Economy Debate

I welcome this govt debate on the economy. The first since we came back in early September. This year it has taken only 8 weeks to get around to the economy.

Last year despite the financial crisis raging around us we had to wait 10 weeks after we came back till 12 Nov after before the govt could find time for a debate on the economy its response to the credit crunch.

Today we have a new document An economic recovery plan update – published at 2.55 just as ministers got up to open the debate – so timed to presumably ensure members could not possibly read it in advance of the debate.
So much for respecting the chamber.

However it is now almost 2 years since the Government’s Economic Strategy was launched – and it has only been debated once in this chamber – shortly after it was published. So surely once every 2 years is not too often to debate the Government’s Economic Strategy.  Can I ask the  Cabinet Secretary if he will commit to find Government time  before Christmas to debate their economy strategy published in Nov 07 and only  debated once?

Can I turn to today’s motion.

Let me begin by acknowledging that to govern is to choose. No-one denies  John Swinney had choices to make in his draft budget. He had to manage a less than 1% decline in his budget next year.

What people want are answers about the choices he has made.

So with just 1% less in real terms overall why did he choose to raid the Enterprise, Energy and Tourism budget by 13% in real terms. Why did he hit the Enterprise budget 13 times harder than the decline he was facing overall.

13 times harder that the overall cut in the budget – that is why business organisations are  increasingly sceptical -  it is because they want straight answers about why the axe fell where it did.

Yesterday see the chief economic adviser provided a paper to the economy committee with plans for the 24 different budget lines that fall within the Enterprise, Energy and tourism budget – it is on the committee website.

It reveals 21 of the 24 budget lines in Enterprise, Energy and Tourism now face a cut bigger than the 1% in the budget overall.

People just want an explanation – not denial, not obsfucation but straightforward honesty in defending the choices that have been made.

People want to know – why just months after passing the most visionary legislation on climate change this budget proposes a bigger than  average cut in the energy efficiency budget.

why the education and skills budget overall is being cut by 6.5%  – more than 6 times the reduction overall

People want to know why Innovation grants face an above average cut and why knowledge and innovation policy are being cut?
 
This is the gap between reality and rhetoric that people are increasingly questioning. And in his two committee appearances this week the cabinet secretary did not remain cool and collected in defence of this choices.
Instead he endlessly changed the subject, he blustered and

I expect we will hear more of that at decision time – when what we want is the cool rationality for the choices he made about where the axe fell. 

It is of course impossible to maintain this stance with any credibility when you are not only cutting skills, enterprise budgets, tourism, transport infrastructure, regeneration and garl by more than the rest of the budget

Finally I want  turn to where the banks where the economic crisis started and continues.  Today’s recovery plan barely mentions the banks. It is like the government are in a parallel universe to the rest of us.

On 24 September I asked the Scottish Executive in writing whether it stood by the First Minister’s previously stated view that spivs and speculators caused the demise of HBOS.

After 30 days I am still waiting for an answer .

But more importantly  I  also wanted to know what the Scottish govt was doing about  the lack of competition in Scottish financial services – back came the answer we have carried out a survey. I challenge the Cabinet secretary to confirm that over the last 12 months the Scottish government have made no written representations whatsoever to the OFT asking it to carry out an inquiry into the lack of competition into banking services. 

The govt’s own survey shows three quarters of businesses in scotland are with just 2 banks – and they have absolutely nothing to say on the matter.

Next I wanted to know what views offered to the European competition authorities. Back came the answer – we have not been asked for evidence so we have provided none.

So then I asked for the government’s views about bankers bonuses

Back came the response –  no representations have been made by ministers.

Nothing to say to Europe, nothing to say to the OFT, nothing to say on bonuses.

No wonder the govt so dislikes debates on the economy.

They might have to offer a view on the tough issues of the day.  Do they have any views on banking, competition or access to credit or do they just want to keep their heads down and their mouths shut. Scotland deserves better.

It has not changed in the last year – it is time it did.