Scottish Parliament, 30 March 2000

346 contributions from 79 members. The official report.

Introduction

Scottish Service Tax

Patricia Ferguson (Labour, Glasgow Maryhill)

Good morning. The first item of business this morning is a Scottish Socialist party debate on motion S1M-700, in the name of Tommy Sheridan, on a Scottish service tax. There are two amendments to that motion. I call Tommy Sheridan to speak to and move the motion. You have 10 minutes, Mr Sheridan.

Tommy Sheridan (SSP, Glasgow)

I am disappointed, given that the subject matter we will be discussing affects some 2.3 million Scots, at the turnout. I hope that we can encourage a debate that in future will inspire even more interest.

I am pleased and somewhat excited that we have the opportunity today to bring a motion to the Parliament that, from a socialist perspective, offers Scotland an opportunity significantly to redistribute the income of our country. Some members may be aware that, as an elected socialist, I stand for an independent, socialist Scotland in which our country's massive wealth and resources are commonly and collectively owned and controlled for the benefit of all our citizens.

Currently, society is horribly divided. Obscene wealth coexists with shameful poverty. Too many pensioners are poor; too many workers are low paid; too many children live in poverty. As a Scottish Socialist party representative, I stand firmly for a complete transformation of our society. My vision is of a democratic, socialist society based on provision for need and the promotion of human solidarity and co-operation, not the continuation of the creed of greed and the worship of profit.

The problem is the limitation of the Parliament. Unfortunately, instead of the adult Parliament that was envisaged by the Scottish Constitutional Convention, whereby Scotland would raise and retain all of its taxes, we have a sort of parental guidance Parliament that has to seek permission from its adult cousin, Westminster, if it wishes to spend more than its allotted block.

The beauty of the Scottish service tax proposal that is to be discussed this morning is that it would breach the restrictive fence. We have managed to get under the wire, so to speak, in that we have been able to make a proposal that concretely and clearly promotes progressive taxation and the redistribution of wealth, despite the restrictions of the Scotland Act 1998.

Many in Scotland say that they support income and wealth redistribution. Indeed, that used to be a cornerstone of the Labour party before its Blairite conversion to the market and to the worshipping of wealth and profit. Today, despite the restrictions and despite the limited resources available to our small party, we are able to present an academically researched proposal that would redistribute income in Scotland and drag the principle of progressive taxation and redistribution back on to the political agenda, where it should be.

Let us be clear: the council tax is deeply unpopular. It is regressive; it is extremely costly to administer and collect; and its associated rebate system is prohibitively complex. What does the Institute for Fiscal Studies say about it? Its figures illustrate that the richest 10 per cent in society pay a lower fraction of their income on council tax than the poorest 10 per cent. The richest 10 per cent pay 1.22 per cent of their income; the poorest 10 per cent pay 7.5 per cent of their income. Even after benefits are taken into account, the poorest tenth still pay 1.86 per cent. They pay more in council tax than the richest tenth.

In the past 25 years, there has been a massive shift in wealth and income from the poor to the rich. It is shameful, but the wealthy not only pay less in taxation generally, but pay less as a proportion of their income than the poor. Wealth has not trickled down over the past 25 years of increased growth. The rich have merely got richer while the poor have, unfortunately, got poorer.

The richest 1,000 list in The Sunday Times recently recorded a staggering statistic: over the past 12 months, the richest 1,000 in the United Kingdom increased their wealth by 27 per cent to a combined total of £146 billion. I repeat: £146 billion among 1,000. In this Parliament, we are trying to meet the needs of 5 million Scots and our total budget is £16 billion. The richest 20 people in Britain have a combined wealth of £14 billion; they have a combined wealth that is almost the same as the budget for this Parliament, which has to cater for 5 million people. It is no wonder that I am a socialist. We have to try to cater for essential services in health, education and local government, and we have to look after our children and our elderly, yet our budget is less than the combined wealth of the top 20 people in the country.

The wealthy are not paying enough in either income taxes or local taxes. With the Scottish service tax, we want to start to change that in Scotland. The Scottish service tax would replace the council tax. It would be levied on each individual according to their income; it would therefore be related to their ability to pay. It would be set nationally, collected by the Inland Revenue via the pay-as-you-earn system and then distributed to each local authority according to a much improved distribution formula that must be worked out in conjunction with the local authority, trade unions, the Convention of Scottish Local Authorities and community groups.

In return for the loss of the fiscal control that the council tax system offers—even though it is a very low level of control in the setting of the council tax—each local authority would be allowed, under the Scottish service tax proposal, to set its non-domestic rate and to keep its non-domestic rates. If such a system were in place in Glasgow, given the amount of non-domestic rates we collect, the city would be £64 million better off.

Andrew Wilson (Scottish National Party, Central Scotland)

The role of redistribution—redistribution is a good aim—should fall to national government rather than to local government, so does Mr Sheridan agree that his proposals are suboptimal to an extent? If every other country in Europe can do it through the national Government, that is what we should focus on in Scotland. We cannot do so because of the limited powers of this Parliament.

Tommy Sheridan (SSP, Glasgow)

Andrew Wilson will be aware that the Scottish Socialist party's position is for an independent, socialist Scotland. We will fight tenaciously for that at the next election, but today I am addressing what the Parliament can do with its present limited powers. I agree that redistribution of wealth and income is the role of national Government through national taxation and policy, but we do not have power over that just now. We have power over local taxation, so let us have a progressive form of local taxation that redistributes income.

The return of control of non-domestic rates to local authorities in no way compensates for the 20 years of damage caused by continual underfunding and loss of fiscal control to central Government, but at least the Scottish service tax would be better for local authorities than the council tax.

The Scottish service tax would be cheaper to collect and administer than the council tax. It would also be progressive and redistributive. All 800,000 people in Scotland whose income is below £10,000 a year would be exempt. The 560,000 Scots whose pay is less than £15,000 a year would benefit automatically. An average couple with an income of, say, £17,500 per year, who live in a band C property—never mind the average band D property—would pay less under a Scottish service tax than under council tax. In other words, the disposable income—the key to growth and generation in our economy—of the poor and of the overwhelming majority of people in Scotland would be increased by the Scottish service tax.

High earners and the wealthy, of course, would pay more. MPs and MSPs like us would pay on average £1,000 more a year. My fiancée and I would pay £1,288 more under the Scottish service tax, and why not? We are well paid—overpaid—and it is about time we contributed more to local education, police, fire and cleansing services. I hope that other MSPs will endorse that view.

Why, under the council tax, does Scotland's richest individual—in the shape of Mr Souter, who seems to have more money than sense—with a personal fortune of some £565 million and an income last year of £650,000, pay £1,516 in council tax for his £1 million mansion in Perthshire? The richest man in Scotland pays barely twice in council tax what the low-paid council worker in Glasgow pays for a rundown tenement. If that is defensible, I would like to hear the defence.

Under our proposal, the wealthy would pay more. Instead of paying £1,516 a year, the likes of Mr Souter would pay £82,000 a year. He would have to struggle by, trying to make ends meet on his remaining income of £568,000 a year. We have to strike a blow for greater equality and stand up for the principles of progressive taxation and income redistribution, for the sake of our pensioners and our low-paid workers. For the ordinary people of Scotland, it is time to drag progressive taxation and income redistribution back on to the centre stage. If the Executive will not agree to a wholesale review of local government finance, I hope that it will support a further review of our proposal by the Local Government Committee.

I move,

That the Parliament supports the principle of progressive taxation on social, economic and moral grounds and, in pursuit of a redistributive and progressive system of local taxation, agrees to refer the Scottish Service Tax proposal to the Local Government Committee for inclusion in any further review it may conduct into local government finance.

Nicol Stephen (Liberal Democrat, Aberdeen South)

My background in politics lies in local politics and local government. Indeed, I was first involved in local politics when the Layfield report, which is now over 25 years old, seemed fresh and new. I supported strongly much of what was said by the Layfield commission, and I campaigned in the 1980s during the rates revaluation crisis and, later, the campaign against the poll tax. I know the problems of local taxation systems and I do not pretend that the present council tax is perfect.

Although I would support a local income tax—which, as Tommy Sheridan and I were discussing before the debate began, is the policy of the Liberal Democrats—I would not support the Scottish socialist service tax. I shall explain why.

About 80 per cent of council expenditure is currently raised by central Government, which means that only 20 per cent is raised locally. Although shifting the balance has proved very difficult, it is desirable—but it should not be shifted to the extent of Tommy Sheridan's solution of 100 per cent central Government funding. We should increase the level of local control. Equally, such a shift in balance should not significantly change the total tax burden on individuals.

A person who pays more to local government should pay less to central Government. Under Tommy Sheridan's proposals, people would pay all their current central Government taxes to Gordon Brown and the Exchequer and, on top of that, pay a Scottish service tax to the Scottish Parliament. The Layfield commission suggested a local income tax with a reduction in UK Government income tax to balance out the burden on the individual locally.

For those reasons, I believe that the Scottish service tax is fatally flawed; it is an old-style, centralist, socialist solution which takes power away from local authorities and local people and centralises it. It is difficult for me to say this in relation to Tommy Sheridan, but his proposal is a return to the bad old days of centralising Thatcherism as it transfers power to central Government.

Tommy Sheridan (SSP, Glasgow)

The minister talks about centralisation, but he has failed to respond to my point that, under my proposals, local authorities would be able to control non-domestic rates.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I am talking about Mr Sheridan's service tax. Having examined the figures, I have come to the conclusion that it is a centralising measure and none of his comments has rebutted that view.

Under Mr Sheridan's proposals, central Government—in this case the Scottish Parliament—not local government, would set the service tax and distribute the revenue raised from it. In his speech, Tommy waxed lyrical about distribution and redistribution, but that point has not appeared in the document produced by the University of Paisley faculty of business or in his comments about the service tax in the press. One of the most sensitive political issues is how central Government distributes taxes to local government. Perhaps he will address that in his concluding remarks.

The Layfield commission suggested a local income tax with local variable rates of tax levied on the basis of the taxpayer's local place of residence. The Scottish socialist service tax would have national rates with national earning bands and would be fixed and distributed nationally. Claiming that it is a local tax is pure fantasy; it centralises all local government funding. At a stroke, it would remove a crucial—many would say the crucial—element of accountability between local councils and the electorate.

The tax has further fatal flaws. It would create a fortress Scotland. Let there be no doubt: it would have major economic consequences. The report from the University of Paisley faculty of business, which develops the tax proposals, mentions the phrase "fiscal flight". That is the wrong term; "employment exodus" would be more accurate.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Nicol Stephen (Liberal Democrat, Aberdeen South)

Not at the moment.

We want Scotland to play a growing and dynamic role in the global economy. There should be no barriers, no blocks, no backward thinking, no battering of business. We want high-quality, highly paid, high-added-value jobs—which the Scottish service tax would kill stone dead.

Andrew Wilson (Scottish National Party, Central Scotland)

Will the minister give way?

Nicol Stephen (Liberal Democrat, Aberdeen South)

In a second.

I do not want to exaggerate this; I do not believe that every new prospect or job would disappear, but most of them would.

Andrew Wilson (Scottish National Party, Central Scotland)

I am gravely disappointed with the minister's tone. Although this tax can be legitimately criticised, employing the same sort of nonsense scare tactics that we used to hear from the Conservatives about the referendum goes down a very dangerous road. Let us have a decent debate, not this nonsense about flight.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I would agree, if what we were talking about was a marginal or small change. The Liberal Democrats have suggested minor changes to the taxation system and the people voted for the Scottish Parliament to have the power to vote for a 3p variation in income tax, up or down. Tommy Sheridan's proposal is quite different. It would mean a massive increase over and above central taxation in taxes for some people.

Tommy Sheridan (SSP, Glasgow)

Hear, hear.

Nicol Stephen (Liberal Democrat, Aberdeen South)

Tommy Sheridan agrees that that should happen. For many individuals, his proposal would mean an increase in taxation of 15p in the pound.

If the tax was imposed on top of existing central Government taxes, inward investment would collapse. Existing companies would choose to expand elsewhere and our small companies, which are the engine room of our economy, would take a hammering. The Scottish Executive's target of starting 100,000 new companies would simply not be achievable. In short, there would be a new brain drain of our best academics, inventors, investors and entrepreneurs. Very few would happily pay and stay.

That is not the new politics; it is not the new modern, competitive Scotland that we want to develop. None of us in the Scottish Executive wants to see the rich getting richer at the expense of the poor getting poorer. That is why we have policies to tackle exclusion, deprivation, disadvantage and poverty. However, it is also why we have policies to increase prosperity and to create jobs, opportunity and growth. That is why I ask members to reject the Scottish service tax. Local government finance is a significant and important issue, but it is complex and needs proper consideration and consultation. It is for that reason that I firmly believe that the Local Government Committee of this Parliament is the right place for the issues to be considered further.

I move amendment S1M-700.2, to leave out from "and, in" to end and insert:

"and welcomes the Executive's commitment in A Partnership for Scotland to keep under review wider issues of local government finance and notes that these matters fall within the remit of the Local Government Committee."

Andrew Wilson (Scottish National Party, Central Scotland)

I congratulate the convener of the Scottish Socialist party, Tommy Sheridan, on his party's first debate in the Scottish Parliament. The party's proposals are a serious matter for debate and should be treated as such.

It is my general contention that issues such as the fairness of taxation and how we fund public services, redistribute wealth and tackle poverty and inequality should not be backed into inappropriate corners or burdened on local government. They are issues that a normal Parliament should address on behalf of a normal country. We should not lose sight of that simple fact.

The way in which the nation's wealth is allocated should be progressive and fair. We should target goals such as improved public services, reduced inequality and, of course, growth in the economy and jobs. The Scottish Socialist party's proposals target only one of those goals, which is why I believe it should not be addressed as a national tax. It is critical that the redistributive burden should not be placed on local government.

Tommy Sheridan's contribution should be welcomed as part of a debate, which we should have in Scotland, about how we make our tax system fair and progressive and how we allocate the nation's wealth to much-needed public services. I am disappointed that the Executive has sought to go down the road of nonsense scare tactics. When, during the elections to this Parliament, we proposed a freeze on income tax—with which Mr Stephen's party at Westminster agrees—people were led to believe that the earth would end if the proposal went through. Gordon Brown said that a quarter of a million jobs would be lost from Scotland. That was nonsense, as scare tactics on tax always are. This is a question of public choice: are we willing to allocate the nation's wealth to public services or not?

Nicol Stephen (Liberal Democrat, Aberdeen South)

Will the member take an intervention?

Andrew Wilson (Scottish National Party, Central Scotland)

I will take one in a moment.

The question is, are we willing to allocate the resources and how do we go about doing that. That is a legitimate debate, but it is not helped by nonsense scare tactics.

The right-wing regressiveness of the Executive's party in London, which is targeting a starting rate of 20p for the basic rate of income tax, should be condemned by Nicol Stephen on behalf of the Liberal Democrats. I will be interested to hear in the Executive's summation whether it goes along with the approach taken in London. The key point that we try to make in all debates is that we have no option but to go along with the general approach in London, which is a shift from direct to indirect taxation—from fair to unfair taxation—combined with a lack of funding for Scottish public services.

Wendy Alexander (Labour, Paisley North)

Will the member take an intervention?

Andrew Wilson (Scottish National Party, Central Scotland)

As ever, I am more than willing to hear from the Minister for Communities.

Wendy Alexander (Labour, Paisley North)

Talking of right-wing policies, the member may want to reflect on why the Scottish National party was unprepared to support the windfall tax, which has raised £5 billion and contributed to a reduction of 70 per cent in youth unemployment and 40 per cent in long-term adult unemployment in Scotland. Why did the SNP not regard that as a measure of progressive taxation?

Andrew Wilson (Scottish National Party, Central Scotland)

A range of issues surround the Labour proposals. Our key concern over the windfall tax approach does not relate to the tax itself, but to the predicating of funding on a one-off tax, which we do not think is sustainable in the long term. The tax itself is not something that I am particularly het up about.

Today's debate, though, is focused on the Scottish service tax, and I would like to raise the SNP's concerns about it.

The Deputy Minister for Enterprise and Lifelong Learning mentioned the breaking of the link between the citizen and the council. That is a grave problem, and I do not think that the restoration of business rates is the route to follow. Business rates place an undue burden on small companies and, in a way, raising them could be seen as regressive, given that so many of the people who are affected by them are at the lower end of the business scale. I do not believe that it is democratic for the one link between the citizen and the council to be made via a business—it should be directly with the citizen.

Perhaps more important, the tax in no way tackles the crisis in local government funding; it raises an extra £100 million—not a nightmare scenario, minister. That sum in no way bridges the cut included in this year's settlement, which the Convention of Scottish Local Authorities has analysed. The cut is more than twice that amount, so the tax does not tackle the problem of service funding. As the minister correctly said, there is no clear method of distribution to the poorest areas.

I would like to cover some of the anomalies of the tax. I do not do so lightly—there are problems with the structure of any tax. Is it fair, for example, that a couple on average earnings, living in a bought former council flat in Glasgow, would pay £916 in service tax, but would have paid only £729 in band A council tax last year? For such a couple, that would be an increase of 25 per cent. It is therefore clear that, while the aims behind the service tax may be just, the actuality of its structure is not fair and does not favour the poorest earners.

Is it fair that four young gentlemen, newly graduated from Glasgow University, doing part-time bar work and earning £11,000 a year each, would pay less towards the council's services than the pensioner living next door in the same building, whose revenue is £15,000 a year? The pensioner's household income would be 65 per cent less than the one next to him, but his tax would be 26 per cent more under the SSP's proposals.

I think Mr Sheridan will take on board that there is still work to be done on the service tax proposal. It is not something that I would dismiss out of hand, but something that could be part of a normal, mature debate which this Parliament and this country need to have with regard to how we allocate wealth to Scottish public services.

We believe that local government finance is a much bigger question: of how we fund public services at a local level; of how we make the taxation system fair; and, most important, of how we make local councils accountable. The question should be addressed through an independent review. That is something which COSLA supports, which the Local Government Committee supports and which my party included in its manifesto.

Our amendment enshrines the principles of progressiveness and fairness that the Scottish Socialist party's motion proposes, but suggests that that could be made part of a more general independent review. I urge the chamber to support our amendment.

I move amendment S1M-700.1, to leave out from "on social" to end and insert:

"and calls for an independent review of local government finance to take account of this principle along with the need to support adequately local government services and local democratic accountability."

Keith Harding (Conservative, Mid Scotland and Fife)

In a public meeting with Tommy Sheridan some weeks ago, I actually agreed with him—and jokingly said that his political career was over. I can assure him that that will not happen again today.

The Scottish Conservatives stand for and believe in an enterprise economy, which is the best way to ensure the prosperity of our people and high-quality public services. We are determined to ensure that people and businesses in Scotland are not penalised by having to pay higher taxes than those elsewhere in the United Kingdom. Like the tartan tax, the Scottish service tax would make Scots pay a higher rate of income tax than people residing in other parts of the United Kingdom.

I will show how damaging the proposed tax could be. The tartan tax would make the average Scottish family around £250 a year worse off; the proposal before us today would be even worse for many families. Unlike the maximum rise of 3p in the basic rate of income tax, which applies to the tartan tax, there is no ceiling for the Scottish service tax. Mr Sheridan makes much of the 800,000 people who would be exempt, but nearly 400,000 people are already exempt from council tax, and almost a further 200,000 people receive partial council tax benefit.

