We will no doubt hear a lot about cuts in budgets this afternoon, although it is debates on budget matters that seem to be cut most regularly in this chamber. With that caveat, I would like to say how pleased I am to introduce the budget bill to Parliament in opening this stage 1 debate.
The Public Finance and Accountability (Scotland) Act 2000 has received royal assent. It is one of this Parliament's first and undoubtedly key pieces of legislation. It requires Parliament to give the Executive full statutory authority before any public money can be spent. The budget bill will give us that authority. I am privileged to be the minister in charge of bringing before Parliament the first in what I am sure will be a long line of such bills.
I am also privileged to have led the new open process that has brought us to this point. That process has involved Parliament, its committees—particularly the Finance Committee, whose input has been informed, positive and constructive—and the public of Scotland. Our consultation has confirmed that our priorities are those of the Scottish people—improved health care and better educational opportunities for all.
Our consultation has also given us new ideas and ways in which to improve the budget processes. For example, the group Engender—which, as its name implies, is concerned with gender issues—suggested that we needed to conduct a gender audit across our spending programmes, to assess their overall impact on women. I have told it that I intend to develop that idea for the future.
A great deal of work has been going on, and so far we have laid the financial foundations for our programme for government. We have set out our proposals, we will be building on those foundations in 2000-01 and we have consulted on those plans.
The culmination of all that will be the first annual budget that this Parliament will set. It will allocate more than £16 billion of public money. Decisions on the way in which that money is allocated and spent will make a difference to every man, woman and child in Scotland—from doctors' waiting rooms to classrooms and the streets in which those people walk.
What I have described so far is a process—an important democratic process—but not an end in itself. The real end lies in making the right choices about the way in which the total resources that are available to us are divided up and spent. The framework for those choices has been our programme for government, which is a comprehensive work plan for what the Executive will achieve over the next three years.
In the real world, we have to make those choices under an overall resource ceiling, which gives us the important challenge of improving efficiency and extracting the maximum benefit from every pound spent. This Administration is committed to a rigorous search for genuine efficiency in all public services by achieving either the same level of service for less money or improved services for the same input. In the context of that commitment, I recently announced our proposals for a new procurement board. The new arrangement will bring a new effectiveness to the Executive's role as a major purchaser of goods and services in the marketplace and will make us more efficient.
The bill presents figures for approval by Parliament at departmental budget level. Those figures are disaggregated in the accompanying budget documents and expressed in real terms, as I promised early in the life of this Parliament that they would be.
The figures accord with the level 3 figures that we presented in the consultation document "Spending Plans for Scotland", which was published in November. They do not take account of additional resources that may come to us as a result of the new arrangements for fuel and tobacco duty. However, as I announced last week, we have decided to hypothecate any such resources to the transport and health programmes. That is a decision by the Chancellor of the Exchequer supported by the Executive—it is devolution for Scotland improving key services. Therefore, the figures shown in the bill may increase.
First and foremost, the proposals in the budget bill support the Executive's commitment to improving the health of the Scottish people. We are providing extra resources for the health service, at significantly above the rate of inflation. It is the people who work in the health service—
As Mr Wilson knows—he is, as he likes to remind us, an economist—the increase for this financial year is significantly above the rate of inflation. Over this year and the next two years, the cash increase is £300 million each year, which
It is important that the health service is a success. A large part of the extra resources that we are devoting to health will go to ensure that health service staff are properly rewarded for their extraordinary efforts.
The members should wait a second.
The record £5.2 billion investment in the health service next year will improve the health and quality of life of the people of Scotland through a modern, high-quality health service. It will deliver real results: the new Wishaw hospital, which is due to be completed in February 2001; Hairmyres hospital, which is due to be completed in September 2000; East Ayrshire hospital, in November 2000; the first phase of Glasgow royal infirmary, in December 2000; the Western general hospital, in March 2001; and the southern isles hospital, in December 2000. Those are examples of the delivery of real improvements in the health service by this partnership Administration.
The elements that I have outlined today are covered properly in the budget estimates for next year. The amount of money that will be required by, and delivered to, the health service next year will increase significantly in real terms. We have to be clear that the amount that we can spend on the health service will never be enough for any of us, but we want to ensure that the amount of money increases significantly year on year to deliver improved health service for Scotland.
We will also carry forward with new vigour the fight against the scourge that is drugs. The drugs enforcement agency will lead the fight against the organised illegal trade in drugs. We will conduct an audit of all Executive spending on drugs to ensure that spending matches priority.
The minister said last week that he would make clear not only the outcome of that survey, but what he intends to do about it. I am sure that the Parliament will welcome that action.
We want to give Scotland's children the best start in life that they can have by making available £134 million to fund nursery placements and by expanding the scheme to include three-year-olds. That means a nursery place for all four-year-olds in Scotland and, by the end of 2000-01, places for 60 per cent of all three-year-olds.
For children of school age, £131 million will be available to local authorities through the excellence fund, which is 21 per cent more than was available in 1999-2000. Next year, we will provide six new community schools and reduce class sizes in primary 3 to 30 pupils or fewer. We have already recruited an extra 750 teachers and will recruit 400 more.
Above all, the budget bill will have real impact across all our programmes and will make a difference to people's lives. It will respond to the modern agenda of this modern Parliament by tackling age-old problems in new ways. For example, there will be new money to tackle domestic abuse. The bill will fund the new food standards agency and will help to fulfil our commitment to provide 18,000 affordable new and improved homes. Furthermore, it will start making real inroads on the drugs trade through the drugs enforcement agency. It will also provide alternatives to car use through the public transport fund.
