Chamber
Meeting of the Parliament 09 June 2011
09 Jun 2011 · S4 · Meeting of the Parliament
Item of business
Scotland Bill: Borrowing Powers and Growing the Economy
It is because Scottish Water is in the public sector, which is exactly the point that we are coming to. How disappointing—I thought that we were going to be told that the SNP is going to abandon the euro and join the Klingon currency.
The issue is not how Scottish Water borrows, but the way in which its borrowing counts in the public finances. Those rules will not be changed in any Scotland bill, as the SNP claims, because they are effectively set by Europe and international bodies. They will not be changed by European legislation any time soon because the euro-loving SNP would not want that.
Unlocking further borrowing potential for Scotland’s benefit requires a change in Scottish Water’s constitution so that it becomes a mutual or public interest company and is taken off the books and outwith direct ministerial control. If that was done, we would have access to more than £1 billion of additional funds to invest in our infrastructure.
The SNP has set its face against that perfectly reasonable course of action, so it has only itself to blame for the limitations that its policy choices are placing on borrowing and investment capacity in Scotland. You have chosen that limitation, so do not forget it, and do not start preaching to the rest of us about the desperate need for more borrowing when you have set your face against it.
I could say a lot more about Klingon currencies and SNP policy. I support the motion, and I hope that the Scotland Bill will be suitably amended in respect of reasonable and moderate borrowing powers by the time it is enacted.
The issue is not how Scottish Water borrows, but the way in which its borrowing counts in the public finances. Those rules will not be changed in any Scotland bill, as the SNP claims, because they are effectively set by Europe and international bodies. They will not be changed by European legislation any time soon because the euro-loving SNP would not want that.
Unlocking further borrowing potential for Scotland’s benefit requires a change in Scottish Water’s constitution so that it becomes a mutual or public interest company and is taken off the books and outwith direct ministerial control. If that was done, we would have access to more than £1 billion of additional funds to invest in our infrastructure.
The SNP has set its face against that perfectly reasonable course of action, so it has only itself to blame for the limitations that its policy choices are placing on borrowing and investment capacity in Scotland. You have chosen that limitation, so do not forget it, and do not start preaching to the rest of us about the desperate need for more borrowing when you have set your face against it.
I could say a lot more about Klingon currencies and SNP policy. I support the motion, and I hope that the Scotland Bill will be suitably amended in respect of reasonable and moderate borrowing powers by the time it is enacted.
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
The next item of business is a debate on motion S4M-00235, in the name of John Swinney, on borrowing powers and growing the Scottish economy.14:30
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney)
SNP
Last week, I set out to Parliament the Government’s strategic aims on the economy, and we had a valuable and constructive debate on the economic priorities f...
Willie Rennie (Mid Scotland and Fife) (LD)
LD
The Cabinet Secretary for Finance, Employment and Sustainable Growth quite rightly says that investment in transport infrastructure is important. He says tha...
John Swinney
SNP
Our election manifesto set out the argument that the savings to the public purse that the excellent and well-run procurement project generated, which were sa...
Gavin Brown (Lothian) (Con)
Con
Not yet.
John Swinney
SNP
Mr Brown says, “Not yet,” but a fixed-price contract applies.
David McLetchie (Lothian) (Con)
Con
We have heard that one before.
John Swinney
SNP
I say to Mr McLetchie that a fixed-price contract is a fixed-price contract. We have such a contract for the M74 project, which will be completed early, and ...
Richard Baker (North East Scotland) (Lab)
Lab
We believe that the question that requires to be answered when we debate whether the Parliament should have new powers is this: will the devolution of the po...
John Mason (Glasgow Shettleston) (SNP)
SNP
Is the member arguing that, in the long run, a private finance initiative approach makes better sense than the Scottish Futures Trust?
Richard Baker
Lab
It certainly made no sense to delay those projects at that time. I make it clear that I am happy that we can instead endorse a strategy on borrowing powers f...
Patrick Harvie (Glasgow) (Green)
Green
I understand entirely the member’s point that the amount of borrowing should not exceed the amount that can be serviced through devolved taxation. However, I...
Richard Baker
Lab
We are discussing what can be achieved in the current negotiations and through proposed legislation that is in process. From that point of view, I am trying ...
David McLetchie (Lothian) (Con)
Con
As a member of the Scotland Bill Committee in the previous session, it gives me great pleasure to open the debate on behalf of the Scottish Conservatives. Th...
John Swinney
SNP
Is Mr McLetchie developing an argument for the limitations in the Scotland Bill to be a firm cap, as envisaged in the current proposals, or is he persuaded b...
David McLetchie
Con
I am happy that there should be a principles-based approach to the determination of the appropriate figure. Whether an absolute figure or a formula and mecha...
John Swinney
SNP
Will the member give way?
David McLetchie
Con
No, thank you—I have to make progress.Members: Oh!
John Swinney
SNP
That is a last-minute trick.
David McLetchie
Con
Presiding Officer, can I take Mr Swinney’s intervention and have some extra time?
The Deputy Presiding Officer (Elaine Smith)
Lab
If Mr Swinney is brief.
John Swinney
SNP
Mr McLetchie went on at great length about constraints and limitations on borrowing. One of the constraints on private borrowing by Scottish Water is the rig...
David McLetchie
Con
It is because Scottish Water is in the public sector, which is exactly the point that we are coming to. How disappointing—I thought that we were going to be ...
The Deputy Presiding Officer
Lab
I remind members to speak through the chair.15:02
Maureen Watt (Aberdeen South and North Kincardine) (SNP)
SNP
In the run-up to the 1997 UK election, Tony Blair once famously claimed that it would be odd if the Scottish Parliament did not enjoy the same powers as an E...
Neil Findlay (Lothian) (Lab)
Lab
Is one of the fluctuations to which the member refers the huge fluctuation in corporation tax that may follow, should the SNP get corporation tax powers? Is ...
Maureen Watt
SNP
I was referring to the fact that it will cause severe problems if we can make changes only to income tax. If we have corporation tax powers, there will be at...
Gavin Brown
Con
What kind of impact would such fluctuations have on a local income tax?
Maureen Watt
SNP
I am sure that that issue will be examined when a local income tax is considered. At least local councils have the option of borrowing for projects, which th...
Rhoda Grant (Highlands and Islands) (Lab)
Lab
I welcome the debate, and I believe that we can reach some consensus on the issue—certainly in principle. Capital borrowing powers were introduced by the Cal...