Chamber
Meeting of the Parliament 25 January 2012
25 Jan 2012 · S4 · Meeting of the Parliament
Item of business
Budget (Scotland) Bill: Stage 1
None of us can be in any doubt about the seriousness of the economic difficulties that we face. Last week’s unemployment figures simply confirmed the damage that is being done to too many families in Scotland. The outlook for growth was already gloomy, and it will not have been leavened by last night’s comments by the governor of the Bank of England, by the IMF’s downgrading of projected economic growth or by today’s confirmation that the economy has shrunk by 0.2 per cent.
My concern is—aside from worries about us teetering on the brink of another recession, about the euro and about the series of radical and difficult cuts to the public finances that we face—that we need to address underlying problems with an economy that is not delivering for the people of this country or for our society.
For more than 30 years, we have followed economic policies that have been based on an assumption that the markets will provide the growth and prosperity that we need in order to thrive, but those markets have never provided the jobs that we need in order that we can truly prosper. We have endured deep-seated unemployment for three decades, and unemployment is now rising again—not falling.
The cumulative impact of permanent mass unemployment has been to create a dependency culture, which in turn undermines the principles on which the welfare state is based. There is still huge support for our national health service, but already attacks are being made—not just on so-called benefits scroungers, but on the whole idea of a welfare system that covers us all. Welfare was originally conceived in a full-employment society as a way of tiding people over during the difficult times. It was there for children and the elderly, and for people who were sick or vulnerable, but able-bodied adults were expected to work. For thirty years, there have simply not been enough jobs for thousands of capable citizens.
What worries me is not just that the Conservative Government in Westminster is cutting back on the public purse because money is tight, but that it is using these straitened times to shrink the welfare state. Universal benefits such as child allowances, which help to tie us all together, are going. The public sector is being reduced while simultaneously and fallaciously being portrayed as a drag on our economy and on the wealth that is created by the private sector. If we wish to defend our progressive vision of a fairer and more just society, we must challenge some of the assumptions and assertions that underpin those attacks, and we will not be able to do so if our first reaction is simply to oppose every cut or to put up taxes.
If we want to hold on to a welfare system that looks after the most needy, that can provide social and economic mobility and which is perhaps even—dare I say it?—a little redistributive, we must do what we can to end the dependency culture, too. That was the road that the last Labour Administration was taking us down through welfare into work, jobseeking, and retraining and reskilling people to improve their employment chances. That is how I believe we should tackle the problems that face us today—by getting Scotland working again, by giving people a job and a stake in our society, and by giving them hope and a future.
However, just as, if left to their own devices, market forces will not provide an answer, neither, unfortunately, does the budget that the cabinet secretary has announced begin to face up to the fundamental weaknesses in the Scottish economy. It does not go nearly far enough in looking at how the state can create or support employment, rather than simply being left to pick up the pieces when people lose their jobs.
A few attempts have been made to explore the economic principles and practices that might create the employment levels that we seek, but they feel marginal rather than mainstream.
My concern is—aside from worries about us teetering on the brink of another recession, about the euro and about the series of radical and difficult cuts to the public finances that we face—that we need to address underlying problems with an economy that is not delivering for the people of this country or for our society.
For more than 30 years, we have followed economic policies that have been based on an assumption that the markets will provide the growth and prosperity that we need in order to thrive, but those markets have never provided the jobs that we need in order that we can truly prosper. We have endured deep-seated unemployment for three decades, and unemployment is now rising again—not falling.
The cumulative impact of permanent mass unemployment has been to create a dependency culture, which in turn undermines the principles on which the welfare state is based. There is still huge support for our national health service, but already attacks are being made—not just on so-called benefits scroungers, but on the whole idea of a welfare system that covers us all. Welfare was originally conceived in a full-employment society as a way of tiding people over during the difficult times. It was there for children and the elderly, and for people who were sick or vulnerable, but able-bodied adults were expected to work. For thirty years, there have simply not been enough jobs for thousands of capable citizens.
What worries me is not just that the Conservative Government in Westminster is cutting back on the public purse because money is tight, but that it is using these straitened times to shrink the welfare state. Universal benefits such as child allowances, which help to tie us all together, are going. The public sector is being reduced while simultaneously and fallaciously being portrayed as a drag on our economy and on the wealth that is created by the private sector. If we wish to defend our progressive vision of a fairer and more just society, we must challenge some of the assumptions and assertions that underpin those attacks, and we will not be able to do so if our first reaction is simply to oppose every cut or to put up taxes.
If we want to hold on to a welfare system that looks after the most needy, that can provide social and economic mobility and which is perhaps even—dare I say it?—a little redistributive, we must do what we can to end the dependency culture, too. That was the road that the last Labour Administration was taking us down through welfare into work, jobseeking, and retraining and reskilling people to improve their employment chances. That is how I believe we should tackle the problems that face us today—by getting Scotland working again, by giving people a job and a stake in our society, and by giving them hope and a future.
