Draft Budget (2000-01)

– in the Scottish Parliament at 9:53 am on 15th December 1999.

Alert me about debates like this

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 9:53 am, 15th December 1999

The next item of business is motion S1M-378, in the name of Mr Jack McConnell, on the draft 2000-01 budget level 2 figures and an amendment lodged by Mr Andrew Wilson. The motion is:

That the Parliament commends the Executive's expenditure plans published in the consultation paper Spending Plans for Scotland on 17 November 1999 and endorses the spending priorities set out in the paper in line with the commitments of the Partnership Agreement and the Programme for Government.

I have selected Mr Wilson's amendment, which is printed on page 2 of the business bulletin. I am very happy to call timeously on Mr McConnell to open the debate and to move the motion standing in his name.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 10:00 am, 15th December 1999

Thank you, Presiding Officer. This time you did not need an intervention from Ms MacDonald.

I am happy to move the motion and to oppose the amendment. This is an important debate and I am grateful that the Parliamentary Bureau was willing to arrange this special meeting to ensure that it took place.

Today's debate is very much about the future—the spending plans for 2000-01, details of which are set out in what has become known as the level 2 figures. The published figures extend to 2001-02, setting out our preliminary plans for that year. There will be a full budgetary cycle in which to discuss the 2001-02 figures—which at this stage have the status only of initial planning assumptions—starting next March. However, the debate today is on the plans for 2000-01.

New processes and principles underlie the budgetary process that we are in. Those new processes and principles will drive a different type of budgeting, in which everyone will have an opportunity to have their say. This is a transitional year, in which we are moving from the old ways of working towards the new approach that we believe is required for the new, more democratic Scotland.

In just six months, we have changed the budgetary process to enhance scrutiny and to involve Parliament and the wider public in consideration of the financial plans. On 9 November, I sent the level 2 figures that we are debating today to the Finance Committee. The numbers were then published in the finance consultation paper on 17 November.

This is the first time that the people of Scotland have been consulted about the Government's future expenditure plans. We will—in the light of my discussions yesterday with the Finance Committee, any points that are made today and the responses to our public consultation—publish final expenditure plans in a budget bill, which I will lay before the Parliament in January 2000.

The consultation process ends today. I am disappointed but not entirely surprised at the fact that the response was low. The transitional nature of this year, the resultant short time scale and the general unfamiliarity with the concept of an inclusive budgeting process have all contributed.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Will the Minister for Finance comment on the document published this morning by the Finance Committee, which says of the report to which he refers that it

"could be thought by some to be misleading"?

Does the minister believe that the consultation document could be thought by some to be misleading?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The member clearly thought that it was misleading, partly because he found it difficult to understand. As I said at yesterday's meeting of the Finance Committee, there are two important points about the consultation. First, next year we will need to provide more explanation of individual figures and the responsibilities and targets that each budget heading covers, not only in the consultation, but in the figures that are presented to Parliament.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I was asked a question, which I would like to answer.

Secondly, as I told the Finance Committee yesterday, in future years we will extend the provision of real-terms figures from level 1 to level 2 to ensure that people can make proper comparisons year on year.

We are in a transitional year, but I am encouraged that there have been clear indications of interest in the consultation paper. If people are taking an interest this year, I have high hopes for much greater engagement in the issues when we start a full financial cycle.

I undertook yesterday to work with the Finance Committee to develop ways of encouraging greater public participation next year. In particular, the figures next year will, as I said, be described in real terms. Moreover, we will provide information for specific committee scrutiny of spending issues and we will supply explanations alongside numbers to ensure that everyone understands where the money goes.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I will finish this next part first.

From next year, the Executive will adopt a new three-stage budgeting cycle. Stage 1 will include the publication of an Executive report, which sets out our strategic approach to future spending and detailed consideration by the Parliament's various subject committees of the strategies and priorities adopted by the Executive for forward years. At stage 2, the Parliament—specifically the Finance Committee—will comment on specific spending plans for the next financial year. Today's debate marks the end of stage 2 for this year. At stage 3, Parliament will consider and approve the Executive's formal budget bill.

The system is based on openness, accountability and probity. Those three criteria form the essential principles of the operation of any sound system of public finance. For many years, those principles have applied at the end of the financial process—financial reporting—but we are now bringing them into the planning stage. They are fundamental to proper parliamentary scrutiny and involvement by the wider community.

Photo of John Swinney John Swinney Scottish National Party

I wish to take the minister back to his point about stage 1 and the information to be made available to subject committees. I welcome the language that he is using, but will he be in a position to offer subject committees much more detailed information—in terms of numbers and the subject areas and programme heads covered by them—than for the level 2 figures? For example, would he be prepared to provide a couple more levels of detail to give subject committees a better feel for what lies within the substantial numbers contained in his consultation document?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

It is important to clarify that there are two different stages to the process. We are at a stage—partly because of the compressed time scale for this year and partly because we are improving an old system and moving towards a new one—of establishing the control totals, or authoritative spend, for next year. The level of the figures that we are debating—the level that is published—is the right one. There could be some adjustment to the figures—I am sure that there will be over time—but it is important to retain flexibility for managers and ministers within the overall totals.

At the earlier stage of consideration, stage 1, when committees are subjecting long-term strategies and proposed budgets to more scrutiny, I think that more detailed information has to be available. Rather than having an overall pattern, it would be right and proper, as I explained at the Finance Committee meeting yesterday, for individual committees and ministers to resolve the best information for each year to help the committees to conduct their scrutiny. I hope that that process can be conducted constructively on all sides.

We need to continue our work on the system of public finance and be proactive in developing new ways of working that make concepts understandable and that illuminate the entire process. Nevertheless, I want to avoid paralysis by analysis—swamping the process in meaningless detail—which would obscure rather than illuminate the bigger picture. I do not underestimate the challenge of delivering inclusiveness, wider consultation and greater accountability; however, we will meet that challenge.

Photo of Phil Gallie Phil Gallie Conservative

I recognise that the minister has some reservations about detail but, as someone who takes a great interest in home affairs, can he explain the significant reductions in the justice expenditure levels?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The changes to different levels are explained by several factors. In recent weeks, Mr Gallie has had a particular interest in the changes to the Prison Service balances in the past few years. As Mr Jim Wallace has said repeatedly, the prisons baseline for this year remains the same. The end-year flexibility for prisons, from money available from the end of last year, has been carried forward into this year and is available to the prisons budget. The money that has been reorganised in the justice budget is going towards, among other things, the £2 million announced yesterday for victim support services. I have heard Mr Gallie discussing victim support over many years and I hope that he will support that reprioritisation.

Ultimately, budgeting is about spending priorities. Our main challenge is to create the type of society that we all want for the citizens of the new Scotland. Social justice underpins the budget for 2000-01. That budget will help to deliver the kind of country that we want—a country where everyone can feel safe, where our children can achieve their full potential through a world-class education system, where creativity is not stifled and enterprise is encouraged, and where people grow older in comfort and in good health.

The figures that we are discussing today progress us along that road. The plans provide the resources to tackle the serious issues facing Scotland: ill health, drugs, jobs and education standards.

We have set out our specific priorities, first in our coalition partnership agreement, and, building on that, in our detailed work plan—the programme for government, which was published in September. Those priorities range across all areas of Scottish life and reflect our determination to secure a better life for all. Top among them are modernising Scottish schools, raising standards and achievement, improving the health of the Scottish people and providing a modern, high-quality and responsive national health service in Scotland. Over three years, £1.8 billion more will be available for health and there will be an additional £1.3 billion for education, delivered through the comprehensive spending review. Our plans set out significant increases in key areas.

The total budget for 2000-01 is £16.7 billion, an increase from this year of £500 million. Of that total, we will allocate just over £6 billion to local authorities, an increase greater than inflation. The health service will be allocated £5.2 billion, an increase in funding of more than £170 million. Nearly £2 billion will go to education and enterprise and around £500 million each will go to communities, rural affairs, justice and transport and the environment.

Within local authority expenditure, the grant-aided expenditure for 2000-01, which gives a guideline for what local authorities might spend, indicates spending of £2.7 billion on education, £1.1 billion on social work, £700 million on police and £200 million on the fire service. Again, the plans reflect the importance that we attach to the health of the nation and to future national success through world-class education.

Photo of David Davidson David Davidson Conservative

The Minister for Finance has given us the figures in cash terms, but will he give us them in real terms?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Mr Davidson is a member of the Finance Committee and had the figures in real terms in front of him yesterday; I hope that he has retained them today.

In our programme for government, we will provide eight major, new, modern hospital developments by 2003. That is the biggest ever hospital building programme in Scotland. We are setting targets to speed treatment and shorten waiting times.

We are committed to ensuring that there are at least four modern computers for each class by 2003 and we are committed to recruiting 1,000 additional teachers and 5,000 classroom assistants by 2002.

Our spending priorities for 2000-01 demonstrate wider commitments to tackle the serious problems in housing deprivation across Scotland and the decay in Scottish transport systems. We are also committed to sustaining our environment. The partnership has delivered new money for roads, for health, for the Food Standards Agency, for action on drugs—

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

I noted in yesterday's The Scotsman that Mr Prescott, the Secretary of State for the Environment, Transport and the Regions, announced £750 million for councils in England for bus priority and integrated transport schemes and that more details would be announced in the House of Commons today. How much are we getting?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

On top of the huge increases already in the budget for this year, we allocated an additional £35 million in the spending review that was announced on 6 October. That is new money, from a budget that was drastically cut by the Conservatives over many years—

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

New money that did not appear—

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

It is new money that did not appear in the budget that the SNP produced for the election in May. If the SNP wants to talk about spending totals, I will be delighted to do so in a minute.

Typically, the Opposition parties have attempted to belittle our achievements. Both have criticised the partnership, saying that we are spending too little on Scotland's public services. That is their right, but let us consider the position if either of them had been in power. We can do that, as the Tories left us spending plans when they left office and, in the 1997 election, the SNP published its plans for spending. Unfortunately, the SNP could not find the time to present us with spending plans for independence in 1999, even though it promised to.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Let me just enjoy this first, and then we will see what Mr Gallie's response is. Under the Tories, spending by this Parliament would have been more than £1 billion lower this year than it is now. Next year, it would have been lower by almost £2 billion and the next year by almost £2.5 billion. That is almost £5.5 billion less spending in Scotland if the Tories had been in power. Following the changes since 1997 at Westminster and here, more than £1.5 billion more has been spent on the national health service. More than £1 billion more has been allocated to local government. Tory claims of underspending in the public sector always rang hollow—these figures show just how hollow they are.

