Scotland Bill

Debate between Lord Clarke of Nottingham and Stewart Hosie

Monday 15th June 2015 Commons Chamber

[Stewart Hosie]

The chief of the snapshot analyses I have just described is the one from the IFS that our opponents pray in aid. They claimed in April that Scotland would face a relative deficit of £7.6 billion, which may rise to £10 billion by 2019-20, and that in itself is enough for them to say no. I also like and respect the hon. Gentleman—I will not finish the rest of that sentence. I would tell him that his argument is fundamentally flawed. In essence, our opponents’ argument is that even if the IFS figures were true, UK Government economic policy has failed Scotland and we should therefore keep economic policy in the hands of a UK Government who have failed. That simply is not credible.

It is of course true that Scotland has a deficit, and so does the UK—borrowing £75 billion this year, almost four times what the Chancellor promised borrowing would be. The majority of advanced economies run deficits, particularly in difficult times. The UK deficit in 2013-14 was £98 billion. Over the five years to 2013-14, the cumulative deficit was £600 billion. The UK was in deficit for 43 of the past 50 years, and 28 of the 34 members of the OECD were in deficit in 2013. If the deficit alone was a reason for a country to surrender its financial independence, the UK economy would be run from Berlin.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

The hon. Gentleman’s desire for independence of taxation seems to be to lower taxation, while he contemplates raising expenditure and he is fairly indifferent to deficits. Does he contemplate any kind of fiscal discipline? Our neighbours across the channel started a single currency, and they—as we would—have a single currency and a single central bank. Had they stuck to their rules on fiscal discipline, the Maastricht criteria, and to their no bail-out clause, they might have done rather better. What fiscal discipline does he propose, or does he think the English will pick up the bill whatever decisions the Scottish Government make?

[Stewart Hosie]

We were very clear in our manifesto that there would be increased tax yield, perhaps from a 50p rate of tax at a UK level, from a bank bonus tax, from the bankers’ levy and from a mansion tax. We supported a number of policies in our manifesto that clearly would have increased yield. We were also very clear on what we wanted to do about borrowing. We laid out explicitly that borrowing would rise, but that it would fund £140 billion of extra investment across the UK throughout this Parliament, as opposed to the cuts in the order of £146 billion that have been proposed by the Chancellor.