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Property Tax

5. Angela Watkinson (Upminster) (Con): What assessment he has made of the impact of introducing a property tax in Scotland. [104872]

The Parliamentary Under-Secretary of State for Scotland (David Cairns): Local taxes, such as council tax and non-domestic rates, to fund local authority expenditure are matters for the Scottish Executive.

Angela Watkinson: The Minister will know that many elderly people live on modest retirement incomes, but the value of their properties has increased substantially over the years. What discussions has he had with his colleagues in the Department for Work and Pensions about the likely impact of a property tax on people on limited or low incomes?

David Cairns: As I said in my main answer to the hon. Lady, any decision to change the basis of local taxation in Scotland is a matter for the Scottish Executive, but my colleagues in the Executive are not attracted to proposals for a local property tax. The best thing that we can do for pensioners and people on low and modest incomes is to ensure that they receive the help and support that they require through pension credit and above-inflation increases in the state pension. I urge the House to compare that with the 18 years of Conservative rule, when the basic state pension rose in value only once.

Rosemary McKenna (Cumbernauld, Kilsyth and Kirkintilloch, East) (Lab): My hon. Friend will be aware that in discussions about local council funding, some people have proposed replacing property tax with local income tax. What assessment has he made of the impact that that would have on Scotland and on individuals who live there?

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David Cairns: The impact on hard-working two-income families would be devastating if we adopted a local income tax. The Burt report, which was published recently, said that to make the same amount of money as the council tax, local income tax would have to be set at 6.9 per cent. I understand that the Scottish National party would cap it at 3 per cent., which would leave a black hole in local finances of £1 billion. That would mean massive Government tax hikes and borrowing or massive cuts in spending in local authority areas. Once again, it would be the hard-working families—

Mr. Speaker: Order. I call David Mundell.

David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con): I think that it can be said that my party has learned from bitter experience that there is no easy answer to financing local government in Scotland. However, the answer is definitely not a local income tax or a property tax, which would result in working families paying thousands of pounds more in tax. As ever, the First Minister has prevaricated on the matter, but given the expectation that the Lyons report will recommend the introduction of a property tax for England and Wales—such a tax is to be introduced in Northern Ireland—is not the reality that a property tax is a fait accompli if Labour is returned to power in the Scottish Parliament elections?

David Cairns: The hon. Gentleman is quite right that the answer is not a property tax or a local income tax. However, neither is the answer introducing a poll tax, which was his party’s last attempt to solve the problem and which was overwhelmingly rejected by the people of Scotland. We have clearly said that we are not going to introduce a property tax nor will we introduce a local income tax, which would cost a fortune to fund, with 32 different rates across Scotland and all the administrative nightmares that that would involve. Most of all, it would clobber hard-working two-income families the length and breadth of Scotland who would be up to £1,000 worse off.


6. Ms Katy Clark (North Ayrshire and Arran) (Lab): What progress has been made towards achieving full employment in Scotland; and if he will make a statement. [104873]

The Secretary of State for Scotland (Mr. Douglas Alexander): Scotland continues to benefit from the Government’s commitment to achieving full employment. The latest labour market data show the highest number of people employed in Scotland since records began. Total employment is up by more than 200,000 since 1997, and the employment rate in Scotland exceeds that of both the wider UK and almost all countries in the European Union.

Ms Clark: I am very grateful to the Minister for his answer and, indeed, for the huge amount of work that has been done to achieve those figures and to tackle the reality of unemployment for the people whom it affects. Last Friday, my hon. Friend the Member for Central Ayrshire (Mr. Donohoe) and I attended the
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opening of offices in my constituency for the Irvine Bay Regeneration Company, which hopes to turn the tide. There has been a 25 per cent. increase in employment in my constituency since 1997, but a huge amount still needs to be done to regenerate the area. Does my right hon. Friend welcome—

Mr. Speaker: Order. The hon. Lady must end her question, as supplementaries must be brief.

Mr. Alexander: I am well aware of the important work that the Irvine Bay company anticipates undertaking, given that that was an area of Scotland devastated by two recessions in as many decades under the Conservatives. As regards traditional manufacturing, I am sure my hon. Friend will welcome the comments of Dr. Peter Hughes, the chief executive of Scottish Engineering, who said on 1 December:

As my hon. Friend recognises, however, the challenge is not just in manufacturing, but in services, so I am sure she will also welcome the words of the RBS Group chief economist Andrew McLaughlin, who only yesterday noted that

Those are welcome signs of continued and sustained economic growth not just in Ayrshire, but right across Scotland.

Mark Pritchard (The Wrekin) (Con): As the Secretary of State knows, a major employer in Scotland is the Scotch whisky industry. What discussions has he had with the Venezuelan Government about the new trade barriers that that Government have introduced, which are having a substantial impact on Scottish exports to Latin America?