Photo of Tommy Sheridan Tommy Sheridan SSP

Would the Minister for Finance agree that the problem with the figures that he presents is shown in the recent Trades Union Congress report on public expenditure in Britain, which states that we have a Government not for three years, but for five years? Although he is correct to say that the comprehensive spending review indicates an increase in spending on public services, spending over a five-year period will be even less than it was under the previous Tory Government.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I am glad that Mr Sheridan is coming round to our way of thinking. This is a five-year Government, and the two years of management of public finances that have already taken place have provided the sound basis that gives us the lowest inflation, the lowest unemployment and the lowest interest rates for a generation. That allows the significant increases that are now taking place to be sustainable—not just for the remainder of the five years of this Government, but for this Parliament to plan stability in our finances for the future. I welcome that long-term perspective, which is a good thing for the country. It is much more interesting to ask, "What about the SNP?"

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

Order. Please—no more interventions. The minister has been generous in giving way and he is running over time already,

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Mr Swinney does not want me to make these points, but I will make them. If the nationalists had won the 1997 election in Scotland, at least £400 million less would have been spent in Scotland this year. Those figures are taken directly from the SNP's 1997 manifesto. Next year, spending would have been £1 billion lower and, the year after that, it would have been almost £1.25 billion lower—a total of some £2.5 billion less for Scotland's services.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Mr Wilson says that that is not true, so I will quote what he said in this morning's newspaper. He said that there was a tiny 0.5 per cent real-terms increase in the health budget for next year.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No—I want to remind Mr Wilson of what he said when he was an SNP researcher back in 1997. The figures that Mr Wilson referred to yesterday during the Finance Committee meeting and that he called tiny reflect a £40 million actual, real-terms increase in the health budget for next year.

Last night, I thought that it would be interesting to look back to see what the additional health spending line amounted to in the SNP's budget proposals in the 1997 election campaign. For 2000-01, the figure was £35 million—not to mention the smaller budget for this year. Andrew Wilson refers to a tiny percentage, but the SNP's proposals are piddling in comparison. We have added more than £500 million to health service expenditure—more than 10 times the amount that the SNP proposed. Over the three years of the comprehensive spending review, spending on health by this Executive will be more than £1.25 billion higher than it would have been under the SNP's plans.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I am just doing so, Presiding Officer.

The figures published in October and the further details laid out in November represent our commitment to the future and our desire to make the lives of ordinary Scots better. They demonstrate clearly the broad canvas on which the Executive operates, with the real priorities identified and addressed. If government is about choices, that is particularly true of budgeting. In a world of unlimited resources, we could do more and do it more quickly, but in this world—our world—the task is to set priorities, plan spending and work out how to deliver maximum benefit across Scottish society and business with the resources that we have to hand—to set targets, meet them and rebuild public confidence in politics. These plans are a reasonable, prudent and pragmatic attempt to change for the better the lives of the people of Scotland and I commend them to the Parliament.

I move,

That the Parliament commends the Executive's expenditure plans published in the consultation paper Spending Plans for Scotland on 17 November 1999 and endorses the spending priorities set out in the paper in line with the commitments of the Partnership Agreement and the Programme for Government.

Photo of Andrew Wilson Andrew Wilson Scottish National Party 10:18 am, 15th December 1999

I thank the Minister for Finance for his visionary and statesmanlike performance. I welcome the opportunity to engage in this debate and to move the SNP's amendment to the Lib-Lab motion, which asks the Parliament to thank the Executive for spending less than the Conservatives spent.

In passing, I will answer the Minister for Finance's point. The SNP spending plans to which he referred were for extra spending over and above what the Westminster Government delivers—they were for new spending from extra revenues raised. That was a mis-spin from the minister's slippery performance. I ask him to reflect on Mr Davidson's question. The minister said at the beginning of his speech that next year's budget would be £16.7 billion; in real terms, however, the budget is £15.9 billion—£800 million less. The minister may wish to reflect on that unnecessary detail.

My colleagues and I want to introduce into the debate some facts about public spending. Most people in Scotland do not expect to hear facts from the mouths of Labour spokespeople these days. However, it is refreshing that we can introduce some truths—I hope that that word is not too foreign—into the debate.

For example, in its first three years in government, Labour spent £1,100 million less than was spent during the final three years of the Conservative Government. I do not remember regarding the Conservatives as particularly generous in their Scottish budgets. Indeed, I remember the Labour party and the Lib Dems—when they existed—complaining about the decline of Scottish public services. Those sitting on the Labour benches cannot deny that. There was only one year for which I can find records in which any post-war Government cut health spending—only one year has not been a record year for health spending. Nye Bevan would be proud—this Labour Government made history in its first year by cutting health spending for the first time ever. This year, of course, the Labour Government is making up for that, with a massive 0.5 per cent increase in health spending. Our nurses and doctors are not safe in Labour's hands.

Labour is committing less of the nation's wealth to public services than has been spent at any point for which I can find records. Under Ian Lang, the commitment was 24 per cent of Scotland's public wealth. A written answer from the Minister for Finance on 3 December shows that next year the figure will be 21 per cent. That may seem big, but it represents in effect a cut in investment in Scottish public services of £4.5 billion, or £900 for every man, woman and child in Scotland. If we had allowed the state of public services to keep pace with growth in the economy and not let them lag, that would have made a difference to our schools, hospitals, transport infrastructure and, most important, our local democracy. If any of those facts are wrong, I urge members from the Liberal Democrats or the Labour party to stand up and contradict them directly, rather than skirt around them in a slippery fashion.

The facts for local government are even starker. Today, as councils throughout Scotland announce cuts, we should reflect on the fact that the Labour-dominated Convention of Scottish Local Authorities has unanimously condemned the settlement for budgets for council services—my colleague Kenny Gibson will address that issue—as councils throughout Scotland have been hammered by the Lib-Lab pact. Labour has given £2.4 billion less to council services in the first three years of its period in office than was given under the last three years of the Tory Government, and we did not regard the Tories as particularly generous to local councils. As a result, council tax payments are up by £0.25 billion and, as we heard last week, are set to spiral. On top of that, business rates are set to soar. It is a dire situation for Scottish local government and a desperate one for this Parliament to consider.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

In his statement last week, the Minister for Finance mentioned that the provisional business rate in Scotland would be 45.8p. However, for some reason—perhaps natural coyness—he did not mention that the provisional rate for England and Wales would be 41.6p. If my arithmetic is correct, that means that, for most businesses in Scotland, business rates will be 10.1 per cent higher than those south of the border. For small businesses, the figure will be around 8p higher than it is south of the border. Labour is now copying a Tory policy of imposing higher business rates in Scotland than in England. Does Andrew Wilson believe that Mr McConnell should get the credit for this new tax on Scotland's businesses and that it should be called Jack's tax? It is Jack's tax on business, which will cost Scotland many jobs.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I thank Fergus Ewing for hitting the nail on the head. Council taxes are soaring and businesses are being hammered by Labour. That may become Jack's legacy. At the risk of immortalising him in a phrase, I suppose that we can call it Jack's tax. Will the minister explain to the waiting Scottish public why he has introduced this tax—Jack's tax, as Fergus calls it?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

All members of the Local Government Committee—those who stay for whole meetings, rather than Fergus Ewing, who dips in and out—will have heard that the revaluation is taking place this year. It is rubbish to suggest that any Scottish business will pay more than any equivalent business south of the border, as Fergus Ewing well knows. If Fergus Ewing listens to business organisations that are explaining that to members at the moment, he will hear that point of view.

Does Andrew Wilson have in his budget for this year—which, I note, the amendment does not mention at all—the £74 million extra that in a press release of 28 November Fergus Ewing, as the SNP small business spokesman, called on the Executive to put into the Highlands and Islands economy next year? Is that money in Andrew Wilson's budget, and will he explain from which area it would come?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I point out to the Minister for Finance that Fergus Ewing was reflecting the desires of Highlands and Islands Enterprise—one of the Government's own agencies—in calling for that money.

The role of any party in this Parliament is to bring to the chamber the desires of public services throughout Scotland. Mr McConnell must answer for the fact that Jack's tax means that Scottish business is suffering, as business organisations throughout Scotland would agree. Jack's tax—as we are calling it—means that the residents of Dundee and Glasgow will pay twice as much in council tax as residents of London will. The increases in council taxation, as a result of Jack's tax, will mean that the average Scot will pay 7.5 per cent more in council tax, at band D, than the UK average. Labour is fiddling the figures while Scottish local government burns. Do not just trust me—listen to what the councils have to say and listen to Labour-dominated COSLA when it reflects on the facts of Scottish local government decline.

I ask the minister to reflect on the fact that spending on health, education and all comparable services is increasing two and half times more quickly in England than it is in Scotland—those are not my figures, but the figures of Professor Brian Ashcroft of the Fraser of Allander Institute. Is that fair and right? Does the minister recognise that a Barnett squeeze is biting hard on Scottish public services? Will he act on that? That is what the SNP amendment asks him to do.

It is not enough to focus on the narrow picture that the Executive—the Lib-Lab pact—will paint for us in this Parliament. We should look beyond the end of our noses, as the amendment seeks to do. We need look no further than Ireland. Barely a fortnight ago, with the tools of a normal country at his disposal, Ireland's Minister for Finance, Charlie McCreevy, delivered a budget that will allow all Ireland's people to share in its prosperity. Old-age pensions in Ireland rose by £7 a week—not 73p. When they reach 100 years of age, pensioners in Ireland will receive a bounty of £2,000. [Laughter.] Members may laugh—

Photo of George Lyon George Lyon Liberal Democrat

Does Andrew Wilson also agree with the provision in Mr McCreevy's budget that stipulates that everyone in Ireland who wants to access the country's national health service can receive free health care only if they earn less than £11,000 per year? Anyone who earns above that must contribute to a private insurance scheme.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I do not. I believe in absolutely free delivery of health, as of education services—unlike, perhaps, the Lib-Lab Executive. I do not regard a free health service as a middle-class subsidy, which is how the Executive appears to view a free education service.

Photo of Alex Neil Alex Neil Scottish National Party

Does Andrew Wilson think that Mr Lyon does not realise that the Irish have abolished tuition fees?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

It remains the position of the SNP that there is value in free delivery of public services in both health and education. That remains the position of the SNP. It is a shame that it is no longer the Labour position. We wait with interest to see what the Liberal Democrat position will be.

The fact of the matter is that it is good to be a pensioner in Ireland. Pensioners are treated with respect because of the wealth of their country's economy. In Ireland, corporate taxation was cut, progressive taxation was introduced and spending on education was increased by 40 per cent. That is the bounty of a real budget, when a finance minister has two hands with which to deliver. A recent editorial in The Times said that the Irish finance minister had delivered an early Christmas present for the citizens of the republic. We will hear no such homily for Mr McConnell during his budget process. Great chap as he may be, the Minister for Finance has one hand tied behind his back and is delivering a hand-me-down budget from London.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Mr Wilson mentioned corporate taxes in Ireland. Does he agree with the income tax levels in Ireland of 45 per cent for people earning more than £14,000 and the extremely high VAT rate of 21 per cent? Is that what we would have in an independent Scotland?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

No, is the short answer. What Ireland shows is that low corporation tax can be mixed with progressive income tax.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I will move on.

