Supporting Economic Recovery

– in the Scottish Parliament at 2:15 pm on 26th March 2009.

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Photo of Alex Fergusson Alex Fergusson None 2:15 pm, 26th March 2009

The next item of business is a subject debate on supporting economic recovery.

Photo of John Swinney John Swinney Scottish National Party 2:57 pm, 26th March 2009

I welcome the opportunity to lead a further debate in the Parliament on the Scottish economy and the programme of activity that the Government is undertaking not only to protect the most vulnerable people during the recession but to build strong foundations for economic recovery.

The reality of the recession is now hitting homes and high streets throughout the country. We must fully understand the impact of the recession. Unemployment is rising, but here in Scotland it is still lower, comparatively, than in the rest of the United Kingdom. Economic activity also remains higher in Scotland than in the rest of the UK. Having said that, we do face major challenges with the loss of employment and the loss of business activity. Behind the economic analysis statistics are real people who have the skills and willingness to work but are being denied the opportunity to access employment. That is the reality of the recession in all of our constituencies. The Government has pledged to do all that we can to support individuals to secure alternative employment should they face unemployment.

We should acknowledge that, as in any recession, some sectors and businesses remain resilient and some are well placed to adapt and seize the opportunities that the recession presents. The Government has every confidence in the ability of Scottish workers and businesses to respond to the challenges that we face and to build on our strengths and capture new opportunities as they emerge.

One opportunity that the Government is determined to seize in the face of the difficult economic circumstances is the chance to capitalise on the new commercial opportunities, new jobs and new technologies that will come from the transition to a clean, green economy. Since the summer of 2008, in a difficult financial climate, our renewables sector has announced nearly £1 billion of new private investment. That represents 1 per cent of our annual output. Renewables already provide us with more than 20 per cent of our electricity needs and they are set to provide us with an even greater proportion.

The Government is putting in place measures to incentivise and support that process. Our £10 million saltire prize is our clean, green energy challenge to the world. Through the prize, we will draw in the talent and ideas to ensure that Scotland, which has about a quarter of Europe's tidal and offshore wind capacity, leads the world in marine energy. That ambition can only be supported by the welcome announcement today that, through the Government's work, the intervention of our economic development agencies and a co-operative partnership with Argyll and Bute Council, we have been able to secure almost 100 jobs at the Vestas wind turbine factory near Campbeltown. In doing so, we have created the prospect of a further 400 green jobs for Scotland. That will transform the prospects of the Kintyre peninsula economy, and it provides further evidence of the opportunities that exist for Scotland to establish a worldwide reputation for supporting green energy industries.

Photo of Lewis Macdonald Lewis Macdonald Labour

On funding for marine energy, does Mr Swinney accept the point that the Institution of Mechanical Engineers and others have made that, after the completion of the current wave and tidal energy scheme and long before the awarding of the saltire prize, a funding gap of perhaps £40 million will kick in some time in the next year or two?

Photo of John Swinney John Swinney Scottish National Party

The Government will remain absolutely focused on ensuring that the wave and tidal industries can be supported through the challenges that there will undoubtedly be in ensuring that their products are fully deployed and that we see economic benefits from that deployment. Extensive discussions are taking place with companies in that sector. The Government will, of course, listen carefully to the sector's analysis and representations to ensure that we can fully absorb the opportunities in developing the area of activity. I think that we all agree that we were slow off the mark in capturing all the benefits of the onshore wind sector. We are determined to ensure that we fully capture opportunities in the wave and tidal sectors for the benefit of the Scottish economy.

The Government has focused on taking measures to support the Scottish economy for some time. Long before the current economic difficulties, we reduced business rates through the small business bonus scheme, which is now benefiting tens of thousands of Scottish businesses. From next month, thousands of businesses in the small and medium-sized enterprise sector will pay no business rates at all. We also took early action to ease the pressure on household bills by freezing the council tax. That is undoubtedly supporting households, and the small business bonus scheme is supporting businesses at this difficult time for the economy.

As economic conditions have changed, so the Government has adapted. Last summer, we developed our six-point programme for recovery.

That programme was set out in detail in January. In February, we secured a budget for economic recovery, which enhanced a number of interventions that the Government was making, and we published a progress report on our programme that provides a clear and coherent structure to our activities.

That report was welcomed by the national economic forum, which met last week. Ministers, including the First Minister, attended that meeting to listen to the concerns of forum members. I heard a commitment to focus on opportunities and to look forward to Scotland emerging stronger from the recession. The members of the forum heard an update from the Council of Economic Advisers—the Labour Party spoke about that in an earlier debate. Forum members will feed material to the Council of Economic Advisers, and they are key partners in driving Scotland's economic recovery. We will continue to listen to and work with Scottish business and our partners in the public sector for the benefit of the Scottish economy.

The Scottish Government continues to revisit and revise its economic recovery programme to ensure that it meets needs in the areas for which we are responsible and fully supports economic recovery. Since our previous debate on the economy, the Government has set out 10 energy pledges, which will more than likely support in excess of 16,000 jobs in Scotland. Those pledges demonstrate our commitment to a green economic recovery.

We have ensured that, this year, a record £644 million will be spent on social housing investment to assist the construction sector in Scotland. Earlier this week, we announced that £6 million of European Union funding will support jobs in the Highlands and Islands. That made good our determination to accelerate the allocation of our structural funds.

In collaboration with business organisations, we have launched the business club Scotland initiative to ensure that Scottish businesses get maximum value from the range of major events that take place in Scotland. We have provided an extra £1 million to Citizens Advice Scotland to help families with debt problems, and through implementing the progress that we made on the apprenticeship issue in the budget, we have made available funding for 1,000 extra apprenticeships in the city of Glasgow.

The Government is also taking forward the opportunities that arise from the year of homecoming, which shows that even in these times of economic difficulty we can find opportunities and benefits. We are well on track to meet our target of attracting 100,000 additional international visitors to Scotland, generating £40 million in tourist activity and creating more than 1,000 new jobs, and we are achieving that in difficult economic circumstances. All members who have interacted with the tourism industry in the past few weeks during tourism week and other events will have been impressed by the optimism and confidence of the tourism sector and its determination to contribute significantly to the year of homecoming and our economic performance in 2009.

In supporting economic recovery, the Government is putting a high priority on investment in Scotland's infrastructure. We are pushing ahead with accelerating £323 million of capital spending as part of a wider programme of investing £3.5 billion in the Scottish economy this year. Our swift action will support an estimated 5,800 additional jobs in Scotland, which are essential at this time.

The Government's clear view is that measures to boost and expand the economy should support capital investment projects and not reduce VAT—as the United Kingdom Government did some months ago—because such capital investment delivers significant benefit to the Scottish economy.

Photo of John Park John Park Labour

The VAT saving is comparable to the saving that is being made through the council tax freeze. Is John Swinney saying that the council tax freeze money could have been better used on public sector projects and investments?

Photo of John Swinney John Swinney Scottish National Party

The council tax freeze represents a way of tempering the significant increases in council tax that took place in the term of the previous Administration—there was a 60 per cent increase during the last term of that Administration. The Government has been determined to take steps to temper the increases in council tax and provide welcome respite to individuals in Scotland.

Photo of John Swinney John Swinney Scottish National Party

I will give way to Mr Kerr in my closing remarks, because I am very close to concluding my opening remarks.

The Government believes that we will have proper investment in the Scottish economy when this Parliament acquires financial powers and has the ability to borrow effectively and take wise decisions about long-term investment. We made progress on that issue during the budget debate, and I look forward to our making further progress on ensuring that this Parliament has the ability to borrow to invest for the long-term future of the people of Scotland.

We face a challenging time in the Scottish economy, but I am certain that the measures that have been taken by the Scottish Government to date, within our competence and responsibility, will establish strong foundations for economic recovery. The Government pledges its determination to work with Parliament and the wider sectoral interests in Scotland to ensure that we create a strong Scottish economy. On that basis, the Government will take forward its programme for economic recovery.

Photo of John Park John Park Labour 3:08 pm, 26th March 2009

I welcome the opportunity to open for the Labour Party. We have serious concerns about what is not being done by the Scottish Government, some of which I will highlight shortly. However, we all have a responsibility to debate in a constructive manner and make positive suggestions about what the Parliament can do to boost the Scottish economy.

We made some suggestions to that end back in October, as part of our 15-point plan, and many of them have been adopted by the Scottish Government. John Swinney said in this chamber in January that he

"acknowledged publicly that the Government has accepted and taken forward a number of the suggestions in the Labour Party's plan".—[Official Report, 28 January 2009; c 14411.]

Whether it was increasing support for the Scottish manufacturing advisory service, making improvements to partnership action for continuing employment or dropping plans for the local income tax, we believe that those were the right decisions for the economy.

The budget process showed ultimately that the Parliament can unite—or almost unite—when required, and we engaged in that process constructively from day 1. We wanted to ensure that the budget would support people who were facing redundancy and those who needed to develop their skills.

We recently agreed to establish the financial services jobs task force, which we hope will drive a positive agenda to secure jobs in the sector throughout Scotland. We did all those things because we in the Parliament recognised collectively the greater good of supporting our people and our economy.

That brings me to some of our concerns about the Government's current approach in certain areas. The most obvious concern, which I think is shared throughout the chamber, is the lack of action on the Scottish Futures Trust. I remember seeing Alex Salmond on the television in the run-up to May 2007 saying that the not-for-profit model would be up and running later that year. At the time, I thought that that was ambitious for an untested new model. Almost two years into the Administration's term, the Scottish Futures Trust has failed to deliver even one school or hospital. Keith Miller, the chief executive of Miller Group, summed it up perfectly when he said in February:

"There has been a moratorium for a couple of years in projects."

That has meant that public sector projects have not taken up the slack in the construction sector from the private house building market and therefore have not sustained employment and retained capacity in the sector more widely. The Scottish Government has to either get the Scottish Futures Trust building projects or forget the SFT and return to previous funding mechanisms.

Sustaining employment and retaining skilled capacity is vital, because, over the next few years, an increasing number of public sector projects will need skilled people not just here in Scotland but across the UK. One of the most obvious of those is the Commonwealth games, but we will also see two new huge aircraft carriers—we are fortunate that those projects are being allocated to Scotland. We will see a new Forth crossing and a plethora of other projects that were outlined in the strategic transport projects review and national planning framework 2. We have to consider how those projects will be delivered, and not just in financial terms. We must also consider how the projects will leave a legacy in human terms as well as infrastructure terms.

I will make what I hope is a constructive suggestion to John Swinney about how we deliver wider economic objectives through public procurement. I believe that ministers could do more to ensure that young people do not lose out on skills and training during the current recession. We should use the procurement process to encourage companies to invest in training. Public sector spending on goods and services in Scotland is around £8 billion per year, which is a huge sum by any account. In the current climate, that money could be used more effectively to support small businesses, local employment and training. I would like the Scottish Government to explore the greater use of community benefit clauses within public procurement to drive up standards in training and workforce development. I think that that would be welcomed by business, all sides of industry and the trade union movement. Good employers want to see that, too, because they understand that the development of skills and support for local businesses is vital to industry. I think that the Government would see supportive engagement from the business community on that idea.

