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Pre-Budget Report and Comprehensive Spending Review

The Chancellor confirmed a number of things today, such as that the growth rate will fall and borrowing will remain high at about £30 billion. However, he failed to confirm that 75 per cent. of his PFI liability was off balance sheet—hiding the numbers—and he did not tell us what research and development spending was this year. Instead, he said there would be another report, which I will look at with some interest. However, we know that R and D spending for the future has been lamentable. Nor did he tell us, although it has been published, that the balance of trade deficit is some £45 billion—a direct consequence of the 1 million lost manufacturing jobs. The Chancellor did, however, tell us two things, and I have questions about those. He spoke about Crossrail and the Olympics. There will be Government funding of at least £5 billion for each of those projects. Will he confirm that that will be subject to the Barnett formula? He also said that the Scottish departmental expenditure limit would rise to £30 billion by 2010. That would appear to amount to a 1.4 per cent. annual rise for each of the three years, but can he confirm that, with the shaving of more than £300 million off the Scottish baseline figure, that amounts in real terms to barely a 0.5 per cent. rise for each of the next three years? If that is the case, when his own report states that"““oil prices have risen above consensus forecasts””" because of factors such as ““resilient demand””, and oil revenues are flooding into the Treasury, is it not shameful that a mere trickle of barely a 0.5 per cent. rise in real terms is returning to Scotland?