I point out to Mr Raffan—who is, I believe, a Liberal Democrat spokesperson—that the Liberal policy is to abolish tax allowances and to increase the top rate of tax to 50p in the pound. That is the position set out last month by Matthew Taylor in the House of Commons, who also said:

"Public spending . . . has been restrained and we see continued deterioration in key areas of public service. Where has the money gone?"—[Official Report, House of Commons, 24 November 1999; Vol 339, c 638.]

Does Mr Raffan agree with that, or does he simply go along with what Labour tells his party to do? The reality is that the Liberals are finished as a serious force.

The SNP asks the chamber to face up to the choices that are before us. We have a choice between decline masked by spin under the Labour party, with its Liberal lap dogs, and the chance for modern investment in the 21st century. Do we want a right-wing, direct-tax-cut, unfair-tax-rise agenda, or a fair and honest investment in the services that we care about? Why is Ireland, with nothing like the resources at its disposal that we have, able to set its sights so high, when all that we do is stare at our collective feet?

Photo of Richard Simpson Richard Simpson Labour

Andrew Wilson has been very eloquent in saying how much extra spending the SNP would provide, but he has said absolutely nothing about how he would raise that money. Would the level of VAT go up, or would the level of income tax go up? How would the SNP raise the millions and billions of pounds that it promises every week?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

The member has been one of the fairest contributors to the debate on finance. I ask him to reflect on the fact that we were very honest at the election in saying that our priority was not a 1p cut in income tax, but a freeze in tax.

We also pointed out that we could access the £20,000 million that will come out of the North sea in the next five years. Our priority is not a war chest, but investment in public services. I ask Dr Simpson how our country, after the war, when it was infinitely poorer than it is today, could afford to demobilise the troops, rebuild our homes, schools and infrastructure, and build a welfare state and a modern health service that was the envy of the world. The answer is that the country chose to do it.

Nye Bevan—a man whom members may remember—said that socialism was "the language of priorities" and that those priorities were jobs and social justice. That point remains, whether one wants to use the terms socialism or social democracy. Our amendment seeks to follow what Jimmy Maxton said in the 1920s—he said that

"a home rule parliament could do in five years what it would take Westminster 25 years to do."

He was right, but that will be true only if we give ourselves the chance.

For Labour, the Thatcher agenda has won. For us and for Scotland, I hope that that agenda will not stand, because the choice for Scotland is between constraint and growth—between what Fergus Ewing has called Jack's tax and honest investment in public services. We have the chance to grow into a normal country and to make normal choices for ourselves. I urge the chamber to back the amendment.

I move amendment S1M-378.1, to leave out from "commends" to end and insert:

"notes the increased pressure being placed on the Scottish budget through the effects of the 'Barnett Squeeze', which means that spending is increased two and a half times quicker in England than in Scotland despite the fact that there is no evidence of a reduction in relative need; calls upon the Scottish Executive to prepare a detailed assessment of the impact of the 'Barnett Squeeze' in consultation with the Finance Committee; regrets the fact that the Parliament is not responsible for raising the revenue it allocates, and notes that normal fiscal autonomy would secure maximum fiscal responsibility and accountability and would allow the Scottish Parliament to allocate the required resources for Scottish public services".

Photo of David Davidson David Davidson Conservative 10:31 am, 15th December 1999

Today, the Minister for Finance has given the chamber the first coalition budget, in level 2 terms. Some weeks ago, the Finance Committee tried to scrutinise these figures with the help of two eminent economists. Those gentlemen advised the committee that they could not unscramble the figures to identify in reasonable detail how the major budget heads were broken down. Here is an example in the figures that the minister has given: we know the totals for Scottish Enterprise and Highlands and Islands Enterprise but we do not have a clue about how the money will be spread among the activities of those organisations.

Under the new process, this Parliament has the right to seek budget modifications, but it cannot do that unless it gets the right level of information from the Executive. If everything is aggregated, how do we suggest alternatives or even try to guess the priorities of the Executive? I welcome what the minister said a few minutes ago about openness in future. On that basis, perhaps we will tick him off only a little about this year's process, but it was dropped on us at fairly short notice. Certainly I hope that the minister will ensure that there are better information flows in future.

If committees are to do their job properly, they must have access to information at the level at which they need it. I think the minister agreed to that, but why, given that all the committees will need that information, and the Finance Committee and the Audit Committee must have it, does he not save time, go for gold and put out the information in a better form?

We have to move away from the magic-show mentality, under which money appears again and again, spun and spun by the huge army of advisers—or at least by those who are left. On that matter, perhaps the minister will come clean and tell us why the taxpayer should be liable to pay off Mr Rafferty.

The Minister for Finance has taken pride in the new budget, but he must practise what he preaches. Andrew Wilson talked about the all-party document that was produced today by the Finance Committee. I hope that the minister will take heed of it. I look forward to the day when we will conclude the written agreements that we have been promised week after week.

The expenditure statement shows clearly that spending is down in real terms in many vital areas. The minister says that the statement is prudent. Is it prudent to have 22 ministers and their cohorts of staff, when Scottish hospital trusts are making public statements of overspends on clinical service and saying that they cannot fund their activities in coming years? Such statements are being made all over Scotland. Why is Susan Deacon not banging on Jack McConnell's door—perhaps she is—to seek priority spending for certain aspects of the hospital life that we try to run in Scotland?

Is Susan Deacon aware that Grampian staff vacancies cannot be filled because of a lack of resources? Why does the Scottish Executive not allow for drug bill inflation or new treatments coming on stream? Why does it not recognise the increasing demands on hospital services? One cannot just use a flat figure across the budget; it does not work. There are rumours about patients in Tayside even being asked to contribute to the cost of treatment—somebody said something similar about Ireland.

What happened to the coalition claim to have health as a priority? Where is the detail in these figures? There is a line that says that revenue for hospital and community health services is £3.67 billion. Does anybody in the coalition know what is hidden in those figures? Perhaps, when some coalition members speak, we might find out.

Health is not the only area of concern. The figure for local government is £5.76 billion. What mysteries lie there? Parents ask about school spending, the elderly ask regularly about home helps and support from councils, and the nervous ask about street lighting. The figures before us today do not provide any answers to those questions. What about the hidden but massive hit on the ability of local councils to provide services? I do not have to go to the Convention of Scottish Local Authorities to find out what local authorities think of that.

Christmas is approaching, but it will not be a happy one for people in the public sector. They are worrying that their jobs may go or that they will not get the pay rise that is vital to pay for the many stealth taxes that have been imposed by new Labour. What kind of Dickensian Executive forces our mentally ill patients out of hospital at Christmas, hoping that staff will take them into their homes, as in the sad case of Lennox Castle? An answer to that question would be welcome.

It is a pity that members of the Executive do not often read The Scotsman. If they did, they might take a hint from an article that appeared on 26 August, when Mark Sneddon of Labour's ruling executive committee said that the lack of money for schools and hospitals was

"enough to make a lot of Labour people and Labour voters weep".

I do not know about that, but it is making an awful lot of Scots weep.

Hidden in the Executive's figures is the fact that, despite the rhetoric and despite the fact that Labour has already been in power for two years, it will be another year before total Scottish expenditure reaches the level spent by the Conservative Government. Even the separatists and the three socialist members agree with that.

That wonderful spinning machine, the partnership agreement, is supposed to have produced the biggest spending increase in history on the national health service, and waiting times—

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I have two questions. First, I note Mr Davidson's new-found interest in jobs and employment. I welcome that conversion by the Conservative party. Will he confirm that one of the reasons we are able to increase public expenditure so much this year, next year and the following year is that the economy is in better shape than it has been for a generation, with the lowest unemployment, the lowest interest rates and the lowest inflation?

Secondly, will Mr Davidson confirm that, had the Conservatives still been in power, total public expenditure would have been £5.5 billion less over that three-year period? That is according to published figures; it is not me trying to guess, as I sometimes have to do, what Conservative policies might have been. That amount comes from the figures published by the previous Conservative Government.

Photo of David Davidson David Davidson Conservative

I am happy to answer the minister's questions. The first was about unemployment, was it not? Did not we hand the current Administration a golden legacy? All Labour has done is continue what we gave it.

Secondly, nobody is arguing about published projected figures, which is what Mr McConnell has been quoting from. If one looks carefully at what happened when the Conservatives were in government, one can see that projected figures were published every year. However, we actually spent far more than those projected figures every year, because we focused on initiatives as they needed to be dealt with. Even Mr Raffan will remember, from his days as a real politician and a Conservative, that that was the case.

If coalition members are not careful, I shall let Phil Gallie back in again.


He has left the chamber.

Photo of David Davidson David Davidson Conservative

I will let Mr McConnell intervene again if he will answer one more question. Are we seeing the beginning of rationing in the Scottish health service, caused by the starvation of funds in key areas? Is the answer yes or no?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The answer is no. Returning to what Mr Davidson has just said, the overall expenditure in Scotland would have been significantly less this year, next year and the year after that, had the Conservatives remained in power. That is stated in the figures that they published. Year on year, the Conservative Government managed to underspend the Scottish budget. The money was not carried forward as it has been this year under Labour; it was kept back at UK level for redistribution in the future.

Photo of David Davidson David Davidson Conservative

Now Mr McConnell has got another speech off his chest, perhaps he would like to consider the truth of the matter. We do not deny that we published projected figures, but members ought to look at the money that we actually spent. The Labour Government, by the way, has published no such figures since coming to power. Committees have asked for those figures, but they have not been supplied. The guys in the Executive are the ones in power. Why worry about the past? It is their ball; why do they not play it?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

May I clarify what Mr McConnell is arguing? He is arguing that the Executive is spending less than the Conservatives did, but if the Conservatives were in government they would spend even less.

Photo of David Davidson David Davidson Conservative

I am grateful for Andrew's help, but he knows that that is not true. If we were in power, we would be doing a far better job than is the Executive. At least we would address the issues.

We will not address the cost of the new Parliament, but I hope that when Mr McConnell sees the First Minister, he will respond to my question about the funding for it.

Let us turn to the coalition; I cannot put all the blame at Labour's door. At every opportunity, the Liberal Democrat party tries to take the credit for steering policy in the coalition—really. The Liberal Democrats were bought cheaply. Does the Minister for Finance think that he got value for money when he bought them?

Photo of David Davidson David Davidson Conservative

Will he come to the Audit Committee and argue that point?

We had pre-election promises from the Liberal Democrats. I will not list them all, but they ranged from the abolition of Skye bridge tolls to 1,000 additional nurses and 500 doctors. The list went on and on. None of them has been realised. The best promise of all was the promise to abolish tuition fees. If I remember rightly, on 4 May Jim Wallace said that tuition fees would be dead by the following Friday.

