John Swinney addresses SNP conference

Addressing the SNP Conference in Perth the Cabinet Secretary for Finance and Sustainable Growth John Swinney MSP said the Downing Street Down turn and financial difficulties lend weight to the Scottish Government's call for the Scottish Parliament to have full fiscal responsibility so that the people of Scotland can have a system that is working for them and not against them.

Currently the UK Treasury is refusing to make simple modifications that will release a billion pounds of Scotland's money that is needed to reflate our economy through investment to increase demand and confidence

In his speech Mr Swinney said:


Last year, when we were given the privilege of serving and leading Scotland, we made clear our determination to make Scotland a more successful country.  We were elected to make Scotland more competitive, so we could increase the prosperity and well-being of families and communities right across our nation.

From day one we acted to deliver smaller, more focused, effective and efficient government.

We set a clear purpose – to focus all government actions on creating opportunities for every citizen in Scotland to flourish - leaving no-one behind – by delivering higher levels of sustainable economic growth.  And we defined this as making our nation wealthier and fairer, safer and stronger, greener, healthier and smarter.

And in the months since, we have begun the important task of delivering on our ambition and our promise.

Our task is now all the greater because our country faces difficult economic challenges that have grown more significant not just in the last 18 months but in the last few days and weeks.

So our early actions – taken to make Scotland more competitive – have been all the right decisions to help Scots through these difficult times.

While people wrestle with higher fuel and food bills, the Scottish Government – working with local authorities - has frozen the council tax – leaving more money in people's pockets when they need it in the hard times.  The Scottish Government - on your side.

As banks tighten their lending and energy costs rise, the Scottish Government has slashed business rates for tens of thousands of small businesses – boosting companies that form the lifeblood of the Scottish economy.  The Scottish Government - on your side.

From day one we have been working hard to make sure our nation is well placed to prosper.

We are investing record amounts - £14 billion over the next three years - in our nation's infrastructure: new railways, new hospitals and new schools.  Today our capital programme is operating at 100% using all of the capital resources we have at our disposal to invest in the fabric of Scotland and to provide vital opportunities for our construction sector.

And delegates let me just list a few of the capital projects that we are delivering:

The new Southern General Hospital in Glasgow,

Flood alleviation in Moray,

Delivering the M74 extension,

The Airdrie-Bathgate railway,

Schools throughout the country.

There is one exception though.  Normally Government Ministers don't apologise for anything and certainly not for major capital infrastructure.  But let me apologise for this one.  I didn't approve of it – but I'm having to pay for it.

The Edinburgh Trams – what a triumph for the Opposition!

As well as investing in infrastructure, we have created new ways of working to make Scotland more successful.  We have established a partnership of equals with local government, ending decades of fruitless competition and division. National and local government are working together to deliver progress for Scotland, with a shared focus and shared priorities based on mutual respect.

And our new ways of working mean that our Government agencies are now focused on promoting growth and promoting prosperity and working together with a real sense of purpose.

All these early actions – lower and fairer tax, record investment in our nation's infrastructure and a public sector that is working together – were designed to kick-start and maintain higher levels of growth. They will also serve us well in the face of the current financial whirlwinds.

But in challenging times we cannot rest on what we have already done.  We must do more to help people and businesses deal with the new economic conditions. That means fighting to protect jobs and decision making in every part of the Scottish economy but particularly at this time in financial services – and specifically on HBOS.

We must do all we can within the current limitations – financial and constitutional – that are placed on the Scottish Government to deliver progress.  

As the economic difficulties have grown we have changed our plans to adapt.

We have re-shaped our capital programme to help the construction sector.

We are accelerating European Structural Fund initiatives to assist development.

We are improving the efficiency of Scotland's planning system – removing unnecessary barriers to development.

We are developing a national tender for electricity to reduce costs right across the public sector.

We are vigorously promoting Scotland as a tourist and business destination with recent initiatives in China, the US, Norway and Russia.  All of this adds to the tremendous opportunity of the Year of Homecoming, to boost Scottish tourism and provide the opportunity to connect Scotland with our friends abroad.

We are making sure that more and more Scottish companies
receive the benefit of direct business advice to help meet these challenges.

And there will be more.  From April next year, small businesses will get a further boost, with 100% rates relief available to tens of thousands of our smallest businesses.  The Scottish Government - on your side.

And for our people there will be more.  Next year the Scottish Government will be making funds available to freeze the Council Tax right across our country.  The Scottish Government - on your side.

We will do all that we can within our powers.  But there is so much more we would like to do and we need to do.

One of the best bits of my job is I get to deal with the UK Treasury.  You can imagine there's a long queue of my Cabinet colleagues jostling to do that part of my job.  And one of the realities of that work in these first 18 months has been the contorted attempts by the Treasury to by-pass the rules of the Barnett formula.

From prisons to Olympic funding, Scotland is losing out on hundreds of millions of pounds that could otherwise be used to provide welcome support and relief throughout Scotland.

And it is frustration and anger that is shared by the governments in Northern Ireland and Wales.

Delegates, today Ofgem, the Energy Regulator, holds £120 million of Scottish money. It is our share of the fossil fuel levy and is there to support the development of renewable generation in our country.

Ofgem don't want it, it's Scotland's money, but daft accounting rules as part of the United Kingdom mean that for every £1 we take from that fund, the Treasury in London will take £1 from our block grant.

