11th January 2016
***CHECK AGAINST DELIVERY***
Thank you for welcoming me.
Thank you to the David Hume Institute for organising this series of events and for the vital role that you play in Scottish society.
David Hume wrote that “the truth springs from arguments among friends.” And that’s the importance of the work the Institute does.
Scotland is arguably the most politically engaged country in Western Europe today, yet we have a real lack of institutions which create that space to argue, a lack of organisations that inform policy discussions and allow us to challenge our existing beliefs.
That is slowly starting to change now, as other think tanks emerge and contribute to the debate, but we badly need more questioning, more accountability, more searching debate.
More arguments amongst friends.
I want to honour the work of the Institute tonight by setting out a powerful, reasoned argument for change.
Change not for the sake of it, but to make our country a better place to live.
That means giving every young person a fair chance in life, no matter their background or how much money their parents have.
And it means creating and enabling a workforce that is able to compete for the jobs of the future, so that we can have a strong economy that generates the wealth we need to bring about that fairer society.
Those are the two key principles that guide my politics:
Equality of Opportunity.
And a strong economy.
Now I don’t plan on making an overly party political speech.
However as this is an election year there is little chance of me making it all the way through this speech without at least referencing the other political parties!
And as I begin, let me posit from the very start that the more powerful our Scottish Parliament becomes, the more vulnerable the status quo looks.
The commentators are already wearily writing that this election is a foregone conclusion. I disagree. I think it’s going to be the most exciting election in the history of our parliament.
The power held by our parliament, and by our government, is greater than ever, and so too are the possibilities for political change in Scotland.
The status quo is no longer something that those in Bute House must passively accept, but it is something they are actively choosing.
I believe that with these new powers over tax and welfare comes a responsibility, not just to use them wisely but to use these powers boldly.
I’ve grown up with the case and cause of devolution. Throughout my adult life the Scottish Parliament has been the central institution of Scottish public life.
I’ve watched it mature, and as the years have passed, it has become less radical.
Paradoxically, the more powerful it becomes, the more cautious its actions have been.
That’s why I believe a strong Scottish Parliament needs a strong Scottish Labour party. Because that has historically been Labour’s purpose.
To challenge the way things are.
To question the inevitability of poverty and inequality.
Of pre-determined destiny.
To shake things up.
I didn’t come into politics for a quiet life, I didn’t stand for the Scottish Parliament because I wanted to manage the affairs of Scotland.
I choose a life of public service because I want to change the face of my country. To realise the potential of all of its people and to use the powerful tools of government to do so. To stretch our brightest and support the weakest.
So I intend to talk tonight about Tomorrow’s Scotland. The challenges and opportunities I see on the road ahead, and how we can use the powers of our Parliament to prepare our people - the most valuable natural resource we have - to make the most of a future filled with possibility.
Because “Tomorrow belongs to those who can hear it coming.” The words of the great David Bowie who we lost today.
Just before Christmas, I stepped in to the future. Also known as the informatics department of Edinburgh University. There I met Baxter. A robot with the capacity and mobility to undertake many human tasks.
Baxter and I built a battery pack. By using a pair of glasses that sensed my eye movement, Baxter could pass me tools and follow my instructions. It was simply awesome.
Baxter represents both an opportunity and a threat. The boundless possibility of science combined with the loss of manual labour jobs. He represents a future where existing jobs are redundant and those set to replace them are still to be discovered.
Think back 20 years. The internet was only just beginning to impact on people’s lives.
I was lucky enough to live in a household with a dial up connection. Spending minutes that felt like hours listening to a whirring modem download blocky looking pages of text.
Today, almost everyone in this room has instant access to the internet on mobile phones in their pockets, and with it the ability to watch live streaming video walking down the street, it’s a technology way beyond what we could have imagined 20 years ago.
Professor Jason Rees of the University of Edinburgh, recently said that “The revolution wrought by computers hasn’t been and gone – it’s only just started.”
And whilst I don’t know what the next 20 years will bring, we can expect with some certainty that young people in school today will have jobs that we haven’t even thought of yet and Baxter will be doing many of the jobs their parents did.