Photo of Patricia Ferguson Patricia Ferguson Labour

You are in your winding-up period, so you should push on.

Photo of David Davidson David Davidson Conservative

I must push on. It is not my fault; it is the lady's.

On Tuesday, will tuition fees be dead, and how will the Liberal Democrats pay for them? The money that was used to buy them to play on the Labour reserve team has been spent. Is not it dishonest to be elected to this chamber to abolish tuition fees, yet sign up with the Labour party and not ask Mr McConnell to put money aside in the budget to do that? Does that mean that the Liberal Democrats had no intention of honouring their promise? Why do they not make Scotland's day and prove me wrong on Tuesday?

Andrew Wilson's speech was an interesting standard piece. The economics were reasonable. I am not sure what the final total was, but he should not play the same old record again and again. He recently released a new one. I believe that the best tune is "The Rowan Tree", which possibly will grow faster than his party's policy, but I do not know.

This is a Scrooge budget that is full of deception and hits at our public services, those who depend on them and those who work within them. It is a budget that must be rejected at this stage. Therefore, I ask the Executive, as the song "Flower of Scotland" states, to go away and "think again." I urge Parliament not to adopt the budget.

Photo of Keith Raffan Keith Raffan Liberal Democrat 10:43 am, 15th December 1999

That was a singularly ill-judged speech from Mr Davidson, in view of his party's record. Nobody denies that the Conservative party knows about money. How could we deny that, when on one day—black Wednesday—it lost not hundreds of thousands, not millions, not billions of pounds, but one half to three quarters of the entire Scottish block?

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will not give way yet. Miss Goldie knows that I have a soft spot for her, and I will give way to her later, but she must restrain herself.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Miss Goldie must not get carried away because she has been nominated as a front bencher to watch. That happened only because, within her party, she is elevated by the flatness of the surrounding countryside. That is a cautionary compliment. She must not get over-excited and intervene too early because I have a lot more to say about the Tories. In just one day they saw more than half the Scottish block disappear down the drain, and with those reserves went their economic credibility. They have absolutely none. Certainly Mr Davidson has none.

On behalf of the Scottish Liberal Democrats, I support a budget that provides the highest ever real-terms spending in Scotland. We are proud to support the partnership and the minister. We congratulate him on the excellent job that he has done. We welcome the broad thrust of the budget—it reflects the partnership agreement—particularly the extra £80 million for Scottish education, which will deliver 500 more teachers. It will also provide more new books and equipment for every school, classroom and pupil in Scotland.

Photo of Keith Raffan Keith Raffan Liberal Democrat

In a second. Let me get into my stride, Mr Neil.

The budget will provide much more: £91 million over three years for the child care strategy; £26 million for schemes to improve public transport; £12 million for the healthy homes initiative to improve damp and cold homes. Within the limits of the block, that is money well allocated, but the minister knows—as we all do—that there are pressures everywhere.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Mr Raffan mentioned £12 million for the healthy homes initiative. Is not he confusing that with the warm deal proposals? Will he explain exactly where that £12 million will be spent or does he agree that it does not actually exist?

Photo of Keith Raffan Keith Raffan Liberal Democrat

I certainly do not agree. Ms Hyslop must not get over-excited. She and I are both members of the Social Inclusion, Housing and Voluntary Sector Committee and we have discussed this matter. She knows that the money exists and that it will be spent in a way that the Minister for Communities has said, in the chamber, will improve homes—

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

The committee has not discussed the matter.

Photo of Keith Raffan Keith Raffan Liberal Democrat

It has been mentioned in the committee. I am sorry that Mr Quinan was not paying attention at the time.

As I said, there are pressures everywhere—in local government, in the national health service, in the police. Councils are in their sixth year of having to absorb wage increases; in Fife Council alone, the cost amounts to £47 million.

Those pressures have produced a partnership at local council level in Fife, as the minister well knows—I remember handing him the motion. The joint Lib Dem-Labour motion in Fife calls for more help from central Government for pay awards and more discretion and freedom in setting budgets; it also emphasises the need for greater resources for capital expenditure, school building maintenance and so on.

Photo of Keith Raffan Keith Raffan Liberal Democrat

In a second. Let me finish this section of my speech.

The partnership at local level reflects the pressures on local government.

In the NHS, consider the predicament of our health boards. I have met two boards in my region recently; they have had to face efficiency savings every year since 1986. They have cut administration to the bone and now say that they may have to turn from non-clinical to clinical savings. That is ominous, if it means health service rationing. The boards face significant inflation, particularly in their generic drugs budget, and are carrying out a sensitive and complex acute services review.

Turning to the police—

Photo of Keith Raffan Keith Raffan Liberal Democrat

If Mr Wilson had been paying attention, he would know that I mentioned rationing; I said that the situation could lead to rationing.

About 86 per cent of the police budget is spent on wages and salaries—I mentioned that to the minister at the Finance Committee yesterday—so efficiency savings must be made on the remaining 14 per cent. Fife constabulary must make savings of 1 per cent this year, 1.7 per cent next year and 2.5 per cent the year after that. Those savings have been described to me by the chief constable of Fife as unsustainable in the long term.

Our public services are under enormous strain because their budgets are under so much pressure, yet the chancellor continues to sit on the lid of his treasure chest.

Photo of Keith Raffan Keith Raffan Liberal Democrat

In a second.

It is speculated that the contents of that treasure chest amount to anything from £10 billion to £13 billion—perhaps even more. The Liberal Democrats do not want that money to be released suddenly—pre-election—in one go. We do not call for huge increases in expenditure, but we do need gradual, phased, well-planned increases in spending where it is most needed.

Photo of Alex Neil Alex Neil Scottish National Party

Will Mr Raffan point out where in Mr McConnell's budget the money has been set aside to pay for his party's policy of abolishing tuition fees?

Photo of Keith Raffan Keith Raffan Liberal Democrat

It has been said several times in the chamber that we are sure that the money can be found; perhaps Mr Neil was not present, but that was made quite clear.

Tuition fees are a matter for next week and the following weeks. The Minister for Finance is a man whose ingenuity I have never underrated or doubted. Over the Christmas period, following the publication of the Cubie report, I know that the minister—with remarkable ease and in his usual relaxed style—will find the necessary resources to fund tuition fees. I am grateful to the Minister for Finance for the eyebrow that he just raised.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I gave way to Mr Neil; I must carry on.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I just answered it. The minister, rightly, warned the Finance Committee—and other subject committees when he appeared before them—that we should not produce an unrealistic wish list. If we are to propose budget increases, we should say at the same time where the money is coming from.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am grateful to Mr Wilson; I was just coming to him. That message has been lost on the Scottish National party. Earlier today I counted how many SNP members in the chamber had not made spending pledges. Three. Perhaps it is fewer now—so many have been made. Spending pledges made by the SNP since 1 September total £1.3813 billion—

Photo of Keith Raffan Keith Raffan Liberal Democrat

Most of those spending promises have come from Mr MacAskill. He is completely out of control, as we know. His spending commitments did not, however, include a bus trip to Wembley.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am not nearly finished. I will happily give way to Mr Wilson when I have finished with the SNP wish list. Its total spending pledge is not merely the figure that I just gave—in addition there is the electrification of the east coast rail line, which is so far uncosted. The total is £13 million per day—

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will give way in a second, when I have finished with the wish list. That pledged spend equals £13 million per day since 1 September. The shadow Minister for Finance—no iron shadow chancellor—cannot control his three colleagues on the SNP front bench, let alone those behind him. He is not the iron shadow chancellor—he is the jelly shadow chancellor. He is seen as Mr Salmond's protégé and that is why the fundamentalists disregard and bypass him at every possible opportunity. They have nothing but contempt for him.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Mr Wilson should sit down.

The SNP has made pledges galore. On 9 September it said that it would spend an extra £300,000 on Grampian police. On 20 September, Mr Ewing pledged £1.7 million for Inverness College. Mr MacAskill would spend £8.6 million on the abolition of tolls on the Forth road bridge. On 21 October, £50 million was pledged for health care and £13 million for the Scottish Prison Service. On 26 October, Mr Swinney entered the fray and pledged £42 million for the abolition of tuition fees. On 28 October, Mr MacAskill pledged £130 million for public transport and on 4 November he pledged £800 million for roads. On 8 November, £75 million was pledged for the police.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Mr MacAskill also pledged £119 million for a stake in Railtrack. On 10 November, £100 million was pledged for the Borders railway, £2 million was promised as compensation for scallop fishermen and £1.4 million was promised for firefighters over the millennium celebrations.

Photo of Frank McAveety Frank McAveety Labour

Will Mr Raffan confirm that the SNP's new song—which should be included on its compact disc—should be "Big Spender"?

Photo of Patricia Ferguson Patricia Ferguson Labour

Please bring your comments to a close, Mr Raffan.

Photo of Keith Raffan Keith Raffan Liberal Democrat

On 2 December, Mr MacAskill pledged £19 million for a national concessionary fares scheme—he makes daily appearances on this list—and £19 million was pledged for health trusts in Glasgow.

Some—perhaps most—of that spending is desirable, but the SNP never tells us where the money will come from. The chancellor's treasure chest is not bulging.

Photo of Patricia Ferguson Patricia Ferguson Labour

Come to a close, please, Mr Raffan.

Photo of Keith Raffan Keith Raffan Liberal Democrat

The SNP has taken a vow of silence on taxes. Mr Wilson withdrew from a debate with me on "Good Morning Scotland" this morning. I thought that he had more guts and that he would debate the spending pledges of his colleagues and the policies of his party, but he would not. The SNP's shadow chancellor is not made of iron—he is not made of any mettle at all. He has no control over SNP spokespersons, least of all over Mr MacAskill, who has gone from spending commitments to the proposal of new taxes on, for example, house sales. He would also divert revenues from certain taxes—such as landfill tax—to extra expenditure.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will close.

The SNP has zero credibility and its shadow Minister for Finance has no credibility with his own party, let alone with others, so why should any of us listen to him?

Photo of Patricia Ferguson Patricia Ferguson Labour

We now move on— [Interruption.]

I realise that we are in the pantomime season, but I would be grateful if members observed some decorum in the chamber.

We now move to the open part of the debate. Members have four minutes.

Photo of Malcolm Chisholm Malcolm Chisholm Labour 10:54 am, 15th December 1999

As I have grappled with Scottish expenditure tables for most of the decade, I welcome this first ever debate on level 2 expenditure totals. I look forward to a more comprehensive process next year, in which all the committees will be involved, to the implementation of the minister's undertakings on real-terms spending, and to more disaggregation of figures where that is appropriate.

I would like to add one note of caution: decisions on the two biggest lines in the budget—local authority revenue and hospital and community health services—are, fundamentally, made at local level. That should be borne in mind when we talk about further disaggregation.