The service tax proposal would destroy the local basis for funding councils. It is anti-democratic and would reduce accountability. By allowing the Scottish Executive to determine taxes for local services, councils would have no autonomy—apart from determining spending priorities. Much of their autonomy has already been eroded by ring-fencing and hypothecation of grant settlements by the Scottish Executive. That runs contrary to the principle of subsidiarity and reduces the already limited accountability of local government.

Mr Sheridan's proposal would mean, in effect, that people would pay income tax twice: a Scotland-wide levy according to income and a UK-wide income tax levy. Local authorities already get approximately 80 per cent of their funding from national sources via the Exchequer as a block grant from the Scottish Executive. Indeed, 50 per cent of their expenditure is accounted for by the revenue support grant that is paid for from Government taxes, the most important of which is income tax.

The SSP's proposal discusses only the effect of its tax in relation to council tax. It takes no account of the other progressive taxes that people pay that contribute to local government services. The argument about the proportion of income paid in council tax by households in different income deciles is spurious as it takes no account of the total contribution from gross income to council services.

Tommy Sheridan (SSP, Glasgow)

Will Mr Harding tell us what the other progressive taxes are?

Keith Harding (Conservative, Mid Scotland and Fife)

I am sure that Mr Sheridan is as well aware of them as I am so I will not waste time on that point. I have only five minutes in which to speak.

People would move to avoid the tax. The introduction of a Scottish service tax would have serious adverse disincentive effects on the Scottish economy as compared to the rest of the UK. An exodus of those who were required to pay much higher rates of tax would reduce the tax take and place the burden firmly on middle and low-income earners, making the tax regressive.

The UK is a complete monetary union. People have the power to order their tax affairs to suit their needs without penalty and it would be impossible to force people to stay in Scotland to pay additional Scottish taxes for local services that were being paid for by a different system elsewhere in the UK. In Scotland, the average levy paid by a household for services, through the council tax, is well above the rest of the UK.

Even in London, the levy is much lower, when we compare bands of charges. That is not a serious problem because the tax is levied on a stationary asset: housing. If the tax is levied on something that is mobile—for example, people—taxpayers will vote with their feet, as they already do in the United States of America, where state Governments are forced to avoid setting taxes too far out of line with their neighbours.

Once variation is allowed across the tax bands, the difference can be immense—much greater than house price changes—and there is an obvious incentive for relocation. The variations according to council tax band are also substantial, but houses are not mobile and the higher levels of council tax in Scotland are incorporated in the lower market price of the housing.

The proposal is ill considered, as is Mr Sheridan's proposal for a minimum wage of £8 an hour. The Scottish service tax would make local services reliant on an inefficient tax base, which would create distortion and produce poverty and unemployment traps for those on benefits—precisely the opposite effect of what the chancellor claims he is aiming for. It would also seriously distort the savings industry and penalise the Scottish financial sector and capital markets.

I cannot support the proposal. If Mr Sheridan is serious about implementing his measures, he should look to countries such as Cuba and North Korea, where his proposal would be received in a more favourable light—but it is not for Scotland.

Des McNulty (Labour, Clydebank and Milngavie)

I was interested to hear Andrew Wilson commending Mr Sheridan. To an extent, I agree with Andrew Wilson: if a proposal is brought before the Parliament, it should be considered seriously.

Tommy Sheridan has put forward a detailed set of proposals and has provided additional information to go along with them. It is interesting that Andrew Wilson is prepared to endorse some of the principles behind Tommy's proposal whereas, in practice, he has refused, week after week, to provide us with the same level of detail of information on the economic proposals of the SNP. If he accepts the logic of his own position, I would welcome a debate on the SNP's economic and tax proposals in more detail than he has been prepared to give us up to now.

I accept that Tommy Sheridan's proposal should be considered seriously. There are a number of different strands within it. There is a commitment to social redistribution, which seems to be the focus of what Tommy is seeking to achieve, and the proposal argues that there should be significantly increased investment in social infrastructure. I recognise those as the premises from which Tommy is starting out. There are, however, aspects of the proposal that go against those principles, on which I would like to focus.

First, it is clear that the implementation of this proposal would result in a much more intense process of means-testing right across the system. The basic premise of the Scottish service tax is much more interventionist in making assessments, and would set wage limits that would be part of the tax banding system. The report on which this proposal is based makes certain assumptions about the distribution of unearned income relative to the UK as a whole, about income banding and about the Treasury's behaviour. Those issues are unknowns and are not justifiable. Any implementation of the proposal that Tommy Sheridan has suggested would be dependent on a fusion of the welfare and taxation systems, creating major administrative burdens.

Andrew Wilson (Scottish National Party, Central Scotland)

Will Des McNulty give way?

Des McNulty (Labour, Clydebank and Milngavie)

Sorry, I would like to outline the three issues that I have identified as problems. I shall take an intervention afterwards.

The second issue that stands out clearly is the proposed reduction of local accountability. The fact that the tax would be paid to the Parliament, which would decide the bases for its redistribution, removes from local authorities even that vestige of financial control over tax levels in their local areas that currently exists. In the context of a revision of the council tax system, or whatever system of finance is in operation in Scotland, I would like to allow local authorities greater control over the gathering of taxes. Tommy Sheridan's proposal would involve a reduction of local accountability for taxation.

Thirdly, the proposal would involve the removal of the explicit property tax element. That idea was introduced by the Conservatives, when they brought in the poll tax. Obviously, Tommy wants to achieve a very different purpose from the poll tax.

Andrew Wilson (Scottish National Party, Central Scotland)

Does Des McNulty believe that this proposal is fairer or less fair than the poll tax?

Des McNulty (Labour, Clydebank and Milngavie)

I assume that Tommy Sheridan's intention is to take a broadly redistributive approach, whereas the intention of the poll tax was to move the tax burden on to poorer people. The real issue is whether the Scottish service tax would achieve the desired redistribution.

David Davidson (Conservative, North East Scotland)

Would Mr McNulty not agree that the Labour party's policy of indirect taxation has an greater effect on the low paid than on others, and that the Chancellor of the Exchequer has moved way beyond where the Conservatives ever intended to go?

Des McNulty (Labour, Clydebank and Milngavie)

Frankly, that is rubbish. The move to a single system of gathering taxation, as is proposed, and the removal of the property tax element represent a distinct shift in the balance of taxation. I believe in the retention of property tax as an important element in the overall tax package; as such, we should seek to maintain it.

Patricia Ferguson (Labour, Glasgow Maryhill)

We now move into the open part of the debate. As time for the debate is limited, I ask members to adhere as much as they can to the four-minute limit for speeches. I apologise in advance to those members whom I will be unable to call.

Sandra White (Scottish National Party, Glasgow)

I congratulate Tommy Sheridan for securing this important debate, which I welcome, and on the hard work that he has obviously put into the debate.

The SNP has always advocated fair and progressive taxation. We have also consistently argued for a full review of local government finance, as everyone who has read our leaflets will know. I hope that they support that review, which is also supported by COSLA and by local government.

While I admire Tommy Sheridan's stance—I believe that I know where he is coming from—my party and I have some concerns about his proposals. I will not scaremonger in the same way as Labour and Tory speakers have done, but I have two concerns that I ask him to address later.

First, the proposal to raise moneys for local services through a business rate puts a heavy burden on local businesses and on small businesses in particular. In my view, there are already enough obstacles facing local businesses and a business rate would be one obstacle too many. We are trying to encourage local businesses, but such a tax would discourage and hinder them.

Other speakers, including Andrew Wilson, have mentioned my second important point, which is that the proposals sever the link between the public and local councils and do not provide for accountability. That worries me, as does the embracing of a more centralised form of government, which is non-democratic. I ask Tommy Sheridan to address that point in his closing speech. Local councils must be democratically accountable to local people if they are delivering local services.

The way in which local government finance is delivered goes to the very heart of what people expect from local government, and it needs desperately to be reviewed. I think that we all agree on that point. People want and expect good services, but they need to know exactly what services they are paying for and exactly what they will receive from those services.

Tommy Sheridan's proposals are commendable and pave the way for future debate on local government finance. I ask him to support, if he is able to, the proposal in the SNP amendment to have a full review of local government finance, which is necessary to return local government to the people of Scotland.

Kate Maclean (Labour, Dundee West)

I read "Time for redistribution of income: the case for a Scottish Service Tax" last night in my hotel room, which is a bit of a sad admission to make. The document is worthy of further examination.

Today's debate is about how we fund local services, on which I hope members will concentrate. No one in this chamber should disagree with the first three points made in the document, which are:

"This research report identifies the need for higher public investment . . .

The current system of local government finance is unable to deliver"

services effectively, and

"The devolved powers for Scotland offer new opportunities for addressing these concerns innovatively."

Before reorganisation, there was a difference of approximately 10 per cent between the highest and lowest council taxes in Scotland, based on local spending decisions. That difference is now around 130 per cent, based on nothing more than a seriously flawed distribution formula.

We must have a serious debate in this chamber, probably preceded by work in committees, on what we want from local government, how much that should cost realistically and how we will pay for those services. Although it is not the position of the Executive, it is well known that I support an independent review of the way in which local government services are financed. I have no doubt that a local income tax would be examined in that review, along with other options.

Andrew Wilson (Scottish National Party, Central Scotland)

Given what she has just said, will Kate MacLean be voting for our amendment, which says just that?

Kate Maclean (Labour, Dundee West)

I will address Andrew Wilson's question later.

The review would include an examination of the method of collection and distribution of non-domestic rates. However, I do not support the system that Tommy Sheridan suggested, whereby collection and distribution of non-domestic rates would make up the difference between central grant and expenditure, because I believe that that would detract from local accountability, which ought to be increased rather than diminished.

My concerns are not addressed either by the motion or by the two amendments. Nicol Stephen's amendment says

"that these matters fall within the remit of the Local Government Committee."

If that can be interpreted as suggesting that the matter be remitted to the Local Government Committee, I will support Nicol Stephen's amendment, as the committees lend themselves well to that type of examination, even though I am tempted to support Andrew Wilson's amendment.

Donald Gorrie (Liberal Democrat, Central Scotland)

This debate shows the merits of proportional representation, which has brought into the Parliament representatives of two smaller parties. Whatever one may think of their ideas, their presence enriches the whole of Scottish democratic life. It is an encouragement for those of us who would like proportional representation in local government, which could greatly benefit from the same richness and diversity.

I welcome the fact that Tommy Sheridan has put forward a constructive idea. The Liberal Democrats and other parties sometimes find considerable difficulty with the irresponsible populist agitating of the Scottish Socialist party. All parties have their defects, and the Scottish Socialist party is not without them. On this occasion, however, Tommy Sheridan has produced a constructive idea, which is welcome, as is the motion that we shall hear Robin Harper propose later this morning.

I regret the content of the Executive amendment and the tone of the minister's speech, which seemed to me redolent of the old politics that we were supposed to be getting away from. Mr Sheridan's motion does not suggest that we have to embrace his idea, but merely that it be put on the table with other ideas. I do not see why we should not accept it.

The service tax, as the minister said, has serious defects. It is a national tax and not a local one, and the redistribution is extreme. However, it at least produces interesting ideas, such as banding, and addresses the question of a progressive and redistributive tax. We must consider how we can achieve more redistribution than we do at the moment, without destroying the whole fabric of society, as the minister suggested that we might do. The current tax system is not progressive enough, and we should make local and national taxation more progressive. Along with my Liberal Democrat and SNP colleagues, I voted at Westminster against the 1p reduction in income tax, because that seemed to lead us in the wrong direction.

The issue is important and Tommy Sheridan's idea is welcome. For years, the Liberal Democrats have argued for a local income tax that is determined locally but collected through the national machinery. There are various ways of doing that and I am sure that other people can improve on our suggestions. That is an important way of producing a reasonably progressive tax and of giving more power to the local community. If the local community has a decent voting system, it can vote out people who raise or reduce the tax too much, and more tax will be in the hands of the local community. That is anathema to the centralisers in Government circles throughout the world, who have the power and want to keep it.

A local income tax is important, and the first stage towards getting it is to have an independent review of local government finance, which virtually all of us in this chamber, apart from a few ministers, are committed to. By hook or by crook we wish to get it. Before someone intervenes to ask how I will vote, it will depend on the order in which the motion and amendments are taken. However, I could not vote against any proposition that called for an independent review of local taxation, because that is a fundamental first stage. We must put all the ideas on the table, such as a local income tax, Tommy Sheridan's idea and any idea from any party, and we should sort this matter out. That is my message to the Executive.

Johann Lamont (Labour, Glasgow Pollok)

I am happy to be part of any debate that reasserts the importance of fair and progressive taxation and the importance of local government services. We all know that the many debates on what Scotland needs, generated as much by the Tories as by anyone else in the chamber, have acknowledged the efficiency and importance of public expenditure. Whether road building, railways, schools or health, we know that the most efficient way to deliver those services is to do so collectively, and we will all benefit from them.

One consequence of the poll tax debacle was that the understanding that the poll tax was unfair somehow collapsed into a view that tax was unfair. I am happy to be part of any debate that reasserts the importance of taxation as an enabler for our society, rather than something to be feared.

We have to look at what is being said in local government. There is a consensus across the country about local government finance issues, but I say to Tommy Sheridan that those views do not concentrate on the problems of the council tax formula. They concentrate far more on the level of local government resourcing and the ability of local government to determine its own priorities.

It is important that at some stage the Executive acknowledges the almost universal demand for a review of local government finance. I have said publicly that I am in favour of such a review, and I can assure members that, as a non-Executive member, I am beavering away doing everything I can to persuade the Executive of its importance.

Equally, the Local Government Committee has said that should a review not be granted, we will do everything in our power to ensure that such a review takes place in the committee. Tommy Sheridan's views on a service tax will play a part in any such review, and I have no problem with his service tax report coming to the Local Government Committee.

I have anxieties about a local income tax and the suggestion that it should be raised centrally and that distribution should be determined centrally. One of Tommy Sheridan's documents says:

"It will be efficiently collected centrally and distributed by the Scottish Parliament to each local authority according to need."

One of the strongest messages from local government discussions that we have had is the importance of covenant and partnership with local government. Too often in local government there is a feeling that it cannot be responsive to local needs, and that too often local needs are determined centrally. We also have to recognise the long-held view that local taxation should acknowledge the importance of taxing property. That is a complex area, and we cannot debate it fully here. We should be relaxed about what the Local Government Committee is allowed to look at in this area.

In such a debate I could not miss the opportunity to talk about Glasgow, because in Glasgow it is clear that the debate is not really about council tax; it is about what happens when council tax has to meet the shortfall in provision from central Government. Glasgow knows more than anywhere the problems of defining need, which is at the heart of our critique of Tommy Sheridan's position. I welcome the fact that the Government has begun to acknowledge the importance of deprivation factors. We know in Glasgow that there are disproportionate levels of poverty among our pensioners and those who have disabilities; disproportionate problems with drug addiction, not just for drug addicts but for their families; and consequences for service provision for young people being brought into care.

A report by Glasgow City Council has identified how Glasgow has not been treated fairly in the grant distribution system. I call on the Executive to look at that. Glasgow is sometimes presented as a huge black hole into which loads of money falls and somehow is inefficiently spent. The reality is that in Glasgow there is huge poverty, but it is among even greater wealth.

I call on the Executive to consider allowing the business tax that is generated in a community to remain there. That would mean that an extra £60 million could be used to address Glasgow's problems. I understand that there are difficulties because where communities are poor, business taxes are not generated, but I ask the Executive to examine that. Equally, I would like the Executive to target money for health and so on in other areas.

I join other members in welcoming the fact that any debate that generates greater understanding of the importance of local government is to be welcomed. Any debate on local government must have at its heart the importance of partnership and delivery of services to those who are most in need.

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

I am pleased to support the SNP motion, which calls for an independent review of local government finance. My clear impression is that if Labour members were to vote with their hearts and for what they believe in, they would vote for our amendment, but I suspect that that will not happen.

We are all engaged in the search for fairness. I agree with Johann Lamont that there is much unfairness in the current system for folk in Glasgow who are on low incomes. Would it not help, however, if a system of rebates was introduced in respect of water charges? There is no rebate on water charges for people on low incomes despite the fact that the Labour party has said that there should be one. They have had three years in power in which they could have introduced such a rebate, but they have done nothing about it.

Des McNulty (Labour, Clydebank and Milngavie)

Will Mr Ewing take an intervention?

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

Not yet.

People on low incomes in the Highlands must pay water charges that have increased by a staggering 43 per cent. Band D households will pay £300 in water charges because Labour thinks that that is a fair policy. I say that it is completely ridiculous. It is deeply resented and it is a source of great anger in the Highlands. The Executive will find that out during the coming months, as people realise how unfair the system is.

I was surprised that Mr Harding made no reference to the poll tax—perhaps that was because of natural shyness—or to the fact that Tories brought in the council tax. He would not take an intervention from me: I was going to ask him to explain why, when the Tories brought in the council tax, they decided that the regime in Scotland would be different from that in England. There are two banding structures—a house that is worth £60,000 in Scotland is in band E and a house worth the same in England is in band C.

Mr Harding admitted that council tax bills in Scotland are higher than in England, but he put forward the puzzling argument that that is perfectly acceptable. It is not acceptable. I thought that the Tories were the party of the union and the party that argued against unfair taxes on Scottish householders. It seems that Mr Harding thinks that it is perfectly in order for people in Scotland—some of whom vote, perhaps, for his party—to have higher bills that people in England.

Mr Harding mentioned the position in London. Parliament might be interested in some research that I have done on the council tax liability of a gentleman called Gordon Brown. The Chancellor of the Exchequer has a property in Great Smith Street in London that was valued at about £160,000—band G—in 1991. We do not know exactly what the flat is worth now, but it might be between £300,000 and £400,000; it is in one of the poshest parts of London's west end.

What is Mr Brown's council tax liability? His headline liability this year is £583. We understand, however, that he also has a property in Dunfermline, so he is able to nominate the Westminster flat as his second home. If he were to do that, as he is entitled to do, Gordon Brown's council tax this year would be £292.

Kate Maclean (Labour, Dundee West)

rose—

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

I will be happy to take any intervention, but I would prefer to take one from a minister who is prepared to argue whether Gordon Brown's council tax bill of £292 is fair.

Wendy Alexander (Labour, Paisley North)

Can we take it that Fergus Ewing endorses Westminster City Council's policies and their council tax bands? Council tax is related to the services that are provided, and given the choice, I would choose the services that are provided by Fife Council rather than those that are provided in Westminster.

Fergus Ewing (Scottish National Party, Inverness East, Nairn and Lochaber)

If that is the best the Wendy Alexander can do, she should try again. She has admitted that the council tax system is grossly unfair, but she supports it. Her Government will not even amend it for the low paid in Inverness, who are having to pay £300 this year for their water, with no rebate, when the Chancellor of the Exchequer will be paying about £8 less for his luxury flat in London. It is hardly surprising, because the worst piece of scaremongering in political history was Gordon Brown's prediction at the Scottish general election that a 1p difference in income tax would cost 250,000 jobs in Scotland, which was complete and utter nonsense.

I am pleased today to have been able to introduce the facts about Gordon Brown's council tax into this debate.

John McAllion (Labour, Dundee East)

I agreed with Fergus Ewing's statement "complete and utter nonsense"—it summed up his whole speech.

At decision time, Nicol Stephen's amendment will be taken first, and members do not need a crystal ball to suspect that it will be carried, and Tommy Sheridan's motion, in its pure form, will never be put to this Parliament. I will therefore begin by registering my support for some of the elements in that motion: the principle of progressive taxation; the on-going pursuit of a redistributive and progressive system of local taxation; and the suggestion that the Scottish service tax should be included in the review of the way in which we finance local government in Scotland. I share many criticisms that Tommy Sheridan and others have made about the present distribution of wealth. I like to think of myself as a socialist, but one does not have to be a socialist to share in many of those criticisms.

