:00:08. > :00:10.idea of lowering the 24-23 or 20 is On Newsnight Scotland tonight, the
:00:10. > :00:17.Scottish Conservative leader has said she reckons only 12% of
:00:17. > :00:21.Scottish households make a net contribution to the national wealth.
:00:21. > :00:30.All the rest of us receive more in public benefit than we contribute
:00:31. > :00:35.in taxes. The view can be regarded as controversial.
:00:35. > :00:40.The dust has yet to settle over the nation's high quality debate over
:00:40. > :00:45.universality of services are already, Ruth Davidson has lodged
:00:45. > :00:48.in you pedal into the pond of public finance. 12% of Scottish
:00:48. > :00:53.households, she says, make a positive contribution to the mast
:00:53. > :00:57.will balance sheet. Everyone else takes out more than a pigeon. The
:00:57. > :01:00.public sector in Scotland is too big, she argues, and the way
:01:01. > :01:10.forward is to stimulate private enterprise. We will hear from her
:01:10. > :01:17.in a moment. But first, to our reporter.
:01:17. > :01:25.In Scotland, is the public sector to be? Are too few of us actually
:01:25. > :01:28.generating wealth? Rather than benefiting from public spending?
:01:28. > :01:33.The Scottish Conservative leader thinks so.
:01:33. > :01:39.It is staggering that public sector expenditure makes up a fool 50% of
:01:39. > :01:42.Scotland's GDP and only 12% of households are net contributors,
:01:42. > :01:50.where the taxes they pay outweighed the benefits they receive to public
:01:50. > :01:54.spending. -- received three public spending.
:01:54. > :01:58.Critics dispute the claim that just 12% of Scottish households are net
:01:58. > :02:03.contributors to the economy. The SNP says the calculations for
:02:03. > :02:07.Britain on the back of an envelope. Some economists are also sceptical.
:02:08. > :02:11.I have never seen that figure used. Quite how they get there is
:02:11. > :02:15.difficult to say. But it would be interesting to see but the UK
:02:15. > :02:24.figure was. I don't think the UK and Scotland are that it of line
:02:24. > :02:30.with each other point In which case, is that staggering as well? As a
:02:30. > :02:33.stark figure, it is pretty meaningless on its own.
:02:33. > :02:37.The Scottish Government argues public spending actually mix of a
:02:37. > :02:43.lower proportion of gross domestic product in Scotland than it does
:02:43. > :02:48.across the UK in a whole. 44.1% when oil and gas is included,
:02:48. > :02:52.against 46.5% for the whole of the UK. But regardless of the figures,
:02:53. > :02:57.is there an underlying problem in Scotland's economy? Is the balance
:02:57. > :03:00.wrong between the public and private sectors?
:03:00. > :03:04.Balance is the key factor. We have more people bringing in money than
:03:04. > :03:08.we have spending it, which is the opposite way for the moment, and
:03:08. > :03:12.the need to get the size of the public sector down a little bit and
:03:12. > :03:18.rebalance the economy. We have been asking for this for some time and
:03:18. > :03:21.take some years to do. All parties should be focusing on it.
:03:21. > :03:24.Scotland's private and public sectors do not exist in isolation
:03:24. > :03:28.from each other point Some businesses, including many
:03:28. > :03:33.construction companies, rely on governments or consuls for a
:03:33. > :03:38.significant proportion of their work. In short, taxpayers' money
:03:38. > :03:41.sustain some private sector jobs. The public sector can facilitate a
:03:41. > :03:46.number of infrastructure programmes, as it is doing very well at the
:03:46. > :03:51.moment. That is vitally important to the economy. It is wrong to say
:03:51. > :03:55.the public sector is damaging the economy. But we just have to have a
:03:55. > :03:58.larger private sector driving forward and bringing in and you
:03:58. > :04:01.economy. The problem of cutting the size of
:04:01. > :04:05.the public sector significantly is that few would comfortably argue
:04:05. > :04:11.for fewer teachers, nurses are police officers. Efficiency gains
:04:12. > :04:16.can only go so far. But can public services be provided in a more
:04:16. > :04:20.efficient way once they are removed from the state? In Glasgow, there
:04:20. > :04:24.are libraries and museums are not run by the Council directly, but by
:04:24. > :04:27.an arms-length trust. And what role can businesses or charities have
:04:27. > :04:33.providing services? I to replacing those currently provided by the
:04:33. > :04:36.state, or complimenting them. What do the public want their money
:04:36. > :04:42.spent on and what they expect as a result of the service deliveries
:04:42. > :04:43.and then how to deliver the service? It is not automatically
:04:43. > :04:47.directly hands-on Government controlled.
:04:47. > :04:52.And this also touches on the debate about what the taxpayer can and
:04:52. > :04:57.cannot afford. Last month, Labour announced a full review of things
:04:57. > :05:01.like free prescriptions for all. Yesterday, the Prime Minister
:05:01. > :05:04.stressed that universal benefits were off-limits for Conservatives.
