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Public Expenditure (Scotland)

Volume 124: debated on Wednesday 9 December 1987

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3.31 pm

With permission, Mr. Speaker, I will make a statement about the allocation of my public expenditure provision in the next three years.

I plan to raise net expenditure on the services for which I am responsible to £8,505 million in 1988–89. This is some 6·9 per cent. more than planned expenditure for the current year, and nearly 5 per cent. more than was planned for 1988–89 in the last public expenditure White Paper. In each of the following two years expenditure provision is to grow by over £100 million.

Within the total figures, the provision made for the services within the Scottish block has been enhanced in the normal way by the consequences of applying the territorial formula to changes agreed in the survey for comparable English programmes. An annotated table giving the allocations for each service is available in the Vote Office, and I am arranging for it to be published in the Official Report.

Provision for industry next year will be increased by £25 million, or over 10 per cent. compared with the plans published in January. Within this, £10 million will be allocated to the Scottish Development Agency and £5 million to the Highlands and Islands Development Board, which should allow increases in gross expenditure in real terms, and £7 million to direct grants to industry. I have also decided to increase the funds available for tourism in Scotland by £1 million.

My planned provision for housing continues to concentrate resources on capital investment in improving public sector housing rather than indiscriminate subsidies. It will also continue to deal with the backlog of payments of private sector improvement grants. The total planned resources for the Scottish Special Housing Association and the Housing Corporation in Scotland will be increased, allowing the SSHA to plan on the basis of some £55 million in total expenditure, and similarly £132 million for the HCIS, for projects including housing co-operatives. Further provision will be available later for suitable new urban regeneration housing projects. Extra provision is included for the establishment of Scottish Homes and its build-up in the later years. Subject to final decisions on the level of subsidies, the planned increase in resources for housing investment in 1988–89 will be about £30 million. This will be the third successive year in which investment has increased.

Expenditure on agriculture and fisheries will increase by £11 million, £16·5 million and £13·7 million over the three years of the survey period. In particular, provision is made to encourage developments under the agricultural development programme.

Planned spending on education will rise to £2,186 million next year, or 9 per cent. more than this year, reflecting the priority that I attach to this service. This will provide principally for current and capital expenditure by local authorities. I look to them to make the most effective possible use of this money in delivering the education service, especially the introduction of standard grade, for which central support will continue to be available.

I intend to increase spending on the health programme by about £130 million next year to £2,393 million, and by over £100 million in each of the following two years. Within this increased provision, there will be over £1,660 million for hospitals and community health services next year, £85 million more than this year's level of funding. Health boards will also be able to retain the resources released through their economy and efficiency programmes, which should amount to over £20 million next year. This should enable them to meet pay and price inflation, develop in new directions for breast cancer screening and treating AIDS sufferers, and to improve their services in line with national policies and priorities.

Provision for family practitioner services is to be increased by almost £35 million to £475 million next year and to £540 million by 1990–91. This takes account of expected growth in public demand for these services, and of the proposals set out in the Government's White Paper "Promoting Better Health".

I am conscious of real pressures on social work resources from demography and new demands, so I have increased provision by just over 12 per cent.

My plans provide £680 million in 1988–89 — an increase of 9·5 per cent. over this year's provision—to meet the needs of law and order services. This should be sufficient for an increase over present police establishments and for the cost of the new working practices under the fresh start agreement, which have just been introduced in the prison service. Capital expenditure over the three years will be £154 million, which is intended to provide for a continuing programme of refurbishment of the prison estate, for new or improved court houses and the needs of police and fire services.

Planned provision for transport will he £12 million above that planned for 1987–88, which followed several years of high relative levels of provision. Provision for 1988–89 will, however, necessarily be £8 million below the level forecast in the last White Paper because of the need to transfer resources within the block to local authority current expenditure. Nevertheless, the resources available will enable investment in trunk roads to be maintained broadly at current levels, with important bypasses being given priority. A start will he made on the upgrading of the A74 in the later years, but my provision will still leave room for other worthwhile projects.

I have been able to increase provision for the other environmental services programme, which maintains essential public services and functions, mainly by local authorities. It includes an increase of £6 million for the urban programme, which is a prime means of directing Government funding into the regeneration of our inner cities. The development of industrial infrastructure in the new towns, which contributed to over 4,000 new jobs in 1986–87, will also be able to increase significantly.

Provision for expenditure on the arts within the Scotland programme will rise by just under 6 per cent. This should enable local authorities to respond constructively to the Miles report on museums in Scotland, and will support Scottish national institutions in making further improvements in their infrastructure. It will also allow planning of the second phase of the new Causewayside building for the National Library of Scotland to proceed.

