Budget (Scotland) (No 4) Bill: Stage 1
The next item is a debate on motion S1M-3785, in the name of Andy Kerr, on stage 1 of the Budget (Scotland) (No 4) Bill. Those members wanting to contribute to the debate should press their request-to-speak buttons now. I call Andy Kerr to speak to and move the motion.
There will be great sadness throughout the land as this debate will be minus seven or eight minutes, but I am sure that we shall cope with the pressure.
This year is the second full year of the budget process, as set out by the financial issues advisory group and adopted by Parliament. We have achieved much to be proud of in that time. We have a far more consultative budget. The process has achieved a genuine degree of public engagement, and it has been transparent and open. There have been many opportunities for the Parliament and the Scottish public to have their say.
That is not solely a result of the Executive's work but reflects the very hard work undertaken by the Finance Committee and the other committees of the Parliament. I place on record my thanks not only for their effort but for their constructive attitude throughout the process.
At every stage of each budget, we have introduced changes to reflect the committees' suggestions and requests, and the process has continued to improve across the life of the Parliament. This year, for the first time, an individual member lodged an amendment to the bill; however, we could not support it. Moreover, this year, we will also lodge the first ever Government amendments to the bill, although they will simply reflect technical accounting changes following discussions with Audit Scotland and the Finance Committee.
As a result, there are signs of an evolving process, and one would expect that further improvements will be made in years to come.
I wonder whether the minister can tell the chamber how many of the committees' recommended options for additional expenditure in the 2003-04 budget he has been able to accept and act on. [Interruption.] Does he want me to go on for a bit longer while he consults the deputy minister?
We wrote back to all the subject committees involved and to the Finance Committee about the details in the budget. However, the more important point is that the opportunity to make such recommendations is available not just to members and committees of the Parliament but to the Scottish public. That is one way in which we do things differently and effectively in Scotland.
To make the process open, transparent and helpful, we also produce a fairly sizeable document of more than 300 pages as well as other supporting documentation. The form and content of that document has grown over the years to meet requests and suggestions from Parliament and others about what it should contain and about the presentation of information. However, I wonder whether the result represents the best way of doing things and whether it helps members readily to access and understand information.
The last debate on this subject was on the Finance Committee's report on stage 2 of the budget process and the next will be on stage 3 of the bill next month. Therefore, perhaps we share suspicions that there are too many debates in which members from all parties make broadly similar contributions. We might want to consider that point in future. It is also worth considering that the parliamentary budget process appears to be compressed into one part of the year.
I hope that, after the forthcoming elections, the Parliament and the Executive will consider together what further improvements can be made. Contributions during the course of this debate will influence that discussion in the next session.
The budget seeks parliamentary approval for the first year of the spending programme as set out in "Building a better Scotland". The budget is for growing our economy and increasing the opportunities in our communities.
Our key economic objectives are to accelerate Scotland's economic growth to provide opportunities for those who wish to work and to ensure that our economic development is sustainable.
Given that the minister has just said that a target outcome from the budget is economic growth, will he answer the question that Alex Neil put six months ago about the expected impact of his budget on the growth in the Scottish economy?
We have linked our funding to targets to ensure that our money delivers. We seek to increase the number of people in work undertaking training and to improve access to modern technology—an example is extending broadband into urban and rural Scotland. We seek to close the gap between unemployment rates in the worst 10 per cent of areas and the Scottish average. We will assist 150 joint academic and industry ventures by 2006. We will invest heavily in education and transport, which are crucial for long-term economic development. We will continue our work with the business community and live up to our commitment to freeze Scottish business rates, to limit future rises in rates to the rate of inflation and to institute a system of rates relief for small businesses. All those assist to build a strong and stable economy in Scotland and one that we seek to grow. No one wants us to have the economic growth figures that we have. We seek to improve those figures, which is why the budget focuses on economic growth and opportunity. That is the purpose of the Executive and of "Building a better Scotland".
The targets for the economy are matched by targets in every area of the Executive's work. Following the 2002 spending review, public services in Scotland will benefit from unprecedented levels of funding over the next three years—there will be a real-terms increase of more than 4.6 per cent. Therefore, we have an historic opportunity to improve our public services for those members of the community to whom the services matter most. We will make improvements that match their aspirations and build on progress that we have made, and we will reverse the decades of underinvestment.
The logical conclusion to what the minister has said in answer to Andrew Wilson is that the more spending there is by the public sector, the more growth there will be. Surely the minister cannot believe that more and more spending will bring more and more growth or he would be advocating more spending every year until there is no private spending at all. Surely the message and the lesson from all around the world is that less regulation and lower taxes are what increase growth. That is the objective that the Executive should be following.
I am under no illusion about the partnership that we must have with the private sector and private investment to aid the growth of the Scottish economy. We play our part, for example, through the public-private partnerships that invest huge amounts of money into our infrastructure and make a huge difference—in Glasgow for example, where the housing stock transfer will create 3,000 jobs and £1.6 billion will be invested in housing stock. Whether it is with the public or the private sector, we seek to work in partnership. We consult the business community to ensure that our interventions in the economy are appropriate ones in order to support their activity, which creates a massive amount of wealth in our economy. The Government's role is to support that activity and that is what the spending review and the budget seek to do. It is a costed programme, linked to genuine targets and it shows our commitment to delivering on the public's priorities and choices about public services.
The budget is based on the strengths of devolution—being part of a strong UK, receiving our fair share of UK public spending and having the freedom to decide in the Scottish Parliament how to use that resource.
During the past year, Scotland has benefited from the stable macroeconomic conditions that have been secured for the UK as a whole. That demonstrates the benefit of our current constitutional settlement. The Barnett formula, for example, provides a clear and stable mechanism for granting funding to the Executive. Devolution ensures that the Executive and the Parliament can monitor how the money is spent and they can ensure the money makes a difference in our communities, including the business community. The recent report on "Government Expenditure and Revenue in Scotland 2000-2001" showed that Scotland had a fiscal deficit of between £1.1 billion and £5.4 billion.
How will the Opposition's spending commitments—the ones that it owns up to, that is—be funded? The SNP argues that they will be funded from the size of the reserve, by ending the public sector reform budget or even by reallocating end-year flexibility.
Leaving aside the debate that we could have about the accuracy of the statistics, is the fact that, by the minister's own measure, the figures have got worse since Labour came to power a reflection of Labour's failure on the economy or of its success?
It is a sign of the Chancellor of the Exchequer's commitment to Scotland to ensure that public spending is maintained at record levels. It is a sign of confidence in the UK partnership that maintains a vibrant public sector in Scotland, which we must use surgically and clinically to ensure that we gain better economic growth. That is why, through the budget and through our announcements about support for business, including business rates reform and freezing business rates, we will continue to work with business to provide the right environment for growth.
Let us take some time to examine the promises that are made. The SNP's comments on a contingency fund amazed me. Having such a fund is a normal process for any Government and allows us to accommodate genuinely unforeseen and unavoidable contingencies. The SNP would not have that money; it would spend the lot. How do we deal with foot-and-mouth disease, the cost of military cover during the fire dispute or support for our fishing communities? With no contingency fund or reserve, we simply cannot do that. With a degree of uncertainty ahead, responsible Governments look to the pressures that may emerge and cover commitments that may occur in the future. That is why the reserve planned for 2005-06 must be greater than in the previous four years.
