Tuesday, 20 April 2010

Supporting Economic Recovery

Here's my contribution to the debate in Parliament last week on the Scottish Government's Economic Recovery Plan. Full text of all MSPs' points can be found in the Official Report on the Parliament's website. Thanks for reading.

Rob Gibson (Highlands and Islands) (SNP): I will look first at the background of the condition from which we are trying to recover, and then at two or three examples of how we are beginning to support recovery.

On Sunday, a commentator set the context clearly.

"It's obvious what went wrong. Britain boasts the most profoundly dysfunctional financial system of any G7 country. It's not just that it went nearer to collapse than any other in the autumn of 2008, it does not know how to finance enterprise."

That was written by Will Hutton, one of the architects of new Labour, who recognises precisely how that crisis has underpinned the nature of our attempts to recover. In a world in which there has been a crisis, Britain has been one of the worst countries at coping with it or making proposals that would allow Scotland, Wales, Northern Ireland and parts of England to stimulate the economy out of recession.

There has been a lot of discussion about the balance of power and the finance needed to achieve recovery. There was also some discussion earlier in the debate about independence and interdependence. What about countries such as Norway that have similar resources to ourselves? What about the oil fund that has been created in the past 15 years? What about Norway's ability to bail out the whole of the UK debt and still have more than £89 billion left in its oil account, far less its own money? Norway is a small country with about the same population as Scotland. We are talking about banks failing and saying that a country of this size could not deal with that, but Norway had to deal with that in the early 1990s.

Andy Kerr: Will the member give way?

Rob Gibson: Just a minute. I want to finish this point.

As our economic recovery is based on investment, we must ask questions about the financial system that is supported by each of the British parties, that has not been altered, and which is aimed at supporting property and share prices. That is what the current financial system was set up to do, rather than invest in real jobs in manufacturing and so on. That is the charge that faces the UK parties, but I believe that Mr Kerr is going to tell us that we are all wrong.

Andy Kerr: No, no. I note that Ireland and Iceland have not been mentioned. Can the member clarify whether he is advocating the same levels of personal and business taxation that exist in Norway?

Rob Gibson: When people get greater pay and better services, they are happy to pay their taxes for those things. There is less division between the rich and the poor in a country such as Norway, and we should aspire to that. I do not think that smirking is the answer. Perhaps Mr Kerr should contemplate whether other countries have models that are worth following.

If we are going to stimulate the economy, we must use the resources that are at our disposal. That being the case, I welcome the renewables policy that the cabinet secretary has laid out in the economic recovery plan, which can create many thousands of jobs. In a European context—the following quote is from the European Wind Energy Association—Scottish and Southern Energy tells us that, every year,

"15.1 jobs are created in the EU for every MW installed."

Given the size of the planned Clyde wind farm, the size of Whitelee wind farm and the size of the others that are proposed for Shetland and so on, as well as the maintenance that creates another six jobs per megawatt installed, we are talking about huge potential. How can we achieve that in Scotland under the present conditions? We must have the capital to establish a green energy bank. We have been promised that, in the outgoing Labour Government's budget, there will be £2 billion for such matters. I have discussed with the cabinet secretary shares of that money for renewables, and not just for nuclear power, which might be the British choice, as Lord Foulkes said. We need money such as that to set up a green energy bank in Scotland and undertake activity that will secure the investment to speed the creation of all those jobs. Scottish and Southern Energy recently announced its investment in a 15 per cent stake in Burntisland Fabrications, in Fife. I wish that it were similarly involved with the Nigg yard, in the Highlands, which can build offshore platforms. Maybe it will be—who knows? I welcome the certainty of the development of offshore wind energy technology in Fife.

The answer must also lie in retrieving the moneys that the Treasury rules have tied up, preventing us from developing the kinds of energy that I am talking about. The moneys from the fossil fuel levy and the landfill levy are tied up by Treasury rules and our hands are tied behind our back because we cannot borrow or even access the taxes that we have paid as citizens in this country. I pointed out earlier—from a sedentary position; I am sorry that my intervention was not taken—that it is our taxes that are tied up in those things. I ask that we look at the conditions that Scotland is in. We have one hand tied behind our back as we attempt to recover, although we know the kind of enterprise and developments that could take place here to prevent our public sector jobs from being decimated to pay for the bankers' bonuses and a financial system that does not work.

How do we create a financial system of our own? That is perhaps right at the heart of the issue. We must create a financial system that is aimed at enterprise, and that cannot happen in the British system; it must happen in an independent Scotland.

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