The increase that we are entitled to under the formula for local authority current expenditure in 1988–89, is less than the extra cost of the generous rate support grant settlement that I announced to the House in July. This is because of the higher level of local authority spending in Scotland compared to England and Wales. I have therefore made up the balance from the rest of my block, so the amount available for local authority capital expenditure and central Government expenditure in 1988–89 is lower than it would otherwise have been. I have no plans for a similar transfer in the later years, in the hope that local authorities will control their current expenditure and thus avoid diverting resources from their capital programmes and other important services within the block.

1987–88

1988–89

1989–90

1990–91

1

Cm56-II

1

Cm56-II Provision

2

Revised Provision

1

Cm56-II Provision

2

Revised Provision

Net

3

Gross

Net

3

Gross

Net

3

Gross

Net

3

Gross

Agriculture186187187200200190210210210210
Industry257295241266297250260290260290
Tourism13131314151020202020
Transport601602621613614630660660680680
Housing695868702639882730700910720920
Other environmental services610684633693773650710790740820
Law, order and protective services621624642680683660690690710720
Education1,9561,9612,0412,1862,1902,0902,2302,2302,2902,290
Arts and libraries8282848787909090100100
Health and social work2,6052,6582,7142,8292,8372,8302,9502,9503,0703,080
Other public services118118122125125120130130130130
LA current expenditure not allocated to services124124127404013040404040
Nationalised Industries external financing8787-20134134-170-70-70-190-190

47,954

8,3018,1088,5058,8758,2208,6108,9508,7709,090
Note: Figures for 1989–90 and 1990–91 are rounded to the nearest £10 million.

1 White Paper (Cm56-II) figures adjusted for pre-Survey changes.

2 Figures reflect Survey changes and changes since the Autumn Statement. Some figures may be subject to detailed technical amendment.

3 Gross provision consists of total net provision plus capital receipts.

4 The figure differs from the net outturn figure of £8,220 million shown in the Chancellor's Autumn Statement for 1987–88; the main differences are continued spending by local authorities above the level provided for; NHS pay settlements; and higher than expected Electricity Board costs.

AGRICULTURE

The expenditure plans will permit development of the Government's agriculture and fishing policies, with particular regard to the environment and the rural economy.

INDUSTRY

Overall provision has been increased by £25m — 10·4% — in 1988–89 compared with last year's White Paper. Provision remains broadly constant over the forward years. The increased provision will allow increased spending by the SDA and HIDB both of which will have increased spending power, in real terms, in 1988–89 compared with 1987–88 and on direct grants to industry.

TOURISM

Total provision for 1988–89 has been increased by about 10% compared to the level in last year's plans and is planned to increase by about a further 20% over the forward years. The major part of tourism expenditure is undertaken by the Scottish Tourist Board which will be enabled to increase both its marketing effort and the grants it makes for tourist facilities.

TRANSPORT

Provision planned for (excluding grants to transport nationalised industries) will be £12m more than planned for 1987–88 albeit £8m less than planned provision for 1988–89 set out in last year's White Paper. This level of provision will enable investment in the trunk roads programme to be maintained at broadly current levels, with important bypasses given priority. Substantial increases have been made in provision for current expenditure by local authorities, although this constrained the amount available for capital

The allocation that I have announced today reflects the priority that I attach to the needs of the different services in Scotland in exercising my discretion within the Scottish block. The increases that I have announced demonstrate the Government's continued commitment to meeting Scotland's needs. We have been able to do this because of our successful management of the economy, which has allowed public expenditure to be increased substantially at the same time as its share of national income has been reduced.

Following is the information

expenditure by local authorities. The Government remain committed to subsidising shipping services and civil aviation facilities in the Highlands and Islands. Provision for the later years has been increased over the levels provided for in Cm 56. A start will be made on the promised upgrading of the A74 in the later years, but the programme will still permit other worthwhile projects to proceed.

HOUSING

The increased provision for Housing is concentrated on capital investment which is planned to increase by £30m and deal with the backlog of private sector improvement grants; and provide the SSHA and Housing Corporation in Scotland with the resources for their mainstream and urban information work.

OTHER ENVIRONMENTAL SERVICES

The Other Environmental Services programme maintains essential public services (mainly by local authorities) concerned with health and safety, and environmental crimes. Increased provision has been made in the total programme including in particular £6 million for the Urban Programme to direct funding into the re-generation of inner cities; and £15 million extra capital provision to assist local authorities in implementation of the Community Charge in 1988–89 (in addition to extra current expenditure for this programme which the Secretary of State announced in July). The development of new industrial expenditure and jobs in the New Towns will also increase significantly. (Over 4,000 new jobs were created in the Scottish New Towns in 1986–87).

