Social and Economic Success

– in the Scottish Parliament on 13th January 2016.

Alert me about debates like this

Photo of Tricia Marwick Tricia Marwick None

The next item of business is a debate on motion S4M-15290, in the name of Alex Rowley, on achieving social and economic success for all of Scotland. I will allow members a few moments to assume their seats.

Photo of Alex Rowley Alex Rowley Labour

As the first member to speak after Lesley Brennan being sworn in, I welcome her to the chamber. Up to now, I was the newest member in the chamber, but it is now Lesley. I congratulate her. [Applause.]

I hope that, in the weeks and months ahead, in the lead-up to the Scottish general election in May, we can have a big debate in Scotland about the most pressing challenges and issues that we face moving forward.

My motion today is on “Social and Economic Success for all of Scotland”. My desire and ambition throughout my life has been to live in a society in which we no longer have the haves and the have-nots but in which everyone, no matter what family or circumstances they are born into, has an equal chance of achieving their full potential. It would be a society in which, if people were unable to work and provide for themselves, there would be a social security system to support them with a minimum income. It would be a society in which, if someone was able to work, they would work and would earn a fair pay and be treated with dignity and respect in the workplace. I do not think that that is an awful lot to ask for; yet, in Scotland in 2016, we are far removed from that kind of society and, despite what the Tories will say today, the situation is getting worse.

That is why we need a more open and honest debate about the state that we are in. What needs to be done to bring about a more fair, just and equal Scotland? I have no objections to the amendment that Alex Neil has lodged on behalf of the Government. Indeed, I remain proud that it was Labour in Fife that brought about the free bus pass for pensioners—the first time that it had been introduced anywhere in the United Kingdom. It was then another Fifer, a Labour Chancellor of the Exchequer, who rolled out that policy across the UK. It was also Labour in Fife that first brought about free nursery education for three and four-year-olds, which is another massive tool for tackling poverty and inequality, as the Scottish Government now clearly recognises.

Although I do not disagree with the measures that are outlined by the Government, some of which were brought about by the Scottish National Party and some by the Labour Party, I have to say that they will not on their own create the fairer society that we all want. Indeed, despite the measures being in place, matters are getting worse for many families, particularly those who are on lower fixed incomes. There is a legitimate debate to be had about how we target resources to reach those who are in the greatest need.

The Government’s own poverty tsar has flagged up issues around universalism. I hope that we are able to debate such matters in a more open, honest and transparent way. For now, let me give members the example of the Cottage Family Centre in Kirkcaldy. Five years ago, the cottage provided Christmas parcels for 100 children. In 2014 that figure was 500, and this Christmas it had risen to 780. Therefore, this year nearly eight times as many children needed help at Christmas than was the case five years ago. In contrast to five years ago, when the need was for extras and toys for the kids that families could not afford, this year the urgent need was for the basics—the food that families could not afford to put on their table at Christmas.

The Tories suggest in their amendment

“that levels of poverty are at historic lows”, but that is simply not the case. While I am on the subject of the Tories, yesterday’s proposal by the Prime Minister that families should be encouraged to save money in a bid to tackle poverty shows just how out of touch those people are with real life.

Photo of Nanette Milne Nanette Milne Conservative

As I will say in my speech, the Scottish Government’s poverty and income publications state that poverty levels are at a historic low.

Photo of Alex Rowley Alex Rowley Labour

The member need only look around Scotland, at the increase in the food banks and at the Cottage Family Centre, for example, to see that poverty is not at a historic low—far from it.

As the Trussell Trust said recently:

“The UK Government is trying to find ways of eating into the national debt, while many people are just trying to find ways to eat.”

Last night, I was at a food bank in Cowdenbeath that is run by the Dunfermline Trussell Trust. I met the volunteers and thanked them for the work that they do to help others. I heard first-hand examples of how emergency food parcels are being accessed and by who. In 2016, it cannot be right—it is not right—that we have men, women and children who are reliant on charity to feed themselves.

For the first time in more than half a century, we have absolute poverty in communities up and down this country. Absolute poverty means that people are unable to access the very basic needs that are required to live. I suggest that food is a very basic need.

We must use the benefits system to help and to support people, not to drive them to desperation. People cannot be starved back to work; rather, they must be supported. Over the past three years, in the Dunfermline area, where there are food banks in Cowdenbeath, Crosshill, Inverkeithing and Rosyth in my constituency, more than 10,000 people have been supported with emergency food parcels. According to the Trussell Trust, the most common reasons for people having to turn to emergency food parcels are benefit sanctions and welfare reform. We need a social security system that is based on respect for those who it aims to help and which treats people with dignity, with a focus on increasing people’s opportunities and choices.

I am always reminded that, throughout the history of the labour movement, the Jarrow marchers, the upper Clyde sit-ins, the miners’ strikes of the 1980s, people marched not for benefits but for jobs. Today, our ambition must be to use all the powers that are at our disposal in this Parliament to support people to get the skills and the opportunities to get jobs.

Let us all agree today that full employment must be our goal, because the key issue is jobs: good jobs; jobs for young people; jobs for the long-term unemployed; quality jobs; jobs that will last; and jobs that we can build our future around. That is why we need to set out a strategy for the jobs, education, training and industrial investment that we need and for the hope in the future that we urgently need to make for a better Scotland in which having a decent paid job is the norm for all Scotland and all its people.

The second point from the visit to the food bank last night is that people in work are also accessing food banks. Some 60 per cent of Scottish children in poverty have a parent in work. Therefore, let us agree that we will work towards achieving the living wage across all Scotland in the next five years. Labour is committed to funding the living wage across the care sector. We are committed to using the procurement process to expand the living wage to all public sector contracts, and we will work with employers and trade unions to make that happen. Action to put an end to poverty pay once and for all in Scotland is needed.

We should take that action further. Scotland’s jobs strategy must be driven by a partnership of Government, employers and trade unions working alongside one another to grow a dynamic economy. We need an industrial strategy for Scotland and the conditions and support to be put in place for new business start-ups and to support and grow existing businesses. All of that must be the backbone of the Scottish economy.

Our policy priority has to be to develop a dynamic approach to growing Scotland’s economy. Most of all, we need a Scotland of high skills and good education in which no one is left behind.

It is widely acknowledged that we have a housing crisis in this country, but we are not building houses for rent or to buy in the numbers that are needed. To compound that, if we were building the houses that we need to build, we would find ourselves with a skills shortage in the construction sector. We would find a shortage of brickies, plasterers, sparkies and plumbers. We need a national house-building strategy for Scotland and new council houses for rent sitting alongside a drive for new build to buy.

Photo of Mark McDonald Mark McDonald Scottish National Party

The member says that we need more houses than those that are planned. Given that the Scottish Government said that it would deliver 30,000 affordable homes and exceeded that target, and that it has set a target of 50,000 for the next session, what target does Mr Rowley believe needs to be set? What figure would he put on what needs to be delivered and what would Labour pledge to deliver? If we are going to debate that, it would be worth knowing where Labour’s plans are on that.

Photo of Alex Rowley Alex Rowley Labour

I wrote to the Minister for Housing and Welfare, who is in the chamber, back in December and welcomed the First Minister’s announcement at that point that the Scottish National Party was committing to 50,000 houses. I thought that that was 50,000 social rented houses, but it was 50,000 affordable houses. The minister has written back to me in the past week and confirmed the 50,000 figure; she also confirmed that 35,000 of those houses will be for social rent. I welcome that. That is not enough, but it is certainly a step in the right direction.

I have a nice photo from back in 2011 of Alex Neil and John Swinney standing with their commitment to 30,000 houses for social rent. Once the SNP was back in power, it changed that to affordable houses. Progress is to be made, but I absolutely want to be committed to building consensus in the chamber, whether it is on 35,000 or 45,000 houses for council housing or housing associations, and to building them so that we do not just make a promise now and revert to not doing that after the election, because we have a shortage of housing right across the country.

As I said, we need a national house-building strategy for Scotland and new council houses for rent sitting alongside a drive for new build to buy. That will not happen by itself; political leadership and drive nationally are needed alongside strategies, planning, a strategic approach and leadership at a regional level across Scotland.

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

Does the member accept that this Government was the first to show the political leadership necessary to end right to buy, which the previous Administration failed to do? Does he welcome that political leadership?

Photo of Alex Rowley Alex Rowley Labour

As the member knows, the problem with right to buy was that there was no replacement of the houses that were sold. That is why we have the crisis, and why the Labour Party voted with the member’s party to end right to buy. A national house-building strategy needs to be developed and put in place now, with a skill strategy sitting alongside it to give young people in this country the apprenticeships and skills that will set them up for the rest of their lives and tackle our housing crisis.

Let us be clear in this chamber—we have a housing crisis. We can and should address it now, because the gap between housing need and supply is bad for people, but it is also bad for our economy. It drives up prices and inflates rents in the private sector. Earlier this year, there were 150,000 households on local authority housing waiting lists. More than 10,000 households are in temporary accommodation. Every 18 minutes, a household in Scotland is assessed as homeless—that is 81 a day. There are 940,000 households in fuel poverty.

Photo of Elaine Smith Elaine Smith Labour

The member is in his last minute.

Photo of Alex Rowley Alex Rowley Labour

Homeless children in temporary accommodation missed, on average, 55 school days, which is equivalent to a quarter of the school year. We can see that poor housing has a knock-on effect and must be addressed.

I do not believe that any of this is rocket science. It just needs political leadership, political will, determination and drive. Let us move beyond the rhetoric of a fairer, more just, Scotland and agree what needs to be done to achieve that.

I move,

That the Parliament believes that current levels of poverty and inequality are of great concern and commits to using the full powers at its disposal to achieve the social and economic success that all of Scotland needs.

Photo of Alex Neil Alex Neil Scottish National Party

I welcome the new member before she leaves the chamber. We look forward to debating with her in the next 10 weeks or so.

There was very little that I disagree with in Alex Rowley’s speech. Like him, I came into politics driven not by a need to be a minister or to be driven about in a Government car but by the need to create and maintain full employment in our society.

I came into politics in 1966—I know that that is hard to believe; I was just out of nappies then—when Harold Wilson was the Prime Minister. In those days, we had full employment. The level of poverty was genuinely at a historic low in absolute and relative terms.

However, ever since the July measures of 1966—for the past 50 years—the position has been going downhill. It started with Harold Wilson and went on with him again and with Jim Callaghan, Ted Heath and all the rest of it.

The fundamental point of principle that Alex Rowley put forward is absolutely right. The best and only way to solve the problems of poverty and inequality is through full employment, not just in the sense that everybody who is fit and able to work has a job but in the sense that they have a good, well-paid job. We share that ambition with Alex Rowley.

That is why so much of the Government’s emphasis, since the day we were elected in 2007, has been on putting economic growth and sustainability at the top of the agenda. It is noticeable in the gross domestic product figures that were announced this morning that against the odds—with the difficulties in the oil industry and the austerity policies that we face coming from London—we can still grow the Scottish economy. The reason why we can still grow it is that we have deliberately targeted a massive increase in capital investment in Scotland, so that we can create and maintain the good jobs that we have.

Let us take housing, for example. The fact of life is that, in comparison with the first eight years of the Parliament, our housing record in the past nine years has been outstanding. We are building about 5,000 council houses, compared with the six that were built in the last year of the previous Administration. If we look at the total number of houses completed, we see that we have exceeded the 30,000 figure, and we will build at least another 50,000 over the next five years.

