Expenditure Plans

– in the Scottish Parliament at 2:31 pm on 6th October 1999.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 2:31 pm, 6th October 1999

We now move to this afternoon's business, which is a ministerial statement and a debate on the Executive's expenditure plans. Before we begin, I remind members that we are today operating a new procedure for the first time. The ministerial statement will be treated as a two-stage process: the statement, with questions only for clarification, followed by a debate on the statement. Spokespersons from the main non-Executive parties will have the right to ask the first questions and to open the debate. However, all questions should be brief and should seek only elucidation of facts. The chair will enforce that rule strictly and will not allow questions to turn into statements. Members who are called to ask a question will not, in principle, lose their chance to take part in the subsequent debate. There should, therefore, be no interventions during the minister's statement.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 2:33 pm, 6th October 1999

Thank you, Presiding Officer. I, for one, am glad that you are here and not in Canada.

This is a statement on the Scottish Executive's plans to reallocate public expenditure for the years 1999-2000, 2000-01 and 2001-02.

When we in Scottish new Labour and the Scottish Liberal Democrats agreed to work together to deliver for Scotland the stable and co-operative Government that the people of Scotland expected and deserved, we published immediately in the "Partnership for Scotland" document our policy agreements for the first term of the Parliament.

In September, we built on those agreements and set out in our programme for government a detailed, timetabled work plan for delivery of our agreed priorities. Those priorities reflect the fact that we want a country where our children can be healthy and play in a safe environment; where our young people can achieve their full potential through a first-class, modern system of education; where our families can raise their children, safe in the knowledge that they will be cared for if things go wrong and that they will be free to express their creativity and enterprise in the work place; and where our senior citizens live at peace, in safe neighbourhoods and can see out their days in comfort. At the root of all that, our driving ambition—our prime motivation—is that we want a country where someone's postcode does not affect their life chances.

Today's Scottish financial statement delivers on those commitments. It is the third piece in our strategic plan. The partnership agreement set out what we had agreed; the programme for government sets out when those agreements will be delivered; and today's statement sets out the details of how we will fund that programme. The final stage will be the process of monitoring, evaluation and review—but that will come later.

My thanks go to those who have passed us such a good legacy.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That gets the Christmas party prize for the best intervention of the year—well organised, Mr Davidson.

My thanks go to those—members will learn about them in a moment—who have passed us such a good legacy. We do not start with a blank sheet of paper. After two years of a prudent approach to public finances, we can spend an extra £1.8 billion on health in Scotland and we can spend an extra £1.3 billion on education. We are doing so while slashing Government borrowing.

I call on everyone in this chamber to give credit where it is due. Scotland felt the scourge of mass unemployment under the Tories. Now, within two years of the new Labour Government's coming to power, unemployment is at its lowest for a quarter of a century—that is a Government delivering for the people. Interest, mortgage and inflation rates are also at their lowest levels for 30 years. All that has been achieved without increasing the tax burden on Scottish businesses and hard-working Scottish families.

With Scotland's public finances now on a sound footing, our partnership is able to direct the people's money to their priorities. That is what this financial statement is about. It stands on the pillars of economic success, financial competence and social justice.

There are those who will seek to use today's debate for the facile political point scoring of the past. I want to look to the future, to take responsibility and to use this debate well. This Executive will make the best use of public spending in Scotland, but we should not do so alone.

I have started a major initiative to ensure that we achieve best value across central Government. We aim to ensure that, in Scotland, every pound of public money is used to maximum effect, with efficiencies identified and implemented and services delivered with only one objective—that the Scottish public, our customers, are entitled to the best and most cost-effective services to meet their needs. I will announce how we intend to take that forward in November and I invite the Opposition parties to engage with us to provide creative, workable ideas for the development of efficient services. I want to challenge them—I want to challenge the Conservatives and I want to challenge the SNP—to find common cause and become part of the solution and part of that future.

I am announcing a significant increase in spending on key priority areas. I want to start by identifying how we have achieved that. Since our election in May, ministers have been discussing the estimates published previously and the review plans. We have carried out the most stringent review of our resources. In some cases, we have seized opportunities to save or redirect money. That has resulted in new opportunities for a sound strategic approach to be taken, allowing the new plans to be laid before Parliament today.

I pay tribute to my ministerial colleagues who have worked together and carefully scrutinised their budgets to find how we can best match our priorities to our spending. We have worked together on this as Scottish ministers in partnership, and I want to thank my colleagues for their commitment.

The new arrangements for end-year flexibility, introduced by the Chancellor of the Exchequer, have enabled us to carry forward significantly more money from last year to this and subsequent years. The arrangement is new; it is linked closely with the move to three-year settlements within the comprehensive spending review. In the past, unspent provision had, in many cases, to be returned to the Treasury, but now, the extent to which it can be carried forward from year to year has been extended and we are making full use of that facility. That will, of course, remain an important part of our budgeting process for the future, and I will be introducing rules for departments not only to encourage management innovation, but to help to create reserve funds year on year. That is appropriate for the creation by a new Parliament of a new financial framework for this legislature's decisions. However, I reserve the right to respond to any new developments as they occur.

In addition, we have been looking at some moneys previously earmarked for the redemption of housing debt. The Scottish Homes debt has been reduced from £400 million in 1997 to £200 million now. Under previous arrangements, the Scottish Office had intended to make early repayments of this debt over the next three years and £59 million had been set aside for that purpose. We now propose to meet the debt charges over the life of the loan, rather than continuing with the arrangements of making up-front payments.

NHS trusts have built up surplus working capital, which under Treasury rules they cannot spend. We intend to use this money to good effect, in an imaginative use of resources that were previously tied up and unusable. The effect of those changes is to reduce the published figures for spending on housing, but not to reduce the investment in housing. When the effects of those two technical changes are removed, the underlying investment profile for the communities programme shows a rising trend. Spending will increase by £50 million over the next three years.

I will now discuss the process. This Parliament inherited expenditure plans for the current year and the two following years. With some minor adjustments, those were the plans that appeared in the final departmental report of the Scottish Office—"Serving Scotland's Needs"—which was published in March this year.

In this year's spending plans, we are operating under the special transitional provisions laid down in the Scotland Act 1998. Under those special transitional arrangements, I will follow up this statement by presenting supplementary estimates at the end of the month. Those amendments to our spending plans for 1999-2000 will be presented to Parliament for implementation by order in council.

For the next two financial years, 2000-01 and 2001-02, we enter for the first time the consultation process proposed in the Public Finance and Accountability (Scotland) Bill. As members will know, the Executive is committed to that process. Under the new arrangements, the process of this Parliament will be as follows. In the first part of any financial year, the Parliament and its committees will strategically consider Scotland's future requirements. The Parliament will have available to it the Executive's provisional forward plans. Those are being announced today and will be formally published in a new form to replace the departmental report in the spring. That exercise should help to define future directions in Scottish public spending.

In the light of the outcome of that stage 1 process the Executive will, by October each year, publish its expenditure plans for the next financial year and its provisional plans for any following years. That is the point at which we are now. In this transitional year, we have not been able to fully implement the first stage. Today I am announcing the Executive's proposals for 2000-01 and estimates for 2001-02.

The process that I will now describe deals with those two financial years. Later this month, I will issue more disaggregated plans for consultation with Parliament, the Finance Committee and the public. Members may safely assume that the figures that I announce today represent a clear view by the Executive of its strategic direction, but the figures for future years are not set in tablets of stone. I will agree our plans for producing more detailed figures for the Finance Committee with Mike Watson, the committee's convener, and the committee will consider our proposals over the weeks that follow. Our plans will also be subject to wider public consultation. My colleagues and I will pay careful attention to any recommendations that can be met from within existing budgets.

The final stage of the process is the introduction and passage of a formal Budget Bill for one financial year, drawn up by the Scottish Executive in the light of comments received. The bill is the formal process of the Executive's seeking Parliament's authority for expenditure in 2000-01. I can announce today that I will introduce that bill to Parliament as early as possible in January.

Looking beyond the present spending plans, I can say that the Treasury will conduct a spending review next year, which will, for the first time, provide figures for public spending by the Scottish Executive for the years 2002-03 and 2003-04. That review will be undertaken in accordance with the funding rules set out in the statement of funding policy; it will be the first real test of those rules. It is my firm intention to engage constructively in discussions with the Treasury in an open and transparent way.

I hope that that sets the context and I make no apology for dwelling on it. It is important that all members know fully what is being discussed and in what context. It is important that all those inside and outside this chamber should understand the process.

I turn now to the details of what I am proposing. I should advise members that tables of the figures underpinning my statement will be made available when I have finished making this statement.

Our main aim has been to match expenditure with the priorities set out in the partnership agreement and the programme for government. My ministerial colleagues will make further announcements over the coming weeks on how they will be aligning spending priorities within their departments with our key strategic priorities.

Let me demonstrate some aspects of that approach. In education, we will provide for after-school places, more books in schools and computers in classrooms. In terms of justice, there will be a new drugs enforcement agency, the implementation of drug treatment orders and renewed support for victims of crime and witnesses to crime.

In enterprise and lifelong learning, we will provide support for increased access and the doubling of assistance to mature students on low incomes. In transport and the environment, there will be the creation of national parks, money will be provided for the Skye bridge tolls and there will be increased investment in water services.

To help communities, there will be the coalfields regeneration trust, new housing partnerships, the rough sleepers initiative and initiatives for social inclusion. There will be money for rural affairs, including additional support for forestry and agri-environment schemes; further money will be available for agriculture in the spring. There will also be money for a new generation of walk-in, walk-out hospitals, one-stop clinics and healthy living centres.

Those are just some examples of how we are putting our country's resources to work for the benefit of the people of Scotland. There will always be competing demands, but we will take the hard decisions that are required and we will do so openly and honestly.

Of course circumstances will change and additional pressures will emerge—for example, the costs of this Parliament and its new building. The initial budget was drawn up over a year and a half ago, but it did not and could not accurately reflect all the emerging requirements of a fully operational Parliament. The new expenditure plans allow for revised costs for the new Scottish Parliament. It is essential that the Parliament is resourced to do its job effectively. However, a proper balance for expenditure must be struck and it is for the Scottish Parliamentary Corporate Body to identify that balance. For future years, we will agree a formal procedure to deal with estimates for the Parliament's running costs.

The requirement for effective links with the rest of the UK is an essential component of the devolution settlement. The Secretary of State for Scotland is Scotland's voice in Whitehall and the UK Government's voice in Scotland for all those powers that have not been devolved. Effective liaison will continue to be essential to the future of Britain. It is essential that the office of the Secretary of State for Scotland is properly resourced—that office must be in a position to carry out its role effectively. A properly resourced Scotland Office is good for Scotland. The Scotland Office budget is likely to be about 0.03 per cent of Scotland's overall budget, and the plans allow for that.

I notice that some Scottish National party members are laughing. They will not be laughing when the Secretary of State for Scotland's negotiations on objective 2 of the European structural funds show the progress that can be made by an effective secretary of state arguing for us in Whitehall.

Today I have attempted to provide some context for both my expenditure announcement and the wider financial processes of which it is a part. Let me conclude by emphasising that today's announcement is not just about financial processes, nor is it just about moving money around a balance sheet—it is about delivering the promises of the partnership.

Eighty million pounds of new money is going into education, to maintain and build on Scotland's reputation for educational excellence and to guarantee our future as a knowledge-based society. We are making available £51 million to meet the school education commitments in the partnership agreement. I can announce today that £11 million is being allocated to develop a broad-band information technology network to maximise the potential of our national learning grid initiative. The education minister will be making a further announcement in due course about the balance of that £51 million. That is our best investment—an investment for our children and our future.

Some £29 million is available for enterprise and lifelong learning to encourage wider participation and increased access to further and higher education and £6 million is available to double assistance to low-income students. Pilot schemes will get £9 million to help lower-income students to stay on at school. We will provide £14 million for increased access funds for higher education students.

Our plans are also about improving the society in which we live. For example, we will provide £10.5 million to establish a drugs enforcement agency, which will aim to tackle head on the scourge of drugs that stalks so many of our communities. The plans are also about coherent measures to protect future generations of young Scots. We are, therefore, carrying out a comprehensive audit of all resources currently directed towards education and rehabilitation. The objective is to maximise quality provision and to refocus existing resources into effective drug education and rehabilitation services.

In line with our commitment to safeguard and protect the health of Scotland's children, I am very pleased to confirm that the estimates for health and community care include £17 million of new money for introducing a Scotland-wide vaccination programme for meningitis C in Scotland. Susan Deacon will make a statement within the next few weeks providing details of the programme.