:05:04. > :05:08.The promise I made at the last election to Britain's pensioners
:05:08. > :05:14.when I said we're not going to take away your winter fuel allowance,
:05:14. > :05:18.you free television licence, you free bus pass, that promise stance.
:05:18. > :05:22.So does this mean the challenge is simply about making sure taxpayers
:05:22. > :05:26.are getting the best value from the public sector and growing the
:05:26. > :05:29.private sector? These are sentiments few in the mainstream
:05:29. > :05:32.would actually disagree with. Or is there an argument for fundamental
:05:32. > :05:41.change? I'm joined now from our Birmingham
:05:41. > :05:44.Studio by the leader of Scotland's Conservatives, Ruth Davidson.
:05:44. > :05:49.Many Tories there think the coalition Government has not been
:05:49. > :05:54.radical enough, but it needs to strip the sheet -- shrink the state.
:05:54. > :05:57.Do you think that will happen? We need to look at a record of the
:05:58. > :06:01.coalition Government. We have seen a reduction in their public sector
:06:01. > :06:05.and a million jobs created in the private sector. It is moving in the
:06:05. > :06:11.right direction. In a speech today, you said only
:06:11. > :06:15.12% of households are responsible for generating Scotland's whelp.
:06:15. > :06:23.Would it that figure come from? I would like to correct her
:06:23. > :06:27.introduction, if I may. These are not white figures. We are wanting
:06:27. > :06:30.to enter these figures into the mature debate in Scotland about our
:06:31. > :06:34.spending patterns, how much we are spending and what we are spending
:06:34. > :06:37.it on. We asked the independent Scottish Parliamentary Information
:06:37. > :06:45.Service what the net contribution ratio was in Scotland. They came
:06:45. > :06:51.back to us with the 12% figure. It is based on the Scottish shoplift.
:06:51. > :06:55.It is all from official data. He 12% of households are responsible
:06:55. > :06:59.for generating Scotland's Welt. That is what you said in a speech.
:06:59. > :07:04.The problem with that is that lots of people are working, lots of
:07:04. > :07:07.people are doing a responsible job, lots of people are supporting the
:07:07. > :07:11.highest earners and working for businesses. They don't seem to be
:07:11. > :07:16.included in that. I think what is staggering about
:07:16. > :07:19.this figure is that we are talking about her soul to have an income of
:07:19. > :07:25.�50,000 and are paying thousands of pounds in tax, sometimes tens of
:07:25. > :07:29.thousands of bines and taxation and possibly were not aware that the
:07:29. > :07:33.public sector spending was so high that they were not considered net
:07:33. > :07:35.contributors by the measure that the independent Scottish
:07:35. > :07:39.Parliamentary Information Centre give us.
:07:39. > :07:43.A argue saying that only 12% are responsible for generating
:07:43. > :07:46.Scotland's well. That is slightly different. In effect, you were
:07:46. > :07:50.saying that those people are the only ones who are creating
:07:50. > :07:52.something, Tring -- contributing something. The restaurant has
:07:52. > :07:57.ticking away. Is that your position?
:07:57. > :08:01.Know. The way in which the SNP have over-reacted on this in terms of
:08:01. > :08:05.going for this spin and Colin mean that Ronnie and all sorts of things,
:08:05. > :08:08.rather than addressing the substance of public sector spending
:08:08. > :08:12.in Scotland shows just how rattled they are about this.
:08:12. > :08:14.G think the pensioners ought to contribute, because I'm not sure if
:08:14. > :08:20.you included them are not in your figures.
:08:20. > :08:25.If it depends very much on income. It is an income and taxation based
:08:26. > :08:30.ratio that the Scottish Parliament independent service give us.
