Public Expenditure (Scotland)

– in the House of Commons at 3:32 pm on 13th December 1988.

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Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office 3:32 pm, 13th December 1988

With permission, Mr. Speaker, I wish to make a statement about the allocation of my public expenditure provision in the next three years. An annotated table showing the allocations for each service is available in the Vote Office and I am arranging for it to be published in the Official Report.

The continued success of the Government's management of the economy has allowed public expenditure to increase at the same time as its proportionate claim on national resources has fallen. As a result, planned provision for my Scottish programmes in 1989–90 will amount to almost £9 billion, 6 per cent. over planned expenditure for the current year.

We have already announced our proposals to integrate training and enterprise development functions in Scottish Enterprise. Detailed provision for Scottish Enterprise will appear in my future public expenditure plans. In the meantime, I have increased next year's provision for both net and gross expenditure on the industry programme, compared with the plans announced last year as well as with the actual level of this year's spending. Within the total, the Scottish Development Agency will have an enhanced budget of over £150 million. There will also be substantial budget increases over the current year of £2·5 million for the Highlands and Islands Development Board and £1 million for the Scottish tourist board. The HIDB will expand its advance factory programme to provide premises for small businesses.

I have been very impressed by the effectiveness of small factory units and industrial workshops in encouraging the promotion of small-scale economic development and employment. There is a strong demand for this type of industrial unit and considerable evidence that the supply of units is not keeping pace.

I am very glad, therefore, that in 1989–90 the SDA plans to provide 180 such units at a cost of about £6·5 million, and I am glad to announce that I am allocating an extra £5 million to local authorities to allow for an increase in the building of small factory units and industrial workshops. This represents a 31 per cent. increase in planned provision, and would allow local authorities to construct about another 140 units. This increased allocation, taken with the commitment of the resources to this purpose by the SDA, the HIDB and the new towns, will go a long way to easing the constraints on further expansion in this area.

I have once again identified the health programme as a priority area. Planned expenditure in 1989–90 will be £2,683 million, which is £182 million or 7·3 per cent. greater than in 1988–89. The Health Service will also benefit from savings in superannuation contributions and from further efficiency savings. Following a report from the Government Actuary, a copy of which I am making available in the Library, NHS employers' superannuation contributions will be reduced by 2 per cent. to 5·5 per cent., and this will produce savings of about £24 million per year. Together they produce a further £60 million for patient services. This means that, in total, additional resources of about £240 million, an increase of nearly 10 per cent., will be available to the NHS in 1989–90 compared to the current year.

These additional resources will allow me, first, to fund a further major initiative to reduce waiting lists. I propose to make available at least £4·5 million for this purpose—an increase of 50 per cent. over the current year—which I estimate will, in broad terms, allow an additional 10,000 in-patients, 5,000 day patients and 40,000 out-patients to be treated. Moreover, I stand ready to allocate a further £2·5 million on top of that sum, making a total of £7 million in all, if health boards come forward with enough good quality projects specifically directed to the reduction of waiting lists. The boost in NHS resources will also allow a 25 per cent. increase in capital expenditure, and increased expenditure on medical developments, on services for the elderly, the mentally ill and mentally handicapped, and on the treatment of patients with AIDS. My decisions for 1989–90 will bring the increase in resources for the Health Service in real terms since 1979 to 34 per cent.

Next year will see the start of Scottish Homes. I am determined that the new body should make a major contribution to Scottish housing from its first day. It will have gross planned expenditure, including loan repayments, of £349 million in 1989–90. This is an increase of £86 million over the comparable planned expenditure of the Scottish Special Housing Association and the Housing Corporation in the current year. Scottish Homes will in particular be able to play a major role in the regeneration work of the urban partnership in the four priority peripheral estates. Next year also, gross local authority provision for investment in housing is planned to increase by 12 per cent. This gives the lie to any claim that local authority provision has been cut to provide resources for Scottish Homes.

I have made substantial extra provision for roads and transport—14 per cent. more than for this year and £40 million more than the previous plans for 1989–90. Planned expenditure increases to £750 million in 1991–92. This will allow a good start to be made on upgrading the A74 to a motorway, as we promised in our manifesto. This is a major project which involves substantial planning in order to create a road of motorway standard. Planning work is going ahead as fast as possible and advance works may start before the end of 1990. Other roads will continue to be improved.

Programmes protecting the environment will be significantly increased in 1989–90. I have made a 14 per cent. increase in capital investment in the water services next year. That will enable local authorities to make more rapid progress in meeting higher quality standards for water supplies; to improve further the quality of our rivers and coastal waters; and to improve the condition of some bathing waters. Additional funds have been allocated to increase archaeological survey and excavation in areas of rapidly changing land use.

Provision for education in 1989–90 will be increased to £2·354 million, or 7·6 per cent. more than the equivalent figure for this year. The major part is for local authority current expenditure, which goes up by 7 per cent. to £1,793 million. Provision for local authority capital is increased by 9·4 per cent. Also, this increase, among other things, will enable me to support our educational initiatives by appropriate training, to expand the number of assisted places in schools, to respond positively to interest in setting up Scottish technology academies, and to enable centrally funded colleges to improve both their equipment and the infrastructure of their educational provision.

