Infrastructure (Public Investment)

– in the Scottish Parliament at 9:30 am on 23rd March 2000.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 9:30 am, 23rd March 2000

The first item of business this morning is a debate on motion S1M-676, in the name of Fiona Hyslop, on public investment in the infrastructure of Scotland.

After the four opening speeches, I will call the maiden speaker, John Scott, from the constituency of Ayr. We should establish the tradition that maiden speeches are not interrupted and are reasonably non-controversial.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 9:31 am, 23rd March 2000

This debate is about rebuilding Scotland. It is about the investment in Scotland's infrastructure that this week's budget failed to address. The purpose of today's debate is to put into a proper context the question of how best to fund Scotland's public service infrastructure.

The objective of the Scottish National party in lodging the motion is to show that, far from delivering the optimum level of public service within the devolved settlement, the Lib-Lab coalition is selling the people of Scotland short. Devolution was meant to be about home rule, but this Government is not even operating the home rules well, in Scotland's interest, and the away rules of Westminster place intolerable restrictions on our abilities as a nation. Scotland needs to be rebuilt—we need houses, schools and roads, which must be built well, making good use of public money.

I will speak about the area in which I work most—housing. Since 1997, new Labour has spent £116 million on new housing partnerships. In the first two years, only 695 units were completed—either modernised or new build. If that same amount had been spent by local authorities, based on an average of 20 units of new-build housing per million spent, a total of 2,320 units would have been completed in the same period, or 7,500 units would have been fully modernised, or 23,000 homes would have had new windows and new central heating.

Council house building has almost ground to a halt. In 1998, the last year for which figures are available, there were only 86 new-build council houses in Scotland.

According to the Convention of Scottish Local Authorities, the 75 per cent clawback rule for local authority capital receipts has meant that 30,000 houses have not been modernised; 5,500 window replacements have been cancelled; and 9,500 central heating systems have not been installed. The 75 per cent clawback rule was brought in by Michael Forsyth, continued by the Labour party and carried on by the Lib-Lab Administration.

Those figures are by no means unique if one examines the spending records of the governing coalition. We are told in press release after press release about its spending plans—money is announced, reannounced and announced again. Cuts are trumpeted as increases and standstill budgets are heralded as breakthroughs. It is the policy of spin over substance and the politics of massage and finesse.

When members debated the local government finance settlement recently, the discomfort on both Labour and Liberal Democrat back benches was palpable. Labour and Liberal Democrat members knew that the SNP's accusation was accurate. They knew that the settlement was not a real-terms increase, but a real-terms cut. They knew that the accusation was true because they saw the reality in their own constituencies. If any one of them was unaware of the situation, the humiliating defeat of the coalition parities in the Ayr by-election would have brought even the most obstinate believer in Lib-Lab spin to their senses.

The accusation that is often levelled by members of the Lib-Lab coalition against me and other SNP members during these debates is that we refuse to say how things would be paid for or that we make rash spending promises. We are either damned as profligates or condemned as cowards. Nothing could be further from the truth. I am tempted to use the intemperate language of the Minister for Enterprise and Lifelong Learning in the post offices debate to describe the accusations levelled at the SNP. I fear that, if I were to do so, I would fall foul of the Presiding Officer.

Before I enter the substance of the debate, I wish to challenge some of the allegations, so that those who peddled them can take the opportunity to retract what they have said and to put the record straight.

I refer first to Mr Raffan. On 16 January, he listed a series of promises that the SNP had allegedly made. He said that I had committed the SNP to an extra £175 million on housing. He failed to mention that the £175 million was part of our spending commitments and had been costed at the most recent election. He added that figure to an alleged list of SNP commitments in the full knowledge that the commitment was merely a reflection of a manifesto pledge.

We should examine closely what is being said. Both the Minister for Finance and the Minister for Communities have said in the chamber that the SNP would write off the estimated £920 million of Glasgow City Council's housing debt. We have long presented a case that, under independence, we would transfer the local authority debt. Under devolution—

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I will continue.

Under devolution, we have said that if we were to use the same funding mechanism as the Executive to relieve that debt—not a penny more, not a penny less—it would free up to the city council an extra £104 million in revenue every year. That revenue figure, along with the existing £20 million that Glasgow currently spends on capital from revenue released from earlier debt packages, would give an annual capital spend for the city of £124 million. That would bring in more than £1.2 billion of investment over 10 years, without stock transfer and at no greater cost than the current Executive proposal.

Photo of Hugh Henry Hugh Henry Labour

Fiona Hyslop said that devolution was meant to be about home rule. Can she confirm that all the spending promises made by SNP spokespeople over the past few months will be delivered in the event of an SNP Administration, in a devolved Scottish Parliament with a devolved budget?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I am glad that the member has identified that the SNP will be the Administration. I am more than happy to go through the spending commitments that I have made—[MEMBERS: "Answer the question."] We are offering real, constructive opposition, real alternatives and real suggestions. That is the theme which I wish to carry forward today.

I would like to carry out a critique of the current Administration. This week, the Minister for Communities announced what she described as great news for Scotland's tenants. That great news was that local authorities would be allowed to borrow the princely sum of £155 million. Not only was that borrowing consent announced as if it was extra money from the Government, but it was announced as if it was an increase. In real terms, it was a cut on the previous financial year.

That announcement was made as if it was the best deal in ages when, in reality, at today's prices, investment in Scotland's public sector stock has fallen from £687 million in 1989-90 to £320 million in 2000-01. Even that £320 million includes £110 million from councils' own revenue. Put bluntly, councils are having to divert money away from repairs and maintenance to subsidise a collapsing capital programme. Add to that the 75 per cent clawback rule and local authorities next year will lose a further £165 million in capital receipts.

Scottish local authorities are suffering an effective double whammy. Their income from capital receipts is falling dramatically, and the Government has cut the amount that councils can borrow to pay for their capital programme. Instead of being great news for Scottish tenants, the announcement is grim news for Scottish tenants.

In my speech in the housing debate on 13 January, I called for increased flexibility in the way in which local authorities are given permission to borrow, in relation to the housing revenue account. I was mocked by Tavish Scott of the Liberal Democrats—that was unfortunate. However, I was heartened to receive support from an unexpected source: the Labour-oriented Institute of Public Policy Research. In the IPPR report on the private finance initiative, published last week, John Hawksworth, who is head of macro-economics at PricewaterhouseCoopers, argued for greater fiscal autonomy for local authorities, and that the example of the financial freedom of the Post Office could be applied to councils. He said that

"it seems perfectly possible that this discretionary granting of additional financial freedoms could be extended on a case by case basis to other public sector bodies such as beacon councils and other high performing public sector organisations."

Beacon councils do not exist in Scotland, but the principle is the same. Indeed, it is very much in line with the benchmark standards that the SNP has argued would help direct housing policy. Where a council has a sound business plan and a proven track record, it should be allowed to borrow what it requires to get the job done. Even local authorities that did not pass that test could set up arm's-length companies to enable that within the current regime without changing the existing Treasury rules. Again according to Mr Hawksworth,

"Immediate candidates for such treatment would include local authority activities (for example housing and local transport) that can be transferred into arms-length companies".

Photo of David Davidson David Davidson Conservative

Yesterday, the SNP made great play of requiring ministers to be honest and give full answers. I hope that that applies to shadow ministers, too. Will the member give us figures for what public debt she thinks is reasonable and how it should be dealt with?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

That is an important point. If we consider what we are capable of delivering within the Maastricht criteria, we will still be able to allow the public sector authorities to use the money that we have. What is important is using the money that we already have.

Photo of David Davidson David Davidson Conservative

Will the member give us a number?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I can tell members that 60 per cent is the rule on Maastricht criteria. We are currently well below that and there is room for manoeuvre. Currently, we can provide local authorities with enough resources—using existing resources—for the investment.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Will the member give way on that important point?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

No, I want to carry on.

It is important that the arm's-length public companies are able to borrow under the same commercial freedom rules under which the wholly owned Post Office is allowed to borrow. The income streams of such companies would not come from taxation, so they should not be subject to crude Treasury caps.

It is clear from Mr Hawksworth's comments—and he is not necessarily a supporter of mine—that existing Treasury rules would allow that to happen. There is no reason why local authorities cannot borrow the money that they require, apart from the fact that the Executive is not prepared to negotiate with the Treasury or to consider new and imaginative ways in which to help local authorities to meet their funding needs.

I would like to move to the arguments put by COSLA for the abolition of section 94 of the Local Government (Scotland) Act 1973 consents for local authority borrowing. Those are the consents that local authorities get from the Scottish Executive for borrowing for public works. Those borrowing consents count twice: first, when the money is borrowed and, secondly, when it is repaid. That is clearly an anomaly and one that could be easily remedied by the Executive. COSLA estimates that ending that practice would release an additional £360 million to be spent on our schools and roads.

That change would be directly in line with the Treasury's moves towards resource accounting and budgeting. Under that new regime, the concept of accruals accounting would be introduced; major capital expenditure would be accounted for over the lifetime of the expenditure. Put simply, if one borrowed £30 million to fund an asset with a lifetime of 30 years, it would be accounted for over the 30 years, rather than at the time of transaction, which is what currently happens. The Executive could move to that system if it chose to do so. All that would be required would be for the Executive to think creatively—to think outside the box.

Quite apart from creative thinking, the Lib-Lab coalition is failing in a fundamental way. It is not fighting Scotland's corner in discussions with the Treasury. To meet the Maastricht criteria, the ratio of net debt to gross domestic product cannot exceed 60 per cent. The Chancellor of the Exchequer has introduced a self-imposed cap of 40 per cent on that ratio, arguing that he needs the flexibility of an extra 20 per cent in case of rough times ahead.

According to the IPPR, the gap between the current debt to GDP ratio and the chancellor's self-imposed cap is £75 billion. That is an estimated £15 billion per annum across the UK for the next five years. The IPPR report says that we would have had the scope

"for all the PFI investment and more to be financed 'on balance sheet' had the government wished to do so".

That is on a UK basis.

Photo of Allan Wilson Allan Wilson Labour

Who would be responsible for that debt? If the Government were responsible for guaranteeing the debt, the plans would not work—the money would be part of the national debt. That would hardly be an economically responsible move.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Well done. Allan Wilson has identified the issue. We have a war chest of £60 billion or more that could finance this. If the Scottish Parliament was a real parliament, with real powers— [Interruption.] That is the point of the debate. Let us consider the scope and powers that we have. Even within the context of devolution, the SNP is suggesting practical examples of things that could be done.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

No, I want to push on. I have already taken several interventions.

I understand that the chancellor might be saving all this money for a rainy day. However, as far as Scotland's public services are concerned, it is pouring outside—and in many schools it is pouring inside. That is the charge that I level at the Executive. There is more than ample room for manoeuvre in the fiscal armoury—all the Executive has offered us are the blunt ideological weapons of stock transfer and PFI. I suggest to the chamber that that is a set of circumstances that would not be allowed to develop under an SNP Administration.

I would like to refer now to the chancellor's budget. If ever there was a missed opportunity, it was that budget. Not only could the chancellor have relaxed the fiscal tightening that I have detailed, but he could—as was called for by the Deputy First Minister—have opened that war chest of nearly £60 billion over the next five years. He could have announced a huge investment in public infrastructure to repair the damage of the past 20 years, but he failed to do so.

Over the next five years, the London Treasury will collect £20 billion in Scottish oil revenues—one third of Gordon Brown's war chest.

Photo of Richard Simpson Richard Simpson Labour

At which prices? Today's? Tomorrow's?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Those are Treasury estimates.

That war chest is not Gordon Brown's war chest: it is the people's money, not the chancellor's. Despite that, the extra spending in Scotland will be less than £400 million. He has left the economy stuck in a sterling straitjacket, in which the pound has appreciated against the euro by a massive 35 per cent since 1996, crippling manufacturing and exports.

Photo of Murray Tosh Murray Tosh Conservative

What will be the implications of increasing public expenditure to the degree that the member suggests? What would be the impact on interest rates and interest rate expectations? What would be the impact on the pound? What would be the impact on our economy?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

That is very interesting. The same kind of expenditure that would be happening under the private finance initiative is happening under the public-private partnerships. Both have an inflationary impact. All that is happening is the replacement of one way of funding public investment with another.

Increases in revenue spending on education have been announced, but we have yet to hear the Scottish version. I am not sure whether we will have an emergency statement on education. From what we can gather, any increases will be swallowed up by cuts that Labour has imposed at local authority level. For example, on education, the increase in spending in Scotland should be around £90 million—but when compared to local authority funding in the last year under the Tories, there will be a cut of £540 million in local authority funding for next year. On transport, the Scottish share should be around £25 million—that is barely a quarter of the more than £100 million that has been cut from next year's Scottish transport budget when compared to the budget in the last year under the Tories. That figure of £25 million is a fraction of the estimated cost of the strategic roads review.

There may be those who are locked in the oncoming headlights of the chancellor's spin. However, we should expect the Scottish Executive to stand up and fight for Scotland's infrastructure so that we can build a better Scotland.

Let me give the Executive a five-point demand from the SNP. First, open the £60 billion war chest to support public services. Secondly, increase the freedom of local authorities to borrow the money that they need—all of which would be within the Maastricht criteria and is money that is available now. Thirdly, relax the 75 per cent clawback rule to free a further £165 million for public housing. Fourthly, abolish section 94 consents. Fifthly, set up feasibility studies into public service trusts to replace discredited PFI schemes.

Ken Livingstone says that he will use a bond system to pay for investment in the London underground. Is this coalition admitting that it does not have the courage to do here what the London Assembly naturally expects to be done in London? Ken can do it, but the Executive cannot. We want this Parliament to be a normal Parliament, with real powers. That means powers to use public money sensibly for public works to rebuild Scotland. Our Scotland, crumbling under this Administration, can be rebuilt—but not under this Government.

I move,

That the Parliament recognises that, to enable Scotland to become a dynamic, prosperous country prepared for the 21st century, priority must be given to the provision of quality affordable homes, a high standard learning environment for children, and modern high quality communication links; notes the difficulties facing Scotland's public services and infrastructure, and calls upon the Scottish Executive to consider ways to increase the scope and powers of the Scottish Executive and the Parliament to provide necessary funding.

Photo of Wendy Alexander Wendy Alexander Labour 9:49 am, 23rd March 2000

We in the partnership welcome this debate, which comes less than 48 hours after a Labour chancellor has delivered new support to the health service at around twice the historical average. We welcome this debate 48 hours after a Labour budget that brings a massive boost of £300 million to Scottish spending this year and over £2.4 billion over the next four years. We welcome this debate because it offers the opportunity to acknowledge the fact that, when it comes to social infrastructure, Scottish families now look forward to public spending surpassing its highest ever level in real terms in Scotland.

The budget is a tribute to the effective management of the economy. Let me remind the Opposition benches of the achievements—stable inflation, the lowest unemployment for 20 years in Scotland, the highest employment levels for more than 30 years in Scotland, and GDP growth above the European average.

Photo of Wendy Alexander Wendy Alexander Labour

Not at the moment.

That success has been built on a disciplined approach to public spending, which is now creating the basis for sustained investment, built on sustained growth. That is not just any old public spending, but the right spending. When Labour came into office in the United Kingdom, the cost to the public purse of debt repayment was more than the entire sum that the rest of the country spent on its school system. We have laid the basis not only for growth, but for the sustained investment in public services that the Tories were never prepared to make. We are proud of the fact that over £1,000 million of capital projects are now being built in Scotland and that that is being done by a range of public and public-private sector partnerships.