The bill will start to tackle seriously the effects of years of Conservative under-investment in roads. It will reduce class sizes in our primary schools; aid eight major new hospital developments; take us towards the opening of Scotland's first-ever national park; and establish a Scottish university for industry.
However, I want to emphasise the extent to which the bill's proposals are part of a continuing process, which is based on the best traditions of all Parliaments but which is guided by Scotland's particular needs and wishes. Although we will deliver improved public services to the people of Scotland in the coming year, we will also be planning well beyond that. A spending review that is under way in the UK Government will add two new years—2002-03 and 2003-04—to the current comprehensive spending review plans.
I thank the minister for giving way; I always hate to interrupt his peroration. However, has not he ignored expenditure on housing, which will affect not just the housing situation of the Scottish people but
Spending will be substantially higher than it would have been in real terms had Mr Neil's party won the 1999 election. As he knows, even the SNP policies that could be afforded would not deliver the 18,000 new homes that we have promised and will deliver.
Scotland's budget will be determined in light of the CSR review by means of the operation of the Barnett formula. In anticipation of that, the Executive will develop its own plans for those years. As a result, I can announce today that we are forming a spending strategy group within the Executive. I am delighted that the Minister for Rural Affairs and the Minister for Parliament will be joining me on that group. In the coming months, my colleagues in the Executive and I will carefully scrutinise the programmes for which we are responsible and the strategies, such as social justice and the fight against drugs, that cross a number of ministerial and departmental responsibilities. We will examine the funding required for those programmes and will conduct a rigorous assessment. Our objectives will be to ensure that our spending delivers the priorities set out in our programme for government; to develop and carry forward those priorities for a further two years; and to free up resources for new initiatives and further developments in the new agenda for Scotland.
I hope that we will be able to announce our new plans in September. That will give the Parliament an opportunity to contribute by feeding in ideas between now and the summer recess and by scrutinising our plans after they are announced.
In a letter that the minister recently wrote to the convener of the European Committee, he said:
"As the overall Assigned Budget is determined by other factors, including the Barnett Formula, increases in structural funds expenditure would result in fewer resources being available for other spending purposes."
How do structural funds provide additional funding for Scotland's public expenditure?
Structural funds provide additional expenditure because they are additional funds that come into Scotland from Europe. As I have tried time and again to explain to Bruce Crawford, Andrew Wilson and Ben Wallace—who is not here today, but who has been commenting on this matter over the past week—those funds are at a level that will no longer be required over the next seven years, which will free up new resources in the Scottish budget for other matters.
Any suggestion to the contrary has been—and is—completely untrue.
The bill sets out our proposals for the next financial year. Those proposals are firmly rooted in our programme for government and will support our progress in implementing it. This budget will improve public services in Scotland and will deliver a modernising agenda for Scotland. It is a budget for everyone in Scotland—for children and their parents, for companies and their employees, for the health service and those it treats, for those who want to enter education no matter their stage of life, for city and countryside, and for communities and those who live in them. The budget proposals are realistic and fair. They represent a good deal for Scotland. I move,
That the Parliament agrees to the general principles of the Budget (Scotland) Bill.
The bill represents, of course, a division of a declining cake; it is not a normal budget on which a judgment can be made about the raising and allocation of revenue and expenditure. We are unable today to support stage 1 of the bill, as it is rendered incompetent by the fact that expenditure announcements that were made just before this debate are not contained either in the budget or in the supporting documents. Before stage 2, the Executive must come back with an amended bill. That is why we are forced to vote against the bill today. What has happened illustrates the chaos that the Executive has been in during the process of deciding the fudge about which we heard earlier this afternoon.
To be helpful, I should say that, in principle, this Parliament's approach to budget development is much better, healthier and more open than the one at Westminster. The consultation should ensure that—it is a step forward that we welcome.
However, the Minister for Finance's claims of openness and integrity in that consultation do not stand. The cash-terms consultation document was described by the Finance Committee as misleading. In The Herald on Monday, the Executive announced—as an exclusive—that school spending per head had risen by 8 per cent. The reality, as my colleague Nicola Sturgeon will point out, is that school spending per head has not risen by 8 per cent over the period in question—in fact, it has risen only by a quarter of that level. That sort of shambolic fiddling of the reality of public finances is utterly unacceptable in any
Will Mr Wilson confirm that the average budgeted running cost per pupil for primary schools in Scotland in 1997-98 was £1,791 and that that figure rose to £1,939 in 1999-2000? Over those three years, that is an increase of 8 per cent for every Scottish primary school pupil.
I called the minister's officials on this question. The figures that he cites take no account of the 5 per cent rise in inflation in that period. In real terms, the figure is 3 per cent. When one takes account of the falling school roll, the 8 per cent spending rise per pupil, which The Herald headline implied, is only 2 per cent. These figures may seem like debating points, but they show what is actually going on. If the Minister for Finance is unable to cite honest and open figures in anything that the Executive does, we are left with a litany of mis-spins and—frankly—lies, which do not impose order on to the budget process.
The reason behind the strategy of puerile diversionary tactics, such as those at the weekend and the mis-spin today, is clear. Despite the warm words from Mr McConnell and his colleagues, there is a crisis in Scottish public services. That crisis will not get better; it will get much worse.