The growing demands on the social work services are also fully recognised in this settlement. Increased provision of 13 per cent. will put local authorities in a very strong position to respond to the demographic and other pressures in this area. In addition, through direct funding of community service orders, which I am to introduce for the first time next year, I am planning for a further 600 orders in each of the next three years to make this alternative to custody more widely available to the courts.

Resources are being provided to increase staff numbers and to enhance training in the prison service. As part of our fight against drug-related crime, a third wing of the Scottish crime squad is being set up. I have also decided to invest additional resources in the court building programme to allow the new Edinburgh sheriff court to proceed and to overcome the inefficiencies of court business taking place in six different locations in the city.

Many positive benefits will accrue to Scotland as a direct consequence of the new allocations that I am announcing today. In many of the initiatives which we have launched in recent years, we have asked both the private sector and the public sector in Scotland to collaborate to the best advantage of the Scottish people. The allocations I have announced today, to Scottish Homes, to the SDA, to the National Health Service in Scotland and elsewhere are in the context of public expenditure actually falling as a proportion of national resources. It is therefore as a consequence of the contribution that the private sector is making to the wealth of the country that we can afford to enjoy these improvements in the public services.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

The Secretary of State normally accuses me of having a mean, ungracious and Presbyterian approach to his attempts to represent himself as a reincarnation of Lady Bountiful, deploying favours to the people of Scotland. He will be glad to know that, on this occasion, 1 welcome some aspects of the statement, but, first, I shall make a preliminary point.

The right hon. and learned Gentleman has confirmed that the planned provision for 1989–90 is £8·97 million, as announced in the Autumn Statement. If we compare that with the estimated outturn for 1988–89, it represents a cut in real terms of £200 million. If hon. Members are interested, they will find that helpfully set out in table 1·10 of the Autumn Statement by the Chancellor of the Exchequer. I recognise that the right hon. and learned Gentleman will argue that plans for next year will not hold, but the Chancellor's figures make it clear that the Government's intentions are anything but generous.

I make it clear that Opposition Members welcome any increased expenditure for the Health Service, but I must say to the right hon. and learned Gentleman that it is not all above board. Will he accept that there will be some understandable cynicism about an increase that includes a reduction in employers' contributions to the superannuation fund and savings that will allegedly take place arising from the privatisation exercise that is being conducted? Will he confirm that any benefit in cash from the sacrifices of staff, who have had to apply for their own jobs at considerably inferior terms and conditions, are now being captured by the Secretary of State and paraded as an increase in public spending?

The right hon. and learned Gentleman talks about an increase of £240 million over planned expenditure in 1988–89. However, will he confirm that, if that is to be a fair comparison, he should include the £105 million which the Health Service pay settlement—and the nurses' pay settlement in particular—cost in Scotland in 1988–89? Will he accept that, on looking at the increase that he has announced, it is only prudent to take account of inflation and the additional 3·5 per cent. that the National Association of Health Authorities calculates must be included for demographic factors and other additional aims and perfectly fair objectives as outlined in the SHAPE and SHARPEN reports? If all such factors are taken into account, I suspect that, in real terms, Health Service expenditure is standing still and little better.

I strongly welcome, however, the £4·5 million for reducing waiting lists. My hon. Friend the Member for Strathkelvin and Rearsden (Mr. Galbraith) has been hammering away at that theme for a considerable time and I am extremely glad that, on this occasion at least, there has been some reaction. I hope that the right hon. and learned Gentleman will continue to listen.

I vehemently hope that there will be sufficient room in the new budgets to ensure that health boards can settle the outstanding disputes on the regrading process in the generous spirit that was, clearly, originally intended.

In other areas there is much less pleasant news. Expenditure on education goes up modestly in real terms next year, but then falls in real terms in the following two years. I do not understand how the Secretary of State can take the extremely optimistic line that he has adopted on industry. He knows that, in 1989–90, there will be a cash increase of £10 million, but, if the GDP deflator is applied, does he confirm that that means a decrease of £4 million? If one does the same sum for the following year, there will be a decrease of £9·5 million and in 1991–92 there will be a decrease of £17 million.

On housing it is the old story. We are told that there will be a lot more cash available, but, of course, the Government's contribution will fall in every conceivable way. What the Secretary of State has done is assume higher and higher receipts from sales and from the disposal of property. Next year, in cash terms, the Government's contribution, the net figure in the table attached to the statement, will be cut by £40 million and, in real terms, by £69 million. In the following two years of the three-year period dealt with, that reduction is followed by drops of £50 million and £32 million in real terms. If the Secretary of State is honest when he says that he wants to mount an attack on the housing problems of the nation, it is obvious that he should rethink the strategy and his contribution to the effort.