Photo of Annabel Goldie Annabel Goldie Conservative

In relation to the Conservatives' record on the infrastructure, does the minister accept that the First Minister has adopted several of the PFIs that were instigated by the Conservative Government? Further, does she accept that, in doing so, the First Minister has embraced—admirably—the concept of PFI and made a significant contribution to the health infrastructure to which she alluded?

Photo of Wendy Alexander Wendy Alexander Labour

There is a role for public and private investment working together, but unlike the Conservatives, we have built in a number of guarantees on the efficiency of the spend and for the workers.

When the SNP—the party that leads the debate today—starts to lecture us on economics and public spending, let us remember its record. Economics is rather dangerous territory for the nationalists, and credibility is in short supply on their benches. Perhaps Fiona Hyslop is here today because if Alex Salmond were leading the debate, he could tell us whether he still believes his comment, made last year, that 50p personal taxation is not a disincentive. If Alex Salmond were here, we could ask whether more than doubling the income tax burden on families in Scotland would meet the public infrastructure requirements that the SNP now wants.

Perhaps John Swinney would be a better bet. If he were here, he could tell us whether interest rates in an independent Scotland—[MEMBERS: "He is here."] I am sorry, John. Should those interest rates continue to be set by the Bank of England?

Andrew Wilson has joined us today. If he were leading for the SNP, perhaps he could pull out his calculator and tell us the latest estimate of the size of the Scottish deficit this year.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

According to the Treasury red book and the forecast for oil revenues that it contains, Scotland contributes—and will continue to contribute—more to the Treasury than it will get back over the next five years. Do not take my word for it; the London City firm Chantrey Vellacott DFK concludes the same thing.

Photo of Wendy Alexander Wendy Alexander Labour

The same firm rubbished the SNP's plans last year.

A host of other SNP economic experts are here today—Fergus Ewing with his pet plan for the relief of small businesses; Kenny MacAskill with his new roads; and Kay Ullrich with her hospitals. None of those plans has been costed, but reality has led to some pruning of the money tree in recent months. We heard this morning from Fiona Hyslop that no longer does the pre-election promise to write off £1,000 million in housing debt hold. Instead, we have an admission that the Executive has got it right.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

When the SNP first suggested that one of the ways of dealing with housing debt in Scotland was to transfer the debt to the national Government, the suggestion was described as fantasy economics. Now the Executive has adopted it. Will the minister admit that she has adopted that principle and that the way in which she will fund transfer of debt will apply to this Parliament, the next, and the next? It will be funded from the proposals that are being put forward now. It is the same money and the same proposals. Does the minister agree?

Photo of Wendy Alexander Wendy Alexander Labour

Fiona Hyslop has confirmed that she no longer proposes the write-off of housing debt, but she is proposing the servicing of it. The essential point in today's debate is that the SNP has said that it will not put private investment into bringing about a step change in Scotland's housing stock. The SNP is prepared to say to householders in Scotland that if they are council tenants, they will continue to be denied private investment for a step change in their house. That goes to the heart of today's debate.

I had written a speech that was based on the SNP's policy for public finance as it was articulated at the previous general election. That was based on public service trusts. However, we have not heard one word about that policy this morning; instead, the SNP has chosen, chameleon-like, to advocate frittering away the Government's sound and prudent management of the economy and to find no role for private investment in housing.

I think that the SNP has at least left behind the blinkeredness of people such as Mr Tommy Sheridan—who has not even joined us today—who say that even though Scotland might have Victorian sewers, schools and hospitals, we should stick to Victorian financing: we have to save the money before we build and are not prepared to take a ha'penny from the banks.

Interestingly, the SNP has said today that it is prepared to use public investment only for Scotland's infrastructure. That is simply not the way to go. The nationalists have found an academic in London who says that it might be possible to pretend that public spending is not public spending, and they have tried to build an economic strategy around that.

Let me make it plain to the SNP: public spending is public spending. If we borrow from the private sector and retain those assets throughout the lifetime of the Government, we will have to meet the full costs of the public sector borrowing requirement—or public sector net borrowing, as it is now known. The SNP's policy would mean that dozens of projects in Scotland would not go ahead—not the four new hospitals, the eight new transport projects, the dozens of new schools. The SNP cannot have it both ways.

Photo of Wendy Alexander Wendy Alexander Labour

No. I want to carry on.

There is another point that the SNP has missed completely, in its suggestion that the issue is merely about the costs of borrowing. Private finance is not an evil; there is nothing evil about using partners and external expertise where appropriate. It is not the cost of inputs that really matters, but the right outputs. Value for money means incentives to deliver in line with contracts, so that the public sector does not have to bear cost overruns; payment on the basis of results; and access to private management skills.

Such measures will allow us to deliver a 40 per cent increase in the amount of public spending on housing planned by the Tories over this five-year period. Uniquely under the SNP, council tenants will not be allowed to benefit from the new private investment that has gone into other socially rented housing. Housing associations have been able to provide 70,000 houses over the past 10 years; if private investment had not been available, 25,000 families would not have a home today. That principle is behind community ownership and the new housing partnerships; the issue is not just about lifting the debt burden, but about the step change in investment.

Such an opportunity is available in Glasgow, where private investment will mean an estimated £15,000 for improvements on every rented home. Other public-private partnerships will provide 11 brand new secondary schools and the refurbishment of a further 18.

We will not be dogmatic: where private investment is not appropriate, we will not use it. For example, in Glasgow, the extension to the royal infirmary is being built with public money because it is better value for money. If the SNP follows the route that it has outlined today, it will take 20 years to get the condition of housing stock up to the standards that tenants deserve.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The SNP's position is absolutely clear: there is a role for private finance in housing. Lenders who have discussed the Glasgow situation with us have told us that the loans might be so large that they would have to issue bonds. Can the Government not inject private capital and still make sure that the ownership of assets remains in the public sector? People want public assets that are owned by the public sector. I admit that housing needs private finance, but the Government has to think differently and creatively about generating such investment.

Photo of Wendy Alexander Wendy Alexander Labour

That is the essential dishonesty. Any local authority can borrow money from the private sector, but it counts as public borrowing. To imply that public borrowing is not public spending is dishonest. My question to Fiona Hyslop—perhaps she will answer this in her winding-up speech—is: why is it all right to bring private investment into hospitals or education, but not into housing? If we go down the SNP route, we will miss the opportunity to recruit all 1,000 of the craft apprenticeships that are to be recruited in Glasgow this year; the opportunity of construction on a scale larger than we have ever seen before. As soon as there is effective management of the economy, the SNP says that it no longer sees a role for public and private to work together in partnership and that it wants to revert to the old ways instead.

After 20 years of Victorian values, Scotland no longer needs to live with the Victorian squalor of dilapidated homes. Those days can be behind us. We need to do things differently.

Let me make that real. On the transport PPPs, is Fiona Hyslop really saying to her constituents that she does not want the PPP transport link through west Edinburgh? Does Andrew Welsh really want to say to his constituents no thanks to the upgrading of the A92 in Angus? Does Alex Neil really want to say that the project in Kilmarnock should not go ahead? Does Dorothy-Grace Elder really think that we should say no to a new secondary school in the east end of Glasgow? Would Fergus Ewing say no to a new terminal at Inverness airport?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Is not the central point of the debate that financing under PFI is much more expensive than Government borrowing? As the minister wants to hear from London experts, does not she agree with John Hawksworth, head of economics at PricewaterhouseCoopers, who said that there is no reason why public investment could not be financed by public Government borrowing?

Photo of Wendy Alexander Wendy Alexander Labour

Let me deal with exactly that point. The rate at which local authorities in Scotland pay interest on their loans—it is called the pool rate—is about 8 per cent. If I were a housing association and wanted a 20-year loan from the private sector to build houses in Scotland, it would cost me about 6.5 per cent. The reason for that difference is that when local authorities borrowed money in the 1970s and 1980s, interest rates were higher. We do not subscribe to the principle that, because interest rates are a bit higher, we should say that we will not build anything for the next 20 years. The differential in the cost of money is less than 1 per cent. As I have tried to say, less than 1 per cent implies that the only benefit of PPPs is the cost of financing. That is a deeply dishonest—I am sorry, Presiding Officer; I should not use the word dishonest—and reactionary position, because it fails to acknowledge that there are management improvements, whole-life costing and so on.

I am interested to hear from the SNP, because—I think this is the position of the academic it quoted—it fails to acknowledge all the other benefits that can be realised through a partnership approach. When members consider the future of our Parliament, I hope that they will consider the advantages of using contractors with expertise and will not try to imply that the only issue is the cost of financing.

The politics of posture, which is what we are seeing today, will not build a better Scotland. Money trees are the politics of protest. We are about delivery—new schools, new hospitals and new homes. After the years of neglect, it is our responsibility to ensure that every pound of public money works as hard as possible to achieve as much as we can for our communities. To do that, we must be prepared to lever in expertise and investment from elsewhere. We must be innovative and open minded about the delivery of public services, because that is the only way in which we can meet the real needs of our communities and deliver for a new Scotland.

I move amendment S1M-676.1, to leave out from "notes" to end and insert:

"and welcomes the action taken by the Scottish Executive to provide the policy framework and secure the resources necessary to achieve the targets set out in the Programme for Government and make a real difference in our communities."

Photo of Annabel Goldie Annabel Goldie Conservative 10:05 am, 23rd March 2000

There would be little disagreement that the stated objectives for Scotland as described in Miss Hyslop's motion are manifestly worthy. A "dynamic, prosperous" Scotland with

"quality affordable homes, a high standard learning environment for children,"— why stop at children; I would have said everybody—

"and modern high quality communication links" is a vision that we all embrace. As has already been said, the challenge is not the vision; it is the funding. The somewhat luxuriant language of the latter part of the SNP motion seems to be steering towards a very familiar Scottish nationalist path that is becoming well worn with the tramp of spend, tax and the familiar signpost of independence, proclaiming economic nirvana. It was at that point, Presiding Officer, that the motion gave me the jitters. Desirable is not the same as affordable, hence the amendment to the motion in my name.

The rub in all this is the money. When it comes to infrastructure, there are three options. Option 1 is to do nothing. That seems to be pretty well the Executive's preferred option in relation to transport. Option 2 is to do something: add to public sector borrowing and tax to pay for it. Option 3 is private finance initiative: let public-private partnerships work for mutual benefit.

Looking at the motion, I shall credit the SNP with ruling out option 1—I assume that its agenda is to do something. I become much more alarmed when I anticipate—and I have now heard it—that the SNP will rule out option 3, given its notorious opposition to PFI. That means it can go only to option 2. Miss Hyslop has tried to explain, very eloquently, why she considers option 2 not to be the Stalinist, socialist formula of former years, but an enlightened, imaginative use of finance.

The minister and I have often disagreed about a great deal of things in this chamber, but I firmly agree with her in her analysis of Miss Hyslop's suggested solution. I, too, had prepared a speech dealing with the SNP's Scottish public service trust. I had understood from Mr Salmond's comments last year that it was the flagship for dealing with public finance. It seems to have sunk somewhere along the line, as there has not been too much reference to it today.

When he unveiled that vehicle, Mr Salmond was talking about the Skye bridge. He said that the pledge that the SNP would make before the last election, to buy out Bank of America as operator of the Skye bridge and to scrap the tolls, would be achieved under the device of a public service trust. According to the SNP, Holyrood would then have had to put up an extra £4 million a year to pay for so-called shadow tolls. It alleges that that income would enable the trust to pay off the interest on its debt.

Given the rosy vision of this morning's motion, the £4 million would be just a start. Reference has already been made to spending pledges given by the Scottish National party in this chamber. I shall not re-articulate them, but they are numerous. Miss Hyslop argued that the election pledges are costed.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I referred to the SNP's spending commitment of £175 million from before the election. It was to be seed money for a homes and communities public service trust that would inject the private finance the minister mentioned, but in such a way that housing and the responsibility for access to housing remained a public responsibility and was not hived off as a private arrangement. That is a practical example of how public service trusts can deliver the affordable homes mentioned in the motion. Perhaps the member could comment on that.

Photo of Annabel Goldie Annabel Goldie Conservative

I acknowledge that Miss Hyslop told the chamber that that proposal had been costed as one of her party's election pledges. As was clear from her proposition, however, her whole argument assumes an independence—

Photo of Annabel Goldie Annabel Goldie Conservative

Well, so she says. I get even more alarmed about the tax implications. What, I think, is not being addressed by the Scottish National party is the fundamental difference between using private money in a private finance initiative and using private money to fund what I think is called a nationalised administration of borrowing. I have to agree with the minister on that point. The two approaches are different: the comparison is not between apples and apples but apples and pears. Fiona Hyslop might believe that her apples are rosier than my pears. We will simply have to disagree.

Photo of Annabel Goldie Annabel Goldie Conservative

I feel apprehensive, but I will.

Photo of Margo MacDonald Margo MacDonald Independent

I am sorry to upset the apple cart. Does Annabel Goldie realise that the choice is not between two different ways of choosing money but between a first-rate health service—which we had in the old Edinburgh royal infirmary—and a substandard one?

At present, a grade G nurse has responsibility for 32 or 33 beds. I have just learned that in the new Edinburgh royal infirmary—which was started under the Tories and will be finished under Labour—a grade G nurse will have responsibility for 50 beds. The difference in quality of care that can be delivered by a PFI should be considered, not just how much it will cost to borrow the money.

Photo of Annabel Goldie Annabel Goldie Conservative

With diffidence, I disagree with the formidable Mrs MacDonald. I do not agree that the choice is not simply between ways of borrowing the money. That is precisely what it is. The new royal infirmary is being constructed and I am sure that the people of Edinburgh welcome that. I must point out that, if the only way to secure funds for the hospital had been by old-fashioned public sector borrowing, that infirmary would not be being built.

If I seem cynical about the SNP's proposals on funding public infrastructure, it is because of my suspicions about the party's attitude to taxation. We know from the SNP's pre-election pledge that if the SNP had formed the Executive Scotland would have been the most highly taxed part of the UK. The SNP's "penny for Scotland" policy was penny wise and pound foolish: the burden proposed by the SNP on the public sector debt and the taxpayer would severely restrict the spending power of this Parliament. The Scottish public service vehicle that has been outlined today is nothing more than a mega-quango. The SNP finds it hard to argue that it can deliver its vision for Scotland by the method that has been described today. I am not satisfied that it would be able to.

That private finance initiatives are the best and most imaginative way forward is not an opinion that is held only by me. Were that so, I doubt whether the Executive would have had anything to do with them. The Executive realised soon after coming to power that PFIs provide an efficient and manageable means of accessing capital to provide essential investment. They allow the Government to provide better public services at a lower cost to the taxpayer. The services remain publicly owned, but the use of private sector capital and skill means a better deal for the taxpayer.

Mr Ewing referred to an independent report; I will refer to another. Arthur Andersen and the London School of Economics concluded, on 10 February 2000, that the private finance initiative appears to offer excellent value for money. The study, commissioned by the Treasury's PFI task force, examined 29 projects and concluded that, compared with the public sector estimates of the cost of buying the same projects conventionally, average savings run at 17 per cent.

The current structure of our water authorities bears examination. They have difficulty accessing capital because of their structure. In my opinion, accessing external capital is vital if they are to continue with the essential infrastructure investment in which they will have to engage.

The position is made a little more complicated by the Labour-legislated Competition Act 1998, which was introduced on 1 March 2000 and will ensure that dominant forces in a monopoly have a difficult time establishing the legitimacy of continuing to operate unchallenged. If we think that our water authorities will be immune from the consequences of the Competition Act 1998, we are misguided.

