Spending Strategy

– in the Scottish Parliament at 2:30 pm on 20th September 2000.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 2:30 pm, 20th September 2000

We move now to Mr McConnell's statement on the Scottish Executive's spending strategy. There will be no interventions during the statement but there will be an opportunity for members to raise points in the debate that will follow.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 3:41 pm, 20th September 2000

I have the pleasure of presenting the draft budget of our Labour-Liberal Democrat partnership for the next financial year and our spending plans for the following two years. A copy is being sent to every member.

The first year of this Parliament laid the foundations for a better Scotland. We have in place a strategic framework for economic prosperity, for social justice and for our cultural and environmental heritage. In the next three years, we will focus on better services and essential investment. We intend to make a difference for Scotland.

Last week, Donald Dewar outlined our key priorities: to end the injustice of the Tory years and enable individuals and communities to fulfil their potential; to ensure that the economy is competitive and creative; and to provide better services and infrastructure. Those aims underpin the draft budget. Our plans promote social justice and they will make a difference for Scotland.

The extra investment that I propose today has come as a result of the Labour Government's sound economic management. There will be no more boom and bust and descent into debt. The Tory years were marked by two things: the Tories' recklessness and incompetence damaged the economy and their dogmatic policy agenda created deep and lasting social divisions.

We reject in every way the Tories' approach. Clearing up their mess has involved meeting tough spending targets, frustrating so many of our early aspirations. The now strong UK economy will increase UK Government spending by a combined total of £43 billion in three years—a real increase in total spending, after inflation, of 3.25 per cent each year.

Devolution guarantees Scotland a fair share of that spending. Joel Barnett's formula delivers for each person in Scotland, pound for pound, the same increase as in England. That comes as a right. A pound in Dover is matched by a pound in Dundee. If ministers had to negotiate spending on each portfolio with the UK Government, there would be little point in having a Scottish budget; it would be decided in Westminster, not by the Scottish people and by this Scottish Parliament.

UK prosperity makes a difference for Scotland. The spending plans that we consulted on in the spring will increase by £800 million next year, by more than £1.9 billion the following year and by £3 billion in 2003-04. With the big increase that we had already planned, that means an additional £1 billion, £2 billion and £3 billion compared to this year—an average real-terms increase each year of 4.4 per cent, or almost 14 per cent over the three-year period.

I want to make something very clear. In a Scotland divorced from the rest of the UK, we would not be deliberating over the finer details of an expansionary budget; we would be untangling the chaos and havoc caused by separation. The rewards that we reap are from a fruitful union that delivers as much for Motherwell as for Manchester and as much for Greenock as for Grimsby.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

On a point of order, Presiding Officer. It is a convention that interventions are not permitted during ministerial statements, because those statements are generally of a factual nature. It will not have escaped your notice that the minister's statement is starting to be of a party political nature—

Photo of Patricia Ferguson Patricia Ferguson Labour

That is not a point of order. Please sit down.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

Will you consider advising ministers—

Photo of Patricia Ferguson Patricia Ferguson Labour

That is not a point of order.

Photo of Patricia Ferguson Patricia Ferguson Labour

It is a ministerial statement. Please sit down.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

On a point of information. Will you advise me what is a ministerial statement? Is it a statement that is truly factual in nature and ministerial in tone, or is it a party political rant? If it is a party political rant, why are we not allowed to make interventions?

Photo of Patricia Ferguson Patricia Ferguson Labour

That was not a point of information or a point of order. Please continue, Mr McConnell.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Sometimes the truth can hurt.

We are announcing a long-term sustained rise in spending. That is reality, not nationalist spin or Tory boom and bust. Our partnership will spend more in Scotland than any Government in history has, but to make an enduring difference we must now move beyond prudent restraint with a purpose to prudent investment with a purpose. Devolution gives us the right to decide our own budget, which brings with it the obligation to spend wisely; I will outline the efficiency and budgeting measures that will make a difference.

Parliament is asked to consider this first three-year budget. However, I want to engage the Scottish public in that exercise. The document published today asks again for their views on our proposals. In an earlier consultation, I heard the public's views from around the country and in letters and e-mails. Four public meetings were held earlier in the year. At those meetings, transport, community care and local services generally dominated discussion. Those views have influenced my announcements today.

The Finance Committee, in its 11th report, also made recommendations. Ministers will take account of those recommendations. I look forward to working with the committee to improve presentation for the future.

This budget is the first to be published in resource rather than cash terms. The new system will more closely resemble a commercial system of accounting, but applying it will mean better budgets and better value for money. I wrote to all MSPs in advance of this statement to explain that significant change.

Devolution means that we are free to decide our own spending. There is no Scottish Executive service agreement with the Treasury. Instead, managing performance is part of the budgeting process on which the Parliament has agreed. Firm targets for expenditure will be included in the budget bill, and I remain committed to concentrating increases on front-line services. Today's plans reduce the proportion of our budget that is spent on administration. That trend will continue.

However, I want to take the search for value further. I can announce today that ministers have agreed to a series of best value reviews of significant spending programmes over the next few years. To assist that process, I will appoint a best value board, with experience of management and change, to ensure that we are rigorous in those reviews. I will make a more specific announcement on that process next month.

We will practise what we preach, delivering greater value for money as well as targeting the spend towards our key priorities of social justice and improving our infrastructure for the future.

Best value is for all. There is good experience in other countries on equality in resource allocation. We need to learn and apply those lessons. Jackie Baillie and I have made a start. Equality proofing will be embedded in the detailed processes of departmental spending and the secondment of research help. The advisory group that we will announce soon will take that forward.

Budget presentations lay out overall spending totals and the resources for departments. Those totals are available in the document published today. They are a clear signal of our economic success and social justice agenda. They are good news for Scotland.

In health, for example, I can confirm increases of £268 million, £687 million and £1.14 billion over previous plans as announced in April. That is record investment—a clear demonstration of our commitment to deliver better health and a better health service for the people of Scotland. Susan Deacon will say more about the distribution of extra money tomorrow.

Over the next few weeks, other ministers will present the detailed plans for their departments. Today I wish to highlight their impact—not to crow over how much, but to emphasise what and whom they are for.

The Government has a responsibility to future as well as present generations. We should not postpone to the next generation the cost of fixing and modernising decaying roads, homes and schools. In developing the economic framework, employers, unions and experts all emphasised that change has to be focused on improving our infrastructure and our skills for the knowledge economy.

A key element of making the difference for the Scottish economy will come from the UK's capital modernisation fund. The figures that I have announced today do not yet include resources from that fund, but the Scottish Cabinet has decided that the CMF will be invested in placing Scotland closer to the leading edge of digital technology. I will make a statement to Parliament on that at another time.

In my spending statement last year, I announced new money for education and roads; ministers recognised the need for urgent investment in both. Today I can go further, with a step change now to raise our future prospects.

