Budget (Scotland) (No 3) Bill

– in the Scottish Parliament at 2:37 pm on 4 February 2009.

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Photo of Alex Fergusson Alex Fergusson None 2:37, 4 February 2009

I reconvene today's meeting of Parliament—I am sorry, but it has to be done—for consideration of stage 3 of the bill. The next item of business is a debate on motion S3M-3380, in the name of John Swinney, that the Budget (Scotland) (No 3) Bill be passed. The question on the motion will be put at decision time.

I remind members that Presiding Officers will not give any one-minute warnings. We are tight for time, so I urge all members to stick to the time limits that they are given.

Photo of John Swinney John Swinney Scottish National Party 2:38, 4 February 2009

At decision time last Wednesday, there could not have been one member of this Parliament who believed that the institution was in a good place; some people will never come to terms with that fact. In the intervening seven days, we have seen real and substantial co-operation across the political spectrum to ensure that Parliament fulfils one of its central requirements, which is to put in place a budget that adequately funds public services and supports the development of the Scottish economy. That requirement could not be more relevant or of greater significance at this stage in the development of our country.

As people face up to uncertainties about their employment or their ability to support their mortgage or the future of their business, they expect Parliament to fulfil its obligation to them and to take wise decisions about the future. The people of Scotland expect politicians of all parties to reach mature agreement on an effective budget that meets the nation's needs in these challenging economic times.

This afternoon, as a consequence of productive discussion over the past week, I am certain that Parliament will fulfil its obligation to the public. I express the Government's appreciation for the constructive attitude that all the parties that are represented in the Parliament have taken over the past few days. We have listened hard to what other parties have said and have been flexible when we have been able to be.

The budget bill as introduced had at its core the need to deliver real action on the economy, but our discussions with others have without doubt strengthened the capability of the budget to deliver on that aim. Of course, our dialogue with other parties has been longstanding. Labour's 15-point plan included a number of practical and constructive suggestions to help the economy that the Government has taken forward, such as on the manufacturing advisory service and on supporting credit unions. The Conservatives have argued for more support to encourage new entrants into business. The Liberal Democrats have argued for a strategic approach to key economic and financial issues. The Greens have made a strong case for a home insulation programme. We want to take forward that input in a constructive way.

The total Scottish budget is in the order of £33 billion. In the budget, we seek to boost public spending, to bring forward capital projects so that we can get construction workers and apprentices into jobs and to help businesses and families wherever we can. Through our spending, we will continue to deliver on the commitments that we made during our first 20 months in office. We will reduce business rates for small companies, provide the resources to freeze the council tax, put more police on the streets, work to tackle climate change and invest in our health and public services. Building on the concordat, we will take forward our proposals in partnership with local government, in recognition of the leadership that local authorities are showing in every part of the country.

For our economic recovery programme, we will focus on the skills that Scotland's people need to remain in the workforce and to keep our businesses competitive. I have already announced to Parliament the enhancements that we will make to the partnership action for continuing employment initiative to help people to deal with redundancy. I am pleased that the Scottish Further and Higher Education Funding Council will support that initiative further by allocating £7 million of its own budget so that colleges can work more closely with PACE.

Over the past few days, we have revisited the arguments from the Labour Party on the need for additional measures to boost skills and employability, as we work to meet our target of 50,000 Scots in appropriate training by the end of the current parliamentary session. I am pleased to announce that we will provide £16 million in 2009-10 to increase apprenticeship recruitment. By our detailed calculations, we believe that that will allow for the recruitment of 18,500 new apprentices in our economy at this vital time. We will actively promote those opportunities to a broad range of groups in society and across a broad range of sectors in the economy, including tourism and shipbuilding.

We will give sympathetic consideration to increasing the number of modern apprenticeships in 2010-11, when the experience of the next year and the financial position becomes clearer. Those issues will also be considered by a summit on apprenticeships that the Cabinet Secretary for Education and Lifelong Learning will convene, at the request of the Labour Party.

That investment will be in addition to the £50 million that we plan to draw in from the European social fund to assist with skills development and employability initiatives. We have worked hard to secure money through that scheme to support people in employment who may be facing redundancy.

At the same time, we know that we need to do more for our young people, who face tough times. I am pleased to announce that we will now provide additional funding for the charity Columba 1400, so that it can do even more of its vital work to help our country's disadvantaged young people to reach their full potential.

Through the budget, we are targeting resources to help those who need it most and to offset the effects of recession by providing a jobs boost for Scotland. Our spending plans include a major programme of capital investment of more than £3.5 billion both this year and next. In addition, I have already said that we will bring forward an additional £230 million of accelerated capital expenditure in 2009-10 to improve health facilities across the country and, with our local government partners, to deliver major infrastructure projects. Through that spending, colleges and universities will also benefit from improvements that will assist energy efficiency and other objectives. That money will generate work and support jobs—4,700 in total on the basis of our detailed plans—and provide a much-needed lifeline for our economy at a crucial time.

Improving infrastructure means investing in Scotland's town centres so that they are able to face major challenges in the current economic climate. The cause of town centres has been championed by the Conservatives and argued for by Labour, and we have listened. That is why, in the autumn budget revision—and I confirm the agreement that I made with the Conservatives in advance of the previous budget discussion—we will bring forward provision for a town centre regeneration fund of £60 million that will deliver real improvements in towns the length and breadth of Scotland.

As part of the budget, we will invest to improve our built environment in other ways. As I announced last week, the Government will take forward stage 1 of a programme of home insulation measures that we have discussed with the Green party. In Scotland, more than half a million homes for which it would be suitable do not have cavity wall insulation; and a million homes have either no loft insulation or inadequate loft insulation. That is a real waste of resources and it contributes to fuel poverty. That is why, through this budget, we will provide £15 million from Government, and will leverage in £15 million from other sources, to provide up to 90,000 homes with advice and assistance on energy efficiency, and with insulation where it is suitable and appropriate. It will be the biggest such scheme to be implemented in Scotland. The scheme will be area based and will be targeted at those who need it most. We are clear that those who are able to pay should make a contribution, and that those who are not able to pay will receive the service free.

Through this budget, we will invest in our companies to help to safeguard jobs in all our constituencies. The budget will allow us to complete the proposals that we agreed last year for the full implementation of the small business bonus scheme in April 2009. On top of the £180 million that we have already committed to spend from the European programmes in 2007 to 2013, we will bring forward a significant share of the remaining £385 million of European structural funds. That in turn will support 300 high-quality projects nationwide, stimulating the Scottish economy. Again, that will bring jobs to all our constituencies.

We will go further. We have listened to the suggestion presented by the Liberal Democrats—that a finance sector jobs task force should be established within the context of the Financial Services Advisory Board. I am pleased to announce today that we will present that proposal—as a Government recommendation—at the next meeting of the FSAB on 10 February.

Over the past few days, we have listened to the case put forward by others to provide greater help to new businesses. Even in the face of recession, businesses can thrive, and we want to do all that we can to ensure that this generation of young Scottish business talent is supported in these challenging times. That is why, in response to representations from across the political spectrum, we have agreed to provide a grant to the Prince's Scottish Youth Business Trust to assist it in its valuable work in encouraging new entrepreneurs among the 18 to 25-year-old age group.

Challenging economic times require a country to draw on all the mechanisms at its disposal to assist recovery. I welcome the case that the Liberal Democrats have made to the Calman commission—that

"the Scottish Parliament should have the power to borrow".

In response to that suggestion, I can confirm that the Government will submit evidence to the Calman commission on extending the powers of the Scottish Parliament—particularly, the power to borrow.

Looking ahead, it is important that this Parliament faces up to the responsibility of recalibrating our strategic financial plans in light of the changing and reducing profile of public funding over the forthcoming years. We have accepted the proposals from the Liberal Democrats to have a joint strategic review of public spending in Scotland. This Government believes that that is required to help us to face the very difficult challenges arising from the changed public spending assumptions made in the chancellor's November pre-budget report. I will chair the review, and I will invite the political parties across this chamber to take part in that valuable and significant initiative.

In the past seven days, Parliament has focused on delivering a budget for economic recovery. However, I believe that we have achieved a great deal more than that. We have demonstrated that we have an overwhelming will to take the correct action to support public services and the Scottish economy. We have demonstrated that, in the face of major challenges over the future of public spending, we can agree on a way ahead. We have demonstrated that, when necessary, Government and Opposition can find common ground.

That is the Parliament that the people elected and, as a Parliament, we have the opportunity to deliver for our people. I commend the Budget (Scotland) (No 3) Bill to Parliament.

I move,

That the Parliament agrees to the general principles of the Budget (Scotland) (No.3) Bill.

Photo of Andy Kerr Andy Kerr Labour 2:49, 4 February 2009

I welcome much of what the cabinet secretary has said, and I hope that we will be in a better place—as he described it—at 5 o'clock this evening. I endorse his view that the actions of the past seven days have demonstrated a will on behalf of all the parties in the Parliament to ensure that we reach agreement on some of the big issues that face the Parliament and the budget.

At the outset of our original discussions on the budget some weeks ago, I said—with stronger powers of prediction than I thought I had—that the media would take a far greater interest in what we had to say about it, and it is clear that that has been the case in the past seven days. The media attention reached a crescendo last Wednesday when the vote was lost and the budget was rejected, but it allowed us to ensure that our discussions over the past wee while have been conducted in a mature fashion and in a way that is appropriate in a Parliament that is governed by a minority Administration.

We should reflect on the events of last week and the way in which the situation developed, because some key principles were at stake during those discussions. Mr Swinney stated clearly from the outset—quite rightly and bravely—that it was his responsibility and that of the minority Administration to produce a budget that the Parliament could support. In turn, it is our responsibility and that of the Parliament to engage positively and constructively in that process. That is even more important, as I said, in a Parliament with a minority Government.

That minority Government has a greater duty to reflect the views of the Scottish people who voted for representatives of other parties, and other parties have a greater responsibility to ensure that the values, concerns and aspirations of those people who voted for them are addressed in the budget. The test of whether to vote for a budget is not that every Opposition party must agree with every word in it, but that they are convinced that the Government of the day has heard and acknowledged the concerns that the people who elected us want us to represent in the Parliament.

Voting against a budget is no easy matter, and I assure members that no one on the Labour benches who voted against last week's budget did so lightly. We did so in sorrow, not in anger. [Laughter.] I note the maturity of members of the Tory party—I will come to them in just a second. It is about the manner in which the budget was presented to us, and the fact that it fell short of our aspirations for Scotland. In those circumstances and at that point, I believe that it was right and proper for us to deny the Government our support.

It is simply not good enough for some members on the Tory benches to be so subservient to the Scottish National Party on so many occasions. I give Michael McMahon due credit for his comment about Derek Brownlee being the Mini Swinney of the Tory benches, but that role masks a total lack of responsibility and of any attempt to hold the Government to account.

Photo of Andy Kerr Andy Kerr Labour

That is very good—I did not quite get it, but there you go.

It is simply not good enough—it is bad for Scots, for Parliament and for opposition—for an Opposition party not to oppose. With regard to the debate about the alliance that is being formed in the Parliament, it is irresponsible for the Tories, in their frenzied preparations for a United Kingdom general election, to use every item in the Parliament as part of their campaign. That is what they do and what they will continue to do: we have an Opposition Tory party in the Scottish Parliament that cannot oppose.

I will say one last word on the Tories. Having listened to the somewhat uncharacteristic rant from Annabel Goldie, who lectured us about irresponsibility in voting against the budget, it was hugely ironic for us then to hear their deputy leader, Murdo Fraser, say that if £1 were to change in the budget—for which they voted last week—they could not guarantee their support for the budget this week.

It is, apparently, irresponsible of us on the Labour benches to put forward our principles of reflating the economy, giving young people opportunities through modern apprenticeships and increasing support for those who face redundancy—but it would be irresponsible in the extreme not to vote for a budget in which £1 has changed from last week to this week. There is a clear contradiction at the heart of the Tory strategy.

It has been painful to watch the Liberals walk away in a strop from the budget process, only to re-enter it by ditching their only policy in favour of a mixture of vague promises and easily agreed concessions. However, the unintended consequence of the exchange in the chamber last week between Mr Swinney and Patrick Harvie is that we have had a more inclusive approach to the budget in the past seven days.

It is to the substantial points of the budget process that we need to address ourselves. The new measures that Mr Swinney outlined are important, substantial changes that have been made to this year's budget. These are tough economic times and we are going through a tough challenge in terms of the economy, so special measures are indeed required. That is why Labour felt it was so important that apprenticeships for Scotland's young people should be retained as a key part of the budget process. The new measures, in turn, gain my support and that of my colleagues in the Parliament.