This statement is nothing like as generous as the right hon. and learned Gentleman has represented. It is full of throwaway lines that are scattered through the statement, which hardly bear examination. I was interested in the image of the Scottish crime squad with a third wing. That is a curious anatomical happening and one is moved to ask whether it will fly.

More seriously, of course we are pleased that, for example, there will be a 14 per cent. increase in the capital spending on the water services. That is balanced by the fact that, if one considers the other environmental services, there is a total cut in real terms between this year and next of £21 million.

In view of the coming debate on electricity privatisation, will the right hon. and learned Gentleman note that, by 1990–91, the loss of revenue from debt repayments and so on from the electricity industry will be in the region of £200 million according to the Secretary of State's figures. If the spending projections are adjusted to take account of that, the Scottish Office net . budget in 1991–92, in real terms, will be below the figure for 1988–89 by some £263 million.

I suggest Mr. Speaker, if not to you, at least to the House, that when dealing with the right hon. and learned Gentleman the term generous often has a special and rather sinister meaning.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

If the hon. Member for Glasgow, Garscadden (Mr. Dewar) is disposed to describe my statement as nothing like as generous as I am suggesting, I think that that is his coded way of saying that he has concluded that it is pretty generous.

. I will respond to the points that he raised. First, he made his usual response by seeking to compare planned provision for next year with the outturn this year. He is perfectly entitled to make that comparison as long as he appreciates that, in the past 50 years, there has never been a year when outturn and planned provision have been the same. Therefore, if outturn has been greater than planned provision in the past—unless the world has changed by an even greater extent that he and I believe likely—it is certain that outturn next year will turn out to be different from the planned provision.

The proper comparison to make is between planned provision today with what we were planning a year ago. I do not believe that he disputes the interpretation and conclusion that we have reached.

With regard to the Health Service, the hon. Gentleman made some reference to the fact that some of the improvements in the Health Service expenditure were being funded by efficiency savings and by reductions in NHS employer contributions. Let me make it clear that the improvements in no way affect the pension entitlements[Interruption.] I am not suggesting that the hon. Gentleman said that, but, for the purposes of the public who may think that such a—[Interruption.] I am delighted that the Opposition were thinking no such thought and that no one wished to suggest otherwise. Nevertheless, I put on record the fact that the reduction in employers' superannuation contributions has no implications for the pension entitlements of their former employees. This means that an extra £24 million will be available for worthwhile improvements in the Health Service.

As for the reduction in the waiting list, I can understand the hon. Gentleman wanting to give a bit of shadow glory to his hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), but I must inform him that the Government's interest in and determination to deal with the waiting list long preceded the hon. Gentleman's elevation to his current post. In the past two years the Government have given priority to this area: in 1987, £3·6 million was allocated for a crash programme of action, and in the current year a further £3 million was set aside to fund projects for this purpose. As a consequence, there have already been welcome reductions in the waiting lists, which were inflated in the past as a result of industrial action which the Opposition continually failed to condemn.

Finally, the hon. Gentleman mentioned housing, and correctly pointed out that one of the reasons why we can make such a generous provision for it in Scotland has been the enormous response by the Scottish public to the opportunities to acquire the ownership of the homes in which they live. We are constantly having substantially to revise upwards the receipts that will be available to local authorities and others as a result of the policy that has been applied. As we said all along, the benefits from the right to buy would accrue not only to people who exercised that right but to local authorities, the SSHA and others in the form of resources for their housing stock. I am happy that that is what is happening now.

I welcome the hon. Gentleman's endorsement of the overall strategy for public expenditure.

Photo of Mr Allan Stewart Mr Allan Stewart , East Renfrewshire

I want to ask a detailed point about the roads programme. I welcome what my right hon. and learned Friend said about the A74, but does he agree that parliamentary answers elicited by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) have clearly shown that the A77 is Scotland's most dangerous road? I hope that the programme for that is not jeopardised in any way.

More generally, is my right hon. and learned Friend aware that, as the hon. Member for Glasgow, Garscaden (Mr. Dewar) listed his welcomes for the statement, some of us became positively alarmed? I hope my right hon. and learned Friend can reassure the House that this is a prudent increase in public expenditure standing in marked contrast to the record of the last Labour Government. Such was their inefficiency in running the economy that they reduced public expenditure in Scotland in real terms by 4£5 per cent. in their last three years in office.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The Government have stated throughout the United Kingdom that our objective is that public expenditure should represent a falling proportion of national resources; but because of the healthy state of the economy and the contribution of the private sector to its regeneration, in Scotland, as in England and Wales, it is possible to provide more for the Health Service and other public services.

As for the A77, I acknowledge that there are requirements for many roads other than the A74. My hon. Friend will have noticed that he fought the last general election on a manifesto that recognised the overriding priority of upgrading the A74 to motorway standard. I have today announced an increase of 14 per cent. in the roads programme for next year, a good proportion of which will be available for other road projects that may be necessary.

