Budget Process 2004-05: Stage 2

– in the Scottish Parliament at 3:10 pm on 17 December 2003.

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Photo of George Reid George Reid None 3:10, 17 December 2003

The next item of business is a debate on motion S2M-716, in the name of Des McNulty, on behalf of the Finance Committee, on stage 2 of the 2004-05 budget process.

Photo of Des McNulty Des McNulty Labour 3:12, 17 December 2003

The pre-Christmas budget debate promises new treats as well as old favourites this year. As last year, Rab McNeil will have to strap himself into his seat to endure 11 minutes from me on the Finance Committee's budget report. However, I am pleased to say that we will not be without a contribution from David Davidson, who is a fixture in the calendar as reliable as the "Morecambe and Wise Christmas Special", and possibly just as dated. There is a special bonus: Fergus Ewing will be winding up the debate. Members of the Finance Committee have been running a Fergus bingo competition in recent weeks to see how often he manages to introduce the Holyrood building into contributions on other subjects. I hope that people have got their pencils ready; the first person to shout, "Holyrood House", on hearing five separate references, wins this year's star prize.

I shall begin by highlighting issues raised by Donald MacRae of Lloyds TSB Scotland and Peter Wood of DTZ Pieda Consulting in their evidence to the Finance Committee about the priority that they felt should be given to promoting economic growth. Donald MacRae felt that there was a risk that the increases in public spending in the budget would

"make Scotland's overall economy more dependent on the public sector."—[Official Report, Finance Committee, 28 October 2003; c 370.]

Peter Wood felt that the political priority given to growing the economy was not adequately reflected in allocations to the enterprise and lifelong learning budget and expressed his concern over the lack of a rationale for the increases between different portfolios.

That concern about the lack of rationale was not confined to those experts. In their joint submission about resource allocation and budget prioritisation, the Justice 1 Committee and the Justice 2 Committee made a similar point. That report recognised that the allocation of resources is not the sole indicator of priority, but said that it seems clear that, if, as the budget grows, any increasing proportion of that budget is allocated to a specific activity, that activity is a priority. On the other hand, if, as the overall budget grows, the proportion allocated to an activity, even when widely defined, struggles to maintain a constant proportion of that budget, that activity cannot be classed as a priority.

Our two economic experts were not arguing against more public spending. Their first concern was that, if growing the economy is the top priority, that should be reflected in budget allocations, not just to the enterprise portfolio but across other portfolios as well. Secondly, they argued that we need to ensure that how the money is spent produces what Alf Young calls revenue payback, in the form of a more prosperous and vibrant Scottish economy.

Particularly when there have been year-on-year expenditure increases—at levels that are unprecedented in my lifetime—with more money for services such as health and education, we must ensure that money is invested in securing longer-term gains, whether that is done by taking advantage of research and technological change; by upgrading transport, hospital and school infrastructure; or by regeneration prospects that deliver a transformation in an area's social and economic circumstances.

Both the committee's experts felt that we need to change the balance between capital expenditure and revenue expenditure at this stage in the economic cycle, because of the importance of capital spending to economic growth. That is a complex issue, into which the committee will delve further. For the moment, however, we recommend that the relative priority that is given to capital expenditure in relation to revenue expenditure in the 2004 spending review be reviewed. We recommend that more should be allocated to targeted capital expenditure such as transport improvements, property and housing-led regeneration and other major infrastructure improvements.

To be fair to the Executive, progress has undoubtedly been made in taking forward major capital projects. The school regeneration projects that are being implemented throughout Scotland, the implementation of ambitious acute care strategies such as the greater Glasgow scheme, the Executive's commitments to the M74 link and the Clyde waterfront project are all steps in the right direction. However, given the lead-in time for major capital projects, we must use the opportunity that we have now to secure lasting benefits, not only in the physical infrastructure but through the economic stimulus that capital expenditure on such a scale can have to the Scottish economy as a whole.

The Finance Committee feels that considerable progress has been made over the past two years in securing greater transparency in the presentation of budget information. In particular, we commend the Executive for its positive response to the previous Finance Committee's recommendation regarding new spending proposals, which are now presented in a discrete section headed "New resources". The committee welcomes the introduction of a distinct section on equality, which identifies spending across departments and marks important progress on the equality-proofing agenda. It also welcomes the absence of cumulative accounting from the budget discussions that we have held with ministers. We recommend that the "Closing the opportunity gap" and "Sustainable development" sections of the portfolio chapters of the draft budget should adopt the model used in the "Equality" section and identify relevant activities and costs.

The Finance Committee would welcome greater clarity in future end-year flexibility announcements, which were delayed this year in order to factor in money that was used to implement elements of the partnership agreement. In particular, we want the Executive to work with the Finance Committee to develop time series data on budgetary trends, ideally over a 10-year period, so as to allow a much more structured appraisal of performance across portfolios, as well as within them. There were some differences of view in the committee about how far down the levels it might be feasible to apply such a time series analysis. Personally, I feel that we would need data at levels 1 and 2. Our goal of a 10-year period might not turn out to be technically feasible, depending on the number of baseline revisions that would have to be taken into account. However, I think that all committee members are agreed in principle that trend data are crucial if we are to have a meaningful strategic overview of the budget and if an informed debate on the choices before us on spending decisions is to take place.

We have had a long dialogue over the past year with Andy Kerr, the Minister for Finance and Public Services, and his deputies, Peter Peacock and Tavish Scott, regarding future arrangements for examination of the budget. There is a clear need to rationalise the overlap in documentation between the annual expenditure report and the draft budget. We are pleased that ministers are suggesting a way forward for 2005-06, especially with regard to performance reporting, which was a key recommendation of the previous Finance Committee's review of the budget process.

Our view is that the revised AER should take into account the changing fiscal context before committees make recommendations on spending priorities at stage 1 of the process, and that the term "annual expenditure report" should be dispensed with, reflecting a revised stage 1 of the process involving an assessment of past performance and a discussion of strategic priorities, both of which are important developments. We believe that the revised documents at stage 1 of the process should include an assessment of progress on spending priorities, including health and local government budgets, in the proposed performance report on progress against targets. That report should give specific, measurable information on such progress.

A clear and unambiguous response from ministers to the committee's spending recommendations in each portfolio chapter of the draft budget should be provided in the formal response to committee reports at stage 1. We recognise the importance of the biennial spending review, as opposed to the annual budget process, in determining changes in spending priorities. We are currently considering how the Finance Committee and subject committees might be most effectively involved in examining options and influencing decision making.

The Finance Committee remains concerned about the number of targets that are set by ministers and how they are selected. A recent report by the Westminster Public Administration Select Committee concludes that ministers need to choose and communicate clear priorities, rather than setting too many targets; to concentrate on key national priorities rather than micromanagement; and to move from targets to trends as the basis for measuring progress. Our view is very similar. We think that there are too many targets and that some of the targets obscure rather than clarify what the Scottish Executive is trying to achieve. We believe that there is too much focus on activities, rather than outcomes, and that the use of targets within portfolios is all too frequently an impediment to progress on cross-cutting priorities.

We are not arguing that there is no place for targets. When they are used, targets must be properly quantified to ensure not only that spending departments are meeting their targets but that such targets are improving public services. In that way, it can be assessed whether or not better outcomes are being achieved. We are keen that effort should be concentrated on areas where progress is possible—for example, linking allocations directly to outputs—and that the Executive should concentrate on developing and meeting strategic targets, rather than departmental activity measures. The use of targets should also promote effective management, by building in incentives for those who achieve efficiency savings. Our recommendation is that the Executive should evaluate the impact of targets in practice, including assessing the delivery of improvements to public services, with a view to rationalising and simplifying the process prior to the 2004 spending review.

The final issue that I want to highlight is the scrutiny of block allocations to health and local government. As a former councillor and member of a health board, I am very sensitive to the need for local autonomy in decision making, including the allocation of resources between different priorities in line with local needs and circumstances. However, the policy and financial assumptions that underpin allocations to health boards and local authorities should be made explicit, especially when new resources are being allocated.

It used to be said that only three people understood the way in which grant-aided expenditure was allocated—one was mad, one was dead and the other was Professor Arthur Midwinter. The Finance Committee is privileged to have Professor Midwinter as its budget adviser. That has greatly assisted us in understanding what is going on in the block allocations. However, we believe that the grant formulas should be made explicit in the draft budget, so that everyone can have access to this information.

I thank the clerks to the Finance Committee, who have done a terrific job for the committee in a very pressured period since it came into being, and Arthur Midwinter, who did a terrific amount of work in bringing together a huge mass of information that has allowed us to write such a comprehensive budget report. I also thank Executive officials and ministers who have co-operated with us in meeting our objectives, and everyone else who has been involved, especially other members of the committee.

I move,

That the Parliament notes the 4th Report 2003 (Session 2) of the Finance Committee, Stage 2 of the 2004-05 Budget Process (SP Paper 62).

Photo of Jim Mather Jim Mather Scottish National Party 3:23, 17 December 2003

About three years ago, when I started to take the SNP economic case around the committee rooms and board rooms of Scotland, a director of one of our major civic organisations said that the two key measurements of any Government's performance should be life expectancy relative to other comparable countries and population growth relative to neighbouring countries. He believed that those measurements encompassed a range of issues—economic vibrancy, job availability, job satisfaction, housing, diet and, crucially, personal and national self-esteem.