As Iain Gray has made clear, the process was not about the price of Labour votes. Unlike others in the chamber, we understand that our role as an Opposition party is to successfully influence the actions of the minority SNP Administration. As a result of Labour discussions and Labour negotiations, an extra 7,800 Scots will have the opportunity to take up an apprenticeship. As Mr Swinney said, the total number of new starts will now be 18,500. That will in some way ensure that we do not return to the mass youth unemployment of the Thatcher years in the face of the recession. Instead, people will gain the skills to see them through the recession and onwards into a more successful Scottish labour market.

Adults will have the opportunity to shift into new roles as a result of apprenticeship training. An insulation programme, which is supported by Labour, will allow those apprentices to train and put their skills to good use. In our tourism industry, we will see many more of the skills that are required for Scotland to remain a competitive tourism destination. As a result of Labour action, if apprentices are laid off, they will have the completion of their apprenticeship guaranteed. I am pleased to acknowledge Mr Swinney's confirmation that we will have a summit of all the key players and providers of apprenticeships to explore how this Labour programme can be delivered and further progress made in future years.

As a result of our negotiations, significant new resources of £50 million will be put towards the PACE initiative and support for those who face redundancy in my constituency at Freescale and in constituencies that are represented by other members in the Parliament. As a result of those negotiations, significant resources will be put into our town centres to help them deal with the recession and the effect that it is having on the high street. In addition, on the first day of the financial year, the health boards will receive all their resources.

However, the budget does not answer all our ills or take on all the challenges that we face. As Mr Swinney acknowledged, we suggested in our recovery plan of last year a fundamental review of the budget in the light of the current economic climate. I think that I welcome the Liberals' support for that view, which came latterly, but I am keen to hear the detail of their proposals.

We have said before and will say again that the settlement for our health services is extremely tight and challenging this year and will continue to be so in the years ahead. Throughout our local authorities, we will see increasing charges, reduction of services and, tragically, some staff roles being lost. It will be a challenging year for them too.

Although we recognise and welcome the steps that the Government has taken today, including those that were taken in response to our economic recovery plan, we cannot kid ourselves into believing that, as a result of our actions today, our troubles are over. We will continue to chase the Government and monitor its actions in response to the challenges that we face.

I make it clear that the Labour Party will vote for the budget bill. Our engagement with the Government has been successful in securing additional apprenticeship places, the guaranteed completion scheme for our apprentices, the enhancement of PACE, the resources and support for our town centres, and other measures. That is why we agree to support the bill.

Photo of Derek Brownlee Derek Brownlee Conservative 2:58, 4 February 2009

I pay tribute to the Government for the constructive approach that it has taken throughout the budget process. I have to give credit to the Labour Party, because it has been more constructive in the past week than it has been before, but it is a little bit rich for it to blame the Conservative party for last week's shambles, given that we voted for the budget. The Labour Party might wish to reflect on the fact that it was not as a result of Conservative votes that we had the shambles of the past week.

At Westminster, the defeat of a budget would bring down the Government. At Holyrood, it seems, it brings down the Opposition, or at least some of it. The Scottish Conservatives have behaved throughout the budget process in a constructive and responsible manner. We will vote for the budget today for the same reasons we voted for it last week—all 234 million of them. To mention just three wins, we have secured more police, tax cuts for small businesses and a £60 million town centre regeneration fund.

We do not have to fashion an elaborate story about why we are changing our position, because we are not changing our position. We said that we wanted to ensure the delivery of Conservative policies and measures to mitigate the recession—or what the Prime Minister now seems to think is a depression. We got those things and, as a result, we voted for the budget.

The public do not expect political parties to abandon their principles. However, given this Parliament of minorities, they do expect us to compromise. If the public want a Conservative budget, they can elect a Conservative majority to the Parliament. Until then, we will do whatever we can to advance our ideas—the same is expected of all other parties.

For months now, at every discussion on the budget or the economy, the Liberal Democrats have lectured us on the need for an unfunded income tax cut and on how awful the budget is because of its less than 1 per cent difference from last year's budget. The budget deal that was struck yesterday between the Liberal Democrats and the SNP might not be the most expensive ever struck by the Government, but it has at least forced the Liberal Democrats to change the record. We should be grateful for small mercies.

When the Greens voted against the budget, they at least did so in the full knowledge that it would fall. Labour and the Liberal Democrats voted no thinking that the budget would pass regardless. It must have come as a shock to them when it was defeated. We had the frankly bizarre spectacle of Iain Gray standing up and asking for clarity about what happens next. He might at least have bothered to find out before he plunged the country into chaos.

As we pointed out last week, voting down the budget has serious consequences for public services, council tax levels and small businesses. It should not have taken the actual voting down of the budget to make that apparent to the other Opposition parties.

Those who voted against the budget last week have been damaged. However, although I do not particularly care if the Labour Party, the Lib Dems or even the Greens have been humiliated, I care when the institution of Parliament is damaged. It took this place years to claw back any semblance of public respect after the Holyrood fiasco, and after last week's shambles we are in danger of going back to square one.

Photo of Andy Kerr Andy Kerr Labour

How does the member equate his comments with those of his deputy leader, Murdo Fraser, who said that there was no guarantee that he would support the budget and, in fact, he would not do so if it did not suit him?

Photo of Derek Brownlee Derek Brownlee Conservative

We voted for the budget last week and we are voting for it again today. I do not understand the member's problem; in fact, I do not think that the member himself understands his problem.

I welcome the belated outbreak of common sense on the other Opposition benches. Long may it continue, because Scotland and the United Kingdom do not have their troubles to seek. I also welcome the Government's announcement of next year's spending review, which, as my speeches both in December's Finance Committee debate on the budget process and last week confirm, the Conservatives have raised throughout the budget process. The mess that the public finances are in thanks to Labour will impact on the Scottish budget for the next decade, and the Parliament will have to confront difficult choices on spending priorities.

Photo of Derek Brownlee Derek Brownlee Conservative

I am sorry, I want to make some progress.

If all this signals a culture change at Holyrood to deliver greater value for money in the long run, taxpayers will benefit.

The Institute for Fiscal Studies green budget, which was published on the day that this Parliament voted down its own budget, shows that real-terms cuts of 2 per cent per annum for the Scottish Government are a realistic prospect in the next spending review. This year, we heard complaints that the real-terms increase in spending is 1.7 per cent but, over three years, the difference between a 1.7 per cent real-terms increase and a 2 per cent real-terms cut will be £3.7 billion, which is more than the combined budgets of the justice and transport portfolios. That is the scale of what might confront us and why we should all pause for thought. It is also why a 2p tax cut was—and remains—unrealistic.

Throughout and outwith the budget process, we have raised the issue of how hospital-acquired infections might be tackled. I welcome the Deputy First Minister's constructive engagement on that matter and her willingness to consider creative ideas such as bed-by-bed infection monitoring. We will continue to work positively with the Government on that and other issues.

The Scottish Conservatives are proud of what we have achieved in this year's budget and what we achieved in last year's budget with our constructive and responsible approach. As I have said, we have secured more police; business rates reductions for 25,000 Scottish businesses and the scrapping of such rates for 125,000 more; and a new town centre regeneration fund that has been set at £60 million this year. With a total of £234 million of budget changes, our record speaks for itself. That is why this afternoon, the Conservatives will vote again for the budget.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 3:04, 4 February 2009

Yesterday, the Cabinet Secretary for Finance and Sustainable Growth said that the Government had not planned to make a submission to the Calman commission. We are pleased that things have changed. I need not quote to some members what they have said about the Calman commission, but the recognition that participation in its work is potentially the best way of delivering enhanced powers for the Parliament is welcome. I hope that there is cross-party support for the move throughout the Parliament.

The Liberal Democrats believe that in relation to the Parliament's financial powers and how we handle our budgets, the status quo is unsustainable. Every party is now working with the Calman commission, and we have a real chance of getting real change for a purpose—so that there can be political choices on finance and borrowing powers for the Scottish Parliament and a different relationship within the UK. I am sure that that will not be the content of a joint submission from us and the SNP, but we will consider the offer of a joint submission. Nevertheless, at the weekend, Professor Curtice said that perhaps the most interesting long-term consequence of the budget situation is the consideration of the powers of the Parliament and the submission to the Calman commission.

The cabinet secretary's response to last Wednesday's vote, the result of which most people in Scotland were baffled and intrigued by, does him credit. He immediately signalled the need for open and genuine discussion with others to secure the budget's passage as soon as possible. Last week, the Conservatives screamed in a press release that Labour, for example, was "descending into hysteria". Of course, the Tories could never be accused of being hysterical. The next day, Bill Aitken shouted in a press release:

"jobs and lives are at stake here."

Annabel Goldie said:

"there will be fewer police on our streets and there will be less care money for our elderly."

Indeed, she spoke the language of treason against anyone who voted against the budget, and she suspected a coup d'état.

Photo of Annabel Goldie Annabel Goldie Conservative

As Oscar Wilde said:

"There is only one thing worse ... than being talked about, and that is not being talked about."

I am therefore delighted by the length of time that Mr Purvis is devoting to me. However, he must accept that my party voted for the budget last week to try to ensure that all essential providers and services in Scotland continued to be funded. Why were the Liberal Democrats unable to do the same? They have secured not one penny more in the intervening seven days.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

We know that the Conservatives voted for the budget and that they sent apocalyptic messages on the same evening. However, my local authority, which is run by a Conservative coalition, managed to set its budget on Monday this week, seemingly unimpressed by Ms Goldie's tales and predictions of lives being at risk.

Last night, Roseanna Cunningham got things just right in a radio discussion with me and representatives of other parties. She said that a budget process is never without pain and that difficult decisions have to be made. She also said that what had happened demonstrates the need for everyone to have a plan B.

Our view remains that the proposal for a reduction in taxation is an immediate and radical response to Scotland's economic crisis. Last week's gross domestic product figures show the desperate state of the economy. We know from those figures that Scotland is likely to be in a deeper and longer recession than the rest of the UK will be. On top of that, in 2011 every worker in Scotland will pay more national insurance tax as a result of the VAT cut from the pre-budget review in London. That is the situation that we are in and which we should consider in the in-year strategic spending review discussions with the Government.

The First Minister has written to Tavish Scott to say that the Government is keen to take forward the suggestion that we need to have a more strategic review of public spending in Scotland. He recognises our belief that that is required to reduce taxation. We respect the Government's view on there being a potential funding gap because of decisions that the Westminster Government has taken. That draws into sharp focus our need to change the Scottish Parliament budget processes, but it also means that each party will be able to take into the processes their own beliefs about how resources should be identified.

Indeed, we still believe that lowering the burden of taxation on lower and middle-income earners is necessary, as is identifying areas for funding to boost the Scottish economy, such as marine renewables technology or minimum income guarantees. I think that the Scottish Conservatives agree with us that there should be a review of Scottish Water. We will be able to bring such proposals to the table under the process for considering this and next year's budget.

Last week Derek Brownlee said:

"We welcome the accelerated capital spend, but the hangover will come in 2010-11."—[Official Report, 28 January 2009; c 14413.]

The Conservatives' warning was clear, but what they did not say is what the Scottish Parliament information centre confirmed to us today: the £60 million for the Conservatives' town centre fund is accelerated capital that has to be repaid next year—that is £60 million of cuts in town centre or capital funding for the year after. We will monitor and scrutinise that issue closely, even if the Conservatives do not.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party 3:11, 4 February 2009

It is with a certain feeling of regret that I find myself speaking in the second stage 3 debate on the 2009-10 budget. The fact that, for the first time, a budget was voted down by this Parliament when we are facing the first recession in a devolved Scotland and the deepest recession since world war two might have damaged the trust that has been built up in this chamber over the past 10 years.

Today, we have the opportunity to start rebuilding that trust. No one can be in any doubt that failing to pass the budget, even for a week, has caused real concerns for people and businesses in all our constituencies. Local authorities want to know with certainty how much funding they will receive, small businesses want to know whether they will get the lifeline of a rates cut, and people want the shadow of council tax increases to be removed.

Photo of Johann Lamont Johann Lamont Labour

For clarification, I tell the member that everybody understands the seriousness of the situation. Does he suggest that there ought not to be an opportunity to vote down a budget? Does he have a proposal to change the rules, because that is the logic of the position that he proposes?