The E coli outbreak in Wishaw in my constituency was a reminder of the need for the new Food Standards Agency. Today's plans include £6 million to fund the agency. As was announced yesterday, it will be located in Aberdeen and will play a key role in ensuring that the Scottish people have food that is safe to eat.

The Executive listens to the women in this Parliament and in Scotland. The significant number of women members of Parliament will make a difference to the policies that we will pursue. They include delivering after-school care provision to enable more women to return to work; improving the health of babies and young children, particularly in our poorest communities; improving the quality, speed and availability of important women's health services such as breast cancer screening, diagnosis and treatment; and addressing the problem of domestic violence to ensure consistent service provision across Scotland and to change society's attitudes—because there is no excuse for domestic abuse. Wendy Alexander will be making a further announcement shortly.

We listen to business groups and local communities as well. For years, the roads programme of the Scottish Office was cut. The comprehensive spending review started to change that and new money for maintenance was included, although we are all aware of the pressure for new and improved trunk roads. Following all the representations made to Sarah Boyack, Henry McLeish and other ministers over the summer, I am very pleased to be recommending in this statement an increase of £35 million to the roads programme. I know that, given the underinvestment of 18 years of Conservative government, that is not a lot of money, but it will allow a modest start on a long-standing issue. Sarah Boyack will address the allocation of the money when she announces the outcome of the review.

Today's is not the first ever Scottish expenditure plan, but it is the first that is subject to democratic decisions made only here in Scotland. This is a special day and I hope that we have a quality debate. If we will it, today's decisions can change people's lives for good. Across Scotland, our decisions, made here in Edinburgh, can secure the quality of life our people deserve. It is their money and it is our duty; whatever we decide must meet their priorities. We have listened and know that improving schools and hospitals, tackling crime and creating a fairer society are the people's priorities. That is what we aim to deliver. We aim for Scottish solutions to Scottish problems.

This is a Scottish financial statement—the first Scottish financial statement. It is not a budget in the traditional sense but it will lead to the first annual Scottish Budget Bill. It builds on the current economic success of the UK but the statement is made in Scotland. It integrates what we do in the UK and Europe but the decisions will be made here. It includes no cuts but it is prudent and modest. It is tidy and practical but it also reflects the largest ever short-term injection of new money into Scottish public services, so investing in the future of every constituency represented here. It will make a difference and I commend it to all members.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Members who wish to ask questions should press their buttons now. I remind everybody of the restrictive nature of the questions that may be asked on the statement.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

By my calculation, £132 million of new money is a zero-sum budget and the minister says that there are no cuts. How does that square? Is it the case that the money he has spent today is the recycling of underspent budgets that, as we have heard, exist every year?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I distinctly remember Mr Wilson saying last Thursday that we should do more to plan outwith the annuality of the budget exercise and that we should try carry more money over from one year to the next. It is a bit rich that one week later he is complaining that we are doing exactly that.

Photo of David Davidson David Davidson Conservative

Mr McConnell announced an extra £1,800 million for health and an extra £1,300 million for education. Over which period does that apply?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

It applies to the three-year period of the comprehensive spending review.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Will the minister tell us whether funds will now be made available to establish an appeals procedure for our hard-pressed farmers in their dealings with officialdom?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That was promised in the partnership agreement and I am delighted to confirm that it exists in today's published figures.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

Can the minister tell us how expenditure on transport and the environment seems to have increased by £600 million on 1995-96? That is a massive jump—where does that figure come from?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The increases in expenditure on transport and the environment reflect a number of changes. The particular change on 1995-96 is a result of money being transferred from local authorities to the new water boards which were created in 1995.

Photo of Richard Simpson Richard Simpson Labour

Will the minister elaborate on his position on the national health service trusts and the funds retained by the Treasury?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I take this opportunity to congratulate our officials, who have been discussing that matter with the Treasury for about eight months. It has been agreed that the money will no longer go back to the Treasury but will be retained in Scotland to help with housing debt. That was a good piece of work—well done. It is an example of our new arrangements working well in practice.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

The Executive claims that it wants to recruit, reward and retain high-quality teachers, which is essential to the maintenance of a world-class education system. What extra money will be provided for the funding of better pay and conditions settlements for Scotland's teachers?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That is a matter for the Convention of Scottish Local Authorities and the teachers through the normal negotiating machinery. However, I make two points on the matter. First, my colleague Mr Galbraith recently announced a review of teachers' pay and conditions; we have to await the outcome of that review before we allocate specific budgets to meet any recommendations. Secondly, I made it clear in my speech that I reserve the right to respond to developments as they occur in that and in other areas.

Photo of Dennis Canavan Dennis Canavan Independent

Will the expenditure plans include contingency funding to abolish tuition fees and restore student grants, especially if Andrew Cubie's inquiry makes such recommendations?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The expenditure plans allow the Parliament to make the expenditure decisions that it needs to. I made it clear in the statement that the relationships—in terms of end-year flexibility and other financial management rules that I want to put in place—will create the opportunity for reserves to exist. It would not be right for us to budget in advance for the outcome of inquiries or decisions that the Parliament might make but which are not yet certain. I reserve the right to come forward with amendments to those budgets when it is appropriate, but for the moment it would be wise to wait for the outcome of the inquiry.

Photo of Dorothy-Grace Elder Dorothy-Grace Elder Independent

How much of the increased budget for maintaining the Parliament will the Scottish Executive be spending on so-called special advisers? How many of those people—who are paid for with taxpayers' money—are there? Last year, it was estimated that each spin doctor—as they are more popularly and correctly called—was costing taxpayers £144,000, which includes the cost of their private secretaries, travel and so on.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Before the minister answers that, I should make it clear that the appointment of special advisers does not come out of the parliamentary budget—that must have been a slip of the tongue.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

To some extent the answer to that question has been recorded in the Executive's responses to colleagues' parliamentary questions. Further details will be made available in the near future in the form of written answers. However, it is a bit rich for somebody who voted for increased allowances in June to complain. We should be consistent about such matters—I certainly will be.

Photo of Annabel Goldie Annabel Goldie Conservative

The minister said that the Executive would be aligning spending priorities within its departments with key strategic priorities. However, he did not say anything about enterprise. Is that no longer a key strategic priority?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Of course it is a key strategic priority.

Photo of Brian Adam Brian Adam Scottish National Party

The minister referred to education and rehabilitation services to deal with drug misuse. Does that include moneys for detoxification as well as for rehabilitation facilities?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

A number of questions may be asked today about specific lines in the budget. I have given the convener of the Finance Committee a guarantee that we will issue the committee with detailed level 2 figures for all budgets, rather than publish them today in the chamber. That is appropriate.

As I said, I am aware that an audit of the resources to which Brian Adam referred is being prepared. Once it is complete, Mr MacKay and, I presume, Mr Wallace will make detailed statements to the chamber.

Photo of Hugh Henry Hugh Henry Labour

Will the minister confirm that there will be no changes to the expenditure plans as a result of any decision that is made on European funding?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Changes to the expenditure plans will be for this Parliament and no one else.

Photo of Murray Tosh Murray Tosh Conservative

Will the minister clarify what he said about the increase of £35 million in the roads programme? Over how many years is that money spread? Is it the increase that was announced in "Serving Scotland's Needs", or is it genuinely new money?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

This is definitely new money. I do not want to overstate what it will do to reverse the underinvestment that at least one of the parties in this chamber supported for a number of years, but it is important that we start tackling some of the outstanding issues in Ayrshire and elsewhere. However, I leave the details of that to my colleague Sarah Boyack, who later this year will announce the outcome of the roads review. This is new money over two years.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

Is the £11 million for broad-band technology genuinely new money or is it part of the £144 million that has already been committed? Why has this money been committed ahead of any report from the digital Scotland network?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

This is definitely new money. It has been included because it is wise to charge on and invest in our education system. We are committed to the national grid for learning, although I understand that during the election campaign earlier this year others had reservations about it.

Photo of Tommy Sheridan Tommy Sheridan SSP

In his statement, the minister claimed that this budget included no cuts in expenditure. Does this budget mean that there will be no cuts in local authority expenditure throughout Scotland and will the minister condemn any subsequent cuts? He also mentioned objective 2 European structural funds. Will he deny that South Ayrshire and South Lanarkshire are to be excluded from objective 2 funding?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The published lines for local authority expenditure are identical in their intent, purpose and actuality to those that were previously published. They will not include cuts to the Scottish Executive's overall programme of expenditure.

It would be wise to leave the question about objective 2 funding until an announcement has been made, which I believe may happen in the fairly near future. I assure Tommy Sheridan that officials of the Scottish Executive, the Scotland Office and I have been working very hard to ensure that the neediest communities in Scotland are represented on the map that is finally agreed.

Photo of Mary Scanlon Mary Scanlon Conservative

Will the minister clarify the £1,800 million of extra spending on health? The figures that were provided today by the Scottish Executive show an increase not of £1,800 million, but of £546 million—a total of £5,161 million in 2001-02 as opposed to £4,615 million now.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Many of these issues require detailed discussion, which would be best conducted in the Finance Committee and other appropriate committees of the Parliament. Within the published figures for each year are elements that are included on a one-off basis. The figures include spending on health and education and considerable investment in buildings, not all of which is shown in these figures—much of it is found in local authority accounts. The health and community care line does not include the amount of money that is spent on community care by local authorities in Scotland.

The detailed figures have to be discussed; one of the beauties of our system is that they can—and must be—discussed in the Parliament's committees. I hope that members will appreciate the fact that today I have not tried to steal a march on the committees by announcing in a statement unpublished detailed plans. That gives members of committees a chance, having had today's strategic debate, to examine the figures in some detail.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

That concludes the 10 minutes allowed for questions. I apologise to the five members who were still hoping to ask a question.

Photo of Andrew Wilson Andrew Wilson Scottish National Party 3:06 pm, 6th October 1999

I welcome today's debate and thank the Executive for the courtesy of a few moments' foreknowledge of the contents of the speech. However, the Executive clearly calculated that time in order to make it just too close to the debate to prevent the SNP from running our spreadsheet model—thank you for that.

On Radio Scotland this morning, we heard two news lines from the Minister for Finance's office. First, he was to announce an extra £80 million for education and, secondly, there would be new funding for waiting time reduction. The first was announced in May and the second was announced three weeks ago—although it did not make it into the minister's speech. I congratulate the minister on not pre-announcing too much that we did not know in advance.

It is a pity that the minister's Labour colleague, Brian Wilson, did not follow the same principle of probity. In The Herald yesterday, we read that Brian Wilson had merrily briefed one of his favoured journalists on the fact that the Scotland Office is to have a cost overrun in its planned spending next year, taking spending to £5.7 million. That is more than double the original estimate and represents a cost overrun of 138 per cent—I note that that was not mentioned in the minister's statement.

Brian Wilson described the cost overrun as "extremely modest". I must tell him that it represents the worst financial record of any Westminster department in history. It makes North Lanarkshire Council—the minister's home council, as it were—seem a model of probity and good management.

The minister spoke in passing of the value of the Scotland Office and the objective 2 debate. Can he confirm in his summation whether objective 2 decisions will make any difference to the bottom line? A moment ago, in response to a question, he seemed to say that it would not.

I return to the revelation about the Scotland Office. I referred to it at the start of my speech because I think it is an offence to the supposed openness of this new democracy. It is no surprise that the man behind it—Brian Wilson—never wanted a Scottish Parliament in the first place. It is a disgrace that an ambitious London MP can play politics with Scotland's budget and Scotland's public finances.

Just as serious, however, are the wider implications. Who is in charge of the budget process—the Minister for Finance or Brian Wilson? How can the Scotland Office claw into the Scottish Parliament's budget? I warned the chamber of that possibility in the past and in a matter of weeks it seems that it has already happened in a cost overrun of 138 per cent. That is constitutionally unsustainable and I ask the minister to identify any constitutional mechanism that he is aware of in the devolution settlement that can stop the Scotland Office taking as much as it wants from Scotland's budget to feather its own nest and promote its own narrow political agenda.

Photo of Hugh Henry Hugh Henry Labour

Given that the people of Scotland rejected independence at the election and are therefore committed to the need for a link with Westminster through the Scotland Office, can the member explain how much it would cost to provide the massive network of embassies that his party advocated? Can he tell us how much it would cost to divorce Scotland from the rest of the United Kingdom?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am grateful for that most relevant intervention. On Hugh Henry's first point, there is a necessity for that link in the settlement, but my point is that I think we should be able to decide how much the Scotland Office spends, rather than the Scotland Office making that decision. That is the wrong route for us to go down—it is anti-devolution.

