08/10/2012 Newsnight Scotland

idea of lowering the 24-23 or 20 is On Newsnight Scotland tonight, the

Scottish Conservative leader has said she reckons only 12% of

Scottish households make a net contribution to the national wealth.

All the rest of us receive more in public benefit than we contribute

in taxes. The view can be regarded as controversial.

The dust has yet to settle over the nation's high quality debate over

universality of services are already, Ruth Davidson has lodged

in you pedal into the pond of public finance. 12% of Scottish

households, she says, make a positive contribution to the mast

will balance sheet. Everyone else takes out more than a pigeon. The

public sector in Scotland is too big, she argues, and the way

forward is to stimulate private enterprise. We will hear from her

in a moment. But first, to our reporter.

In Scotland, is the public sector to be? Are too few of us actually

generating wealth? Rather than benefiting from public spending?

The Scottish Conservative leader thinks so.

It is staggering that public sector expenditure makes up a fool 50% of

Scotland's GDP and only 12% of households are net contributors,

where the taxes they pay outweighed the benefits they receive to public

spending. -- received three public spending.

Critics dispute the claim that just 12% of Scottish households are net

contributors to the economy. The SNP says the calculations for

Britain on the back of an envelope. Some economists are also sceptical.

I have never seen that figure used. Quite how they get there is

difficult to say. But it would be interesting to see but the UK

figure was. I don't think the UK and Scotland are that it of line

with each other point In which case, is that staggering as well? As a

stark figure, it is pretty meaningless on its own.

The Scottish Government argues public spending actually mix of a

lower proportion of gross domestic product in Scotland than it does

across the UK in a whole. 44.1% when oil and gas is included,

against 46.5% for the whole of the UK. But regardless of the figures,

is there an underlying problem in Scotland's economy? Is the balance

wrong between the public and private sectors?

Balance is the key factor. We have more people bringing in money than

we have spending it, which is the opposite way for the moment, and

the need to get the size of the public sector down a little bit and

rebalance the economy. We have been asking for this for some time and

take some years to do. All parties should be focusing on it.

Scotland's private and public sectors do not exist in isolation

from each other point Some businesses, including many

construction companies, rely on governments or consuls for a

significant proportion of their work. In short, taxpayers' money

sustain some private sector jobs. The public sector can facilitate a

number of infrastructure programmes, as it is doing very well at the

moment. That is vitally important to the economy. It is wrong to say

the public sector is damaging the economy. But we just have to have a

larger private sector driving forward and bringing in and you

economy. The problem of cutting the size of

the public sector significantly is that few would comfortably argue

for fewer teachers, nurses are police officers. Efficiency gains

can only go so far. But can public services be provided in a more

efficient way once they are removed from the state? In Glasgow, there

are libraries and museums are not run by the Council directly, but by

an arms-length trust. And what role can businesses or charities have

providing services? I to replacing those currently provided by the

state, or complimenting them. What do the public want their money

spent on and what they expect as a result of the service deliveries

and then how to deliver the service? It is not automatically

directly hands-on Government controlled.

And this also touches on the debate about what the taxpayer can and

cannot afford. Last month, Labour announced a full review of things

like free prescriptions for all. Yesterday, the Prime Minister

stressed that universal benefits were off-limits for Conservatives.

The promise I made at the last election to Britain's pensioners

when I said we're not going to take away your winter fuel allowance,

you free television licence, you free bus pass, that promise stance.

So does this mean the challenge is simply about making sure taxpayers

are getting the best value from the public sector and growing the

private sector? These are sentiments few in the mainstream

would actually disagree with. Or is there an argument for fundamental

change? I'm joined now from our Birmingham

Studio by the leader of Scotland's Conservatives, Ruth Davidson.

Many Tories there think the coalition Government has not been

radical enough, but it needs to strip the sheet -- shrink the state.

Do you think that will happen? We need to look at a record of the

coalition Government. We have seen a reduction in their public sector

and a million jobs created in the private sector. It is moving in the

right direction. In a speech today, you said only

12% of households are responsible for generating Scotland's whelp.