What we want in this chamber is a mature debate on the water industry and the supply of water in Scotland, without any of the ideological baggage that has dogged the subject in the past. All issues and possibilities must be considered if the quality of service is to be improved, if Scotland's environment is to be protected and if the households of Scotland are to receive real value for money.

Photo of Brian Adam Brian Adam Scottish National Party

Will Miss Goldie concede that PFI or PPP—whatever the latest version is called—does not allow public authorities the flexibility to adjust and make the changes that the public sector borrowing requirement, or whatever its new name is, allows in terms of publicly owned and managed assets?

Photo of Annabel Goldie Annabel Goldie Conservative

No, I do not agree with that. Where they have been used, PFIs have been used for specific projects, which is why they have been popular in the health service and in education. They have also been used, to a limited extent and for specific projects, by water authorities. That has shown the merit and value of PFI.

The task with which our water authorities are saddled is having virtually to renovate and replace centuries-old infrastructure. At the moment, they are trying to do that through huge capital expenditure out of revenue, which means very high charges for the customer—as members will know, having recently received their bills. This is an area in which there must be mature and intelligent debate, as the current structures are restrictive. We must be prepared to consider how we can enable water authorities to access external capital to give the people of Scotland a more manageable and affordable deal than they currently receive.

I move amendment S1M-676.2, to leave out from "to increase" to end and insert:

"other than using its powers to propose rises in taxation, to stimulate investment in Scotland's essential public services and infrastructure."

Photo of Keith Raffan Keith Raffan Liberal Democrat 10:17 am, 23rd March 2000

Without upsetting Miss Goldie too much, I would like to say that I agree with much of what she said at the tail end of her speech. That may be worrying for her.

How water authorities access capital is important, especially considering their massive burden of renewing infrastructure, which was estimated by the Minister for Finance at around £5 billion. That is a priority, as they are dealing with infrastructure that has not been adequately maintained and is way out of date. We must consider openly how the necessary money can be accessed more readily than through the unacceptably high charges with which customers are currently faced.

I hoped that this debate would not be a re-run of the somewhat bad-tempered debate in late June on PFI, PPP and the public service trusts. I hoped that it would be a constructive debate, so I drafted my speech in my usual constructive and positive manner. [Laughter.] I shall try to get the debate back on track and follow the positive course that Miss Goldie set in the last few minutes of her speech, if not in the earlier part of it.

We all agree that there is a huge backlog of maintenance and capital projects that are urgently required. All members can think of major projects in their constituencies that are urgently needed and for which local people are campaigning.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I would like to get a little further into my speech.

Mr Crawford is an example of what the SNP does on the ground, rather than what it says in the chamber. As the eminently intelligent leader of Perth and Kinross Council, before he was translated to become the somewhat less intelligent SNP chief whip in the chamber, he instituted a PFI for council offices.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Just wait. I will let Mr Crawford in but I am not finished with him yet. I want him to be able to reply to everything I am saying. He instituted a PFI and I know what he is going to say: "It was the only game in town. There was nothing else I could do. It was cuts in Government expenditure. It was so urgent for me to have a brand new big office in my new council headquarters. Think of my desperate need as council leader to have adequate facilities. I was driven to the necessity of a PFI."

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Very interesting and very clever, Keith. I will talk about the PFI in a minute—

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

Order. You cannot talk about a lot of things; this is an intervention.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Trying to get an answer into a question is not easy. Will Keith tell us why, during the local government debate, when it was clear beforehand that he was against what was happening in local government expenditure—I have often heard him talk about the difficulties of Perth and Kinross Council—he chose, on the day, to sit on his hands? He voted with the Government to put through the local government expenditure plans that are destroying local democracy, which he has said time after time is so important. It is time for him to talk with his hands—by pressing the right button.

Photo of Keith Raffan Keith Raffan Liberal Democrat

It is easy to answer that. I did not vote with the Executive; I abstained. Mr Crawford got that plain wrong, as he so often does. I will come to local government spending in a minute.

I arranged a meeting between the Minister for Finance and Perth and Kinross Council. There was an all-party council delegation, including an SNP councillor. I attended, as did Nick Johnston. Dr Simpson could not, unfortunately, attend, but sent his apologies. No SNP MP or MSP turned up.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No. SNP MPs and MSPs were informed but did not turn up. So much for the SNP's—synthetic—indignation about the local government finance settlement. I have not made that point in public before, despite Miss Cunningham's attacks in The Courier on Perth and Kinross Council, because I think it is more important to resolve such issues and to have constructive meetings, but it was a disgrace that no SNP member for either Perth or North Tayside turned up.

Let me get back to the constructive part of my speech—I have used half my time on the SNP. What a waste.

I said that each of us could think of projects off the top of our heads. I will give three examples for Mid Scotland and Fife. A new hospital for Angus is needed—whether based at Stracathro or elsewhere—costing £20 million. Spending is urgently needed on school buildings to deal with the backlog in maintenance and to upgrade all the schools that have portacabins or huts in their grounds. I visited Bell-Baxter High School in Cupar last week. It is a split-site school, which in itself is inadequate. Behind the old buildings there are 50 huts and portacabins, some dating back to the 1940s. That is not acceptable and dealing with it should be a top priority—and the problem is replicated in schools across Scotland. Bell-Baxter has a very good education record despite inadequate facilities.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No—I must get on. The Kincardine bridge is a priority because of the congestion and pollution in Kincardine. Scott Barrie, the member for Dunfermline West, and I recently attended a meeting of the west Fife villages forum where we heard about a higher than average level of asthma among children in Kincardine. The bridge is also crucial to the economic development of west Fife and Clackmannanshire, as Dr Simpson knows.

Those are only three projects in my area that should have high priority.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will give way in a minute if I can just try to make some progress—I am still on the first page of my notes.

The Liberal Democrat position—our federal policy—is that we seek alterations to the current unnecessarily restrictive Treasury rules on investment. Why does the Treasury stick so rigidly to a definition of public sector borrowing requirement that is the exception, and not the rule, in Europe? Of course that is a reserved matter, but it need not stop the Finance Committee considering it and its impact on Scotland. That definition has bred public-private partnerships, of which PFI is the principal example.

Photo of Murray Tosh Murray Tosh Conservative

If we can agree that the Finance Committee should examine that issue, will Mr Raffan commit the Liberal Democrats to support for PFI and PPP, to which they have been hostile in the past? Will he commit the Liberal Democrats to support the PPP for the air traffic control centre at Prestwick?

Photo of Keith Raffan Keith Raffan Liberal Democrat

We have always said that we will judge each project on its merits—that position is not very different from that of the Labour party. We have certainly criticised PPP and PFI, and I hope that we will continue to try to improve and develop the policy. Unlike the SNP policy of public service trusts, PPP and PFI are evolving and improving. The trouble with the SNP policy is that it has not evolved at all. It did not develop between last February, when it was announced, and last June, when we debated this issue. The SNP was thoroughly mauled in that debate when it was exposed that the three councils that the SNP had controlled—Angus, Moray, and Perth and Kinross—had all indulged, some more heavily than others, in PFI projects. SNP members have not answered the fundamental concerns about flaws in their policy.

To give credit to the Labour party—in partnership with the Liberal Democrats in the Executive—there have been notable developments in PPP and PFI. That policy should be a process, as should devolution. It should not be finite—we should always be examining ways in which to refine and improve it. That is why I hope the Finance Committee will eventually examine this matter—the convener and other members of the committee are here.

I hope that we will also examine public service trusts. In fact, we should take evidence on them, not from a few selected accountants or from individual academics, but from a cross-section, so that we get an objective view on public service trusts and can expose many of the flaws over which SNP members glide so rapidly.

Let me return to the constructive part of my speech.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No. I would like to give way, but I am only on page 3 of my speech and I have a minute to go.

It is crucial that our policy on PPPs should be open to innovation and flexibility. In the debate in June, the Minister for Finance responded positively on the issues of surplus land, employee protection—particularly in relation to pensions—assets reverting to public ownership and the provision of more information. I support what he said on those issues as moves in the right direction. We may have to go considerably further. It is now up to the committees—the Finance Committee on policy and the Audit Committee on particular PFI projects—to drive changes forward in a positive manner.

I am sorry that there has been so much petty point scoring today by SNP members. We have to respond to their silly attacks—we cannot let them pass into print without being challenged. I wish that SNP members would present positive suggestions. Miss Goldie and Ms Alexander were right about that. And, of course, I am right.

I agree with what Ms Hyslop said about the chancellor getting off the top of his treasure chest and about giving local authorities more freedom of action—I am on record as agreeing with her on those issues. However, the shadow minister provided no development of the policy of public service trusts, no detail, and no response to criticisms that have been made.

The Bank of Scotland and the Royal Bank of Scotland have been in a tug-of-war recently, but one thing on which they agree is mutual condemnation of the public service trust policy as unworkable and not feasible. The Opposition owes it to this Parliament not just to attack, but to propose. If the SNP is to be regarded as a credible potential party of government, it must propose policy in far more detail than it has done so far and it must respond to the valid criticisms of its policy that have been made.

Photo of John Scott John Scott Conservative 10:30 am, 23rd March 2000

I rise to express my grateful thanks to the constituents of Ayr for having returned me as its member of the Scottish Parliament. It is both an honour and privilege to have been elected to represent that famous constituency, and I will work as hard as I know how to represent the views of my constituents.

Although the election was keenly contested, now that it is behind us I will endeavour to represent the views of all my constituents, whether or not they voted for me. I also look forward to working with South Ayrshire Council, Westminster MPs and members of the European Parliament for the betterment of the constituency. While on the subject of thanks, I would like to thank members of this Parliament for their kind and warm welcome yesterday, both inside and outside the chamber.

Ayr is a particularly favoured constituency. It was Burns who described Ayr as a toon of

"Honest men and bonnie lasses".

Having called on what feels like every house in the constituency over the past two months, I can confirm that what was true more than 200 years ago is still true today.

I wish to raise many issues on behalf of the people of Ayr, Prestwick, Troon and surrounding areas, but I have been advised that a maiden speech should be non-controversial. For that reason, I will confine myself to raising one issue—the upgrading of the A77. That is of paramount importance to the future of the Ayr constituency and, indeed, south-west Scotland. I know that I speak for all parties and all my constituents when I say that.

The importance of the immediate upgrading of the A77 cannot be overstated. I was particularly disappointed that the budget for that job was not announced at the same time as the funding was put in place for the upgrading of the A1 and the A78 bypass. I know that the funding will not now be in place until 2002 at the earliest, and I seek an assurance from the Minister for Communities that in the next three-year programme the money will be available.

Because of the delay in the project, three years have been lost. More important, lives have been lost on the road, which has an accident rate 65 per cent higher than the national average. Business development opportunities have also been lost. In simple terms, that means jobs, and it is essential that we cherish existing businesses in the constituency and nourish new business start-ups.

The success of Prestwick airport over the past 10 years needs to be encouraged by adequate infrastructure, as does the aerospace campus at Prestwick. The current state of the A77 is a threat to those businesses. Indeed, Ayrshire is the only major industrial area in the UK not to be served by adequate motorway links. Tourism is another industry with huge growth potential in the area. It, too, needs to be encouraged by better road links. I seek an assurance from the minister that the Executive will commit sufficient funds from its next three-year budget round to fund the public-private partnership that it has promised my constituents.

I wish to express once again my gratitude to my constituents, who have sent me here. I will do everything in my power to be of service to them. [Applause.]

Photo of Andrew Wilson Andrew Wilson Scottish National Party 10:33 am, 23rd March 2000

I begin by congratulating Mr Scott on a very gracious and considered maiden speech and wishing him a happy, if busy, three years in his position as member for an excellent constituency. Every member in this chamber will wish him well in the work that he has to do over that period.

Today we are seeking to point up a serious constraint on the funding of Scottish devolution and the Parliament's entire programme. When we consider what is going to happen over the coming years, it can only be concluded that this process is unsustainable unless we do something. The Barnett squeeze, which we seek, where possible, to raise in every debate, is leading to artificial and sharp convergence of spending per head, without any reference to need or public choice.

The point of devolution is that we do things differently in Scotland. However, the financial constraints on this Parliament are making us do the same as the rest of the UK, which entirely misses the point. We do not want uniformity in how we deliver public services—it cuts against democracy and against public choice. It does not have to happen, as Scotland is a lucky country with a large landmass, a wealth of national resources and a small population. Obviously, that makes the delivery of certain services that are distributed geographically more expensive, but it also makes some of the administrative public services much cheaper to deliver.

At the modernising government conference on Monday, Chris Yapp, the research fellow at International Computers Ltd, said that much of the holistic programme that the Government seeks to promote across the UK would more usefully be delivered at a Scottish level, because the efficient and normal size of a normal country is around 5 million.

I suppose if public service, and this debate, are about anything, they are about the allocation of our scarce resources. My concern, which the SNP motion expresses, is that, within the constraints of devolution, we do not have the opportunity to deliver services in an efficient way that suits Scotland.

One only has to look round our public services to see those constraints. Every person would admit that there are problems in public services. For example, Kilsyth Academy, which the Prime Minister visited only a fortnight ago, is North Lanarkshire Council's second best school in terms of academic performance. I visited the school before the Prime Minister's visit. The school has giant mould growing in the main corridor, windows that are permanently leaking and doors that do not hold back the wind and the rain. Greenfaulds High School in Cumbernauld has a permanently flooded fire exit. The school can hold fire drills only when it has not rained in Cumbernauld for three consecutive days. Anyone who knows that area knows that that is an unlikely event. According to the Local Government Committee, North Lanarkshire Council needs £80 million to bring its schools up to standard. This issue cuts to the heart of everything that the Scottish Parliament is about, but how do we address it?

I say to Ms Alexander that, according to the Chancellor of the Exchequer's budget report, the current level of net public sector investment is still well below the levels of the early 1990s. I do not remember the Labour party, or anyone else, congratulating John Major's Government on his high levels of net public sector investment. Even with the backing of many PFI projects, Ms Alexander is failing. The level that she announced for local authority housing support this year is less than it was when Mrs Thatcher came to power in 1979.

That is the reality of the situation. We should recognise that Scotland is a rich country and that it does not have to be like this. We were told of the chancellor's approach, and that that was all that could be done because we cannot afford more, on a nod and a wink—indeed, the Labour party was sold PFI on that basis.

Leaving out the question of borrowing, even within the surplus that was available to the chancellor, by his own admission £60 billion is available over the next five years. On the Maastricht deficit criteria of 3 per cent, and without breaching the Maastricht constraints, the sum is much larger—£136 billion over the next five years. It is not prudence with public finances that stops the chancellor accessing those moneys; only a fear of inflationary tendencies in the south of England prevents him from doing so.

The chancellor tied himself into a sterling straitjacket in his first budget and in his approach to the Bank of England. Workers in the west midlands are now suffering from the sterling straitjacket, despite the quite disgraceful diversionary tactics of the Prime Minister, backed by the tabloid press in that part of the UK. Labour back benchers must believe that the sterling straitjacket has led to 22,000 manufacturing workers losing their jobs since Labour came into power, according to the Government's statistics.

Photo of Wendy Alexander Wendy Alexander Labour

It seems to me that there is a change in employment mix in all global economies.

Will Mr Wilson comment on the fact that unemployment is at its lowest level for a quarter of a century and that employment in Scotland is at its highest level since 1966?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am grateful to the minister for that question. She should be honest and admit that the figures that she has just quoted have been criticised as a fiddled Tory statistic throughout my time in politics and, when I worked as a civil servant, by the Labour party and by Labour ministers—Brian Wilson and others. [MEMBERS: "ILO."] No, the figures quoted by the minister are based on the claimant count; they are not based on International Labour Organisation figures, which do not show that unemployment is at its lowest level for a quarter of a century.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am happy to comment on the employment mix. Manufacturing is an important sector, according to the minister's colleague Henry McLeish, yet 22,000 manufacturing workers have lost their jobs since Labour came into power. I ask the minister whether she accepts any responsibility for that fact.