EDUCATION

Provision has been increased by £180·1 million or 9 per cent. Within this figure local authority provision has been increased by £164·1 million, including £90 million which is unallocated to particular services pending the review of staffing standards. Central support for education reforms has been maintained (Standard Grade) or established (£0·8 million for curricular development, assessment and management planning). Increased provision for higher education (£8·5 million) will significantly ease the running cost pressures on the centrally funded sector.

LAW, ORDER AND PROTECTIVE SERVICES

Plans for the prison service give full cover for the cost in staff and supplies of the expected inmate population; provide for the costs of keeping Low Moss Prison open until 1989 and for the cost of introducing new working arrangements for prison officers in accordance with the Fresh Start agreement. For the police, provision will meet fully the expected cost of the service with a modest annual increase in manpower and will maintain central support for the Scottish Crime Squad and its Drugs Wing and to the Scottish Criminal Records Office. There will be continuing support for crime prevention measures. The plans also allow for higher levels of demand for legal aid services and for increased running costs in the Courts. £154 million of capital spending is planned over the next three years, on new or improved court and prison buildings including the replacement of Peterhead Prison, and on the needs of the police and fire services.

ARTS AND LIBRARIES

Provision for local authority expenditure on Arts and Libraries has been increased by £6·1 million (or over 10 per cent.) compared with 1987–88. Central government provision reflects completion of phase 1 of the National Library of Scotland and planning for phase 2.

HEALTH

Expenditure on the National Health Service in Scotland will be increased by about £130 million next year, which is about 5·8 per cent. above this year's level of spending, and by over £100 million in each of the two following years. The provision for hospitals and community health services will be increased by £85 million, or 5·5 per cent., to over £1,660 million. Health Boards will also be able to retain the resources released through their efficiency programmes, which should amount to over £20 million next year. Plans for the Family Practitioner Services allow for expected increase in public demand and for the proposals for improving the services set out in the Government's White Paper "Promoting Better Health". Capital spending on the health service will total about £370 million over the next three years.

SOCIAL WORK

Total provision for Social Work is planned to rise by some £47 million primarily for local authority current and capital expenditure. The figures reflect the transfer of responsibility from the Secretary of State to local authorities for certain court disposals of children.

OTHER PUBLIC SERVICES

The expenditure covered by this programme is to provide for the administrative costs of the Scottish Office, including the Royal Commission on the Ancient and Historical Monuments of Scotland, and of three smaller Scottish departments: the General Register Office (Scotland), the Scottish Record Office and the Department of the Registers of Scotland.

I note that the right hon. and learned Gentleman's press department has been hard at work in anticipation of today's events. One result was an item in the latest issue of the Sunday Times, which talked of a significant boost to Scotland's share of Government spending and produced a most tempting list of goodies.

Does the Secretary of State accept that the final product that has been unveiled today does not live up to the advertisement, and that this kind of creative journalism does nothing for his credibility or for the standing of politics in Scotland?

The right hon. and learned Gentleman states that he intends to raise expenditure to £8,505 million. The House will be somewhat underwhelmed, as the Autumn Statement announced a figure of £8,510 million. The difference is no doubt accounted for by the fact that in the Autumn Statement we tend to even up the figures. The truth is that the figure is the same as was announced in the Autumn Statement. If we take that figure, allow for inflation and compare it with the expected outturn for 1987–88, one finds that there is a cut in real terms of between £80 million and £85 million, and not the increase that was so enthusiastically trailed by the Secretary of State.

It is a complicated set of figures, presented in a slightly different way this year. I should like to ask the Secretary of State about some of the specific totals. Is it not true that, on housing, taking the net figure for 1987–88 against the net provision for 1988–89 produces a cut in cash terms of £56 million and in real terms of £87 million? If we take the gross figure for 1987–88 and compare it with that for 1988–89, including the expected capital receipts from the sale of public sector housing, the cut still remains at £25 million in real terms. Is that not an abdication of responsibility, given the scale of the housing crisis in Scotland? The Secretary of State talks about the concentration of resources. Is that not a cruel euphemism for another significant cut in the already savaged housing budget?

Will the Secretary of State admit that, although he spent more than £300 million on industry last year, £206 million on regional aid, and just under £100 million on the Scottish Development Agency, he is planning to spend in net terms only £266 million next year and £260 million in the two years to follow? To put into perspective the rather extravagant claims that he has been making, is it not true that he spent in current terms just over £330 million as recently as 1985–86? Why does the Secretary of State boast so shamelessly of success in negotiating on Scotland's behalf in the Cabinet when he will spend less next year than he did in the current year? Will he give us a specific guarantee that Scotland will not be affected by any alterations in regional aid policy dreamed up by his noble Friend Lord Young?