The more I considered his comments, the more they rang true. Although any normal Government will properly also monitor and control borrowing, spending, growth and taxation in order to balance the books and achieve the best outcome for its people, its overall performance will be reflected, crucially, in life expectancy and population growth. We must face the fact that in Scotland at the start of the 21st century neither life expectancy nor population levels match what is being achieved by any of our western European neighbours.

That is not surprising, given that for 30 years we have underperformed all of them in economic growth. Today, we are reviewing a budget that in the words of one of our expert witnesses, Donald MacRae,

"is more of a series of spending plans than a budget."

In other words we are reviewing a process that is a pale shadow of the budget processes of our competitor nations and that exposes the self-imposed handicap of branch-economy status with ample evidence of direct and collateral damage to the people, fabric and credibility of Scotland. Of the three attributes of real economic management that I mentioned earlier—borrowing, spending and taxation—only spending is really devolved to the Parliament. It is the only complete power that the Executive has to influence outcomes for the people of Scotland. Without its logical companion powers, it is woefully inadequate.

Nevertheless, we are where we are and I will not shrink from my duty of making suggestions for the better management of Scotland's finances under the current settlement, echoing some of the recommendations in the committee report. Three major recommended changes in the report strike me as important. First, there is a need for the restatement of historical financial data on a consistent basis, going back at least 10 years, thus allowing spending trends to be identified and analysed. Secondly, there should be much more comprehensive data on capital expenditure and a more appropriate balance between capital and revenue spending. There is a vital link between capital expenditure and long-term economic growth. Thirdly, we are also looking for a more tangible link between a policy objective being a priority—or even a top priority—and a planned expenditure total and relative percentage increase in that area, reflecting its priority status.

To those points I add a concern, which was voiced earlier, and by several witnesses, that our private sector is shrinking and that there is a danger that we have created conditions that have made us even less entrepreneurial and less likely to achieve the economic growth that we need to achieve. There is concern about the effectiveness of our Government's spending and its ability to achieve its specific objectives, let alone improve the lot of everyone in Scotland.

I will address each of those points in turn and I refer first to comparative data. Peter Drucker, the eminent author and consultant, once said famously, "If you can't measure it, you can't manage it." He was right. Scotland needs, and this Parliament must demand, proper comparative data for 1993-2003 and beyond. Only then will we be able to see the trends in spending and plot the effect of that spending on the measurements that matter to us all, including growth, life expectancy and population level. That is elementary and essential and it must be addressed soon.

Secondly, we need data on, and a healthier emphasis on capital expenditure, not only because that is right and proper—in line with Drucker's comment—but because we all aspire to living in a Scotland that builds infrastructure and assets that are rooted here and that can help us thrive and compete. Yet over the two years in question, the increase in capital expenditure is only 4 per cent, compared to the increase in the operational budget of 13 per cent. Those of us who aspire to taking the mature step of allowing Scotland to be all it can be, and who reject our branch-economy status, are duty-bound to highlight the Executive's excessive emphasis on revenue spending. After all, that is one of the historic problems in the water industry, for which we are all paying a heavy price. Surely sound management practice and painful precedent dictate that the Executive must ensure that there is a better balance in future.

Thirdly, I mentioned priority status, which is crucial, particularly vis-à-vis economic growth, because that continues to elude Scotland and it is no great mystery why. As long as the Executive is content for Scotland to be a branch economy—and to pay the price for that status by allowing Scotland to be a low-wage economy with high migration and low labour productivity—we will fail to realise anything like our considerable potential.

The unsustainable nature of that position is now clear and the key point is this: having made the indefensible choice of allowing Scotland to compete without the full set of macroeconomic tools, the Executive now has to say when the extra public spending is going to produce a revenue payback in terms of a more prosperous and vibrant Scotland and when it will produce better tangible outcomes for patients, parents, pupils, students and those who would like to come back to well-paid jobs in Scotland.

Photo of Murray Tosh Murray Tosh Conservative

I now call Brian Monteith to close—sorry, to open—for the Conservatives. That was wishful thinking, Brian.

Photo of Brian Monteith Brian Monteith Conservative 3:29, 17 December 2003

I assure you, Presiding Officer, that despite the fact that I normally wind up, today I will be opening, although I suspect that my speech might also end up as a wind up in some respects.

The debate is about the Finance Committee's report on the budget process. For the detail of the Conservative take on that issue, I will defer to my good friend Ted Brocklebank, who serves on the Finance Committee. I would like to say a little about the overall context in which the budget process must be placed and the committee's recommendations that come from that. In doing that, I shall not give a partial, partisan or ideological view, as is my usual custom, but shall instead turn to the comments that were made by a number of learned academics in their evidence to the committee.

First, I will draw on some evidence from Peter Wood of DTZ Pieda Consulting. He told the Finance Committee:

"The budget statement and its supporting documents are very detailed. However, they contain many detailed priorities rather than discussion of the overall priorities. Below the level of detailed targets for increases, it is not clear why the big decisions have been made. Why is spending on health and transport being increased more than spending on higher education?"

He went on to give a number of further examples, but his point is clear. It occurs to me that if it is not possible to have more discussion of the priorities during the budget process itself, there is ample opportunity for us to do that in the chamber.

Peter Wood continues:

"I look at the increased spending in the Scottish budget and ask whether that spending is intended to increase the quantity or quality of public services or whether it is about keeping pace with public sector cost inflation—increasing spending in real terms just to stand still. For all the detailed information that appears in the budget, it is hard to discern the answer to that question."—[Official Report, Finance Committee, 28 October 2003; c 374.]

I agree entirely with that sentiment, both as a finance spokesman for the Conservatives and from my past experience on subject committees. I do not feel that we get down to that detail. Although the Finance Committee's report shows that there have been some welcome advances in how the budget process proceeds, there is still a great deal to be achieved and many of the people who gave evidence to the committee drew attention to aspects of the process that could be improved.

It is no surprise that Donald MacRae has already been mentioned by several members. He said:

"there is a risk that high public spending may crowd out private sector activity. Secondly, high public spending exaggerates the weakness of the private sector in Scotland. Both elements have contributed to the poor performance overall of the Scottish economy over the past few years."

He went on to clarify that, by saying:

"The support that the public sector provides is not guaranteed, because the spending increases that have taken place in the past few years may not continue in coming years."—[Official Report, Finance Committee, 28 October 2003; c 375-6.]

Donald MacRae was echoing what others, including Arthur Midwinter, have said. He was saying that there is a mood about—some put it stronger than that, but I will give the Executive and the United Kingdom Government the benefit of the doubt—that the spending increases cannot continue, that there will come a day of reckoning and that that will have to be addressed.

It is important that committees such as the Finance Committee bear in mind the point about the balance between the private sector and the public sector when they examine the detail of spending because, when we spend public money, there is an issue about productivity and value for money. Within the UK, tax revenues have been depressed and the public borrowing estimates for this year have had to be revised four times, from an original figure of £15 billion to the present figure of some £37 billion. We have had warnings not only that there might have to be public service cuts in about 2006 or beyond, but that some taxes might have to go up. There is speculation about a rise in stamp duty, about VAT going up to 20 per cent and about income tax hikes.

I suggest that the tax-and-spend model for the economy has crashed and that we must reboot our system. We need new, low-tax, low-regulation software that provides better public services for Scotland's people and fresh opportunities to create wealth. That can be done. The sceptics need only learn that lower marginal tax rates can, and often do, lead to higher tax revenues as direct and indirect costs to taxpayers are reduced. The economy and, indeed, the public sector can be more productive without damaging cuts. One has only to have faith in our business leaders and in consumers that they will spend their own money more wisely than Government ministers can.

In conclusion, the signs are that the minister's financial proposals do not address the real problems that exist. Inherent in the Finance Committee's report is a recognition that there are tough days ahead, so we need some improvements in the way that we budget our finances through this parliamentary session.

Photo of Murray Tosh Murray Tosh Conservative

I call Dr Elaine Murray to open for the Labour party.

Photo of Elaine Murray Elaine Murray Labour 3:35, 17 December 2003

I see that Rab McNeil is still in the press gallery. He might be bored by Des McNulty, but he thinks that I am a dog.

Photo of Elaine Murray Elaine Murray Labour

I might be a bit of a mongrel, actually.

Anyway, I welcome the opportunity to speak in today's debate, which is about the presentation and the process of reporting on the budget rather than about the budget's content, which will be a matter for debate at a later stage when we have the budget bill in front of us.

There has been general agreement that the process and presentation have improved. In 1999, we inherited the Westminster model of presenting budgets, which uses shock-and-awe tactics whereby the House of Commons is bombarded with information that has to be picked over during subsequent days as the media, back benchers and Opposition parties try to interpret the proposals to decide whether they will support or criticise them. There is a role for that sort of theatrical event in politics—the UK budget is one of the few political events that actually interests the public—and it is absolutely appropriate that budgetary decisions are presented to the Parliament through ministerial statements. However, the operation of the Scottish Parliament is rooted in its committee system; it is necessary that the information that we receive is presented in a manner that enables us to fulfil our function as scrutineers of the Executive.

The Executive is to be commended on the continuing improvement in the provision of financial information that Des McNulty referred to. I am particularly pleased to see the absence of cumulative accounting. However, our report requests further clarity in how objectives and targets are funded to reflect the Executive's key priorities. That would allow us to interrogate whether and how funding decisions achieve or do not achieve those policy priorities. That is why I agree strongly with Wendy Alexander—sadly, she is off ill, or she would be standing here now—on the need for that broad financial backdrop against which funding decisions are made. As Jim Mather pointed out, it would be of great assistance to know what the trends have been over a period of years, so that we could assess how those are related to policy priorities and what the outcomes were.