On the second, irrelevant point, the British Foreign Office is among the most profligate in the world. I argue that we need to see bangs for bucks. There are no best-value criteria to measure the delivery of services from Westminster departments.

Today's budget is a non-budget. It merely recasts existing spending plans and makes alterations to about 0.5 per cent of the overall budget.

Mr McConnell has taken five months to tell us where he will find money to pay for the partnership commitments. Is it good, credible budget practice for the minister to announce spending plans without any indication of how he will pay for them? We found out today, at last, during the question session, that he has cut nothing and has not even been involved in serious negotiations. The budget is simply a recycling of last year's surplus. We pointed that out to the media yesterday.

On Mr McConnell's plans, any proper assessment of the Executive's effectiveness should examine its activity in a context of openness and efficiency of outcome. The big numbers that we heard today tell us where the ship is headed. I will concentrate on that, but while the big picture is bad enough, when we get down to the detail of what is being spent and how it is meeting the needs on the ground, the human reality of the Government's failure will become most apparent. To take just one example, nowhere in the figures that we heard today—or in any Scottish Office reports from the past few years—does it mention the fact that Scottish Enterprise spends £1 million a year on one public relations company whose word the First Minister does not appear even to trust.

We must examine the context of today's statement. Everything that we heard today comes after three years of stringent public spending cuts that would make Keith Joseph blush. In the Labour Government's first three years, it is spending £1.1 billion less on Scotland's budget than was spent in the Tories' last three years. Does that make members on the Government back benches proud? On industry, Labour has spent £320 million over the same period. On schools, the figure is £121 million. Instead of education, education, education, the reality was cutback, cutback, cutback.

On local government—a matter that is close to many of our hearts—the capital spend over the same period is nearly £1 billion less. Current expenditure on local government is £1.3 billion less. Labour is hammering local authority budgets throughout Scotland and has left a black hole that will mean only service cuts or council tax hikes over the coming period. My colleague Kenny Gibson will highlight that later.

We find ourselves in a tough context, on the back of a period of slash and cut in vital public services. My colleagues will concentrate on the implications of that where it matters—in the daily provision of services to people in their daily lives.

This is a hand-me-down budget; it is about managing the decline in Scottish public services. Peel away the sheen from any new Labour statement and we find that the new Labour project is all about taking on the baton of Thatcherism. Mrs Thatcher boasted that she rolled back the frontiers of the state. Today confirms that new Labour in Scotland is in the process of finishing off that job and public services with it.

Labour used to call the Conservatives' programme the creeping slow death of public service. Labour is accelerating that process.

The minister and his colleagues will have to answer to some facts during this debate, the first of which is that Labour is committing less of the national wealth, in terms of gross domestic product, to public services than has happened at any point in the past 40 years. That will surprise most people in this country. Is that in line with Scotland's modern, social democratic objectives? It is a fact—

Photo of Andrew Wilson Andrew Wilson Scottish National Party

It is a fact; the Minister for Communities cannot deny it.

On health, around £700 million less is being spent than if we had frozen health spending at the 1994-95 level of GDP share under Ian Lang. That is a fact. On industry, enterprise and training, the difference is about £1.3 billion less. On education, the figure is similarly large—around £500 million.

The second point that the Minister for Finance must wrestle with is the Barnett squeeze.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

Mr Wilson mentioned health. In real terms, he took the best of 18 Tory years when the figure was £4.2 billion. That figure will be over £5 billion at the end of the comprehensive spending review period. His point about percentage of GDP is invalid—because the economy is doing so well, it is the total figures on public expenditure that matter, not the percentages.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am grateful for the intervention, but—with respect to Mr Chisholm, who I know has some commitment to public services—if one commits less of the nation's wealth to public services, one does not respond to the needs of the day. If the country progresses as the economy progresses, surely public services should keep pace. If they do not, they fade and fall behind.

The reality is that, in London and in Edinburgh, Labour is playing a dishonest game. A Government's priority can be either right-wing tax cuts or investment in public services—it cannot be both.

Gordon Brown—the real chancellor—is sitting on a war chest that The Observer estimates will be worth more than £60 billion in the next five years and will be worth even more if it is taken over the Maastricht threshold. We in Scotland should note that, despite the economically inept doom-saying of the Labour party before the election, oil and gas revenues will supply one third of that money—£20 billion. That is the amount that is being lost by public services to pay for tax cuts, pre-election bribes and a dishonest, right-wing agenda. That is wrong, it leads to bad governance and, in the words of Neil Kinnock, is

"irrelevant to the real needs".

Can the Labour party think that it is proper to use public resources merely to get Gordon Brown the tag of "the iron chancellor"? Or does it agree with us that it is more important to invest our resources in schools, hospitals, housing and infrastructure? This is a Government that announces first and thinks second. It makes budget commitments without knowing where the money is coming from and, in a range of policy areas, the Government chases a cheap headline and is not interested in good government.

The Parliament must examine what is being done in its name and in that of the people. The information that we have been given today does not allow us to do that. Today is about overall investment in public services and whether we judge that we are putting enough of our nation's wealth into public services. As a Parliament and as an Opposition, we will pore over the detail of all expenditure and, more important, of policy outcome—what is happening on the ground is the most important thing.

Big numbers mean nothing to people who are seeing their hospitals and schools decay and their environment suffer—I am grateful to Mr Chisholm for that point.

When we come to the formal budget process next year, we will need a much greater openness about Government policy and decision making than we have now so that we can begin to make improvements in public services, within the constrained context that we find ourselves in.

My key message, however, is that an Executive that acts as a conduit for decisions taken by one of the most right-wing London Governments in our history is utterly inadequate for Scotland's future. We need the chance to make responsible choices about how to allocate our own resources to meet our own needs in a way that provides modern and effective solutions that are tailored to our own requirements. To get to that point, we need enough honesty and openness to address the weaknesses in the Parliament's position and to try to enhance and strengthen Scotland's new democracy—to nurture it, in the words of the Presiding Officer on the opening day.

We owe it to the people of Scotland not to stand by while our cherished public services are demolished. The solution is in our hands.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

I would like to thank Mr McConnell and Mr Wilson for keeping well within the agreed time limits.

Photo of David Davidson David Davidson Conservative 3:17 pm, 6th October 1999

I will do my best to follow their lead, Presiding Officer.

I congratulate the minister on his professional delivery. In his former role as chief enforcer for the Labour party in Scotland, he defended the party's cause and tidied things up where necessary. That role has given him strength today and has given him a lot of words—I should stop there: he has given us a lot of words, but not much substance.

As we live in an age of openness and disclosure, I wonder if honest Jack will declare that he is a member of the magic circle and that that is where he gets the ability to make the same money appear again and again. That is a talent that Labour has developed in its two-and-a-half years in government. Recycling has been mentioned already, but the people of Scotland deserve better than that: they deserve clearer statements of where their money is going to be spent.

The statement is in main head form only. We accept that the committees have a wonderful role to play in the Parliament—they have the ability properly to scrutinise the details that we hope to receive in the weeks to come. However, we need an assurance that the Scottish Executive will not adopt the practice of Tony Blair, and make statements outwith the chamber or the committees.

I ask the minister to ensure that the Finance Committee is given regular spend-to-date information so that it can properly scrutinise all ministerial departments' responsibilities. Without it, neither the Finance Committee nor the Audit Committee can do their work.

Mr Lyon—I see that he has vacated the chamber again—and his colleagues will claim that they steered the budget. In fact, we know that the Executive is able to deal with the Liberal Democrats' small requests in the partnership agreement well within budget capabilities. However, in answering a question on whether university fees should be abolished, the minister gave the distinct impression that he was not for moving and was not prepared to address the subject.

Will any of the Liberal Democrats, when they eventually stand up, clarify whether the minister can find the money to deal with the abolition of tuition fees, and how long he will have to do so, should that be the recommendation of the Cubie committee?

Photo of David Davidson David Davidson Conservative

While I am swallowing my water, certainly.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am a bit confused about Tory policy; can Mr Davidson clarify it, in view of Mr Hague's statement at the Blackpool conference that he supports tuition fees?

Photo of David Davidson David Davidson Conservative

I am sorry, but we are in a Scottish Parliament to which at least three of the parties—if not some of the smaller parties as well—were elected on the basis that tuition fees would be abolished in Scotland. Has Mr Raffan forgotten that? He has to realise that this is Scotland, not Westminster.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Will Mr Davidson confirm that he is disowning his leader?

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Just a minute, Mr Raffan. Mr Davidson, I take it that you are not giving way.

Photo of David Davidson David Davidson Conservative

I am not giving way. He has had his chance.

Photo of Phil Gallie Phil Gallie Conservative

Mr Raffan should know better.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

There can be only one member on their feet at one time. Mr Davidson is not giving way.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

Does what Mr Davidson said mean that he accepts that a decision of this Parliament will be supreme in ruling what happens on tuition fees?

Photo of David Davidson David Davidson Conservative

I seem to remember that we had a manifesto before the election. I am not sure whether the good lady has read it—I suggest that she leaves the chamber to have another look at it.

Another matter arising from the statement which, as Andrew Wilson said, we saw only fleetingly before the meeting—we are grateful for the opportunity just the same—is that very little money will be put into the enterprise and lifelong learning department. The minister mentioned a few sums of money to help people into education, but I did not hear anything in the statement about what the minister is putting towards the development of the enterprise culture that I recall everybody in this chamber supporting at the beginning of this Parliament.

Photo of John Swinney John Swinney Scottish National Party

If I had managed to catch the eye of the Presiding Officer during questions earlier, I might have raised this point, but perhaps Mr Davidson can help me. The minister said that £29 million of additional expenditure was being allocated to enterprise and lifelong learning but, in my calculations, before the changes, there was to be a cut of £5 million over the next year and a cut of £22 million in the following year. Can Mr Davidson explain how the Government's addition adds up?

Photo of David Davidson David Davidson Conservative

I am sorry, but I am not responsible for the maths teacher that Mr McConnell once was.

The Minister for Finance and the First Minister came to this Parliament to establish Labour's credibility as a party that sought to create an enterprise culture in Scotland. We have got to get a grip in this Parliament. We need to consider wealth creation; that produces jobs and is the way forward in Scotland.

We hear time after time in different committees—we have heard from Henry McLeish—the various local enterprise issues that members raise.

Photo of David Davidson David Davidson Conservative

If I let Mr McConnell in, will he give a further statement on where money is coming from?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

In the spirit of Mr Swinney's consistent remarks over the past 12 months—at Westminster, during the election campaign, and here in the Scottish Parliament—that we could make better use of the resources available to local enterprise companies and Scottish Enterprise, does Mr Davidson agree that the spirit of enterprise that he refers to is sometimes best served by making better use of existing resources rather than by adding to lines where that money may not be required?

Photo of David Davidson David Davidson Conservative

If that was a statement of intent, I welcome it. We look forward to Henry McLeish coming to the chamber in the next few weeks to give us some details of the way in which he intends to rejig the system, because to date, Mr McConnell, we have had little evidence that the Labour party has accepted the full thrust of enterprise.

One subject—the use of roll-forward budgets—bothers me tremendously. I am sure that it also bothers other members—Andrew Wilson has already referred to it. Traditionally, we are led to understand— [Interruption.] Frank, Jack, is it all right if I speak? Sure? Thank you very much.

We are assured that 1 to 2 per cent of the budget has, traditionally, not been spent. That allows for little fluctuations in spending and so on. What the minister is offering today is obviously what he is using last year's roll-forward for. It would have been interesting to know what that figure was, but we have not heard it.

What I want from the minister, in front of the chamber, is a categorical assurance that in future such surpluses, if rolled forward, will be drawn down during the budget year and used to reinforce the infrastructure and the structures of Scotland, and not gathered up over three years into a potential war chest of £1 billion. If Mr McConnell sits on the money, that is what he will have and it is the last thing that will do the public credibility of this Parliament any good.

Many of my colleagues will pick up on detailed points related to their particular briefs, so I will not go into those points. We have had an awful lot of words and very little information today. The Executive is beholden to accelerate ministers' coming to this chamber and the committees and issuing detailed plans on how they intend to spend the money that the minister wishes to allocate to them, so that Parliament can get on with its job of scrutiny.

I am disappointed. I had hoped that, with our new start, we would have had far more clarity of vision and—

Photo of David Davidson David Davidson Conservative

I am beginning to wind up. Is it of desperate need?

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

There can be only one member on their feet at a time.

Photo of Ian Jenkins Ian Jenkins Liberal Democrat

As there are schoolchildren in the gallery, and as we have confirmed that an extra £80 million will be spent on education, is this or is this not an excellent day for education?