We are witnessing an increasing number of job losses, particularly in the manufacturing sector. We obviously welcome the increase in advisors for SMAS and we know from first-hand experience how important the expertise that they provide can be. That is why Labour set up the manufacturing advisory service in England, which was copied here in Scotland.

It is important to put on record our concern about the consistency of the Scottish Government's approach on manufacturing job losses. When NCR announced its job losses a week or so ago, there was a high-profile intervention from Jim Mather, the Minister for Enterprise, Energy and Tourism. I know NCR well, and I have been disappointed by the decline in manufacturing there and in Dundee more generally for the past few years. I support high-profile intervention by the minister. I absolutely agree with that approach, which is similar to the approach taken by ministers in the previous Executive. However, I am concerned that although we have witnessed closures in other parts of Scotland on a similar or larger scale over the past year, we have not seen such a high-profile response from Scottish ministers. I accept that work often takes place behind the scenes, such as in the case of Vestas, which we have heard about today, but I am sure that the cabinet secretary will acknowledge that, in future, members will expect ministers to take a similar approach to the one that Jim Mather took in the case of NCR.

Scottish manufacturing is as important now as it has ever been to our economy, which is why we called recently for a manufacturing summit. It is important to bring together all sides of industry with Government, so we are pleased that the Scottish Government has agreed to that suggestion. I hope that the cabinet secretary will spend some time giving us the detail on that in his summing up. It is important that we as a Parliament understand what the commitment will look like and what it will mean for everyone in industry who is keen to engage and support our manufacturing sector.

The apprenticeships summit, which was agreed to during our budget negotiations with the Scottish Government, is also taking place. I was disappointed not to see one mention of apprenticeships in the document "Progress on the Scottish Economic Recovery Programme", because they warranted one.

Since the budget, I have spoken to many companies that have an interest in apprenticeships. They are enthusiastic about what they can deliver—with the right level of Government support. The Labour Party believes that we should never return to the levels of youth unemployment that we witnessed in the 1980s, and we strongly believe that apprenticeships are key to ensuring that that does not happen.

A number of issues must be addressed to support apprenticeship training and make it more widely available. We have spoken in the chamber previously about increasing non-traditional apprenticeships in areas such as management and information technology, which cut across all sectors of the economy but do not have individual skills councils batting on their behalf.

We know of the concerns of those who say that businesses cannot take on apprentices at this time. There is a need to consider how partnerships between large and smaller employers can be developed. Many larger companies in Scotland have their own internal training facilities, so they could support smaller employers in taking on apprentices and support training in supply-chain companies. That would help wider industry and help to address skills shortages in the future. Those measures could break down some of the barriers—either real or perceived—that SMEs often identify to taking on apprentices and retraining their workforce.

However, other barriers must also be tackled. I hope that the summit will give serious consideration to challenging the gender stereotyping that leads to occupational segregation—my colleague Johann Lamont will follow up on that issue in the debate. Serious consideration must be given to practical measures to increase the involvement of disabled and black and minority ethnic apprentices in the skills agenda. I too often hear concerns about the lack of apprentices from non-traditional backgrounds but no solutions as to how to increase their uptake of apprenticeships. I look forward to tangible solutions coming out of the summit.

We also recognised during the budget deliberations that we must help and support apprentices who are facing redundancy, because it is a waste of everyone's time and resources if young men and women are jettisoned halfway through their training or, even worse, when they have nearly finished. The issue was addressed at First Minister's question time both last week and today. We must make it easier for those young people to benefit from the apprenticeship guarantee. Members should put themselves in the shoes of someone aged 18 or 19 who is worried about losing their job and has been told to contact different agencies—it is incomprehensible. The Scottish Government should set up a hotline for apprentices who face redundancy. It does not matter whether it is local or national, but the Government must make it accessible and ensure that it delivers, not on the political deal that was done but for apprentices who face redundancy.

The Scottish Government can take a number of steps to ensure that shovels start hitting the ground in public sector projects. I hope to hear more about that from the cabinet secretary when he sums up, because I am sure that that is what all members want to see happening.

Photo of Derek Brownlee Derek Brownlee Conservative 3:17 pm, 26th March 2009

Throughout the chamber, we welcome the news about the jobs in Kintyre. Even just in my own area in the South of Scotland, the news on unemployment in the past year has been grim. Unemployment in the area has increased by 6,200 over the past year: 1,100 jobs have been lost in the Borders, 1,100 have been lost in Dumfries and Galloway, 1,000 have been lost in Clydesdale, 700 have been lost in East Lothian and 2,300 have been lost in Ayrshire. The same pattern applies across the country, and the situation looks set to get worse. The unemployment problem is very significant.

Aspiring to gain a competitive advantage in green jobs in the renewables sector is perfectly reasonable. To create a jobs base in Scotland in that sector, we should learn lessons from the oil and gas industry, which has been successful at creating jobs that are based in Scotland even when the work has not taken place in Scotland. Learning those lessons will allow us to build the foundations for a stronger recovery when the recovery comes.

John Park mentioned infrastructure projects. Although we might take a different view of the nuances of the Scottish Futures Trust, we are probably on the same page in relation to the importance of infrastructure projects to the economy and our economic potential.

Although it is not fashionable to talk about it now, we still have a very important financial sector in Scotland. It might not be the flavour of the month with the public or with the media, but there are still significant numbers of jobs and significant opportunities in the financial sector. We expect the Scottish Government and the United Kingdom Government to do what they can not only to protect existing jobs but to grow the sector. There is, of course, also the opportunity to attract inward investment and create jobs.

It is crucial that we set the right tone. Our ambition must be for Scotland to be a competitive place where people want to set up in business. The abandonment of local income tax is particularly helpful, because it sends an important message, although perhaps not the message that the Government wished to send.

In previous debates, I have highlighted the significance of the constraints that the increase in debt under the current UK Government has placed on the options that are available to it, and the knock-on impact of those constraints on the Scottish Government. When I made that point in December's debate on the pre-budget report, Andy Kerr intervened to quote the governor of the Bank of England in his support. I suspect that he is less likely to do that today.

Along with the Confederation of British Industry, we have said consistently that the scope for a fiscal stimulus or an expansion in public spending is severely constrained by the level of public debt. The governor of the Bank of England has now said the same.

Photo of Andy Kerr Andy Kerr Labour

I will deal with Mervyn King's comments in my closing speech. Would the member care to comment on the fact that, according to International Monetary Fund statistics, the UK is second only to Canada in respect of positive indications of debt? France, Germany, Italy, Japan, the United States of America and the euro area are all more indebted than the UK. If all those nations are below us, how do the member's figures add up?

Photo of Derek Brownlee Derek Brownlee Conservative

The problem is that national debt, which now stands at £717 billion, was £610 billion a year ago. Before the start of the recession and bank recapitalisation, national debt doubled under the Labour Government, even with 11 years of uninterrupted economic growth, so what will happen to it in the recession is truly frightening. There is therefore little, if any, prospect of any meaningful increase in the resources that are available to the Scottish Government through Barnett consequentials, and any actions that we seek from the Scottish Government will have to come from reallocating spending.

Regardless of whether the failure of the auction of Government debt is related to market concerns about the sustainability of UK debt or is due to a one-off factor, it should at least give pause for thought to those who argue that more debt is the answer. There may not be scope for more debt. The Scottish Government should think about what will happen if even the current projected level of spending cannot be supported and should prepare contingency spending plans in case the level of reductions is more than the £500 million that ministers commonly quote. I am sure that all parties would be happy to work on a cross-party basis to develop such plans.

As we have said in the past, there is a limit to what the Scottish Government can do to mitigate the impact of the recession in the short term, but it can lay foundations for economic recovery in the medium to long term. The substantial reductions in business rates that will take effect from next week are welcome, but there is more to do. Because of the constraints on spending, difficult decisions will emerge. Traditionally, in a recession, spending on capital projects is scaled back and funding is focused on maintaining revenue spending. There are understandable political reasons for that, but we should avoid that approach in this downturn, because infrastructure spending has the capacity to improve our economic potential and to lay the foundations for a more successful economy in the future. We should protect the spending in the Scottish Government budget that grows the economy and prioritise spending on infrastructure and discretionary revenue spending in areas that will promote economic growth to the greatest extent.

Like the previous Administration, the Government states that its purpose is to promote economic growth. That has never been more crucial than it is now, and it should take precedence over other worthy objectives. Every action that the Scottish Government takes should be assessed for its impact on economic growth, and a much firmer stand should be taken against proposals that will reduce the potential of the Scottish economy to create jobs and investment. We should neither overstate nor be ignorant of what the Scottish Government can do.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 3:23 pm, 26th March 2009

The Liberal Democrats said that they would work with the Scottish Government on shared priorities, not only during the economic downturn but during the budget process that concluded earlier this year. We were pleased that the Government changed its mind about making submissions to the Calman commission on how it can use the powers of the Parliament and the levers that are available to us to support the economy in the long term.

In the medium term, as part of the budget review process, we wanted the Government to shift its focus to supporting the economy and doing exactly the sort of things that Derek Brownlee mentioned. We wanted it to lock in benefits from spending that supports the economic recovery of Scotland and to move resources away from areas that might be good for headlines but are not good at supporting jobs in the economy. So far, we have had one meeting with the cabinet secretary on that shared agenda. I hope that there will be others, because the public finances in Scotland for the coming years demand that kind of work.

We also argued for a joint jobs task force for the financial sector in Scotland, given the sector's importance in providing jobs in our cities and rural areas.

During the past six months, there have been nearly 700 job losses in my area, many in the textiles sector. Members know the human cost of the credit crunch that started months ago, which is why, towards the end of last year, we argued for a fiscal stimulus in the budget. We argued for income tax cuts and we shifted the debate in Scotland by proposing a more radical response, because, according to all the figures that are at the Parliament's disposal, the recession will be longer and deeper in Scotland than it will be in any other part of the UK. That means that the Scottish Parliament and the Scottish Government need to do more to respond.

The Government's attack on the VAT cut is at odds with the support that the Scottish National Party expressed for the policy in December. The Government's claim that it wants to invest its way out of the recession is at odds with its creation of a hiatus in infrastructure investment in Scotland. The Government's solution is a council tax freeze, which the Parliament debated yesterday. That approach locks in the unfairness of the council tax and provides more support for people who are better off, instead of focusing on people on low and middle incomes and restoring confidence in the economy.

