Public Expenditure (Scotland) (Hansard, 2 December 1992)

§ The Secretary of State for Scotland (Mr. Ian Lang)
With permission, Madam Speaker, I wish to make a statement about public expenditure in Scotland.
My right hon. Friend the Chancellor of the Exchequer announced the Government's expenditure plans in his autumn statement on 12 November. On the same day, I announced my decisions for aggregate external finance for local authorities. I am publishing today details of the council tax transitional relief scheme which will accompany the introduction of the council tax in Scotland next year. As a result of settling the final details of that scheme, I have been able to increase the level of aggregate external finance available for distribution to local authorities from 3.2 per cent., as previously announced, to 3.5 per cent. I am also able to announce how I propose to allocate the remainder of the resources available for my programmes in Scotland. As usual, a table summarising my decisions will appear in Hansard. Full details will be included in my departmental report, which will be published in February.
My right hon. Friend made it clear that the Cabinet had set a remit for the public spending round which would keep public expenditure under firm control. The resulting overall settlement has, as a consequence, been a tight one. Nevertheless, the net public expenditure resources available to me for allocation in 1993–94 amount to no less than £13.45 billion. That is around £1 billion higher than last year's settlement and the largest ever annual spending total available to my departments, not just in cash but in real terms.
Our commitment to continue to fund growth in the health service in real terms, year by year, is an important one. But this year, with a tight public expenditure settlement, that is a demanding target. However, I am glad to say that, despite the tight limits on total resources and the priority given to economic recovery, I have once again been able this year to make substantial provision for the national health service and to plan for real growth in its funding. In 1993–94 the health programme will amount to more than £3.75 billion of net expenditure, an increase of £151 million over plans for the current year, and a real terms increase of 1.4 per cent. At that level, expenditure on the NHS in Scotland will be 47 per cent. higher in real terms than in 1979.80. That amounts to an all-time record of £744 per head in Scotland.
In deciding the disposition of the reminder of my resources among my various responsibilities, my first priority this year has been to invest in Scotland's economic recovery and longer-term growth. The House is already aware of the additional £340 million economic package for Scotland announced as part of my right hon. Friend's autumn statement. The promotion of economic recovery is also at the heart of the expenditure plans that I am announcing today.
Provision of national roads over the next three years will enable the programme of investment which we published last year to proceed as planned. More than £233 million will be invested in 1993–94, a 2 per cent. increase in real terms over plans for the present year. In addition, there will be new opportunities for the private sector to invest in Scotland's transport infrastructure. Resources available for local authority roads and other transport 266 programmes, including forecast receipts from the European regional development fund, are expected to increase in real terms to £206 million.
The private sector-led local enterprise companies have a central role to play in promoting enterprise development, training and environmental recovery throughout Scotland. The LECs are actively encouraged to seek private investment and their strength is not accordingly to be measured solely by the level of their public funding. This year there has been understandable speculation that, to help fund other programmes, Scottish Enterprise's budget would have to be cut—a cut of 10 per cent. has been quoted in the press. It is true that the training budget, which represents Scotland's share of the funding for programmes in Great Britain, has fallen. It is none the less right in the present economic circumstances that the Government should back the LECs' development efforts with substantial resources. I am happy therefore to announce that the budget for the enterprise and environment functions of the Scottish Enterprise network will increase by £27 million in 1993–94 compared with plans for the present year. This is an increase of almost 11 per cent. in real terms.
In addition, the LECs are attracting an increasing share of the available grants from the European regional development fund which are additional to the expenditure allocations announced today. As a result the total cash resources available to the Scottish Enterprise network are expected to exceed the £455 million planned for the present year. Provision for Highlands and Islands Enterprise will be maintained at £78 million and is expected to rise to over £80 million once forecast ERDF receipts are taken into account.
In seeking to ensure that, within a tight overall settlement, the resources at my disposal should, so far as possible, be directed towards stimulating economic recovery, I have ensured that, across my programmes as a whole, my plans provide for gross capital expenditure totalling over £2.5 billion next year and an aggregate of £7.8 billion over the survey period. Together with European regional development fund grants, this enables a higher level of activity to be undertaken in real terms for 1993–94 than previously planned.
Spending on agriculture and fisheries is vital to the rural economy. Provision will increase in 1993–94 by some £141 million. That is 43 per cent. growth in real terms compared with plans for the present year. These increases reflect the outcome of agreement earlier this year on reform of the common agricultural policy, which switched the emphasis from commodity price support to direct payments to farmers.
Investment in education is the key to longer-term economic strength. The budget of the Scottish Office Education Department will be increased by 80 per cent. to nearly £1.2 billion next year, reflecting not just growth, but also my new responsibilities for the older Scottish universities and my new direct funding responsibilities for further education colleges in Scotland.
Adjusted for these transfers, provision for education will rise by 5 per cent. in real terms next year with further real terms growth thereafter. Scottish participation in higher and further education will be maintained at record levels following the substantial increases of recent years.
I am also able to invest substantially in a better environment. Expenditure on environmental programmes will amount to £485 million. Provision for the water and 267 sewerage programme over the survey period amounts to some £728 million. This represents a doubling in the programe over five years. Local authorities will be able to add to these resources grants obtained from the European regional development fund.
In housing, local authority expenditure on private sector improvement grants will increase by 1.5 per cent. in real terms while expenditure on council housing can be maintained at the level of expenditure per house provided for in this year's provisional allocations. The resources available to Scottish Homes represent an