I see that the Deputy Minister for Local Government is sitting next to the Minister for Finance. During the first period of the Labour Government, some £2.4 billion less was spent on local authorities than under the Conservatives. Now we have Labour-controlled COSLA identifying a black hole in local government finance of £675 million. Council taxes are shooting up and, in what has been dubbed "Jack's tax", people in Glasgow and Dundee are paying twice as much as people in London. Council tax increases are running at twice the rate of inflation across Scotland.
We also have the abolition of the uniform business rate, even though that was not announced in the manifesto. At the election, Gordon Brown said that a 1p freeze in the income tax rate in Scotland would lead to 250,000 job losses—incredible, but if it is said by the chancellor, it must be true. How many jobs, then, will be lost by a tax increase of 10 per cent, in comparison with what is happening in England, which is directed on employers through the abolition of the uniform business rate?
Back on the planet reality, we do not control the purse strings, so we have not spent a penny.
I have no doubt that we will hear more allegations about extra spending by the SNP. I have other things to do, but I took time out at the weekend to look at the Official Report. In just one day, during a debate on 2 December—I ask the Liberals to take note—Robert Brown committed the Liberal Democrats to a restoration of the link between earnings and state pensions, at a cost, according to him, of £8.4 billion. That is three times the figure in the allegation that Mr Kerr has just placed at my door.
One of the more respected of Labour's back benchers, John McAllion, agreed with Mr Brown. He said that that was the Labour party position and that most Labour members held to it. Allegations are made, and they are supposed to weaken us—which of course they do not—when the uncosted, unprincipled spending commitments of the Liberals and the Labour party—
I have said no.
We have seen utter incompetence from the Labour party and a daft, puerile tactic, which will not work and which does not apply to the realpolitik. What is actually happening is much more serious. The minister did not deny the fact that the health programme budget is increasing by a paltry 0.8 per cent next year. That compares with Mr Blair's promise of 5 per cent. What is happening to the difference?
A document from the Parliament's information centre pointed out that, even if Mr Blair's promise were implemented,
"Scotland will 'lose' £500 million."
That is what is going on in Scottish public services; it is why Labour is in trouble and will lose Ayr. It is also why the people of Scotland are in deep distress at what is happening to their health service. No wonder that, at the weekend, nine out of 10 people said that they did not trust Labour with the health service. That is what is actually happening. We are not talking about some imagined grievance; we are seeing an attempt by Mr Kerr to put a foot on the ministerial ladder.
In education, £300 million less is being spent than under Ian Lang. Those are the figures not of Andrew Wilson, but of Jim Wallace, from before the most recent election. The amount that the Liberals have managed to lever in is paltry compared to that gap. Why is it that the Liberals
I know that Mr Wilson is in favour of rigorous costing, so perhaps he will give a full costing of the SNP's student package, which is Cubie plus, plus, plus, as the SNP has committed itself to financing Scottish students not just in Scotland, but furth of Scotland, which means worldwide.
That costing is in every submission that we made to the Cubie committee. Perhaps Mr Raffan will outline in his speech how the Liberal Democrats intended to finance the abolition of tuition fees, which they promised in their manifesto. I do not recall seeing that information in any Liberal manifesto.
In the wider context, the Minister for Finance cannot be blamed for many of the current problems, because they are a function of the squeeze in Scottish public finances. There is a solution to that squeeze. It was said that
"the answer lies in . . . full fiscal freedom for the Scottish Parliament under which it would raise and spend all its own taxes, with a just contribution for the services we still receive from London."
Those words were said not by Andrew Wilson, but by Brian Monteith, an education spokesperson for the Conservative party, on 28 May. One month previously, David McLetchie, the leader of that party, agreed with that and said that the process should happen—but not yet. Every independent member, the SNP and, clearly, some members of the Conservative party agree with that strategy. It is the only solution to the problems that we face today.
Our job is not to sit back and allow the Executive to manage the decline of Scottish public services. It is not for us to make do with the constraints of this Parliament; we must deliver. We do not have to limit our horizons; we should raise them. We have to grow as a Parliament and deliver some of the solutions. I see Richard Simpson at the back of the chamber—during the previous stage of the budget process, he, too, called for greater fiscal autonomy. Let us think big and try to be normal when we talk about our budgets. Let us focus on what is actually going on, rather than some imagined grievance.
I listened with some amazement to Jack the lad passing off the bill as a tremendous
Not at the moment.
Over the past few months, despite our warnings, the health service survived the winter only because of the superb efforts of its staff. The service is on its knees. My colleague, Annabel Goldie, mentioned the £50 million overspend. I do not recall hearing the minister say whether that overspend has been taken care of; if it has, there are people working in NHS hospital trusts who have not heard that good message.
What lessons has the Executive learned? We hear lots of rhetoric, but patients are still left to suffer for longer. This morning, I received a letter from a local dental committee, in which it complained that waiting lists have been closed. The fact that people are waiting for treatment does not mean that the waiting list has closed; it means simply that people will not get on the list very quickly. The letter, from one small but important part of our health service, contains some extreme comments about the requirement for additional funding. It states that spiralling waiting times, underfunding and lack of strategic funding—compounded by changes in postgraduate education—are overwhelming the service and will result in its ultimate destruction. That is not what Scotland deserves.
In a moment, Richard.