Photo of Charles Kennedy Charles Kennedy , Ross and Cromarty and Skye

Does the Secretary of State agree that these welcome increases, where appropriate, from central Government will by no means overcome many of the real and legitimate problems being encountered nearer the local and community level by local authorities, and by health boards in particular? In that context, will he give an undertaking—or at least a sign—that if the outcome of the outstanding appeals to do with nurses' regrading requires further adjustment of the health figures, he will give an open-minded response to health boards?

As regards housing expenditure for local authorities, will the right hon. and learned Gentleman bear in mind the fact that the reductions in housing benefit have left many local authorities throughout Scotland—I quote Inverness as a local example—having to increase rents and put their repairs budget on an emergency or standstill basis because of the inadequate income they are now receiving? Will he also be sympathetic to that problem?

Finally—this is a matter close to my heart—will the Secretary of State at least indicate that, in his roads expenditure totals, he is not closing his mind to the much-needed bridge to Skye?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

So far as the latter point is concerned, the hon. Gentleman will be aware that there have been discussions with the Highland regional council and various ideas are being discussed as to how such a bridge, if it were appropriate, might be financed. We may see progress on those matters.

With regard to the health aspects of the hon. Gentleman's question, for the reasons that I have mentioned relating to both the efficiency savings and the savings from NHS superannuation contributions, the Health Service in Scotland has an increase of resources available for expenditure of almost 10 per cent. It should therefore be possible for any minor adjustments as a result of appeals to be absorbed within the existing provision, which itself represents a generous increase.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

Does my right hon. and learned Friend accept that the increases that he has announced today in those special programmes—the Scottish Development Agency, the roads programme, the housing programme and, more importantly, the Health Service—will be very welcome? They are welcome because we recognise that they result from the growth in the economy which the Government have handled effectively and well. Who would have believed us in 1979 if we had said to the public of Scotland that there would be a 34 per cent. increase, over and above the rate of inflation, in Health Service expenditure in Scotland? That is what we have achieved and we should be trumpeting it from the rooftops.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

My hon. Friend is correct in saying that in any country the improvement of provision in the public services, such as health, housing and education, can be achieved only if the private, wealth-creating sector of the economy is successful. That lesson has now been learnt in the Kremlin, but has still to be learnt in Labour party central office.

Photo of Mr Ernie Ross Mr Ernie Ross , Dundee West

The Secretary of State must know that we cannot run the National Health Service in fits and starts. If he is to have these bursts of enthusiasm and give more money to tackle waiting lists, because he genuinely wants to tackle the problem, he must realise that, when he last gave money for that purpose, many health authorities were constrained by the fact that they did not have the proper back-up facilities to take advantage of those additional funds. We do not want bursts of enthusiasm; we want sustained, necessary expenditure in the health services to allow them to build up teams around the surgical teams that he claims to want to help.

Will he also answer the question posed by my hon. Friend the member for Glasgow, Garscadden (Mr. Dewar) relating to the fact that part of the money comes from the salary cuts that are being borne by those Health Service employees who are now the employees of private companies?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I agree with much of what the hon. Gentleman said in the earlier part of his remarks, but there have been sustained increases in expenditure. The problem with regard to waiting lists is that there have been occasional explosions in their size because of industrial action. But for the industrial action that has taken place over the years, waiting lists in Scotland would be far less than they are at present. Occasionally, therefore, it is necessary for us to try and deal with those unexpected bursts through initiatives of the kind that the Government have promoted.

With regard to the second part of the hon. Gentleman's question, the Health Service does not exist for its employees. Its employees are entitled to proper remuneration and should provide those services that they are contracted to provide. However, the House should agree that efficiencies can be achieved in the Health Service and in other areas of expenditure. If, by so doing, we can provide an improved quality of service for patients, that must be desirable and in the interests of the NHS.

Photo of Alex Salmond Alex Salmond Deputy Leader, Scottish National Party

May I suggest to the Secretary of State that Opposition Members do not like comparing his previous plans with his present plans because he has the statistical habit of setting his plans low? That is the only way in which he can announce any increases. If we compare the net outrun for the year with the right hon. and learned G Gentleman's plans, we find that there are reductions in Scottish public expenditure. There is a reduction of £80 million if a comparison is made with the revised outrun, or one of several hundred million if a comparison is made with the Autumn Statement outrun. Will the right hon. and learned Gentleman tell us where he expects the cuts will fall?

Did the Secretary of State notice an article in Scotland on Sunday—it was written by his erstwhile colleague Michael Ancram—that complained about those who talk about Scottish expenditure without reference to the exploitation of Scottish-based assets"? Does he look forward to the day when we can talk about Scottish spending with reference to Scottish revenue and Scottish assets, and not his statistical juggling?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I can understand why the hon. Gentleman made the most urgent exit from a banking career that he was able to find. If his understanding of economics is explained in his remarks this afternoon, the longer he stays away from banking, the better for the Scottish banking industry.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

There speaks the jailed lawyer.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

I would not want the Secretary of State to defend me in the courts.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

If I defended the hon. Gentleman, I might not mind too much what the verdict was.