I recognise, of course, that outcomes are what matter and I know both that economics is not an exact science—in fact, I suspect that it is not a science at all—and that local and national economies are not isolated systems, but I would like to understand better what the reaction pathway is. We would like to know how putting £X million into one budget line or £Y million into another budget line actually achieves the outcomes that the Executive desires. Not only would that enable Parliament to scrutinise Executive decisions better, it would also encourage Opposition parties to propose, as oppositions in councils have done for many years, alternative budgets on which they could be judged.

Opposition members in the Parliament often say that the job of the Opposition is to oppose, but—

Photo of Elaine Murray Elaine Murray Labour

I will just finish the sentence before giving way.

Opposition members often say that it is their job to oppose, but their job is not just to oppose but to provide alternative policies. Good Oppositions should be able to suggest how those policies would be funded.

Photo of Brian Monteith Brian Monteith Conservative

I wholly agree with the member that it would be beneficial for the Parliament to have alternative budgets to discuss at some stage, but does she agree that the Parliament's budget process, which requires that amendments or alternative budgets be introduced at committee level, is not conducive to having that debate?

Photo of Elaine Murray Elaine Murray Labour

I will refer to some of that later, but part of the point that I was making was about the difficulties for Opposition parties.

It is clear that some form of scrutiny of the links between financial inputs and outcomes is done outwith the budget process. The Finance Committee considers the financial memorandums that are attached to the policy statements that accompany bills. For example, we can assess the Executive's key priority of tackling crime not only by looking at things such as the number of police on the beat, but by considering the bills that reform the court system, that introduce other disposals to provide deterrents and that enhance community safety.

The Executive is expected to use the financial memorandums to indicate what funding might be required to support the legislation. However, that memorandum cannot and does not provide the whole story. The problem is making the link at strategic level between the funding allocation decisions and how those produce the desired objectives and outcomes. It is not just about how many millions are put into a portfolio; it is about the information that we need to allow us to judge whether that funding is being allocated in the best possible way to get the desired outcomes.

That is where the budget continues to disappoint, because we could not trace how the Executive is funding sustainable development or the closing of the opportunity gap. We are not yet in a position to judge whether a bit more in one budget line or in one portfolio might better achieve the stated objectives. That then makes it difficult to analyse the decisions that are made in the biennial spending review process to identify new areas for funding, to decide what areas should receive increased funding or might need to be sunset for various reasons; it is also difficult to analyse what quantitative criteria are used to make those decisions.

That knowledge would enable the Parliament to judge better the action taken within the Executive's parameters and it would allow the committees to make meaningful alternative budget suggestions. That is the point that Mr Monteith made. There is a common desire to understand better the mechanism that affects outcomes. Throwing money at an issue is likely to effect some improvement, but the effectiveness depends on what is put in and where it is put.

To achieve best value, we need to understand how particular inputs and investments in areas of activity influence outcomes and the extent to which that happens. After that, we can have an informed debate about those outcomes and much of that will be a political debate between the different parties. However, we also need to know about how investment is used to achieve outcomes and whether that represents value for money.

I close by thanking the Finance Committee clerks, members and of course, Professor Midwinter, and not just because he bought me a drink last night.

Photo of Mark Ballard Mark Ballard Green 3:42, 17 December 2003

I thank the committee for the opportunity to comment on the Scottish budget process. We are fortunate that we have the chance to scrutinise Scotland's draft budget. That level of scrutiny is not available to our Westminster colleagues and we ought to welcome it.

The Finance Committee's report that we are debating makes many points that I do not intend to recycle. However, there is one criticism of the budget process that was mentioned by Des McNulty and Elaine Murray and which is worthy of close examination. The committee points out the lack of the information that is required to scrutinise the effectiveness of the cross-cutting themes that were laid out in "Building a Better Scotland". That document offered five areas for priority action and two cross-cutting themes: closing the opportunity gap and sustainable development. Those themes were to

"form the basis for all of our work".

In addition, the BABS document described

"a commitment to sustainable development running throughout all of our spending proposals".

The First Minister reinforced those points in a speech that he made in February of last year, in which he said

"Today I welcome this opportunity to set out some early action that will be taken across the Executive. Action on recycling, action on renewable energy, action on local concerns and most of all action to make the spending decisions across all the devolved budgets more sustainable."

The Scottish Green Party welcomes any commitment to increasing the profile of sustainable initiatives. It is perfectly possible that the spending plans for next year contain good examples of the cross-cutting initiatives. Unfortunately, as the Finance Committee has made clear, the lack of the information that is required to scrutinise past performance on those initiatives or to examine future budget allocations makes it impossible to assess their true effectiveness.

It is not only the Finance Committee that has made those criticisms. As is mentioned the Finance Committee's report, the Education Committee, the Health Committee, and the Environment and Rural Development Committee also made similar points about the lack of transparency. Good initiatives may well be taking place, but without that transparency it is impossible to assess their effectiveness. My concern is that this appears to be yet another example of laudable Executive rhetoric on the environment and sustainable development simply not being matched by the reality.

As many examples of the Executive's policy show, the sad truth is that, as soon as there is a perceived conflict between sustainability and economic growth, sustainability is quietly put to one side and not permitted to rock the boat. I hope that there is evidence in the budget to show that that is not the case. However, without that transparency, it is impossible to assess the evidence. Until MSPs can scrutinise not only the financial aspects of the Executive's draft budget, but its environmental and social aspects, we will not fully carry out our function of scrutinising the budget process.

I very much commend Des McNulty and the Finance Committee for highlighting the shortfall in the information that is contained in the draft budget. We hope that, in future, draft budgets that are published by the Executive will enable us to scrutinise fully the sustainability pledges that cut across all departments as part of the wider process of looking at the social and environmental, as well as the financial, aspects of our budgeting. It is a great advantage of this Parliament that we have that scrutiny process. Flawed though it is at the moment, it is great to have it.

Photo of Christine May Christine May Labour 3:46, 17 December 2003

This is my first year in the Parliament, so it is the first opportunity that I have had to participate in the budget process. I was quite excited about it. My briefing note said that there was the opportunity for committees or individual members to lodge amendments at stage 2. "Good," I thought, "We are going to have a debate." I looked for the amendments but, of course, there were none.

Had he been alive today, I am sure that Oscar Wilde would have been thinking about me when he had one of his characters say:

"I am known for the gentleness of my disposition, and the extraordinary sweetness of my nature".

That is true not just of Gwendolen Fairfax, but of me. I am slow to get angry. However, what makes me angry are deceit, duplicity and discreditable behaviour in financial matters. I consider that all the parties in this chamber other than the Executive parties are guilty of all three.

Let me start with the SNP. "We can do it all by ourselves," they say. Giving money and power to them would be like giving whisky and car keys to teenagers—to paraphrase P J O'Rourke, another Irishman. "Give us more," they say, "More public money for roads, railways, health, education, the Shopmobility Highland bus service"—the list goes on and on. Nowhere have I seen or heard how that spending would be paid for.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

If the SNP said that it would not spend £500,000 on hedgehogs and £401 million on Holyrood, would the member agree with us?

Photo of Christine May Christine May Labour

I would like the SNP members to say anything with which I could agree—or disagree—but they have not. They have not said how they will fund any of their proposals—I think that they are scared to. They want the public to believe that it can all be had for no pay. That is deceitful, duplicitous and discreditable behaviour.

On my right are the Tories. George Bernard Shaw said:

"A government which robs Peter to pay Paul can always depend on the support of Paul."

I suppose that I should give the Tories credit for at least being honest. They want to take from the poor and give to the rich—that is what they said last week.

Photo of David Davidson David Davidson Conservative

The member mentioned Peter and Paul. Does not that describe the Arbuthnott formula that the Executive uses to fund our health boards?

Photo of Christine May Christine May Labour

No. In the debate last week, the Tories said that they would take money from the national health service and from schools to fund private care. They said that that would free up space for the poor; however, they forgot to mention that they would have taken all the money that might have funded that space. That is deceitful, duplicitous and discreditable behaviour.

Photo of Brian Monteith Brian Monteith Conservative

Although she is new to the Parliament, the member will know that the official report tries hard to ensure that all quotes and examples that members give in speeches have references. Will she be able to provide exact examples of any Conservative members saying that money would be taken away as she suggests?

Photo of Christine May Christine May Labour

My understanding of what was said last week is that money would be removed and used for the purpose that I suggested.

The Greens are too busy hugging trees to see the limits of the forest. We cannot just take the long-term sustainable view without considering the short-term economic consequences—

Photo of Christine May Christine May Labour

I ask the member to let me finish the point. To pretend otherwise to that point of view is to practise deceitful, duplicitous and discreditable behaviour, like others. As for the rest, they are wired to the moon and living on planet Zog. We have heard not only the same old song, but the same monotonous whine.

We are considering the Executive's budget plans and the Finance Committee's report. The Executive's point of view is that the budget plans start from a strategic basis. We have strategy documents on which the Executive bases its budget plans for the long term, the medium term and the short term. The goals are consistent and the proposals have consistent funding—many are funded over three years. That is as much certainty as we can have in an uncertain world.

The Finance Committee considered the budget, as have the subject committees. I am pleased that many subject committee comments were picked up in the Finance Committee's report. I will not rehearse all the comments, but I will pick up on one or two. The report calls for

"greater clarity in future EYF announcements".

From a back-bench point of view, that would improve the quality of scrutiny by committees and the Parliament.