I shall now deal with the health and social work budget. In net terms for 1987–88, the budget was £2,605 million. It is now rising in net terms for 1988–89 to £2,829 million. I concede that that is an increase in real terms of £107 million. Does the Secretary of State really think that that is adequate? Is there not an element of sleight of hand, as in the real terms increase of £107 million we have to accommodate the £130 million increase in cash terms in the health budget to which he referred and the 12 per cent. increase in the social work budget that he is also parading in his statement?

Whatever happens to the figures, does he not admit that they simply do not deal with the major problems facing the Health Service in Scotland and certainly will not face up to the problems referred to by the president of the Royal College of Physicians in Edinburgh? Professor Michael Oliver said that Ministers "won't or can't hear" and that it will take a "few deaths, a few scandals" to move them. Will that view not be confirmed by today's announcement?

The figures seem to be totally inadequate and no amount of juggling with the totals can disguise the fact that this is a disappointing performance by the Secretary of State. I repeat that, if one takes the outturn figures given by the Government in the Autumn Statement for this year and the expected expenditure figures for the Scottish Office, the total budget for next year is cut in real terms by over £80 million and that cannot be good news by any standards.

The Secretary of State has made minor adjustments to individual spending totals within a budget that has declined overall in real terms. Much though he may try to make of it, I wish that he would pay more attention to the problems facing Scotland — the problems that will continue to trouble the people of Scotland—and less to the sort of political sleight of hand and packaging that has been a mark of the Secretary of State's performance in recent weeks.

I hope that the hon. Gentleman will forgive me saying that, if the worst that he can say about my statement today is that it was disappointing, that shows its worth in terms of the real benefits that it will bring the people of Scotland.

The hon. Gentleman confirmed that the amount referred to today was the same as in the Autumn Statement. Therefore, perhaps he should attach more importance to these matters than to speculative items in newspapers, which he seemed to assume to be holy writ.

The hon. Gentleman said that there was a reduction in the net amount available for housing. He will be aware that what matters to people in Scotland is how much is to be invested in the housing stock of local authorities, the Scottish Special Housing Association and the Housing Corporation. Whatever the hon. Gentleman says, he cannot avoid the fact that, as I said in my statement, £30 million more will be available for investment in the public sector housing stock in Scotland, which will be highly beneficial. [Interruption.] It is the gross figure that shows how much will be spent on the improvement of the housing stock and on building new sheltered or special needs housing, and that represents a substantial increase which will be available to the various recipients.

The hon. Gentleman will be content to know that the Scottish Development Agency will receive resources higher than it has received at any time in its history, enabling it to carry out more excellent work on urban regeneration.

On regional policy changes, I must ask the hon. Gentleman to keep his patience for a while. I can assure him that any policy developments in regional aid will have been come to in the full consideration of how we can best boost employment and economic development in the various regions of the United Kingdom.

I am grateful to the hon. Gentleman for conceding that my announcement today represents an increase in real terms in health expenditure. [Interruption.]That is exactly what the hon. Gentleman said. I listened to him, even if his hon. Friends did not. I am grateful to the hon. Gentleman for conceding that.

I must also point out to the hon. Gentleman, and, indeed, to others in Scotland who point to the continuing needs of the Health Service in Scotland, that their views will carry more weight if represented in a more balanced fashion. For example, if they pointed to the fact that since 1979 new capital investment in the NHS in Scotland has resulted in the completion of 51 major new hospital developments, providing over 5,770 beds and some 481 day places, and to the fact that 32 major developments are now under construction or in planning, that would represent a balanced view of the situation affecting the Health Service in Scotland at present.

Does my right hon. and learned Friend agree that, with the excellent announcement last week on Ravenscraig, today's financial statement is more good news for Scotland? Is he aware that the continued high expenditure on trunk roads is most welcome, and will that include the Dumfries bypass? Finally, does he further agree that the 9 per cent. increase in education is excellent news towards increasing the quality of education and the facilities required to that end?

I am grateful to my hon. Friend. Yes, I can confirm that the proposed construction of the Dumfries bypass will be going ahead. I am also grateful to my hon. Friend for his remarks about the important extra help that we are giving to the development of education, particularly standard grade, in Scotland.

Does the Secretary of State accept that there is no real news in this statement? Of course, it adds flesh to the bones of the Autumn Statement, but it takes us no further. Does he accept that he led the House to expect that there would be advances beyond the Autumn Statement? Is there not a real need for a rural development agency within the SDA, or however erected, particularly having regard to the troubles of Scottish agriculture, since that will enable some stability and long-term planning in that sector?