§ Mr. Henry McLeish (Fife, Central)
Is the Secretary of State aware that, four days after his second anniversary in the post, when facing the longest recession since the 1930s, with business and consumer confidence at rock bottom, this statement does not begin to deal with the real issues facing Scotland? It will do nothing to allay fears about unemployment, to help boost the economy, or to improve the quality of public services.
268 increase of £31 million in its investment resources compared with this year's plans—a real terms increase of almost 7 per cent.
The plans which I have announced today provide for the highest ever level of funding for Scottish Office programmes. They permit continuing real improvements in the provision of public services. They provide a framework for jobs and economic growth. I commend them to the House.
Following is the table:
The casual listener today might have been forgiven for thinking that Christmas had come early. When we consider the sleight of hand, manipulation of the figures and the inclusion of enormous transfers from other Departments, a very different picture will be revealed, which will put a different complexion on what has been announced. Any statement on expenditure must be assessed against the fragile condition of the Scottish economy.
269 The Secretary of State claims that there has been a real terms increase of 4 per cent. The Treasury says that, if one excludes transfers, there has been only a 1 per cent. increase in real terms. Will the Secretary of State clear up that confusion and confirm that he set out to use a different set of figures in his press release on 12 November, which was not a presentation shared by the Treasury?
The Secretary of State has virtually said that money is flowing from the Scottish Office into every nook and cranny of Scottish life. In that case, why is there a cut of 5 per cent. in real terms for industry, a cut of 8 per cent. for roads and transport, a cut of 3 per cent. in housing, and a cut of 9 per cent. in other environmental services? The right hon. Gentleman can tell us when he responds why his figures simply do not add up. The tables are more accurate than the Secretary of State's rhetoric.
Secondly, the Secretary of State talked about a £340 million recovery package. Will he confirm that next year all that we will get is £23 million of housing investment by Scottish Homes, and that that is the extent of his £340 million recovery package? If that is so, it does not begin to address the key issues which Labour Members appreciate but which are constantly ignored by the Secretary of State and his complacent friends in the Scottish Office.
Thirdly, will the Secretary of State tell the House why he has surrendered on the Barnett formula? For 13 years we have been led to believe that that is quite important and that it had an impact on the quality of public services and the volume of expenditure. Now the Secretary of State would like us to believe that the Barnett formula did not mean a great deal. He should come clean and tell us what it means in terms of future funding and expenditure.
The real tragedy of the statement, stripped of its hype and hypocrisy, is that it will do nothing for jobs, nothing for unemployment and nothing to tackle homelessness and the rising crime rate throughout Scotland.
When unemployment has risen in the past two years by 23 per cent. to nearly a quarter of a million, why has no emergency employment programme been announced in the statement? Have the Government given up on the unemployed? Are they not concerned about the one in four young Scots between the ages of 16 and 24 who are out of work? Is the Secretary of State not concerned about the one in 10 of our working population who are also out of work? By their actions today, the Government have shown that they have no interest in the unemployed.
The chief executive of Scottish Enterprise is alarmed about what might happen to his budget, but today we have been treated to the simplistic notion that the Secretary of State is increasing the budget. Would the Secretary of State like to come clean and tell us about the training elements of Scottish Enterprise, which he conveniently forgot to mention in his statement and his presentation to the House?
Training is a crucial item of the budget and the statement. One quarter of training places have been lost in the past two years. Nearly 9,000 young Scots are without a youth training guarantee. Surely the Secretary of State should come clean on the extent of the cut because it is vital for young people and adults and for Scotland's economic recovery.
Will the Secretary of State also consider that, in Scotland, 12 people are chasing every vacancy? 270 Bankruptcies have increased by 280 per cent. in the past two years. Faced with all that, why is the industry budget being cut by 5 per cent?
We have had no better definition of insanity in public policy than this afternoon's statement. Problems are mounting by the day and the budget for investment is declining by the day. It simply makes no sense, and the Secretary of State should comment on that.
The Opposition are not convinced that Scottish Enterprise has a healthy future in the hands of the Conservative party. Budget cuts are being imposed, morale is at rock bottom, and we now see the appointment of another representative of that cosy clique of Conservative cronies, Mr. McKay, the chairman of Scottish Enterprise. When will that placement approach to politics in Scotland stop? We need people who will tackle the Scottish Enterprise budget problems properly and who do not have such close affinities with the Conservative party.
Another issue that did not surface in the statement was crime. Why has the crime rate increased from 900,000 in the past two years to more than a million, yet the statement specified no figure to show why—

§ Madam Speaker
Order. As crime was not specifically mentioned in the statement, I remind the hon. Gentleman that the procedure restricts him to questioning the statement.

§ Mr. McLeish
The law and order issue is contained in the table that accompanies the statement, so it is germane to the Scottish Office's current expenditure, Madam Speaker.
When a crime is being committed every 30 seconds in Scotland, we should have a response about what the Government intend to do about the rising crime wave. Have they simply given up once again on crime, which stalks our streets and houses in Scotland?
The final point that was not dealt with in the statement was that of homelessness, which is now at record levels with 39,500 households having registered with local authorities as homeless. Why is there no vigorous improvement in investment in house builds? It cannot be right that nearly 100,000 Scots, according to the Government's latest figures for the past year, are now without a home. Why, therefore, has 3 per cent. been cut from the housing budget in today's statement?
Local government expenditure is also crucial because, once again, tucked away in the tables accompanying the statement is a 3 per cent. cut in the cash going to local authorities. Will not that mean that the 1.5 per cent. pay issue will simply disappear and that we shall have a pay freeze? Will it not mean the underfunding of care in the community, and council tax being set at artificially high levels because of the meanness of Government funding? Is it not a potentially lethal cocktail to suggest that vicious capping of local authorities will accompany inadequate funding to ensure that council tax levels remain reasonable at the expense of services and jobs?
The statement is not worthy of the problems in Scotland. The Secretary of State well knows that, when the transfers from other Departments to the Scottish Office are excluded and when we consider the increasing need in housing, crime and the economy, the statement will receive 271 no support from the Opposition. I urge him, even at this stage, to reconsider the unemployed and to give them a priority which, until now, they simply have not had.

