HC Deb 07 February 1983 vol 36 cc761-72 1.21 am
Mr. William Hamilton (Fife, Central)

This debate gives the House an opportunity to examine what the Government have in store for Scotland during the next three years up to 1985–86. All the expenditure figures are given in the White Paper in cash terms, and no account is taken of inflation, although table 1.14 on page 17 of volume 1 of the White Paper gives the expenditure figures in cash terms, using 1981–82 as the base year. I shall put the figures on record to show what we are complaining about tonight. Whereas in 1980–81—the year before the base year—the total public expenditure in Scotland was £5,893 million, in 1983–84 that figure has fallen to £5,656 million. That is a reduction of £237 million, or more than £40 per head of the Scottish population. It represents a substantial cut in expenditure on housing, education, health and the services that do so much to improve the quality of life of many Scottish people.

The cuts could be much more devastating than the bare figures show, because they are based on the assumption that the rise in prices each year will stay at about 5 per cent. However, not many experts are so optimistic. The Sunday Times stated yesterday: The White Paper's assumptions on inflation are, bluntly, incredible. The article continued Five per cent. inflation … is a Government fantasy". and suggested that 8 per cent. inflation is more likely. The article gave pensions as an example. It said: The pensions increase for next November to be announced in the Budget is to be based on an assumed 5 per cent. inflation rate in the year November 1982–83. Pensions, however, will not go up by the full 5 per cent., the White Paper makes clear; a deduction is to be made for the fact that pensioners got two per cent. more than needed to compensate for inflation in the last uprating … If 5 per cent. for prices is incredible, so, too, is the 3½ per cent. which is all the Government allows for public sector pay. The article goes on to say that every 1 per cent. above the 3½ per cent. received by public sector workers would cost the Exchequer about £350 million a year.

In theory, of course, according to the Government, if the workers received more than 3½ per cent. in increased pay, the difference could come from programmes, but The Sunday Times article pours doubt on that proposition. Can anyone imagine the chiefs of the defence staff saying that, if pay increases by more than 3½ per cent., we will cut the purchase of guns or battleships. That would not happen. But, in paragraph 14, on page 79 of the White Paper relating to Scottish education, the Government say that, while a real cut in education is projected: The number of teachers that can be afforded within these plans will depend crucially upon the level of pay settlements for teachers. In other words, the Government are saying that, if the teachers receive more than 3½ per cent., there will be fewer of them and therefore, presumably, poorer education for the children. Even taking account of inflation, there will not be an improvement in the education service at any level over the three years with which we are concerned.

In terms of job opportunities for the young, the old, the middle aged and women, Scotland is rapidly becoming an industrial desert. A "scorched earth" policy could hardly have created as much devastation as the Government's policies in the past three and a half years. Yet, as the dole queues lengthen day by day and month by month, the Government do little or nothing except to cook the figures and pretend that unemployment is good for the soul, and that it is not as bad as it used to be since the Secretary of State for Employment got his fingers on the statistics.

Table 2.4 of volume two shows that regional development grants are to be cut from £600 million in 1982–83 to £474 million in 1983–84. That help has gone and does go mostly to manufacturing industry in badly hit regions such as Scotland. Is Scotland being protected from that massive cut, because it is happening at a time when manufacturing industry is suffering its deepest recession for 50 years? How will the Scottish economy be protected from that onslaught? How many more jobs will be threatened under the present policies?

One can hardly pick up a daily newspaper without finding evidence of the increased number of redundancies all over the country. About 800 jobs are threatened at British Aluminium in Falkirk, and 1,900 jobs are threatened at Timex in Dundee.

The steel industry at Ravenscraig is by no means out of the wood and the workers are desperately worried. If the threatened takeover of Andersons of Strathclyde by Charter Consolidated goes ahead at the Government's instigation, how many jobs will be threatened? At John Haig's at Markinch in my constituency there is cold-blooded murder of 340 jobs. Markinch will be dead as a community if John Haig's closes. When I talked to the management last week there was no sentiment. It seems that the workers are regarded as pawns on the chess board to be moved or swept out of the way. The company is owned by distillers and is a profitable and wealthy organisation but the redundancy terms are appalling. I talked to a man who has been working for the company for 27 years. He has given loyal service. He will get £4,500 in redundancy pay, less than one year's pay. It will be gone almost overnight after 27 years. He is only in his early 40s, but he will not work again. There is no other work available for him in the area.