The report deals with setting and funding priorities, and in particular how priority targets are set. I have said before that we have too many targets and that the danger is that the Executive might seek to micromanage and that the budget would reflect that. I urge ministers once more to take that on board.

More work and greater clarity are essential on cross-cutting themes and the way in which targets and spending in support of those targets are identified. I would like detailed work to be undertaken and detailed proposals to be made on the argument about the balance between the priorities that are given to capital and revenue.

I hope that, as I become more used to the system, I will have a better speech to make next year, when I hope to be called to speak. I also hope that other members have listened to me and will produce concrete proposals against which we may put some arguments.

Photo of Alex Neil Alex Neil Scottish National Party 3:52, 17 December 2003

I share Christine May's aspiration that she should make a better speech next year. She started by saying that she had looked forward to the debate with excitement. It is well seen that she is a new member, because she is the only member who would look forward with excitement to a debate that Des McNulty started.

Members:

Oh!

Photo of Alex Neil Alex Neil Scottish National Party

To be fair to Des McNulty, ever since Jack McConnell sacked him as a minister, he has been somewhat animated—so much so that I began to think last week that he was looking for a job with Disney as Mickey Mouse.

Christine Grahame—sorry, I mean Christine May: they are two very able ladies. Christine May said that in financial figures, she hated deceit and duplicity, which she thinks are disgraceful. I agree with her. I say to her that if she is looking for deceit, fiddled figures and duplicity, she should read the publication that the Scottish Executive produced last week called "Government Expenditure and Revenue in Scotland 2001-02". That document contains a litany of fiddled figures, lies, damned lies and not many statistics.

Photo of Christine May Christine May Labour

Would the member like to give the chamber two examples of the Executive lying and of fiddled figures?

Photo of Alex Neil Alex Neil Scottish National Party

I would be absolutely delighted and I will give more than two examples. When the identifiable public expenditure per head in Scotland is compared with that for the rest of the United Kingdom, the premise is that we are supposed to be subsidy junkies. Then one looks at the detail of the figures.

The Executive gives a figure for the revenue that was raised in Scotland. When one comes to the expenditure figures, however, the Executive does not give the figure for the money that was spent in Scotland, but the figure that was allocated by Treasury civil servants for the Treasury ledger charge against Scotland. When one takes away that fiddled figure and adds in North sea oil—according to these fiddled figures, none of the oil belongs to Scotland—one does not get a deficit of £8 billion, but a surplus of £5 billion for Scotland.

I say to Christine May and her unionist comrades on the Liberal, Labour and Tory benches—for it was Ian Lang who started the annual fiddle—that they should look at the figures. If they do so, they will realise that there is no basis for suggesting that we are the subsidy junkies of the UK. Let me take the figure for the non-identifiable expenditure, which was the part of the equation that was used to reach that conclusion. The expenditure is non-identifiable because, if the Executive were to identify it, that would destroy its argument.

On defence expenditure, one has to use the figures for 2001-02, as they are the latest year for which figures are available for Scotland. Is that because UK Government civil servants cannot count or because it takes them an extra year to fiddle the figures for Scotland? If one looks at the defence figures, over £2 billion is allocated for Scotland. Where is the money spent? It is not spent in Scotland. If one looks at the Defence Research Agency's budget, we do not get 10 per cent or 8.6 per cent of its expenditure; we get less than 1 per cent. If we in Scotland had our fair share of the Defence Research Agency's spend, that would almost double the total amount that was paid annually into our universities and similar organisations for their research budgets.

Where is the duplicity? It is on the Liberal-Labour benches here and on the Labour benches in London. Far from being subsidy junkies, we are being robbed blind as a result of being part of the union. If we take into account the multiplier effect and the knock-on benefit on jobs and additional revenue, far from being a poor nation, we would be a relatively rich nation; far from being a nation with high unemployment, we could have much lower unemployment; and far from being a nation in poverty, we could be a nation without poverty.

I say to Christine May that, between now and next year's debate, she should go away and dae her homework. She should check out her figures and come back and tell the chamber the truth. If she does that, I am sure that she will agree with me.

Photo of Murray Tosh Murray Tosh Conservative

Nobody seemed to disapprove of that speech too much, but I ask the remaining speakers to address—even if just occasionally—the budget for 2004-05. I call Jeremy Purvis after which I am minded to call a Conservative should any of them care to press their request-to-speak buttons.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 3:59, 17 December 2003

I shall endeavour to get back to the debate in hand. I am also a new member and, as such, I echo the comments that were made by Dr Murray and the committee convener in paying tribute to the clerking staff and our professional advisers. I also pay tribute to the many witnesses who gave evidence to the committee and to the Deputy Minister for Finance and Public Services and his officials for being so responsive.

As a new member, I have had no experience of previous budget processes, so I will focus my comments on two areas. An element of a theme has developed in the contributions of those members of the Finance Committee who have spoken so far this afternoon. That theme builds on my comments in last week's debate on public services, when I said that the Parliament needed to move the debate on—slightly—from a focus on setting quantitative outputs towards a greater consideration of qualitative outcomes.

However, if we go down that route, we will need a bit of a self-denying ordinance in our questioning of the Executive when we debate the budget. For example, it is possible to gauge indicators for an outcome in relation to healthier children, but it is hard to do so. When the Executive set out targets in the budget document, some committee witnesses—and our own instincts—suggested that some targets were less meaningful than others.

When, for example, a witness suggested that the budget contained too many targets, I pointed to the clear target for 18,000 more low-cost or rented homes by 2006. That was followed by a target to

"reduce the number of households becoming homeless more than once in a year".

Therefore, there is a lack of consistency. Indeed, the target that states that by 2006 the Executive will

"increase the number of Scots achieving success in key sports and events from the position in 2000" jars with many of the other, serious targets that were included in the budget document.

I agree that there needs to be a better understanding of what the targets in the budget are for, but we must also pay regard to the overarching outcomes. We can hit every target in the budget, but services will not necessarily get better if the policies for which the targets were designed were not good policies in the first place. That was highlighted in the evidence that the committee received from the respected health economist Dr Andrew Walker when he discussed the performance assessment framework for health with us. There are many indicators on procedures and outputs—for example, there are many targets in the health service for reducing coronary heart disease and cancer.

The budget could show an increase in health expenditure, and it does. The budget could show health improvement measures for long-term reductions in mortality, and it does. However, the budget could be more radical and show areas where the Executive knows that an evidence-based early intervention can provide better outcomes—for example, nicotine patches or pharmacy consulting for those who wish to quit smoking. However, the budget does not show that information; as Dr Walker told us, neither do the performance indicators, and we cannot tell how much health boards spend on such early interventions. I am conscious that that is just one example, but it illustrates the need for the budget process to be geared towards presenting across all budget lines interventions that are known to be effective in helping the Executive to achieve its strategic, qualitative outcomes.

One of the little-publicised decisions in the chancellor's pre-budget report was a continuation of the scrapping of a number of targets that are determined by the Treasury and the Cabinet Office under the auspices of the delivery unit and public service agreements. Christine May mentioned her desire for a reduction in the number of targets, and I share that desire. In 1998, there were some 350 Treasury targets, and that number was cut to 130 in 2002. There has been a change of focus, away from the arbitrary targets that were probably designed more with the Treasury's primacy over the spending departments in mind than with better public services in mind. That should also be the approach in Scotland.

Finally, the committee touched on another aspect of the comments that I made last week: the relationship between central Government and local authorities, health boards and police forces. Are they policy makers that are accountable to the local electorate for policy decisions, are they responsive to policy priorities, or are they service deliverers for the Government in Scotland?

I hope that we will have a wider debate on those questions in the continuing work of the committee and the Parliament. I agree with the evidence that the committee received on the subject from Dr Andrew Walker. After my question about the level at which such policy decisions are made, he said:

"Personally, I do not have any strong feelings on where those decisions should be made, but my training tells me that they should be evidence based."

I agree. On the local crowding out of decisions when we balance central Executive priorities with local accountability, he said:

"We need ... the public involved in the priority-setting process, because that is lacking at the moment."—[Official Report, Finance Committee, 7 October 2003; c 351-352.]

I hope that the Parliament will have an opportunity to return to these important issues as the process moves forward. I commend the report to the Parliament.

Photo of Ted Brocklebank Ted Brocklebank Conservative 4:04, 17 December 2003

This appears to be one of those occasions when new members abase themselves publicly by explaining their inexperience, and I am no exception. I think that I am the only member of the Finance Committee to have failed my arithmetic leaving certificate not once, but three times in total. There is something wonderfully quixotic about a Parliament that can make an appointment such as mine to a finance committee.

I thank those who have helped me to overcome my naivety and inexperience. I thank the clerks for their help and hard work and for putting together such a cogent report. I thank Professor Arthur Midwinter, that staunch son of Arbroath, for alerting us when something fishy seemed to be going on with the figures. I do not know whether Arthur knows much about smokies, but he certainly recognises a financial smokescreen when he sees one. I congratulate Des McNulty and committee colleagues who have helped to cover my lack of expertise. I am sorry that Wendy Alexander is not present, because I had hoped to be able to pay particular tribute to her. She sits next to me in committee and I thought that by peering across at her notes as she wrote feverishly, I would be able to gather something about economics. Unfortunately, the girl who puts the glam into the gloomy science also happens to write like one of Fergus Ewing's hedgehogs, so I am afraid that there have been no cribs from two-brains Wendy.

The former Tory Prime Minister Alex Douglas-Home said that all he knew about economics, he had worked out by counting matchsticks. Would that it were so simple. Scrutinising the draft budget has been a bit like trying to count the individual strands on a plateful of spaghetti—one does not know where the things start or finish and one can twist them into any shape one likes. That is why I echo the general view of the committee that the budget produces lots of facts, but very little in the way of information.