The NHS faces increased costs. Mr McConnell talked about inflation being met, but while the 2.6 per cent GDP deflator may, in the round, reflect inflation according to his calculations, I know no section in the health service in which inflation is running as low as 2.6 per cent. The drugs budget and the new treatment budget, for example, face higher inflation. Furthermore, next year's pay rises have not yet been met and the trusts are extremely worried about them.
I am grateful to Mr Davidson for giving way. Further to his point on pay rises, we should consider the fact that 60 per cent of the Scottish budget is allocated to public sector wages and salaries. We have just heard that, this year, average earnings will rise by 4.7 per cent. How
That was exactly my question. I thank Andrew Wilson for his support.
It is obvious that when Donald Dewar was Secretary of State for Scotland, he failed to plan properly for the new Parliament. The budget today shows, in real terms, a net cost increase of around 43 per cent. That does not say much about his skills in long-term planning and setting budgets. I hope that we do not have to allow a 40 per cent variance every time someone in the Executive produces a figure. I appreciate that Mr Dewar is now two men down, but surely, between themselves, members of the Executive can do a bit better on planning.
The bill represents a failed opportunity to prioritise spending. I would have thought that issues on which we receive letters, such as health, law and order, and in particular housing—core council services—would have featured more strongly in the budget. The budget is a sham; it involves an awful lot of smoke and mirrors, and money moving around. What about the morale of the people who work in our public services and the morale of people who depend on those services?
I notice a reduction in the rural affairs budget. There may be a technical argument about that, but people in rural areas feel that their problems are not being addressed. I do not see how the budget addresses properly the problems of rural Scotland.
Our police services are under-resourced when trained officers are being diverted to the new drugs enforcement agency. We welcome the establishment of that agency, but the Parliament must ensure that our police service gets alternative resources, especially as it wishes to set up the new public safety radio communications project trunked communications system, which will cost many millions. At the same time, the police service is trying to find 5.2 per cent efficiency savings. Which budget will those resources come from and why are they not part of existing planning? Our police forces perform extremely well, but the Parliament has a duty to ensure that they, the courts and the prison services are assured of the support they need to carry out the job that they do on behalf of our people.
The budget seems to contain nothing extra for wealth creation. We heard, during questions on the statement about Cubie, that Mr McLeish's department's budget will take a hit to deal with Cubie. Nor has the chamber passed any legislation. So, Andrew, it is fair game that it is not in the bill. Whether it is will depend on the moral fibre of the Liberal party. No doubt we will hear more about that tomorrow.
Any funding for those proposals will come from
I welcome one or two parts of the minister's statement—not too many—but before I do, I ask the minister to tell us at the end of the debate where he is going to find the money to fund the proposed Cubie mutant that the Executive has come up with. Furthermore, where has the £80 million that the Liberals got out of the minister vanished to? That is not stated clearly in the document that we have.
That is an interesting point, Richard, because at no time have I suggested that we should increase taxation. In fact, I have complained about taxation. We are talking about prioritisation on behalf of the Scottish people—
This budget shows no vision. It establishes no path forward and it fails to recognise the needs of the Scottish people. We cannot support it and I ask Parliament to take the proposals apart line by line in all of its committees and send a clear signal to the Executive so that when the bill comes to its final stages, the Executive ensures that it is amended to fit the resources that are available and the prioritised needs of the people of Scotland.
The Scottish Liberal Democrats warmly welcome this budget, particularly the significant changes that were made to the provisional budget in the autumn in order to reflect the new priorities that are set out in the partnership agreement. As the minister said, it makes a difference to every man, woman and child in Scotland—particularly every child—and, after yesterday, to every student as well.
Some £51 million of the £80 million that Mr Davidson referred to is extra money for our schools, providing extra teachers, new books and better equipment for every school and every pupil in Scotland; £29 million will be used to widen access to higher education. In addition, of course, we have yesterday's £50 million package for students, abolishing tuition fees for those in higher education a year earlier than Cubie expected or thought possible; abolishing tuition fees for those in full-time further education, which amounts to 40,000 students—beyond the Scottish Liberal Democrat pledge; and introducing bursaries or grants towards living costs for students from low-income families. This is not only a partnership Government; it is an education Government.
The minister was right to say that responsible government, which the SNP does not have a clue about, is about choosing from an infinite array of demands and pressures.
As Mr Raffan is making claims about the partnership agreement, particularly with regard to education, how does he respond to the situation in Aberdeenshire, where there is speculation that teaching posts will be cut as a consequence of the partnership's failure to fund Aberdeenshire properly? A series of new taxes are about to be introduced, such as the 35 per cent water tax, which has just been announced.
We are bound, as is the minister, and as would other parties be, by the grant-aided expenditure assessment for Aberdeenshire. We are unhappy about that. We realise that there are problems in particular council areas, such as Aberdeenshire, and Perth and Kinross, where the population has increased and where councils have to provide services for that additional population before the increased numbers feed through to the settlement.
My colleagues Nora Radcliffe and Mike Rumbles have held lengthy meetings with the minister on this issue on behalf of their constituents, as have I
Do Mr Raffan and his colleagues welcome the fact that I have met representatives of Aberdeenshire Council and had constructive discussions with them and their leader in recent weeks? Do they further welcome the fact that I have taken on board Aberdeenshire Council's point of view and am likely to make an announcement within the next few days that recognises the difficulties that the council faces?