Photo of Derek Brownlee Derek Brownlee Conservative

I have heard that criticism of the council tax freeze from Liberal Democrats and the Labour Party, but does the member acknowledge that for the criticism to be valid there would have to be a link between earnings and council tax bands? That would mean that the council tax was the progressive tax that the Liberal Democrats seek.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

Mr Brownlee does not understand. The council tax is frozen across all bands. Because the bands are unfair in that they are not linked to ability to pay, a freeze puts more money in the pockets of people who were better off to start with. It is simple. That is perhaps why the Conservatives remain committed to the principle of the council tax, which angers many of my constituents.

If we are to recover from the recession, it is critical that we invest in skills and infrastructure. It is regrettable that in the Scottish Government's first two years of office there has been a real-terms cut in universities spending, for the first time since devolution, and a fall of 1,000 in the number of teachers, which is unheard of. It is understandable that there is concern in the education establishment in Scotland, which should be at the forefront of building a reputation for Scotland as the most innovative and entrepreneurial economy. We cannot build that reputation by lowering the priority of skills and education.

The Government published a skills strategy, which the Parliament has yet to endorse. The strategy envisages a starring role for Skills Development Scotland, the new, centralised quango, but its regional structure, which was recently announced, does not use the boundaries that Scottish Enterprise uses. Therefore, under the new "more focused structure", as the Government has described it, Scottish Enterprise does not have the same boundaries or programme as its skills partner, and the boundaries of both bodies are at odds with local government boundaries, which determine where businesses must seek help from the business gateway. There used to be a one-stop shop for support for small businesses and start-ups, but companies must now go to their local council for start-up support, to the national body Skills Development Scotland for skills support, and to Scottish Enterprise if they are forecast to have a turnover of more than £1 million. The Government's decision on business support and its decision to reduce considerably VisitScotland's ability to promote local areas were made with catastrophic timing in advance of the recession.

We were told that the Scottish Futures Trust would enable us to invest our way out of the recession, and the electorate was told that the SFT would fund infrastructure investment, but now we are told that it will simply give advice. In response to a freedom of information request that I made for information on how quickly the SFT will develop schools, I learned that it will be four years before the first school that the SFT supports is built, in East Renfrewshire. In defending the role of the SFT, the Minister for Transport, Infrastructure and Climate Change said that it would bring together projects, but the SFT said in its FOI response that that was not necessarily the case.

Regrettably, the ingredients to get us out of the recession—investing in skills and in infrastructure—are two of the Scottish Government's weakest areas.

Photo of Rob Gibson Rob Gibson Scottish National Party 3:30 pm, 26th March 2009

I welcome the chance to discuss the Scottish Government's recovery programme, and I want to develop some examples of how we can create a smarter Scotland in these difficult times.

I will start with what is at the heart of driving the economy—the ability to borrow. It is a sad fact that, in today's banking world, the safest bank in Britain is the Airdrie Savings Bank, but the message is that the kinds of deposits that back that bank provide the smart banking that we could have if we had a Scottish investment bank with arms in various parts of the country. I believe that people would be happy to invest what savings they had in such an organisation to help us deliver local projects.

Photo of Andy Kerr Andy Kerr Labour

Most of the members of the Council of Economic Advisers are among those who designed the banking system that the member has just criticised, so I suggest that he is on to plums if thinks that they will produce a measure that is somehow safer than the rest of the institutions in Scotland.

Photo of Rob Gibson Rob Gibson Scottish National Party

The recovery of the private banks will of course take some time. Thanks to the Labour Government's light-touch regulation over the past 10 years, much of the economy changed radically last autumn. We do not need any help from Labour members on the issue: indeed, they should listen for a minute because we might be able to build more local resilience by being a bit innovative.

As the cabinet secretary said, we need fiscal powers to make the changes that allow us to deploy money to best advantage. However, given the fixed sums that we have and the support that we gain from various sources, I advocate that we look carefully at how best to exploit the recovery plans that are being developed elsewhere—for example, the EU recovery programme. In particular, that programme would help us create green energy jobs that should be properly defined and measured so that we can show categorically that Scotland is in the lead in that direction.

I am delighted that the EU recovery programme will support with cash the development of the North Sea grid for the energy that we can produce, which our country will benefit from. That is one of the areas where the programme will be most helpful. In addition, the Aberdeen offshore wind farm will act as a demonstrator and, as part of our recovery, potentially lead on to many more jobs in the clean energy area. However, lest we think that that is the only way to work at present, and as work needs to done speedily, we must consider how research is being conducted.

To some extent, complaints about the amount of money available are on the margins because we must consider examples of where excellence is produced, such as the environmental research institute in Thurso, which is undertaking research that will help us understand how the Pentland Firth works and how we can undertake more successful marine energy projects there. We must consider the green benefits of saving our environment and understanding, for example, the great carbon sinks that we have in the peat bogs of the north, particularly in the flow country. We must ensure that bodies such as the institute and the consortia of which they are part are given our full support.

I note from the EU programme, too, that it wants broadband to be developed in various parts of Europe. Part of our problem in Scotland is that, although BT has announced super broadband for the cities, we still do not have proper broadband in many rural areas. We need to concentrate on how to achieve that at this time.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The member knows that, in his and my areas, the previous Administration's pathfinder project has meant that school buildings in particular are connected to high-speed broadband. What is this Government's policy to continue and expand the momentum of the project that the previous Administration started in the Highlands and the south of Scotland?

Photo of Rob Gibson Rob Gibson Scottish National Party

The cabinet secretary will have in mind ways to build on the Avanti Communications programme and so on, with a view to ensuring that, when it comes to paying for high-speed broadband, people in rural areas who receive a low number of megabits do not pay for 8 megabits. I hope that the Government will argue for such an arrangement when it develops its demands for some of the European money to help broadband to step forward.

I will discuss the land sector, because the European recovery programme supports the common agricultural policy health check to an extent. People in this country can take measures now. The Cabinet Secretary for Rural Affairs and the Environment has told landowners that no right-to-buy legislation will be introduced in this parliamentary session, yet some people will not rent farms to tenants. Landowners could play their part in providing the equivalent of apprenticeships by allowing young farmers to get started in our rural market. Young farmers are frustrated at present.

The Government will have to consider carefully the creation of new crofts and forest crofts and community buy-outs, especially given that—as I have said before—the Big Lottery Fund is sequestering a lot of its funds in the east end of London and has cut off any chance of communities buying land for such purposes. The Government needs to advocate that in order for us to have a better economy.

I have run out of time. I thank the Presiding Officer for the opportunity to speak.

Photo of Johann Lamont Johann Lamont Labour 3:36 pm, 26th March 2009

I welcome the opportunity to participate in this important debate. There is a danger of a little occupational segregation among MSPs in economy debates, with only men contributing to debates on big issues such as the economy while we reflect on social issues elsewhere. In my speech, I will try to bring the two aspects together.

It is essential to understand the impact of the global economic crisis not just in general terms but in particular terms and for particular groups. The cabinet secretary reflected on that, but he spoke generally about the economy and did not address particular groups' needs. I will explore with the Scottish Government what its six-point plan and other approaches do to understand needs and impacts and to address them properly.

As John Park said, public procurement alone amounts to £8 billion. It is right to ask not only how that money is being disbursed but how it can be used to lever in social and economic benefits for the people of Scotland. We should not separate out that issue, which provides an example of how we can shift from general aspiration to making a difference to individuals, families and communities.

Concerns are already felt about the Scottish Government's willingness or capacity to address equality in its spending. Equality groups have flagged up their concerns about the lack of transparency in the budget and the step back from the progress that had been made on interrogating budgets on the basis of equality. Ministers have deprioritised equality in the development of single outcome agreements.

This morning, I searched the Scottish Government's website for an updated position, since May 2007, on women and employment, disability and employment, and employability. My search was fruitless, which is a concern because it suggests that the Government is not reflecting on those critical elements in economic recovery.

In these unpredictable and unprecedented times, I do not set the Government the task of solving everything, but we must ask one question: are the Government's actions making things better or worse? The first part of Rob Gibson's speech was deeply depressing because the Parliament has put in place opportunities to ensure that the general develops into the particular and to make a difference. I am concerned that, if the imbalance in need and the disproportionate impact are not understood, the opportunities to protect and support people will be lost. In that regard, the Scottish Government will make things worse and not better.

In the remaining time, I will flag up some issues. Low pay remains an important issue for women—16 per cent of men and 29 per cent of women are in low-paid jobs. What does our economic strategy say about that? On addressing vulnerability to unemployment and redundancy, what is being said about the fact that women are more likely to work part time? As for occupational segregation, the service industries have been hit more in the recession, and 19.5 per cent of women but only 4 per cent of men are in administrative and secretarial jobs. There is also segregation within sectors. In retail, women make up two thirds of the workforce, but still more men are in full-time retail posts. Women are concentrated in part-time, low-paid jobs and men in management posts.

What is the strategy on the occupational segregation that faces black and ethnic minority communities? What is being done to address the challenge that people who live in poverty face in securing work when fewer jobs are available? What is being done to address the scandalous levels of unemployment among people with disabilities? It is essential that the Government focus on that.

The Government announced an apprenticeship summit, but it was silent on equal access to training. I challenge it on that: who will be invited to the summit? I hope that the minister will respond and reflect on what equality groups need to be at the summit to address equal access to training, which must be a key part of the agenda. The policy of concentrating adult modern apprenticeships in particular sectors has had the consequence of directing moneys away from the sectors in which groups such as women are found. We cannot leave it to the market to find modern apprenticeships for women while Government moneys are concentrated on construction, engineering and life sciences.

The update on the skills strategy is silent on diversity in need, and it is critical that the Scottish Government should speak on that.

What is being done to continue an employability strategy? I regret the ending of Scottish Enterprise's role in that, as I remember intermediate labour market initiatives in my constituency that took women who were unemployed, trained them in child care, provided child care, and offered a bridge into employment. Those initiatives have now gone but must feature once again in the Government's employment strategy.

What is being done to match the package of £42.5 million that has been made available in the rest of the United Kingdom to support the voluntary sector through recession? The minister often talks about the amount of money in the voluntary sector, but what is he doing to address the impact of recession? It is regrettable that organisations such as Community Service Volunteers Scotland have to cut back their services when the voluntary sector and volunteering can give people critical skills to face the recession.

Tackling disadvantage is not only for when the sun shines; it is an integral part of economic recovery. It does not get headlines, but it passes a more important test: it addresses needs and strengthens economic opportunities. I urge the Scottish Government to recognise that fact in its apprenticeship summit, skills strategy and spending decisions.

Photo of Alasdair Allan Alasdair Allan Scottish National Party 3:42 pm, 26th March 2009

Like other members, I can readily list the hardships that my constituents have suffered as a result of the credit crunch and economic downturn. I do not want to enter into a bleak game of top trumps with other members, but I will mention some of the problems that have beset the islands since it first became obvious how poorly the UK's banking sector had been regulated over the years.