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

I am suggesting that, particularly during a recession, there is a duty on the Opposition to act responsibly in the interests of the people of Scotland.

There are things that will make a difference. The chief executive of the Scottish Chambers of Commerce, Liz Cameron, summed it up on Sunday when she said that every day the budget is delayed is damaging to Scotland's economy. We all have a responsibility to our parties, but we also have a responsibility to those whom we are here to represent. It is impossible to argue that Scotland and our constituents would be better off if £1.8 billion of funding was delayed. As was the case last week, I am happy to add my support for the Scottish Government's budget. It meets the needs of Scotland's households and businesses at this time of economic uncertainty.

I welcome the support of the Liberal Democrats, not least because it gives me something new to say—after several debates on this year's budget, I was running out of derogatory adjectives. In all seriousness, I congratulate the Liberals on their pragmatic approach this week. They have recognised that taking a constructive approach—as the Conservatives and Margo MacDonald have done throughout—can be beneficial for all parties and those whom we represent.

I also welcome the Labour Party's support for the budget. It is unfortunate that it did not feel able to support the budget earlier, because it would have saved a lot of angst throughout Scotland. Labour and the SNP might not agree entirely on some issues, but with the consensus that we have reached on the budget today, it is clear that we agree that this is the right budget at the right time for Scotland. I hope that that wave of consensus is the start of a new approach to politics by both the Labour and Liberal parties. If that is the case, it is the people of Scotland who will be the winners.

At the heart of the budget is an approach by the Scottish Government to make things fairer and to ease the burden on those who are most at risk from the economic downturn. The budget allocates a further £70 million to allow local authorities to freeze their council tax for the second year running. In previous years, the regular round of council tax rises led to a doubling of council tax in a decade. That time is past, and I am confident that councils throughout Scotland are working hard to deliver a second historic council tax freeze this year.

Today's budget is also about support for small businesses, which are the bedrock of our economy and vital for employment in Scotland. In the economically challenging year ahead, we must ensure that we take the necessary measures to ensure their continued economic success.

Phase 2 of the small business bonus scheme will benefit 150,000 small businesses throughout Scotland. With the passing of the budget, 7,500 businesses in Dundee alone will have their rates scrapped or cut.

The budget also addresses the need to protect jobs in the current economic climate, particularly in the construction industry. I therefore welcome the £230 million of capital expenditure that is being brought forward from future budgets, which will help to support 4,700 Scottish jobs.

As was the case last week, today's budget is a clear choice between supporting families and businesses in Scotland and turning our backs on the problems of our constituents. I believe that the whole Parliament acknowledges that, which is why we have seen much greater consensus this week. I hope that that consensus will result in unanimity by the end of the debate.

Throughout the budget process, and in the past few days, parties throughout the chamber have come together to ensure that we do the right thing for the people of Scotland. Be in no doubt: this Parliament let the people of Scotland down by failing to pass the budget last week. Today, we have an opportunity to make amends. A unanimous vote will send the people of Scotland a strong signal that this Parliament takes its responsibilities seriously.

Photo of James Kelly James Kelly Labour 3:16, 4 February 2009

I welcome the opportunity to take part in this afternoon's budget debate. In many ways, this is like groundhog day: it is another Wednesday and we are having another budget debate; again, I am following Joe FitzPatrick in the debate; and, again, Derek Brownlee has launched an attack on the Labour Party in his speech. I am sure that we all welcome the fact that we will not see a repeat of last Wednesday's scenes when, from my current vantage point, I watched various SNP representatives offer Patrick Harvie bits of paper, like chips at a casino. It was like sitting in the front row during "The Price is Right".

The key thing to understand is why we are back here again this Wednesday. We are here because the cabinet secretary made a political miscalculation, in that he thought that he had the support of the Greens, and because Parliament sent the SNP Administration a strong signal that the budget that was before us last Wednesday was not fit for purpose.

It is perfectly reasonable to vote against a budget, particularly when we do not feel that it is good enough for the hard economic times in which we live. Indeed, the Liberal Democrats described the budget as "woefully inadequate". There was a lack of investment in jobs and not enough hope for our youngsters. There were concerns that there had been a failure to protect front-line services in the national health service. As a result, the budget was voted down. Today, we have before us an improved, enhanced budget, on which I think we can all agree. Scotland will be better for the amended budget that is before us today and for the fact that the previous budget was voted down a week ago.

We have absolutely no truck with the Conservatives' scaremongering in the aftermath of last week's vote. As I said, the Parliament sent the SNP Administration a clear signal that the budget was not good enough. To give the cabinet secretary his due, he has worked hard over the past seven days in discussions with other political parties to bring to the chamber an amended budget that can be agreed on tonight. A week on, we have ended up with a budget that, I hope, can be agreed upon, and the world has not fallen apart, despite what the Conservatives predicted last Thursday. Perhaps they should turn up at Waverley station tomorrow to retract the leaflets that they were handing out last Thursday morning.

Photo of Margo MacDonald Margo MacDonald Independent

Is the member attempting to say that, as a Parliament, we should explain to our fellow Scots that the process that we have just undergone is good for everyone? From his background, he will recognise that it is called negotiation.

Photo of James Kelly James Kelly Labour

The member is leading me on to the points that I want to make.

I welcome some of the amendments that have been made to the budget. It is good news for people in my community of Cambuslang and Rutherglen and for people throughout Scotland that, as a result of the process that we have gone through over the past week, there will be 7,800 additional apprentices. Those apprentices will be able to take up places in the insulation programme, the capital programme—which has been enhanced to the tune of £230 million—and the housing investment programme. I welcome the investment of £50 million in partnership action for continuing employment, the additional £7 million that the cabinet secretary announced today and the guarantees for apprentices who are threatened with redundancy, which will be particularly useful in my constituency, where 150 job losses are threatened at Vion.

I welcome the town regeneration fund of £60 million. Labour campaigned for such a fund, which was included in our 2007 manifesto and our negotiations on the budget. It will be welcomed throughout the country at a time when "for sale" and "to let" signs are going up in our main streets.

Some concerns remain to be addressed. Michael Levack from the Scottish Building Federation has expressed concerns about the slowness of the pipeline for capital investment. Local government and our health boards face serious challenges, and there are issues relating to health inequalities.

I welcome the amended budget that is before us, but there are still serious areas of concern, which Labour will monitor closely. I hope that the Parliament will agree to the amended budget at decision time.

Photo of David McLetchie David McLetchie Conservative 3:22, 4 February 2009

It is indeed another week, another budget, following the collapse of the stout parties that are now settling for some very thin rations.

I begin by giving the Labour Party in general, and Jim Kelly in particular, given his speech, a wee lesson on the subject of chronological order—a concept that Labour members appear to have great difficulty grasping in the context of town centre regeneration. I start with the period 1999 to 2007, now better known as the wilderness years. During that period, the sum total of the Labour-Liberal Democrat Scottish Executive's contribution to town centre regeneration was nothing—zero, zilch, nada, nowt.

Next we come to the 2007 Scottish Parliament elections. On 28 January 2007, the Scottish Conservatives announced proposals for a town centre regeneration scheme, as part of a package of measures to support small businesses and traditional shopping areas that are under pressure from out-of-town retail parks and supermarkets. The policy was highlighted when we published our election manifesto on 2 April 2007. The first cheep that we heard from the Labour Party came when it published its manifesto. I point out to Mr Kelly that that was on 10 April 2007—eight days after the Tory manifesto launch, and after eight years in which the Labour Party had done precisely nothing on the subject, despite having every opportunity to address it.

Photo of David McLetchie David McLetchie Conservative

No thank you. It is Labour members who I am attacking. Your turn is coming, Mr Purvis.

Photo of David McLetchie David McLetchie Conservative

No thank you. The member will just have to bide his time.

I appreciate that the Labour Party wants a fig leaf to cover its embarrassment in light of its budget climbdown, but its claim on town centre regeneration is not a fig leaf but a straw at which it is clutching.

As we all know, our consideration of the budget is set against the backcloth of Labour's economic recession, the collapse of our currency and a rising tide of unemployment. We need serious measures for serious times. Unfortunately, serious measures have not been much in evidence in this session of the Parliament. Two weeks ago, in the debate on the report of the Council of Economic Advisers, Scottish Labour's response amounted to a proposal that John Swinney should speak first in parliamentary debates on the economy and that we should establish a formal link between the Council of Economic Advisers and the national economic forum. As a recession-busting measure, we were all suitably underwhelmed.

When I heard the proposal, I thought that we had reached a new low point of surreal irrelevance, but I was wrong. Never ones to be outdone when the chocolate teapot prize is at stake, the Liberal Democrats have surpassed themselves with their efforts of the past week. First, there was the letter: the Liberal Democrats forced Alex Salmond to write a letter to Sir Kenneth Calman seeking borrowing powers for the Scottish Government. Frankly, if Sir Kenneth does not know that Alex Salmond is in favour of borrowing powers for the Scottish Government, he must be the only person in the country to fall into that category.

We can but picture the scene in Bute house: Mr Salmond is propped up in bed, a Wee Willie Winkie hat on his head and a guttering candle on the bedside table. It is freezing cauld in Bute house, because Patrick Harvie did not get enough money to insulate the roof. The First Minister starts on his tortuous letter with the words "Dear Santa"—I am sorry; I should have said "Dear Sir Kenneth". He goes on to say, "I don't have enough pocket money to spend. My friend Lavish Tavish, who knows a thing or two about spending money, says that you should let me borrow. Please give me that and I promise that I will be a good boy. Love from Alex." So much for the letter.

Then there was the next Lib Dem masterstroke: a committee on financial sector jobs. They called it a committee, then a sub-committee and then said, "Oh, let's call it a task force." How imaginative! I had never heard that suggestion before. The Scottish Conservatives have no objection to a task force or any other body coming up with imaginative ideas to help to repair our broken economy—broken by a Labour Government—but, in the debate tomorrow, let us ensure that we set in place a mechanism to monitor the success of the task force.

There is also the other suggestion for—yet again—another committee. This committee is supposed to review Government spending in order to find ways to finance the Liberal Democrat tax cut policy that the Lib Dems could not find themselves in six months of trying. As everyone knows, the reality is that public spending is likely to fall in real terms over the next few years. Scotland is not immune to that. This country will have a hard job sustaining its public services at current levels of taxation never mind at reduced rates.

I will end on a generous note, Presiding Officer: it is in my character to do so. I express my deep gratitude to the Labour and Liberal Democrat parties in the Parliament, whose sheer incompetence and ineptitude over the course of the budget negotiations enabled the Scottish Conservatives to win concessions totalling £234 million from the SNP Government, which all Labour and Liberal Democrat members will end up voting for. That is what I call a real achievement. Let us face it: the next best thing to a Tory Government is a Government that does what the Tories tell it to do and whose policies Opposition parties vote for in any case.

Photo of Keith Brown Keith Brown Scottish National Party 3:28, 4 February 2009

As a supporter of the Scottish Government, I am delighted that it appears possible not only for the budget to be passed but for it to be passed with near-unanimous support. If that were to happen, we should all relish the achievement, which would be an achievement for not only minority government but the inclusive politics for which we all stated our support at the outset, even if the latter has not been much in evidence thus far in the debate.

Even though saying this puts me at risk of being accused of crawling, I will say it: the achievement has a great deal to do with the businesslike and straightforward approach of the Cabinet Secretary for Finance and Sustainable Growth, not least in the way in which he dealt with the less-than-easy job of negotiating with several other parties—parties whose views diverge legitimately from those of his Government and, indeed, of other Opposition parties.

I am sure that, compared with the past few weeks, last year's budget process now seems like a cakewalk and that the cabinet secretary will take even greater satisfaction in the passing of this year's budget bill than he did in the passage of last year's. If it is passed today, the budget will represent an achievement above all for the Parliament. We know that there are many and vocal interests who seem happy only when the Parliament is seen to stumble, and it will be interesting to see how they use this situation to deride the Parliament again—as I am sure they will.

I will focus on an area in which, I believe, the budget has been substantially improved since we discussed it last week. It might not cost any money, and it has already been the subject of some derision by David McLetchie, but I believe that the commitment by some parties to co-ordinate their activities to promote borrowing powers for the Parliament is significant.

I mention that commitment not simply because it has been the subject of one party's discussions with the Scottish Government over the past week. I mentioned borrowing powers during the debate on the report from the Council of Economic Advisers, and I lodged a consensual motion on the issue two weeks ago. I have sought support from other parties for an agreed approach on borrowing powers, and I hope that those parties will encourage their members to support that motion, especially as we are discussing the matter tomorrow.