The budget that I have set out today makes new provision to improve our skills and learning infrastructure, with increases in budgets for schools, universities and colleges reflecting our commitment to lifelong learning. For education, education, education, there will be more, more and more again. In 2003-04, for the first time in the history of our world-famous system, overall spending on education and children will pass £5 billion. That will deliver modern approaches to teaching, better classrooms, equipment and learning materials, and a sharp increase in the spread and intensity of computer use in schools. I can confirm today that, over the next three years, we shall be renovating or building more than 100 of Scotland's schools. We are making a massive investment in modernising our education system, for the future of our children and for the economic future of Scotland.

Rising transport spending will also make a contribution. The overall transport budget is set to rise by a record 45 per cent in real terms over those three years, with a major boost to public transport and roads investment. By year 3, spending will be £170 million higher. Sarah Boyack will announce our plans soon.

On top of that investment, our spending plans are to invest in further education, community health centres, hospitals and medical equipment, waste management and the basic infrastructure of local services. It is not just the money that central Government spends that is important. I am also providing local authorities with the means to improve infrastructure in the important services that are often taken for granted: mending roads and street lights; providing books and equipment for libraries; and providing decent cleansing services and recreational facilities. Those are the services that are most vulnerable when budgets are tight.

We are intent on improving rather than ignoring local government. The figures announced today give real increases, above inflation, of 10.5 per cent in resources to local authorities. I have introduced an element of support for authorities to meet inflationary pressures, including pay. This will be the best real-terms increase in the settlement for local services for a decade. It reinforces a partnership between this Parliament and Scotland's local councils and puts service delivery first. By year 3, there will be an extra £1.2 billion for local communities and a better quality of life for all. Our investment with local authorities will support public-private partnerships. It includes an increase of 57 per cent in direct support for capital investment by councils. For that, I expect investment in our school buildings and other vital local facilities to be significantly improved.

Those are all investments for the long term, making a difference for the future, but Labour and Liberal Democrat MSPs want action now to change Scotland for the better. Our plans will do that.

The Labour Government and this Labour-Liberal Democrat partnership are defined by our commitment to close the opportunity gap between rich and poor, but we know that it is harder to close that gap than it was for the Tories to open it. There is no single policy or action that can be taken to eliminate poverty. It is the right combination of hundreds of initiatives that will create equality of opportunity and make a difference for the elderly, for young adults and for families and communities.

In tackling inequality, we understand the importance of UK-wide action, because for some issues there are no geographic boundaries. However, we recognise what we can do here in Scotland. We have put social justice at the forefront of our policies and spending plans. We promise to bend the spend to deliver our social justice promises, with ministers working across departments to make better policy that can help individuals and families through the transitions of their life course—as infants, as school-age children, as young adults, as workers and as retired people in older households. We recognise that poorer areas require resources and change to overcome multiple disadvantage.

I can announce today new resources that are directed towards reducing the great divides in Scotland—between people and between places. I will highlight three examples from our drive for a better Scotland for all. Our first year has seen major contributions to improving Scotland's poorest places. The communities budget will increase by 20 per cent in real terms over the next three years. A total of 80 per cent of that budget will be spent within the poorest fifth of Scottish neighbourhoods. This budget, built around putting people first and putting communities at the heart of Scotland's regeneration, will make a real difference to Scotland's poorest urban and rural communities.

Two further measures will close gaps between rich and poor. The additional spending on health, which comes to more than £400 million of new money each year, will enable us to implement the Arbuthnott recommendations on distributing health resources more fairly, in line with the needs of poorer areas.

I am also announcing a better neighbourhoods fund, targeted on the communities that are suffering the most deprivation. The fund will total £90 million over three years and will be spent by local authorities in order to lever up services and opportunities in those areas that were left behind during the Tory years.

I am proud to announce a package of support for elderly households. It will include a promise to tackle delayed discharge in the national health service in order to free beds for critical cases; a warm deal for all pensioners in Scotland, with a promise of central heating and insulation within five years from next April; the introduction of a national concessionary travel scheme; and a package of support for those older people who require care both at home and in residential settings. That will allow us to make a step change in arrangements for the care of older people.

The overall cost of that package of four measures will be more than £300 million over three years, rising to £140 million per year by the third year. On top of that, we intend a significant part of the extra NHS resources to be used to deliver better health and health services for older people.

I can also announce that I have agreed with Susan Deacon to put in place measures for the better integration of health and social care. That will improve front-line services and release resources for their development over the next three years.

As a result of those plans, ministers will, in the weeks to come, announce measures to expand and integrate spending programmes for children through a range of services and departments. There will be new resources to mainstream special educational needs and a change fund to improve service delivery.

We have given a priority to young adults across a range of programmes. We are providing additional investment for a new national network of challenging programmes for persistent young offenders. That should lead to safer communities, fewer victims and fewer wasted lives.

In higher and further education, new bursaries and more educational maintenance allowances will create new opportunities for young Scots from poorer families.

In all those age groups and areas of activity, we encourage people to prosper, we try to prevent problems before they occur and we support action when they do occur. In no area of the Executive's work is that more apparent than in how we deal with the prevention, treatment and consequences of drug abuse. In 1999, we set up the Scottish Drug Enforcement Agency and created a strategy and action plan to deal with the scourge that is drugs—that cause and effect of social injustice. These budget plans contain new funds to implement that action plan; the ministers involved will announce details next week.

There will be debate today and in the months ahead on these plans. I look forward to our Tory opponents spelling out which funds they would cut and I hope that the nationalists will contribute helpfully and not concentrate on whipping up division.

I believe that most, if not all, of us were elected to serve in this first Scottish Parliament because we wanted to change Scotland for the better and to make a difference. These spending plans, which I commend to members today, will do just that. By the end of the first year of the next session, these plans will have helped to transform lives.

More than £1,000 will be spent on the NHS for every citizen of Scotland each year; more than £1 billion will be invested in transport over the three years, making journeys to work easier and life outside work more flexible for all; tens of thousands of older Scots will be better cared for in return for their contribution to society, with fewer worries for their families as a result; investment will be made in our young people through the renovation or building of more than 100 schools; £6.5 billion next year, rising to £7.3 billion, will be spent on local services to improve community life across our land in a new partnership with Scotland's local councils; and priority investment will be allocated to tackling the social evils of our time—youth crime and drug addiction—with action to clean up our streets, to bring families back together and to create new hope for the thousands of Scots who are caught up in a life of despair.

This is a three-year budget for Scots and for Scotland. It is a plan for urban and rural communities; it is a plan for young and old. It will make a difference from Arran to Aberdeen; it will make a difference for someone who is 80 and is struggling to cope; and it will make a difference for someone who is 18 and is starting their adult life. It is a budget for all of Scotland, made possible by a strong economy and a Labour Government and made reality by this Scottish Parliament and the partnership between those parties who want the new system to work for the people of our land. It is a fitting start to a new century and for all of Scotland. I urge all MSPs to make a difference and to give it their support. [Applause.]

Photo of Patricia Ferguson Patricia Ferguson Labour

I see that Mr Wilson is getting support before he has even begun.

Photo of Andrew Wilson Andrew Wilson Scottish National Party 4:00 pm, 20th September 2000

I thank Labour members for their charming applause to welcome my entrance and introduce my speech. I hope, Presiding Officer, that you will give due attention to the point of order that was made during Mr McConnell's speech. The minister is given the protection of an uninterrupted ministerial statement, and that protection should be treated in the manner in which it is given. It should not be used for party political speechmaking or, indeed, for putative leadership bids. A ministerial statement should be used to give information to Parliament, on the basis of which a debate can then unfold.