Some losses, like the closure of the Woolworths store in Stornoway—ironically, virtually the company's most profitable branch in Scotland—are common experiences to many towns throughout Scotland, but they leave a particularly large hole in an island town centre. One shopper recently commented to me that there is now nowhere to buy a DVD in a 100-mile radius, although I have yet to test the accuracy of that assertion.

Perhaps most painfully, the islands lost their single largest private employer when Lighthouse Caledonia ceased operations at its fish processing plant in Marybank, with the loss of more than 100 jobs. That closure came at the same time as a convoluted situation emerged at the Kenneth Mackenzie tweed mill, in which the new owner made a welcome investment in plant but adopted the bold business strategy of not actually selling tweed—a long story for another day.

The islands do not have the highest unemployment in Scotland, but the statistics mask two underlying problems: the low wages of many islanders who are in work and the ever-present threat that the jobless will simply leave.

I am not stupid enough to talk to anyone about green shoots of recovery, but there is a lot of evidence in the islands and elsewhere to back up the Scottish Government's belief that, at a time like this, Government needs to invest in the economy, not cut it back. With Government support, much can be achieved for Scotland's economy.

I will give members a local example. The Arnish construction yard, which for so many years had struggled to find orders, now has a new tenant—one with a healthy order book. After many months of patient negotiation by Highlands and Islands Enterprise, BiFab construction is taking on 60 skilled workers. HIE continues to work with Lighthouse Caledonia and others to seek a long-term future for the fish processing sector in the islands and, despite the problems, there is overwhelming evidence of a demand for tweed, borne out by the fact that two smaller mills in Carloway and Shawbost have been able to start to take up from where Mackenzie's has for the moment left off.

The tweed industry was given further support this week when the Scottish Government levered in £92,000 from the European regional development fund and £82,000 from the European social fund to set up an industry fund and training programmes for the industry respectively. That came the same day as the First Minister announced more than £1 million of funding for the creative industries.

Photo of Alasdair Allan Alasdair Allan Scottish National Party

I will indeed—although I think I know what the member is going to say.

Photo of Andy Kerr Andy Kerr Labour

I was listening closely to what the member had to say about the Western Isles. He has spoken about light-touch regulation, and he mentioned the First Minister just a moment ago. On 7 April 2007, the First Minister said that his Government was

"pledging a light-touch regulation suitable to a Scottish financial sector with its outstanding reputation for probity, as opposed to one like that in the UK, which absorbs huge amounts of management time in 'gold-plated' regulation."

Which side of the argument is the member on? Is he with the First Minister or the UK Government?

Photo of Alasdair Allan Alasdair Allan Scottish National Party

Anyone who has seen the banking sector regulation that has been on offer from the UK in recent years will conclude that it has been one of the most disastrous pieces of misregulation and under-regulation in our history. I do not think that anyone needs to take any lessons on that one, because the evidence is easy to see.

As I was saying, the First Minister has announced that more than £1 million has been allocated to the creative industries in the islands to assist the development of the growing media industry. Aside from the few businesses that I have mentioned, virtually all the industries on the islands are made up of small businesses. Therefore, on the islands as elsewhere, it is important to create the environment for wider economic growth—whether by cutting the cost of transport, as the Scottish Government has done, or by cutting the cost of fuel, which the UK Government has not done. Fuel duty comes within the remit of the UK Government.

All the encouraging examples from the islands have a common theme, and it is a theme with a wider application. For a country such as Scotland to come out of a downturn such as this one, its Government must play a proactive role. That means front-loading investment to aid the construction and other industries, as Scotland's Government is doing. That is why the £293 million of capital spending accelerated into 2009-10, on top of the £30 million in 2008-09, will support an estimated 8,500 jobs.

I could go on, but suffice it to say that I hope that there is now consensus, among at least a large part of this Parliament, that no Government can cut its way out of a recession. Constrained as we are in the Scottish Parliament without borrowing powers, I believe that Scotland is nonetheless showing a clear understanding of that point.

To those who call on the Scottish Government to make still further investment in specific areas, I can conclude only by saying this: their enthusiasm is commendable but, as I hardly need remind them, the size of Scotland's budget is not, bizarre as it may seem to most of us now, determined in this place. They should take their argument to the London Government that is seemingly hellbent on cutting £1 billion from Scotland's budget in the teeth of a recession.

Photo of Trish Godman Trish Godman Labour

Before I call Margaret Curran, I remind members that speeches should be limited to six minutes. We are tight for time.

Photo of Margaret Curran Margaret Curran Labour 3:48 pm, 26th March 2009

Thank you, Presiding Officer. I will not take that request personally, although it might have been an indication that I overrun from time to time. Yes, I think it was.

I begin with an apology, as I may have to leave the chamber at some point. I hope that I will not miss the closing speeches but, in case I do, I apologise in advance.

It can be tempting for members to resort to business as usual in the chamber: we speak in debates; we represent our constituents; and we pursue our issues. We have heard some of that this afternoon, but we must remind ourselves of the scale of the challenge and the environment in which we currently live. As Johann Lamont said, we live in unprecedented times. The scale of the financial crisis has been breathtaking. It has a particular resonance in Scotland, and it must lead to some profound rethinking. It must not lead just to a regurgitation of our normal party-political debates.

The standing of the Scottish banks was inextricably linked to the reputation of Scotland. We all took great pride in the Scottish banks because we knew that they enabled us to punch well above our weight internationally. As a result, the depth of the financial crisis has particular meaning for us and will, I hope, encourage us to think again about certain issues that matter to us.

So much for the masters of the universe. We on the Labour benches well understand why anger at the bankers is sweeping the country. Of course, none of us would indulge in or endorse personal attacks, but we need to register our anger at those who behaved more like casino operators than sound financiers, arrogantly failing to think through the implications of their actions for jobs, families and communities throughout Scotland. At a recent event that I attended, Will Hutton said that we needed a Marshall plan for recovery and a Nuremberg trial for the bankers. The sentiment might have been a bit strong, but it certainly drew a lot of support from the people who were there. It is clear that it cannot be business as usual and that the Parliament must rise to the challenge.

Party politics is important, and we cannot simply pretend that it does not matter. It plays a vital role in such times because we need to hold the Government to account, to test it properly and to demand that it acts in a way that benefits the country. Given some of the speeches that we have heard this afternoon, it is legitimate for Labour members to ask John Swinney in particular to explain what his Council of Economic Advisers says about the current economic crisis. Do the individual members hold any responsibility for their contribution to it? The background of George Mathewson, the chief economic adviser to the First Minister, is interesting in that respect. Has his advice changed? Has he reflected on the analysis that he has given in the past? What is his current analysis of the situation? I presume from what other members have said that we are all committed to a fiscal stimulus plan, but I want to know what the Council of Economic Advisers has advised.

We must galvanise our resources in the Parliament and work together to protect Scottish industries and jobs. As I have said before, I remember too well what happened in the early 1980s and its impact on the east end of Glasgow, and I argue fervently that the area paid too heavy a price. Those people had to pay not only an enormous social cost but an economic cost as potential was smashed, skills were lost and opportunities were missed. We must ensure that we do not make the same mistakes again and that we do all that we can to make the protection of jobs our highest priority. As we know, people who are unemployed in their teens will, when they reach their early 40s, earn 12 to 15 per cent less than they might otherwise have done, and this recession is taking a particular swipe at young people.

Last week, we had a members' business debate on the Vion factory in Cambuslang, where many of my constituents work. I have to say with the greatest respect that, when we pressed Jim Mather on whether Vion could get some of the £75 million that the Government has committed to support the food and drink industry, we did not really understand his response. I think that it was a no, but let me ask the cabinet secretary directly whether it is possible to use some of the £75 million that the Government has committed to support and protect jobs at Vion. Given that some of that money has gone to the constituencies that John Swinney and Alex Salmond represent, some of it should, in fairness, come to the west of Scotland. It is exactly the kind of intervention that is required.

At this time of economic downturn, we in Scotland need to seize economic opportunities to deal with that other great looming global crisis: climate change. As the cabinet secretary has made clear, Governments throughout the world from Korea and China to the United States are meeting that challenge by integrating plans for green jobs into their approaches, but the climate change targets in the current Scottish bill will not kick in for another decade, which is simply not good enough. An important part of Labour's 15-point plan is a commitment to growing the energy efficiency and microgeneration industries, and we need much more specific commitments from the Government on that. I hope that the cabinet secretary will comment on that in his summing up.

On a recent visit to Allied Vehicles, a company in the north of Glasgow that I believe has also been visited by a Government minister, we saw great evidence of a business that is on the brink of major developments and could in future produce electric cars in Scotland. That company is waiting for announcements about sustainable transport and hoping that the Government will intervene directly with measures that will provide jobs in Scotland, help us to tackle climate change and allow us to lead the way in this technology. I hope that the minister will answer that point directly.

In conclusion, we need a step change—

Photo of Trish Godman Trish Godman Labour

I am afraid that you must finish there, Ms Curran.

Photo of Alex Johnstone Alex Johnstone Conservative 3:55 pm, 26th March 2009

It has always been my view—I have expressed it before and will probably do so again—that politics and macroeconomics are characterised by long periods of stability, in which nothing much exciting happens, followed by periods of frantic and sometimes catastrophic change. Sadly, a long period of stability has now ended and one of catastrophic change seems to have begun.

In today's debate on how we support economic recovery in Scotland, it is not my job to attribute blame, but I must say that the much of the speech that preceded mine could be characterised as "It wisnae me."

Photo of Alex Johnstone Alex Johnstone Conservative

Not at the moment.

The Labour Government and Gordon Brown rode a wave of economic stability and success with continued growth over a long period, but the impression that the Prime Minister gives today, as the tsunami washes over him, is more like that of the rabbit in the headlights than anything else.

Given that we are here to debate how we support Scotland's economic recovery, let me pick up on some figures that the Cabinet Secretary for Finance and Sustainable Growth mentioned in his opening speech. Scotland might appear to be doing rather better than the rest of the United Kingdom at this stage in the economic downturn because our unemployment is not so high, our growth remains slightly higher, and our descent into recession seems to be on a much slower trajectory. However, I have a concern that the reason for those figures is that Scotland's economy is more dependent on the public sector than the economy in the rest of the UK is. That underpinning by public resource might slow our rate of progress into recession, but future projections must take into account the fact—as many of us now admit—that less public money than we would like will be available to us in the recovery phase. The danger is that, having descended more slowly into recession, we will have a significantly slower ascent out of it.

For that reason, in looking at how Scotland's economy can best recover, the Government has a clear duty to consider how best to invest the limited resources that are available to ensure that we are not late recoverers from the recession. I have heard much to encourage me today, given that both John Swinney and John Park talked about how we might use money from the public purse to underpin the development of private enterprise in the recovery phase when, once its confidence is restored, private enterprise will willingly go ahead with borrowing and investing to create genuine jobs for that recovery.