A new book called "What If?" was reviewed yesterday in the press. It contains 15 visions of change for Britain's inner cities and includes amongst its contributors Gordon Brown, so it must be taken seriously, even by Fergus Ewing. Another contributor is Will Hutton, who is the chief executive of the Industrial Society and a contributing editor to The Observer. He states that there is a gaping inequality of wealth and that inequality in our society is increasing. He argued that it makes a mockery of the claim, made by all parties in this Parliament, that we have a comprehensive system of education or a national health service that gives comprehensive health coverage to people on the basis of need. We cannot make that claim while such great inequalities exist in our society. Anyone who argues for the fiscal status quo is arguing for the continuation of inequalities in our society. I hope that nobody—other than the Tories, whom we expect to argue for that—will argue for that.

The council tax is part of that status quo. Representing half of Dundee, I would be in trouble if I spoke in defence of the council tax because it is in serious trouble. We, as the Parliament responsible for the council tax, must recognise that. Year on year, Dundee has been forced to reduce its level of spending on the services that it provides, yet at the same time it is forced to increase its council tax every year. Dundee now spends below the expenditure guidelines issued by the Scottish Executive for fear of the council tax rises it would cause if it reached the expenditure guidelines.

Dundee now has the highest council tax in Scotland, yet the city contains some of the poorest and most deprived communities that can be found anywhere in Scotland. If members consider the other concentrations of poor and deprived people in Scotland, in places such as Glasgow and West Dunbartonshire, they will see that they are in the same position as Dundee. They are having to cut spending on services and set the council tax higher every year.

Dorothy-Grace Elder (Independent, Glasgow)

rose—

John McAllion (Labour, Dundee East)

I have not got time to take interventions.

Fiscal flight has been mentioned. I am not concerned if the likes of Brian Souter leave Scotland; it might be a better place if that happened. However, council tax is causing fiscal flight in Dundee. People who have enough money can choose to live in Angus, Perth or north-east Fife, places where they pay a much lower council tax, and commute into Dundee to work and to use all the services that the city provides as a regional centre, which are paid for by Dundee's council tax payers. That is wrong and it must be changed. If we do not recognise that that is wrong and must be changed, there is something wrong with this Parliament.

Some members have said that this proposal is centralising. I am against centralising as well, but I did not hear many objections when the non-domestic rate was centralised. Nobody got on their feet to say that was wrong. We all want to defend the centralisation of the non-domestic rate without doing anything about the poor council tax payers. I want to see local taxes locally levied as well as locally collected and I criticise the Scottish service tax on those grounds. Nevertheless, it is one of the few practical attempts being made to address the inequalities in our society. For that reason it should be taken seriously.

George Reid (Scottish National Party, Mid Scotland and Fife)

We will now move to the wind-up speeches.

Trish Godman (Labour, West Renfrewshire)

Tommy Sheridan said that there were very few members in the chamber this morning. Please note that most of the members of the Local Government Committee are here.

The Labour amendment welcomes the Executive's commitment to keep under review the wider issues of local government finance. The Executive is refusing an independent review at this time, but we should acknowledge that Jack McConnell, Wendy Alexander and Frank McAveety are taking on board some of the concerns expressed by local authorities. For example, at the COSLA conference last week, Jack recognised the dissatisfaction with the way in which resources are allocated and distributed.

The system by which the Executive determines and distributes resources for local government must be modernised. The Executive should not dictate how that is done, but facilitate debate—Jack McConnell is beginning that process. Steps that have been taken after listening to local authorities include the proposals for three-year budget planning and the introduction of a programme by which the appropriate parliamentary committees will look at the budget for 2001-02. As the convener of the Local Government Committee, I am meeting the clerk today to plan how we will take evidence and report to the Finance Committee on that.

David Davidson (Conservative, North East Scotland)

Will the Local Government Committee be considering not just how money is delivered to local authorities but exactly what those authorities should be doing? Will it look at the overlap in various areas in Scotland that leads to additional bureaucracy and waste?

Trish Godman (Labour, West Renfrewshire)

We will look at everything that is relevant to local government finance and service delivery.

Like Johann Lamont, I have put on record my belief that we should have an independent review of local government finance—and when the two sisters turn up at the Executive's door saying that that is the way forward, evidently people tremble. The Local Government Committee is committed to a review of local government finance because of councils' outstanding concerns, including on the funding of pay increases—it is clear that efficiency cuts will not always cover pay awards. Tommy Sheridan mentioned the distribution of non-domestic rates, but I am concerned about councils that do not have a strong business base, so we should look again at redistribution. On hypothecation, ring fencing and special grants, officials have told the committee that, when they put in a bid, they do not know why they do or do not get the grant. I hope that ministers will address those issues.

The SNP amendment calls for an independent review of local government finance; the Executive does not want one at this time. However, I have said that the Local Government Committee will review finance—the committee is not a limb of the Executive.

Tommy Sheridan's motion asks the Local Government Committee to consider his proposals for a Scottish service tax. I cannot comment specifically on the proposals today but, as convener of the committee, I am sure that I speak for other committee members in saying that we will read his paper with due care and diligence and consider it alongside others when we begin our review. I reiterate that I am still of the view that there should be an independent review of local government finance. If that does not happen, the Local Government Committee will undertake a review and open it as widely as possible to all relevant issues, including Tommy's proposals. I have no problem with Tommy's request that we do that, but I have problems with the first part of his motion.

Bill Aitken (Conservative, Glasgow)

Tommy Sheridan began, quite properly, by highlighting the sparse attendance this morning. He went on to say that the council tax is deeply unpopular. I know from past experience that he was not exactly ecstatic about the poll tax. In that respect, he finds himself with a strange bedfellow, Benjamin Disraeli, who once memorably stated:

"The ability to tax and please is a gift not given to Man."

We should be examining the funding of local government under three headings. First, it should be fair; secondly, it should be practical; and, thirdly, it should be consistent with the sensible running of a mixed economy. Tommy Sheridan is coming forward with what are, basically, redistributive proposals; he is open about that. He feels that the existing system is not fair, as it is not related to ability to pay. I would argue strongly against that.

First, the council tax is related to the possession of property, which is usually indicative of the wealth of individuals.

Tommy Sheridan (SSP, Glasgow)

rose—

Bill Aitken (Conservative, Glasgow)

I ask the member to let me finish my point.

Secondly, the vast majority of the funding of local government comes from central taxation, which is related totally to the ability to pay.

Tommy Sheridan (SSP, Glasgow)

Does Bill Aitken think that the inhabitants of Balmoral Castle have a decent standard of wealth? If they do, can he comment on what their council tax was last year?

Bill Aitken (Conservative, Glasgow)

I am sure that, like me, Tommy Sheridan never asks a question to which he does not know the answer, so he will no doubt provide the figure when he is summing up. The existing system—although I concede fully that it is imperfect—is fair.

The second element is practicality. I remember attempting, some years ago, to persuade the Conservative party to hold an inquiry into whether the local income tax, much beloved by the Liberals, was the answer to the problem of local taxation. I was told that it was simply unworkable, despite the arguments about individual postcodes and so on. Perhaps that is a wider debate for another day, but practicality must be a key component of any method of funding local government.

Thirdly, the funding of local government must be consistent with the sensible running of a mixed economy. I am sorry to have to say that the SSP's proposals are completely flawed in that respect. The scheme that Tommy Sheridan is seeking to introduce would bring about his own version of the Highland clearances. People would not be willing to stay to pay high taxation when they could easily find a bolthole down south where they would pay much less. The knock-on effect of that would be that middle earners and, perhaps, those with below-average earnings would have to make good the shortfall.

Johann Lamont (Labour, Glasgow Pollok)

Does the member agree that people are choosing to move away from areas such as the one that he represents, the city of Glasgow? Would he support calls for metropolitan status for Glasgow, which would be acknowledged in a distribution formula, to prevent people choosing for financial considerations to move outside the city boundary while continuing to use services located within that boundary?

Bill Aitken (Conservative, Glasgow)

Naturally, I would say that people are fleeing Glasgow because of the effects of the policies that are being pursued by Johann Lamont's colleagues on Glasgow City Council. That, again, is an argument for another day.

I am running out of time, but I would like to make one or two further points.

George Reid (Scottish National Party, Mid Scotland and Fife)

Very briefly, please.

Bill Aitken (Conservative, Glasgow)

The SSP's proposals are redistributive, but they would have wider consequences, which have not been thought through. They are merely an extension of the thinking of Tommy Sheridan's mentor, Leon Trotsky—no doubt Tommy learned about Trotsky during his time at Stirling University, where he took a degree in economics. As someone who worked hard to finance Tommy's studies, I want my money back.

Kenneth Gibson (Scottish National Party, Glasgow)

From today's speeches, it is clear that there is virtual consensus in this chamber that a review of local government finance is imperative. On the Labour side, that consensus now extends to the Minister for Finance, who last week advised COSLA that, although the Executive would not carry out a review,

"The full resources of the Scottish Executive will be made available to the Local Government Committee if they decide to undertake a review of local government finance."

The SNP welcomes that.

Much of what has been said today relates to local government finance in general, rather than to the details of the proposals by the Scottish Socialist Party (Convener Tommy Sheridan). That is why we have chosen to amend the motion. We have concentrated on the substance of the concern, rather than supporting a proposal that is not yet fully worked out. We have not yet heard how the Scottish service tax would fit in with other demands from the Scottish Socialist Party (Convenor Tommy Sheridan), such as buying back council housing at market value so that tenants could live rent-free after 15 years' occupancy, the maximum income proposal, or the plan to allow the transfer of public sector discounts to the private sector. Those pledges cannot be sustained or paid for.

We are amending Tommy Sheridan's motion to make a serious point about the crisis in local government finance. To do otherwise would be to let the Executive off the hook. To allow the debate simply to be about populist notions that fall apart on scrutiny would be to let the people of Scotland down and to turn our back on local government, which is struggling under the weight of the coalition-created financial crisis.

The ideas that have been presented do not move the debate on; they have little weight and no substance. They would undermine democratic financial accountability but barely increase the resources that were available to local government. If one considers the impact of Tommy's proposals relative to the top rate of tax on earned and unearned income under Dennis Healey's chancellorship, Tommy begins to look very new Labour.

Mr Sheridan's plans do not hold the Executive to account and they do not aid the cause of local government—they simply allow the Executive to walk away. Let us have a debate on the future of local government and consider the options, but let us not be sidelined into discussing ideas that have been worked out only superficially.

Tommy's critique of the regressive and unsustainable council tax set the scene very well, but the proposal—which Johann Lamont seemed to support—that all non-domestic rates should be retained by the local authority that raises them causes me concern about the Scottish service tax. The proposals would inject only another £100 million into local government; Glasgow would indeed gain £64 million, but that would leave only £36 million for the rest of Scotland's councils. Some councils would suffer greatly. I would like to hear how Tommy would square that circle.

As the minister pointed out, the SNP supports a local income tax, which would ensure local accountability and a sustainable yield; the Government should examine that proposal in great depth. Andrew Wilson described a number of cases in which the Scottish service tax would make life more difficult for families on low incomes. I hope that Tommy will address those issues when he sums up.

I was curious about the support given by Des McNulty, who is no longer in the chamber, for a property tax. Property taxes are not necessarily progressive, which is one reason why we believe in a local income tax. As John McAllion pointed out, inequality is rising under new Labour. That must be addressed sooner rather than later.

In conclusion, we are pleased that Mr Sheridan has tried to be constructive in this debate. As a disciple of Leon Trotsky—a poster of Trotsky was always on display in his council office and even the family cat is named after him—Mr Sheridan may have endorsed the cult of personality, but at least he has not called today for the dictatorship of the proletariat, forced collectivisation of agriculture, liquidation of religion, the deportation and mass murder of political opponents, the surrender of our most productive land to the forces of German imperialism, or even the enslavement of the working class through, as Trotsky demanded,

"coercive forms of economic organisation".

We should be grateful for small mercies. Members should support Andrew Wilson's amendment.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I am sure that this will be the first of many debates on reform of local taxation. I have no doubt that local taxation will be reformed over time, but a new central tax is not the solution.

Andrew Wilson says that higher taxes are no threat, as if they have no economic consequences. However, minor changes in taxation have minor consequences, and major changes can have major consequences and can do real damage to the economy. I want to press him again on his position. These are questions of judgment, so I ask the SNP what its judgment is. What increase in taxation would the SNP criticise? Does it support the increase that Tommy Sheridan proposes? Does it have any concern about the impact that Tommy Sheridan's proposals would have on the Scottish economy? If it believes that there should be a different increase, what is that?

Andrew Wilson (Scottish National Party, Central Scotland)

If the minister examines our manifesto, he will see clearly what we propose, within the powers of this Parliament. We propose a freeze in the basic rate of income tax. The Liberal Democrats joined a coalition with a party that went through with a right-wing cut in income tax. Why do the Liberal Democrats say one thing here and another in Westminster?

Nicol Stephen (Liberal Democrat, Aberdeen South)

We do not say one thing here and another in Westminster. We do not have powers over the UK Government's spending plans. As Andrew Wilson knows, in London, the Liberal Democrats voted with the SNP on the cut in the rate of income tax.

Let us be clear: under Tommy Sheridan's proposals, it is not the super-rich who will be hit. As Andrew Wilson pointed out, there are serious consequences for individuals on average income. A couple on average income would be hit significantly.

I give Tommy Sheridan credit where credit is due. On this issue, he is putting his head above the parapet and saying what he believes in; I am doing the same in my response. Middle-income earners should not be hit in this way by the Tommy Sheridan socialist tax. However, the SNP has been far from clear in its response. I believe in fair and progressive taxation but I also believe in local democracy with local accountability, which the proposed tax would remove.

I mentioned economic consequences and I said that it would be wrong to exaggerate the consequences of Tommy Sheridan's tax. However, I repeat that there would be consequences. I did not suggest that the whole fabric of society in Scotland would be destroyed; I said that the consequences of taxation at that level, on that scale, would be less inward investment, a reappraisal by existing companies in Scotland of whether to expand and an impact on the start-up and development of new businesses.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Does the minister think that Tommy Sheridan has forgotten what local taxation is for? It is for local services. Far be it from me to protect Brian Souter, as I am sure he does not need it, but does the minister not think that for Tommy's tax proposal to hit Tommy Souter as—

Tommy Sheridan (SSP, Glasgow)

Brian.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I beg Tommy's pardon—Brian Souter. Does the minister not think that to hit Brian Souter with a tax of more than £80,000 for emptying his garbage is a bit too steep even for him?

George Reid (Scottish National Party, Mid Scotland and Fife)

To allow Tommy Sheridan a reasonable run-up, I would be grateful if Nicol Stephen would keep his remarks fairly tight.

Nicol Stephen (Liberal Democrat, Aberdeen South)

I thank Mike Rumbles for that. I agree in broad terms with every word that he has said. Modern politics is about new ideas from new parties. I welcome Tommy Sheridan's contribution, although I am not sure how new and fresh his ideas feel when he has been compared with Thatcher, new Labour and Leon Trotsky. Modern politics is all about strong arguments and beliefs, but it is not about accepting old-style centralism and an old-style approach to taxation. It is about recognising that redistributing and reducing revenue is no good to anyone. That is the danger in all this. We are not just talking about a penny increase in taxation; we are not just talking about hitting the very rich. The proposals would hit middle and low-income earners hard.

In short, we welcome Tommy's initiative and his contribution, but sadly his proposals are not practical, realistic or deliverable. They are centralising, they will punish middle-income earners and they will have economic consequences. The issues that the motion highlights should be considered further, but the right place for that is in the Local Government Committee. Clearly, that is not my decision; it is a decision for that committee and for the Parliament. The Scottish Executive is not proceeding with a review at this time, but Jack McConnell has not ruled out such a review altogether.

George Reid (Scottish National Party, Mid Scotland and Fife)

Under the business motion, the knife falls at 11 o'clock precisely. I have no discretion to allow overruns, so it would be helpful if Mr Sheridan would keep his eye on the clock.

Tommy Sheridan (SSP, Glasgow)

I start with a quick question to Nicol Stephen: did he read the document?

Nicol Stephen (Liberal Democrat, Aberdeen South)

I read the document. I spent a significant amount of time, yesterday and this morning, reading the document.

Tommy Sheridan (SSP, Glasgow)

May I encourage him to read it again? Johann Lamont quoted from the document in relation to the distribution formula that we envisage for centralised collection and localised distribution. Johann may or may not agree with that formula, but the minister said that there was nothing in the document about distribution. I ask him to reread the document.

The minister talks about the practicality of the proposals. In fact, what we have had today—probably for the first time—is a concrete alternative to Executive policy. I was asked what we would do in relation to local government if we were in power, and I was asked how much more money we would be able to raise. We have said that we would implement a Scottish service tax, that we would tax the wealthy and that we would generate at least £100 million more on current incomes. As average incomes rise, the amount raised through the Scottish service tax rises accordingly.

The Executive has come up with no reason to oppose that set of proposals other than to say that it does not want to tax people too much. Of course, the people that the Executive is talking about are not the low earners who were specifically mentioned by Nicol Stephen. No low earner would be disadvantaged by the Scottish service tax. Anyone who is on an income less than £15,000 a year would automatically gain under the Scottish service tax.

Des McNulty talked about increased means-testing, but the Scottish service tax would undermine means-testing. We would introduce automatic exemption. There would be no more embarrassment, no more filling-in of rebate forms, and—for our pensioners—no more jumping through two or three hoops to get council tax rebates. If a person has an income of less than £10,000 a year, he or she is automatically exempted.

I do not know whether this example will accord with the average earnings that Nicol Stephen talks about, but in an average band D property in my city of Glasgow, an employee on £22,500 with a partner on £17,500—who are currently paying £1,094 in council tax—would pay, under the Scottish service tax, £1,024. Even at that level of income, that couple would be saving £70 a year under the Scottish service tax.

The problem may be that the Executive has misread the document. I was speaking to some Labour members who quoted figures to me. They seemed to have combined people's incomes, looked at the table and found a figure that related to the combined income, forgetting of course that the Scottish service tax is an individual tax. That is why the local government review is welcome. I am sure that the guarantee that Trish Godman gave is sincere and that the committee will look at these proposals in more detail and accord them the respect that they deserve.

However, one thing is correct—perhaps I should be accused of being a moderate. Members will remember Mr Healey, who used to be considered to be on the right wing of the Labour party. He once famously said that he would squeeze the rich "until the pips squeak". The 1974 to 1979 Labour Government had a marginal rate of top tax at some 93 per cent. I am asking for a marginal rate of top tax at 55 per cent. Perhaps I am getting moderate in my old age.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

I am loth to praise the Conservatives, but I will do so at this point. Does Mr Sheridan accept that, when they reduced those horrendous levels of Labour taxation, the tax take increased?

Tommy Sheridan (SSP, Glasgow)

Marginal rate taxation has to be effective. I am arguing that the marginal rate of taxation that we would introduce would be effective. If, as has been argued, the Scottish service tax meant that there would be a massive flight from Scotland of multimillionaires and politicians such as Bill Aitken, perhaps people would vote for it—perhaps that would be something positive.

On the property element of taxation, I asked about Balmoral Castle. As Bill suspected, I know the answer. Balmoral Castle's council tax last year was £1,436. That bears no relation to income or wealth. The council tax, as a form of local taxation, is no longer sustainable.