Each year we have a budget and occasionally we have comprehensive spending reviews. Each year we have hysteria and headlines and each year ministers in Scotland divide by 10 and reannounce what Gordon Brown has said. Let me read out some familiar headlines from popular Scottish tabloids. "Gordon's Giveaway" is the headline from the Daily Record, whose subtitle is "Scotland's Champion". The Sun, which describes itself as "Dedicated to the people of Scotland", has the headline "The Hand of Gord—Spending spree on NHS and schools". That is the type of hysterical headline that appears at this time of year, but those headlines appeared two years ago, at the time of the first comprehensive spending review in 1998.

It was two years ago when the "Hand of Gord" rested lightly on our shoulders, his giveaway budget invested in the future of the NHS. Since then, we have had two NHS crises, schools have been closed across the country and council taxes have risen to their highest level ever. There have been local authority strikes— [Interruption.]

Photo of Patricia Ferguson Patricia Ferguson Labour

No, I was calling the chamber to order, Mr Wilson. Please continue.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

There have been local authority strikes for the first time in 11 years. Scotland has entered its first recession since Mrs Thatcher came to power— [Interruption.]

Labour members seem to find that amusing, but I do not think that they would be laughing if they were looking into the eyes of the 47,000 people whose manufacturing jobs have been lost and whose families have been badly affected since Labour came to power. Those strikes, crises and job losses have all happened since the giveaway "Hand of Gord" budget of two years ago, and exactly the same will apply during the coming months. Headlines will come and go, but budgets will change nothing until we tackle the real questions.

Labour members should observe closely the context in which this budget has been drawn up. At the end of the CSR period, public sector net investment will be lower as a share of gross domestic product than it was in 1992. That statistic comes from Gordon Brown's own CSR document, which Jack has divided by 10 today. Total public spending as a share of the wealth that we create in the country will be less at the end of the CSR period than it was when Labour came to power. At the end of the peak year, which Labour members have welcomed with such gusto today—acting in accordance with the briefs that said "Clap continuously like they used to when Stalin spoke in Gori"—less of the nation's wealth will be invested than was invested when the Tories left office and Labour came to power.

Those simple facts underpin the figures that Jack McConnell and his colleagues have announced today. Those are the facts that mean that no matter how big the numbers sound, the impact on the ground will not be what people hope or demand of their public services. That is a shame, because Scotland is a wealthy country. We are on the verge of a new oil boom. We are wealthier today than at any point in our history. [MEMBERS: "Rubbish!"]

Did people in Norway cry "Rubbish" when that country discovered oil? It has reaped the benefits every year since. Labour members would do themselves and their party credit if they would wake up and realise the opportunities that face Scotland, rather than manage the decline of Scottish public services.

With the greatest respect to Jack McConnell, he is a finance minister with fewer tools at his disposal than any other finance minister in the world bar none. He has to change his budget whenever Gordon Brown changes his. Whatever Gordon Brown announces, Jack McConnell can only wait for a tenth division of it. There is no independent or deliberative thinking on Jack McConnell's part. That is not because of a lack of ability—I am sure we all agree that he has ability in abundance—but because this Parliament has fewer powers than any other legislature in the world.

The devolution of legislative power has not been paralleled by devolution of practical financial power. There is constriction through the Barnett formula, which is squeezing—and squeezing hard—and cannot be sustained.

This week, the London Times estimated that the gap between spending now and what it would have been if Scottish spending had kept pace with the rest of the UK is more than £2 billion over the CSR period. Labour members—they are disappearing—with a Westminster brief will recognise the name of Peter Kilfoyle, the Labour MP for Liverpool Walton. He said this week that Scotland's spending advantage was withering on the vine. Are Labour members in this chamber content that Scotland's advantage should wither on the vine, or do they take the view that Scotland's spending position is fair and should be sustained, or indeed enhanced? If they have faith in the reality of devolution, why do they not want to follow it through with practical financial powers instead of the centralisation and restriction that is occurring due to the current position?

Photo of Phil Gallie Phil Gallie Conservative

The member has mentioned Labour members and their attitude to the Barnett formula. Is he aware of the dispute breaking out between Jim Wallace and Charles Kennedy over the lifeline of the Barnett formula?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I thank Mr Gallie for that point, which I will come to. However, as in all such matters, Conservatives should ca' canny a wee bit; I am all too aware of the disputes within the Conservative party about the future position of Scotland's financial support.

It is interesting, though, that the Deputy First Minister, his party—the Liberals—many Labour bank benchers and even some ministers believe that the Parliament should have more financial power. I can assure the chamber that the SNP believes that the Parliament should have more financial power and I am sure that if Phil Gallie and his colleagues were honest, even the Conservatives would admit that they believe that the Parliament should have more financial power.

So why should Jack McConnell and his colleagues on the front bench not listen to the views of the consensus of this Parliament—and the consensus of Scotland—that this Parliament and the Minister for Finance should be equipped with the tools that allow him not to announce every year big spending giveaways that do not make a difference, but to start to tackle the real question, which is are we or are we not devoting enough of the wealth that we create in Scotland to the improvement of public services? That question will not be left alone because, at the end of this CSR period, we are committing less of the wealth that we create to public services than we were when the Conservatives left office. It is no wonder that Scottish public services are in their present state.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Out of respect to the Labour party, I will give way to one its back benchers, but I point out that the minister was entirely protected throughout a party political speech, which was wrong.

Photo of Pauline McNeill Pauline McNeill Labour

Instead of making general statements about Scotland's wealth, will Mr Wilson tell us specifically what his party would do to improve Scotland's services? We have not heard one word about that so far.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

With the greatest respect, I have been given a few moments to respond to a ministerial statement, which is the job that I am now doing. If the member had listened— [Interruption.] I see that Labour members are now briefed on hand actions as well as shouting, which is terrific. The 15 or so Labour advisers at the back of the chamber are clearly very well paid.

If members had listened to what the SNP has said consistently throughout the first year of the Parliament, they would know that we have brought together not only a manifesto for the Parliament, which did not go through, which had a penny off tax to be invested in public services, but ideas in every debate about what we would do. As we move towards the next election, we will do the same, because there are serious problems in Scotland that will not go away. The strike today is a case in point. Public sector pay will continue to be a problem as long as investment fails to keep pace with growth in GDP. That is a critical issue that must be addressed.

The key point is that for Scotland and all parties in this chamber, it does not have to be this way. By the Government's own analysis, Scotland is contributing more this year to the London exchequer than we will get back in expenditure—we are in surplus. Will we follow Norway's lead and invest the oil boom for the future, or will we be left like poor Sarah Allan of Lesmahagow who, it is reported in the papers today, has missed out on her own lottery win?

