 The next item of business is members' business debate on motion 2 900 in the name of Alex Rowley on local government finance and the state of the debt. This debate will be concluded without any questions being put and may I ask those members who wish to speak in the debate to press the request to speak buttons, please. I call on Alex Rowley to open the debate around seven minutes, please. I would like to begin by thanking those MSPs who signed my motion local government finance and the state of debt in order that we can have this debate this evening. I also want to put on record my thanks to Unite Scotland for all the work that we have done around this issue and to the Unite membership who have campaigned up and down Scotland to raise awareness of the arguments around a debt amnesty for public services. There are a few Unite members in the gallery this evening and they are very welcome. In bringing forward this motion tonight, I am aiming to raise further the awareness of the campaign for a debt amnesty on pre-devolution council debt. I am also hoping that we can build a consensus in this Parliament in Scotland on the issues that our Parliament can put the pressure on to the UK Treasury in Whitehall to agree a debt amnesty on pre-devolution council debts for Scottish local government. I would hope to gain support of the Scottish Government for this campaign and an agreement of the Scottish Government that it will make direct representations to the UK Treasury for all pre-devolution debt owed by councils. There are two broad reasons for making this claim on the UK Treasury. The first and the key one, as far as the case is made with the UK Treasury, must be fairness. Some £2.5 billion of Scottish council debt owed to the UK Treasury's public works loans board dates back to pre-devolution. Interest rates on those pre-devolution debts are around 8 per cent, but interest rates on post-devolution debts are around 4 per cent, which is the standard rate for a 30-year public works loans board loan. This means that Scottish residents are paying 50 per cent more interest on pre-devolution debt to the UK Treasury than we are on post-devolution debt. It means that, on average, Scottish local government is spending the equivalent of £44p in every pound of council tax collected from Scottish residents on servicing debt liabilities. Unite Scotland Estimate 10p off this in every pound derives from outstanding pre-devolution liabilities. It means that, in the 17 years since devolution, Scottish councils have sent back a minimum of £3.3 billion to the Treasury in interest payments on pre-devolution debt liabilities alone. On the grounds of fairness, I suggest that we have a strong case for pursuing an amnesty and I hope that this Parliament and the Government in Scotland will join the campaign and make the case to the UK Government for this to happen. So there is a strong case for the Treasury based on what is fair and what is right and just, and we need to make that case. We also must consider the current financial pressures on Scottish councils and the growing demands being placed on local public services, as that makes the need for such an agreement on a debt amnesty even more important and crucial. A report today by the Accounts Commission makes very difficult reading and brings home the case for reform but also the case for investment. The chair of the Accounts Commission states, and I quote, that councils are increasingly relying on the use of reserves to bridge projected funding gaps. Moreover, he states, there is a dependence on incremental change to services, increasing charges and reducing employee numbers in order to make savings. These are neither sufficient or sustainable solutions for the scale of the challenge facing councils. We need to support councils to face up to those challenges, and that means stopping the cuts and investing in more preventative approaches, something that the Christie Commission supported by all parties in this Parliament advocated. I think that the Scottish Secretary of United Part Rafferty best sums up the current position of local government in Scotland when he states, without doubt, that we are facing a perfect storm of austerity across Scottish local authorities and left unchecked that thousands of crucial jobs and local services will be further decimated to the point of no return. He continues, we believe that these extraordinary circumstances call for special measures, and that is why we are pursuing an amnesty on the pre-devolution debts owed by our councils to the UK Treasury. He adds, an amnesty is a matter of political will, and there is certainly a precedence, as witnessed by the UK Treasury right off of a £900 million housing debt in Glasgow City Council. It can be done. That is a key point in this debate, I would suggest. It can be done. It just requires the political will to make it happen, and that is why this debate is important. As Unite says, this is not the whole solution to the massive challenges facing local councils, but it is part of a series of measures that need to be taken to address the financial pressures that councils are under so that we can sustain jobs and services under public ownership for future generations. I did write to the Chancellor and the Scottish Secretary raising that issue with both, and I got a reply from the chief secretary to the Treasury that basically