Scotland Bill

Ian Murray Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Bain]

It is intriguing. We have several descriptions: “indy-lite”, “devo-plus”, “devo-max”. Various formulations for additional powers have been put out for public discussion. I think this is “devo-positive”. It will give the Scottish Parliament additional democratic legitimacy by enabling it to raise about 35% of what it spends—far more than at present—but without the race to the bottom with other countries or parts of the United Kingdom on tax rates, including corporate tax rates, which would be very damaging for growth.

[Ian Murray (Edinburgh South) (Lab)]

Lots of adjectives have been attached to the word “devo” with regards to the debate about the constitutional settlement in Scotland. Given that the Scottish National party supported it, then did not support it, then supported it again, then did not support it, then supported it again, could this be “devo-hokey cokey”?

[Mr Bain]

That is a very interesting point put with typical style by my hon. Friend.

As a party that first supported devolution more than a century ago, we are pleased to see the Scottish Parliament strengthened by the Bill’s progress through the House and the other place.

--- Later in debate ---

[Pete Wishart]

One of the first things we did when we came into government, back in 2007, was to ensure that we were a Scottish Government. If it looks like a Government, walks like a Government and quacks like a Government, it is a Government. We will continue to be that Government. The days of the unambitious Labour-Liberal Executive have now gone, and thank goodness for that.

We welcome the amendments, and I look forward to discussing the others and finding out why the Labour party has changed its mind on—

[Ian Murray]

rose—

[Pete Wishart]

I have just about finished my speech, if the hon. Gentleman does not mind. I have had enough of Labour Members’ interventions, as they all tend to be on the same theme, but I thank him for his interest.

We will support the Lords amendments. It is in Scotland’s interests that the powers should be transferred, and we will continue to support the rest of the amendments.

[Mrs McGuire]

I appreciate I am a blushing violet sitting here and you obviously did not quite see me, Mr Deputy Speaker. You are one of the few men who could say that they did not see me—even on this matter, but never mind!

I want to deal with the comments made by the hon. Member for Perth and North Perthshire (Pete Wishart) on this group of miscellaneous amendments. I think his comments are indicative of the fact that it does not matter how much devolution is given to Scotland or is agreed with the people of Scotland, it is never enough for a party that has only one ambition in this life, which is to separate Scotland from the rest of the United Kingdom. Such a party will continue to throw around the sort of parliamentary insults that the hon. Gentleman managed to put into his short contribution—such as “unambitious”. Frankly, it is not unambitious to provide the greatest transfer of powers to the Scottish people, and to give not just fiscal autonomy, which is a camouflage for independence, but fiscal responsibility to the Scottish Parliament.

I can see that you are getting agitated, Mr Deputy Speaker, because I may not be addressing the amendments, so let me deal with amendment 7, which is about health professionals. I have some concern about it. Although there is significant devolution of power, there is still cross-border traffic when it comes to health professionals. It was rational to say that this should have been a reserved power. However, it was yesterday’s statement by the First Minister that convinced me that this was probably the right way to go. We are now going to have not only the same Queen, the same currency and the same NATO, but, I hope, the same level of regulatory provision for health professionals, too.

I welcome the amendment, but I ask the Minister to convince me that there will be enough communication and consideration between the UK Government and the Scottish Government to ensure that we keep in sync health professional regulation between Scotland and the rest of the United Kingdom, so that people do not feel that they will get a different level of professionalism from the people they need to trust for their medical care according to whether they live north or south of the border.

[Ian Murray]

My right hon. Friend is creating an important narrative for the link between the national health services in Scotland and in the rest of the United Kingdom. Does she agree that that probably explains how the Scottish National party ended up voting on the Health and Social Care Bill—because of the interlinked nature of the NHS between Scotland and the rest of the UK?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The amendment refers only to leaving something out, which is all we are effectively debating. I have allowed some latitude, but I have to watch that we do not stray too far away from the amendment. I understand that the provisions affect Scotland and that hon. Members want to open up the debate, but we must try to stick to the amendments.