How powerful an argument it would be if the whole Parliament could agree on the need for more borrowing powers. It is easy to attach party-political considerations and party advantage to the initiative, but any party in the Parliament that harbours ambitions to govern in the future has to pause for only a second to realise how willing it would be to have those powers even in good economic times, far less during the current economic recession.

Wendy Alexander has previously mentioned the urgent action that is required to tackle the downturn. That is true both in absolute terms, with respect to how quickly action can be taken to help save and promote jobs, and in relative terms, with respect to how quickly that can be done compared with other economies.

We are substantially behind the curve when it comes to borrowing powers, which are one of the fundamental tools that Governments are currently using to address the economic downturn. As we have heard from civic Scotland—this has been said, for example, by Reform Scotland, the Scottish Trades Union Congress, the Liberal Democrats and, in a previous debate, Malcolm Chisholm—there is general support for the idea of borrowing powers. However, at least not until now, there has been no real urgency on the issue.

In last week's debate, I said that the Calman commission could meet quickly to address the matter. There is no reason why it has to wait for its next meeting: it could meet quickly, agree a position—if there is consensus—and work with the Scottish Government, as now appears possible, on a joint approach to Westminster in order to deal with the issue as quickly as possible.

Public-private partnership is still a matter of division between the parties, and I do not intend to rehearse the arguments, but they are substantially superseded both by the new accountancy procedures that we will be obliged to follow in the late spring and by the fact that PPP projects down south are being delayed and deferred because of the lack of private finance for funding them.

We are perhaps behind civic Scotland on borrowing powers. All sorts of bodies have supported them in the past, and there is no reason why we cannot act quickly now. The fact that we appear to be moving quickly today to agree a budget that was not agreed last week shows that, when the Parliament wants to do something and when there is consensus, we can move very quickly. Members are giving their own reasons for their positions last week, which are not their positions this week, but, whatever those reasons, the severity of the economic downturn is one of the major things that have been playing on people's minds.

I do not mean this on a party basis, but there has perhaps been a time lag for some people in appreciating how severe the economic downturn is and how quickly it is happening. If we vote unanimously, or nearly unanimously, in favour of the budget, having moved very quickly through the three stages of the budget bill in one day, there is no reason why we cannot show the same urgency of action on borrowing powers.

Despite my sometimes harsh words towards the Liberal Democrats in the past, I appreciate the significance of their commitment to campaign against the £500 million of cuts that are coming down to us. That will be a key subject of political debate in future years, and to have support against the cuts is important.

Considering the various initiatives that members have mentioned—help for apprentices and building works, for example—we could do so much more in the short term if we had borrowing powers. Much more labour-intensive activity would be possible, which would help to soak up unemployment and provide opportunities for apprentices to go into real jobs. That is a crucial aspect in the Parliament's consideration of the current economic crisis.

Some parties might have fun having a go at each other today—that is part of the debate—but I hope that we can concentrate on the fact that, at least for a brief moment, we have some unanimity, consensus and a willingness to work in an urgent fashion. I certainly hope that that carries through into the issue of borrowing powers for the Parliament.

Photo of Johann Lamont Johann Lamont Labour 3:34, 4 February 2009

I welcome the opportunity to contribute to the debate.

The budget process is always difficult, and it is self-evidently more difficult for Opposition members because the budget bill can never be a neutral document. The budget reflects the priorities of the Scottish National Party; it is not a Labour budget, so it is our responsibility to try to influence and shape it. That is an understandable part of the process—our role throughout the process has been to seek to influence and shape the budget in the direction of the commitments that Labour would have made and the strategy that we would have had. Nevertheless, the budget bill that we are debating is not the one that we would have introduced.

There is frustration that the budget process has been characterised in commentaries as being about playing games. The sense that horse trading and game playing were going on was reinforced by decisions that the cabinet secretary made, such as his singling out of Edinburgh instead of addressing the needs of all our cities.

Photo of Johann Lamont Johann Lamont Labour

No. There is recognition that problems have been caused by the presentation of decisions and by the pretence that there was no serious negotiation by Labour before last week's vote, which is simply not true. The process was too much about the arithmetic in the Parliament and not enough about genuinely reaching out to members to find ways of improving the budget.

There has also been frustration about the pretence that, in seeking to support proposals that would improve the budget, we somehow supported the whole budget. It is dishonest to suggest that members who sought to persuade the cabinet secretary of the strength of a particular approach had a reckless disregard for the impact on local communities. That is simply not true—what is happening in our communities has driven and motivated serious negotiation on the part of the Labour Party.

We focused on key issues and we sought to support families and communities who are facing the current economic challenge, so we welcome the announcement of what we sought: a secure guarantee to people who are currently in apprenticeship placements. As a consequence, many young people and their families can have certainty when before there was a great deal of uncertainty. For that alone, today will have been a good day at the office.

We urged the Government to understand the critical role of Government intervention and action that goes beyond simple assertion. We recognised the importance of supporting people who face unemployment and transition to other jobs. We sought significant increases in the number of apprenticeships because we know our history and we remember what happened when Government took a laissez-faire approach and abandoned young people and families to the scourge of unemployment. We recognised the opportunity that apprenticeships would provide for training and planning for the future. The change that we secured in the Scottish budget is a Labour dividend for families; at last there is a firm commitment on apprenticeships.

Critical issues will come into play in the delivery of that commitment. In the past, I have raised significant issues about the importance of equality proofing and anti-poverty proofing the budget and the role of equality impact assessments. I remain concerned that, although the budget allocates moneys, it does not do the hard job of ensuring that we meet the diversity of need in our communities. We can have no confidence that there is any understanding of how people experience disadvantage and discrimination if the budget process does not explicitly set out how such an understanding is arrived at.

Single outcome agreements play a critical part in addressing need locally, and the social inclusion budget has been entirely devolved to local government. Stewart Maxwell has said that equality impact assessments should be done but that if they are not done it is for the Equality and Human Rights Commission to investigate. Such a process would take a long time, and there is a simpler solution, which I urge ministers to accept: if they think that equality impact assessment of single outcome agreements should be undertaken because of how such agreements affect communities, they should say that an agreement will not be accepted without evidence that an equality impact assessment has been done. It is as simple as that.

I want to ensure that the shift in the budget addresses need. The cabinet secretary has considered Labour's case for modern apprenticeships, and I urge him to apply an equalities approach, too. It is not enough to assert that Government policy inevitably helps disadvantaged people. It has been claimed that free school meals, free prescriptions and the council tax freeze benefit the poor, but in a written answer to a parliamentary question the Government confirmed that there is no evidence of such benefit. We need evidence, so that we can ensure that what we do makes a difference.

As part of the summit on apprenticeships, the cabinet secretary must commit to addressing structural employment issues such as segregation, which reinforces the position of women. If apprenticeships are segregated, it is inevitable that women's experience of low pay will continue. We must consider the sectors in which apprenticeships are offered. Are we improving the care sector, in which there are many women workers? We must address that issue.

We have to consider what we say to employers. I was told today that an apprentice hairdresser earns £60 a week for a 45-hour week. That is unacceptable and would not happen in England. I urge the cabinet secretary to ensure that the summit on apprenticeships addresses that.

An understanding of those issues is critical to driving social inclusion. How much of the town centre regeneration money will go to our most-deprived communities? How will PACE meet the needs of people with disabilities, who are more disadvantaged in the employment market? We need to understand that equality is not a bonus but at the core of spending decisions and policy documents. Otherwise, the budget decisions that we make today will reinforce inequality rather than challenge it.

I welcome the shift that the cabinet secretary has made, but I urge him to ensure that, when he allocates funds for his commitments, he considers how his allocation meets the needs of particular groups in our communities. That is central to our approach, and I look forward to him acknowledging that in his closing speech.

Photo of Liam McArthur Liam McArthur Liberal Democrat 3:41, 4 February 2009

After my remarks last week, I am a little disappointed that nobody got round to making "Groundhog Day 2". I suspect that the producer felt that a sequel would have undermined and missed the point.

The debate does not quite feel like déjà vu all over again—I welcome the tone and much of the content of the cabinet secretary's opening speech—but there have been some exceptions. Astonishingly, having sat through three budget debates in as many weeks, I have yet to hear a Tory MSP mount any critique of the Scottish Government. We have been treated to plenty of well-crafted rage about Labour's recession, which I presume has more to do with pre-UK election posturing than scrutinising the budget or holding the Scottish ministers to account. We have also witnessed the creative genius that gave birth to the Tories' dodgy dossier on the Scottish Liberal Democrats, but it is more the deluded musings of the SNP Government's unpaid research unit than the actions of a serious Opposition party. All that was delivered with trademark wit by Mr Brownlee and with flamboyant bravura by Mr McLetchie, but it was hardly likely to have Mr Swinney overly concerned about how he might secure the Tories' votes.

The overall tone of this afternoon's exchanges has been different from last week, which is appropriate and reflects well on the Parliament. All parties and every commentator sought to interpret the public mood on the crisis that engulfed the Government and its budget last week. Indeed, the Presiding Officer had scarcely made his dramatic intervention before Alex Neil treated us to the inside scoop of what people were telling him. With all due respect to Alex Neil, I suspect that the margin of error in such a poll is unacceptably high.

Since last week's vote, every MSP will have spoken to constituents, gauged their views and reflected on their expectations. As I did that, I certainly detected anger but, as much as anything, it was anger at having been told that, if the budget was not agreed to last Wednesday, public services would grind to a halt, investment in major projects all over Scotland would not take place and an election was inevitable—all of which was clearly untrue. I note that, in a piece of masterly understatement, Bill Aitken insisted that lives were at stake—Mr Neil has some competition.

Speaking to my constituents, I found no echo of the scaremongering that characterised some of the speeches in last week's debate and no desire to see the Government's budget simply rubber-stamped for ministers' convenience. People want agreement to be reached and a budget to be passed that—as far as possible—reflects the economic circumstances in which we find ourselves. They want serious measures for serious times.

The Liberal Democrats have responded to that mood, as has the Government. Notwithstanding the reservations that I continue to have about aspects of the budget, we have used the process to persuade the Government to make important changes that will lock in long-term benefits for Scotland during the recession and beyond. We remain committed to the need to reduce the tax burden for those on low and medium incomes. That could not be achieved in this budget process, but a platform has been laid for permanent tax cuts in the future through the new strategic review of Government spending.

Bringing to bear the Council of Economic Advisers' depth of knowledge and array of expertise in considering the budget will provide real benefits, as will the Government's change of mind on a finance sector jobs task force. Despite Mr McLetchie's reservations, under the auspices of the Financial Services Advisory Board—FiSAB—such a task force can provide a real focus for action to assist that key sector through exceptionally difficult times.

Liberal Democrats still believe that the approach of the Scottish Futures Trust is misguided. It has proved costly and resulted in uncertainty and confusion precisely when the construction industry in particular has looked for a clear steer. However, by agreeing to Liberal Democrat demands for councils to receive revenue support under the SFT, Mr Swinney has taken an important step towards ensuring that building programmes for schools and hospitals have a chance of being re-started.

Photo of Liam McArthur Liam McArthur Liberal Democrat

I am afraid that I must crack on.

That news has been particularly welcomed by local authorities around the country, not least by the City of Edinburgh Council. Councillor Jenny Dawe said:

"A proper programme of support for school building will be a very helpful move. So far, this has been missing from the Government's plans."

I dare say that even Lord Foulkes will be pleased by the news, though doubtless Mr Swinney would see that as a perfectly good silver lining being spoilt by a large, dark cloud.

Let me come to the concession that Professor John Curtice has suggested is the

"most interesting long-term consequence of all".

Photo of Lord George Foulkes Lord George Foulkes Labour

I of course welcome the news of SFT support for council building programmes, but I will be satisfied only when I see the first brick laid for each new school. Only then will I believe that the SNP's promise to match brick for brick has been met. I will watch the situation over the next few years very carefully indeed.

Photo of Liam McArthur Liam McArthur Liberal Democrat

As, indeed, will we.

In agreeing to make a submission to the Calman commission on the case for additional borrowing powers for Scotland and to free up Scottish Government officials to support the work of the commission, the SNP has not simply reiterated its long-held position. Lord Wallace of Tankerness, a member of the commission, observed:

"As a result of the new position of the Scottish Government, there is now assembled a powerful coalition for change."

