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Mr. Fallon: That must be right. It was certainly the case under the previous Government--I know that it seems to have changed now--that civil servants were ultimately responsible to the Crown. It has yet to be established how they will be able to serve two different Parliaments. That reinforces the case for spelling out in

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more detail in the Bill, in legislation and, if necessary, on the ballot paper what powers those who vote in the referendum in Scotland will be voting for.

Mr. William Cash (Stone): Will my hon. Friend give way?

Mr. Fallon: I will, but I am conscious that others want to contribute.

Mr. Cash: I said yesterday that the role of the Secretary of State is also left in limbo. Does my hon. Friend accept not only that civil servants are servants of the Crown, but that, as the function of the Secretary of State is an indivisible function, that matter must be sorted out? As it is impossible for any one Secretary of State to be distinguished from others, the issue of the relationship between Ministers of the Crown and those who would be representatives in a Scottish Parliament, setting out their policy in that Parliament, will have to be sorted out.

Mr. Fallon: It certainly needs to be sorted out. It would also lead us down the path of exploring the relationship between the Secretary of State, who is accountable to the House, and whoever is chosen to be first Minister in the new Scottish Parliament. However, that might be outside the scope of the amendments that we are debating, so I will not take that path.

The third power of Parliament is the power to grant or withhold supply. However legislation is framed, no system of parliamentary government is constructed without the prospect of granting supply to or withholding it from its Executive. Before any citizen, any resident of Scotland, comes to vote in a referendum this autumn, they will surely want to know exactly what type of supply may be controlled by the new Scottish Parliament and may be granted to or withheld from its Executive by that Parliament.

That matter might affect the funding of every local authority, hospital, school, university and public service in Scotland. There may well be many people in remoter parts of Scotland who will not agree to the granting or withholding of that type of supply, exercised on the whim of a coalition in the new Scottish Parliament in Edinburgh, that will, for example, dramatically reduce the moneys available to the councils of the Western Isles or the Shetland Islands.

That is why the powers to be exercised by the new Scottish Parliament must be set out. If they are not to be set out in legislation before the referendum, we are entitled to say that they should be specifically set out on the face of the Bill, as proposed in the Government's narrow phrase "tax-varying powers" in clause 1, or on the ballot paper. If that is impossible, as a last resort it would be better than nothing that those powers be set out in some type of formal literature that is sent to every resident of Scotland before he or she votes in the referendum. That is a proposition which the Committee cannot discuss, because of the way in which the timetable motion has been drawn up.

Unless the powers are specifically set out in legislation, and unless we can assure those who are voting that they know exactly what powers the new Scottish Parliament will have, we are driven back to the solution proposed by the hon. Member for Linlithgow (Mr. Dalyell), which we should put before the House again.

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How can those who vote in a referendum--this autumn, perhaps--be sure what they are voting for, unless they see in detail the powers that the new Parliament will exercise? When the Minister of State winds up the debate, he should re-examine the phrase "tax-varying powers", and consider the deletion of the adjective "tax-varying". He should at least come clean with the Committee and say that the vote this autumn should be on the establishment and powers in toto of the new Scottish Parliament.

Mr. Donald Gorrie (Edinburgh, West): I want to reiterate the Liberal Democrat position on the Scottish referendum. The position is different in Wales, and our Welsh colleagues will make clear their position.

First, we are against a referendum on Scotland. We believe that the proposal for a referendum was born from panic. The Labour leadership was put in a panic by the former Secretary of State for Scotland. Fortunately, the Scottish voters have a great deal more--if I may use two Scottish expressions--spunk and smeddum than the Labour leadership. They have rejected the attempts of the previous Secretary of State to frighten them and turn them against the idea of a Scottish Parliament. The Scottish voters have shown better sense than the Labour leadership. There is no need for a referendum.

Our position is diametrically opposed to that of the Conservatives, who are against any form of democracy anywhere, especially in Scotland. We believe that the views of the Scots are clear and a referendum would be a waste of time.

Secondly, we are against the second question. We consider it politically inept. However it is written, it will be read by many voters as, "You do want to have higher taxes, don't you?" Those of us who learnt Latin learnt a form of question which called for the answer no. This is such a question. It is written in such a way that people will tend to vote no. It does not state, "If you vote for higher taxes, you will get better schools, better hospitals and so on," which our party put forward in the general election. It merely asks in the abstract, "Would you like to vote for higher taxes?" We believe that that is inept.

Furthermore, as my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) made clear yesterday, the question puts on offer a proposition that no party is putting forward--that is, a Scottish Parliament without tax-raising powers. That is not on the political agenda, so it is wrong to offer it. It also demolishes any moral position that the Government may have for rejecting the nationalists' claim to have their question included in the referendum. Once one starts opening out the scope of the referendum, where does one stop? The second question is foolish and undermines the Government's position.

I shall deal with some of the arguments that we have heard against a Parliament with tax-varying powers. The hon. Member for Linlithgow argued that the existence of borders created difficulties, but there is no problem if a citizen of Connecticut pays different taxes from a citizen of New York state, or if the citizens of two adjacent German Lander are taxed differently. The hon. Gentleman may say that America is a federal country--but that makes no difference to the principle. Denmark, a unitary country, has district, regional and national income taxes.

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The system works perfectly well; there is no rioting in the streets of Denmark of the kind we had here with the poll tax.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Is the hon. Gentleman saying that we should not ask the Scottish people whether they want a taxation system different from the one they have at the moment, even though, on his own evidence, there are at least five or six ways in which that could be interpreted?

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Mr. Gorrie: We are saying that the tax-varying element of the Parliament is an integral part of the whole structure. Hence to ask a separate question about it is idiotic.

Mr. Andrew Lansley (South Cambridgeshire): The hon. Gentleman proposes that a Scottish Parliament must, of necessity, control an entirely separate fiscal regime from the one applying to the rest of the UK. That seems to imply that a Scottish Parliament must, also of necessity, be economically independent from the United Kingdom Parliament.

Mr. Gorrie: I do not see why it should not be, but it is also possible to have a mixed system, which is what the Government seem to be proposing. We say that, without some control over the money, the Scottish Parliament proposal is fatally flawed.

Mr. Garnier: For some time, it has been Liberal party policy--I do not know whether it still is--to advocate a local income tax, so I can well understand a Scottish Parliament having the power to raise a local income tax that varied from region to region or from county to county. Does the hon. Gentleman, however, agree that the second question is meaningless because the people of Scotland will be invited to answer it with no idea of the true definition of "tax-varying powers"? At the moment, it is just a nice-sounding phrase with no detail behind it.

Mr. Gorrie: By the time voting takes place, a White Paper will have been issued and debated at length. The citizens of Scotland are not all as stupid as English Conservative Members seem to think they are. It would be quite simple for them to say that they wanted a Parliament with some control over money. We are against asking a separate question at all; but if there is one, we shall campaign flat out for a double yes in the referendum, because tax-raising powers are essential.

Conservative Members have raised the chimera that because of a slightly higher income tax in Scotland, people and companies would indulge in a mass emigration to England. That is rubbish. There are already in Scotland at least three pairs of adjacent local authorities the gulf between whose council tax D bands--the standard rate band--is greater than the gulf that would ensue from the imposition of an extra 3p tax on the mythical average taxpayer. Yet there is no mass emigration or immigration--


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