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Mr. Ancram: I am grateful to my hon. Friend for his question. I have one or two questions myself on financing and on the Barnett formula, but, before I ask them, I should like to deal with Scotland's future role in Europe.

We have been told that Ministers of the Scottish Executive will have a specific role in Europe, even if Scotland does not have a voice in the United Kingdom. The Secretary of State shakes his head. He obviously does not believe that Scotland will have such a role in Europe.

The White Paper, however, tells us that Ministers of the Scottish Executive will be involved in formulating UK policy positions; supporting and advancing the single United Kingdom negotiating line; working as a United Kingdom team; and, when appropriate, speaking in Councils for the United Kingdom. That is pure political unreality--based, I suspect, on an assumption that there will somehow be a permanent new Labour majority in both England and Scotland, working cosily hand in hand.

What will happen, however, when there are different political colours and perspectives, as inevitably there will be? How likely is it that there will be agreement on a common United Kingdom policy position? What will happen to Scotland's position if there is no agreement? Will Scotland's case effectively be unrepresented in Councils, as it cannot be under current arrangements? What will happen if, politics apart, there are conflicting interests between Scotland and the rest of the United Kingdom on a European matter? How will Scotland's voice be heard?

By what right will a Scottish Minister from the Scottish Executive speak for the United Kingdom? We are told that it will be done by agreement. How often is such

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agreement likely to be given? How will such a Minister answer to the United Kingdom Parliament--of which he will be neither a Member nor a Minister--for what he has said on behalf of the United Kingdom? The matter is a mess and a muddle, and we have received no answers to our questions about it--because, I suspect, it is irresolvable. The proposal is part of a sales pitch to win support at the referendum, but it does not add up, and the people of Scotland should know that before 11 September.

In reality, Scotland's voice in the Council of Ministers would be considerably lessened after implementation of the proposals. Scotland would be further marginalised, and greater would be the consequent resentment in Scotland. We would be left with such extraordinary anomalies as allowing Scottish Members to vote on abortion but not on capital punishment in the United Kingdom Parliament. Ultimately, such anomalies can only further marginalise Scotland within the United Kingdom.

Mr. Salmond: Will the right hon. Gentleman give way?

Mr. Ancram: Yes, but it will be the last intervention in my speech.

Mr. Salmond: I am interested in the right hon. Gentleman's comments on Scotland's role in Europe, because it is an important matter. Can he tell us the percentage--to the nearest 10 per cent.--of times that Scottish Office Ministers attended Council of Ministers meetings? Was it 10, 20, 50 or 60 per cent? Does he know?

Mr. Ancram: I do not have the answer to that question to hand, but I know from my experience as a Minister in the Scottish Office and in the Northern Ireland Office that, when interests were at stake, Ministers were present, they were consulted and had a common view. The point that I am making is that if there is a differing view--if the United Kingdom position cannot be in line with that of the Scottish Parliament--the Scottish Parliament's voice would be unrepresented, and so would Scotland.

The United Kingdom would be threatened, Scotland would be marginalised and, on top of that, Scots would be worse off. The cost of the Scottish Parliament, including its setting up, would come off the Scottish block--£70 million in the first year and £30 million thereafter, we are told in the White Paper, but I suspect that that is a gross underestimate. Whether or not it is, that money will come from the block; it will come from the schools budget, the hospitals budget and the local government budget, all of which will have to pay for it.

We are told that the Barnett formula will be retained. Perhaps the Secretary of State will tell the House and the Scottish people how often the increasing levels of Scottish spending over the years were achieved by the Barnett formula alone. Is it true that, over time, the Barnett formula will equalise proportionate spending, rather than preserve currently favourable Scottish differentials? How will that mean more provision, as we are told it will, for the Scots under a devolved Parliament? Or will it all have to come from tax, from the can of tartan tax worms that we began to open last night? These are the central questions that must be fully answered before the referendum.