The Government's new position is significant because it brings closer the prospect of meaningful change to, and enhancement of, the powers of the Parliament. It also brings closer to fruition and makes more credible the Scottish ministers' assertions about the Government's major infrastructure plans—for example, that the new Forth bridge can be constructed without jeopardising every other transport project in the country.

The Calman commission is precisely the forum through which to make the case for additional borrowing powers for Scotland. For all the bluster about the national conversation, that approach lacks credibility. I note that, on the Scottish Government's website, the national conversation is represented by an icon of a small man, all alone, shouting through a megaphone. That just about sums it up for me.

Last week, I referred to Mr Swinney as a sooth-saying rodent, but his reaction to the vote was well judged and his engagement with Opposition parties on a range of substantive issues was well managed. I withdraw my previous comparison and look forward to the budget bill being passed at decision time.

Photo of Angela Constance Angela Constance Scottish National Party 3:47, 4 February 2009

Heaven loves nothing more than a repentant sinner, which is perhaps why so many MSPs were present for time for reflection today.

Parents are always encouraged to praise their children for the good things that they do, to focus less on the naughty things that they do and, of course, never to cast up past mistakes. For that reason, I will not speak at length about how last week's events ran the serious risk of disrupting local authorities, including my local authority of West Lothian Council, which could have had a £19 million shortfall and a 40 per cent increase in council tax. However, I would heed the words of Jim Spowart, who said at the weekend that now is not the time for point scoring. It is often the leading lights in civic Scotland and in the business community who speak good old-fashioned common sense. I believe that the political parties, Parliament and Scotland have moved forward and for the better this week.

As Keith Brown did, I welcome the growing consensus that Scotland should have a budget that makes decisions about raising income as well as about spending it, instead of what happens just now, which is a bun-fight about how we will cut the cake. Many of us will recall the unedifying comments by Tony Blair when he drew comparisons between the Scottish Parliament and English parish councils. Ironically, parish councils can borrow £5 for each person in their area. Furthermore, local authorities can utilise prudential borrowing and the Northern Ireland Assembly can borrow up to £2.5 billion. Instead of having such powers, we have a fixed budget that is given to us by the mother of all Parliaments—apparently, mother knows best. However, I hope that one day our adolescent Parliament will come of age.

I suppose my hope is that, when next we approach budget negotiations, we will have learned the lessons of past budget negotiations and give ourselves a reality check, in order to remember two things. First, the budget is a balancing act for all parties, but all must remember that whatever they propose must find support across the political spectrum. Secondly, a significant proportion of the £30 billion-plus budget is already committed, with fixed and non-negotiable costs as well as statutory obligations.

Before negotiations in smoke-filled rooms, or even before the first handbag is drawn, we must remember that a third of the budget—in excess of £10 billion—has already been eaten up by local government, and pensions liabilities for teachers and NHS staff take up the best part of £3 billion. I bet that by the time we include European Union regulations for agriculture support, for roads, and for police, fire and prison services, at least half the cake has already gone. Maybe Mr Swinney will clarify how much of the budget is available for discretionary spending.

The devolution settlement ensures that no one can be bought and sold for Swinney's gold, I am—of course—sad to say. However, even a limited amount of money can go a long way if it is spent wisely. I have never believed that one political party has a monopoly on good ideas. Spending £230 million on accelerated capital spending, £70 million on affordable housing, and £60 million on town centre regeneration supports 5,000 jobs as well as apprenticeships, and are the right things to do. Without full economic powers, however, we will never truly tackle poverty or inequality.

We are living through the worst recession in 60 years. As Joe FitzPatrick does, I welcome the comments of Liz Cameron, who was absolutely right to say that

"every day the budget is delayed, that's delaying contracts that could be going out to the private sector."

She urged

"all political parties to get around the table" and to concentrate on "the bigger prize" that could

"be won ... for the Scottish economy."

The loss of jobs in my constituency has focused the mind. At this time, our resolve and aspirations should be focused on the bigger picture and on, as Liz Cameron put it, the "bigger prize". In a Parliament of minorities, we all have an opportunity to grasp that prize. Ensuring the safe passage of our budget is the responsibility of all 129 members of the Scottish Parliament.

Despite the political commentary describing last week's events as "a crisis", I prefer to think of it as a rite of passage, the growing pains of a young Parliament or perhaps the birth pangs of a better nation. The past week has been a defining moment for the Scottish Government and Parliament. Across the political divide, there has been a shift in thinking and in how we do business. Minority government does work, and Scotland has changed forever and for the better. The challenge to all 129 MSPs is to move with the times and not be left behind.

Photo of Patrick Harvie Patrick Harvie Green 3:52, 4 February 2009

I am bound to disdain the "mother knows best" attitude. I hope that the idea that a Parliament that asserts itself against the Government should be compared to an errant child does not come to reflect the SNP Government's attitude.

At the start of the debate, Andy Kerr rightly said that no one would lightly vote down a budget and that it had, in the Labour Party's case, been done more in sorrow than in anger. I have to admit that, for myself, there was no small measure of both in last week's debate.

I argued last week that, without incorporating into the budget substantial measures along the lines that we proposed, the budget would reflect an inadequate response to the economic situation in which we find ourselves, and to the ecological crisis of our own making. I am sorry to say that the budget still represents an inadequate response to those crises.

Governments in Europe and America are recognising the need to get to grips with the concept of a green new deal. They recognise that recovery from the current economic situation will depend on substantial investment in low-carbon infrastructure. They recognise that we must not only generate energy more cleanly, but must cut our consumption radically. We in Scotland should recognise the opportunities that such an approach could offer. Instead, the Government has continued to pile resources into projects that will increase carbon emissions. I have to go past one of them every morning on the bus coming out of the south side of Glasgow, where concrete piles are being driven into the ground to carry tens of thousands of additional car journeys into and out of the city centre.

We argued from a Green perspective that the budget was not supportable unless it incorporated, as a counterbalance, substantial measures along the lines that we have proposed. I am sad to say that, after months of trying to persuade the Government to adopt just one such positive measure, it still does not get it. The basis of our proposal has been not just scale but universality. A free, area-based approach is the only way to drive up participation rates to the high levels that are needed if we are to cut people's bills, preserve jobs in the construction sector and cut emissions. Sadly, the response that I have had from the Government following last week's debate demonstrates that it still does not get it.

Just today, the National Audit Office has published an assessment of previous fuel poverty campaigns that demonstrates that the target-and-miss approach will have to end. We cannot continue with that approach; if we want to eradicate fuel poverty and to cut our emissions, we need to adopt an approach to insulation that is based on free and universal provision.

We argued that that would cost in the region of £100 million a year for a 10-year project. All the Government data that I have seen so far support that assessment. The Scottish Government's initial suggestion on the scale of what could be delivered, however, involved the provision of £4 million a year. It would have taken more than three centuries for that scheme to complete the job throughout Scotland. Last week, a slightly larger scheme was offered, which involved the provision of £22 million a year. It would have taken 44 years for that scheme to complete the job throughout Scotland. Even though the cabinet secretary stated that what was on the table last week remains on the table, he can guarantee only £15 million a year from his own resources, which means it would take 65 years to complete the job throughout Scotland.

This morning, I lodged an amendment to the stage 3 motion, which offered Parliament a final opportunity to endorse the adoption of the free and universal approach for which we have argued. Sadly, it was not selected for debate—not that I would necessarily have expected the other parties to support it.

Photo of Angela Constance Angela Constance Scottish National Party

How many houses in Scotland need insulation? Very few council houses in West Lothian have no insulation at all.

Photo of Patrick Harvie Patrick Harvie Green

The initial proposal was for a scheme that would cover 1.8 million properties. That was supported by the Scottish Government. The answer depends on how much we want to do. Do we want to cut emissions only from households that have already had half their loft insulated, or do we want to support everyone to cut their emissions through insulation?

The debate that we should be having is not about the detail of the scale of our proposal; it is about how we have got to where we are. The Liberal Democrats have done a complete U-turn. In the past few weeks, they have described the budget as "wholly insufficient", and the Government's response to the economic situation as

"the weakest and most reduced response of any national or devolved Government in western Europe"—[Official Report, 28 January 2009; c 14416.]

and "woefully inadequate". The same budget has now been re-presented and this time they are voting in favour of it. It is greatly disappointing that the wave of criticism from the Labour and Liberal Democrat Opposition has receded and that members have been pacified by the assurance that the SNP still supports its own policy.

Mr Swinney argues that he expects Parliament

"to reach mature agreement on an effective budget".

Unfortunately, we are being asked to give quiet acquiescence and docile agreement to a business-as-usual budget. At decision time, there may be only two votes against the budget, but given that the science is clear on climate change and peak oil, I do not care about the numbers or about how seriously they are taken by the rest of Parliament. Those votes will represent a wider movement that has been born in an age of increasing recognition of the crises that we face. While the middle ground of politics continues to represent an inadequate response to the central challenges of the 21st century, the Greens will continue to stand for that movement.

Photo of Margaret Curran Margaret Curran Labour 3:59, 4 February 2009

Many speakers have articulated a sense of déjà vu. As Angela Constance made clear, we have learned one overwhelming lesson—that the process that has been gone through this week, which has involved the critical ability to give ground on key areas that matter to other parties and the ability to tie down details and to clinch a deal, should have been gone through last week. If that had happened, the budget might not have been defeated last week.

In no circumstances—especially grave economic circumstances—should we witness a scramble at the back of the chamber as the First Minister passes notes throughout the afternoon to a member. As Angela Constance acknowledged in her speech, that should not happen again. The SNP Government has learned the lesson that that is not how a Government should negotiate. It will not negotiate like that again in the future.

It is in that spirit that Labour's central proposals have been reconsidered. This is not the budget that my party or I would have proposed, but the priority that is now being given to work, skills and opportunities is welcome. We welcome the step change that has taken place in the past week, which is about the attention and support that have been given to the substance and the coherence of Labour's package of proposals. It is not surprising that Labour's flagship proposal should focus on apprenticeships and skills and the broader impact on the Scottish economy, but in the context of the current economic downturn, it is in all our interests to give ground on such strategic issues.

There is a commitment to almost 8,000 new apprenticeships in next year's budget. That is not just good news for those individuals; it will directly benefit their families and communities. I echo what Johann Lamont said about the equality impact assessment. I am sure that those of us who were members during the first session of Parliament do not need to remind the members of the SNP Government who were MSPs back then what they said then about the budget and equality. I hope that they are truer to their words now than they have been so far.

However, we now have a guarantee for apprenticeships for people who are threatened with redundancy. That is a confidence boost not just to them but to the Scottish economy. We now have £50 million specifically committed to help to retrain people who are facing redundancy. That will not only help those individuals but will provide direct assistance to key sectors of the Scottish economy. Because of that progress, it is right to negotiate and compromise. I recognise the passion behind Patrick Harvie's words, but I part company with him on the issue. He is right to flag up the significance of the climate change crisis and of the actions of Government, but there are times when it is right to negotiate and to do a deal. The Government has made enough progress—just enough—to allow us to support the budget.

I still have deep reservations about the budget, though. I hope that the Government is not arrogant after today's vote, and that it does not assume that all criticisms of its actions will be suspended. That would not be a fair price for us to pay for our support. The SNP Government has been grossly unfair to Glasgow—I will continue to remind the Government of that. It has presided over a host of missed opportunities—I will remind it of that, too. I make it absolutely clear that I could never be comfortable with a Government that has developed such a close working relationship with the Tories. The SNP and the Tories think that all it takes is a tax cut and they have ticked the business box.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

Will Margaret Curran tell us her views on the coalition that runs Dundee City Council? The administration there requires the support of the Conservatives to get its budget through and to run the council on a day-to-day basis.

Photo of Margaret Curran Margaret Curran Labour

Mr FitzPatrick might not be aware, but I was a member of the previous Government, which was a coalition. There is an enormous difference between working with another party to find common ground and delivering that party's political agenda.

David McLetchie made what was perhaps the best remark in the debate, when he described this Government as

"the next best thing to a Tory Government".

That is exactly what we are witnessing.

Progressive voices know that what we need right now is active Government intervention to maximise spend and link it directly to jobs and economic activity.

We all know that political life requires pragmatism, so I acknowledge the moves that have been made by the cabinet secretary. This is a sobering time, and we cannot afford to be complacent. I also acknowledge the moves that have been made on partnership working and hope that they will continue. Our focus has to be on the economic and social interests of Scotland and on the experience of the people whom we represent. I would not shirk working with anyone in order to make progress with that agenda. Perhaps Mr FitzPatrick will understand that. However, that does not mean that anyone should shirk criticism when that criticism is right. We need to get the balance right—I think Angela Constance made more moves in that direction than Mr FitzPatrick. We have to acknowledge where there is common ground and where criticisms still have to be made.