Johann Lamont talked about Glasgow. Glasgow would benefit more than any other city in Scotland from the introduction of the Scottish service tax, which would increase the disposable income of literally hundreds of thousands of pensioners, low-paid workers, students and others who are caught up in the council tax nightmare.

The argument against the Scottish service tax that has been put by Nicol Stephen is a very poor one—I thought that it was going to include blame for the bad weather in Scotland. The Scottish service tax is an excellent start in the review of local taxation. Yes, there are things that can be ironed out and improved, but the Scottish service tax is a marked improvement on the council tax. It is a redistributive and progressive tax. If members believe in the redistribution of income and wealth, they are duty-bound to support the motion on the Scottish service tax.

Housing Energy Efficiency

George Reid (Scottish National Party, Mid Scotland and Fife)

The next item of business is a Scottish Green party debate on motion S1M-707, in the name of Robin Harper, on housing energy efficiency, and an amendment to that motion. I call Robin Harper to speak to and move the motion. You have 10 minutes, Mr Harper.

Robin Harper (Green, Lothians)

As winter draws to a close, it is timely for us to debate a problem that will have cost the national health service millions of pounds over the past few months. During that time, it will also have cost lives.

Let us be clear about the reality. Scotland has the worst housing conditions in northern Europe. A quarter of our homes are damp or have condensation. The average energy rating of a Scottish home is only four out of 10 on the national home energy rating scheme. Some 362,000 children and 119,000 pensioners live in houses that suffer from damp or condensation. That poor housing costs us a fortune; £100 million is spent by the NHS in Scotland each year to treat the victims of cold, damp housing. Every winter, emergency admissions of people suffering from respiratory diseases increase dramatically. Ministers claim that the winter bulge is caused by flu epidemics, but NHS figures show that the rise occurs even when flu is excluded from the figures. Poor health is not the only result. The excess winter death rate in Scotland is twice as high as in Scandinavian countries, which are colder than Scotland, and Canada; it is higher even than in Siberia. Recent press reports show that the death rate at the end of the 1990s is rising again; again, that is caused not by flu alone. Poor energy efficiency is a life-and-death issue.

Age Concern says that our pensioners cannot afford to wait for a rolling plan that now has no set date. In the partnership agreement, the Labour party said that the date would be 2007, but that seems to have disappeared.

Poor housing is bad for health, and it kills; it is also bad for the environment. Our poor housing stock leads us to waste precious fuel and to pump out extra pollution. A proper programme of home improvement could cut carbon dioxide emissions dramatically, by up to 9 million tonnes a year. Given the Government's admission of defeat in getting to grips with transport emissions—it refuses to set CO2 reduction targets for transport—it will need all the more help from action in other sectors.

The scale of fuel poverty makes a mockery of social inclusion. A massive 506,000 households need to spend more than 10 per cent of their income on heating and hot water alone. If other fuel uses are taken into account, the figure is 738,000. Fuel poverty takes money from the pockets of pensioners and children, money that could otherwise be spent on better food or clothing, and in local shops or on local services.

We have a massive problem in Scotland, but also a massive opportunity. Better housing means better health and a better environment; it would also boost local economies. The Executive understands that, but current Government initiatives, although they are a start, are inadequate. That is why I cannot accept the Executive's amendment, which wipes out, from my motion, the drawing up of new guidelines for efficient use of energy in homes; the provision of a minimum level of heating in properties; the appointment of a domestic energy efficiency co-ordinator in every local area; the identification of new fuel poverty and carbon dioxide reduction targets; and the establishment of a domestic fuel poverty advisory group.

I am pleased that the Executive has accepted, in its amendment, that home energy profiles should be available to house buyers and sellers, but that is not all that it has done. It invites us to commend a scheme that is clearly not working and is giving much concern to organisations such as Friends of the Earth, Energy Action Scotland and Age Concern—indeed practically everyone involved in reviewing the situation. The Executive cannot seriously ask us to vote for an amendment that wants us simply to commend a good idea.

Although winter fuel allowances for pensioners are a welcome attempt to address the poverty of those who live in poor housing, the housing stock remains so poor that most of that £100—soon to be £150—will go on heating the air around the houses, rather than on the houses themselves. Some pigeons roosting in the eaves have greater comfort levels than our pensioners. Furthermore, the winter fuel allowance does nothing for families with young children, especially lone parents who also spend long days in cold homes; and it does very little if—as The Sunday Times reported this weekend—it does not arrive until some time in spring, possibly posthumously in some cases.

The warm deal programme is the Government's flagship initiative for tackling fuel poverty. However, although it is targeted on the poor, it is poorly targeted. Furthermore, it is under-resourced: its maximum grant is too little to tackle the problem. A report from Scottish Homes, which the Executive has so far declined to publish, shows that at best the warm deal can reach only one sixth of the families that suffer from fuel poverty.

What could be done? We are missing a huge opportunity to tackle this blight on Scotland. In its 1999 election manifesto, the Scottish Labour party pledged to eradicate fuel poverty by 2007; however, that pledge disappeared from the coalition agreement. Although a huge amount of money has been spent on repairs and improvement of Scottish housing, it has not been properly co-ordinated and directed. That must change.

The basic housing standard for Scotland, known as the tolerable standard, is a remnant of the 19th century. The first housing bill for 12 years presents an opportunity for change. However, last year's housing green paper—the first for a generation—made very little of tackling fuel poverty.

I want to propose a range of policies that could be easily implemented to ensure that the ambitious but achievable target of ending fuel poverty is met. The housing bill, which is to be published this summer, must include measures on fuel poverty, and I will mention two examples. First, the sole statutory standard—the tolerable standard—that was introduced in the 1960s should include a measure of energy efficiency. That is a simple thing to ask for. Most people would find it astonishing that the basic standard does not mention the biggest problem in Scottish housing. The then Scottish Office launched its review of the tolerable standard two years ago, since when there has been silence.

Secondly, the role of Scottish Homes is being expanded to regulate both housing associations and council housing departments. The agency could have a new role in regulating the private rented sector, where conditions are worst. The regulation could be undertaken through local authorities, with Scottish Homes setting out standards and model practice. We already spend more than £200 million in Scotland in housing benefit payments to private landlords, and it is about time that we were able to guarantee that tenants were at least living in dry, warm conditions.

However, I do not want to leave the impression that because we are a legislature, all measures must be by law. If it wished, the Scottish Executive could introduce many measures tomorrow that would not involve opening the statute book, which is the issue addressed by my motion. First, I propose a new home energy efficiency champion for Scotland, who would act as a linchpin between the 32 local authorities, which should have overall control over energy efficiency in their areas, and the departments in Whitehall and Europe that also influence energy policy. The new post would be charged with co-ordinating the countless different energy initiatives, to ensure that they were all pulling in the same direction.

Secondly, I want local authorities to be placed at the heart of local energy efficiency work. Although they already have that role through the Home Energy Conservation Act 1995—which, incidentally, was a Green party initiative even before we had parliamentary representation here—they have few powers to make it real.

Thirdly, if it wanted to, the Executive could change the tolerable standard guidance tomorrow. At the moment, a house will pass the tolerable standard specification for adequate heating if there is an electric plug point in the room. The guidance could be changed to make it clear that a plug point is not enough and to reflect the need for heating provision to be adequate and affordable.

Fourthly, although regulation of the mortgage industry is a reserved area, the law governing house purchase is devolved. I would like energy ratings to become a compulsory part of the standard survey that is done when a house is sold. The Executive has discussed the introduction of a seller's survey to the Scottish housing market. It would be easy to introduce energy ratings as part of that. I am glad to hear that the Executive is at least conceding that point.

Much of what I have said is about making better use of the resources that we have. Between them, landlords and owner-occupiers spend more than £3 billion a year on repairs and improvements to Scottish homes. However, that money is not always spent in ways that provide the maximum long-term benefits to the community, the environment and the nation's health.

Plans are afoot to improve Scotland's housing stock. It is vital that the billions of pounds are invested wisely. All local authority housing plans and new housing partnership transfer plans should be subject to health impact assessments. In England, an idea is being permitted to go ahead, I believe in Cornwall, whereby doctors can prescribe insulation on the national health service.

We need to measure exactly what will be contributed to better homes, better health and a greener future for Scotland. What I have said only scratches the surface of what is possible. Our homes have to last 60 years or more. What we decide today will have a profound impact on the decisions that our grandchildren face.

We like to talk about joined-up thinking in Scotland. Let us move now to joined-up doing. I urge every member to support the motion and to become at one swoop an environmentalist, a health activist and an anti-poverty crusader.

I move,

That the Parliament calls upon the Scottish Executive to draw up and issue new guidelines to improve housing energy efficiency in both the public and private rented sectors and in the privately owned sector which include requirements that (a) at point of sale owners are entitled, as part of the Executive's proposed "Seller's Survey", to have access to a home energy profile based on National Home Energy Rating (NHER) specifications, (b) NHER energy audits are carried out on change of occupation in both the public and private rented sectors and (c) the guidance on the Tolerable Standard is amended to include a minimum level of provision for affordable heating within a property; commends local authorities on innovative initiatives such as the Edinburgh Rewarm project and asks the Executive to revise its Home Energy Conservation Act (HECA) 1995 guidance to require local authorities to appoint a dedicated HECA officer to co-ordinate all domestic energy initiatives in each locality, and urges the Executive to acknowledge its responsibilities under Climate Change Protocols and its own commitment to end fuel poverty by 2007 by identifying new targets and funds required to meet these targets and by setting up a fuel poverty advisory group, chaired by a newly appointed home energy efficiency champion, to prepare recommendations on the elimination of fuel poverty by 2007 and co-ordinate policy and funding in the domestic sector.

Frank McAveety (Labour, Glasgow Shettleston)

I thank Robin Harper for his speech. I hope that what I say will meet some of the aspirations that he outlined in his closing comments.

The Executive is clearly committed to improving home energy efficiency and to tackling fuel poverty. As Robin Harper indicated, one of our key aims is to use the warm deal and the healthy homes initiative to achieve that.

I want to outline the measures that the Executive is undertaking, to give a fuller picture than Robin Harper gave. I also want to connect those measures to the wider housing initiatives in which we are engaging in the forthcoming period.

I stress the fact that the warm deal is the largest home insulation scheme ever in Scotland. It provides much-needed help for pensioners and other vulnerable households. Under the previous Conservative Administration, the budget for home energy efficiency in Scotland was about £5 million per year. It is important to recognise that the situation has changed substantially since the introduction of the new Scottish Executive.

The warm deal provides grants of up to £500 for loft insulation, cavity fill and tank and pipe insulation and energy advice to help families make the best use of their budgets. The previous Administration felt that the noble sum of £170 was enough.

The programme for government commits the Executive to providing 100,000 warm deal grants during this Parliament. We have already exceeded the target for this year of 25,000—31,000 houses have benefited from the grants. I am convinced that we will more than meet our target during the next three and a half years.

We are backing the warm deal with real increases in expenditure.

Fiona Hyslop (Scottish National Party, Lothians)

Will the minister give way?

Frank McAveety (Labour, Glasgow Shettleston)

I will conclude this point and then let Fiona in.

The budget for the year now ending is £10.25 million and will increase to £13 million next year and £14.5 million the year after that. That is a budget of almost £40 million over three years. That key commitment is far more substantial than any previous commitment.

The key difference with the warm deal in Scotland is that it is connected to the social inclusion agenda, allowing us to find employment opportunities for young people on the new deal. A total of 400 places are now available each year for young people taking part in the new deal. We hope that those people will then move into full-time employment. Much of the record indicates that that is the case.

The warm deal is an attempt to deal with fuel poverty. The 1996 figures show that more than half a million Scottish households spend 10 per cent or more of their income on keeping warm. Where I agree with Robin Harper—and presumably with Fiona Hyslop—is that that is a challenge to each and every one of us.

Fiona Hyslop (Scottish National Party, Lothians)

I think that Robin Harper would take this position as well: the Scottish National party welcomes the warm deal. The issue is this: do we acknowledge that the problem with the warm deal is basically one of insulation? It is not just about tackling dampness. There is no provision, for example, to have central heating systems that would really start to tackle fuel poverty in the way that we want. Will the minister please acknowledge that this is a problem, and review the operations? We are not getting what we could out of the warm deal.

Frank McAveety (Labour, Glasgow Shettleston)

I said that the various strategies that we are engaged in complement each other. The warm deal is part of that. Within the warm deal, we identify three major reasons for fuel poverty: poor energy efficiency, low household income and fuel prices. The general condition of Scottish housing stock could be added to those reasons.

A number of measures that go over and above the warm deal tackle the problem. That is why Wendy Alexander spent three hours yesterday explaining to the Social Inclusion, Housing and Voluntary Sector Committee the Executive's aspirations for the injection of new money from private investment into our housing stock, above and beyond the new housing partnership investment. Without that step change in investment, many of the objectives that people in Scotland are concerned about will not be delivered.

Energy Action Scotland's report, "Scottish Fuel Poverty Update 2000", showed the challenge that we face. I am about to quote from it because reference has been made to a number of pressure groups. Pressure groups will ask for much more than the Government can sometimes deliver, but the report says that

"some dwellings cannot be made energy efficient, because of their construction, without the expenditure of unrealistic sums of money."

We want to understand how that interacts with wider Government initiatives to tackle household income. Without dwelling on the recent past, a number of the major changes to benefits, including the working families tax credit, are geared towards tackling the issues surrounding poverty households in Scotland and in the UK as a whole.

Last week, several commentators indicated that Mr Brown's budget was clearly targeted to address the needs of poor families. The commitment to the winter fuel allowance is 15 times the figure left to us by the previous Conservative Government.

Several major issues were raised by Robin Harper, about how we connect the warm deal.

Margaret Ewing (Scottish National Party, Moray)

Will the minister give way?

Frank McAveety (Labour, Glasgow Shettleston)

I am sorry, but I will not take an intervention at the moment.

The healthy homes initiatives and increases in benefit for low-income households represent substantial help for fuel-poor households. We are listening to many of the pressure groups in Scotland, to address those issues over the forthcoming period.

Although the improvement and repairs grant system is one way in which we can do something substantial, the forthcoming housing bill will reform the grant system. For the first time, it will include work to improve energy efficiency, and grants will be available for cavity wall, loft, tank and pipe insulation and for space and water heating. The households on the lowest incomes will qualify for grants at rates of up to 100 per cent. We are targeting that investment, as Robin Harper indicated, to the most needy people. Such a step forward could be a major change.

Climate change was also raised by Robin Harper.

Lloyd Quinan (Scottish National Party, West of Scotland)

A number of organisations have suggested that the re-targeting of the warm deal, from 70 per cent being concentrated on public housing to 70 per cent being concentrated on private rented housing, and the suppression of the tolerable standard review, are directly related to the need for the lowest possible valuation on council housing, prior to the stock transfer.

Can the minister allay the fears that have been raised about that, and assure us that the review, which has now been processed for two years, will be made available to members?

Frank McAveety (Labour, Glasgow Shettleston)

As always, Lloyd Quinan is accurate on no occasion. I am referring to the improvement and repairs grant system to target houses in private ownership—where most of the larger-scale problems in Scotland are. When we analyse where the most fuel-poor households are, we realise why they are targeted under the warm deal.

We recognise the role that local authorities can play in targeting fuel poverty. That is why we have announced another increase in the allocation of grant for that. I can assure Lloyd Quinan that we want to bring forward the evaluation and assessment of the tolerable standard so that Parliament can discuss the matter. I can give a commitment to do that in the near future.

Sarah Boyack recently published for consultation a programme of measures to reduce greenhouse gas emissions. The changes to the improvement and repairs grant system will help that process. We also intend to amend the building regulations to require any new build to meet more demanding standards for energy efficiency than ever before. I hope that that will address many of the issues that Robin Harper raised.

Robin Harper's motion urges the Executive to require home energy audits at time of sale. We agree with the principle of sellers' surveys, and the "Partnership for Scotland" and "Making it work together" documents both indicate that such a system will develop. We think that that can be dealt with through the market, but we will watch how the market develops before deciding whether legislation is needed.

I commend the local authorities that have engaged in good practice under the Home Energy Conservation Act 1995, particularly City of Edinburgh Council, which has done pioneering work. We expect local authorities to work together. That is why we support the HECA officers network. We are examining the local authorities' first progress reports and will publish a report for Parliament later this year, which will assess their progress. We will also issue further guidance in the summer. I hope that all authorities will have a designated HECA officer. I cannot direct them to do so, but I can encourage them. I hope also that they will work with other independent bodies, such as the fuel companies, which are crucial to addressing the issue of fuel poverty.

Robin Harper's motion calls for a champion of home energy efficiency. I think that the Parliament should be that champion and I believe that the Executive is committed to ensuring that it is.

The policies that I have outlined today represent some of the steps that we are taking to tackle fuel poverty and meet climate change goals. We share the aspirations of every member of this Parliament in tackling something that has been ignored for too long: the condition of fuel-poor households in Scotland. I have outlined the progress that has been made in the Executive's attempts to eradicate fuel poverty in Scotland over two sessions.

I move amendment S1M-707.1, to leave out from "calls upon" to end and insert:

"commends the Executive for its Healthy Homes Initiative as pledged in the Partnership for Scotland and the Programme for Government; commends the Warm Deal; welcomes the investment in improving Scotland's housing; welcomes the Executive's agreement in principle to the introduction of sellers' surveys, including an energy efficiency assessment; notes favourably the proposals for reforming the Improvement Grant system and amending the Building Regulations to require higher standards of energy efficiency, and recognises that these initiatives show the Executive's firm commitment to tackling fuel poverty and its effects and meeting climate change objectives."

George Reid (Scottish National Party, Mid Scotland and Fife)

I interrupt the debate to make an announcement on behalf of Sir David Steel; he has asked me to bring this information to members as quickly as possible. A meeting has been arranged at half-past 1 today in committee room 1, at which members will have a chance to question the Scottish Parliamentary Corporate Body and John Spencely on their respective reports. There will also be a presentation by the Holyrood design team next Tuesday at midday.

Fiona Hyslop (Scottish National Party, Lothians)

I thank the Green party and Robin Harper for bringing the motion to Parliament today. The Scottish National party supports the motion as a first step to building a cross-party consensus on the eradication of fuel poverty. The focus of my speech will be on trying to build that consensus. The first step towards reaching that consensus is recognising the scale and severity of the problem. There is some concern about the Executive amendment's self-congratulatory tone and the absence of targets. There is a perception that the Executive is denying the scale of the problem. The Government must address the pertinent points that were made by the Scottish Warm Homes Campaign.

The fuel poor are defined as those who have to spend a disproportionate amount of their income on heating and hot water. In Scotland, 506,000 households spend 10 per cent or more of their income on heating and hot water. Excluding all other fuel costs, such as lighting, cooking and leisure, there are more than 500,000 people in Scotland who are fuel poor. Fuel poverty in an energy-rich country is a scandal. Scotland is the only country whose people have become poorer after oil was discovered. We have an opportunity today to make a collective pledge to put an end to that situation across all housing: private, public, rented and owned.

I will put forward an idea that was first floated at the annual general meeting of Energy Action Scotland: a warm homes amendment to the upcoming housing bill. I challenge the Executive to build into the bill at the outset energy efficiency measures, preferably complemented by targets.

A warm homes amendment would lay down in law the minimum standard that all homes would have to reach before being put on the market for sale or for rent. That minimum standard could be phased in over a number of years and would aim to lift all Scottish households out of fuel poverty within a given time frame. It is unfortunate that the Executive's commitment to end fuel poverty by 2007 has, as Robin Harper said, been removed.