They will work in occupations not yet invented using technologies that will be as alien to us as the idea of a mobile app developer would have been when I was at school just 20 years ago.
Technologies like 3D printing, or robotics, have the potential to transform manufacturing and with it, international trade. The distribution of goods around the world and of course the occupations and careers that go with them.
We also know with certainty that the pace of change will leave those individuals and nations who are not prepared for it behind. So why does this all matter?
I want to see Scotland as the most creative, intelligent and innovative country on the planet. Where businesses, charities, community groups and individuals have the ability and the opportunity to take ideas, run with them and see them into reality, making their part of the world a better place for them, their family, their community and their country. Where people are rewarded fairly but also one where everyone, from the poorest to the very richest, pulls together to make their part of Scotland the best it can be.
I want Scotland to be investing in our people and in our infrastructure, and through that, in our businesses, communities and country to make Scotland lead the UK, and with our efforts, leading the UK to lead the world. Through the Scottish Parliament we can show the rest of the UK how to do this, and show once again that left-wing governments can indeed be the most radical and reforming government.
A successful economy, especially one that is geared up to face the challenges of technological change facing the world, needs public investment to support our businesses and communities and it needs to find a productive role for everyone, and every community in Scotland. Getting the most out of talent wherever it exists, and stretching that talent to reach its full potential.
With our Scottish Parliament we can do this. We can disrupt conservative forces wherever we find them, respond to the hugely changing world before us, making sure Scotland is ahead of anywhere in the UK and anywhere in the world at being a place to make your ideas a reality.
A Scotland where ideas and ideals are valued as one and the same, where we harness the public, private and voluntary sector, working together towards one ambitious vision:
to make Scotland a place where poverty and inequality are eradicated,
where business is supported and championed so that Scotland develops a new economy able to take advantage of the huge opportunities around the corner,
a Scotland that provides the jobs and opportunities for every single family to lead fully productive and content lives – full employment reimagined for the 21st centruy
and most importantly of all where families and wide communities are empowered to affect their bit of the world for the better, where everyone rich and poor is stretched and supported to reach their full potential.
Preparing for this next phase of a technological revolution demands equality of opportunity because when the greatest natural resource we have is our people, we need all of them to be fulfilling their potential in order to realise that strong economy.
It’s why we live in an age where even the IMF recognises the economic case for addressing inequality.
That’s why the decisions our political leaders make today will have to be bold. There simply isn’t time to put off big decisions until tomorrow, to hope that problems will work themselves out, to manage when we should be changing. I hope this election will address these fundamental questions:
How will our education system prepare people for the future jobs we can’t yet imagine?
What will security mean in an economy where technological change will abolish careers people have spent their whole lives in?
How will we invest to support an elderly population without cutting back on investment in the future?
How do we prepare an NHS founded in the 1940s for the 2040s?
These are huge challenges. They demand and deserve big bold answers.
Let me turn to that last one briefly.
The NHS. Labour’s greatest and proudest achievement. Universal health care, the envy of the world. Designed for an age beset with disease. How will it cope with an age where old age will be the big killer?
Our political discourse is obsessed with targets. Governments set them ambitiously high and are pilloried when they are missed so demand new and creative ways to fulfil them.
On Friday, I met two leading cardiologists at Edinburgh Royal Infirmary courtesy of the British Heart Foundation. These two doctors are acutely aware of the pressures A&E departments are under, not least with presentations of people suffering chest pains.
Each one is considered very serious, leading to an admission and numerous tests in spite of the fact that only 1 in 10 incidences are proven heart attacks. So the doctors had to find a faster, more efficient way of determining whether someone was having a heart attack and devoted their research time and funds to the cause. The cause of meeting the A&E targets set by the Government.
Their genius identified that the human body produces a protein called Troponin during a heart attack. A blood test that identified this protein was developed and with it arrived the capability to quickly rule a heart attack in or out, saving countless lives and millions of pounds in addition to the goal of meeting A&E targets.
I mention that today because the current budget proposed by the Scottish Government not only reduces research spending within the NHS, but takes the ring fence away as well, leaving NHS Boards free to redirect funds should other areas be more pressing.