Photo of David Davidson David Davidson Conservative

Anything spent on education is a good thing. The children of Scotland are our future. However, we have to look at the fine print of how the money is spent. We need to scrutinise and not just spend. The minister talked about best value—he said that just now if Mr Jenkins had been listening. He said that we need to look very carefully at using and targeting existing funds better. If that extra £80 million produces a real benefit to our children, obviously we will support that spending. We have yet to see the proof of the pudding. I hope that that answers the question.

I must say one or two things to my colleague Mr Andrew Wilson. Last week, he was very gracious in the chamber and wished for my good health. I thank him for that. Unfortunately, I cannot agree with some of the other things that he said. However, I agree with one thing, and I thank him most sincerely for this on behalf of my party—he is a very good advocate for the wonderful job that my party has done in government in the past, particularly in Westminster.

Mr Wilson and his colleagues have a difficulty—they seem to think that the only way to solve any problem in Scotland is by the use of public funds. On numerous occasions when his colleagues have been in committees or in meetings with me, they have raised that issue. This Parliament should be seeking not only to get the best out of public funds, but to see how best we can harness the good that the private sector can bring to partnership working, because without a strong private sector, Scotland is doomed to be a second-rate nation. It has never been that in the past because of the joint role of the public and private sectors in partnership. I hope that the Scottish National party takes that lesson on board.

The last comment I want to make to Mr Wilson is that I am extremely worried. Having told us how wonderful we were in the past, he now accuses us of trying to pass policy across to Labour. I hope that when the time comes for us to take Labour's place on the benches over there, we will make a far better job of it than the Labour party has made of it so far.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Unusually, all the front benchers have set an excellent example on timekeeping today. If everyone on the back benches keeps their speeches to four minutes, everyone who has asked to speak can be called. I call Keith Raffan.

Photo of Keith Raffan Keith Raffan Liberal Democrat 3:30 pm, 6th October 1999

After the two grudging speeches from the Opposition parties, I warmly welcome the minister's statement. The Opposition spokesmen have been grudging and nit-picking, and that is all that they can be because the comprehensive nature of the statement has taken the wind out of their sails. That was quite clear from Mr Wilson's speech and from Mr Davidson's.

The fact is—everybody in the chamber knows it now, and everybody in Scotland will know it by the time that they have seen the evening news—that the partnership agreement has delivered today. Most important, as my colleague Ian Jenkins mentioned, it has delivered an extra £80 million for Scottish education. It will deliver more teachers—500 of them—as well as new books and better equipment for every school, every classroom and every child and pupil in Scotland. It has delivered an extra £30 million to pay for 500 extra teachers and an extra £21 million to pay for new books and equipment. That amounts to an extra £8,000 per school or an extra £24 per pupil.

It would have been nice—although it would have been a surprise—if the Opposition spokesmen had acknowledged those spending allocations.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will not give way. I have a shorter time in which to make my speech than was given to the other front-bench members, and I have a lot to say in response to the points that they made.

Members of the SNP ought to listen to my point. They have glossed over the fact that a lot of extra resources have been allocated to education. I shall return shortly to Mr Davidson's point about small requests and small amounts. Money has not been given only to pupils. An extra £9 million has been—[MEMBERS: "What about students?"] I am glad that that has been mentioned. I am not avoiding the issue of students; I am about to come to that very point.

In fact, an extra £9 million is being allocated to encourage pupils from low-income families to go on to higher education, because this coalition Government aims to widen access to higher education. There will also be an extra £14 million to help students in greatest need. Everyone in the coalition partnership supports students, and I wish that the same were true of the unholy alliance between the Opposition parties.

The extra £80 million on education will be spent because of the partnership agreement between the Liberal Democrats and Labour; it would not have been spent without it. That is the simple message that goes out today from the chamber to every part of Scotland: the partnership is working for the Scottish people; it is delivering for them; and this is just the beginning. In drawing up future expenditure plans, we in the partnership will work together to ensure that that spending is in line with the policy priorities outlined in the agreement. That means that our first priority is still more public investment in Scotland's future—and that is what Scotland's pupils are. Scotland's share of any extra money that the Chancellor of the Exchequer is able to find—and I hope that he will not sit on the lid of his so-called war chest for too much longer—will be spent where the partnership has already agreed that it is most needed: in our schools and in our classrooms.

I wanted to ask the minister about drugs. He mentioned that there would be £10.5 million of new money for the drugs enforcement agency. I have spoken before in the chamber about the need to correct what I and many other members perceive to be an imbalance in our spending on tackling drug misuse, leaving too little money for treatment and aftercare, prevention and education. I am glad that he has announced a comprehensive audit of all resources directed towards education and rehabilitation, but I would be grateful if, when he winds up, he would let us know the deadline for that audit. Money for treatment and aftercare is desperately needed. There are 120 beds in Scotland for in-patient residential treatment for addicts, but there are 5,000 addicts in the Fife part of my regional constituency alone.

The Tories like to see themselves as the party of good economic management, thrift, prudence and value for money, and we heard all that from Mr Davidson today. That is how they like to see themselves, but we do not. Nor does Norman Lamont, and he was a Tory chancellor. Poor Norman, waiting outside the door of John Major's room as not millions but billions were lost to Britain. It is no wonder that Mr Davidson says that £80 million is paltry. Eighty million pounds is a very small sum compared with the amount that the Tories lost on Black Wednesday. It was not £80 million that they lost; it was billions and billions of pounds, and it is time that they showed some humility about their appalling record of economic mismanagement.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I shall not give way. Enough self-inflicted damage has been suffered by the Tories this week at Blackpool, without my giving way to Mr Davidson to allow even more. I am a kindly man. The Tories are in great pain as a party, and I do not want to talk about them too much.

All that I will add concerns Miss Goldie's speech of last week, about inadequate public transport—"inadequate public transport" is what she said. She and the Tories should know all about that. They cut spending on roads by nearly 40 per cent, between 1994 and 1997, from £247 million to £162 million. The minister today announced an increase of £35 million. That will not go far enough, in the long term, but it is a good start. On public transport, the Tories have shown zero tolerance—literally zero. They reduced grants for local authorities to support public transport to zero: zero money for local roads, zero money for bus lanes and zero money for bus stations.

While the Tories go back to basics, what do that lot on my left—they are on the left geographically, not in any political sense—want to do? The SNP wants to go back to the blackboard. The minister today announced a welcome increase of £11 million for the national grid for learning, but the SNP wants to scrap it. No wonder, then, that University of Glasgow students told me earlier this week that they view the two Opposition parties as indistinguishable: they regard the SNP as photocopy Tories. It is our coalition that is giving the lead in Scotland, and we are providing the quality debate. I only wish that those parties would provide quality Opposition.

Photo of Mike Watson Mike Watson Labour 3:37 pm, 6th October 1999

Mr Raffan in full flight is a difficult person to deflect, but he is always deflected eventually. However, his approach is certainly preferable to that of Andrew Wilson, who I thought was rather churlish in his response on behalf of the Scottish National party, and undeservedly so.

This is a big step forward in the way in which Scottish public finances are managed. Mr Wilson, who is a member of both the Audit Committee and the Finance Committee, knows in great detail that this is a new way of managing public finance, and he should have welcomed it. Instead, we are mired in questions of how much something is worth, where the new money is and what is in Gordon Brown's war chest. That is not the issue today, and the people of Scotland will not welcome such an approach as this Parliament begins to discuss financial matters seriously for the first time. I certainly do not.

I have heard SNP members comment that it is the same money. The issue is the reallocation of resources, for the most part—nothing other than that has been claimed, in terms of the three-year comprehensive spending review.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Mike Watson has just appeared on the "Holyrood" television programme, saying that there is no new money. The Minister for Finance said that there is new money. Will Mike Watson tell us who is right?

Photo of Mike Watson Mike Watson Labour

I understand that Mr Wilson is one of Scotland's 50 most eligible bachelors. Frankly, I am not sure what he is eligible for. He is certainly not eligible for election to the SNP's national executive, as he has just failed to achieve that. That might be because he is completely out of line with that party, which wants to tax every family in Scotland. Mr Wilson does not agree with that.

Andrew and I are talking about two different things. I do not know how he managed to hear what was said in my interview for the "Holyrood" programme, as I was being interviewed while he was speaking in the chamber. However, I said that there is no new money, and that the issue is the reallocation of resources for this year. Some money has been freed up in the way that Jack McConnell suggested, for Scottish Homes and NHS trusts, but the new money will be delivered over the three years of the comprehensive spending review. This is the partnership agreement in practice. We outlined what the partnership agreement would do, then the programme for Scotland took that one step further and described how those things would be funded.

Photo of Mike Watson Mike Watson Labour

I will give way in a moment. There must be a great deal to be welcomed, but I am sure that that welcome will not come in this intervention.

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party

Let us be clear about this. Perhaps Andrew Wilson was in the chamber, but I was not 10 cm from Mike Watson when he was interviewed. What he said was nothing like what he has just come out with. He told us categorically that there was no new money. It was put to him in the interview that Mr McConnell had told us that this was new money. There is a rift which he is trying to heal over, but cannot. Please tell us who is right: is it the Minister for Finance or is it the convener of the Finance Committee?

Photo of Mike Watson Mike Watson Labour

The only rift that I have is a result of my lunch. I am a member of a very small club. It does not have many members, and not many of them are members of the Scottish National party. I like Duncan Hamilton, but he tries too hard and he is again trying to be too clever.

Ten minutes ago, we did an interview on the "Holyrood" programme. What I was talking about was the reallocation of resources for this year. The new money was made perfectly clear in the minister's statement. We did not go into that detail in the television debate, and it is not relevant to what we are talking about. The SNP is trying to get us off the main track of the good news that was announced in the finance minister's statement.

We should pay tribute to the fact that we have a new, three-way process for managing Scotland's public finances. We have not had that in the past. We now have openness and accountability. When we get the draft budget lines for this and subsequent years, they will be worked up into a Budget Bill. We will have the opportunity to go into that in far greater detail than has previously been the case, in committee and in the chamber, and the public will have their input, too. Cannot the Scottish National party welcome that, rather than quibbling about pennies here and there; new money, old money? The minister's statement is perfectly clear about where we are and where we are going. That has not been the case in the past.

What is most encouraging in the statement is the new use of year-end flexibility. That means that money does not have to be spent in a rush towards the end of the year—often unwisely—and that unspent money does not have to be returned to the Treasury. That will have a major impact on Scotland's public finances and it is part of a new way forward, a more positive, open and accountable way of running our finances. The statement is to be welcomed. This is the Scottish Parliament getting down seriously to business.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party 3:42 pm, 6th October 1999

I am afraid that I will quibble, and it will not be about pennies.

In these days, when most political parties worship at the altar of low income tax, but at the same time seek to be seen to be increasing public expenditure, it is always illustrative to look at precisely who is paying the bill.

I recently had the pleasure of looking at the Executive's expenditure plans in the document, "Serving Scotland's Needs". In particular, I was interested in local government and in how the Scottish Executive would manage to put the quart of its spending plans into the pint pot of its self-imposed financial constraints. The news for Scotland's local authorities and hard-pressed council tax payers is not good. Finding that out was not an easy feat. The presentation of the figures in "Serving Scotland's Needs" is particularly obscure. Nowhere in the publication is it possible to make a direct comparison between the amount that local authorities will need to spend both to maintain current levels of service and to meet new burdens, and the resources that the Government plans to make available. Yet that comparison is crucial to determine how much extra cash will have to be provided through council tax or by how much services will have to be cut.

To make the comparison, I have made two broad assumptions: first, that loan charges will increase faster than inflation—4 per cent per annum for 2000-01 and 2001-02; and secondly, that expenditure will need to rise in line with inflation—by 2.5 per cent per annum.

Using those assumptions, I estimate that local authorities will need an extra £660 million in 2001-02. According to "Serving Scotland's Needs", the planned increase in funding for those years is only £490 million. That leaves a gap of £170 million that local authorities will have to find for themselves, either by putting up council taxes or by cutting services.

I am afraid that that is not the end. Including the new commitments—or new burdens, as they are called—worsens the situation. I would like to list some of the more important ones. The new burdens include specific grants. Our research indicates that, after inflation, there will be a shortfall in that area of £14 million in 2000-01 and £44.6 million in 2001-02. Another burden is the expansion in child care. In September 1998, the Government announced an additional £91 million for the expansion of child care. That is not included in specific grants, but is part of central Government support and is not budgeted for in 2000-01, or the year after that. Estimated additional costs for that new burden in those years are £18.7 million and £22.4 million respectively.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

In 1998-99, local authorities estimated that they had spent an additional £41 million over and above the central allocation to support extra funding for pre-school education. Assuming that that top-up moves in line with inflation, by 2001-02, local authorities will need to find an additional £37 million not budgeted for.