Another 200 jobs are threatened at Balfours at Leven. That is in an area where male unemployment in November 1982 was over 28 per cent. Despite repeated representations by the local authorities and Members of Parliament, the Government have refused repeatedly to return special development area status to the Levenmouth area.

The latest unemployment figures in Fife and throughout Scotland show the devastation of unemployment. The White Paper gives no crumb of comfort for those who are on the dole. There is an assumption of another 280,000 for the breadline in the United Kingdom next year. That will mean about 50,000 in Scotland. In October 1982—the latest figures available—127,837 had been out of work for over 12 months. I suppose that the figure is now about 150,000. When these figures were mentioned in the House last week the Secretary of State for Employment bleated "There is no easy solution. There is no easy, painless, short-term solution to this." We remember the fraudulent Tory poster at the 1979 election that was produced by Saatchi and Saatchi. It implied that if the electorate got rid of the "wicked Labour Government" the unemployment problem could be solved almost overnight. It was claimed that it was all the fault of the Labour Government.

The Prime Minister is constantly referring to the great achievement of her Government. She reminds us that the Government have brought inflation down to 5 per cent. I do not know what it is in the Sahara desert, but it will be less than 5 per cent. We can always get inflation down as long as we are prepared to pay the price. The price is 3 million to 4 million on the dole with more to come. There is no sense in boasting about the rate of inflation if we have a ruddy desert on our doorstep, and that is what we are getting throughout the United Kingdom.

On her last visit to Scotland the Prime Minister appeared bejewelled, glittering, peroxided, powdered and painted and said "You have got to take it. Take your medicine, it is doing you good." The right hon. Lady is not suffering and nor is anyone on the Government Benches, but our people are. She said that the people should return to the Victorian virtue of hard work and thrift. By God, those on the dole would be happy if they could return to the prospect of hard work and thrift. They cannot work and they cannot exercise thrift. They have been denied both by the Government.

We were told last week that over 14,000 building trade workers are out of work. Yet over the past three years, we have seen the worst record of house building in 50 years. In 1980, only 2,800 council houses were started—the lowest peacetime figure since the 1920s. As we have had less money provided by the Government than ever, that downward spiral will continue. In the whole of 1981, and through the first nine months of 1982, according to the Under-Secretary, only 17,300 houses were completed in the public sector. In the same period, 28,500 houses were sold, with a net loss in the public rented sector of about 11,000 houses.

The Shelter survey in the winter of 1981 showed that more than 157,000 were on council house waiting lists in Scotland. There is an enormous pent-up demand for public house building, for the old, the single, those on low incomes and the newly married. Yet, the Government have not the wit to marry the 14,000 unemployed building trade workers with that enormous demand for houses. It is common sense, morally, politically and in every other way.

The figures in the White Paper show that, far from the Government doing that, public expenditure on housing is to be slashed in real terms by 20 per cent. in the next three years. That amounts to criminal irresponsibility, and a gross dereliction of duty on the part of the Government.

The sad story is told in table 2.15.3 on page 78 of the second volume of the White Paper. It shows that 5,100 houses were completed in 1982, but in 1976, under the previous Labour Government, 22,823 were built. In that same period, while the number of houses has gone down by 75 per cent., average rents have gone up by more than 150 per cent. Another period of Tory Government and all building of council houses will cease and all public money towards the building of those houses will have ceased.

Another aspect of this depressing White Paper is that of education. I speak as an ex-teacher, and I hope that everybody accepts the view that the long-term future prosperity of the Scottish economy depends more than anything else on investment in education at all levels. However, the Government are planning for a worsening of the pupil-teacher ratio, from 17:1 in 1982–83 to 17:6 in 1983–84 and 17:5 over the next two years.

It is true that the overall expansion in education expenditure is planned to rise by 9 per cent. from 1982–83 to 1985–86, but that is 9 per cent. over three years. That is 3 per cent. each year, which is a substantial cut in real terms. We have seen the examples of threats to teachers on the Clyde. In Lothian, several hundred teachers are threatened with being sacked in the foreseeable future. Coupled with that, there will be severe restraints on teachers' salaries.