§ Mr. Lang
I know that figures are not the strong point of the hon. Member for Fife, Central (Mr. McLeish), but he should take a closer look at the figures before making such comments.
I am glad that the Opposition have accepted my proposal that the Scottish. Grand Committee should meet to discuss the statement, because it covers many important issues that deserve debate. I assure the hon. Gentleman that my announcement, with all the real terms increases that I have listed, will lead to improved public services. There is no question of sleight of hand. For that, we look to the hon. Gentleman who, less than a month ago, suggested that the Government's spending on Scottish Enterprise was set to fall from £373 million to £340 million next year. The resources at Scottish Enterprise's disposal next year will be £455 million, which is rather different.
The hon. Gentleman suggested that capital allocations to local authorities would fall from £826 million to £810 million. The figure is likely to be nearer £900 million, so the hon. Gentleman has a bit of homework to do. He also questioned the unadjusted real terms increase—in other words, whether allowance was being made for the transfer of programmes to Scottish Office responsibility. Unadjusted, the programme expenditure increase is 5 per cent. in real terms, plan on plan. However, after taking out provision for higher education and care in the community, the increase is not the 1 per cent. that the hon. Gentleman suggests; it is a 2.7 per cent. plan-on-plan increase.
The hon. Gentleman spoke about Scottish Enterprise and about a cosy clique of cronies. Perhaps he was thinking of Monklands. He mentioned morale in Scottish Enterprise. He should speak to it following my announcement because it has had its enterprise and environment functions budget increased by £27 million, a rise of 11 per cent. in real terms. That returns Scottish Enterprise's total spend, after the reduction in the training budget to which I referred, to broadly the same level as for the current year. That is very different from the hon. Gentleman's figures.
The hon. Gentleman asked about roads and transport and suggested that there were cuts. The roads and transport programme will increase by 5 per cent. in cash terms and by 2 per cent. in real terms. The hon. Gentleman failed to take account of the European regional development fund share which will be allocated to those programmes in the year ahead.
The hon. Gentleman asked about the change in the Barnett formula. The updating of that formula took account of the population changes since it was introduced arising from the 1991 survey, thus bringing it back to the same broad level intended by the then Chief Secretary, Mr. Barnett. The impact on this year's total programme is about £12 million, which is less than one tenth of 1 per cent. of the total. Anyone who contrasts that with the £340 million package that I was able to secure outwith the block will begin to realise that I have secured about 10 times as much by that means.
The hon. Gentleman derided the £340 million package as though it had only one small component involving the Scottish Homes budget, but it comprises £70 million of resources in the current year for schools, hospitals, roads and a range of other areas which we have now spelt out 272 and published. It also includes the writing off of debt inherited from Scottish Homes' predecessors, and that will release about £70 million over the next three years. It also included the reduction of £68 million this year, carrying forward to future years, in Scottish business rates.
That is the emergency employment plan for which the hon. Gentleman called, and that and the more than £2.5 billion of capital spend will help to generate jobs and stimulate the economy.
The hon. Gentleman spoke about the law and order budget. We have not given up the fight against crime. That is why we are increasing the law and order budget by 11.6 per cent.

§ Mr. Bill Walker (Tayside, North)
Does my right hon. Friend agree that the substitute striker for the Opposition Front-Bench team, the hon. Member for Fife, Central (Mr. McLeish), was offside for most of the game? He failed to understand or realise that in order to score goals he must make statements that will stick. Has the hon. Gentleman failed to notice how, since 1979, the Conservative Government have increased spending on the health service over and above the rate of inflation by 47 per cent.? Has he failed to notice that we are now spending much more on the environment, which has been targeted in the way that people want? Has he not noticed that the shift in emphasis on the way that Scottish Homes is to be financed will make a substantial contribution, especially in rural areas, to funding?
All that is against the background of a world recession. My right hon. Friend is to be congratulated, not condemned.

§ Mr. Lang
I am grateful to my hon. Friend. He is quite right to point to the increase in expenditure on the health service in Scotland of 47 per cent. in real terms since 1979–80. That is dramatic evidence of our long-term commitment to improving the delivery of public services. My hon. Friend might also have said that expenditure on health in Scotland is 24 per cent. higher per head than in England. My hon. Friend is also right to draw attention to the environment budget. He may like to know that the budget for Scottish Natural Heritage is being increased to £36 million, a 5 per cent. real terms increase over the current year. The Scottish Homes budget is also being increased. My hon. Friend will also be pleased to know that there is provision in these figures for expenditure of £4 million on raspberries over the next three years.

§ Mr. James Wallace (Orkney and Shetland)
Can the Secretary of State confirm that there is no increase whatever in the Scottish Enterprise budget for this year? What guarantees can he give that the increase announced for the environment and enterprise will not have to be siphoned off to allow the training guarantees to be met? Will he confirm that there is no increase in the budget for Highlands and Islands Enterprise? How can he justify that given the loss of jobs at Ardersier, Nigg and Dounreay?
The Minister implied that there would be a make up from the European regional development fund. Have those figures ever before been included in the statement, or is it just that he needs to put them in to give a gloss to the statement? Is he aware that the loss of the Barnett formula will continue year after year and the one-off that he managed to secure this year as part of an overall United Kingdom package will not make up for that?

