Government Expenditure (Hansard, 2 February 1995)

§ 1. Mr. Viggers
To ask the Chancellor of the Exchequer if he will give the amount of identifiable Government expenditure per head for each of the four constituent parts of the United Kingdom.

§ The Chancellor of the Exchequer (Mr. Kenneth Clarke)
Identifiable Government expenditure per head in 1993–94 was £3,458 in England, £3,913 in Wales, £4,185 in Scotland and £4,781 in Northern Ireland.

§ Mr. Viggers
Although we English are happy, in present circumstances, to support the Scots—indeed, I even married one—does my right hon. and learned Friend agree that the substantial subsidy for the Scots and others might be different if there were a tax-raising Parliament in Scotland? Does he agree that the Scots may face the double jeopardy of a Scottish tax from Edinburgh and reluctance from London to pay the present 20 per cent, subsidy to Scotland?

§ Mr. Clarke
As my hon. Friend says, Scotland receives a considerable subsidy from England, but that is based on the Government's judgment of needs in the various countries, and we judge that to be the correct level of spending. My hon. Friend is certainly right that it is proposed that the Scots should have a Parliament with the ability to raise 3p in the £1 on income tax. Why one should be taxed more heavily for working in Scotland than for working in England, I am not sure; nor am I sure what advantage it would bring to the Scots. The English 1200 taxpayer might ask why, if the Scots have 3p in the £1 to spare, he should continue to shift so much money north of the border.

§ Dr. Bray
Do those figures include mortgage interest relief, defence procurement expenditure, transport subsidies and similar matters that are directly budgeted for as Government expenditure?

§ Mr. Clarke
As the hon. Gentleman knows, that is identifiable Government expenditure, but the aspects of expenditure that he describes are all for the benefit of the United Kingdom. We are talking about identifiable Government expenditure on public services. The hon. Gentleman will have heard the warning from my hon. Friend the Member for Gosport (Mr. Viggers): that there is a risk that the Scots will have an extra 3p increase on their income tax, which would have a very damaging effect on living standards for the average inhabitant of Scotland.

§ Sir Wyn Roberts
Will my right hon. and learned Friend consider updating the Welsh and Scottish budgets that were published in the early 1970s, which gave attributable revenue as well as expenditure in Scotland and Wales and which showed clearly, irrespective of any additional taxation that might be imposed by a Scottish or Welsh assembly, an adverse balance in expenditure?

§ Mr. Clarke
I shall certainly consider the possibility of doing so. As my right hon. Friend says, there is an adverse balance. Scotland receives more by way of expenditure than it pays in taxation, but that is entirely right if a United Kingdom Government and a United Kingdom Parliament decide that it reflects the needs of the population in certain areas. I cannot understand why it is proposed by some that if one works in Scotland one should pay 3p in the £1 more in income tax than if one does the same job in England. I can only imagine that that is likely to be damaging to the Scottish economy.

§ Mr. Ieuan Wyn Jones
Will the Chancellor remind the right hon. Member for Conwy (Sir W. Roberts) that the big difference between 1971 and now is that we are members of the European Union and that there have been great changes? As someone who favours European integration, he will know that the small nations and regions of Europe that have developed in the past 20 years have been those such as Catalonia, which is now seen as one of the driving forces of changing performances in Europe. Why does he not recognise that the people of Wales and Scotland should be given the same opportunity for the same constitutional arrangements as every other small nation and region in Europe?

§ Mr. Clarke
When I attend the Council of Ministers in Europe, I do not sit down with representatives of Catalonia, Galicia and so on, whose people have an identifiable local nationality but are represented by the Spanish Government. The four countries that comprise the United Kingdom have a more powerful voice in Europe because they are members of the United Kingdom. It would be a mistake for any part of the United Kingdom to start equating itself with Catalonia and thinking that we would be able to play the same part in European politics as we do at the moment—or as we could at the moment.

§ Mr. Jenkin
Are not the major transfers between the different regions of the United Kingdom necessary to 1201 maintain the economic cohesion of the United Kingdom under the single currency of the United Kingdom, the pound sterling? Would not, equally, huge transfers be required to maintain a single currency across the European Union? Does not that vindicate the Government's scepticism about a single currency?

§ Mr. Clarke
We opted to have a straightforward choice on a single currency, which we shall exercise if and when the proposal is put to us. Meanwhile, it makes obvious sense to take part in the preparations for economic and monetary union so that we can make a better informed choice when we have a sensible debate on it. It is not inextricably linked to political union. I recall that political union between Scotland and England occurred many years before monetary union. Rather than relating it to Scotland, we should consider the case for and against economic and monetary union on its merits.