I was just coming to that point. I am grateful to have been able to give the minister the opportunity to say how positive he has been in his meetings with Aberdeenshire Council and in his response to its concerns. I know that the minister will be similarly positive when he meets representatives of Perth and Kinross Council on Monday. We are looking forward to that meeting. I am glad to see that the minister is nodding his head.
There are difficulties in choosing between the infinite array of pressures and demands. Nowhere is that more evident than in the national health service. The situation is not helped by the fact that the UK Labour Government stuck to Tory spending limits for its first two years in office. The Liberal Democrats disagreed strongly with that decision for precisely the reason to which the Prime Minister constantly refers—the fact that it takes four years to train a nurse and seven years to train a doctor.
Not at the moment.
We would have invested more and earlier because it takes time for money to feed through into improved health services. We call on the chancellor—as have Charles Kennedy and the Liberal Democrat Treasury spokesmen at Westminster—not to proceed with the 1p income tax cut. If we need any extra evidence to support our case, we can call on no better witness than Tony Blair himself who, on "Breakfast with Frost" on 16 January made a pledge—or was it an aspiration?—to increase spending on health until it reaches a proportion of gross domestic product equal to the European Union average. As Andrew Wilson indicated, that would mean a 5 per cent increase in real terms for at least five years, or perhaps even more than that—there are different estimates.
Reversing the 1p cut in the basic rate would be enough to narrow the gap between UK and EU rates of health spending by a quarter in one year.
I cannot give way, as I am limited for time. This is a short debate, so I hope that the
No budget speech of mine would be complete without my mentioning the latest episode in the long-running SNP soap opera. What shall we call it? Bankruptcy Street? Neverenders? Or simply, Spenders Galore?
Members will recall that after the last episode we stood at spending of £13 million a day. I would have thought that my comments during the debate on the draft budget in December would act as some sort of restraint on the SNP, but in fact its commitments have accelerated to more than £16 million a day.
On 16 December, Duncan Hamilton popped up, talking about £665 million extra on health spending. On 12 January, Kay Ullrich committed the SNP to £41 million extra on residential care beds. On 13 January, Fiona Hyslop called for £175 million of additional housing investment. On 17 January, Kay Ullrich called for £49 million extra in pay awards for the NHS. Those figures do not yet include SNP spending on its student finance commitments—Cubie plus plus—which Mr McLeish has estimated will cost at least £100 million.
Unfortunately, this was scheduled as a very tight debate. The statement ran on, so we are very short of time. I apologise in advance to members who will not be called. I do not intend to reduce the time limit on speeches, which will be four minutes, but I ask members to consider the fact that we will get more in if they speak for a slightly shorter length of time.
I am pleased that Andrew Wilson referred to the debate on 2 December, because it was during that debate on the elderly that I was the first in the chamber to highlight the fact that the SNP's response to every imaginable issue is to make fresh financial commitments. The theme that I adopted on that day has been taken up by others, most notably by Mr Raffan. I am pleased that he is keeping the SNP's score card.
To some extent, the situation is like the conquests of Don Giovanni; once one gets past the first few episodes, one knows what is going to come. There is really not much point in keeping a tally.
I will give way in a moment, Andrew, but I would like to finish my point first.
The SNP is not prepared to make any practical choices. In my view, the essence of politics—its whole focus—lies in making real concrete choices. The responsibility of any political party that hopes to govern sensibly and to make itself accountable to the electorate is to declare what those choices are.
Andrew Wilson—the jelly chancellor who has no control over the people surrounding him, who make commitments and promises that he does not have to deliver. He has no intention whatever of carrying out the promises in the list that Keith Raffan gave. Those were empty promises with nothing to back them up. Andrew can now defend himself.
"Most Labour members agree that pensions should be linked to earnings rather than to inflation. That was always our position and it remains our position."—[Official Report, 2 December 1999; Vol 3, c 1137.]
On the same cod analysis that Keith Raffan and others have undertaken, that is a pledge of £8 billion by John McAllion and Robert Brown—a figure four times greater than the one I have given in this debate. What is Des's response to that? It is a stupid analysis and a puerile attack—because his party is worse.
Des McNulty talks about "practical choices". On Monday, it was announced that £1,939 will be spent this year on every primary school pupil in Scotland. Back in 1995, in Denmark—our closest European neighbour—
Nicola makes a point about Denmark. I am sure that she could make points about all kinds of other countries as well. We can all find whatever examples we like. I would like to make a point about Scotland.
Today, we have heard an announcement from the Government that puts £50 million into higher education and deals with the real problems of students who have not been able to maintain themselves and function as students because of financial hardship. I have worked in higher education and I have experienced those problems. The Government has made a real choice and a real commitment. Unfortunately, no real choices are being made by the SNP. Its statements on Cubie and higher education have to be balanced against its statements on roads, on housing, on pensions and on everything else. It is not prepared to make choices. If it were, its arguments would be more credible.
I would like to commend the minister and his officials for producing the comprehensive documentation and the mass of facts and figures that accompany the bill. As a member of the Finance Committee, I look forward to the detailed scrutiny of the bill; I believe that Mr McConnell is appearing before us next Tuesday.
The stark fact that stares out at me from the mass of information is that this budget cannot be regarded as worthy of a national Parliament. It is more akin, and more directly comparable, to the annual budgets produced by our local councils. Just like them, we have to accept what funds we are given by a central authority—in our case a block grant from Westminster that, over time, will bear little relation to what we actually need to spend on our nation's public services to maintain, never mind improve, their quality.
