Meeting of the Parliament

Meeting date: Thursday, May 10, 2012

Official Report 1109KB pdf

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Government Growth Strategy

The next item of business is a debate on motion S4M-02808, in the name of John Swinney, on the Scottish Government’s growth strategy.

14:56

I am grateful for the opportunity to open the debate on our actions to support growth in the Scottish economy. My remarks will centre on the support that we make available for business and on the importance of Scotland as a location for international investment and a home for ambitious export companies.

With a fragile recovery predicted in the United Kingdom and Europe this year and next, it is vital that we grow our exposure to international markets. The debate is all the more pertinent in the light of recent, emerging United Kingdom data. When we last debated the economy in February, I maintained that trends and poor forecasts highlighted the inherent weakness in the UK Government’s economic strategy, with too much emphasis being placed on austerity and not enough on promoting growth. That is why we have continued to press the UK Government to make provision for the shovel-ready projects that we have suggested to stimulate further economic activity.

Our concerns about the direction of the UK economy were well stated in a joint declaration with the other devolved Administrations as far back as October 2010. Although I would like to have been mistaken in my assessment, it is now clear that the Government’s concerns were well founded.

As we are all aware, with the estimated fall of 0.2 per cent in gross domestic product in the first quarter of this year, the UK is now formally in a double-dip recession. There has been some debate about the reliability of such initial estimates, but the clear message is that the UK recovery has stalled. Indeed, growth in the UK since the recession started has been the weakest in the G20 with the exception of Italy, compared to which the UK has performed only marginally better.

Estimates for quarter 1 growth in Scotland will be released in July, but recent data indicate some reasons for cautious optimism about economic recovery here. Recent manufacturing export data showed growth of 4.8 per cent in 2011 and data from Her Majesty’s Revenue and Customs showed Scotland’s exports in all goods increasing by 18 per cent in 2011—the largest rise of all four United Kingdom countries. News from the retail sector has also been relatively positive, with data showing growth in the volume of retail sales of 0.6 per cent over the past year, which is faster than throughout Great Britain as a whole. The purchasing managers index for March indicated private sector growth for the 15th consecutive month and at the fastest rate for 12 months.

On the ground, the Scottish Chambers of Commerce reacted to the latest UK GDP figures by sharing its reflections on the state of the Scottish economy. It said:

“We suspect that the Scottish economy has not suffered in the way that the rest of the UK has suffered and we are optimistic that the official Scottish GDP figures for the first quarter … may reveal a more positive situation north of the Border.”

As I said, those data will be clear later in the year.

By far the most encouraging development has been the improvement in the labour market, with unemployment falling and employment rising over the three months to February. Unemployment is still unacceptably high at 8.1 per cent but it is, once again, lower than in the United Kingdom. We also have higher employment and lower inactivity than the United Kingdom as a whole. However, our ability to generate a sustained reduction in unemployment depends on securing a robust pick-up in the wider economy. That is why we continue to use every lever that is available to us to respond effectively to challenges.

Contrary to the headlines, therefore, there are positive developments in the Scottish economy. Instead of discussing recession, I hope that in Scotland we can move the focus on to delivering a strong recovery. Our Government economic strategy recognises the need for continued action to accelerate the recovery and to identify our priorities for delivering sustainable economic growth, boosting employment and tackling inequality in the longer term.

Scotland’s businesses and entrepreneurs are the primary drivers of growth and our role is to help to create the best possible environment for them to flourish. Small businesses, in particular, are the lifeblood of communities. They account for around 98 per cent of all enterprises in Scotland and 41 per cent of private sector employment. The Government takes forward a range of measures to support the development of companies. However, in order to grow such businesses, we are keen to work in partnership with the private sector.

The First Minister visited an excellent example of that co-operation at the Entrepreneurial Spark facility at City Refrigeration in Glasgow, where emerging entrepreneurs come together to develop new business ideas and to share information about their inventions and ambitions. The early indications are that that is a very successful approach to entrepreneurial development. I commend the initiative and look forward to formally opening the second Entrepreneurial Spark facility in Scotland in Ayrshire in June.

We are committed to maintaining and further developing a supportive business environment, with a particular focus on growth markets, growth sectors and growth companies. That includes ensuring that companies in Scotland have access to public sector procurement opportunities through Public Contracts Scotland.

A key aspect of our strategy is to improve Scotland’s links with the global economy. Although the economic downturn has created a range of challenges, there is also a range of exciting new opportunities. For example, the economy of the United States, which is an important export market, appears to be gaining momentum, and emerging markets continue to grow robustly. In 2012, the International Monetary Fund forecast growth of more than 8 per cent in China, around 7 per cent in India and more than 4 per cent in the middle east and north Africa. In all those markets, we focus our activities to support development opportunities for companies in Scotland.

Aligning investment towards export promotion is essential and we have an excellent product to sell. Scotland is a brand that is known around the world and we take every step to capitalise on that brand. To encourage Scottish companies to capitalise on export opportunities, our economic strategy established an ambitious target for Scottish businesses to deliver a 50 per cent increase in the value of international exports by 2017. That ambition is shared by industry. At a recent meeting that I attended with the chairs of all the industry sectors in Scotland, there was a general consensus that increasing exports is critical to achieving growth in the companies sector and improving productivity and competitiveness.

There is cohesion between public sector objectives and private sector ambitions around the objective of increasing exports by 50 per cent by 2017. Although that target is ambitious given historical performance—there has been 13 per cent export growth in the past six years—our target is helping to create focus, dynamism and development prospects in existing exporting companies and to encourage other companies to be active. To ensure that we fulfil the objective, we are widening our export support to encourage more growth companies to become active exporters.

Our enterprise agencies and Scottish Development International are focused on encouraging and enabling Scottish companies to export to new and emerging markets. For example, SDI is working with partners to help between 8,000 and 10,000 more businesses develop the skills to go international in their business activity by 2015 and our export support initiative delivers advice and support to small and medium-sized enterprises with significant export potential. In addition, in February we launched the export from Scotland initiative, which provides guidance to Scottish companies on exporting and growing their international business activity.

As well as focusing on overseas markets to boost our exports, our strategy also sets out a range of measures to ensure that Scotland attracts international investment. The recent introduction of four enterprise areas will offer companies a range of incentives to help the areas to realise their potential by boosting economic growth and creating jobs and will also ensure that Scotland remains the most attractive place in the UK for international investment.

To complement that activity, SDI launched a campaign last month to attract 200 FTSE companies to Scotland, to spread the message that Scotland is open for business and to highlight that the costs of some functions are almost a third lower than in other parts of the UK. We are also working alongside our enterprise agencies and SDI on actively seeking new opportunities to attract investment from international companies. Over the five years to 2010-11, the agencies’ efforts attracted inward investment projects that led to 32,900 planned jobs.

The Government’s economic strategy focuses on a number of key sectors, but I want first to highlight the achievements that have been made in the energy sector and then look at further developments that might emerge in other areas. As Scotland has not only 25 per cent of Europe’s wind and tidal resource but world-renowned expertise in offshore engineering, international firms are increasingly interested in the opportunities that we are developing to support the renewables sector and many are choosing to locate here. For example, in March, Gamesa announced that its new UK plant will be sited in Leith, creating around 800 new jobs with investment of up to €150 million. In January, Samsung Heavy Industries announced that it will develop its offshore wind technology in Fife. Its 7MW wind turbine prototype will be one of the largest in the world and is the company’s first European offshore wind project. Despite Doosan Power Systems’s decision not to pursue opportunities in the offshore wind market due to the position in the euro zone, my visit to the company last month reaffirmed its interest in low-carbon activity in Scotland.

How will local communities be involved in those exciting new offshore wind initiatives, particularly with regard to transferable skills?

With that question, Claudia Beamish opens up a substantial part of the debate. An essential product of our focus on renewables will be the significant increase in demand for skills in all parts of Scotland. Although the initial phase of this activity centres on the east coast of Scotland, it will gravitate to the west of Scotland and, in order to service certain projects such as the Leith and Fife ventures, we will be required to create a new engineering skills base. In that respect, we will have an opportunity through effective partnerships in various localities to ensure that we motivate and train individuals to be part of these sectors. I must compliment many public sector organisations, such as colleges, on their positive response to the challenge and on the way in which they have amended their own provision to meet the demand that is being created by some of these investors.

There will, of course, be other knock-on opportunities in the supply chain. For example, as a result of the Samsung venture, one of the companies owned by the prestigious Scottish company Clyde Blowers, David Brown Gear Systems, will be supplying gearbox systems for Samsung’s next-generation offshore wind turbines. That shows that opportunities will emerge in localities that are not necessarily in the immediate vicinity of these wind developments.

To promote the Scottish economy, the Government has embarked on a sustained programme of international contacts. Recently, the First Minister and Mr Lochhead completed a series of visits in the middle east to promote the food and drink sector. As I have said, I visited Japan and South Korea in April and the First Minister has also visited China. Some of the fruits of those visits are emerging. For example, in January 2011, we brokered an agreement with the Chinese Government to allow exports of fresh Scottish salmon to the country and, just nine months later, exports to China had reached almost £20 million. It is clear that this activity is having some positive knock-on effects.

Alongside the food and drink and renewables sectors, the tourism sector is now preparing for 2012 to 2014—or what have been characterised as the winning years—with exciting developments around the Disney Pixar film “Brave”, the Commonwealth games, the Ryder cup and the year of homecoming.

In life sciences, GlaxoSmithKline has announced investment in Scotland coupled with partnerships with our universities and work to boost the research capability in Scotland.

Those are all indications that the focus in the Government’s economic strategy is correctly positioned to maximise our opportunities. We are utilising every possible opportunity to strengthen the economic recovery in Scotland, and we will continue to do so. The Government looks forward to acquiring the further powers and responsibilities that will enable us to do that to even greater effect in the years to come.

I move,

That the Parliament supports the Scottish Government’s approach to accelerating recovery, supporting long-term sustainable economic growth and boosting employment, as set out in the Government Economic Strategy, including the focus on growth sectors and growth markets; notes the UK’s double-dip recession and, in light of this, recognises the alternative approach pursued by the Scottish Government and its calls for an urgent economic stimulus from the UK Government in the form of shovel-ready projects; notes the focus of the Scottish Government and its agencies, Scottish Development International, Scottish Enterprise and Highlands and Islands Enterprise in boosting international exports and securing international investment; recognises that growth sectors including food and drink, tourism, finance, life sciences, energy and low-carbon industries are performing well; welcomes the further actions that the Scottish Government is taking to ensure that Scotland continues to increase its international presence by pursuing opportunities in growing export markets and by continuing to attract substantial international inward investments.

15:10

Presiding Officer, I hope that you will not mind if I begin by celebrating a marvellous election result this week. I do not mean the local election results, although it has been very enjoyable to see the people of Scotland putting the First Minister’s gas at a peep. I mean the election of François Hollande as the new President of France. His first message to the people of France was that there is an alternative to austerity. Speaking at the Bastille in Paris, he spoke to us here in the UK and Scotland. He said:

“In all the capitals ... there are people who, thanks to us, are hoping, are looking to us, and want to reject austerity”.