--- Later in debate ---

[Mr Bain]

My hon. Friend raises a pertinent point, because although we hear demands for powers made by certain parties, no purpose is ever given for the devolution of those powers. It is a staggering omission that we know absolutely nothing about the future of stamp duty land tax, given that it is due to be devolved to Holyrood in just a few short years. We have heard about the lack of evidence provided for the devolution of other taxes, with the Institute for Fiscal Studies setting out convincing evidence in its “Green Budget” a few months ago that devolving corporation tax would involve a race to the bottom and be a very risky endeavour indeed.

[Ian Murray]

My hon. Friend is being incredibly generous in giving way again. Is it not the case that the setting of corporation tax was devolved to Northern Ireland simply to allow it to equalise its rate with the rate on the other side of the land border to the south? Indeed, the First Minister of Scotland’s speech at the Institute of Directors yesterday, in which he said that he would use the taxation powers only to equalise the rates, highlights why corporation tax should not be devolved to Scotland.

[Mr Bain]

The other implication of devolving corporation tax for it to be reduced to the levels that apply in the Republic of Ireland is that £2.6 billion would be lost from the Scottish block as a result. That would not be in the interests of economic growth, services, health or education in Scotland. As PricewaterhouseCoopers said in its report to Scottish Parliament’s Bill Committee on the Bill, the cut in corporation tax was only the 16th or 17th highest reason for companies investing in the Republic of Ireland, while most of the investment in the Republic of Ireland occurred when corporation taxes were not at the reduced level. The case for devolving corporation tax has therefore not been made. As we have seen in the past few days, with confusion over income tax policy and no rule on what debt levels a separate Scottish state would have, the First Minister’s plans for separation seem to be dissolving into yet another omnishambles.

--- Later in debate ---

[Rory Stewart]

I thank the hon. Gentleman very much indeed.

Having been a little rhetorical, I will return to the measures set out in the new clause proposed in Lords amendment 18. I congratulate the example set by my hon. Friend the hon. Member for Milton Keynes South in the moderation of his tone. The conduct of the Ministers in this regard, which has been praised by the hon. Member for Dundee East (Stewart Hosie)—he is now leaving the Chamber to research in his history books—shows exemplary co-operation and is an example of why the United Kingdom Parliament works so well. The moderate voices of the hon. Member for Milton Keynes South and the shadow Minister show that separation is unnecessary. The correct praise for the Scottish National party for its successes shows the successes of autonomy, not of separation and independence. If we can get the principles of transparency correct and the exact details of Lords amendment 18, the sinews of the Union, the point-by-point, sometimes dry legislative amendments that allow us to work together and avoid what the Scottish National party wishes to push us into—a black-and-white solution of either fatal inertness or still more terrible activity—we will instead, through a voice of passionate moderation and amendments of this sort, keep together the Union that made us great and will make us greater still.

[Ian Murray]

It is a great pleasure to follow the hon. Member for Penrith and The Border (Rory Stewart), who has a great knowledge of everything historical and has driven the hon. Member for Dundee East (Stewart Hosie) out of the Chamber to hunt out not only his history books, but no doubt his horned helmet. If he can drive SNP Members out of the Chamber with such ease, he should speak here more often to ensure they disappear.

I, too, wish to concentrate on Lords amendment 18 and its proposed new clause, and that is for one simple reason: transparency. Transparency is the word that hits the new clause on the head, as the hon. Gentleman suggested. We need transparency because over the past few months, and indeed since the Scottish parliamentary elections in 2011, we have had anything but from the Scottish Government. We have had smoke and mirrors on tax, the constitutional settlement, the currency, visa arrangements and NATO—the list is endless. One of the most prevalent calls in Scotland in the debate on separation is for transparency on taxation, because that feeds into public services and the ordinary lives of everyone who lives in Scotland and, indeed, the other component parts of the United Kingdom.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

My hon. Friend is making an excellent speech. Does he agree that there is a strong case for transparency from the Scottish Parliament on how money is spent, because we have not always had that?