Housing is important not just because of the need for it, which we totally agree has to be a top priority for this Parliament and for the next Government as well as this Government, but because, as we know, good, decent housing is a prerequisite for reducing and eliminating poverty, and it is essential for achieving educational attainment and improving the nation’s health. Housing ticks every box in terms of being good policy, which is why we have set aside more than £3 billion over the next five years to build at least 50,000 new affordable houses.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I take the minister back to the GDP figures. I was a bit surprised that he claimed them as a success story, because Scotland is lagging behind the rest of the United Kingdom in the figures annually and for the current period. Would he like to reflect on his claim that that is a great success?

Photo of Alex Neil Alex Neil Scottish National Party

I said that the GDP figures were a success given the state of the oil industry, the impact of the austerity measures that were implemented by the Government that Willie Rennie supported and, more recently, the budget that Osborne introduced last year. To be frank, if we had not been implementing our economic policy and spending the money that we are spending on capital programmes, including spending through the Scottish Futures Trust, the GDP figures would have shown no growth at all.

If the member cares to look at the analysis of the GDP figures, he will see that while there was some growth most recently, the real growth sector was construction.

Photo of Alex Neil Alex Neil Scottish National Party

No.

That construction growth is coming from our investment in a new bridge over the Forth, in the central Scotland motorway network, in 30,000 new houses and in the railways. All that growth is because of our investment in construction and the jobs that are brought with it. That contributes not only to a much higher level of employment and growth than would otherwise be the case but to keeping poverty and inequality at a lower level than they otherwise would be at. Alex Rowley is right that the best way to get people out of poverty is to give them a good, well-paid job, which is what our capital programme is doing.

Photo of Alex Neil Alex Neil Scottish National Party

I am sorry, but no.

We are taking specific measures within our limited powers at the moment over social security and other types of benefit, and we are looking to the future. In relation to what Alex Rowley’s motion says, we will use the powers that we have at any one time to the maximum to reduce poverty and inequality in Scotland.

Reducing poverty and inequality in our society is in this Government’s DNA. However, it is rather ridiculous that we are having to spend well over £100 million a year on mitigating the impact of policies such as the bedroom tax that we have voted against in Scotland. We have to fork out money to mitigate the impact of the imposition from south of the border of regressive policies on benefits.

Photo of Hugh Henry Hugh Henry Labour

The cabinet secretary indicated that he would support using full powers and that it was in his and his party’s DNA to act accordingly. Will that include tax increases?

Photo of Alex Neil Alex Neil Scottish National Party

As John Swinney has outlined, we have used the major taxes that we have control over, such as the new land and buildings transaction tax, to raise the upper level, reduce the lower level and make the system much fairer than it was under Gordon Brown or Alistair Darling and fairer than it is under George Osborne—and that is just a start.

The member will know that, under the powers that we have at present over income tax, we cannot increase the upper rate without simultaneously increasing the lower rate by the same amount. That changes in 2017 and, as John Swinney has made absolutely clear, we will use every opportunity that we get to make the tax system fairer so that those who earn the most pay proportionately the most.

We will do that irrespective of what tax we are talking about, because we believe in a fairer society. We believe that people at the bottom end need a better deal. We believe that we should use the tax system and the benefits system as well as public spending and the social wage as tools to make our society fairer. That is why we have been out since last summer consulting people across Scotland on our document “Creating a Fairer Scotland: What Matters to You?”, and we will publish the results of that fairly soon. Creating a fairer Scotland is a top priority for the Government.

The problem that we have and the limitation on our ability to achieve our aim is that we lack the powers that really matter—those over the great swathe of tax policy that we do not control and over the great swathe of social security benefits that we will not control even under the provisions in the Scotland Bill. If we had control over all those things—over all taxation, spending and social security in Scotland—we could, even without independence, do much more than we are able to do or will be able to do with the limited powers that are afforded to us. That is the whole point.

On the tone of the debate, I think that Alex Rowley basically agrees with me and I agree with him about full employment, tackling poverty and deprivation and creating a fairer Scotland. The faultline between him and me is that I believe that this Parliament should have all the powers to make the big differences and create the society that I believe he really does believe in.

With the very limited powers that we will have, we can go so far, but we will not be able to go further until we have all the powers, because as long as there is a Tory Government or a Liberal and Tory Government in London, we can bet our bottom dollar that we will continue to get policies that make society less fair, reduce employment opportunities, treat the regions and countries outside the south-east as low priorities for investment and, to be frank, mean that we will continue not to get our fair share of the national wealth that is created by the United Kingdom. That is really the fundamental and probably the only major faultline between me and Alex Rowley. I believe that we have to get those powers. The Labour Party believes that we should be satisfied with the limitations of what we have and with what we are getting.

I joined the SNP 30-odd years ago because I believe in all the things that Alex Rowley talked about. When I was growing up in politics, we had all those things. We have gone back the way in the past 40 or 50 years under successive UK Administrations. I joined because I recognised that getting control over those areas of policy is a fundamental prerequisite for delivering the society that we in the SNP and, I believe, most Labour members want to see. That is why we are happy to support Alex Rowley’s motion along with our amendment. I am delighted that Mr Rowley and the Labour Party will be voting for our amendment and, for once, the Labour Party and the SNP will vote the same way at decision time at 5 pm.

We should never lose sight of the guilty men and women in London who are doing so much damage not just to poor people north of the border but to poor people throughout the United Kingdom, and we should never forget what the treacherous Liberals did by putting the Tories back into power and supporting all the right-wing policies that our people are now suffering from. That is a result of what the Liberals did in making David Cameron Prime Minister in 2010.

We will march on with implementing our policies for fairness, full employment, a fairer society and a better Scotland, and we will use and are using all the powers that are at our disposal to make that happen.

I move amendment S4M-15290.4, to insert at end:

“, and, in doing so, agrees that universal benefits such as free prescriptions, free tuition, concessionary fares for older and disabled people, free personal care and free school meals are all essential to tackling poverty and inequality effectively, as is the reversal of the damaging cuts to social security benefits and tax credits being imposed by the UK Government on Scotland’s most vulnerable citizens against the stated wishes of the Scottish people”.

Photo of Nanette Milne Nanette Milne Conservative

I welcome the new Labour member to the Parliament and wish her well.

We have been presented with a motion about poverty and the Parliament’s powers to promote Scotland’s social and economic success. I think that there is more commonality between members than Mr Rowley suggested that there is. The motion is broad and eminently reasonable, to the point that parts of it appear to be general statements of common sense.

Let me be clear. Any level of impoverishment in this country should always be of the utmost concern to members of the Parliament. The state has always had a special duty to focus on improving conditions for our worst-off citizens. I take that duty seriously. Our amendment seeks not to undermine the Labour Party’s motion but to clarify it and balance it against the improvements that are being driven forward.

As I said when I intervened earlier, the Scottish Government’s poverty and income publications show that poverty levels are at a historic low. However, we must strive further. We are certainly not yet where we want to be; too many people in our country are socially excluded, feel the blight of long-term unemployment and see little opportunity for improving their lives. Some are trapped by cycles of ill health, by addiction, by debt or by a lack of skills. For many people, the issues are generational, and such long-standing problems will not be fixed overnight or in one parliamentary session.

As members know, my main involvement in the Parliament has been with health, and I am a member of the Health and Sport Committee. The committee carried out an interesting piece of work on health inequalities, which was followed by a debate in which other relevant subject committee conveners were asked to give their thoughts on what their committees could do to reduce wider inequalities, which would have a corresponding impact on health and wellbeing.

The traditional downstream response of the health service, in treating established disease or seeking to change behaviours that are known to give rise to ill health, such as smoking and alcohol and drug misuse, has not led to less inequality. Indeed, many public health lifestyle campaigns have widened health inequalities.

The Health and Sport Committee’s inquiry concluded that, if progress is to be made, significant effort will be needed across a raft of policy areas, and different agencies will need to collaborate and work together more effectively. The early years are particularly important, and health service initiatives such as the early years collaborative and family nurse partnerships are helping to make a difference. The announcement by Alex Neil, when he was health secretary, of 500 extra health visitors was important and was welcomed by Scottish Conservatives, because we think that universal provision of general practice-attached health visitors for children up to the age of seven could have a significant impact in reducing health inequalities.

Of course we must use the full powers that the Parliament possesses to address our social and health problems while working in partnership with other parts of government, whether at community, local authority, European or UK level. I do not think that anyone would disagree with that view. What matters is how we use the powers and what the impact will be. For too long, policy makers have applied sticking plasters to poverty, while for the people who are the most difficult to help, poverty has become ever-more ingrained.

One of the Parliament’s core functions should be to consider and tackle the root causes of poverty. Conservative members have often spoken about work being the best and most sustainable route out of poverty. The SNP and Labour have said exactly the same thing during the debate. However, we are not blind to the thousands of people who work but still do not find the security that they deserve. That is why Britain needs a pay rise. We welcome the national living wage premium, which will give an unprecedented wage rise to the lowest-paid workers from this year through to 2020.

Photo of Nanette Milne Nanette Milne Conservative

I have only six minutes, so I will not give way to Mr Stewart.

I recognise the impact of changes to the income tax personal allowance, which will take hundreds of thousands of the lowest earners in Scotland out of paying income tax altogether.

We recognise the achievements of our schools and the dedication of our teachers, but there is little doubt that our education system has historically failed some of the worst-off people in our society. We therefore welcomed the investment in the Scottish Government’s attainment fund, but we must ensure that the money is spent effectively and has measurable outcomes. It should be effectively targeted and combined with the earliest possible interventions.

My Conservative colleagues have given examples of our successful reforms in England, such as the pupil premium and increased autonomy for schools and headteachers. Schools must not be expected to provide only an excellent general education; they must also provide the skills and the support that pupils will need for their future lives. I agree with Mr Rowley that we need those skills.

The substantial range of new powers that are to come to the Parliament will be transformative and will give the Scottish Government a genuine responsibility to raise the money that it spends. That is why I am pleased that the Labour Party’s motion makes an explicit link between social and economic success because, regardless of the Parliament’s best intentions, it is our economy—the trade and hard work of individuals—that provides us with jobs, stability and improved living conditions.

It is also the hard work of our people and their success that supply us with the money that we spend here. That is why we should seek to create a Scotland that is an attractive place in which to live, do business and invest. That means that we cannot simply ramp up taxation to fund public services to some indefinite degree. There is a balance to be struck that recognises that Scotland must remain competitive not only within the UK but internationally.

We must examine how powers over measures such as the work programme can be best used and how devolution can create opportunities to work better with some of our other devolved services or even to administer services more locally to respond better to the diverse economic circumstances that we find across Scotland. I pay tribute to the Welfare Reform Committee’s serious work on that.

Poverty is linked to a range of poor outcomes not only for individuals but for society as a whole. It is a blight on the country and it is closely connected with crime, ill health, mental illness, social exclusion and a lack of skills. It must be tackled head on, seriously and in a way that reflects reducing poverty as one of our central priorities and which realises the often difficult choices that that brings. The rewards not only for individuals but for society are far too great to be overlooked.

I move amendment S4M-15290.3, to insert after “concern”:

“; welcomes that levels of poverty are at historic lows while recognising that more still needs to be done; notes that increases in employment and pay are built on the success of the UK as the fastest growing major advanced economy in the world; acknowledges the positive effect of reducing the number of workless households as work is often the most sustainable route out of poverty; considers that the national living wage premium will have a positive effect for people on the lowest wages; invites all voices across the Parliament to consider how best to use its existing powers as well as the substantial new powers to be devolved in the Scotland Bill to create a fairer, more prosperous Scotland,”.