He told the crowd:

“You are a movement lifting up everywhere in Europe, and perhaps the world.”

C’est formidable, Monsieur le Président!

There is an alternative to austerity, and that alternative is sustainable growth. I am pleased that the Scottish Government brought this debate to the chamber. We have the opportunity to lend our voices to those echoing around Europe that not only is austerity not working, it is positively damaging our economy and society.

At the end of last month, we heard the grim news that the UK had entered recession for a second time. For the past two years, the Labour Party and others have argued repeatedly that, unless the Tory and Lib Dem coalition changed economic tack, we would be heading for a double dip. “We told you so” does not even begin to capture the sense of frustration and despair that accompanied confirmation of that news. This week, in response to the developing political and economic situation, the Prime Minister and his deputy travelled all the way to Essex to renew their austerity vows. I did not know whether to laugh or cry.

Today, it would have been good to be able to speak with one voice from the Parliament about the political and economic direction that we want the country to take. It would have been good to be able to join the Scottish National Party and those around Europe who are clamouring against the wrong-headedness of punishing working people, families and pensioners with an austerity programme that is simply failing to deliver. Unfortunately, instead of reaching such an understanding, the SNP has lodged yet another self-congratulatory and, frankly, self-delusional motion about its supposedly distinctive alternative set of economic policies.

“Delusional” is a good word to describe the Labour Party on this issue. The five-point plan for growth that it published in November contains only one area of policy that is devolved to the Scottish Parliament. Surely if the Labour Party wants to end austerity and get back on the right track, it must agree with the SNP that the best way to do that is to have all the reins of power in the Scottish Parliament.

What a fantastic contribution from Mr Stewart. He has the good fortune of hearing me open and close in today’s debate and I will certainly return to some of the many policies that we could pursue to encourage growth, including using procurement and wage subsidies.

First, I will look at what the Scottish Government is actually doing as opposed to what it says that it is doing and we will see whether it can back up its assertions about focusing on jobs and growth. Economic commentators are certainly clear about where the evidence points. Professor David Bell, an adviser to the Parliament’s Finance Committee, pointed out that the average difference in unemployment rates between Scotland and the UK during the recession has been only 0.4 per cent. He therefore concludes that the SNP has not driven any massive differences in labour market outcomes north of the border since the beginning of the recession.

Professor Bell is not the only one, of course. The same point was also made by Professors Peat and Armstrong, and backed up by the Centre for Public Policy for Regions, which stated:

“Overall, the different approaches taken by the Scottish and UK governments thus far appear to have made little difference to the economic outcomes. The deterioration in both GDP and the labour market have been on a similar scale in both Scotland and the UK.”

The Scottish economy, for all intents and purposes, is in exactly the same unhappy position as the wider UK economy. One can only conclude, therefore, either that the Scottish Government is not delivering on its promises, or that its policies are not working.

One example is the policy to support enterprise zones in Scotland. When the cabinet secretary was asked by one of his own back benchers how many jobs the new enterprise areas would create, he was forced to admit that he could not quantify that number. That is not exactly the response that I would expect from a Scottish Government that is truly putting employment first.

What about the public health levy—the so-called Tesco tax? The minister has not even apologised for not carrying out a business or employment impact assessment for that.

As my colleague Michael McMahon pointed out only yesterday, and as the Scottish Trades Union Congress and others have repeatedly flagged up, there is no evidence whatsoever that the small business bonus scheme has improved employment levels or helped small businesses to grow. In fact, it appears from the STUC’s comparison that small businesses in Scotland have not done as well as those elsewhere in the UK.

Mr Macintosh opens up some fascinating territory. In his last two sentences, he said that he wants to relieve highly profitable supermarkets of a contribution to our preventative spending agenda, and to punish small businesses because he thinks that they do not contribute enough to the Scottish economy. If I may give Mr Macintosh some advice, that is a rather reckless contribution to the Scottish economy.

Mr Swinney does not seem to have been listening very closely. I was illuminating the difference between his far-fetched claims and assertions, and the evidence of what the Scottish Government is doing and what is happening.

Ministers constantly rush—as Mr Swinney just did—to point out the popularity of the rates relief scheme for small businesses, but that says it all. The SNP is concerned about the popularity of the scheme, not about whether it is working or making a difference to employment or growth as the Government claims.

Mr Macintosh surely cannot have missed the successive comments from the Federation of Small Businesses, which has highlighted the importance of the small business bonus scheme in keeping many small businesses afloat and helping them through the recession.

Again, Mr McDonald is not listening to what I am saying. The Scottish Government constantly claims that it puts employment and the pursuit of growth at the top of its agenda. That is what the debate is about. However, there is no evidence—either from the Federation of Small Businesses or from anyone else—that growth or employment has been achieved because of that policy. Yes, it is popular, but that is not the same thing.

The pursuit of popular policies is called populism, and that is the trouble with the SNP. It is populist, not progressive, and it does not believe in economic growth. It is pursuing not economic growth but popularity, which is not the same thing.

The sector that is most often linked to growth—

Does Mr Macintosh favour scrapping the small business bonus scheme?

I certainly do not favour scrapping it.

Members: Oh!

I do not see why the SNP should feign surprise at that. Why would one wish to take so much money out of a key part of our economy? I am asking what we are getting in return for that policy. Could that money be better used? Could it be applied better? That is the key. Could it achieve growth or increase employment? It is not doing so at present, and the SNP should not try to claim otherwise.

The sector that is most often linked to growth in the economy is construction, yet all the Scottish Government’s talk about shovel-ready projects masks the fact that the construction sector has lost 30,000 jobs in the past year, which is a reduction of more than 15 per cent. That compares to less than 2 per cent in England and 0.5 per cent—

I regret to say that I must ask you to close.

Despite all those interventions, Presiding Officer?

You can have another 30 seconds.

Very well.

I am not trying to blame the downturn on the Scottish Government, but I expect ministers to take responsibility for their decisions. Need I remind the minister that his election manifesto promised, for example, 6,000 social rented houses per year, not 6,000 affordable homes, as it has been rewritten. Instead, the Government is withdrawing £100 million from the housing budget, which is money that could boost construction and grow the economy.

I move amendment S4M-02808.3, to leave out from “supports” to end and insert:

“believes that the UK Government’s austerity programme has failed, given that the UK economy has shrunk yet again despite repeated warnings to change course to avoid a double-dip recession; agrees that both the Scottish and UK governments need to pursue policies that will promote sustainable growth, secure employment and lead to a low-carbon economy, but fails to see how the SNP administration’s actions in cutting the housing budget by more than £100 million are consistent with pursuing shovel-ready projects; is dismayed that, in the face of 100,000 unemployed young people, the Scottish Government has seen fit to cut funding to colleges by more than 20%, following on from last year’s cut of more than 10%, and further calls for an urgent change of policy on procurement to prevent contracts such as the Forth Replacement Crossing being awarded to China, particularly at a time when Lanarkshire’s steel mills lie underused.”

15:20

There has been much talk in the chamber today, at First Minister’s question time and earlier in this debate, about the elections last week in Scotland and in France, but we have not yet heard any mention of the most critical, or I should say the most worrying, election that took place last week from an economic point of view, which was the one in Greece. The results of that election led to the elimination of the parties that signed up to the deal with the European Union, which could put the country back at the brink. This morning, we heard news of £1 billion of funding being withheld. On the BBC website, we read comments from Stephanie Flanders, the economic correspondent, who said:

“you have to say the chances of a messy Greek exit are higher than they were a few months ago. And, let’s face it, they were pretty high then.”

The Scottish Parliament and Government must watch events across Europe carefully, particularly those that are starting in Greece and those that will lead to pretty significant announcements in Spain tomorrow.

The Conservatives welcomed the reductions in unemployment in Scotland and the UK in the last quarter. The acceleration in the reduction in Scotland led to the figure being lower here than it is in the UK—as we heard, it is 8.1 per cent here compared to 8.3 per cent in the UK. However, we cannot get even remotely complacent about that statistic, and the cabinet secretary rightly said that the figure is still far too high. However, it was deeply concerning to read earlier this week about a report from the respected organisation the Centre for Economics and Business Research, whose regrettable prediction is that unemployment in Scotland will be higher than that in the rest of the UK at the end of the year. The prediction, which I certainly hope is wrong, is that the figure could remain higher until 2016. Although it was right to welcome the reductions, we must keep our eyes firmly on the ball and we cannot have a shred of complacency from any party in the chamber.

I want to discuss some of the things that the Scottish Government has done. As the cabinet secretary outlined fairly eloquently in his speech, the Government has done some good work. Certainly, the Conservatives would not deny that some very good work has been done. We approve whole-heartedly of the small business bonus—we pushed for it to be accelerated when it was first introduced. We think that the appointment of a Minister for Youth Employment is a positive move and we support it. We think that the focus on exports is absolutely correct. Although we did not support the recent budget as a whole, I certainly approved of the increase in funding for Scottish Development International, which was a critical measure.

It was good to hear good news on exports. Of course, we must be nervous about that, too. Although we have had success, and although we do not really compete on price as a country and therefore have to compete on quality, the move of sterling against the euro and the dollar in the past couple of months is a cause for concern. Sterling is now 3 per cent higher on a trade-weighted basis against the euro than it was in February and it is projected to continue in that direction, because we are seen as a safe haven.

There are positive points, but my critique of the Scottish Government is that it is not using every lever at its disposal to try to move the economy forward. That is the yardstick by which the Government has asked to be judged. In my view, as we have said already, the cuts to college funding were definitely a step backwards at a time when youth unemployment is so high. At a time when the construction industry is struggling hard in Scotland, the cuts to the housing sector, which were addressed in the budget debate, were a mistake. As I said at length in the chamber, I feel that the retail levy, which makes Scottish retailers less competitive than those in the rest of the UK, was a backward step that sent out the wrong signal.

Where would the money that the member wants to put into colleges and housing come from?

For the best part of a decade, we have been up front about the fact that we would, for example, take Scottish Water out of public ownership, which would save about £100 million a year or more in capital funding. The capital part of the college sector would be covered by that, as would housing, which, by its nature, entirely involves capital funding. That is just one example. We have given others, but that is one that gives a pretty strong answer to the member’s question.

Following Mr Mason’s intervention, Gavin Brown has argued for capital funding for housing, and I can see his argument, but college funding is resource funding, and he has not told us where that money would come from. The retail levy is resource funding, so that does not provide us with an answer either. Using Mr Brown’s numbers, my calculations suggest that he is still something like £70 million adrift. It would be helpful to have an answer to the question of where the money would come from.