What do we need to do? As several others have said, infrastructure is key. The limited resources that are available at this difficult stage must go towards infrastructure, which will then be present to underpin the recovery when it comes. Yes, that means roads and bridge, but it also means schools and other public buildings. The opportunity should be taken—and taken urgently—to use our resources to ensure that those who would otherwise have no job are kept in work preparing our infrastructure for recovery. I need not repeat that the failure of the Scottish Futures Trust to deliver the resources necessary to push forward those projects will be written as an epitaph across this Government if it falls.

We have also heard about green jobs. I am very interested in them, and I genuinely believe that a massive number could be created. A number of such opportunities exist, but let me take this opportunity to highlight one problem that we could see recur in future.

This week, I met Mr Alistair Kerr of the Wood Panel Industries Federation. He was concerned about the increasing use of wood-fired biomass in Scotland. We all know—and I agree—that such use is a good thing. Last year I joined the Cabinet Secretary for Finance and Sustainable Growth at Macphie of Glenbervie, where he formally opened a large woodchip boiler that is being fired by wood from local timber. That is exactly the type of thing that we want to encourage.

The problem is that, if we also want sustainable construction of highly energy-efficient houses in Scotland, we will need those raw materials. Mr Kerr told me that, since the advent of biofuel-fired or woodchip boilers, the cost of his industry's raw material has gone up by a factor of three or more. If our industry cannot compete in that environment, the raw materials that the people whom we put to work use to build energy-efficient houses might come in from abroad.

Such problems, which involve a situation in which one industry is supported and succeeds while another is damaged by the same action, will have to be addressed by the Government at every stage of the development with which we are going ahead. We need to progress a return to stability for Scotland's economy, but the private sector is essential to that recovery.

Photo of Liam McArthur Liam McArthur Liberal Democrat 4:01 pm, 26th March 2009

I, like Margaret Curran, apologise to members; due to commitments in my constituency, I will not be able to stay until the end of the debate.

I welcome the Government's decision to bring to the chamber, in its own time, a debate on the economy. However, it is disappointing that ministers have not put forward a proposition to set out clearly the measures that they plan to take to tackle the most challenging economic circumstances of the post-war period and to seek Parliament's backing for that approach.

Current ministers lectured us when they were in opposition on the need for motions to be laced with vision and aspiration. The Minister for Parliamentary Business, Bruce Crawford, was particularly critical of what he called "wishy-washy" motions, but now he does not even want a wishy-washy motion lest it contaminates the debate with party politics. However, I will enter into the spirit of the debate that it is clear Mr Crawford wants us to have.

I agree with much of what the Cabinet Secretary for Finance and Sustainable Growth said about the role of clean green jobs in supporting economic recovery. Amid all the understandable gloom around the current state of the economy, there are pockets of optimism. For example, as we face up to the responsibilities of tackling climate change, real opportunities exist for creating new jobs and new wealth. The secretary-general of the United Nations, Ban Ki-Moon, recently told the Davos economic forum that although the obvious temptation is to focus on short-term economic problems, it is important to remember that climate change remains the "one true existential threat" to the planet.

I am not sure whether Derek Brownlee was distancing himself from that view and suggesting that economic growth should take priority over other worthy causes—I hope not. Decarbonising our economy is not optional, but how we choose to do so, where Government makes its investment and what incentives it puts in place will determine whether we emerge from the current economic trough taking full advantage of the green-collar job opportunities.

The cabinet secretary has announced a target of creating 16,000 green jobs in Scotland by 2020. That target strikes me as somewhat modest, which is not an accusation that is levelled at the Government too often. Modesty is not the real worry, however: in response to the questions that I have raised in recent weeks, ministers admit that they have little idea where those jobs will be created or of what constitutes a green job. In effect, the Government is setting targets for what Donald Rumsfeld would class as "known unknowns".

The RSPB points out in its briefing that those jobs need to be properly defined and measurable. The Government must cast aside its new-found modesty and recognise that opportunities are broad ranging, including the

"development of green infrastructure, environmental management and wildlife tourism".

I look forward to reading Mr Swinney's winding-up speech tomorrow to find out whether any further light has been shed on the issue.

It is right that ministers continue to emphasise the potential of renewable energy to create jobs and wealth. I add my welcome to the cabinet secretary's announcement about the turbine facility at Machrihanish. The benefit of that, as Mr Swinney suggests, will extend beyond the Kintyre economy.

The potential that can be found across a mix of technologies should not be underestimated, although it is obvious that I have a particular interest in the marine energy sector. I was pleased to see, from responses to parliamentary questions that I lodged recently, that the Government is now committed to undertaking a detailed supply chain analysis of the sector. The absence of such an analysis at this stage is viewed by the marine energy industry as a barrier to forward planning, and ultimately to job creation.

Concerns have been raised with me by, for example, those who are involved in vessel supply. Increasingly, bespoke supply vessels will be needed to support the marine energy industry through installation and generation. The scope exists for designing, building and crewing those vessels in Scotland. I would be interested to hear ministers' views on how the development of the sector could be supported, either directly or through incentivising collaboration between technology developers.

To date, there has been a pipeline of Government support for renewables research and development. However, although I welcome the plans for tiered renewables obligation certificates for wave and tidal energy, I remain deeply concerned about what one developer told me was

"a lack of any open source of R and D funding for marine renewables."

For all that the First Minister loves to wrap and rewrap himself in his saltire prize, as Lewis Macdonald said, it will not pay out until 2015 and represents a winner-takes-all approach. Government needs to recognise the need for on-going support for those who are looking to scale up their projects as well as bringing on other, earlier-stage devices.

A further threat to the creation of a renewables revolution is the limitations of the grid. Although more attention must be paid to decentralising generation and taking seriously issues of storage, the demand for grid infrastructure remains and is growing. I am told that there is no shortage of potential investors but that the regulatory regime needs to be sorted out. Ministers have been part of the broad coalition that has been arguing for change, but that pressure must now be intensified. In my constituency, Fairwind Statkraft last week announced that its onshore wind projects were on hold due to a lack of progress in reducing charges for access to the transmission system.

The potential for job creation in energy efficiency as well as in energy generation is significant. There is also the added benefit of achieving quick wins in reducing both emissions and fuel poverty. Building up skills and capacity will be crucial to securing that win-win situation. Dave Watson of Unison has called for the Government to build up a carbon army to be sent into battle against poor insulation, energy inefficiency and waste. That certainly has a ring to it. It needs to be a nationwide effort, however. At present, carbon emissions reduction target and community energy saving programme funding discriminates against my constituents and others who live in island areas, as do the insulation initiatives that are being promoted by various retailers. That is unacceptable and a nonsense, given the prevalence of fuel poverty in my constituency.

A nonsense, too, is the fact that, under the Government's insulation and central heating schemes, no local installers are used for jobs in Orkney. Economically, socially and environmentally, that makes no sense. In the future, more attention must be paid to the local recruitment of Mr Watson's carbon army.

In the area of waste, the potential for job creation is substantial but, unfortunately, time does not permit me to go into that.

I welcome the debate and look forward to further opportunities to debate the issues more fully. I apologise again for having to absent myself before the winding-up speeches.

Photo of Patrick Harvie Patrick Harvie Green 4:07 pm, 26th March 2009

I find something that I can agree with in the first sentence of the Government's progress report on economic recovery. It states that, from day one in office, the Government has been clear about its central purpose being to create success on the basis of sustainable economic growth. I agree that the Government has been clear in setting that objective, but it has been unclear in explaining what that means. It is the latest in a series of verbal tricks. First, we had economic growth, then economic development, then sustainable economic development and now sustainable economic growth. Each of those verbal tricks has attempted, over the years, to distract us from the fundamental question in the modern economy: can everlasting growth be sustained on a planet of finite resources? Every other political party in the chamber, so far, remains at least formally committed to arguing that it can be.

The aim is growth everlasting and, despite the linguistic gymnastics that are used to imply otherwise, growth that is to be pursued regardless of the social and environmental impacts. For decades, a vision of everlasting growth based on conspicuous consumerism has been pursued by Governments of all mainstream political persuasions around the world. That has led to a society in which people are encouraged by a torrent of advertising to judge their worth as human beings on the basis of how much stuff they consume.

The recession should be taken as a hard lesson about the meaning of unsustainable economics. We have seen debt piled upon debt, with transactions spiralling out of all proportion to the value of the goods and services that are produced in the real world. We have seen patterns of production and consumption that have been hideously mismatched to people's actual needs and a handful of individuals growing obscenely wealthy playing at masters of the universe. Some of us have been arguing for years that the prevailing economic model, which has left half the world too thin, half the world too fat and vital natural resources plundered and squandered, is doomed to failure. The question is this: does economic recovery mean resurrecting that failed model or finding something new?

Mr Swinney described a transition to a clean, green economy. That is, indeed, an important part of our response. Many Governments see that as part of a stimulus approach and are spending on infrastructure that we will need in the 21st century instead of more of the same. China and South Korea are perhaps the most ambitious examples of that approach, and the United States of America is doing something similar. However, the UK's green investment package is not even halfway up the table of the green investment packages of European countries.

What of the Scottish Government's response? I am bound to point out that the remarks on energy efficiency in the Government's progress report are the mere remnants of a failed attempt by my colleagues and I to persuade the Government to do the whole job for the whole of Scotland, which would have cost something like £100 million a year for 10 years, which is less than the price of one mile of the M74. Instead of that, we have £15 million. At that rate, we will barely finish half the task by 2050.

Should we welcome even that small amount as at least the beginning of a transformation? I am afraid not. It is a supplement. Alongside that investment in the green alternative—in what should be transition or transformation—we see more of the same: unnecessary roads and bridges, more coal-fired power stations and airport expansion. Every country is guilty of the same thing—I do not lay this entirely at Mr Swinney's door. However, even if green investment is being seen as part of a green stimulus, it is an attempt to stimulate the corpse of what went before, resurrecting a failed economic model; it is like Dr Frankenstein applying a few volts to the severed frogs' legs on the bench in front of him, seeing them twitch and crying out in triumph, "It's alive!" Well, it is not. The animal remains, in any real sense, a lifeless form.

Is that metaphor intended to represent the Scottish economy? Am I saying that our economy is dead? No, of course not. However, the notion of abolishing bust and having boom forever—the notion of everlasting growth—is dead. The era of treating energy as a cheap commodity is over. The persistent habit of human beings living beyond our means, financially and ecologically, must be killed off too.

What does economic recovery mean? Recovery does not mean keeping a dying patient alive for one more day, still in pain, still dependent on a life-support system provided, in this case, by the Treasury. It means treating the underlying sickness.