We have the same choice as we had in 1975: to take advantage of the boom off our shores and invest in our future, or to watch it being frittered away by successive London-based Administrations. That is the choice the Parliament faces. We can have the short-term bickering and the unministerial and ungracious statements from the front bench or we can start to open our minds to what this Parliament can do to invest in the future of our country, using the tools that normal countries have. Why do we have such a lack of faith in ourselves that, in this Parliament, we have fewer financial powers than any other Parliament on earth?

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I must come to a conclusion. When Mike Rumbles makes his speech he should reflect on those opportunities, as we all should. I look forward to debating in detail in the Finance Committee what the budget has to offer, but let us keep our eyes on the bigger prize. We are investing less than the Tories used to and that is why we are reaping the consequences.

Photo of David Davidson David Davidson Conservative 4:10 pm, 20th September 2000

I thank the minister for giving me a copy of his speech as I came into the chamber.

We have just heard the latest irresponsible and unsustainable spending commitments of new Labour. The priorities are not based on the benevolence of Brown or the abilities of Mighty Mac the Magician but on the swingeing stealth taxes on everything from pensions to petrol that have been taken from our pockets since 1997. That is the basis of what we see today. Today's largesse is financed by hard-pressed motorists, anxious savers and Scottish families struggling to get by. It is nothing more than a naked bid for short-term votes.

It is a fact of life that Government spending cannot grow faster than national income. Gordon Brown made much of his affair with prudence. Marriage has obviously put an end to that. Let us be open and honest: the additional spending is inflationary. The Minister for Finance said:

"we must now move beyond prudent restraint".

In other words, they are getting so desperate for popularity they will do anything to buy votes. It could lead to increased taxes or higher borrowing. The fuel protests throughout the UK, and particularly in Scotland, have shown that Scotland's taxpayers have had enough. Unlike Labour, we listen and our pledge today to reduce tax at the pumps is evidence of that.

Photo of Scott Barrie Scott Barrie Labour

Mr Davidson has partly answered my question but—

Photo of Scott Barrie Scott Barrie Labour

Just wait. Surely the point about naked vote bidding is illustrated by what the Tories are proposing today—knocking 3p off a litre of petrol without showing how it would be funded.

Photo of David Davidson David Davidson Conservative

I suggest that the member does his homework and pays more attention to what is on the news and on the web about what was actually said.

Photo of David Davidson David Davidson Conservative

In a moment.

It is interesting that the Minister for Finance called us the Opposition today. At last we have a realisation that our popularity is returning and that people understand that most of what Labour has done during the past three years is based on smoke, mirrors and illusion. The SNP, and even the Liberal Democrats in the early stages, accused Labour of following Tory policy. The minute Labour changes from following those general trends of a sensible approach to spending, everything is out of the window, taxes go up and up, and it is not terribly honest.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

On that point of honesty: David Davidson and I were at a meeting on Friday afternoon at which we both called for increased spending for local government in Aberdeenshire. Could he at least welcome the remarkable 10.5 per cent increase over the next three years and the £1.2 billion that will make a real difference to his constituents and mine?

Photo of David Davidson David Davidson Conservative

Is Mr Rumbles the new spokesman for Labour? That is interesting. I remember a number of things at that meeting that I will not go into but that made the Liberal Democrats look rather foolish. We did not agree the need for increased spending—other MSPs were present—but we discussed what happened at the local government settlement and the farce of the Liberal revolt.

The minister mentioned resource accounting. We have to have a guarantee of transparency, clarity about spending statements—which should be made in the chamber—and the year-end balances should be dealt with in a clear and honest manner.

I shall try to respond to some of what the minister said. We welcome the renewed spending on health—much of it was flagged up in the past—but we ask again: will the Executive fund Sutherland? We are not asking whether the Executive will put it on a back burner, but whether it will fund it.

Photo of David Davidson David Davidson Conservative

I have given way enough. I am sorry.

We welcome the concessionary fares, but they are only part of a package and we look forward to taking apart the different strands that the Executive is offering on transport policy. Considering what has been going on with our Scottish motorists, I thought that it was a bit rich of the minister to talk about making the journey to work easier.

It is good that schools are being renovated, but what is in it for rural schools? As for the new bursary scheme, it would have been better to do away with the new graduate tax and invest in education as an open door enterprise. Undoubtedly, some people are beginning to worry about that.

The minister stressed the Government's concern for pensioners. He seemed to want to know what the Conservatives are about, which is useful—our UK-wide priority is to ensure that there is a decent basic pension. We welcome the initiatives that he talked about, but Sutherland will deliver a lot of what the Executive claims to want to do.

Not surprisingly, £1.2 billion is being spent on local government—just what the Convention of Scottish Local Authorities ordered in a press release a few days ago. Will the Executive show that it is thinking on behalf of Scotland and that it is not driven by COSLA? That statement made it look as though the Executive is weakening.

There are many issues that we could pick up from the statement. The minister asked what the Conservative party would do. During the budget process, we are happy to engage with the Executive in the committees. We will plan overall for increases in public spending above inflation, but on a sustainable basis. In that way, we can put real money into public services that are our priority and still cut tax in normal circumstances. That is the difference between the Conservative party and the Executive: we recognise that the economy has a cycle. Gordon Brown obviously does not recognise that, as he can predict four years ahead.

Photo of Keith Raffan Keith Raffan Liberal Democrat 4:17 pm, 20th September 2000

I warmly welcome the Minister for Finance's statement. I suppose that that is predictable. However, if he really wants a statement of how well he has done today, he has only to look at the fact that Opposition members are thrashing around aimlessly and have not made one effective point.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No—it is time the Conservatives sat down and listened. After 18 years of disaster and starving Scotland's public services, they should listen to the Scottish people. I left them because of what they did to the public services. The last thing I need is to hear David Davidson preaching to me.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I will certainly not give way to Miss Goldie—she just gabbles on.

The Conservatives must sit and listen. Their record is deplorable. I shall come to it in a minute—in fact, I shall come to it right now. Members should not expect Mr Davidson to reply straightaway, but he will know in what high respect the House of Commons Library's estimates and figures are held. According to those estimates, the Conservative promise to restrain growth in public expenditure to the rate of growth in national income will result in £13.7 billion of cuts in public services over the period of a Parliament. The Conservative party has been consistent only in refusing to say where those cuts would fall.

To be fair to the Conservatives, they have committed themselves to extra public expenditure: they have committed themselves to spending more than £1 billion on a ballistic missile defence system. The Tory TARDIS is stuck in the 1980s and nothing that Dr Who McLetchie can do will crank it up and propel it 20 years ahead.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No. I am not wasting time. I am trying to make progress on a number of important points.

The Conservatives must tell us where the cuts should fall. It is all very well for them to ask the Scottish Executive, "Are these expenditure increases sustainable?" The Conservative party refuses to say what services it would cut, although it is committed to huge cuts over the period of a Parliament, should the absolute nightmare of that party being returned to power occur.

Photo of Annabel Goldie Annabel Goldie Conservative

I am very grateful to Mr Raffan for giving way.

