Malcolm shares his thoughts on Chancellor of the Exchequer Alistair Darling's pre-budget report
The Pre-budget Report and spending on Education & Housing Malcolm Chisholm (Edinburgh North and Leith) (Lab): Today we should concentrate mainly on the action that the Scottish Government should be taking, but we have to start by considering the comments that various parties have made about the Westminster Government. Notwithstanding Alex Neil's speech, the interesting fact is that the SNP's response to what the Labour Government has done at Westminster is relatively supportive.

The SNP has supported a lot of the actions that the Labour Government has taken. It supports the general direction of travel and acknowledges the need for a fiscal stimulus in particular. That contrasts with the approach of the Conservative party, which wants to do absolutely nothing about the situation at UK level; of course, that approach will increase unemployment and the borrowing about which Mr Brownlee is so concerned.

The Liberal Democrats are in an interesting position. Although they support a fiscal stimulus at Westminster, they do not support it in this Parliament, because if one reduces income tax by 2 per cent and thereby has to reduce public expenditure by £800 million, the net fiscal stimulus is zero.

The SNP supports Labour's general approach in relation to a fiscal stimulus. In fact, the SNP benefited from that approach today, given the announcements that it has been able to make about £260 million of accelerated capital expenditure. It is certainly about time that we heard an announcement of significance from the Scottish Government. In the middle of August, it was proud to announce a housing package, which it claimed was ahead of what was happening in the rest of the United Kingdom, but what have we heard from it for the past three and a half months, apart from the very thin six-point plan?

We welcome the announcement that all the capital money is to be brought forward. It was certainly interesting to hear how the Scottish Government intends to spend it, which was slightly different from what we heard last week, when schools expenditure was flagged up as the key, number 1 spending priority. Today, that was hedged, along the lines that "Local government will have to decide, but that's still what we would like."

When I heard the announcement about schools last week, I welcomed it, but I also thought that, in a sense, the Westminster Government was helping the SNP Government out of a hole. We all know that councils have been unable to proceed with the commissioning of new schools over the past 19 months because of the Scottish Government's failure to set up the Scottish Futures Trust and the hiatus between that and the previous PPP arrangements. Spending a lot of the accelerated money on schools might enable the SNP to play catch-up.

The building industry has also pinpointed the delay in setting up the Scottish Futures Trust as one of the major reasons why so many jobs are being lost in the construction sector as we speak. Alex Neil should remember the job losses caused by his Government as well as what he describes as the job losses caused by actions elsewhere.

Alex Neil:
Is it not a bit daft to take all measures to protect jobs while allowing 40,000 unnecessary redundancies if the proposed takeover of HBOS by Lloyds TSB proceeds?

Malcolm Chisholm:
The main banking union does not take that view. The route that Alex Neil advocates would create more job losses.

Employment has not been helped by the slow-down in housing expenditure. We were all shocked to find that 600 fewer housing association homes were built in the first six months of this year in comparison with last year. That figure has not been significantly offset by only £9 million of the accelerated money having been spent. Of course, another £9 million was announced last year -

The Minister for Communities and Sport (Stewart Maxwell):
Will Mr Chisholm give way?

Malcolm Chisholm:
I do not have time; I have only a minute and a half left and I need to say a bit more about housing.

We need far more acceleration in housing spending and more housing money in general. The extra £10 million that was announced today is welcome, but we have a golden opportunity to build affordable housing when land is cheap and when rising unemployment and increasing housing needs can be addressed by housing investment.

However, one problem is that although John Swinney said that the extra £10 million of accelerated housing money that he announced would be deployed on the basis of need, that is inconsistent with an answer that Stewart Maxwell gave Sarah Boyack recently, which suggested that Edinburgh would receive none of the accelerated housing money. The accelerated money must be spent on the basis of need, to address the greatest affordable housing shortages and—crucially—to ensure that all local authorities can meet the historic 2012 homelessness target.

The City of Edinburgh Council has made it absolutely clear in its strategic housing investment plan, which the Government has, that it cannot meet the target without significant increases in supply of about 500 houses each year over and above what the council is already building. The £36 million a year that the council receives will not address that need. The danger is that the accelerated money from 2010-11, of which Edinburgh will receive none, will mean that Edinburgh ends up with less money over the three years than it would otherwise have had.


I hope that the Cabinet Secretary for Finance and Sustainable Growth and the Minister for Communities and Sport will consider that seriously. All housing money must be distributed on the basis of need.
December 3rd 2008, (Columns 12983-5)