Scotland Bill

Debate between Chris Philp and Stewart Hosie

Monday 15th June 2015 Commons Chamber

[Stewart Hosie]

I can almost hear Professor Adam Tomkins, the Tory adviser to this Tory Minister, coming up with that daft question. I say this to the Minister: our amendment 89 would deliver full fiscal autonomy in a way that makes sense.

Our opponents argue that full fiscal autonomy would lead to more cuts to the Scottish budget, which is ridiculous when one considers that between 2009-10 and 2013-14, at a time when the North sea was generating £32 billion in oil revenues, the Scottish Government’s budget was cut by about 9%. According to the Institute for Fiscal Studies, prayed in aid by Tories and Labour alike, the cuts of more than 5% implied in 2016-17 and 2017-18—in this Parliament—will be twice the size of any cuts over the last Parliament. The UK Budget showed that implied cumulative cuts to day-to-day spending on public services in Scotland over this Parliament could amount to £12 billion in real terms compared with 2014-15. In the absence of full fiscal autonomy, therefore, we are not protected from cuts. Rather, we suffer a double blow: continued austerity and an inability to grow the economy and increase tax yields in the way that Scotland requires.

[Chris Philp (Croydon South) (Con)]

The hon. Gentleman mentioned that tax receipts in Scotland are on average 3% higher per head than in the rest of the UK. Public spending in Scotland, however, is more than 10% higher. The reason, of course, is the Barnett formula. Will he confirm that under his proposals the Barnett formula would be done away with, and will he explain where the extra money would be found? Would it be tax increases or spending cuts? If so, where from?

[Stewart Hosie]

It is extraordinary! UK debt is £1.5 trillion and the Government are borrowing £75 billion more this year than UK tax revenue would allow, and they have the audacity to question whether the Scottish Government, who have balanced the books every year, could do so in the future. If we have the right tools and levers, of course we can do the job. The hon. Gentleman’s argument is fundamentally that there would be a cost to Scotland of full fiscal autonomy. As we have seen, our opponents tend to quote figures for this financial year, whereas we would move to full fiscal autonomy only over the medium term.

The second key issue, as the IFS has said on many occasions, is that our opponents fail to take account of the potential positive impact on Scotland’s economy of full fiscal responsibility. The entire point of FFA is to empower our Parliament to take decisions for the benefit of Scotland’s economy to deliver full tax and investment powers and to enable Holyrood to make better spending decisions.