§ Mr. Lang
I am happy to reassure the hon. Gentleman. The Scottish Enterprise budget has been increased on enterprise and environment functions by 11 per cent. in real terms, which makes up for the reduction in the Scottish Enterprise share of the Great Britain training budget. As to the budget of Highlands and Islands Enterprise, that will be over £80 million next year, higher than it is this year, and it may be as high as £83 million or £84 million, depending upon how much ERDF resources it receives.
The hon. Gentleman said that ERDF resources had not been included in the past. On the contrary, they have always been included. This year, we have responded to Commissioner Millan's request that they should be seen transparently and separately. Therefore, they are published separately in the tables. That is why they are shown in that way.

§ Mr. Phil Gallie (Ayr)
I share with my right hon. Friend the despair that he must feel at times at the Opposition's constant gloom during statements. Once again, he has confounded—[HON. MEMBERS: "Question."]—he has confounded all of their expectations by increasing—[HON. MEMBERS: "Question."]

§ Madam Speaker
Order. Hon. Members are asking that questions be asked. I hope that the hon. Gentleman will ask a direct question, and I also hope that hon. Members in all parts of the House will be ready with their questions, not comments. I call Mr. Gallie to ask a question.

§ Mr. Gallie
Is my right hon. Friend aware that there is great joy in Scotland at the continued drive towards the uniform business rate and the good use to which the £340 million mentioned in the Chancellor's statement is to be put? Will he join me in reminding Opposition Members that it was a Conservative Government who introduced the idea of the enterprise trusts in Scotland? Does he agree that there is a continuing commitment from him and his fellow Cabinet Ministers towards enterprise trusts?

§ Mr. Lang
I am happy to assure my hon. Friend of our continuing support for the good work done by enterprise trusts, working well with local enterprise companies. I am also grateful for his welcome for the business rates reduction of £68 million that I was able to announce for next year. That will bring to £348 million the resources put into bringing down business rates from the high levels set mainly by Labour-controlled local authorities to levels comparable to those in the rest of the United Kingdom.

§ Mr. Jimmy Wray (Glasgow, Provan)
The figures used by the Secretary of State are misleading. If he were to tell the House the truth, he would have to calculate the figures going back to the level of 1978–79 prices. The Convention of Scottish Local Authorities states quite clearly—

§ Madam Speaker
Order. The hon. Gentleman heard me say a moment ago that I am not open to debate and comments. I am interested only in direct questions.

§ Mr. Wray
Is it not the case that, since 1978–79, there has been a cut in revenue support grant of £47 million, totalling over the years £600 million, with a total cost cumulatively, accordingly to the gross domestic product deflator, of £1.8 billion overall?

§ Mr. Lang
Next year, the support that I shall give to local authorities through the aggregate external finance 274 will be £5.2 billion. That is a higher figure than ever before. It represents an increase of 3.5 per cent. over the current year.

§ Mr. Raymond S. Robertson (Aberdeen, South)
I congratulate my right hon. Friend on his statement. I assure him that, unlike Labour Members who came here ready to carp and criticise before they had even heard what he had to say, the people of Aberdeen will not be so dogmatic or blinkered, and will welcome the statement. Will he confirm, preferably in words of one syllable, that the statement sets out the largest amount of public spending ever announced in the House by any Scottish Secretary of State, not just in real terms or cash terms but in any terms?

§ Mr. Lang
I am happy to assure my hon. Friend that this is a record statement in every way. Coming as he does from Aberdeen, which has two universities, my hon. Friend will be pleased to hear that we have increased education provision by 5 per cent. in real terms, and our assumption for higher education numbers will increase from 100,000 this year to 107,000 next year.

§ Dr. Jeremy Bray (Motherwell, South)
What consideration has the Secretary of State given to training programme cuts and their effects on Lanarkshire in particular? During the coming financial year, the training support for Lanarkshire steel workers received from European Community funds will expire. Is the right hon. Gentleman aware that the contribution to overheads will therefore bear heavily on the training provided for young people and for workers who have lost their jobs, who have never had the benefit of European Community funds?

§ Mr. Lang
I certainly recognise Lanarkshire's problems, which is why we have given special attention and resources to its interests, and why Scottish Enterprise and the Lanarkshire development agency have been specially funded. It is also why we have devoted resources to training in that area. We shall be able to continue to do so as a result of the increased funding that I have been able to generate for Scottish Enterprise, to top up the training budget that it receives as a result of the Great Britain training negotiations.

§ Dr. Bray
How much?

§ Madam Speaker
Mr. Kynoch.

§ Mr. George Kynoch (Kincardine and Deeside)
There are many things in my right hon. Friend's statement—

§ Dr. Bray
rose—

§ Madam Speaker
Order.

§ Dr. Bray
I believe that the Secretary of State's last words were lost.

§ Madam Speaker
Perhaps the right hon. Gentleman will repeat them for the sake of the Official Report.

§ Mr. Lang
As an afterthought, to answer the hon. Gentleman's sedentary question, I said that the apportionment for local enterprise companies will be decided later.

§ Mr. Kynoch
There are many things in my right hon. Friend's statement to welcome, despite the comments of 275 Labour Members, who clearly wrote their speeches before they heard it. There are real increases across the board, although the Opposition and the media predicted cuts. I particularly draw attention to the £31 million extra for Scottish Homes, which is a 7 per cent. real increase. Will my right hon. Friend ensure that an adequate proportion of that money will be devoted to rural, developing areas of population, such as my own constituency of Kincardine and Deeside?

§ Mr. Lang
I am glad to assure my hon. Friend that Scottish Homes pays great attention to the housing needs of rural areas, and I feel sure that its resources will be directed at that, as at its other priorities. Scottish Homes will also devote some £7 million of its budget to the interests of care in the community—another subject to which I know my hon. Friend pays much attention.