Does the minister acknowledge that the document that is before us today shows that he has actually cut support to the fisheries by £20 million? If he is struggling to find out where those figures are, I will tell him that they are on pages 13 and 15.
That is inaccurate, and I shall correspond with Mr Adam on that point. The figures take into consideration some technical calculations to do with the use of capital in the building of a vessel. What he will find is that support for fishing has increased over the spending period and in the budget that is before him today. I will correspond with him precisely on those matters, as there are technicalities involved that may not be best explained in this debate.
That brings me back to my point about responsible government and the need for contingency and reserve. The reserve is there to deal with pressures, and no mature Government could do without one.
Three-year planning has many advantages and it allows us to react to new opportunities between spending reviews. That is the point of the public sector reform budget. It will allow the Executive and future Governments to make decisions about how best to use our resources in future years. That is the sole purpose of the public sector reform budget. Some accuse us of having an election war chest. My idea of an election war chest is that one would spend it before the election and clear the decks of all the money. What we are doing is sensible and responsible, ensuring that future decisions can be made about public sector reform that will change the delivery of our public services here in Scotland.
End-year flexibility is another old favourite that is much criticised by many members of the Opposition. That resource is available to us. It is finance put aside for planned future expenditure, such as the Glasgow housing stock transfer. It covers slippage in capital projects caused by planning issues, foot-and-mouth disease or inclement weather. The whole purpose of EYF is to allow flexibility in our future spending, but that is money that we have dedicated to future projects. It is real money. If one chooses to spend EYF, as some of the nationalists have chosen to do, one is cutting other services that the Parliament has agreed to deliver.
Some of the spending commitments made by the Opposition are irresponsible and, as usual, not real. That would be a bitter pill for many of us to swallow in the unlikely event of the SNP being in government. EYF money is not lost; it is just carried forward into the next financial year. That is prudent, effective and necessary financial planning. It is incredible to hear some of the public spending commitments of the nationalists and how they see Scotland's economy and public finances, and to consider the mess that the nationalists would clearly get them into.
The budget bill that the Executive has presented sets out a fully costed programme. We have set clear targets to show how every penny will deliver for Scotland. The bill's principles are those of any mature and serious Government, and I therefore commend the document to the chamber.
I move,
That the Parliament agrees to the general principles of the Budget (Scotland) (No.4) Bill.
Once the minister got past the reasonable part of his speech, it was clear whom he is concerned about and who his main opponents are in the election, as he spent the second half of his speech simply attacking the SNP.
I will try to be more reasonable than the minister. As he said, this debate is part of a process. Some of us may feel that the process is interminably long—the minister referred to that—and that it requires a select few to put basically the same arguments interminably to each other, but it is nonetheless a process. I echo what the minister said: the quality of the documents has improved significantly over the four years of the session.
However, it is disappointing that the Finance Committee's stage 2 report on the budget process, which we published in early December, was responded to only this morning. That does not give us much time to analyse the response to the recommendations.
The member said that the budget documents had improved significantly over the past four years, but I fail to see how. Does he not agree that there is great room for improvement, particularly in the elementary matter of having an index, so that we can look things up and not have to wrestle with and go through whole documents, particularly in respect of cross-cutting expenditure?
Every document is capable of improvement and I suspect that improvements can be made. However, if the member compares the documents from the first year of the Parliament with those from the fourth year, he will see that there have been great improvements—I suspect that I am doing the minister's job for him now.
While I am answering Mr Raffan, I congratulate him on his magnificent four-page constituency newsletter, which I received through my door some weeks ago. It seemed to indicate that everything that the Scottish Parliament had done was a result of Mr Raffan's intervention. I am glad to see him back here to move us on a stage.
I would like to discuss one or two of the Finance Committee's recommendations. The committee said that it
"strongly recommends that the practice of cumulative counting of budget increases should stop and that increases over the Spending Review period should be expressed simply in terms of the actual cash increases or percentage terms, without the distraction of cumulative accounting."
The minister responded:
"We believe that the figures set out in Building a Better Scotland and the budget documents are transparent and accurate."
That is not a commitment that agrees with the committee's recommendation. Let us look at what the document says and see how clear it is. It states:
"Where spending is shown as increasing, for example, by £10/20/30 million, this means that spending will increase by £10 million in 2003-04, by £20 million in 2004-05 and £30 million in 2005-06."
That is capable of two interpretations. It does not say whether the year 2 or the year 3 increases are compared with year zero or the preceding year—in other words, whether they are cumulative or not. To make matters worse, if one looks through the document and sees where that notation is used, nowhere does it refer to a single expenditure line in the tables to enable the reader to work out which of the two interpretations that the reader can make is correct. Why does the minister not take the simple course, follow the committee's recommendation and stop using the cumulative method of accounting, regardless of whether he thinks that he has got things right or not?
The Finance Committee stated:
"In relation to non-domestic rates, we recommend that the Executive assures businesses that their rates bills will not rise above inflation rather than simply the rate poundage rising in 2004-05 and 2005-06."
Again, the response did not answer the question. The response stated:
"Our policy is to limit the annual increase in the poundage to the increase in the Retail Price Index … The rates bill will depend not only on the poundage, but the rateable value".
We know that. There is no commitment that the bill will not go up on aggregate across Scotland as a result of revaluation. It is likely that revaluation will increase rateable values, so will the Executive give a commitment that if that happens—leaving aside global melt-down and all the caveats—any increase in poundage will be such that average rate bills will not rise above inflation? That is what the committee requested—will the minister give that commitment or not?
Successive committees and—to be fair—ministers have been concerned to point out that it is outcomes that are important rather than the amount of cash. It is therefore good that the draft budget contains many targets. However, some of the targets are rather vague or unsatisfactory.
For example, consider the targets in rural affairs. Target 8 is to
"Encourage more sustainable agricultural activity on 13,500 farm businesses in Scotland's remote hills by 2006."
I know that there is a whole wodge of explanatory notes, but I asked the Executive how that target will be assessed. The answer stated:
"Support to farm businesses in Scotland's remote hills is provided through the Less Favoured Area Support Scheme. Maintaining the number of claimants at or above 13,500 indicates that the scheme is helping to maintain agricultural activity".—[Official Report, Written Answers, 18 November 2002; p 2267.]
By definition, those subsidies are governed by the European Union's agreed rules, so to meet the target all that we have to do is pay out money to 13,500 applicants. That does not prove that we are encouraging sustainable agriculture; it proves that we are paying out the money. It is not an outcome; it is an output.
The second target that I will pick on is target 1 in transport, which is to
"Reduce the time taken to undertake trunk road journeys on congested/heavily trafficked sections of the network by 2006."
That sounds great, but the supporting documents indicate that we do not yet have a firm way of measuring trunk road journeys or congestion. That is the kind of target to which we could all sign up. How can we know whether the resources that are being allocated are adequate to deliver the target when we do not have the ability to measure the baseline from which we are trying to work out the target? Quite a few more targets are of that nature.
