| Previous Section | Index | Home Page |
Oral Answers to Questions
SCOTLAND
Inward Investment
2. Mr. Stewart: To ask the Secretary of State for Scotland what is his latest estimate of the level of inward investment into Scotland; and if he will make a statement. [34170]
The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): In the year to March 1996, Locate in Scotland and the Scottish Office Education and Industry Department helped to attract 84 inward investment projects to Scotland involving planned investment of nearly £1 billion and the expected creation or safeguarding of a record 12,560 jobs.
Mr. Stewart: Is not the Government's outstanding record on inward investment, about which we have just heard, due in large measure to consistency of policy and the ability of my hon. Friend and his colleagues to make decisions about Scotland in Scotland? What does he think would happen if the present Scottish Office team were replaced by a bunch of puppets who would do every U-turn at the behest and whim of Islington spin doctors?
Mr. Kynoch: There is no doubt that my hon. Friend is correct in saying that speedy decision-making is critical in the process of attracting inward investment. Equally, it is critical to ensure that we have the right business environment in which inward and indigenous investors can thrive. The one thing that is absolutely certain is that the Opposition's proposal for a tartan tax in Scotland, whether by referendum or otherwise, whereby Scotland will be taxed at a higher rate than the rest of the United Kingdom, is bound to influence inward and indigenous investors.
Mr. Norman Hogg: Although the Minister has little experience of success in business, would he care to comment on Professor Hood's statement that a Scottish Parliament would have no impact at all on inward investment to Scotland?
Mr. Kynoch: The hon. Gentleman is an expert in acrobatics, supporting something which in the past he was against. Tax is bound to be an important element in any equation for a potential inward investor, and if the taxation rate in Scotland were higher than that in the rest of the United Kingdom, and if other Opposition policies were brought into being, such as the social chapter or the minimum wage, that would all contribute towards a reduction in inward investment and in investment in Scotland, and that would be bad news for Scotland.
Mr. Bill Walker: Does my hon. Friend agree that, when overseas companies consider inward investment into Scotland, one of the factors they have to consider is political stability--the fact that Scots can be Prime Ministers, Foreign Secretaries and Home Secretaries and can occupy any Front-Bench post--and the fact that the
Government have no plans to put all that at risk with madcap policies that are unworkable, unsaleable in England and dangerous for the United Kingdom's unity?
Mr. Kynoch: My hon. Friend is right. I am sure that he will have read in The Sunday Times an article concerning an Edinburgh fund management company, Stewart Ivory, which has already said that the uncertainty caused by the fear of a tartan tax in Scotland has been sufficient to persuade investors from south of the border not to invest in Scotland. I am sure that that view is alive in business, but it is one on which the Opposition seem slow to pick up.
Mr. Wallace: Does the Minister accept that perhaps the most important attraction for inward investment is the access that locating in Scotland gives to markets in the European Union, and that incalculable harm may be done to that if the Conservative party continues its anti-European rhetoric and if his right hon. Friend the Secretary of State makes petty points about flying European flags and sits on the Treasury Bench giving tacit encouragement to Conservative Back Benchers introducing Bills to dissociate us from the European Court of Justice?
Mr. Kynoch: I understand that the hon. Gentleman supports the introduction of a social chapter. That would be incredibly damaging for United Kingdom business, and particularly for Scottish business. The minimum wage would also be counter-productive. The hon. Gentleman's party is rather more honest and straightforward than the official Opposition, as it apparently does not need a referendum to tell the people of Scotland that it believes that taxation in Scotland should be increased beyond that of the rest of the United Kingdom, which would definitely be counter-productive for business in Scotland and for inward investment into Scotland.
Mr. Sykes: My company used to have a factory in Glasgow and a depot in Edinburgh, and they were successful enterprises up there, but if we had had a minimum wage, the social chapter, the 48-hour week, the tartan tax and a Scottish Parliament, we would have had to close both down and withdraw back to England.
Mr. Kynoch: I am pleased to hear that; it is confirmation of the message that I have been getting from the many businesses around the country that I visit. Indeed, if the hon. Gentleman had read The Scotsman, he would have seen an article about Scottish and Newcastle plc, whose chief executive, Brian Stewart, has indicated that devolution for Scotland would be "bad and disruptive commercially." That is a view with which I am sure my hon. Friend agrees.
Mr. McFall: I challenge the hon. Member for Eastwood (Mr. Stewart) outwith the Chamber to call me a puppet. The puppets are there, on the Government Front Bench, who are allowing their colleagues in England to try to absorb Locate in Scotland into Invest in Britain. Will the Minister fight on that? Does he not realise that companies such as Quintiles and Chunghwa have said that devolution and the tartan tax threat played no part in their decision to locate in Scotland, but that what did play a
part was a good, educated and trained work force, the product of good local Labour authorities, a tradition that we shall continue with a Scottish Parliament?
Mr. Kynoch: It is interesting to see how touchy the hon. Gentleman is, but I am not surprised: if I were on the Opposition Front Bench and had to undertake the U-turn that they have had to undertake in the past week at the instigation of their master south of the border, I, too, would be rather touchy about such a comment.
The hon. Gentleman referred to two inward investors--Chungwa and Quintiles. He is probably referring to an answer given by Quintiles in an interview with the BBC, in which it announced its inward investment. I was there, whereas the hon. Gentleman was not. It clearly said that devolution was not the main issue and that tax was only an element. For a company such as Quintiles, and the business that it is in, it is rather more appropriate for it to be near higher education of a high standard. That is the important element for it.