Just at a time when we should be grasping at the possibility, choosing to innovate, investing in science. Rising to the challenges and opportunities of tomorrow - we find ourselves turning our backs. Making managerial choices. Next time it will be that bit harder to innovate.
Why has Scottish politics become so managerial?
Partly it is a result of that lack of challenge I spoke about. Devolution has brought government closer to the people. The downside of that is that accessibility of government in Scotland means that, on many issues government, business and civil society operate a shared agenda.
This creates a somewhat cosy consensus where sometimes there should be challenge. I have spoken before about how there is now a new establishment in Scotland, dominated by the governing party. We need louder voices expressing the need for urgent change.
Partly I think politics has become managerial because of how the current government sees itself. All second term governments attempt to turn incumbency into advantage by suggesting only they have the experience to rule.
However this government has made competence their chief selling point.
Now I dispute that claim to competence strongly, but I will save that for another, more partisan speech.
But it is revealing that they choose to define themselves that way. Their claim is to be able to effectively manage the status quo, not to change it.
There’s no attempt to describe themselves as, say, radical because there is no credible case that they have been.
Voters are entitled, of course, to choose more of the same. But I don’t think that is what they really want and I know it’s not what Scotland needs.
Because in Scotland today the hardship of austerity is felt by too many. Hope, ambition and aspiration is felt by too few.
Let’s take a moment to look at inequality in our schools.
The most recent OECD report into our schools found the achievement gap between the most and least deprived children growing. With feint praise, it said Scotland had the potential to be a world leader in education, something which in years past we’d realised and could boast.
The most stark inequality is faced by Looked After Children, kids in care. Whose tariff scores are a fraction of their classmates. Those children are still far more likely to see the inside of Polmont than Pollock Halls. Only Labour has a comprehensive plan to address that deep rooted inequality.
Other studies show a slight narrowing of the gap, only because the highest achieving pupils are falling back.
Tomorrow the Scottish Government will debate the Scottish Education system, and in that debate Iain Gray, Labour’s Opportunity spokesperson will detail a new evidence base which shows that the curriculum is narrowing and standards are falling further.
The Government, at the end of their second term of office have finally announced a plan to measure the problem, I welcome that, but that is very different from having a plan to deal with it.
We can’t wait any longer to take radical action to deal with this or we will pass disadvantage onto another generation.
So I have proposed that we take radical action to change the way we fund education to make sure that achievement and opportunity are not determined by how much your parents earn and we’d use the new tax powers to do so.
Under current policy only some schools get special funding to close the gap in attainment, the First Minister was in one of them today. The problem with this approach is obvious – every nursery school, every primary, every secondary has poor children on the roll who need extra support. In fact we know that 60% of Scotland’s disadvantaged children don’t go to schools in disadvantaged areas.
The absurdity of the current policy was brought home to me when I was recently in Renfrewshire.
I visited two schools in one building; Cochrane Castle primary school and St David’s primary school in Johnstone. They share a joint campus. The pupils use the same gym hall, the same dining hall, the same playground. However, only one of those schools gets money from the Scottish Government’s attainment fund. One school gets funding to close the gap, but the other is left behind.
We would take a radically different approach. We would introduce a Fair Start Fund which follows every child from a poorer family to school. £1000 for every child from a poor background in primary school, £300 for every child from a poorer family in nursery school. Using free school meal entitlement rather SIMD.
By linking funding to children we would ensure that every school has an attainment fund equal to its needs.
We would also learn from the approach the Labour government in Wales has taken. We would hand this investment directly to head teachers. There’s an evidence base for which interventions work best to help close the gap. But we’d give those people who know best, the teachers in the schools, the freedom to decide which particular changes will make the difference.
The other big difference from the current policy is that this plan wouldn’t be for three or four years but a permanent change in how our schools are supported to close the gap.
Funding education has to be a national priority again. We know that difficult decisions have to be made in government, but when prioritising where any cuts have to fall, education should be the last place you look.
Instead the budget put forward by John Swinney before Christmas looked to education first, imposing the largest cuts on local school budgets.
Cuts made by the SNP in previous budgets to local education funding are already impacting on our children’s schools.