I say to the hon. Member for Banff and Buchan (Mr. Salmond) that the announcements that I have made today represent to any but the most twisted mind a generous increase in public expenditure in Scotland.

Photo of Mr David Lambie Mr David Lambie , Cunninghame South

Like my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), I welcome the extra expenditure on the roads programme and on water and sewerage services. The Secretary of State will be aware that most of the priorities for spending the extra cash will be determined by local authorities, including regional councils. Will he give a guarantee that he, along with the other Ministers in his Department, will ensure that Strathclyde regional council, over which my constituents and I have little control, determines priorities for extra expenditure on roads so as to include the provision of a motorway system from north Ayrshire to the main motorway system and the upgrading of the A737, along with the extra provisions for water and sewerage departments, so that the people of Cunninghame have a pure water supply for the first time since 1975? Let us clear up the pollution on the beaches of Ardrossan, Saltcoats, Stevenston and Irvine.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I never cease to be amazed. The hon. Gentleman has built a career under successive Labour and Conservative Governments on accusing those Governments of interfering with the rights of local authorities. He has now made an impassioned plea to me to insist that the Strathclyde regional council ceases to use it discretion and instead uses his or mine when expending its resources. I shall pass on the hon. Gentleman's views.

Photo of Mr Andrew Stewart Mr Andrew Stewart , Sherwood

May I offer my congratulations to my right hon. and learned Friend on his announcements today about Scotland, which will make my constituents green with envy? Does he agree that the best way to continue funding extra resources is for the entire United Kingdom to work together as one, bearing in mind that eight out of every 10 taxpayers live in England?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

If my hon. Friend examines the resources that are being made available for his constituents in Sherwood and the announcements that have been made by my right hon. Friends in other Departments, he will find that improvements in the Health Service, housing provision, education provision and other areas of expenditure are to be found throughout the United Kingdom. They are explained by the increased wealth of the private sector. I am happy to say that the private sector in England has made a contribution to the improvement in national wealth.

Photo of Michael Martin Michael Martin , Glasgow Springburn

I hope that the Scottish Development Association will carry out the Secretary of State's wishes and do something about unemployment. I was informed only last night that an unemployed family in my constituency had to have a sheriff's warrant sale. This took place only 14 days before Christmas. That is what people in the cities and throughout Scotland are having to tolerate. I hope that the SDA will do something to get unemployment sorted out. I have heard hon. Members on both sides of the House talk about roads. There are so many roads in my constituency that many of them could be put in the rest of Scotland and Springburn would still have plenty left. There are people who are living on islands, as it were, who are trapped by motorways, dual carriageways and bypasses. If the Secretary of State is serious about the environment, he should examine inner-city road building plans.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I have enormous sympathy with what the hon. Gentleman has just said. I believe strongly that if we are to try to encourage a better quality of life in the urban environment, we must realise, especially the planners, that towns and cities are built for those who live in them and not for the vehicles that they occasionally use. It is unfortunate that in the planning of some new towns, and of some of the projects for urban regeneration, assumptions have been made on the car usage of those who will live in these areas, when a significant proportion of them do not have access to their own vehicles. The quality of their life would be greatly enhanced by their ability to walk to wherever they need to go without risk to life through traffic or the dehumanising effect of major road networks in town centres. Sometimes this cannot be avoided, but when it can it should be.

Photo of Mr Dick Douglas Mr Dick Douglas , Dunfermline West

Will the Secretary of State reflect on his remark about the Health Service not being made for its employees? There is much merit in that remark, but NHS employees cannot exist on a diet of praise whenever there is an emergency, such as the recent rail crash. It is all very well to praise public servants, but they cannot exist on such a diet. They must be properly remunerated. They should not have to buy their jobs, as they are doing in Fife, by accepting inferior standards of employment and reneging on long-won trade union agreements. That is not what we would expect from respectable public employees. When will the right hon. and learned Gentleman meet the Dunfermline district council, with me, to discuss urban renewal within Dunfermline? These matters do not come within the orbit of the four cities that he mentioned earlier.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I look forward to hearing from the hon. Gentleman on his proposals for Dunfermline.

I accept that Health Service employees are entitled to proper remuneration for the work that they do. They will be aware that significant increases in pay have been given to a high proportion of those who work in the NHS. For example, nurses have a standard of living that is infinitely higher than anything that they have obtained previously.

As for competitive tendering, it does not necessarily follow that the levels of expenditure for the provision of certain ancillary services that have prevailed in the past have been the best use of public resources. It is for health boards to decide whether the quality of service that is required for health services in their area can be better achieved in another way. We have required them to go out to competitive tender. The fact that many health boards have decided at the end of the day to opt for in-house contract while some have gone for the private sector illustrates that they are left with the discretion to reach their own considered conclusion on these matters.