Mr Wilson used a lot of figures in his speech today. I will address some of them. He talked about public expenditure as a percentage of gross domestic product, but he did not mention the extent of GDP—because we have a stronger economy and a much larger GDP than we did during the Tory years to which he referred. He talked about the final years of the Conservative Government, but he did not mention the unsustainable levels of borrowing during that period, which have to be dealt with. Mr Davidson spoke on the same theme and referred to the high point of Tory public expenditure in 1994-95. That was a freak year, if members consider the whole period of Conservative Governments. That level of expenditure was unsustainable without the economic problems being dealt with.

The main point that Mr Wilson made—and repeated in his amendment—was about percentage increases in England as distinct from Scotland. I tried to deal with that issue at question time last week, which was perhaps unwise given that most members had their minds on another matter. If we start with a higher base, we will have lower percentage increases each year.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

As the Barnett squeeze means that we start per capita spending at one level and it decreases, does Mr Chisholm believe that that is fair today or fair tomorrow? Does he think the current share of UK health spending in Scotland is fair?

Photo of Malcolm Chisholm Malcolm Chisholm Labour

Mr Wilson was especially unwise to talk about health spending, given that health spending in Scotland is 20 per cent per head higher than it is in England.

The point that Mr Wilson did not consider about the budget is that, over the three-year period of the comprehensive spending review, Scottish Parliament expenditure goes up by £856 million in real terms. Can Mr Wilson tell me of any three-year period in Scottish politics when that has happened? We should keep that fact in our minds.

Mr Wilson was unwise enough to emphasise health. The real-terms increase in spending on health is £546 million over three years. Again, I defy Mr Wilson to find a three-year period in which there has been such an increase. It was especially inappropriate for Mr Davidson to talk about starvation of health funds in that context.

In the papers today, Mr Wilson talks about the increase from this year to next. As I pointed out when I dropped in briefly to the Finance Committee yesterday, the reason for that is that there was a big in-year increase in health expenditure this year—an extra £140 million in October. That reduces the percentage increase from this year to next. Over three years, the increase in spending on health is £546 million in real terms, or 11 per cent. That is unprecedented.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

I have five seconds left, so I cannot give way.

As usual, the SNP says—in the second part of its amendment—that fiscal autonomy would allow the Scottish Parliament to allocate the resources required for Scottish public services. I know that there is controversy about the details, but this week's "Government Expenditure and Revenue in Scotland 1997-1998" report makes it clear that the overall range for the Scottish fiscal deficit, including oil, falls somewhere between—this is where the argument arises—£5.25 billion and £2 billion. We also know the long-term trend in oil over the next 10 to 20 years will be falling production levels.

I know that Mr Wilson is one of the few SNP people to have acknowledged a structural fiscal deficit, so perhaps that point can be addressed in the summing-up at the end of the debate.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party 10:59 am, 15th December 1999

Listening to the Minister for Finance and his deputy, I am minded of the line in the Proclaimers song, which says:

"But I can't understand why we let someone else rule our land

Cap in hand".

What a poverty of aspiration—boasting and bragging about expenditure levels that are inadequate to meet the needs, never mind minister the aspirations, of our people.

At this time of year, people have their mind on family reunions and enjoyment. We should remember that we are the fifth largest oil producer in the western world, yet one in five of the youngsters sleeping rough on the streets of the city of London are Scots kids driven from their native land by a lack of housing, lack of employment and lack of hope. That is a badge of shame which every man and woman should wear until that wrong is righted.

The draft budget is tokenistic and only tinkers with the nation's serious problems. We are the only country in the world that discovered oil and got poorer. Other nations discover oil and make the desert bloom; we discover oil and see the creation of an industrial desert in parts of the central belt.

In what way is the budget an advance from the years of financial famine that we experienced under Thatcherism? The adage that there are lies, damned lies and statistics comes to mind when figures trip from the lips of the minister and his supporters. Their tarty publication attempts to mask real-terms cuts with cash-terms statistics. After years of Tory under-investment, it seems that Labour can do no better than the Tories.

Scottish spending on transport during the next three years will be about £360 million less than if it had remained at the inadequate level that was inherited from the Tories. In October, the minister sounded a fanfare and announced that Ms Boyack would have an additional £35 million to spend on the roads programme. However, that would not cover even half of the long-overdue safety improvements on the A77. Incidentally, in the financial fog of the figures, I have been able to find only an increase of £20 million. However, I am not interested in pursuing a paper-chase that—in relation to the investment that we need in our infrastructure—amounts to a pittance.

Two-Jags Prescott says that £80 billion for transport is available in the next 10 years. What is our share? Under current spending levels, the Scottish transport budget would be only a cumulative £3 billion in the next 10 years.

In another fanfare of publicity, the Chancellor of the Exchequer announced the abolition of the fuel duty escalator. Was it really abolished? The name of the mechanism might have changed, but we face an increase next year, although this time the money will be ring-fenced for transport. What will our share of any ring-fenced fuel duty increase be? Just 1 per cent of any increase would pay for the much-trumpeted new money for Ms Boyack's budget.

As I said earlier, John Prescott announced that £750 million would be made available to councils in England for bus priority and integrated transport schemes. Mr Raffan and others have criticised the Scottish National party for wanting to spend. I was criticised by the minister for saying that we should implement the strategic road review in full, even though I said that it should be implemented during a certain time scale. That £750 million would almost meet the strategic road review in full.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I know that Mr MacAskill might be restricted to speaking only about his budget responsibility for the SNP, but I want him to indicate to the chamber—as he has not done at any time in the past two months—which budget would be reduced, to pay for the significant increases that he repeats every time he speaks.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

That is just what I am moving on to.

The situation does not need to be as it is. We do not need to go cap in hand to London. We are an oil-rich country. We are also a highly taxed country. I will leave it to others in other debates to confirm the wealth of our country and to articulate the fact that only with independence can we build the nation that our people need and deserve—that is on a macro level. However, resources are available on a micro level to provide what we need. The minister offers a one-off investment of £2.5 million to Scottish local authorities to implement a waste strategy, while £40 million a year—and rising—is sent to London to be hypothecated to reduce employers' national insurance contributions. That is neither green nor environmentally sound.

As has been said, we have the only airports in mainland UK with more than 4 million passengers but without direct rail links. However, £65 million—and rising—is paid in air passenger duty.

Some £12 million is given to the Exchequer from fiscal fines, principally road traffic fines, at a time when we still have to pay tolls for bridges long since paid off. I say to Mr Raffan that the Erskine bridge makes a profit, as does the Forth road bridge, as the Automobile Association pointed out. When platitudes are uttered about cycle training and other such worthy measures, no funding is available to support them. We would not have to touch our oil revenues—a fraction of that £12 million would suffice.

I could go on and on, listing Labour's hidden stealth taxes. The Labour party provides us with so-called financial cake but steals the bread from our mouths at every opportunity. Let us be clear: we do not need to live that way. Let this Parliament run our country. Labour can keep its charity; we will keep our oil revenues, our excise duties and our taxes.

Photo of Nick Johnston Nick Johnston Conservative 11:05 am, 15th December 1999

I suspected that, like the minister's document, the debate would be long on promises and short on detail; it is a debate that follows new Labour's policy on recycling, where money is laundered, and used time and again. If the Scottish National party has plumbed the heights of economic illiteracy, the Executive has mastered the art of economic chicanery.

Let not the Labour party boast about how much it is increasing spending. Let it consider the problems that underlie that spending; let it consider the cost to the health boards, as a result of the revaluation of properties; and let it consider how much money has been taken out of the health service by the shortage of generic drugs and the increase in the drugs bill. Let us not forget that this Government is the Government that, for the first time in the history of the national health service, is capping spending on prescriptions, cash-limiting treatment and bringing in rationing by the back door.

The Conservatives have always said that we would maintain vital services, as we proved when we were in office. We want to see money being spent efficiently. For example, Perth and Kinross Council has dispensed of five directors—five heads of departments have taken early retirement and are not being replaced. The total saving must be about £400,000. If that council can do it, other local authorities can do it.

When will we get rid of directors of leisure, of public policy, of recreation and of legal administration—director upon director upon director, all feeding from the public purse? There must be savings of at least £12 million in local authorities, at director level alone, in Scotland. Let us root out, in our local authorities, our health boards and in all our public services, those who are costing but not performing, and who are feeding from the public purse. Why is the model for best practice, for the way in which our local authorities run their services, not working? Efficiency savings in local authorities would release money for services, and efficiency savings in the health service would release money for patient care.

I keep returning to the example of the planning system, which—as I have said many times in the chamber—is archaic, creaking and holding back development. However, all we are promised is another Government review: that kiss of death, the Government review; that excuse for doing nothing, the Government review—

Photo of Nick Johnston Nick Johnston Conservative

One moment.

Perhaps when the minister winds up, he will explain why elderly hospital patients are being denied food and drink, when Gordon Brown is increasing taxation and sitting with his war chest of £12 billion.

Photo of Richard Simpson Richard Simpson Labour

I was hoping to comment on efficiency savings. In fact, the health service is required to make such savings every year. That requirement has been there since the Conservatives introduced it in 1986, as part of a process of re-engineering. I am not sure why Nick Johnston made that comment, and I am also appalled by his awful comment on food and drink.

Photo of Nick Johnston Nick Johnston Conservative

I have succeeded in appalling Richard Simpson.

Perhaps when the minister sums up, he will explain why our roads are still congested and our road building programme and economic development are being halted, when Gordon Brown is increasing taxation and sitting with £12 billion in his war chest. Perhaps he can explain why 20 per cent of our children emerge from our secondary schools illiterate, when Gordon Brown is increasing taxation and sitting with £12 billion in his war chest. As Gordon Brown sits counting that £12 billion, perhaps just for once, to use Mr McConnell's favourite phrase, the Executive will admit that the careful husbandry of the Conservative Government, in the last five years of its administration, laid the basis for this economic boom. I beg him to remember that, above all, all he is doing is redistributing our money.

If the Labour party is intent on spending less of the gross domestic product than the Major, Thatcher, Heath, Wilson or Callaghan Governments—in fact, any Government that I can remember—at least let it admit that the raised expectations as a result of electoral promises will not be realised. The people of Scotland will remember those who promised so much, yet whose spending will not reach that of the previous Conservative Government until 2001. The people of Scotland will come to realise that they are paying more in tax and getting lower standards in return. I reject the motion.

Photo of Des McNulty Des McNulty Labour 11:09 am, 15th December 1999

It is always instructive to speak soon after Mr MacAskill, with the single transferable rant that he seems to adopt as his argument on any issue.

There is a genuine debate about how much is spent in Scotland, and the future of the Barnett formula. Unfortunately, we are not having that debate—rather, we are having a debate on different sums of money spent in different parts of the UK, and the Scottish National party and the Conservatives have had nothing enlightening to say on any other matter.