We live in a time of challenging economic change. Today, we will make some progress in addressing the key issues, especially in relation to work. However, this is just the start. I hope that the cabinet secretary will, when he sums up, indicate his willingness to work with Parliament, and not to ignore Parliament when it suits him.

Photo of Margo MacDonald Margo MacDonald Independent 4:05, 4 February 2009

I thank the cabinet secretary for being accessible, for listening and for being fair. He practised with me the message that was preached by Johann Lamont: he acknowledged that I have a mandate, too. It is a more limited mandate than that of the parties in this chamber, and for that reason my objectives were perhaps more limited in my negotiations with the cabinet secretary. It was a pleasure to do business with him, and I look forward to repeating the process all over again next year. I have some ideas in mind.

Next year, Parliament will continue to be a Parliament of minorities—Angela Constance was correct in much of what she said. However, we would all do better to explain to Scots that, in this Parliament of minorities, it will be continuous negotiation and not name-calling that determines the outcome of proceedings. Shame on those who say that one cannot have a good Tory. I used to believe that, too—until I came to this place of consensus. I now think that it is much better to listen to what the Tories have to say, because they have some good ideas—and I do not care whom they pinched them from, so long as we put them into effect.

It is better still, I think, to do what Labour members have suggested and to start the horse trading earlier. Had that happened, we would not have to decide now whether to keep on the hair shirts that were so speedily donned last week, or to cast them off and say, "Everything is all right now." I have campaigned for the capital city supplement for years, and I always started early, as every finance minister would admit. However, one outstanding question has arisen from some of the exchanges. I do not want to pursue the idea that there is any division between the twin cities of the plain. It would be an artificial division. I want the cities to work together and I have made moves in that direction. What I want to know is this: should I infer from what Labour members say that they will, the next time they are in government, withdraw the capital city supplement? I ask the question because Edinburgh will still be the capital and will still perform services that are peculiar to the capital on behalf of the rest of Scotland.

Photo of Margo MacDonald Margo MacDonald Independent

I hope that Margaret Curran will not mind if I do not take an intervention just now. I will see whether I have time at the end—but there is something else that I would like to start negotiating on now.

Parliament is to have a review of public spending, and we are to have a group including representatives of all the parties in the Parliament. It should also contain representatives of no party in the Parliament. A considerable body of opinion stands behind the idea of independent negotiation. For example, Patrick Harvie can point to opinion outside this chamber, and that opinion should be represented in the group's deliberations. I therefore give notice that I will be knocking on the cabinet secretary's door to suggest my name for a post.

Finally, I thank the cabinet secretary for the courtesy that he accorded me, and for his sheer patience. The city of Edinburgh's capital city supplement is safe, and it will be a year-on-year budget heading because we will continue to be the capital. I also thank the cabinet secretary for sensibly saying that he will give early and sympathetic consideration to Edinburgh's request on council housing. The need is urgent. I did not try to put a figure on it, because I knew that the cabinet secretary was trying to accommodate many other interests.

Having thanked the cabinet secretary, I am now quite prepared to give way to Margaret Curran.

Photo of Margaret Curran Margaret Curran Labour

I am shocked that Margo MacDonald seems to have abandoned all her criticisms of the Tories, and appears to be cosying up to them. In response to her direct challenge to me, I tell her that Labour recognises the challenges that Edinburgh faces and that the city has a special status as our capital. However, we also recognise the challenges that other cities face—especially Glasgow, which hosts half of Scotland's poor. It is particularly divisive to say that one city's needs override those of another.

Photo of Margo MacDonald Margo MacDonald Independent

That is the last time I will give way to Margaret Curran. I say, following that full exposition of where Ms Curran stands on the position of the cities, that Edinburgh is the capital city. It undertakes unique services and provides unique facilities on behalf of the whole country, so it is not fair that Edinburgh council tax payers should pay for those with the expenditure not being shared throughout the country.

In that respect, Edinburgh is unique. In respect of health, Glasgow is uniquely bad. I kept my tongue between my teeth when it came to reviewing the Arbuthnott report on expenditure and how money was allocated according to need, because Glasgow's need is much greater than ours in Edinburgh. However, I would hate an artificial division between the cities to be one of the fall-outs from the current budget process. Aberdeen has a good case in all sorts of ways to argue for specialised cash, as have all the cities. I acknowledge that. I simply argued for on-going recognition of Edinburgh as the capital, and acknowledgement that right now, because of the city's peculiar situation in relation to the fall-out from the collapse of its financial centre, there is an urgent need for public housing.

The cabinet secretary has satisfied my requests, in that he is willing to take them on fairly.

Photo of Alex Neil Alex Neil Scottish National Party 4:12, 4 February 2009

Harold Wilson once said:

"A week is a long time in politics."

I can hardly believe that it is only a week since I was attacking my good friends in the Liberal Democrats and in the Labour Party for their proposals. However, they have made great strides in the intervening week in reaching agreement with the Government.

At the end of the day, this is not about what any party or individual achieves in the negotiations, but about what is best for Scotland as a whole, and for the particular requirements of different sections of our community and the different geographies of Scotland.

Last week, David McLetchie made one of the best speeches in the chamber; he has done the same this week. The first point that he made last week was about the amount of discretionary spend that the cabinet secretary has at his disposal. As Angela Constance very articulately pointed out earlier, when the commitments on local government, salaries, meeting our European Union obligations and all the rest are pared away, the amount that remains to be divvied out in a different way from the previous year is very limited. I congratulate the cabinet secretary on becoming almost a magician in trying to meet the demands of all the parties—with the possible exception of the Greens—in order to achieve a near-unanimous vote.

I share Margo MacDonald's concern: it would be a terrible tragedy if the budget debate ended up setting one part of Scotland against another. The basic principle is that resources need to be allocated on the basis of need. There are particular needs in Edinburgh that result from its status as a capital city, and the cabinet secretary—

Photo of Alex Neil Alex Neil Scottish National Party

I will come to Andy Kerr in a minute.

The cabinet secretary has tried to meet those needs. As I represent Lanarkshire, I know that there are similar needs in Glasgow and Lanarkshire, and I hope that those will be reflected in the additional spend on health, housing and other services. I also hope that the review of local government funding and allocation of resources will help to improve the formula and ensure that allocations are based on economic and social need.

Photo of Andy Kerr Andy Kerr Labour

The member's assertion that Labour sought to divide our cities is far from the truth. Through the cities growth fund, Labour sought to ensure that extra resources were made available to all our cities in recognition of their individual needs and circumstances.

Photo of Alex Neil Alex Neil Scottish National Party

I did not accuse Labour or anyone else of trying to divide us; I just expressed the hope that none of us will fall into the trap of trying to set, or accidentally setting, one part of Scotland against another.

Another important element is the Liberal Democrats' point about borrowing powers. The Northern Ireland Assembly represents a smaller population and has a smaller budget than the Scottish Parliament, but it has the power to borrow up to £2.2 billion. It makes sense, particularly in a time of recession, to give us the flexibility and the additional resource that can come from having the power to borrow. I draw a comparison between what happened last week south of the border and our current limitations north of the border. Quite rightly, Lord Mandelson announced a package of support for the car industry, which is concentrated south of the border; that support, which amounts to £2.2 billion, comprises a combination of different types of borrowing and guarantees.

Just as that support is justified for the car industry in the midlands and elsewhere, it would be entirely appropriate for such funding, if necessary, to be made available from borrowing to help the Scottish economy. For example, it could help us to meet the cost of the new Forth crossing. Scotland requires such support. I hope that, when we discuss borrowing powers, not just in the context of tomorrow's debate but in relation to the direction that the Parliament should take, we will achieve a consensus on the principle that we should have such powers.

However, the debate on borrowing powers is not a naked debate, because it relates to powers over taxation. A Parliament's ability to borrow is enhanced if it also has the power to raise its own money for its own spending. Therefore, I argue, as the Steel commission did, that as well as considering borrowing powers we need to consider revenue-raising powers, even in a devolved situation, because the two go hand in hand.

We all recognise that we are living in difficult times. Last week's International Monetary Fund forecasts were not encouraging for Britain as a whole, and we take our share of those. It is therefore incumbent on every one of us, irrespective of our particular priorities and views, to support the budget at 5 o'clock, not for the sake of any party or individual but for the sake of Scotland.

Photo of Frank McAveety Frank McAveety Labour 4:18, 4 February 2009

I echo the sentiments that Alex Neil expressed at the end of his speech. Every member in the chamber wants a budget that is right for our country, particularly given the straitened circumstances that we know the country faces in the next couple of years.

Alex Neil quoted Harold Wilson, who said:

"A week is a long time in politics."

After seeing Tavish Scott's performance on "Newsnight", I am tempted to think that six hours is a long time in politics, given the Liberal Democrats' about-turn in relation to their key demands of the Government—but more of that later.

I am sure that the Conservatives will respond to this point, but I was concerned about the leaflet that they rushed out. When I read the horror stories in the leaflet, I thought that it was advertising a film adapted for Scottish circumstances—the Tory version of "Apocalypse Noo". The leaflet said that there was going to be a major meltdown in the Scottish economy. A week later, we know that that was always balderdash. We knew that just 24 hours after last week's vote.

We are in a better position this week because members have come together and recognised that there are areas of mutual concern and consensus. I agree with Margo MacDonald. I do not want there to be a disproportionate distribution of resources between Glasgow and Edinburgh, or between other cities. However, urban policy must reflect the fact that a number of Scottish cities have very different and distinctive needs. Margo MacDonald—and, indeed, my Labour colleagues in Edinburgh and the Lothians—is perfectly right to highlight why Edinburgh should receive a fairer allocation of resources. The same, of course, can be argued of Glasgow by Glasgow members, including me.

Diogenes said that we were born with two ears and one mouth, by which he meant we should listen more and speak less. Of course, I am going to ignore that advice totally for the next three or four minutes. However, the fact that the cabinet secretary has spoken less and listened more has had benefits, although I have to say that I found all the scurrying about the chamber to secure a solution during last week's debate rather unedifying. Mr Swinney might well have been trying to seek solutions but, given the character traits of our First Minister, I am not totally convinced that his approach necessarily led to last-minute solutions. I see Patrick Harvie nodding, so some secret diary entry about what went on might still emerge.

The fundamental question is: what can we do in the face of a global economic recession? I understand the Tories' natural partisan behaviour in trying to blame a UK Labour Government solely for the situation. There are times for engaging in that debate; however, I will take no lectures from the Conservatives, whose Governments, after all, authored two UK recessions and who never really wanted the Scottish Parliament in the first place. Given the historical facts, I find it very difficult to come to terms with the Tories' language on this matter.

Labour has consistently articulated its position on how we need to respond to the situation. At the weekend, I was disappointed to hear that business leaders were concerned about some of our demands. Given the difficulties faced by individuals in certain sectors, I understand why some might have those concerns, but I think that in the midst of a recession it is wrong to argue that apprenticeships should not be considered for continued support. Indeed, that was the very brutal lesson that we needed to learn in the 1980s and 1990s, given the skills shortage facing the new economy that emerged at the beginning of the century.

I realise that the Liberal Democrats might have moved on in the debate. However, their position today stands in sharp contrast to some of the previous positions that Jeremy and Tavish have articulated. It all puts me in mind of "Pride and Prejudice", with Tavish in the role of Darcy—

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Please refer to members by their full names.

Photo of Frank McAveety Frank McAveety Labour

With Tavish Scott in the role of Mr Darcy—[ Laughter. ] I must apologise; I am not a massive enthusiast of Victorian literature.

As I say, in my paraphrase of "Pride and Prejudice", Tavish Scott plays the role of Mr Darcy; unfortunately, Miss Elizabeth will have to be played by John Swinney. In his letter, Mr Darcy writes, "Miss Elizabeth, I have struggled in vain and I can bear it no longer. These past months leading up to the budget have been a torment. I have fought against my better judgement, my family's expectations and circumstance. All these things I am willing to put aside. I ask you to end my agony. I don't understand it, but I love you." Tavish Scott, John Swinney and the First Minister might well have authored such a letter jointly.