On prison and hospital services, does the Secretary of State really think that the figures that he has announced this afternoon will adequately measure up to the real and acute problems that these important sectors face? Does he accept that there is the whiff of an underlying theme in the statement that the Government are moving directly away from the local authorities and the provision of services through the local authorities in Scotland? Surely, if that is the Government's policy, the right hon. and learned Gentleman should have the courage to say so openly and not in this underhand fashion.

I am surprised to hear the hon. Gentleman say that no further information has been provided that did not appear in the Autumn Statement. The global amount available to the Scottish Office was announced in the Autumn Statement and as in previous years this announcement deals with the distribution of that sum to the various functional responsibilities of the Department. Therefore, the hon. Gentleman now has the exact details that he requires. He knows how much will be available for health, housing, education and the various other aspects of Scottish expenditure. Had the hon. Gentleman been listening to the statement, he would be aware of that fact.

Rural development is a matter to which I attach very considerable importance. The Scottish Development Agency has a responsibility for the whole of Scotland, and I believe that the extra resources available to the agency will help it to carry out activities in rural areas. In addition, the extra resources being provided for the Scottish tourist board will be of particular importance in rural areas because tourism is clearly one major source of potential further employment and growth.

I have indicated the resources that will be made available for prisons and hospitals. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) conceded, the figures represent increases in real terms in both categories. I should have thought that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) would have acknowledged that.

Do not the opposition parties' questions show a total inability to recognise what is good news for Scotland? Conservative Members recognise the achievements of my right hon. and learned Friend the Secretary of State on behalf of Scotland, which will also be recognised in Scotland. Will my right hon. and learned Friend assure me that the improvement of the A94 Perth-to-Aberdeen road to dual carriageway standard will go ahead as planned?

Yes, I can confirm to my right hon. Friend that most of the trunk road developments currently envisaged will be going ahead because the overall resources for the trunk programme are being maintained. The particular projects and allocations will be announced in due course, but I would not expect any significant changes in the trunk road programme. I am grateful to my right hon. Friend for his earlier comments.

Why does not the Secretary of State answer the question of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about totals? The figures that my hon. Friend cited were absolutely accurate and were taken from the Government's own document. The outturn for the current year is expected to be £8,220 million. The figure announced for next year is £8,505 million—an increase of only 3·5 per cent. in cash terms, which is less than the rate of inflation. The figures announced in today's statement represent a cut in expenditure in real terms in the next year.

The right hon. Gentleman is incorrect. The figures that I announced represent an increase of 6·9 per cent. over planned expenditure for the current year and an increase of nearly 5 per cent. over what was planned for 1988–89 in the last public expenditure White Paper. I realise that Opposition Members are desperate to find grounds to criticise the statement, but they will find it very difficult.

I congratulate my right hon. and learned Friend, especially on his last reply, which confirmed that, while public expenditure is increasing in real terms it is falling as a proportion of gross domestic product — in Scotland as in the rest of the United Kingdom — as a result of the success of the Government's economic policy.

Can my right hon. and learned Friend say anything about new towns industrial infrastructure? I am not sure whether I missed that part of his statement. On trunk roads, I take it that I am correct in assuming that it goes without saying that major route improvements will go ahead in the trunk road programme, but can my right hon. and learned Friend say anything about the structural maintenance of trunk roads?

The development of the industrial infrastructure in the new towns can be increased significantly and the road maintenance programme can be maintained at a high level. There will be a reduction in the local authority capital programme on roads, but that will not affect the maintenance programme, particularly with regard to road safety matters.

Will the Secretary of State help the House by telling us whether he has resolved the dilemma in the Cabinet? If the enterprise culture is indeed coming to Scotland, should he not announce dramatic decreases in public expenditure? On the other hand, if, as we suspect, the enterprise culture is there, but needs dramatic subventions from the Treasury, these subventions, particularly those on urban aid, are inadequate. A £6 million increase in urban aid is wholly inadequate, not just to deal with the burdens of a central city, but to deal with areas such as the mining communities, which have been decimated for many years. We need a re-assessment of the amount and the criteria for urban aid, so that those areas come within its orbit.

The figures that I have announced do not represent some dramatic increase in expenditure purely for Scotland; this year we have had an announcement of increases in Government expenditure in the United Kingdom as a whole. The figures that I have announced today are figures to which Scotland is entitled on the basis of the formula which has been used for several years to determine appropriate levels of provision.

Does my right hon. and learned Friend agree that the enterprise culture is found significantly in Scotland in areas of tourism? Does he agree that the Government recognise that, which is a reason why they have increased the funding to assist the pump-priming of tourism which will create many new jobs in rural areas? Can he confirm that the Scottish Office has spent about £670 million on trunk roads on major routes throughout Scotland since 1979? Will he confirm that the expenditure on education announced today will make it possible for the schemes that his hon. Friend the Minister is introducing to come to pass?