An economic recovery plan for Scotland that understood recovery as healing rather than reanimation would have at its heart three key aspects. First, it would have new ways of defining economic progress, including all its impact on human life and our environment, not just growth, and would understand that the word "economy" shares its roots with "ecology" and is about more than just money. Secondly, it would have clear definitions of the social and ecological limits within which the economy must exist and a sense of how the private, public and third sectors can work together to achieve them. Thirdly, it would involve an all-out attack on the shallow and selfish values of consumerism. The age of me me me, more more more, greed and overconsumption must die if something more sustainable and human is to be allowed to live. That would be recovery, and it would mean ending the futile attempt to resurrect the corpse of the 20th century.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party 4:13 pm, 26th March 2009

Last November, when the Parliament debated the state of Scotland's economy, many members, including me, were able to reflect on the fact that what was then being euphemistically referred to as the credit crunch had come to dominate the news headlines across the various media forms and had eclipsed practically every other issue of note. Nearly six months on from that debate, we can all agree that that remains the case, even if the terminology has changed from credit crunch to recession. The state of the global economy and the latest indicators and announcements from Government and industry continue to be the dominant stories of the day. In the intervening period, we have witnessed too many businesses closing their doors for the last time and too many people losing their livelihoods. That reflects the real and immediate impact that the recession is having on the everyday lives of individuals and families.

Public concern is widespread and real. Although we hope that that does not manifest itself solely in the form of grievances against private citizens—the results of which we have seen in recent days—we ignore that concern at our peril. That is why it is right for Parliament to have this debate today.

There is now no question but that we are in this for the long haul. Figures that were released this week might have contained conflicting evidence about inflation, but other indicators show that unemployment in Scotland is up and economic output is down.

The many and varied solutions and steps to recovery have been occupying some of the greatest economic minds throughout the world. Answers are sought to questions about how we got here in the first place. We are right to assess the role that bank bosses played and to be concerned that they can draw pensions of hundreds of thousands of pounds even as their methods of running the banks are discredited, but we must also assess the role that was played by those who allowed the framework to be put in place that let the bankers operate in such a fashion. All those who quietly assumed that limited regulation of financial markets was an appropriate driver of economic growth must critically assess their role and consider more appropriate models for sustainable economic recovery.

Photo of Andy Kerr Andy Kerr Labour

On that point, I ask the member to put in context the statement in the SNP's manifesto that says

"we will minimise the burden of bureaucracy by ensuring Scottish regulations do not have British gold-plating."

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

That intervention comes very much from the he-said-she-said school of political debate, in which Mr Kerr seems to be engaged. I am not particularly interested in engaging in that. If I was, however, I suppose I could turn to the speech that Gordon Brown made at the CBI conference in 2005, in which he called for limited regulation and even questioned the need for regulation at all. He said:

"we should not only apply the concept of risk to the enforcement of regulation, but also to the design and indeed to the decision as to whether to regulate at all."

As I said, however, I am not interested in the he-said-she-said school of political debate.

At present, the various roles that were played is largely a matter for the United Kingdom Government. I turn to the Scottish Government's efforts to help to put Scotland's economy on the road to recovery. Because the Scottish Government has been committed to the sustainable development of Scotland's economy since the election, it has been well placed to react quickly and mobilise resources to counteract the effects of a general economic slowdown. Bringing forward capital investment has helped to create a positive spiral, ensuring not only that jobs are created but that we gain all the benefits that flow from those jobs, such as the wider demand that is created in the economy.

I warmly welcome, for example, the extra money that was announced on Monday for Scotland's colleges, including a funding increase of £132,000 for Cumbernauld College in the Central Scotland region, which I represent. Staff and students will feel the benefits of that immediately, but so will the workers who are employed to improve the college's infrastructure, and, in turn, so will their families and wider communities.

The Scottish Government is accelerating £120 million of investment in affordable housing. That is helping the construction industry and is delivering affordable homes for people, such as the 76 new homes that will be built at Carbrain in Cumbernauld and the 32 that will be built in Grangemouth. When we also consider the widening of entitlement to free school meals, the freezing of the council tax, the reduction in business rates, the scrapping of tuition fees in the form of the graduate endowment, and the phasing out of prescription charges, we can see that the thread of working for economic recovery runs throughout the Scottish Government's work. Those measures put back into the pockets of the Scottish people money that they can then spend to aid economic recovery.

Of course, I wish that the Scottish Government could do more. In recent times, Norway has established two funds that are worth £10 billion to help to improve access to loans for companies and households and to stabilise the financial market. That is not borrowed money. Rather, it flows directly from Norway's decision to establish a sovereign oil fund in 1990—the kind of fund that Scotland has never been given a chance to establish.

When we discuss economic recovery, it is important to consider what kind of economy we want to be recovered. Sometimes, it seems that we are seeking a reset switch, or that we want to wave a magic wand that will make the problems disappear and put everything back to the way it was. I do not think that that is the way that things can be. We need to consider how we can measure quality of life and economic success with a range of measures and not simply through gross domestic product. When I spoke in our debate in November last year, I quoted the late Robert Kennedy, who spoke of how we measure material gain. I quote again from his words of 18 March 1968. He said:

"Gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile."

Those words should stay with us all as we concentrate our efforts on rebuilding our economy so that it truly meets the needs of the years and generations to come. GDP is an important measure of our economic performance, but, more fundamentally, so is our people's general wellbeing. That is another lesson that we can all learn from the current economic situation.

Photo of Peter Peacock Peter Peacock Labour 4:19 pm, 26th March 2009

I welcome today's announcement from Kintyre about the jobs that will be secured there. Those jobs were brought by a previous Government, but the news in an otherwise quite gloomy picture is welcome.

I want to reflect on my experiences in recent months of being approached by a good number of construction and engineering firms in the Highlands and Islands that are facing real difficulties as a result of the economic prospects that surround them and are fighting day by day to avoid more redundancies. Indeed, some of those firms are fighting to save the firm as an entity.

Some of the problems undoubtedly stem from the banking crisis and the housing market collapse, but it has been striking about the approaches that have been made to me that most of the concerns have been about our domestic policy and how Government policy is impacting on the things that those people are concerned about. Ministers in Scotland can have an impact on those issues; indeed, Scottish Government policy may be the biggest factor at work. I want to contrast, as the people from those firms have done for me, what they see as the rhetoric about recovery and the reality for them on the ground. I want to make serious points and suggest actions that the Government could take. I regret in some ways that my remarks may be necessary.

The Scottish Building Federation has reported that confidence in the building sector is low. Some 82 per cent of companies are less confident about the prospects for the next 12 months compared with the previous period. The federation has said that there is a danger that there will be 32 per cent fewer apprentices in the coming year and that

"Firms are crying out for new projects to bolster their business".

The Civil Engineering Contractors Association has estimated that there has been around 10 to 20 per cent downsizing since October. In some firms, 50 per cent of the workforce has gone. Firms have gone into administration or are on the verge of doing so and are trying to avoid it. Civil engineers and builders need to see the public investment programme that we have heard talk about turning into projects on the ground. That is the big challenge for the Government.

I want to speak about three public policy areas: housing; civil engineering, as it relates to water and roads; and public buildings.

On housing, around two weeks ago, I was in the office of the managing director of a significant contractor in the Highlands and Islands. That meeting followed discussions with other contracting companies in the area. The managing director was seriously concerned about his business and about the expertise that he had built up, which allowed him to compete successfully for work. The business does a lot of housing association work. The managing director said that he despairs at the gap between the rhetoric that he reads in the papers and the reality. The rhetoric would have him believe that £100 million is being released and is coming through the system, but the reality is that his order book is collapsing. Little money is going through to where he operates. He and I know that some money has gone into land banking, but he pointed out that that does not create any jobs. If the same amount of money was put into construction, jobs could be created, and that is essential at the moment. Ministers could act on that matter today and sort it out.

The managing director also reported slow decision making inside Government for approvals for projects. When cash flow is extraordinarily tight and the next project is desperately needed to keep jobs and people in business, decision making in Government becomes critical.

The housing association grant problem has a particular rural dimension. The HAG has been reduced. Housing associations can apply for more grant; an assumed rentals calculation then takes place. The assumed rentals are higher than the achievable rentals, which means that housing associations cannot make the figures add up, which in turn means that they cannot get work out to contractors. Again, it is within the power of ministers to deal with that.

Scottish Water and Transport Scotland support represents a huge part of the support for all the contractors in the civil engineering sector. Those civil engineering contractors believe—and I believe—that Scottish Water and Transport Scotland have banks of approved work in the top drawer waiting to be done. That work could be mobilised quickly. Some budget flexibility at the margins may be needed and cash may need to be spread out over longer periods of time than we previously expected, but I hope that ministers will urgently consider such things and find out whether further action can be taken.

Scottish Water contractors in the north have told me about a collapse in work as we enter the final year of the quality and standards III period. Exactly the same happened in the final year of the Q and S II period. There is a peak in the early years of the period and then a following trough. I know that Scottish Water has been trying to break that cycle, but that does not seem to be happening, which has profound implications for firms. I hope that ministers will reflect on that and that they will take action to smooth the peaks and troughs in spending. They should look to the longer term and take longer Q and S periods to allow that to happen.

Recently I lodged a series of parliamentary questions about any reserve that is held by Scottish Water. I look forward to the answers. If contractors are laying people off despite there being work that needs to be done, it would be absurd not to use any reserve that might exist. I urge ministers to examine that question and to act on it.

I hope that ministers will act to tweak expenditure programmes, to the extent that I know ministers can do, to support the sort of quick action that gets jobs on the ground speedily. Road surfacing provides an example of that, and Derek Brownlee pointed to other things.

Finally, the Scottish Futures Trust is a massive failure in public policy. Contractors tell me that the contracts that we set in place will end this summer. Then, there could be a collapse in the Scottish construction industry. I hope that the minister will set aside the ideological baggage that I am afraid he and his colleagues carry on the issue, and that he will take some decisions to get the work flowing quickly.

Photo of Maureen Watt Maureen Watt Scottish National Party 4:26 pm, 26th March 2009

I, too, welcome the opportunity to speak in this debate on economic recovery. The speeches that have been made so far have been interesting—and some of them have been helpful. I would like to be excused from the final speeches, Presiding Officer, as I have a constituency event that I wish to get to punctually if I can.

It is almost unbelievable how we got into this mess, which has turned into a global disaster. Three things spring to mind: seduction, self-indulgence and self-delusion. Those terms can be attributed to UK Government ministers as well as to City bankers. We see the unedifying spectacle of Gordon Brown gallivanting round the globe, trying to find out what other countries are doing to help their economies. At home, the predictions just go from bad to worse.

No one knows how long the economic downturn will last, but it is certain that the pain from it will be felt for a very long time and that many things will never be the same again—nor indeed should they be. To say that this Government is not doing all that it can is just plain wrong, and the fact that some Opposition speakers have just had a moan, offering few constructive suggestions, is galling, to say the least, when the issue is so important. The public are suffering more and more. In a time of crisis, they expect their politicians to pull together rather than to be at one another's throats.