One of the most interesting items in the spending—allegedly on our behalf—is the one that does not even show in the budget documents: the cost of the Scotland Office, which is about £8 million a year. That money is creamed off the Scottish block before we even get it. That is money that is used to support an office that virtually nobody wants and to support 107 civil servants to do God knows what. It is money to keep ministers in place to campaign, especially this year, for the Labour party in Scotland. They cannot even do that properly, as Mrs Liddell's campaigning role is widely seen as having been given to John Reid—another Cabinet minister without a real job.
Will Alasdair Morgan take an intervention?
The member is in his last minute.
As I have said before—I will say it again because it becomes more relevant all the time, especially now that Mr Chisholm has had to put a caveat on his payments to hepatitis C sufferers because he must in effect get Westminster's permission—we should not be discussing this part budget, which has only a little of the Scottish revenue and only part of Scottish expenditure. We need control of all our revenue and expenditure in Scotland so that we can use the fiscal system to incentivise Scottish business, grow the Scottish economy and improve Scottish public services.
Once again, a Labour finance minister stands in the chamber crowing about the vast sums of money that he is benevolently distributing. There is never an acknowledgement that the money comes from the pockets of hard-working Scottish families. Those families have had rise after rise in taxes inflicted on them by a Chancellor of the Exchequer who cannot balance his books. I wonder when the Executive will understand that everyone, not only taxpayers, notices when large increases that are put into public services without reform or focus fail to improve the services.
This is a budget of tax and waste. Spending has increased by 12 per cent from 2002-03 to 2003-04 and 53 new taxes have been introduced. Oil and gas taxation rises risk the sustainability of that important sector in Scotland. In April, our economy will be hit by the increase in national insurance while it trails in growth terms behind the rest of the UK.
Our public services are seen to be increasingly inaccessible and to be failing, despite the best efforts of the staff. Extra money is not the solution. Money poured into centralised and inefficient systems is not what our people want or deserve.
How can the Executive claim to have delivered improved health care on the back of all the extra money when waiting lists and waiting times have steadily increased over the past three years and fewer out-patients are being seen within nine weeks than ever before?
In education, why is it that—despite increased spending—up to a third of pupils in the early years of secondary school are failing to acquire basic skills? Despite the extra spending in the justice budget, our communities are not safer. Crime, especially drug crime, is increasing.
Will the member admit that some of the Scottish Executive's policies, such as education maintenance allowances, have been introduced precisely to address the concerns that he raises? Does he welcome such measures?
The fact is that, although quite a lot of taxpayers' money has been spent during the past three or four years, we are not seeing the effects. If anything, we are going backwards.
The people of Scotland are concerned not so much about how much money is spent, but about how it is spent. They are concerned about the level of waste, a prime example of which is the Holyrood project, which is now nine times over budget and, I suspect, the cost is still rising. The marriage of convenience between Labour and its Liberal Democrat bedfellows has not produced the promised renaissance in public services. The main contribution of the Lib Dems, apart from supplying the votes required to deliver the Labour agenda week after week in the Parliament, seems to have been a U-turn and a new tax for Scotland—the graduate tax—which the Scottish Conservatives would abolish.
Will the member give way?
I want to make a bit of progress, then I will let members in.
The Liberal Democrats claim to have delivered free personal care for the elderly, but they are wrong. They delayed free personal care for a year, which resulted in the honourable resignation of Keith Raffan as the party health spokesman. Council after council now complains that it does not have sufficient resources to deliver the policy. There is also confusion as to who will qualify. The scheme is supposed to be national and not another one that is rationed by postcode.
The member mentioned that his party would abolish the graduate tax and that it is in favour of free personal care, but thinks that more money is required. How would his party produce the funds for those measures without increasing tax?
We offered a solution to the graduate tax problem in 1999 and we were one of the first parties—if not the first party—to say that we would deliver free personal care.
The Budget (Scotland) (No 4) Bill, which Andy Kerr has introduced, talks about the great delivery and a lot of extra money. Every party in the Parliament was supposed to support that, but it is failing already, which is Labour's problem.
Will the member give way?
The problem is not so much about money but about definitions and rules. Councils are confused. We could reduce council tax rates simply by improving the collection rate.
On Monday, Jack McConnell told the business community in Aberdeen that he recognised its concern about higher business rates and that the Executive intends to freeze them. That admission was fair enough, but we would go further by reducing business rates to the same level as in the rest of the United Kingdom.
Labour cut the road spending plans that it inherited from the Conservatives. We acknowledge that new money for transport has eventually come through after a lot of pressure, but we would transfer £100 million from the enterprise budget to renew the Scottish infrastructure, which has been neglected in the five years under Labour. The announcement about the western peripheral route for Aberdeen was welcome, but I want a categoric assurance that the scheme will not involve tolls, which seems to be the plan for Edinburgh.
The SNP made no attempt to explain where the resources will come from for its spending pledges. The SNP's solution for everything is to tear Scotland out of the successful monetary union of the United Kingdom and put us into the uncertainty of the euro. That would leave us at the mercy of Europe, which is already destroying our fishing industry.
I will let Mr Wilson in.
No. Mr Davidson is in his last minute.
I want to know where the Minister for Finance and Public Services intends to find the £50 million that is required to support the fishing community. We have a small reserve which, as far as I am aware, has been overspent several times. Perhaps the minister will say whether that money will also come from EYF.
Scotland needs the rainbow coalition to recognise that pouring money into public services without reform and modernisation is wasteful and insulting to those who work in them. The truth is that the budget will fail our economy and our people.
Mr Davidson was very fortunate in being so often in his last minute that he was unable to give way. Perhaps in the Conservatives' winding-up speech, the Tory spokesman, or whoever is economically literate among them, will tell us whether they agree with the proposals that were made in the Christmas recess by the shadow chief secretary to the Treasury, Howard Flight—whom I remember from my Cambridge days as being pretty economically illiterate and who has not improved much since then—who advocated 20 per cent cuts in some areas.
Mr Davidson seems to be a devotee of improving public services despite the cuts that Mr Flight proposed. Those were partly contradicted by Mr Duncan Smith in the usual confusion that follows policy announcements by the Tories, who never know what one another are doing. Mr Flight made specific commitments to substantial cuts that would not just hit public services, but which would be catastrophic for public services.
I am not giving way to Mr Davidson. He can respond in the Tories' winding-up speech. He did not give way to me.
Before we go into the election, we want detailed Conservative spending cut policies. What we need from the SNP is the very opposite. We need to know exactly where the SNP stands on its members' various spending proposals. In a three or four-month period back in 1999, they managed to promise £1.5 billion of expenditure. Mr Kenny MacAskill proposed most of it, so I suppose that allowances must be made. However, during the last general election campaign, they promised £3 billion of spending proposals, all of which they ditched immediately afterwards.
SNP members are now promising more social workers, more pay for nurses, more money for Inverness airport. Of course, Mr Ewing always gets in on budget increases and promotes his specific interests: he knows what pork-barrel politics is all about. Inverness would be paved with gold if Mr Ewing had his way—and there would be more police, more general practitioners, more pay for dentists, smaller class sizes, more money to councils for children's hearings, more money for concessionary fares and extra cash for free school meals.