For others, taxation is a very important element, as is competitiveness. The hon. Gentleman and his party do not understand what competitiveness is all about. He advocates policies--the tartan tax, the social chapter or any of the other taxation measures that have been talked about--that would be bad for business in Scotland.
3. Mr. David Shaw:
To ask the Secretary of State for Scotland if he will make a statement on levels of public expenditure in Scotland. [34171]
The Secretary of State for Scotland (Mr. Michael Forsyth):
Public expenditure in areas for which I am responsible in Scotland is more than 35 per cent. higher per head of population than on the equivalent services in England.
Mr. Shaw:
Can my right hon. Friend tell me what would be the impact of a Scottish Parliament on public expenditure? Would current public expenditure in Scotland be sustainable without a tartan tax, or is a tartan tax inevitable if there is a Scottish Parliament?
Mr. Forsyth:
The present arrangements ensure that Scotland has about 35 per cent. more per head of population than England. Local government, for example, gets 45 per cent. more per head of population in grant than England. If a Scottish Parliament were to be established, as the constitutional unit has pointed out, there would have to be some assessment of a formula to determine the expenditure of the Scottish Parliament, which would still be decided in Westminster, where the office of Secretary of State would no longer have any meaning--if, indeed, it was in existence--and where the number of Scottish Members of Parliament would be reduced. That seems to me to be putting at risk the health service, the education service and the caring services in Scotland, but the Labour party is prepared to do that because it puts its politics and its party before the interests of its country.
Mr. Canavan:
Will the Secretary of State point out to the hon. Member for Dover (Mr. Shaw) that if we take
Mr. Forsyth:
The hon. Gentleman will forgive me if I do not agree that it should be distributed solely on the basis of need. A recent "Social Trends" survey showed that Scotland enjoys a standard of living unequalled in any other part of the United Kingdom except the south-east of England. As for his point about London, the public expenditure figures for Glasgow are even higher than those in England, but that is not a fair test. The hon. Gentleman must get his mind around the fact that public expenditure in Scotland greatly exceeds the revenue raised there. If he favours a separate parliament raising its own revenues, he must accept that we would either have to pay high tartan taxes or allow our services to be decimated. In fact, we would have to do both.
Sir Hector Monro:
In a year involving an exceptionally difficult financial settlement, my right hon. Friend did a magnificent job in maintaining a high level of block grant from the Treasury. What does he think would happen if there were no Secretary of State to fight for Scotland, which is what Labour proposes?
Mr. Forsyth:
I can hardly disagree with my right hon. Friend's flattering comments, but in any event he has made an important point which transcends party interests and is important to Scotland. The office of Secretary of State for Scotland is powerful in relation to Scotland and its interests. [Interruption.] I am sorry that the hon. Member for Fife, Central (Mr. McLeish) does not think that that is the case. He should cast his mind back to Willie Ross and other Secretaries of State for Scotland who have done a tremendous job in fighting for Scotland's interests. The hon. Gentleman would toss that aside for a pigmy parliament in Edinburgh.
Mr. Chisholm:
Can the Secretary of State confirm that the principle of the Barnett formula, which determined the level of public expenditure in Scotland in relation to expenditure in the rest of the United Kingdom, has never been called into question in any of the last 17 years by Lady Thatcher, the right hon. Member for Enfield, Southgate (Mr. Portillo) or any other Conservative politician hellbent on slashing public expenditure? Is the Conservative party now saying that Scotland gets more than its fair share, or is it simply punishing Scotland because it wants a greater say in its own affairs?
Mr. Forsyth:
I welcome the hon. Gentleman to his Front-Bench responsibilities. I understand that he has been put in charge of the referendum campaign in the unfortunate event of a Labour Government; I hope that he will show the same enthusiasm for a "no" vote as he did on the last occasion.
I do not wish to embarrass the hon. Gentleman further on his first day out, but when he has an opportunity to examine his brief he will discover that the Barnett formula--which gives us our share, relative to population, of any increase in English expenditure--brings Scottish
and English expenditure into line. He is advocating bringing Scottish expenditure into line with English expenditure, which must mean a tartan tax.
The point is that the existing level of expenditure has been agreed, and is historically there. If we had a parliament whose funding was determined down here, there would have to be some kind of assessment of need. I can tell the hon. Gentleman that many people in the Treasury will be delighted to hear his words, but they are not words that will ever come from the Conservative party, because we stand for Scotland's interests.
Mr. Dunn:
Given that there is a link between Government income and public expenditure, will the Secretary of State confirm that we have no plans to tax 16 to 18-year-old students, to impose an employment tax or a tartan tax and, more significant for rural dwellers in Scotland, to tax the motorist?
Mr. Forsyth:
I agree entirely with my hon. Friend. I am proud of our record in Scotland in sending youngsters from school to higher and further education. Far more youngsters are doing that. That is one of the reasons why we commit far more resources in the settlement that we were able to achieve last year and in previous years. I can think of nothing more disastrous than a tartan tax and a teenage tax, which would remove child benefit from children over the age of 16 still in higher education, as Labour Members wish to do. That would hit Scotland harder than any other part of the United Kingdom because more of our youngsters seek the opportunity of higher and further education.
| Next Section
| Index | Home Page |