Currently in Scotland 340,000 homes have a national home energy rating of 2 or below—that is, approximately 70 per cent of the total. A warm homes amendment could impose a legal requirement on anyone who is renting or selling a dwelling to ensure that that dwelling has an NHER of 3 or above by, for instance, 2007. The same amendment could set a deadline of 2015 for all homes to have a minimum NHER of 6, which would involve a further 1.6 million Scottish homes. That would mean that all housing in Scotland would reach a target that is currently enjoyed by only 20 per cent of dwellings. The amendment could set a realistic NHER target that would be achievable by the end of this Parliament's second session, and a longer-term target of an NHER of 6 for the middle of the next decade.

I realise that there are potential flaws in the proposal, and that we will have to debate the issue. Because of age or design faults, some properties will never reach those targets. For some properties, the level of investment would not be economic, but solutions must be found for those properties. A seven-year lead time for all properties to reach a minimum NHER of 3 is generous, and a 15-year lead time to reach an NHER of 6 is achievable with political will.

That method puts the responsibility on all of us to find a way, and responsibility on the Government to ensure that the private finance that it proposes to bring into the public sector is not spread too thinly, to look good in the context of the political numbers game. When the valuations are made as part of the stock transfer process—which will happen over the next year—we need the minister's assurance that fuel poverty and energy efficiency issues will be considered from the outset.

Home owners should be made responsible, and must be motivated to invest in their property. I foresee the estate agent's advertisement proudly boasting the NHER of a property as an incentive to potential buyers. It is unfortunate that Frank McAveety did not talk about making that part of the legislative process for independent guaranteed surveys. Responsibility should also be imposed on the private sector rental market, to ensure that the valuable homes that it supplies are of an adequate quality.

Future Governments should take responsibility for ensuring that parties such as the SNP, which seek to become the Government, include in their housing manifesto a worked-out plan of the way in which they intend to reach the legal standard. The warm homes amendment that could be promoted by this Parliament would set a national benchmark for us all to measure up to: a national ambition that is taken out of party politics and held up as an example of what the Parliament can achieve.

It is a cliché in political debate to say that no one has a monopoly on truth or good ideas. However, let this Parliament monopolise the issue of fuel poverty and eradicate it. I urge members to support the Green party motion. If this Parliament can deliver warmth in this cold, damp country of ours, it will have proved its worth.

Bill Aitken (Conservative, Glasgow)

I congratulate Robin Harper on the way in which he proposed his motion: his speech was sincere, articulate and highly commendable. There is much common sense in the ideas that he put forward today. We should—and, indeed, we must—be more energy efficient. As Fiona Hyslop said, we live in a cold, damp country, and the issue of fuel conservation and energy efficiency is perhaps more relevant to life in Scotland than elsewhere.

There is much to commend in Robin Harper's motion. One would have hoped that local authorities would already—on their own initiative, and without urging from the Scottish Executive or legislation by the Parliament—have introduced staff officers who would be responsible for ensuring that homes are well insulated and that we are fulfilling our requirement to assist those who suffer from fuel poverty. Fuel poverty is an evocative issue, and one regarding which we have, in all probability, not done nearly enough.

Nevertheless, I take issue with Frank McAveety's remarks. He dwelt at length on the effectiveness of the warm deal, but did not, strangely enough, deal at all effectively with the measure that the previous Conservative Government introduced in the Social Security Act 1990—the home energy efficiency scheme. That was the first time when home energy efficiency had been considered in depth; the effects of both the legislation and the scheme were extremely positive. In the United Kingdom, some 3 million houses were assisted with a reduction of £45 in fuel costs, and 1.5 million homes were removed from the fuel poverty trap. The minister should have acknowledged that, no matter how grudgingly, given that, with the warm deal, the Labour party has built on the success of the previous scheme. I accept that the limit of £500 a house is an increase on the limit of £315 under HEES. Yet again, the Labour party has taken on board a Conservative policy, changed it mildly and made much play of the fact that the policy is unique to Labour.

Mr McAveety should also have mentioned the effect on fuel poverty of the privatisation of the public utilities, which resulted in a significant decrease in the amount that each household paid for fuel, including the VAT element added to fuel bills in 1985. There was a 29 per cent fall in domestic energy costs from 1985 to 1996, which was of tremendous benefit and which sought to achieve what Robin Harper's motion seeks to achieve.

However, we cannot support the motion because of one flaw. In due course, when the housing bill comes before the council—[MEMBERS: "Parliament."] I am sorry—I returned briefly to my previous existence.

I understand that the housing bill will be introduced in Parliament in June and that it will deal with home surveys. The concept of the seller's survey has considerable superficial attraction, but I do not think that it has been thought through. We are attempting to make life much easier and much cheaper for potential purchasers—particularly for first-time buyers, who are vulnerable. However, at the same time, we must ensure that we do not simply enlarge civil lawyers' already bloated gravy train. We must examine the proposal, which has yet to be properly considered—we shall have an opportunity to consider the proposals that emerge when surveys are debated.

On that basis, I am sorry that, despite the highly laudable nature of Robin Harper's motion, we will not be able to support him today. He is to be congratulated on the manner in which he put his motion before the chamber.

Robin Harper (Green, Lothians)

Has the member finished his speech, or will he take an intervention?

Bill Aitken (Conservative, Glasgow)

I have not quite finished.

Robin Harper (Green, Lothians)

If Bill Aitken reads the motion carefully, he will note that it states:

"as part of the Executive's proposed 'Seller's Survey', to have access to a home energy profile".

The theory behind the motion is that, if a seller's survey is introduced—and I am sympathetic to its introduction—access to a home energy profile should be included. There should be access to such a profile whether the seller's survey is introduced or not.

Bill Aitken (Conservative, Glasgow)

According to my interpretation of Robin Harper's motion—and the interpretation of any reasonable person who reads it—it commits us, to some extent, to the principle of the seller's survey. That would be an unsafe approach until the matter has been researched in greater depth.

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

We should recognise that we have come quite a long way in the past 20 years in dealing with energy efficiency and fuel poverty. During my previous, professional career, I talked to ministers about fuel poverty in the '80s and '90s.

Margaret Ewing (Scottish National Party, Moray)

And in the '70s?

Euan Robson (Liberal Democrat, Roxburgh and Berwickshire)

Yes, and in the '70s, too. At that time, there was little understanding of the concept of fuel poverty and an absolute denial of the existence of excess winter deaths. It took a long time for that concept to be understood and appreciated by government. Every year, 430,000 Scots die from the cold. That is hardly understood in Scandinavia; Norwegians and Swedes do not appreciate that there could be such a problem, as it does not exist in their countries.

Just as there was no recognition of fuel poverty or excess winter deaths, there was no understanding of the NHER scheme. At one time, the gas industry regulator actually abolished the contribution made from gas bills to schemes such as HEES. That was a retrograde step. The previous gas regulator felt that millions could have been invested in energy efficiency.

I recall the debate on VAT on fuel. I facilitated the "VAT on Fuel—Scotland Says No" campaign. One of the primary reasons for taking that stance was that there was no reinvestment of VAT in energy efficiency or fuel poverty measures. It was simply a tax grab by the Government of the day.

HEES has been important, and I commend the work of Energy Action Scotland in developing it over many years. The previous Government facilitated the Home Energy Conservation Act 1995, which was introduced by my federal party president, Diana Maddock, and received all-party support.

We are making progress. It is important to recognise that. Standards-of-performance payments are made from the electricity industry and, more recently, from the gas industry towards efficiency schemes. That is helpful, but I hope that the rate of £1.20 per consumer will rise in years to come.

There is growing cross-party agreement that fuel poverty must be given careful attention. At £12 million, the warm deal has been a useful start and the emphasis on owner-occupiers is to be welcomed. As the minister said in reply to Lloyd Quinan, the evidence comes from Scottish house condition surveys, which show clearly that private rented accommodation has the worst NHER of all homes in Scotland. It is important to switch resources in that direction.

It is also important to recognise that the warm deal is over target this year, at 31,000 homes. I cannot overemphasise the importance of training, however. It is no use just throwing money at the problem; there must be adequate training. I shall illustrate that point with an anecdote that I heard recently from a constituent. Her loft had been insulated, but she had not removed her luggage. When she went up into the loft, she saw that it was perfectly insulated, with the luggage in the middle and the insulation fitted neatly around it. When she challenged the operative, he said, "I'm a loft insulator, not a porter, madam." Training is important because the job must be done correctly. There is still some way to go.

The tolerable standard must be raised. It is ridiculous that that has not been addressed and I hope that the minister will take that on board. Building regulations have been amended, but they are not retrospective. Why can building regulations and the new standards therein not apply to refurbishments? We should tell the chancellor that, although it is good to take VAT off the energy efficiency products that go into homes, we also need to take VAT off refurbishments. The raising of energy efficiency standards during refurbishments could be built into building regulations.

It is fine to insulate a house, but if the heating appliances in it are useless or are at the end of their life, nothing will have been achieved for the comfort levels there. For years during my previous professional career, I argued that the quality of appliances should be addressed in the Scottish house condition survey. I wish I had £1 for every occasion on which a tenant came to me and said that they were living with a 20-year old appliance that could no longer be repaired on a care-and-maintenance basis. We have to invest in appliance quality.

I accept that, with a change in occupancy, an energy rating should be applied. Stock transfer provides an ideal opportunity to provide targets for improving the quality of homes. We can eliminate fuel poverty in Scotland. A 15-year target is appropriate, and I am pleased that my party leader, Charles Kennedy, committed my party to that at our recent conference in Dundee.

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

We have heard an academic definition of the fuel poor. As far as I am concerned, the real fuel poor are the people who sit with their heaters off in winter because they cannot afford their bills, or the people who disconnect because they do not have the money to buy another power card and have already used up their credit. In any discussion of fuel poverty, we have to ask why—as has been acknowledged by the Department of Trade and Industry—the most expensive form of domestic energy payment is pre-paid meters. The poorest people are paying most for their energy.

I want to be more positive and constructive; I want to talk about a project that has been going on in my constituency. The South Ayrshire Energy Agency has set up a partnership with Austria and Finland, neither of which are nice hot Mediterranean countries, so that we can learn from them how other countries tackle energy efficiency. Already in South Ayrshire, an energy planning study has been performed. It is the first of its kind in Scotland and I hope that the results will be looked upon favourably by the Scottish Executive when it is circulated.

South Ayrshire Energy Agency has provided education about energy efficiency and has worked with young people in schools and other organisations using a board game that allows them to survey their own homes and to educate their parents about how to be more energy efficient. A project has applied for funding from the Energy Saving Trust to help householders install the energy-efficient appliances that have been talked about this morning, particularly central heating systems. That has coincided with the local authority working with housing associations to install double glazing to ensure that in villages such as Dailly in South Ayrshire—which I invite the minister to visit to see what has been achieved there—everybody is living in the same conditions. The agency has also worked with the private sector, because many people in the area live in either private rented accommodation or own their own homes and have been unable to bring them up to standard. Imaginative work has been done.

There have been other measures, including a small pilot trial of a hydro scheme on the River Ayr. Ayrshire Solar Club has been set up, which allows people to look at using solar energy, and enables them to purchase solar panels at a discount. It has been extended to include the installation of solar panels for water heating in some sheltered housing units, the free distribution of energy-saving fluorescent bulbs to elderly people in those units, and further work to see how those schemes can be supported through projects such as the Girvan sustainable community.

In future, we should look seriously at energy efficiency and housing. I am sympathetic to a number of Robin Harper's points. In particular, we ought to see what we can include in the forthcoming housing bill. I would support measures that call for energy efficiency and anti-fuel poverty initiatives to be addressed in the housing bill. We should be reviewing the tolerable standard regularly. We should be looking at the house condition survey.

The situation was brought home to me graphically by a student nurse in my constituency. She lives in private rented accommodation. After she has paid for her heating in her one-bedroom flat, she has little left to live on. When will we tackle the private sector and ensure that when people are letting homes for profit they do so at an affordable level?

I have overrun my time so I will finish on that point.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

As other members have said, there is an unacceptable level of fuel poverty in Scotland. I want to thank Shelter, Energy Action Scotland and the Scottish Warm Homes Campaign for providing MSPs from all parties with briefing papers. Nobody in Parliament will dispute the conservative estimate that a quarter of our population is too poor to keep warm, or that those who are poorest—pensioners, single parents and the chronically ill—are the same people who are forced to live in the poorest and worst housing.

Investment in housing is essential if we are to make a serious attempt to tackle fuel poverty. The Government's pensioners bonus is welcome, but it is sad to see—as Robin Harper said—that the money is escaping from the purses of our pensioners to the profits of the fuel companies. The extent of the problem is that there are half a million households in Scotland—the most energy-rich nation in Europe—that cannot afford adequate heating. Surely that should have put fuel poverty at the centre of the Executive's programme. The SNP hoped that that would happen.

When the Executive launched its flagship social inclusion document, "Social Justice . . . A Scotland Where Everyone Matters", in a blaze of publicity last year, we might have expected that the fuel poverty problem would be addressed, but how disappointed we were. Instead of addressing fuel poverty, the document sets out an impressive list of targets, milestones and statistical indicators, from the number of mothers who smoke during pregnancy to the number of people who draw an old-age pension and still take exercise.

Such precision and attention to detail might have inspired confidence, but anybody who looked for hope for those who are in fuel poverty was sorely disappointed. Rather than setting a target, the document simply says that the Executive will increase

"the quality and variety of homes in our most disadvantaged communities."

There is no mention of how many homes that means, how quickly it will happen or when it will happen. Why? The same answer is repeated time and again—we are told by ministers that the warm deal will meet Scotland's needs with a budget of £12 million per annum.

Looking back through the answers and exchanges on the matter, I was astonished to see the range of needs that the £12 million warm deal is meant to address. Until now, the warm deal has been the minister's stock answer to questions on matters that range from provision for the elderly to the time scale of a fuel poverty review. As Frank McAveety said today, the warm deal can be used to tackle draught-proofing and insulation; it can be used for lagging pipes and tanks; it can be used for advice; and it can be used to buy energy-efficient light bulbs.

The warm deal, however, will not install any new heating systems and it will not install a single new boiler or radiator. Such things are beyond the parameters of the warm deal in Scotland—in contrast with the situation south of the border. Even if the Government had a 100 per cent take-up rate, the warm deal would affect only one sixth of the families who are unable to afford heating. It is not a warm deal—it is a raw deal. It is a raw deal for the people who need things to get better. Perhaps that is why the Executive has not included fuel poverty in its glossy list of targets and milestones. Theirs is a Scotland where everybody matters—unless one is old, ill, cold or poor.

I welcome Frank McAveety's honesty in acknowledging the limits of the warm deal. The warm deal is not a panacea for fuel poverty. Perhaps for the first time, we can have the kind of debate that we need to have, so that we can genuinely tackle fuel poverty and bring hope to the half a million people in Scotland who are suffering.

The time is now—Parliament can do something about alleviating the problem, but we must all get together to achieve that. The first step towards achieving that will be admission by ministers that the warm deal, far from being commendable, has not solved and will not solve the problems of fuel poverty in Scotland.

Mary Scanlon (Conservative, Highlands and Islands)

I welcome Robin Harper's motion—it provides an opportunity to strengthen the links between policies on health, housing and the physical environment. Those links are mentioned in a report by the Scottish Council Foundation entitled "The Possible Scot: Making healthy public policy." Robin Harper's commitment to better-quality housing is a view that is embraced by that document.

From the health point of view, I congratulate Robin Harper on his motion. There is no doubt that it is a good working example of a holistic approach to policy making. "The Possible Scot: Making healthy public policy" states:

"There is much evidence to suggest that poor health in Scotland arises from the complex interaction of a poor physical environment, adverse social environment, lack of life skills . . . and damaging personal behaviour."

It states that well-insulated, damp-free homes contribute strongly to the complex web of interaction from which the health status of the population emerges.

If we propose to concentrate on preventive health care, investing in housing could more efficiently improve our health status. A healthy housing policy should enable people to live in a home that promotes physical, mental and social health. Improvement to the physical fabric or energy efficiency of housing brings additional health improvements. The combined consequences of high fuel bills, poor living conditions and low incomes are debt, disconnection and ill health. There is no doubt that damp, cold housing causes chronic health problems and contributes to the winter increase in mortality.

The reported rate of asthma cases among children in homes with dampness is double that of those in homes without dampness. It also leads to more absences from school and children missing out on education, training, life opportunities and future earning capacity. Like many members, I visited a home during the warm homes week. I visited a lady in Dingwall who is part of the warm deal. I was able to see for myself that the lady, who is not very mobile, is on benefit and has a fixed income, is able to benefit from the draught- proofing and insulation in addition to low-energy lightbulbs and energy advice. All had contributed to her quality of life, better health and additional comfort. I was impressed with what I saw. That does not mean that it was adequate, but it was undoubtedly a great benefit to her.

Many people with inadequate heating keep their windows shut. The lack of ventilation can exacerbate respiratory problems, especially if there are smokers in the house. I have a lot of sympathy for Robin Harper's commonsense proposal of health impact assessments. Damp houses and poor heating also exacerbate arthritic conditions. People with respiratory problems often do not function efficiently and find it difficult to concentrate. There is also evidence that poor quality and damp housing can lead to depression and a lack of self-esteem.

For many reasons, including the joined-up thinking and the holistic approach to policy, I commend this motion. With more money being spent on fuel, there is less available for nutritional food, which leads to dietary imbalance that can lead to a person's general health suffering. Good insulation and warm homes are positive measures to advance preventive health care and people's quality of life.

I congratulate Robin Harper on bringing this motion to the chamber and on illustrating the benefits of one policy as it overspills and synergises to benefit so many others.

Nora Radcliffe (Liberal Democrat, Gordon)

The trouble with houses is that, by and large, the architects who design them and the developers who build them do not have to live in them or pay to heat them. If we want more energy-efficient housing, we must force, persuade or encourage architects and builders to think more about energy efficiency. National home energy ratings being made routinely available should help to focus minds and hearts on energy efficiency. Potential buyers are given a measure of how relatively expensive to heat their new home will be—a factor that has not been readily available hitherto.

Tricia Marwick (Scottish National Party, Mid Scotland and Fife)

Nora Radcliffe's point about architects and builders is true, but will she accept that 70 per cent of Scottish housing was built before any insulation was required? The result is that 70 per cent of our housing stock was built pre-insulation.

Nora Radcliffe (Liberal Democrat, Gordon)

That is a good point—Tricia is right.

If energy efficiency becomes a significant selling point, new homes will be built with it in mind and existing home owners will have more incentive to invest in efficient central heating boilers, double glazing, insulation, solar panels and so on. The recent amendment of the building regulations to require higher standards is welcome and will have an impact, but only on new housing. Our energy efficiency standards are still lower than those of most northern European countries.

Local authorities need to be able to fund substantial home improvement grants for environmentally effective measures, targeted at the worst stock regardless of whether it is rented or owner-occupied, to encourage people living in below standard properties to upgrade them. Better support should also be given to the voluntary organisations that help people make improvements to their homes when they are too elderly or infirm for do-it-yourself or cannot afford to pay tradesmen. The people who are least able to afford heating usually live in the hardest to heat homes and have the most expensive and inefficient heating systems and payment methods. More than a third of Scottish households suffer fuel poverty and well over 100,000 households suffer extreme fuel poverty—they spend more than a fifth of their income on fuel.

