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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

Swinney, John SNP Perthshire North Watch on SPTV

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 for Scotland. By re-electing this Government, the people of Scotland have ensured that the issues of importance about which we campaigned and which we set out have been brought to the fore in this session. That gives us the opportunity to secure enhanced powers and greater economic freedom for this Parliament, which is at the heart of the Government’s agenda. Today’s debate, on capital borrowing powers, responds to the expectation of the public and the mandate that we have been given.

In his opening speech of the new session of Parliament, the First Minister made clear the commitment of the Scottish Government to work with all parties across the chamber openly and positively to advance Scotland’s interests. On borrowing powers, as on many other issues, we are building on solid foundations, including the work of the Scotland Bill Committee in the previous session, the Calman commission and the Holtham commission in Wales. We can have confidence that the issues around capital borrowing have been well exercised by that process of discussion and debate in recent months and years.

I will focus my remarks on the substance of the Scotland Bill proposals on capital borrowing and how this Parliament can strengthen them. First, however, I want to offer some broader reflections on the process in which we are engaged.

As members are aware, we are engaged in detailed and substantive discussions with the United Kingdom Government on strengthening the powers of the Parliament. Those are important discussions, and we encourage the UK Government to take a positive approach to our proposals. Indeed, I noticed on the Press Association wires at 1.55 this afternoon that the Deputy Prime Minister, on a visit to South Queensferry, has indicated that capital borrowing powers that were to be in place by 2013 will be available this year. We await further detail from the Deputy Prime Minister and others on what underpins that remark.

We should consider the task that we face with regard to borrowing powers. We are considering a long-term and fundamental reform of Scotland’s financial governance. Members across the chamber will have different views about what is ultimately the right economic and political framework for Scotland, but it will be the people of Scotland who will settle those questions. Our shared responsibility, today and in the coming months, is to ensure that the outcome of the Scotland Bill is a coherent and durable set of financial reforms that can substantially enhance the authority and effectiveness of this Parliament.

It is important to be clear on the purpose of capital borrowing, and we are very clear. There is an overwhelming economic logic behind capital borrowing powers. For example, they can support the construction of large strategic projects, such as the Forth replacement crossing, which will benefit future generations but will also create significant short-term financial pressure on today’s capital budgets. They can provide a medium-term economic stimulus, similar to the accelerated capital programme that we have undertaken, but without the need to cut investment while recovery is still fragile. They can also help to lever in additional private sector investment by enabling Government to act as the funder to key sectors, such as the renewable energy, enterprise, housing and regeneration sectors, and they can prevent destabilising swings in capital spending by helping to smooth investment and to manage capacity in our key public services.

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Meeting of the Parliament 09 June 2011

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