Mr. Alexander: I am sure all hon. Members will be interested in the fact that the Scotch Whisky Association is having its annual reception this week at which there will be an opportunity for us to meet its representatives. Since assuming the office of Secretary of State for Scotland, I have of course met the Scotch Whisky Association. With reference to the hon. Gentleman’s particular point about Venezuela, in a previous role as Trade Minister I made representations on behalf of the Scottish whisky industry to the Indian Government and to other Governments about the need for trade barriers to come down. That argues for the effective link-up between the Scotland Office and the Foreign and Commonwealth Office, which would be imperilled by a break-up of the United Kingdom and the loss of national influence that the United Kingdom brings.

Oil/Gas Industry

7. Mr. Frank Doran (Aberdeen, North) (Lab): What recent discussions he has had with the oil and gas industry. [104874]

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The Secretary of State for Scotland (Mr. Douglas Alexander): I maintain regular contact with the oil and gas industry in Scotland, and met representatives as recently as last week.

Mr. Doran: When my right hon. Friend met representatives of the oil and gas industry, did he discuss with them their tax liability over the next 30 years? It is unlikely that he did, as neither he nor I nor the oil industry knows what the oil price is likely to be next week, never mind over the next 30 years, but I am told that there are some people who think that one can run a country on the basis of the oil income.

Mr. Alexander: I find myself in agreement with my hon. Friend. I met the chairman of Shell in the UK last week and made it clear how inherently difficult it is to try to predict the oil price looking to the future. One need only look at the significant drop in the price of Brent crude in recent months to evidence the fact that it would be the height of irresponsibility to try to build an economic policy on as volatile a commodity as oil.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I draw the attention of the House to my entries in the Register of Members’ Interests related to the oil and gas industry. The price of oil into the future is obviously unknown, but what can be less unknown is Government policy. The Government can give a clear indication of the framework in which investors will operate—both the tax and regulatory regime. What message has the right hon. Gentleman given to the industry about his Government’s desire for a long-term strategy to ensure maximum recovery of oil and gas from the North sea?

Mr. Alexander: The meeting that I had with Shell was the latest meeting that I have had with representatives of the oil interests in the United Kingdom. Of course we want to see a long-term productive future for the UK continental shelf, and for the North sea basin in particular. That is why, through the PILOT mechanism, my hon. Friend the Under-Secretary and I have been working week in, week out, month in, month out to ensure that there is a sustained engagement with our Department, the Department of Trade and Industry and the Treasury. On that basis, I believe we can look forward with real optimism to the years ahead for the North sea.

Miss Anne Begg (Aberdeen, South) (Lab): With reference to the fluctuating oil price, has my right hon. Friend had time to look at the GERS figures that were published yesterday, and what conclusion does he draw from them?

Mr. Alexander: The figures confirm, as The Scotsman made clear on its front page today, that there is a black hole in the Scottish National party’s economics. Oil has a significant contribution to make, but it cannot fill the black hole created by the public expenditure commitments that the nationalists would be determined to make.

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Act of Union

9. Mr. Philip Hollobone (Kettering) (Con): What plans his Department has to mark the 300th anniversary of the Act of Union in 1707. [104876]

The Secretary of State for Scotland (Mr. Douglas Alexander): As I informed the House on 7 November, the Chancellor and I will launch a commemorative £2 coin. There will be exhibitions in both Houses of Parliament and in the Scottish Parliament, and other activities are in preparation.

Mr. Hollobone: Apart from her gracious agreement to appear on the new £2 coin, what other activities and engagements does the Secretary of State plan for Her Majesty in the tricentenary celebrations?

Mr. Alexander: With respect, it would be better to take that issue forward in discussions with the royal household rather than prejudging it with an answer today.

Mr. Greg Hands (Hammersmith and Fulham) (Con): Would not one way of celebrating the Act of Union effectively next year be for Scotland to join England in its World cup bid for 2018? That would allow the two countries to show joint sporting endeavour, and Scotland would finally be allowed by the Chancellor of the Exchequer to bid for the World cup with England.

Mr. Alexander: The hon. Gentleman may be aware that FIFA does not encourage joint bids. I will disappoint him, if he wants to argue for a joint United Kingdom football team, because I have supported Scotland too often and with enough disappointment in the past to be deeply unconvinced by that particular argument.