Andrew Wilson has got in on the act and is proposing that people, businesses and corporations should pay less tax. Of course, nothing adds up. The fact is that they have spending proposals that would bankrupt the nation, yet they want to cut taxes at the same time. The Scottish people will not fall for the absolutely silly proposals of the SNP, which is proposing to cut taxes and raise expenditure substantially at the same time. When the SNP leader-in-waiting on the back benches, Mr Neil, eventually emerges as John Swinney's successor after the devastating election defeat that the party is about to suffer—
On a point of order. I thought that we were here to discuss the budget document, not the policy of the SNP.
I think that Mr Raffan is talking about the SNP's budget proposals.
I could equally be talking about the Conservative party, which is about to be reduced in size here, as we know that it will make more proposals for spending cuts.
We need greater clarity in the budget document. I wrestled with it for several hours, trying to track spending on tackling drug misuse, which is a major cross-cutting issue. The important Finance Committee recommendations on end-year flexibility need to be followed, drawing the distinction between expenditure that has slipped and expenditure that has been forgone. Similarly, I agree with Mr Morgan on the issue of cumulative spending increases. The Executive must publish expenditure details on cross-cutting issues, so that we can track that expenditure. That is essential for clarity.
The Finance Committee made an important point about the joint report of the justice committees to it, which stressed the need to reverse what they see as a decrease in expenditure. Cross-cutting issues need to be taken into account. That is apparent in the presentation of figures relating to drug misuse in the budget document. We are told that specific expenditure is £56.1 million and that generic expenditure is £85.4 million, making a total of £141.5 million. However, the same policy unit in the Executive that produced that review of Executive expenditure on tackling drug misuse says that the total expenditure is £332.92 million, although it does not say how it reached that figure.
The situation is similar regarding the figures on tackling alcohol misuse. We are told that the specific expenditure is £3.83 million: the £2.33 million plus the £1.5 million after the national plan was published. However, the Executive maintains that the total expenditure—which is bound to be much bigger because it is a cross-cutting issue—is about £267.9 million. We need greater clarity because we could then make a judgment about where greater expenditure is required.
I welcome the opportunity given to Parliament to discuss further the budget and the processes that we employ for scrutinising expenditure. When we get to this stage of the budget process there is a temptation to think that it has all been said. However, we can undertake the debate having been informed by the Executive's response to stage 2 of the budget process. I am pleased to say that that response is extremely positive, even if it took an unacceptably long time to produce.
At stage 2 of the budget process, the Finance Committee made a strongly worded recommendation about the practice of portraying budget increases in a cumulative manner. I welcome the Executive's commitment to work with the Finance Committee to find ways of introducing more clarity to the figures that the Executive produces.
During consideration of the budget, proposals for change were made that would assist hepatitis C sufferers who seek compensation. I am sure that it is reassuring to every member in the chamber to see that the Minister for Health and Community Care is seeking, through another route, to address that issue.
The Executive's positive response to the Finance Committee's stage 2 discussions on the budget process is most encouraging and I welcome the Executive's willingness to work with the committee and the Parliament. One overriding factor that should shape today's debate is that the budget is expansionist and successful. Credit should be given where it is due. The process of scrutinising the Executive's budget has evolved significantly during this first Parliament, but no one should doubt that we will need significantly more progress over the years to come if we are to unveil the mysteries that lie beneath a £25 billion budget.
The Parliament's subject committees have played a significant part in the process so far, but all our committees, including the Finance Committee, will need to continually reassess their approach to budget scrutiny if we are to achieve the transparency and opportunity to influence that we desire.
The Finance Committee recently commissioned research from Professor Colin Talbot on budget setting and financial scrutiny in devolved administrations and regional governments around the world. The research looked at countries such as Australia, Belgium, Italy, New Zealand, Spain and the United States. The report is excellent and informative and I would commend it both to members and to parliamentary committees as they consider more precise approaches to budget scrutiny. I certainly believe that the document could be of immense use to the new Finance Committee when, during the next Parliament, it continues to push for the evolution of our budget scrutiny process.
Finally, I welcome again the agreement that the Finance Committee reached with the Executive on next year's process. As members will know, the timing of the election makes the publication of the annual expenditure review practically meaningless. The agreement to have the draft budget report published before the end of the summer recess will allow the new Parliament to analyse properly the new figures in circumstances that would otherwise have been difficult. I welcome the Budget (Scotland) (No 4) Bill. I commend the Executive for the expansion and vision contained within the bill and I look forward to the evolution of the budget scrutiny process, which empowers Parliament and informs the people whom we represent.
I am sure that the fact that the number of people in the public gallery decreased by more than two thirds during Mr McCabe's speech was no reflection whatsoever on the contribution that the Finance Committee convener just made, which was as measured as ever. I am sure that more people will now leave the public gallery.
We are, of course, debating half a budget. That is the key reason why Scottish Parliament budget debates command neither the theatricals nor the interest from the media or the general public that such debates do in normal countries. In every other country in the world the budget would be presented in relation to what it meant for the economy in terms of growth and the prospects for the economy; whereas there is no reference in the Scottish Executive's budget document to the economy. The United Kingdom's green budget has the Government's forecasts for underlying growth, inflation and revenues and the impact of all those on the health of public finances. In the Scottish Executive's budget, of course, we see nothing about revenue, the economy, or growth.
When the minister launched the consultation document last autumn, he said that it was a budget for growth. However, when Mr Neil asked him during question time that week what the budget's impact would be on growth, the minister could not answer. Today, after six months of preparation, the minister can only list initiative after initiative. The simple truth is that the Government does not know or understand what is going on in the Scottish economy, except that it can have little impact on the economy.
To the extent that this budget does impact on the Scottish economy, let us examine it. Alasdair Morgan mentioned business rates. The revenues from that taxation over the course of this budget year will rise at twice the rate of inflation—£76 million will come out of the business community at a time when the economy is stagnant.
In relation to regional selective assistance, the Government's only intervention tool on the investment front in terms of direct subsidies to industry, there has been a welcome shift towards indigenous industry, but it will be reduced by a third. Scottish Enterprise and Highlands and Islands Enterprise both see their budgets being cut in that context.
The contribution of this budget to underlying growth in the economy, notwithstanding some of the measures on the enterprise side, can only be negative. If the Government took any cognisance of that fact, we might have more faith that it might take the economy seriously. It talks growth, but delivers far from it.
The minister was reticent when he mentioned the recent "Government Expenditure and Revenue in Scotland 2000-2001" report. No wonder—it is largely accepted as being wholly irrelevant and is discredited by the commentators and the media who are involved in examining such matters. The truth is that the document was dreamed up by the Conservatives as a means to perpetuate the myth that Scotland is subsidised, and to oppose devolution.
As Alf Young, no fan of the SNP, said in The Herald only a couple of weeks ago, GERS was certainly born as a party-political ploy when Iain Lang was the Secretary of State for Scotland. George Robertson used to oppose the document, but Andy Kerr and his colleagues have developed it. One leading Conservative member said to me privately this week that GERS was a set-up from the start. It is yet another Conservative approach to politics that Labour is happy to take up. With great grace and accuracy, when he was launching the document, the Government's chief economist said that it tells us that we have a deficit with the current constitutional arrangement, but tells us nothing about what the situation would be if Scotland were independent.