In our manifesto last year, we said that we would change the criteria for concessionary travel, which we felt would save about £40 million a year. We never proposed to bring in free prescriptions, and we could probably save £37 million a year in that regard. We have given some pretty clear numbers all the way through the debate, and have not shied away from the difficult decisions, unlike the Scottish National Party.

One of the points that concern me the most is that, having brought in a tax—the retail levy—that will make us less competitive than the rest of the UK, the Scottish Government now wants to bring in another one. It wants to bring in an end to empty property rates relief—almost an end; it will be set at 10 per cent. It proposes to bring in that measure without any form of impact assessment or consultation whatsoever. The measure has not proved to be successful elsewhere—indeed, the Welsh Government is reviewing the policy as we speak, and its consultation made it extremely clear that the measure had not been successful. Further, not even the Government’s documents estimate that it will put any properties back on the market. Last week, the First Minister claimed that the measure would put 5,500 properties back on the market but, if he had read his bill and his Government’s documents, he would have realised that 5,500 is the number of properties that would be due to pay the tax, not the number that would come back on to the market. For those reasons, we do not think that the Government is using every lever at its disposal.

I move amendment S4M-02808.2, to leave out from “supports” to end and insert:

“believes that the Scottish Government’s actions do not back up its claim to be prioritising long-term sustainable economic growth for Scotland; regrets the Scottish Government’s decision to cut college funding at a time of high youth unemployment; regrets the Scottish Government’s decision to cut spending on housing at a time when construction faces a very difficult time; believes that introducing a £95 million raid on Scottish retailers at a time when retail in Scotland is struggling is mistaken; calls on the Scottish Government to rethink its proposal to reduce substantially empty property rates relief, which will act as another brake on growth; welcomes measures taken by the UK Government, including the additional cut in corporation tax, which will mean that, by April 2014, the UK will have a 22% corporation tax rate; welcomes the £20 billion National Loans Guarantee Scheme to get cheaper loans to businesses; welcomes the £1 billion youth contract, which will provide 40,000 work places in Scotland, and welcomes the recent announcement to locate the corporate headquarters of the Green Investment Bank in Edinburgh.”

We now come to the open debate.

15:28

I am pleased to have been called to speak in this important debate. As we have heard, the SNP Scottish Government is absolutely committed to driving forward sustainable economic growth in our country and to promoting investment and jobs. The Government’s economic strategy is, as we know, underpinned by a number of strategic priorities. One key element is the establishment of a supportive environment for business. Indeed, as far as small business is concerned, we have seen the introduction of the small business bonus scheme, which, having heard the debate earlier involving the Labour front bencher, I would say has been an absolute lifeline for small businesses in these difficult times—more than 80,000 small businesses across Scotland have benefited from that flagship policy, which was launched by the SNP Government. For many small businesses, it has made the difference between being able to stay open for business and continue to employ people and having to close.

Ken Macintosh rose—

I have absolutely no idea how Mr Macintosh can take a contrary view, but I see that he wants to attempt to explain his confused position.

Does Mrs Ewing believe that the policy has increased growth or improved employment?

I thank Mr Macintosh for his intervention, but I do not think that it helps to make his position clear. What I have said and what is very clear to small businesses throughout Scotland is that for many of them the rates relief scheme has made the difference to their ability to stay open and continue to employ their staff. In itself, that contributes to growth in our economy.

Not only the small business sector has benefited from the Scottish Government’s actions, because the Government has committed to investing in growth sectors and opening up key international markets to Scottish companies, as the cabinet secretary said in his opening remarks. We can see the results of such activity in our tourism industry, our extremely successful food and drink industry and in our life sciences industry, to name but three. All three of those industries are major success stories for Scotland and we should be proud of all the hard work that has been done to secure continued growth in those sectors.

In preparing for the debate, I came across many statistics, but one that was particularly interesting and stuck in my mind was a figure that the Scotch Whisky Association provided that pointed out that Scotch whisky exports now contribute more than £134 per second to the United Kingdom balance of trade, which is indeed a staggering statistic. Earlier, during rural affairs and the environment question time, we heard about the importance of the food and drink industry and about the success story in relation to increasing exports, at just under £12 billion at this point. At the same time, we see the continuing success of Scottish Development International and others in attracting new investment and jobs to Scotland.

The member just quoted a figure from the Scotch Whisky Association and referred to the whisky industry’s great export results. What is her analysis of the SWA’s report on the effect that minimum unit pricing will have on whisky exports?

I thought that the member now supported minimum unit pricing, but perhaps he is taking a different position from the rest of his group. In the years to come, we will continue to see the whisky industry’s concern about the punitive rate of excise duty that the member’s Government in London imposes on a key industry.

On where we are in securing investment for Scotland, the cabinet secretary referred to Gamesa’s hugely significant decision to come to Leith. There was a lot of competition for that investment, but Gamesa chose Scotland. What a vote of confidence in Scotland, particularly at this time. Of course, that followed Samsung’s equally important decision to invest in Fife. At First Minister’s question time today, we heard about BASF’s important decision to invest in the Western Isles and bring jobs there. As the cabinet secretary said, the position is not by any means all doom and gloom.

We could of course do more if we had the powers and were not operating with one hand tied behind our back. For example, the construction industry is crying out for further capital investment. We proposed 36 shovel-ready projects that could be started now, which would require about £300 million of capital advance and would create about 4,000 jobs, and what did we see about it from the London Government in the Queen’s speech yesterday? Absolutely nothing. That is a scandal. It shows that if decisions are taken about our economic life outside our country and we have no say in decisions on resources, we will not realise the potential that we could had we the powers of a normal independent country. If key decisions—for example, on the VAT rate on tourism and our fuel taxes, which are the highest in Europe—are taken outwith Scotland and we have no say over them, we do not reap the best dividend. The sooner that Scotland reclaims all the powers that we need to promote growth in our country, the better for our economy.

15:34

I welcome this debate and note that all political parties here and in London are now talking about the need for growth. However, there is no use talking about the need for growth if particular Governments are imposing policies that impede it. I shall talk first about the UK Government, because its actions still have a massive influence on what happens in Scotland.

The UK Government’s focus has been the causes of the deficit. A lot of political capital is still being made by the UK Government and the Scottish Government out of that subject, with the last Labour Government getting the blame. It is important to state from the outset that it was not fiscal laxity that caused the crisis. The budget deficit that so many people are worried about is the result of the financial crisis, not the cause of it. If the Tories or, indeed, the SNP doubt that, I remind both parties that they agreed entirely with Labour’s spending limits before 2008. In fact, I seem to remember the SNP wanting far more spending than Labour was carrying out.

More fundamentally, we must look at the consequences of trying to reduce the deficit—or aiming to reduce it too fast, because that is what we are basically living with now at a UK level. Many commentators who are not particularly on the Labour side of the political divide are now saying that the Government in London has fundamentally got that wrong and that it is implementing policies that are counterproductive from the point of view of reducing the deficit and bringing about growth.

Just yesterday, I was struck by the assertion by a Tory former adviser to Norman Lamont, when he was chancellor, that the UK Government’s fundamental mistake was to try to reduce the deficit too fast before growth had been achieved. He contrasted that with what happened in the 1990s.

I was struck also by the words of Martin Wolf in the Financial Times yesterday, when he said:

“Fiscal tightening does not improve outcomes in shrinking economies. Thus, austerity is merely begetting more austerity.”

I note that the managing director of the IMF, and the April review of the National Institute of Economic and Social Research, both carry a similar message, which is that all the budget cutting is merely leading to increased deficits and less growth. There is a strong body of opinion now, not particularly on the left of politics, that the UK Government has got it wrong. We are living with the consequence of that in Scotland.

At UK level, the Labour Opposition is showing the way with its emphasis on reducing VAT, bringing forward infrastructure investment—especially in housing—and having a well-thought-out and costed jobs plan. That is the model that we need in Scotland, too.

Turning to the Scottish Government—

Will the member give way?

I am exactly halfway through my speech but I had better give way since I have been criticising the Conservative Government.

I am very grateful.

The member wants to reduce VAT. To reduce it to, say, 17.5 per cent would cost about £12 billion. Does he think that that money should be recouped through an increase in tax or an increase in borrowing?

The member completely fails to understand the basis of my argument. One of the fundamental problems is lack of demand in the economy. If we can reduce tax in a targeted way and boost growth, that will help the deficit in the long run. In a sense, the member’s intervention encapsulates what is wrong with Conservative, and indeed the coalition Government’s, thinking at Westminster.

I welcome much of what the cabinet secretary said about renewable energy in general and Gamesa in Leith in particular. However, where is the Scottish Government’s comprehensive jobs plan? Where is the Scottish Government’s action on the most important infrastructure element of job creation, which is housing? Where is the Scottish Government’s action on procurement?

To deal briefly with those three topics, we are all concerned that the projection for Scottish unemployment is that it will rise for the next four years. Gavin Brown mentioned the projection that unemployment in Scotland will be beyond the UK level by the end of the year. We desperately need a finalised strategy, particularly for youth employment. I welcome the fact that a dedicated minister has been appointed for youth unemployment, but the finalised strategy is nowhere in sight, notwithstanding a number of smaller announcements in that area.

In housing, we welcome the increases late in the budget process. However, from the Scottish Government’s point of view, the simplest way of bringing about a big jobs boost would be to put more money into housing. As Ken Macintosh mentioned, 30,000 construction jobs have disappeared in the past year. The number of construction jobs is still falling, and housing investment would help the economy in the most effective way and would fulfil an essential social need.

Finally, where is the action on procurement? I know that a bill has been promised, perhaps for next year, but we need action now, particularly to help SMEs. We need a simplified procurement process. The business gateway needs to give advice to SMEs so that they can come together to bid for contracts. Contracts that are too large and which therefore exclude SMEs need to be disaggregated. Where disaggregation is not possible, SMEs need to have the opportunity to get subcontracts. I do not know whether I have time to quote from—

You do not.

Therefore, I conclude by merely referring briefly to the Jimmy Reid Foundation report on procurement, which indicated that the Government could implement European Union directives far more flexibly and in a way that helped SMEs and the Scottish economy in general.

15:41

I am pleased to speak in the debate, because few of the subjects that are debated in the chamber are as important, in these difficult times, as the Scottish Government’s growth strategy. Within the limited powers that are available to it, the Scottish Government is doing its utmost to shelter Scotland from the worst effects of the Westminster Government’s disastrous austerity policies—although perhaps they are not disastrous but are doing what they are designed to do, which is to deliver austerity—and is doing so with some success.

That success is remarkable, given that it comes in the face of most savage cuts to our budget, particularly our capital budget, which has been cut by 32 per cent. It is also remarkable because we lack the powers of any normal country, which means that we are constrained in what we can do. We lack the borrowing powers and the full fiscal levers that would allow us to do much more. Evidence for that success lies in our unemployment rate, which is currently below the UK level, and our employment levels, which are higher than those for the UK.

Will the member give way?

Not at the moment, but I will do presently.