said no, while Mr Mundell did not bother to reply. We know their position, but councils across the UK have been renegotiating debt and interest rates and making massive savings with private lenders, so the idea that the UK Treasury cannot do that is fanciful. Let us firm up our position and our resolve to fight the case for debt amnesty on the grounds that I have set out today. I call Sandra White, followed by Graham Simpson. Thank you very much, Presiding Officer, and thank you to Alec Rowley for bringing this forward. Certainly not just myself, but many people, elected and unelected, are very interested. I just want to quote some stuff from Mr Rowley's motion himself in regard to obviously the debt. It has around £2.4 billion of pre-Scottish devolution debt liabilities, and in the very last paragraph it considers that Scottish devolutions intends to be a new beginning for Scotland and notes a few that the time has come for the historic burden to be dropped by the UK Government. Although I agree entirely with what you say, Mr Rowley, I think that we have to be perfectly honest in this particular debate. I have to remind Mr Rowley that there was a Labour Government that was there at that particular time. I would ask not just before devolution, but when devolution came in, why it was never ever suggested under a Labour administration to administer a Labour Government in Westminster, why it was never raised then? That is something that I have to ask. I am not saying that I am cynical, but I think that we need to ask that. Even further on from there, there was a Labour Government that brought in PFI, which is costing even more moneys in that respect. Although I appreciate what you are saying, I absolutely agree about the debt. I have to ask why now at that particular time—if you just let me finish, Mr Finlay, I am going to quote yourself as well. I have to ask at that particular time why all of a sudden, at that particular time, when the Labour Government was there and you mentioned yourself as well, Mr Rowley, it was the Labour Government that wrote off the debt of the housing, a historic debt, Glasgow City Council, to transfer those houses to Glasgow Housing Association, which was unaccountable, not just to the council, but to the people whose houses were there as well. That was Gordon Brown who did that. Could it have been done then? Why was it not asked to write off the debt when he was doing this particular one? That is a question that I have to ask. I thank Unite Union and I absolutely thank them as well because I have been on the picket line with some of the people in Glasgow that I know in regard to writing off the debt. I also thank Unison for their briefing and I quote from Unison's briefing. He mentioned PPP, PFI as an expensive form of borrowing, a very expensive form of borrowing. I could also quote Neil Finlay in that same document that Unison sent to us. Mr Finlay, you said at the time that it would be financial madness to buy a house on a credit card and yet that is exactly what we are doing with PFI and NPD. In some cases, I let you in a second, in some cases we are paying double the digit interest rates on some existing PFI projects. I ask why did Labour bring PFI projects in and why did you not ask a Labour Government in Westminster, a Labour Government here to write off the debt? I let you in, Mr Finlay. Neil Finlay mentioned my quote on PFI and NPD debt. NPD is the Scottish Government's scheme, which is PFI by another name. I actually believe irrespective of which Government was in power that we now have a unique opportunity because we have borrowing powers coming to this Parliament and we have historic low interest rates. We have a unique opportunity now. We won't have it on-going to renegotiate those debts, whether they are historic debts or whether they are current NPD debts. We should take that opportunity now. No more than another minute, please. I thank Mr Finlay and I said that I appreciate the motion as it is, but I still ask why, when it was a Labour Government in Westminster, a Labour Government here, you did not even ask them to write off the debt. As Mr Rowley said, they wrote off the debt on council housing in Glasgow. They could do that, why could they have done it for other debts? No, your party was in power and you never even embraced or wrote or asked them. Gordon Brown was in power at that time and yet they didn't even write it off. Maybe you might call me cynical. I would like us to get together in something. Could you to realise that you speak through the chair and when properly asked to rather than to have an individual argument? I apologise, chair. I didn't realise that I was doing that. As I said, I think that it is a good debate to have, but obviously I don't understand why when Labour was in power in Westminster, Labour was in power here, they could not write this off then. All of a sudden now, apparently because of low interest rates, we are being asked to take this on board. Thank you very much, Presiding Officer. We've got off to a very consensual start. Graham Simpson to be followed by George Adam. Thank you very much. I hope that you won't take up too much of your time today. First of all, I thank Alex Rowley for bringing the debate. Local Government finance is always worth discussing. I share your view on that. It's certainly in the news today, as Alex Rowley has pointed