The reality is that our current structure provides needless constraints. PFI need not happen. It is an option that we can use if we so wish, but there is no need for it within the financial strictures that the chancellor has set, the golden rule for borrowing and the fiscal constraints for national debt.

That is why the report from the Institute for Public Policy Research—not known as a hotbed of nationalism—concluded that this Parliament can do better and can do more for Scottish public services. Two thirds of Scots believe that this Parliament should have more powers and that we should be growing the process of devolution. If we are able to respond to that and lift our sights on what we can do, we may be able to deliver and achieve the consensus that Keith Raffan so needs.

Photo of Hugh Henry Hugh Henry Labour 10:40 am, 23rd March 2000

It is unfortunate that we have to have this type of debate in the Parliament. In a sense, it is a recognition of the fact that, in their 18 years in office, Conservative Governments destroyed the social infrastructure that had been built up by successive Governments in the post-war period. They managed to undermine our health service, our public sector housing, our education system and every important part of the social fabric that the people of this country took for granted.

Photo of Hugh Henry Hugh Henry Labour

Give me a minute; I have just started. It is also unfortunate that this debate is a wasted opportunity. Instead of talking about what we are doing to improve the legacy that was inherited by the Labour Government three years ago or about new investment in health and education and the radical improvements suggested for housing, the SNP's contribution could be described in a number of ways. Some people have said that it is a whinge and a whine; others have said that it is fundamentally dishonest.

Andrew Wilson has admitted that he thinks that devolution cannot deliver. That admission comes from the same people who say that they want this Parliament to work. Fiona Hyslop started off by saying that devolution was about home rule, but she went on to say that investment could be delivered only if the Scottish Parliament was a real Parliament. That is an admission that, for SNP members, this Parliament and Scotland's devolved settlement are not something to be taken for granted; they are something to be dismissed. That is the reality of today's debate; the SNP is dismissing this Parliament and the devolved settlement.

Despite persistent questioning, today and on other occasions, we have had no admission from the SNP that its promises cannot be delivered within the Scottish block by the Scottish Parliament. The SNP's arguments are pie in the sky and fundamentally dishonest, and they mislead the people of this country.

The SNP motion

"calls upon the Scottish Executive to consider ways to increase the scope and powers of the Scottish Executive and the Parliament to provide necessary funding."

That is exactly what the Executive is doing, but instead of giving the Executive credit for doing that, Fiona Hyslop and Andrew Wilson have talked about everything but their motion. They still have to address the basic tenets of the motion. They are ignoring it and dodging it.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Does Mr Henry recall that, in my concluding remarks, I gave five suggestions for practical things that could be done, the majority of which could be delivered under a devolved settlement? We are challenging the Executive to take on board those five constructive ideas. Mr Henry is right to say that this devolved Parliament is not enough for Scotland. We have to be independent. Which of our five ideas does he support and which does he reject?

Photo of Hugh Henry Hugh Henry Labour

Fiona Hyslop has admitted that she only glanced over those suggestions in her concluding remarks. She threw away some basic and brief suggestions, but she did not flesh out Alex Salmond's flagship proposals on the trusts or how the SNP intends to deliver its promises. We were supposed to be focusing today on how we would improve our housing and build new schools. The SNP motion calls for

"quality affordable homes, a high standard learning environment for children".

We should have been talking about finding ways of financing homes with better heating, double glazing and a more secure environment for our families—the things that the Executive is doing.

Photo of Hugh Henry Hugh Henry Labour

None of those things is being addressed by the SNP. This motion is fundamentally dishonest. The SNP has not offered a way out, within the constraints of our powers, for this Parliament to consider. SNP members are saying that this Parliament cannot work for them, and only independence is on offer as far as they are concerned. The Scottish people have rejected independence. They have made it clear time and time again that the SNP has nothing to offer. We should be looking for some honesty from the SNP with regard to what it would deliver in a Scottish budget in a Scottish Parliament.

Photo of Christine Grahame Christine Grahame Scottish National Party 10:45 am, 23rd March 2000

First, I wish to make it clear that I am for independence, but I say to Mr Henry that I want this Parliament to work, although I want it to be honest about itself. I want it to underline its financial inadequacies, which will become apparent to the Scottish people three years down the road. They have high expectations that the social infrastructure of Scotland will be improved three years down the line, but with the money that we have available it is being dishonest to say that the social infrastructure can in any meaningful way be improved.

I am going to apply a test to that. Scottish pensioners post-war saw, from their tax payments and their national insurance contributions, the beginning of the welfare state. That was a wonderful innovation, which I and many other working-class people benefited from. The hope was that, as the decades went on, the welfare state would be enhanced, but it has not been enhanced. Not only did we have a Conservative Government dismantling the best of the welfare state, but we have watched new Labour continuing that process. For Miss Goldie to be congratulating Ms Alexander on the policies and the financing that the Government is undertaking must send a shiver down the spine of many old Labour supporters.

Photo of Christine Grahame Christine Grahame Scottish National Party

Let me get on a little bit first.

Let us look at the reality on the ground, because I sit through many speeches in here and I wonder what Scotland we are talking about when it is compared with the Scotland for pensioners that is outside. My mother waited two years for a hip replacement operation. She ended up being given an oxygen mask and being transferred to Edinburgh royal infirmary, where she was put in Dickensian conditions in a congested corridor, which was an insult to all the patients who were there and to the staff.

I know that the minister will come back with a comment about the need for more hospitals, but the Executive is financing that in the wrong way. It is common sense that we need more hospitals—everybody knows that—but the problem is the way in which the Executive is going about it. My mother called that hospital a dump. It was. Good for her: 78 years old and still fighting.

The most important concern of old people is that they stay in their own homes.

Photo of Duncan McNeil Duncan McNeil Labour

Christine Grahame may be only a few minutes into her speech, but she and her party glory in failure, and they underline it. They do not want new homes and new hospitals for the people of Scotland. They want this Parliament to fail.

Photo of Christine Grahame Christine Grahame Scottish National Party

Mr McNeil would admit that I contribute to this Parliament and its committees in a constructive manner. I am simply speaking up for the people outside and about the reality out there. I want things to change for them as much as anyone else does, including those in other parties, but I am being honest about the inadequacies that exist.

Photo of Duncan McNeil Duncan McNeil Labour

Girning, girning, girning.

Photo of Christine Grahame Christine Grahame Scottish National Party

Why should I not say what the truth is outside?

I shall proceed. The fear of many older people is that they cannot stay in their own homes. There are simple measures to allow them to stay in their own homes. They are called aids and adaptations in the Sutherland report on long-term care for the elderly. However, they would require capital from local authorities. If older people apply to have a downstairs shower or a downstairs toilet or a ramp, there is no money for it.

That small amount of money would allow people to stay in their homes before the predictable fall that leads them into hospital and physical and psychological decline. That is the truth. It is not girning; it is holding this Parliament, and more important, the Labour-Liberal Democrat Executive, to account. The Executive is sitting on the Sutherland report. It has done nothing with it. I keep asking questions, as does Sir Stewart Sutherland. The report is from the royal commission that was set up by the Labour Government at Westminster.

There are homeless elderly people. They are a hidden statistic, and it is convenient that that statistic remains hidden.

Photo of Christine Grahame Christine Grahame Scottish National Party

There are so many areas on which older people could put the Executive right, such as the reality on Scotland's streets and pavements—pavements that are a danger to walk on if you are older and streets that have potholes. How to avoid the potholes in the city streets should be part of the driving test.

And what of Ayr? The town is not famous only for

"Honest men and bonnie lasses", but for grey power—the Labour-Liberal Democrat defeat is writ large on the walls of Carrick Street halls. If, in three years' time, the Government has not started to deliver, it will suffer another defeat.

Photo of Mike Watson Mike Watson Labour 10:50 am, 23rd March 2000

I will start by pointing out that the SNP also lost in Ayr. It is a point that should be repeated. Christine Grahame is, like many others in Scotland, too good at trumpeting gallant defeats. I am not interested in gallant defeats—one either wins or one does not.

Photo of Mike Watson Mike Watson Labour

I am not trying to suggest that Labour won. Christine Grahame has, however, tried to suggest that the SNP somehow did, which is, at best, a bizarre claim.

It is important to concentrate the debate on the infrastructure of Scotland. I welcome the debate. It is interesting to examine the wording of the motion to which Fiona Hyslop spoke. She did not address the motion to a great extent, but there is not a lot in it that one could disagree with. I will, obviously, vote for the Labour amendment because it improves the motion, but if they were asked, most people would agree that they wanted what is asked for in the motion.

Christine Grahame began her speech by asking whether the Government would examine what is projected for Scotland in the next three years in terms of public services. She then asked whether there would be improvements and answered by saying that there would not. That is simply not the case; it is nonsense. That can be seen by examining the announcements that have been made. Wendy Alexander has outlined many of the improvements that will happen. What of the additional money that was announced this week as Scotland's share by the Chancellor of the Exchequer? There will be £300 million spent this year on public services, and a further £2.4 billion will be available in the next four years. Is Christine Grahame saying that that will make no difference to public services in Scotland?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

On the budget, will Mike Watson agree that the moneys that have been announced are, in the main, revenue moneys? That is the nub of the problem. The SNP wants to address capital investment and the problems of infrastructure—bricks and mortar—which are the keys to rebuilding Scotland, although revenue is important.

Photo of Mike Watson Mike Watson Labour

I do not accept that. I am not interested in inputs or outputs, but in outcomes. I challenge anybody to suggest that the £2.4 billion that will be available in Scotland for public services in the next four years will not make a considerable difference. To do so would be nonsense.

If I understand correctly, one of Fiona Hyslop's five points was that there should be a feasibility study on public service trusts. Keith Raffan also referred to that. I would be happy to see those trusts put under the spotlight. They have already been dismissed by the Bank of Scotland and the Royal Bank of Scotland. We can mention individual academics, but if two such august institutions say that the trusts are not workable, I am more than willing to go along with them. Let us, however, put the trusts in the spotlight. Let the Parliament's committee's examine them and hold them up to the light.

There is a fundamental misunderstanding. In an ideal world it would be possible for the public sector to fund everything that we in this country need. We do not live in an ideal world, and although I have not previously advocated public-private partnerships, to ridicule them—as the SNP has—is to ignore their benefits. Those benefits include less borrowing, better value for money, savings on design, maintenance and construction and the public sector not having to bear the burden of overspend. Fiona Hyslop misunderstands those benefits.

Look at the Holyrood project. The overspend on that project must be picked up by the public sector and there will shortly be discussions about how that will be done. In a public-private partnership part of the agreement is that such costs are borne by the private sector. I do not advocate a public-private partnership for Holyrood—I want that to be clear—but there are situations in which PPP would be an appropriate and effective use of resources that would result in better public services.

We can examine the list of new and improved schools and new hospitals in Scotland that result from PPP, but that is not necessarily the only way of providing new schools or hospitals. Hospitals are built being built through the public sector as well as through PPP. I am primarily interested in the provision of better public services, including better health services and better housing, especially in Glasgow.

People in Glasgow want warm and secure homes at affordable rents, and I am not prepared to say that that will not happen just because public sector borrowing cannot be increased. I want to find the best way of providing good housing. Poor housing leads to poor health, which leads to poor educational achievement. We must understand that if we are to put money into the public sector, we must aim for that best way.

When the SNP argues that it has a monopoly on wisdom in relation to how public services should be delivered, its members should consider what is being offered through this Parliament and this Executive and should not run down what is being done. There will be significant improvements through the investments that have been announced this week and through the Government's programme. The SNP ought to accept that and not continually run it down, using fantasy economics.

Photo of Gil Paterson Gil Paterson Scottish National Party 10:55 am, 23rd March 2000

Earlier this month, this Parliament examined the local government financial settlement. Members considered the revenue budgets, the council tax cuts and which services would need to go, to ensure that our councils did not spend beyond the limits set by the Executive. What is overlooked by the press, and what was missed in the debate, was the year-on-year erosion of the Scottish infrastructure as a result of declining capital budgets.

Yesterday, I witnessed Susan Deacon's refusal to acknowledge the crisis faced by the NHS. Every time that this Parliament raised the issue of cuts or closures, rather than address the problem, the minister simply renamed it. Calling a closure a transformation may make a better soundbite, but it will not solve the problem. There will be no such hiding place for the Executive in this debate, because I will get the facts in first.

In the three years before Labour came to power, our councils were allowed to spend just over £2 billion in capital projects. In the first three years that the Labour party has control of this Parliament, it proposes to allow councils to spend £1 billion on capital projects. Labour, aided and abetted by the Liberals, has halved investment in the nation's infrastructure. That fact is taken straight from the Executive's publications.

The well-being of the nation's infrastructure is dependent on investment made in it. What does this dramatic cut mean for Scotland? Perhaps we should consider our nation's history. We have a proud civic background dating back to Carnegie and before. Initially, communities invested to build town halls, libraries, schools, hospitals, swimming pools, parks, gardens and even the infrastructure that is used today to bring fresh water to our towns.

Many of us, particularly those who, like me, are from a council background, resented the dark Tory years, when Treasury cuts meant that we could not afford to renew public infrastructure for our communities. As councillors—as many Labour members were—it was all we could do to keep our public buildings wind and watertight. Little did we imagine that the situation would be twice as bad under Labour.

The outstanding school repairs budget has been quoted as approaching £1 billion. I have seen the consequences, which are crumbling schools with inadequate heating and classrooms that might house the latest soundbite computer, but have roofs that leak and broken windows that need to be replaced.

Not 500 yd from this Parliament, the Infirmary Street baths, which were opened in Victorian times, now lie empty—abandoned through lack of finance. A mile away in Leith, the showpiece Leith Waterworld, which is barely a decade old, is boarded up pending finance for repairs. Under such savage budget cuts from Labour, councils can do little to stem the tide of decay, to stop the rot or to prevent nature from taking its course and reducing our public buildings to rubble.

Not satisfied with starving public assets into dereliction, Labour has found a new tactic—the great sell-off. It wants to pick up where Thatcher stopped and privatise what even she did not dare to touch. Labour has sold what was not even its to sell. It started with Falkirk's schools and moved swiftly on to Glasgow's. Those were not built by Blair or his Government, or even Thatcher's. They were gifted to communities by businessmen and other men of means in days gone by and were certainly not Labour's to sell. As a consequence, Scotland's largest city can now no longer boast of owning even a single secondary school.

The facts are before us today and the consequences will follow. Labour has halved spending on the nation's infrastructure and is selling off what is left before dereliction sets in.

The money that remains is insufficient to cover what Labour has not yet sold. I say "yet sold". I wonder what they will sell next. Our councils, most of which are Labour-run, can do nothing but wring their hands as their repair bills rise and buildings fall. Labour—trusty custodians of the nation's inheritance? Nae chance.

Photo of Nick Johnston Nick Johnston Conservative 11:00 am, 23rd March 2000

The Rev I M Jolly lives. [Laughter.]

As someone who, over 27 years, has invested in premises, sites and people, I welcome the Scottish National party motion for raising this issue in the Parliament. I even welcome the tone of the motion—at least, the first part of it. Improved as it is by our amendment, there should be no reason for divisions at all in the chamber today.