Photo of Mr John Townend Mr John Townend , Bridlington

Will my right hon. and learned Friend tell the House how much the Exchequer would save if public expenditure per head in Scotland was reduced first to the level of that in the north of England and, secondly, to that in England as a whole?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I do not think that we have reliable figures on the level of public expenditure per head in the north of England. It might be interesting to ascertain the figures. My hon. Friend is entitled to say that Scotland, Northern Ireland and Wales have higher levels of public expenditure than the English average, and have had them for many years. Whether that applies with equal force to each part of England is another matter. There may be variations within England, given the overall size of the population in that part of the United Kingdom.

Photo of David Marshall David Marshall , Glasgow Shettleston

I welcome the Secretary of State's announcement of the upgrading of the A74. I hope that the work will be carried out as soon as possible. Has the right hon. and learned Gentleman made any additional moneys available to Strathclyde regional council to enable it to make additional payments under section 20 to ScotRail to enable it to carry out necessary improvements to rail services within Strathclyde?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

As far as I am aware, we have not yet determined individual allocations to specific local authorities. I have announced today the global resources that are available. We shall be considering the respectwe priorities of individual authorities over the next few weeks.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

Perhaps the Secretary of State will begin his afternoon's work by telling that twit on the Conservative Back Benches, the hon. Member for Bridlington (Mr. Townend), that public expenditure is higher per head in Scotland because there is higher unemployment and more poverty—

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. I do not think that "twit" is a very elegant word to use in the Chamber.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

If it is ruled that it is an unparliamentary expression, I will call the hon. Member for Bridlington an ill-informed gentleman, if that is better.

In connection with the resources that the Secretary of State referred to in his statement, will he spend a small sum to buy the Minister responsible for education and health a copy of the EEC "Childcare Network" report which the Minister admitted that he had not heard of at the last Scottish Question Time? I assume that the Minister has not found the time or taken the trouble to read that report, as he has failed to make any response to it.

I will remind the Secretary of State about the contents of the report. All member states of the EEC have formed a network of childcare experts which published its report a few months ago. The report found that British childcare levels were the worst in Europe and that the level of childcare support in Scotland was worse than in the rest of Britain. What resources will the Secretary of State provide to solve that problem? Is it not a disgrace that he has not referred to a penny of support for care for the under-fives in Scotland?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I have already indicated the level of increases available for education and other matters involving the care of children. The hon. Lady might like to reflect on that. With regard to the earlier part of her question, unemployment in Scotland is considerably lower than unemployment in the north of England, but as yet we have no reason to believe that public expenditure in the north of England is any higher than in Scotland. Indeed, it may be less. The hon. Lady would be ill-advised to take that comparison too far.

Photo of Mr Nicholas Bennett Mr Nicholas Bennett , Pembroke

Has my right hon. and learned Friend seen the answer in yesterday's Hansard which shows that net disposable income in Scotland, after taking account of housing costs, is higher than in the north of England, the midlands, Wales and Northern Ireland? As public expenditure is also higher in Scotland, is it not the case that the taxpayers of England and Wales are making a net contribution to Scottish expenditure?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

My hon. Friend is correct to state that the net disposable income of those in employment is higher in Scotland than in most of the rest of the country outside the south-east. In the United Kingdom we do not think in terms of English, Scottish or Welsh taxpayers; we think of United Kingdom taxpayers and decisions of the United Kingdom Government on how the resources should be used. Some hon. Members prefer to consider this on a sectional or separatist basis, but they represent an insignificant minority.

Photo of Mr Harry Ewing Mr Harry Ewing , Falkirk East

Is the Secretary of State aware that it is rather pitiful to see him joining his English Back Bench colleagues in the comparison between English and Scottish expenditure per head of population? Is the Secretary of State aware that in relation to health, only Finland has a higher number of deaths from cardiac failure per head of population than Scotland? Is he aware that no other country has a higher number of deaths from respiratory illnesses per head of population than Scotland? Is he also aware that our infant and perinatal mortality rates are third from the top of a rather dubious league? The reason that we get the money for the Health Service is that we have the problems.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman is correct and I am bound to add that if in 1988 that is true, notwithstanding a 34 per cent. increase in real terms since the Government came to office, one must ask what priority was given to those issues by the Labour Government of which he was a Minister responsible for health in the Scottish Office.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

Will the Secretary of State remind his hon. Friends the Members for Bridlington (Mr. Townend) and for Sherwood (Mr. Stewart) that since the Government came to power they have had the advantage of £62 billion of North sea oil revenues, much of which has come from Scotland not just for geographical reasons, but because of the efforts of Scottish enterprise and Scottish working-class people many of whom have given their lives? The result is that the Chancellor of the Exchequer down here has been able to impose a morality throughout the United Kingdom which is like Sherwood forest in reverse; the Government are robbing the poor to pay the rich by dishing out tax concessions to the rich friends of the Tory party instead of giving money to the National Health Service in Scotland and elsewhere in the United Kingdom to enable a fair implementation of the nurses' grading review.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