Yes, I can confirm those points. An additional £1 million is being made available for tourism, primarily for the Scottish tourist board, and I can confirm the substantial road infrastructure improvements, to which he referred.

May I remind the Secretary of State that, during the general election campaign, he called a press conference and declared that part of his party's manifesto was to upgrade the A74 to M74 status? Today we hear that that has again been postponed for later years. I have 32 miles of this inadequate A74 running through my constituency. How many men, women and children will be slaughtered on this unsafe road before the Secretary of State carries out his manifesto commitment?

Obviously, the hon. Gentleman knows little about road construction. He should appreciate that one cannot simply start the construction of a new motorway within weeks of announcing one's intention to do so. The planning and design work is already in preparation and we intend to upgrade the A74 to motorway status in order to connect the motorway network of Scotland with that of England and Wales. The announcements that I have made today will enable us to continue to make good progress towards achieving that objective.

Does the Secretary of State accept that he is better at news management than at winning budget increases for Scotland? It has already been pointed out that the totals announced today are exactly the same as those in the Autumn Statement. We are only hearing about a rejigging of the programmes within that.

If we examine the details of provision for 1990–91, the picture becomes even worse. In 1990–91, £8,770 million will be provided, but at 1986–87 prices that is £7,550 million and compares with £7,577 million in 1979–80. Can the Secretary of State explain how, with a succession of apparent triumphs in Cabinet, Scottish public expenditure will be less in real terms in 1990–91 than it was in 1979–80?

I am somewhat amused and disconcerted by the great surprise among Opposition Members that the grand total of the announcements that I have made today is exactly the same as the grand total contained in the Autumn Statement a couple of months ago. As the purpose of today's statement is to announce how that money is to be distributed, it should have come as no great surprise. In each of the years during which the Government have been in office, expenditure in Scotland has remained at the same proportion of comparable expenditure in England. The fluctuation from year to year has been very small.

My right hon. and learned Friend is to be congratulated on continuing, in his usual excellent way, the privileged position of the Scots in the United Kingdom. Will he confirm that public expenditure per capita in Scotland is still 20 per cent. or more above that in England? Will he confirm that public expenditure as a percentage of gross national product is 48 per cent. in Scotland as opposed to 41 per cent. nationally? Does he believe that, in future, the Conservative party will obtain a response and gratitude from Scottish people as it has in the past?

My hon. Friend is correct to highlight public expenditure. He will be aware that, not just as between Scotland and England but within Scotland and within England, we must vary expenditure according to need. Just as public expenditure varies in different parts of England, so it does in parts of Scotland. It is not always entirely helpful to use all-Scottish and all-English figures other than as a method of statistical presentation.

The Secretary of State will appreciate that the distribution of funds is important. May I test his good news? Will he assure the House that the health authorities that have been required to cut expenditure this year will have those cuts restored in the next financial year? Although Lothian health board has £18 million-worth of capital expenditure this year, will the Secretary of State assure the House that the board will receive additional funds to rebuild the Royal infirmary so that it need not rely on Victorian endowments simply to patch and mend?

As the hon. Member for Garscadden conceded, I have announced today real increases in the provision for the Health Service in Scotland. The provision of individual health boards will be determined in due course and I cannot comment now on the amount that will be available to Lothian health board.

Will my right hon. and learned Friend continue to reject the whining, whingeing and synthetic indignation from the Opposition to which we have become accustomed? Does he accept that many hon. Members who represent English constituencies —mine is in the far south-west—have gained the distinct impression that Scotland is almost being force-fed with public expenditure? In support of that, may I point out that we do not even have a development agency, whereas the budget of the Scottish Development Agency has just been increased by 10 per cent? Despite what Opposition Members say, expenditure on tourism is expected to increase by more than 20 per cent. in Scotland. May we have similar treatment for England?

Similar industrial and environmental work to that of the SDA is carried out in the areas of England, albeit in different ways. Although there is no development agency for England, the work of industrial assistance and environmental improvement is carried out by organisations such as English Estates. The main advantage of having an SDA is not the amount of resources that it attracts, but the opportunity that it provides to co-ordinate the responsibilities of several Departments, which in Scotland are all the responsibility of the Scottish Office.

