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By going down the national insurance route, the Chancellor has also effectively reduced the amount that will be invested in the NHS and other public services. It should be remembered that the NHS is a major employer. A large proportion of its costs is wages and salaries. All will be subject to the changes to employers' national insurance contributions and some £26 million every year will be taken out of the NHS in Scotland and given back to the Treasury. Local authorities will pay more than £35 million. Overall, we calculate that the cost to the public sector will be £1.2 billion.
I want to refer to some specific clauses. Clause 90 changes North sea oil taxation. I am not sure about its effect in Wales, but it will make a great impact in Scotland. The changes in royalties are largely red herrings because they affect only pre-1982 fields. The new 10p tax is more important and could have a detrimental effect on employment in the North sea, especially on the utilisation of marginal fields. Earlier, the hon. Member for Waveney (Mr. Blizzard) made the good point that many fields in the North sea are marginal. Indeed, the UK Offshore Operators Association said that the changes
The Government are ushering in a substantial change in a vital industry, apparently without undertaking any public-economic assessment of its effect on the 264,800 jobs that depend on the industry. The changes will reduce industry net cash flow, and that will have a negative effect on exploration, which is already low. Exploration and appraisal have decreased by approximately 55 per cent. since 1996. We tabled an amendment in the debate on the Budget; alas, it was unsuccessful, but we may return to it.
The Chancellor must know about the huge damage caused to the rural and remote parts of Scotland by the high cost of fuel. The Budget did not increase fuel duty, but froze it. That is cold comfort to those who experience steadily rising prices. The most cynical among usthat must include most of uswonder how much of the new 10p North sea oil tax will be passed on to consumers at the pumps. Fuel duty may be frozen, but taxation of fuel may effectively rise. Will the Financial Secretary take any action to ensure that it is not passed on to customers in rural petrol stations?
Perhaps the Financial Secretary will not be surprised to learn that we also have severe difficulties with clauses 126 to 130, which cover the aggregates levy. It is likely to have a disproportionate effect on Scotland's economy. In Scotland, many small quarries will experience dramatic increases in costs through the levy. It is a flat rate levy; that means that the increase will be proportionately greater in Scotland where aggregates are cheaper than in England.
However, the greatest impact of the aggregates levy will be on local authorities and projects such as coastal improvements. In my constituency, Angus council is dualling the notorious A92 road. The levy will add £2 million to the cost of the work. The council tax payer will ultimately bear that cost. That will happen throughout Scotland and Wales because 40 per cent. of all aggregates are used by the public sector.
The aggregates levy will have an impact much further down the line on those who manufacture added-value aggregates products such as pre-cast concrete. I recently visited Montrose Concrete Products, a manufacturer in my constituency. I was told that its products were already undercut by those from Northern Ireland. It appears bizarre, but I am told that the majority of some pre-cast products that are used in construction in Aberdeen come from Northern Ireland.
The Bill provides for transitional relief for Northern Ireland but not for Scotland. That is patently unfair. I do not begrudge Northern Ireland its relief, but Scotland and Wales should receive similar consideration. I appeal to the Government to reconsider the matter. Again, we tabled an amendment in the Budget debate. We received some support from the Ulster parties and some from Liberal Democrats, but not from the main Opposition.
There are wide variations in growth. In the United Kingdom, Scotland is held in a state of managed decline. Although United Kingdom growth has been 2.5 per cent. over the past 10 years, Scottish GDP has grown by 2.1 per cent. resulting in an opportunity cost of £3 billion. Growth in the UK may be set at 2.2 per cent. now, but as the Secretary of State for Scotland recently admitted, growth in Scotland is only 1.2 per cent.
The Bill shows yet again that the priority for Scotland is winning fiscal independence for the Scottish Parliament. Scotland is a wealthy country that can and should stand on its own fiscal feet, legislating to combat its unique challenges and to take advantage of its unique opportunities.
Kevin Brennan (Cardiff, West): I emphasise at the outset that I have never met the hon. Member for Buckingham (Mr. Bercow) outside the House, despite his remarks. He described the Chief Secretary as Vesuvius, but it was the hon. Gentleman who brought a volcanic metaphor to mind. He resembled a miniature Stromboli, huffing and puffing and showering the Chamber with rhetorical sparks, but ultimately destructive and negative, leaving a lingering whiff of bad eggs. At least he did not speak for as long as the hon. Member for Kingston and Surbiton (Mr. Davey), who rumbled on and on without threatening to erupt into life. I should congratulate the hon. Member for Angus (Mr. Weir), who spoke on behalf of Plaid Cymru as well as the Scottish National party.
Kevin Brennan: It was, at least, short, as my hon. Friend says. I congratulate the hon. Member for Angus on the detailed knowledge of Welsh affairs that he extemporised during his speech. At least we were spared a speech from the moody mullah of misery, the hon. Member for East Carmarthen and Dinefwr (Adam Price), who normally speaks for Plaid Cymru on Treasury matters.
Mr. Tom Harris: Unfortunately, I was not able to intervene on the hon. Member for Angus. Does my hon. Friend agree that now would be a good opportunity for the Scottish National party to volunteer to serve on the Standing Committee for the Finance Bill, as it has missed previous opportunities to do so and bitterly regretted that afterwards?
The Bill provides us with the legislative means by which most of the changes announced in the Budget can be put into effect. I disagree with the hon. Member for Kingston and Surbiton whoif I heard him correctlysaid that the Bill was about more than national insurance. It is not about national insurance at all; those provisions are not in it.
There is no doubt in my mind that this Budget is the best in recent history because this represents the moment at which the Government took the steps required literally to insure the health of the nation. It is possible to introduce the measures in the Billand the associated changes in the Budget, including the changes to national insurance contributionsbecause of the favourable macro-economic position over which the Government have presided. There was a time, not long ago, when any economic textbook would have said that it was impossible simultaneously to have low inflationa record low, as my hon. Friend the Member for Caerphilly (Mr. David) pointed out earlierlow unemployment and high growth, relatively speaking, all at the same time. I remind Opposition Members that our economic growth is very strong at a difficult period for the G7 countries, yet unemployment is at its lowest for more than a generation.