"Serving Scotland's Needs" estimates 2.5 per cent per annum for a teachers' pay increase. We all know that the Educational Institute of Scotland rejected the recent pay offer. If it accepts a future comparable offer, by 2001-02, the shortfall will be £100 million.

Taking those figures cumulatively, local government faces a shortfall of nearly £400 million by 2001-02. That shortfall can be made up through cuts in council services or through an average 40 per cent increase in council tax across Scotland. That is the dishonesty that we face on the part of the Scottish Executive. It is the reality of new Labour: from the toll tax to the fuel escalator and the council tax, someone will always have to pay the bill.

Photo of Paul Martin Paul Martin Labour

Kenny has been critical of the financial plan that Jack McConnell put forward, but can he tell me where the SNP will make a difference? What will it suggest as an alternative to Jack McConnell's plan? He can phone a friend, or do whatever he likes to get an answer.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

If Paul Martin had listened to Andrew Wilson's speech, he would have known that he emphasised Gordon Brown's war chest. It is up to the Executive to demand that Scotland gets its fair share of that war chest, to ensure that services are not cut, that people do not have to pay more in taxes and that jobs are not lost.

I will wind up—if I can remember where I was before Paul's intervention. I was not going to take an intervention, but I did, as it was from him.

The Labour party has our assurance that we will spend every waking hour explaining to the people of Scotland that for every penny that is knocked off income tax, they will have to pay back double in stealth taxes, and for every penny bribe that is handed out at elections, the cost will be poorer public services, higher council taxes and fewer jobs.

Photo of Mary Mulligan Mary Mulligan Labour 3:46 pm, 6th October 1999

I welcome today's announcement of an additional £80 million for education and children. The £30 million that has been allocated to fund 500 additional teaching posts must be welcomed by everyone in the chamber. Unfortunately, it has not been. I hope that that money will continue to fulfil Labour's desire to reduce class sizes. A commitment was given, and is being fulfilled, to reduce the number of children in classes in P1 to P3 to 30 or fewer by August 2001, but more money for teachers will allow that policy to be continued throughout the rest of children's schooling: in fact, up to S2.

The £21 million for books and equipment will also be welcomed. Shortly before the elections to this Parliament, there was criticism from the SNP that new Labour's proposal to extend the national grid for learning was at the expense of providing more books and equipment. I never believed that it was an either/or situation. We must continue teaching children about information technology, but we also recognise the importance of books and equipment. We know how the Tories reduced education spending, so that children had fewer books and had to share the books that they did have, and teachers had to spend half their time photocopying to enable classes to be held. I welcome this money.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

Mary was at the meeting of the Education, Culture and Sport Committee when Mr Galbraith made it clear that he would not provide more money to fund the teachers' pay settlement this year. Does she think that that will help our children's education?

Photo of Mary Mulligan Mary Mulligan Labour

Sam Galbraith never said that he would not provide additional money to fund the teachers' pay settlement. He said that we have to allow the teachers and their unions to negotiate a pay settlement, and at that stage it is their prerogative to discuss the issue with the minister. He never ruled out additional money, because we have not reached that situation yet. The fact that SNP members keep returning to hypothetical situations instead of living in the real world, like the rest of us, shows how unrealistic they are.

We are now investing in books. I agree with Keith Raffan, who spoke of the unholy alliance between the SNP and the Tories in their grudging recognition of the additional money.

What worries me most about debates such as this is the way in which we argue whether facts and figures are true or false, or whether it is new or old money. The money that has been announced today is part of fulfilling the agreed policies that the partnership is implementing. It strikes me that the real worry is coming from the SNP and the Conservatives, who are not willing to deal with real life and to come forward with some realistic proposals of their own.

Photo of Patricia Ferguson Patricia Ferguson Labour

I had intended to call Murray Tosh next, but unfortunately he is not in the chamber. Instead, I call Phil Gallie.

Photo of Phil Gallie Phil Gallie Conservative 3:50 pm, 6th October 1999

At the beginning of his remarks, Mr McConnell forecast that there would be some facile political point scoring. Ironically, he started off his speech exactly along those lines. Jack seems quite prepared to lash it out, but he does not like to get it back.

Mr McConnell should be grateful to this part of the chamber, because the Labour party inherited a great legacy from the Tory Government that has enabled the Labour Government to do well economically. That is not just the view of members on the Conservative benches—

Photo of Phil Gallie Phil Gallie Conservative

Oh sit down, George, for goodness' sake.

Photo of Phil Gallie Phil Gallie Conservative

No, Jack, just give me a minute. In 1997, Tony Blair—Jack's master—said in Amsterdam that he was extremely grateful to the Tory party.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I notice that Mr Gallie is wearing a pound sign badge that he presumably bought in Blackpool this week. That is appropriate for a finance debate.

Does Mr Gallie agree with Margaret Thatcher's prejudiced remark at last night's Scottish night at the Conservative party conference, that all the problems that this country—and perhaps the whole world—has faced for the past several decades have been created by mainland Europe and that the only solutions to those problems have come from the English-speaking world?

Photo of Phil Gallie Phil Gallie Conservative

If we look back at the sad years from 1914 to 1918 and at the sad happenings from 1939 to 1945, I have to say that the great lady has perhaps got something going for her.

Mr Raffan, who was quite happy to intervene but was not prepared to give way, accused the Conservatives of making mistakes with Black Wednesday. However, the biggest mistake that we ever made was joining the exchange rate mechanism.

Photo of Phil Gallie Phil Gallie Conservative

I am acknowledging that joining the ERM was the greatest mistake that we ever made. However, Mr Raffan would have had us rushing into the euro; given the devaluation of that currency, how much would that move have cost people in the UK?

We should consider the issue of law and order in relation to this budget. One of the Labour slogans at the previous election was, "Tough on crime". However, I am pretty disappointed at the lack of comment on law and order issues.

Photo of Phil Gallie Phil Gallie Conservative

Not just yet—I am being timed on my four minutes.

We very much welcome the drugs enforcement agency. Last week in the chamber, Angus MacKay suggested that £4 million would be provided to cover the costs of 200 extra policemen. At that time, I said that the costs would be nearer £12 million. I am absolutely delighted that Jack McConnell said today that £10.5 million would be made available. I was rubbished by Angus MacKay for an off-the-cuff remark, but it seems that my figures were correct. I welcome the minister's acknowledgement of that.

Having complimented the minister, I have to say that I am pretty concerned about expenditure on police. No additional resources are going into the police service. When the Tories left office, £29 million was being spent on the police, and the same is still being spent today. I recognise that there are difficulties. Central Government provides 51 per cent of police funding, with the other 49 per cent topped up by local authorities, which suggests that the matching funding that we all want is not always there.

There has been a reduction in the number of serving police officers in the Scottish police service. The Strathclyde area, for example, has a shortage of 350 officers. In his speech, Mr McConnell put forward the vision of

"a country ... where our families can raise their children, safe"— when they play—

"a country ... where our senior citizens live at peace, in safe neighbourhoods".

The fact is that crime is rising under Labour, and no provision was made to counter that in Mr McConnell's comments.

Photo of Phil Gallie Phil Gallie Conservative

If Mr McConnell says that the issue will be re-examined at some point, he has our word that we will enter into partnership with the Labour party to bring about greater expenditure on law and order. However, we must examine the figures. Expenditure on justice in 1994-95 was £513 million; for 2001-02, it is £512 million. That is a reduction of £1 million over a period of six or seven years. That does not give us real confidence in Labour's original pledge to be tough on crime.

Photo of Phil Gallie Phil Gallie Conservative

That represents a 15 per cent cut in real terms in expenditure on justice issues.

Jack McConnell spoke of support for victims of crime and witnesses. Once again, it seems to me that that will not increase at all. We do not even have a steady hold in expenditure; there is a reduction in support for victims of crime.

Photo of Phil Gallie Phil Gallie Conservative

The minister shakes his head. I stand to be corrected. If he can give me detailed figures that show that support for victims of crime will go up, he will have the support of the Conservatives. He talked about legal aid. [Interruption.] In fact, I do not think that he talked about legal aid, but it is an issue that he must reconsider. Once again, financial support for legal aid is falling.

Finally—

Photo of Andrew Wilson Andrew Wilson Scottish National Party

On a point of order, Presiding Officer. The member has overrun by some minutes.

Photo of Patricia Ferguson Patricia Ferguson Labour

Not quite, Mr Wilson. Mr Gallie will close in one sentence.

Photo of Phil Gallie Phil Gallie Conservative

I want to make one final point. In response to a question that I asked last week, the Minister for Finance said that £300,000 per year is spent on ministerial cars. Surely that £300,000 could be spent on other things.

Photo of Maureen Macmillan Maureen Macmillan Labour 3:56 pm, 6th October 1999

I am absolutely delighted with Jack McConnell's announcement of funding to tackle the causes and consequences of domestic violence. I noticed that Jack was one of the few men present at the debate on domestic violence a few weeks ago, and I hope that he took note both of the concerns expressed by all parties and of the need for funding to address the problem.

I particularly welcome the commitment that the funding will be used to ensure that provision is consistent across Scotland. That is one of the things that I was arguing for in the domestic violence debate. It will mean that a person's postcode will not be a measure of the availability of refuge provision. Without repeating my previous speech, I want to say that I know that the funding will be of particular relevance to rural areas, where distance and lack of public transport make it difficult for women to access help.

The money is desperately needed, for refuge provision, for other support for victims and for campaigns to educate and to raise awareness of that terrible cancer in our society. I would particularly like to see support for education programmes on relationships, from the earliest years in school. In due course, I look forward to hearing from either the Minister for Finance or the Minister for Communities about the details of the proposals.

I welcome the announcement of extra funding for roads. Without repeating the speech that I made in the debate on the Mallaig road, I want to say that that is of special interest to rural areas, too. I look forward hopefully to further announcements on where the extra money will be allocated.

Photo of Kay Ullrich Kay Ullrich Scottish National Party 3:58 pm, 6th October 1999

Let us clear away the smoke and the mirrors so that we can see the reality behind the claims of big spending on health and community care. Over the next three years, health spending in Scotland will increase by an average of 3.5 per cent, compared to an increase of 4.3 per cent south of the border. That is a loss of £410 million to the Scottish health service. Does that mean that the people of Scotland are getting radically healthier and therefore do not require as much to be spent on health care? Unfortunately, the evidence suggests otherwise.

In any category I can mention—perinatal mortality rates, deaths from cancer, heart disease, strokes—the mortality rate in Scotland is higher than in England and Wales. However, new Labour intends to spend less on health care in Scotland.

Photo of Kay Ullrich Kay Ullrich Scottish National Party

No, I will not.

If the Executive really believes that the NHS in Scotland is being adequately resourced, can it explain why we are hearing reports of hospitals that are already operating non-admissions policies for elective surgery in an attempt to prevent a repeat of last year's winter crisis in accident and emergency? Can the Executive explain why, within the last two weeks—during an unremarkable time of year for the health service—Edinburgh royal infirmary was unable to accept any admissions because there were no available beds?

Furthermore, why is it that, in spite of a proclaimed commitment to mental health, not one acute psychiatric bed was available in any of the four psychiatric hospitals in Lothian at the beginning of September, resulting in vulnerable people being placed in hospitals far from their homes and their families? Such is the reality of new Labour's two-and-a-half-year stewardship of the NHS in Scotland.

Surely the biggest let-down, however, is in the area of community care. There cannot be a single member in this chamber who has not had an inquiry from a constituent on the subject of community care. The fact is that social work departments all over Scotland are being starved of the funds that would enable them to provide needs-led community care. An average-sized local authority in Scotland will today have in excess of 100 people who have been assessed as being in need of long-term residential or nursing care. Yet the social work department will have enough funding to place only four people per month. It does not take a genius to work out that hospital beds will remain blocked and that frail, elderly people will continue to be left at risk in inappropriate living conditions.

The signs today are that the situation in terms of local government funding will only get worse. In addition to the growing crisis in the long-term care of the elderly, there is an apparent refusal by Labour MPs at Westminster and by the Scottish Executive even to look at the Sutherland report, which is widely regarded as showing the way forward on funding for long-term care of the elderly. It is a total obscenity that elderly people should have to sell their homes and use up their savings to pay for long-term care.

