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
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 powers in question benefit Scotland and, in particular, help us to grow our economy? It is not about getting new powers for their own sake.
We believe that the case for additional borrowing powers for the Scottish Government certainly has been made, and it is right that that initiative should be supported across the chamber. It was the Calman commission that made the case for the Scottish Government to have further borrowing powers. In the previous session, the Scotland Bill Committee made the case for those powers to be introduced more quickly and, indeed, for an extension in their scope. Therefore, when the Scottish Government makes the case for them to aid economic growth, it is right that we should support it, and we will support its motion.
I noticed that, as the First Minister walked along Downing Street in the rain yesterday, he did not deign to share the shelter of his umbrella with the cabinet secretary and Mr Crawford, who were left to brave the elements. I am happy to report that the cabinet secretary has taken a far more collegiate approach with his motion, and I welcome the fact that, even with a Government majority, he has worked hard over the past few days to ensure that the motion receives the widest possible support in the debate. We welcome that approach. I hope that a clear message from the chamber today will aid fruitful negotiations between the cabinet secretary and his UK counterparts.
The meeting of the devolved heads of Government with the Prime Minister yesterday seems to have been reasonably cordial in tone at least, even if the tone has not been that in today’s press. However, we hope that the dialogue on the issue that we are discussing at least will be productive. Indeed, it seems that we have good news on the timescale for introducing the borrowing powers and their establishment this year. Getting good news from Nick Clegg is a welcome change. We look forward to hearing further details of the announcement that he indicated.
The cabinet secretary has made it clear that his goal in seeking additional borrowing powers is to protect investment in our economy, particularly at a time when the capital budget has been cut to such an extent by the UK Government. There is a clear need for the Scottish Government to be able to use borrowing powers to take the required action. The GDP figures in the last quarter of 2010 may well have been better for Scotland than for the rest of the UK, but they still showed that while the UK economy contracted by 0.5 per cent, our economy contracted by 0.4 per cent. Therefore, there can be no room for complacency in tackling the economic challenges that Scotland faces. Business organisations are still reporting a lack of confidence in the economic outlook, and the International Monetary Fund has revised downwards its economic growth forecast for the UK. It is clear that that presents us with significant challenges in Scotland.
We have argued that preserving Government investment in our economy and infrastructure should be a key part of the strategy to strengthen growth in Scotland. We do not want to see key infrastructure projects being stalled and more jobs being threatened because of the cut to the capital budget.
Four years ago, we took issue with the Scottish Government on its decision to delay new school buildings and new transport projects while it established the Scottish Futures Trust, because we believed that that was damaging for important sectors such as our construction industry, in which jobs were lost at that time.
We believe that the case for additional borrowing powers for the Scottish Government certainly has been made, and it is right that that initiative should be supported across the chamber. It was the Calman commission that made the case for the Scottish Government to have further borrowing powers. In the previous session, the Scotland Bill Committee made the case for those powers to be introduced more quickly and, indeed, for an extension in their scope. Therefore, when the Scottish Government makes the case for them to aid economic growth, it is right that we should support it, and we will support its motion.
I noticed that, as the First Minister walked along Downing Street in the rain yesterday, he did not deign to share the shelter of his umbrella with the cabinet secretary and Mr Crawford, who were left to brave the elements. I am happy to report that the cabinet secretary has taken a far more collegiate approach with his motion, and I welcome the fact that, even with a Government majority, he has worked hard over the past few days to ensure that the motion receives the widest possible support in the debate. We welcome that approach. I hope that a clear message from the chamber today will aid fruitful negotiations between the cabinet secretary and his UK counterparts.
The meeting of the devolved heads of Government with the Prime Minister yesterday seems to have been reasonably cordial in tone at least, even if the tone has not been that in today’s press. However, we hope that the dialogue on the issue that we are discussing at least will be productive. Indeed, it seems that we have good news on the timescale for introducing the borrowing powers and their establishment this year. Getting good news from Nick Clegg is a welcome change. We look forward to hearing further details of the announcement that he indicated.
The cabinet secretary has made it clear that his goal in seeking additional borrowing powers is to protect investment in our economy, particularly at a time when the capital budget has been cut to such an extent by the UK Government. There is a clear need for the Scottish Government to be able to use borrowing powers to take the required action. The GDP figures in the last quarter of 2010 may well have been better for Scotland than for the rest of the UK, but they still showed that while the UK economy contracted by 0.5 per cent, our economy contracted by 0.4 per cent. Therefore, there can be no room for complacency in tackling the economic challenges that Scotland faces. Business organisations are still reporting a lack of confidence in the economic outlook, and the International Monetary Fund has revised downwards its economic growth forecast for the UK. It is clear that that presents us with significant challenges in Scotland.
We have argued that preserving Government investment in our economy and infrastructure should be a key part of the strategy to strengthen growth in Scotland. We do not want to see key infrastructure projects being stalled and more jobs being threatened because of the cut to the capital budget.
Four years ago, we took issue with the Scottish Government on its decision to delay new school buildings and new transport projects while it established the Scottish Futures Trust, because we believed that that was damaging for important sectors such as our construction industry, in which jobs were lost at that time.
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...