The Government's tactics tell us nothing about the prospects for growth, but tell us everything about the manifest failure of Labour to sort out Scotland's mediocre economic performance over the long term, which has got worse in recent years. The imperative for any Parliament in the years ahead must be to focus on growth and sorting the economy. That is where the SNP will focus its attention and we hope that, in due course, the Scottish Parliament will acquire the powers that it needs, not only to examine the impact of the budget on the economy, but to get the economy going.
I am pleased to be able to take part in what has been a highly entertaining debate.
I draw members' attention to the introduction to the education department figures in the budget document, which tells us that the departmental aim is to
"enhance everyone's quality of life through sport, culture and the built environment, and to help make Scotland a must-visit tourism destination."
I entirely agree with those laudable aims. The figures in the document show that the net operating expenditure for tourism, sport and culture is reducing from around £173 million to around £165 million. Of course, if we then add the acceptable increase in capital expenditure, we find that overall there is a net increase in expenditure of some £400,000.
However, given that we have a cultural strategy that puts forward programmes that we are told are of crucial importance to the cultural fortunes of Scotland, why do we allow a situation to develop in which the Scottish Arts Council raids the national theatre budget to give to other theatres because its budget is at a standstill? The figures show that it would have taken a change of only some £2 million in the balance of the figures' arrangement—within the £165 million that I mentioned—to ensure that the national theatre could have been protected.
Alternatively, the minister could have reduced the increase in capital expenditure and allowed for protection of the national theatre's income. I would like to hear from the minister, possibly in an intervention, what decision was reached that allowed the Executive not to protect the national theatre expenditure within such a large amount of spending.
I was going to take the point at the end. Over the five-year period to 2003-04, annual funding for the Scottish Arts Council will have risen from £27.2 million in 1998 to £37.2 in 2003-04. Funding in 2003-04 will therefore be £10 million—or 37 per cent—higher than it was five years ago. There can be no accusation that the Executive does not support the arts. It does and does so effectively. That is why the drama budget of the Scottish Arts Council has grown by 16 per cent.
I thank the minister for explaining the increase in the budgets. I am not disputing that there are increases in the budgets, but the Arts Council of England's drama funding alone has increased by £25 million, with the result that the SAC is raiding the budget for the national theatre company to ensure that there is not a brain drain of talent down to the south. I suggest that the Ministers for Finance and Public Services and the Ministers for Tourism, Culture and Sport find a way of protecting the national theatre budget so that we can achieve a national theatre.
There are other ways of funding the national theatre. Mr Morgan touched on those. One would be to examine the costs of the Scotland Office. I would far rather have good actors employed by a national theatre company than dud actors employed by the Scotland Office or operating out of the House of Commons.
The Scottish Arts Council distributes some £14.5 million out of its £38 million. Would the minister care to have a discussion with the Minister for Tourism, Culture and Sport on moving that allocation directly to that minister's department rather than leaving it with the SAC? It seems absurd that 38 per cent of the grant allocation is taken up by the national companies when the National Galleries of Scotland, the National Library of Scotland and the National Museums of Scotland are all funded directly from the Scottish Executive education department. Would it not be more appropriate that the SEED fund them directly?
I look forward to the minister's answers in his closing speech.
The budget that Mr Kerr has laid before us today sees a rise of 14.5 per cent in real terms over the lifetime of this Parliament. To deliver that at a time of global recession and when Scotland's economy is small and fairly exposed is indeed remarkable, particularly as it is combined with the lowest unemployment that we have seen for 30 years, low inflation and low interest rates.
The budget debate is about what the parties stand for. Throughout the past four years, the coalition parties have made it clear that there are two fundamental principles in the budget debate. One is that investment is in return for reform and the second is that we should invest in enterprise.
Mr Kerr made clear how much the budget is pro enterprise. I will apply that criterion to the principal Opposition. I will address my remarks to Alasdair Morgan, because his seem slightly at odds with what we heard from the Scottish National Party back benches. I say to Andrew Wilson that I may sit on the Labour back benches, but I can wholly endorse the enterprise strategy of my party. It is not clear to me that the same can be said for the SNP. I will illustrate the point.
Will Wendy Alexander give way?
No. I will continue.
First, in the SNP's pre-manifesto we saw that that party is anti quangos. What does that mean for the enterprise budget? What does it mean for Scottish Enterprise, HIE, the Scottish Higher Education Funding Council and the Scottish Industrial Development Advisory Board? It means that in all those areas, the Parliament knows better.
Secondly, we also saw that the SNP is going to kill off the public services investment fund.
Thirdly, the SNP is also anti public-private partnerships. It is happy to have the private sector's money, but God forbid that we have the private sector involved in managing services, because that might raise productivity.
Fourthly, where does the SNP stand on fiscal stability? I draw members attention to the SNP's promises. Perhaps, in his closing speech, its finance spokesman could comment on them. Do Roseanna Cunningham's promises on secure accommodation, Bruce Crawford's call for more money for recycling, Alasdair Morgan's call for more on roads and Sandra White's call for more on the Glasgow underground stand? Do we have a golden rule of any kind?
Finally—this is the most important question—where does the SNP stand on enterprise? Mr Kerr has already outlined the investments that the Executive parties are making in modern apprenticeships and technology institutes.
I notice that the SNP's analysis, as outlined in its pre-manifesto, is that the best way to stimulate enterprise in Scotland is through a further cut in property taxation. According to the SNP, that is preferable to investing in technology institutes, in Careers Scotland or in modern apprenticeships. That implies that the real problem is that all firms in Scotland perform the same. We know, however, that the key problem in enterprise is that our least productive firms are five and a half times less productive than the most productive ones. That is the problem that we need to solve, but which the nats do not address.
SNP members know that Scotland's problem is not about cost; they know that, if Scotland is to compete in future, we will not do so by undercutting, but on the basis of our own knowledge and our own ideas. The whole issue has become one of a political tactic masquerading as an economic strategy. That is what the SNP is about. It is all about upping the ante on the constitution and having us debate that again, instead of actually talking about the economy.
For those of us who would like to see an SNP budget about investment in return for reform and about enterprise, let me ask whether it is the SNP's red faction or blue faction that is in control. I genuinely do not know where Alasdair Morgan stands. The future of public services does not depend on our making the promises of the red faction, which imply that we will spend more and more, but without employing any golden rule; nor does it depend on the blue faction's pretending that Scotland can cost-cut its way to economic success. I ask the SNP to clarify whether it stands by the five enterprise strategies that it has outlined: cutting out the quangos; killing off the public services fund; being opposed to PPP; slashing the enterprise budget; and getting rid of the technology institutes.
Wendy Alexander was asking the SNP for a golden rule. That rule is that whatever the Scottish Executive and the coalition Government spends, the SNP will always top it—or that independence is the answer to every policy issue.
What about violence in schools?
Yes—violence in schools. We heard about that earlier this afternoon. It is an interesting new policy.
I join Keith Raffan in welcoming the substantial increase in investment in our public services that is contained in the budget for the coming year. The above-inflation increases are part of the sustained and unprecedented rise in public sector spending that is necessary to improve and invest in the education service, the health service, the transport infrastructure and tackling crime.