The Deputy Presiding Officer:

We turn to the open debate. Because of the late withdrawal of speakers who had intimated that they were going to speak, there is a little time in hand and I can give members up to seven minutes.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

I welcome the opportunity to debate the issue today. I share many of Mr Rowley’s hopes and wishes. It is rather frustrating to see that the gap between the haves and the have-nots has increased over the past number of years and continues to increase.

As somebody who lives in an area of deprivation and represents areas where people struggle from day to day, the years under the Liberal-Tory Government—and we now have a Tory Government—have been extremely frustrating, to say the least.

I too want to see people reach their full potential. I wish that we had all the levers of power to ensure that we could create more jobs and sustain existing jobs.

I cannot stand here today without talking about the difficulties in the oil and gas industry in the north-east of Scotland and beyond. Really, I would have expected the Chancellor of the Exchequer to come up with a package of measures to ensure job security in the industry, so that we retain skills and ensure the future of that industry. Unfortunately, that has not happened. I believe that if the Scottish Government had those powers we would be acting somewhat differently from George Osborne and Amber Rudd.

Photo of Claudia Beamish Claudia Beamish Labour

I thank the member. Does he agree that it is very important that the Scottish Government and the range of agencies, universities, colleges and businesses plan for the transfer to the low carbon economy that will inevitably come and that we are gradually moving towards in marine as well as terrestrial energy?

Photo of Kevin Stewart Kevin Stewart Scottish National Party

If the member was as aware as some of us in the north-east of Scotland are of the activity that goes on there, she would know that many companies are doing that already. What we cannot afford to happen is for them to have the rug pulled from under them before transitions can take place. However, we should not forget that the oil and gas industry is still extremely important, and that there are many more decades of oil and gas to come.

I move on to social security. I grew up in a family that believed in the welfare state and that there should be a social security safety net. Fortunately, over the piece, my family has not had to rely on that social security safety net very often—but who knows what is round the corner?

One of the things that really frustrate me—Dr Milne came up with this in her speech—is the idea that we have “generational” problems to deal with. It is as if they can never be dealt with at all. I ask Dr Milne and the Tories whether it is right that we deal with such problems by sanctioning folk through swingeing benefit cuts, or by paying universal credit to the man of the house. Is that the way to tackle those problems? I do not think so.

Photo of Nanette Milne Nanette Milne Conservative

The member may be interested to know that I joined the Conservative Party because I believe in helping those who cannot help themselves. That is why I am a firm believer in the national health service, and it is why I think that we cannot do these things without a thriving economy. We are not miles apart. We would stress different nuances, but I firmly believe in that principle.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

The phrase

“helping those who cannot help themselves” adds to the woes here. The reality is that, sometimes, we just need to do a tiny little thing to get folk on their way. That is where the Government has been really proactive in ensuring that we put in place things to help folk on their way. We called that the social wage at the very beginning of the minority Government session, and I kind of liked that idea. It includes free education, free bus passes, free school meals and free prescriptions.

I do not think that Johann Lamont is in the chamber but at the weekend, there was some repetition of what she said—another suggestion that popular policies that help people make Scotland a something-for-nothing country. Johann Lamont’s somewhat infamous something-for-nothing attack on those vital universal services has haunted Labour since the day she made it. She has resurrected that toxic rhetoric just four months from the Scottish Parliament elections. That is a headache for Mr Rowley and the Labour Party.

One thing that Mr Rowley did not spell out today is which policies he will keep and which policies the Labour Party will set aside. Does he actually believe in that rhetoric of a something-for-nothing society, or does he share my belief and that of the cabinet secretary that those progressive policies ensure that we do much to tackle inequalities? That has to be spelled out by the Labour Party today and over the next few weeks.

Photo of Jenny Marra Jenny Marra Labour

My colleague Alex Rowley was very clear when he stated the Labour Party’s intention to vote for the Government’s amendment.

I draw Kevin Stewart’s attention to the Scottish Government’s poverty tsar, and to her note for the First Minister, which came out through a freedom of information request. At paragraph 5, she says that stakeholders have raised “contentious issues”, including “targeting versus universal approaches”. How does he feel about the poverty tsar’s questions on the issue?

Photo of Kevin Stewart Kevin Stewart Scottish National Party

I believe in universalism, and I make no apology for doing so. I also believe in progressive taxation but, unfortunately, we do not have all the powers to deal with that.

The fact that Ms Marra intervened at that point suggests to me that there is a question mark over what Labour is about when it comes to universalism. In my grandfather’s day, the Labour Party was the party of universalism. Unfortunately, that seems to have gone.

The Deputy Presiding Officer:

Please draw to a close, Mr Stewart.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

No matter what Labour does, people in Scotland can rest assured that the SNP will continue to protect and build on the progress that we have made since we came into office. We will use every lever at our disposal to continue to make Scotland a fairer and more equal country.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

There is nothing more important in politics than action to tackle poverty and inequality, and there are two mindsets that we in this Parliament should avoid. The first is the idea that because we cannot do everything, we cannot do anything significant. There have always been significant things that we can do in relation to health, education, housing, skills and many other areas, and there will be even more action that we can take with the new tax and social security powers.

The second false mindset is the idea that there is some dichotomy between universalism and targeting. I believe in what somebody else has called progressive universalism. That should be our central principle when we approach the whole controversy about universalism and targeting. I will give two examples of that. The NHS is a classic example, because we all believe in the NHS as a universal service, but we also need to provide extra resources—resources that are over and above the average—to those areas that are most disadvantaged. The deep-end GP practices are the best example of that. More money is needed in those areas, because the shocking fact is that the most deprived fifth of the population of Scotland have a healthy life expectancy that is more than 20 years shorter than that of the most prosperous fifth of the population. We cannot do everything about health inequalities by that method, but we should do that, because it would be a significant contribution.

The same principle applies to educational inequality, particularly the attainment gap. Kevin Stewart said that he wanted Labour to put forward concrete policies. Kezia Dugdale has put forward specific policies on that issue in the past few days. It is clear that education, like health, is a universal service but, within that, extra resources should go to schools and—crucially—nurseries where, according to the free school meals indicator, there are a significant number of children from deprived backgrounds.

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

I am sure that we would all love to devote more resources to many things. Can Mr Chisholm say where he intends to get the funding to pay for those things and what other services he would cut in order to provide them?

Photo of Malcolm Chisholm Malcolm Chisholm Labour

I have a section on tax, because we need to talk about tax. We have a costed proposal on taxing the very highest earners, which I was going to refer to later. That proposal is about targeting resources at individual schools and individual nursery schools to do something about the attainment gap; that is what is crucial about Labour’s proposal. We need to target resources at nurseries, too, because we need to get in early. Research for the Scottish Government by the University of York and Durham University that was published last week said that, by the time they started school,

“Children from the least deprived areas had higher scores than those from the most deprived areas by”, on average,

“around 14 months of development”.

Therefore, we need to get in very early, and that is why Labour is saying that money should be targeted at nursery schools as well as schools. That is an example of progressive universalism in action.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

I am very grateful to Malcolm Chisholm for taking my intervention.

On targeting, Malcolm Chisholm will be aware that the Government has identified money for vulnerable two-year-olds in relation to early years, and I am sure that he supports that. Is he aware that Labour-controlled Dumfries and Galloway Council did not use its grant for getting vulnerable two-year-olds into nursery this year and instead put it into general funds? How does that tie in with the comments that he has made?

Photo of Malcolm Chisholm Malcolm Chisholm Labour

I apologise for not being familiar with the budgetary details of Dumfries and Galloway Council, but if that is the case, it is clearly not acceptable.

We need to have a more equal society not just for the obvious social justice reasons, but because it is good for the economy. It is an economic policy as well as a social justice policy. That is obvious not just in relation to people not realising their educational potential; it is also important in terms of demand in the economy, people having good incomes and so on.

We have talked about jobs and skills, in relation to which the Parliament has important powers. That is why I will repeat what Alex Rowley says about using our procurement powers to insist on the living wage and working towards the living wage. We have flagged up the social care sector in the first instance. Generally, of course, we should use our new social security powers to redesign the work programme and so on.

I want to move on to tax because we need to talk about tax. I believe that reform of local government taxation will happen in the next parliamentary session. Again, Labour has made specific pledges on the use of the new tax powers in the next parliamentary session. I have referred to the very top rate of tax being used for the educational initiative, but in general we have said that those in the higher tax bands will, relatively speaking, be taxed higher than those in England because we think that that is a fair contribution for better-off people to make towards a more socially just society. However, none of those things will kick in next year and we have to address and think seriously about the situation that is facing local government in three months’ time or less.

In a written submission for yesterday’s meeting of the Welfare Reform Committee, Children in Scotland said:

“We have significant misgivings about Local Authorities’ ability to continue to provide the vital frontline services that the poorest and most vulnerable families depend upon.”

We are talking about poverty and inequality today. Close the Gap flagged up women and children in particular as being in that category and talked about punishing cuts for vital services.

I do not think that the SNP has taken in the scale of the 5 per cent cut to local government funding yet. I had a briefing with the City of Edinburgh Council on Monday, and we are looking at £80 million-worth of cuts in Edinburgh in April, at project closing and at thousands of jobs going across Scotland, with even education and social work not being protected. I am not going to advocate a particular tax policy for that in the debate, but I know that every single member of this Scottish Parliament has to look at the scale of those cuts and our revenue-raising powers and at least think about the question whether there comes a point when we just have to raise more revenue in one way or another. We might not do that through the council tax, as we have income tax powers, but let us at least think about it. That is all that I am saying to members today. There will come a point when the poorest and most disadvantaged in society will be penalised by the scale of the local government cuts that are coming down the track in three months.

I regret the loss of some central Government funds, such as the fairer Scotland fund, which did good work in disadvantaged communities. Such funds are now subsumed in local authority funds but because of the cuts, they are being dissipated.

I do not have time to speak about housing because my seven minutes is up. All I will say about housing is that I applaud the Scottish Government’s increased target for housing in the next parliamentary session. However, from my conversations with social rented housing providers, unless something is done about the level of the housing association grant, it just will not be possible to build whatever the number of houses is that has been pledged for the next session. I think that Alex Neil gave a figure of 35,000 houses.

The Deputy Presiding Officer:

The member has to close.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

I have to close. My final comment is that, relatively speaking, we have too much rhetorical commitment to tackling poverty and inequality and not enough practical action. Let us make tackling poverty and inequality the number 1 objective of the next parliamentary session—and I apologise that I will not be here.

The Deputy Presiding Officer:

I have allowed the first two open debate speakers to go a bit over seven minutes because of interventions but, from now on, I would be grateful if members could keep to their seven minutes.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

I welcome the chance to speak in this important debate. There is nothing natural or inevitable about poverty or inequality. Although the rhetoric of austerity seeks to scapegoat individuals and apportion blame to the most vulnerable in society, I am pleased that in this chamber at least that is not the majority mindset.

The Scottish Government has a strong track record on delivering a form of sustainable economic growth that safeguards social justice. However, today I want to highlight—as others have—the role of universalism and how it delivers fairness. It is something that I touched on in last week’s debate on public services and it merits being revisited.