:08:30. > :08:35.You talk about the size of the state in Scotland. Where is the
:08:35. > :08:38.evidence? Where is the evidence that a strong state, that
:08:38. > :08:41.Government is bad for growth. There are plenty of countries for growth
:08:41. > :08:45.has been relatively good. Sweden, long-term, its growth has been
:08:45. > :08:49.every bit as good as America. And it has a big Government rather than
:08:49. > :08:52.a small Government. If yes, and America's growth has
:08:52. > :08:56.been every bit as good as Sweden's and it has a small Government
:08:56. > :09:02.rather than a big Government. This is when we get on to the bait that
:09:02. > :09:08.we're trying to have. We see the SNP trying to run away from
:09:08. > :09:11.addressing some of these issues. I welcome to one Lamond's late
:09:11. > :09:15.conversion and coming onto the ground that Scottish Conservatives
:09:15. > :09:18.have been holding for some time. I welcome their intervention of
:09:18. > :09:22.independent figures, like the former Auditor-General Robert Black
:09:22. > :09:26.getting in on this debate. What I am worried about is that the SNP
:09:26. > :09:30.are attacking the messengers rather than addressing the message. For
:09:30. > :09:34.example, instead of giving Scottish people the information that they
:09:34. > :09:37.are requesting, they're using taxpayer's money to go to court to
:09:37. > :09:41.stop information being released, they're putting down perfectly
:09:41. > :09:44.reasonable amendments of parliaments, where we as Scottish
:09:44. > :09:49.Conservatives at the SNP to give us their own projections for how much
:09:49. > :09:52.things like the personal care would cost into the future, like free
:09:52. > :09:56.tuition at universities would cost into the future, and they refuse to
:09:56. > :09:59.give that information. There are several people in Scotland and
:09:59. > :10:03.several parties in Scotland that are trying to have a mature debate
:10:03. > :10:09.on the issues and to talk about substance and all we're getting
:10:09. > :10:13.from the SNP is lashing out and trying to attack the messengers.
:10:13. > :10:17.Their defending the status quo. I will return to the question I just
:10:17. > :10:21.ask. What evidence is there, other than your opinion, but it is a good
:10:21. > :10:25.idea to chop the state? I think as you previously stated,
:10:25. > :10:30.there are several different models for running the country. Many small
:10:30. > :10:35.state countries are very competitive, have good rates of
:10:35. > :10:39.growth. I believe that that is the best balance for a country. I don't
:10:39. > :10:43.think that having a strong private sector is a particularly
:10:43. > :10:53.controversial position in the Western world. That is the way in
:10:53. > :11:01.
:11:02. > :11:06.which we want to take spot and Where does the axe fall? In the
:11:06. > :11:10.Scottish context, we have told clearly about where we want changes
:11:10. > :11:14.to happen. I do not particularly like the model of which sees
:11:14. > :11:20.hundreds of billions of pounds across the course of a Parliament
:11:20. > :11:22.been paid to prop up Scottish Water. I do not believe that most people
:11:22. > :11:26.across Scotland want free aspirin when they see people with rare
:11:26. > :11:30.cancers not getting the drugs that you can get elsewhere in the
:11:30. > :11:39.country. I think that what is encouraging is that we have started
:11:39. > :11:43.this debate. We are starting to talk about the issues in Scotland.
:11:43. > :11:47.I welcome all the contributions that are substantial that her going
:11:47. > :11:54.across the country. I just wish the SNP would quit the wreck to wreck
:11:54. > :12:02.and get on with such as -- quit the rhetoric and get on with substance.
:12:02. > :12:07.David Cameron has said that free bus passes and freaky there it --
:12:07. > :12:10.TV licences will not be cut. Why is that bad in Scotland when it is
:12:10. > :12:14.writing England? It is about personal choices and actually
:12:14. > :12:18.things like the winter fuel allowance a for the hall the UK.
:12:18. > :12:23.What I am saying is that we want to look at the mix of universal and
:12:23. > :12:26.selective benefits. We want to use the contributions that people make
:12:26. > :12:32.throughout their working life to make sure that there is a state
:12:32. > :12:40.person -- pension. I do not think there should be universal free
:12:40. > :12:44.prescriptions. There we must leave it. A Thank you very much.
:12:44. > :12:50.Joining us now is Lesley Riddoch, writer and commentator, with a
:12:50. > :12:53.specific interest in how things are done in Scandinavia. Also, the
:12:53. > :13:02.writer and commentator Bill Jamieson. Vacuum both for joining
:13:02. > :13:11.That speech today was aimed at the Tory faithful. Does she have a
:13:11. > :13:14.point? Today has been a baffling day all round. Not only did we hear
:13:14. > :13:18.from raised but then George Osborne went on to talk about workers
:13:18. > :13:24.becoming owners of companies by giving up some of where employment
:13:24. > :13:27.rights to be able to own shares in companies. We have heard the
:13:27. > :13:37.suggestion that housing benefit might be cut by under 25 year-olds,
:13:37. > :13:40.half of whom love with children. This is quite horrible stuff. It
:13:40. > :13:46.suggests a kind of diametric opposition between welfare and
:13:46. > :13:52.wealth. You mention Sweden -- Sweden. The Nordic countries manage
:13:52. > :13:57.like bumblebees to be able to combine high levels of wealth, a