[Ian Murray]

I am grateful to my right hon. Friend for raising one of the key points on why we need transparency. The hon. Member for Penrith and The Border said clearly that transparency helps not only the Scottish people to determine how their money is spent and allocated, but the other component parts of the United Kingdom to see how money is spent in Scotland, which would be welcomed by everyone in this House. Indeed, we have not even had transparency on the Bill itself. The Bill has been called “a poison pill”, “a dog’s breakfast” and “dangerous” by the same party that voted for it, campaigned against it and will, no doubt, vote for the amendments if the House divides this afternoon.

We need transparency from the Scottish Government at every level on what they wish to achieve. In the past few months, we have heard the Scottish National party say in public—the records are available—that it would reduce fuel duty, reduce corporation tax to the level it is in Ireland, and will be in Northern Ireland, which is 12.5 %, and that it would reduce duties and business rates. I am not an expert on taxation systems or, indeed, on algorithms or mathematics, but it seems that that would lower every single tax in Scotland, so I pose the question, where would the money come from? There is only one place that it can come from, and that is public services, so, on the report that would come from the Secretary of State concerning those powers, I challenge the Scottish Government and the Scottish National party to tell us, with regard to every single tax that they wish to lower or decrease, where the money will come from and where the money will go.

Let us take corporation tax, which my hon. Friend the Member for Glasgow North East (Mr Bain) mentioned, and which is a complicated issue. I mentioned smoke and mirrors at the start of my contribution, and there has been a lot of smoke and mirrors from the Scottish Government on corporation tax. They have used the example of Northern Ireland, but there are two clear lessons from Northern Ireland.

As I said in an intervention, Northern Ireland wants corporation tax devolved to equalise its rate with the country on its land border to the south and ensure that it is not disadvantaged. That highlights two things: first, that the land border is important; and secondly that corporation tax levels, when they are lowered to such a drastic state as we have seen in Ireland, create an uncompetitive situation and a race to the bottom.

We cannot afford that race to the bottom in the United Kingdom, with its land border between England and Scotland, because it would create an environment in which the money that came out of the block grant—some £2.6 billion if the rate were equalised with Ireland’s at 12.5%—would have to come from public services.

The Scottish Government have yet to tell us which public services they would cut. The national health service already has far fewer nurses in Scotland than it did in 2007, and the Scottish Government have yet to tell us where the money would come from in terms of public services, so I should welcome the debate and the evidence that the hon. Member for Perth and North Perthshire (Pete Wishart) tells us we should have about corporation tax, because perhaps the Scottish Government could lay out that information, and the report under discussion, which would come back annually to the House until those taxation powers had been fully devolved, would be very welcome and could examine some of those issues.

The smoke and mirrors continues, because the First Minister of Scotland, Alex Salmond, when he was in London yesterday, no doubt met his London SNP colleagues to discuss these issues. In his speech to the Institute of Directors he suggested that, with the powers in the Bill transferred to Scotland, income tax levels in Scotland would not be changed. One of the key points here is that the Scottish Parliament has powers to reduce or to increase income tax in Scotland by 3p, but the Scottish Government chose not to maintain HMRC’s systems to enable that, so we are left with the Scottish Government and, indeed, the First Minister jumping up and down like little children, demanding powers—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I have given the hon. Gentleman some latitude, but I am sure that he is coming back to the debate which we are having here about the importance and relevance of the report.

[Ian Murray]

I will be coming back to the report this very second, because it is about transparency, and what we have had quite clearly from the Scottish Government is a complete lack of transparency. I hope that the report allows us some, because when the Bill receives Royal Assent, we will have a Scottish rate of income tax, the devolution of stamp duties, the devolution of landfill tax, the power to create new taxes and the power to borrow of many billions of pounds—borrowing powers, incidentally, which the Scottish Government did not want but have planned to use. So it is quite important that the report comes back.

With this amendment, the Lords have done a good job of enabling us to see where the new taxes will go. I certainly welcome it and will support it later this afternoon.