Fuel poverty could be tackled by raising incomes—a good idea for pensioners—or by reducing fuel prices, which would be a good idea for me. Neither would meet environmental concerns. To do that, we need to make homes easier to keep warm for the same or less money and fuel. Failure to tackle the waste of energy involved in trying to keep damp and poorly insulated houses warm has consequences for us all; an estimated 14 per cent of carbon dioxide emissions come from the domestic sector.

According to Energy Action Scotland, the Government estimates the cost of personal subsidies for fuel consumption—cold weather payments, winter fuel payments to pensioners and so on—as £3.6 billion over the next three years. Over the same period, spending on property improvement will be £1.2 billion—about a third of that subsidy—and it will treat only the symptoms, not the disease.

Money spent on bringing Scotland's housing stock up to an acceptable standard of thermal efficiency would be money well spent. The cost to Scotland of damp, cold homes is enormous. The cost of treating illness is estimated at about £1 billion a year. We must add to that the economic cost of days taken off work through illness and loss of productivity. A less obvious cost is the waste of human potential. Children cannot study properly if they do not have a reasonably warm and quiet place at home to do so; older people become less active and their quality of life deteriorates; and, to put it brutally, many older people die.

Mortality in the Scandinavian countries is roughly the same throughout the year. In Scotland, the death rate rises by more than 30 per cent in winter. Could that be because the average Scottish house scores only four out of 10 for energy efficiency and because a quarter of our housing is damp or affected by condensation? The problem is huge, but we know what the solutions are, that they would save money, that they would bring other benefits and that they would help us meet environmental targets. We should get on with it.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

I am pleased to speak in the debate and I understand why Robin Harper has introduced the motion. I am glad that we are focusing on improving energy efficiency and tackling the scourge of fuel poverty. I will not repeat what has been said about fuel poverty but I agree that in the 21 st century its extent and its continuing existence is unacceptable.

The Labour Government was the first to accept explicitly the existence of fuel poverty. It did so for a real purpose—to tackle the problem. Under the previous Government, fuel poverty was ignored—even ridiculed. I am sure that we all remember the introduction of VAT on fuel. We should also remember that one of the first actions of the Labour Government was to reduce VAT on fuel to 5 per cent—the lowest possible figure under European Government rules.

Margaret Ewing (Scottish National Party, Moray)

Will the member give way?

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

I will not give way, because my time is limited.

There is a definite need to continue to work in partnership with other sectors, especially fuel suppliers. I welcome the recent announcement by suppliers that they intend to abolish standing charges. We need to work with them to reduce the cost of fuel and to help people on low incomes pay for it in a more efficient way. We should remember that people on low incomes usually pay more than those of us who can afford to pay by direct debit or standing order, or those of us who receive discounts for prompt payment. Surely that is not right. We should encourage fuel suppliers to find another way of collecting payments.

The Executive has introduced measures that will improve the energy efficiency of many Scottish homes. The warm deal is an example of that. People throughout Scotland have taken advantage of the funding that is available to improve their homes. Tricia Marwick described the warm deal as a raw deal. I am sure that the approximately 750 people from my council area who have benefited from the warm deal programme would not describe it as a raw deal, but as a start in tackling fuel poverty.

This is a valuable opportunity to focus on fuel poverty. It is also an opportunity to focus on fuel efficiency. Efficient use of energy in our homes has clear benefits for the environment. Uninsulated or inadequately insulated homes—homes with draughty windows and doors—mean a waste of precious energy and, as has been said too often this morning, of cash that can be ill afforded.

Modern lifestyles mean that we pay little regard to the small decisions in our lives that, collectively, could make a big difference to the volume of fuel that we consume. Inefficient behaviours, coupled with poor standards of design, construction and repair of homes, lead to a huge amount of wasted energy every year by domestic households. For that reason, we need to look at the bigger picture. Reform of building regulations and standards must come. Through good-quality regulation, we can ensure that homes are energy efficient. Extra expenditure of between £500 and £900 could bring new-build homes up to standards acceptable for the 21st century. Over the term of a mortgage, that is not very much.

There is agreement that fuel poverty and fuel efficiency must be addressed. The minister has highlighted the start that the Executive is making. I hope that, through the coming housing bill and the review of building regulations, fuel poverty will be eradicated and energy will be better used. I welcome the start that the Executive has made and will support Frank McAveety's amendment.

Patricia Ferguson (Labour, Glasgow Maryhill)

I apologise to those members whom I have been unable to call this morning. I call Robert Brown to wind up on behalf of the Liberal Democrats.

Robert Brown (Liberal Democrat, Glasgow)

I apologise to the first two speakers in the debate for not being present to hear them. Unfortunately, I had an appointment with destiny with the dentist. I will read the speeches with interest later.

This has been a good debate. Robin Harper, who initiated it, is to be congratulated on its content. Robin is becoming something of an expert on this topic and has been very generous in sharing the information that he has acquired with the rest of us who have an interest in it.

I want to try to summarise the issues. The standard of new buildings is a key issue, but it is self-defined to some degree. More significant in the short term is the situation with regard to existing houses—houses that have not been built to standard and that do not have proper insulation. It is in such houses that the poorer sections of the population tend to be concentrated.

I detect this morning that there is a growing sense of authority in the chamber about the way forward. Fiona Hyslop talked about taking party politics out of the issue and Euan Robson talked about growing cross-party concern. This chamber speaks with authority when it says that, although the Executive has done a lot of good work and there has been significant progress through initiatives such as the warm deal, there is a large, desperate and urgent problem to be tackled. It will redound greatly to the credit of the Parliament and the Executive if we make a significant impact on the curse of fuel poverty in the first parliamentary session.

This is a policy area in which we can achieve a range of good things. We can deal to an extent with global warming. We can help people in poverty. We can help to reduce costs of output. We can contribute to tackling the health problems that have been mentioned in this debate.

I wonder whether there is potential for a Cubie-style report on existing housing. Regardless of the background politics, Cubie did a very good job in identifying and presenting information and options.

Fiona Hyslop (Scottish National Party, Lothians)

Will the member give way?

Robert Brown (Liberal Democrat, Glasgow)

No. I will not get into a party dispute on this matter. The Parliament could initiate a task force under the leadership of somebody suitable in the field, which could focus on the issue, identify the costs, deal with the priorities and arrive at a consensus around which Parliament and the Executive could move forward. There is a will in the Parliament and the Executive for that to happen. I hope that the minister will consider such an approach.

I know that much good work is being done behind the scenes and that the warm deal has advanced things. I know that there is a problem over the amount of money that can be drawn in from fixed budgets. We need to make every penny count. A cross-cutting approach is very important. We have had experience of leasing arrangements with the fuel companies, which allow the installation of new central heating equipment without capital input by the Executive or local authorities. It is worth while to develop such arrangements as much as possible.

When I was a councillor, there was something called the estate rate heating addition, which I think no longer exists. It was a significant weekly payment that allowed people on income support who had inefficient heating systems to heat their houses. The result was that, instead of tackling the problem, we fed the symptom. There must be many examples of that elsewhere.

This matter is urgent and requires action now, not tomorrow. There is consensus in the Parliament that there should be such action. I hope that the Executive will respond positively to the many good suggestions that have emerged from this debate.

Keith Harding (Conservative, Mid Scotland and Fife)

I, too, congratulate Robin Harper for bringing this motion before Parliament and for the manner in which he has addressed the issue. His motion allows us to debate a very important aspect of housing, which is a subject that is not high up on the list of priorities for the Scottish Executive's initial legislative programme.

I agree with much of what Robin Harper has said. Many of his proposals and the issues that he has raised should be the subject of further discussion and consideration in the long-awaited housing bill. I also agree with Cathy Jamieson that that bill must address dampness and fuel poverty. Reducing dampness and condensation in our houses would create considerable savings and health gains and bring about a most welcome improvement in the quality of life of residents.

Labour's manifesto promised to eliminate fuel poverty by 2007, but that promise became vague and watered down in the partnership agreement. Is that another Liberal triumph?

The part approach of Labour and the Executive to fuel poverty has been to replace the Conservative Government's successful home efficiency energy scheme with a revised scheme, warm deal, and with fuel allowances. Labour's overall approach to housing is a continuation of many of the policies that were championed by the Conservative Government.

Local authority expenditure for improving housing conditions in the private sector has suffered substantial cuts since 1995. The fault lies not only with the Labour Government, which has drastically reduced capital grants to councils, but with councils. Prior to 1995, funds allocated to councils by government were ring-fenced to housing.

Following representations from COSLA, Michael Forsyth, the Secretary of State for Scotland, devolved decision making on this spending to councils and removed the ring fence. Councils claimed they knew better how to spend capital allocations in their areas. The result was that capital spending on private sector housing plummeted from £118 million in 1995-96 to £45.3 million in 1998-99. Nearly £200 million that would previously have been spent on improving housing conditions for elderly and low-income home owners has been spent on other local government services. Both groups are growing and their need for support is increasing year on year.

According to Shelter Scotland, fuel poverty affects some 738,000 households in Scotland. The greatest benefit to those householders and to other energy consumers resulted from the Conservative privatisation of the utilities. Bill Aitken mentioned the fall in real energy prices, although he did not describe it in full detail. Cathie Craigie mentioned the imposition of VAT but, despite that, between 1991 and 1996, the cost of gas fell by 8.5 per cent, the cost of heating oils fell by 10.5 per cent and the cost of electricity fell by 5 per cent.

We support the stock transfer of houses from councils to local housing associations, housing co-operatives and a range of other providers.

Linda Fabiani (Scottish National Party, Central Scotland)

Will the member tell me how stock transfers will achieve an improvement in the physical condition and energy efficiency of the stock?

Keith Harding (Conservative, Mid Scotland and Fife)

Is the member talking about the right to buy or stock transfers?

Linda Fabiani (Scottish National Party, Central Scotland)

Stock transfers.

Keith Harding (Conservative, Mid Scotland and Fife)

Stock transfers will bring in the necessary resources to improve the standard of accommodation. Such resources are not available through local government resources at present and are unlikely to be so. Stock transfers would bring in private sector investment to assist in the necessary repair and renovation projects, which would greatly reduce the number of cold and damp homes in Scotland.

The problems will not be resolved overnight; however, there is a real opportunity, through the Parliament, to begin this huge task. We look forward to debating it and to working with the Executive and the other parties in addressing this mammoth issue.

Lloyd Quinan (Scottish National Party, West of Scotland)

I thank Robin Harper for bringing about this debate. As everyone is aware, the Scottish National party will be supporting the motion from our colleagues in the independence movement, the Green party.

We have to face the harsh reality that Scotland, where one in four households is fuel poor, is an oil-rich and energy-rich nation. The simple, shaming truth is that while our country exports energy in many forms for profit, more than half a million households shiver through a cheerless and fireless Scottish winter.

I am pleased that this debate has exposed the nature of the problem, which is the shortcomings of our nation's most fundamental infrastructure—the homes in which our people live. The statistics have been laid before us: nine out of 10 Scottish homes fail modern energy efficiency standards. Those who can least afford it can only watch the bills soar, due to the countless units of electricity and therms of gas whose expensive purchase has done little but warm the streets of our towns and the air above our villages, and increase the profits of the generating companies.

It is positive that the Executive has at least recognised the problem and has implemented a warm homes initiative. However, what is far less positive is that the Executive has failed to acknowledge the scale of the problem and to provide resources correspondingly. Contrary to the answers given in Parliament, the warm deal, as it stands, is no panacea to fuel poverty. Far from it. No matter how we look at it, even if we spend £12 million a year—or £40 million over three years—from now to eternity, we will not keep this country warm.

Perhaps that is why, despite repeated questioning, I have been unable to secure an answer about the work that is being done to establish the scale of the warm homes initiative. Indeed, a whole winter has passed since I last wrote to the Deputy Minister for Local Government, asking about the time scale of the review of fuel poverty. As yet, I have received no reply. In the spirit of consensus, I would not like to suggest that the Executive was anything other than committed to eliminating fuel poverty. However, a little evidence that it is at least analysing the problem would not go amiss.

We fully support Robin Harper's suggestion that the concept of tolerable standard should include a measure of energy efficiency. There should be regulation where conditions are worst—in the private rented sector.

I remind the Executive of the strongest point to have come out of this debate. If Scotland is to have the warmth that we deserve and to which we have a right, investment in housing in essential. In these days of climate change, the Kyoto accord and limited revenue budgets, it is short-termism in the extreme to suggest that we can solve fuel poverty by asking people to spend ever increasing amounts, subsidised by the state or otherwise, on coal, gas or electricity for heat that will be lost in the battle against dampness or that will simply escape to the outside air. It has to be recognised that investment in housing is essential if fuel poverty is to be tackled.

We all had high hopes that the Executive had recognised that when, in November, in the chamber the Minister for Communities said that she had

"put together a revolutionary package for . . . housing".—[Official Report, 24 November 1999; Vol 3, c 823.]

By December, Ms Alexander wanted "more than rhetoric" and said that she had opted for "a fundamental rethink." No one could have dreamed that the minister's fundamental rethink would involve cutting almost 10 per cent from housing budgets between the publication of "Serving Scotland's Needs" in March last year and the Executive's budget document "Making it work together" in December.

Adjusting her figures to real terms, and considering the first three years of this Parliament, Ms Alexander has cut some £126 million from Scotland's three major housing budgets. I had thought that that money might have been redirected into the Government's priority policies, but unfortunately the figures for the new housing partnerships and the new deal are down as well, cut by some £35 million from the figures of last March.

Energy efficiency clearly has to be looked at from a new perspective. We have to consider our situation as a small nation in the north of the northern hemisphere. We must learn the lessons on sustainability that our Scandinavian neighbours learned many years ago, and bring in regulations to ensure that Scotland's housing stock is suited to Scotland's climate. It is senseless to continue with building regulations that were set in Westminster and that were drafted from a middle England perspective for a middle England climate. We have our own Parliament. We can surely adapt our standards to ensure that our housing stock matches our climate. We must learn from our European neighbours. The Scottish National party fully supports the motion from the independence-minded Green party.

Frank McAveety (Labour, Glasgow Shettleston)

I would like to reiterate something that I said earlier. The facts speak for themselves—taking the figures that we inherited in 1997 as a base, there has since been an increase of 40 per cent in the figures on the line for housing expenditure. We have doubled the amount of money that has been spent on the warm deal, although we recognise that the warm deal is but one part of the solution to the critical issue of fuel poverty. We are committed to the new housing partnerships and to levering in new money over the next five to 10 years through the community ownership strategy, a strategy that seems to be opposed by many who have spoken today. There are many measures that can tackle fuel poverty.

We are also committed to tackling problems around household income. A whole raft of measures has been adopted by the United Kingdom Government to try to improve the general level of income of people in the poorest households. Figures relating to that are key to the debate on fuel poverty. During the earlier debate on the Scottish service tax, we heard about Balmoral Castle, which is probably not very energy-efficient accommodation. However, the individual in that castle could probably well afford to pay its heating bills. The income of people who live in particular houses is relevant.

I want to engage in the debate with political parties, local representatives and pressure groups, and I want to talk about the scale of the challenge that faces us after 100 years of housing policies that have left us with housing much of which is no longer fit for habitation or suitable for future needs. We require a radical step change, and the new housing partnerships and stock transfer proposals should be considered in their totality.

I will try my best to respond to the points that have been raised. We have set targets for what we aim to do under the warm deal. Our target of 100,000 grants aims to ensure over the next four years that people receive the benefit of the warm deal. That is substantially more than can be targeted in the system in England.

Robin Harper (Green, Lothians)

rose—

Frank McAveety (Labour, Glasgow Shettleston)

I will let Robin Harper in in a moment.

When the much-trumpeted issue of central heating systems in England is mentioned, it is as if everybody would require—or qualify for—that benefit elsewhere in the UK. In reality, it is targeted at a small number of pensioner households on income support. Many lone parents in England would not be eligible for the benefits that are provided through the warm deal in Scotland.

I also want to address some issues that were raised by Fiona Hyslop. We need to take on board the reports that will be produced over the coming period. They will inform the Parliament, the Social Inclusion, Housing and Voluntary Sector Committee and the other committees that have an interest in energy efficiency. I hope that parliamentarians will take on board, with the Executive, the shared agenda of tackling energy efficiency. I hope that we can progress many of the issues that have been raised today, not just in the committees but in the housing bill that will be introduced.

Euan Robson mentioned building regulations. We want to encourage owners to improve energy efficiency at refurbishment through advice that is produced as part of the energy efficiency best practice programme. We also want to examine a number of other areas within the building regulations. We hope to consult on those areas and take some views.

I am happy to receive input from members. Lloyd Quinan said that he had not received a reply from me. I will check whether that is the case, and I guarantee that he will get a response in future.

I think Robert Brown mentioned the Scottish Homes report and the national house condition survey. We will have those reports over the next period of time, and they will inform critically any response that we make. I hope that we can take on board any of the comments made within that report.

There is much on which we can work together with Robin Harper to tackle the bigger picture of fuel poverty. We want to work with organisations across Scotland to come up with something that will address many of the issues.

In my constituency, there is a substantial amount of housing that is below tolerable standard. On Friday afternoon, as part of my constituency duties, I met the Govanhill Housing Association, so I am being made aware, at a constituency level, that the issue is critical. It is about combining a whole series of measures, including ring fencing, and whether allocation within local authority housing budgets should be reintroduced to ensure that we have a planned programme. Admittedly, that would require discussion with COSLA and local government, but we hope to address that.

There are many other issues that I hope will influence us through the work of the Social Inclusion, Housing and Voluntary Sector Committee and other related committees. I hope that they will shape and influence some of the things that will emerge in the housing bill.

I commend the Executive amendment to the chamber.

Robin Harper (Green, Lothians)

Somewhere deep in the recesses of Victoria Quay, there is somebody who writes every single Executive amendment. All those amendments come to us in the same self-congratulatory tone and ignore the facts that are staring the Executive in the face.

I was glad to hear the minister mention, for the first time in this debate, the possibility of ring fencing. The sum of £100 million is spent every year by the NHS on curing the problems that are caused by poor housing and dampness, while about £5 million to £6 million is spent on addressing those problems through insulation programmes, the warm deal and so on. We have things upside down.

Today's debate will achieve one thing if it drives housing energy efficiency further up the agenda, for the country and for the Parliament. It is an education concern—think of the child doing his or her homework, in the one room of the house that can be heated, with the rest of the family watching television. It is also a health concern, an income concern and an environmental concern, and must be the top priority for the next year of the Scottish Parliament. That is why I cannot accept the tone of the Executive amendment.

I am also sad that the Tories have bottled out, just as they did last week in the debate on genetically modified organisms. If the Tories had voted for my motion in the GMO debate, the Executive would have had its nose put slightly out of joint. Today, the Tories have bottled out again.

Bill Aitken (Conservative, Glasgow)

We would have voted for Mr Harper's amendment but for the fact that it is not our policy to try to embarrass the Executive just for the sake of it, only when it is wrong.

Robin Harper (Green, Lothians)

Well, the Tories should make that their policy.

The Executive's amendment is misleading. Although it has been consulting with councils on the effectiveness of the warm deal, it has still not revealed that survey's contents. I commissioned my own study last November, and Christie Ellis, an American politics intern from the politics department of the University of Edinburgh, produced a report based on responses from a third of Scottish local authorities.

That report was handed to the Executive, the SNP and the Liberal Democrats and is one of the many documents that I have shared with the parties in the chamber. The report's bottom line was that our authorities believe that the scheme is seriously underfunded, as member after member has pointed out this morning. The Executive must recognise and admit that fact, and tell us that it will find the money for the scheme.