Photo of Kay Ullrich Kay Ullrich Scottish National Party

No, I want to continue. The irony is that those having to sell their homes are members of a generation that was told by a Labour Government after the war that if they contributed to the public kitty, they would be looked after when their working lives were over. New Labour—and the Tories before it—must stand accused of a complete breach of faith with an entire generation.

We have had the fine words and the glossy brochures, but, as I am fond of saying, facts are chiels that winna ding, and the facts are that new Labour puts right-wing tax cuts before the health service and Gordon Brown's election war chest before caring for our elderly people.

Photo of Patricia Ferguson Patricia Ferguson Labour

No, the member is winding up.

Photo of Kay Ullrich Kay Ullrich Scottish National Party

Health spending as a proportion of national wealth has dropped under new Labour to its lowest level in a quarter of a century. However hard the new Labour spin, the facts and the reality that people see every day tell a different story—one of underfunding, neglect and shame for new Labour.

Photo of Mary Scanlon Mary Scanlon Conservative 4:03 pm, 6th October 1999

I welcome the level of contribution from the Opposition parties, given that we had less than one hour to scrutinise the statement. Not only would more time help us, it would help our colleague Keith Raffan, who would not have to go back to Golden Wednesday 1992. Perhaps Keith could comment on today's statement, rather than on Conservative policies from seven years ago.

My first point is on the £17 million for vaccination. [Interruption.] Andy Kerr and Phil Gallie, will you two stop talking? [Laughter.] Once a teacher, always a teacher. [Interruption.] Keep quiet.

Photo of Mary Scanlon Mary Scanlon Conservative

Absolutely.

I welcome the £17 million for vaccination, but I am concerned that there are no meningitis C vaccinations in Scotland. I am sure that most members who have held surgeries will have been visited by young students who say that they must get a vaccination before they go to university. Students are vulnerable, as there were fatalities last year. Although I welcome the £17 million, I would welcome more a supply of vaccinations, because students must have a period of time in which to build up immunity.

Photo of Iain Gray Iain Gray Labour

Is Mary Scanlon clear about the fact that the additional money relates to the new vaccine, which is not yet available or in production? The supply problems have been with the older vaccine, and those problems have been resolved. In terms of the money, we are talking about two different vaccinations.

Photo of Mary Scanlon Mary Scanlon Conservative

I am talking about two constituents who came to a surgery in Wick. Their sons were going to Imperial College, London. Last week, they could not get the vaccine in Wick—it was not available. I want to be positive, Iain, and I welcome the fact that you are addressing the matter.

Photo of Mary Scanlon Mary Scanlon Conservative

Wind up? I have just started. [Laughter.] I want to make one brief point. It is on bed blocking. I welcome the fact that we should be constantly scrutinising best value for money and monitoring good practice. I am delighted that the Health and Community Care Committee have made care in the community a top priority.

My main concern—this is a very brief point—relates to Sir Stewart Sutherland's comments last week about £750 million being missing from the care budget, UK-wide. Not only should we scrutinise what we do in this Parliament, but I would like clear, concise and accountable scrutiny by us and by local government.

I think that we should be working towards better working partnerships with local government to deliver the health care that we need.

I have a lot more to say.

Photo of Mary Scanlon Mary Scanlon Conservative

The same principles apply to spinal injury patients, whose care costs £250 per day. In that case, better working relationships with housing departments could mean that those patients have the care that they need in their own homes.

Photo of Andy Kerr Andy Kerr Labour 4:07 pm, 6th October 1999

I congratulate Jack McConnell on his speech. I share the views of some members that the Opposition groups, grudgingly and working in tandem as usual, have chosen to be fairly churlish.

I apologise to Mary. When I was talking, I believe that I picked you up correctly: you did say Golden Wednesday?

Photo of Andy Kerr Andy Kerr Labour

That was when this nation lost millions of pounds. I am astonished that anybody would refer to it as Golden Wednesday, albeit according to the Conservatives' anti-European agenda, which took them out of the exchange rate mechanism. I think that that is fairly disgusting, and I am glad that it is on the public record.

I turn to the statement. We must welcome the new money going into Scotland's services: the money announced by Jack and the reallocation of resources to what he called in his speech the people's priorities. It is about education.

Phil said, "Tough on crime". We are also tough on the causes of crime. That is why, looking at the general economic climate, youth unemployment is at a historic low level, general unemployment is at a historic low level, long-term unemployment is at a historic low level. That is what Government's role is. Working in partnership with Westminster, we can deliver those macro-economic solutions, which will have local implications for crime and so on. I welcome that reduction in unemployment. It is generally respected by journalists.

Photo of Andy Kerr Andy Kerr Labour

Andrew Wilson was quoting journalists about Gordon Brown's war cabinet. [Laughter.] I also quote from The Herald . One of its headlines was:

"Golden age hailed as jobless total plummets".

That relates to the management economy. We keep comparing expenditure patterns. The baseline figures provided by Jack McConnell and his office show that we are growing in terms of health expenditure, which may be reduced in terms of gross national product, but we have a well-managed economy that is running at higher levels than ever before. In comparative terms, there may be reductions, but in a context of £4 billion of new money coming to Scotland through the CSR, and of £800 for every man, woman and child in Scotland, I would have thought that the Opposition parties would have managed some grudging congratulations to Labour and to Jack McConnell for spending the money so wisely in Scotland.

Photo of Alex Fergusson Alex Fergusson Conservative

I congratulate Mr Kerr for giving way, if that makes him feel happier.

If the Labour Government is so tough on the causes of crime, perhaps he could explain why crime figures are increasing in general.

Photo of Andy Kerr Andy Kerr Labour

Crime is a very complex matter, and that is why we are spending more money on drug enforcement agencies, and why the Deputy Minister for Justice is going to Ireland to examine new measures for dealing with drug enforcement and the seizure of assets. We are dealing with the issues as we see fit—successfully, I would argue. Drugs are one of the main focuses of criminal activity. Therefore, we are spending the money on the people's priorities: on the drugs issue, on the drugs enforcement agency and, I hope, on the seizure of assets. That is how to deal with the drugs problem and its effect on crime.

Let us consider the big picture, which Andrew Wilson talked about. The big picture is inflation at all-time lows, interest rates at all-time lows, unemployment at all-time lows, and Jack McConnell presenting a firm financial statement for the Scottish people's benefit. It is their money and he is spending it well.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 4:10 pm, 6th October 1999

To follow Andy Kerr, I would say that housing investment is at an all-time low.

There is some good news on housing, in that under current plans there will be an increase in expenditure from £464 million in 1997-98 to £640 million in 2001-02. I welcome the £50 million of recycled money going into the housing budget. I would ask Liberal Democrat members if they have examined where their healthy homes initiative, which was put into the partnership agreement, appears in the minister's statement. I do not think that it does.

The bad news is that, over the past decade, housing's share of the Scottish Office budget has declined from 7.2 per cent to 3.1 per cent. That is the context of public service investment that we are addressing. When we examine the figures, there has been a fall in gross public sector investment from £1,195 million in 1992-93 to £604 million in 1997-98. That shows the scale of the problem. Housing association investment fell by 41 per cent from 1995-96 to 1997-98. Local authority investment declined by 45 per cent. That is not a gap in public spending; it is a gaping chasm.

We need strong public services and the political will to support strong public services. Why do we need that? It is not just about pounds, shillings and pence; it is about people and their needs. Overcrowding causes family tensions. Families who want to live near each other are scattered to the four winds, because there is no affordable housing locally. Young people are forced to leave their homes in rural areas. Poor public investment leads to the breakdown in the social need to keep communities together. The Government and the Executive talk about social inclusion—good housing is part of that.

One in four people live in damp houses and there are 2,500 excess deaths. In this land of plenty energy, we allow old people to die because we do not invest in healthy homes. It is all in the name of prudence. Remember that prudence can come in many shapes and forms, and at this time Prudence is an old lady who stalks Scotland, lives in a cold house and may end up in hospital because of cold-related illness. When she is assessed for community care, she will be waiting eight months hence to get a place, because the council coffers cannot afford a community care place for her as the public purse prudence does not recognise her namesake. Labour would rather keep the war chest closed than address real need.

The Executive proposals fail Scotland because a disproportionate amount of its budget is spent on its obsession with wholesale stock transfer proposals. The policy of transferring 25 per cent of Scotland's housing stock could cost as much as £4.8 billion over the next 40 years. Is that a legacy that we should leave our children?

On investment, I will quote the submission of the Glasgow and west of Scotland forum of housing associations to the housing green paper. It put it better than I could:

"Affordable good quality social housing requires significant amounts of public subsidy. Extending the role of the private sector without increasing public expenditure input is a recipe for either spiralling rents or inadequate maintenance or both."

The investment strategy proposed in the financial proposals of the Scottish Executive will deliver precisely that.

Then there is Barnett. Remember the Barnett squeeze as it will have significant effects on housing budgets. The Scottish Executive, tied to the UK tax-cutting obsession, restricts borrowing consents of local authorities that retain their housing stock. The consequence will be increased rent, which will damage social inclusion strategies and increase benefit dependency.

In conclusion, the Executive must realise that that if it is to deliver its stated aims, adequate levels of public subsidy must be retained, as must realistic levels of public investment. On its own, private finance will never meet public need adequately. Labour's Tory policy is delivering poorer public services and higher finances as a result of private finance.

What Scotland needs is a Government that is prepared to tell the truth about tax and that is prepared to stand up for Scotland's interests. I am sorry to say that what I have heard from the Minister for Finance does not do either.

Photo of Tommy Sheridan Tommy Sheridan SSP 4:15 pm, 6th October 1999

It is little consolation to the man who lost both arms and both legs through a tragic accident, only to be told a number of years later that a transplant will give him back one of his arms. He is still a severely disabled man.

Unfortunately, the minister's statement makes up in no way for the massive reduction in public services and expenditure in public services that we have suffered in the past two decades. The problem is that the statement is part and parcel of new Labour's on-going crusade against public services and in favour of private finance. It shows total disregard for the value and the morale of our public service workers.

Reference was made earlier to a London School of Economics report that, after extensive analysis, clearly exposed the fact that this Government is spending a smaller proportion of its wealth on public services than any other Government in the past 40 years. It is of little consolation to the 200,000 pensioners, of little consolation to the 300,000 poor children and of little consolation to those hundreds of thousands of public service workers to hear talk of prudent finance.

I challenge this Executive to make a strong case to the British Government. We in Scotland must budget with the mere morsels that are given to us, rather than controlling the wealth and the resources of this country as we should. It is time that this Executive went back to Mr Brown to say to him that it is a disgrace that £12 billion is sitting in the public coffers while 200,000 pensioners are poor and while 300,000 children are poor. It is a disgrace and one of which this Executive should be ashamed.

A recent Trades Union Congress report shows that Britain remains bottom of the European league of public investment. Britain is No 15 out of 15. The European Commission's forecast is that we will still be bottom of that European league of public expenditure in the middle of 2000. The TUC's statement shows that when the comprehensive spending review and this Executive's statement are taken into account, we are still spending 25 per cent less on public services in real terms than we did in 1993-94.

The statement goes on to make the point that as far as total Government expenditure is concerned there has been a 45 per cent reduction in real terms between 1994 and today. No matter what the spin is, if you have a pun o mince, ye might heat it up but it is still mince.

This statement from the Executive goes nowhere near fulfilling the aspirations or addressing the needs of ordinary people the length and breadth of Scotland. I would argue that what is required is for the Executive to go back to the British Westminster Government and to argue for a better settlement for expenditure in this country. To paraphrase an old song, we should send them homewards tae think again.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

On a point of order. You have indicated, Presiding Officer, that Mr Tavish Scott is next to be called. I recall that you called him about three speakers ago and he was not in the chamber because, I understand, he was doing a television interview. There are many members who have sat throughout the debate—

Photo of Tricia Marwick Tricia Marwick Scottish National Party

—who are waiting to be called and there is a possibility that they might not be called. It is a gross discourtesy—

Photo of Patricia Ferguson Patricia Ferguson Labour

I have turned your microphone off. Mr Scott was not called. I indicated that I was about to call him. Then I realised that he was not here and did not call him. If we press on at the current rate, it should be possible to accommodate everyone who wishes to speak. I take your point, but for that reason we are moving on now.

Photo of Tavish Scott Tavish Scott Liberal Democrat 4:21 pm, 6th October 1999

I am not the only person who has had to go out to do a TV interview and has then spoken.

