Scottish Liberal Democrat leader Willie Rennie MSP speech to the David Hume Institute:
Thank you for tonight’s introduction.
This series of lectures is now an important part of Scotland’s political year. And is so this year, just a few weeks away from the start of the Scottish Parliament election.
I have said in the summary for my talk that I want to get Scotland “fit for the future”.
Tonight I am going to explain how I want to move on from the independence debate, to bring unity and heal the divisions of the referendum.
I am a strong supporter of the U.K., and always will be, but we all need to move on to bring the country together.
This is a pivotal election and the next term will be pivotal for the Scottish Parliament too. New tax varying powers. A new settlement for Scotland. The debate must be - will be - on how those powers can be deployed to the benefit of the people who live here.
What will bring our country together with a powerful vision.
That vision means we need a plan for the next five years.
We need to tackle the issues that have been allowed to slip;
We need to look around the world to see how Scotland, and the people in Scotland, can have a bright future in a difficult world.
At the election Liberal Democrats will offer bold, positive change.
Tonight I will say that to get fit for the future our children and young people need the best education.
We will give every child a chance to realise their potential, and to give the economy the skilled workforce it needs.
To get fit for the future we need the best health care. That is why we support a step change in mental health services, the recruitment of more GPs and better social care.
To get fit for the future of the planet we need to meet Scotland’s climate change targets with action for warmer homes, renewable energy and better public transport.
To get fit for the future our civil liberties must be guaranteed whether on excessive use of stop and search, armed police or Scottish Government plans for an intrusive super ID database.
To get fit for the future we need to reflect the rich diversity of the country and end the centralisation of power at Holyrood. We need power back to local communities and empower police, nurses, doctors and teachers to do their job.
To get fit for the future we need a strong economy, fair tax and good public services. That’s why we support continued membership of the European Union, a reformed tax system that makes work pay and investment in good public services.
It is a big agenda for a bright, liberal, green future. It will need five years of focus and commitment from our new government after May.
I am going to dwell on just one or two aspects of this plan this evening.
At our heart we want every individual to achieve their potential.
To be a successful country Scotland will need the skills, talents and creativity of everyone who lives here to participate in the economy and society, to get a good job and to feel they belong.
I referred to this drive for participation and productivity in my David Hume Institute speeches in 2014 and 2015.
Diversity and education will be the twin engines that drive invention and creativity to enrich our country and provide a bright, liberal future.
Business needs a Scotland where they can draw on the well-educated and trained talents of people from all backgrounds, with a government that supports education, innovation and science.
We need a government which is competitive on business taxes, which will invest in the modern infrastructure needed in a 21st century economy, and that will work to keep us in the EU.
I set out my strong view on EU membership right here in 2014.
Let me just say that we are now facing the biggest gamble in our country’s recent economic history.
By putting his divided party before his country, the Prime Minister is now risking the departure of the UK from the European Union.
From a continent of conflict in previous centuries we now have a continent of free trade, free movement of people, universities that work in partnership, common security and reciprocal health services. All this we have whilst retaining our own national identities.
Our ancestors who lived through the terrible military conflicts that blighted Europe would look on with incredulity that we should even be considering a departure from this peaceful arrangement.
Yet, David Cameron thinks it right that Britain should flirt with exit.
And this at a time of market turmoil with the FTSE 100 hitting a three-year low, military conflict in the Middle East, tension with Russia and economic difficulties in China.
If ever you needed the evidence that the future prosperity of this country cannot be entrusted to the Conservatives, then look at this gamble and see what it might mean.
Britain’s place should be firmly in the European Union and that is the outcome that Liberal Democrats will firmly campaign for.
Scotland needs to get the benefit of the diverse talents of everyone to increase productivity. That means there should be opportunity for everyone whatever their background.
We saw action last week by the Scottish Government to take fresh steps to help people from disadvantaged backgrounds get to the top of careers in medicine.
They are right to do so. But it is also right to say that the same approach is needed in every other trade and profession.
The fewer barriers there are, the greater the diversity of the workforce, the better it is for every part of our economy and society.
I will argue that the extra investment in medicine last week will be needed on a much bigger scale for all other parts of the economy as well.
This is the vision for Scotland to which Scottish Liberal Democrats will devote the next five years.
Fundamentally, the route to participation is education.
It has been the route out of poverty and to a life of achievement for more than a hundred years. The Scottish tradition of education for all was founded on that notion.
I announced last month how my party will levy a Penny for Education on income tax to be used for four priorities within education.
I want to briefly set out the challenges that our Penny for Education will solve.