However, there will be divisions, because we are faced with a motion from a party that wishes to reach back into the mists of time, when the public school boards erected our schools, when the hospital authorities built our hospitals and where everything has to be built, owned, controlled, bought and run by local civil servants and funded by tax increases.

In the nine months of the Parliament, I have learned a number of things, one of which is that the ethos of public service is totally different from that of private industry. In private industry, I was charged with making the most of shareholder funds and of fixed assets such as buildings and land or machinery and equipment. Every penny had to show a return—a return that equalled or bettered that available in the marketplace. Otherwise, funds were not available and they had to be replaced by borrowed money.

Similarly, it was the policy in our company to plough back profits to improve our sites and machinery, and to improve productivity so that profit was our motive. I carried that over into the Parliament; however, I have quickly realised that the ethos of public service is very different. The impression I have gathered from public sector managers—good managers in their own right—is that, in many cases, they are charged with delivering the finest service from a finite allocation of resources, within the constraints of the guidelines imposed on them at any time by the Executive in power.

So diverse are those projected outcomes that they may seem irreconcilable, but they are not. What is needed is the realisation that services are what the public sector is there to deliver. It is irrelevant to talk about who owns the premises that services are delivered from. It does no service whatsoever to tie the hands of public agencies by insisting that they operate from ancient, inefficient, ill-maintained, expensive-to-heat premises, when, with the imagination and innovation of the private sector, modern, efficient, bright buildings would improve not just the services provided but the morale and output of staff.

In this debate, we should be talking about the maximum benefit from investment, whether private or public. We should not be talking about dogma. We should be talking about true partnership between public service and private investment, to improve services, increase employment and provide opportunity.

That is why the Conservatives welcome the private finance initiative investment in our schools and why we will congratulate the Executive on the Labour-dominated Glasgow City Council, which has accepted the principle of PFI. Every secondary school in Glasgow will be rebuilt or completely upgraded. A private consortium will spend more than £400 million rebuilding and refurbishing the city's 29 secondary schools.

Scottish negative party plans would condemn schools to years of underfunding. Nicola Sturgeon, commenting on the proposals, claimed that PFI, in bringing much-needed investment to our schools, was wrong in principle and in practice. She said that it represents

"privatisation of public services. Privatisation of the education system, the national health service and transport services."

The only thing that she missed out was undertaking—maybe the SNP will privatise that next.

Is it really the SNP's stance that our children should be denied decent schools because of dogma? Is it really the SNP's approach that our health service should suffer because of the lack of innovation? Is it really the SNP's argument that private capital has no place in the rebuilding of Scotland and that the divisions between public and private finance have to be maintained?

Photo of Fiona McLeod Fiona McLeod Scottish National Party

Would the member like to comment on PFI in education? We are building schools for our communities, for community use, using private finance, which means that the community cannot get access to the plans for those schools. If someone is an elected member of a school board, they have to sign secrecy waivers before they can see the plans. Is that a good use of public money to provide public facilities?

Photo of Nick Johnston Nick Johnston Conservative

The point here—and it is a point that many members will not understand if they have not been involved in business—is that there is such a thing as commercial confidentiality. Would Mr Crawford, who invested heavily in Perth and Kinross under a private finance initiative, tell me the details of the car parking that he says will pay for the whole initiative?

Photo of Nick Johnston Nick Johnston Conservative

I will let Mr Crawford do just that in a moment. The divisions between public and private finance have to be maintained. Under the SNP's plans, our public sector is condemned to fall short of the private sector. If that were the case, shame on the SNP. Scotland would be ill served by that party and no one will thank it for such a doctrinaire approach.

I support the amendment.

Photo of Fergus Ewing Fergus Ewing Scottish National Party 11:05 am, 23rd March 2000

The policies that the Liberal-Labour Executive has described are among the most short-sighted, misconceived and erroneous that I have ever heard. The attitude of the Executive is based on a false premise, which is that PFI-PPP is less expensive than Government borrowing. That is simply not true.

I question whether the Executive is aware of the anger about the lack of public investment. In the Highlands, the state of the roads and schools is of grave concern to almost everyone I meet. The A95, for example—the road along which most of Scotland's whisky travels from Moray to be exported to the rest of the world—barely merits the description "goat track". However, thousands of billions of pounds in tax have emanated from that part of the world.

David Green of Highland Council has called for a capital works project in the Highlands and Islands. I hope that the Executive will adopt that plan, bearing in mind the fact that thousands of workers at BARMAC are about to be made redundant. David Green has suggested the capital works project in the context of extremely alarming statistics that show that the capital funding received by Highland Council has fallen from £17.74 million in 1994 to £5 million in 1999. Highland Council has said that, at the current rate of revenue spending on road maintenance, road surfacing would take place every 108 years. According to Mr Shimmin, the director of roads and transport at Highland Council, road surfacing needs to be undertaken every 35 years. If we do not accept the advice of the director of roads and transport, the bill that other administrations will have to meet in years to come will far outweigh the money that should have been spent at this time.

A serious barrier to the creation of jobs and investment in infrastructure is the failure of the Department of Trade and Industry to agree the assisted area status map with the European Commission. As the DTI has not agreed that map—despite having had 18 months to do so—no public sector agency can give more than €100,000 over three years to any inward investor, business or infrastructure project. That is total incompetence. The letters DTI stand for the department of total inertia. The DTI is bungling on a monumental scale. There have been excellent investments in the Highlands, bringing many jobs, such as Inverness Medical, White Electronics and the Cairngorm funicular railway. None of that would have happened if the €100,000 limit had applied. Unless the Labour party sorts that out, tens of thousands of jobs will be lost, not only in the Highlands, but throughout Scotland and the rest of the UK.

There is much that should be done in relation to investment in our water supply and sewerage system. However, I must question whether every project submitted by North of Scotland Water Authority should be conducted over the next three years. I am surprised that that has not been questioned. I am astonished that the Labour party supports the increase in NOSWA's charges this year of 42 per cent. That is unsustainable and it is creating an anger in the Highlands in which ministers do not seem to be interested. They would be well advised to take the advice of Ian Davidson MP to get out a little more.

Photo of Andy Kerr Andy Kerr Labour 11:10 am, 23rd March 2000

I place on record my congratulations to John Scott on his maiden speech. We spent some time in hand-to-hand political combat in Ayr and I am sure that he will do his best for the constituency that he now represents.

I now turn to the grim reapers and girners on the SNP benches—I have never heard such a desperate performance of talking Scotland down. Fiona Hyslop asked us to look at the reality in our constituencies. When I look at mine, I see the working families tax credit, the largest ever increase in child benefit, the winter heating allowance, nursery places, women returners—all of which would be placed in great danger by the economic madness of the policies that the SNP has presented today.

The debate this morning has contrasted the way in which we will manage the economy in a stable and prudent manner that allows us to rebuild the infrastructure as we need to, with the SNP way, which is not even boom and bust, but fantasy politics that I find pretty rich.

When I go to Hairmyres in East Kilbride and see a brand new hospital being built, people do not come up to me and say in a political or dogmatic way, "I don't like the way you've done this; I don't like the way you've done that." They want a modern hospital where people are not carted between wards on trolleys through wind and rain to get to other parts of the hospital for X-rays and so on. They want a proper hospital. Yes, we have had underfunding in services; and yes, Labour is delivering changes—nationally and, through the partnership, in Scotland.

Photo of Brian Adam Brian Adam Scottish National Party

The new hospital at Hairmyres is being built under a 25-year or 30-year deal. We are continually being told by Susan Deacon that we are in a period of change in the health service. How will that non-publicly owned hospital be able to accommodate the considerable changes that will take place during the time of the contract if it is not under public control?

Photo of Andy Kerr Andy Kerr Labour

Brian Adam fails to understand the nature of the contract and specifications. We are in control of the process—that is what the contract and specifications for the public-private partnerships are all about. I would add that Hairmyres is used as a model for trade union and worker involvement in such projects.

Mr Adam should come to East Kilbride and argue on the doorsteps. I am happy to take him on over the delivery of real services to real people in real communities. This debate is all about comparing the fantasy land of non-delivery with the actual delivery by the Scottish Executive.

People in East Kilbride look enviously at the Glasgow school project. They see the renewal of the whole secondary school estate that will allow young people in Glasgow to learn and to develop in the modern economy. That is what this is all about—not the political posturing and pathetic responses that we have heard all morning from the SNP. The SNP talks down public servants—the same public servants whom I meet every day in my constituency when I visit hospitals and schools. Those people want us to develop. They are not bothered about the intricacies of the debate that we have had this morning; they want real delivery.

Let us remember that every project is individually assessed. That is why—in the largest ever hospital-building programme in the history of the NHS—four projects are publicly funded and four projects are coming through the public-private partnership. We assess the projects; we go on what is the best fit, and on what is best for the economy of Scotland. That is the way in which we deliver for the economy of Scotland and that is the way in which we will continue to deliver.

Public sector trusts and the independence tag are rarely mentioned. I am glad that those issues are at last being talked about—both have been hidden in the SNP shadows. They are the real issues that we want to get over so that the people of Scotland know about the SNP's inability to deliver and about the damage that falling into the independence black hole will do to the Scottish economy.

Photo of Michael Matheson Michael Matheson Scottish National Party 11:14 am, 23rd March 2000

I will concentrate on the effect of the Government's financial policy on vulnerable members of our community—especially the elderly and the disabled. As I am sure members will recognise, many of our elderly and disabled are dependent on public services.

In particular, I will talk about housing and the provision of community care for our elderly and disabled in local communities. There are major difficulties in providing suitable housing services, especially for the disabled. That situation has arisen principally because of the capital finance restraints on local authorities, which affect their ability to invest in local housing stock to provide housing for the disabled. That vacuum has now been filled, largely by local housing associations.

Christine Grahame mentioned aids and adaptations for elderly and disabled people in our communities. I am sure that there is no MSP who has not received a complaint from a constituent about the waiting lists for those aids. There is a waiting list for assessment by the social work department to determine whether the adaptation or equipment is required in the first place. After that, the person finds themselves on a second waiting list for the adaptation to be undertaken or the equipment to be provided.

Before the election, I was one of the public servants who were responsible for providing services to our elderly and disabled. Prior to that, I worked in a service that had to sustain a cut of £400,000 across three community care teams. That resulted in cuts not only to staff numbers, but to resources, and affected the allocation of nursing and residential home beds and the provision of basic services such as aids and adaptations. When I was in that job, the average waiting time for someone to see me had been around two to four months. When I left that job, as a result of the cuts, the average waiting time for assessment by the team was more than nine months. People then had to wait on secondary waiting lists for the adaptation and the equipment to be provided.

Photo of David Davidson David Davidson Conservative

Mr Matheson describes a council that lacked any sense of priority in how it delivered services. That has nothing to do with money; it is about the design of services.

Photo of Michael Matheson Michael Matheson Scottish National Party

I thank Mr Davidson for that, because the council used to be under Conservative control. In fact, Stirling Council started under the Conservatives, but—as I am sure Mr Davidson is aware—it is now under Labour control.

To substantiate the fact that the problem is not isolated to one local authority, I refer to a written answer that I received from Iain Gray on services and funding for disabled people and services provided by local authorities. His answer showed that, during Labour's first two years in government, the amount spent by local authorities on services for the physically disabled fell from £620,000 to £450,000. By my reckoning, that is in the region of a 28 per cent drop in funding for local authority services for that vulnerable group.

The real effect of the Government's financial policy is to hurt those who need such services. Andy Kerr may say that when he goes round his constituency people tell him that everything is okay—

Photo of Michael Matheson Michael Matheson Scottish National Party

—but I have been on the receiving end of the Government's policies and I see people who suffer day in and day out because of the cuts that result from his Government's financial policies on, and attitude towards, local government.

Photo of Andy Kerr Andy Kerr Labour

I asked Mr Adam to come to East Kilbride, to the Hairmyres site, and to argue the SNP's policy for public service trusts and against the hospital that is rising from the ground and that patients will move into in the next 12 months.

Photo of Michael Matheson Michael Matheson Scottish National Party

I touched on that. It is interesting that Mr Kerr chose not to take me up on funding for adaptations for disabled people in his area. If he chooses to do so, I will be more than happy to meet him in a public forum in his area to debate that matter. I could present the figures that show how Labour is hurting disabled people and the elderly in his community.

Local authorities are also struggling, because of limitations in capital expenditure, to meet the criteria of the Disability Discrimination Act 1995. Many local authority public buildings will have to comply with that act by 2004. However, because of the constraints under capital budgets, local authorities cannot adapt those buildings or build new ones.

I want to hear the minister talk today about the real politics of change. I want to hear what she will do to address the waiting lists and to ensure that local authority public buildings will comply with the Disability Discrimination Act 1995 by 2004. Will she give local authorities the money either to provide facilities by adaptation or to build new facilities?

Photo of Johann Lamont Johann Lamont Labour 11:19 am, 23rd March 2000

I enter this debate with some trepidation; it is so often clouded in technical financial terms that it is difficult for many people to focus on the issues under discussion.

Quality housing, good school buildings and strong infrastructure should be matched by the rigour of a real social inclusion strategy to allow us to build a healthy environment in which people can participate fully. As Christine Grahame and Michael Matheson should know from the work of the Equal Opportunities Committee and the cross-party group on older people and aging, the SNP has no monopoly of concern for older people. We are all engaged in a hard debate about how to deliver quality services to the older members of our community.

We should set this debate on infrastructure in the context of years of Tory neglect. We are often accused of using the Tories as scapegoats; however, we should remember that scapegoats were often innocent, and the Tories were not. We should acknowledge that this society is picking up the pieces and living with the consequences of a policy of neglect, which was driven by profit and based on attacking the public sector.

It is disappointing that the SNP sees this debate only as an opportunity to prove that the Scottish people were wrong when they voted for our current constitutional settlement—as the SNP encouraged them to do—and as an opportunity to point out what the Parliament cannot do. I hope to highlight the Parliament's powers to get the best value for money from our infrastructure and to build an infrastructure that will deliver for us in the 21st century.

I am aware that there is a huge on-going debate about housing. As a result, we should seriously examine the work of the Social Inclusion, Housing and Voluntary Sector Committee and its findings. Furthermore, we must be more confident about other ways of providing housing. Although private sector moneys have always been available, the challenge is to find out how those moneys can be directed.

My area contains some good examples of how bringing together private and public moneys through the housing association movement and housing co-ops has developed good-quality housing and created a volunteer dividend for the community. Housing in its broader context has been recognised in social inclusion partnership initiatives. Crucially, the housing association movement has led the way in putting tenants at the heart of decision making on the design and running of houses. People in such areas shed no great tears over the old public sector model, which allowed very little or no tenant control. Any stock transfer must have at its heart a matching commitment to real tenant empowerment. We must take into account the points that have been raised about the transparency of the process, and the Executive needs to address some issues about consultation with the community.

We should be stricter in drawing up contracts. If the central principle is that the private sector is more dynamic, such dynamism should be demonstrated in ways other than low pay or reduced pension rights. That challenge is particularly important in the construction industry, which will benefit from much of the work on our infrastructure. It is still a sad fact that, in the UK, there are three deaths a week in that industry. Despite the millions of pounds that have been invested in construction work in my area, anyone who has visited a building site in the past 10 years will have found not one apprentice. The only apprenticeships and real training are being provided by Glasgow City Council and—dare I say it—its direct labour organisation. We must acknowledge the key social role of DLOs in developing apprenticeships for girls and boys, proper safe training and genuine local employment. The challenge to the private sector is to match such quality training and local jobs; the people in our communities must receive a work dividend from these developments.

