Currency in Scotland after 2014

Debate between Ian Murray and William Bain

Wednesday 12th February 2014 Westminster Hall

[Ian Murray]

My hon. Friend is absolutely right. A currency union requires some kind of political co-ordination to ensure that the stabilisers make the currency work. What better political stability could we have than being the United Kingdom, with a strong Scottish Parliament as part of that overall economic and political framework?

[Mr William Bain (Glasgow North East) (Lab)]

I apologise for missing the start of the debate; I have just come from a debate on a statutory instrument that affects my constituency. My hon. Friend is making a powerful contribution. According to the International Monetary Fund, none of the 64 largest economies in the world operates without a central bank. Does he agree that if Scotland were forced into the position, which was denounced by the SNP’s fiscal commission, of using the pound without a central bank, the consequences for business and ordinary people throughout Scotland would be devastating?

[Ian Murray]

I could not have put it better myself. I look back to 2008, when hundreds of billions of pounds were poured into Scottish banks to keep the economy afloat, and to keep my constituents, many thousands of whom work in such banks in Edinburgh, in jobs. Without such action, the whole financial structure would have collapsed.

European Union (Referendum) Bill

Debate between Ian Murray and William Bain

Friday 8th November 2013 Commons Chamber

[Ian Murray]

This is the crux of a very important debate not just about the Bill, but in general about membership of the European Union. Does my hon. Friend think the Government will object to the amendment on the basis that they do not want to hear the answers from those august organisations because they disagree with the Government’s position?

[Mr Bain]

My hon. Friend points to the inconvenient truth for the Government and for the promoter of the Bill that we have already had some of the answers this week, with the CBI setting out that the benefit of being part of the European Union means that every household is £3,000 a year better off and every individual in this country is at least £1,200 a year better off. What is clear from the Bill is that neither its promoter nor the Government have any idea about the consequences of a yes vote, because they cannot say on what terms they wish the UK to remain part of the EU, and even more damagingly, they cannot set out the consequences or implications of a no vote.

--- Later in debate ---

[Mr Bain]

Absolutely, Madam Deputy Speaker.

Through these amendments, I seek to give Parliament and, indeed, many interest groups in wider society the degree of consultation that was given in the 1975 referendum.

[Ian Murray]

The CBI has consulted its members and said that eight out of 10 of them, including 77% of small and medium-sized enterprises, say that we should remain within the European Union. That is why it is important that this amendment is accepted, so that the number of bodies that are consulted on this very important constitutional change is as wide as possible.

[Mr Bain]

I entirely agree with my hon. Friend.

It is interesting to explain the purpose behind these amendments, and I can best do so by contrasting the referendum proposed in this Bill with the referendum that was held in 1975, when two White Papers were issued on the terms of the renegotiation between the United Kingdom and our European partners. That was prior to the Bill’s publication and its being presented to Parliament. When Parliament was asked on that occasion to consider legislation to establish a referendum, it knew the full details of the implications of a no vote and, indeed, a yes vote for the electorate. That is what my amendments seek to put into the Bill, because, as drafted, it simply does not achieve that aim.

Scotland Bill

Debate between Ian Murray and William Bain

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 ---

[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.