§ Mr. Dennis Canavan (Falkirk, West)
At a time when 100,000 Scots are homeless, how can the Government justify their persistent refusal to give local authorities the resources to build sufficient houses and at the same time propose to spend up to £60 million of taxpayers' money on Windsor castle? Does the Secretary of State agree with me that it would be absolutely unjustifiable for the Government to cut legal aid to those on low incomes when the Chancellor of the Exchequer—who lives in a rent-free house and has a salary of more than £63,000 a year—is receiving legal aid from the taxpayer?

§ Mr. Lang
As to housing, my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch) mentioned the 7 per cent. real increase for the budget of Scottish Homes. In addition, we announced £20 million as part of the package for 1992–93, from which £7.5 million will go to housing. Housing resources are, therefore, being effectively focused. Far from cutting the legal aid budget, we anticipate a 40 per cent. rise over the period of the survey.

§ Mr. David Shaw (Dover)
Will my right hon. Friend ensure that ordinary Scottish people will benefit from the increased public expenditure in Scotland? In the Monklands district council area, much of the additional money seems to be going into the pockets of councillors and their families. Is my right hon. Friend aware that Monklands district council has approved legal fees to be paid—

§ Madam Speaker
Order. I am perfectly willing to hear a question on the statement from the hon. Gentleman, but only on that subject.

§ Mr. Shaw
I apologise, Madam Speaker, but I do not think that I was straying from the statement because—if I may finish the point—the decision was taken to spend money that my right hon. Friend has just announced is supposed to go to the Scottish people on legal fees to support a private action by Monklands district councillors. That would be an abuse of the money that my right hon. Friend the Secretary of State—

§ Madam Speaker
Order. I call the Secretary of State.

§ Mr. Lang
I am sure that the appropriate authorities will be able to investigate any misappropriation or wrongful use of resources by local authorities. However, I am pleased that local authority funding is increasing in the 276 way that it is and that, for example, the local authority capital spend on school buildings is going up from £74 million to £82 million.

§ Mr. William McKelvey (Kilmarnock and Loudoun)
Several schools in Kilmarnock are crumbling because money is needed to repair them. How much of this money does the Secretary of State think will be directed towards that source? In general, how does he think that the life of the people in Kilmarnock will be improved by his announcement?

§ Mr. Lang
The allocation between authorities will be made in due course and the hon. Gentleman's anxieties will be set at rest. As to the improvement in the life of the people of Kilmarnock, I am sure that they will be pleased to hear that the advance works on the A77 should be able to start in 1993–94.

§ Mr. Brian Donohoe (Cunninghame, South)
Can the Secretary of State be more specific about the training budget? He referred to statements in the Scottish press about a 10 per cent. reduction, but, when asked, he avoided answering our question regarding the training budget for 1992–93.

§ Mr. Lang
The allocation of resources is a matter for Scottish Enterprise and the local enterprise companies. They can decide whether to reallocate resources or to apply operating surpluses to training, in addition to the existing budget. The youth training guarantee will be met. By levering in more private sector training resources—which is already happening, according to the survey carried out recently by the Confederation of British Industry—I would expect the funds committed to training in Scotland to continue to rise.

§ Mr. Robert Hughes (Aberdeen, North)
Has the Secretary of State really considered the problems of housing in Scotland? Has he considered how many local authority houses will be modernised and brought up to standard and how many new-build houses will be available as a result of this statement? What is the basis for university funding? Is it based on the Scottish population, or on the number of students that Scottish universities put through in a year?

§ Mr. Lang
The funding for university students is based on the number of students already in higher education and those anticipated to be in higher education. That number is anticipated to rise from about 100,000 this year to about 107,000 next year. I cannot give the hon. Gentleman the specific housing figures that he requests, but the housing programme's gross capital expenditure will rise by £25 million more than was forecast.

§ Mr. Peter Atkinson (Hexham)
May I just—[Interruption.]

§ Madam Speaker
Order.

Hon. Members
The hon. Gentleman was not here for the statement.

§ Madam Speaker
Order. I have seen the hon. Gentleman rising to his feet for some time.

§ Mr. Atkinson
Thank you, Madam Speaker. [Interruption.]

§ Madam Speaker
Order. Do I understand that the hon. Gentleman was in the Chamber for the statement?

§ Mr. Atkinson
Yes, Madam Speaker, I was.
I congratulate my right hon. Friend on another bright spot in the statement—the settlement amounting to £440 million for Scotland's farmers, which is 44 per cent. up on the previous settlement. That will be warmly welcomed by Scottish farmers. May I use this opportunity to draw attention to the bargains that can be obtained in my constituency's livestock marts, just across the border, and hope that Scottish farmers will make full use of them?

§ Mr. Lang
I am most grateful to my hon. Friend for the close interest that he takes in Scottish matters as a result of his membership of the Select Committee on Scottish Affairs. He will be glad to know that funding for the suckler cow premium is expected to rise from £26 million to £37 million in Scotland.

§ Mr. Michael J. Martin (Glasgow, Springburn)
The Secretary of State will know that many visitors to Glasgow are impressed by the rehabilitation of the older tenements as a result of the sandblasting and re-roofing that was done with Government and local authority grants. Can he tell me whether the statement means that more money will be available for that type of work? Many young couples and elderly people in the older tenements suffer from rain penetration and dampness in those tenements. They want to remain in them, but they will need assistance if they are to remain in those parts of Glasgow where they have lived for many years.

§ Mr. Lang
Expenditure on private sector improvement grants will rise by 1.5 per cent. in real terms over 1992–93 plans. Provision for housing expenditure assumes that £63 million will be spent on special needs.