The capital expenditure programme on the Health Service will increase from £104 million to £132 in the three years of the survey period, which is an increase of 27 per cent., or 9 per cent. a year. That might well match inflation for the period, but there is hardly any scope for improvement in the service. It also implies a pay freeze of about 3.5 to 4 per cent. That applies to the nurses who were so scandalously treated in the last pay round. In addition, ancillary workers will be expected to take not more than 3.5 to 4 per cent. Meanwhile, inflation will increase to about 8 or 9 per cent. In other words, there will be a further reduction in the living standards of all those workers.

There will be no significant improvement in the health service despite the fact that the number of elderly people is increasing and that more resources are therefore needed. There are also greater demands on the local community services provided by local authorities, which are hard hit by the Government. The prospect is grim for almost every section of our community. Scottish Members of Parliament will have received today—and if not, they will receive tomorrow—a letter from Age Concern in Scotland which refers to the fear of the clawback that the Chancellor of the Exchequer is likely to announce in his Budget statement. It continues: Over half our retired people are living either in poverty or on the margins of poverty. The letter also refers to the poverty brought about by the fact that this winter fuel costs are beyond the means of many of our old people. But the elderly are not the only ones to be involved in the struggle against poverty. By 1985—if the Government last until then—the number of those living on supplementary benefit and on the poverty line in the United Kingdom will have reached a record of more than 4 million. A large proportion of them are old-age pensioners.

I have concentrated on a few of the services that are likely to be axed. There is no doubt that the figure that I gave earlier shows a substantial overall decrease, which means a reduction in the standard of living. However, there has been an enormous increase in defence expenditure. The Government can find plenty of money to spend on guns, bombs, aeroplanes, ships and soldiers. Spending has increased from £12,072 million in the last year of Labour government to £14,163 million in 1983–84. That is an increase of more than £2,000 million in defence spending in four years. It means that for every man, woman and child in Britain, we shall spend £250 a year. That is £5 per week for every man, woman and child.

As I have said, on the Government figures that have been published so far, the Falklands exercise will cost us more than £2,500 million, or about £2 million per head for every Falkland Islander. For Scotland, with a population of about 5 million, the proportionate figure would be £10 billion. The Government are spending all that money on the Falkland Islands and the whole story has not yet been told.

We are also spending a lot more money on the police and law and order. While the Government squeeze expenditure on housing, education, health and the services on which our standard of living depends, they are upping sevices for the police, the soldier, defence and the prison service. The figure that I have for the prison service shows a substantial increase. So if a person wants to get a house in Scotland he should go into the prison service. That is the best way to get one. If he wants a good wage, he should join the Army or the police force, because that is where the money is going. Those are the Government's priorities.

My conclusion is a simple one. The Scottish economy is sick, although not dying. Among all sections of the community there is a feeling of despair and anger, a feeling that nothing is being done to help those who are most in need. Far from being optimistic, people feel that the situation will get worse. The Government believe that, too. That is why there is pressure on the Prime Minister to cut her losses and go to the country quickly in June before she is found out, and the pressure is coming from Tory Members.

The projections in the White Paper show that there is little or no sign that the Government intend to do anything to improve a situation which makes us all very despondent. Unless the Government change their policies, or unless there is a change of Government, that despondency will continue, and I shudder to think what the ultimate prospects may be.

1.46 am
Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

I congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on raising this important matter against the background of the public expenditure plans for Scotland.

I start by taking up my hon. Friend's final point about the increase in expenditure on the police and prison services, compared with the decreased expenditure on the other services that he mentioned. I am sure that my hon. Friend will agree that there is a connection, in that the reduced expenditure is causing unemployment and problems in the Health Service, education and housing. As a result of a reduction in expenditure on those items, the Government are having to increase expenditure on the police and prisons. There is no doubt that the social pressures on people in Scotland as a result of the Government's economic policy are leading to a substantial increase in crime. The Government came to power saying that they would end unemployment and reduce crime, but what has happened? Unemployment has soared dramatically, and so has crime. Unemployment and crime both came down during the last year of the Labour Government. Unemployment fell for seven or eight consecutive months, and in the last two years of the Labour Government crime, too, was reduced. Under the Conservative Administration both have gone up.