Even more significant, the block grant that we are given to allocate and distribute bears little or no relation to the revenues that Westminster ingathers from Scotland. Under the current devolution settlement, we have been invested with even less responsibility than a local council has in
We should view the bill as the Executive's best shot at shielding the Scottish people from budget cuts imposed by our remote and uncaring Treasury in London—the real master in this chamber. Make no mistake, Gordon Brown has inflicted serious damage. With £1.1 billion in cuts to services in Scotland over the first three years of a Labour Government compared with the last three years of the wicked Tories, Scotland's shield is heavily dented.
Many members of this Parliament will be aware that their former local authority colleagues are struggling—struggling to balance budgets and struggling to explain to their electorates why increased taxes are accompanying cuts in services. When they were in local government, members such as Mr McAveety, who is sitting next to Mr McConnell, were quick to point out where the blame for their predicament lay. The blame for the funding shortfall, both in councils and in this Parliament, lies at the door of the London Treasury.
The situation has become worse and more restrictive under Gordon Brown's stewardship of the United Kingdom economy. We now have less than we did during the darkest Tory years. If Brown's Treasury in London had allowed Scotland to spend even the same proportion of the national wealth that we spent five years ago, this Parliament would have an additional £4.5 billion in its budget over the next three years.
I am sorry, but I cannot give way.
For the Executive, that would have saved the embarrassment of robbing classrooms to bail out Scottish Opera and Hampden Park. A drugs enforcement agency could have been funded without cutting the Scottish Prison Service budget. The Cubie recommendations could have been comfortably funded in full. We have yet to hear what programmes will be cut to fund Cubie.
The problem with this bill goes far deeper than how much we get as a handout from London. This Parliament is not in control of its income. Regardless of how much our citizens pay through value added tax, fuel duty, stamp duty, insurance tax, car tax, corporation tax or even our own North sea oil revenues, not one additional penny will come to Scotland. All of it flows into
I am pleased to have the opportunity to speak in this budget debate today. It is an historic day in many ways, a disappointing one in others. The minister has made it plain on many occasions that expenditure on one area of government must be paid for by cuts in another. The Conservative party always welcomes the conversion of sinners, and especially of profligates.
The image springs to mind of the minister as an old wifie at a church social, carefully cutting the cake into slices and deciding upon which plate the crumbs will fall. The issue is more serious than that, however, because this Parliament has the chance to change for the better the lives of the people of Scotland. Through the budget, the Executive has a chance to change the way in which many issues are tackled. It is a matter of sorrow to me that those opportunities have been wasted.
The new Labour party told us that it would change Scotland, but all the Labour Government's initiatives since May 1997 have been just that—lots of shouting but no substance. Now we have a chance. I, too, have a vision for Scotland—of a land where our children are educated and not abandoned, where our elderly people are cherished and not threatened, where our communities flourish and do not stagnate and where our businesses and commerce have the chance to thrive and to produce the wealth that pays for our hospitals and schools, the wealth that allows people to move from the misery of long-term unemployment into the dignity of work and the wealth that allows communities to be policed and prisons to be staffed.
Labour had a chance to embrace that vision, but it has failed; it is conservative with a small c. Where is the radical agenda? Why has it not seized the chance to change society, move away from the little box mentality and take bold steps to
Will Mr Johnston agree that one of the ways of stepping away from such a narrow agenda would be full fiscal freedom for the Scottish Parliament, under which it would raise and spend all its own taxes, with a just contribution for the services that we still receive from London? Will he agree with me, and Brian Monteith, or is there disagreement within the Conservative ranks?
I agree that if the Parliament would embrace some of the policies that we have proposed, such as removing education from the grip of local authorities and giving it to school councils, we could save—on my estimation—32 local government directors of education at a cost of £70,000 each, which adds up to £2.24 million. Those are the sorts of policies and radical ideas that I would propose, which are needed to transform Scotland.
I realise that Nick Johnston wrote his speech before I delivered mine, but I wonder—given what he has said about the need to review our budgets in an imaginative and creative way and plan for the future across departmental boundaries—whether he welcomes the spending strategy group that I announced in my speech and has been formed by the Executive?
I welcome any initiative that will lead to radical thinking and a new way of looking at things. The Executive seems to be stuck in always accepting things as they have been in the past. That is why spending is down in the justice department. How many police officers and prison officers will we lose? Spending is down on wealth creation, which is the powerhouse of the economy. Spending is down on aid to rural Scotland, on our transport system and on our courts system.
That is not a happy picture and it is not one that will impress the people of Scotland. When the Executive lacks vision, what hope is there for an improvement in the lives of ordinary Scots? When ministers do not see performance as promises and when the Scottish people see results and not rhetoric, I will congratulate the Executive on its spending plans.
This is a welcome debate on the first budget bill of our new Parliament.
The Liberal Democrats congratulate the minister on delivering this bill, given that what we will come to know as our normal process was necessarily truncated this year. Doubtless next year we will also see fully costed budgets from the Opposition, including one from the chancellor of the exchequer for cloud-cuckoo-land.
The plans for 2000-01 are a good match of prudent use of resources and investment in vital services. As my colleague Keith Raffan said, the Liberal Democrats especially welcome the investments in health and education. We look forward to the benefits of the £80 million increase for education that was announced in the autumn. We note the minister's point that almost half of the comprehensive spending review funding increase has gone to health.