§ Mr. Andrew Welsh (Angus, East)
If training represents hope for the present and growth for the future, why are not the Government, who are giving £1.75 billion in a straight subsidy to London Transport, adequately funding training in Scotland? Does the Secretary of State understand that this package is woefully inadequate, given the reality of unemployment and the infrastructure needs of Scotland? It will neither get Scots off the dole queues nor build up the nation's infrastructure. The right hon. Gentleman has simply let Scotland down once again.

§ Mr. Lang
Perhaps the hon. Gentleman should reflect on the fact that our expenditure on training is two and a half times as high in real terms as that of the previous Labour Government, whom his party supported in office. Perhaps he will also reflect on the fact that a comparison of the programmes covered by the Scottish Office block with those in England shows that expenditure in Scotland is 30 per cent. higher per head.

§ Mr. John McAllion (Dundee, East)
Last year, the Secretary of State announced an increase in the specific grants to local authorities for police to £243 million, which allowed for an additional 200 police and civilian staff. What is the increase this year, and how many additional police and civilian staff will it allow for in the face of the crime wave that is sweeping the country—which seems to have escaped his notice?

§ Mr. Lang
We have increased law and order provision by 11.6 per cent., which will provide for police, prisons, 278 legal aid and other aspects. The details of the specific grants have yet to be decided, but I reassure the hon. Gentleman that we have approved an increase in police manpower in the current year and that we shall not give up on crime.

§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
As the Secretary of State has collective responsibility for economic policy with the Chancellor of the Exchequer, will he say how he will tackle the horrendous problems of unemployment in Scotland, particularly among young people in the new towns? What changes does today's statement make to the funding of the five Scottish new towns, with particular reference to inward investment and the mechanisms that the Government use for that purpose?

§ Mr. Lang
The resources for Locate in Scotland, which encourages inward investment and is run jointly by the Scottish Office Industry Department and Scottish Enterprise, will be decided by Scottish Enterprise from the extra resources—up by £27 million, a real increase of 11 per cent.—that we have given for its enterprise and environment budgets. The hon. Gentleman will be pleased to know that we have budgeted for a real terms increase of 10 per cent. in expenditure on the infrastructure of new towns.

§ Mr. John Maxton (Glasgow, Cathcart)
Does the Secretary of State believe that the money that he intends to spend on housing will do anything to help to solve the problems of employment in the construction industry or of dampness in housing throughout Scotland and of homelessness? If he does, will he ensure that a fair proportion of the money goes to Glasgow district council so that it can improve housing in south-west Castlemilk and lift the threat of demolition from tenants in the Hangingshaw area of my constituency?

§ Mr. Lang
Yes, I believe that, and I shall bear in mind the hon. Gentleman's representations.

§ Dr. Norman A. Godman (Greenock and Port Glasgow)
When funds are apportioned to the local enterprise companies, will the Secretary of State ensure that sufficient funds are given to Renfrewshire Enterprise so that its officials can deal with the massive problems generated by continuing high unemployment in Inverclyde, particularly in Greenock and Port Glasgow? Many of those unemployed people are highly skilled adults and youngsters; they have been denied employment. They deserve a better chance in life from a so-called United Kingdom Government.

§ Mr. Lang
The hon. Gentleman will know of the attention that we have given his constituency and its problems, not least in establishing an enterprise zone in the area. The budget of the local enterprise company is a matter for Scottish Enterprise, and I am sure that it will note his representations.

§ Mr. Ian Davidson (Glasgow, Govan)
What hope is there in the Secretary of State's announcement for the people in my constituency who are experiencing difficulties? Can the right hon. Gentleman tell me what hope was offered in his statement to young people without work, to people in damp, badly repaired houses, and especially to the elderly, who live in constant fear of crime? 279 Does not he agree that his statement contained far too little to meet the real difficulties faced by people in my area?

§ Mr. Lang
The hope that those people can derive from my statement comes from the fact that we have made resources available for housing, for the Scottish Enterprise initiative, for education, health and roads, for the environment and for a whole range of other things. As a result of my statement, spending in Scotland will be about £1 billion higher in 1993 than it was in 1992.

§ Mr. Adam Ingram (East Kilbride)
Will the Secretary of State tell the House what sum has been allocated for the new towns' transfer of housing stock, with reference to the capital consents that will have to be applied to the transfer to local authorities?

§ Mr. Lang
That matter has not yet been decided.

§ Mr. Thomas Graham (Renfrew, West and Inverclyde)
Not long ago the Secretary of State said at the Dispatch Box that we needed £5 billion to improve water and sewerage systems in Scotland. Yet today's announcement makes it look as though we shall continue to need £5 billion to fix the environment in our country. Why has the right hon. Gentleman not fought to ensure that the people of Scotland have proper water to drink which complies with EC standards? Why has he not introduced measures to improve our sewerage systems?

§ Mr. Lang
The hon. Gentleman cannot have listened to my statement. I said that we were finding £728 million for water and sewerage over the survey period, including an increase of £16 million for the year ahead compared with the current year.

§ Mr. Robert Maclennan (Caithness and Sutherland)
As the Secretary of State has announced some increase for Scottish Homes but the planned outturn for housing this year is 11 per cent. above the projected provision for next year, by how much is the right hon. Gentleman cutting local authority spending on housing?

§ Mr. Lang
As I said in my statement, local authority expenditure on housing is being maintained on a per house basis. The hon. Gentleman is wrong to compare outturn with plan. The proper comparison is plan with plan.

§ Mr. Eric Clarke (Midlothian)
Does the Secretary of State realise that he is being accused of, and is guilty of, the sin of omission? He has omitted from the statement many things that we would have liked to hear, one of which was community care. How much money is being allocated to community care—or is it now called care in the community, or hidden within some other nondescript phrase?