out already. We have the timely accounts commission report on performance and challenges in 2017, and that shows what most of us in this chamber realise, that local government has been squeezed over many, many years in Scotland. We've seen a long-term decline in revenue funding under the SNP. Total revenue funding will fall this next year by £216 million in real terms, as that report shows, and COSLA says that there's been a £550 million cut in the local government settlement. They call for longer-term planning. All of this, of course, has an effect on jobs and services. More than 15,000 full-time equivalent jobs have gone in local government in the last five years. It's pretty depressing. Mr Stewart wants in. Mr Stewart will recognise that the Scottish Government's discretionary budget has been cut by £2.9 billion, which is 9.2 per cent lower in real terms than it was in 2010-11, by 2019-20. That is his Government that is slashing our budget. Does he not realise that that has an effect on every single public service in Scotland? That was more of a speech than a question. However, the premise of the question was entirely wrong because, as the Fraser Allander Institute has pointed out, in fact, Derek Mackay's own figures show that there has been an increase this year from the UK Government. That's why my colleague Murdo Fraser has described Mr Mackay as a very lucky man, indeed, and yet still he's chosen to cut local government. 15,000 jobs have gone full-time equivalent jobs in the last five years. Now, if we come on to the thrust of what Alex Rowley is asking us to consider, which is an historic debt, there is a bit of a contradiction between Alex Rowley's motion and what Unite is actually calling for in their paper, which I have read and it is very interesting. The paper, it seems to me, is calling for an amnesty on the interest, but Alex Rowley appears to want to write off the debt entirely. He does not mention an amnesty on interest in his motion, so I'm not really clear where he's coming from. It would certainly be irresponsible for us to hear today call for writing off £2.4 billion of debt on the day before the UK budget. Perhaps that answers Sandra White's point. Kezia Dugdale? We recognise that Unite Scotland is also asking for the reprofiling of debt, and as a conservative—a ffiscally conservative—conservative, can I at least accept the merits of using the fact that interest rates are in all-time low to save government and local government money? Surely a ffiscally conservative could support that? Graham Simpson? I'm merely trying to get the Labour story straight in my head, because I'm not really clear where you're coming from. If you're asking for £2.4 billion of debt to be written off, that strikes me as being somewhat irresponsible. If you're asking for an amnesty on interest, that's an entirely different matter. Alex Rowley may want to act like a Labour Chancellor, but we're certainly not going to be playing that game today. I've checked with COSLA. They've made no representations on this matter at all, although they do have some sympathy, of course. It would seem to me that COSLA, if any representations are to be made, are probably the group to make it to the UK Government. Alex Rowley has done so himself. He should probably use the Scottish Government if they're so minded, but he has to ask first. We need to be clear on what Alex Rowley is calling for. George Adam, to be followed by Alexander Stewart. I thank Alex Rowley for bringing this debate to the chamber, because, like myself, he is a former councillor, and he's probably heard debates about funding within local authorities more often and more time than we both care to remember. One of the important things about the debate is—it's funny when I was listening to my colleague Sandra White—it sounds like we're almost in pre-evolution days here when we're having this debate because it sounds like a debate that we had way back in the day. It's one of the things that I think there is merit in what we're trying to discuss here today, because there is some merit that we have to talk to Westminster and ensure that we manage to get something out of it as well. At the heart of the debate is the key point, that local government has financial autonomy. That's something that must continue, but in order for us to do that, we need to make sure that Westminster, as the individuals who gave the loan, are the ones who do something. I have some concerns with that. Local councils must be held accountable and be allowed to pay off their debt, but, however, I think that they should get a bit of flexibility. We're looking at United's report here. They've got some of the historic debt, and it's in Renfrewshire Council money, and it's £97 million, and post-evolution it's £165 million. In the real world, that effectively means—and former councillors in here will be aware of that. That's when the officer normally says to you, that we don't have the capacity for that project, councillor, because we don't have the funding capability to be able to do it, because you are carrying this debt. It's similar to what Sandra White was talking about with the housing debate, where, effectively, for years, councils were carrying debt for houses that, in some cases, had already been knocked down at certain stages. It's important that councils get that flexibility, and I welcome everything