I realise that there have been a number of attacks on universalism. Some of them are insidious and come from the right. Others, I believe, are perhaps well intentioned at a time of very restricted resources as a result of austerity. However, they are looking at the wrong solutions. We abandon the principle of universalism at our peril.

At its inception the welfare state was designed to provide a series of social safety nets for people from cradle to grave, in the famous phrase, meaning that all citizens have a right to a dignified existence free from want. The cradle-to-grave concept as imagined in the 1942 Beveridge report, which laid the foundation for Labour’s welfare state, fostered a sense of citizenship and social cohesion that had already been fomented by a devastating war. The current UK Government is tearing up the Beveridge report before our eyes, undermining the fundamental rights of everyone in our society and targeting the most vulnerable.

Universal services such as the NHS, which is free to all, are at the heart of the cradle-to-grave concept. That is why Nye Bevan resigned from the Labour Government when prescription charges were introduced, as he recognised that it was an abandonment of the principles on which the NHS was founded.

As the social reformer Richard Titmuss observed, the abandonment of universalism leads to targeted selective services, and services for the poor will always be poor services. Studies have shown that moving from universalism to selectivity increases social and economic inequality and, crucially, that the processes and procedures that underpin means testing actively separate benefit recipients from the rest of society. The result is a stigmatisation of benefit claimants, which reduces take-up, creates social divisions and turns the spotlight on the victims of austerity rather than holding to account its politically motivated architects. That is not the basis for a fair society.

Last week I quoted from a 2012 report by the Jimmy Reid Foundation, “The Case for Universalism: An assessment of the evidence on the effectiveness and efficiency of the universal welfare state”, and I make no apology for doing so again today. The report states:

“the historical and contemporary evidence strongly suggests that the appropriate response to austerity is to increase universal provision and so stimulate economic activity, equalise damaging wealth disparity and improve both government and wider economic efficiency.”

That is perhaps one of the reasons why Joseph Stiglitz, one of the most respected writers on inequality, has noted that inequality is not as great in Scotland as in the rest of the UK. He said:

“Tackling inequality is the foremost challenge that many governments face. Scotland’s Economic Strategy leads the way in identifying the challenges and provides a strong vision for change.”

Staying on the subject of universalism, we have talked about housing quite a lot, so I turn to Labour’s big policy that was announced in the new year. I do not know how much input Alex Rowley had on that policy. I wonder how it can deliver fairness for all, given that it hands an additional £3,000 to those who can afford to save for a house that is worth a quarter of a million pounds.

As the First Minister suggested last week, the policy will not build a single additional home for those in need of affordable housing. It is certainly not universal. It will inflate house prices, which will make matters more difficult for the poorest first-time buyers. I have a lot of sympathy for first-time buyers, but I worry that, at a time of straitened resources, the Labour Party is pushing a policy that will benefit only a select few.

Obviously the policy is not universal—it is targeted at the better off. In a sense, it is an inverse means test, as people have to be able to afford to save in order to qualify for it. It is very strange that a party whose many members have attacked the fully funded council tax freeze has come up with a policy of inverse means testing. I know that Alex Rowley is a reasonable man, and other members on this side of the chamber have complimented him and said that they share many of his principles. Perhaps he can use his influence with the party leader to come up with something a little bit more sensible.

I turn to the council tax freeze. The council tax is certainly not perfect. It was introduced by the Conservatives in the 1990s after a great deal of pressure and a mass movement such as we have never seen in this country. It replaced the poll tax and was dubbed the son of poll tax, because of course it was not a progressive tax. That is why it is absolutely right that, at a time of austerity, the Scottish Government has frozen the council tax, as that has put more money into the pockets of working families.

The Government was also right to set up the commission on local tax reform to reach a consensus on a fair alternative to the council tax. I welcome the commitment from the Labour Party to come up with something better. I do not agree that more pressure should be put on the poorest people by raising the council tax. Of course, the Conservatives did not join the commission, presumably because they think that the council tax is fantastic. In my area, the Conservatives are going into the coming election claiming to be the party of low taxation. However, this morning we learned that Conservative-controlled Moray Council is planning to raise the council tax by 18 per cent.

Photo of John Scott John Scott Conservative

You must come to a close, please.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

The Conservatives claim to be the party of low taxation, but I suggest that that applies only to the rich and not most other people. Certainly, people in Moray will be hammered by a Conservative council raising the council tax.

The Deputy Presiding Officer:

I call Willie Rennie. You have up to seven minutes, please, Mr Rennie.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Absolutely, Presiding Officer.

Malcolm Chisholm’s parting comment about the contrast between rhetorical commitment and practical action summed up the debate so far. That is the starkest criticism of the SNP Administration. From listening to Alex Neil, one would think that the minute increase in gross domestic product was all the responsibility of his Government and that everything bad is the responsibility of the UK Administration. We know that life is not as simple as that, and Alex Neil knows it, too.

Alex Neil did not mention that, between 2010 and 2015, 174,000 extra jobs were created in Scotland. He did not mention that GDP was up and that, on the rate of increase, we were vying with the United States of America to be the top in the G8 group of countries. He did not mention that unemployment was down. That was combined with action from the Administration that my party was involved in to cut taxes for those on low and middle incomes, which took thousands of people out of tax altogether. That was helping hard-working people on low incomes.

Alex Neil would never describe that Administration as progressive but, in fact, it was progressive in helping those on low and middle incomes. There was also the triple lock on the state pension and the increase in that pension, but Mr Neil did not mention that, either. I would not be so ungenerous as not to give credit to the SNP when it gets things right, but giving credit seems to elude Alex Neil when he speaks in the chamber.

Alex Neil’s dismissal of the GDP figures did not reflect well on him. He said that the increase of 0.1 per cent in GDP in Scotland was all his responsibility, as a result of the non-profit-distributing programme. That NPD programme, which he trumpeted, could not get the money out the door for the first few years of its operation, so he cannot claim it as a great success. The failure to make the planned £20 million investment in rail in Scotland will not have helped to grow the economy either.

Photo of Alex Neil Alex Neil Scottish National Party

The point that I was making was that, if it had not been for our heavy concentration on capital spend through the Scottish Futures Trust and by shifting revenue into capital spend, the GDP figures would not have shown any growth at all. I am not trying to claim credit for every job in the country, as other Governments try to do. However, I am saying that our intervention made a substantial difference. The growth in the construction sector was nine times the average growth in the manufacturing sector, for example. That would not have been possible without the level of investment that we have made in the construction sector.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I am glad that the cabinet secretary is not claiming responsibility for every job in the country—that is a contrast from the rhetoric that we had in the past. I will give credit for some of the programmes that have been invested in, because they help to create the new schools and hospitals that we desperately need. My point was that, although the NPD programme was not very successful at investing in its early years, the Government was claiming credit for all the job growth at that time. Both things cannot be true.

I like Alex Rowley’s approach to the contrast between jobs and welfare. The Jarrow marchers did not march for welfare; they marched for jobs. That theme is common across the chamber: all members who have spoken in the debate said that the best route out of poverty is work. That unanimity across the chamber must be welcomed. For me, the best route into work is through education, to which I will return later. It is critical that we make that investment, to give everyone an opportunity to get up and get on.

We made welfare changes when we were in office at Westminster, and some of them were difficult. What I cannot understand is how the Conservatives can expect to make £12 billion-worth of cuts to the welfare budget. I do not know where they will find them. They have already backed off on tax credits and I will be interested to see exactly where the cuts will come from. That figure confirms that the Conservatives, unrestrained by us, are as callous and harsh as they ever were. The sanctions regime is a classic example of that and it needs to change, because some people are being penalised far too heavily.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Not just now.

I find the artificial debate about universalism to be frustrating, and I thought that we had got it out of our system about two years ago. Not everything that we provide is universal, and universalism is not necessarily the answer to everything. Sometimes it is the most effective way to invest Government resource. Sometimes means testing is not worth it, because of the small number of people involved—one could argue that prescription charges were removed on that basis. However, the claim that universalism is the way to tackle inequality is intellectually bankrupt. We need to work out the best way to use the public resource that we have to tackle inequality. I do not understand how giving subsidies to the middle classes en masse somehow deals with inequality. It does not. Perhaps from time to time it removes stigma, which is a benefit, but it does not deal with inequality.

Sometimes universalism is the best way to do things. I support the free school meals initiative. Before it was introduced, there was a big chunk of kids who needed a good meal but were not getting it. They were regarded as poor but not officially regarded as such by the administration. Another example is free personal care, which breaks down barriers between different types of care and allows people to get the type that they need. However, to claim that universalism is the answer to everything is nonsense.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I am about to conclude.

Education is the biggest investment that we should make in this Parliament. The statistics on nursery education are very disappointing and I hope that the Government has an action plan to increase the rates of two-year-olds who get nursery education. We were promised 27 per cent of the most disadvantaged two-year-olds, but the Government’s own figures show that it is only 7 per cent—a difference of 20 percentage points. The Government needs to act on that, and we need to invest in our pupil premium. We need to recognise that the Government is planning a £500 million cut to local government funding. Half of what local government spends is on education, so that needs to change.

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

It is difficult to disagree with the principle of Labour’s motion. Like the cabinet secretary, I agree with most but not all of what Alex Rowley articulated in his speech. The SNP Government has done much to tackle poverty and of course we must do more.

Inequality, and the consequent poverty, is a scourge in our society and I can only lament the fact that inequality increased rather than decreased under the last Labour Government in Westminster. Inequality accelerated under the coalition that Willie Rennie is so proud of and has done so again under the current Conservative Government.

Nanette Milne’s amendment suggests that we have the fastest growing economy in the developed world. She fails to mention that it is growing from a much lower base than many of our competitors’ economies, that we are near the top of the league table in inequality and that the fastest growing facilities across the UK are food banks.

I repeat that I disagree with Labour only on how we best tackle these problems. We should certainly not seek to tackle inequality by removing universal services or our commitment to the principle of universalism. It is well established that the costs of administering means testing far outweigh any savings. It is well established that means testing discourages many of those who are most in need of benefits from applying.

Photo of Hugh Henry Hugh Henry Labour

When might the member consider the abolition of means testing for council tax benefit and housing benefit? When will he support the introduction of universal benefits for those two?

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

I thank the member for making that point. I am for the principle of universalism wherever it can be reasonably applied. It is well established that restricting services to the poorest has the effect of reducing the quality of those services and creating poor services for poor people.

The Labour Party once proudly stood up for the principle of universalism. Generations of Labour supporters believed in it and I always believed that such a principle was at the core of Labour beliefs. I suspect that it is because Labour has abandoned that and other core principles that the people of Scotland have abandoned Labour.

I repeat that I disagree with Labour only on how best we should tackle the problems of poverty and inequality. There is no single magic bullet to tackle inequality.

Photo of Alex Rowley Alex Rowley Labour

Does the member agree with our broad agreement that the best way of tackling inequality and poverty is to give people the opportunity, skills and jobs to get them out into the labour market and help them to get themselves out of poverty?

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

It is an unfortunate part of Scotland’s history that we educated generations of young people for whom there were no opportunities in Scotland and they left Scotland. We need to bear it in mind that we need to provide jobs. As other members have said, that is the single most effective thing that we can do to tackle inequality.

The multifaceted approach of the Scottish Government is the best and only approach possible, given the powers that we currently have. Just as we are doing our best to mitigate the destructive policies and attacks on the poor that are emanating from Westminster, so we must do our best to grow our economy. We cannot help the poor if we become a poorer country.