Photo of Annabel Goldie Annabel Goldie Conservative

Even allowing for his normally excitable demeanour—

Photo of Annabel Goldie Annabel Goldie Conservative

Does Mr Raffan accept the fairly basic economic principle that inflation is created if expenditure is increased beyond the natural income growth of the capacity of the economy? Does he consider that, in that event, inflation is desirable? Is he aware of warnings that have been sounded by institutions such as the Bank of England about the Executive's and the Government's proposed spending plans? Does that worry Mr Raffan, or is that just another irritant to his monologue?

Photo of Keith Raffan Keith Raffan Liberal Democrat

I knew that I had made a mistake in giving way—Miss Goldie can make her own speech in her own way at the end.

Of course we realise the importance of keeping inflation low. We were the party that proposed the independence of the Bank of England and the establishment of the monetary policy committee. That policy was opposed by Mrs Thatcher, despite Mr Lawson's putting up extremely good arguments in favour of it. When it comes to controlling inflation, we do not need to take any lessons from the Tories.

I especially warmly welcome the dramatic increase in spending in local government and the moves to a three-year settlement—I understand that there will be an allowance for pay inflation within that. As the minister knows, those moves have met three of the points made by Scottish Liberal Democrat members—I am glad that he has listened to the forceful representations that we have made. He is a politician to his fingertips; it would be churlish and undiplomatic of me to suggest that he would not have made those important moves in the right direction but for fear of losing our votes. Teasing aside, the point is that we really are grateful to him on that score.

The minister will be aware of the three key points that remain. One is the issue of guidelines, which we would like to go or at least to be relaxed. Another is ring fencing and hypothecation. It is absurd that in some council areas special needs teachers are being made redundant while classroom assistants are being taken on. The third point is the inadequacy of the formulae and deprivation indexes. I know that he is considering those points; we look forward to moves in all those areas.

I must not miss out the SNP. I have decided to try a new tack with it. I will wait until the leadership changes on Saturday, then I will write to Andrew Wilson—I give him notice—to ask how many of its £3 billion spending commitments are real commitments. He said that, as we move to the next election, he would make that clear. I presume that he was talking about the general election. It will have a manifesto for that—which I am sure will be fully costed, as I know the SNP takes great pride in that.

My final point is on the Holyrood project. I do not know whether members will remember that the SNP had one as well. The SNP's Holyrood project was 2.5 per cent planned savings in every non-pay budget. Perhaps when I write to Andrew Wilson he will also confirm whether he is still committed to a Holyrood project that seems almost as ill-fated as the other one.

I hope that we will see the SNP adopting a more responsible position on spending pledges when the leadership changes.

Photo of Mike Watson Mike Watson Labour 4:23 pm, 20th September 2000

I wonder whether SNP and Tory members are capable of spotting good news when it arrives. It may not arise often, but it does not come much better than today's announcement. Mr Davidson and Mr Wilson would fit neatly into today's big news story, which is the £20 million lottery win. Had they been part of that syndicate, they would have been greeting and bleating that they had to share it with other people and that the pot was not big enough. I do not know what one can do to please such people.

The partnership of opposition is in danger of falling apart: Andrew Wilson has told us that it is not enough whereas David Davidson has told us that it is far too much. That coalition looks a bit shaky, but no doubt it will survive as long as the Labour-Liberal Democrat partnership.

Photo of Mike Watson Mike Watson Labour

I will eventually, Kenny, but not just now.

I do not know why David Davidson is incapable of coming to terms with the fact that the partnership is in operation and has been effective in delivering government for Scotland. Why is it such a surprise every time Liberal Democrats agree with a Labour member? This is a partnership, as Jack McConnell stressed at every stage of the process.

Photo of Mike Watson Mike Watson Labour

No. The purpose of this debate is not to say whether there should be a coalition. The people of Scotland decided that on 6 May last year, to all intents and purposes.

The SNP should be capable of welcoming the news that we have heard today. In every debate in the chamber, we are told that we should spend more on the health service, on local government, on transport and on any other area that one cares to mention.

Almost everything for which the SNP has asked is covered in the minister's statement, yet still that is not enough: spending plans are not applied correctly or they are not drawn up in the context of an independent Scotland, with oil at $10, $25, $35 or whatever a barrel.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

The Minister for Finance said today that the Executive will increase the capital that is available to councils by 50 per cent. Does Mike Watson accept the details in "Strategic Resourcing for Effective Local Services", which was produced by the Convention of Scottish Local Authorities—a Labour-controlled organisation—showing that the amount that is available to local authorities is half of what it was 10 years ago? A 50 per cent increase in capital will take us only to the point at which capital is three quarters of what it was 10 years ago. Does he accept that what we have heard from the minister is spin and that, regardless of what he said in his statement, local government will be worse off in capital terms than it was under the Conservatives a decade ago?

Photo of Mike Watson Mike Watson Labour

Kenny Gibson has encapsulated the SNP's problem. Andrew Wilson cited public spending as a percentage of GDP in 1992. There was a recession in 1992, so the comparison he made was meaningless. Now we are talking about local authority spending 10 years ago. The key is to look forwards, not backwards. There is no point in comparing what we had three, five or 10 years ago, as the debate is about what we will have in the next three years. It is like the old story of somebody asking directions and being told, "If I was going there, I wouldnae start from here." We are starting from here, right now—that is the good news.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

When Mike Watson was a Westminster MP, he criticised every Conservative budget, but every one of those budgets in the previous Conservative Administration—whether there was a recession or not—invested a greater proportion of the nation's wealth in public services than has been invested at any point during the Labour Administration. Does he like that, or not?

Photo of Mike Watson Mike Watson Labour

I like the spending plans that have been outlined today, which everybody should recognise are an improvement on the past. Vastly greater resources are becoming available. For example, local government will receive 10.5 per cent above inflation over three years. How is it possible to criticise that? Social justice is at the forefront of all policy delivery.

Photo of Mike Watson Mike Watson Labour

No. I have taken two interventions and am running out of time.

I will not repeat the figures that we have heard, because the Finance Committee and the subject committees will go into them in considerable detail over the next two months. The strength of our position is that not only is there transparency, we are now on a three-year cycle.

The spending statement is good news for the people of Scotland. It is good news for the delivery of much of the Arbuthnott report and for investment in local authorities. There will be a year-on-year increase in real terms. That will happen in the context of resource accounting and budgeting.

All parties should welcome the spending plans. It is disappointing that we are hearing cheap political point scoring, given that these spending plans are good news for the people of Scotland.

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party 4:28 pm, 20th September 2000

I am used to greeting Mr McConnell's statements with disbelief, but there were two points in his statement today that I found particularly worthy of note. First, he said that he had not come to the chamber to crow. For a man not attempting to crow, he did a damn good impression of it.

Worse than that was the assertion that this is a partnership budget. We have heard the Liberals say that they played a full role, but no one in their right mind will listen to them. I cannot think of a single thing in the budget that is exclusively a Liberal policy that the Liberals press-ganged Labour into accepting. We all know that the Executive is not a coalition—there was a takeover at the beginning of the Parliament and the situation is the same today.

The Barnett squeeze is an idea that has been knocked around the chamber before. I am aware that some members think that we should not return to it, as it is an old argument. Sometimes the old ones are the classics. I see Malcolm Chisholm smiling—I do not know whether he recognises himself in that description.