Communities and Local Government

The Secretary of State was asked—

Sustainable Communities

14. Mr. Andy Reed (Loughborough) (Lab/Co-op): What steps she is taking to promote sustainable communities in areas of high density student housing. [108116]

The Parliamentary Under-Secretary of State for Communities and Local Government (Angela E. Smith): My hon. Friend the Minister for Local Government recently met my hon. Friend the Member for Loughborough (Mr. Reed) and representatives from the university, the local authority and community groups, of which the Storer action group was particularly impressive, to discuss the issue. As a result of that meeting, we are now examining a number of measures in the areas of planning, housing, finance and local area agreements to try to find a sustainable resolution to the problems. The problem can be more general, and as part of our work to create sustainable communities, we supported the publication of the Universities UK guide on studentification in partnership with the Department for Education and Skills earlier this year, which outlines good practice to integrate students into the community.

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Mr. Reed: I thank the Minister for that reply and, through her, thank the Minister for Local Government for recently visiting Loughborough to talk to residents and those who are concerned. We have a genuine partnership in Loughborough, where university students and others are working together, and I am proud of that. We want to pursue use classes orders, which are prevalent in Northern Ireland in determining the change of use that turns a particular property into a house in multiple occupation. Will the Minister agree to meet me and other representatives at some stage to pursue that particular point, which may not change the problem that we have at the moment but could help with future studentification problems around the country?

Angela E. Smith: I thank my hon. Friend for that contribution, and he has played an extremely valuable role. He has lobbied Ministers, including me, and the Minister for Local Government was particularly impressed by the group that he brought together and by his lobbying on the issue. There are differences between the situation in Northern Ireland and the situation in Great Britain. The circumstances here may mean that UCOs are not suitable, but we should discuss anything that could relieve the situation and are happy to meet him. He has made his arguments with some force, and a meeting could be helpful.

Mr. Robert Syms (Poole) (Con): There is no doubt that studentification is a major and growing problem in towns such as Loughborough and in many cities in England. I welcome the fact that the Government are looking at proposals, because the Housing Act 2004 did not say very much about that growing problem. A recent UK Universities report stated that the key is joint working, which I welcome, but I hope that the Government examine proposals to strengthen the ability of housing authorities to protect local citizens. The offset to the growth of universities is that many local people find it difficult to get into the housing market.

Angela E. Smith: I recognise that there are a number of problems. Students want decent housing and to maintain a community, and local residents often feel the effects of experiencing a different kind of community. We need to examine housing and planning, and there are some new planning regulations that address some of the issues that the hon. Gentleman has raised. We are keeping the matter under review and are aware of the problems. My hon. Friend the Member for Loughborough has been particularly vocal in highlighting the issues of concern that we need to address.

Lynne Jones (Birmingham, Selly Oak) (Lab): In roads in my constituency near the university, half the population turns over every year. When that happens, every other house has a “To Let” sign outside it, which is not a sustainable community. I know that the Minister is aware of the problem from her experience in Northern Ireland, but I wonder why the Government have set their face against imposing similar solutions not only to reduce the size of the population in an HMO at which point planning permission is required, but to require compulsory licensing for all small HMOs as well as large HMOs, which are included in the Housing Act 2004.

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Angela E. Smith: It would be wrong for my hon. Friend to assume that the Government have set their face against changes that improve the situation. The original purpose of the HMO legislation was to run fire safety and risk assessments. Different remedies are available in GB that are not available in Northern Ireland. For example, Northern Ireland does not have local area agreements. One of the approaches that we are pursuing, particularly in Loughborough, is that of using local area agreements, and if possible bringing in the universities as well. That is not an option in Northern Ireland. We must consider every possible way of trying to resolve the problem. I would be reluctant always to see students as part of the problem; I hope that they can be part of the solution. We do not want to demonise students. We need to ensure that we have sustainable communities in which everybody feels comfortable.

Andrew Stunell (Hazel Grove) (LD): I am sure that the Minister agrees that sustainable communities, whether in student areas or elsewhere, can be created only if environmental sustainability is taken fully into account as well. She will know that buildings are responsible for more than half of all carbon emissions in this country. Will she come clean and publish the overdue first biennial report on the Sustainable and Secure Buildings Act 2004, which will set out what measures, if any, she has taken to reduce the carbon imprint of buildings?

Angela E. Smith: We will consider that issue. The Government have made several responses. The planning policy statement on climate change, which will be published in draft form tomorrow, will provide an opportunity to consult and get some views on these issues.

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab): Surely it is difficult to maintain sustainable communities in areas of high density student housing if students’ travel arrangements are undermined by the Department’s arrangements for funding passenger transport authorities. The problems in Tyne and Wear have been raised on the Floor of the House on several occasions. They have now been going on for more than a year. The Department has promised to do something about it, but so far has not. When will we hear what the solution is?

Angela E. Smith: If a solution were easily found it would have been found by now. It is a complex situation. I can tell my right hon. Friend that transport is one of the areas examined in the PPS on climate change, so it will be taken into account in that regard.

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