The Parliamentary Under-Secretary of State for Scotland (David Cairns): I have regular discussions with the First Minister on a range of subjects. In 2005 the First Minister, in agreement with my right hon. Friend the Secretary of State for International Development, launched a fund that will provide £12 million over four years to help improve health and education, particularly in Malawi.
James Duddridge: I thank the Minister for that reply. In the same year of 2005, the Government signed the Paris declaration, whose stated aim was to eliminate duplication of efforts and to rationalise
donor activity to make it as cost-effective as possible.
David Cairns: No, I do not. If the hon. Gentleman had listened to my answer, he would have heard me say that the First Minister was in agreement with the Secretary of State for International Development. Staff of the Department for International Development sit on the expert group that advises how the fund is used, and that group is working in harmony. We will take lectures on international development from many quarters, but not from the party that cut international development spending year on year.
Ann McKechin (Glasgow, North) (Lab): May I draw to my hon. Friends attention the fact that NHS Scotland is providing much expertise and training assistance to Malawi? When the International Development Committee visited last year, it was made clear that there was a real need to address the brain drain from that country, and its total lack of capacity. NHS Scotland and its partners in the rest of the UK are playing an important part in helping in that regard.
David Cairns: My hon. Friend speaks with great authority on the matter, as she is a member of the International Development Committee and has a connection with the all-party group on the great lakes region and genocide prevention. She is right to say that DFID and all the other agencies that we work with are operating in partnership in Malawi. DFID is recognised as being the gold standard when it comes to such work: that is why it is important, even though the fund being administered is small compared with the vast sums of money at DFIDs disposal, to make sure that it does not suffer from duplication of effort. I am confident that it does not.
Pete Wishart (Perth and North Perthshire) (SNP): May I too urge the Minister to ignore anti-Scottish and anti-Malawian Tories, and to acknowledge Scotlands distinctive relationships and associations with sub-Saharan Africa? Has he seen the opinion poll carried out by the Scottish Catholic International Aid Fund, which shows that 76 per cent. of the Scottish people believe that decisions about Scotlands share of development funding should be made in Scotland?
David Cairns: The people of Scotland, through the countrys membership of the UK, are making the most fantastic contribution to international development around the world. The policy of the hon. Gentlemans party is to break up the UK and take Scotland out of it, but that would do nothing to further the cause of international development. It is this Governmentled, in this instance, by the Chancellor of the Exchequers international leadershipwho have led the way in cutting debt and helping the most heavily indebted poor countries. At Gleneagles, we brought together leaders from all over the world to set up an international finance facility. Scots should be proud of the role that Scots in the UK play to help the poorest in the world.
Sir Robert Smith:
The Minister will be aware that people in vast areas of rural Scotland will not be able to receive through their aerials the full range of digital services that are available to the rest of the country.
What action will he take to ensure that rural Scotland does not receive a second-tier service for digital terrestrial television?
David Cairns: The hon. Gentleman raises an important matter that I have acknowledged previously from the Dispatch Box. Essentially, this is a matter of engineering. The full suite of programmes can be broadcast from the main transmission masts, but that cannot happen from the relay transmitters because the signal is weaker. That is where the two-tier element comes in. On Thursday, I am due to meet Vicki Nash of Ofcom Scotland at the organisations office in Glasgow. I assure the hon. Gentleman that I will raise the matter with her, and that I will get back to him.
Mr. Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD): I assure the Minister that that issue was raised at the borders digital forum last weekbut may I draw his attention to another issue? Digital TV providers are rightly promoting early adoption of the technology required for digital switchover, which means that older people and people in vulnerable groups are already converting their sets ahead of the availability of the financial assistance scheme later in the year. Will he explain why his colleagues in the Department for Culture, Media and Sport do not support the provision of retrospective support for those who convert now and would otherwise have been entitled to that financial assistance?
David Cairns: The whole point about assistance is to help those who are experiencing difficulties converting. Obviously, if people have converted they might not have been eligible for that assistanceand the hon. Gentleman knows that there is always a problem with retrospective payments in such cases. However, I hope that he will be reassured to learn that I will add that particular point to the ever-growing agenda for my meeting with Vicki Nash on Thursday.
The Secretary of State for Scotland (Mr. Douglas Alexander): I hold regular discussions with Cabinet colleagues and members of the business community on a range of matters, including fiscal matters. As part of the United Kingdom, Scotland continues to benefit from this Governments management of the economy, which has delivered stability, low inflation, low interest rates and high employment.
John Robertson: Does my right hon. Friend agree with Sir Peter Burt of the Burt commission that replacing council tax with a local income tax would be impractical, and that setting up a nationally set tax would cost the Executive £19 million and employers £60 million, and that it would have annual running costs as high as £55 million? If so, will he ensure that such a rise does not happen for Scotland or the Scottish people?
Mr. Alexander: Sir Peter Burt makes a powerful case. It would be very difficult for people to explain, whether at Westminster or from Holyrood, why it would be in Scotlands interest to become the highest taxed part of the United Kingdom. A recent success of devolved government is the reversal of the brain drain and an historic turnaround in the demographic challenge that we faced in Scotland. It is for others who want to make Scotland the highest taxed part of the United Kingdom to try to make sense of that policy, in the context of the real successes that are being enjoyed at the moment.
