Previous SectionIndexHome Page

31 Jan 1996 : Column 981

Oral Answers to Questions


Income Tax

1. Mr. Jacques Arnold: To ask the Secretary of State for Scotland what discussions he has had with the Treasury concerning the practicalities of a different rate of income tax for Scotland. [10785]

The Secretary of State for Scotland (Mr. Michael Forsyth): Labour, Liberal and Scottish National party support for a tartan tax will be immensely damaging to Scotland and create huge problems for employers on both sides of the border.

Mr. Arnold: Bearing in mind the huge costs and problems for employers in Scotland, and although I, as an English Member, would welcome the transfer of jobs from Grangemouth to Gravesham, how on earth does my right hon. Friend think that Labour and the other parties can justify to the Scottish people that impact on jobs in Scotland?

Mr. Forsyth: My hon. Friend is absolutely right. The tartan tax will be a tax on Scotland's jobs and would certainly disadvantage Grangemouth. He also has considerable cause for worry about his constituents in Gravesham, because Labour is proposing a tax on jobs--the social chapter--that would apply to the whole of the United Kingdom.

Mr. Canavan: Can the Secretary of State name any Parliament in the world that does not have revenue-raising powers or any country in the world, apart from Scotland, that has its own laws and legal system but no Parliament of its own to pass those laws?

Mr. Forsyth: The hon. Gentleman should move back two Benches and join the Scottish Nationalists if he wants to ask questions like that. In case he has not noticed, the United Kingdom is the greatest country in the world, with the greatest history. All parts of the United Kingdom have benefited from that.

Sir Hector Monro: Is my right hon. Friend aware that, during the passage of the Scotland Bill in the 1970s under a Labour Government, it was generally accepted that the advice from Treasury Ministers to the Government was that it was impossible to introduce a differential income tax in the United Kingdom? What is the view of the Treasury Ministers in our Government?

Mr. Forsyth: I have to agree with my right hon. Friend. He is right. It was considered impractical for the same reasons as Labour Members have opposed a local income tax. They argued that a local income tax would be difficult to collect because of great administrative problems. People are taxed not according to where they live but according to where their employer is. There is no doubt that a tartan tax would create enormous problems and anomalies. For example, Scottish Labour Members would not pay the tartan tax even

31 Jan 1996 : Column 982

though they were Scottish Members because they are paid in Westminster in England and would therefore be exempt from it.

Mr. Menzies Campbell: The Secretary of State has obviously taken a careful interest in the effect of taxation on employment. Would he be kind enough to tell us his assessment of the consequences for employment in Scotland of the tax increase--which is now equivalent to a net 6p in the pound--that his Government have imposed since 1992?

Mr. Forsyth: The hon. and learned Gentleman has a real cheek. To be fair to his party, it is at least honest--unlike some Opposition Members who vote for our tax reductions and then complain about the public expenditure consequences. The hon. and learned Gentleman and his party want income tax to go up. Although their partners in the Scottish Constitutional Convention say that there is no tartan tax, he and his hon. Friends are going around promising to spend it even before it has been brought into being.

Mr. Peter Atkinson: Will my right hon. Friend speculate on the tartan tax's impact on businesses on either side of the border? Would it encourage more of my constituents in Northumberland to shop in Scotland, or even more Scots to travel from the border regions to Newcastle shopping centres?

Mr. Forsyth: Far be it from me to give any credibility to the idea of people not shopping in Scotland, but my hon. Friend is right. The tartan tax would add to the costs of employment and of businesses. It would put prices up in shops in Scotland. As my hon. Friend points out, his constituents would benefit from that. Even more seriously, together with the crackpot policies for a Parliament whose funding would still be determined here, it would lead eventually to the fragmentation and break-up of the United Kingdom, which would mean huge price increases in Scotland, high inflation levels and spiralling unemployment.

Mr. George Robertson rose--

Mr. Jenkin: Cluck, cluck.

Mr. Robertson: Dear, oh dear. That comment, Madam Speaker, was from the parliamentary private secretary to the Secretary of State.

Now that the Secretary of State has had his wrists slapped for breaking the guidelines, will he apologise to the Scottish Office information directorate for using it as a scapegoat for putting party propaganda in press releases, and to the Scottish taxpayer for peddling propaganda at their expense? When will he realise that the truth about the popularity of our plans for a Scottish Parliament will always beat the lies about non-existent taxes?

Mr. Forsyth: When will the hon. Gentleman rise to the occasion that being shadow Secretary of State for Scotland requires? On the use of the phrase "tartan tax", before I used it--and I did so in the first press release that I issued from the Scottish Office--I asked for advice from the permanent secretary and I was assured that it would be in order. The permanent secretary's advice changed

31 Jan 1996 : Column 983

after the hon. Gentleman complained that the phrase was in widespread use and now a matter of political controversy. I have always accepted that advice. Why is the hon. Gentleman so afraid of the tartan tax? Is it because he knows that the people of Scotland do not want to pay it? If it is non-existent, let him rise in the House and tell the people of Scotland that he will drop his crackpot proposals to have a tax-raising power for his Scottish Parliament, which would impose that tax on the working people of Scotland.

