Income Tax (Hansard, 7 March 1996)

§ 1. Mr. Gallie
To ask the Chancellor of the Exchequer what representations he has received in respect of the advantages and disadvantages of maintaining a common income tax banding in each of the countries which comprise the United Kingdom; and if he will make a statement. [17616]

§ The Financial Secretary to the Treasury (Mr. Michael Jack)
It would be nonsense for the United Kingdom to have anything other than a single income tax system because different rates of income tax would lead to distortions, complications and additional costs.

§ Mr. Gallie
Does the Minister agree that the imposition of an additional 3 per cent. on income tax would cause great anger and confusion for individuals on whom it was 436 imposed in any area of the United Kingdom? Does he also agree that the right hon. Member for Sedgefield (Mr. Blair) recognises this and would dearly like to withdraw from Labour's tartan tax?

§ Mr. Jack
My hon. Friend has raised an interesting point—no doubt we shall have a new industry of tax exiles in Carlisle if that comes about. Labour says that it supports the proposals of the Scottish Constitutional Convention, but then tries to move away from that. Labour says that it wants a competitive Scotland; yet it proposes to increase taxes in Scotland that would add £6.10 a week to the average family tax bill. Labour also says that it wants a more competitive and better-off Britain. It is a case of it saying one thing and doing another.

§ Mr. McAvoy
The Minister mentioned additional taxes, but he omitted to say that the Government have imposed an extra 20 tax increases on Scotland and the rest of the United Kingdom. Does he accept that the hardship and confusion referred to by the hon. Member for Ayr (Mr. Gallie) will be even worse when there are swingeing increases in council tax for residents in Scotland, which is now to be known as a Forsyth tax?

§ Mr. Jack
The hon. Gentleman should look to his own before he criticises us. My right hon. and learned Friend the Chancellor made difficult decisions to bring the British economy back under control, and the economy is now doing very well and living standards are rising. When the Labour party was last in power, it disguised its taxation by over-borrowing. Had the Labour party had the same borrowing regime as us, it would have had 10p more on the standard rate of tax.