My hon. Friend dealt with the industrial scene. He spoke of the reduction in expenditure between now and the financial year 1984–85 on regional and industrial assistance, which goes primarily to manufacturing industry. The Minister should tell us how much truth there is in the story in the Sunday Standard and other reputable papers that discussions are taking place inside the Government with a view to restructuring the various development areas, the special development areas, and the intermediate areas, and that the Secretary of State for Scotland is prepared, yet again, to accept more than his share of the Governments's reduced expenditure on regional aid.

The last time this exercise was entered upon, the reduction in regional aid amounted to £250 million for the United Kingdom as a whole. The Minister, who has drawn the short straw and has to remain here until 2 am to reply to the debate, will recall that he was a Back Bencher at the time. He will also realise that had he still been a Back Bencher he would now be in his bed. These jobs have their rewards and their punishments. The hon. Gentleman is now suffering the punishment. I have experienced it myself. I am not, of course, sympathising with the hon. Gentleman, who deserves everything that he is getting.

Of the £250 million reduction in regional aid to which I referred, the Secretary of State for Scotland gave up £45 million, or about 20 per cent., of the total. If there had to be reductions at all, the Secretary of State should not have been prepared to surrender more than 10 per cent. The story that I read in the Sunday Standard had opposite it pictures of the Minister of State, Department of Industry, and of the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), whom I have to face in the British Shipbuilders Bill Committee at 10.30 am—the gruesome twosome, as I have been describing them recently.

How much truth is there in the story that discussions are taking place? I warn the hon. Gentleman that if any attempt is made to reduce the status of many of the development areas in Scotland, in the interests of other parts of the United Kingdom, it will be strongly resisted by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan), by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is present for this debate, and by all my hon. Friends on the Opposition Benches. Scottish industry, as the Minister will know from his previous incarnation with the CBI in Scotland, is in such desperate straits that, far from suffering a reduction in regional aid, we badly need an increase. All the assisted areas require upgrading if the problems that beset Scottish industry are to be dealt with.

My hon. Friend the Member for Fife, Central referred to the problems at Markinch following the announcement of the closure of John Haig's, a company of over 100 years' standing. There are problems associated with the possible closure of Henry Balfour and Son at Leven, my home town, and with the closure of the Carron company in Falkirk, a company of 260 years' standing. The first furnace was blown at the Carron Company in the year that Rabbie Burns was born. The furnaces were blown out last year by the Prime Minister.

That is the story throughout Scottish industry. It may be argued that these industries are old, but the new industries on which the Scotland of the future was to be rebuilt—the car plant at Linwood, the pulp mill at Fort William and the smelter at Invergordon—are also going. It is an additional warning to the Scottish Office not to contemplate giving up any resources.

I do not wish to forecast what will happen later this morning at Falkirk in my constituency. The Minister knows that the situation there is serious. There is to be an announcement today that will bring gloom and despair to the town against the background of the closure of the Carron company. When the Minister was pushing through the House his statutory instrument on the derating of external plant and machinery, I warned him of the devastating effect of the increased rate burden that he was imposing on other industries in my constituency. In a few hours we shall see the first casualties of his actions.

There is nothing to be cheery about on the job front in Scotland, despite what the Secretary of State tells us about the number of small business start-ups. We have had another major bankruptcy in East Kilbride today, in which the Scottish Development Agency has a major stake. Such bankruptcies are occurring one after the other. Almost daily we hear despairing announcements about the industrial scene in Scotland.

I could continue for some time on the subject of jobs, because the Scottish economy is in a desperate situation, but let me deal with housing, a subject dear to the heart of my hon. Friend the Member for Garscadden. Local authority and public sector housing in Scotland leave a great deal to be desired. Housing starts are at their lowest level. Local authorities are being starved of funds and there has been an attempt to deprive Falkirk district council of any housing start grant at all. If that action is carried out, the authority will have gone from a housing start grant of £8 million three years ago to nothing in 1983, all under this Government. That is a disgrace in anybody's language. Housing stock in Scotland, as the Minister knows well, because it is his responsibility, leaves a great deal to be desired, are all his policies are based on the altar of the ability to sell council houses. That is a policy that does not now bear examination because of the heartbreak that young couples are suffering due to the lengthening waiting lists in local authorities and their inability to get a local authority house.