We must do that by incentivising and nurturing areas of our economy where we have a competitive advantage, such as the oil and gas sector that Kevin Stewart talked about, and the renewable energy sector. The Wood report of 2014 indicated just how badly the UK Government has managed the oil and gas sector. No one could prevent the recent decline in oil prices, but we can seek to optimise such an important industry, not least by granting proper tax relief for exploration and providing fiscal relief in these difficult times.

The UK Government should have established a stability fund to assist the industry when prices are low, and it should have established an oil fund to create a lasting legacy. Successive UK Governments have let down the oil industry and the people of Scotland.

As if that was not bad enough, the Tories have abruptly ended renewables incentives for almost all Scotland’s most promising technologies—wind, wave, tidal, hydro and solar—just at the point at which the pioneering technology of onshore wind was fast becoming our lowest-cost form of energy. I talk about the energy sector in particular, not just because we have a competitive advantage in those areas, not just because we are world leaders in the energy sectors, and not just because they offer us an opportunity to rebalance our economy but because they offer us the possibility of a reindustrialisation of Scotland. Those sectors offer the possibility of rebuilding a high-waged economy. We need a race to the top, not a race to the bottom, so that ordinary working people can, once again, find high-paying employment. That, more than anything, offers the route out of inequality.

Photo of Jayne Baxter Jayne Baxter Labour

When a society is faced with poverty and inequality, tackling the root causes and mitigating the effects should be the foremost concern for any politician anywhere in any Parliament. We live in an unequal world in which wage disparities are so massive that it is shameful and a problem of global magnitude. We also live in an unequal Scotland and the current levels of poverty and inequality should be the paramount concern for those who want to effect real change where it matters most.

Poverty has a devastating effect on families across Scotland. It has massive consequences for both people’s health and their educational attainment. Poverty and inequality also have direct correlations with crime and antisocial behaviour, they have effects on the environment and they hit children, single-parent families, ethnic minorities and those with a disability the hardest.

Scotland is fortunate in that it has a lower percentage of individuals on a relatively low income compared to the other countries of the UK, which is to be welcomed. The Scottish Parliament can be a force for good in tackling the poverty and inequality that are prevalent here in Scotland. We have the means at our disposal to effect real change in people’s lives right here in communities the length and breadth of Scotland. However, that does not mean that we can rest on our laurels. We must continue to tackle poverty and inequality until the blight that it places on people’s lives is eradicated. As a Parliament, we must commit to using the full powers at our disposal to achieve the social and economic success that all Scotland needs.

First and foremost, I believe that it is time to discuss what we mean by economic success. It is frequently used almost interchangeably with a varying number of indicators. What indicators should we use to measure economic success? Can we measure economic success by decreasing numbers of those in poverty? Do we consider our productivity and economic output? Are we achieving economic success through GDP growth? Growth is the factor that, time and again, jumps to the forefront as the key measurement of economic success. However, I believe it is time that we re-evaluated that position by noting that growth for the sake of growth alone is not a good measure of success.

Increasingly, we must be aware of environmental considerations and the massive impact that environmental problems can have on the economy. Sustainability should be at the forefront of the measurement of economic success.

Photo of Mike MacKenzie Mike MacKenzie Scottish National Party

Does the member agree that the Tory cuts to renewable energy incentives are extremely damaging because they are interfering with our ability to decarbonise our energy supply, which, more than anything else, will lead to better environmental outcomes?

Photo of Jayne Baxter Jayne Baxter Labour

In a word, yes.

In the decades to come, sustainability will be an increasingly important driver of all economies. With no sustainability, we will not have any economic success—certainly none that will last. We must learn the lessons of the past—the credit crunch and the global financial collapse—and change the way that we model our economy on current resource consumption.

Alternative models exist to a varying degree. One of those is the circular economy model, which we have debated previously, in which materials are retained in use for as long as possible with the aim of eliminating waste. That model has had growing traction in recent years, especially in Scotland, and companies are building very successful business models around it. Vegware, a Scottish company, is the only company manufacturing completely compostable packaging that is operating globally, and it has recently been ranked among the UK’s fastest-growing businesses in The Sunday Times fast track 100. Scotland is leading the way in that area and we must continue using the powers that we have to drive further achievements and build on the success that we can already demonstrate.

If we frame economic success in terms of sustainability, it is an absolute necessity to completely eliminate poverty and inequality. An emphasis on growth can mean that poverty and inequality are left to develop unchecked. A system based on growth alone does not necessitate the eradication of poverty or inequality; in fact, it could even be argued that it relies on those aspects to propagate expansive economic growth. However, poverty and inequality are not sustainable and, if we wish to develop a socially progressive Scotland, then we must do all that we can to achieve social and economic success for all.

In practical terms, one of the most useful things that we can do is challenge the low-wage economy. I welcome the Scottish Government’s support of the living wage campaign and I want to see the living wage being extended further. Increasing wages is a key method of tackling poverty, alongside job creation. I have been campaigning on that issue for a long time and I also have a petition calling on the Scottish Government to extend the living wage to all care sector workers.

We must use the full powers at our disposal to stimulate economic success. We must expand the living wage and provide the sound economic argument for why that is a necessity. We must also support diversification of the economy, championing alternative economic models such as the circular economy and alternative business models such as social enterprises.

We must continue to support third-sector enterprises and recognise that the impact such organisations have is not limited to economic success alone. We can use the powers that we have in Scotland to build on the record of success that we can see, and only rest when poverty and inequality are relics of the past.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

I am sorry that Alex Rowley is not in the chamber, because I want to praise him for his speech. Although there were some elements that I did not agree with, I agreed with the vast majority of his comments. However, I am really happy that it is the SNP that is in government and attempting to deal with the Scottish economy.

I accept that Scotland has faced huge challenges over the past eight years but I know that, with John Swinney and the other cabinet secretaries at the helm, every possibility will have been examined to see whether any proposed action could help to progress our economy.

We have heard from Labour its suggestions for how the economy progresses. Quite rightly, it sees education as a key driver in that progress. That is something on which I am sure that all in the chamber can agree; there would no division in that regard. However, when Labour’s wider position is considered, its sums just do not add up.

We have heard about Labour’s 50p tax policy. Hugh Henry even asked the cabinet secretary why the 50p tax should not be introduced now. Some have argued for that; others have argued that it should come in when we get the powers post the current Scotland Bill. However, if the 50p tax were to be introduced, that would have the effect of increasing both the middle and lower bands, too, which would have an adverse effect on many people, particularly those on lower incomes.

Irrespective of what happens in that regard, Labour has plans to spend the money on multiple projects, despite there being no guarantee that it will be a revenue generator. I am not just throwing those remarks into the debate: Kezia Dugdale said that in an interview. When asked how much a 50p tax rate would raise, she told Holyrood magazine:

“Up to £100 million. But bluntly, Mandy, it could also raise zero because of the mechanisms by which people can avoid paying tax so it is up to £100 million which we would ringfence purely for school spending.”

I am sure that the chamber and the electorate will appreciate the frankness of that we-don’t-know response. Labour has made spending pledges for that money totalling more than £138 million, but the tax take will be somewhere between £0 and £100 million. Given that the Scottish Parliament information centre has reported that the 50p tax band would raise around £34 million, and the Institute for Fiscal Studies has reported that the figure would be closer to £8 million, Labour would clearly be left with an economic black hole.

Labour has also spoken of its desire not to decrease air passenger duty when we get control over that tax; rather, it plans to spend the money several times over on ending education inequality, tackling in-work poverty and giving £3,000 to all first-time buyers taking out a mortgage. APD generates an estimated £250 million in taxation, but the fundamental point remains that keeping it as it is now, as Labour proposes, will not provide any extra revenue to the Scottish budget. The situation would be the status quo. Therefore, Labour has to explain what it would cut in the Scottish budget to fund its proposals.

The SNP Government proposes halving and then scrapping APD altogether, as that can be a driver for economic growth. Only last year, a study that was carried out on behalf of Edinburgh airport concluded that halving APD would create nearly 4,000 jobs and add £1 billion to the Scottish economy by 2020.

Ultimately, Labour’s failings with the 50p tax band and APD alone prove its complete inability to be in opposition, never mind in government. It is clear that Kezanomics is not to be given any great credence and that the economic report card must say, “Must try harder”.

On the other hand, the Scottish Government is committed to driving Scotland forward to be a more equal nation with more economic activity. Despite the limited powers that we already have and with the potential for additional limited powers to come here, the SNP Government does not lack ambition for the people of Scotland. Its record up to now certainly proves that.

As Alex Neil’s amendment highlights, a range of measures have already been introduced or extended by the SNP Government that have helped the people of Scotland. There are free prescriptions, free tuition, concessionary fares for older and disabled people, free personal care, free school meals and the council tax freeze, which, according to the Scottish Parliament information centre, has been overfunded.

I recognise that economic conditions are tough, and I am sure that every single member in the chamber recognises that. As my colleague Mike MacKenzie highlighted earlier, one of the sad increases in recent years has been that in the number of food banks across Scotland. I find that absolutely abhorrent and I am sure that every member in the chamber does, too; it is a fact of life that we really have to address. If we did not have policies such as free prescriptions and free tuition, how much worse would things be for many people in Scotland today?

The Scottish Government has been forced into mitigating Westminster’s austerity cuts. If the SNP Government did not need to mitigate the bedroom tax, that money could have been invested in doing something else to have a positive outcome. It is clear that the mitigation has had a positive outcome for the particular individuals who have been affected, but we could probably do more. With more cuts coming from the Tory UK Government, the SNP Government may well need to spend even more money and time focusing on mitigation rather than on delivering new policies to take our economy even further.

I am conscious of the time, Presiding Officer. The drive at the UK Government level to hammer the less well-off, the total incoherence from Labour at the branch-office and London levels and from the Tories at the UK level clearly highlight why, in May, it is only the SNP that will stand up for the people of Scotland and protect them from the worst of Westminster.

Photo of Mark McDonald Mark McDonald Scottish National Party

I have been struck by a couple of things in the debate thus far, the first of which is how few Labour members have stayed in the chamber to participate in or listen to a Labour-led debate. One would almost think that something else—some list-ranking event that was taking place that they required to be out of the chamber to take part in—was preoccupying their time at the moment. Indeed, I say to members who are still in the chamber and have that list ranking in mind that others are out there stealing a march on them and they may wish to get out there and ensure that they can continue their campaign in that respect.

The other thing that I was struck by was what I felt during the course of Alex Rowley’s speech. I have a great deal of time for Alex Rowley. I have served on the Local Government and Regeneration Committee with him and I always find his contributions in the chamber to be interesting and thought provoking. He has come forward with some very interesting ideas in debates that have often deserved to be considered and challenged, although not always agreed with. Those ideas, particularly his views on fiscal autonomy, often challenge conventional thinking. However, there has been a danger of this becoming an almost entirely philosophical debate and discussion, as one of the difficulties that the Labour Party faces is that it does not yet have a coherent policy platform to outline and test against some of the very worthy sentiments and notions that were expressed during Mr Rowley’s speech.

We got some of that thinking in Malcolm Chisholm’s speech, and there are areas of that that merit some examination. One of the areas that exercised Mr Chisholm was the issue of local authority finance. I do not think that anybody would disagree; indeed the Cabinet Secretary for Finance, Constitution and Economy himself has said that it is a challenging settlement for local government.