The comprehensive spending review has put more money into services in Scotland. The figures that have been produced today, alongside those that have been presented in the past, make it clear that there has been a significant growth in spending on new projects.

We need to focus our attention on how allocations between different budget heads are made and how effectively those budgets are used. The debate is not just about the volume of money, but about the way in which resources are applied and used.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Mr McNulty is correct in what he says, but I would like him to reflect on the long-term issue. Mr Chisholm mentioned that, according to the Government, 20 per cent of UK health spending is in Scotland. Does Mr McNulty agree that that is a fair share, or does he think that it should be reduced, as I expect will happen?

Photo of Des McNulty Des McNulty Labour

The volume of health spending in Scotland is significantly higher than it is south of the border. It is interesting that Mr Wilson raises the health issue, given that members of his party have been particularly prominent in opposing the early implementation of the findings of the Arbuthnott report.

Before I became an MSP, I sat on Greater Glasgow Health Board, which, under the Scottish health authorities revenue equalisation formula, was faced with a progressive, relative reduction in the amount that it could expend, despite having Scotland's greatest health needs. That reduction was relative because money was being diverted elsewhere under the formula introduced by the Conservative Government. The Arbuthnott formula is a method of changing that by linking health spending more closely to need.

The budget contains a series of proposals that reinforce that process of change. Addressing health disadvantage is not just about health spending, but about dealing with housing expenditure, employment-linked expenditure and the way in which local government expenditure is implemented. All those aspects need to be brought together to deal with health disadvantage. Simply arguing about the volume of money that has been or could be spent and arcane Treasury processes is not addressing the issue. We must consider how we bring together the resources—health, local government and housing expenditure—to ensure that we bring benefits to our people, particularly those in areas of the greatest health disadvantage.

Photo of Des McNulty Des McNulty Labour

No. I will carry on speaking, because I do not have much time.

I represent a mixed area: Clydebank, in West Dunbartonshire, which is the local authority area of highest health disadvantage in Scotland, and Bearsden and Milngavie, which is relatively prosperous, with fairly good health statistics. To address the issue of poor health in Scotland, we must consider the fairness of allocation across Scotland, to ensure that the services that are provided reflect the pattern of need. We must not look at that purely in terms of particular initiatives; rather, we must bend the spend across a range of budget heads. We must consider how local government and health allocations are put forward and the way in which money is routed into local enterprise companies and Scottish Homes, to ensure that we apply the principles of social justice and fairness.

That is what the Government is about and that is what the economic debate in Scotland should be about. We must discuss how we organise the way in which we allocate and plan expenditure, to ensure that we provide services that match needs. I regret that we are not having that debate, but I hope that I have pointed us in the right direction.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party 11:14 am, 15th December 1999

I welcome Des McNulty's speech. I would like to be able to say that this has been a constructive debate, but too many members of the Lib-Lab coalition were more interested in attacking the Scottish National party than they were in defending their policies on public spending.

I want to focus on education spending. I am happy to welcome the extra money that will be spent on education over the period of the comprehensive spending review. That extra money is welcome—but it is certainly not before time. Education spending in the first two years of the Labour Government was less than it was in the last two years of the Tory Government—a fact that was recently admitted in a parliamentary answer to my colleague Andrew Wilson.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Not just now.

It is also not before time when we consider that, hidden in the detail of Mr McConnell's consultation document, is the fact that between last year and this year central Government spending in schools was actually cut by nearly £12 million—a fact that was missing from his opening remarks today.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Perhaps a bit later on, Richard.

I want to concentrate on measuring education spending against education need. It has to be acknowledged that, although spending on education is increasing, so too are the burdens on local authorities. Much of the extra spending on education is ring-fenced specifically to meet new burdens on local authorities. For example, the spending on pre-school education and child care is for local authorities to meet new obligations in those areas.

I am not saying that there is anything wrong in that approach, but it means that core education budgets remain as stretched now as they have been in the past. Perhaps that is why it is so galling to find that substantial sums can be found to bail out Scottish Opera or the national stadium, but that money cannot be found to tackle, for example, the fact that in Glasgow half the primary schools cannot afford to install basic security systems. The Scottish Executive's answer to that is that no more money is available.

Education authorities will face several challenges over the next few years, and the budgets that have been announced will not be able to cope with them. The outstanding repair bill for Scotland's schools is around £1 billion, and the Government's only answer is private finance. The SNP's views on the private finance initiative are well established, but it is fair to say—and the minister might even acknowledge it when he sums up—that, with the details that are emerging from the Glasgow PFI projects, some of the SNP's concerns are proving to be well founded. There are fewer classrooms, fewer staff rooms and poorer sports facilities—that is the reality of private finance.

There is no denying the fact that, when the McCrone committee reports next year, teachers will demand a substantial pay increase—and rightly so, because they have fallen behind other professions. How, within the budgets that have been announced, can local authorities properly reward teachers? They have to find a way of doing so if we are to attract the best graduates to the teaching profession.

Jack McConnell talks about "1,000 additional teachers". Given the shortage of supply teachers that already exists, it is absolutely essential that we find a way of properly rewarding our teachers if we are to be able to meet that commitment.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I am summing up.

In his summing up, Jack McConnell will no doubt attack the SNP again. He would perhaps do better to reflect on the fact that education spending is rising at a slower rate in Scotland than it is south of the border. Would he argue that the education system in Scotland needs less money than the system in England? Or does he agree with us that fiscal economy is needed in Scotland to allow us to spend appropriate sums on our much valued public services?

Photo of George Lyon George Lyon Liberal Democrat 11:18 am, 15th December 1999

The debate offers a good opportunity to discuss Scotland's first budget. The discussion has been reasonably constructive, although not always. On behalf of the Scottish Liberal Democrats, I welcome the increase in real-terms spending from the low, in 1997-98, of £14.17 billion to £15.8 billion by 2001. That is a significant increase in resources coming into Scotland, and especially into Scotland's public services. It reverses the Tory cuts from 1994 through to 1997—cuts that were, rather disappointingly, carried on by the Labour Administration. I am glad that the Scottish Executive is now turning that round, and that we will see a big lift in spending on public services over the next two to three years.

Photo of Annabel Goldie Annabel Goldie Conservative

Does Mr Lyon welcome with equal relish his party's ditched promises, which, as Nicola Sturgeon will be interested to learn, included a promise at the previous election of 2,000 extra teachers? The Liberal Democrats' promise to abolish tuition fees has evaporated in the interests of the partnership agreement; they also promised to boost the planned education budget by £170 million. Can we anticipate that Mr Lyon will welcome such breaches with the same fervour as he welcomes the minister's statement?

Photo of George Lyon George Lyon Liberal Democrat

I will come to the Liberal Democrats' specific spending commitments, of which education was a key priority.

Although we welcome the huge increase in funding that will come into Scotland in the next two or three years, there is still a major case to be made at Westminster for the Chancellor of the Exchequer to free up some of his huge reserves. I hope that Scottish ministers will make a case for the next comprehensive spending review to allocate some money to support our hard-pressed public services.

As Keith Raffan said, the partnership Government will deliver an extra £80 million for education, which is an extra £8,000 to every Scottish school for books and equipment. There will be an extra £26 million for schemes to improve public transport, which includes a welcome £13.5 million for rural Scotland. There will be 200 extra police officers for the drugs enforcement agency and £12 million for the healthy homes initiative, to improve 100,000 cold or damp homes. Finally, there will be £91 million over three years for the child care strategy, and the highest ever share of national wealth is now being spent on the health budget. The Scottish Liberal Democrats certainly support those major increases in funding.

The Scottish National party makes much of comparisons with England. We recognise that the Barnett formula will narrow the gap between England and Scotland, but there is a massive difference in the amount spent on Scotland year on year, which is a fact that the SNP has failed to acknowledge at every turn. Independent figures from Stephen Boyle of the Royal Bank of Scotland show that identifiable spending per capita in Scotland was 19 per cent higher than the UK average and per capita programme spending in Scotland is higher than in any other UK programme. The Scottish premium is greatest in such areas as agriculture, housing, environmental services and economic development. Those are independent, not Government, figures, which demonstrate that there have been substantial increases in the Scottish budget.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

If we accept those figures as true, does Mr Lyon believe that that is a fair share? Should that share stand or fall?

Photo of George Lyon George Lyon Liberal Democrat

As I said earlier, the Chancellor of the Exchequer at Westminster should increase public spending to allow that share to increase again.

We need to discuss the Barnett formula; I will support any such discussions in the Finance Committee. However, we must be careful about opening up that debate, because there might be negatives as well as positives to consider.

Governments are responsible for ensuring that priorities are met while keeping the books balanced. There is a stark difference between the partnership Government's policies and the SNP's wish list. As Keith Raffan said, the SNP's spending commitments stand at £1.38 billion, which works out at £13 million a day since September. If spending is maintained at that level, it will have risen to £17 billion by the next election. The basic level of tax would have to increase by 99 per cent to cover that. How on earth can such la-la-land economics be taken seriously? Promises of endless cash being chucked at every problem only make good copy for the papers.

Andrew Wilson cannot control his spending spokespeople, who are led by Kenny MacAskill. The SNP should change its name to NSP—the national spending party.

Photo of Mike Watson Mike Watson Labour 11:24 am, 15th December 1999

This has been a lively and important debate, which has been informed by the deliberations of the Finance Committee. However, only Andrew Wilson has made a brief reference to the fact that the Finance Committee report is available, and I am not sure that everyone who has spoken in the debate has received it.

The report highlights a number of areas where the Finance Committee probed the Government's initial figures. The Minister for Finance appeared before the committee on three occasions to discuss the issues. The report contains valuable points, some of them critical of the Minister for Finance, although he took the criticism in good part and responded positively. As a result, members will be even better informed when the 2001-02 figures come to Parliament for consideration, as the new three-stage system will be fully operational and the subject committees will have the opportunity to discuss in considerable detail the Scottish Executive's proposals. The process for dealing with the Scottish budget will be even more open than has been possible in the past, which I welcome.

I welcome also the minister's commitment to provide real-terms figures, to which most members who have participated in today's debate have referred and which, for obvious reasons, will be much more helpful.

The figures must be put in their context. It is predictable that there has been considerable criticism, particularly from the Scottish National party. It is instructive that its members often use England as the basis for comparisons, when it is the party's policy to break all ties with England. In fairness to Andrew Wilson, he was far more relevant when he cited the Republic of Ireland. If the SNP wants to break away and have an independent Scotland, why use England as the basis for comparisons? Why then turn round and ask Labour or Liberal Democrat members why spending levels are so much higher in Scotland and whether we want to maintain them at that level, as Andrew Wilson has just done?

The reasons why levels of spending, particularly on things such as housing and health, are so much higher are well known. The priority is to tackle the root causes of those problems. The funding that has been made available in the budget will enable that to be done.