§ Mr. Lang
It was announced some time ago that the care in the community budget will be £41 million, £5 million more than was being spent in Scotland by other departments, plus a top-up of £20 million from the Scottish Office block, making £61 million. In 1994–95 we are planning for £106 million, and in 1995–96 for £158 million.

§ Mr. Michael Connarty (Falkirk, East)
Does the Secretary of State really believe that he will get away with the sleight of hand on the housing budget? We have the absurd situation of the Secretary of State giving money to 280 local authorities theoretically to deal with homelessness, which means that between now and next March they will be scrabbling around for short-term solutions and buying short-term properties, while the statement announces a cut in real terms in the housing budget. Will the right hon. Gentleman admit to the people of Scotland that he has no long-term way of dealing with homelessness, because he will not give the local authorities the finance that they require to deal with homelessness by providing more homes?

§ Mr. Lang
I have already told the House that the homelessness budget was increased by £7.5 million within the current year, on top of existing resources. As I have also said, the Scottish Homes budget will increase by an extra £31 million next year, a 7 per cent. increase over and above the rise in the cost of living.

§ Mr. Malcolm Chisholm (Edinburgh, Leith)
Given that the outturn figure for health expenditure this year is £3.64 billion and that the figure announced for next year is £3.75 billion, is it not true to say that the increase in cash terms is barely 3 per cent.? Surely the Secretary of State realises that that is an inadequate figure which does not even cover general inflation, and totally ignores the facts that medical inflation runs at 2 per cent. higher than general inflation, and that 1 per cent. extra is needed just to cover developments in medical technology and the needs of an increasing elderly population.

§ Mr. Lang
The hon. Gentleman should have heard the figures that I gave earlier. We are increasing health expenditure, plan on plan on the direct comparison, by 1.4 per cent. We do not know what the final outturn will be in the current year, which we are only halfway through, but on present estimates there will still be an increase in real terms, over and above the rise in inflation, of 0.6 per cent.

§ Dr. John Reid (Motherwell, North)
May I impress on the Secretary of State the desperate need for continued investment in Lanarkshire, especially in the Motherwell district? Although I and others welcome the increase in capital allocations for 1991–92, does the Secretary of State recall that those allocations were made before the closure of Ravenscraig? Will he examine with sympathy the case that has been presented for the five-year development plan by Motherwell district council? In that context, can he make a statement about progress on the upgrading of the A8 to motorway status? He will recall that, for very good reasons, the upgrading was postponed earlier this year. He promised that he would make a statement before Christmas.

§ Mr. Lang
We hope that the A8 may feature in the roads programme. The hon. Gentleman will be pleased by the upgrading of the A74, which should be close to being two thirds completed by the end of the next financial year. That will be of major importance to not just Lanarkshire but the whole of Scotland.

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Will the Secretary of State and his sycophantic acolytes come away from the Westminster world into the real world? If he does, he will see that the Ayr sewerage scheme is delayed because of his cuts, that the bypasses in my constituency are further delayed because of his cuts, and that Scottish Homes cannot put money into Dailly and Drongan because of his cuts. Does he realise that, 281 unless he gives an assurance that all those projects will go ahead in the coming year, his pretence to act as Santa Claus will wear thin?

§ Mr. Lang
The hon. Gentleman could not have been listening to a word I said. Over the next three years we will spend £728 million on water and sewerage. If the hon. Gentleman had listened to all the other increases in real terms that I announced across the range of programmes, he would have recognised that the extra £1 billion expenditure in Scotland for 1993–94 offers a real opportunity for progress.

§ Mr. Nigel Griffiths (Edinburgh, South)
Does the Secretary of State recognise the despair that the statement will cause in hospital wards throughout Scotland? In those wards nurses are so stretched that they are unable to take tea breaks, recovery is inadequate and patient health is at risk. Why will the Secretary of State not act on those matters?

§ Mr. Lang
The action that I will take is to say to the hon. Gentleman that this Government, with their 47 per cent. real-terms increase in health expenditure, have recruited hundreds more doctors and thousands more nurses than were employed by the Labour Government. The contrast between our achievements and the Labour Government's record of cutting nurses' wages and capital expenditure on the health service is dramatic.

§ Mr. Sam Galbraith (Strathkelvin and Bearsden)
The Secretary of State said that £728 million will be available for sewerage over the next three years. How much of that money will be given to the Kelvin drainage scheme? Unless that scheme in my constituency is started immediately, we will not be able to fulfil the EC regulations.

§ Mr. Lang
I note the hon. Gentleman's representation. The matter will be borne in mind when it comes to apportioning resources.

§ Mr. Jimmy Hood (Clydesdale)
Does the Secretary of State accept that not one penny extra in real terms will be spent on housing, employment and health care? Unemployment will still incease in Clydesdale; the homeless will receive a poorer service from local agencies; and hospital lists will continue to grow. Is that not the effect of the statement? Frankly, it is a disgrace.

§ Mr. Lang
The hon. Gentleman is wrong on all three fronts. The budget for the enterprise and environment functions of Scottish Enterprise will increase by 11 per cent. in real terms; the budget for Scottish Homes will increase by 7 per cent. in real terms; and the overall health budget of £3.75 billion will increase by 1.4 per cent. in real terms.

§ Mrs. Margaret Ewing (Moray)
In the context of the budget for roads and transport, when will the Secretary of State be able to advise regional authorities of their allocation? That is especially important to those of us in the north-east and in the highlands of Scotland where communications are vital, especially against the background of the single market. Will there, for example, be additional funding to ensure the Fochabers bypass on the A96? Will the west highland railway line continue? Will the 282 Secretary of State go out fighting to ensure that Objective 1 is secured for the highlands and islands as that would have major implications for the infrastructure?