here. However, as I said earlier, it's only the lender of the loan that can write off that debt. We would have to appeal to the better nature of the UK Government, and considering all the issues that we're currently facing with Westminster, I think that that's quite a difficult ask. I do believe in negotiation for my car salesman that I am. I think that we could probably find some common ground somewhere in those things, but if we don't get that right, it's going to hit our poorest areas, because if, for talking sake, we end up in a situation where the Scottish Government tried to find a way to have an amnesty in its own, it would affect our own budget that we've already settled with local government just now. I also agree that my concerns are with Westminster, and you'll call me a cynic, Presiding Officer, but any plea to Westminster to write off pre-devolition debts would no doubt be met with ridiculous terms and conditions, and an amnesty could require the Scottish Government to dramatically reduce its budget, thus decimating agreements that are already made. Should Westminster not be more agreeable, those further cuts to offset council debts could already affect £120 million extra that's already gone to local government, but any change of that debt would have to be dealt with carefully. That's my biggest concern. We need to make sure that when we do those negotiations that we have to deal with. I do believe that this is a very important debate for us to have with local government and with Westminster, because it affects delivery of the actual services that everybody in our constituencies and communities actually deal with. One of the things that I'd like to say in closing is that this debate is extremely important for us to have it, but we need to explore all the options. It needs to be in a non-confrontational manner. Listening to Mr Simpson's interventions earlier on, it sounds as if the Tories and Westminster do not want to have this open debate, because Mr Rowley has stated that, yes, he's got some ideas, the Government will have some ideas, the Scottish Government, but we need to make sure that Westminster buys into that as well. For me, if we don't get that right, we're going to cause more chaos and more financial troubles from our local authorities. That's something that none of us want, so let's have this open and frank discussion and let's see if there is something in some capacity for us to be able to do something here. I have Alexander Stewart followed by Neil Findlay. I am still a serving councillor in Perth and Conor's councils, so I refer members to my register of interests. I begin by thanking Alex Rowley for securing this debate today on the issue of debt owed by local authorities in Scotland. Although I might not agree with all the conclusions of the paper that was published by Unite and Union Scotland, I strongly make the case that many councils face serious challenges in funding their public services. As a local councillor myself, I have seen that in full. Although the £2.4 billion worth of pre-devaluation debt owed by public works loan boards accounts for a not insignificant amount of money, the total that's been accrued of Scotland's local authorities is round about £13.6 billion. That has contributed to making local government debt per household in Scotland almost twice that of England in Wales. The greatest financial pressure facing our local authorities, however, is the result of the lack of sufficient funding from the Scottish Government, which has made it necessary for councils to borrow more. Or did Scotland reveal that local government in Scotland has suffered a 10 per cent real-term cut in funding since 2010-11? That is the real challenge facing local authorities, and the Accounts Commission have recognised that in its report. Will Mr Stewart give way? Happy to do so. Kevin Stewart recognised that the reduction to local government is about the same as the reduction to the Scottish budget overall, which is thanks to numerous Tory chancellors who have slashed Scotland's budget by £9.2 billion up to 2019-20. Do you recognise the actions of your chancellor in terms of the budgetary position that we are in? Alexander Stewart. Mr Stewart, you have heard it many times before from our benches. We know and you also know that there has been an increase in funding to you. I am sorry, it is true. You are in a better position today than you ever have been because of the Barnett consequentials and all the rest of it. So you have been the people who have attacked local government here in Scotland when you have been in charge for the last time. Can I remind members to always speak through the chair, please? The report makes it quite clear that decisions made by the SNP and Labour to raise council tax in some areas by up to 3 per cent will have a limited impact on council resources. It is also worth bearing in mind that, with the range of local authorities that we have, 32 of them across Scotland range from about half to over one and a half times the council's annual income. Different councils have different ways of dealing with the challenges, and we have seen that in savings and reorganisation. Councils can benefit from learning from examples from each other about best practice. Audit Scotland has talked about a handful of councils having a rating of strong financial management. That speaks volumes if we