Now that the Secretary of State is providing money to upgrade the A74—which I welcome, since it is the main road from Scotland to England—is it not time that he considered other roads, including the main A737 through the Garnock valley connecting Irvine new town and Hunterston with the main motorway system in the Glasgow area? The construction by the Finnish company, Caledonian Paper, of a new pulp paper mill will cause a tremendous increase in traffic. The Clyde port authority has published new plans for further development at Hunterston. Is it not time for the Secretary of State to stop blaming Strathclyde regional council, and instead give it the money to upgrade this road, which will be necessary in the development of all of north Ayrshire?

I thank the hon. Gentleman for welcoming our proposals for the A74. Strathclyde regional council must determine its priorities for non-trunk roads.

May I be the first to represent the interests of the taxpayer in discussion of this boondoggle? Will my right hon. and learned Friend tell the House why this slush fund has been welcomed with so little gratitude by the recipients on the Benches opposite? Can he tell the House why, when we have a Conservative Government, those who are most Socialist receive the most public money? Will he also tell my constituents how much subsidy, on average, they pay per capita to each constituent represented by hon. Members opposite?

My hon. Friend will appreciate that the response of the Opposition is almost exactly the same as the response to the statements of my right hon. Friend the Secretary of State for the Environment and others who represent Departments involved in such matters. The expenditure is not paid for solely by my hon. Friend's constituents: it is paid for by taxpayers throughout the United Kingdom, including my constituents.

The Minister mentioned urban renewal. A project in my constituency — the conversion of Spiers wharf warehouses into houses—has the support of Strathclyde region, Glasgow district and the SDA. Those houses are on the bank of the Forth and Clyde canal. It appears that the British Waterways Board is receiving no support from the Department of the Environment in cleaning that canal. Since the project depends on the renewal of the 12 miles of canal from my constituency to Kirkintilloch, will the Secretary of State meet his opposite number in the Department of the Environment to see what can be done to improve matters?

The most appropriate action that the hon. Gentleman could take would be to raise those matters directly with the relevant Minister at the Department of the Environment. If it has responsibility for such matters, that would be the sensible way of pursuing his constituency interest.

I was surprised to hear my right hon. and learned Friend say that the point made by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) was unhelpful. In my experience, my hon. Friend is one of the most helpful Members of the House, and I thought that he made a good point on behalf of the taxpayers of England.

Will my right hon. and learned Friend confirm that, in 1986–87, public spending per head in England was £1,968 and public spending per head in Scotland was nearly one third greater, at £2,519? Will his statement today improve that disparity? Will public spending per head in Scotland be brought down towards the level in England? Does not this annual rattling of the begging bowl in Scotland tend to give the Scots a sense of inferiority?

My hon. Friend will be the first to appreciate that expenditure should take into account need. That factor has long been recognised as justifying different expenditure in different areas of the United Kingdom. Many parts of England receive higher expenditure than do parts of the south-east. Conservative Governments have always attached great importance to such matters, because it is crucial to ensure that our provision takes into account the requirements of an area. I believe it to be entirely justified.

The right hon. and learned Gentleman seems to drift from net to gross, and from gross to net, according to which matters he is dealing with. Will he turn his attention to what he said were the preferable figures — the gross figures? When one looks at them, one sees an immediate collapse in direct spending on industry in Scotland. Is that not disgraceful, given the level of unemployment that we have?

What I announced today was an extra £25 million for industry in Scotland. If the hon. Gentleman does not see that as an improvement, it is difficult to know what would impress him.

In view of the insults thrown at the people of Scotland by the hon. Member for St. Ives (Mr. Harris), will the Secretary of State advise the Scottish tourist board to spend some of the additional money that it has—the £1 million—on telling the people of Scotland not to go to St. Ives for their holidays? The hon. Gentleman's constituency could not survive without the thousands of Scots like myself who spend their holidays there. Does the Secretary of State agree that the hon. Gentleman's constituents who run hotels and boarding houses will not be happy tomorrow when they read what the hon. Gentleman has said about the holidaymakers who go to St. Ives?

I look forward to many thousands of Scots continuing to visit St. Ives, and I also look forward to many residents of St. Ives continuing to visit Falkirk.

Does the Secretary of State accept that the answers that he gave to his four hon. Friends — the foolish foursome —about public spending in Scotland were too difficult for them to understand because there were too many big words? Perhaps he should give a clearer explanation in a writ ten answer. The reason why there is more public expenditure in Scotland is that there is more unmet need and higher unemployment than in the south. One has only to look at the constituencies with the highest unemployment and the lowest pay to see that. Conservative Members should look at the figures. The Secretary of State has an educational job to carry out. Conservative Members should think about that and not spend their time tiresomely insulting Scotland.

The hon. Lady might appreciate that there might be less irritation, perhaps misunderstanding, about the requirements of her constituents, if occasionally she was willing to recognise that, far from her constituents being deprived as a consequence of the Government's decisions, they have benefited from a recognition of the differential levels of need.