Despite all that, the fundamental question in today's debate—and, indeed, in everything that has happened in the past seven days—is whether the budget is better today than it was seven days ago. I think that it is. Have we reached more of a consensus in the debate on the future of Scotland's budgets? I think so, although I must argue with Alex Neil about the cabinet secretary's room for manoeuvre. Mr Swinney has, for example, £950 million of end-year flexibility that was not available to previous finance ministers in the Scottish Parliament, and access to certain other flexible arrangements might also lead to solutions.

The fundamental message from my constituency is that we need to keep people in work where possible and to sustain the hope that I think young people have begun to have in the 10 years since this Parliament's creation—and, indeed, in the 12 years since the election of a UK Labour Government that had genuinely different priorities. As a result of the debates that we have had, we have managed to get a much better budget. Last week, one of the newspapers said that people get excited and hung up on process, not the end result, but what really matters is that we have a budget that makes a difference for the citizens we care about.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 4:24, 4 February 2009

I regret that when it seems that all parties that are represented in the Parliament agree for the first time on active participation in the Calman commission, Andy Kerr chose to ridicule that in his opening speech. I hope that he will reflect on his comments and that the Labour Party and the Conservatives—and, indeed, all parties—will see the process as a real and active way of bringing long-standing changes. As members of all parties have said, that could be the most significant long-term effect of the discussions that have taken place over the past week.

The budget is still not the best or the most appropriate budget for the economic situation that we face in Scotland. As Frank McAveety said, it is better than it was last week, but it is still woefully inadequate to deal with the situation that Scotland faces. However, the long-term approach to powers for the Parliament and the way in which our budget discussions will be conducted has improved. A process is starting now for members of the parties that are represented in the Parliament and, potentially, people outside it to consider not only strategically but aggressively lines of budget spend. Critically, for the first time civil service support will be part of the process. That is a significant move.

Photo of Patrick Harvie Patrick Harvie Green

I have no beef with Jeremy Purvis's assertions about the longer term and borrowing powers. However, does he accept that if the Liberal Democrats still regard the budget on which we will vote tonight as "woefully inadequate", they should have been less keen to trot along and offer their support immediately after the budget fell last week? That would have given the SNP an incentive to make the budget a little less inadequate today.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I take note of the negotiating tips that Mr Harvie has given over the past week and will come back to some of his remarks in a moment.

Councils throughout the country have welcomed the agreement that has been reached for the first time that revenue support for schools projects will be forthcoming. The Government knows our views on the Scottish Futures Trust—they are perfectly clear—but the fact that level playing field support, or revenue support as it is now called, is being restored is significant and has been warmly welcomed.

Joe FitzPatrick, Keith Brown and other members have argued consistently for the need to engage in the Calman debate on the powers of the Scottish Parliament. That is also welcome.

David McLetchie was so impressed by his own speech that he thought it unnecessary to listen to many other speeches. However, there was a chronological gap in his lecture. There was a Nixonian missing 18 minutes—I refer to the time when the Conservatives voted to support the abolition of town regeneration funding through the Scottish Enterprise network. That funding was simply not transferred over to councils. He argued that town centre funding was getting close to perfection, as far as his policy was concerned; indeed, before the vote on Wednesday that was already on postcards that were handed out at Waverley station. Within a breath, he attacked us for having uncosted policies to boot.

I have asked SPICe how the Government would fund the regeneration policy—I am sure that the answer was known to Mr McLetchie. SPICe told me today that, as a result of additional Barnett consequentials for accelerated capital spending, the £60 million for the town centre policy is accelerated capital spending that must be cut from next year's capital budget. The Conservatives must tell us which councils' budgets or which capital budget lines will have to be cut next year. They have asked where alleged cuts will fall in our policy, which they do not support. It is fair enough that they should ask about that, but it is equally fair for us to ask where the real reductions in next year's capital budget lines will fall. I will not be alone in being concerned about SPICe's confirmation to me this morning that

"It is not yet known how those £60 million of cuts to the capital budgets will be managed next year."

Surely when Mr McLetchie was doing his impersonation of Wee Willie Winkie, he asked how the £60 million of cuts would be managed next year.

I enjoyed Mr McLetchie's speech—indeed, I always enjoy his speeches. His attacks on us are always well rehearsed. However, in recent weeks, they have been on alleged cuts, and perhaps in them he should have paid cognisance to the fact that there will be real cuts in capital budgets next year. Those cuts will be considered as part of the scrutiny process. No doubt, he will fully engage in the new structures that the cabinet secretary has set up.

Patrick Harvie cited my comments about the budget not only in his speech, but in his intervention. He quoted accurately my concerns about the economy and asked how on earth I could support the bill today. I remember that, at the start of the budget process last year, he said that he would not support that budget because it included funding for the M74 extension. However, he changed his view. Last week, his unshakeable, principled stance on addressing global challenges would have been placated by a last-minute 50 per cent increase in a £22 million scheme.

I was impressed by Mr McAveety's knowledge of both pride and prejudice. Perhaps he unwittingly summed up the debate, which has involved a lot of pride—not only dented, but espoused—and a tinge of prejudice. If we are all wearing hair shirts, as Margo MacDonald said, the budget is ultimately better and I hope that the country's finances will be better, too.

Photo of Gavin Brown Gavin Brown Conservative 4:31, 4 February 2009

We have heard from an unhappy Mr Purvis today. Perhaps he is suffering from indigestion after gorging on humble pie for the past seven days or so.

What matters to Scotland's people, institutions and businesses is stability and certainty. At times like these, people do not just want that—they demand it. It has been apparent in the past seven days that the mood in Scotland is clear: people want not risky games and brinkmanship but action and delivery. As one business leader said at a recent event,

"I don't care how you do it—just make sure it now happens."

The Scottish Conservatives have attempted to be responsible from the beginning—from early discussions to stages 1 and 2, final negotiations, stage 3, act 1, and stage 3, act 2. We have thought carefully about our position and our tone at all times and we have gained solid achievements.

The consequence of that is £234 million of Conservative policies that would not otherwise have been implemented. We pick out the town centre regeneration fund, which we welcomed last week, to the tune of £60 million. We have campaigned for that for a number of years—we started back in January 2007. As David McLetchie said, we have campaigned for that fund for longer than any other party has. The cabinet secretary acknowledged last week that

"In their input to the budget process, the Conservatives have set out the arguments for a new fund to support town centres."—[Official Report, 28 January 2009; c 14406.]

As he said today, the Conservative party has championed such a fund.

Town and village centres are the life-blood of communities. Many have been at a competitive disadvantage for several years and some have been on a downward spiral. The fund will be a shot in the arm. It has been described—rightly—as new money that can build momentum for regenerating our towns and put them back on an upward spiral in the next couple of years.

That success builds on several successes that the Scottish Conservatives obtained last year—1,000 extra police to go on our streets, an acceleration of the small business rates cut and an emphasis in the drugs strategy on recovery instead of damage limitation or maintenance.

If the bill is passed, the small business bonus will increase again from 1 April. More than 150,000 businesses, in every constituency, stand to gain. Of those, 120,000 will pay no business rates at all from 1 April. The other 30,000 or so will receive a meaningful discount.

Best of all, the small business bonus comes with no strings attached. Businesses decide how best to use the saving, perhaps by creating a new display, installing a new shopfront or employing a new member of staff. In the current climate, the saving might make the difference between keeping and losing a member of staff. It is clear to all Scottish Conservatives that business owners know best how to spend that money, which is why it should not be tied. They know far better than me, the Government, any Opposition politician or any trade union how to spend their money. In these difficult times, such a measure could be the difference between profit and loss or the difference between trading and not trading.

I turn to the other Opposition parties. We have seen the Liberal Democrats and the Labour Party attempting to run the four-minute mile along the road to Damascus. Both parties have expressed a belated desire to appear positive, but what did they get that made it all worth it? David McLetchie offered a good analysis of what the Liberal Democrats got. As one reporter said:

"It would be most unfair to say the Lib Dems have been bought off—their demands would not cost a penny."

Last week, my colleague Derek Brownlee cruelly described the Liberal Democrats as capitulating for the cost of a stamp. Even that is not true, because they can now e-mail the Calman commission, which would make a 27p saving. Perhaps next year the Lib Dems will go for a full pound in their negotiations. Some of the suggestions that the Lib Dems have made are perfectly sensible—some are things for which we have argued for months—but it is hard to see how they square them with the passing of the budget for 2009-10.

Photo of Gavin Brown Gavin Brown Conservative

I am always happy to take interventions from Mr Rumbles.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Gavin Brown seems genuinely upset that the Liberal Democrats are voting for this consensus-based budget. Why are the Conservatives so upset about that?

Photo of Gavin Brown Gavin Brown Conservative

Mr Rumbles did not even have time to roll over and have his tummy tickled before he agreed to vote for the budget. Although the Lib Dems' support for the budget is belated, we are delighted that they are going to vote for it, with all that that entails.

It is difficult to see what is now on the table that was not on the table before for the Labour Party. As one newspaper reporter said this week:

"Mealy-mouthed Labour leaders skulked around in the background saying plenty but doing nothing".

We have heard once again today that Labour is still in denial about the fact that the recession in the United Kingdom has an awful lot to do with Gordon Brown, which is why, as the IMF said, the recession is projected to be deeper and longer than in any other western country.

The Conservatives have taken a responsible approach from day 1. We have sought to help with measures for the economy and other Conservative policies. We want to see town centre regeneration, business rates cuts, more police on the beat, and accelerated capital spend. In short, we want a budget for the high street. That is why we will support the budget today.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I call David Whitton. Mr Whitton, you have up to 10 minutes.

Photo of David Whitton David Whitton Labour 4:37, 4 February 2009

Thank you, Presiding Officer. I hope that I can rise to the challenge that you have just set me.

A week ago, when the Cabinet Secretary for Finance and Sustainable Growth was doing one of his many interviews about the budget, he said that it was his duty to put forward a budget that convinced Parliament. As we all know, last week he and the SNP failed that test. However, it is to his great credit that he did not shirk his responsibility or try to deflect any blame that was heading his way for what happened then. Instead, he reintroduced his budget and set about further negotiations in order to be more convincing this time. Has he succeeded? We do not have to wait long to find out.

It is interesting today to reflect on what was said during our debate last week. Derek Brownlee, the so-called financial guru of the Conservative group—at least, that is how Mary Scanlon describes him; I have heard other names for him, but parliamentary privilege prevents me from mentioning them here—spent most of his time attacking the Labour Party. There was nothing new about that. Since the debate last week, and today, he and his sidekick Mr Gavin Brown have been running around boasting about size—the size of their so-called achievement. In typical Tory boy fashion, they go back to the days of Loadsamoney, when biggest meant best. It is a wonder that the Del Boy and Rodney of Scottish politics did not turn up for the talks with Mr Swinney in a yellow Robin Reliant with their nicked policies, such as the town centre regeneration fund, loaded in the back.

Photo of David Whitton David Whitton Labour

I say to Mr McLetchie that I am just coming to chronological order. He should just wait. My friend Mr Brownlee and I happen to agree on the need for a town centre fund. It is just a pity that he did not vote for one on 15 January 2008—another date for the chronology on which Mr McLetchie is so keen—when he had the chance to do so in the Finance Committee. However, as Angela Constance pointed out, a sinner who repents should always be welcome—let us welcome a sinner who has repented.

Photo of Derek Brownlee Derek Brownlee Conservative

If I remember correctly the detail of the amendment to which the member refers, it proposed to fund town centre regeneration from a non-existent budget line. It was then revealed that the budget line was the local government settlement—Labour wanted to take money from councils and then give it back. How would that have helped regeneration?

Photo of David Whitton David Whitton Labour

The member is talking nonsense, as per normal, but never mind—he repented.

Photo of Andy Kerr Andy Kerr Labour

The money was taken from capital projects.

Photo of David Whitton David Whitton Labour

Thank you, Presiding Officer. They are a rowdy bunch—typical Tories.

I am sure that Mr Brownlee and his colleagues welcome the fact that his request for £20 million was turned into a £60 million boost for Scotland's small towns, thanks to Labour's intervention.

By a lucky coincidence, a letter from my favourite minister, Mr Jim Mather, arrived at my Kirkintilloch office today. Mr Mather has agreed to meet local traders in my constituency to discuss their concerns. He can rest assured that he may bring his mind maps with him; a reply, with dates, will be sent to him shortly.

Mr Brownlee is a man with an amazing capacity to predict the future. Last week he declared:

"Tavish Scott ... has, since 2007, elevated irrelevance to a point of political principle".—[Official Report, 28 January 2009; c 14414.]