It also lies in the fact that, when we become independent, the Organisation for Economic Co-operation and Development would place Scotland in sixth place in its prosperity ranking, whereas the UK would be in 17th place. Our GDP per capita would be 15 per cent higher than that for the rest of the UK. More evidence for the remarkable nature of the Government’s success is the fact that Scotland has been in fiscal surplus for four out of the five years to 2010, whereas the UK was in deficit for each of those years.

The stats that the member gave on unemployment were correct and he says that that is evidence that the Scottish Government is doing a great job. If the UK unemployment rate were lower than the Scottish rate—as it has been for most of the past year and as it is predicted to be—would that mean that the Scottish Government was doing a bad job?

Mr Brown is employing a bit of sophistry. The comparison is unequal, given that the Scottish Government lacks the powers that the UK Government has. Let us make the comparison once we are independent.

I was glad to hear what was almost some humility from Mr Brown, because it should be a matter of shame for the Tories, and the Lib Dems, that the UK economy has gone back into recession. They have been warned of that risk repeatedly, but they have ignored all the advice that they were cutting too quickly and too deeply and that if they did not produce growth, the fiscal situation would worsen in the face of a shrinking economy. It is far from the case that UK borrowings are diminishing—they are increasing—and it is far from the case that the Tories and the Lib Dems are safeguarding the UK’s AAA rating; they have been warned that that, too, is under threat.

In contrast, the Scottish Government is following a path of long-understood economic wisdom: in times of recession, Governments should accelerate and increase capital spending, which they will recoup from increased taxation revenues when growth returns. Like all great truths, Keynesian economics is, at its core, very simple—in fact, it is so simple that it seems strange, to say the very least, that neither Mr Osborne nor Mr Cameron seems to understand it.

Despite the highly punitive cuts that have been made to our budget, the Scottish Government has continued, and will continue, to invest in infrastructure projects, such as the new Forth road bridge, that are creating jobs and improving infrastructure as part of the infrastructure investment plan. That plan commits £60 billion to a long-term programme of infrastructure investment up until 2030, and it is the provision of that long-term certainty that will help to secure jobs and build a platform for a more prosperous future.

We will continue to invest in housing and we will build 30,000 affordable homes during this session of Parliament. We are supporting that with £710 million of expenditure over the next three years. Before I hear the old broken record about whether that is affordable housing or social housing and what the exact definition is, I say that a house is a house is a house.

We will continue to pursue our economic opportunities in areas such as renewables, which will create at least 40,000 jobs by 2020 and many more beyond that, and we will continue to support that new and exciting industry with investment such as the £70 million national renewables infrastructure fund. If we had borrowing powers, we could do much more, investing in more infrastructure to support jobs now and improve our future prospects.

If we had taxation powers, we could do still more to increase the competitiveness of Scottish businesses.

Will the member take an intervention?

The member is in his last minute, Mr Macintosh. I am sorry.

I apologise to Mr Macintosh. I would have been happy to take the intervention, but the Presiding Officer must preside.

If we had taxation powers, we could cut VAT on tourism, for example, to increase the competitiveness of our tourism industry. We could cut VAT on housing and building repairs, maintenance and improvements to create jobs and improve the quality of our built environment and our housing stock.

I would dearly like to hear from those in the dependence parties exactly what their economic plan is, beyond visiting more cuts on this disunited kingdom.

15:47

We welcome another debate on the Scottish economy and, in particular, the growth strategy. As a Highlands and Islands MSP, I very much welcome the 90 jobs that were announced today for Lewis. The Western Isles have the lowest average wage rate in Scotland and Moray has the lowest average wage rate for mainland Scotland. Against that background, the new jobs are very welcome.

It is always constructive and interesting to compare our performance against economic indicators with that of the rest of the United Kingdom, other EU countries and the G20. However, rather than focusing on what is best for Scotland and what can be learned from elsewhere, our debates on the economy tend to become nationalist and divisive, as we heard from Mike MacKenzie and Annabelle Ewing, at a time when people across Scotland do not really care whether something is a Westminster or a Scottish Government economic initiative, but just want jobs, opportunities, support to start a business, support to stay in business, training, education opportunities and an occupational health service to support staff through illness, along with other pro-business approaches.

I say to Mike MacKenzie that, when John Maynard Keynes wrote “The General Theory of Employment, Interest and Money” in 1936, he was living in very different times from those in 2012.

Mike MacKenzie rose—

Mark McDonald rose—

For a start, international competition is quite different. If Mike MacKenzie wants an economics lesson, he should consider the time at which Keynes’s theory was indeed exceptionally successful.

Mary Scanlon is right to say that the world was a very different place in 1936, when we had come through the great depression. Is she aware of the work of Paul Krugman, which shows that the recovery from the great depression was quicker than has been the recovery under the UK Government at present?

I just said, I think, that the recovery in 1936, on the basis of Keynes’s general theory, written in 1936—he was of course a member of the coalition Government through the war—was very different from the recovery today. Maybe the member did not hear that. I think it was fairly clear.

As joint convener of the cross-party group for Scotch whisky, I was drawn to the motion’s reference to the “growth sector” of “food and drink”. That sector is performing exceptionally well; indeed, I listened to what Richard Lochhead said at question time and welcome what is happening in that respect.

Nevertheless, it is worth noting that whisky accounts for 80 per cent of all Scotland’s food and drink exports. Although that is very welcome, I note that it accounts for 99 per cent of food and drink exports to Singapore, 90 per cent of such exports to the United States of America and 72 per cent of such exports to China—and before Mr Swinney jumps to his feet I should tell him that I am going to talk about salmon. Given that Scotland has products of such fabulous quality, we should examine why whisky accounts for 80 per cent of food and drink exports and perhaps focus on other opportunities. That said, last year’s 23 per cent increase in whisky exports is obviously incredibly helpful to the economy.

I also welcome exports of Scottish salmon to markets in China and elsewhere and the Scottish Government’s support for a sector that provides sustainable jobs in remote Highlands and Islands locations. Indeed, such developments are particularly welcome, given the reduction in demand across the European Union that Gavin Brown referred to. Whisky not only supports jobs but makes an enormous contribution to our tourism sector and has truly focused on energy efficiency and renewable energy. We should all welcome the building of new distilleries such as Ardnamurchan’s Adelphi, where the creation of 10 permanent jobs will be a huge boost to the local economy; mothballed distilleries being brought back to life; and production capacity increasing at several other distilleries.

It is worth noting that over the past two years growth north of the border totalled 1.4 per cent, compared with 2.8 per cent for the whole UK. Moreover, with regard to the 0.2 per cent reduction in UK output, it should be pointed out that as we do not have the figures for Scotland we cannot make a like-for-like comparison. As John Swinney made clear, that figure will be available in July. Things could be looking good for Scotland in the first quarter of 2012, but we do not know yet.

According to the briefing provided by the Scottish Parliament information centre, average forecasts for the Scottish economy for 2012 have been revised downwards since January’s economic indicators, while IMF growth forecasts for the UK have been revised upwards. There is a sharp contrast between the projections for the UK and those for Scotland.

You must close, please.

I am just about to, Presiding Officer.

Finally, the Scottish Government should welcome the measures that have been introduced to tackle tax evasion and avoidance, as they will not only deal with those who cheat and find ways of not paying tax but bring in more revenue.

15:53

A little under 18 months ago, on 24 January 2011, an article appeared on the BBC news website stating:

“Aberdeen is the British city best-placed to grow out of the economic downturn”.

That was according to the think tank Centre for Cities and its “Cities Outlook 2011” index, which

“found that Aberdeen had the best growth prospects”.

Just two months ago, The Herald published the encouraging news that

“Santander is looking to further expand its presence in Scotland and is targeting growth in Aberdeen.”

According to that report, Kevin Boyd, divisional director at the bank

“was keen to boost the bank’s presence in the north-east during 2012”

and had said:

“There is a great opportunity in Aberdeen as there is still a boom there. We have been providing support from the central belt up until now but it is difficult to get into deals when we are not up there all the time ... So as well as a little bit of organic growth in the support staff for the central belt Aberdeen will be the next beachhead for us.”

That is welcome news for the north-east.

Moreover, on 26 March, a Press and Journal article said:

“Aberdeen was the only major city in the UK to grow its economy during the recession, according to a report published today.

The Granite City outperformed both London and Edinburgh, the heartlands of the country’s financial sector, thanks to the continued strength of the oil and gas industry.”

Supportive comment has come from Tom Smith, the chairman of Aberdeen city and shire economic future, who said:

“It is vital that both the Scottish and UK governments understand our economic significance and support us in building on this position of strength by developing the right infrastructure that will ensure we continue to attract, retain and develop the necessary skills, businesses and investment to secure our long-term future.”

Members will hear more from him later in my speech.

Those quotations demonstrate that Aberdeen has a fundamental role to play as a powerhouse of the economy not just of Scotland but of the UK, for as long as we remain part of the wider UK economy. There are a number of other local successes across the north-east. The Rowett institute of nutrition and health has been given £10 million of funding for health-related research. Dundee has been named a hub for the rapidly developing renewables sector. Investment of £20 million is being made in life sciences companies, including investment to help Antoxis in Aberdeen with its research in the fight against Alzheimer’s.

There are high-quality food and drink products across the Aberdeen area, including those from Brewdog, the independent brewer in Fraserburgh, which makes 80 per cent of its turnover from overseas sales, as was highlighted to us at the Finance Committee just yesterday morning. Deeside and the Cairngorms are one of Scotland’s six key tourism locations and will develop a destination plan to help to attract people to the area. The Banffshire Coast Tourism Partnership will also look to attract people to the area. The north-east has a lot going for it and we should celebrate the fundamental role that it is playing in boosting the economy.

However, a note of caution is being sounded. Today’s editorial in The Press and Journal says:

“After decades of inertia, Aberdeen looked on the verge of a new chapter of potential development and progress”

with

“Plans for the Aberdeen Western Peripheral Route ... an enhanced garden for the city centre”

and

“a new crossing over the River Don”.

It continues, however:

”Today, that potential progress has come grinding to a halt ... Scottish Labour leader Johann Lamont calls us a powerhouse of the Scottish economy, but her party seems unwilling to push it forward ... The transformational City Garden Project would have helped put a heartbeat into an under-utilised and disconnected city centre.

But despite far more people voting in favour of it than voted in favour of the new administration’s parties, its very future now looks in doubt ... It is to be hoped that it can be salvaged and other key developments pushed forward by this new administration. Otherwise, the city and its people will not be known as Ms Lamont’s ‘economic powerhouse’ but an area that continues to enjoy the trappings of individual wealth, but has very little to show for it.”

Tom Smith, to whom I referred earlier, has said:

“we do have concerns that Labour are opposed to some of the projects and initiatives ACSEF supports to drive growth in the economy and create jobs ... it is hard to believe that a political party are prepared to go against a project which secured a majority vote in a referendum. This brings both integrity and democracy into question.