As Wendy Alexander said, the Scottish Executive budget will increase by 14.4 per cent in real terms by 2005-06. The increases have been argued for consistently by my Liberal Democrat colleagues at Westminster, and I am glad that we won the political argument. No one can deny that the increases are on a scale not witnessed in recent times. Indeed, over the 20 years of Tory rule, we saw the complete reverse, with cuts all the way through.
Even SNP spokesperson Nicola Sturgeon admitted, when she submitted a proposal to the Finance Committee on funding compensation for hepatitis C sufferers, that the budget heads would still receive
"substantial increases over the years concerned."—[Official Report, Finance Committee, 19 November 2002; c 2384.]
Even the SNP recognises the unprecedented rise in investment in public services.
The SNP's decision to abandon the penny for Scotland campaign shows that it has now accepted that the Barnett formula is delivering for Scotland and will continue to deliver throughout the next session of Parliament.
In criticising GERS, Andrew Wilson failed to recognise that it continues to show that there is a substantial redistribution from the centre—from Westminster—to Scotland year on year. That is still the case when oil revenues are taken into account, and has been the case over the past 10 years.
The penultimate paragraph of page 2 of GERS 2000-01 states:
"The calculations required to derive Net Borrowing for Scotland are subject to imprecision due to the need to estimate a number of elements of both expenditure and revenue."
In other words, it is a load of nonsense.
I am sure that Mr Neil would like to think that, but most of the major economists in Scotland accept the view that there is a substantial deficit, even taking into account oil revenues. Every time that the SNP argues for a separate Scotland, it really has to say where it would plug that gap, because the issue is fundamental. Will there be a major cut in public spending or will there be a major increase in taxes? The SNP cannot have it both ways.
In my constituency, increased investment by the coalition parties has shown through in new schools—we have £80 million to redevelop schools in Argyll and Bute—and in the building of a new hospital at Mid Argyll. There is also a proposal to build a new hospital in Bute. There has been investment in our transport infrastructure—our ferries and ports. Link spans are being provided at Oban, which is vital for our islands.
So far the Parliament and the Executive have experienced a period of sustained growth in public spending, but even the most optimistic among us believe that that will not continue in the long term. The background is one of falling stock markets, zero growth in many major economies throughout the world and stuttering growth in the USA, which is widely recognised as the engine that drives the world economy.
I do not think that the current growth in public spending will continue in the long term. The key issue for the coalition parties and for the Parliament is to ensure that the increased resources that are being made available to our public services are spent wisely. We must secure reform as part of that investment and ensure that the money that we are investing produces a vast improvement in our public services in the long term.
I would like the minister in his summing up to indicate in detail how he intends to monitor the effectiveness of the increased investment that we are making and to ensure—
Mr Lyon, you must now close.
This year there is record growth in the Scottish budget, which is continuing to deliver the required investment in public services that benefit everyone in Scotland. As Wendy Alexander and George Lyon said, we are seeing the highest real-terms sustained growth in the Scottish budget since 1975. That growth is beginning to improve life for communities all over Scotland.
As a result of the spending review, the Scottish budget will rise by £4.1 billion by 2005-06. There will be sustained, year-on-year real-terms increases. In Aberdeen we are now able to develop one of the major aspects of the modern transport system strategy: the western peripheral route. Massive investment is also being made in modernising and upgrading transport links in central Scotland. By 2005-06, investment in Scotland's transport will stand at more than £1 billion. That is absolutely vital to Scotland's economy and fulfils many of the commitments that were made in "Building a Better Scotland".
Vibrant successful cities are important to Scotland's economy. Following the cities review, which concluded recently, extra funds have been made available to support cities via the cities growth fund. The fund will enhance the cities' role as economic centres and help to deliver a clear vision for the future.
Industry and business will be supported further by the freeze in business rates. Small businesses will receive even more help through the rates relief scheme. I look forward to the development of the business improvement districts concept, in which Aberdeen, like other cities, is very interested.
This year's budget is delivering for the young people of Scotland. More resources are being invested in schemes such as educational maintenance allowances, which will provide young people from low-income families with extra support that will enable them to stay on at school after age 16. In some parts of Aberdeen, the number of those who go on to further and higher education is very low, partly because employment at 16 is available. The extra help that I have described will ensure that those young people can stay on at school to get the better qualifications that will give them more opportunities later in life.
There are real, sustained increases in funding for local government. Aberdeen City Council informs me that this year it will receive an extra £20 million that will be used to improve many different facilities in local communities—play parks, schools and roads. Those measures will improve people's quality of life.
From speaking to pensioners from across Aberdeen, I know that they and pensioners elsewhere in Scotland are enjoying and benefiting from free concessionary travel, which offers them greater freedom and mobility. More than any other group, pensioners use the national health service and need good health services, the budget for which will rise to £8 billion by 2005. We are benefiting from real, sustained increases in funding throughout the public services in Scotland.
For too long, public services and the transport infrastructure in Scotland were starved of resources. Railways, for example, did not get the money that they needed for many years. However, the money is now beginning to go in to support them. Public transport in particular did not get the investment that it needed. However, this budget and the ones that follow it will be able to support that investment and to support a more successful Scottish economy. We will now see real change and growth, building a better life for all Scotland.
I begin by exploding the myth that all is well in the Scottish economy. Two weeks ago, the manufacturing export figures for Scotland showed a drop of 25 per cent in manufacturing exports and a 36 per cent drop in the export of electronics. This week, a report from the University of Sheffield and the University of Warwick has shown that the real level of unemployment in Scotland is not around 100,000, but well over 300,000. A report from the UK National Audit Office, two weeks ago, showed that PPP is by far the most expensive way to finance public sector projects and leaves a legacy of debt to future generations. Just before Christmas, the figures on child poverty showed not only that child poverty levels in Scotland are not falling, but that child poverty is getting worse.
The Executive's targets on health are being missed, both on waiting times and on waiting lists; its targets on education are being missed, particularly on literacy and numeracy; and its targets on enterprise are farcical. One of the key strategic objectives in the budget document is to increase the share of Scotland's gross domestic product that is spent on research and development from the current figure of around 0.8 per cent to the Organisation for Economic Co-operation and Development's average figure of about 1.8 per cent. In a reply to me, the Minister for Finance and Public Services confirmed that that would require an additional annual expenditure by 2006 of £750 million. Nowhere in the budget does that figure, or anything like it, appear. In other words, the targets are pure mythology, like the GERS document itself.
Will the member tell us where exactly he would reprioritise the budget to deal with that?
My priority would be research and development. Wendy Alexander is wrong—not for the first time—in that the SNP's policy is not to abolish the intermediate technology institutes. The policy of our party is to increase the level of spend on research and development and to allocate additional resources from the enterprise budget to meet that objective. I do not have time to outline everything in detail, but I can tell members the gist of it. Putting science, research and commercialisation at the top of the economic development agenda is the sensible thing to do, because that is where the future jobs and prosperity will come from.