We cannot escape the incontrovertible fact that the rate of rise in health spending is lower in Scotland than in England. That is a simple fact. The Government can argue that it is investing more money, but Mr McConnell cannot argue—although he sought to do so when he compared the positions of people in Motherwell and Manchester—that Scots receive the same rate of rise as people in England. That argument cannot be sustained, so the question becomes, why is Mr McConnell so determined to drive the Scottish percentage of spending down to parity? Why is he so determined to lose money from the Scottish budget in relation to the rest of the United Kingdom?

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party

No.

Does Mr McConnell simply not recognise the additional costs of providing health care in Scotland? Does not he understand that, with a third of our landmass being rural and island communities, health care costs more? Is not it the Minister for Finance's job to argue the case for Scotland to get a better deal than we get at the moment? Or does he envisage a reduced health budget for Scotland because, during his travels round the country, he sees reduced need? I cannot believe that that is true. Every member in the chamber will tell the Minister for Finance that there is a profound need for more spending on health in this country; his job is to go and argue that case, not simply to surrender meekly.

Photo of Richard Simpson Richard Simpson Labour

Does Duncan Hamilton recognise the frustration of Labour and Liberal Democrat members? We are not saying that his song is not important, but it is a single song and it keeps coming. Instead of delivering the same song all the time, will he give us some other indication of how his party would spend the money that is available?

Photo of Duncan Hamilton Duncan Hamilton Scottish National Party

When we get an answer to a basic injustice, we will move on. What is clear is that there was no answer today and no answer in previous statements.

I turn briefly to the elderly. There is a breathless heading in this statement: "Making a difference for older people". That begins one of the key paragraphs. It is an attempt to try to hide the Government's failure to deliver properly. If the minister is so concerned about making a difference for older people, why do he and the Administration fail to see the coalition—apparently we are all in favour of coalitions—that exists in the chamber for the full implementation of the Sutherland report? If the Liberals have so much clout in the partnership, why is the Liberal policy—of full implementation of Sutherland—utterly ignored by the Minister for Finance? If he really wants to make a difference for older people and to do something radical in the health service, he should start with full implementation of the Sutherland report and introduce a bit of honesty to the process.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat 4:32 pm, 20th September 2000

I will focus my comments on the welcome extra funding for local government services that was announced by Jack McConnell, the listening Minister for Finance. He said that it is the best settlement in a decade, and I am delighted with it.

As members may be aware, several Liberal Democrat colleagues and I not only voiced our great concerns about what we felt was an inadequate local government financial settlement this year, but we voted against it. As the constituency member for West Aberdeenshire and Kincardine, I have been acutely aware that the cuts imposed on Aberdeenshire Council this year have resulted in marked reductions in services with an increase in council tax.

To concentrate on one issue, I felt that it was wrong that—at a time when the Executive was announcing more money for education nationally—in Aberdeenshire the council was forced to cut school budgets by 3 per cent while the proportion of council funding that is spent on education increased from 53 per cent to 55 per cent of the budget. That showed clearly that Aberdeenshire Council maintained its priority for education but with less money from the Executive. There is no doubt about it: local government, and Aberdeenshire in particular, was getting a raw deal.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

In a moment.

Therefore I was pleased—I hope that Duncan Hamilton is listening—when the Liberal Democrat group decided that local government would be its No 1 priority for the additional funds that were announced today by Jack McConnell. I have said several times over the past few months that I felt that Mr McConnell and the Executive were not responding on the important issue of local government finance.

I am delighted to say that it is clear from Jack McConnell's statement that he has listened; more than that, he has acted—that is the important point.

Photo of David Davidson David Davidson Conservative

The minister made a point about the Joel Barnett formula delivering for each person in Scotland pound for pound. Am I correct in saying that Mr Rumbles—judging by his comments in the debate—disapproves whole-heartedly of what has been going on at the Liberal Democrat conference down south, where it has become quite clear that there will be a Kennedy crunch on the Barnett formula? Should Mr Rumbles and his party have anything to do with national Government, where will they find the money to give to the Minister for Finance if they reduce the Barnett settlement?

Photo of Patricia Ferguson Patricia Ferguson Labour

Mr Rumbles, you have two minutes.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I hope that you will give me time for taking that intervention, Presiding Officer.

Photo of Patricia Ferguson Patricia Ferguson Labour

That is why you have two minutes.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Thank you, Presiding Officer.

David Davidson really cannot stand good news, can he? I thought that his intervention would deal with the local government financial settlement, which is the same topic that I referred to when I intervened during his speech.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I will address the subject in my speech.

The Conservatives want to divert attention from the first-class news that is being sent from the chamber to local authorities throughout the country. The figures are here—local authorities will get an increase of 10.5 per cent in real terms.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

The figures show that the spending in real terms of £5.9 billion will rise to £6.645 billion. I have heard nothing—

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I have heard nothing from the Conservatives or from the nationalists—

Photo of Patricia Ferguson Patricia Ferguson Labour

Order. Mr Rumbles, are you taking an intervention from Mr Gibson?

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

No. I have taken one intervention, and I have only four minutes.

Today's announcement is an important first step. I am enthusiastic about what the Minister for Finance and the Executive have done today, for which they have my full support. However, today is only a step down a long road, and we must recognise the difficult financial situation that faces all our local authorities.

I look forward to a fair local government settlement over the next three years for each individual council, notably my own in Aberdeenshire. I am sure that I will be able to support that financial settlement fully, and I look forward to doing so. I hope that the time will come when I can welcome it in similar terms to the welcome that I have just given.

I congratulate Jack McConnell on being a listening Minister for Finance.

Photo of Patricia Ferguson Patricia Ferguson Labour

Order. The debate has been tight for time and we have reached the end of the period for speeches from the floor. We move to wind-up speeches, and I apologise to members who were not called.

I am afraid that I must go straight back to the Liberals, for whom I call Rob Brown to wind up. Mr Brown, you have four minutes.

Photo of Robert Brown Robert Brown Liberal Democrat 4:37 pm, 20th September 2000

It is unusual for a debate to be dominated by Liberal Democrats.

This has been a cruel debate: cruel because it exposes vividly the contrast between the policies and actions of the Liberal Democrat and Labour partnership parties—targeting funding, going for the people's priorities, spending money imaginatively for Scotland—and the naked opportunism of the SNP, which adjusts its position to every passing wind, spending fairy gold—

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

The member mentioned naked opportunism, but he is a member of the party that, in East Dunbartonshire Council, switched its alliance with the Labour party to one with the Conservatives at the drop of a hat.

What do the Liberals have to say about the information from the Convention of Scottish Local Authorities, which said that local government will need a minimum of £3,024 million new money over the next three years to meet new burdens such as McCrone, school security, the national road safety strategy, and pay awards? Does not that expose the fact that the extra £1.2 billion, which Jack McConnell promised, is buttons in comparison with the amount that will be required to deliver local government services—

Photo of Patricia Ferguson Patricia Ferguson Labour

All right, Mr Gibson. You have made your point.