As usual, the hon. Gentleman is light years out of touch with the real world. If today I have been able to announce a massive increase in resources for the Health Service in Scotland, which is comparable to that throughout the United Kingdom, and if that has come about because of the increased prosperity of the private sector in the United Kingdom economy, the hon. Gentleman should appreciate that without a thrusting, thriving and successful private sector, it is impossible to improve the quality of public services. He must remember that, because he was most critical of the Labour Government's inability to fund the public services. The main reason for that was because of the poor condition of the British economy at the time.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

It is unfortunate that comparisons have been made in public expenditure between various parts of the United Kingdom. Does my right hon. and learned Friend agree that, thanks to the Labour party, Scotland is getting the reputation of having a handout mentality? Scotland's great contribution to the United Kingdom and the world was on the back of individual contributions to commerce, industry, insurance, the law and banking, not through public expenditure.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I have no doubt that we need a healthy balance between the major contribution that Scottish enterprise in its wider sense and the private sector as a whole can continue to make to the regeneration of the economy. We have always emphasised that in Scotland as elsewhere in the United Kingdom, it is through the regeneration of the private sector that we can afford the major resources available for improvements in the Health Service and elsewhere. That is not a Scottish phenomenon; it is common to the United Kingdom as a whole. I believe that there is a continuing change in the attitude of people in Scotland to the role that the private sector can play. Given the nature of Scottish history, as my hon. Friend said, it would be surprising if that was not the case.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

With regard to the allocation of funds for the SDA, I sincerely hope that Inverclyde will be treated with some sympathy—aye, and perhaps a splash of generosity. May I remind the Secretary of State that east Greenock has the highest level of unemployment in the Strathclyde regional council area? May I also point out that the Inverclyde initiative has done little or nothing to dent that scandalously high level of unemployment? No employer of any size has come to the lower Clyde since the initiative was set up. Will the Secretary of State give me an honest answer to this question: when are we to see a decent improvement in the economy of the lower Clyde?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman will be well aware that each of the initiatives suggested by those who live in Inverclyde has been responded to positively by the Scottish Office and the Government. In particular, the establishment of the Inverclyde enterprise zone has already led to a significant number of inquiries from people contemplating investment in Inverclyde and the consequential employment that would flow as a result.

Obviously the benefits will not come overnight. We are completing the designation of the enterprise zone and the SDA has acquired some of the land that Scott Lithgow no longer requires to adapt it as suitable for investment. As the hon. Gentleman would be the best qualified to inform the House, one of the curious and rather difficult factors about Inverclyde is that, although, as he rightly says, it has high unemployment, because of its topography it has very few sites available for a major inward investor without work being carried out by the SDA and others to improve potential sites to make them suitable for investment. Problems must be overcome, but if the hon. Gentleman considers the matter he will agree that an enormous amount is going on on the ground to solve the problems.

Photo of Tom Clarke Tom Clarke Shadow Minister (Disability)

When the Secretary of State referred in his statement to the elderly, mentally ill and mentally handicapped, did he not regret that he has not yet found the limited resources to introduce the section of the National Health Service (Amendment) Act 1986 which would have introduced joint planning in Scotland? Is that not a pity because, apart from the fact that virtually every voluntary organisation in those areas that I know of supports the proposal, the introduction of that section of the Act would simply take Scotland to the level of participation which has rightly been enjoyed by England and Wales for more than a decade?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

We have made significant progress in that area and the voluntary arrangements currently available are leading to real improvements. Obviously I will carefully consider the points that the hon. Gentleman has made.

Photo of Mr Neil Hamilton Mr Neil Hamilton , Tatton

Does my right hon. and learned Friend agree that his statement today should be particularly welcomed by all who believe in high and rising levels of public expenditure? Does that not also demonstrate the value to Scotland of the Union with England? Is it not therefore surprising that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should be so churlish in his response this afternoon? Without the union with England, the Labour party would be even more embattled and unelectable than it is.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I have to say that I do not think that the hon. Member for Garscadden was churlish. By his standards, he gave an almost effusive welcome.

Photo of Mr Jimmy Wray Mr Jimmy Wray , Glasgow Provan

Does the Secretary of State agree that his statement is hypocritical as far as nursery education is concerned? That is one item on which the Government say that they are spending 26 per cent. more. Can the Secretary of State tell me why it is that, although, in 1977, 29,000 children received nursery education and now in 1988, 38,000 children receive nursery education, the Government are spending £300,000 less on Scottish nursery education and £3 million less than in 1977 in Strathclyde region?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman's comments on local authority expenditure may say something about the priorities of the local authority in question. Strathclyde regional council is probably responsible for more resources than any other local authority in Scotland or, probably, in the United Kingdom as a whole. If it does not attach the importance to nursery education that the hon. Gentleman wishes, he should address his comments there.