The Government is already doing much of what John Park asked for in his speech. The suggestion that we go back to past methods of finance, such as public-private partnerships and the private finance initiative, is breathtaking. Infrastructure investment is going ahead with capital spend and traditional borrowing. Just in the past few days, the UK Government had to spend £2 billion of taxpayers' money to prop up PFI projects. That is a humiliating bailout. During this time of economic crisis, that £2 billion could be well spent on other things, and the bailout just shows—if anything were needed to show it—how little financial credibility is left in the Exchequer. PFI is a millstone round the UK's neck, and it is set to add more weight to the existing millstone of debt.

Photo of Andy Kerr Andy Kerr Labour

Why did Allyson Pollock of the University of Edinburgh, for instance, and her assistant, describe the SNP's proposals for the Scottish Futures Trust as simply another form of PPP? Indeed, why did the Cabinet Secretary for Finance and Sustainable Growth tell the Finance Committee that the Scottish Futures Trust is in the PPP family? The Scottish Futures Trust is the same model as the one that the member has criticised so much today.

Photo of Maureen Watt Maureen Watt Scottish National Party

Andy Kerr knows that we are trying to ensure that the huge amounts of capital spending on PFI and PPP—on things that were not properly bargained and negotiated—will not happen again.

Johann Lamont referred to the poorer people in our society. That made me think about projects in many third-world countries—as the western world catches the cold, they get the flu. We will see that effect worldwide.

Many social enterprises are excited about their prospects under this Government. For many decades, people such as Rob Gibson and me have championed social enterprises, which are now seeing that there are many opportunities in Scotland. The voluntary sector, too, is upbeat, as it knows that where it really makes a difference to people's lives, it is secure and growing.

As others have said, this Government has taken measures to protect business and individuals, as far as its competence will allow, and to provide a fiscal stimulus where possible. The finances of Scotland are well protected and wisely spent by John Swinney. He never forgets that he is entrusted to spend people's hard-earned taxes wisely and for their benefit, rather than to squander the money because it is only taxpayers' money and there is more where it came from. We all know that it is not true any more that there is more where that money came from, because receipts from income tax and corporation tax are falling dramatically. We do not know whether quantitative easing will work, but early indications show that it is not that popular.

I press the cabinet secretary to do all he can to protect the hands that feed from the tax and grab of the Treasury. I am talking, of course, about the oil and gas sector. It is still relatively buoyant, but a long-term low oil price might lead some businesses to pull their operations from the North Sea. Successive Westminster Governments have looked on Scotland's oil as a cash cow rather than as a long-term security, as Norway has done. Norway's sovereign oil fund places its Government in a strong position to enact economic stimulus without increases in Government net debt.

I plead with the cabinet secretary not to let the vital infrastructure projects in the north-east slip. The oil and gas sector and the north-east agricultural base, which provides 14 per cent of the UK's food, need easier access to markets.

Our citizens will also want to know that part of the recovery will be about having a financial sector that is regulated so that the current situation never happens again. Gordon Brown talks about only limited regulation.

Photo of Ross Finnie Ross Finnie Liberal Democrat 4:32 pm, 26th March 2009

In order to be helpful, I give you an undertaking, Presiding Officer, that I will remain for decision time, so that we are quorate when that moment comes.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I am pleased to wind up this important debate on behalf of the Liberal Democrats. We are all facing quite a difficult time. We recognise of course that the current situation was much precipitated by a credit crunch and banking problems. Given that the banking sector is so important to us in Scotland, as Derek Brownlee said, we in the Parliament have to make it clear that we are prepared to support our banking sector and ensure that it recovers and, we hope, recovers the reputation that it once enjoyed. In making that point, let us be in no doubt that, as far as Liberal Democrats are concerned, as long as the banks, which have been hugely funded by the public purse, singularly fail to support many businesses in our constituencies with perfectly solid-based accounts and projects that are properly financeable, they will rightly draw criticism.

Although we have a desire to support the banking and financial sector going forward, we must not forget—I would not put this in quite such stark terms as Margaret Curran—that the executive and non-executive directors, advisers, auditors and all those involved in the banks that demonstrably had some responsibility for producing the £280 billion loss will still have to account for it. We should recognise the distinction there and separate those two points.

The question what we do to come out of a recession arises. Liberal Democrats always like to look back briefly at history and see, for example, what this country did in the 1920s. We find it encouraging that the major call to try to assist the recovery of the economy by making strategic infrastructural investment was first proponed by the well-known Liberal, John Maynard Keynes. We are prepared to support that call.

We are right about borrowing powers, but let us not forget that we in Scotland have borrowed and that as part of the United Kingdom we have borrowed, and that the recovery of the Royal Bank of Scotland and the Bank of Scotland has not happened by accident—it has happened as a result of UK Government borrowing. We must all recognise that—whether we are in Wales, Northern Ireland, Scotland or England. We must also recognise that, if we want to advance public expenditure to stabilise the economy today, there will come a time of reckoning when we will all—each and every one of us—have to contribute to the recovery process. We should not pretend that we are insulated from that process; I believe that to do that is to be profoundly dishonest to those who elect us.

I also happen to think that the important point in respect of stabilising the economy is the point that Johann Lamont made much of, which is that we must recognise, from a Liberal Democrat perspective—the view is shared by many—that experience shows that such a downturn always hits the segments of and individuals in our economy that are least able to cope. Those are therefore the segments of the population and the sectors of the economy that the measures introduced by the Scottish Government and others must assist, so that we give succour and support to those individuals who were in difficulty even before the recession and who are now hit hardest. The voluntary sector will play a large part in that process. Unlike Maureen Watt, I did not detect great buoyancy in the voluntary sector—far from it. I have found that it sees its task and the way forward to be incredibly difficult.

There is no question about whether we all support the measures that the cabinet secretary mentioned in relation to transport and housing, but we also make it clear, as many members have done in the debate, that we are not trying to go back to the way we were yesterday. That is particularly true in respect of housing. We regarded a house not as something that we lived in but as a gambling chip on which we would make a profit. There requires to be fundamental and structural change in how we do housing and we must question the necessity for us always to own a house. From a Liberal Democrat perspective, we must place much more emphasis on creating a viable and long-term rental sector, for the benefit of the economy and individuals.

I agree that we also need to get back to the basics in respect of the kind of industries that we must look to in the short and medium term and when we look forward to how we will be prepared and able to cope economically as we emerge from the current problems. Both my colleagues who have spoken in the debate have made much of green energy. Scotland has an advantage in that sector, which I hope the cabinet secretary recognises. The previous Government gave it considerable recognition. We have life sciences, power transmission, information technologies and medical imaging. All of that is crucial and we believe that those are the sectors into which we should be putting our efforts. I also agree—

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I am sorry, but the member's time is up.

Photo of Gavin Brown Gavin Brown Conservative 4:38 pm, 26th March 2009

I will pick up on some comments that have been made in the debate before I reflect on some of the ideas that could help to move our economy forward in the coming months and the next couple of years.

One member—I forget who it was—said that there have been conflicting messages about inflation over the past couple of weeks. It is important to note that the consumer prices index, which is the primary way in which the Government measures inflation, is up; it is up to 3.2 per cent according to the figures that were released yesterday. That presents difficulties to many people in Scotland. Every major food group has gone up in price over the past couple of months, the price of gas is up, the price of electricity is up and the price of clothing is up, so to say that there are conflicting messages is not strictly correct. The main measure has most certainly gone up. Those prices are going up at the same time as salaries effectively flatline and jobs are lost, which creates an enormous squeeze on a number of families throughout Scotland.

The second point that I will pick up on is about VAT, which a couple of members have mentioned. There is now almost universal acceptance among commentators that the £12 billion temporary VAT cut was not an effective measure and that it was, effectively, a waste of £12 billion. Similar comments were made in Germany, France and most other European economies. Some declared instantly that the measure was poor—and have continued to say so since—whereas others took a few weeks or months to decide that that was the case.

I want to make two points about the VAT cut. First, John Park tried to compare the benefits of the VAT cut to families and individuals with those of the council tax freeze, but the fundamental difference is that whereas every family in Scotland gets the council tax freeze as a matter of right, an individual must spend money to get any benefit from the VAT cut. It has been suggested that the cut will save families £250 a year; the problem is that to get that saving a family must spend £10,000.

Photo of Johann Lamont Johann Lamont Labour

We can argue about the benefits of the council tax freeze, but does the member agree that it does not benefit those on the lowest incomes? About 30 per cent of people do not pay any council tax. Those people, who are among the most vulnerable groups, do not get one coin in benefit from the measure.

Photo of Gavin Brown Gavin Brown Conservative

I do not want to point out the obvious to Johann Lamont, but people who do not pay council tax do not have a council tax problem. Of course they do not benefit from the council tax freeze.

My second point about VAT is intended to rebut comments that the First Minister has made many times and that the cabinet secretary repeated today. The SNP group at Westminster, which does not include Mr Swinney, voted in favour of the VAT cut. An amendment was lodged that would have allowed the stimulus package without the VAT cut, but SNP members did not vote for it—they thought that the cut was a good idea. The cost of the measure is £12 billion that will not go to the Exchequer. If Scotland's share of that cost is 10 per cent, the figure is £1.2 billion. The SNP must accept some responsibility for any budget cut that may happen in the future.

Photo of Gavin Brown Gavin Brown Conservative

I am sorry, but I cannot do so at the moment.

Mr Kerr made the point that the IMF does not think that the UK's national debt is particularly bad.

A year ago, our national debt was 42 per cent of GDP. It is now 47.5 per cent of GDP, and by 2012 it will be 57 per cent—a staggering figure that terrifies me and should terrify everyone in the country. Mr Kerr might like to know that the IMF has also said that the United Kingdom will suffer the largest contraction and have the longest recession of any major economy. Sadly, the markets have made up their minds about that: the pound is at its weakest against the dollar for 20 years and it is at its weakest ever against the euro—only €1.07 to the pound.

We have spoken many times about the small business bonus scheme, which will happen. Ross Finnie, Peter Peacock and others made the point that what matters is not announcements but when measures are implemented on the ground. The small business bonus scheme will be implemented on the ground on 1 April this year. Ultimately, I would like the bonus to be applied automatically, instead of companies having to apply for it. I hope that that may be possible in the future.

The Government was right to set up the regulatory review group; let us see it put business impact assessments into practice, as the group recommended. On tourism, let us not just promote a cheaper Scotland, as I read recently, but think about the longer-term implications of such an approach. On green energy, let us look clearly at the infrastructure and prototypes that need to be developed.

Photo of Andy Kerr Andy Kerr Labour 4:44 pm, 26th March 2009

It is a pleasure to take part in today's debate. I echo the cabinet secretary's sentiments about the effect of the recession on real people. I remind the chamber of the 800 real people who are suffering as a result of job losses at Freescale in East Kilbride. We can compare and contrast ministers' activity in that context with the activity that we witnessed after the announcement by NCR. I make no value judgment in that regard, but I hope that, in future, ministers will make more effort to reflect on people's needs throughout the country.