The third Don crossing is part of the region’s transport strategy to deliver an integrated transport network that will reduce congestion and improve the use of public transport. It is also closely linked to any developments at the Haudagain.

It will be interesting to hear the new administration’s alternatives to these projects which are integral to the economic development of our city.”

There is a lot to be positive about in Aberdeen at present, but we cannot afford inertia in the north-east, given what we have heard about driving the economy forward. I implore the new administration in Aberdeen to think long and hard about the potentially serious and damaging consequences of cancelling some of the infrastructure projects that are vital to the future economic growth of the north-east and of the Scottish nation as a whole.

Mr Macintosh talked about the small business bonus scheme. When the Federation of Small Businesses says that that has been a lifeline, it means that if it was not in place, small businesses would have gone out of business. That would have meant less economic activity and more people unemployed. Mr Macintosh might wish to cast aspersions on the scheme, which has benefited 85,000 businesses across Scotland, but I suggest that what the FSB says demonstrates clearly that if the scheme was not in place, the small business landscape in Scotland would be in a very different place, which I would not want us to visit. I caution him seriously about considering any proposals to tinker with or undermine the small business bonus.

15:59

I welcome the opportunity to speak in the debate, which is extremely timely. As colleagues have mentioned, only a fortnight ago, we learned that the UK has officially entered a double-dip recession. Unemployment in Scotland is at an alarming level, and youth unemployment in particular is reaching record levels. Recent statistics show that, since 2007, Scotland’s long-term youth unemployment rate has risen by more than 1,000 per cent.

We know that immediate action is needed to create jobs and stimulate growth. Instead, young people across the country who have secured employment have been hit by the UK Government’s welfare reforms, which means that 16 to 20-year-olds are no longer exempt from making national insurance contributions.

For those who are looking for work, there is the Scottish Government’s much-vaunted modern apprenticeship scheme. That scheme is welcome, but we must ensure that any such schemes are focused on positive outcomes.

I am glad that Ms McTaggart has mentioned the modern apprenticeship scheme. I, too, hope that there will be positive outcomes, unlike those from some of the schemes south of the border. Why did Ms McTaggart vote against modern apprenticeships in the recent budget?

I have been led to believe that I was not here and did not—[Interruption.]

Well, your party did.

I will carry on.

It is not enough simply to repeat the 25,000 modern apprenticeships mantra, as the Scottish Government has been in the habit of doing. What do those apprenticeships consist of? What skills are taught? How long do they last? Crucially, where do they lead? Young people and their parents have raised those queries on the doorstep over the past months.

Organisations such as Barnardo’s Scotland have called for a maximum waiting time for young people to get access to the opportunities for all programme. I whole-heartedly endorse that idea. To ensure that apprenticeships provide a positive destination for our young people, we must ensure that there is a clear and transparent mechanism for monitoring them. Much of the correspondence that I have had with Skills Development Scotland shows that it does not track the long-term progress of apprentices following the completion of their scheme. That must change if we are to be certain that the schemes are making the positive impact on young people’s lives that they deserve and which we expect.

It would be remiss of me to omit from my speech the concerns about further education that many of my constituents have brought to my attention. More and more young people are facing a catch-22 situation. With the daunting prospect of unemployment on the one hand and swingeing cuts to local colleges on the other, they are left unable to find a job or gain a place on a college course that will equip them with marketable skills. Now, more than ever, further education has a vital role to play in Scotland’s move towards economic growth, but the Scottish Government’s cuts to the sector suggest that that has not been recognised. I note for the record that, through Labour-led Glasgow City Council, 16 to 24-year-olds will have the Glasgow guarantee of training or work.

It is not just youth unemployment that is affecting Scotland. The cabinet secretary’s motion mentions many sectors that are performing well, but it does not mention the alarming rise in the rate of female unemployment in Scotland, which, like the youth unemployment rate, is higher than the UK average. As a working mother of three children, I know just how difficult it is for people to ensure that their children are looked after while they are at work. The childcare factor plays a large part in many women’s lives as they look to get back into work. The Labour Party in Glasgow has already pledged to guarantee every child in the city 15 hours of childcare from the age of three—a move that could be worth up to £1,500 for every child. I have spoken to a number of parents who are both relieved and excited by that prospect, which they feel will make a big difference to their ability to secure and maintain employment.

I am pleased that Glasgow will continue to roll out employability programmes that train early years staff, which helps parents back into work. I urge the Government to endorse that approach and to encourage its take-up across the country.

As we look to rebuild and to encourage growth, it is imperative that we base our efforts on ethical and co-operative foundations. Many parts of the social economy and many social enterprises are growing year on year. Members will be aware that 2012 is the international year of the co-operative movement, and we should be striving to expand the co-operative model, particularly in the financial sector, where a drive to support and encourage credit union membership would be a huge boost to responsible banking. Credit union membership in Glasgow has risen by more than 20 per cent.

I hope that members agree with and will support Scottish Labour’s amendment.

If members need to hold lengthy conversations on matters of importance, those could perhaps be conducted at the rear of the chamber or even in the coffee room.

16:06

I welcome the opportunity to speak in the debate and to support the Government’s motion.

I contextualise our current position by saying, to paraphrase a famous Tory campaign slogan, that the UK Government isn’t working or, to be more precise, the UK Government’s economic strategy isn’t working. People could be forgiven for asking when the pain will end. If we are to believe Nick Clegg—although that is not a gamble that I would like to take—it could take six or seven years to balance the UK finances. I note that no Lib Dems are in the chamber for this important debate. Nobody can deny the need for deficit reduction, but it must be done over a realistic timescale. That is not happening.

There is little good in austerity if it creates a lost generation of young people and a society in which the poorest are paying proportionately more than the richest. Dogmatic austerity is in danger of killing rather than curing the economic patient. The Scottish Government’s strategic priorities are clear, and what is also clear is how much more Scotland could do—I agree with Annabelle Ewing—if it was independent. If the full range of economic levers was available to us, we could use those powers to improve our circumstances, as our independent neighbours in Scandinavia do.

However, with the limited powers of devolution, the Scottish Government has proved its worth in the teeth of recession. It may be disputed by opponents, but it is true and factually based to say that Scotland’s recession was shorter and shallower than the recession in the rest of the UK. We had five quarters of recession as opposed to six in the UK and the decrease in GDP was 5.9 per cent as opposed to 7.2 per cent in the UK.

The UK economy has contracted by 0.2 per cent in the first quarter of 2011, which has pitched us into a double-dip recession. However, as the cabinet secretary identified, Liz Cameron seems confident that, when the first quarter figures for Scotland are produced, those will paint a more positive picture.

As I said, I fully support the Scottish Government’s motion, but I want to add the textiles sector to the list of sectors that is cited in it. Dr Lena Wilson confirmed in her evidence to the Finance Committee yesterday that the textiles sector is experiencing strong growth in demand, particularly from emerging markets such as Brazil, Russia and China, and from traditional markets in the US and Europe. I look forward to the Minister for Youth Employment visiting Hawick next week to see for herself the pioneering Scottish Borders knitwear group training association, which has pooled apprenticeships in an effort to meet emerging skills shortages and skills gaps arising from such strong growth in demand.

At the Finance Committee yesterday, we also heard from Philip Grant, one of the Lloyds Banking Group’s senior executives. He stated that not only is the debate on independence helping to focus people’s minds on Scotland’s economic fundamentals, but that

“There are parts of the world where people are getting interested in Scotland again and there is maybe some advantage in that.”

Does the member agree that there is serious cause for concern in relation to the proposed cuts, on which there is only a 30-day consultation period, to Heriot-Watt University’s textiles department? Does he agree that it would be very useful if the cabinet secretary could give some backing to the concern that has been expressed about jobs in the Borders and about the future?

I am happy to add my support; indeed, I signed Ms Beamish’s motion on the subject. Although it is for the university to determine what it does with its provision, now is the wrong time to be cutting back provision in textiles when there is such strong growth in the demand for those skills.

Professor Jim McDonald was also optimistic on a number of fronts. He cited the fact that 50 per cent of foreign direct investment in Scotland is being driven by Scotland’s strength in research and development. He also raised several positive examples of how Scotland is pooling research in a way that other countries are not and how we are attracting growth on the back of that.

In addition, Dr Lena Wilson stated:

“For a company like Samsung, the constitutional question makes no difference to them whatsoever ... I would say, broadly speaking, I don’t see any impact on our pipeline for investment and that’s not a political statement. It’s the truth.”

Some of the scare stories about the impact on growth of the independence referendum debate have greatly exaggerated the situation. I was hugely encouraged by Dr Wilson’s clear focus on growth companies, particularly those with export potential, including companies in the food and drink, engineering, financial services and textiles sectors. The committee had a very positive session yesterday—I hope that even Gavin Brown would accept that.

Ken Macintosh commented on Labour’s policy on the small business bonus scheme. I respect Ken Macintosh, but I think that Labour’s policy is confused, as has been laid bare today. Labour members may deride the scheme, but they do not seem to have the courage to say that they want to cancel the small business bonus. That will be of some concern to the FSB and its members, as Mark McDonald indicated. The uncomfortable truth is that it is a popular policy, and popular policies are often the right policies. As we have heard from other members—indeed, I have heard it from a number of businesses throughout the Borders—the scheme has protected jobs and has allowed companies to invest in their future in way that they would not otherwise have been able to.

Will the member take an intervention on that point?

The member is in his last minute.

I am in my final minute—I apologise to Mr Park.

Labour’s amendment refers to the Forth bridge contracts and implies that the use of steel from outside Scotland is a mistake. I would be grateful if the cabinet secretary could confirm this, but I understand that no bids were received from Scottish companies for that work and that there is now very limited scope within Scotland for fabricating steel of the kind that is needed for that contract. That happened on the UK’s watch, while we are still part of the union. I wonder whether Opposition members have any views on that.

16:12

Today, we are focusing on growth and we have heard of the many positive actions that the Government has been taking. Scottish Government policies have been very focused on growth and jobs, and, across the chamber, we all welcome that. Nevertheless, it is right to say that unemployment is too high, especially among young people, women and older people and in certain locations.

As we have just heard from Paul Wheelhouse, the Finance Committee had a very positive session yesterday at which we heard from three witnesses who were extremely optimistic and had a lot of good news to tell us about what is happening out there. Dr Lena Wilson from Scottish Enterprise spoke about targeting growth companies in, for example, South America, where Scottish Enterprise is developing offices. It strikes me that one of the real advantages of our leaving the UK would be that we would probably have a much better relationship with South America, as the UK is viewed with a considerable amount of suspicion there at this time.

We heard from Professor Jim McDonald of the University of Strathclyde, who spoke of the high regard in which Scottish universities are held around the world, especially in subjects such as engineering, where there are generally more jobs available than in other sectors. One of the disadvantages of our being in the UK was highlighted: the UK Government and the Borders Agency are doing their best to restrict the number of students who come here, despite the fact that we both earn money and gain friends around the world through their being here.