We cannot in effect use or touch that money that is indisputably ours.

This makes no sense in today's economic climate.

If we had this money to spend there is so much we could do.  It could allow us to deliver low-cost renewable energy for fuel poor communities and high energy industries across Scotland – putting money in people's pockets and giving business a competitive edge.

It would mean lower bills and more jobs – benefits for thousands of Scottish families. Exactly what we need.  It is a nonsense that Scotland cannot access this cash.

And why does this issue matter.  Is it not just simple revenge from the UK Government for Scotland daring to dump Labour and vote SNP?  Is it just another fight we are supposed to pick?  Well it matters because it would help us take swifter action to meet our ambitious climate change targets.

When we came to office we set out our ambition to lead the world on our vision of tackling climate change.  We face immediate economic challenges but we face a massive generational challenge of reducing our impact on the environment.  We accept the responsibility to do that and we will put in place the legal framework to live up to that responsibility.

I was delighted yesterday to hear the UK government move to equal the Scottish government's position of an 80% reduction in emissions.

But that is not nearly enough.  

So when we set out our Climate Change Bill later this year we will demonstrate that we have listened to the mood of our country, listened to the thousands of people who have taken part in our consultation on the Climate Change Bill.  We will demonstrate on the vital issues of emission reduction targets, on the inclusion of international air travel and shipping and on the inclusion of all 6 greenhouse gases that Scotland will have a Climate Change Bill able to lead international action.  Responsible leadership on Climate Change from this small country of Scotland.

So it matters that we get a solution to the perverse financial rules of the United Kingdom that stop us accessing resources that would help to tackle major issues in Scotland.

The financial rules tell us all we need to know about the United Kingdom.  We didn't write the rules – so it's no wonder they don't work in our nation's interest.

We are doing what we can within these limitations - as far as we can. We point out when they aren't being applied fairly and where they need to be changed.

We are standing up for Scotland at every turn and make no apologies for that.

But the rules don't work for Scotland and ultimately the people of Scotland must create the rules they want to design our future.
We launched a national conversation to talk about what future Scotland wants.  We set out our desire for Independence.

Consistently, Scots say they want more responsibility.
And we may have found a convert.  When Iain Gray was Minister for Enterprise he once said "we have to do something different than we've been doing for the last 40 or 50 years".
He's right.
When we try something different we have to make sure Scotland gets the real powers for the economy that will allow us to make a real difference to the lives of our people.  Replacing one set of failed rules like the Barnett formula with another set of rules that give Scotland little financial responsibility and flexibility - like the latest wheeze of assigned revenues - is no answer.

We must have financial powers that give us the same responsibilities and opportunities as other similar nations.  

It is even more important for our nation, for our families and for our future that we move to the same Independence that is at the root of all nations' resilience and success.

And why does the debate on powers matter.  Well it matters because it gets to the heart of the need to exercise financial responsibility.

Just before the election last year, Wendy Alexander told the Scottish Parliament and I quote -

"In the eyes of the electorate, political credibility requires financial credibility……[She went on] A perceived lack of financial credibility led to 20 years in the wilderness for my party. [And she concluded] So come election day, it will be economic and financial credibility that will count."

Well the electorate certainly weighed up the political credibility and the financial credibility of Labour and the SNP - and we won the election.  So on Wendy's own test, we are the ones with the economic and the financial credibility.  

But 18 months on where stands Labour's financial credibility.  On the brink of recession, with rising unemployment, rising inflation, failed financial regulation, the banking system in crisis and future generations burdened by credit card interest rates on PFI projects, on Wendy's own test Labour's financial credibility stands today in tatters.

The UK Government took 30 years of Scotland's oil wealth - £249 billion in revenues - and – unlike Norway - left no lasting legacy.  That's what the UK Government did when Scotland's roof needed fixing.

On Gordon Brown's watch, a housing bubble was created which has now burst.

Personal and national debt has clearly reached an unsupportable level.

PFI projects paid for by the national credit card at credit card rates of interest will force this Scottish Government alone to find £1 billion of interest payments each and every year until 2020.

There's no financial credibility left for Labour in that.

So it is essential for the future of Scotland that we acquire the financial powers that will give us the responsibility and the flexibility to act in the best interests of our country.  The financial turmoil of the last year – culminating in the financial crisis of the last few weeks – demonstrates there has been no British economic miracle.  It was just another chapter of the Union Dividend of the last thirty years that has kept economic growth in Scotland trailing economic growth in the rest of the UK.  Just more of the same Union Dividend.

We know what needs to be done.  We have an economic strategy to make Scotland a competitive place that invests in the human capital of our people.  We have a government – all of government – focused on doing what needs to be done – increasing sustainable growth in Scotland.  We have a vision of a prosperous, fair and outward-looking country that creates opportunities for every citizen to flourish.  And we have the energy and the leadership to create this new country.

In 1950, one of the great founders of our movement, John MacCormick predicted in his seminal work "Flag in the Wind", that by the end of the last century a Parliament would be established once again in Scotland.  In the recent edition of that book, introduced by our much loved colleague and John's son, Neil MacCormick, we are reminded of MacCormick's immortal words that ran alongside that prediction.  He wrote "the last lap is now to come".  We are in the last lap, and we must win it for Scotland.