Although we all recognise the background against which the Scottish economy works—that every Scot has £1,234 a year more spent on him than his or her English counterpart and that the £40 billion spend on Scotland under the Barnett formula is more than £8 billion more than is currently raised in taxes in Scotland—we have no idea from this budget whether the money is being spent effectively.

Despite attempts by ministers to put a better spin on things, smart, successful Scotland just does not seem to be working. Many of our schoolchildren have problems with literacy. Our economy totters on the brink of recession. In the five years of this Executive's life, Scottish business start-ups have reduced by 25 per cent. Despite our investing 25 per cent more than England does on health, waiting lists and times continue to grow. We simply have no idea whether we are getting value.

As we have heard, Donald MacRae and Peter Wood gave the committee independent evidence. Donald MacRae observed particularly that there was little linkage between the expressed priorities and the planned expenditure totals. Both observed that the budget is likely to make Scotland more dependent on the public sector, which was a fairly serious indictment. The Government has an important role to play in capital investment, but an economy that is heavily dependent on the public sector will continue to suffer low growth rates and a decline in business. As Donald MacRae pointed out, a healthy private sector is the lifeblood of a vibrant economy.

Our committee felt that, although targets are important, we had little evidence of whether the targets were being met. The accounting system has changed in the past two years, as have the various spending headings. I checked with the Scottish Parliament information centre earlier today and it was unable to make valid comparisons with five years ago, far less with a decade ago when a Tory Administration ran Scotland. I would like to tell you that things were better under the Tories and I genuinely believe that to be the case. However, the Executive appears to offer no system of comparative accountancy, under easily recognisable headings, with the way we were.

Photo of Des McNulty Des McNulty Labour

Unemployment under the Conservatives was much worse, spending was much lower and, in particular, economic growth between 1979 and 1997 was consistently lower under the Conservatives than it has been in Scotland since 1997. Those are clear comparisons.

Photo of Ted Brocklebank Ted Brocklebank Conservative

That is a classic example of the kind of spin that we often hear in the chamber. Whenever a set of figures is released, somebody comes along and knocks it down with their version of a limited time scale. What we should be looking for—and what the Executive should be providing us with—are direct comparisons, so that we can compare like with like over a decade. We might then be in a position to make some judgments.

Photo of Alex Neil Alex Neil Scottish National Party

In that analysis, is not Ted Brocklebank saying that the Tories failed, Labour failed and the Lib Dem-Labour coalition is failing? Is not the common denominator the fact that the economy has been, and is being, run from London? Until we are run from Edinburgh, we will continue to fail, irrespective of which Tories are in power.

Photo of Ted Brocklebank Ted Brocklebank Conservative

I am not sure that that is what I am saying at all. I am saying that nobody seems to know. That is the problem.

For valid political and economic judgments to be made, the Finance Committee needs meaningful data to allow it to function as an effective check on the legislature. I urge the Minister for Finance and Public Services to implement the committee's recommendations and to produce a clearer, more focused budget next year.

Photo of Elaine Smith Elaine Smith Labour 4:11, 17 December 2003

I am not a member of the Finance Committee, so I thank the committee for the work that it has put into producing the report.

I will talk about gender proofing and equality, and I will make a suggestion to the committee. I was pleased that Elaine Murray pointed out the importance of establishing how investment is used to achieve the desired outcomes.

The report of the strategic group on women, "Improving the Position of Women in Scotland: An agenda for action", provides evidence that tackling gender inequality must remain a priority for the Executive. The report states:

"Inequality between women and men is both a widespread and persistent feature of contemporary Scottish society."

In general, women have less access than men to income, earnings, pensions and material resources such as cars or housing. They have less access to time that is their own and that is not spent on caring for other people or on paid or unpaid work. They have less access to political power or to decision making across a wide range of public bodies and they have a one in five chance of experiencing domestic abuse during their life.

In 2002, 42 per cent of women in employment worked part time, compared with 9 per cent of men. Work is still split into women's work and men's work. For example, almost 70 per cent of managers and administrators are men, while 74 per cent of clerical and secretarial workers are women. The gender pay gap in 2003 was still 16 per cent for full-time workers, albeit that that figure was down from 19 per cent in 2002. Women's median weekly individual income in 2001-02 was 59 per cent of men's income.

Members have been saying that they are new to the process. Members who are not new to the process will know that I have made some of those comments in different ways on many an occasion, as have others. Those points have been made before, but I make no apology for repeating them because until the situation changes and we achieve equality, they must be repeated in the chamber at every opportunity.

During the debate on mainstreaming equalities, it was emphasised that the equality perspective should inform every aspect of our work. Critical to that are the role of the budget and the role of committees in scrutinising spending proposals from an equality perspective. During the debate, I made the point that

"The role of committees in scrutinising spending proposals with equality eyes is crucial."—[Official Report, 1 October 2003; c 2209.]

I asked Margaret Curran what progress was being made on producing a gender-proofed budget. In reply, she stated:

"In the first session, we thought that we had only to say, "Let's gender proof the budget," and the rest would follow. Having looked at other models, we now understand that policy has to be mainstreamed, and that we must create the means to obtain the necessary information to deliver a properly gender-proofed budget. Otherwise, we end up with a fairly superficial approach. We are committed to ensuring that a gender-proofed budget is achieved."—[Official Report, 1 October 2003; c 2198]

"Exploring the Role of Gender Impact Assessment in the Scottish Budgetary Process", by McKay and Fitzgerald, was published in 2002. That research, which was commissioned by the Executive, recommends with regard to strengthening the committees' scrutiny role that the guidance that the Finance Committee issues to the subject area committees

"could provide the other committees with advice on the kinds of questions to ask when examining the possible gender impact of a particular proposal and worked through examples on gender proofing in action".

Unfortunately, the Finance Committee's guidance to the subject committees with regard to scrutinising the draft budget for 2004-05 makes only two references to equality that I can see. One of those references asks for comments on the sections covering the cross-cutting issues, which include equality. The other, which is directed only to the Equal Opportunities Committee, asks whether that committee wants to make any comments or recommendations about specific spending proposals to enhance equality.

I thanked the Finance Committee for its hard work, but I suggest that, as a means to progress the gender proofing of the budget, the committee should in future direct guidance at every subject committee to remind them of their responsibility to scrutinise the budget with equality eyes and, in particular, to consider gender equality issues.

Photo of John Swinburne John Swinburne SSCUP 4:15, 17 December 2003

It is a great pleasure to take part in this exciting debate. When I first became an MSP, I was consigned to the Finance Committee—a thought that I abhorred—but I must say that it has been enlightening. The committee is made up of lovely people and it does tremendous background work on behalf of the Parliament and Scotland. Every member of the committee does well in their own way and tries their best. I hope that they will succeed, because we must succeed.

The debate has been under way for some time, but pensioners and senior citizens have not been mentioned. Of course, the issue is possibly not devolved, but pensioners make up one quarter of the electorate. If we want to know about a budget process, we should ask the members of the Finance Committee to live in an impoverished pensioner's home for two or three days to see how things are done, rather than going on an away day to a big hotel to junket. We should go to the grass-roots level. Such pensioners would tell us how to budget. They might have a little nest egg put aside that they will not touch; they will not even divulge the fact that they have it and they will pass it on to their children and grandchildren. There is no way that any Chancellor of the Exchequer or benefits organisation will means test them and impinge upon that nest egg. They would sooner live below the level of the minimum income guarantee than part with their nest egg. That is good budgeting.

The Labour Party and the Lib Dems, who are in control at present, care little for the senior citizens of the country. I was in Buchanan Street bus station on Friday of last week. The Labour Party's manifesto boasts free travel for the elderly. However, if a person gets on a bus to Edinburgh from Buchanan Street, they have to get off at Harthill and stand in the rain for half an hour waiting for the next bus to come along so that they can pay the fare from Harthill to Edinburgh—I believe that it is £2.50. The same process applies on the way back. Scottish Citylink Coaches decides where the border is and the poor pensioner has to get off the bus. I rest my case—that is lunacy.

Photo of Elaine Smith Elaine Smith Labour

I accept the member's point, but is he seriously saying that the Labour Government does not care about pensioners, given that it introduced the winter fuel allowance for pensioners?

Photo of John Swinburne John Swinburne SSCUP

I am saying that the Administration could tell some pen-pusher in Citylink tomorrow to sort out the matter and stop people being thrown off buses to stand in the rain at Harthill. Enough pensioners are dying off because of poverty and poor heating systems. Two thousand and fifty pensioners died last year; if the Administration is to make more of them die through needlessly waiting for a bus at Harthill, God almighty, what are things coming to?

Photo of Elaine Murray Elaine Murray Labour

I recognise John Swinburne's point, but that is precisely why the Liberal-Labour Government intends to introduce a national free travel scheme, which will mean that pensioners do not have to stand outside in the rain waiting to pay.

Photo of John Swinburne John Swinburne SSCUP

I take that point.

The Strathclyde regional policy is perfect; it is a tremendous example to the rest of the country. Sadly, although free travel was promised before the election, people still get thrown off the bus at Harthill if they are going to Edinburgh and at Beattock if they are going to Dumfries. It would take only a phone call from Nicol Stephen to the appropriate company director and the problem would stop. Let us get the problem sorted out, sooner rather than later.