have councils that do not have strong financial management across Scotland and the difficulties that they face. Councils can, as I say, learn from each other, but at the end of the day, efficiency savings and workforce management planning can only go so far before the resources that we have take us to extreme measures. At the time when our councils are facing increasing pressure and an ageing population and their workload has increased, we need to ensure that we do all that we can to adequately fund and allow them to continue to provide high-quality public services without the need to see sufficient borrowing continue. The Scottish Government urgently needs to rethink its approach to local government, and that, I firmly believe. I will let the minister come back to his seat and perhaps apologise to us for having had to leave the chamber. Neil Findlay, to be followed by Andy Wightman. Presiding Officer, I declare an interest as a member of Unite the Union. Having been a councillor for nine years and saw close quarter the capacity of local government to change people's lives for the better, it breaks my heart to see what has been done to our councils at the moment. Actually, I am thoroughly depressed with some of the contributions that I have heard this afternoon. Unite have done a very good piece of work on that, and they have exposed how there has been an eight and a half percent cut in council budgets over the past six years alone. What we have to remember is what those cuts impact on. They impact on the very services that civilise our society, that educate our kids, that care for our elderly, that keep our communities safe and clean. That is what local government is all about. If we combine that with the retention of a regressive system in local taxation, we see real tragedy occurring because local government is in the front line of the fight against poverty and inequality in our communities. Councils have lost tens of thousands of jobs. No task force, no emergency debates, no talks of crisis from the Government, just denial and jobs being lost hand over fist as services are cut. My local authority in West Lothian has been starved of 90 million. Similarly, large cuts in Midlothian, Edinburgh and even worse, and every other council across Scotland too. On top of that, we see the UK Government ripping councils off with high interest rates on historic day. I do not care if it is her red Government, a blue Government, a yellow Government or whatever Government I would be raising these issues because they are fundamental to the proper running of local government. Of course I will. Sandra White I thank the member for taking intervention. What I was trying to get across was that you were a local councillor and people were elected. Why did you not ask the Labour Government, when it was in power here, to write off the date or the interest rate? Can members please remember to speak through the chair? Could you also wait until your names called before you start talking again? Ms White, sit down please, now from Mr Finlay. Sorry, Presiding Officer. Ms White is making an assumption that we did not lobby to do those things when Labour was in power. You would be wrong. Ms White would be wrong on that because that has been on the agenda for many, many years. That is not something that has just come to our attention now. On top of the cuts to local government, we see the UK Government ripping off councils with this historic date. I do not know anyone who is receiving 8 per cent on their bank account balance at the moment. Maybe Mr Simpson is with his expansive portfolio of shares or whatever it is. I am sure that he might be with some of the people who manage his finances, but I do not know any normal person who is getting 8 per cent. First of all, Mr Finlay has no idea whatsoever about my personal finances. I do not have a vast portfolio of shares. Perhaps he would like to retract that. Could he be any clearer than Mr Rowley was? Is Labour today asking for a total write-off of £2.4 billion, or are they backing the union in calling for a debt interest amnesty—two very different things? Neil Finlay. I do withdraw that, and I apologise for that. If Mr Simpson is saying that he will support us in getting rid of the interest rate part, let us go for that as a starter. If he wants to join us and call for the eradication of all the debt, I am quite happy with that as well. Let us put hands across the chamber and join in whatever it is that Mr Simpson wants to get rid of, so we can sign a letter and we can all send it off to the UK treasury today. I am sure that he will be first out when he is penned. I also say that there is a case for us to look not just at this debt but at the debt that Sandra White mentioned, the PFI NPD debt. That is past PFI debt and current NPD debt, because it is irrespective of which Government accumulated that debt. We have an opportunity at the moment where we have historic low interest rates. We are getting borrowing powers for the first time and there is an opportunity to renegotiate those debts. There are examples in England where that has done freeing up tens of millions of pounds for public services. I plead to the minister why I am not doing it. I think that we should be setting up a debt recovery unit within the Scottish Government and looking individually, case by case, on NPD and PFI debts. We should look