Given the events of the past few days, who could disagree with that statement? 2p or not 2p, that was the question. We now know the answer. However, the slings and arrows of outrageous fortune have certainly not gone the way of the Liberal Democrats. In one tortuous interview on "Newsnight Scotland", referred to by my colleague Frank McAveety, Mr Scott was asked for the details of his masterstroke—the get-out-of-jail-free card that he had presented to the First Minister in order to get the budget through. He said, "It's a secret. I can't tell you." That from the party of openness and transparency.

Well, now the secret is out—it is an economic storm rescue plan that involves Mr Salmond writing a letter to the Calman commission about borrowing powers, a subject about which we will hear a lot more tomorrow. My colleague Andy Kerr did not rubbish the commission, as Mr Purvis suggested—all he said was that Mr Scott is seeking vague promises from Mr Salmond. We all know that Mr Salmond likes writing letters, but they are usually addressed to Sir Sean, rather than Santa. I suppose that getting him to correspond with someone else is an achievement, but it will not change the budget by 1p, never mind two. What effect has that policy earthquake had on the Liberal finance spokesman? Alas, poor Jeremy Purvis, I knew him well.

I congratulate Patrick Harvie and the Greens on sticking to their principles. One or two armchair generals sent letters to the papers suggesting that, having had the temerity to vote no last week, they should now get nothing, but that is not the case. The insulation programme, such as it is, will help to provide vacancies for some of the apprentices whom we want, along with jobs for those who will oversee the work. My only advice to Mr Harvie is that there is an old saying about a bird in the hand being worth two in the bush, and that £33 million is probably worth more than £15 million. I am sorry that he is shaking his head.

Photo of Margo MacDonald Margo MacDonald Independent

Could Mr Whitton advise me of whether, the next time that Labour is in government, it will discontinue the capital city supplement?

Photo of David Whitton David Whitton Labour

I look forward to the next time that we are in government, when we will continue our capital city's growth fund.

Mr Swinney was right last week when he said that the focus of the Government and the Parliament should be

"to produce a budget that does everything" possible

"to support recovery from the difficult economic conditions that we now face."—[Official Report, 28 January 2009; c 14403.]

That is why Labour members were determined that everything possible should be done to create and maintain opportunities for young people and to support those who have already lost their jobs or are facing the prospect of redundancy; several members have spoken about that this afternoon. As my colleague Andy Kerr said on opening for the Labour Party, we in the Labour Party remember clearly the Tory recessions of the 1980s and early 1990s. We remember over 3 million people being out of work and—worse than that—youngsters leaving school with no job, no training opportunities and no hope.

That is why today's modern apprenticeships are so important. They provide jobs with training and not training for jobs. At present, 10,714 modern apprentices are in training. The SNP has accepted our request to create an additional 7,800 modern apprenticeship places in this budget year—an increase of 70 per cent. That is a step change that will make a difference. The SNP has committed to making further increases next year. We look to Mr Swinney to honour that commitment. He knows the numbers that we are looking for. The young people of Scotland will expect him to deliver on that.

Labour went into the budget negotiations with a package of measures to help to tackle the situation that our country faces. As we said at the time, and many of my colleagues have mentioned in the debate, our top priority was to create those modern apprenticeship places. Last week, we had no firm numbers and no guarantee that young people could finish a course—we had only an assurance. There was no clarity on partnership action for continuing employment funding or NHS budgets. We voted no and we were right to do so.

What has changed? After further talks with Mr Swinney, a meeting between our leader, Iain Gray, and the First Minister, and yet another exchange of letters between them, what have we achieved? This year, 7,800 more young people will get an apprenticeship with funding to support them through a three-year programme and we have a written commitment that more apprenticeships will be created next year. We have also achieved apprenticeship places that are tied into the accelerated capital expenditure programme, and an apprentice guarantee scheme—not simply an assurance. Also, Iain Gray has persuaded Mr Salmond to hold an apprenticeship summit with key employers from all around Scotland to explore how modern apprenticeship places can be created and maintained. Furthermore, we have achieved £50 million for the PACE programme, £60 million for the town centre fund, and a promise from the Government that it will tell NHS boards at the beginning of the year how much they will get from centrally held funds. Those achievements add up to a package of measures that we on this side of the chamber can now support.

Unlike the Tories, the public are not interested in who got most from the budget process. What counts for the public is what is delivered. Does securing what we have achieved mean that we will support all that the SNP is doing in government? No, it does not. Questions remain about the Scottish Futures Trust, the Government's local income tax proposals and the local government settlement. We will continue to put questions on those matters. For the Labour Party, unlike other parties, the process was never about the price of our votes but about doing the right thing in terms of creating job, providing training places and giving hope to those who face redundancy. Our package does that. The SNP has accepted it. We will therefore vote for the budget at decision time.

Photo of John Swinney John Swinney Scottish National Party 4:47, 4 February 2009

Many harsh things have been said during the debate, by members on all sides of the chamber—

Photo of John Swinney John Swinney Scottish National Party

Mr Rumbles is absolutely right. I will resist the temptation—the almost all-consuming temptation—to do so.

In the previous stage 3 debate, Mr McArthur accused me of being a soothsaying rodent. I understand that he used the same terminology in today's debate, but that he has now withdrawn the accusation. I am grateful for the increase in the quality of parliamentary terminology.

David McLetchie spoke of the wilderness years. I became quite worried for him, given the dangerous ground on which he stood when saying that. Some of us have long memories. We remember the real wilderness years that brought some of us into politics to lead our country in the direction of paradise, with a Scottish Parliament and a journey to independence. That said, I listened with interest to David McLetchie's amusing journey through the wilderness years.

There were a couple of contradictions in Margaret Curran's remarks. She seems to think that there is something absolutely and atrociously despicable in the Government coming to an agreement with the Conservatives. Mr Whitton knows full well that his colleagues sit in a coalition with the Conservatives on East Dunbartonshire Council. As Mr FitzPatrick pointed out, the Labour Party works with the Conservatives on a co-operative basis on Dundee City Council.

Photo of Margaret Curran Margaret Curran Labour

I was trying to make the point that you should be explicit about the coalition that you have with the Government. [ Laughter. ] I beg your pardon: I meant the coalition that you have with the Tories. You should make it clear—Mr McLetchie rightly gave you praise for this—that you are implementing a Conservative approach to Government.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I remind members to make their remarks through the chair.

Photo of John Swinney John Swinney Scottish National Party

Margaret Curran is on common ground with the Conservatives about the town centre regeneration fund—although I concede the fact that there is a debate about the chronology. It is being suggested that it is somehow despicable for the Government to work with the Conservatives on certain issues—we are not working with them on all issues; they frequently vote against us—yet it is also being suggested that it is all right for the Labour Party to do the same thing. That is inconsistent.

Photo of David Whitton David Whitton Labour

On a point of information, it is actually a Labour-led coalition in East Dunbartonshire.

Photo of John Swinney John Swinney Scottish National Party

That, of course, makes all the difference.

The other contradiction in Margaret Curran's speech centred on a vigorous attack—she always does this, and with tremendous passion—on our having presided over some cuts in taxation. I know that it is hard to believe, but the United Kingdom Labour Government has also, on occasion, cut taxation at different stages. It is obviously okay for it to do so. Of course, the Labour Government has bumped up taxation, too, and it will be bumping it up again in the future. We must be consistent about the lines of argument that we advance.

Angela Constance made a fantastic contribution to the debate, on the emergence of some of the challenges that the budget process has posed for the Parliament this year. We are going through a learning process as a Parliament that is operating, for the first time, without an in-built majority. Last week, in a pretty painful fashion, we found out the consequences of a budget not succeeding. I readily concede that the public services of Scotland did not emerge with absolutely no money last Thursday morning. However, without the speed of engagement between different political parties that has taken place over the past seven days, we could have stumbled towards a situation where our public services were not properly supported at a time when support is required. Angela Constance made the point that it is important that the debate is driven by the desire to secure an outcome that is right for our people. That shows the correct approach, which is driven by common sense.

Photo of Johann Lamont Johann Lamont Labour

The Labour side was frustrated because there was not a sufficient speed of engagement before last Wednesday. In fact, Labour did negotiate seriously. Does the minister agree with me that it ill behoves the Parliament to impugn the motives of those who sought to improve the budget, in the way that Labour did?

Photo of John Swinney John Swinney Scottish National Party

I will come on to that point. It is not particularly constructive for us to go over old ground. Labour front-bench members may contradict my remarks in public if they wish, but the Government engaged genuinely with the Labour Party in discussion on the budget process—better than we did last year—in advance of the Budget (Scotland) (No 2) Bill being debated in the Parliament last week. There was more and better engagement this year compared with the 2007-08 process. Personally, I felt that we were very close to getting some form of agreement. The areas of division were not that great. In the end, we were not able to bring about an agreement, but we have been able to do so in time for today, which I warmly welcome. In his opening speech, Mr Kerr made it clear that the engagement with the Government had been successful, and he welcomed that.

When we spoke initially about the budget process, the Liberal Democrats advanced their principled position that we should reduce taxation. The Government could not accept that point; we did not think that it was the right thing to do; we thought that it would not have commanded support in the parliamentary chamber. Following the different circumstances in which we found ourselves last Wednesday, we have had a constructive and meaningful discussion. I make particular reference to the point in the Liberal Democrats' propositions that relates to what is possibly the greatest challenge for the Parliament: public expenditure. We have set out a working-group approach, to advance the arguments around the challenge of the public spending profile in future. I missed the theatrical parts of Frank McAveety's speech—those parts are always entertaining—but I listened to the substantive final 20 seconds of his speech, in which I think that he was reminiscing about the previous eight years, when there was a substantial above-inflation increase in public expenditure. That will not be the case during the next six to 10 years in the Scottish Parliament, so the Liberal Democrats' suggestion that we examine and review our approach to public expenditure is timely and necessary. I look forward to all parties taking part in that process. Whether there will be time on the agenda for Margo MacDonald to participate is an open question, but I am sure that we will manage to squeeze her into the discussions—how could we exclude her?

The Government has tried to work to secure agreement with the Scottish Green Party. Patrick Harvie was right to say that he came to us in October with proposals for a home insulation scheme. We have had a significant amount of engagement on the matter and the Green party has been given access to Government officials, to try to advance the matter in detail. It is unfortunate that we were unable to secure a final agreement, as we found last week.

I appreciate that Mr Harvie might well be disappointed with the quantum of resources that have been allocated to the home insulation scheme. I simply make two points to him and to Mr Harper. First, the Government has tried to introduce the largest home insulation scheme that has been announced and implemented in Scotland. Secondly, to ensure that we brought other political parties to a point of agreement, we have had to identify resources that could be deployed to support commitments on apprenticeships that the Labour Party wanted. As finance secretary, I cannot spend the money twice; I can spend it only once.

Photo of Patrick Harvie Patrick Harvie Green

I entirely understand that the cabinet secretary cannot spend money in the Scottish budget twice. We have been asking him to spend money differently. We have stressed time and again that a home insulation programme will be successful at driving up uptake if we remove the barrier of cost. Why does he continue to propose a means-tested approach, which has failed, failed and failed again?

Photo of John Swinney John Swinney Scottish National Party

For the simple reason that I cannot justify paying for people like me to get home insulation for nothing when people who are more deserving than I am require it. In the Government programme we are trying to ensure that all aspects of government recognise the contribution that they can make to tackling climate change, through programmes such as the climate challenge fund or through the work of Scottish Enterprise and universities to encourage more innovation and technology developments.

The Government listened carefully to the Parliament during the past couple of weeks. I think that we have understood the importance of bringing people to a point of consensus that can support a budget proposition. I give Parliament the commitment that as we engage in future budget processes, that will be the tone and style of the Government's engagement. We will seek to bring people to a point of agreement so that we can put in place a budget that reflects the needs of the people of Scotland and the aspirations of our country at a difficult time. That will be the thinking process that the Government puts into the formulation of choices on the budget and on the difficult issues that we confront. As a Parliament, we must demonstrate to the people of our country that we have listened to their concern that the financial arrangements to support our public services and deliver for the economy must be in place. That is precisely what the Government's budget is designed to ensure.

Photo of Alex Fergusson Alex Fergusson None

That concludes the debate.

Before we move to the next item of business, I am sure that members will want to join me in welcoming to the gallery the German ambassador to the United Kingdom, His Excellency Herr Georg Boomgaarden. [Applause.]