Photo of Robert Brown Robert Brown Liberal Democrat

I am not sure whether Mr Gibson has an overdose of the Kenny MacAskill disease—he has the ability to add up very large figures, make huge problems and solve them, all in one go. The SNP's approach to this debate is opportunistic and unrealistic, and is based on fairy gold: the SNP will promise anything to anyone who will listen.

I know about such matters as, for 30 years, I sat on opposition benches in one form or another. It is easy to be in opposition, but it is better and more sensible to be in government, to try to make the hard decisions and to make progress.

It is not the case that the minister is to blame for everything. So often, we hear the language of scapegoat, outrage and betrayal from the SNP but, when the chips are down, what counts is how effectively finance is used. Today's spending statement from the Executive was very effective. From my point of view, the centrepiece of the statement was the promise to give central heating to every pensioner and to every tenant in the social rented sector.

Photo of Robert Brown Robert Brown Liberal Democrat

No. I am sorry, but when I gave way before, I received a lengthy diatribe from Kenny Gibson.

That promise has been carried out in partnership between the Parliament and the rest of Scotland. It is a major initiative to end the scandal of fuel poverty, an issue that has been raised by many members. Age Concern Scotland has described the initiative as almost too good to be true. I have not always seen eye to eye on policy with the Minister for Communities, but she, Jack McConnell and the Executive ministers deserve the thanks of every elderly person in Scotland for the package that we have been presented with today.

Mike Rumbles has touched on local government and I have only one thing to add, which is my hope that the settlement will recognise the need for long-term, stable funding for the voluntary sector. Much of that sector's funding comes from local government.

As members have said, the Scottish Parliament has a budget that is, in essence, fixed by Westminster. However, Westminster too is constrained. No Government can go forward raising taxes willy-nilly. No Government has a bottomless goody bag. I make that point because hanging over this debate—and every other financial debate in the Parliament—is the fact that we have an SNP Opposition that believes in Santa Claus. We ran out of nothings on our calculator when their pledges reached £3 billion. Those pledges are made by a party that cannot even keep its own finances in order. Furthermore, its pledges are entirely dependent on the price of oil, in a highly volatile market, exceeding a certain level.

Scotland benefits from being part of the UK. It benefits from higher public spending. It is difficult to understand why Duncan Hamilton in particular cannot recognise the fact that every man, woman and child in Scotland receives more input from public spending than do people in England. That is a result of the ability to target spending in the UK.

It is time for the SNP to accept the home rule settlement, to start being an effective Opposition and to present alternative strategies to those that are set out in the programme that the Liberal Democrat-Labour Administration announced today. We are getting on with the job. When will the SNP play its part?

Photo of Annabel Goldie Annabel Goldie Conservative 4:42 pm, 20th September 2000

We must thank the Liberal Democrats for unrivalled entertainment—if nothing else has happened this afternoon, there has been political posturing that, even by the standards of this chamber, stretches incredulity beyond all limits. We have listened to the Liberal Democrats seriously asking us to accept a situation in which they cosy up to Labour in the Scottish Parliament, while their leader wants to dismantle the very formula that lets them have the financial stability on which the spending plans are pledged. While the Liberal Democrats cosy up to Labour in Scotland, they have a leader who is trying to distance himself from Labour down south. The Liberal Democrats' position is untenable, unconvincing and incomprehensible, and shortly they will prove to be unelectable.

Photo of Robert Brown Robert Brown Liberal Democrat

Does Annabel Goldie accept the logic of the home rule settlement, with different Governments, different Parliaments and different parties at different levels of Government? That is what her party does in local government, where they form various alliances in different parts of the country. Does she accept the home rule settlement?

Photo of Annabel Goldie Annabel Goldie Conservative

It is clear from Mr Brown's remarks that he aligns himself with Mr Kennedy, rather than with his colleagues in the chamber. That is a manifestation of the increasingly incredible position in which the Scottish Liberal Democrats find themselves.

When I first read Mr McConnell's finance statement, I took heart because the first heading was "economic prosperity"—an objective that I applaud. However, when I listened to his remarks, my spirits began to drop. I could not help but notice that the clapping cohorts in the Labour ranks applauded warmly every time that the Minister for Finance mentioned "spend". They cheered him to the skies; such was the fervour that met his concluding remarks, one would have thought that he had just won the Eurovision song contest.

I am therefore surprised that Mr McConnell chose to omit any reference to several factors. He chose to omit any reference to Gordon Brown's alleged threat to require the Scottish Parliament to use its tax-raising powers, or to what is technically a recession in Scotland—not a situation that I welcome. He chose to omit any reference to our productivity level, which is lower than that of the rest of the United Kingdom. Finally, he chose to omit any mention of the inflation risks that are implicit in a spending programme such as the one that he announced this afternoon and certainly such as Mr Brown's comprehensive spending review.

Those are not just my empty opinions. The Bank of England has warned that Government spending plans will send inflation higher unless consumer spending is reined in. Furthermore, the July monetary policy committee meeting reported that, given the likely increases in public spending over the next two years, private sector spending needs to slow further if inflation targets are to be met. I do not pretend to be an economic genius; however, those frank warnings must be taken on board, since they suggest that there must be a very cautious approach to the sort of financial programme that the Parliament might consider.

Although we welcome sincerely the spend objectives that the Minister for Finance has embraced, we must ask whether, given the rather alarming criteria to which I referred but to which the minister made no reference, those objectives are accompanied by the necessary prudence that Scotland is entitled to expect.

It seems clear that there are some alarming omissions in the areas of expenditure that Mr McConnell has outlined. One of those areas, which have been alluded to in the debate, is the non-implementation of the Sutherland commission's recommendations. Mr McConnell could promise our elderly people everything under the sun, but he would hit the button if he pledged to implement Sutherland.

Furthermore, the current allocation to transport is £18 million. That is not what business needs. We are becoming uncompetitive and are experiencing problems in moving goods and services. Our haulage companies are finding it difficult to operate. The Minister for Finance's statement offers little comfort on that matter.

In short, although this budget statement might be laudable in intent, its implementation is potentially alarming. The Conservatives would pursue a much more prudent approach that would provide services against a responsible backdrop of what national income can sustain.

Photo of Brian Adam Brian Adam Scottish National Party 4:47 pm, 20th September 2000

This has been quite an enjoyable knockabout afternoon, but I do not know whether we have learned an awful lot. Many questions have not yet been answered—is not that the way of things? In Westminster, we have the leak and then Gordon Brown makes his statement; in Scotland, we have the leak and then Jack McConnell makes his statement. Indeed, I think that the Deputy First Minister was accused of telling his party conference in Bournemouth details of the local government settlement.

Although we have had the minister's statement, we do not know many of the details. In fact, Keith Raffan pointed out that a number of key questions about the local government settlement have not yet been answered. As Jack McConnell keeps a firm grip on local government finance, perhaps he can tell us when he sums up whether he intends to be honest about how much of the 10.5 per cent increase over the three years will pay for new burdens; how much will be ring-fenced; and whether he will allow the word "local" to come back into local government. If we follow the route outlined by the Minister for Communities, local government will no longer have responsibility for housing. Furthermore, given the recent statements on education, what power is left to local government to make its own choices?