To return to the budgetary system, it has been enlightening to listen to top experts such as Professor Midwinter and others, who are way over my head. Being educated in high finance at my age has been an illuminating process. I always thought that an exciting day for accountants and number crunchers was looking at the weather forecast to see whether they should put on their mac. The only thing that I knew about accountants was that the collective noun for accountants is a light brigade—it is something to do with the way they charge. Apart from that, I knew little about accountancy.

It has been a great pleasure being part and parcel of the Finance Committee, and I look forward to being part of it for some time. The back-up team has been magnificent. They do not get paid enough. That should be addressed in their next paper.

Photo of Mike Watson Mike Watson Labour 4:20, 17 December 2003

It is a pleasure to be asked to sum up in this debate. I am not a new boy or a new girl, as some members who have spoken in the debate have characterised themselves. I am a returner, in the sense that for the first two and a half years of this Parliament I was in the position that Des McNulty is in now. I admit that Rab McNeil was much kinder to me than he has been to Des McNulty. That was because he never mentioned me but, in relative terms, that is a plus. It is good to come back to such debates. I concede that this one has been a lot livelier than some have been in the past.

It is important that some of the issues that we have discussed today are put in the context of the process that has led us here. Jim Mather talked about budgetary processes in other countries. I do not know what he had in mind, but the process that we have here is light years ahead of the process at Westminster in terms of the amount of detail that we are able to go into, the time over which we are able to discuss the issues, and the extent to which we are able to influence the outcome. To my knowledge, none of the Opposition parties has ever submitted an amendment to any of the budget bills that have appeared before this Parliament. I look forward to the time when that happens, because it will make these debates even more interesting.

I take issue with one or two points that Jim Mather made. To some extent, Alex Neil stole some of my thunder—he would say not for the first time, although I would deny it—because he commented on the GERS report. I insist on using a hard "G", because some of us have football affiliations elsewhere, which make that absolutely necessary. That report gave figures that Alex Neil rather unfairly described as fiddled, and he said that it suggested that we in Scotland are subsidy junkies. The GERS report suggests that Scotland does rather well in UK terms, but it does not suggest that we are subsidy junkies. People in Scotland should not be using that terminology. That terminology came from London in recent years, and we have tried to gainsay it. It is not helpful if fellow Scots use it and subscribe to that theory.

The figures that came out last week show perfectly clearly that even if North sea oil is taken into account, there is a considerable deficit. That is why I take issue with Jim Mather when he says that we will never do anything unless we stop being a branch economy. Those figures show exactly what we would do if we were not in the current relationship with Westminster. I would like Jim Mather or Alex Neil to tell me what services they would cut and what taxes they would put up—if there was ever an independent Scotland—to make up the gap that the GERS figures illustrate.

Photo of Jim Mather Jim Mather Scottish National Party

Why does the member assume that Scotland is a negative, zero-sum game that cannot be advanced? Why does he rejoice in maximising the negativity of the figures that he presents? Why does he not make the sensible adjustments that show Scotland in an internationally positive light by factoring in figures on oil, for example, which show Scotland as a positive place in which people can expect a decent future and a decent return on investment?

Photo of Mike Watson Mike Watson Labour

I am the last person to talk Scotland down—I never do it, under any circumstances—but the situation is there for everyone to see. Whether or not North sea oil revenues are added in, we are still in a deficit position relative to other parts of the UK. That is a fact.

Photo of Alex Neil Alex Neil Scottish National Party

Where in Scotland is the £2 billion spent that is allocated against Scotland for defence? It is not spent in Scotland. Indeed, a fair chunk of it now is spent in Iraq.

Photo of Mike Watson Mike Watson Labour

That question could lead us into a debate about what should happen to the Royal Scots Regiment and where army expenditure goes. All that money is not necessarily spent in Scotland, although it funds a lot of activity that the SNP would no doubt want to be taken out of the country. Indeed, some of us understand why that should happen. However, the point is that the GERS figures contain compensating factors and show that Scotland does well in some cases and not so well in others. I am referring to the overall effect, and the SNP has to tell us how it would fill the gap that the figures illustrate.

I am aware that I do not have much time. I note that my colleague Christine May—who is certainly not Christine Grahame—mentioned Oscar Wilde. Although I respect Alex Neil, his remarks on the GERS figures lead me to quote Wilde again. Given Alex's liking for the public eye, he obviously feels that it is better to have people talking about him than not to be talking about him. Such an approach is not particularly helpful in shedding light on this aspect of the budget.

We have made considerable progress, but we need to make further progress on cross-cutting. I know that cross-cutting goes on between Scottish Executive departments in a way that does not happen at Whitehall; anyone who had heard Estelle Morris's remarks when she resigned last year would know that. She said that there had been a failure to link sport and education to improve children's health south of the border. We have made such links in Scotland in a number of areas such as culture and sport, and education about healthy eating in schools. There are also obvious links involving sport, culture and tourism. As the report highlights, we have a good story to tell about cross-cutting, but we need to make a greater effort to tell it. Furthermore, we need more joined-up thinking by officials—not about what they do, but about how they report what they do.

I want to add to Elaine Smith's comments about gender proofing budgets. When I was a Finance Committee member, I was pleased to be instrumental in getting advice from Engender's women's budget group on how we might take forward such issues. I am very pleased that the Executive has established the equality proofing budgets and policy advisory group. The group's effect can be seen in the budget document, in which every departmental chapter contains a number of bullet points that outline what has been done on equality. I agree with Elaine Smith that more still needs to be done on the matter—and more will be done. That said, I would like the Executive in the future to reflect the amount of detail that the document contains in its chapters on closing the opportunity gap and sustainability development. The document shows that things are moving forward and I think that we can be pleased with a great deal of the progress that has been made over the past four years.

Photo of David Davidson David Davidson Conservative 4:27, 17 December 2003

It was very nice at the beginning of the debate to be welcomed back with a comparison to the fine institution of Morecambe and Wise, who, I might add, are very popular with the public. Is the Tory recovery finally being recognised? The remark was especially nice given that it came from the Des O'Connor of the Labour Party.

After four years on the Finance Committee and my fifth debate in a row on the budget, I am beginning to understand why I got a medal at the very beginning of the Parliament. I wonder whether David McLetchie was influenced by that when he gave me that finance role.

Once again, the Finance Committee has raised the same issues and has stated clearly that very little of the process has altered. After all, this debate is supposed to be about the budget process. In Des McNulty's opening speech—I think that it was a speech—he said that there were too many targets. That is good, but I wish that he had listened to such criticisms when he was a minister. He also said that there was not enough on outcomes. Well, that criticism formed the basis of the first of these debates five years ago.

Photo of David Davidson David Davidson Conservative

In a moment. Mr Neil should be patient. I can see that he is on a spring and is ready to go.

Five years ago, we debated outcomes and the fact that the parliamentary committees wanted to deal with how services were delivered and accessed and where the money went, not with how much was spent. What did we get in response to that request? This afternoon, member after member—apart from Alex Neil—has talked about value for money. The truth is, now that we are in our fifth year and into our second session of Parliament, we have the same old Executive and we face the same problem. Devolution stops with the Executive; it does not reach the parliamentary committees, which have constantly asked for clear, user-friendly information that is available on time. Each committee has filed questions back into the process, but very few of them have been answered.

I see that Mr Neil can contain himself no longer.

Photo of Alex Neil Alex Neil Scottish National Party

I utterly agree with David Davidson. If we look back at the Finance Committee's recommendations over the past four or five years, we see that very few of them have been implemented. As Tavish Scott has recognised previously, one of the problems with devolution is that we do not control the civil service. The civil service controls ministers, and the resistance from the civil service to many of those recommendations is the reason why nothing happens.

Photo of David Davidson David Davidson Conservative

I am damned because Alex Neil has praised me and agreed with me. That is terrible.

I turn to the SNP contribution, and I welcome Jim Mather as a replacement for Andrew Wilson in the anorak tendency; it is always good to have a professional accountant here. It is obvious that there are not many accountants in the Executive, or the budgets would be easier to understand. The prime concern that Jim Mather raised, which I thought was interesting, was life expectancy. Coming from someone so senior in the party, does that indicate that there is a problem with the SNP's future survival? He went on to mention birth rates, which I thought would be a good plug for his interest in maternity service closures across Scotland, which he has been involved in highlighting in the Oban area.

Mr Mather raised the issues that the committee included in its recommendations about capital and revenue spending, about clarity in EYF and about the shrinkage of the private sector. Members on the Conservative benches certainly recognise those issues, because mentioning wealth creation is still almost like saying a dirty word in the budget process.

My party's contribution from Ted Brocklebank—known as honest Ted, although he will never be a bookie as he failed his arithmetic three times—included interesting points about the fact that Scotland gets more money per head to spend than the rest of the UK does, but that we do not use that money properly and in a focused manner. The budget process has brought up that point time after time.

My colleague, Brian—our finance spokesman and local government spokesman and spokesman on various other things—

Photo of David Davidson David Davidson Conservative

It was not his name that I was worried about, but his title.

Brian Monteith asked why decisions have been made, and that is an important part of the budget process. We do not get clarity on why decisions are made. We do not even get a discussion of the Executive's latest priority list, which seems to vary depending on which debate ministers are speaking in.

Many members have spoken about cross-cutting funding. That has been talked about in the budget process for five years now and there is still not enough clarity. I hope that, in his winding-up speech, we will get some clarity from Tavish Scott, Shetland's answer to the calendar girls. It was a pretty photograph, but perhaps people do not know about his latest appearance in a charity calendar—very dignified.