We also heard from Philip Grant of Lloyds Bank, who is widely quoted in the media today. He pointed out that Scotland’s raised international profile can be a huge advantage for trade and exports and that a larger share of the bank’s employees are in Scotland than the size of the population would merit.

At a more local level, the east end of Glasgow and I are seeing investment in the Commonwealth games. After the games, the village will become social housing and a care home as well as private housing. There are also new sports facilities, Dalmarnock rail station and the east end regeneration route, which is opening up the east end for businesses and jobs. A lot of positive things are happening.

It is true that we cannot always choose our priorities for capital expenditure. Among my priorities for Glasgow would certainly be housing, which has been mentioned, and primary schools, which have been sadly neglected by Glasgow City Council over many years. However, the reality is that we are sometimes forced to invest in areas that would not be our first choice. One of those is the Forth road bridge. As I have said previously, I remember the existing bridge being built. It is a huge disappointment to us all that we are having to replace it at this time. In no way could the decision to replace the bridge be called a populist one; it is being replaced because that is right and necessary. Everybody I meet, including in Glasgow, accepts that, but nobody would have wanted the project to happen. That gives the lie to the idea that the Government follows populist policies.

We need to consider procurement, which Malcolm Chisholm mentioned. The Finance Committee received good evidence on that from Jim and Margaret Cuthbert, who said that we could learn from other countries about breaking down contracts into smaller chunks so that SMEs and smaller organisations could take them on more readily.

Another project in which we have been forced to invest but which would not be a top choice is the Edinburgh trams. That is down to the crazy decisions of other groups, some members of which might be present today. As far as I am concerned, the money would have been better spent on housing.

To be fair to Gavin Brown, he told us how he would fund some of the things that he would like, such as housing and colleges, by selling off Scottish Water. My assumption is that, despite Labour’s movement on a variety of policy areas, it does not support selling off Scottish Water. Therefore, we are interested to hear from Labour about where the cuts would be made to pay for housing and colleges. My assumption is that the cuts would be to the health sector, because Labour members have not mentioned that.

We need to know what growth—if we have it—will lead to. The briefing for the debate from the Scottish Council for Voluntary Organisations states:

“for us, the economy is about much more than growth”.

It continues:

“At a time of austerity, growth is important, but growth should be a means towards supporting people and making their communities sustainable. Growth is not the end in itself. We need to make the economy more sustainable and meaningful to people and their communities.”

We do not have any Green members with us today, but I am sure that, if we did, they would say that growth does not stand alone and must be tied in with the environment and sustainability. We have received evidence from several bodies, including the Poverty Alliance, that growth must be inclusive. Growth can be a bad thing if it is overreliant on short-term debt or if it comes at the cost of damaging the environment or developing countries. The benefits of growth must be shared fairly.

The recent Sunday Times rich list shows the increasing gap between rich and poor, which has happened under Labour and the Tories at Westminster. Tax for the wealthy has been reduced—sometimes they do not even pay much tax at all—while those at the bottom have their wages frozen and their pension contributions increased. Many of us are supportive of the reasons behind today’s strike over pensions by some in the public sector. If the cuts were 1 per cent for those at the bottom, 5 per cent for those in the middle and 10 per cent for those at the top, we might accept that, but it seems that ordinary people are the ones who are suffering.

16:18

I welcome the opportunity to participate in the debate given the real issues that our communities face on unemployment and youth unemployment in particular. I am sure that those of us who have been going round doors on the campaign trail in the past four or five weeks cannot fail to have been struck by the number of young people in our communities who are clearly not in a college place or who find it difficult to get into employment and hold down a job. That has certainly struck me. I have had dialogue with a number of young people in different settings about the challenges that they face. Those are not just about trying to find a job, but about whether the public transport links are there to support them when they find one. If they find a college place, there are again issues to do with public transport and with whether they have the family infrastructure to support them and ensure that they make the most of it.

The challenges are not just about employment; they are about how we support our young people to get into employment and to sustain it in the longer term.

Gavin Brown’s amendment refers to colleges. The direction of travel of the regional college proposals will throw up some challenges. For example, Fife has two pretty large colleges in the south—Adam Smith College and Carnegie College—which are only 12 miles apart on the map, but which serve completely different communities. There is a severe and significant lack of transport connections for young people in the west of Fife to allow them to get over to central Fife. We need to take note of the challenges that young people face in that regard, given the regional route to college mergers—particularly in Fife, although I am sure that similar challenges will exist in other parts of the country.

A number of speakers referred to the proposed procurement bill. I look forward to that proposal coming to Parliament, particularly if it gives us more clarity. Over the years, many people have felt that we have played strictly within the rules with regard to European procurement regulations. However, as the Jimmy Reid Foundation report highlighted, there are things that can be done within the existing framework. In Wales, for example, a more significant emphasis is placed on value than on cost. That has had a positive impact on prime contractors, subcontractors and small businesses and on employment in Wales. That is certainly something that we could do, too—we should be learning ways of doing business from other countries.

We have spoken in the chamber today about the new Forth road crossing, but the stark reality is that the weighting given for cost was 92.5 per cent. I do not think that any public sector procurement contract that the Welsh Government placed would have had that level of weighting given to cost; employment opportunities and social aspects would be given more weighting.

There is a lesson that, without playing party politics, we can all learn from that process. I hope that when we come to discuss the proposed procurement bill, there will be consensus in the Parliament that the £9 billion-worth of goods and services that we procure every year in this country should not only deliver top-quality public services, but provide job opportunities for all our communities.

I want to focus on the opportunities that come from emerging industries, particularly renewables. I am fortunate to sit on the Economy, Energy and Tourism Committee as it undertakes an inquiry into the Government’s renewables targets. There is obviously a huge opportunity for us in that area and I believe that we are on the cusp of something very significant for employment, but there are challenges. I gave the committee the example of Tullis Russell, which is building an industrial biomass plant near Glenrothes. Despite the significant job losses that there have been in the construction sector, there is a shortage of skilled construction workers for that project. The contractors have been forced to bring in workers from overseas because we do not have the specific skills here. That is to do with the skills mix and not the nature of the work. We must ensure that our skills mix fits the needs of future job opportunities. We must tackle the real, live issue of unemployment with one eye on skills needs in the future.

That brings me on to apprenticeships and the global figure of 25,000, which is mentioned a lot. As John Swinney said in his opening speech, 98 per cent of our businesses in Scotland are small or micro in nature. With that in mind, it is really important that we find ways of ensuring that those companies—which I think most people would agree are the lifeblood of our communities, particularly fragile ones—can come together and benefit from apprenticeship opportunities. If we do not do that for the small businesses that bring in employment opportunities and boost local economies, there will be a long-lasting negative impact on what they can do and on our ability to meet skills needs in the future.

I welcome the opportunity to speak in this debate, but my six minutes went very quickly, Presiding Officer. It is time for me to sit down and be quiet.

Mr Park, I would have given you another minute.

I call Kenneth Gibson. Mr Gibson, you can have an extra minute.

16:24

Wonderful. Thank you, Presiding Officer.

I thank the Cabinet Secretary for Finance, Employment and Sustainable Growth for bringing this debate to the chamber. As many Scottish households continue to struggle during these difficult times, I can think of nothing more important than discussing the Scottish Government’s strategy to promote economic recovery and accelerate growth in Scotland.

As convener of the Finance Committee, I have had the opportunity to listen to a variety of experts and key stakeholders in Scotland, including representatives from a diverse array of organisations. As colleagues have mentioned, one of the people who gave evidence to us yesterday was Dr Lena Wilson, chief executive of Scottish Enterprise. A piece in The Scotsman on 10 April quotes her as saying:

“You’d all say the economy is the number one objective. Well, when you looked at what everyone was doing, it didn’t always look like that. There has been an absolute sea change in the last few years.”

The Scotsman goes on to say:

“Leadership from the top helps—she is full of praise for finance secretary John Swinney who, without much public fuss, has firmly directed all public bodies onto the priority of economic development. A good example, she says, came recently with salmon. A massive disease in Chile, one of Scotland’s biggest salmon competitors, had wiped out much of their stock. There was therefore a huge chance to upscale salmon production and clean up. The problem was planning. ‘We went straight to John Swinney and within a matter of weeks we had a salmon planning summit where he had every single head of planning for every local authority and salmon federation and salmon producers and made it clear about the intention.’ The planning issue got cleared.”

Professor Jim McDonald, Strathclyde University’s principal, also gave evidence to the committee. I quote from a piece about him in The Scotsman on 11 April:

“It’s understandable ... that companies have headed east in search of lower costs. But now, those same firms are realising that they need the expertise, research base and talent to be found in Scotland”.

The Scotsman goes on to say that, in March,

“Strathclyde won the competition to become the home of the UK government’s grandly titled ‘Offshore Renewable Energy Catapult’, another £50 million project to fund academics to bridge the gap between paper dreams and money-making energy projects. The way Scotland’s universities work together on all this gives the country an edge. ‘Our research pooling is the envy of Europe.’”

The piece also says that, according to Professor McDonald,

“Scotland also punches well above its weight in its top-quality research ... borne out by new figures showing that higher education research and development spending in Scotland is now 13.6 per cent of the UK’s, well ahead of its population share. ‘We have a scientific and engineering and technology research base that is among the very best in the world. It’s not us saying that, it is the statistics around academic performance—patents, publications, at the top end.’”

Professor McDonald says:

“A real key piece in this is leadership ... we hear the strong messages from the Scottish Government about partnership and focus.”

We have already heard about Philip Grant, who also gave evidence to the Finance Committee, and the optimistic messages from business. Mr Grant talks about 14 months of slow but steady economic growth in Scotland under the leadership of the SNP Government.

Having listened to that broad cross-section of opinion, I believe that the SNP Government is doing all that it can under the terms of the current constitutional settlement to achieve its stated goals of accelerating recovery, supporting long-term sustainable economic growth and boosting employment.

Yesterday, Mr Justin King, chief executive of Sainsbury’s, lambasted the Tory-Lib Dem coalition Government in London for fuelling uncertainty among already cash-strapped consumers, arguing that greater consistency in key Westminster policy areas would bolster consumer confidence. Mr King summed up the situation by saying:

“Unfortunately, what we have seen over the last couple of years is something that could not be described as a consistent pursuit of a clear policy that the consumer at large understands, whether that is a consistent tax environment, or a consistent rates environment.”

Will the member give way?

In a minute, Mr Brown.

The Scottish Government has protected universal services, kept university education free, frozen the council tax and worked with the Convention of Scottish Local Authorities to set aside £40 million to help 567,000 low-income Scots. Those measures have not only contributed to the development of a fairer society in Scotland, but boosted consumer confidence by providing greater certainty and stability at a time when household budgets are already stretched thin.

I have not forgotten Mr Brown—I will let him in in a second.