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

On Friday, Brian Adam, along with all the other north-east MSPs, attended a meeting with Aberdeenshire Council and made the same points about the need for an increase in local government spending, particularly for Aberdeenshire Council. However, he has not yet said whether he welcomes the 10.5 per cent increase over the next three years and whether it will be particularly welcome in Aberdeenshire.

Photo of Brian Adam Brian Adam Scottish National Party

If I knew that there was to be an increase in spending for Aberdeenshire, I would welcome it. We do not know whether the financial settlement will restore any of the cuts that have been imposed throughout local government or whether it will just pay for new burdens. However, I certainly welcome the recognition, at last, that self-financing pay settlements are unsustainable and I hope that we will have movement on some areas for which we have no information as yet.

Furthermore, we have had no commitment on the Sutherland recommendations, full implementation of which would make the biggest contribution to the comfort of our elderly.

Our biggest problem with the statement is that this Parliament does not have any real control over its finances. All that we are doing is arguing about slices of the cake; we do not control the cake. The Barnett squeeze is taking effect. It is taking £2.2 billion out of the Scottish budget as determined by the comprehensive spending review. It is not just the SNP that is saying that—The Times has done the analysis and suggests that that is the case. We are also making spending decisions against the backdrop of a technical recession, and our economy will experience some difficulties.

I am not ashamed to say that I believe that if we had more financial control, or full financial control—indeed, I am not averse to using the word independence—we would not have to wait for Gordon Brown to take his foot off the fuel tax accelerator. We would be able to control that here and we would be able to make investment decisions on a much broader basis than is possible at the moment.

Photo of David Davidson David Davidson Conservative

Brian Adam referred to the economic future. When does the SNP estimate that the spending that is proposed by Gordon Brown will run out of steam? Can Brian Adam give us a year for that?

Photo of Brian Adam Brian Adam Scottish National Party

I do not intend to second-guess Gordon Brown. However, if the member is asking what the SNP will do, he should have a little patience. We will publish that in our manifesto in the very near future. Watch this space.

I was most interested to hear the praise that was heaped on Jack McConnell today from the Liberal back benches. I did not hear the same kind of praise being heaped on Gordon Brown by the Liberal back benchers in Westminster. Which set of Liberal policies applies? This is just a 10 per cent formula, and Liberal members are quite happy to accept the cake that it produces.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

On a point of order. Mr Rumbles is waving a piece of paper that the rest of us are not party to. We were told that we would get that information at the end of the debate—[MEMBERS: "It is in SPICe."]

Photo of George Reid George Reid Scottish National Party

That concludes that matter, Mr Crawford. Please continue, Mr Adam.

Photo of Brian Adam Brian Adam Scottish National Party

I am delighted to reassure Mr Watson that we have a different outlook on public spending and different policies from the Conservatives. Perhaps the next time that he wants to suggest that there is some unholy alliance between us and the Conservatives, he will remember the point that he made today. I can assure him that we do not have the same policies.

Photo of Brian Adam Brian Adam Scottish National Party

After Jack McConnell's statement today, it will be most interesting to hear the spending ministers make their detailed pronouncements. Only then will we start to get to the detail we require. We welcome the opportunity to debate this spending programme in the Finance Committee and the other committees of the Parliament. However, I cannot welcome today's statement because it does not provide us with the detail that we need. This is another major disappointment.

Photo of George Reid George Reid Scottish National Party

I call Jack McConnell to wind up the debate and to respond on behalf of the Executive.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 4:53 pm, 20th September 2000

I was very happy to provide all members of the Parliament with the table that Mr Crawford mentioned. Copies are handily placed in envelopes in SPICe. I thought that envelopes might be handy for the Opposition to do some of its calculations on.

The response to today's debate has been very disappointing. We sit in this Parliament with probably the most open and transparent budgeting process of any Parliament in western Europe. Not once in 15 months as Minister for Finance have I heard an alternative spending proposal from the nationalists or the Conservatives, in this chamber or anywhere else.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No.

Today we have heard from both Opposition parties a disappointing set of statements, which reflect the way in which they try to hide the facts of their policies. When the nationalists talk of wanting more power for this Parliament, they mean wanting more power to raise taxes in this Parliament. They want to raise more tax in Scotland, not less. Their campaigns last week and this week to reduce taxes in Scotland are false. They want to increase Scottish taxes, and they would pay the price for that if they were more honest about it.

For Annabel Goldie to say in the same speech both that we need a more prudent and restrained economic policy and that we need to spend more money on community care, transport and everything else that I mentioned in my speech is dishonest. No one can have their cake and eat it. Either there is more spending or there are the totals that I announced. There cannot be more spending as well as a more prudent budget that reduces spending.

It is important that we address the issues that face Scotland. In the brief time that I have, I want to talk about what this spending statement will achieve. It is not about Scotland's oil—a slogan that was around before Mr Hamilton was born and still seems to be around in the language of the SNP front bench. I say to David Davidson that it is not only about popular spending, although, if today's plans are popular, I will plead guilty every time. It is about making choices for Scotland.

Those choices are important. We have said clearly that we will make a difference. We will make a difference to our economy by concentrating the investment in areas such as transport and education. There are people in the gallery today from the meeting that I held in Gourock four months ago, who said in that meeting, as was said in Inverness, Fort William and Dumfries, that transport, local services and community care are the most important issues facing communities in Scotland. Transport and education also come up time and again in meetings with business and trade union leaders to discuss ways to revitalise our economy.

The spending statement will make a difference in services with the best local government settlement for a decade. It will help to transform local government services in Scotland and should be welcomed by those who care about our local councils.

The spending statement will make a difference for the elderly, children and young adults and will improve the justice that is available to them. It will increase the opportunities that are available not only to young people to get a proper start in life but to our elderly people to live a more satisfactory life.

On a personal note, I will say two things in conclusion. I spent a lot of time in the 1980s as a Labour councillor in Scotland. With all due respect to our Liberal Democrat colleagues who have pressed us hard to ensure a good local government settlement—I recognise that pressure—I know how much Labour councillors have done in Scotland in the past 20 years to hold together local services at a time when the Conservative party was doing its best to take them apart. At that time, I dreamt about the opportunity to come to a Scottish Parliament and transform local services across Scotland. I am delighted to be doing so today and I know that Labour councillors across Scotland will spend that money wisely.

I hope that I can say this in the chamber with some respect to those about whom I am talking. Four weeks ago, I attended my grandfather's funeral. I was struck by what my grandmother and everyone who had been close to him in the last 18 months of his life said about the care that he had received from the health service and the local council. He lived an independent life in a rural community as a farmer who did not really use public services. However, the last 18 months of his life were made much easier by those who looked after him. That is important.

The community care and elderly package that we announced today was not put there by accident or for a headline. It was put there because travel, social care and heating are fundamentally important services that will make a difference to the lives of older people across Scotland. That is what this partnership is about: making a difference for the people of Scotland. I am proud to be putting the spending statement forward and will defend it in every committee and in the chamber until the budget bill is passed.

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

That concludes the debate. As there are no Parliamentary Bureau motions before us and no questions to be put at decision time, we move straight to members' business.