Mr Sheridan speaks with considerable eloquence on the areas he is deeply concerned about, but I still think the £17.4 billion is not just a small morsel and, although we can differ on how we might spend it, it is a considerable sum of public money. For the Liberal Democrats I wish to recognise the investment that is going into transport and the environment in the increase from £570 million to £587 million over three years. I also welcome the additional money in relation to the strategic roads review. Thirty-five million pounds will not deal with all the concerns and requirements of communities around Scotland but, as was said earlier, might be able to deal with the Mallaig road, for example. That is an important step forward and shows that the partnership Government is listening to a particularly important area of concern in Scotland.

While the broad sums are important, some of the more minor details are also important. The former chief executive of a council I worked in told me that, as a councillor, I should worry about only the vision and not the small details, but the detail is what builds the vision and we should concern ourselves with it. The Minister for Finance mentioned the Scotland Office and its £5.7 million budget and 130 civil servants. I would like to understand what that money is being used for and our role in ensuring accountability for it.

In an article by Mr John Reid I read in The Parliamentary Monitor this week he explains the secretary of state's role. He said:

"it is my job to ensure that Scotland's voice continues to be heard at Cabinet" and, when drawing up the assisted areas map,

"in consultation with my Cabinet colleagues I was able to ensure that the UK government's decision was fair to Scotland."

In the longer term, in the federal Britain that Liberal Democrats seek, there would be no role for the Secretary of State for Scotland. I accept, for now, as the Minister for Finance made clear, that there is a need for a secretary of state looking after Scotland's interests in Cabinet. I have concerns about the scale of the operation, however. There are questions that should be asked about accountability and scale: what do all 130 civil servants do and how does this Parliament ensure that the secretary of state represents our views?

Kenny MacAskill expressed concern at a Transport and the Environment Committee meeting about how we would be able to make representations to the UK Government on the fuel escalator. That is an obvious role for the secretary of state. I am interested in how we as a Parliament make sure our representations are fed into that process. While today there has been an important step forward in terms of financial accountability—

Photo of John Swinney John Swinney Scottish National Party

I am grateful to Mr Scott for giving way on this important point about the representational role of the Secretary of State for Scotland on behalf of Scotland. To what extent does Mr Scott think that the First Minister—who was the Secretary of State for Scotland until a few months ago—ever raised objections within Her Majesty's Government about the impact of fuel prices and the fuel duty escalator on Scotland? If that was an issue that the secretary of state could handle, why did some of his colleagues vote against the fuel duty escalator before the election?

Photo of Tavish Scott Tavish Scott Liberal Democrat

Mr Swinney is talking about a Government in which I was not involved. I am interested in what is happening now. I want the representations that the Parliament makes on particular issues to be taken forward in the most active way possible. That is what I am trying to allude to and tease out today. While the Parliament creates an opportunity to be accountable over finances, in this case it is, to some extent, not matched by any accountability over that aspect of our democratic life. It should be, and I look forward to finding ways in which that can be taken forward.

Photo of Richard Simpson Richard Simpson Labour 4:28 pm, 6th October 1999

I particularly welcome the additional expenditure on the national health service. However, I do not recognise much of what the Opposition said about forward planning. It is true that we have had two years of prudent budgeting. We have inherited one of the strongest economies in Europe and one of the lowest unemployment rates in the western world. That is a sound basis on which to develop public services. It is crucial that we develop those services. Mr Jack McConnell's commitment not only to the introduction of the previously planned expenditure but to definite new expenditure is not—as Kay Ullrich claimed—smoke and mirrors. It is reality.

Let us look at some of those realities. Getting the £50 million in the NHS trust capital spend back from the Treasury is of considerable importance; putting it into housing is a demonstration of the Executive's joined-up thinking. As the Opposition says, health is not just about health; it is about other issues. We are as committed to that as the Opposition is, but in a realistic, not fanciful, way.

The Scottish Executive is already spending more than £200 more for every woman, man and child than is spent in England. It is almost obscene for us to ask for even more, when there are people in Birmingham, Manchester and other areas of England who are suffering deprivation that is just as great. The Barnett formula favours us enormously and the percentage increases that people play games with mean that we will receive—and will continue to receive—substantial increases.

Photo of Kay Ullrich Kay Ullrich Scottish National Party

Does Dr Simpson dispute that morbidity and mortality rates are higher in Scotland than in England?

Photo of Richard Simpson Richard Simpson Labour

What I dispute is Scotland being measured against the UK average. There are areas in England and Wales that are suffering just as much from poor morbidity as areas of Scotland. It is crucial that those areas—

Photo of Tommy Sheridan Tommy Sheridan SSP

Dr Simpson has made a criticism of the comparison between Scotland and the UK. I specifically made comparisons between the UK and Europe. Does he question those comparisons?

Photo of Richard Simpson Richard Simpson Labour

In health terms, we are spending less, but it is because we have a health service that, because of its primary care system, is considerably more efficient than health services anywhere else.

That efficiency is the next item to which I turn. I say to the Conservatives—whose number is depleted by greater events—that although the Conservative Government spent considerably more money on the health service over 18 years, it did not spend it wisely. The money was spent on administration; under the Conservatives, the percentage spent on administrative costs more than doubled. The Executive is trying to spend its money prudently; we have begun that process with reorganisation.

I have two more points. First, the chamber has to get to grips with the issue of drugs. I recommended in the Health and Community Care Committee that there should be a separate subject committee on drugs. Drugs are one of the most destructive things in our communities; the Parliament must state that it regards the issue as a priority. I welcome particularly Jack McConnell's commitment to the drugs enforcement agency. He also indicated that there would be a review of expenditure on rehabilitation and education. We must examine how we spend that money and ensure that it is spent wisely. The drugs issue is fundamental to social inclusion, to health and to the criminal justice aspects of the Parliament's work.

Secondly, I welcome the money that is being spent on the meningitis C vaccine. That is an indication that this Executive is prepared to take up important new developments and spend money appropriately.

I welcome the minister's statement; it is just a start, but it is an excellent start. I am pleased that he has accepted the need for level 2 funding analysis, on which the Finance Committee is particularly keen. I am sure that members from all parties will welcome that, and that John Swinney will mention it when he sums up.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party 4:31 pm, 6th October 1999

It is reasonable to expect that the announcement of expenditure plans to the Scottish Parliament will be an opportunity to outline a vision and to dispense goodies to an eagerly awaiting nation. What we have heard so far amounts to little more than crumbs swept from the table—crumbs that are not bound together by any great vision, because there is neither a big picture, nor a big idea.

What is the current situation in Scotland? As others have said, in London, Gordon Brown's UK war chest is being built up in preparation for a Dutch auction at the next election. Labour is involved in an unseemly scramble with the Tories to cut direct taxation further, at the same time as it continues to introduce indirect taxation by the back door.

Fuel duty is the classic, crippling example of that. Eighty-five pence in every pound that is spent by the Scottish motorist finds its way directly to London, no doubt thickening the lining of Mr Brown's war chest. Scotland may be Europe's major oil producer, but Labour dictates that we have the highest fuel prices on the European continent.

Even air transport is not exempt. Last year the Treasury raked in from Scotland £54 million through air passenger duty, but we do not even have rail links to our major airports. We heard an announcement of £45 million for roads, but Labour's accident tax will be covered in three and a half years from Scottish motorists' increased premiums. We are paying for it through the back door.

Transport infrastructure forms the backbone of a stable economy, creating jobs and wealth. That backbone is crucial to a geographically remote nation such as ours.

Let us consider the priority that the Executive has given transport. The rhetoric may be fine, but it is belied by a lack of financial commitment. The Executive's proposals would cut transport expenditure by more than £200 million over the first three years of this Parliament, as compared with the last three years of Tory rule. We may be becoming a wealthier nation, but under Labour a smaller proportion of our wealth is being invested in our nation. Our wealth is being extracted to fund a tax bribe promised by a London chancellor.

In 1993-94, 0.56 per cent of gross domestic product was spent on roads and transport. According to "Serving Scotland's Needs", by 1999-2000, that will have fallen by about a third. If spending had remained at 1993-94 levels, this Parliament would have had an additional £488 million to spend on transport. A comparison of the last three years of Tory spending with the plans that have been published for the first three years of this Scottish Parliament indicates that expenditure on motorways and trunk roads is on course to fall by some 70 per cent.

That leaves Sarah Boyack as not so much the Minister for Transport and the Environment, but the minister for potholes. Do not ask for Ms Boyack—it would be as well to ask for Ralph or Clarence, as that is all that the budget will pay for. Under the trunk road maintenance review, road maintenance may be hived off, privatised or undercut. Local authorities are worried about that.

Where is the money for the big projects? Where are the plans for infrastructure to allow us to be economically competitive? London is a great deal less geographically peripheral than Scotland, but the Government seems happy enough to pour money into its infrastructure.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

I am sorry, but I will not give way. The Presiding Officer has made it quite clear that other people wish to speak.

What about the £2.5 billion for the new Jubilee line in Docklands? What about the £440 million for Heathrow Express? What about the £1.8 billion channel tunnel link? There is even talk of a second Eurotunnel, when we in Scotland do not have a direct link to the first one.

No visionary projects of that sort are contained in Scotland's budget statement. A mere £35 million would cover the upgrading and electrification of the Edinburgh-Shotts link. Just £15 million would open a freight and passenger service connecting Stirling, Alloa and Dunfermline and £180 million would provide us with the M74 northern extension, which would boost the economy in the west of Scotland. The cost of just one station on the Jubilee line would be enough to upgrade the A77 to motorway status.

At a time when environmental issues are becoming more and more important, when Kyoto is climbing up every agenda, with a need for closer monitoring and tighter regulation, we discover that the environmental watchdog, which we trust to look after and monitor our environmental needs, faces a 6 per cent budget cut. On the environment, Labour's commitment does not match the rhetoric.

We need a basic change in philosophy. We need to recognise that investment in community and country is essential. We must invest for the common good, not withdraw for the individual gain, in order to compete economically in the global economy, which is a prerequisite for us to be able to implement our plans for social justice. In today's statement, the Executive has fallen lamentably short. It has been subject to examination and it has failed.

Photo of George Lyon George Lyon Liberal Democrat 4:36 pm, 6th October 1999

As usual, Kenny shows tremendous vision but gives no indication of how he means to pay for all his proposals—that is typical of the SNP.

It was interesting to hear David Davidson say what a wonderful legacy Jack McConnell, the Minister for Finance, had inherited.

Photo of George Lyon George Lyon Liberal Democrat

I think that it was David who claimed that the Conservatives had left that legacy. I have had a look at the figures. What a wonderful legacy, indeed: £15.9 billion was spent in Scotland in 1994-95; that figure fell to £15.147 billion by 1997-98.

I welcome the announcement by the Minister for Finance. There is new money and new spending—£80 million is to be spent on education, which is important because it represents a big commitment to our schools, to our children and to our children's future. Liberal Democrat policies and priorities have been turned into Government policy—I am sure that the unholy alliance in the chamber will get little opportunity to do the same.

I will put into context what this extra money represents at grassroots level. In my constituency of Argyll and Bute, where I live, we face the prospect of the closure of small rural schools, despite a 4.6 per cent increase in the budget for this year. The extra money that will come through next year should allow the council to re-examine that proposal. I hope that it will decide to hold off closure and to support the small rural schools.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Although £80 million sounds a lot of money and anyone with half a brain will welcome new resources in education, does George Lyon accept that the outstanding repairs bill for Scottish schools is in the region of £1 billion? If the extra money is put into that context, it does not sound so great after all.

Photo of George Lyon George Lyon Liberal Democrat

As Nicola Sturgeon will know, the partnership agreement included a £600 million commitment for capital projects. Moreover, £80 million is a lot more than the SNP will deliver over the four years of this Parliament.

The extra money is coming through as a result of the partnership agreement, on top of the comprehensive spending review increases in expenditure over the three-year period. As my colleague Keith Raffan said, we hope to see more money flowing through in the second comprehensive spending review. It is particularly important to remember that the priorities that were set out in the partnership for government programme are the priorities that the new money will address. There will be investment in public services—investment in our future and in better health and education.

I also welcome the extra £29 million that has been made available to help to address student hardship—that is a first step in tackling student hardship while we await the outcome of the Cubie inquiry. It will be interesting to see what will happen after Cubie, now that William Hague announced that the Tory party would do a U-turn on tuition fees. That is unusual—is it a change in policy of which the Scottish Conservatives have failed to inform the chamber?

Photo of David Davidson David Davidson Conservative

I thank Mr Lyon for giving way. If he had been present in the chamber for the whole debate, he might have heard my response to his colleague Mr Raffan on that point.

Photo of George Lyon George Lyon Liberal Democrat

I was outside doing a television interview, but I will no doubt read it tomorrow. Perhaps the Tories have a different policy in Scotland from the one that they have in the rest of the UK.