Local authorities require more money because there is a great deal to be done to the immediate post-war housing stock, which, rightly, was built in a hurry because the needs were desperate at that time when men were coming back from the war and they and their families needed to be housed. But those houses are now 30, 35 or 36 years old and require a great deal of money to be spent on them. Indeed, there is a strong case for a scrap and build programme. Some of the older immediate post-war houses could be demolished altogether and replaced by new and modern houses. I know that the Minister will argue about loan charges, but, as my hon. Friend the Member for Fife, Central said, the Government are expert at producing money almost from nowhere to meet the whims of their mistakes in the Falklands. I am sure that they could produce money for the things about which I am talking.

Hon. Members talk to parents every week at their surgeries and we see them as we go round our constituencies. They are now becoming more and more worried about Scottish education. It is simply not good enough for the Government to say that they are spending more per head on pupils now than ever before. Somehow or other the Government seem to assume that because they spend more money they should be producing more O-grade and H-grade passes, and so on, as if that were the be-all and end-all of education.

As my hon. Friend said, the rate support grant settlement budgets for a reduction in the number of teachers employed in the Scottish education system. Discussions are now going on about the further contraction in the colleges of education where most of our teacher training is done. I am very much aware of the announcement by the Under-Secretary on Friday to introduce an all-graduate profession in the year beginning 1984. It will be 1988 before we get the results of anything from that. In that time enormous damage could be done to the Scottish education system as a result of the cuts in public expenditure to which my hon. Friend has referred.

Health is a subject dear to my heart. I have heard the Under-Secretary responsible for health, and the Minister himself, who had responsibility for health for three or four weeks, say that there are more nurses and doctors, and more this and that in the Health Service. The Minister knows that the Health Service is bursting at the seams. It is creaking under the strain because the Government have not yet published any building programme since the day they were elected. They are still working on the building programme left to them by the outgoing Labour Government in 1979. Not one brick has been laid under plans made by this Government for Health Service building. All the health centres and hospitals that have been built, and anything that is being built at the present time, whether it be a geriatric or a maternity unit, is part of the last Labour Government's building programme.

The Government have circularised all health boards. The Under-Secretary was at the Department when the circular was sent out telling the health boards in Scotland that before they could even ask for permission to build a new bed they must write to private hospitals to see if they had any spare beds. If there were any, the health boards had to buy those beds before they could get any permission or consideration to build new beds. The National Health service is becoming a two-tier service.

Ministers tell us that health boards are responsible for administering their own health board area. I believed that until a fortnight ago, when I read that the Secretary of State had overruled seven or eight health boards which had refused to accede to requests from consultants to use the National Health Service facilities for private practice.

The consultants have apparently appealed to the Secretary of State. The right hon. Gentleman has overruled the very people whom he appointed to administer those health boards areas. In anybody's language, that is a disgrace.

The Minister has been given a difficult job because he has to justify the Government's economic policy against the background of the debate.

Mr. Donald Dewar (Glasgow, Garscadden)


Mr. Ewing

My hon. Friend says "Impossible". The electors in Scotland will be the judge of this matter. We may debate this matter across the Floor of the House, but like my hon. Friend, I am convinced that sooner rather than later the electors will get the opportunity to judge the Government's record in Scotland. I think that the judgment will be harsh on the Conservative party and on Conservative Members of Parliament. Many of the small number present had better start looking for jobs. There are nearly 400,000 unemployed people in Scotland. Old-age pensioners will have their pensions reduced, folk cannot get into hospital, parents of school children are complaining bitterly about the schools, and there are lengthening queues for local authority housing.

The Minister must know from his CBI connections that industrialists are thoroughly sick of this Government. I was talking to some of them today in my constituency. They are all turning against the Government, and their judgement will be harsh, indeed, when the time comes. It will be interesting to hear what the Minister says. No doubt he will do his best to paint a rosy picuture, but there is no rosy picture. The Minister must know that. He has constituents, just as we have. He must know that the scene is very depressing indeed.

2.5 am

The Under-Secretary of State for Scotland (Mr. Allan Stewart)

I agree with the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) on at least one point. I congratulate the hon. Member for Fife, Central (Mr. Hamilton) on his choice of topic. It also goes without saying that hon. Members who are present, and those who are not, will no doubt return to some of the themes that have been raised.