Photo of David Davidson David Davidson Conservative

Then we come to the excitable Christine May. All that I can say to Christine May is that her speech had some interesting content—I think—but she seems to have a very low excitement threshold. However, I can respond to her by saying that, as far as the Conservatives are concerned, the patient passport does not only deliver for those who cannot get decent care in the health service because of a lack of capacity; it allows them to get treatment outside the health service and still leave 40 per cent of the drug or treatment tariff within the health service. That is added value, added process and added treatment, and Christine May needs to go and read her notes better.

Alex Neil talked a wee bit about the fact that he is not a GERS fan. That was fairly good. He wants the oil industry back, but he denies totally the benefits of the union that we have shared for many years. I point out to Elaine Smith that gender proofing was raised not only by Mike Watson but by Elaine Thomson, and was included in a report three years ago. John Swinburne suggested that we visit a pensioner. That is a good idea. He also mentioned nest eggs. Why do pensioners have to spend their money on buying treatment outwith the health service to enjoy quality of life in their later years? With the money that we spend on the health service, they should not have to do that.

Five years on, there has been little improvement in the budget process. It is still smoke and mirrors, and the time scales and user-friendliness of the process are once again highlighted in the committee's fine report. I have little doubt that the Finance Committee will argue on. I just hope, for the sake of Christine May and others, that when members of the committee come back here next year the Executive might actually have listened to them.

Photo of Brian Adam Brian Adam Scottish National Party 4:34, 17 December 2003

This annual debate has become a debate about process, not the detail, of the budget. As one or two members have done on every occasion, Elaine Murray, Mike Watson and Christine May have today filled in for the deadly duo who used to sit on the Lib Dem benches and make the same point—Iain Smith and George Lyon. They always ask where the Opposition amendments are. The whole point of the budget is that it is a zero-sum budget. The fact is that we do not have a budget; we have only one side of a budget. The reason why nobody is sitting up in the press gallery listening desperately to what we have to say is that the public are not desperately interested in the budget process. That is because it is just a process. If it had a direct impact on people's lives that they could see, there might well be more interest. What is missing is our control over the amount of money that is raised, as well as the amount that is spent.

Photo of Des McNulty Des McNulty Labour

Brian Adam was in local government for a considerable period. In local government, the debate is not just about council tax levels; crucially, it is about spending priorities. Why is his party not prepared to do the work to establish what its spending priorities would be for £22 billion of public money? Brian Adam should let us know what he would do, rather than talk about independence. What would he do with the money that is different from what we are going to do?

Photo of Brian Adam Brian Adam Scottish National Party

I thank Des McNulty for his routine intervention.

If what I have said today is wrong, tomorrow's papers will be full of this debate—not the local government settlement. However, tomorrow's papers will of course be about how much money has been allocated to local authorities. On our budget day debate—local authorities will have theirs, too—what will be in the papers is the level at which council taxes have been set. That is what the public are interested in; they are not interested in the process. We are interested in the process, however, and quite rightly so.

This is normally quite a dull debate. I thank Christine Grahame and, in particular, Alex Neil, for making it a much more lively—[Interruption.] I am sorry; I am as bad as Alex. I meant to thank Christine May and Alex Neil for making this a livelier occasion than it has been in the past. We had a very interesting start today—Brian Monteith was actually heckled by the Tories, and he apologised for not knowing an awful lot about the budget process, because it is not his particular responsibility. Then Ted Brocklebank told us that he—he also referred to a previous Tory—could not count. We then had David Davidson trying to sweep things up and make it look as if there were some serious policy issues on which the Tories might have something sensible to say.

I wish to go back to the key issues on the economy that Jim Mather raised earlier, in particular the top priority that the Administration allegedly gives to the economy. I suggest that we will never have a growing economy if the population is declining. Our economy is a branch-factory economy, and the debate about "Government Expenditure and Revenue in Scotland 2001-2002" is very relevant. The figures are fiddled and until we accept that we need to get away from the dead hand of Westminster and take control over all the decisions ourselves—

Photo of Brian Adam Brian Adam Scottish National Party

Just a minute. I will let Christine May in later. Until we do that, we will not be able to make the changes in growth that we require.

Photo of Brian Adam Brian Adam Scottish National Party

No thanks, Elaine. We need to encourage population growth. The problems with the population of Scotland declining were identified by SNP members a number of years ago. Alex Neil and Kenny Gibson consistently made significant points on the matter. It is fair to say that the First Minister has recognised the problem, but the only solution that he has offered us is that we should offer work permits to foreign students who come here to study.

Photo of Brian Adam Brian Adam Scottish National Party

No thank you, David.

The First Minister's suggestion is one contribution to the problem, but some individual members have made significant contributions. I acknowledge the contribution that Janis Hughes has made to population growth, although she is not in the chamber now. Shona Robison has also contributed to population growth, as has Richard Lochhead. Recognition was given earlier of the contribution that the former Minister for Finance and Local Government has made recently and I understand that the Minister for Transport is about to make a contribution.

However, unless the dinkys—dual income, no kids yet—of this world do something about the "no kids", there will be no one to pay for the pensioners. Unless there is a significant change in our population statistics, pensioners will continue to be dumped at Harthill, or some other device will be found to reduce the money that is available to meet their needs. We cannot make that change just by encouraging asylum seekers or students to stay here—a culture change is required. Unless those of us who are more interested in the here and now than in the future are prepared to make sacrifices so that we can contribute, we will continue to have population decline, especially if we lose people to the head offices that exist everywhere apart from Scotland.

Photo of Tavish Scott Tavish Scott Liberal Democrat 4:40, 17 December 2003

This debate has been much more lively than was the equivalent debate last year. Mr Brocklebank mentioned Wendy Alexander. I sat next to her during last year's debate on the budget, which was a more cogent occasion. However, because of a number of political and other observations that have been made, this afternoon's debate has been revealing of the different parties' perspectives on the budget process.

It is important to start by reflecting on the fact that, rightly or wrongly, the subject of the debate is the process, rather than the contents of the budget. I say to Mr Brocklebank that there are plenty of opportunities across the range of parliamentary activity for genuine scrutiny of the Executive. That work continues.

I begin by thanking Des McNulty and his colleagues for their considerable work, and members from all parties for their contributions to this afternoon's proceedings. I have read the Finance Committee's report with considerable interest—certainly with more interest than Mr Davidson. I am not sure whether Mr Davidson has read the report—he may have written his speech long before it appeared. [Interruption.] The member is holding up a copy of the report, but in my book that is rather different from reading it.

It might help Mr Davidson if I say that a minute or two ago I found last year's stage 2 report on the budget by the Finance Committee, which states, before going on to make some other points:

"The Committee finds that the Draft Budget document marks a significant improvement in financial information",

I do not accept Mr Davidson's suggestion that nothing has been achieved.

Photo of David Davidson David Davidson Conservative

Last year I did not wish to force a minority view. I believed that some improvement had been made and went along with the rest of the committee. The minister needs to read the fine print.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Well, there we go.

Because of our determination to have a transparent budget process that ensures that money is allocated in a way that meets the needs of the Scottish people, we are determined to work with the Finance Committee to secure continual improvement in the budget process. Both the constructive tone of the report and today's proceedings indicate clearly that there is common ground. The Executive will respond positively and favourably to many of the conclusions and recommendations that the report contains and we will do so in writing before the stage 1 debate in late January next year.

I will not rattle through all 17 of the report's conclusions, but I will focus on three of the most important recommendations and give an early indication of the Executive's thinking about them. Those issues—all of which have been raised this afternoon by members from all parties—are time-series data, capital spending and targets and priorities.

Before I do that, I will touch on some of the general comments that have been made. In particular, I want to pick up the point that Mike Watson made about where we are now and how we scrutinise the Executive's budget in the post-devolution era. Clearly, the member has the background to understand what happened before devolution, but I recollect what did not happen when I was a mere researcher at Westminster. What we do now is a demonstrable improvement in scrutiny. Some may not like it for political reasons that relate to their philosophical choice of solutions for Scotland's future, but it represents a huge step change and a move forward in the budget process. It is important to reflect on and to respect that.

Many good speeches were made today. There were some sprightly contributions from the new boys and new girls, especially Christine May. As the former leader of a major local authority in Scotland, she will welcome what we have done in the context of local government by ending compulsory competitive tendering, introducing best value, ending capping guidelines and introducing the first three-year settlements for revenue and capital. In my view and in the Executive's view those are all strong steps forward in the development of our relationship and partnership arrangement with local government.

I found it intriguing that Alex Neil gave such a spirited speech. It is unfortunate that it was in front of only three of his colleagues, but we all enjoyed it. He mentioned GERS—how one pronounces that depends on one's political and football persuasion—and I always find it curious that the SNP goes back to GERS. I will not quote Oscar Wilde, but I will for Alex Neil's benefit refer to something that Andrew Wilson said. There is always juxtaposition in the SNP's approach—its analysis has always gone one way or the other. In looking at the 2000 figures, Andrew Wilson said that it was game, set and match to the independence case. A year later he said that the GERS report was back-of-an-envelope economic gibberish. The SNP's contributions on this matter change according to what day of the month it is or, indeed, what day of the year it is.

I will deal with a couple of the more important contributions in terms of particular recommendations. Des McNulty and Jeremy Purvis talked about block allocations in relation to local government and health spending. Those are significant issues; we have discussed them in committee and I am sure that we will continue to do so. We will certainly work with the Finance Committee to provide better information, not necessarily—if I may say—in the draft budget, but possibly in separate documents or on Executive websites. I am aware, for example, that the Minister for Health and Community Care will meet the Health Committee early next year to discuss scrutiny of the health budget in the way that Des McNulty talked about this afternoon. I hope that we can make progress on that.