at them individually not as a blanket approach and see if those can be renegotiated to free up more money for local government. Imagine what the two things combined would do for the financing of education, for the financing of social work, for our local environment and for rebuilding the services that are being cut year in, year out in our communities. The last of the open speeches, I call Andy Wightman. I thank Alex Rowley for initiating this important debate. I also welcome Unite's report on local government finance and the state of the debt and agree with the case for debt interest amnesty. I want to stress two main points in this debate. The first is why limit is to pre-devolution public works alone board debt and the second is public debt in an age of austerity and the consequences of that. In a report published in November 2016 by the Scottish Green Party a month before the Unite's report on local government debt in Scotland, we identified total debts of £11.5 billion. Unite's figure is £12.1 billion, much the same. There are three elements of this long-term debt. There is pre-devolution public works and loans board debt, there is post-devolution public works and loans board debt and then there are things called lobos, which I will come to in a second. Now, £9 billion of public works and loans board debt, about 20 per cent of that, £2.4 billion is pre-devolution debt and 80 per cent is post-devolution debt. But the further £2.4 billion that we identified in our report in November is lender option, borrower option loans, so-called lobos. Those are very long-term loans, often lasting 40 to 70 years. They were initially offered on fixed teaser rates, typically undercutting PwLB rates. In the 2010 spending review, public works and loan board rates rose from 0.15 per cent to 1 per cent, reduced to 0.8 per cent following the 2012 budget. Lobos appeared just as the public works and loans board rates were being hiked. I think that it is instructive to delve deeper into that coincidence, because today some councils are facing 7 to 9 per cent interest rates on lobos. We regard lobos as illegitimate, odious and unsustainable, and it is not even clear how much is being paid in debt, but it is not just lobos. It is about the post-devolution public works and loans board debt. In 2015-16, Scottish local authorities paid almost a billion in interest to the public works and loans board, and of that, Unite is proposing an amnesty for only 20 per cent. In our report, we argue that there is also strong argument for writing off all post-devolution debt, public works and loans board and lobos. I do not understand why a case can be made and it can for pre-devolution debt. The same case does not exist for post-devolution debt. Much of the debate is a consequence of the age of austerity. It is a consequence of the fact that the Government bailed out the banks to the tunes of hundreds of billions of pounds following the financial crash. As we saw from the Accounts Commission report published this morning, local authorities faced very challenging a few years ahead. Debt issued by the public works and loans board is owned by the Government. It is public debt. Debt forgiveness costs the Government nothing because it costs the Government nothing to issue. There is a case to go beyond an amnesty to write off all of this debt. I think that the moment now is significant in contrast to what Sandra White was talking about with Labour Governments previously because of the austerity that we are living in, because of the very real challenges facing local government. I think that there is a clear moral economic and political case for writing off all of this debt. However, the question that I have left with is why is the focus of Unite only on pre-devolution debt. As I say, it costs the Treasury nothing to write this off. It would improve the balance sheet of local government by £9 billion and revenues by hundreds of millions a year. To conclude, debt is an important issue so too is the future of local taxation and the need to scrap the regressive council tax. So too is the future of local government finance, as a whole later this week we will be publishing proposals to strengthen the local government financial settlement. To conclude, it is clear that we and Unite and indeed Labour agree on debt forgiveness, but we argue rather that we should go much further. I welcome the opportunity to respond on behalf of the Government to today's motion on local government finance and the state of their debt. The motion asks the Parliament to consider that Scottish devolution was intended to be a new beginning for Scotland and to note the view that the time has come for the historic financial burden to be dropped by the UK Government. I would start by recognising that, since the motion was tabled, the Cabinet Secretary for Finance and the Constitution announced on 2 February that local authorities would benefit from an additional investment of £160 million to support local services. Taking next year's local government finance settlement, including the extra £160 million, plus the other sources of income available to councils through reforms and having set their council tax and funding for health and social care integration, the overall potential increase in spending power to support local authority services now amounts to more than £383 million, or 3.7 per cent in 