I want to respond to the detailed points raised by both hon. Members, but before doing so I should like to tell them of a change in the procedure of reporting the details of public expenditure plans in Scotland. I hope that it will be helpful to all hon. Members. In the past, my right hon. Friend has provided the Select Committee with a detailed memorandum on the public expenditure figures, and that has subsequently been published. This year, we propose to bring forward the programme, and the detailed commentary on the figures will be published in the very near future.

Let me put the debate into a general context. The Government have sought progressively to reduce public expenditure as a proportion of national output as a necessary condition to reducing inflation and freeing resources for the private sector to use productive, wealth-creating enterprise. Unlike Labour Members, we believe that that is the only sure way forward. We must create a sound base for a healthy economy in the medium and long terms.

Within that general context of restraint, resources have been channelled to priority programmes such as law and order, health and defence. We have also tried to sustain the capital programmes.

In total, the provision for 1983–84 is an increase of about 5 per cent. over the plans for 1982–83. That is broadly in line with expected inflation. The hon. Member for Fife, Central seemed to quote press reports suggesting that the Government's inflation forecasts would not be achieved, but later admitted that inflation was currently running at about 5 per cent. The Government have been extremely successful in the battle against inflation—a great deal more successful than most of the forecasters envisaged.

Looking ahead to 1984–85 and 1985–86, increases of 3 per cent. overall are planned for the programmes under the Secretary of State's control.

Mr. Dewar

In the housing projection up to 1985–86, there is a cut in cash terms of 9 per cent. Presumably the Minister will have done the calculation, so perhaps he will tell me what that is in real terms, assuming that the anticipated inflation figures are in reality.

Mr. Stewart

I shall come to housing, but I should first like to put the broad picture.

We must not compare the Scottish programme with the United Kingdom programme as a whole. Some misleading comparisons have been made, but not by the hon. Member for Fife, Central tonight. Scotland also benefits from United Kingdom programmes such as defence and the externally financed expenditure of the nationalised industries. When we compare like with like, there is a 3 per cent. increase each year for the Scottish programme, and that is on a par with increases in the comparable English programmes.

The hon. Member for Fife, Central referred to table 1.14 of the White Paper and claimed that, because the figure for the Scotland programme in 1983–84 is £170 million less than the expected outturn for 1982–83, this showed a neglect of Scotland's interests. I think that that is a reasonable summary of what he said. Quite apart from the qualifications that should hedge about any argument on cost terms comparisons, the cost terms figures for 1983–84 look low simply because the 1982–83 figure is so much higher than it should be because of spending by local authorities. If that is discounted, the so-called cut in real terms shrinks to vanishing point.

Hon. Members should pursue that line of figures backwards. They will then find that even without making allowance for local authority overspending the Scotland programme for 1983–84 in cost terms is still higher than it was in 1978–79, the last full year of the Labour Government. That puts into context some of the more extreme statements that have been made about savage cuts, cuts to the bone, and so on.

On housing, the hon. Gentleman's figure of 20 per cent. is wholly misleading. Real comparisons in cost terms are a poor way to judge expenditure plans. Not only do they suffer from the deficiencies surrounding any cost terms figures, but the allocations to the housing programme, as to any programme, must be set against the needs of the programme. There is an overall surplus of houses over households and there are about 29,000 empty public sector houses in Scotland. There is also enormous scope for a far greater contribution from the private sector, and housing starts are rising sharply. Against that background, it is perfectly right and reasonable that the housing programme should be concentrated on the needs of special groups and on rehabilitation, improvement and repair. That is a sensible policy which avoids the elementary mistake that has been made in the past of equating high public expenditure with good housing.

The hon. Member for Fife, Central also mentioned council rents. The current average council rent is less than 7 per cent. of the average earnings of a male manual worker in Scotland and an even smaller proportion of the average household income. That puts that complaint into its proper perspective.

Houses sold to sitting tenants are not, as the hon. Gentleman claimed, lost to the housing stock. They remain in the housing stock, and the total housing stock has increased by 50,000 houses since the Government came to power.