However, just as, if left to their own devices, market forces will not provide an answer, neither, unfortunately, does the budget that the cabinet secretary has announced begin to face up to the fundamental weaknesses in the Scottish economy. It does not go nearly far enough in looking at how the state can create or support employment, rather than simply being left to pick up the pieces when people lose their jobs.
A few attempts have been made to explore the economic principles and practices that might create the employment levels that we seek, but they feel marginal rather than mainstream.
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
The next item of business is a debate on motion S4M-01773, in the name of John Swinney, on stage 1 of the Budget (Scotland) Bill. Will members who wish to ta...
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney)
SNP
Last week, I introduced the Budget (Scotland) Bill for 2012-13, which will implement the draft budget that I set out in September last year. I thank all thos...
Gavin Brown (Lothian) (Con)
Con
I am grateful to the cabinet secretary for giving way so early in his speech. Does he accept that this year’s budget is a cash-terms increase?
John Swinney
SNP
The words that I have used in my speech are:“another real-terms reduction to our total departmental expenditure limit”.That is what the Government faces. We ...
Ken Macintosh (Eastwood) (Lab)
Lab
Further to that, does the cabinet secretary believe that plan MacB is making a difference to the Scottish economy?
John Swinney
SNP
Yes I do, because the Scottish Government has, since 2008, used a set of measures and interventions to try to offset the difficulties and serious consequence...
Ken Macintosh
Lab
It is good to hear the minister’s words about his commitment to tackling youth unemployment, but how will cutting the colleges budget by 20 per cent, followi...
John Swinney
SNP
The Government is ensuring that it supports the further and higher education sectors effectively. I have recounted the resources that we are applying in the ...
Gavin Brown
Con
Some of that capital transfer comes from savings from the Forth crossing. For about the fifth time in the chamber, I ask the cabinet secretary whether he wil...
John Swinney
SNP
For about the fifth time, I say that I have explained to Mr Brown the basis of what is happening. Savings in the Forth replacement crossing budget have been ...
Ken Macintosh
Lab
Will the cabinet secretary take an intervention?
John Swinney
SNP
I need to bring my remarks to a close.Our recently published infrastructure investment plan secures the project pipeline, thereby bringing stability and pred...
Ken Macintosh (Eastwood) (Lab)
Lab
None of us can be in any doubt about the seriousness of the economic difficulties that we face. Last week’s unemployment figures simply confirmed the damage ...
Mary Scanlon (Highlands and Islands) (Con)
Con
In addressing the underlying problems, will Ken Macintosh acknowledge that 43 per cent of people on benefits in Scotland have an underlying mental health pro...
Ken Macintosh
Lab
I welcome Ms Scanlon’s question. It is important that the welfare system be sustained and that we all feel that we are part of it. It should be there for eve...
John Swinney
SNP
Before Mr Macintosh moves on from capital spending, will he accept that the size of the capital DEL budget that the Scottish Government has at its disposal i...
Ken Macintosh
Lab
I am arguing first that the budget is not radical enough overall and secondly, that the budget does not deliver on the claims that the minister makes for it....
The Deputy Presiding Officer (John Scott)
Con
I remind members to speak through the chair, please.
John Swinney
SNP
Those are Mr Macintosh’s opinions; of course, we can trade opinions. However, on the factual point that I made, I want Mr Macintosh to consider whether the c...
Ken Macintosh
Lab
Mr Swinney seems to be avoiding the key point that I am making about his claims for the budget. He can excuse himself and say that plan MacB is working, but ...
Ken Macintosh
Lab
SNP members’ approval is interesting, so I ask them what levers of economic power they have in mind. Perhaps they mean control over currency—the pound or the...
John Mason (Glasgow Shettleston) (SNP)
SNP
The member has been talking about capital expenditure. Does he accept that one power that we do not currently have but which we could have is borrowing power...
Ken Macintosh
Lab
We will get more borrowing powers if the SNP supports the Scotland Bill. It will be interesting to see whether that happens.As I understand it, the First Min...
Gavin Brown (Lothian) (Con)
Con
Prior to the publication of the draft budget and every day since then, the Scottish Conservatives have said that the budget must focus on jobs and the econom...
Kenneth Gibson (Cunninghame North) (SNP)
SNP
Does Mr Brown accept that, when the SNP drew up its manifesto, we did not anticipate an inflation rate of 5.2 per cent? He talks about cash terms, but the re...
Gavin Brown
Con
If the SNP Government had read the Bank of England’s inflation reports prior to the election, it would have anticipated sharp increases in inflation for 2011...
Maureen Watt (Aberdeen South and North Kincardine) (SNP)
SNP
Given that the cabinet secretary has had to make cuts, is it not reasonable and realistic to make the cuts in the areas where other methods of finance can be...
Gavin Brown
Con
I think that we got a bit of policy on the hoof there; I am not sure whether that has been cleared by the SNP front bench. If we follow that argument to its ...
John Swinney
SNP
Will the member give way?
The Deputy Presiding Officer
Con
The member is in his last minute.