The challenge is this. We have to look at how we can reform the delivery of public services to ensure that they can weather the storm of austerity. The storm of austerity is here to stay for the next five years, based on the projections from the UK Government, and possibly beyond that, depending on whether the collective UK Labour Party gets its act together. We have to be able to take the opportunity to reform public services in such a way that we either have more sharing of services or different ways of delivering services that enable that storm to be weathered.

If we look at my own local authority, Aberdeen City Council, I have seen the finance convener talking in the press about £10 million-worth of cuts having to be considered by the council. At present, Aberdeen City Council is sitting on uncommitted cash reserves of £116 million. Audit Scotland recommends that a buffer of around 2 to 3 per cent in revenue terms should be carried in uncommitted reserves. That £116 million equates to 27 per cent of the council’s budget.

The money is there, not necessarily to mitigate the cuts, because I do not think that we should operate on the basis of mitigating through the use of reserves, but the money exists that could enable the transformation of service delivery, should the council choose to do that. It becomes a question of political will and the ability of those councillors to put their shoulders to the wheel and ensure that the services are reformed.

I heard what Alex Rowley said when he welcomed the commitment to build 50,000 affordable houses with 35,000 of those for social rent. I have great difficulties when politicians stand up and say, “I welcome it but it is not enough.” We need some idea of what would qualify as enough. If all we are going to get is members of the Labour Party saying, “Ach, it’s no bad, but it’s no as good as we could have,” without actually demonstrating to us what would be enough, what they would consider to be their target and how they would then deliver that target within the financial envelope, it becomes not a debate of ideas but simply carping from the sidelines. That is the risk that the Labour Party has to shoulder—it runs the risk of that being the case.

Over the Christmas period, after watching my children perform in the local church nativity, I went out leafleting. It was not political leafleting. I live in the community of Dyce in Aberdeen, which most people would say was a reasonably prosperous middle-class suburb. However, the reality is that the local church is now operating a food bank, because it has identified individuals within our community who require the support of a food bank. As were a number of other members of the church, I was out delivering leaflets that told people that the food bank had been established and was seeking donations.

That drove home to me the very real situation that we cannot talk about simply identifying specific areas that we know suffer from entrenched poverty. We now have individuals living in areas, perhaps being lost within certain communities, because they would not be picked up in a kind of broad brush examination of income levels across those communities. There are individuals suffering from poverty in communities that would not necessarily be identified as likely to have such individuals. Some of that is a consequence of the uncertainties that have been created as a result of redundancies in the offshore sector; some of it is a result of the welfare changes that are taking place—of that I have no doubt.

We need to look very carefully at what powers are coming to us in the next session of Parliament, provided that the Scotland Bill fiscal framework can be agreed, and consider how we will use those powers. Some of that thinking is being outlined by the Scottish Government and I welcome some of the direction that is being given there, particularly the early introduction of a social security bill.

I have spoken at great length about how we should look at not just taking what exists at UK level and transplanting it into a Scottish context, but how we could improve on what is done at UK level and perhaps do it differently. We could certainly simplify some of the application and renewal processes, which would greatly enhance individuals’ ability to access that to which they are entitled.

The key point in all this has to be to move towards a situation in which those people who require jobs can access well-paid jobs. With regard to that journey, I think that there is much that unites the chamber. The question, therefore, is whether we have the political will to make that a reality. I recognise that the Scottish Government has that will and I would be interested to hear proposals on that from other parties.

Photo of Hugh Henry Hugh Henry Labour

Mahatma Gandhi said:

“To be wealthy and honoured in an unjust society is a disgrace.”

However, in Scotland, which despite what we have heard this afternoon is still a wealthy country, our richest 100 people are worth over £21 billion, while it is estimated that around 870,000 people in Scotland live in poverty. We clearly have a problem.

As a number of speakers in the debate have indicated, once additional powers over benefits and taxation come to this Parliament there will be more that can be done. However, let us not kid ourselves on that there is nothing that can be done just now or, indeed, that nothing could have been done since the Parliament was established in 1999.

Stuart McMillan said that he wants a more equal nation, and I concur with that view. Kevin Stewart said that it has been frustrating to see gaps between the haves and have-nots increase in the past few years. Yes, it has been frustrating, disappointing and, frankly, downright disgusting to see some of the things that have happened in the past few years.

It is dead easy for the majority of us to gang up on the Tories and say that everything is the fault of the uncaring Tories and the stupid Lib Dems who got into bed with them in the coalition Government, and blame everything on that past period. A lot of that is true, because we have had a deeper recession than necessary and harsher cuts than necessary, some of which have been counterproductive because they have stopped economic growth. However, that just deflects attention away from what we in this Parliament can do with the powers that we currently have, never mind the powers that we are about to get.

Kevin Stewart said that he is frustrated about the gaps between the haves and have-nots increasing in the past few years, but we should remember that the SNP has been in power in Scotland for nearly nine years now, and a lot could have been done by the SNP Government during that time.

Photo of Hugh Henry Hugh Henry Labour

In a minute. Let me make a further point or two.

Let me look at what has happened since the SNP came to power, particularly in Renfrewshire, the area that I represent. The number of data zones of people living in poverty has increased. In 2006, there were 36 such data zones in the most deprived areas in Scotland, but now there are 48. The number of data zones in the most deprived 5 per cent increased from eight in 2004 to 14 in 2012. In my constituency of Renfrewshire South, there are 18 data zones; and 21 per cent of data zones were found to be in the 15 most deprived areas in Scotland. Therefore, relative to the rest of the country, poverty has increased in my area. Renfrewshire has the third busiest food bank in Scotland. There are pockets of deprivation in Renfrewshire, although parts of it are extremely affluent, with many people doing well.

One of the things that is depressing about a debate such as this one is that, again, we gang up on the evil Tories and the rest of us say how much we can agree with each other except for this or that little point and that, generally, we are all doing the best that we can to make things better for those we represent. However, the truth is that we are not doing everything that we can for those we represent.

Willie Rennie was right to talk about universalism. There are times when universalism is effective and absolutely the right thing to do, but there are times when it does not make sense. To those who say that they believe fundamentally in universalism come what may, I say, “Why not for council tax benefit or housing benefit?” Why do they agree with the means testing of those other benefits?

Photo of Mark McDonald Mark McDonald Scottish National Party

I think that the point is that, in order to ensure that those of us who are contributing more into the system buy into the concept of benefits being paid out, there has to be a degree of universalism so that those individuals see that they also get something back as a consequence of what they put in. I would not suggest universalism across the board, but targeted universalism is important because it ties people into that social contract.

Photo of Hugh Henry Hugh Henry Labour

That is not a principle that I would disagree with, and it ties into what Malcolm Chisholm said about progressive universalism, but if Mark McDonald has listened to some of the speeches by his colleagues, he will know that they have supported universalism at all costs, with no differentiation.

We are seeing not just the increase in poverty but people like me doing very well out of the current system. Malcolm Chisholm is right. There are two things that can be done if we want to extend services, help more people, tackle poverty and do everything that we say we are going to do. The first is to increase taxes, and I note that I asked not about the 50p tax rate but about taxes in general—local government taxes and those in the Scottish Government’s power. Are we prepared to increase taxes to meet our aspirations? That is one way of doing it. The other way, if we do not have the power or the will, is to cut our cloth to suit our means. That means using the money and resources that we have in a different way.

That brings us to the fundamental choice that we have in this country. With the limited resources that we have—if we are not going to increase taxes—we can either help everybody, including people such as us who are doing very well thank you, or we can choose to target some of our most deprived and poorest constituents, which we are not doing. Despite everything that has been said, my poorest constituents have not received an extra penny from the council tax freeze, free prescriptions or free school meals. The rest of us have done very well, but the poorest in our country have not.

Let us get a bit of honesty back into this debate. Who are we trying to help? Is it everybody, as Mark McDonald said, so that we all buy into the bigger picture, or are we going to finally do something about those who are being left behind? Like Malcolm Chisholm, I will not be here to participate, but I hope—I suspect that it is a forlorn hope—that there will be some honesty in the debate after May because, frankly, if we go on as we have done in the past, we will be letting everybody down.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

I am interested in some of what Hugh Henry has just said. I note that he said that the SNP has been in power for nearly nine years and there is so much that we could have done. I put it to him that, right across central Scotland, including Glasgow, the Labour Party was in power for 50-plus years and we still have great problems of deprivation throughout that area. Perhaps he should look to his party before he starts on ours. I think that we have really started to take strides forward in the most difficult of circumstances.

That is why I was really pleased that Alex Rowley started by stating that he agrees with the Scottish Government’s amendment and, in turn, Alex Neil, on behalf of the Scottish Government, confirmed that this Government is hugely concerned about the levels of poverty and inequality and will always use its powers to achieve success for Scotland.

Alex Rowley was quite right to note that what is in Alex Neil’s amendment is not enough, in itself, to close the poverty and inequality gap. However, the bases on which we can build include healthcare that is free at the point of need including free personal care, education that is based on the ability to learn rather than the ability to pay, transport to counter social isolation—we had a super debate on our Equal Opportunities Committee’s report on that last week—and increased take-up of free school meals by those who most need them.

Such examples of universalism must be preserved and used as a base from which to tackle poverty and inequality. I am pleased that the deputy leader of Scottish Labour agrees. I hope that members who believe in the core principles of a decent society can come together to oppose those who would divide society and further disadvantage people who have been well hammered over the past five years or so.

Contrary to what Hugh Henry said, a basic philosophical fight is going on here about what is and is not acceptable in our society. The sums that the Scottish Government has expended on mitigation, generally with the agreement of this Parliament and the consent of the people of Scotland, show that we think that that is a fight worth having and that people think we should carry on.

In the face of on-going cuts from Westminster, I think that we have made our case. Despite our having limited powers over welfare, the Scottish Government is investing more than £100 million this year to mitigate the worst of Westminster’s welfare cuts.

That includes investment of £35 million to mitigate the impact of the bedroom tax. It is all very well for Willie Rennie to try to airbrush history by talking about the fantastic stuff that the Lib Dems did in government, but the Lib Dems agreed with the bedroom tax, and mitigating the impact of the tax is costing the Scottish Government £35 million this year. A further £38 million is going to the Scottish welfare fund, to provide support for 100,000 Scottish households.

That is on top of the Scottish Government’s council tax reduction scheme—a total of £360 million is being provided this year. Carers allowance is increasing, too, and that is a fundamental benefit. Also, as it says in Alex Neil’s amendment, Westminster’s damaging cuts are being imposed

“against the stated wishes of the Scottish people”.

Unfortunately, mitigation is not enough, as Alex Rowley said. It is never enough. Members talked about how we can move forward in a sustainable way, and I think that the Scottish Government is husbanding its resources, targeting them and making sustainable progress.

Let us look at infrastructure. We can all talk about the Forth bridge and all the other things that are happening. In my area, there is investment of £439 million in the M8, M73 and M74 motorways. Scottish Water is investing in waste water infrastructure, with a £4.3 million refurbishment of the treatment works in my area—there is also investment in the Thorntonhall pumping station. We also have the schools modernisation programme.

Such investment has wider effects, as we heard. Although we should never be complacent, we can see from the figures that came out today that the long-term trend in the construction industry is upwards. That is partly to do with housing. We have met our targets, and a better target has been set for next year. It is also about investment in people. Alex Rowley said that he is concerned about skills. That is a concern, but great work is going on. In my area, South Lanarkshire College has a fantastic construction department.