Mr. Dewar

The Minister makes a rather strange argument to suggest that there is no housing need in Scotland, but why does he regard the attempt to establish what the cash figures in the housing estimates mean in real terms as a misleading exercise? Will he answer the simple question that I asked? What would be the cut in real terms if his 5 per cent. and 3 per cent. inflation projections were met?

Mr. Stewart

I have already explained why the hon. Gentleman's figures for expenditure in real terms are wholly misleading. Not only do real comparisons in cost terms suffer the deficiencies surrounding any cost terms figures, but any programme must be set against the needs of the programme. That is the question to which the Government must address themselves. Of course there are housing needs and it makes every kind of sense to concentrate resources on improvement and repairs. Hon. Members also forbore to mention the financial incentives that the Government have provided for improvement and repair in the private sector. Those incentives are extremely generous and have been so regarded by local authorities of all political persuasions, including Labour authorities.

The hon. Member for Fife, Central referred to the education programme. It must be seen in the context of the falling school rolls. We are faced with a 3 per cent. fall in pupil numbers this year. He also referred to the pupil-teacher ratio, he correctly quoted the figure for 1983–84 at 17.6, and 17.5 for the following two years. That figure compares with a figure of 18 in the last full year of the Labour Government in 1978–79. That shows that the provision for education is reasonable.

The hon. Gentleman, as the House would expect, referred to health. He knows a great deal about that subject. He was rather more cautious in his comments on the Government's plans in that area than about some of the other programmes. The provision for health and social work is £108 million higher than the expected outturn for 1983–84, with further increases in the later years of the programme. For health alone, the increase in 1983–84 is £101 million, which is more than 6 per cent. It is well in excess of the expected movement for programmes as a whole. That shows the priority that the Government are according to health. It will enable health authorities to meet new demands caused by demographic changes and by advances in medical techniques. It is important that inflation is kept under control. The real resources that will be available will depend on the level of inflation.

Opposition Members were critical of the Government's priorities for law and order and prisons. Most ordinary people would regard the priority for law and order as perfectly right and proper. They would regard it as highly desirable that there should be a modest growth—such as we are planning—in police numbers to meet estimated needs. I was taken aback by the criticism of the Government's provision for increased spending on capital for the prison service.

Mr. Harry Ewing

The Minister should not misquote me. I did not criticise police expenditure. I said that it was inevitable because of the reduced expenditure on the social programmes. The Government are fully responsible for the increase in crime and, therefore, the increase in the prison population. The two are linked. The Minister must not misquote me. The additional money that he is having to spend on the police and the prisons is of his own making because of the reduction in expenditure on social programmes.

Mr. Stewart

I do not for a moment accept that analysis. The hon. Gentleman must know in his heart that the causes of rising crime are a great deal more complex than that—as Opposition Members constantly told the House when they were in Government. The Government are providing for increased investment in improving conditions in prisons. We are providing for the capital reconstruction of Greenock and also for the next phase of the development of Shotts prison. I would have thought that all hon. Members, irrespective of party, would support those priorities.

Both the hon. Member for Fife, Central and the hon. Member for Stirling, Falkirk and Grangemouth referred to industry and to jobs. Selective financial assistance to industry will continue at broadly its current level, as will the programme for the Highland and Islands Development Board. The provision for the Scottish Development Agency in 1983–84 is more than the agency has spent in any past year. Of course, there are undoubtedly serious problems that face the Scottish economy. Nevertheless, it would be cruelly misleading to those who are out of work for anyone to suggest that there is a serious prospect of quick and easy alleviation. The fact remains that the economy is in recession and that we cannot spend ourselves out of trouble in the way in which some Opposition Members seem to think we can. A massive injection of public money might bring some apparent short-term relief, but the lasting effect would be more inflation or high interest rates or both. That would inevitably lead to a loss of competitiveness and jobs.

It is essential to the employment prospects of industry and commerce in Scotland that the Government maintain their firm anti-inflationary policy. It is clear from the White Paper that the Government will continue to concentrate on their priorities. It is also clear that we shall seek realistic economies. It is essential to make more effective use of resources in the public sector. It is by maintaining a proper balance between the public and private sectors that conditions for the growth of industry and commerce will be created and maintained. that is what the programme, as set out in the White Paper, is all about. that is as important for Scotland as it is for the rest of Britain.