§ Mr. Lang
I am glad to be able to assure the hon. Lady that we are proud of our record of increasing trunk roads expenditure by 75 per cent. over the past five years, which is a 35 per cent. real terms increase. I hope that the A96 will be able to feature in our substantial roads programme over the next few years. I am glad to be able to assure the hon. Lady that the ferry schemes for the highlands and islands should be able to be maintained at the planned level of expenditure.

§ Mr. Barry Porter (Wirral, South)
rose—

§ Madam Speaker
Order. I did not see the hon. Gentleman in the Chamber during the statement. Do I understand that he was in the Chamber?

§ Mr. Porter
I was, Madam Speaker. I do not think that you were looking. I was here throughout the statement.

§ Madam Speaker
I accept what the hon. Gentleman says as he is an honourable gentleman.

§ Mr. Porter
I am very much obliged to you, Madam Speaker. I came here under the naive impression that I was a Member of the United Kingdom Parliament—

§ Madam Speaker
Order. All hon. Members have a right to ask questions. I insist that, before they do so, they should have been in the Chamber and have had the courtesy to hear the statement. That applies in all cases.

§ Mr. Porter
I would not disagree with that statement, as you know, Madam Speaker.
Does the Secretary of State agree that, whatever he offers by way of public expenditure in Scotland, it is never enough and will never be enough for the Opposition? Does he also agree that the north-west of England deserves something similar? The north-west has twice the population of Scotland—and, on the evidence available, twice the intelligence.

§ Mr. Lang
I suspect that my hon. Friend is right in pointing out that, whatever we announced, it would not be enough for Opposition Members. This is a substantial increase in resources. We have directed it towards programmes that will bring maximum benefit to Scotland's economic prosperity.

§ Mr. Tam Dalyell (Linlithgow)
In all the agonies with the Public Expenditure Survey Committee round and the tight financial position that he faces, has it ever occurred to the Secretary of State that he could make a considerable saving? What is to be the cost of all the proposed local government reform? Would not it be better to say to Eastwood district council, which is the tail that is wagging this dog, "Forget it."? The rest of us cannot face the added financial burden and all the problems that my hon. Friends have described of yet another change in local government reform. It is all about the Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart). He should be told that he is wrong.

§ Mr. Lang
Far from adding to the cost of local government, the evidence suggests that the reform of local government to a single-tier structure will generate substantial savings which could be as high as £200 million a year. However, I am sure that the hon. Gentleman will 283 be pleased to know that we have managed to increase the arts budget next year, in spite of the costs that we bear in various areas, which will enable the new museum of Scotland to go ahead. We have also been able to authorise the extension to the herbarium and library at the Royal Botanic gardens.

§ Mr. McLeish
The discussion has been interesting and has shown a number of things. Will the Secretary of State now concede that there will be massive cuts in the training budget of Scottish Enterprise? Will he acknowledge that his statement means cuts in the road programme, cuts in industry, cuts in housing and cuts in other environmental services? Will he accept that, despite his trying to create today an illusion of progress, he has failed? Will he now accept that there is a real programme of work to be addressed which simply is not included in the statement?

§ Mr. Lang
I said that figures were not the hon. Member's strong point. They are palpably his weak point. The roads programme, far from being cut, has been increased by 2 per cent. in real terms. The industry budget is broadly where it was with the enterprise and environment components increased by 11 per cent. in real terms. The Scottish Homes budget is being increased by 7 per cent. in real terms. On the question of other environmental services, he might like to know that Scottish Natural Heritage and Historic Scotland budgets are both being increased by 5 per cent. in real terms.
This is a programme which is carefully targeted to generate the maximum advantage and improvement of public services in Scotland and the delivery of economic growth and the creation of new jobs in Scotland. I am confident that it will deliver its objectives.

£ million
	1992–93	1992–93	1993–94	1994–95	1995–96
	estimated outturn	planned provision	planned provision	planned provision	planned provision
	gross	net	gross	net	gross	net	gross	net	gross	net
Central Government's own expenditure (including public corporations other than nationalised industries) and local authority capital expenditure
Agriculture, fisheries and food	337	331	304	300	444	441	490	480	530	520
Industry, energy, trade and employment	626	544	617	535	615	530	630	580	650	600
Roads and transport	431	431	418	418	406	406	420	420	440	440
Housing	1,031	668	1,040	665	1,020	664	1,050	700	1,060	710
Other environmental services	488	387	477	376	485	361	490	360	500	370
Law, order and protective services	432	406	429	403	470	448	480	460	500	480
Education	636	636	628	628	1,167	1,167	1,220	1,220	1,270	1,270
Arts and libraries	49	49	47	47	54	54	60	60	60	60
Health	3,761	3,643	3,725	3,615	3,888	3,766	4,060	3,940	4,200	4,070
Social work services	62	62	62	62	63	63	70	70	70	70
Other public services	222	180	222	180	222	185	240	190	240	190
Total Central Government and local authority capital	8,073	7,337	7,968	7,229	8,834	8,085	9,200	8,470	9,500	8,760
Grants from the European regional development fund	—	0	—	0	—	120	—	120	—	120
Central Government support to local authorities' current expenditure	—	5,203	—	5,198	—	5,207	—	5,420	—	5,590
Nationalised industries financing limits	—	32	—	32	—	35	—	—20	—	—20
Total expenditure within the Secretary of State's responsibility	—	12,571	—	12,458	—	13,446	—	13,990	—	14,450
Forestry Commission	—	99	—	99	—	94	—	100	—	100
TOTAL	—	12,670	—	12,558	—	13,540	—	14,080	—	14,550