There has been some rewriting of history. During its last period in Government, Labour built no council houses in 31 out of 32 local authorities. Under this Government, 191 council houses have been built in South Lanarkshire alone. Of course we could do with a lot more, but 191 is a lot more than none.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

No, thank you. I am just about done.

For all Labour members’ rhetoric, it was the Labour Party, in coalition with the Lib Dems here, that extended the right to buy to housing association tenants in Scotland, before the Tories down south thought of doing so. I sat here and fought that move. I think that some members on the Labour benches do not realise that that happened.

Labour also did away with community empowerment, by taking away fully mutual co-ops, where tenants were truly in control. If I may use a hackneyed phrase, I will take no lessons from Labour on how to empower people or on housing supply.

We have to remember that what counts is investment in people—social investment. That is happening through this Government’s policies, such as the fair work agenda and the Scottish business pledge, which incorporates much that is fair, including the living wage. There is a lot to do, but we are on our way and this Government should be supported.

Photo of Christian Allard Christian Allard Scottish National Party

I was thinking about this debate earlier and considering that we have a new member for North East Scotland—whom I welcome and we all welcome—I thought “Why not try to change the tone?” I thought about the kind of advice that we could give Lesley Brennan for a maiden speech—about how to talk up the north-east of Scotland, which her predecessors and the existing Labour members for the north-east have maybe failed to do over the years. Social and economic success for all of Scotland is achievable, and we show that in the north-east.

First, I would like to refer to Hugh Henry and what he said about universalism. He said that some of us on the SNP benches say that we want universalism for everything. I think that he is mistaken. I do not think that he can have heard what Alex Neil said, and not only what he said but what he wrote in his amendment. I believe that Labour is supporting that amendment.

We have been very clear on what part of universalism we are supporting. I would encourage Hugh Henry to have the honesty to vote tonight with the SNP because it is right there in black and white: free prescriptions, free tuition, concessionary fares for older and disabled people, free personal care and free school meals. It is very clear. We are defining it, so he just has to follow our leadership.

I encourage the new member to do just that—to follow our leadership—because this devolved Parliament can help to achieve the social and economic success that all of Scotland needs only if we have more powers at our disposal. The question remains: are the powers reserved to Westminster the real barriers to reducing inequality and poverty in Scotland? I think that the new member would agree that we need more of those powers.

We are a wealthy country, but we know that one in six people is currently living in poverty. That is completely unacceptable, and we all agree on that in both the SNP and Labour. We need to acknowledge that levels of poverty are decreasing across Scotland and doing so faster than those across the UK. While child poverty has decreased in Scotland, it has increased in the UK.

One of the issues is the language that we use, and I was delighted that Kevin Stewart repeated what the Scottish Government is trying to push out: replacing the dreadful word “welfare”—which does not sit very well with me—with “social security”. It is very important to use different language, and I would encourage everybody to replace the word “benefit” with “entitlement” because that is what it is about: the need for entitlements could happen to any one of us.

I thank the Scottish Government for its progress in tackling poverty and reducing inequality, and we need to do a lot more. The Labour members and the new Labour member will agree on that. I know that Jenny Marra is closing and she is perhaps the only Labour north-east MSP in the debate this afternoon—I do not know whether the person who has decided not to speak in the debate was a Labour MSP from the north-east. I would encourage her to follow my example and to promote north-east Scotland as much as possible.

Scotland is very much an economic success. It is a wealthy country, and the north-east has been a driver of this wealth for a very long time. We have talked a lot about what the public sector can do and what the Government can do, but let us not forget the private sector. The private sector is very important in creating the conditions for jobs.

Historically, the food and drink sector in the north-east has been at the heart of the north-east economic drive. Let us remember that in 2007 the Scottish Government set a very challenging target for Scotland's food and drink exports at £5.1 billion. We exceeded the 2007 target in 2012. Does the Scottish Government want to rest on its laurels? Certainly not. The new food and drink export target for 2017 is £7.1 billion. We can do even better, and the private sector is very much responding to that food strategy.

Scottish seafood is so important, as you will know, Presiding Officer, not only to the north-east but to the rest of Scotland. It is the best export we have. There is also Scotch beef and lamb, which everybody in the world loves to have on their plates.

The Government’s strategy is really paying off, making Scotland the brand a mark of quality in every food and drink product that we export. That creates employment, although we sometimes do not realise the impact of it. We have perhaps become used to it over the years, but it is so important that it is there.

I encourage the new member always to use these opportunities. I know that Labour members are not always used to talking about what is happening in our rural areas, but perhaps she might break the habit and try to promote what is happening across Scotland and our region a little more, particularly in our rural communities.

The Scottish Government has done a lot for small and medium-sized businesses. We have reduced about 46 per cent of all rates bills by up to 100 per cent, which has benefited about 100,000 businesses in 2015-16 and has saved businesses about £174 million this tax year. It is important to note that that has created sustainability of employment in small and medium-sized businesses.

I very much welcome the fact that the Scottish Government enabled councils to further reduce rates under the Community Empowerment (Scotland) Act 2015 from last October. I urge local authorities in the north-east, particularly Aberdeen City Council, to help small businesses. I hope that the new member will support that, too, to help food manufacturers and others to grow and prosper in some of the most expensive streets of the granite city, where business rates do not reflect the traditional activities of many people working there. We need to make those changes.

I heard the leader of Aberdeen City Council this morning on the radio, and I am delighted that at least one Labour politician shares our optimism for the economic future of the north-east of Scotland. Will the new regional MSP follow our example, or will she join the ranks of doom and gloom of north-east Labour MSPs, who never have anything positive to say about our great region? The question needs to be answered, and I hope that it will be answered soon. We are very proud of our region and of what it is going to do.

I remind members that the powers reserved to Westminster are still the real barriers to reducing inequality and poverty in Scotland.

Photo of Cameron Buchanan Cameron Buchanan Conservative

I welcome this opportunity to discuss what can be done to address the social and economic problems that face Scotland, including the need to help people into well-paid work.

Discussions on broad general economic and social policy strike at the very heart of the political beliefs that each of us holds, so it is hardly surprising that they raise such robust political debate. Such a sweeping topic obviously touches on a wide range of issues—my colleague Nanette Milne highlighted a number of issues around poverty and inequality. I therefore think that it would be best for me to use this time to narrow our focus down to one key aspect of economic life: ensuring that people in work get the take-home pay that they deserve. There is actually a positive story of improvements in this area, which is certainly worth examining as we debate wider social and economic policies.

On top of that, the introduction of a national living wage from April will mean a pay rise of approximately £900 a year for someone who is working full time on the minimum wage. By 2020, it will reach more than £9 an hour, which will be worth at least an extra £4,800 a year in cash terms. Taking tax and benefit changes into account, that means that a renting family with two children in which both parents work 35 hours a week on the minimum wage will see their income increase in cash terms by more than £5,500. A key point to make here is that that Government policy was announced not in isolation but in the context of the increased growth and business confidence that is needed to make the reforms stick.

As well as that good news, it is worth considering how people’s incomes can be improved beyond the headline rates of pay. We Conservatives recognise the importance of supporting people in keeping more of what they earn by targeting take-home rates of pay. Back in 2010, the personal allowance was £6,475. In the coming year, it will have risen to £10,600, which makes a substantial difference to how much pay stays in one’s own pocket rather than going into the taxman’s.

Photo of Alex Neil Alex Neil Scottish National Party

When the threshold for income tax was raised, VAT was increased to 20 per cent, and there were substantial increases—as there have been almost every year—in other indirect taxes. That is giving with one hand and taking it all away, and more, with the other, so working people are no better off.

Photo of Cameron Buchanan Cameron Buchanan Conservative

I think that the SNP is a great example of giving with one hand and taking away with the other.

The main point to underline is that policy decisions cannot be assessed in isolation. Time and again it has been shown that policies must take into account the context in which they will be applied, including social, economic and political factors. That applies on two levels. First, there has to be a full understanding of how the problem that is to be fixed or the benefit that is to be gained by a policy fits in with other priorities. Secondly, all direct and indirect consequences have to be weighed up. After all, experience has shown that behavioural responses to Government policies do not necessarily match policy makers’ intentions all the time.

That ties in with Alex Rowley’s statement about using the full powers that are at the current and future disposal of the Scottish Parliament. Although it is tempting to use Parliament’s powers and to legislate for every issue, spending decisions must be balanced by fiscal restraint. After all, such decision making and trade-offs are the difficult business of accountable politics. The key point is that, as we strive to achieve social and economic success, we must ensure that social goals are achieved and that we maintain the economic competitiveness that drives employment. That is not to say that the two are somehow a trade-off—a competitive economy is a fundamental driver of social and economic progress.

To retain a successful economy and high levels of employment, it is vital that Scotland remains competitive within the UK and internationally. We must underpin our policy aims for Scotland with the overarching objective of making it an attractive place in which to live, work and invest. Despite the rhetoric that often surrounds debates about tax, the aim of a low-tax approach—I am talking here about direct taxes—is to foster the conditions in which jobs are created so that economic opportunities are as widely available as possible, which allows social aims to be met.

Photo of Cameron Buchanan Cameron Buchanan Conservative

I do not think that I have time.

I mentioned rhetoric as well as policy because it can play a large role in shaping the investment climate that underpins our economy. I say that because it is particularly important in the run-up to more tax powers being devolved through the Scotland Bill that the political debate in Scotland is not centred on a competition to tax the most. To create the fair and prosperous country that we all want, a nuanced approach to policy making is required that understands when the Government should step back as well as when it should step in.

Today’s debate has highlighted where social and economic challenges may lie ahead for Scotland, and it has pointed towards what can be done to address them. I also hope that we can draw on areas in which there has been substantial positive news—for example, increasing pay levels. However, we must recognise that more needs to be done. As more powers come to the Scottish Parliament, our approach should be to understand the context in which policies are made so that economic and social aims can be achieved not just because we legislate, but because we create the underlying conditions that allow them to be achieved. As Willie Rennie and others have said, the best way out of poverty is work.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

There are a couple of things that I want to say. It has been clear throughout the debate that there is considerable agreement across the chamber, particularly on the desire to reduce inequalities and to create a fairer and more prosperous country. That is a key priority for the Scottish Government. We will always do what we can, with the powers that we have, to reduce inequality, and we will do that with the powers that are coming our way.

When Alex Rowley opened the debate, his remarks were an endorsement of our programme for government. There was very little that I could disagree with in what he said.

Photo of Willie Rennie Willie Rennie Liberal Democrat

The minister said that all the powers that will become available to the Scottish Government will be used. Does that mean that the Government intends to increase income tax?

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I said that we will do everything that we can, with the powers that we have, to continue to address inequality. I think that the cabinet secretary answered that question earlier. What we have said—this might address Hugh Henry’s point—is that the powers that we currently have to increase income tax are such that we would have to increase it across all the bands, and the Scottish Government is strongly of the view that we do not wish to increase income tax for people at the lower-paid end of the scale. That is what we have said, and we will continue to say that. We are not going to increase the tax burden on the poorest-paid people in our country.

Hugh Henry also made a couple of points about universalism. Of course it is not about having universalism across everything at all costs. I think that Mark McDonald made that very clear. Hugh Henry also said a couple of things that I absolutely disagree with. He said that people in his constituency are not benefiting from free prescriptions or from some of the other measures that the Scottish Government has taken. I can say quite categorically that in my constituency, which is a very—

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I will finish my point first. My constituency is a deprived area and I know that many people on very low incomes are benefiting from the free prescriptions policy. People on benefits always got free prescriptions—I know that—but people on low incomes benefit very much from the free prescriptions policy and they very much appreciate it.