The Conservative plan to put 3p a litre plus VAT on fuel this autumn will only damage economic recovery. As for Gavin Brown’s concern at £95 million being redistributed within Scotland through the health levy, he seems remarkably unconcerned at the £3 billion that will leave Scotland in increased VAT payments over the same period—money going straight to the Treasury—not to mention money from fuel duty increases and public sector pension grabs and so on.

I find it strange that the member is quoting Justin King of Sainsbury’s, without acknowledging what Mr King said about the Scottish Government’s retail levy.

We must take everything in context. I have pointed out that the retail levy amounts to 3 per cent of the money that Gavin Brown’s Government in London is taking straight from the Scottish economy and giving to the Treasury. That does not include other things that have been mentioned. Also, the money from the retail levy is recirculated within the Scottish economy. Mr Brown must admit that his argument on the retail levy is a bit of a fig leaf.

It is important to remember that we have delivered those measures during difficult economic times and have secured £700 million in efficiency savings over three years. We also have an impressive record of legislative competence.

In December last year, when the Parliament responded to the chancellor’s autumn statement, I highlighted an OECD report that had been released that week, which warned that the UK was on course to slip back into recession. In March, the First Minister wrote to the UK Government reiterating our calls for increased capital spending. As per the Prime Minister’s request, he also provided a list of specific shovel-ready projects. However, with the UK in double-dip recession, still no ground has been broken on any of those projects because the UK has not provided funding, despite the fact that it is a matter of urgency. We heard yesterday from Mr Swinney that, if Labour had been in power, the cut to capital spending would have been £4 billion more than the one that the UK Government imposed.

Scotland suffers from a Tweedledee, Tweedledum approach from the UK parties. The members of this Parliament, all of whom are accountable solely to the Scottish people, are best placed to address the problems that Scotland currently faces, including the continuing need to bolster economic growth and recovery.

As we look to the problems that may arise in future—whether the need for economic growth and recovery, the need to address demographic change in Scotland or other issues that are related to fiscal sustainability—it becomes ever clearer with each passing day that the Parliament needs the real powers that come with independence if we are to address effectively the challenges that Scotland will face and ensure prosperity for our people.

I call Gavin Brown to wind up for the Conservatives. Mr Brown, you have a generous seven minutes.

Members: Ooh!

16:31

Thank you very much, Presiding Officer. I am not sure where to begin with that.

Let us begin with Mr Gibson’s speech. He is extremely persuasive and has definitely persuaded me of the error of my ways on the retail levy among other things, but let us examine some of the things that he came out with in his speech.

Mr Gibson said that he wanted more money for pensions. He does not think that what is happening on pensions is correct and says that the UK Government needs to put more money into them. He also wants more money to go into cutting fuel duty. He does not approve of the 3p rise, as I am sure many people do not, and says that we must put more money into stopping the rise from happening.

We heard earlier from other SNP members that we need to put more money into housing and ensure that we reduce VAT for tourism. We also heard only a couple of weeks ago from the Minister for Energy, Enterprise and Tourism that air passenger duty needs to be reduced.

Will Mr Brown give way?

I will give way in just a moment.

We also heard that we need billions of pounds for shovel-ready projects, need to reverse the cuts to welfare that are being introduced via the Welfare Reform Act 2012 and need to cut VAT for home improvements. That is to name only a few of the things for which SNP members called. On a quick calculation, in the course of an afternoon, they called for much more than £40 billion-worth of commitments on things that need to happen.

I played the game. I was asked how I would fund the measures that I called on the Scottish Government to take, so let us hear from Kevin Stewart—

Will Gavin Brown give way?

I will let Mr Stewart in first. Let us hear from him how the SNP will fund the £41 billion of commitments that we have heard about in the past two hours.

I point out that we are talking about those numbers throughout the UK and not only here in Scotland.

Mr Brown talked earlier about how he would fund some of his commitments, which would mean scrapping such measures as free prescription charges. That is not particularly progressive. We require all the levers of power to boost the economy, which would see increased taxation. One of the first things that I would scrap is Trident nuclear weapons. Will Gavin Brown comment on that?

With a quality intervention like that, it is a pity that Kevin Stewart did not get a generous seven minutes to make a speech, because I am sure that it would have been an absolute delight.

I return to some of the points that we have heard from a number of SNP members. I think that every SNP speaker mentioned shovel-ready projects. They all get a big tick for covering things that were in their briefing documents. They have all those shovel-ready projects, but they completely ignore the fact that, in the autumn statement, £0.5 billion of additional capital was added to our block grant over the spending review period and, in relation to the Caledonian sleeper funding, an additional £50 million was given to the Scottish Government. That money could not be used on the sleeper initially, so what did the Scottish Government decide to do with it? It gave the money to Scottish Water. If we genuinely had all those shovel-ready projects, why on earth did the Scottish Government not put some of the money into them? There are plenty on the list; it could quite easily have done so.

Mr Swinney looks as if he is about to intervene. I give way to him.

I am grateful to Mr Brown. I will assist him with the shovel for the hole that he is digging for himself. I confirmed to him at the Finance Committee the reason for the decision to allocate the money to Scottish Water. The Caledonian sleeper money is not a new sum of money that could be deployed on other projects, from which it could not be taken back at a later stage. It had to be lent to Scottish Water so that it can be deployed later on the Caledonian sleeper, to fulfil the conditions of Her Majesty’s Treasury. I am the last person who would want in any way to breach the commitments that we have given to Her Majesty’s Treasury.

If that was Mr Swinney’s best shot, I am feeling pretty nervous. He seems to forget that in our little exchange at the Finance Committee I asked him a simple question—did the Scottish Government consider or ask the UK Government about putting that money into shovel-ready projects? The clear and simple answer was no. A Government that had all those shovel-ready projects did not even consider that. If Mr Swinney wishes to reverse his previous decision, I will give him a second bite at the cherry.

I assure Mr Brown that there was plenty of dialogue with the United Kingdom Government, which resulted in the approach that the Scottish Government took. I come back to the point that I repeatedly make, and I make it because I want to try to ensure that Mr Brown does not mislead the public of Scotland. The money that was allocated for the Caledonian sleeper can only be allocated over the duration of the time for which the money is available for the purposes of the Caledonian sleeper investment. It cannot be spent on something other than that priority. We are simply using Scottish Water as an efficient and effective way in which to handle the financial arrangements around that resource.

I close on that by saying that I am happy to refer to the Official Report of our exchange at the Finance Committee. I will happily put that in SPICe, if that will help, as I know that the Scottish Government likes to do that. I am happy for members and the people of Scotland to judge that exchange on the terms on which it happened.

They will be queueing up at SPICe’s door.

Mr McDonald, enough.

Quite.

We heard the usual invective that we get in these debates about how the UK Government’s approach is too fast and too deep, but not a single member in this debate or any other has said what would not be too fast or too deep. How many years do members of any of the parties around us believe it should take for the deficit to be reduced? We have never had an answer to that question. How much additional spend do they believe ought to take place in each of the additional years while the deficit is reduced, and how would they pay for that? Would it be through extra borrowing or extra taxation?

Gavin Brown knows full well that, in the general election two years ago, Labour said that it would halve the deficit in four years. At that time, the economy was beginning to grow and unemployment was falling. If that plan had been maintained, that improvement would have continued.

I think that Mr Chisholm’s conclusions on that are simply wrong. What he ignores, and what was not happening at that time, is the high inflation that we have across the world at present, which is related to fuel prices and other basic commodity prices. Also, we did not have at that time the euro meltdown across the zone, which impacts on us, of course, as we do more than 50 per cent of our trade with those countries. He mentioned what he felt was working at that time, but I am pretty sure that it would not be having the same effect today, based on what has happened subsequently.

The Scottish Government needs to back its words with actions and use every lever at its disposal to help to grow the Scottish economy.

16:39

It is an opportune time to discuss the importance of growth over austerity, but it has been disappointing to hear from the SNP a list of unsubstantiated assertions in the place of evidence-backed argument.

Annabelle Ewing and Kevin Stewart suggested that only separation can deliver the levers of economic control that are necessary to make a difference. I fundamentally disagree with that assertion, and it illuminates the contradiction in the SNP’s position.

On the one hand, the SNP claims to be making a difference with its so-called plan MacB, which has apparently made the recession slower and shallower. On the other hand, however, it claims that it is prevented from making a difference because it does not have the powers to do so. Which is the true position?

That contradiction was illuminated even more frankly by Mike MacKenzie. He tried to claim credit for the Scottish Government’s success in making the unemployment rate lower than it is in the rest of the UK, but when he was challenged by Gavin Brown, who noted that the figures are often higher in Scotland than elsewhere in the UK, he said simply that that is nothing to do with the SNP. As an argument, that clearly makes no sense whatsoever, and I fundamentally disagree—

Will the member take an intervention?

I will make some progress first, and let members in later. I took so many interventions in my opening speech that I did not make the points that I wanted to, so I will do so now.

I believe that we can do so much more here and now, in a devolved Scotland, to build sustainable growth through promoting manufacturing, developing our skills agenda, using procurement through effective regulation and giving industry our political support.

Those who contributed to the Finance Committee’s debate have stressed how much could be done within the devolved settlement. The Joseph Rowntree Foundation highlighted skills, the WISE Group and others talked about employment and Colin Mair from the Improvement Service said:

“in the public sector, and particularly in local government, we tend to be focused on our services, which are what we think will have the beneficial impact. In reality, it is our employment capacity and not our services that might have the beneficial impact on people’s lives.”—[Official Report, Finance Committee, 18 January 2012; c 532.]

That is an important point. The UK Government has a target of shedding up to half a million jobs in the public sector, and the Scottish Government’s contribution in the past year—despite its talk of a growth in employment—has been to shed 25,000 public sector jobs in Scotland. Where, for example, is the proposed sustainable procurement bill?

Malcolm Chisholm and John Park mentioned the report from the Jimmy Reid Foundation, which highlights the millions of pounds that are leaving Scotland as big public contracts go to foreign firms. For example, the steel for the new Forth crossing is coming from China rather than from Lanarkshire. I respect Paul Wheelhouse’s intelligent and informed comments, but I did not understand his closing remark that the reason that we did not have that steel was somehow due to the UK Government.

Malcolm Chisholm’s contribution was particularly good. He reminded us not only that Government indebtedness was caused by the recession rather than being the cause of it, but that all political parties supported the levels of borrowing that we carried in that decade. I mention that because I believe that one of the reasons that austerity is failing to convince people in this country and elsewhere in Europe is that, as a policy, it appears still to be driven by financiers, or by politicians who are keen to win the support of financial markets.

Our country, more than many in Europe, has been too dominated by the financialised economic model, which essentially means that our economy is focused too narrowly on the financial sector. We need not only to rebalance our economy, but to reflect a wider set of values in our decision making.

Will the member give way?

Possibly in a couple of minutes, Mr McDonald. I will make some progress first.

