02 December 2010

S3M-7159 The Scottish Economy

Scottish Parliament

Thursday 02 December 2010

[The Presiding Officer opened the meeting at 09:15]

The Scottish Economy
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The Presiding Officer (Alex Fergusson): Good morning. The first item of business is a debate on motion S3M-7159, in the name of Jeremy Purvis, on the Scottish economy.

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The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

I start by delineating some of the areas of agreement in the debate, of which there were a substantial number. There was broad agreement that we can and must do better, that we can and should export more and that we need a structure that provides support for business, which is probably segmented into support for large growing companies, mid-range growing companies and small start-ups. There was also broad agreement that we need a banking system that provides transaction services for business and private individuals, provides access to small-scale borrowing to keep the economy going, and—this is fundamental—has local presence. Those are the fundamentals.

The Liberals have brought forward a useful debate that at least brings forward a proposal that is open to analysis and discussion. That is perhaps in stark contrast to the blank-sheet-of-paper approach to policy formulation that the Labour Party takes.

Jeremy Purvis correctly said that the Scottish economy is a tiny economy in a fast-growing world. I do not think that that is beyond a fact—it is simply true—and it highlights an important thing. Tiny and small economies take an approach that is different from that which has to be taken in large economies. Small economies can be fleet of foot and can respond more rapidly to changes and opportunities.

Jeremy Purvis suggested that we should see exports rise by 50 per cent over the next session and by 100 per cent over the next 10 years. We all wish that parameter to move ahead over those periods of time. He also mentioned China and India. It is likely that they will be partners for us rather than competitors. That is an important point. Small countries do not operate in isolation from the broader world economy or from the major and growing players in the world. That is why it is so important that Government ministers have spent time in China and India with Scottish companies that are successfully exploiting the opportunities in those countries.

Robert Brown: Will the minister help us by defining the extent to which the Scottish economy is distinct from the UK economy, particularly in light of the Irish experience?

Stewart Stevenson: It is clear that the Scottish economy is different from the UK economy in a number of respects. It is also different from the Welsh economy. Compared with the Scottish economy, a much more substantial proportion of the Welsh economy is involved in manufacturing. The Scottish economy has particular strengths in intellectual endeavours—in training and education—and, as a result, many of our universities set up outposts in other parts of the world. We do not have to be there to deliver there. There are differences in the Scottish economy, which is precisely why we need a different approach. If we had a wider range of powers, we could do even more than we currently do.

Let us consider the proposals that the Liberals have put in front of us. Some people have read those proposals and some, rather than reading them, have relied on gossip from others. If each of us took a couple of pages of the document, we would be able to read its 47 pages quite quickly. In certain respects, there is muddle in the present iteration of Mr Purvis’s proposals, but he has made proposals that pose the right questions.

Mr Purvis has talked about the difficulties in securing finance. It is fundamentally correct that there are difficulties in doing that. He has identified that a network of 13 regional banks would be the answer to those difficulties, and his motion mentions

“a single body to offer equity finance support for businesses and a single promotional, marketing and inward investment body”.

As politicians, we love to tinker with such things and we love to introduce legislation—it is fun and gives us a sense of achievement—but it does not necessarily influence the outside world in any way. However, it keeps us employed.

Mr Purvis made the important point that all of that would be self-financing, but underwritten by the Government. That is fair enough as far as it goes, but, of course, things would not be taken off the Government’s balance sheet. Liabilities would remain for the Government and, if things were not properly managed, private companies would be able to play fast and loose with public money. There is an opportunity to develop that point further. I invite Mr Purvis to consider doing so, not necessarily today, but in the future. There is a genuine difficulty that we need to consider.

Jeremy Purvis: I caution the minister that the model that I have used is, by and large, operating in the south of Scotland loan scheme, which has been in operation and self-financing for a number of years. I think that the Government entirely supports it.

Stewart Stevenson: I hope that members will not think that I shot Mr Purvis’s proposal out of the water absolutely. That was not my intention.

Let me make a broad general point. All the parties that are represented in the chamber are minorities. Minority Governments must lay out their fundamental goals, but they should work within the long-term grain of strategies. Those strategies may have been inherited from previous Administrations, and it is likely that, in a chamber of minorities, we will all have contributed to such strategies. There is certainly something in that.

David Whitton: Will the minister give way?

Stewart Stevenson: I am really out of time for dealing with the points that I have to deal with.

There is a divergence between the principles that have been espoused and the proposals that have been made.

Rob Gibson talked about Stavanger, Seattle and Ullapool. Ullapool has changed a little bit, but not much; Stavanger and Seattle have changed.

Mary Mulligan made a very amusing speech, although I am not sure that she meant to be so amusing. She referred to housing. The previous Labour Administration built six council houses. She talked about the previous UK Government’s capital reduction and criticised it, and she said that food sales are close to zero. The rumbling sound was obviously the sound of empty stomachs around the chamber. She also talked about ring fencing of the tax on supermarkets, although I think that she meant hypothecation.

Lewis Macdonald said that the popularity of bankers is at an all-time low. Those who have looked at my register of interests will realise that I have moved from banking to politics in an attempt to improve my reputation. That has worked, which is very good. He also talked about the proposed company in Aberdeen. The important point is that with limited liability companies, that is just what we get.

Joe FitzPatrick referred to the four Gs of Dundee and showed that there are local opportunities that we all have to take.


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