Photo of Hugh Henry Hugh Henry Labour

I thank the minister for taking the intervention. She is misquoting me. I did not say that people on low incomes do not get any benefit; I did not say that no one in my constituency is getting any benefit. I said that the very poorest people in my constituency have not received a single extra penny. That is true and it will be as true for the people in the same situation in the minister’s constituency.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

Hugh Henry talked about measures and I will follow up on that. For example, the very poorest people in my constituency and—I am sure—in his constituency benefited from our policy on the bedroom tax. They have also benefited from the council tax reduction scheme in relation to charges. I am not going to get into a debate about who is poor and who is poorer. I think that our policies are helping to reduce inequality across Scotland and we will continue to promote such policies.

Nanette Milne and Cameron Buchanan talked about supporting people into work. We all want to support people into work; it is an absolute priority and there is no disagreement from me that work is the best way to get people out of poverty. However, in many cases we need to support people into work. What we are getting from the UK Government in that regard is something at which we should all be outraged. The Cabinet Secretary for Fair Work, Skills and Training was involved in discussions today about what we are having devolved to us in 2017—a reduction of 87 per cent in work programme funding. That should worry all of us who want to support people into work. I hope that I have the support of the Labour Party in saying that that is an absolute outrage. If Nanette Milne has any influence at all with George Osborne, she should certainly take that matter up with him because it is an absolute outrage.

I will carry on with what I was saying about fair work and work practices. Work is absolutely the best way out of poverty. The real concern is about what we are seeing now, which is people who are in work but are also in poverty. That goes back to the point that the cabinet secretary made when he intervened on Cameron Buchanan: people in work are getting poorer because of Westminster policies and the Conservatives cannot hide from that.

Across Scotland, in our fairer Scotland discussions, what we have heard is that income and wages are important to people, as well as workplace practices. We believe that a living wage makes sense both economically and socially. It is critical to the inclusive growth agenda and it is clearly set out in our economic strategy. Although we welcome the UK Government’s commitment to increasing the national minimum wage, it is not a living wage and it should not be called that. A living wage is a wage that is based on the cost of living and which people can actually live off. They cannot live off the national minimum wage. The UK Government is trying to say that what it is proposing is a living wage. It is not: it is an increase to the minimum wage. However, we welcome any increase to wages from anyone across the country.

Since 2013-14, we have invested about £1.6 million a year in the living wage rate across the parts of the public sector in which the Scottish Government controls the pay bill. That approach has benefited about 3,000 workers each year.

We are continuing to work towards encouraging more and more employers to sign up to the living wage. Recently I attended an event in my constituency at which an employer was announcing to its employees that it was becoming a living wage employer. To see the employees working out the difference that that could make to their lifestyles was quite encouraging.

Photo of Alex Rowley Alex Rowley Labour

Does the minister accept, given that approximately 90 per cent of the money that goes into the social care sector is public sector money for public sector contracts, that the only way we will achieve payment of the living wage across the care sector is if the Government puts in the money to make it happen?

Photo of Margaret Burgess Margaret Burgess Scottish National Party

The Government is working with the Convention of Scottish Local Authorities and the care sector, and we are committed to encouraging and promoting the living wage, and to seeing it being paid across the sector. We have provided £12.5 million in 2015-16, as part of a tripartite arrangement with local authorities and care providers that is worth £25 million, to improve the quality of care that the sector provides. As part of our plan to retain and recruit people in the sector, part of the money that has been set aside for the integration of health and social care is to encourage local authorities and the care sector to work towards providing the living wage.

We want to see every employer in Scotland paying the living wage.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I am going to wind up now.

We heard a great endorsement of our housing policy from Alex Rowley at the start of the debate, so I do not need to mention that. I will end simply as I started, by saying that we will always use the powers that we have to reduce inequality across Scotland. That is at the core of all our policies and at the heart of what we do. We will continue to do that, working as a Government, using our current powers and any new powers that come to the Parliament.

Photo of Jenny Marra Jenny Marra Labour

It is my great pleasure to speak in support of the motion in Alex Rowley’s name and close the debate on behalf of the Labour Party. I start by welcoming my newest colleague, Lesley Brennan, to the chamber. It is a great privilege to represent North East Scotland, and I am sure that she will feel that privilege and joy as much as I do.

The debate should unite every member in the chamber. It is an opportunity to put on record our shared ambition to use our Parliament to reduce poverty and inequality and our desire to work together to achieve that. There might be disagreement on which policies we should prioritise to meet the goal, but I do not doubt for one second the intentions of a single member of the Parliament with regard to our hope of making life better for people in our communities whose lives are blighted by economic poverty and the poverty of hope.

Together we cannot—and should not—accept the inappropriate housing that many families have to make do with; the deep-rooted health inequalities that mean that some people will die years before others just because of their postcode; and a system that fails to realise the potential of so many young people on the basis of their family income and living circumstances. We should be united in striving to create better jobs and opportunities for those who rely on insecure and low-paid work, and we should be ready to mould a compassionate and generous social security system for those who cannot work.

We have debated work and the importance of work. I am committed to that; that is in the name of our party. We believe, as we always have done for the hundred years since the party was founded, in the dignity of work and the dignity that it affords people and their families.

It has been interesting to hear the contributions from members on work. Stuart McMillan spoke about reindustrialising Scotland. I share that ambition, but how about we consider the reality of what has gone on over the past nine years?

Photo of Jenny Marra Jenny Marra Labour

How about the 750 renewables jobs that Alex Salmond promised to Dundee, not one of which has been delivered? How about the 65,000 job losses in oil and gas, which Dennis Robertson does not see as a crisis? The SNP denied that there would be a problem in the oil and gas sector throughout the two years before the referendum.

How about, in my community, the civil service jobs that were promised to Dundee, not one of which was delivered? Shona Robison made great play of that in opposition, but not one job has been delivered by her in government. How about the potential job losses from Mr Swinney’s local authority cuts, which my newest colleague, Lesley Brennan, estimates at 750 in Dundee alone?

As a Parliament, we can build a society that ensures that those who can afford to pay their share do just that and that those who most need a helping hand get it. If poverty and inequality could be eradicated easily by our debates, they would have been abolished long ago. Sadly, overturning the deep-rooted poverty and inequalities that exist in our communities will take much more than that.

Let there be no doubt that poverty and inequality exist today in Scotland. Just a few months ago, the First Minister had her picture taken with the Government’s poverty adviser, Naomi Eisenstadt, who has told us that living standards in our country remain flat and that levels of material child deprivation are increasing. With a Parliament united in our disgust at Scotland’s poverty, why have we not been able to do more to help those living with it?

I agree that the UK Government must shoulder some of the blame. Its ideological pursuit of cuts, a smaller state and a harsh benefits regime has undone much of the progress on child and pensioner poverty that the previous Labour Government made. David Cameron talks of us all being in this together, yet his political priority is to cut inheritance tax for the wealthiest while the victims of welfare reform queue in food banks. His strategy for tackling child poverty is to alter the targets and not to change lives.

No one believes that the humiliating poverty that exists in our communities is a recent development or that any First Minister could reverse decades of decline and deep-rooted inequality with one swish of their hand. However, with power over education, health, housing and job creation, the SNP Government should not be content just to blame the UK Government or accept the inevitability of unequal communities.

G

Jenny Marra , you talk of blame. ideological pursuit of cuts, a smaller state and a harsh benefits regime but I do not see your name against EDM767 which would provide equality and dignity to the state pensioners abroad if given the debate that is so urgently needed to abandon the undemocratic and cruel discrimination of a minority of state pensioners abroad living mostly in Commonwealth countries with whom we are supposed to have a special relationship. Jeremy Corbyn has signed already and it would be appropriate to add your name along with more of your party members.

Submitted by George Morley

Photo of Jenny Marra Jenny Marra Labour

The SNP has the power to change things for the better—

Kevin Stewart rose—

Photo of Tricia Marwick Tricia Marwick None

Mr Stewart, the member is not giving way.

Photo of Jenny Marra Jenny Marra Labour

The SNP is responsible for the choices that are made in the Scottish budget and now also for the scope of that budget. Malcolm Chisholm made a powerful plea to the SNP to consider its revenue powers. He pointed to the devastating cuts in local authorities, such as £80 million in Edinburgh and £28 million in Dundee.

Photo of Jenny Marra Jenny Marra Labour

Apart from teachers, every council worker in my home city—thousands of them—has been sent a letter that offers voluntary redundancy.

Photo of Jenny Marra Jenny Marra Labour

I know that Mr McMillan will want to hear about this, as it is happening in his region.

At the previous Scottish election, the Government told council workers that there would be no compulsory redundancies in local authorities, but it did not tell them that they would receive a polite letter on their desks that asked them to go quietly. Alex Neil says that the cut to council budgets is 2 per cent; the reality is that it is more than double that. His SNP MP colleagues are saying today that that is nothing to do with them.

Photo of Alex Neil Alex Neil Scottish National Party

If the Labour Party was in power, which taxes would it raise or which budgets would it cut so that local government could get more money, as the member allegedly wants?

Photo of Jenny Marra Jenny Marra Labour

I am aghast that Alex Neil has asked that. We are the only party in the Parliament that has put it on record that we will raise tax to create more revenue for a fairer Scotland. [Interruption.]

Photo of Jenny Marra Jenny Marra Labour

So far—[Interruption.]

Photo of Jenny Marra Jenny Marra Labour

Not if the intervention is as spurious as the last one. [Interruption.]

Photo of Tricia Marwick Tricia Marwick None

Order—let us hear Ms Marra. Settle down.

Photo of Jenny Marra Jenny Marra Labour

So far, the Scottish Government has shied away from using the taxation system to fund—

Photo of Alex Neil Alex Neil Scottish National Party

On a point of order, Presiding Officer. I am sorry, but I did not quite catch what Jenny Marra said. Did she say that Labour would raise taxes this year? Which ones?

Photo of Tricia Marwick Tricia Marwick None

You have made your point, Mr Neil.

Photo of Jenny Marra Jenny Marra Labour

I think that the minister heard exactly what I said.

Presiding Officer, will you advise me how much time I have left?

Photo of Jenny Marra Jenny Marra Labour

This First Minister has unprecedented powers. She likes to boast about her approval ratings, but she does not have a single redistributive policy to boast of. She wields power that is unprecedented in this country but becomes powerless when she is required to act, and instead blames Scotland’s problems on other people.

This Government achieved a huge victory in 2011 and with it came the power to reshape the country as it wished—what an opportunity and a privilege that was. We now have a First Minister with enough political capital to take the hard decisions that are needed to tackle poverty. As this five-year session draws to a close, those on the Government benches have cause to reflect on how they have used that mandate, and they may want to think on whether they could have done more and spent more time on tackling poverty and inequality.

The past cannot be undone, but we can look ahead to the next session and the opportunity of a new Scottish Government with even more power to bring about change. What hope do we have of a First Minister after May who is brave enough to commit to tackling the poverty and inequality that shame Scotland, to make the case for why it is in all our interests to build a fairer and more equal society, and to gain a mandate for real action to end poverty and inequality?

For too long, the Parliament has presided over poverty in our communities and, even worse, poverty of ambition and courage to change that. I hope that that will change in the next session.