Des McNulty was absolutely right: the important thing is to prioritise resources within the various budget heads and to consider how resources are allocated and used. I am sure that almost any Labour or Liberal Democrat member could speak to the Minister for Finance one to one to argue for greater resources for a particular measure or for their local area.

The budget must be considered overall. There is no point in picking out one item and asking specifically what will be done on education or housing. Issues are being tackled in a wide array of ways and through different funding initiatives in addition to the budget heads that we are discussing today. It is important to put the debate in that context.

It is a bit wearing to keep hearing the same arguments. Mr MacAskill was at it again today. He keeps coming back to questions of funding for transport and comparing what Mr Prescott is doing in England with what we are doing here. The point is that we are trying to do things differently in Scotland. I find it strange and perplexing that Mr MacAskill wants to use England as a reference point.

It is far more instructive to examine the figures that are before us and decide what can be done with the resources that we have in Scotland. We all argue for a maximisation of those resources in our areas, but it is important to understand that the way in which the budget is evolving, particularly with the end-year flexibility produced by the comprehensive spending review, will have an impact in a number of departments. That fact has been widely recognised.

I welcome the budget overall, but greater consideration must be given to the allocation of budget heads, and there must be recognition of what that will mean in different parts of the country. Rural affairs will have an increasing claim on resources, but recent figures on health, housing and other aspects of life in Glasgow mean that those must be priorities. Those of us who represent the city will continue to argue for increased resources.

Nevertheless, overall, it is disingenuous to talk about cuts when the real-terms figures are higher than have ever been produced, particularly in health, where around £700 million more will be spent in this three-year period than in the previous three-year period.

I welcome the fact that we are at the start of a process, which in future years will be even more fruitful, because the whole Parliament, the subject committees and many more members of the Parliament will have contributed to the plans in the early stages, before they come to the chamber at stage 3.

Photo of Tommy Sheridan Tommy Sheridan SSP 11:29 am, 15th December 1999

Earlier, the Minister for Finance avoided the question that I asked. I invite him to answer it in his summing-up. The question was on using the comprehensive spending review as the baseline for gauging the spending level of the Government. The problem is that we have not a three-year, but a five-year Government. The fact remains, despite what Mike Watson and others have said, that the Government is spending less on public services than even the previous Tory Administrations.

The Trades Union Congress report of only four weeks ago—I also ask that this be referred to the minister's summing-up—states that, in real terms, we are spending 45 per cent less on public services than in 1994-95. A report carried out by Tony Travers of the London School of Economics, of which the minister will be aware, shows that the proportion of public expenditure on services is lower than that of any Government in the past 40 years. That is the background to the discussion on this budget. It is not enough for those in the new Labour party to argue that the settlement is a good one. It is not a good settlement.

It is fair enough arguing for a better, most efficient division of the settlement, but socialists should be arguing for an improvement in the size of the cake, not just for dividing it up better, which means that someone's improvement is someone else's cut. We in Glasgow City Council will be fighting for a greater share of the resources, but the problem is that, unless the overall resources are improved, Glasgow's improvement will be the loss of other parts of Scotland. That cannot be acceptable to any members of this Parliament.

I hope that the minister will accept that, although it is factually correct that there is an overall increase in spending over the three years of the CSR, when it is compared to the five years of the Parliament, even the levels of the previous Tory Administration are not reached, because of the acute cuts in the first two years.

With regard to Andrew Wilson's earlier points, I support the SNP amendment if for no other reason than that the SNP refers to the need to discuss independence in relation to this settlement. I differ, however, on the SNP comparisons with the Republic of Ireland. It does have fiscal autonomy because it is an independent republic—and I wish Scotland to become an independent republic—but the Eurostat report of only two months ago says that, of the 15 nations of the European Union, Britain is bottom of the table for the proportion of the population living in poverty. Second bottom in that table is Ireland. Although it is an independent republic, it is one that is deeply divided in terms of the distribution of its wealth. We have to confront that problem here.

Early in the new year, we will bring to the Parliament the idea of a new, alternative tax, and I hope that the Minister for Finance will support it. He used to support progressive taxation and the redistribution of wealth. We will advance the abolition of the council tax and its replacement by a Scottish service tax. That tax will be redistributive, and will mean that MSPs will pay more. I hope that the Executive will support it because it will exempt pensioners and students while imposing a heavier rate on those with wealth.

I hope that Kenny Gibson and others will agree with me that we do not improve our share of oil revenues by cutting corporation tax. We do so by doing what Norway and most countries of the middle east do: we publicly own our oil industry so that we can use the £11.2 billion of profit that was made last year—£11.2 billion of profit was made in the worst year for two decades. We could do with a share of that for Scotland's public services.

Photo of George Reid George Reid Scottish National Party

I regret that four members have not been called. I should point out that members who persistently overrun their speaking times may find themselves dropping back in the speaking order for future debates.

Photo of Ian Jenkins Ian Jenkins Liberal Democrat 11:34 am, 15th December 1999

I believe that we need more money for Scotland. In the long term, this Parliament will not be able to do all the things that we want to do with the level of funding that is available at present. Along with my Liberal Democrat colleagues in Westminster, I will continue to press Gordon Brown to loosen the purse-strings over the next few years in a way that is sensible and steady—[MEMBERS: "For tuition fees?"] Absolutely. I will come to that shortly. As long as there are real needs to be fulfilled I will not support Westminster proposals to cut income tax. As Tommy Sheridan said, the cake needs to be bigger and that will have tax implications. That is not for our Parliament—

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

Mr Jenkins welcomes the budget. Can he identify where the money for the abolition of tuition fees is in it?

Photo of Ian Jenkins Ian Jenkins Liberal Democrat

I cannot but it is not my job to do so; it is Jack McConnell's job, and he will need to find it. As Des McNulty said, we are considering the way in which we divide the cake we have. I welcome the expanded spending on education, which is part of the partnership agreement. Eighty million pounds will start to change the shape and mood of Scottish education, paying for more teachers and so on.

Along with that there is a massive extension of funding for child care. That is a strategy of early intervention—getting to the heart of problems at an early stage to prevent difficulties and spending later on. In the partnership we see this not simply as expenditure but as long-term investment. By getting education right, by early intervention through nursery education and child care, we should avoid youngsters becoming detached from schooling, disaffected, disconnected from the norms of society, bored, attention seeking, becoming disruptive and resentful and drifting into offending and not entering employment because they have not had an education.

Similarly, spending on drugs enforcement tries to get at the heart of the problem before it leads to social deprivation and more spending on justice and social work. Instead of mopping up, we are stopping things before they occur. In the warm homes initiative we are trying to combat the cold and dampness that is a breeding ground for illness and social deprivation, damaging people's lives and driving them out of the house for comfort, to fags and drink, their kids on the streets. If we can make their homes better places it solves problems. If we spend the money wisely early on, we will save money later.

Andrew Wilson said we should look beyond the ends of our noses. That is what we are doing—what we approve today. All of us dream sometimes about winning the lottery and think about how we would spend the money, but we cannot run our lives or our country like that. We cannot wait for Andrew Wilson's balls to come up. [Laughter.] We cannot wait for his Thunderball economics. We must work with what we have and invest it wisely for the future.

Photo of Annabel Goldie Annabel Goldie Conservative 11:38 am, 15th December 1999

We welcome the Minister for Finance's statement. I was interested to hear that the consultation had elicited a low response. That may be because we are dealing with level 2, so many people felt unable to comment. I also listened with particular interest to his words: openness, accountability and probity. I agree that, as has been said, we need a greater disaggregation to make sense of the spending proposals. Even at level 2, however, there is cause for concern.

We are dealing with a presentation that is on a cash basis. Although Mike Watson applauded that, I find it a simplistic approach. The cash basis shows cuts in some areas, but they are even worse if an adjusting inflation factor is introduced. Will the people in Scotland relish cuts in real terms, since Labour came into power, in housing support grant, to funds to the Crown Office and fiscal services, to enterprise and lifelong learning and to the police?

The reality has been expressed frequently during this debate: Labour is spending £1.1 billion less than the Conservatives. If that is not bad enough, Labour has failed to anticipate demands on health, education and services in local authority areas. The Executive cannot sit back in complacency, look at the sums that have been divvied up and say, "We've done a good job." It is the Executive's business to anticipate the needs of our communities in Scotland and to make a serious attempt to address those needs.

I have no doubt that it will be of great comfort to patients, parents, pupils, teachers and the police that this Executive is able to fund 22 ministers and legions of special advisers, spin doctors and ancillary staff, not to mention Mr Rafferty's pay-offs. I suggest to Mr McConnell that charity begins at home, and some pruning of the Executive's ménage would be a start.

Politically, the coalition budget is not about openness, accountability and probity, because this Labour Government has taxed more than even the previous Labour Administration, and, in relative terms, it is spending less than any other UK Administration in four decades.

Photo of Richard Simpson Richard Simpson Labour

When did the Conservative Government ever publish level 2 funding for Scotland with any explanation at any point in its 18 years in power? How does that match up to transparency?

Photo of Annabel Goldie Annabel Goldie Conservative

Alas, we have not had a Conservative Executive. Perhaps when we do, such transparency will not be a problem.

I already challenged Mr Lyon on the matter of his party's commitments, or at least some of them, which simply flew out of the window once the partnership agreement was hatched. Under Labour and the Liberal Democrats, Scottish expenditure is down in many key areas. The Lib Dem manifesto commitments include pledges on education, health and transport, but the money that the party could have used to abolish tuition fees has been quite clearly designated for other areas. There can be no other explanation for the prevarication and obscurity of the Executive's replies to questions posed about that matter.

This is a time of festive good will; far be it from me to be churlish and to not show some contemporary spirit concurrent with the times. We have watched with interest the debate about Scottish Enterprise. I spoke to Mr McConnell and to his colleague Mr McLeish, and I am pleased to note that the latter is a convert to Conservative thinking in relation to a reconsideration of Scottish Enterprise. I float the suggestion to Mr McConnell that there may be merit in considering the operation of Scottish Enterprise development funding, which is a successful activity. I suggest that there is good reason why Scottish Enterprise should be allowed to obtain net gain from successful development funding, thus creating a self-generating, indigenous enterprise development fund where success would, literally, breed success. I say that in a spirit of co-operation.

I do not envy Mr McConnell's difficulties in trying to examine a spending plan alongside his budgetary proposals. I have articulated my criticisms of those plans, which have been repeated many times in this chamber. At times, it behoves the Opposition to try to be constructive and positive with its suggestions. I suggest that if Mr McConnell adopts our idea on development funding, he could both create money, which is legitimately the fruit of development activity in Scotland, and retain that money for a fruitful and vital purpose.