On gender proofing the Scottish budget, I agree with much of what Elaine Smith said. The ability to gender proof the budget is linked intrinsically with the Executive's work on mainstreaming equality into policy. I accept that that process will take some time, but we have made progress in recent years and we are glad that both the women's budget advisory group and the Parliament's Equal Opportunities Committee have acknowledged that in their reports. We will continue to work with them and with others—as we have done in previous years—to make further improvements in the area.

The Finance Committee's report includes a request for time-series data so that the committee can examine budgetary trends over a 10-year period. We will work with the committee on that; indeed, I understand that my officials and the Finance Committee's special adviser are looking into the subject at this time. We will undertake scoping work on it at the beginning of 2004. At the same time, we will continue our discussions with the committee's officials on how best we can meet the committee's requirements. We hope that that work will allow us to give the committee a clear indication at an early stage of what information we will be able to provide and the time scale in which we can provide it.

We have also noted the committee's desire—a number of members raised this today—to obtain additional information about capital expenditure. We intend to make progress on that issue in relation to the supporting documentation for the Budget Bill 2004-05. We will publish that next month: its introduction will, in addition to the capital table that was used in this year's draft budget, provide tables of expenditure, such as capital grants, which are not currently classified as capital expenditure. Once those tables have been published, we will discuss with the committee what further capital spending information on present plans we can provide in order to assist scrutiny of expenditure in the run up to the 2004 spending review. I therefore accept the points that members have made on the capital-revenue split, especially Des McNulty's point on lead-in times. We recognise the importance of that and, indeed, possibly share the frustration about the lead-in times across ministerial departments and we are seeking ways to minimise them.

The report comments on the Executive's strategic approach to budgeting in its sections on spending priorities and targets. We agree with many of the comments that the report makes: we accept the need for strategic and portfolio priorities and we accept the need to ensure that targets help to improve public services. Our approach of setting clear priorities and targets to ensure that portfolios achieve clear outcomes with the money that is allocated to them is still reasonably new. We believe that the budgetary processes have improved substantially in recent years, in terms of both the external scrutiny to which they are subjected and the internal rigour that we now apply to spending decisions. We look forward to refining further our current systems for the 2004 spending review.

It is important to recognise that the House of Commons's Public Administration Select Committee's report, which Mr McNulty also mentioned, calls for the improvement, rather than the abolition, of the measurement culture. It states clearly that the measurement culture cannot, and should not, be abolished. There is much that we can learn from that report.

On transparency, we believe that it is vital that we give the public a clear idea of what we will achieve when we spend their money. Although we will always strive to improve our processes, we think that it is important to bear in mind the progress that has already been made.

As next year is a spending review year, it is even more vital that we get our spending decisions right. We will allocate funding until 2008 in a way that advances the priorities in the partnership agreement, including that of growing the economy and therefore meeting people's needs. To do that, we will work to further improve our targets and our setting of priorities and will continue to work with the Finance Committee to create an increasingly transparent and effective budget process.

Photo of Fergus Ewing Fergus Ewing Scottish National Party 4:50, 17 December 2003

I apologise to Des McNulty and Jim Mather for not being present during their opening speeches; I was outside doing the "Holyrood Live" programme. However, I heard about their speeches and will try to restrain my sense of anticipation about the prospect of reading Des McNulty's speech tomorrow.

I have enjoyed the debate, which has been livelier than in previous years. Although it has been long on liveliness, it has at times been short on relevance because—as has been pointed out—the debate is about the process rather than the substance of the budget; it is not about GERS but about Kerr's budget and the budgetary process.

I arrived in the chamber in time to hear Brian Monteith's speech, in which he predicted that there would be tough days ahead. I must share with members the view that it is easy to believe that prediction. I also enjoyed listening to Alex Neil and was reminded of the reasons why he was nominated for one of the politician of the year awards. I am sure that he could have enjoyed a career on the stage—although I hasten to say that it would have been in vaudeville rather than in pantomime.

I found Christine May's speech to be rather idiosyncratic. I say to the gentle lady that the points that she made might have been relevant on a different occasion but, with respect, they were unremittingly irrelevant today. In a self-effacing way and with some generosity, Ted Brocklebank pointed out that he is innumerate and that he repeatedly failed his O-level mathematics. That not only explains why Conservative policies have not added up for several decades, but provides the further—if not particularly surprising—revelation that the Conservatives are not capable of adding up.

I genuinely enjoyed John Swinburne's speech, just as I have enjoyed what he has said in committee. He is to be commended for his generosity of spirit towards committee members and for his speeches in the Parliament on behalf of, and his work for, senior citizens. I am sure that all members would wish to endorse that.

I enjoyed the speeches of Elaine Smith, Mark Ballard and others. Given that I am speaking on behalf of the committee, rather than in my normal persona, I want to say that it is the committee's duty to study what those members have said in the debate in order to inform the work that we do next year.

I was intrigued by Dr Elaine Murray's somewhat surprising introduction of a canine metaphor. I have always admired and enjoyed working with Dr Murray on the committee, but I am not quite sure what species of dog I would be. I am speaking on behalf of the committee, not in my own capacity, so I ask members not to suggest that I would be a Rottweiler. In the sense that I am speaking in a spirit of consensus and co-operation with all members, I am a cuddly puppy Labrador. I see that a flash of recognition has come across the Deputy Presiding Officer's face. [Laughter.] Enough of this hilarity.

The report has many points to commend it and it is difficult not to agree that there should be more clarity or that there should be a clear analysis of the balance between capital and revenue expenditure. The most fundamental dearth of statistical data is in comparative data. I am pleased that the work that Elaine Murray and I are doing on the relocation of Scottish Natural Heritage is considering the example of how the Irish carry out such relocations. I am sure that that work will in due course inform relocation policy.

However, one point that I would make to the minister—if I could secure his attention; we are coming up to that time of year when thoughts tend to dwell on other things, no matter how cogent and forceful the arguments of the person speaking may be—is that the key or nexus or nub of our report lies in the following three questions. How effective generally is the spending of the £23 billion? How effective is that spending in achieving the targets? How effective is the spending in achieving the top priority, which we know is to grow the economy?

Photo of Trish Godman Trish Godman Labour

I ask members to keep quiet, please.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Underlying the report is the sense that those questions are the function of the Finance Committee. I welcome and commend the work that has been done. I also, of course, thank the clerks and the advisers and the witnesses who have contributed to our proceedings.

However, there are questions for the minister. Although I welcome his undertaking to respond to our report within eight weeks, I hope that he will focus specifically on the issues of effectiveness and measurement, which seemed to the committee to be lacking. People have questions for the minister, such as:

"If more good money is going after bad, how do you know? What kind of relationship do you have with the large spending departments if, year after year, they receive more money and the public see no equivalent improvements in services? Do you simply hand over the cheque if it is requested? Do you ask the departments why they want it?"—[Official Report, Finance Committee, 10 November 2003; c 510.]

Those questions that I have just read, which come from Mr Purvis, seem to be apposite. I hope that Mr Purvis's Executive colleague will provide a reply.

I see that I still have time, so I will mention two matters that are close to my heart. The first is that businesses in Scotland, especially small businesses, are not receiving the deal that they should receive. That point was picked up by Wendy Alexander when, during the committee's deliberations, she questioned the £500 million windfall, which is the revenue that has come from business into the coffers of the Scottish Executive over and above what was estimated just 12 months ago. By definition, therefore, all the arguments that took place in previous years should be totally changed by that huge windfall, which was larger than anybody perhaps anticipated.

I know that the minister will reply in detail to my earlier question about table 10.03 and whether the windfall will be even greater than £500 million, but I predict that it probably will be. In the committee, Wendy Alexander quite rightly raised the issue with the Scottish Executive—perhaps she is putting in an early bid for the award of free spirit of the year next year; one never knows—but the answers that we received in the statement today did not persuade everyone.

I never like to disappoint Des McNulty, as he knows, so my final point relates to Holyrood, which was the subject of two recommendations in our report. Those who are interested should look at paragraph 81. Today is an appropriate opportunity—they do not arise frequently—to mark the fact that we all acknowledge Presiding Officer George Reid's work; first, in bringing some discipline to the control of fees and in securing a reduction in the level of fees that are payable to the contractor.

Secondly, we should acknowledge the Presiding Officer's role, which is less well known—although Deputy Presiding Officer Murray Tosh will be aware of this because, as I recall, the original response was to his written question some years ago—in reconsideration of the matter of commercial confidentiality. The new Presiding Officer has completely changed the previous decision on the release of information about the Holyrood project: now, the presumption is in favour of releasing the information. Previously, under the first Presiding Officer, the decision was that we could not be trusted with the information. The current Presiding Officer has stated that that decision was incorrect, and incorrect in law. After I and others made detailed representations to the current Presiding Officer, I was heartened that George Reid took the decision with which I hope we all concur, which was that there should be disclosure of information about the Holyrood project.

Finally, as I am speaking as a man of consensus, goodwill and generosity, I take this opportunity to offer my best wishes to all over the coming fortnight.

Photo of Murray Tosh Murray Tosh Conservative

Before we proceed to the next item of business, we are pleased to welcome to the gallery members of Parliament and speakers from Armenia, Azerbaijan and Georgia, who are in Scotland for a meeting of the South Caucasus Parliamentary Initiative. We wish them well in their work for reconciliation in their region. [ Applause. ]