My final point is about GERS. The document is about mythology rather than about reality. We hear all this nonsense about Scotland's alleged deficit. The UK figures this year show that the estimate for the UK fiscal deficit ranges anywhere between £30 billion and £100 billion. Does that mean that the UK is incapable of being an independent nation state? Of course it does not. We cannot say that Scotland cannot be independent because it has an alleged fiscal deficit and say that the UK can be independent.
Will the member take an intervention?
I am afraid that I do not have time.
The only way to achieve the targets on health, education, unemployment and manufacturing is to give this Parliament the sovereign powers over the Scottish economy to allow us to do that.
We are running behind time, so I apologise for not calling Dr Simpson. We must go to closing speeches and I will have to insist that we stick closely to the time limits.
As is customary in a winding-up speech, I will refer briefly to speeches that have been made during the debate.
The Minister for Finance and Public Services referred to the transparency and openness of the budget process and paid tribute to the work of the Finance Committee, for which I thank him. I have witnessed the closeness of the working relationship, which has been constructive. Mr Kerr also referred to the issue of working closely with industry; that, too, is laudable. He mentioned the contrast between the openness of the monitoring process in the Scottish Parliament and the situation at Westminster. The fact that we give as much time to the issue as we have done this afternoon demonstrates what devolution is all about.
Alasdair Morgan, rightly, praised the improvement in the budget documents, notwithstanding the point that my good friend, Mr Keith Raffan, made about the index. I associate myself with Mr Morgan's remarks about the committee's recommendation on cumulative accounting. There is general recognition of the committee's position. In the next session of the Parliament, the Executive and the Finance Committee will be able to work towards addressing that issue. Mr Morgan's reference to the pointlessness of the Scotland Office begs the question, "What is the point of Alex Salmond?" [Interruption.] George Lyon is suggesting that Alex Salmond is the leader in waiting.
David Davidson got himself in a bit of a fankle over tax. Like other Tories in Scotland, he has the perennial problem of Mr Iain Duncan Smith across the border, to which Mr Raffan referred in his point about contradictory messages. I compliment Mr Raffan on a vintage speech, which represented a complete demolition job on poor Mr Davidson. For Mr Davidson's sake, I will now lay off the Tories, as Mr Raffan has done enough damage.
The convener of the Finance Committee, Tom McCabe, referred to the committee's work and to its close liaison with the Minister for Health and Community Care, Malcolm Chisholm, in the work on addressing the issue of hepatitis C.
Brian Monteith was right to mention funding for culture, which has received many column inches of newspaper coverage. Although I do not know the rights and wrongs of the issue, I suggest that it might well have to be addressed by a new Executive and a new committee in the next session of the Parliament.
Do not worry—we will do it.
I am glad to know that Mr Monteith will be with us in the next session of the Parliament.
I have three remaining points. I have described how the openness of the budget process represents a terrific change to the previous situation at Westminster, when whole budgets went through the House of Commons with no one but a man and a dog present to give consideration to them.
The member should not speak about Alex Salmond in those terms.
When I said a man and a dog, I was not referring to Alex Salmond.
Secondly, I make no apology for raising the issue of money in and money out. Although we put the money in and the Executive puts the money out, we do not always see it coming out at the other end. I refer Mr Peacock to the remote areas of Scotland. If we can be seen to deliver in those areas, that will show what the Scottish Parliament is doing for all areas of Scotland.
Thirdly, we should remember what we are doing today—we are approving stage 1 of the bill. At the end of March, we will hand over a clean set of accounts and a healthy economy to the new Parliament. That is the importance of what we are doing. The books balance, which is more than can be said of some of the suggestions from the two Opposition parties. The budget, and the money in it, are sound. That is the strength of what we are delivering.
I commend the bill to the Parliament.
I notice that Mr Stone made no reference in his speech to the furniture budget and I am glad that he did not lecture us on prudence.
I have a correction to make. Mr Raffan did most damage to the Tories when he was a Tory member of Parliament; he does not do such damage when speaking out against us in the Scottish Parliament. Mr Raffan is substituting for Des McNulty in today's debate and things do not feel quite right without a contribution from Des.
However, there were some interesting speeches, not least from Wendy Alexander, who has left the chamber. When she was a minister, she felt quite able to point out that transport in Scotland had been much underfunded during the term of the Executive. Now that she is a back bencher, she has joined George Lyon in becoming a member of the Executive's fan club.
I remind the member that Ms Alexander also pointed out that the Labour party had not had a new idea since 1906. The budget proves that to be correct.
Indeed. Mr Neil makes a valid point. His colleague Mr Wilson—whom Mr Neil sometimes agrees with—also made the valid point that the Parliament's budgetary exercise should focus much more on the impact of the budget on Scotland's economy. As with much that goes on in this Parliament, the nature of the budgetary process puts far too much focus on spending and not enough on where the money actually comes from.
Many have lauded the fact that the budget has increased significantly under the Parliament, but it would be pretty awful if expenditure had not increased, given the 53 new taxes that Labour has introduced since it came to power at UK level. It would be quite a disgrace if such tax increases had not led to additional spending.
The real question, which only some members focused on, is whether the money is making any difference. The answer is no. For example, Elaine Thomson mentioned trains—
Will the member give way?
I shall deal with the Liberals in a moment, Mr Raffan. At Westminster—where the Liberal Democrats have a bit of backbone, if I may recall Mr Neil's infamous remark—the Liberal Democrats ask questions of the Labour Government. One Liberal Democrat MP elicited the fact that, during the Conservative period in power, some 61 new stations had been opened, whereas in the whole of the Labour Government's period in power through two elections, only eight stations have been opened. That shows Labour's commitment to trains and public transport. The reality is quite different from the spin.
I do not agree with Alasdair Morgan that the Executive has an election war chest—it has an election spin chest. Announcements are made and repeated, but the cash is never produced to back them up. The Executive does not need a war chest, because there will not be that level of spending.
About three seconds into his speech, Mr Kerr could have sat down—
Wind up.
—as I will do now, Presiding Officer.
Despite this exercise, the only way in which the people of Scotland can change the budget is through the election on 1 May. Let us hope that they do.
One part of the budget that I welcome is the transfer of £145 million from the Department for Work and Pensions. The transfer is not just a matter for anoraks, as it relates to the grant for the supporting people initiative. It does not deliver more money; it is simply a transfer to Scotland of funds that were previously controlled by Westminster.
Having worked that particular miracle, perhaps ministers can now do the same with housing benefit. Unless we have control over that kind of financial element, we will not truly be able to provide a proper housing policy in the future. If we are to address the social inclusion agenda on housing, we need control over such matters. However, the development is very welcome.
Some have talked today about the long and convoluted budget process that will continue over the next couple of weeks. I will wait until the Finance Committee meeting to ask some of the detailed technical questions—
Even then, the minister will write a letter.
Indeed. Mr Kerr seems to like writing letters to the SNP—he normally does not provide answers to the questions we ask.
We have not had a satisfactory answer to the question about cumulative accounting, which is a genuinely cross-party complaint that the Finance Committee has made. I am disappointed at the less than generous response we received from the Minister for Finance and Public Services. In all sincerity, I hope that we will have a more positive response from whoever fills that role after 1 May.