In early years progress has been really slow on getting early education for two-year-olds. We won the argument with the Scottish Government to get them to launch the policy. It took sometime but the Government eventually agreed that I was right.
But they agreed to start with the least well-off 27% of children in Scotland. They only managed 7% according to the census in September.
I knew things were bad as when I asked the First Minister about it, she said she’d write to me but then never did.
But I did get a meeting with the minister Aileen Campbell and she admitted to me that the figures were shockingly bad. I don't want to break any confidences but let me put it this way she joked that her first reaction when she saw the figures was, “Oh, what will Willie say”.
The Scottish Government has set up several working groups to try to sort this out. The campaigning think tank the Common Weal estimate that the policy is miles away from being delivered. That is why we need more resources, to train staff and pay for this transformation.
Professor James Heckman won a Nobel Prize for his work demonstrating that the best way to improve a child’s life chances is through investment before the age of three.
So it is no surprise that I want that to be the important first pillar of investment from our Penny for Education.
And at primary and secondary school, the gap between rich and poor is getting worse. That is why I am proposing a Pupil Premium in Scotland. That will give extra investment in every classroom. It would be used across the whole of Scotland and unlike the present restricted attainment fund wouldn’t ignore a third of children in need.
Liberal Democrats have already introduced this in England. The results of their Pupil Premium were impressive in primary schools. The attainment gap fell by 5% in just three years. Learning from the English experience will enable us to get this up and running quickly in Scotland. That is pillar two.
I have to tell you that I view the situation in Scottish colleges as very serious. We have all seen the headline number: 152,000 fewer college students under the SNP. Part-time places dumped - the only option for many parents and carers looking to get on in life.
I want more courses, available in more places. And I want colleges to be able to help us develop the growing workforce we will need for the care sector and for expanding mental health provision. So colleges are pillar three.
And for the year ahead, I have been simply horrified to see the cuts to education and the surrounding services taking place in councils across Scotland. These are now staring councils in the face.
I have told the Scottish Government that they need to call a halt. I have one last chance to win them round in the Budget vote next week. So repairing council cuts to teaching assistants, supply teachers, school resources, training and more is pillar 4.
Sir Ian Wood said in his introduction to the Commission on Future Skills that “There is nothing more important to Scotland's medium term economic future than getting the skills of its young people in tune with the very fast changing skills, technology and knowledge requirements of the modern world.”
The SNP established that Commission.
But their decisions have undermined its central philosophy and a generation of Scottish school children are set to pay the price.
I believe in what Sir Ian Wood has said.
And it is in that spirit that the Liberal Democrats have developed our Penny for Education.
Education is the essential investment.
I have also been crystal clear on how we would pay for it.
Increases to the personal allowance, championed by Liberal Democrats in government, mean that we can make this transformation in education without hitting the poorest Scots. Anyone earning less than £19,000 will pay less tax next year than they have this year under our Penny for Education plan.
Meanwhile, those at the top will pay 30 times more than someone on the median wage of around £21,000. This is a fair and progressive measure.
It has been judged progressive by independent experts including the Resolution Foundation and the IPPR.
And it meets the axiom for tax set by Sir James Mirrlees: that to be progressive it requires a tax-free personal allowance.
What we propose is a liberal approach in which tax is paid fairly to the benefit of all - and most especially those with greatest need.
It shouldn’t be a surprise that Liberal Democrats want to take action using new Scottish powers.
I represent a party that has helped Scotland on a long journey to gain those powers.
From packed halls with the Constitutional Convention; to the Steel Commission and the Campbell Commission setting the agenda; to the Calman and Smith commissions shaping the legislation; we have equipped the Scottish Parliament with the powers to shape Scotland.
So we now stand at a great cross-roads of policy.
We have great choices ahead.
And, I tell you now, I and my party are not prepared to stand to the side in the face of that choice.
Inertia is not the friend of Scottish education.
The SNP have been campaigning for powers for Scotland for decades. They tell us it is not about nationalism, not for their own sake, but because they want action on our priorities.
Yet when the powers come they are rooted to the spot. The funding demands of education are urgent but the Nationalists will not move.
Scotland's place in the international education standing is slipping but they seem not to care.
That is because this is about their goal of independence rather that our urgent needs for education.
It is inertia in the face of a crisis simply because it is not good enough for them.
And the parties of inertia should not be allowed to turn their backs on the opportunity for change that is before us.
Future tax powers
So that brings me to the future tax powers in Scotland and the main piece of news I want to talk about this evening.
