HC Deb 02 March 1995 vol 255 cc1168-9
4. Mr. Jacques Arnold

To ask the Chancellor of the Exchequer what estimate he has made of the effect on the Scottish economy of an increase in taxation equivalent of between 3p and 19p in the pound; and if he will make a statement.

Mr. Aitken

Such an increase would be unnecessary and would make the Scottish economy less competitive.

Mr. Arnold

Does my right hon. Friend agree that the vast sums of money currently being paid to Scotland should perhaps be considered the English subscription to the United Kingdom? Is it not perhaps more important to consider that payment as a transfer payment thought necessary because both England and Scotland are part of a single currency—the pound?

Mr. Aitken

My hon. Friend is right to draw attention to the factual position which is that Scotland today receives 21 per cent. more public expenditure than England—worth approximately £13 per head—but that is because of decisions taken by the elected and accountable Government of the United Kingdom. Whether future proposals for a single currency with fiscal harmonisation would or would not lead to higher levels of public expenditure in various parts of the European Union is one of the many difficult matters that we should have to assess when we considered whether a single currency might at some stage in the future be in Britain's national interest.

Mr. Salmond

The Chief Secretary is making it very clear why he was laughed at by the business men at the Scottish Council Forum last week. When will he educate his hon. Friends about the huge hidden subsidies that pour into the south-east of England and, more directly, about the fact that, over the past 16 years, the Government have been bankrolled by Scottish resources to the tune of £100,000 million of oil revenues, or £20,000 per head for every man, woman and child in Scotland? When will he start educating Conservative Back Benchers about the true fiscal position?

Mr. Aitken

The sort of rubbish that the hon. Gentleman has just uttered shows why, by contrast, I was warmly applauded when I spoke in Scotland. The fundamental point that I made, with which the business community agreed, is that a tax-raising Scottish Parliament would be an expensive self-indulgence which would scare away inward investors, cost a single man as much as £6.35 a week in tax and cost Scotland jobs, employment and competitiveness. Only the hon. Gentleman would wish to pursue such a path of folly.

Sir Donald Thompson

Is my right hon. Friend aware that my constituents do not care how much goes to various parts of the United Kingdom and that my people in Yorkshire think that a strong Scotland is a strong England and, therefore, a strong Yorkshire and object to this spurious devolution nonsense?

Mr. Aitken

My hon. Friend articulates the view that all our colleagues share—that a strong Union is good for Scotland, good for Britain and good for all parts of the United Kingdom, including Yorkshire.