The increase from non-domestic rates could come from a variety of sources. Perhaps ministers would like to explain precisely how they will increase the take from non-domestic rates by £76 million. As far as I can see, it could happen as a consequence of an increase in the levy. Alternatively, it could happen as a consequence of projected growth in the economy. As far as I can see, the economy in Scotland is not growing significantly and it is certainly not growing at that rate. I would like to hear from the minister exactly how we are going to get another £76 million.
The key to any successful enterprise—or, indeed, country—is growth. Alex Neil rightly identified the fact that Scotland will get growth if we invest in research and development. We can turn that research and development into jobs. We will be able to do that by providing a competitive environment for our industry. The budget does not appear to do that, especially where we are expecting to take another £76 million from non-domestic rates.
Will the member give way?
The member is in his last minute.
As I am in my last minute, I will not be able to take interventions.
I welcome some of the announcements that the Government has made in recent times, particularly the announcement of the western peripheral route around Aberdeen. The minister was very cagey about that when he was questioned on it by the Finance Committee. However, we have not heard where the money will come from. We have not heard how a number of initiatives are going to be financed. Some of them have been mentioned by other members. We look forward to questioning the minister on the detail of those initiatives when we get to committee. We need to ask whether the money is coming from the contingency fund or EYF. If it is not coming from those sources, where is it coming from?
In an interesting speech, Keith Raffan rightly identified that the cross-cutting approach taken by the Executive—which is to be welcomed—is not as clear and transparent as it might be. We look forward to further developments in the process in the future. I will close on that point.
I will respond to some of the points that have been made during the debate and I will start with some of the points that Keith Raffan made. He asked upon which recommendations we have acted. Two things come immediately to mind. Andy Kerr and I attended a series of public meetings across Scotland and listened to what people had to say about their priorities for the budget. Out of that, and alongside our consultations with local authorities, came the quality of life initiative—£180 million in the budget to tackle the real issues that people want tackled.
The Finance Committee raised with us the vital need to improve the health improvement budget. We are doubling the amount of money on health improvement during the spending review period.
I am grateful to the minister for speaking to my points, but I was asking about the first report on the budget, which listed the specific recommendations made by various committees, such as the Local Government Committee's concern about national insurance increases and the feeling that the Executive, not local authorities, should bear those increases.
The member has raised another good point: we met that recommendation in the local government settlement that we announced.
Keith Raffan also raised a useful point about the cross-cutting nature of certain budgets and how we track expenditure. The Finance Committee is now considering that matter in relation to particular items of cross-cutting expenditure in the Executive. We have given evidence on that and we are keen to make improvements. One of the features of the Executive is that we are trying to join up service delivery and to make sure that that impacts on the community and meets people's real needs. We want to make further progress on that.
Alasdair Morgan raised a number of points. I was going to say that I enjoyed hearing his speech for the second time—we heard it a few weeks ago—but I would be lying if I said that. His speech was like one of those films that, when seen a second time, reveal new things. I am glad he acknowledged that the budget process is improving each year.
I apologise to Alasdair Morgan, Tom McCabe and other members of the Finance Committee for the lateness of the Executive's response to the committee's report. There was a particular reason, which was caught up with our wanting to respond fully on hepatitis C. That matter was not dealt with in the Parliament until yesterday morning. I apologise for the lateness of our response and I hope that it will not happen again.
I am also grateful to Alasdair Morgan for confirming to the Parliament our response to the Finance Committee: the rate poundage will be frozen, which will reduce the taxation burden on Scottish business and thus help to promote further growth in the economy.
Will the minister respond to the committee's request for the rate burden, not the rate poundage, to increase by no more than inflation?
As Alasdair Morgan knows, we cannot second guess the work of valuation officers in the revaluations that take place. We have made a commitment, and we have the powers, to reduce the burden of taxation.
David Davidson raised questions about this being a tax and waste budget. He tried to imply that we have achieved nothing in the Parliament with all the expenditure that we have had so far. There are record numbers of police in Scotland. Is that a waste of funding? We have 572 more doctors and 77 more dentists. Is that a waste? More qualified nurses are working in NHS Scotland now than did in 1999 and there are 12 major accident and emergency centres. Is that a waste? More than £40 million has been recovered in drug seizures. Is that a waste? Perhaps in the world of the Tories, where they want to cut public expenditure, it is a waste, but it is not a waste to us because it is bringing benefit to people throughout Scotland.
Will the minister give way?
I cannot, as I am short of time.
I want to build on those achievements. I shall turn to a point made by Tom McCabe, George Lyon and Elaine Thomson. One of the things that the Finance Committee drew out from its consideration of our plans was that this is an expansionist budget. The committee reported that the plan would deliver the largest sustained increase in public expenditure for a quarter of a century and bear down on problems of which we are all aware.
My response to Tom McCabe is that, as we proceed, we want to develop better scrutiny of what we seek to do. That picks up on George Lyon's point about monitoring expenditure and ensuring that we see the impact of an increase in expenditure. Wendy Alexander also said that we must ensure that we have not just investment, but reform at the same time.
Indeed, we have set so many precise objectives as we have moved forward in this budget process because we want to provide ourselves with a basis on which to measure the outputs for which we argued when we allocated the money and to ensure that those outputs are delivered in the community. We are establishing the mechanisms to do that.
I have to say that Alex Neil was more depressed than usual this afternoon. He really has no reason to be; his opportunity to become the new leader of the SNP is only three months away. As we begin to move through those three months, the distinction between the Opposition parties and the Executive cannot really be clearer.
The Tory record speaks for itself. As Keith Raffan pointed out, it is the party of public expenditure cuts. Indeed, at the previous election it promised to make £20 billion-worth of such cuts. Keith rightly wondered where those cuts would have fallen and what their impact would have been. The Conservative party is simply interested in the few, not in the many. It is also dying on its feet. It is to Scottish politics what the Norwegian blue parrot is to Monty Python sketches. To all intents and purposes, the Tory party is a dead political party. It is not resting; it has expired. It has kicked the bucket and gone to meet its maker in the sky. It is politically stone dead; it is deceased; it is no more; it is a political stiff, bereft of life; it is an ex political party. As I look around the back benches, I see that rigor mortis is beginning to set in. Indeed, as I look at the front bench, it seems that the body is beginning to decompose.
The corpse rises to speak.
I assure the minister that my hovercraft is full of eels.
I am not entirely clear what that means and it seems that no one else is either.
In addition to the Tories, we have the SNP, which will soon join the Conservative party on death row. The party is at odds with itself and is riven with divisions. Indeed, some of its most long-standing members have left it. The nationalists have only three short months to go before the bloodletting commences. Even as we speak, the claymores are being drawn from beneath the thatch—not to challenge the Executive, but to slay their own leader. The SNP cannot add up; it has an ever-growing black hole at the centre of its finances. It promises anything but provides the costs for nothing. However, its plans would cost Scotland, which is why the people of Scotland will reject it.
The Tories and the SNP stand in stark contrast to the Executive, which has strong leadership and a clear vision for the future. It is building public services and delivering for Scotland. Through the Budget (Scotland) (No 4) Bill that we are considering today, the Executive is making record investments in health and in education, to reduce crime, to improve transport and to support jobs. The Executive is building a better Scotland. The bill provides the means and I commend it to the chamber.