Photo of John McAllion John McAllion , Dundee East

Will the Secretary of State tell us whether he has included in the allocations this afternoon a sum to cover the cost of the latest scheme promulgated by the Scottish National party on Tayside regional council? It recommends that people who pay poll tax in full and early should be given a 5 per cent. discount. When it was pointed out to the nationalists on Tayside by an official that the costs of their scheme for helping the better off would have to be borne by the poor, the nationalists responded by saying that they were a party that represents the rich as well as the poor. I know that the Secretary of State does not share their point of view and I ask him, if money is made available, to ensure that their madcap scheme never comes into being.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman must understand that he has put me in a very difficult position. I have to say that it does not surprise me that the nationalist party should behave in a way that is so inconsistent with its theoretical position. Angus district council, for example, which is the only council that is under nationalist control, will co-operate fully in collecting the community charge; and now that the nationalists on Tayside, as the hon. Gentleman has claimed, wish to provide incentives to ensure that the community charge is raised as quickly and as smoothly as possible, I look forward to welcoming their continuing support in every possible way.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I wonder whether I could ask my right hon. and learned Friend if he can explain kindly to my English constituents why it is that per capita expenditure in Scotland is, and always has been, much higher than it is in England. I think he can reassure them that it is not because the Government are trying, to reward Scotland for a predilection for voting Socialist, but perhaps has something to do with the fact that Scotland is heavily over-represented in the House, which enables a massive distortion in the pressure for the allocation of public expenditure. May I suggest to him, as a member of a Cabinet that wishes to cut public expenditure, that the easiest way to do that would be to cut the number of hon. Members from Scotland in the House? Could he further say that, if there is any party in the House that has any silly ideas for tinkering with the proposal for devolution, the condition precedent for anything like that taking place would be a massive reduction in Scottish seats in the House?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I have to say to my hon. Friend that he is certainly right in saying that institutional arrangements for the representation of Scottish constituencies in Parliament have not done any harm with regard to the allocation of resources in the United Kingdom over the years, but he must bear in mind that the nature of many Scottish constituencies is somewhat different, from a geographical point of view, from his own slightly more compact constituency. Although Scotland may have only 9 or 10 per cent. of the population in the United Kingdom, its land mass represents 30 to 40 per cent. of the total land mass of Britain and, as a consequence, expenditure on roads, houses, schools and health cannot have the same benefits of scale that are sometimes available to his constituency and, perhaps, mine.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

I am grateful to you, Mr. Speaker, for restoring me to my traditional position of sweeper.

Does the Secretary of State recall his visit to Cumnock and Doon Valley in the summer? If he does, he will be aware that the people of Cumnock and Doon Valley will judge whether he is to be considered a Santa Claus or a Scrooge in the light of his statement, and on the basis of whether it will enable the Cumnock and Auchinleck bypass, which was so drastically cut from the programme last year when everything was ready to go ahead, to be restored to the programme? Can he give me an assurance that it will go ahead in the next financial year, and can he say whether, in his extensive provisions, he has made just a modest little contribution for an appropriate celebration when Heart of Midlothian return with the UEFA cup?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I will bear in mind the latter suggestion on the likely achievements of that football club, which is well known to me. My visit to Cumnock and Doon Valley was a very pleasant experience and I have become familiar with the perspective of the hon. Gentleman about the needs of his constituents. Matters involving the individual allocation to local authorities have still to be determined. I shall bear the hon. Gentleman's comments in mind.

Photo of Mr Ernie Ross Mr Ernie Ross , Dundee West

On a point of order, Mr. Speaker. I wonder whether you heard, when my hon. Friend the Member for Dundee, East (Mr. McAllion) was making a

£million
1988–891989–901990–911991–92
Cm. 288-II1 provisionCm. 288-II1 provisionRevised provision2Cm. 288-II1 ProvisionRevised provision2provision2
NetGross3NetGross3NetGross3NetGross3
Agriculture197198211204205210200200210210
Industry267289261277307260280310280310
Tourism15161617192020202020
Transport615616660700701680740740750750
Housing6398826985991,0577206401,0206801,150
Other environmental services693750710706768740720780750800
Law, order and protective services681692692741744710760760780780
Education2,1862,1882,2262,3542,3602,2902,4002,4002,4802,480
Arts and libraries8888949595100100100100100
Health and social work2,8302,8382,9483,1823,1893,0703,3103,3203,4503,460
Other public services125125130122122130130130140140
LA current expenditure not allocated to services40404137374040404040
Nationalised industries external financing134134-74-61-61-190-210-210
48,5108,8568,6108,9739,5438,7809,1309,6109,68010,240

Note: Figures for 1990–91 and 1991–92 are rounded to the nearest £10 million.

1 White Paper (Cm. 288-II) figures adjusted for pre-survey changes.

2 Figures reflect survey changes and changes since the Autumn Statement. Some figures may be subject to detailed technical amendment.

3 Gross provision consists of total net provision plus capital receipts and for housing, from 1989–90, some Scottish Homes' loan repayments.

4 The figure differs from the net outturn figure of £8,720 million shown in the Chancellor's Autumn Statement for 1988–89; the main differences are continued spending by local authorities above the level provided for and NHS pay settlements.]