Liberal Democrats in government from 2010 to 2015 raised the personal allowance from £6475 to £10,600, more than £4000. It saves low and middle earners £800 every year.
It was one of the biggest and most progressive changes of tax policy for generations.
It moved the country on from the botches and confusion of Labour’s 10p starting rate that came and went in the course of just a few years. Our change made sure work paid and that the benefits were gained by people on local and middle incomes.
So I want to describe to you how there is the possibility to take that further in Scotland in the next five years.
The new Smith powers open the door to that. These are big new powers and can do big new things.
Tonight I am proposing a Zero-Rate band for the Scottish Rate of Income Tax. This will be in addition to the personal allowance still to be set by Westminster.
The Scottish Zero-Rate will take more low paid people out of income tax completely and cut the taxes of people on low and middle incomes.
It is a power that we specifically and purposefully argued should be in the Smith Commission proposals and is sitting there in section 13(5) of the Scotland Bill.
It protects those on low and middle incomes and helps make work pay.
So today I am setting the principle and committing the Scottish Liberal Democrats to a new Zero-Rate band of Scottish Income Tax.
This sets us in clear contrast with other parties.
The Conservative Government’s priority is to raise the Higher Rate threshold from £43,000 to £50,000 giving the top ten per cent of taxpayers a tax cut of £1400. According to the Scottish Parliament Information Centre it would cost £400million in Scotland.
The Scottish Conservatives have promised to match UK tax policy. So we know they will be wedded to that tax cut for the highest earners.
I might also add that the Scottish Conservatives are planning £140million worth of stealth taxes and charges presumably including new charges for students, charges for bus passes and charges for prescriptions.
The SNP have matched George Osborne every step of the way so far – on income tax, on second homes and on the business rate poundage. And the SNP plan to undercut George Osborne on council tax and Air Passenger Duty.
So it will be a hard job to persuade the SNP away from simply copying any proposals from George Osborne.
And I remember that the SNP repeatedly opposed us in Westminster when we raised the personal allowance in government. So low paid workers cannot rely on the SNP.
Tax cuts for the wealthy and secret taxes and charges for everyone else from the Conservatives.
And inaction from the SNP.
That is the contrast now with the Scottish Liberal Democrats.
Investing in education is our top priority.
And as our investment in education delivers economic benefits and increased tax revenues, we will use those revenues to set the Zero-Rate band, cutting the amount people on low and middle incomes pay.
When resources allow they should be used for a Scottish Zero-Rate band not for tax cuts for the very richest.
What I have set out tonight, for the first time, is a radical reshaping of our tax arrangements.
Setting the right, solid foundations from the beginning of Scotland's new tax system.
A penny for education to transform Scottish education to be the best in the world once again.
And the principle that the first priority for tax cuts should be a tax cut for workers on low and middle incomes.
It is progressive, it's fair and it is right for Scotland.
I have set out these radical reforms, a bright, liberal vision, a positive and transformational programme because Scotland needs such solutions to get fit for the future.
The Scottish Liberal Democrats have punched above our weight at Holyrood in the last five years.
We have used our influence and our strong liberal voices to bring about change.
We were the first to talk about early education for two-year olds. I badgered the First Minister every week for months with the evidence of the benefit it brings for children. The SNP started to groan every time I stood up at Holyrood to talk about it. But then the Scottish Government stopped groaning and agreed to the policy.
Alison McInnes has had quite remarkable success in justice and human rights. She was criticised and abused by the powerful people at the top of the justice system when she started on, for example, stop and search.
But dogged determination allowed us to expose the unjustifiable industrial scale stop-and-search that had been brought into Scottish policing without safeguards or accountability.
Jim Hume has had to talk about mental health every week for two years. At last there has been movement from the Scottish Government, but they are still way off what is needed.
Liam McArthur did get the Scottish Government to drop some of their cuts to colleges from 2012, but there is still more to do.
And Tavish Scott may yet persuade the Scottish Government to take its failures on CAP payments to farmers and crofters seriously.
So that is why people should support us.
That is why our bright, liberal, green vision matters.
And it is how we will win the positive changes we want.
This evening I have set out the Liberal Democrats plan for a bright, liberal, green future.
A plan that put the divisions of the referendum behind us and focuses on the big challenges ahead.
It’s a plan that seeks to strike the balance between investing in education and supporting workers incomes.
It’s a plan that invests to get our country fit for the future by having a transformational effect on education. It’s a plan that reforms the tax system to protect those on low incomes.
It’s a Liberal Democrats plan for bold, positive change to get Scotland fit for the future.