This debate is not about blind faith in one area or another. Our committees must examine the options and find the best possible solution for our people. Across parties, in local communities and in local government, people are taking hard decisions because they want good schools, which they will have in Glasgow; good housing, which Glasgow will have once the housing debt is cleared; and services that our young people and older people deserve. As a result, although we scrutinise the available options, our test is not whether we will benefit electorally from our decision; it is whether we deliver the service locally, whether we improve people's lives and whether we use private moneys in ways that our communities, not the private companies, want. I urge members to see this debate not as an opportunity to undermine the Parliament's work, but as an opportunity for the committees of the Parliament to take a constructive role.

Photo of Fiona McLeod Fiona McLeod Scottish National Party 11:25 am, 23rd March 2000

I begin by saying to Johann Lamont that that is exactly the line that the SNP takes—we are talking about a constructive and creative approach to building a modern Scotland that is fit for our future.

I take issue, however, with what Johann said at the beginning of her speech about the need to consider this issue in the context of 18 years of Tory neglect. I remind her that we have had three years of Labour Government. I will give her some facts and figures about what the Labour Government has done for the education infrastructure of this country during those three years.

Peter Peacock has said that it would take £1 billion to rebuild Scotland's schools to the standard that they should be at for the 21st century. However, in the comprehensive spending review, Labour has committed only £185 million. That in turn must be seen in the context of the £23 million of cuts in education across our local authorities just two weeks ago. In East Dunbartonshire, in my constituency, an independent consultant's report said that it would take 20 years to bring our schools up to standard, at a cost of £3.3 million a year.

Photo of Johann Lamont Johann Lamont Labour

I agree that we have a serious problem. The largest part of our infrastructure was created by the previous Labour Government, but there were then 18 years when nothing was done except to destroy our economy. I hope that Fiona McLeod agrees that the challenge is to recognise the difficult situation that we are in and to come together to find a solution. However, we cannot deny that those 18 years happened and caused huge damage to our economy.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

Nor can Johann deny that three years of Labour Government have not brought the investment for which Scotland is looking. Labour's dogma in refusing to consider public service trusts and innovative ways of financing the infrastructure of this country offers nothing to the people of Scotland.

As I said, East Dunbartonshire Council needs to invest £3.3 million a year in schools. Two weeks ago, its education department suffered a cut of almost £1 million in expenditure. How will we solve the problems in Scotland's schools in those conditions?

In Lenzie Academy, a school with more than 1,000 pupils, there are only three toilets. That is shocking. In an article in The Herald today, the secretary of the parent-teacher association at Larbert Village Primary School writes about the fact that children have to sit on the floor to eat their packed lunches. Those are the facts and figures that reflect what three years of Labour Government have given us.

We must be more imaginative and we must look to the future. Under devolution, the SNP put forward the imaginative idea of children's centres. The idea was to examine the present financial settlement and investment and to use buildings more creatively, so releasing funding for alternative uses. In the future, under independence—which is not a dirty word, nor a word from which the SNP shies away—the Government of Scotland will set borrowing requirements to reflect the needs of our country and will therefore be able to invest in the future of our country.

Photo of David Davidson David Davidson Conservative 11:28 am, 23rd March 2000

The SNP motion seems to pose more questions than it gives answers. Once again, the threat has been trotted out of a return to failed, Soviet-style centrally controlled policies that would frighten any potential investor to death.

The Labour Government came into power with the mantra "education, education, education". In the chamber today, we are getting debt, debt and more debt. We all agree about affordable homes, but we have had years of council neglect, which have run down the public sector housing stock in Scotland. I say to Michael Matheson that, in the four years when the Conservatives ran Stirling Council, many programmes for renovation, central heating and the warm homes initiative were turned round. The council was up to speed and well ahead. Unfortunately, since then—I served in opposition after that—Labour has lost control, supported in almost everything it has done by the SNP. The SNP is keeping Labour in power now, and its members should be careful about how they go around labelling people. Fiona Hyslop says that private finance is necessary. I congratulate her for what is at least a piece of honesty.

Housing associations all over the country get attacked, but the perception of what a housing association can do is something that we need to accept and investigate further. That perception can provide something that Johann Lamont—who I see has left the chamber—talked about: tenant control and influence. That is a form of democracy, which will roll on in the various associations without the strangulation of central control and without deviation from budget. Firm packages can be and are being designed to install disability aids, either on a percentage basis or by negotiation. We support such initiatives.

How does the SNP intend to pay? I ask that the shadow ministers also start to be honest and give us some direct answers. Are bonds a tax? Are they a levy? Who pays? Is it the taxpayer? Is it business? How will the SNP persuade people to put money into bonds? The SNP has said nothing about that. Who would be the contractor? How would the SNP establish tendering mechanisms? Will bonds be run by a central mega-quango, despite the SNP's claim not to like quangos, or will they be run by local politburos, such as we have seen in SNP policy statements over the past few years?

Alternatively, will the SNP's bonds be under democratic control? Which rules will it use? Will the commercial rules of business be used, with contract setting and accountability? The one thing that the PFI system provides—and I do not dispute that there will be an occasional need to tweak it a bit to suit the needs of specific projects—is a contractor who is tied into delivering the construction, fabric, performance and maintenance of the building; we know to the penny what that will cost.

The projects are accountable under PFI, but that is not the case under local authorities. What about the overruns from the days of direct labour organisations? That was not the fault of the people in the DLOs; it was the people who were elected to run them who lost control. The private contract system provides the clarity of purpose and clarity of function that allows us to roll on.

Miss Hyslop raised five points; I will concentrate on the first three. First, she talked about opening up the war chest. Does that mean that the SNP does not believe in the prudence of having a reserve when in government? That is the first time that we have had any honesty about that. Her second point was about loosening the ties on public borrowing. She is saying, "It is open season: borrow what you want." Who controls that? The SNP has not told us. That is dishonest. Her third point was to relax the 75 per cent clawback rule. Does that mean that the SNP is into postponing debt for future generations yet again? That is not a very clever way in which to go forward. Who sets the public sector borrowing requirement in an independent Scotland? Can SNP members give us some numbers or some ideas that would allow us to break even in their debt system? What are the rules of engagement?

Who designs the project? Who manages the project? What do SNP members want: just bricks, and no services? Is it more important to have bricks than to use the money to employ doctors, nurses and professionals in the health service?

Stirling Council does a good job with education. When I was a councillor, I was pleased about the Balfron High School project. It has worked. The local community was involved and there is public access. A school, in an area of high demand, that had antiquated buildings and that was neglected by the former Central Regional Council—which was, I might say, always run by Labour—has been assisted in an imaginative way.

I noticed that the Deputy Minister for Children and Education, Peter Peacock, was in the chamber and I thought to myself, "Oh, what are we going to talk about?" Were we going to talk about something other than the usual bricks and mortar? Were we going to talk about something that the Chancellor of the Exchequer did not quite make clear? The chancellor is indeed allowing some tax relief for people in business to buy a computer—we all need to be engaged in that—but not a word was spoken about the infrastructure that is required to do that.

I require some answers from the minister, but it would be nice if the SNP, whose members look to build a future for Scotland, would address my points. In conclusion, I would not recommend any new forestry schemes—money does not grow on trees.

Photo of Allan Wilson Allan Wilson Labour 11:34 am, 23rd March 2000

I agree with members who have said that today's debate is apposite because of the four consecutive Tory Governments' years of neglect of public sector infrastructure. That neglect was driven by the ideological right, with its philosophy that the market would provide, irrespective of the social and economic consequences for our traditional manufacturing base. The frontiers of the state were driven back for ideological as opposed to economic reasons. The principal casualty of that philosophy was capital investment in our public infrastructure. However, the crumbling public infrastructure not only created a society of haves and have nots and widened the gap between those who were dependent on public services and those who could afford private schooling and health care, but impaired economic performance, with periods of boom inevitably being interspersed with periods of bust.

The Tory response to that was PFI, which was simply an adjunct to the party's ideological predisposition to privatisation. It was not new thinking: the levering-in of private sector finance to rebuild a crumbling public sector infrastructure was first suggested by John Prescott when he was the shadow transport minister. He argued, in anticipation of the privatisation and break-up of the rail network, that public control and accountability could be retained and private sector investment secured in a partnership between what was then British Rail and the private sector.

John Prescott's proposal would have kept the national rail network within the public sector; it would have delivered—without affecting the PSBR—the necessary large-scale capital investment that everyone agreed was necessary to make the rail infrastructure competitive with road and air alternatives; and it would have given a return to private sector companies that had invested in the rail network. His proposal would have precluded the need for privatisation, which the self-styled radical right argued was necessary not simply for ideological reasons, but for economic reasons.

PPP was an alternative to privatisation and would lever in otherwise unavailable capital to buttress the wider social inclusion agenda, the agenda of the left: new hospitals, new schools and warm housing.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

As Allan Wilson is an extremely clever chap, does he agree that the main objection that we have to PFI is that, as a way of financing projects, it is more expensive by 5 per cent than Government borrowing? It costs more and Labour is wasting public money.

Photo of Allan Wilson Allan Wilson Labour

PFI can be more expensive. That is why we take a pragmatic approach to PFI, based on the merits of individual projects. I will explain later how PFI can also be more efficient and more cost-effective.

When Labour defeated the ideological right, we were able to supplement our traditional ideological commitment to the NHS, comprehensive state education and social housing with private sector investment in public sector infrastructure. We got that investment not as a means of privatising the services but as a way of improving the services. As a consequence, Labour is delivering better schools, new hospitals and better housing. Unlike the Tories, Labour is not privatising key areas—areas such as clinical services and the state education service are excluded from the PFI process. The private sector can sometimes operate more efficiently than the public sector—Crosshouse hospital is an interesting example of that.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Unison, a trade union with which Allan Wilson was closely associated, recently said that it

"notes with concern the Scottish Executive's continued reliance on Private Finance Initiative which is economically flawed and poor value for money for Scotland's taxpayers, since it will cost more in the long run than to fund capital projects."

Does Allan Wilson agree with that?

Photo of Allan Wilson Allan Wilson Labour

If Bruce Crawford knew anything about what he is talking about, he would understand that, within Unison, I argued against that policy. I did so because—if Mr Crawford is interested at all—Unison positioned itself incorrectly in that debate. Unison's principal objective is to defend the rights of the workers who are involved in the public sector and to ensure that they are protected and enhanced. It is not a self-styled guardian of the public sector ethos—that much is clear.

As ever, the nationalists want to have their cake and eat it. That is why, as Mike Watson and the banks have said, its proposals have been correctly described as unworkable—superficially interesting, perhaps, but unworkable nevertheless. Perhaps that describes nationalism in general: superficially interesting, but unworkable.

Photo of Brian Adam Brian Adam Scottish National Party 11:41 am, 23rd March 2000

I was greatly entertained by Allan Wilson. SNP members have been accused this morning of being reluctant to mention independence and public sector trusts, but I have not heard any good socialist principles voiced here today by our colleagues in the Labour party; in fact, they almost gallop away from that. We heard earlier, from Wendy Alexander, about new Labour and the right way in which to spend money. New Labour is definitely on the right—there is no doubt about that—and I have grave doubts about whether that is the correct way in which to spend money.

Undoubtedly, PFI and PPP cost more, and we are encouraged to consider them objectively. The National Audit Office examined in detail the M74 project, and its report stated that there was, at best, only a marginal benefit to PFI.

Photo of Brian Adam Brian Adam Scottish National Party

I will give way if Mr Tosh will allow me to develop my argument a little.

There are considerable doubts about the public sector comparators that are being used. Those have been not just academic doubts, but doubts that have been expressed by officials who are willing to put their heads a little above the parapet—not all the way, and I am not going to name any names. Those people suggest that the public sector comparators are often designed to make the PFIs and PPPs seem to offer some marginal benefits.

Photo of Murray Tosh Murray Tosh Conservative

I have read the transcript of Mr Adam's interview with the National Audit Office. Does he acknowledge that marginally cheaper means cheaper? Does he acknowledge the fact that he could not show that that project was more expensive? Does he acknowledge that the audit through the national audit process found many ways in which subsequent projects could be delivered more effectively and economically, and that his argument is fundamentally flawed?

Photo of Brian Adam Brian Adam Scottish National Party

I do not accept any of the premises that Mr Tosh has just enunciated. The National Audit Office report suggests that, at best, PFI might have been better—it does not suggest that it would have been better. It also points out that we have not properly examined the issue of affordability, and insists that any further projects be examined on the basis of affordability. This process locks us in, regarding what we can or cannot do in the future; it reduces the options in the future. It locks us in, so that those choices are not there any more. Those who have had experience of successive compulsory competitive tendering, followed by PFI and PPP, will know that there is no great experience in the public sector of drawing up specifications. We have rushed into that process and, as a consequence, we have been taken to the cleaners by private sector folk who are much more experienced in dealing with contracts.

Photo of Brian Adam Brian Adam Scottish National Party

No. I would like to develop my argument. I might allow Mr Davidson to intervene in a moment.

There is no great experience in the public sector in dealing with contracts. We have great difficulty in allowing the flexibility for the changes that will come during the time of the contract, to allow what is wanted in the public sector to be delivered by the private sector, when it comes to design, build and operate—especially when it comes to operate.

I do not accept the point that we are now looking after the interests of staff. Why is it all right for ancillary staff to be employed by a private company while doctors and nurses are kept in the public sector? At Edinburgh royal infirmary, the major current PFI, we will have fewer beds and staff and no control during the period of the contract. There will be variations in what is wanted and negotiating those variations will cost more. Public service trusts would give us control.

Photo of David Davidson David Davidson Conservative

Brian Adam slurs a lot of people who are working at a high level in local authorities. As he knows as a former councillor, all councils deal on a contractual basis with all sorts of suppliers, mostly in the private sector. His council leased vehicles, equipment and so on. Did he always vote against that, saying, "We are not competent as councillors to deal with it"?

Photo of Brian Adam Brian Adam Scottish National Party

It is not a question of competence, but the member is right that it is about how finance is dealt with. PFI is leasing on a much grander scale and it constrains the choices that can be made, by locking us into contracts with private sector providers that we cannot vary without significant penalties.

Photo of Des McNulty Des McNulty Labour 11:46 am, 23rd March 2000

When I saw the Opposition motion I wondered what tactical genius, what McBismarck, had managed to tee up a debate on investment in public services in the immediate aftermath of the budget. The budget has been acclaimed by serious, knowledgeable commentators as delivering the largest ever package of new investment in core public services since 1945—investment in health, education, transport and the war against crime. The debate should be placed in that context.

There are two key lessons from the Conservatives' years in government. The first is their record of under-investment in public services, which gives us a contrast against which we can project our policies. The second is their demonstration of the bankruptcy of boom-and-bust policies. Remember black Wednesday and its consequences for UK public services.

As a Government, we are trying to put together a serious package of investment in public services. Fiona Hyslop said that the £2.4 billion that is coming to Scotland is largely revenue based and asked: what about capital? That money is not entirely revenue based; some of it is going into capital and some to revenue. The use of other options such as public-private partnerships and private finance initiatives adds to the amount that can be spent from taxation revenue. They are flexible ways of levering more resources into the public infrastructure. We need to look at how that can best be done on a case-by-case basis and not go into the black hole the SNP wants us to go into—the politics of denial, where PFI is out of the question under any circumstances.

Mr Hawksworth's report for the Institute of Public Policy Research has been quoted by the SNP. That report stated:

"The new public sector financial control framework introduced by the Labour Government over the past few years has removed some of the most serious constraints on public sector investment imposed by the old PSBR-based regime."

