Income Tax (Hansard, 1 May 1996)

§ 13. Mr. Brooke
To ask the Secretary of State for Scotland what estimate he has made of the additional revenue which would be raised from an extra penny on income tax in Scotland. [26065]

§ Mr. Michael Forsyth
The latest Treasury estimate is that each penny raised in tartan tax would raise £130 million.

§ Mr. Brooke
Given what that sum would achieve if expended throughout Scotland, does my right hon. Friend agree that it would be much better if it were allowed to remain and fructify in the pockets of the people?

§ Mr. Forsyth
I agree with my right hon. Friend's words, which I think were originally put forward by Gladstone, whose legacy has been betrayed by the Liberals, who are too keen now to raise the tartan tax in Scotland. I agree that it would be unjust for people in Scotland to have less in their pay packets for the same wage as others elsewhere as a result of implementation of the proposal to have a tax-raising parliament.

§ Mr. David Marshall
Does the Secretary of State agree that Scotland is colder than the rest of the United Kingdom and that Scots pay more value added tax on fuel than any other part of the UK? Does he not realise that VAT on fuel is a hated and iniquitous Tory tartan tax on Scotland's people?

§ Mr. Forsyth
If we had listened to Labour Members, we would have much higher VAT rates, because, until recently, their period in opposition has been geared towards arguing for more expenditure. If the hon. Gentleman is interested in taxes that place an unfair burden on Scotland, he might have a word with the hon. Member for Dunfermline, East (Mr. Brown), who wishes to remove child benefit for children over the age of 16. That was originally a tax allowance. Removing it is a tax on education and on students. With more people staying on after the age of 16 in Scotland than in any other part of the UK, Scotland would be hit hardest by that Labour proposal to tax education.

§ Mr. Gallie
Does my right hon. Friend agree that additional revenue raised by Government means lower take-home pay for individuals? What effect would that have on business, on high streets in Scotland and on people attempting to create wealth?

§ Mr. Forsyth
If we have to pay higher taxes for Labour's Scottish Parliament in Scotland, there will be one result: fewer jobs, less take-home pay, less investment and less opportunity for us to have a say at the top table in the European Community, at Westminster and in the world's councils. That deal suits no one except the socialists.

§ Mr. Maclennan
I welcome the Secretary of State's recognition of Mr. Gladstone's fiscal prudence, which is, of course, a typically Liberal characteristic, and I draw the Secretary of State's attention to Mr. Gladstone's favouring of devolution all round. Instead of speculating 1143 about taxation in future, will the right hon. Gentleman give a factual account of how much increased revenue he and his Government have raised in Scotland as a result of taxation increases since the last general election?

§ Mr. Forsyth
May I respectfully point out to the hon. Gentleman that the best traditions of 19th-century Liberalism are found on the Conservative Benches? On the subject of his party's commitment to home rule in the 19th century, perhaps the Labour party might learn a lesson there, because that commitment destroyed the Liberal party and condemned it to being out of government for a generation and more.

§ Mr. George Robertson
Given the Government's deplorable record in breaking practically every one of their tax promises made at the last general election, the Secretary of State has a cheek to raise in any way the subject of tax. When will he realise that the Scottish people are not impressed by scare stories and exaggerations about a power for the Scottish Parliament, which will probably never be a tax burden, but they are impressed—and, indeed, disgusted and angered—by the fact that, since 1992, they have had to pay 22 extra tax increases imposed by the Government, they have had a real tartan tax in VAT on fuel and they are now getting the Forsyth tax and council tax bills through every letterbox in the land?
I read that the Secretary of State was claiming that the Scottish Tory party has no divisions and no factionalism", and that he wants it to be seen as a model for the Tory party nationally. If that model is going to reduce the national Tory party to 13 per cent. in the opinion polls, I endorse his call.

§ Mr. Forsyth
I hope that the whole of Scotland will recognise the hon. Gentleman's smugness in assuming that, because he happens to have a bit of a lead in the polls at present, he has a mandate to make the Scottish people pay more in income tax than any other part of the UK.
The hon Gentleman is a reasonable man. If he is sincere in his hints that he will never use the power that he says he will seek in order to raise a tartan tax, why does he not just drop his commitment to the tartan tax and end the uncertainty that is disadvantaging Scotland in competing for jobs and inward investment? Why not remove that from the scene altogether? It would be easy to do.
The hon. Gentleman should also say how he will fund the promises made by his hon. Friend the Member for Dunfermline, East, involving about £390 million extra for local government. That represents the whole of the 3p of tartan tax. Where is the money to come from and what is going on in the Labour party? This morning on the radio, the hon. Member for Holborn and St. Pancras (Mr. Dobson), who speaks for the Labour party on local government, said, "There will be no more extra money for local government." But north of the border Labour is saying that there will be more money for local government. Where will it come from if not from the tartan tax?

§ Lady Olga Maitland
In addition to the punitive tartan tax, will my right hon. Friend confirm that the sixth form 1144 tax that has been proposed by Labour would punish people to the tune of £1, 000 per child for children trying to follow a sixth form course? [Interruption.] Is that not cheating children, denying them the chance of fulfilling their education?

§ Mr. Forsyth
These questions are broadcast, and I hope that every parent in Scotland with teenage children who is struggling to keep them at school or send them to further education colleges will note how Opposition Members laughed, jeered and sneered when my hon. Friend spoke about the importance of child benefit and what it means. The hon. Member for Hamilton (Mr. Robertson) might like to note that the removal of that benefit is equivalent to an additional tax. It is far more than the tartan tax, and it has been proposed by the Labour party, which should be ashamed of putting it forward.