HC Deb 15 July 1997 vol 298 cc181-3
5. Mrs. May

To ask the Secretary of State for Scotland if he will make a statement about his proposals for tax—varying powers for a Scottish Parliament. [6694]

The Secretary of State for Scotland (Mr. Donald Dewar)

As stated in the Government's manifesto, Parliament will have defined but limited power to vary revenues. The details will be set out in a White Paper to be published shortly.

Mrs. May

I am grateful to the right hon. Gentleman for confirming that, despite some recent uncertainties, the Government retain their commitment to impose 18 tax rises on the people of Scotland compared with the 17 tax rises announced in the Budget for the rest of the country.

Will he confirm that the summary of the White Paper, which the Minister has just said will be distributed to households in Scotland, will include details of the tax-varying powers? Will it explain why the Government feel that it is necessary to impose that extra tax when the Prime Minister consistently said to the people of the country prior to the election that there would be no tax rises? Will the right hon. Gentleman provide an explanation in that paper about whether the Scottish Parliament will have full tax-varying powers or whether, as the Prime Minister suggested before the election, it will simply be like a parish council?

Mr. Dewar

I congratulate the hon. Lady on her assiduous repetition of propaganda from central office. I commend the White Paper to her when it is published. Perhaps she could start, however, by visiting Scotland and talking to people there. As I am sure she will know if she reads the papers even in a cursory fashion, the polls show an increasingly healthy majority support not just for the concept of a Scottish Parliament but for the need to give it the discipline and responsibility of having powers to vary some of its revenue.

Mr. Dalyell

What is the answer to the question put in yesterday's leading article in The Scotsman as to who pays for the new Parliament building on Victoria quay, which apparently the Secretary of State has discovered he now needs?

Mr. Dewar

The one thing that I have always enjoyed about my hon. Friend is his precision, but I can assure him that on this occasion he has fallen short of his normal high standards. Consideration is being given to various options, the reasons for which I think anyone who knows the Royal high school building will appreciate. We will be looking for a scheme that gives value for money, combined with effective government and an effective working environment for new members of the Scottish Parliament. I think that there will be widespread support for that.

Mr. Wallace

Although the Labour party has suggested that it would not necessarily use any tax powers given to the Scottish Parliament in the first term of that Parliament, can the Secretary of State confirm, having consulted his officials and the Inland Revenue, that those powers will be available for use by that Parliament in its first term if the Parliament wishes to make the necessary additional investment in education and health that some of us think is needed?

Mr. Dewar

That is the intention. I am grateful to the hon. Gentleman for precisely drawing attention to the difference between an existence of the power and the use of it.

Mr. McAllion

Does my right hon. Friend agree that a directly elected Scottish Parliament will have a democratic legitimacy that cannot be matched even by the Scottish Office? It will therefore be a far more significant player in the annual public spending round than any Whitehall-based Department. It will therefore be better placed to defend levels of public spending in Scotland and to build upon that with its tax-varying power. Will my right hon. Friend therefore join me in recommending all those who want to see better public services in Scotland, which are better funded, to go out at the referendum and vote yes, yes?

Mr. Dewar

I certainly endorse what my hon. Friend says about the need for a good turn-out and to maximise the enormous potential support that exists, as almost every opinion poll has shown. The most recent one showed that eight out of 10 Scots, in the sample polled, felt that a Scottish Parliament directly elected in the way we suggest would produce policies more attuned to the needs of Scotland. There is an essential democratic case at the very heart of our argument for a Scottish Parliament.

Mr. Ancram

The Secretary of State is always keen to remind the House that the tax-varying power means downwards as well as upwards, so can he confirm the statement made in the other place recently by Government Treasury spokesman Lord Haskel—that, if a Scottish Parliament lowered the standard rate of tax by the permitted 3p in the pound, the Treasury would cut the Scottish block by £450 million to make up the lost revenue? On that evidence, can the right hon. Gentleman still claim that the tax-varying power, to reduce or put up tax, is good for the Scottish people? Will they not suffer either way from this half-baked tartan tax idea?

Mr. Dewar

The right hon. Gentleman will want to read the White Paper with care. I congratulate the noble Lord, who seems to have gone some way to educating Opposition Front-Bench spokesmen about the proposals. If we reduce taxation, that will have an obvious impact on the subvention from the United Kingdom Exchequer—it would be extraordinary if it did not. I hate to imagine the assault that would be mounted on us if we proposed otherwise.

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