:13:57. > :14:03.pretty vibrant private-sector, and very high levels of high-quality
:14:03. > :14:07.welfare, which all their citizens choose to take benefit of. One of
:14:07. > :14:12.the benefit I have got about this debate is, never mind the
:14:12. > :14:18.universalism debate, never mind who is entitled to some other services,
:14:18. > :14:21.the thing is that so often people opt out anyway. People ought are
:14:21. > :14:26.paying in tax for health services and then some people have private
:14:26. > :14:29.insurance. People pay and their taxes for an education system and
:14:29. > :14:34.they choose not to have their own children go through it. If you
:14:34. > :14:37.really want to look at the things that concern the more successful
:14:37. > :14:42.societies our size, the Nordic Council's main concerns about
:14:42. > :14:46.welfare now arch declining quality, because that means that number to
:14:46. > :14:52.the will be less Solidarity in society and that is what they are
:14:52. > :14:57.aiming for. Bill Jamieson, that 12 % figure that Ruth Davidson is
:14:57. > :15:04.quoting. Do you think it is accurate? I am not sure it tells us
:15:04. > :15:08.very much. I think we should take out of that the sector of the
:15:08. > :15:11.population that is retired. I think it is unfair to say that they have
:15:11. > :15:17.not contributed, they have certainly contributed over their
:15:17. > :15:22.working lives. If you take out pensioners, if you cut working
:15:22. > :15:26.households, due perhaps get a more interesting figure, that is about
:15:26. > :15:33.39 % of working age households are getting more in benefits than they
:15:33. > :15:39.are paying tax. That percentage is up for about 29 % in 1979. I think
:15:39. > :15:42.Ruth Davidson is right on her direction of travel, I am not quite
:15:42. > :15:48.sure if pitting pensioners into that equation really enlightens the
:15:48. > :15:51.argument. You're saying there today that the debate is really out of
:15:51. > :15:56.the comfort zone. His other direction we are heading in
:15:56. > :16:02.Scotland? Are we now as a nation going to have to confront some of
:16:02. > :16:08.these awkward choices or it will be issued just rumble on and be kicked
:16:08. > :16:12.into the long grass? I think we could usefully start to discuss
:16:12. > :16:21.some of the things we know happen anyway. When we look at the
:16:21. > :16:27.universal benefits issue, it is about �800 million. Meanwhile,
:16:27. > :16:31.there are other difficulties, like 1.5 billion, it is estimated, is
:16:31. > :16:36.spent on pensioners been admitted to hospital, emergency admissions
:16:36. > :16:39.when those pensioners end up not actually having any kind of
:16:39. > :16:43.injuries, sometimes there is a panic in the middle of the night or
:16:43. > :16:48.they are in pain and to be on the seaside they are admitted. That
:16:48. > :16:53.speaks volumes about the lack of support in their own community.
:16:53. > :17:00.That is a big issue about benefits and the welfare state. That asks
:17:00. > :17:04.lots of questions really about how well empowered people where they
:17:04. > :17:08.live and it could cost forward a different way of looking at how we
:17:08. > :17:12.managed to integrate care so that communities are powerful enough to
:17:12. > :17:19.take care of their own folk, which is actually what people would want
:17:19. > :17:23.to see happen. That is a challenge about control and it is a sort of
:17:23. > :17:29.bureaucratic challenge that is not as sexy as arguing about these
:17:29. > :17:35.headline figures. In the meal -- in the meantime, a bill, there is this
:17:35. > :17:40.focus on middle-class benefits and there are many pensioners who are
:17:40. > :17:43.looking at this wondering if those benefits will continue. It is a
:17:43. > :17:47.difficult sell for the Conservatives, to see their needs
:17:47. > :17:52.to be more up of a squeeze on middle-class benefits because
:17:52. > :18:02.ultimately many of the voters will benefit from them. Yes, I think is
:18:02. > :18:04.
:18:04. > :18:08.a difficult sell on both the left and the right. If we just go to the
:18:08. > :18:17.very simple figures that were laid out in that wonderful document to
:18:17. > :18:22.the Independent but it report, that clearly set out the UN
:18:22. > :18:26.sustainability of universal services and he put that on the
:18:26. > :18:31.table as the report said to Alex Salmond that early action had to be
:18:31. > :18:34.taken to redress this. Now, nothing has since happened. The only
:18:34. > :18:42.problem is that because of the delay it has become more expensive
:18:42. > :18:45.to address. Lesley, you have looked at Scandinavian countries. We
:18:45. > :18:49.imagine them to be very high- spending countries, but we also see
:18:49. > :18:56.their own to be, but for example you sometimes have to pay for it.
:18:56. > :19:00.Are we ready for that sort of thing you? In Sweden and Norway, it is
:19:00. > :19:05.about �20 charge to go to the doctor. In Narvik, you get an
:19:05. > :19:12.exemption card at you have spent �200 up front. But that is about
:19:12. > :19:16.seven % of their total expenditure. But they also have a cap on maximum
:19:16. > :19:22.of �200 a month on kindergarten care. We are black-and-white, you
:19:22. > :19:25.either have it completely funded by yourself in which case it is
:19:25. > :19:31.unaffordable for practically everyone, or you may get it for
:19:31. > :19:41.three. We need that kind of really excellent service. There we must
:19:41. > :19:41.