We are unable to support the minister's motion and certainly unable to support the Scottish National party's amendment. While we welcome the minister's statement, we have profound reservations about the current levels of spending in Scotland. We are far from satisfied. With the degree of taxation—much of it by stealth—that applies to the population of Scotland, this spending round is a double blow to the Scottish people.

Photo of John Swinney John Swinney Scottish National Party 11:44 am, 15th December 1999

This has been an interesting morning. I will begin my speech by mentioning some of the issues that have been raised by the Finance Committee. I am sorry that Mike Watson, the convener, is not present to hear me compliment the committee on the report that was published yesterday. I also wish to compliment warmly the committee's clerks for being able to arrange so speedily a meeting with the minister yesterday and for producing a report that adds meaningfully to the debate.

I welcome the minister's commitment, which was made earlier today, to provide further detail of a more disaggregated nature and a greater specificity to each of the subject committees at stage 1 of the consideration of the budget. I am glad that, at last, we have managed to extract from the minister—albeit somewhat grudgingly—a commitment to provide information in real terms as well as in cash terms. That is recorded in the Finance Committee's report.

I am sorry that it has taken so long to produce that report, and I am sorry that it took the publication of the Executive's glossy document, which does not include a real-terms figure anywhere, for us to get there. The Finance Committee yesterday agreed that some of the presentation of information in that document, in cash terms, could be thought to be misleading. I firmly take that view.

I shall give one example of that from the spending plans document that the minister has published. In that document, the minister says:

"Planned health spending will increase from £5076 million in 1999-2000 to £5558 million by 2001-02."

He also says:

"This fulfils our commitment to increase NHS spending substantially in real terms each year."

If I did not look closely enough, that paragraph would leave me with the impression that the real-terms increase was around £500 million. In fact, the real-terms increase is only £200 million. The text of the document is very misleading in the way in which the figures are presented. The minister's agreement with that fact is welcome.

Photo of Richard Simpson Richard Simpson Labour

Will Mr Swinney agree with me that the real increase over the four-year period is 12 per cent, and that the big increase—from £4.6 billion to £4.9 billion—came in the current year? Will he also agree that the increase in the first three years of the Labour Administration, nationally and in Scotland, was £700 million, which is a substantial increase that fulfils, at least in part, our commitment?

Photo of John Swinney John Swinney Scottish National Party

Dr Simpson is welcome to put those points on the record, but he should also have said that in the figures from 1996-97 to 1997-98—the first year of the Labour Government at Westminster—there was a real-terms cut in the health budget. That completes the information that should be put on the record.

In this debate, a lot has hinged on whether we are spending enough in Scotland. We have heard different views from several different sources in the Parliament. The clearest and sharpest differences of view have come from Liberal Democrat members. Ian Jenkins made a most revealing statement, a moment ago, in which he said that he thought that much more money should be spent. We also heard a rant from Mr Raffan about the fact that all those things were not appropriate subjects for the debate.

Mr Raffan cited the interesting example of the situation of Fife Council, which does not surprise me, as such situations are occurring across the board. Last Friday, COSLA estimated that an extra £300 million is required by local authorities to meet the current policy commitments that central Government has allocated to them, which is not included in the spending settlement. Mr Raffan says all these things on the record, but nothing happens. We are not tackling problems such as the fact that Fife Council or Perth and Kinross Council, or whichever local authority it is, is having difficulty in meeting its requirements in relation to its spending commitments. Such issues are thrown into the debate—the problems that are expressed and the difficulties that are highlighted—but the Liberal Democrats have delivered nothing to address them in this spending settlement.

Mr Raffan also argued against east coast rail electrification. I was not at the Finance Committee meeting yesterday because I was at Scottish question time, a rather sad and lamentable occasion at Westminster. Who was arguing there for east coast electrification? Malcolm Bruce, the Liberal Democrat MP for Gordon. The Liberal Democrats had better establish some consistency, both in their arguments between themselves in this Parliament and in their arguments with their group at Westminster. They are fighting one argument at Westminster and a totally different argument in Scotland.

That brings us to the nub of what we get from the Liberal Democrats in terms of spending priorities next week. I am criticised for arguing that resources should be allocated to abolishing tuition fees. I am attacked not by the Minister for Finance—I might have expected that, because at least he has a manifesto commitment that would support it—but by the Liberal Democrats. What on earth is left of the principle of the Liberal Democrat commitment to abolish tuition fees?

Another unanswered question has arisen from today's debate. Andrew Wilson put it to Malcolm Chisholm, to Des McNulty and to George Lyon, without receiving a definitive answer from any of them. If the Barnett formula is about expenditure convergence, do those three distinguished parliamentarians believe that Scotland's expenditure on key public services is right today or right at the end of the Barnett formula process? We do not have an answer to that. Perhaps some clarity from each of those people would help to inform the debate on the patterns of Scottish public expenditure and what is right and appropriate.

It is important that in this debate we set a clear vision for Scotland—a vision of which the Executive is bereft. We must raise the sights of Scotland and have ambitions about the type of public services that we want, the type of business environment that we want and the type of quality of life that we want for people. We must examine the public purse with greater imagination than this Executive has been prepared to show so far, to work out how we can leverage more value out of it and put that into our key services. So far, we have not had a word of that from the Executive. These are issues that we raised well in advance of the election to stimulate debate.

We need to hear more about taking responsibility for the finances of Scotland and the Scottish Parliament. That is why we want to go down the route of fiscal autonomy—to give this Parliament proper power and proper control over our affairs. By doing that, we would bring the honesty and transparency to this debate that the Government's report on expenditure and revenue in Scotland and the minister's statement fail to deliver. What the minister will not say is that his budget—what he is doing to local authorities—is not creating a uniform, stable environment for everybody, but placing the burden of funding this Government's proposals on the council tax payer. COSLA has highlighted that, and the minister should have the honesty to make it clear to Parliament.

Photo of John Swinney John Swinney Scottish National Party

I am terribly sorry that I cannot take an intervention from Mr McNulty, as I have reached the end of my time. However, if he wants to address my concern about the fact that he has not told us whether expenditure is at the right level today or at the end of the Barnett formula process, we can happily debate that in the future.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 11:52 am, 15th December 1999

This has been an interesting and short debate, in which a number of good points have been made. It would be helpful if we could say that about all sides, but to some extent the nature of the debate was set by the SNP's amendment. Instead of taking this opportunity, for the first time in any parliamentary setting in the United Kingdom, to move amendments to the proposed budget of the Executive—to suggest changes, to reorganise priorities and to set out an alternative vision—the SNP has complained that it did not get quite enough information, even though it received more information than has ever before been made available. Next year, we will provide even more information. As Mr Swinney should know, Westminster MPs have to find out that information themselves, by looking up the annual reports in the House of Commons library before they take part in debates.

Photo of Des McNulty Des McNulty Labour

Has Mr McConnell ever heard from Mr Swinney, Mr Wilson or any other SNP member what their spending priorities are from among the issues that they have raised even in today's debate? We have had Mr MacAskill's comments on roads, Mr Swinney's comments on student fees and comments by other members on health. What prioritisation process does the SNP wish to engage in, because I have not heard it?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

It is quite clear that the SNP—and, increasingly, the Conservative party—is more interested in rhetoric than responsibility. The truth was revealed earlier in the debate. Mr Swinney himself admitted that the real-terms increase this year in the health budget in Scotland is more than £200 million, once the end-of-year finance is taken out. That is significantly more than Mr Wilson was going on and on and on about in the Finance Committee yesterday. Even the amount that he was talking about is more than the additional health spending of £35 million that the Scottish National party was planning on a reduced Tory budget for Scotland this year. The increase of more than £200 million is enough for three new hospitals in Scotland. It is a significant amount of money, which should be welcomed rather than criticised and run down by the Opposition.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No. I enjoyed Mr Davidson's speech so much that we will leave it at that for the moment.

There were a number of good speeches. Des McNulty made the very good point that we are here to ensure that money is spent on real priorities, on tackling deprivation and on need, and that this Parliament's duty is to ensure that the budget is skewed in that direction. Malcolm Chisholm made good points about the balance of expenditure between Scotland and England and the balance of expenditure within Scotland, and about how the Opposition parties' sums do not add up.

Unfortunately, we heard from colleagues in both the Scottish National and Conservative parties a depressing list of yet more proposals for additional expenditure. I thought that Nicola Sturgeon might shed some light on the process when she said, at the beginning of her speech, that it was not all about money. I thought that, at last, we had a Scottish National party spokesperson who was interested in standards, exam results, perhaps the performance of our schools or the nature of our education system and the curriculum. But she went on to talk about money—again and again. As Mr Raffan has identified, there has been more than £1.3 billion-worth of promises in only three months. What on earth will be the promises over the next three years?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No. I want to answer the point that Mr MacAskill makes so eloquently every time that he comes to the chamber. The Scottish National party has recently produced a compact disc and, obviously, we have moved on from the age of the long-playing record, but one LP certainly got stuck in the 1970s: the "It is Scotland's oil" speech, which is repeated over and over again, not just in transport debates but in debates such as this.

Mr MacAskill clearly did not notice the publication this week of the latest edition of "Government Expenditure and Revenue in Scotland", which showed that Scotland received 10 per cent of total UK Government expenditure in 1997-98—never mind now—which is well above its population share of 8.7 per cent. At the same time, Scotland's share of total UK Government receipts was 8.6 per cent, which was just below our population share.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That left a deficit in Scottish finances, which is, quite rightly, funded by the United Kingdom, as funding is allocated on the basis of need. We should welcome that situation. There is a deficit of £5.4 billion between £32.1 billion of expenditure and £26.7 billion of receipts.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No. Let us go back to Mr Wilson's figures. As he knows, the Scottish National party said that, even on its own figures, which are based on an over-optimistic claim on Scottish oil receipts of 75 per cent, there would be a deficit in Scotland.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No. Mr Wilson moved an amendment that referred to the level of expenditure in Scotland compared to the level in England, but did not address that issue in his speech. He should not try to use the time for other people's speeches to dig up his arguments. If he wants to move the debate away from priorities in Scotland to a comparison between Scotland and England, he should use his speeches to make his points, to which we will then respond.

Even if one took all the oil revenues—not just the 75 per cent that the SNP thinks that we would get—Scotland's deficit is still more than £2 billion. That represents 10p on the basic rate of income tax. The SNP admitted earlier this year that that deficit exists. They could not produce a budget—beyond the figures from 1997 that I have here—in this year's election campaign. The reality is promises here, promises there, promises everywhere. Different promises are made in different parts of Scotland.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

John Swinney has a cheek to talk about the Liberal Democrats saying slightly different things here and at Westminster, given the way in which the SNP tours around Scotland, making promises here, there and everywhere about the different budgets of this Parliament.

These spending plans balance. They allocate additional money to expenditure that is already at the highest level that Scotland has ever known. They are good spending plans for Scotland, which deserve the support of the chamber.