HC Deb 22 November 1995 vol 267 cc647-9
7. Lady Olga Maitland

To ask the Secretary of State for Scotland if he will make a statement on wealth creation in Scotland. [777]

Mr. Kynoch

The process of wealth creation in Scotland would be severely damaged by the constitutional changes advocated by Opposition Members.

Lady Olga Maitland

I thank my hon. Friend for his reply. Is he aware that the Scottish chamber of commerce has found that 70 per cent. of Scottish businesses are bitterly hostile to the idea of a Parliament with tax-raising powers? They know very well that that would be the death knell for Scottish investment from outside. Indeed, it would kill all the work of the past five years, when £3 billion has been invested in Scotland, creating 47,000 jobs. Is he aware that those jobs would simply head down south, which would put thousands on the dole?

Mr. Kynoch

My hon. Friend is absolutely right and I wish that the hon. Member for Hamilton (Mr. Robertson), instead of talking to one of his colleagues on the Opposition Front Bench, would listen and realise that

70 per cent. of Scottish businesses have said that his tartan tax-raising Scottish Parliament is bad for them, the people of Scotland and the economy of Scotland.

Sir Russell Johnston

Is the Minister aware that both he and his right hon. Friend the Secretary of State going on and on in a mindless way about a tartan tax, which is no more than a superficial, meaningless soundbite, should consider federal systems throughout the world, such as those in Germany, the United States and Canada, where it is possible for federal units to raise taxation and thereby stimulate wealth creation?

Mr. Kynoch

Perhaps the hon. Gentleman should talk to his Liberal Democrat colleagues because that is not what his party advocates. It is advocating a tax-raising Parliament for Scotland. It is clear to everyone who looks at the figures on funding in Scotland that that will be bad for Scotland. Seventy per cent. of businesses in the Fraser of Allander report confirmed that it would be bad for business in Scotland.

Mr. Stephen

Does my hon. Friend accept that people who have a job in Scotland and elsewhere in the kingdom are working harder and for longer hours than ever before and that their employers would like to take on more staff but are afraid to do so because, if they prove unsatisfactory, they might not be able to get rid of them? They are afraid that they might be taken to the cleaners under so-called employment protection legislation.

Mr. Kynoch

My hon. Friend refers to employment practices. What is clear to the people of Scotland, and to employers in Scotland, is that the policies advocated by the Labour party—the social chapter and a national minimum wage—are, along with the tartan tax-raising Parliament, very bad news for the Scottish economy and bad news for business.

Mr. Maxton

Instead of continuing to mouth his closed-mind attitude to devolution, why does not the Minister—and the Secretary of State—take a little time to study what has happened in the autonomous regions of Spain, in particular, which is much more like what is being proposed in Scotland? Catalonia, the Basque country and Galicia have all shown an improvement in their economic structures as a result of devolution and have not been damaged.

Mr. Kynoch

I wish that the hon. Member would look at all the positive things that are happening in Scotland: the fact that unemployment is falling steadily—whereas in Spain I understand that it is at record levels—and that business is performing better than ever before, with record output and exports. None of this would be possible if businesses were not competitive. The hon. Gentleman should look at the success stories in Scotland and question why he wants to make it very difficult for business to continue succeeding in Scotland.

Mr. Gallie

Has not the principle of level taxation across the United Kingdom given Scotland the opportunity to create the levels of wealth of recent times? Will that not be put in jeopardy—and the Union too—if we impose a tax on Scottish people which is not imposed across the Union as a whole?

Mr. Kynoch

My hon. Friend is absolutely right. I am sure that nobody in Scotland wants to pay more tax than the rest of the United Kingdom. We have been discussing record inward investment and the successes of last week. I question whether we would have been able to convince those companies that they should locate in Scotland if it was taxed higher than elsewhere in the United Kingdom. Quite blatantly, the Opposition parties cannot see how their tax-raising Parliament will square the books unless they either reduce services or increase taxes, and that would be bad for the people of Scotland.

Mr. McFall

The Minister knows that the 21 Tory taxes since 1992 are the equivalent of one every seven weeks in Scotland. Can he look in the eye the 200,000 unemployed and 50,000 young people who do not have a future and tell them that they are participating in wealth creation? Like the Prime Minister and the Secretary of State for Scotland, is he not wrong on devolution, culpable on the poll tax, which wasted £2 billion, and part of a Government who have deeply scarred the Scottish economy and Scottish society? Does he not accept that the majority of Scots believe that the Government's lies on taxation render them unfit for office?

Mr. Kynoch

I hope that the hon. Gentleman will look the people of Scotland straight in the eye and explain to them how, if he were ever to get in a position of having his tax-raising Parliament, he would justify the loss of jobs, not just from the tax-raising Parliament but from signing up to the social chapter and the national minimum wage, even though he and his party are scared to tell the people what national minimum wage he proposes. I suggest that he is scared because he knows that it will cost jobs—and dearly.