Scotland Bill

Debate between Angus Brendan MacNeil and Ann McKechin

Tuesday 21st June 2011 Commons Chamber

[Ann McKechin]

I do not discredit the hon. Lady for making strong statements in this Chamber. However, I find it extraordinary that the First Minister, who feels that he can speak about any issue that impacts on Scotland and who has more powers, does not take the opportunity to speak about the issues that matter to ordinary people in Scotland every day of the week.

I will return to the Bill, as I am sure you would wish, Madam Deputy Speaker.

[Mr MacNeil]

Will the hon. Lady give way?

[Ann McKechin]

The hon. Gentleman is jumping up to speak.

[Mr MacNeil]

Will the hon. Lady clarify whether she is saying that she would welcome the First Minister coming to Downing street to talk about welfare reform and pensions?

[Ann McKechin]

If the First Minister had anything sensible to say, I would, but as yet, I have not heard it. It is a bit like the corporation tax issue—[Interruption.] The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) needs to calm himself and not get over-excited. The Scottish Government have had many weeks to produce detailed analysis. They have complained that things have been rushed and that we have not had figures from the UK Government on a variety of issues throughout the passage of this Bill, yet they cannot produce the detailed evidence and analysis that would allow people in Scotland to judge whether their calls have validity.

The hon. Member for Dundee East was given five opportunities this evening to explain what the impact would be on Scottish public expenditure if there was a cut in corporation tax. He said in Committee:

“I would like it cut over a number of years”.—[Official Report, 14 March 2011; Vol. 525, c. 70.]

Members may be interested to hear that that has not always been the Scottish National party’s policy on corporation tax. In 1988, a certain Alex Salmond was suspended as an MP from the House of Commons for attacking the Tory Government’s reduction in corporation tax.

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[Ann McKechin]

I would like to continue this point.

Does the SNP believe that a further tax cut for banks, which pay the majority of corporation tax in Scotland, is a progressive policy? Does it believe that there should be a shift from corporation tax to personal income taxation, as has been the case in Switzerland, for example?

[Mr MacNeil]

That’s a poor country, isn’t it?

[Ann McKechin]

Actually, there has been very little increase in growth in Switzerland. There is no direct correlation, and the evidence is weak.

As I have said previously, and as a report that came out this week clearly indicated, many different levers of economic growth are already in the hands of the Scottish Government, but they have either chosen not to use them at all, or when they have chosen to use them it has had a detrimental effect as well as sometimes having advantages.

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[Ann McKechin]

The hon. Gentleman is right to raise the serious problem of alcohol consumption in Scotland. As the Labour group in Holyrood pointed out, simply raising the price and allowing supermarkets to retain the surplus—I think that that was the Scottish Government’s first plan—was neither popular nor logical.

However, it is important to note that excise duty is now subject to an escalator above inflation. The Labour Government introduced it before the general election so that excise duty increases above inflation. Although, following the recession, as might have been anticipated, consumption in England dropped, that has not happened in Scotland to the same extent. There is a significant difference between consumption in Scotland and average consumption in England, despite the identical price and range of products.

Price sensitivity does not seem to apply in Scotland to the same extent as it does in England. That suggests that cultural and social issues are predominantly behind the problem. I do not derive any satisfaction from that. It would be much easier if we could say that a simple price escalation would lead to a reduction in consumption. However, the evidence to date has not shown that that would happen. Indeed, the medical evidence shows that the unit cost would have to be considerably higher than that in the Scottish Government’s proposals to make any impact. Obviously, that would have an effect on the drinks industry, particularly given that much of it is located in Scotland.

The subject is serious. The Scottish Government already have a range of levers at their disposal. The one for excise duty is exceptionally complex and I do not think that the argument for it has been made. Certainly, more needs to be done, but it needs to be based on hard evidence. We also need to realise that some of the things that we would like to do and that we think could work might not be sufficiently strong to make an impact. We might have to reconsider our proposals.

I appreciate that the Scottish Government have begun re-examining the issue because I think that they recognise that providing money to supermarkets was not the way forward. However, the issue is much wider and requires several different measures. The power to ban drink discounting, which the Labour group supported, is already on the statute book in Holyrood. That has still to go ahead. I therefore hope that the Scottish Government will enforce the legislation that they already have on the statute book.

[Mr MacNeil]

First, I observe that on the minimum price of alcohol, the SNP minority Government were supported by a range of professional opinion. However, is not the hon. Lady’s point on the differences between alcohol consumption north and south of the border an argument for pricing within cultures, as opposed to uniform, blanket, one-size-fits-all pricing?

[Ann McKechin]

The hon. Gentleman must recognise that the cost of alcohol has increased by slightly more than inflation over the past 20 or 30 years, when, of course, the increase in incomes has been much greater. The Government’s ability to control that gap is limited.

The other problem is that the total price of alcohol is, to a large extent, made up of different forms of tax. When we increase taxation to more than a certain level, we find that there is an increase in black market sales, as we found when we increased taxation on cigarettes. I do not discount the fact that price can have a bearing on consumption, but the evidence to date in Scotland presents us with a much more complex problem, much of which is about cultural and social values. They are the only things that can explain the difference in consumption north and south of the border. The regimes of alcohol selling are more or less the same, but there is increased drinking at home rather than in public houses. The problem is complex, and a range of measures must be put in place to deal with it. My Labour colleagues certainly want to make changes that will make an impact, and they are prepared to have a serious debate.