The hon. Lady should realise that the constant refusal to acknowledge that her constituents receive differential levels of expenditure, and that that has continued under the Government, means that perhaps she has herself and her colleagues to blame, when there is evidence of such frustration among hon. Members from other constituencies. I must say to the hon. Lady that it is not lust hon. Members from constituencies south of the border, but hon. Members with constituencies elsewhere in Scotland, who sometimes feel concerned at what they see as the differential levels of expenditure in constituencies such as that represented by the hon. Lady. If there is a refusal to recognise support when it is being provided, that may be part of the explanation for the concern.

The Secretary of State has shown today that he is incapable of distinguishing between levels of planned expenditure and outturn expenditure in terms of public expenditure in Scotland. However, I hope that he is capable of recognising that, in Tayside, the efforts to provide proper community care services have been hamstrung by the inability of Tayside health board or Tayside regional council to find sufficient resources from within their present budgets, which are under the continual pressure of cuts. Is the right hon. and learned Gentleman satisfied that the level of spending on health and social services that he announced today will be sufficient to enable both those bodies to provide the funding that they are seeking? If he receives future representations from those two bodies for extra funding, will he grant those extra funds?

The hon. Gentleman knows perfectly well that in most years — virtually every year — outturn expenditure tends to be higher than planned expenditure. Therefore, if one is trying to make any attempt at a valid comparison between Governments proposals this year and proposals in previous years, it makes sense to compare planned provision with a planned provision announcement at a comparable time in a previous year.

Will the Secretary of State reflect—[Hon. Members: "Reading."]

Order. The hon. Gentleman is perfectly entitled to hold a note in his hand if he wishes, as long as he does not read it.

The behaviour of certain Conservative Members is eloquent testimony as to why the Tories have done so badly in Scotland.

Will the right hon. and learned Gentleman talk about the real economy in Scotland, not the one that he would like us to believe exists? His statement on the industry increases is slightly misleading because our calculations suggest that there is a £2·6 million reduction in the budget. Indeed, if one takes the juggling of figures between the SDA and the HIDB in direct grant, it may well be that some parts of the industry budget are suffering to accommodate an increase in other parts.

The Secretary of State should also reflect on this. We hear about whingeing. What about the 320,000 Scots who are whingeing on the dole queue? What about the 100,000 Scots who are whingeing on Government special programmes? Will not the right hon. and learned Gentleman take seriously the fact that investment in industry, jobs and the economy in Scotland does not measure up to the problems that we face?

Finally, will the right hon. and learned Gentleman reflect on one other development, which the Secretary of State for Employment may or may not have told him about? We shall have an extra 40,000 places next year on the Government's new adult programme. Will the right hon. and learned Gentleman provide resources in the statement so that those concerned can embark on projects that are worth while and provide effective training—or is that to be a workfare scheme on the cheap?

With regard to unemployment, the hon. Gentleman should recognise that there is unemployment in Scotland, as there is elsewhere in the United Kingdom, but he might have referred to the fact that unemployment in Scotland has fallen by some 55,000 since January this year. If that decline in unemployment continues at that rate, we can look forward to unemployment ceasing to be the serious problem that it continues to be at present.

Does the Secretary of State agree that when one looks at Health Service expenditure and applies the National Health Service prices and wages deflator, which is the correct deflator, one sees that the increase is under 1 per cent? One needs 1 per cent. to stand still, but we have an increase of under 1 per cent. As we are already budgeting for an increase in primary care, that means that there will be effective cuts in the hospital service. Where will those cuts be in the hospital service?

I do not concede for one moment that there is to be a cut in health expenditure in Scotland. I refer the hon. Gentleman to the views expressed by his hon. Friend the Member for Garscadden.

Does the Secretary of State agree, looking at the housing figures, that the capital allocation for next year remains below the level, in real terms, of the capital allocation for 1979–80? Does he further agree that the way in which the increase on last year's figures has been achieved in the capital allocation comes about by including the total cost of covenanting schemes within one year's allocation instead of, as is more appropriate, spreading it over the life of those covenanting schemes?

I remind the hon. Gentleman, if he is going back to 1978–79—[Interruption.] I can see why the hon. Gentleman does not want to go back to 1978. As he will recall, it was the previous Labour Government who were responsible for a massive cut in capital expenditure on housing in Scotland. That is a fact that we shall not let the hon. Gentleman and his hon. Friends forget. Capital expenditure on housing in Scotland has gone up over the past few years. Today I have announced further provision, which will mean extra investment in capital expenditure on housing in Scotland of some £30 million. That can be only for the benefit of those who depend on that north of the border.