The cabinet secretary talked about the clean, green economy. I welcome work to secure jobs at Vestas and I hope that the 400 additional jobs that he mentioned will be secured. Lewis Macdonald reminded us of the challenges when he quoted the Institute of Mechanical Engineers.

As John Park said, if it is right for the SNP to cut the so-called burden of council tax on the Scottish people it is also right to cut VAT. Indeed, Gavin Brown reminded us that the SNP supported the VAT cut.

It was a bit rich of the cabinet secretary to talk about assisting the construction industry. Almost every member has reflected on the dire consequences of the Government's inability to deliver the Scottish Futures Trust. The cabinet secretary mentioned only one nation in the arc of prosperity, which is no surprise when we consider the challenges that countries are facing.

John Park was right to remind us of issues to do with the SFT and the skills agenda. We are interested in hearing from the cabinet secretary on public procurement, manufacturing support and apprenticeships. Ross Finnie talked about industries in Scotland on which we should focus, which can grow and give us cause for optimism. Margaret Curran reminded us of the impact of our banks' standing on the nation. In that context, she mentioned the links to our banks of many members of the Council of Economic Advisers.

I thought that it was hilarious when Alasdair Allan and Rob Gibson talked about a light touch. They had no response to what their leader the First Minister has said and what the SNP manifesto said about reducing the amount of gold plating that the UK Government does.

Photo of Rob Gibson Rob Gibson Scottish National Party

We are back to the he-said-she-said approach to debating. A light touch is better than no touch at all.

Photo of Andy Kerr Andy Kerr Labour

With respect, the member raised the issue when he criticised the UK Government for its light-touch approach, although his First Minister has said that there should be less of the gold plating that is the UK Government's approach. The cabinet secretary has said the same thing and the SNP manifesto said so, too. It is quite important to know what he said or she said, given that the member is trying to lay the responsibility for the economic crisis at the UK Government's door. What he said was wrong and what I said was right.

Johann Lamont was right to talk about the needs of particular groups and to remind us all that the recession is having a disproportionate impact on certain groups in society. She talked about the effect on black and minority ethnic groups, women and disabled people and she asked what the Government is doing to develop an employment strategy that includes intermediate labour market initiatives.

Peter Peacock was right to remind us of the situation in the Highlands and Islands, where companies are struggling. At the heart of that struggle is the failure of Scottish Government policy to respond to the economic crisis.

Maureen Watt is no longer in the chamber, but I am sure that she will read the closing speeches in the Official Report. I remind her that, from what we can gather from the experts that SNP members used to quote when they were in opposition, the SNP's proposals are for PPP by another name. Unison says so, the Cuthberts say so, Allyson Pollock says so and Mark Hellowell says so. Indeed, Mark Hellowell says that the non-profit distributing model of delivery that is being forced on everyone in Scotland is more expensive for the taxpayer. We look forward to seeing more detail on the SFT, but I suggest that the SFT will not in any way, shape or form live up to the SNP manifesto commitment to not-for-profit trusts.

The Tories talked about the IMF. Dominique Strauss-Kahn, the IMF's managing director, said:

"If there has ever been a time in modern economic history when fiscal policy and a fiscal stimulus should be used, it's now."

I could supply many other quotations that support the UK Government's approach.

Photo of Gavin Brown Gavin Brown Conservative

I wonder whether Dominique Strauss-Kahn said that six months ago or more recently.

Photo of Andy Kerr Andy Kerr Labour

He said that on 15 November 2008. I could supply the member with a quotation from Barack Obama on 2 February and with many others.

Let us get back to the Tories' fond phrases. I am sure that they get a bonus from their leader every time they talk about Brown's recession, but let us get the facts out, because that is a blinkered and partisan view that talks down the UK. Of course we in Britain are feeling the effects of the recession, but, when I last checked, Gordon Brown was not in charge of Germany, Italy or any other nation. Germany's GDP contracted by 2.1 per cent in the fourth quarter of 2008 and Italy's GDP contracted by 1.8 per cent. The economic performance of other nations shows that they, too, have problems trying to come out of the global economic recession.

Despite what the Tories have said about debt, we are the second best-placed nation in the G7 in relation to debt—better placed than the United States, France and Germany and second only to Canada. The UK's ability to have resources available has allowed the UK to invest in key measures that will see us through this difficult recession. It is not the Tories' little Britain isolationism but the UK's approach of working in concert with other nations around the globe that will allow us to deal with the challenges of the recession.

We would have liked to take up many more issues during the debate, but let us get back to the Scottish Futures Trust, which I understand has met twice. It is blamed by every building and construction company in the country for the loss of jobs—25,000 so far—and we have not seen it act yet. The Scottish Government has a real power there that it refuses to use.

There is a mass market in Scotland for microgeneration involving micro wind turbines and heat pumps in particular and there are industries in the sector, but the planning regulations that come into force today do not go far enough to support those industries. A combination of bureaucracy and SNP complacency therefore threatens the embryonic micro wind industry in Scotland. I hope that the cabinet secretary will give a lifeline to that industry by ensuring that the regulations that he produces will encourage the production and use of its methods.

As Peter Peacock said, the SNP's downfall is the difference between its rhetoric and reality. There is a lack of delivery on its big commitments, such as the local income tax, the Scottish Futures Trust, the six-point plan for economic recovery, the strategic transport projects review, the skills strategy and the national planning framework. The Government has all those tools at its disposal, but it is not using them in the interests of the Scottish economy.

Photo of John Swinney John Swinney Scottish National Party 4:52 pm, 26th March 2009

There have been many and varied contributions to the debate, some of which have made helpful suggestions for the formulation of the Government's economic recovery programme, which is precisely the point of our engaging as parliamentarians in the debate.

John Park asked for further details about the manufacturing summit that will take place on 25 April. It has been organised jointly by the Government and the Scottish manufacturing advisory service and it is designed to draw together a range of voices to ensure that we reflect the challenges in the manufacturing sector and further the Government's economic recovery programme.

Mr Park also asked about the approach to public procurement. The Government has put in place a series of effective measures to structure procurement arrangements in order to deliver better value and greater access to procurement for companies around the country. Public contracts Scotland is a new and helpful website on which contracts can be placed and local companies can register for and have access to contracts. In addition, an important part of the procurement agenda that the Government has developed is the wider utilisation of community benefit clauses, which have significant value for individual companies.

There was discussion in the debate about the involvement of the voluntary sector—the third sector—in the Government's wider agenda. I am pleased to tell Parliament that Mr Mather, the Minister for Enterprise, Energy and Tourism, and I, who share responsibility for third-sector policy, will have the next of our discussions with a range of third-sector providers in April to assess the effect of the recession on those organisations. Their position is obviously enhanced, though, by the Government's funding support for the third sector's development. In particular, as my colleague Maureen Watt said, we have encouraged the development of a wider range of social enterprises, for which there is significant potential in Scotland. We will take that forward with a range of third-sector organisations.

Photo of Johann Lamont Johann Lamont Labour

We can debate the reality of voluntary sector funding at another time, but does the cabinet secretary recognise that some voluntary sector organisations are concerned that they are being encouraged inappropriately to become social enterprises and to find funding in that way, which makes them unable to deliver services to the groups that they seek to serve?

Photo of John Swinney John Swinney Scottish National Party

That point depends entirely on the organisation's profile and outlook. Nobody has been forced to become a social enterprise but, if we can create a wider social economy with a broader range of social enterprises, I would have thought that Labour members would welcome that and the Government's desire to move into social equity and to change the models of economic activity, which several Labour members asked us to do today.

Mr Purvis suggested that university funding was being cut. I am pleased to tell him that we are spending a greater share of the Scottish Government's budget on universities than the previous Administration did. Of course, we would all love to have more money for everything—everybody in the Parliament demands more money for everything—but I must balance the books.

A central question in the speeches by Johann Lamont and Margaret Curran was on what the Government is doing for some of the more disadvantaged in our society and what we are doing to support people who are on low incomes. The Deputy First Minister launched the Government's anti-poverty framework, "Achieving Our Potential", in which we set out a range of measures to assist individuals who are on low incomes through income maximisation, the uptake of benefits and the expansion of opportunities. We have deployed disproportionately high levels of resources from the European social fund budgets to focus on encouraging employability, supporting those who are in hard-to-reach groups and ensuring that individuals who find it difficult to enter employment are supported into employment. The devolution of responsibility to community planning partnerships to address local labour market issues through the fairer Scotland fund is designed to support people—particularly women—who will find dealing with some of the employment challenges at this time more difficult.

Johann Lamont's argument had a mismatch. She said that, essentially, we were deciding which employment opportunities were more or less relevant for women in our society, but she criticised us for expanding modern apprenticeship programmes in some sectors, although they present opportunities for women to access employment. Moreover, the Labour Party demanded that expansion of modern apprenticeship opportunities. We need a little recognition that the Government is doing all that it can to support such activity.

Photo of John Park John Park Labour

Johann Lamont's point was that the Scottish Government refocused adult apprenticeships on engineering and construction last year without having a policy to support more women to enter those sectors.

Photo of John Swinney John Swinney Scottish National Party

I just said that the Government has undertaken a range of measures through its work under European social fund programmes and wider skills investment to encourage those who find it difficult to enter the labour market to succeed in doing so.

A number of statistics have been bandied about. Mr Kerr mounted perhaps his most spirited defence of the United Kingdom's financial position, but I will put some facts on the record. The annual deficit for the United Kingdom is forecast to be 9.5 per cent in 2009 and to rise to 11 per cent in 2010. Those are the highest figures in the G20 countries, whose averages are to be 5.9 per cent and 6.3 per cent, so we should be slightly cautious about some of the estimates that have been put around.

On the subject of estimates, Mr Purvis said that Scotland will be the worst-affected part of the UK in the downturn. That is not the case. The average Scottish forecast for 2009 is -1.4 per cent, which is less than half the United Kingdom's average forecast of -3.2 per cent. Let us not talk ourselves any further down into the difficulties that we have.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

Will the cabinet secretary confirm that he has just read out the latest set of official GDP figures? If not, what is Parliament to go on? I quoted the official GDP figures from the Scottish Government.

Photo of John Swinney John Swinney Scottish National Party

The figures were exactly what I said they were—the average forecasts for 2009 and 2010. [ Interruption. ] They are forecasts. Mr Purvis would have us in a recession before we are in the depth of position—

Photo of John Swinney John Swinney Scottish National Party

No, I am just bringing my remarks to a close.

We must be careful about the issues that we put on the agenda.

I was greatly cheered by the thought that there would be a change in the fiscal position when I heard some words uttered in the House of Commons the other day by one of the principal figures of the Labour Government. The Prime Minister said:

"No country in the world is choosing to cut public spending at a time when people are in need of ... help".—[Official Report, House of Commons, 11 March 2009; Vol 489, c 292.]

I hope that he is thinking about that when he subjects this country to £500 million of cuts in public spending, which we certainly do not need.