speeches in the chamber today—like Iain Gray, I counted nine. Without exception, each of them was thoughtful and sincere. I wish all our new MSPs well. Each of them will bring a new flavour and tone to the work of the Parliament, together with their range of different experiences.

The Government's central purpose is to focus public services on creating a more successful country, with opportunities for all Scotland to flourish through increasing sustainable economic growth. Scotland can be wealthier and fairer; it can also be smarter. Both those Government objectives need to be championed and they both need to be developed in their own right, with their connections promoted, too. Those objectives are shared among all the cabinet secretaries.

As Cabinet Secretary for Education and Lifelong Learning, I will take an holistic approach to early education, supporting children and families, improving learning in schools, developing skills for work and promoting excellent innovation, science and research in our colleges and universities. It is about learning for life and learning throughout life.

I would say in response to John Park that my role is to support the people who will deliver the competitiveness that we seek for a wealthier, fairer country: the pupils, researchers, teachers, academics, apprentices, trainees, investors, innovators and scientists.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I ask the member to let me continue. I will comment now on the wealthier agenda. As many members have done, I endorse John Swinney's vision of a new economic approach. Lower business tax, deregulation, improved infrastructure and a more focused enterprise strategy are key building blocks for a more successful Scotland.

Photo of Johann Lamont Johann Lamont Labour

I am sure that we all agree on the importance of increased growth and shared prosperity. We heard today from the Equal Opportunities Commission about the experience of women in the workforce and of classroom assistants in particular. Will the minister ensure that, whatever the enterprise network looks like, it will understand the structural inequality that exists and will work to support people, given that a critical part of its role is supporting people into employment?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I acknowledge that Johann Lamont and other women MSPs have championed equal opportunities, which have been at the heart of the Parliament. As a woman in the new Government, I pledge to continue that work.

I turn to some of the issues that were raised in the debate. Elizabeth Smith and others mentioned vocational education. The debate is about how we drive it forward for all and whether it is just for some or whether we have a two-tier system. The Parliament will hear that debate, on which I certainly have views.

Wendy Alexander said in her contradictory speech that enterprise policy was not about structure but about strategy. Iain Gray then said that it was not about strategy but about structure. Wendy Alexander proceeded to focus on the SNP structure of Government, whereby we have given lead responsibility for lifelong learning to a cabinet secretary, while the previous Executive gave it to a deputy minister—the late lamented Allan Wilson.

We heard Labour and Conservative support for cutting business rates. We heard from Derek Brownlee about the impact on town centres. Iain Gray might want to ask the former First Minister to reflect on Labour's achievements in promoting the town centres of Lanarkshire. I was at the Bathgate traders forum last night, which supported and applauded the prospect of business rate reductions to help the town centres of West Lothian.

Many members mentioned the education agenda. There is increasing evidence of the importance of the contribution that early years services can make in improving outcomes in later life. The best start is an early start. This Administration is committed to making early years provision and early intervention a key plank in our wealthier and fairer Scotland.

Economic growth is a critical objective, but it is the characteristics of growth that will underpin success. On the fairness agenda, we heard from members throughout the chamber about what the characteristics of growth should be. For this Government, Scottish economic growth will have the characteristic of solidarity, with overall wealth to increase the proportion of national wealth for the poorest in our society. We heard about that from Bob Doris and David Whitton. There has to be cohesion for the wealth of every region to increase and for the 10 per cent GDP disparity per head between the richest and poorest parts of Scotland to be addressed and reduced. Those points were made by John Lamont and Hugh O'Donnell. We will also have the measure of sustainability.

I return to the role of lifelong learning. Learning has to reflect an increasingly complex world. It has to be relevant, exciting and inspirational throughout the journey that children make from the age of three to 18. We want to improve the opportunities for education, employment and training for all young people, which is the point that Alex Neil made. We want all young people to become responsible citizens, effective contributors, successful learners and confident individuals. That is one of the policies that Peter Peacock promoted when he was Minister for Education and Young People. I pledge to continue with it and in doing so I hope that I will receive the support of many members.

Jeremy Purvis talked about science, research, excellence and innovation. We need to continue our investment in further and higher education institutions to continue to deliver a highly skilled workforce for the future. Investment decisions are part of the comprehensive spending review and the importance of the continued excellence and competitiveness of Scottish universities will be reflected in those discussions.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I need to move on. I am conscious of time.

We need to encourage science graduates and embrace a research base that attracts world-class scientists from around the world. We have a particularly vibrant life science and medical science research community, which we need to support. We need to make a step change in translating the output of research into sustainable wealth creation by tackling both the business demand and research supply aspects.

Scotland is and has historically been a learning nation. That is exemplified by our long-established commitment to universal school provision, our ancient universities and our disproportionately large contribution to industry, invention, literature, philosophy, commerce, philanthropy and politics, all of which have shaped the world that we know today. We need to maintain that for the future. Scotland, the learning nation of the past, will develop into a learning nation for the future, inspiring a competitive, sustainable economy for a wealthier and fairer Scotland.