HECA officers and everyone else involved have a great deal of expertise—and a great will—to tackle the problem. By 2007, with the present and future resources available, we will have dealt with at most a fifth of the total problem in publicly and privately owned properties of all types. Yet the Executive invites our congratulations.

We need a housing bill and the highest possible building standards. Although Sweden and Denmark are cited as being the best in that respect, we do not need to go to Scandinavia to see what can be done. People can just hop on a number 5 bus or take a healthy 25-minute walk down to Lower London Road to the LINK housing project, where 95 houses have been built with an NHER of 10, the highest possible rating, and a standard assessment procedure, or SAP, rating of 93 per cent, at a cost that is only 4 per cent higher than the average cost of building such tenements in Scotland. It is a fantastic project that should set the standard. There should not be any talk about setting higher standards in the housing bill. There is built proof at the foot of the Royal Mile that we can build to the highest standard.

The minister has a problem with my suggestions. Civil servants are paid to solve problems that Parliament sets for them. I care not whether guidelines are issued in green, white, yellow or purple papers, or in a simple letter to local authorities and the Royal Institution of Chartered Surveyors. It is simple as that. Why is the Executive unwilling to flag up ideas that might well be in the new housing bill? Why not give everyone a chance to try out these strategies if they wish to and to benefit from the experience as the bill is developed?

My motion is an attempt to make the housing debate as important as the debates on education and health, and I hope that it has had some effect in that respect. Housing should arguably be our topmost priority and is clearly not yet. My motion sets out a small agenda which should be helpful to local authorities and have minimal cost implications, with none for the Executive, unless the cost of paper is counted as significant. The amendment is smug, self-congratulatory, misleading and vapid; it is of little use and should not recommend itself to the chamber. In short, it should be rejected.

The Executive has a problem with my motion—oh dear, oh dear, oh dear. I appeal to the chamber to give the Executive another problem: vote for the motion and reject the amendment.

Business Motion

Patricia Ferguson (Labour, Glasgow Maryhill)

The next item on the agenda is consideration of business motion S1M-713, in the name of Mr Tom McCabe on behalf of the Parliamentary Bureau, which sets out our business programme.

Tom McCabe (Labour, Hamilton South)

Before I move the motion, it is only right that I highlight a few items within it. As members are aware, on Wednesday 5 April, we will discuss the Holyrood project, which will be preceded by a ministerial statement. So that the time for the debate on the Holyrood project is not shortened, decision time will be moved to 5.30 pm that evening.

On Thursday 6 April, the SNP's non-executive debate will now cover two topics: public finance and agriculture.

Finally, there will be another ministerial statement on the afternoon of Thursday 6 April on the subject of rural affairs and agriculture.

I move,

That the Parliament agrees a) the following revision to the Business Motion approved on 23 March 2000:

Thursday 30 March 2000 after Business Motion, insert:

followed by Ministerial Statement on Spending Allocations 2000 - 2001 followed by Motion on publication of Mental Welfare Commission Report, followed by a decision and, after First Minister's Question Time, delete all and insert:

3.30 pm Ministerial Statement on Mental Welfare Commission Report

4.00 pm Executive Debate on Public Appointments followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business - debate on the subject of S1M-488 Cathy Jamieson: Health and Safety at Work in Scotland and, b) the following programme of business— Wednesday 5 April 2000

2.30 pm Time for Reflection followed by Ministerial Statement followed by SPCB Debate on the Holyrood Project followed by Parliamentary Bureau Motions

5.30 pm Decision Time followed by Members' Business - debate on the subject of S1M-643 Lord James Douglas-Hamilton: A701 Thursday 6 April 2000

9.30 am Non-Executive Business - Scottish National Party followed by Business Motion

2.30 pm Question Time

3.10 pm First Minister's Question Time

3.30 pm Debate on a motion for UK legislation on the Regulation of Investigatory Powers Bill

4.15 pm Ministerial Statement followed by Parliamentary Bureau Motions

5.00 pm Decision Time followed by Members' Business - debate on the subject of S1M-418 Kenneth Gibson: Suicide

Patricia Ferguson (Labour, Glasgow Maryhill)

The question is, that motion S1M-713, in the name of Mr Tom McCabe, be agreed to.

Motion agreed to.

Patricia Ferguson (Labour, Glasgow Maryhill)

Before moving on to the next item of business, I remind members that a presentation and question-and-answer session on the Scottish Parliamentary Corporate Body's report on the Holyrood building project, which includes the Spencely report, will take place in committee room 1 at 1.30 pm today. There will be an opportunity to discuss the reports with the SPCB and John Spencely.

Spending Allocations 2000-01

Patricia Ferguson (Labour, Glasgow Maryhill)

The next item of business is a statement by Mr Jack McConnell on spending allocations for 2000-01. The minister will take questions at the end of his statement, so there should be no interventions.

Jack McConnell (Labour, Motherwell and Wishaw)

Last week, the Chancellor of the Exchequer announced major increases in spending for health, education and other vital services. Today we allocate the resources, which will be added to our Scottish budget as a result.

In 2000-01, the increase will be in the order of £288 million. I want to be clear: this is extra money that comes to Scotland without constraints. We are a devolved Parliament and we reserve the right to have different spending priorities. The extra resources are an increase in our total budget. The Executive, and ultimately the Parliament, will decide where they should be applied. Our priorities may be shared elsewhere in the UK, but they are our priorities. They include turning round Scotland's appalling health record, ensuring that every school in Scotland is excellent or improving—or both—investing bit by bit in Scotland's transport, and ensuring safer communities by tackling crime.

Those aims guide our spending plans. I can confirm today that additional resources will be allocated to those priority areas. Broadly, we will direct £87 million to education, nearly £9 million to justice and nearly £16 million to transport. The priorities of this coalition—health, education, transport, justice and enterprise—will all benefit from the new money, because those are the priorities of the Scottish people.

In one area, health, we will be even more precise. I am delighted to announce today that we will increase the health budget by £173 million in the financial year 2000-01. That is a massive injection of resources for the national health service in Scotland, on top of the increases in health agreed in the Budget (Scotland) Bill. That means a 7.3 per cent real-terms increase next year and major real-terms increases each following year to 2003-04. The increase per head for people in Scotland will be the same as for people elsewhere—£34 for every man, woman and child.

However, there is more investment to come. The chancellor announced additional spending for the national health service, from which Scotland will also benefit. In the three years 2001-02, 2002-03 and 2003-04, the increases in the health programme will be £268 million, £687 million and £1.14 billion. That is a grand total over four years of £2.268 billion—almost £450 per person in Scotland. It is a four-year programme of investment and reform in the national health service.

The new resources will provide an enormous boost for public services across the country. We have a duty to ensure that we employ them to maximum effect. Ministers are determined to maximise the added value to Scotland, prioritising demands, concentrating on outputs rather than on inputs and looking at what the extra money will buy rather than at how much we are getting. Above all, we want to find Scottish solutions to Scottish problems.

The spending strategy group, which I announced in January, comprising the Minister for Rural Affairs, the Minister for Parliament and myself, will ensure that the new money is used strategically to target priorities and to secure additional value. Money will not be unduly compartmentalised. With flexibility, we will consider and deal holistically with the big problems that straddle departmental, ministerial and accounting boundaries. We will direct the money to where it will best be used. We have time and we will take time to get that right, making the extra resources really work for Scotland.

The Cabinet will meet again after Easter to decide how to invest those additional sums. Ministers will outline in due course the real improvements to services that will be targeted in each priority area.

Susan Deacon has announced that the resources from tobacco duty will be used to promote public health, and she will target the remaining health resources equally effectively, not necessarily through concentrating on traditional health targets, but through working together to improve the health of our nation. We will not waste resources on partial interventions; we will attempt to get to the heart of problems, using resources efficiently and, most of all, imaginatively.

This is a massive investment in Scotland's services: £288 million next year and £2.4 billion in total up to 2003-04. We will use that as a total over those years, planning and investing across years as well as within years. That is joined-up budgeting for a joined-up set of priorities.

Public spending in Scotland will be at its highest ever, surpassing in real terms all previous peaks and then growing well beyond that. I want every pound to make a difference to the life chances of ordinary Scots. I want every pound to deliver maximum added value to Scotland, with public services measurably improved for all citizens.

The resources can and must be a down payment on a better, fairer Scotland for all. We must use them creatively for real improvements in daily life and for social justice for all. They provide millions of pounds more for the national health service, which will give all our citizens the opportunity to live healthier lives; millions of pounds more for schools, to give all our children the opportunities they deserve; millions of pounds more for our public transport systems, to improve transport links in our cities, towns and rural areas; and millions of pounds more for tackling crime, to make our streets safe and to remove the fear of crime. This is a down payment now for better hospitals, better schools, better transport and safer streets; it will be a windfall tomorrow for ordinary people the length and breadth of Scotland.

Patricia Ferguson (Labour, Glasgow Maryhill)

The minister will now take questions on the issues raised in his statement. I intend to allow around 20 minutes for questions, after which we will proceed with the next item of business. It would therefore be helpful if those members who wish to ask questions would press their request-to-speak buttons.

Andrew Wilson (Scottish National Party, Central Scotland)

I thank the Minister for Finance for giving us foresight of his statement and congratulate him on his announcement, which repeats what John Reid announced this time last week.

Can the minister describe how he can make a £173 million increase into a 7.3 per cent increase? I am sure that he will explain that feat of arithmetic in the health department report. Will he confirm that the increase—this year, next year, the year after and the year after that—will be continuously less in total than the percentage increase in the health budget in the rest of the UK?

Will the minister confirm that the increase for transport is less than 6 per cent of the increase announced by the Chancellor of the Exchequer for the UK, and that the increase for crime is barely more than 3 per cent of the UK total, despite our population share being much larger than that?

Will the minister tell us whether he thinks that the £173 million, which equates to 66p a week for every Scot, will tackle the crisis in health spending? Does he agree that we cannot tackle that without the opportunity to invest real resources in public services, rather than waiting for a hand-me-down budget that, in any event, is continuously increasing more slowly than in the rest of the UK?

Jack McConnell (Labour, Motherwell and Wishaw)

One of the great advantages of giving members a speech in advance is that it provides them with the opportunity to read it. I hope that, in future, Mr Wilson will take that opportunity. I specifically said that the money was on top of the increases in health agreed in the Budget (Scotland) Bill. The Parliament agreed to pass a budget bill that has already increased the health budget in Scotland by more than was ever promised by either of the two main Opposition parties.

Today's increase takes the increase for next year to 7.3 per cent, which represents the same amount of money per head as would apply elsewhere in the United Kingdom. That is something of which we should be proud. It is a substantial increase.

This week, I noticed a slight divergence of opinion on this subject among leading figures in the SNP. While Mr Wilson was complaining in Scotland this week, Mr Salmond was in London, defending the funding formula, which he described as good for Scotland and something that he wanted to continue.

There may be a difference of opinion among SNP members, but there should be no difference of opinion in this chamber today. This is the best ever investment in the health service in Scotland. It will radically transform Scotland's health record and health service. It is something that this chamber should welcome, as I do.

David Davidson (Conservative, North East Scotland)

I thank the minister for providing us with an advance copy of his statement.

Although I welcome the additional resources for Scotland, which we recognise as coming out of the increased taxation that Gordon Brown has collected in the past three years, will the minister assure the Parliament that the money will not merely be used to plug gaps in inefficiencies in our public services or as a sticking plaster to cover up Labour's inadequacy in government, particularly in health delivery? Will the minister further assure us that the resources will be used to provide new services and initiatives in Scotland's public sector and infrastructure?

Will the minister tell us how the money will be labelled to ensure that the committees of the Parliament can scrutinise the actual use to which the money is put and appraise the outcomes and not, as he said, the outputs?

Jack McConnell (Labour, Motherwell and Wishaw)

There will be considerable discussion of the Executive budgets in the committees of the Parliament in the three months to come. The specific changes that result from today's announcements and subsequent announcements will be included in the supplementary estimates that will be agreed by the committees in the usual way between now and the summer. I give the Parliament a guarantee that that will happen.

The issue of the adequacy or inadequacy of the increase might be of interest to Mr Davidson. It is strange that he says that there are gaps that should be plugged and then asks for a guarantee that the money will be used to provide new services and initiatives. I can guarantee that there will be new improvements in the health service, in justice and in education. The improvements will appear to be more dramatic than they otherwise would because of the record of the Government that was replaced in 1997. There will be an increase of more than 50 per cent in health spending in Scotland over seven years.

I realise that Opposition parties need to criticise, probe and question the Executive but, every now and again, it would be nice if something as dramatically good for Scotland as this extra money could be welcomed by members on all sides of the chamber, rather than simply by those across the centre.

George Lyon (Liberal Democrat, Argyll and Bute)

rose—

Kay Ullrich (Scottish National Party, West of Scotland)

He wants a job.

George Lyon (Liberal Democrat, Argyll and Bute)

I see that I have fans already.

On behalf of the Scottish Liberal Democrat party, I welcome the Executive's announcement. I am sure that the massive increase in health and education spending will be welcomed by all those who are involved in the day-to-day delivery of those key services. The additional funding will reverse years of neglect under previous Administrations.

I ask the minister to clarify how the £30 million that has been announced for education will be paid. Will he also confirm that the per capita health spend in Scotland is some £964, which is 18 per cent above the UK average, and that the extra £173 million will mean that we will still have a per capita spend that is 18 per cent above the rest of the UK? That spend represents £150 extra per head. For Kay Ullrich to claim that health spending in Scotland falls short of health spending south of the border is disingenuous, if not a deliberate attempt to mislead.

Jack McConnell (Labour, Motherwell and Wishaw)

Many misleading comments have been made during the past week, with spokespeople from the other parties saying different things in different parts of the country.

I can confirm that health spending in Scotland will remain substantially higher than it is south of the border per head of the population. That is a good thing for Scotland. It recognises our special circumstances and gives us the opportunity to turn round our health record.

I draw members' attention to the middle part of my statement. It is important that we make it clear that, by joining up the service delivery mechanisms, we can get more for the money in Scotland than might otherwise be the case. We need to raise our horizons. We will quote the figures, justify the budgets and rebut the paltry arguments of those who seek to dismiss what we are doing. At the same time, the Executive and the Parliament have a duty to consider ways in which we can deliver more for the money and secure the maximum added value to which I referred in my statement. I hope that we can do so.

Nicola Sturgeon (Scottish National Party, Glasgow)

I was pleased to hear the minister talking about raising horizons. He will know that his colleague the Minister for Children and Education is fond of league tables. Is he aware that Scotland is near the bottom of the European league table of education spending per pupil, lying below Denmark, Austria, France, Germany and a host of other countries?

According to current Executive figures, spending per primary school pupil in Scotland is £1,900 this year. The European average is £2,500 a year, which is £600 more. In Denmark, one of our closest European neighbours, £3,600 a year is spent on every primary school pupil. Is the minister satisfied with Scotland's place at the bottom of the European league table? If not, what will he do to ensure that our young people receive the same start in life as their European counterparts? The spending that he has announced today will not achieve that.

Jack McConnell (Labour, Motherwell and Wishaw)

I said clearly in my statement that it is important that we invest those extra millions in Scotland's schools, to give children opportunities and to ensure that all our schools are either excellent or improving—or both. That is an important priority for Scotland, just as it is a priority elsewhere in the UK, which is why the Scottish education service has received such a substantial increase in investment this year, and why this coalition Executive—which Nicola Sturgeon occasionally likes to criticise—has made such a priority of additional money for education over the past 12 months.

No matter what interpretation is put on figures for specific services, there is no easy comparison between different European countries. It is easy to play around with statistics. The reality is that we need to turn round the massive under-investment in Scottish education of the past 20 years. We are doing that. We have not achieved it yet, and we certainly will not achieve it if we divert money away from education to pay for Kenny MacAskill's promises on transport, Kenny Gibson's promises on local government or any of the other promises that the SNP has made over the past six months. Education is our priority, and we continue to spend more on education, year on year, than anybody could have expected before last year's election. That should be welcomed.

Tommy Sheridan (SSP, Glasgow)

The minister asked everyone to applaud increases in expenditure. Every member of this Parliament would applaud increases in expenditure. However, does the minister accept that, after three years of sticking to rigid Tory spending plans, the extra expenditure that has been announced in no way returns us to the level of investment that is required in either our health or our education? Will he confirm that what has been announced today is extra expenditure on health and education at a cost particularly to local government services, which will continue to be squeezed under this Executive?

Jack McConnell (Labour, Motherwell and Wishaw)

No, that is not the case. In due course, the facts will prove Tommy Sheridan wrong. Moreover, it is misleading to say that, although there is an increase in expenditure, it will not return us to some golden age when things were so much better. This is the highest level of public investment in Scotland's services that there has ever been, and it will increase over the next three to four years. That is an important fact on which to focus. This expenditure is not about returning to the past, but about looking to a future that is substantially better than the past. I hope that, some day, Tommy Sheridan will recognise that.

Cathie Craigie (Labour, Cumbernauld and Kilsyth)

I can go further than George Lyon by saying that I very much welcome the minister's statement and any increase in public expenditure. The minister said that the money would be spent strategically and that every pound that was spent would make a difference. In considering how to spend the extra £16 million for transport, will he remember the A80, which runs through my constituency? Over the weekend, he found himself held up in a traffic jam on that road, so he will understand the difficulties that are faced by the people of my constituency and those who use that road to travel through west-central Scotland. When he sits down to decide how to spend this money, will he consider improving traffic management on that strategic road?

Jack McConnell (Labour, Motherwell and Wishaw)

Cathie Craigie may get the prize for the most opportunistic intervention of the year. I will certainly pass on her comments to the Minister for Transport and the Environment, who I am sure will be delighted to hear them.

It is important to recognise that Scotland's roads and public transport require significant investment—all of us in the chamber are aware of that. The budget delivers that investment without increasing fuel duty above the rate of inflation. That is an important move, which should be welcomed; it will lead to long-overdue improvements in Scotland's rural and urban areas. Mr Sheridan may have alluded to this point in his question, but the fact that significant investment is required is a direct result of the huge under-investment in transport infrastructure in Scotland during the 1990s by the Government of the time. The situation is being turned around, bit by bit, and this money will help to make a difference.

Kay Ullrich (Scottish National Party, West of Scotland)

Does the minister accept that his Government's record on the health service has been one of failure? Only yesterday, we heard that waiting lists have increased yet again, by 2,300, that the number of available beds in the NHS has decreased by almost 5,000 since new Labour came to power and that spending on bureaucracy has increased by £8 million during Labour's tenure. Can he explain how those and other failures will be addressed by a smaller increase in health spending in Scotland in comparison with elsewhere in the UK?

Jack McConnell (Labour, Motherwell and Wishaw)

This may sound unlikely, but I prefer not to be too partisan in my response. I wish to state for the record that there is a frankly shocking degree of dishonesty in this chamber when we discuss health spending.

During the Scottish elections last year, the SNP did not promise £173 million—it promised £82.9 million, which it would produce by raising taxes. The £173 million from the budget statement comes without an increase in income tax. For 2002-03, the SNP promised £89.45 million, which was described at the time by Mr Wilson, Mrs Ullrich and their colleagues as the biggest investment ever in Scotland's public services—an investment of which they could be proud. That £89.45 million is slightly dwarfed by the £687 million that I promised in my statement. That sum is dismissed by Opposition parties, including the nationalists, but the facts speak for themselves: £80 million a year from the SNP pales into insignificance beside the £173 million, £268 million, £687 million and £1,140 million from the coalition Administration.

Mary Scanlon (Conservative, Highlands and Islands)

Will the £26 million from tobacco duty be allocated to smoking cessation measures? Will the minister guarantee to maintain the differential in health spending, which was recognised by successive Labour and Conservative Governments, in order to meet Scotland's needs?