Do I take it from Euan Robson's comments about costed budgets that the Liberal party will act as an independent party in this chamber and produce its own figures and policies? Will he accept that there is an element of doubt among members about whether Liberal members speak as Liberals or as aides to Jack McConnell?
When we speak, we do so as Liberal Democrats who are part of the partnership Government. Our plans are included within those of the Executive, because we are part of the partnership Government. I would have thought that that was self-evident to Mr Davidson.
Nevertheless, the Liberal Democrats retain our independence in promoting our policies at a UK level and, as Keith Raffan said, we are campaigning for the Chancellor of the Exchequer to cancel the 1p tax cut this April and use the money for health expenditure. The electorate understands that tax cuts and better services are contradictory.
"How many people out there in the country would rather see that money going on local hospitals and solving the problems of the health service? That is our priority, that is where the money should go."
My understanding is that the figure is £215 million.
We maintain our commitment to hypothecate
It is important to draw attention to one major, looming problem in public expenditure: funding pay rises. I know that it has exercised the minister; it is a matter of particular concern to local government. There have been seven consecutive years of failure to fund pay rises. I believe that the option of finding that money from efficiency savings is diminishing and that the cumulative effect is biting ever deeper. We must address that matter during the next financial year for the following one.
The SNP makes much of pegging expenditure to a percentage of gross domestic product, claiming that that would mean a major increase in expenditure. If expenditure were pegged to GDP, spending would be slashed dramatically during a recession. In the early 1990s, it would have been necessary to cut £4 billion from the Scottish budget—when demand would have been rising. Restoring expenditure to the Ian Lang level, which SNP members keep citing, would equate to a 10p increase in income tax.
We welcome the bill as the foundation for the programme for government that our partnership Administration will deliver.
I appreciate that we are discussing not the minutiae, but the general principles—the rough shape—of the bill, which is akin to trying on a new outfit and having a quick squint in the mirror to get a first impression.
First impressions matter, and I have to tell the minister that I do not care for my first glimpse of his proposals. The shape chosen by the Executive does not appeal. I find marked increases in expenditure where I do not want to see them. There is, for example, a 43 per cent increase in spending on this Parliament and a 50 per cent increase in spending on the Executive secretariat—on which spending has more than doubled.
This budget garment is looking a bit baggy where I want it to be better fitted, but where I want it to be more amply cut, I find it pinched: there is a projected drop of £47 million in the total budget for rural affairs; the drop for the enterprise and lifelong
Professor Brian Ashcroft said:
"It is difficult to resist the conclusion that the industry, enterprise and training budget has had to bear a large part of the burden of the set-up costs of the Scottish Parliament."
There is a further cause for concern about the statement of budget principles. If I understand the position correctly, the education budget is set to increase by £41 million. However, the pound of flesh for the coalition deal was £80 million, so where will the other £39 million be found?
Oh, no, Mr Raffan—I shall not be caught again.
Were we not so tight for time, I would take Mr Raffan's intervention, but I do not have time to deal with him adequately.
As I said, there is a projected drop in the enterprise and lifelong learning budget of £26 million, but we have just heard that the Executive's response to the Cubie report will cost £50 million. Where will the extra money come from?
I am thankful that there is a projected increase of £73 million to the health budget, but we know that health trust budgets are currently overspent by £50 million. Is that allowed for?
The three financial components that I have mentioned will be found elsewhere, or we are talking cuts, which will be, I suspect, considerable cuts. I would rather that there were more nurses than special advisers to the Executive.
In conclusion, I do not like the cut of Mr McConnell's budget suit. It does not fit Scotland in the way that the Conservative party would wish it to. Furthermore, in relation to recently disclosed areas of extraordinary expenditure, there is no transparency about which budget sector will bear what burden.
I regret that, in those circumstances, the Conservative party will have no alternative but to abstain and not approve the minister's budget principles.
It has been an oddly short debate. SNP members will follow their argument through and vote against the budget on the ground that it does not contain the allocations that are needed to finance announcements made earlier today by the Executive. The process could have been handled far better. In future, we will seek to scrutinise budget bills, not to obstruct them, because of the importance of the legislation.
The debate has included many student debating points that have little substance to back them up. Will the Executive say for the record whether the commitments that were made by John McAllion and Robert Brown to spend £8 billion stand? Do all the Labour members agree with John McAllion? He has a noble aim and it is right for back benchers and Opposition spokespeople to say what they think. It is our job to aspire to do something substantial with Scotland's public finances. The SNP brought costed manifestos to the election—the appropriate time to do so.
Keith Raffan—who has not learned much from his time at Westminster, apart from some odd behaviour—made some embarrassing errors in his statements. I will be writing to him after the debate, because I have not seen the full details of his comments. In a letter to the Sunday Herald, Keith displayed his vast economic mind and alleged that the SNP had promised spending of £2.5 billion—a silly allegation—and that that would mean that we would have to increase income tax to 90p in the pound. According to HM Treasury figures that I looked up today, such an increase would raise £13.5 billion. We all make mistakes, but that is a mistake of 540 per cent—perhaps in scale it is one of the most embarrassing mistakes that someone who aspires to being a financial spokesperson could make.
Keith Raffan does not have a clue when it comes to the reality of Scottish public finances—there are serious issues at stake. It is our job as the Opposition—and the job of the Labour back benchers and even of the Liberals, to the extent that they matter—to scrutinise and to make suggestions about what should be done. At the next election it will be our job to produce a costed alternative programme on which the electorate can vote.