Mr. Alex Salmond (Banff and Buchan) (SNP): Given that the great Budget tax cut con trick has been well and truly exposed, the Red Book shows that oil revenues are rising, not falling as claimed by the Chancellor, and the Labour party has committed itself not just to keeping but to revaluing the hated council tax, causing misery to hundreds of thousands of Scottish families, is it any wonder that Cabinet Ministers cannot even remember the name of the First Minister, and that the First Minister has taken to calling the Secretary of State rude names in French? Who is responsible [ Interruption. ]
Mr. Speaker: Order. The hon. Gentleman must take his seat. I do not see what the First Minister has to do with his question. It should be a bit more specific, and he must keep it tight. Just a few more wordsnothing more.
Mr. Alexander: The second intervention was no more worthy of the hon. Gentleman than the first, Mr. Speaker. As for tax con tricks, I am concerned about the suggestion by the Scottish National party that a 3p rise in income tax would be adequate to cover the large financial hole in its income tax proposals. The fact is that it is not the Governments policy to saddle every Scottish family with an additional tax bill of £5,000. It is not our policy to make the Scottish part of the United Kingdom the highest taxed part of the UK; that is the policy of the SNP.
Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): My right hon. Friend will be aware that the consequences of 6p on income tax would be particularly severe in areas where incomes are higher than the Scottish average. Will he consider making an assessment of the impact of local income tax on different parts of Scotland so that we can see the full damage for ourselves?
Mr. Alexander: My hon. Friend makes an important point. It is the SNP whose sums do not add up, not the Governments figures. I would simply say that the dividing line is now clearer than ever: it is a 2p cut in the basic rate with the Government, or a 3por, indeed, 6prise with the Scottish National party.
Jo Swinson (East Dunbartonshire) (LD): One in five Scots will be hit by tax rises under the Chancellors latest Budgetthat is 1 million Scots who are already on low incomes. He has proposed increased tax credits to compensate, but take-up among some groups is as low as 20 per cent. How can the Government pretend to create a fairer tax system when the reality is that the Chancellor is acting like Robin Hood in reverse?
Mr. Alexander: With respect, in the middle of a debate about figures adding up, I am not sure that the Liberal Democrats are the most authoritative source. If the hon. Lady seriously wishes to address the issue of child poverty, she will welcome the child benefit rise to £20 a week. Child benefit was £575 a year in 1997, but by 2010 it will be more than £1,000. Before asking her next question, perhaps she should look at the Institute of Fiscal Studies report on the Budget, which stated that when those changes in the tax system and the tax credits system are taken into account, the poorest 20 per cent. will benefit most from the Budget.
Mr. David Marshall (Glasgow, East) (Lab): Does my right hon. Friend agree that quite apart from the substantial damage that would be done to the people of Scotland by any proposal to increase income tax by 3p, or to introduce a local income tax, such measures are totally unworkable except at tremendous cost? Does he further agree that they would also require the agreement of the Westminster Departments that would have to collect any such taxes?
Mr. Alexander: Of course, some people advocate a position called fiscal autonomy. For example, Crawford Beveridge argues that there should be a shift in the tax powers. Indeed that individual has been quoted a number of times by several Members, so it would be helpful for people to understand the consequences of such a change. On 29 October, Crawford Beveridge stated:
I advocate the policy that Scotland should raise the money it spends. I know that could potentially plunge the place into recession, because it is unlikely that the total tax take would be as much as Scotland currently receives under the Barnett formula.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con): Although I might agree with the Secretary of State about the disastrous impact that the SNPs 3p tax rise might have, did he really think that anyone in Scotland would not see through a Budget that gave with one hand and took with the other? What does he have to say to people about that?
Mr. Alexander: First, may I say what a pleasure it is to welcome the hon. Gentleman to the Housenot least because when he has important contributions to make to public debate in Scotland, he is so often busy with constituency events? None the less, the statement he has just offered us evidences the point that he made in his previous work as an MSP, when he stated that there was a simple lack of thinkers on the Scottish Conservative Benches.
On the hon. Gentlemans substantive point about the changes in both income tax and corporation tax, I would have hoped that he would welcome the cut in
corporation tax and the cut in the basic rate of income tax. If, as part of the new modern Conservative party, he is seriously concerned with the distributional effects, I again refer him to the Institute for Fiscal Studies, which said that the poorest 20 per cent. would benefit most from the Budget.
David Mundell: At least I know the names of my colleagues in Scotland. The Secretary of State is as complacent about poverty in Scotland as he appears to be about the Scottish election campaign, which he is allegedly running. Is he aware that figures released today by the Department for Work and Pensions show that child poverty is increasing, inequality is rising, and the incomes of the poorest fifth are in decline? Is it any wonder that the people of Scotland are so determined to get rid of Labour in May?
Mr. Alexander: The reason why the hon. Gentleman knows the names of his colleagues is that they are all calling for his resignation. Frankly, with a question like that, is it any wonder that he is the only person in historyas far as I am awareto be rejected as a parliamentary candidate by the Liberal Democrats? The fact is that over the past 10 years child poverty has fallen more rapidly in the United Kingdom than anywhere else in Europe, and child poverty is falling more rapidly in Scotland than in any other part of the UK. Of course there is work to be done, but the party that can be trusted to take it forward is Labour, not the Opposition.
Mr. Brian H. Donohoe (Central Ayrshire) (Lab): Does my right hon. Friend agree that when we are trying to attract new talent to Scotland because of skills shortages, to have the highest taxation in the UK would not be appropriate?
4. Mr. Alan Reid (Argyll and Bute) (LD): What recent discussions he has had with the European Commission on the effects of the European maritime cabotage regulations on Scottish ferry services. 
The Parliamentary Under-Secretary of State for Scotland (David Cairns): Ferry services within Scotland are a matter for the Scottish Executive. The UK Government supported the Executive in making representations to the European Commission on matters relating to ferry services in Scotland, securing a number of important concessions.
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