Clear evidence from expert authorities shows that the way in which we are doing things is more flexible and more organised, and a more effective way of raising revenue. Is Fiona Hyslop serious in arguing, as she appeared to, that there should be no controls on local authority public expenditure? Are we talking about Monopoly money? Does Fiona Hyslop think that whatever figure she names can be delivered? Two weeks ago, the SNP spokesperson on the water industry pledged £1.8 billion of public money for the water industry. Where will that money come from? If the SNP wants to participate in an informed debate about public investment, it must engage with the parameters within which public investment operates.

As a former Glasgow councillor, I know what tenants in Glasgow want. They do not want to look at every brick to see whether it is a PFI or a public sector brick; they want money to be spent on their houses and schools. When investment in schools in Glasgow was debated, the SNP representatives on the council did not oppose taking the PFI route as a way of getting more money into schools.

Let us be realistic and imaginative. Let us talk about how we get investment. Labour has delivered substantially more public investment than anyone has delivered before, but we should consider other ways of getting money in. If the SNP wants to debate whether it is appropriate to follow the PFI route in the water industry, the housing sector or education, we should debate the issues properly. We should not have an ideological debate that is based on slogans and not on economic reality. I am disappointed that that continues to be all that we hear from the SNP.

Photo of Bruce Crawford Bruce Crawford Scottish National Party 11:51 am, 23rd March 2000

I will start by dealing with Des McNulty's point about serious politicians and debate and his selective quoting. He chose to give us only a small part of Mr Hawksworth's deliberations. Immediately after the sentence that Des McNulty chose to read out, Mr Hawksworth said:

"At the macroeconomic level, this paper confirms the conclusion in Robinson's paper that there is no good reason why PPP spending could not just as well be financed through additional borrowing without breaching the chancellor's two fiscal rules."

Let us have the whole truth.

I suppose that Allan Wilson voted against this Unison motion:

"Congress notes with concern that Scotland's public services remain grossly under-funded and that the increases fail to remedy, in real terms, the cuts implemented in both the early years of the Labour Government and by the former Conservative Government."

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I will let Allan Wilson intervene in a moment, but first I will read another Unison motion, which he perhaps voted against as well.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

The motion said:

"Congress should call for a review of the PSBR rules and the abandonment of PFI/PPP in favour of alternative routes of funding capital projects."

Photo of Allan Wilson Allan Wilson Labour

What did Unison, which Bruce Crawford is so keen to promote and quote, say about the SNP's proposed public service trusts?

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Unison also said:

"Congress reaffirms its opposition to the Private Finance Initiative on the grounds that it is fundamentally economically flawed and endangers the democratic foundation of Scottish local government."

There was a cracker of an example of selective evidence from Annabel Goldie; she quoted Andersen Consulting in support of PFI. Andersen Consulting has made more money out of PFI than any other organisation, so it is no wonder that it favours PFI.

I find it bizarre to hear people such as Hugh Henry—I wish that he was in the chamber—the former leader of Renfrewshire Council, defending Government expenditure plans on capital. Only a few months ago, people such as Hugh Henry, and Peter Peacock and Kate MacLean, who are in the chamber, and Frank McAveety, who is goodness knows where, complained long and hard through COSLA about the difficulties that local authorities faced on capital expenditure—on schools, libraries, roads, housing, community centres or adult resource centres. Those are the structures that build the fabric of our society; they are crumbling and are taking our society with them. If the Executive does not believe that that is the reality of Government expenditure, it should look at its figures, which were produced in September 1999.

Photo of Wendy Alexander Wendy Alexander Labour

Leaving aside the four out of five demands by Fiona Hyslop that are not for this Parliament but for another place, will the member confirm one factual point? Would spending on the public service trusts be on balance sheet or off balance sheet? Three hours into the debate, will Bruce Crawford clarify that tiny detail?

Photo of Bruce Crawford Bruce Crawford Scottish National Party

The same problem exists with PFI. In 1994-95, the Tories put in £708 billion in local authority capital expenditure. Next year, the Government will put in £392 billion. The reality is there in the Executive's own figures.

Quite rightly, Kate MacLean, Peter Peacock, Hugh Henry and Frank McAveety complained long and hard. However, today we hear that complaining is girning and carping. We will girn and carp all the way through the life of the Parliament, until the Executive changes course. We will girn and carp until Labour is chased out of this place by the Scottish people because it is not meeting their priorities. We will girn and carp until Labour is out of here.

Photo of Patricia Ferguson Patricia Ferguson Labour

That brings the open part of the debate to a close. I call John Munro to close for the Liberal Democrats.

Photo of John Farquhar Munro John Farquhar Munro Liberal Democrat 11:56 am, 23rd March 2000

Today we have heard many issues debated that contribute to the economic prosperity of Scotland. We have heard various suggestions—for high-quality, affordable houses, modern and better communications, better public services, and an infrastructure that would allow all those things to happen.

We cannot have a buoyant, prosperous, inclusive economy without an effective and interactive physical infrastructure that serves all our people and communities. We have made significant advances in information technology, electronics and communications—nobody in the chamber would dispute that those are very welcome. However, I fear that support for them has been at the expense of our indigenous industries. I need not tell members about the problems that are being experienced daily in agriculture, about the problems in our fishing industries, or about the downturn in our tourism industry. We seem to forget that tourism is one of the main planks of the Scottish economy—statistics show that it produces £2 billion for the Scottish economy each year.

The Scottish economy will survive and flourish only with an effective and affordable transport system. Without that essential link in our infrastructure, our industries cannot compete on a level playing field with those of our colleagues in Europe. On several occasions, members have heard me mention the expansion and development that has taken place in and around Inverness during the past two decades. That expansion would not have been possible without the massive improvements that have been made to the A9 road.

Photo of John Farquhar Munro John Farquhar Munro Liberal Democrat

Much more needs to be done. We still have endless miles of tortuous, winding single-track roads and many substandard bridges that restrict development and exclude much of rural Scotland from the economic revival that we are all striving for.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Do John Farquhar Munro and the Liberal Democrat party support David Green, convener of Highland Council, in his call for a capital works project that would allow the council to upgrade the roads to which the member has just referred? Do they agree that about £20 million should be devoted to that?

Photo of John Farquhar Munro John Farquhar Munro Liberal Democrat

I am sure that the convener of Highland Council will hear many suggestions for projects to encourage the economic well-being of the Highlands. For my part, I suggest that roads and bridges should be priorities, but other people in Highland Council might have a contrary view. I am sure that the efforts promoted by the convener and the council will be to the advantage of both Highland Council and the people it serves.

I want to mention one statistic. Over the past five years, spending on the strategic roads network in Scotland has diminished by £115 million. In 1995, spending was £208 million, while current spending is £93 million, which is a tremendous drop. The trunk road network lost £84 million over the same period, which is quite a significant reduction.

We have heard about the suggested integrated transport system. My view is that the transport system is the economic link to the economy's well- being. I fully support the laudable concept of an integrated transport system, but without effective and affordable road, rail, air and ferry services, we will never secure such a system, which is, I suggest, the essential element of Scotland's future wealth and prosperity.

Photo of Patricia Ferguson Patricia Ferguson Labour

I call Murray Tosh to wind up for the Conservative party. Mr Tosh, you have up to eight minutes.

Photo of Murray Tosh Murray Tosh Conservative 12:01 pm, 23rd March 2000

I agree with Hugh Henry's comment that it is a pity we had to have this debate. However, on the heels of that comment, he proceeded to make perhaps the most negative and unconstructive speech of the day.

This morning, we have lost an opportunity. One or two constructive points, which we might have developed usefully, were buried in the morass of abuse, girning and moaning from the SNP. Fiona Hyslop set herself up in a rather unfortunate way at the beginning of the debate. She set the tone. Her first litany was to go through all the desperate circumstances that face housing. She said that we do not build council houses any more, but she did not mention housing association houses. She drew in the 75 per cent clawback rule, but did not bother to mention that when that rule was introduced, borrowing consents were extended to councils to compensate for that rule, to a large degree.

Fiona Hyslop was correct to point out that, in the past few years, the resources available to local authorities for housing have diminished substantially. That is a great disappointment and a great pity and it must be addressed, but she made it clear that stock transfer is not one of the ways in which she would address that problem. I know that, when pressed, the SNP is willing to accept some stock transfers in principle and to say that the party approves of stock transfer in different ways, but when the rhetoric is high and the juices are flowing, the SNP simply opposes stock transfer. Stock transfer is a "boo" expression and the SNP use the phrase "discredited PFI" in the same way, as if that were its official title. Andrew Wilson may say, "We would use PFI in certain circumstances," but we have yet to discover any circumstances in which he would consider using it.

Some good points have been made. Fiona Hyslop talked about using arm's-length companies to allow local authorities to invest more. Such an approach is allowed under existing Treasury rules, so although it was not all that much of a move forward in terms of SNP strategy, in terms of intellectual commitment from the SNP it was welcome.

Fiona Hyslop also suggested, as did Mr Raffan, that the Parliament should consider how we might allow local authorities to borrow more without breaching Treasury rules. I agree that we should consider that, although it would be better to do so through a committee approach rather than through a confrontational and rhetorical debate.

Mike Watson was correct to say that the Parliament, through our committees, should examine the proposals for public sector trusts. It may be that all the financial advice on and assessment of public sector trusts is absolutely right and that they are a total non-starter. I am happy to accept that we should consider them, however, because on the Conservative benches there is an ideological commitment to getting things done. We are quite happy to consider a variety of approaches.

We have seen a lot of fantasy politics and posturing this morning. One member—Johann Lamont, I think—said that absolutely nothing had been done under the Tories during the past 18 years. We know that no Labour MSPs went to Ayr for the by-election; if Johann Lamont had gone, she could have driven down the new motorway, which the Tories built, and passed the new sewage works, which was built when the Tories were in power, or the new primary schools in Troon. She might even have taken a slight detour into Carrick, Cumnock and Doon Valley, to visit the new Ayr hospital, which was built in the late 1980s.

The posturing has not come only from SNP members; there has been posturing and self-congratulation from Labour members as well. The simple fact of the matter is that we need to invest more and find more efficient and effective ways of procuring improvements in all public services.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

Mr Tosh said that all financial advice is against the concept of public service trusts. I take it that he has heard of Bill McCall and would concede that Bill McCall, by general repute, is among the top half dozen investment bankers in the city of Edinburgh. Has he read Bill McCall's ringing endorsement of the concept of public service trusts?

Photo of Murray Tosh Murray Tosh Conservative

I made it clear that those issues are worth considering. If I took the view that absolutely everybody who had ever looked at the idea was totally damning, I would probably not be prepared to spend any time discussing it. Let us look at the arguments. Although, as was recently said by Labour members, many of these matters are not devolved, one of the roles of this Parliament is to examine reserved issues and fight Scotland's corner.

I started by saying that we welcome some of the constructive things SNP members said during the hour and a half on aggregate for which we heard them ranting against the present and previous Governments and promising all sorts of benefits without any pain, cost or intellectual input. I am happy to debate their proposals. It is just a pity that Fiona Hyslop waited until the final minute of her speech to introduce the SNP's proposals.

Why should we reject PFI? Andrew Wilson said that he would accept it in some circumstances, but Fiona Hyslop referred to it as the discredited PFI and Fergus Ewing is utterly hostile to it. The National Audit Office found that the M74, which Brian Adam mentioned, was procured at a saving of £17 million. It might have been only £13 million, or there might not have been any net financial benefit, but the National Audit Office found that £17 million was saved.

The Audit Committee—bringing to bear its greater incisiveness, expertise, authority and all the string pulling of Bruce Crawford behind the scenes—attempted to pull the National Audit Office report apart, but could not do so. The civil servants saw Brian Adam off the field in the exchanges that took place. The report found that the M74 was procured at good value for money and economically. It is an old PFI. PFI has been subject to refinement, redevelopment and improvement by the work of the National Audit Office, and it has been carried forward by the current Government.

Photo of Brian Adam Brian Adam Scottish National Party

Notwithstanding Mr Tosh's rhetoric, the National Audit Office suggested that the figure of £17 million was not substantiated at all. It was produced by the Scottish Office. The National Audit Office suggested that it was inaccurate and that, at best, there may have been a marginal saving.

Photo of Murray Tosh Murray Tosh Conservative

"At best" and "marginal" are good enough for me. If that project had been done in the traditional way, we would have had to account for the whole cost in the years when it was built, and it would not have been built. The same is true of every hospital, every road and every sewage treatment works that has been built, is being built or will be built under PFI.

Until the SNP has validated and established the creativity of its alternative, its formula is a recipe for cancelling the investment programme altogether. Well, "altogether" may be an exaggeration, but about 50 per cent of the investment programme would be cancelled—a very large slice indeed. The SNP's approach is driven by ideology.

Photo of Murray Tosh Murray Tosh Conservative

Now it all comes out. In her introductory speech, Wendy Alexander made a good analysis of the benefits of PFI. Yes, it is marginally more expensive, Fergus, to finance a project by PFI, but the savings on the construction and management, and on maintenance in the subsequent years, overwhelmingly cancel out the higher financial costs, which are themselves diminishing year by year as we develop expertise—bluntly, as we get better at PFI and PPP.

Photo of Murray Tosh Murray Tosh Conservative

If the SNP adopted an approach that talked about what we can do for Scotland and looked at input and output and what we can deliver for people, it could look flexibly at what is happening and would be able to find some merit in it. The trouble is, as we have just heard, an ideological approach is being taken.

What is my ideological approach? I have an ideological approach as well—if I could find my notes. [Laughter.] We should improve our housing stock. Stock transfer to create tenant control and to democratise management is an excellent way to do that. My ideology says that we should build roads. Our approach is to accept PPP and to argue within the debate about the allocation of resources that money should be given for that. Our approach is to build hospitals and schools, to support councils that build schools and roads, and to use the PFI and PPP instruments that make that possible. That should be the ideological commitment: to see what is necessary and to deliver it, and not to care whether we have ideological bricks and politically correct mortar, and not to validate the ranting and girning and utterly unconstructive approach that Mr Crawford took, except when he wanted to deliver the output of his own council headquarters.

Photo of Patricia Ferguson Patricia Ferguson Labour

Come to a close please, Mr Tosh.

Photo of Murray Tosh Murray Tosh Conservative

Presiding Officer, I cannot remember how many minutes you said I had.

Photo of Patricia Ferguson Patricia Ferguson Labour

You are considerably over them. Please close.

Photo of Murray Tosh Murray Tosh Conservative

I accept the rebuke.

I will conclude on this point. If we are serious about this Parliament, best value, service delivery and new politics, let us look at all the options to develop facilities, investment and progress. Rather than kid ourselves that 30 or 40 people sitting here for one and a half days each week insulting each other, ignoring each other's arguments, skimming over the inconsistencies in past speeches and trotting out what was said by people two or three years ago—by the way, I welcome Allan Wilson's Damascene conversion, and so should the SNP—let us get on with the real work of improving Scotland by whatever means we can. I second Miss Goldie's amendment.

Photo of Peter Peacock Peter Peacock Labour 12:13 pm, 23rd March 2000

My volume control is better tuned than is Murray Tosh's and I will try to keep the temperature down, although I may not fully achieve that.

The SNP's motion is curious and warrants the closest examination. As is usual, it starts from a negative disposition:

"to enable Scotland to become a dynamic . . . country".

Once again we see the SNP talking down Scotland and making clear that it does not believe Scotland is a dynamic nation. What does that say to our entrepreneurs who are leading the world with so many high-tech developments? What does that say to our doctors and engineers who still lead the world in so many ways? What does that say to our younger generation who are achieving more and more through academic qualifications and academic standards and are competing with the best in Europe? The motion says nothing about them, and it typifies the SNP's approach. To see some political success, the SNP needs to invent a crisis and then portray Scotland as being in it. It talks down the people of Scotland and their entrepreneurial achievements.