No one in the chamber would deny the right of the member to scrutinise the
Keith Raffan might not have been totally right, but we are talking about a 20p increase in income tax being needed to pay for SNP promises. In scrutinising the budget, the SNP has a responsibility to say where it would raise money.
I do not know whether Dr Simpson remembers this—or whether he was even a member of the Labour party at the time—but before the 1997 election the Tories accused Labour of making 89 spending promises. All of their claims were bogus and Alistair Darling said that that tactic was daft. It is odd that the Executive is adopting the Conservatives' tactics along with that party's policies. We might expect that from Keith Raffan, who is a Conservative at heart, but it is odd to hear such an argument from Dr Simpson.
The two members are welcome to stand, but I will not take an intervention because, as I have said, I am summing up.
Council taxes are soaring, as are water charges. People are being asked to pay through the nose for worse public services. The Government is spending £230 million less on enterprise and lifelong learning than the Tories did. It is spending £362 million less on transport than the Tories did. I hear that Ross Finnie is to be in the Star Chamber, which will no doubt strike fear into the hearts of civil servants. Will he act on the fact that the Government is spending £336 million less on rural affairs than the Tories did? That is what is going on.
The budget does not fit the needs of public services and the numbers do not fit. If we take party politics out of it, we, as a Parliament, must come up with a serious solution to the Barnett squeeze or we will be doing a disservice to Scottish public services and to the wider public. It is happening. It is biting, and we must be serious about it.
Perhaps this has been a short and not particularly illuminating debate, but I hope that it has been the proper debate with which to begin scrutiny of the budget bill. We should record the importance of the occasion. I deeply resent the suggestion by the Scottish National party spokesperson for finance that this process has not been open and has not involved this Parliament or people outside it. He ignored the fact that this month and next month, the Parliament will have to pass the budget bill before the Executive can start to spend the money allocated for its expenditure. That will be a first for the United Kingdom. We should be proud of that because we passed unanimously the bill that creates that set of circumstances. The Parliament met to debate the spending plans of the Administration. It scrutinised them in committee, consulted Scotland and then debated them again in their proper context.
The plans have been produced today are set out not just in cash terms, but in real terms. It is easy for the Opposition to distort them, but the plans are there in real terms for everybody to see and to scrutinise. Mr Ingram is right to say that I will appear before the Finance Committee next week, before the bill comes back to the chamber in February for a final vote.
That is good for Scotland and it should be approved of, not resented, by Mr Wilson, who should sit down.
The bill that is before us is a good bill for Scotland and would deliver improvements in Scottish public services. Some of the speakers today have recognised that fact. However, in the eight or nine months that this Parliament has existed, no member from either the Conservative party or the SNP has come forward with a responsible suggestion for increasing one budget and reducing another to pay for it. I notice that the alliance of the Opposition parties is now so cosy that Mr Wilson quotes Mr Monteith in his speeches.
No, it is important for Mr Davidson to hear this.
On the day that we announce around £52 million additional expenditure on Scottish students, Mr Davidson says that this budget will not provide for wealth creation in Scotland. That indicates a fundamental misunderstanding of the importance of education to wealth creation. He should pay more attention to that.
I want to make something absolutely clear to Ms Sturgeon, Mr Wilson, Mr Ingram and others who have said that this budget would not fund the Cubie proposals. The Scottish National party's penny for Scotland—the much-celebrated penny for Scotland that was, of course, not a penny but £230 million, as I am sure Mr Russell will remember from his pre-shaving days—would, in the year after next, have delivered £50.9 million for Scottish education as a whole. The SNP could not have funded even the proposals that Henry McLeish presented to the chamber this afternoon, never mind the exaggerated proposals that it wanted to put forward. Let us get that absolutely clear.
No, I will not give way. The members had their chances earlier. They have had plenty of chances in this debate and in others, and not once have they put forward a reasonable suggestion as to how we could move money from one area to another.
Mr McNulty and Mr Raffan made important contributions to the debate, pointing out—as Mr Raffan in particular has been careful to do over recent months—the extravagant promises that have been made, not by back-bench members of the Parliament, but by the front-bench spokespersons of the Scottish National party.
Mr Fergus Ewing proposed in December to fund the whole agricultural business improvement scheme to the tune of £23 million. Fergus also has his own solution to the problems of the health service—a promise a day keeps the doctor away. He promised £150 million to Scottish business to revise the rate poundage that I announced in December.
The SNP proposes to magic £2.5 billion out of nowhere and does not propose so much as a saving of a pound in any area.
The Executive's budget provides a vision for a better Scotland. It does so because we have power in this chamber. I do not agree with Adam Ingram's contention that this is a Parliament without power or serious responsibilities. We have the power to spend a huge budget—over £16 billion. We have the power to make laws, we have the power to improve our road and rail networks, we have the power to deliver better housing, better health and better education and we have the power to tackle crime in Scotland.
Those are fundamental responsibilities that are vital for the day-to-day lives of the people of Scotland. More money is only a part of the solution. Serious debates in the chamber, new resolutions, new laws and new proposals will be equally important. That is what will come from this Administration. This budget is only the start. It provides a foundation on which to work.
I will use the comparison that was made by Mrs Goldie—I mean Miss Goldie. I apologise for being mistaken about what she once referred to as her forthcoming marital status. To use the comparison that was made by Miss Goldie, not only is the budget fit for Scotland, it was made to measure for a better Scotland.