The expenditure plans demonstrate that the partnership Government is committed to delivering quality public services. Extra investment will be made not just this year, but over the next four years. I welcome today's announcement.

Photo of Annabel Goldie Annabel Goldie Conservative 4:40 pm, 6th October 1999

Mr McConnell gave a very attractive performance. He has the jaunty, Jack-the-lad air that could entice a lady to follow him into a bar, but it will no doubt be a source of great relief to him that I shall not be that lady—I would end up paying for the drinks.

As an expenditure statement, this is a Chinese puzzle; the more one looks at it, the less one sees. In my question, I mentioned the minister's key strategic priorities. The statement includes a worthy list of areas on which the minister proposes to spend money and many of the contributors to the debate have referred to that list. Under the heading of education, however, the list makes no acknowledgement of the teachers' plight and no recognition that we have a serious situation—an impasse—in which the teachers are being promised no comfort until the outcome of an inquiry in May 2000. If Labour, in its first year of spending, managed to cut spending on education by £219 million, does not that make the £80 million look paltry in terms of the educational sphere's current needs?

On justice, what about more, instead of fewer, police? What about fewer cuts to funding—or more money—for Victim Support? I asked the minister about enterprise and lifelong learning. Reference is made to increased access and doubling assistance to mature students on low incomes, but it is difficult to reconcile that with the tuition fees impasse. There is complete silence on help for enterprise.

Mr MacAskill eloquently described the shortcomings of our transport system. If ours is an unholy alliance, Mr MacAskill, I am proud to share it with you. It is the duty of Opposition to point out such things. In Scotland, we have an overdue improvement programme for killer roads and a tired and inadequate roads infrastructure that desperately needs investment.

The statement is good on communities and no doubt encouraging for those who will benefit from that, but what cheer is there for people who have the misfortune to live in the country? What about fuel taxes, the neglect of our rural communities and the difficulties that face them?

Under the subject of rural affairs, there is no comfort for our agriculture industry. That is very pertinent to those members who today met the representatives from the pig industry; we heard an acute plea from an industry that is on the point of collapse. What succour is there for the pig industry?

I see gaping and disturbing gaps in the statement. On health, what about reducing waiting lists and waiting times? What about increasing the number of nurses? Such things matter to the people of Scotland.

There is no doubt that the minister's statement is ambitious, nor is there any doubt that it is carefully crafted. There is no doubt whatever that the money has been recycled so much that the food processor is in danger of exploding as it tries to produce yet another dish from the minister's kitchen.

At Westminster, there is a roll-forward of surpluses that are not being disbursed; that practice is spreading to this Parliament. That is not welcome news. A war chest is being built up and is becoming immoral in its immensity. At the current rate, it is costing £1,500 for every taxpayer in Scotland. We are entitled to ask whether that money could be distributed in many more advantageous ways than being kept to hone the weapons of election combat.

In short, the expenditure statement might bring comfort to some people, but it will bring none at all to most.

Photo of John Swinney John Swinney Scottish National Party 4:45 pm, 6th October 1999

To preserve my reputation for fair-mindedness, I would like to say to Richard Simpson that I welcome the Minister for Finance's decision to give the Finance Committee access to level 2 financial information. Neither men will be surprised to hear that I will now be demanding level 3, level 4, level 5 and level 6 financial information to satisfy my interest.

One statistic that the minister did not include in his outline is the fact that, over the three years from 1999 to 2002, spending is rising two and a half times faster in England than in Scotland. The rise in England is 4.4 per cent, compared with 1.8 per cent in Scotland. That is what the anoraks of the world call the Barnett squeeze. The Barnett formula is not generous to Scotland. It is not a benefit; it is a constraint.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

Surely the fact is that there is a higher base now. The reality is that spending in Scotland is at a higher profile during that three-year period than it has been for decades.

Photo of John Swinney John Swinney Scottish National Party

Richard Simpson said that the Barnett formula was good for us. As I have just illustrated, that is not the case.

The minister made points about the negotiation of future budgets, particularly in relation to the Treasury and the future funding settlement for Scotland. How does the minister propose to deliver a process that can be carried out in what he called an open and transparent way? I have never known Her Majesty's Treasury to be open and transparent.

Mary Mulligan accused my colleagues of not living in the real world. She must not have been listening to Kenneth Gibson's speech, which captured the reality of the situation. The Government is cutting in real terms what is going into local authorities while adding to the burdens that local authorities are being forced to bear. That is why my constituents do not have adequate social work provision for residential care and why there is not enough investment in the education service in the areas of Scotland where the population is increasing. None of that will be solved by the things that the minister talked about today.

Keith Raffan—I am glad to see him back in the chamber again—boasted about the money that was in place to encourage students to enter higher education, particularly those from low-income households. We support that process but where is the joined-up thinking? That money will not be effective unless we take account of the regime that exists for the financial support of students.

The minister said that the final stage of the exercise he is involved in will be the process of monitoring, evaluation and review. That gets to the heart of the problems that I have with what the Administration is doing. It is great at making announcement after announcement but we are in no position to judge the effectiveness of any of the measures.

Last week, the Parliament—including members of the Conservative party, our opponents in Opposition—refused to support our sensible measures to put in place a framework to benchmark the Scottish economy and let us judge the performance of the Executive. I want measures to be put in place that will allow us to test the effectiveness of its policy initiatives.

There was confusion today between Mike Watson and Mr McConnell about whether there was or was not new money. There is, of course, no new money. The minister explained the process of rolling forward budgets and that is where the largesse that he has announced has come from.

Who is going to pay for the new programme of action? The people who are paying tuition fees, the people who will pay the toll tax and the people who pay council tax.

Photo of Duncan McNeil Duncan McNeil Labour

The real question is where the money will come from. Does Mr Swinney agree with increasing tax for hard-working families in Scotland?

Photo of John Swinney John Swinney Scottish National Party

Duncan has prompted me on the next line of my speech: the people who will pay for the shortfall in local authority expenditure are the council tax payers. We argued during the election campaign for fair taxation to ensure that money that is spare is invested in public services.

Photo of John Swinney John Swinney Scottish National Party

The Presiding Officer will tell me to be quiet in a moment, so I will wind up.

I welcome what the minister said about trying to extend the value of available public funds. I recall that when I argued that point before the election I was told that it was not a strategy that amounted to very much, but I am delighted that the minister has taken it to the heart of his strategy and done the decent thing and admitted that I argued for it consistently.

It is vital that we extend value, but extending value is different from cutting other budgets. That is the essential change that we seek to leverage into this programme. The minister will have our co-operation in developing the strategy of extending value, but he will not have our co-operation in extending the cuts that the Labour party is presiding over.

Annabel Goldie made a rather strange analogy with wanting to go into a bar with Jack McConnell. Let me assure him that— [Interruption.] I see that Annabel Goldie confirms that she would not want to go into a bar with Jack McConnell—I am sorry; I picked that up wrong.

The minister has announced a regurgitation of all the statements and announcements that have been made before. This statement contains nothing that is new or different or takes the debate forward, except for the arguments about extending value in the public purse. I am delighted that those arguments came positively and constructively from the SNP before the election.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 4:51 pm, 6th October 1999

It would have been helpful if both of the partners in the Opposition coalition had recognised that today we did not recycle a series of announcements. If the statement was remarkable for anything, it was that it did not include recycled announcements. It is right and proper that ministers make the announcements that arise from this statement and that the committees of the Parliament have a chance to discuss them.

It was interesting that Mr Swinney and Miss Goldie described themselves as opponents. Perhaps that is because there is no vote this afternoon—otherwise they would be in their usual alliance.

It has been my privilege to present this statement. The programme that this Administration has set out will deliver for all the people of Scotland. It is there for Scotland's children in the increased investment in education, and in other measures. It is there for Scotland's families in the increased investment in support for strong communities. It is there for senior citizens, particularly in the investment in tackling crime and the causes of crime—I hope that Mary Scanlon agrees that sometimes that might include getting Phil Gallie to let her speak.

I hope that the budget process can go ahead in an open and consultative way and that our discussions in the overall review next year can be open and transparent—in Scotland and with the Treasury. I can assure members that that is our commitment.

The plans that were outlined today deliver. They deliver £80 million of new money for education. They deliver programmes on social inclusion, transport, justice and other areas that will improve the quality of life in Scotland. Frankly, I have found many Opposition members' comments about the issues that confront us as elected MSPs in Scotland's first Parliament lacking in substance.

Photo of Keith Raffan Keith Raffan Liberal Democrat

There was one point of substance from the SNP, which, of course, was about 1993-94 levels of real expenditure. An increase of £7.8 billion would mean a 10p increase in income tax. Obviously we in the coalition do not wish to impose that on the Scottish people, but the SNP does.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The SNP's references to 1994-95 expenditure levels are wearing a bit thin, two and a half years into the new Government. Also, credibility is stretched beyond the limit when we hear Conservative members talk about their record on public expenditure and finances, considering the massive level of debt the Government took on in 1997 and the size of budget cuts at that time—as the figures that have been published today show.

Contained in today's figures are other factors that are relevant to points that have been raised. The figures include urgent assistance for Scottish salmon farmers, which should be welcomed on all sides of the chamber. The extra money for the new deal is there for industry and for enterprise. Again, it stretches credibility for a party that said during the Scottish election campaign, if I remember Mr McLetchie's comment properly, that it would abolish the new deal in Scotland—and that may well still be his party's policy—to criticise the amount of money that we are spending on industry and enterprise.

Mr Raffan asked about drug rehabilitation. Today's figures include recent announcements by ministers on drug action teams and on the essential effectiveness of our drug rehabilitation policy. When ministers receive the audit report that they should receive soon, we will hear statements in the chamber that will take drug policy forward, at the same time as we tackle the pushers and the people responsible for this problem in so many of our communities.

The number of times that we hear that health expenditure in Scotland has lost out in comparison with health expenditure in England because of the existence of the United Kingdom is getting ridiculous. Health expenditure in Scotland remains 20 per cent higher than it is in England. SNP members may object, but it is time that we recognised that, that we were honest about it, and that Mrs Ullrich—every now and again—welcomed the odd positive announcement on the health service in Scotland. Perhaps that is too much to ask.

The stuck record of constantly complaining about how Scotland compares with England does not fit with the reality of public expenditure in Scotland today. We were elected to spend money better, not to complain about what is being spent in Birmingham or Bristol or anywhere else south of the border.

It is interesting to note the comments that have been made about the Scotland Office and the process of decision making that was outlined in the statement of funding policy earlier this year. That policy remains in place and will work well in practice for Scotland. The nationalist members of the House of Commons at Westminster are well resourced—they receive a considerable amount of money in back-up, even though they are not there very often. Perhaps they should occasionally go there to ask questions and make speeches. That would be welcome.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Mr Swinney, please listen for a second. It would have been welcome if, some time during the past six months, SNP members had complained, asked questions and commented on the statement of funding policy and raised these particular issues in the place where the statement was originally published.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I will finish by summing up what has been a debate between two sides. A number of people in this Parliament were elected to do a job. They believed in devolution when they stood for election, they believed in devolution after they were elected, and they joined together in a partnership to make devolution work better for all the people of Scotland. There are two parties in the chamber who do not believe in devolution. Their statements today have confirmed that. They are more interested in complaining about decisions that are made in other Houses of Parliament elsewhere, or comparing figures from past years, choosing the years to suit them so that they can make the same old moans and groans.

Some of us are trying to make the settlement work. We are succeeding. Today's statement introduces new money and the proper management of money so that it can be used on the priorities of the people of Scotland. It allocates resources based on needs. It may be a first financial statement for Scotland, but it will not be the last, and it will be one that makes a genuine difference to the quality of life of families and communities in every part of rural and urban Scotland. It will be a statement that this partnership can be proud of in three years' time.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

That concludes the debate, but I should like to make a point that I have made before. Those who speak in the debate should be here for the winding-up speech by the minister. Saying that is a bit like preaching against poor Sunday attendance, because my remarks are directed against people who are not present, but I hope that all members will take note. Such discourtesy will be noted in future by the chair.

There are no Parliamentary Bureau motions and no questions to be put as a result of today's business.

Photo of Annabel Goldie Annabel Goldie Conservative

On a point of order, Sir David. I doubt that any of us in this chamber have been unaffected by the news of the dreadful rail tragedy down south. Would you, on our behalf, extend our sympathy to the families that have been affected by the death or injury of loved ones?

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

I have to tell the chamber that the latest report is that 28 people are confirmed dead and approximately 40 are unaccounted for. It has been a major tragedy. I think it right to do as Miss Goldie suggests on behalf of the whole Parliament, and I shall do that.