Teacher numbers are now at their lowest level for ten years while pupil numbers have been increasing. The average amount spent on a pupil in pre-school, primary and secondary school has been cut.
Cutting schools budgets are cuts that our children pay for – in the opportunities open to them today and the ambitions they hold for the future.
And, of course, it undermines the economic potential of our nation. We would choose to invest in our children rather than asking them to pay the price of austerity.
If people choose a Labour Government our budgets we would prioritise spending on children and the young first, not last. Not just because it is the right thing to do, not just because social justice demands that we invest to close the gap between richer and poorer children, but because investing in early years and in education is our most important economic policy.
It’s the best and boldest thing we can do to prepare all our children for tomorrow’s Scotland. To give them skills not for one job but for an ever changing world.
As I said at the start of this speech, I want the barometer of everything we do to be whether it gives young people equality of opportunity and whether it strengthens our economy.
Closing the gap in our classrooms ticks both of these boxes.
So Labour will contest this election on the idea that encouraging aspiration and ending austerity go hand in hand.
It is understood and well argued that you cannot end austerity without a dynamic economy driven by people’s ambitions for themselves and their families. But the opposite is also true.
You cannot claim to be a party of aspiration if you continue to support an austerity agenda that has dashed the financial aspirations of a whole generation.
So let me turn to another example of how Labour would use the new powers of the Parliament to deliver a bold step change.
We have started the year by putting the aspiration of home-ownership in Scotland at the centre of our platform.
We should be in no doubt that this is one of the biggest challenges that has emerged in recent years. In 1999, 48 per cent of Scots under 35 owned their own home. That figure stands at just 28 per cent today. That has been matched by threefold increase in younger people renting privately.
Some have argued over the last week that it is a matter of choice for people to rent privately rather than own, although I’ve noticed that many of them were home owners themselves.
Of course private renting will suit some. But the idea that there is a whole generation of people who have chosen to work to pay for their landlord’s mortgage rather than to invest in owning their own home doesn’t bear any scrutiny.
A survey last year by the biggest mortgage lender, Halifax, found that 20% of Scots wanted to own but were not able to. 75% of those not owning their own home did not believe they would ever be able to own their own home. The majority citing the size of the deposit as the main barrier.
We need to tackle the failure of the market and ensure better housing supply, and we have set out ambitious targets for house building, but that kind of change in the market will take years to achieve.
This is another area we cannot wait for change. We risk a whole generation being left behind, forever asking when it will be their turn.
So again, we will take a radically different approach.
The current government propose cutting, then abolishing air passenger duty, a tax cut initially costing £125 million a year, eventually rising to £250 million. The airline industry is booming in Scotland with record passenger numbers reported at airports around the country.
Financial measures to boost the economy are always welcomed, but it is hard to argue that this is a sector that should receive, as it has, the first and only commitment from the Scottish Government to using new tax powers. So we’d reprioritise that money.
Today you can save in a first time buyer ISA and receive a 25% top up, up to the value of £3,000. This will help some but it still leaves a deposit for a home far out of reach for the younger generation. For those who can’t draw on the bank of mum and dad.
So we will effectively double the help towards saving a deposit for first time buyers. Investing an additional £3,000 for first time buyers saving as part of our plan.
The example we have cited is of a young couple, each saving £100 a month towards a deposit.
Their savings in their first time buyer ISA, over the three years, would amount to £7,200 and they would receive £1,800 on top of this through the ISA.
Our new plan would add an additional £6,000. Taking that couple’s deposit to £15,000 - putting home ownership within reach of that generation left behind by austerity.
Now some of the comments from our political opponents following this announcement have been interesting.
Some have argued that there is nothing progressive about helping people buy their own home.
I disagree.
Young people of my generation have been hit hardest by austerity.
Slower wage growth, higher unemployment and too many of those who have found work are in part-time, zero-hour, insecure employment.
Many young professionals, who have done all that is asked of them, find themselves saddled with debt and stuck in the private rented sector.
It’s a generation in desperate need of support. Young people who want to invest in their future but simply can’t.
There are fewer things more progressive than giving every young person the chance to get on in life, no matter their background.