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Indeed, there are many questions on tax that need to be answered. The Secretary of State said that he wants the Scots to have the facts. Well, let us see whether we can get some facts today. Previously, I have been singularly unsuccessful in getting any answers, and I fear that I am again pursuing the triumph of hope over experience.

Will the Secretary of State start by confirming that, contrary to the impression given so far, income tax is not the only element of the tax-varying powers being made available to a Scottish Parliament? In particular, will he--[Interruption.] The right hon. Gentleman may want me to repeat that question so that he can answer it. Will he confirm that, contrary to the impression given so far, income tax is not the only element of the tax-varying powers being made available to a Scottish Parliament, and that other elements are available, too?

Mr. Dewar: What are they?

Mr. Ancram: I am asking the right hon. Gentleman. I return to a point made by my hon. Friend the Member for Aldershot (Mr. Howarth) and by the hon. Member for Linlithgow (Mr. Dalyell). It is a serious point that has yet to be addressed. Will the Secretary of State please tell the House what will happen if changes in income tax bands or fluctuations in the tax base, which decide how much 1p in the pound can secure in terms of revenue, create a situation in which a 3p increase in the standard rate of income tax will not produce the guaranteed and index-linked £450 million? How will that shortfall be met?

The Secretary of State made it absolutely clear in his statement and, indeed, in the White Paper, that the £450 million is guaranteed. If the tax take from a 3p increase in taxes does not produce that, a shortfall will occur and, under the guarantee, it will be made up. How is that to be done--by allowing for more than 3p to be raised in the pound, which we have been told is the maximum, or by another tax? It has to be one or the other. If not, the guarantee is false. I shall give way to the right hon. Gentleman if he wants to explain how the shortfall will be met.

Mr. Deputy Speaker: Order. It is not for the right hon. Gentleman to invite anyone to intervene; it is for other hon. Members to ask to intervene. The right hon. Gentleman should continue with his speech.

Mr. Ancram: I take your point, Mr. Deputy Speaker, but, having failed to get any answers from the Minister who I think is going to wind up the debate, I was hoping that I might have tempted the Secretary of State to intervene to give me an answer. It is something which the people of Scotland want to know. Either the guarantee is false or the shortfall will be made up by putting up the basic rate by more than 3p or through another tax. The Scottish people, who are worried about the 3p increase as it is, need to be told.

Mr. Dewar: It is poverty of imagination on the part of the right hon. Gentleman if he thinks that they are the

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only two possibilities. He might consider a 3p maximum on a similar tax but a differently constructed income tax base.

Mr. Ancram: We are now being told that there is going to be another tax.

Mr. Dewar: I suppose that it was unwise of me to rise to the bait, but the right hon. Gentleman was asking me to answer a hypothetical question. If, at some future date, the present band on which the maximum of 3p is levied does not produce the requisite revenue and some alternative has to be found, it does not necessarily mean raising the 3p rate. One might look for another income tax base on which the 3p could be levied to produce the rate.

Mr. Ancram: The only possible interpretation of that is that there is going to be a different tax banding in Scotland. That is not in the White Paper.

There is a simple question to which the Scottish people need the answer. In a recession, for example, when there are fewer pounds to be taxed, if I can put it that way, and the 3p rate does not raise the £450 million calculated in the White Paper, there will be a shortfall. According to the guarantee that has been given, that shortfall is going to be met. I ask again, where is the money to come from? We are told that it will come from another arrangement relating to some other form of income tax. We want to know what that new form will be. We need answers to such essential questions.

I move on, however. Will the Secretary of State confirm that a Scottish Parliament with control over aggregate external finance and over the non-domestic rate and other local taxation could raise its own spending by passing the burden on to individuals and businesses through higher local taxes? For instance, could a Scottish Parliament retain some of the aggregate external finance for its own purposes, thereby pressurising local councils to increase council tax? Could it restructure the uniform business rate to achieve the same result? Or, could it, as I understand from the White Paper, introduce a new local tax--say, a sales tax--in order to justify retaining resources for itself? If it could do these things, are they not back-door methods for a Scottish Parliament to raise taxes even if the second question in the referendum has been answered no?

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