Scottish Government

2. Mr. Duncan: To ask the Secretary of State for Scotland if he will make a statement on the future relationship of the Government of the United Kingdom with the Scottish people. [10786]

Mr. Michael Forsyth: We are Unionists and stand four square behind the Union, which has benefited Scotland, England, Northern Ireland and Wales.

Mr. Duncan: Does my right hon. Friend accept that those of us from England who express an interest in Scotland do so not to pursue narrow party advantage, as the Labour party does, but out of concern for the United Kingdom as a whole? Will he reaffirm that devolution would be a profound act of unsettlement? Would it not throw into turmoil the number of Westminster Members of Parliament that there should be from Scotland, the way in which Scotland is taxed and funded, and the election system itself? In seeking any cross-party understanding on this matter, has my right hon. Friend had any confirmation from the hon. Member for Hamilton (Mr. Robertson) that he is prepared to deal with the anomalies to which he has admitted, and with his differences with the Liberal Democrats?

Mr. Forsyth: I do not like the word "anomaly", which is how the hon. Member for Hamilton has described the vital issue of how many Members of Parliament represent Scotland in the House. Nor do I agree with the Leader of the Opposition, who described the funding of the Scottish Parliament as an accountancy detail. On those matters rests Scotland's prosperity, the quality of public services and our ability to have an effective voice for Scotland here at Westminster, where, even under the Scottish Constitutional Convention's proposals, the big decision--on Scotland's budget--would be taken. Liberal Democrat Members are at least honest enough to admit that there would have to be a reduction in the number of Members of Parliament, and the loss of the office of Secretary of State for Scotland. That is too high a price to pay on top of the Labour party's tartan tax.

Dr. Reid: One of the primary mechanisms by which the people of Scotland convey their representations to the United Kingdom Government is local government. I understand that, within an hour, there will be a report of the inquiry into local government in North Lanarkshire council. Why was that not available before Question Time today? Is it because it exonerates councillors in North Lanarkshire and, if so, will the Secretary of State tell us how much the inquiry cost and who will pay, and guarantee that in future such inquiries will not be used as a party political weapon by one party against another?

Mr. Forsyth: A written question has been tabled and the report will be published. No doubt the hon. Gentleman

31 Jan 1996 : Column 984

will be able to study it, together with the report that has been published by his own party. The inquiry was established after we received representations from those with responsibility for ensuring fair play in local government, and it is pretty disgraceful of the hon. Gentleman to ask a question in those terms.

Mr. Marlow: How would my right hon. Friend describe a proposal that would allow Scottish Members of Parliament to vote, for example, on whether there should be selection in our schools in England, but would not allow English Members of Parliament to vote on education policy in Scotland? Would that not be hypocritical perhaps?

Mr. Forsyth: I am a Unionist. I believe in this Parliament and I believe in everyone's right to vote on matters that concern the United Kingdom. Opposition Members have argued that English Members should not vote on issues affecting Scotland. It is interesting to note that tonight, when we celebrate the bicentenary of the birth of Robert Burns--

Mr. Foulkes: The death.

Mr. Forsyth: All right, it is the bicentenary of his death. The hon. Gentleman may be celebrating his death, but let us compromise on death and birth so that we have his life's work.

It is significant that tonight, as we have a big function in Whitehall to celebrate the life and works of Robert Burns, Scottish Opposition Members will insist on no pairing arrangements applying to voting on, of all things, the English rate support grant.

Mr. George Robertson: The relationship between the Government and the Scottish people will be immeasurably soured by the spending restrictions that the Secretary of State is imposing on Scottish local councils. Has he read The Scotsman today, in which the Tory leader of the new Borders council has expressed his disgust at the spending restrictions that are being imposed on that council, necessitating cuts in the education budget?

When the Secretary of State sounds off about law and order in Scotland, which is an important issue in the relationship between Government and the people, will he explain why the expenditure of Strathclyde police joint board is £304 million yet the Government will give it only £302.5 million? With that spending gap, how will the police be able to tackle the problems of law and order in that part of Scotland?

Mr. Forsyth: I have given substantial increased provision for the police. The hon. Gentleman's position would be slightly more credible if he and members of his party were not travelling around Scotland saying that expenditure was not enough without saying how much extra they would spend.

Instead of speaking about cuts, perhaps the hon. Gentleman would acknowledge that there is an increase in local government expenditure in Scotland over and above the amount that we get under the Barnet formula consequences of more than £25 million. Instead of telling fibs about the Government and what the Government have done, members of the Labour party would do better to draw

31 Jan 1996 : Column 985

attention to the increase that has been made. If the hon. Gentleman feels that the expenditure is not enough, he should say how much more a Labour Government would provide. If he is not able to do so, he should stay quiet.

Next Section

IndexHome Page