That is certainly the message that is coming from our trade unions, our churches and the fair trade movement. It has been spelled out in books such as “The Spirit Level” and by organisations such as the High Pay Commission, which recently revealed in evidence to the Parliament that over the last 30 years, the top 0.1 per cent of earners have become substantially wealthier. It pointed out that in the past decade, the earnings of FTSE 100 directors have risen from 47 times to 102 times the average earnings, and concluded that excessive top pay is deeply damaging to the UK as a whole.

That message was also embodied in Oxfam Scotland’s humankind index, for which I welcome the cross-party support.

Mary Scanlon talked about how tax avoidance and evasion has become a feature of the Conservative agenda in the UK. I welcome that move; indeed, as I said in yesterday’s debate, we need a more open discussion about the relationship between the taxes that we contribute and the services that we enjoy and share.

The Scottish Government motion emphasises the importance of attracting inward investment. Of course, the First Minister is never happier than when he is reeling off lists of companies that are supposedly investing in Scotland—although I note that, six months too late, Doosan has been dropped from the script. However, he still refers to Amazon. Not only is that company associated with unwelcome employment practices but, as we have discovered, it is avoiding paying tax in this country. What does the cabinet secretary think of such practices? Has he written to or contacted Amazon to raise those concerns?

Perhaps even more worrying, among all the dodgy dealings that the First Minister seems to have enjoyed with Rupert Murdoch—

Members: Oh!

Well might SNP back-benchers squirm. One of the most unsettling reports was about the First Minister trying to lure News Corporation to Scotland with promises of lower corporation tax. Scotland as a tax haven for the unsavoury is not my idea of inward investment or sustainable growth.

In an attempt to return Mr Macintosh to the matter in hand, does he agree with me and the business community in the north-east that a move by the new council administration to shelve certain vital infrastructure projects will have grave dangers for the economy of Aberdeen and, indeed, Scotland? Will he undertake to speak to his colleagues in Aberdeen City Council to ensure that those projects are not shelved?

If Mr McDonald believes that the new garden planned for the centre of Aberdeen is a “vital infrastructure project”, I have to tell him that—from a distance, I admit—I fundamentally disagree with him. The people of Aberdeen face many problems that the new council will have to address, and I am very pleased at the new council that has been voted in—

Will the member give way?

No. Members have already had one go at this and I have addressed the point.

We need to rebalance the economy. That means having not just a more effectively regulated and reformed banking sector, but a reinvigorated manufacturing sector to create attractive, sustainable employment and make our economy more resilient. Indeed, we need only look at countries such as Germany to see the advantages in such a strategy.

Given how the SNP veers between its unsubstantiated claims of economic success—the so-called plan MacB—to expressions of economic helplessness such as, “We’ve done all we can—if only we had more powers,” I ask the cabinet secretary or his colleague Fergus Ewing to say in their summing up whether we still have a plan MacB. The reason I ask is that almost as worrying as the current second dip into recession are the economic forecasts that have been shared with us of our prospects over the coming years. Many colleagues in the chamber were present at the briefing at which the Royal Bank of Scotland suggested that there would be a continuing rise in unemployment.

There is a lot that we can do, but I am not convinced that the SNP is taking all the action that it can. We need wage subsidies; we need to do far more for the half of the population who are not going to university; and we need job-ready schemes, work experience and welfare reform. Instead of forcing people into dead-end, unfulfilling jobs, we need to give them proper support to get back into the workplace. Where is the Scottish Government’s equivalent of the future jobs fund? Perhaps after last week’s result in Glasgow the SNP will wake up and think about the importance that voters gave to Labour promises on, for example, the Glasgow guarantee that my colleague Anne McTaggart highlighted. In any case, given that the ministers were not paying much attention to Ms McTaggart’s speech, I ask them to answer her specific question about what is happening to reduce unemployment among women, which has shamefully risen over the 100,000 barrier.

My colleagues and I in the Labour Party have no problem with the stated intention of placing jobs and growth at the heart of policy, but there is little sign that that is happening. Let us seize the moment and follow the example of our French colleagues. Allez, les socialistes!

I call Fergus Ewing to wind up the debate. Minister, I would consider it a great favour if you could continue until 5 o’clock.

16:49

That should not be too difficult, Presiding Officer.

It is with great pleasure that I speak in a debate about growing the economy. Of course, growing the economy means creating jobs, opportunities and all the benefits that flow from growth. That is not only a worthy objective but, as members have pointed out, a means to an end; it is about having a fulfilling life and a rewarding career and being able to look after oneself and one’s family in the way that one wishes.

Growth is pivotal to this Government’s objectives and rightly runs through and permeates every one of its policies. Beneath the bluster, the colourful rhetoric, the overly negative criticism of policies by some of our opponents when it turns out that they support them, and the sturm und drang of the Opposition’s tone, what are we left with? Where are the alternatives? I do not know, Presiding Officer.

I will take a different tack. I spent the morning in Mr Chisholm’s constituency at the annual general meeting of the organisation that helps to promote the success of one part of the tourism business in Scotland—the cruise industry. I learned a fact that I suspect very few people know—I did not know it until this morning—which is that, in 2000, only 45,000 people visited Scotland each year through our manifold ports and the attractions that they offer around the shores of this country. The figure is now 318,000. In a decade, the little segment of our tourism industry that is cruise Scotland has got together and, without masses of money or Government support, it has worked with the Government and others and transformed the industry. In a time of recession, it has seen growth in the number of people coming to Scotland and the amount of money that is spent in Scotland.

I mention that not because it is hugely important to the overall scheme of the economy, but because one of the most important levers that we have in this country is the duty of all ministers to engage with Scottish society and go out and find out what it is up to, so that we can understand what is being done in our name, see the opportunities that are being created, and help people to achieve. It is not always about money; often, it is about practical arrangements. For example, where are the German-speaking tourist guides whom we need if we are to get more cruise liners from Germany, which is our second biggest market? How can we organise the luxury buses that those visitors want? That is the type of practical problem that takes up a lot of my time as minister, not the rather futile, high-level exchanges on who is right and who is wrong about the ebb and flow of macroeconomics.

If the time that I have for my short contribution permits, I will answer some of the points that have been made during the debate. However, first I will run through some of the levers we have that have not been focused on during the debate. For example, the account management system of Scottish Enterprise and Highlands and Islands Enterprise is run so that each company across all sectors in Scotland, not just the growth sectors, is allocated an individual, specific person to assist it to get advice from the Scottish Government’s enterprise network about how it can be helped. Every company that I have met that has an account manager values that resource, because the company itself does not have time to look up websites and keep abreast of every development in the manifold Government assistance that is available. Those companies need someone to help them to achieve growth.

The cabinet secretary alluded to growth in exports. The Scottish Leather Group Ltd of Bridge of Weir produces high-quality leather hides for most of the top marque cars in the world and has achieved almost £100 million of exports. Mary Scanlon and Gavin Brown made a number of sensible points, with which we agree, about the success of companies that export. Food exports have increased by 62 per cent since 2007—what an incredible achievement. There has also been a 50 per cent increase in whisky exports, and we heard about the success of the Scottish salmon industry with its quality recognition throughout the world. Individual sectors are seeing great success and they have the account management assistance.

Another lever that has been alluded to is SDI. As you know, Presiding Officer, because we were there together in New York—

Members: Oh!

I shall say no more, Presiding Officer. My lips are sealed. To spare your blushes, I should say hastily that we were there with several thousand others at the tartan day parade.

SDI does a marvellous job of selling Scotland throughout the world. At first hand, Mr Swinney, the First Minister, Mr Neil, Mr Lochhead and I are going out to other countries in the world and using SDI as a resource to bring back the goods for Scotland. My goodness, how we are succeeding in comparison with almost every one of our competitors. That is one of the levers that we have at the moment. By working with SDI, HIE and others, we have the capacity to increase this country’s economic success through inward investment, which leads to jobs, opportunity and success.

The cabinet secretary alluded to the success of manufacturing, in which there has been stupendous growth in recent years. One of the most positive conferences that I have attended was not in New York but in Dunblane. There has rarely been a conference at which the mood among the delegates—who, in this case, represented a range of exporting companies in Scotland—has been as uplifting as it was at the Scottish Manufacturing Advisory Service’s conference.

We are seeing tremendous success in the development of skills. John Park was quite right to mention the skills challenge. I agree that one of the key challenges that the country faces is to ensure that the skills are provided for the work that needs to be done. I have visited Carnegie College and I know what good work it does, along with Adam Smith College and all the other colleges and universities throughout the land. Last Thursday, I visited Nigg and saw for myself the skills academy that Global Energy Group has developed there. I saw the enthusiasm and commitment of the people who are doing a foreshortened apprenticeship in the hope of being part of a new and exciting industry.

As the debate has illustrated, we have some—although by no means enough—tax powers. The small business bonus scheme has been commented on. I thought that Annabelle Ewing made a characteristically measured speech, in which she set out that 85,000 people can testify to the fact that the scheme is helping businesses throughout Scotland. As Labour members said, 98 per cent of businesses are small businesses. If Labour members want to find evidence of what small businesses think about the small business bonus scheme, I suggest that they go out and speak to some of them, as I did last Friday, when I visited Dalcross Logistics in my constituency.

The minister said that the small business bonus scheme had given Scotland an employment advantage in comparison with other parts of the UK. Why has employment in small businesses gone down by 11.3 per cent in Scotland, whereas it has gone down by only 2.8 per cent in England, 4.5 per cent in Wales and 3 per cent in Ireland? Given that that has happened over the three-year period for which we have had that comparative advantage, it is clear that it has not led to more jobs.

We will simply have to agree to disagree on the statistics. It is absolutely clear that, were it not for the small business bonus, many of those who have received it would no longer be in business. That is undoubtedly the case. The member should go and ask some of the business owners in the Victorian arcade in Inverness in my constituency what they think about the prospect of running a small business without the help that the Scottish Government has provided.

I found it slightly surprising that, instead of the constructive critique that we might have expected the principal Opposition party to provide, we got sustained condemnation of a number of our policies. As well as the small business bonus scheme, the enterprise areas and the public health levy were the subject of sustained criticism from Mr Macintosh. It emerged, however, that although Mr Macintosh was condemnatory about each of those policies, he supports all of them. Far be it from me to give advice to the official Opposition in this Parliament, but would it not be an idea for Labour to put forward some alternatives that it believes in, rather than ones that, it turns out, it does not believe in? I urge Labour to think again.

Will the minister take an intervention?

Well, all right. Why not?

You will have to be very quick.

Did the minister hear our comments on sustainable procurement, the skills strategy and the many other policies that we wish the SNP to proceed with?

You have 30 seconds left, minister.

I wish that I had longer; I am sure that I could fill in another hour or so, if members were patient.

We in Scotland face many challenges, which we are tackling with the powers that we have. If we had the full powers of a normal country, we would be able to achieve the success that this country so richly deserves.

It is a pity that the minister forgot the old adage of what goes on tour stays on tour.