The motion then talks about Scotland becoming a prosperous country, as if it were not already a prosperous country in many respects. Of course there is much more for us to do on that front, but that part of the motion goes to the heart of a previous SNP claim—and contradicts it. For many years, the SNP has been telling the Scottish people that Scotland is so prosperous that it is being held back by subsidising the rest of the United Kingdom. At last, today, we see the SNP revealing the truth. It does not even believe its own rhetoric on that point. That may be why we do not hear the arguments for independence that we once did from Alex Salmond, John Swinney and many others in the SNP.

The motion reveals even more. The SNP believes that all we need to do to make Scotland a dynamic society is to increase spending on housing, communications and learning environments. Those are important issues—I do not want to diminish their importance—and it is why the Government is investing more in them. We are using public finance to lever out private finance to make the investments that are necessary if we are to move forward.

Astonishingly, in trying to create its dynamic and prosperous Scottish society, the SNP does not mention what happens in our schools. It does not mention the information and communications technology skills that we need for the future. It does not mention that the health of the people of Scotland is a precondition for success. It does not mention the health of the environment—one of the building blocks of Scotland's success. It does not mention the arts or creativity. It does not mention enterprise and how we will instil that in the people of Scotland. It does not mention social inclusion. None of those issues is mentioned in the motion, but they are part of the further development of an already dynamic society.

Photo of Peter Peacock Peter Peacock Labour

Instead, we hear the usual litany of grumbles and moans. The SNP is constantly negative—it never looks to what we can do with the powers of the Scottish Parliament and to how we might do things better. It is constantly whining, whingeing, moaning and talking Scotland down. It constantly seeks and accentuates what is negative. It holds on to the past and opposes all change.

Photo of Peter Peacock Peter Peacock Labour

The SNP does everything that will oppose the creation of a dynamic and prosperous society in Scotland.

A successful, sustainable, dynamic and prosperous society will not scrap the national grid for learning. It will enthusiastically embrace change and talk confidently about its achievements and prospects. It will believe in and trust its own people and their enterprises.

Photo of Peter Peacock Peter Peacock Labour

Such a society will have a total view of the needs of its citizens and it will be outward looking in disposition. All—

Photo of Patricia Ferguson Patricia Ferguson Labour

Mr Peacock, I must interrupt you—there is a point of order.

Mr Ewing, I hope that this is a genuine point of order.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Is it in accordance with the standing orders for a member not to respond in any way to members who are seeking to intervene? Is not it a contravention of the standing orders simply to ignore those who would intervene?

Photo of Patricia Ferguson Patricia Ferguson Labour

No, Mr Ewing. I think you know that that is not in contravention of the standing orders. Please continue, Mr Peacock. I am sorry about the interruption.

Photo of Peter Peacock Peter Peacock Labour

I was about to give way once I had finished that little passage. I had planned to say that what the SNP—

Photo of Peter Peacock Peter Peacock Labour

Will Mrs Ewing wait for a moment?

I was about to say that what the SNP proposes is the antithesis of what is needed to create a dynamic and prosperous Scotland. Its approach to politics is to cast things in a negative light, not in a positive light. That is why the SNP stands for the opposite of what its motion seeks to create.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Now that the minister has stopped mumbling down Scotland's prospects, let me say that he clearly does not trust the people of Scotland to run their own economy. When he attends the Highlands and Islands Convention on Monday—from which elected members in the chamber are excluded—what will he take with him from the Executive? Will he take the outlines of capital programmes for the local economy? Will he offer money or will he offer only platitudes?

Photo of Peter Peacock Peter Peacock Labour

I will attend that convention in a positive frame of mind, as will other members of the Executive and—I am sure—other participants from local authorities and enterprise companies. We will examine the ways in which we can take forward positively the interests of the Highlands and Islands; the participants will join together to do that. It will be done in a spirit of partnership and co-operation. We will look for innovation and for the sort of things that we want to encourage. I will not go there moaning. I will not go there whining. I will not go there whingeing. I will not go there with a negative disposition, looking for things to carp about and to criticise.

The Highlands and Islands of today are comparatively successful because people there have an outward-looking perspective and they talk confidently about their prospects. They recognise progress and they recognise where progress must still be made. They will challenge us about what new things must be done.

If we examine the motion more closely, it is even more revealing. It reveals the true depth of the crisis of financial incompetence in the ranks of the SNP. The SNP is looking to the Executive to increase the scope and powers of Parliament to meet its spending aspirations. It now admits that the penny for Scotland—the SNP's flexible friend—which has been stretched to accommodate every spending commitment known to mankind, is not enough. Not only is that penny not enough, the motion reveals that the Parliament's power to vary tax by 3p would not be enough. The SNP wants more—more of the people's money and more power to fleece Scotland's taxpayers.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

In my introductory speech, I set out five proposals. Some of them could be done using devolved powers and some require co-operation with Westminster. Which of those five positive and constructive ideas will the minister accept?

I understand from Murray Tosh that the Conservatives are interested in at least two and a half of them. Among the Labour back benchers there are members who recognise that the ideas are positive and constructive.

Photo of Peter Peacock Peter Peacock Labour

What characterised Fiona Hyslop's speech was the 15 minutes leading up to the last minute. They were all about moaning, girning, carping, griping and groaning. The last minute of her speech was put in only to ensure that the SNP could issue a press release that tried to give the impression that it is taking a positive approach to Scotland's affairs—but anybody who attended the Parliament during the speech saw what the SNP is about.

The SNP wants this Parliament to gain more powers so that it can take more Scottish taxpayers' money to pay for its political correctness; more powers so that it can fund its financial plans that—as other members have said—are in a fantasy world. The SNP's plans are in the old world of economics.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

On a point of order. Is it the convention in the standing orders for a member who is summing up a debate—and therefore meant to be summing up what has been said in a debate—to read out a speech that was obviously written before the debate started?

Photo of Patricia Ferguson Patricia Ferguson Labour

Nothing in the standing orders covers that point, Mr Salmond.

Photo of Peter Peacock Peter Peacock Labour

My speech was not entirely pre-written, but I had a fair idea of what was going to be said, because we have heard it all before.

The SNP seeks undefined new powers from this Parliament for an uncosted programme.

Photo of Brian Adam Brian Adam Scottish National Party

Given Peter Peacock's long response to Fiona Hyslop's question, will he tell us which of the five positive proposals from the SNP he is prepared to accept?

Photo of Peter Peacock Peter Peacock Labour

I have already dealt with that. The only reason we heard those five ideas was so that the SNP could construct a press release. They had nothing to do with today's debate.

Today's debate is about considering an uncosted SNP programme that is unrealistic, unachievable, unsustainable and unprincipled. It is the unacceptable face of Opposition politics. Contrast that with the events of Tuesday of this week. In the context of a well-managed UK economy, more money is coming to Scotland than the SNP's penny for Scotland would have raised in tax yield. That has been delivered at the same time as cuts in income tax and additions to our spending on transport, education, health and the environment.

We are starting the long road back from the disastrous Conservative days of cuts in capital spending. We are continuing, unencumbered by dogma, to improve our infrastructure. We are prepared to use public funding to lever out the PFI investment that is required. I invite Fergus Ewing and his SNP colleagues to go to Ardnamurchan and tell the people there, who are getting a new secondary school, that the SNP wants that school to be stopped because it is ideologically not acceptable. Go to the people in Tomatin who are also getting a school—and to the people in Glenurquhart—and tell them the same thing. Tell them that they cannot have new schools, new roads and new hospitals because the SNP believes that PFI is not ideologically or politically correct. Tell them that the only way in which they will get those things is to drag them out of the UK and increase their taxes—although the truth is that they can stay in the UK and get them today while their taxes are reduced and there is still public investment because the economy is being well managed.

I look forward to hearing Lloyd Quinan's summing up. I challenge him to explain the contradictions in the motion. How does scrapping the national grid for learning square with creating a dynamic society? I challenge him to speak for 10 or 15 minutes without belittling Scotland once and without talking Scotland down, moaning, whingeing or whining.

The Executive's amendment finds the right balance. I commend it to members.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party 12:24 pm, 23rd March 2000

The extraordinary Mr Peacock will be a hard act to follow. He is the perfect example of the newest of new Labour. How long has he had his membership card?

I will start with Wendy Alexander, as this speech is about summing up what has been—in some ways—an interesting debate. I was interested to hear that there are some members in other parties who understand that debate is about the exchange and examination of ideas rather than taking entrenched positions. Hence the SNP's giving the chamber five positive ideas. I must have left the room, as I did not recognise what Peter Peacock said in his summation—I did not hear the level of carping and whining to which he referred.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

Not at the moment, Murray, but later, gladly.

I begin with the Minister for Communities. For months now, we have heard the proselytising of what are effectively Tory concepts and ideology.

The Government has at the same time attacked 18 years of Tory government and failed to take responsibility for having had more than 900 days to address the problems of the United Kingdom and Scotland. That is a reality.

No longer can the Government hide behind blaming a previous Administration—unless it would like to consider the record of the Labour Government prior to this one, which managed successfully to halve manufacturing in Scotland between 1974 and 1979 and to double unemployment in the same period. If the Government wants to talk history, let us talk about the history of the Labour party in government.

Moving to Annabel Goldie: at last we have the honesty of the meeting of minds. Annabel accepts nearly every concept—as the Labour party does—for the funding of the public sector. I re-emphasise what we all know and what the people of Ayr clearly understood: they could vote for the real Tory or they could vote for the fake Tory. They voted for the real Tory.

Mr Raffan, yet again—

Photo of Johann Lamont Johann Lamont Labour

I am interested to know where, in the 18 years of Tory government, there is evidence of a Tory commitment to community empowerment and social inclusion, which are at the very heart of our education and housing policy. As I said earlier, any transfer of housing has at its heart a commitment to community empowerment. I do not see that in the Tories' policies during those 18 years.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

I thank Johann Lamont for that. It is not my job to support Tory ideology—I leave that to her front bench.

Mr Raffan, with his negative, single transferable speech, gave us the 13 SNP pledges on spending—

Photo of Keith Raffan Keith Raffan Liberal Democrat

It is more than that now. [Laughter.]

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

I point out to Mr Raffan that it was not 13 to begin with; he should get a decent researcher because he is clearly not getting value for money.

Hugh Henry is guaranteed to leap to his feet and suggest that the SNP supports independence. That is a complete surprise to the many people who vote for the Scottish National party and those of us who carry a card that says that we believe in an independent Scotland. He cannot understand that a political party can have an ideology and stick to it, unlike the Labour party over the past 10 to 15 years, which abandoned the miners, the steelworkers and clause 4.

We still have a core belief that the best way forward for the people of this country is an independent Scotland.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

So Mr Raffan was listening, for a change.

The noble Lord Watson started extremely well. Unfortunately, in a desperate need to show loyalty in the control freakery of new Labour, he fell badly at the last. Nick Johnston: another single transferable speech. We get to find out what Nick did on his holidays and what Nick did in business in previous years.

Photo of Wendy Alexander Wendy Alexander Labour

Give us one positive example, on or off the balance sheet.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

We have already explained that. Labour has PFI. We would be in exactly the same position on the balance sheet.

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

Mr Quinan must decide whether he is giving way. We cannot have a shouting match.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

I know—thank you.

Our suggestions for borrowing, as we have stated very clearly, were all within the Maastricht criteria of 40 per cent. That answers the minister's question.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

If she does not accept the answer, that is fine.

Photo of Nick Johnston Nick Johnston Conservative

Does Mr Quinan understand what a balance sheet is?

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

I can reassure the member that, having worked in industry, I do.

Let us reconsider the five very reasonable suggestions made by Fiona Hyslop. The Tories accepted two and half of them and the back-bench members of the Executive supported three. First, we must open up the £60 billion to which Gordon Brown has access. The budget gave us something, but not enough. The infrastructure of the country requires investment. Why not invest instead of letting the money simply pile up? The Executive would have to talk to Westminster, making the best use of devolved government. The devolved Government must go to central Government to negotiate. There should not be a problem, as the Executive would be talking to members of the same party.

Secondly, we should increase local authorities' freedom to borrow the money they need. As we have said, that could happen within the Maastricht criteria. It could be done partly from Holyrood, but it would require negotiation with Westminster. Is there a huge problem in the devolution settlement about negotiation with Westminster? I think not.

Thirdly, the Executive should relax the 75 per cent clawback rule, therefore freeing up a further £165 million for public housing. We can do that and I ask the Executive to consider it.

Fourthly, the Executive should abolish the consent for local authority borrowing required under section 94 of the Local Government (Scotland) Act 1973, because it makes no sense. That would free up resources and is an action that can be undertaken by the Scottish Parliament.

Most important, in light of today's debate—and in reference to what Johann Lamont, Murray Tosh and even Keith Raffan said—would it not be sensible to initiate a feasibility study into the concept of public service trusts to replace the PFI schemes that have been discredited in most people's eyes?

Photo of Murray Tosh Murray Tosh Conservative

I put that back to the SNP. If the Conservatives are willing to consider the SNP's proposals, why will the SNP not respond to the audit investigation of PFI-PPP schemes? Why will the SNP not accept that that is an appropriate vehicle and is the core of the considerable amount of investment that has taken place over the past few years?

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

Mr Tosh said that "at best" and "marginal" is good enough for the Conservatives. I accept that that is the Conservative position, but it is not good enough for the SNP. That is why we want a proper examination. If Mr Tosh can convince me that marginal is worth while, I will consider it.

Photo of Murray Tosh Murray Tosh Conservative

I put it to Mr Quinan that both the National Audit Office and the Parliament's inquiry of an early PFI project identified several ways in which the scheme could have been delivered more economically. They found that improvements had been built into subsequent PFI and PPP schemes and that there is scope for delivering substantial economies in every investment project currently supported by PPP.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

That is Murray Tosh's belief, but it is not the belief of the SNP or the Institute for Public Policy Research. I accept that position, although I hope that it will change eventually. The Tory concept of PFI and the Labour concept of PPP are different things. Every contract is different. We must examine all those things. Surely that is the sensible way in which to proceed.

I give way to Mr Raffan.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Oh. I was going to raise a point concerning the fact that SNP economic policy is so heavily based on the price of a barrel of oil. A year ago, oil fetched $11 a barrel, but is now worth $30 a barrel. Mr Wilson is always quoting Chantrey Vellacott DFK. Does Mr Quinan agree with Mr Wilson and Chantrey Vellacott DFK that if the price of oil fell below $11 dollars per barrel, income tax would have to go through the roof? The SNP is basing its economic policy on the price of oil, which is highly volatile. That is an extremely irresponsible policy.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

I will clear something up for Mr Raffan. The debate today takes place in the context of devolution, and our suggestions are made in the context of devolution. It is obvious to anyone that the Scottish National party stands for independence. That does not mean that every debate that we have in this chamber is predicated on independence—as has been proved by the five pledges that we have today asked the Executive to make. That is very straightforward; there is no need for us to discuss the varying price of oil.

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

He is in his last minute, and we are running over time.

Photo of Lloyd Quinan Lloyd Quinan Scottish National Party

Some extremely interesting ideas have been thrown up today. There are clearly tensions within all parties about the manner in which we finance the public sector and the infrastructure of this country. I suggest that we require an immediate and proper investigation into PFI, PPP and the public service trusts. We should then revisit this debate so that we can deliver for the people of Scotland high quality at a prudent cost. I support the motion.

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

That concludes the debate; the votes will take place during decision time at 5 o'clock.