Jack McConnell (Labour, Motherwell and Wishaw)

The allocation of the £26 million was dealt with in a statement that was given last week. Work will continue on that allocation and the Minister for Health and Community Care will make appropriate statements as decisions are made. It would be wrong to rush that process by making a further announcement only a week later.

I stress that the increase per head that we receive in Scotland for transport, justice, health and education is exactly the same as the increases that have been allocated elsewhere in the United Kingdom. That is in line with the funding policy that was agreed before devolution and that was supported in the referendum by my colleagues, the Liberal Democrats, and by the Labour party. I understand that it was not supported by the Conservatives and that it was not questioned at the time by nationalist members of the Westminster Parliament. The funding policy will stand the test of time for Scotland.

Only this week, the self-styled leader of the Opposition in this Parliament was in London, where he defended that funding policy and demanded that it remain in place. It is a pity that his front-bench colleagues do not do the same thing in this Parliament week after week.

Margaret Smith (Liberal Democrat, Edinburgh West)

Like Cathie Craigie, I could take this opportunity to ask the transport minister to fund the A8000 in my constituency, but I shall pass quickly on from that to ask a question with a health dimension.

Will the minister give an assurance that he will use this golden opportunity to tackle two areas in which we can make great inroads in health across the board? I am thinking particularly of funding for community care and for fuel poverty, a subject that Robin Harper raised this morning. Those are two areas in which the kind of approach that the minister described is badly needed and in which pooled budgets and a new joint approach to training and working together would bear fruit. In the past, we may have talked a good game on those policy areas, but we have not put in the money that was needed. I welcome the minister's announcement and hope that he will put money into those two areas.

Jack McConnell (Labour, Motherwell and Wishaw)

Much as I enjoy the debate over figures, this Parliament has a duty to look beyond sterile discussions on how much was spent when and by whom or on how much is spent per head in Carlisle or in Cumbernauld. Over the next few months, we must consider how we can maximise the ability of this money to transform services in Scotland across the piece. When we add the money into departmental budgets for transport, justice, health and education, we will also examine local government budgets to ensure that all priority areas get maximum added value to improve services such as support for elderly people, funding to tackle drug dealing and to provide drug rehabilitation and prevention services, and initiatives to tackle homelessness.

Departmental barriers will not get in the way of achieving those improvements in services. Whatever the total that is allocated to the departments, what is important is what that money is spent on. I guarantee that we shall work endlessly to ensure that the improvements occur.

Robin Harper (Green, Lothians)

Following the minister's reply to Margaret Smith's question, and in the context of this morning's debate, will any of the money be spent on the warm deal?

Jack McConnell (Labour, Motherwell and Wishaw)

As I came into the chamber and heard Robin Harper summing up in the previous debate, my heart sank because I thought that he would ask me that question when I made my statement on the budget policy. We have deliberately not outlined the specific initiatives that will be supported from the four departmental budgets that have been highlighted. Each of those areas, including any proposals for additional spending on specific areas, will be considered over the next four weeks. Departmental ministers will make appropriate announcements in due course about the projects, initiatives and improvements in services that will be developed as a result.

Patricia Ferguson (Labour, Glasgow Maryhill)

Because of the brevity of that question and answer, I can get one more question in. I call Kenny Gibson. I hope that you will be brief.

Kenneth Gibson (Scottish National Party, Glasgow)

I shall try to be brief. The minister talked about transformation, but I do not see anything to transform local government. According to the Convention of Scottish Local Authorities, £298 million has just been cut from local government for the forthcoming year, resulting in council tax rises and in jobs and services being slashed, so why has he ignored local government in his statement?

Jack McConnell (Labour, Motherwell and Wishaw)

As I pointed out in a previous debate, council tax rises would have been much higher if SNP budgets in different councils across Scotland had been agreed. I think that the right balance has been struck between council tax rises and increases in expenditure. Councillors are to be congratulated on the way in which they have handled the situation.

I hesitate to make this point, but I shall make it none the less. It is important to listen to what is being said. The money will be added to the departmental budgets and used across those departments' initiatives to ensure the maximum added value. That will involve local government. Local authorities deliver the majority of directly provided services in Scotland outwith the health service. They carry out a significant job, for which the Executive provides the majority of the funding. As I said last week at COSLA's annual conference, we need to review the longer-term mechanisms for providing local authority funding over the next few months but, in the short term, local authorities will be involved in the distribution of much of this expenditure and in service delivery. Local authorities have responsibility for delivering education, which is our agreed shared top priority.

Mental Welfare Commission Report

David (None, Lothians)

Before we begin, I am sure that members will want to recognise and welcome the Speaker of the Hungarian Parliament, Dr János Adel, and his colleagues from the Parliament of Hungary. [Applause.]

Question Time — SCOTTISH EXECUTIVE

Sandra White (Scottish National Party, Glasgow)

To ask the Scottish Executive what representations it has received concerning the proposal to relocate the royal hospital for sick children, Yorkhill. (S1O-1452)

Susan Deacon (Labour, Edinburgh East and Musselburgh)

I have received representations from one member of the public about the possible relocation of the services that are provided at Yorkhill hospital.

A number of comments have been received by Greater Glasgow Health Board on that and other aspects of its review of acute services, and I am sure that it will receive many more during the current public consultation exercise.

Sandra White (Scottish National Party, Glasgow)

I thank the minister for that answer. Is she aware of the views of many people who are concerned that the closure of Yorkhill hospital will undermine the state-of-the-art service that is provided? Is she further aware of the views of those who are concerned by the lack of direct transport links to Southern general hospital, which is the proposed site for the relocation?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

I make it clear that I understand the concerns of local people and—for that matter—local elected representatives who want to ensure that hospital and other health services are of the highest standard and that they meet the people's needs.

I stress that review exercises such as that which Greater Glasgow Health Board is going through are undertaken to enable local people and health authorities to look to the future and to examine how services can be best provided, where they ought to be provided, how we harness new technologies and new treatments and how we harness the skills of all health service professionals. That will provide the highest possible quality of care throughout our hospital services. The review that is taking place is the biggest public consultation exercise in the history of the national health service, and I am confident that its outcome will be a better future for health services in Glasgow.

Pauline McNeill (Labour, Glasgow Kelvin)

Does the minister agree that Yorkhill children's hospital—which is a specialist hospital that serves mothers, babies and children—represents the children's voice in the debate? Will the minister listen to the experts who say that when it comes to health services, children are different?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

I would like to stress that the review processes in Glasgow and in other parts of the country are local review exercises. The views of local communities and individuals rightly ought to be submitted to and considered by local health authorities as part of their planning processes.

I agree with the basic principle of Pauline McNeill's question, which is the importance of children's services and the need to build and develop services around the needs of children. Hospitals such as Yorkhill and the sick kids' hospital in Edinburgh have led the way in many aspects of the care and treatment of children. I hope and am confident that in future—wherever those services are provided—the standard and quality of care, which is tailored to the needs of children, will be every bit as high, if not higher than it is now.

Adam Ingram (Scottish National Party, South of Scotland)

To ask the Scottish Executive how much it is currently spending to combat the effects of coastal erosion and how much it has spent in each of the past three years. (S1O-1469)

Sarah Boyack (Labour, Edinburgh Central)

Direct spending by the Scottish Executive to combat the effects of coastal erosion comprises both grant payments to councils for their coastal protection capital works schemes and also grant in aid towards councils' revenue expenditure on coastal protection.

In the period 1996-97 to 1999-2000, four councils made grant claims to the Executive for coastal protection capital works schemes. Those claims resulted in payments by the Executive of £393,000 in 1999-2000, £34,000 in 1998-99, £59,000 in 1997-98 and £103,000 in 1996-97. Total expenditure by councils on coastal protection during that time amounted to around £1 million annually.

Adam Ingram (Scottish National Party, South of Scotland)

I thank the minister for that reply. Will she respond to the challenge that such spending levels are totally inadequate? Will she comment on the fact that Troon Community Council has written to me asking for help to secure funding to repair the esplanade wall of Troon south beach and stabilise the sand dunes, because the financial constraints on South Ayrshire Council will not allow both Ayr and Troon beaches to be defended? Will she make additional funding available, so that we can defend more than half of our coastline?

Sarah Boyack (Labour, Edinburgh Central)

The process is that the Scottish Executive provides assistance on the basis of applications from councils. There are at present no schemes before Scottish ministers for approval. I know that a number of schemes are being prepared by councils, where they have identified projects that they may wish to promote. It is for councils to decide on their priorities in line with the needs of their areas.

Lewis Macdonald (Labour, Aberdeen Central)

To ask the Scottish Executive when it expects to make an announcement about supporter involvement in football clubs following the deadline for responses to the leaflet, "New Mutualism—A Golden Goal". (S1O-1460)

Rhona Brankin (Labour, Midlothian)

The Scottish Executive has invited the views of the main football bodies in Scotland, including the Scottish Football Supporters Federation. I have also held meetings with other interested parties on the issue with a view to formulating our position, which I hope to announce in the near future.

Lewis Macdonald (Labour, Aberdeen Central)

I thank Rhona Brankin for her response. Does she recognise that this is one area where football supporters in Scotland might benefit from following the English example, by giving fans more of a say in the running of their clubs, as is being done through Supporters Direct south of the border? Does she recognise that holding the Scottish cup semi-final between Aberdeen and Hibernian in Glasgow at 6 o'clock on Sunday evening is a further example of the need for fans to have a greater say in the running of the game?

Rhona Brankin (Labour, Midlothian)

The Executive is sympathetic to the idea of more supporter involvement in football clubs. We are aware that a unit is to be formed to help establish supporters trusts in England. We are keeping in touch with those developments.

Our main priority at the moment is the development of a network of football academies, to bring on the best of our young Scottish footballers. We would not want to be diverted from that important objective. We are aware of developments, we have sought views on the matter and we will make a statement as soon as possible.

I am sure that Lewis Macdonald will make it to the game, whatever time it is at.

Dennis Canavan (Independent, Falkirk West)

I join Lewis Macdonald in urging the minister to consider the experience in England, where money is apparently available from the Football Trust, for start-up grants to enable football fans to establish mutual trusts, which in turn enable them to have representation on the boards of football clubs. Will the minister ensure that such money is available from the Football Trust for Scotland, bearing it in mind that the Football Trust has, over the years, had considerable sums from Scottish football supporters and pools punters?

Rhona Brankin (Labour, Midlothian)

As I have said, the Executive is aware of the developments in England. We are seeking the views of the football bodies in Scotland.

I reiterate that our immediate commitment is to develop a network of youth academies. We are keen that that development goes ahead. We are examining the idea of supporters trusts. We will make a statement as soon as our view is formulated.

Cathy Jamieson (Labour, Carrick, Cumnock and Doon Valley)

I do not want to suggest that the footballing academies are not a welcome development, because I accept that they are welcome. However, does the minister accept that a small financial input into supporting and developing the concept of football trusts would ensure that football clubs developed at community level?

Will the minister also endorse the sentiments contained in the pamphlet published by the Co-operative party about the role of mutuals in the future of all types of sporting organisations?

Rhona Brankin (Labour, Midlothian)

We are sympathetic to the idea of more supporter involvement in football clubs. Fans are the lifeblood of the game, so it is important that their views are known and taken into account.

I reiterate that we are aware of developments, we are in close touch with those involved and we will reach a view as soon as possible.

Scott Barrie (Labour, Dunfermline West)

To ask the Scottish Executive what plans it has to promote physical activity among young people in order to improve their general health. (S1O-1454)

Susan Deacon (Labour, Edinburgh East and Musselburgh)

The curriculum framework for children aged three to five already emphasises the importance of physical activity and development for young children. Sportscotland is promoting a number of youth sport programmes, including a pilot active primary schools programme. We are developing a national physical activity strategy for Scotland. Our aim is that 50 per cent of 11 to 15- year-olds will be taking vigorous exercise four or more times a week by 2010.

Scott Barrie (Labour, Dunfermline West)

Does the minister agree that it is vital that young people's physical activity is promoted, particularly given recent research showing that today's teenagers are less fit than teenagers were 30 years ago?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

I agree; as I said in my statement to Parliament last week, we must get better not only at treating ill health but at preventing it. One way in which we can reduce the incidence of cancer and coronary heart disease in Scotland is by improving children's health. I was delighted to be able to announce last week a major investment of £26 million in public health and health improvement; improving children's health will be at the core of that work.

Robin Harper (Green, Lothians)

Perhaps this question is as much for the Minister for Transport and the Environment, but does the Executive have plans to protect the steadily decreasing green spaces available to children?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

I am assured by the Minister for Transport and the Environment that planning policy guidelines are being looked at that will include that issue.

I will take the opportunity of Robin Harper's question to comment on the need for us to work across different policy areas, departments and ministerial responsibilities to bring about improvements. For example, education, environment and health ministers work together on initiatives such as safer routes to school, which are about improving health as well as the environmental benefits. The Minister for Finance today restated our commitment to working together to make best use of our resources and energies, to ensure the biggest possible improvements for the people of Scotland. We will go on doing that.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

To ask the Scottish Executive whether it has any plans to exclude from the proposed extension to the right to buy those rural communities where social housing provision is already at a very low level. (S1O-1446)

Wendy Alexander (Labour, Paisley North)

As part of the rural partnership for change initiative, which I announced on 11 March, we are considering whether provision needs to be made in the forthcoming housing bill to designate a specified period for pressured rural areas during which new tenants would not be able to exercise the right to buy. Any such power of designation, which would replace the current but rarely used power, would apply solely to new tenants and would not affect the rights of existing tenants in any way.

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

Is the minister aware that the authoritative 1997 Shelter report suggested that 35 per cent of rural council housing has been sold off? In Aberdeenshire, that figure is over 50 per cent and in my own constituency it is even higher. Does the minister accept that the proposals as they stand will cause real problems in rural communities? Will the minister give a guarantee that the availability of socially rented housing in rural communities will not fall below a specific level?

Wendy Alexander (Labour, Paisley North)

The right to buy is popular with tenants. The level of sales has fallen to a third of what it was 10 years ago. The proposed extension to the right to buy is estimated to mean 120 additional sales per year. This year, we are promising to build 1,570 new homes in rural Scotland. That, combined with the power to designate, will allow us to increase the supply of socially rented housing in rural Scotland.

David Mundell (Conservative, South of Scotland)

Does the minister agree that significant changes to national planning policy guidelines and in the approaches of many local authority planning departments are needed if we are to see socially provided housing stock replaced in Scottish rural communities?

Wendy Alexander (Labour, Paisley North)

David Mundell raises an important point that applies to all housing in rural areas. That is why the rural partnership for change will look at land assembly, land designation and development powers in such areas, to allow both socially rented and low-cost ownership houses to be more easily built.

Kenny MacAskill (Scottish National Party, Lothians)

To ask the Scottish Executive what representations it intends to make to the strategic rail authority regarding electrification of railways in Scotland. (S1O-1466)

Sarah Boyack (Labour, Edinburgh Central)

Provision has been made in the UK Transport Bill to enable the Scottish ministers to issue directions and guidance to the strategic rail authority in relation to rail services that start and end in Scotland. Those directions and that guidance will be concerned with matters such as service levels and fares policies. It will be up to the train operating companies and Railtrack to provide the necessary infrastructure.

Kenny MacAskill (Scottish National Party, Lothians)

Thirty-eight per cent of the UK rail network is electrified, but only 23.6 per cent of the network in Scotland is electrified. When does the minister think that we will have reached the UK average, and what lines does she propose to electrify to ensure that we get up to that average?

Sarah Boyack (Labour, Edinburgh Central)

I am not prepared to accept Mr MacAskill's simplistic analysis of how we need to improve the railway network in Scotland. The east coast main line, for example, does not end in Edinburgh, and new proposals that are being made by both Virgin and Great North Eastern Railway refer to tilting trains. Electrification is not the only way in which to improve services in Scotland. Tilting trains and the network improvements that are currently being carried out will also do that.

Helen Eadie (Labour, Dunfermline East)

What plans does the minister have to make representations to the rail regulator about redefining the east coast main line as stretching from Aberdeen to London, rather than Edinburgh to London?

Sarah Boyack (Labour, Edinburgh Central)

We aim to ensure that when the franchise process takes place we retain at least the level of service that we have at the moment. In discussions with the strategic rail authority, my intention will be not just to maintain the existing service, but to expand and improve on it. That is not just about extending the east coast main line, but about integrating it with the ScotRail services that also run on the line.

Murray Tosh (Conservative, South of Scotland)

Will the minister confirm that the so-called McLeish settlement gave the Scottish Executive powers of direction, instruction and guidance? Will she explain why in her answer to Kenny MacAskill she omitted the word instruction and say why that was significant? Does she believe that the McLeish settlement is still intact in its entirety?

Sarah Boyack (Labour, Edinburgh Central)

The answer that I gave Mr MacAskill was technically correct in relation to the UK Transport Bill. I do not think that it is significant that the word instruction does not appear in the bill. We are delivering the McLeish settlement, both through the work that we are doing in Scotland and through the Transport Bill that is being considered at Westminster.

Bristow Muldoon (Labour, Livingston)

To ask the Scottish Executive what NHS per capita expenditure in Scotland will be compared with England and Wales and compared with the European Union average, following the Chancellor of the Exchequer's budget announcement. (S1O-1486)

Susan Deacon (Labour, Edinburgh East and Musselburgh)

Following decisions taken by the Scottish Cabinet on Tuesday, Scottish expenditure on health will be £1,057 per head from 1 April. The comparable English figure is £890. Comparable figures for Wales and the European Union for 2000-01 are not available.

Bristow Muldoon (Labour, Livingston)

I welcome the continued additional investment in Scotland's health service compared with the rest of the United Kingdom. How does the minister intend to work in partnership with NHS staff to use the additional investment to improve Scotland's record on cancer, stroke and coronary disease?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

It is more than significant that we are, without question, channelling record amounts of investment into the NHS in Scotland. As I have said before in the chamber—and I say it again—it is important that we do not just spend more, but spend better. That means that we must ensure that investment is targeted on change—on improving and developing services and making a difference to patients by reducing waiting times and making treatment more responsive.

Staff in the NHS must be at the heart of the decision-making process on changes to services. We have led the way in Scotland, through the establishment of the Scottish partnership forum, in working together with staff representatives and trade unions. We are rolling out partnership working at a local level. As we move forward, investing more, doing better and achieving more in the NHS in Scotland, NHS staff must be at the heart of that.

Duncan Hamilton (Scottish National Party, Highlands and Islands)

On the subject of spending per head of population, the minister is always keen to highlight the fact that Scotland receives 20 per cent more per head than the rest of the UK receives. Does she agree that that is entirely justified by the additional costs of providing services for rural communities and of dealing with historical deprivation? Will she give an absolute guarantee that over the next four years the 20 per cent differential will be maintained?

Susan Deacon (Labour, Edinburgh East and Musselburgh)

Members may call me naive and optimistic, but I would have thought that, after the many debates and exchanges that we have had over recent weeks, the SNP might have come up with an original question and one that made more sense.

Perhaps SNP members should think about uttering the words—as even Michael Portillo did in Westminster last week—that they think that it is a good thing that record levels of additional investment are going into the national health service in Scotland. The figures for the next four years were announced in the Parliament today. They show record additional investment in the health service, an increase in spending per head of population that is the same as in England, and continued higher health spending in Scotland. I do not think that we can be any clearer about that. It is time that the SNP grew up, moved on and started to engage in the facts and the real issues.