These two issues that I offer you tonight, housing and education, illustrate how the new powers coming to Scotland are beginning to change how the political debate operates.
Scottish politics isn’t any longer just a case of managing money and making an election offer. Behind every party manifesto at this election will be a set of choices on taxation, just as there has always been in UK elections.
Ahead of the election we will set out our tax plan. Our starting point is for progressive taxation so we can invest to grow our economy and ensure more Scots share in our national success.
Giving every young person a fair chance in life and securing the economic future of our nation.
The hard truth of politics – that change doesn’t come for free – has arrived in Scotland.
So who will pay? I’m going to say something really brave to this well-healed Edinburgh audience – it’s going to have to be many of you.
It is right that everyone pays something towards the services they receive. The shared responsibility of taxes is one of the things that binds us together as society. However it is morally and economically right that the majority of the burden for changes we want to see has to be carried by those who can most afford to pay.
We have already set out three different choices which we would make. Different from the Conservatives and different from the SNP. And we have been clear about why we are making those changes:
First, I’ve already set out the different choice on Air Passenger Duty in order to help support young people to buy their own home.
Secondly, we have also set out how we would not follow Osborne’s plans to raise the threshold for the upper rate of income tax, providing around half a billion pounds a year by the end of the Parliament to invest in the future.
And thirdly we have said we would bring back the 50p top rate of tax, paid by those earning over £150,000 a year, specifically to fund our plan to close the gap between richest and poorest children in our schools.
The impact of these changes is that we can guarantee that the tax plan we set out before the election will be significantly progressive, with those lucky enough to be doing very well being asked to pay more than the vast majority. That is a challenge to other parties.
We have, to borrow a phrase, a once in a generation chance to reset Scottish politics. We can move on from the arguments of the past, use our powers for radical change, and offer a break from the austerity which has left so many behind.
Both the party of government in Scotland and the official opposition have fought over this ground in recent years. The arrival of real financial powers in Holyrood will show who really means it.
John Swinney’s Scottish budget has been widely recognised as a facsimile of the UK budget.
The Guardian described it as a ‘powerful echo of George Osborne’s approach.’ The Financial Times concluded he ‘did little more than ape the UK Chancellor’s policies’. And the Telegraph labelled it ‘a tory copycat’.
There will be some who welcome this, perhaps even in this room, and if Scottish voters choose to go the same way as the rest of the UK on austerity, that will be their choice. But that’s what it is, a choice.
That’s what makes Scottish politics so interesting now.
We can no longer pretend that the things that are happening in our country are simply inevitable or the fault of someone else. At times when you listen to those in Government in Scotland and across the UK it sounds like they are helpless in the face of economic realities.
They are not.
The power of government is immense. Government ministers have the power to affect more change in one day at work than most will be able to achieve in their lifetime.
The NHS, the minimum wage, the creation of the Scottish Parliament, the smoking ban were not random acts of god. These were all positive decisions to use the huge power of government to change the status quo.
Similarly, the gap in achievement between wealthier and poorer children is not inevitable. Cuts to schools budgets are not inevitable. It is not inevitable that a whole generation will miss out on owning a home. More of the same, is not inevitable.
I said at the start of this speech that I wanted to set out a powerful, reasoned argument for change.
Change guided by two core principles:
Giving our young people a fair shot at life;
And creating a strong economy.
My plan for greater investment in education, and our proposals to help young people get on the housing ladder, are just two examples of how we can deliver that change using the new powers coming to our Parliament.
The kind of change that will transform the lives of people in this country.
Politics that makes its priority governing to achieve fairness,
the eradication of poverty,
the pursuit of equality,
full employment in modern, secure, sustainable and fulfilling jobs,
and an incredible quality of life for everyone.
If we as politicians aren’t here to do that then why are we here?
So expect Scottish Labour to surprise you. To challenge the status quo, challenge the assumptions about what is inevitable in Scottish politics, and, I believe, confound people’s expectations in May.
I’m determined to keep setting out a vision of how things can and will be different in tomorrow’s Scotland. A future filled with possibility - a strong dynamic economy built by its people. The greatest natural resource it has.
Thank you.