Would it that figure come from? I would like to correct her

introduction, if I may. These are not white figures. We are wanting

to enter these figures into the mature debate in Scotland about our

spending patterns, how much we are spending and what we are spending

it on. We asked the independent Scottish Parliamentary Information

Service what the net contribution ratio was in Scotland. They came

back to us with the 12% figure. It is based on the Scottish shoplift.

It is all from official data. He 12% of households are responsible

for generating Scotland's Welt. That is what you said in a speech.

The problem with that is that lots of people are working, lots of

people are doing a responsible job, lots of people are supporting the

highest earners and working for businesses. They don't seem to be

included in that. I think what is staggering about

this figure is that we are talking about her soul to have an income of

�50,000 and are paying thousands of pounds in tax, sometimes tens of

thousands of bines and taxation and possibly were not aware that the

public sector spending was so high that they were not considered net

contributors by the measure that the independent Scottish

Parliamentary Information Centre give us.

A argue saying that only 12% are responsible for generating

Scotland's well. That is slightly different. In effect, you were

saying that those people are the only ones who are creating

something, Tring -- contributing something. The restaurant has

ticking away. Is that your position?

Know. The way in which the SNP have over-reacted on this in terms of

going for this spin and Colin mean that Ronnie and all sorts of things,

rather than addressing the substance of public sector spending

in Scotland shows just how rattled they are about this.

G think the pensioners ought to contribute, because I'm not sure if

you included them are not in your figures.

If it depends very much on income. It is an income and taxation based

ratio that the Scottish Parliament independent service give us.

You talk about the size of the state in Scotland. Where is the

evidence? Where is the evidence that a strong state, that

Government is bad for growth. There are plenty of countries for growth

has been relatively good. Sweden, long-term, its growth has been

every bit as good as America. And it has a big Government rather than

a small Government. If yes, and America's growth has

been every bit as good as Sweden's and it has a small Government

rather than a big Government. This is when we get on to the bait that

we're trying to have. We see the SNP trying to run away from

addressing some of these issues. I welcome to one Lamond's late

conversion and coming onto the ground that Scottish Conservatives

have been holding for some time. I welcome their intervention of

independent figures, like the former Auditor-General Robert Black

getting in on this debate. What I am worried about is that the SNP

are attacking the messengers rather than addressing the message. For

example, instead of giving Scottish people the information that they

are requesting, they're using taxpayer's money to go to court to

stop information being released, they're putting down perfectly

reasonable amendments of parliaments, where we as Scottish

Conservatives at the SNP to give us their own projections for how much

things like the personal care would cost into the future, like free

tuition at universities would cost into the future, and they refuse to

give that information. There are several people in Scotland and

several parties in Scotland that are trying to have a mature debate

on the issues and to talk about substance and all we're getting

from the SNP is lashing out and trying to attack the messengers.

Their defending the status quo. I will return to the question I just

ask. What evidence is there, other than your opinion, but it is a good

idea to chop the state? I think as you previously stated,

there are several different models for running the country. Many small

state countries are very competitive, have good rates of

growth. I believe that that is the best balance for a country. I don't

think that having a strong private sector is a particularly

controversial position in the Western world. That is the way in

which we want to take spot and Where does the axe fall? In the

Scottish context, we have told clearly about where we want changes

to happen. I do not particularly like the model of which sees

hundreds of billions of pounds across the course of a Parliament

been paid to prop up Scottish Water. I do not believe that most people

across Scotland want free aspirin when they see people with rare

cancers not getting the drugs that you can get elsewhere in the

country. I think that what is encouraging is that we have started

this debate. We are starting to talk about the issues in Scotland.

I welcome all the contributions that are substantial that her going

across the country. I just wish the SNP would quit the wreck to wreck

and get on with such as -- quit the rhetoric and get on with substance.

David Cameron has said that free bus passes and freaky there it --

TV licences will not be cut. Why is that bad in Scotland when it is

writing England? It is about personal choices and actually

things like the winter fuel allowance a for the hall the UK.

What I am saying is that we want to look at the mix of universal and

selective benefits. We want to use the contributions that people make

throughout their working life to make sure that there is a state

person -- pension. I do not think there should be universal free

prescriptions. There we must leave it. A Thank you very much.