2017-18, compared to this year. That, despite the Tory austerity that they are unwilling to admit and what they fail to have told the chamber today and Fraser of Allander points out, is that there is a difference between discretionary spend and other spending that we have no control over whatsoever. Turning now to some of the detail in the various reports on the issue, I have read with interest the UNITE paper on local government finance and the state of the debt and have listened to this debate. I thank Mr Rowley for bringing this to Parliament for discussion. I am happy to support the terms of this motion and would welcome an amnesty on pre-devolution debt or even a write-off of the whole amount. As it would free up resources to support the investment in the services delivered by our local government partners. However, we also need to be mindful of the likely UK Government reaction to such a request. I do not think that it would be particularly favourable. If we thought that there was any prospect of securing some concession from the current Government, we would have no hesitation in making an approach. Sadly, the reality is that, for the reasons that I will develop further, I think that we all know that there would be a very negative reaction from the UK Government. The UNITE report makes a number of relevant points that I would like to reflect on. Firstly, the report notes that the pre-devolution debt is unique as the interest rate in the debt carries such a high interest rate—8 per cent. The report compares that with current rates charged by the UK Government on loans from the Public Works Loans Board, which are at 4.4 per cent. Interest rates over the pre-devolution period were at a time of high interest rates. Unfortunately, we can probably all remember the 1980s and early 1990s when interest rates rose to nearly 15 per cent. While the pre-devolution debt is unique, given the average rate of 8 per cent, it is also the case that the timing of devolution came at a time when rates were falling, and that trend has continued. I suspect that DHM Treasury would inevitably attempt to argue that, to be able to lend to local authorities, the central Government itself needs to borrow at the prevailing rates. It would say that comparing rates from the late 1990s when interest rates were higher to current interest rates, which are at a record all-time low, is not relevant when considering pre-devolution debt. Analysis shows that of the total outstanding pre-devolution debt, nearly half of the £2.5 billion outstanding was borrowed in 1997 and 1998. That is immediately prior to devolution. Further, 99 per cent of the pre-devolution debts are interest-only loans. I would expect the Treasury to argue that that means that local authorities have not made any repayments on those loans since taking the loan out prior to devolution and will not repay any amount until the maturity date of the loan. Borrowing on those terms was a decision taken by each local authority at the time. We also have to bear in mind that, if the councils had chosen to borrow on a repayment method, the value of the outstanding debt and the associated interest costs would now be lower. Local authorities have had borrowing powers for a significant number of years. Of course, decisions on borrowing are rightly made by each local authority, as Mr Adam pointed out. Central Government does not require them to borrow. That is a decision that they take for themselves. Of course, they employ professionally qualified staff and often use professional treasury advisers to manage and advise on their treasury management strategies. I will give way to Mr Findlay. Neil Findlay. I have gone here last minute. To summarise what you are saying today is that you do not think that they will do anything so that you are not going to speak to them. The second thing is that it is all local governments fault for negotiating bad deals in the first place. That summarises what you have said so far. Kevin Stewart. If Mr Findlay listens to the conclusion of my speech and listens to the beginning of it, he will find out exactly what I am saying. If I go back to treasury management strategies, the types of loans and the period of any loan are therefore rightly all matters for each local authority. It is important to say here that, by providing that analysis, I am not in any way defending the debt costs associated with the pre-devolution debt. I am simply pointing out the reality of the likely stance that the UK Government will take. If it were possible, I too would wholeheartedly support any moves that would deliver a reduction in those costs. I also believe that, even if they were minded to offer any concession, that would not come without catches. I would also expect them to say that it will be up to the Scottish Government to provide an offsetting reduction to our budget, which would, of course, remove much-needed resources at the very time that they have already imposed cuts to our budget, which will mean that by 2019-20 the Scottish Government's discretionary budget will be £2.9 billion—9.2 per cent lower in real terms than it was in 2010-11. To conclude, although I, too, would like to see an amnesty for or a write-off of pre-devolution debt costs, for the reasons that I have outlined, I cannot see the UK Government agreeing. I wish that things were different. Thank you, Presiding Officer.