HC Deb 11 March 1987 vol 112 cc281-3
6. Mr. Fallon

asked the Secretary of State for Scotland what proportion public expenditure represents of the Scottish gross domestic product.

Mr. Rifkind

Identifiable public expenditure in Scotland in the financial year 1985–86 was 48 per cent. of Scottish gross domestic product at factor cost in the calendar year 1985.

Mr. Fallon

Can my right hon. and learned Friend confirm that for every £4 of public expenditure south of the borders about £5 is spent north of the border? [Interruption.]

Dr. Godman

The hon. Gentleman should get his hands out of his pockets.

Mr. Speaker

Order. The hon. Gentleman has as much right as a Scottish Member to raise this matter.

Mr. Fallon

To what does my right hon. and learned Friend attribute this extraordinary difference? Is it the automatic element in the block formula, or is it his own formidable lobbying skill at the Treasury?

Mr. Rifkind

I know that my hon. Friend visits Scotland quite frequently. He will know that although the population of Scotland is a relatively small fraction of that of the United Kingdom, the land mass of Scotland is a far higher proportion than the population would imply, and therefore requires somewhat disproportionate expenditure on, for example, roads and transport, and because of the special circumstances of the islands of Scotland, which have specific requirements. Therefore, rather crude comparisons of the kind that my hon. Friend makes are not entirely appropriate.

Mr. Roy Jenkins

As it is the Government's desire to reduce public expenditure as a proportion of gross domestic product, and as the Government regard public expenditure as an albatross around the neck of private industry, does the right hon. and learned Gentleman regard the public expenditure level in Scotland as an achievement or as a failure?

Mr. Rifkind

I can tell the right hon. Gentleman that the proportion that I mentioned has actually gone down over the last few years. Therefore, I consider the level an achievement.

Mr. Fairbairn

Does my right hon. and learned Friend appreciate that one reason for the excellent level of public expenditure in Scotland compared to that in England is that the mother of my hon. Friend the Member for Darlington (Mr. Fallon) lives in my constituency, and it is spent on her? I do not understand his complaint. Will my right hon. and learned Friend make sure that the message is spread that the quality of life in Scotland is infinitely better, thanks to him and his fellow Ministers, and that more people could live there and commute to the south than the other way round?

Mr. Rifkind

My hon. and learned Friend is correct. The definition of public expenditure that I used in my reply to my hon. Friend the Member for Darlington (Mr. Fallon) is of identifiable public expenditure as a whole and not merely that of the Scottish Office, and does include transfer payments of the kind to which my hon. and learned Friend refers.

Mr. Douglas

Can the Secretary of State confirm that we are talking about public authority current expenditure on goods and services and, of course, about gross domestic capital formation, and part of that is public expenditure?

Mr. McQuarrie

That is big talk.

Mr. Douglas

The hon. Member for Banff and Buchan (Mr. McQuarrie) says that that is big talk, but he ought to remember that, like me, he is only a wee fellow.

If the Secretary of State wants to go further, will he tell us about the jobs related to that public expenditure and the essential services and about the infrastructure that is created by it and which is essential to Scotland's economic progress?

Mr. Rifkind

Throughout the United Kingdom, public expenditure supports a certain level of employment. The hon. Gentleman will be aware that a previous Labour Government came to the conclusion that one could not expect public expenditure to answer the questions of unemployment. The country as a whole now fully appreciates that.