Joining us now is Lesley Riddoch, writer and commentator, with a

specific interest in how things are done in Scandinavia. Also, the

writer and commentator Bill Jamieson. Vacuum both for joining

That speech today was aimed at the Tory faithful. Does she have a

point? Today has been a baffling day all round. Not only did we hear

from raised but then George Osborne went on to talk about workers

becoming owners of companies by giving up some of where employment

rights to be able to own shares in companies. We have heard the

suggestion that housing benefit might be cut by under 25 year-olds,

half of whom love with children. This is quite horrible stuff. It

suggests a kind of diametric opposition between welfare and

wealth. You mention Sweden -- Sweden. The Nordic countries manage

like bumblebees to be able to combine high levels of wealth, a

pretty vibrant private-sector, and very high levels of high-quality

welfare, which all their citizens choose to take benefit of. One of

the benefit I have got about this debate is, never mind the

universalism debate, never mind who is entitled to some other services,

the thing is that so often people opt out anyway. People ought are

paying in tax for health services and then some people have private

insurance. People pay and their taxes for an education system and

they choose not to have their own children go through it. If you

really want to look at the things that concern the more successful

societies our size, the Nordic Council's main concerns about

welfare now arch declining quality, because that means that number to

the will be less Solidarity in society and that is what they are

aiming for. Bill Jamieson, that 12 % figure that Ruth Davidson is

quoting. Do you think it is accurate? I am not sure it tells us

very much. I think we should take out of that the sector of the

population that is retired. I think it is unfair to say that they have

not contributed, they have certainly contributed over their

working lives. If you take out pensioners, if you cut working

households, due perhaps get a more interesting figure, that is about

39 % of working age households are getting more in benefits than they

are paying tax. That percentage is up for about 29 % in 1979. I think

Ruth Davidson is right on her direction of travel, I am not quite

sure if pitting pensioners into that equation really enlightens the

argument. You're saying there today that the debate is really out of

the comfort zone. His other direction we are heading in

Scotland? Are we now as a nation going to have to confront some of

these awkward choices or it will be issued just rumble on and be kicked

into the long grass? I think we could usefully start to discuss

some of the things we know happen anyway. When we look at the

universal benefits issue, it is about �800 million. Meanwhile,

there are other difficulties, like 1.5 billion, it is estimated, is

spent on pensioners been admitted to hospital, emergency admissions

when those pensioners end up not actually having any kind of

injuries, sometimes there is a panic in the middle of the night or

they are in pain and to be on the seaside they are admitted. That

speaks volumes about the lack of support in their own community.

That is a big issue about benefits and the welfare state. That asks

lots of questions really about how well empowered people where they

live and it could cost forward a different way of looking at how we

managed to integrate care so that communities are powerful enough to

take care of their own folk, which is actually what people would want

to see happen. That is a challenge about control and it is a sort of

bureaucratic challenge that is not as sexy as arguing about these

headline figures. In the meal -- in the meantime, a bill, there is this

focus on middle-class benefits and there are many pensioners who are

looking at this wondering if those benefits will continue. It is a

difficult sell for the Conservatives, to see their needs

to be more up of a squeeze on middle-class benefits because

ultimately many of the voters will benefit from them. Yes, I think is

a difficult sell on both the left and the right. If we just go to the

very simple figures that were laid out in that wonderful document to

the Independent but it report, that clearly set out the UN

sustainability of universal services and he put that on the

table as the report said to Alex Salmond that early action had to be

taken to redress this. Now, nothing has since happened. The only

problem is that because of the delay it has become more expensive

to address. Lesley, you have looked at Scandinavian countries. We

imagine them to be very high- spending countries, but we also see

their own to be, but for example you sometimes have to pay for it.

Are we ready for that sort of thing you? In Sweden and Norway, it is

about �20 charge to go to the doctor. In Narvik, you get an

exemption card at you have spent �200 up front. But that is about

seven % of their total expenditure. But they also have a cap on maximum

of �200 a month on kindergarten care. We are black-and-white, you

either have it completely funded by yourself in which case it is

unaffordable for practically everyone, or you may get it for

three. We need that kind of really excellent service. There we must