Stewart Hosie
Main Page: Stewart Hosie (Scottish National Party - Dundee East)Department Debates - View all Stewart Hosie's debates with the Scotland Office
(8 years, 10 months ago)
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Stewart Hosie (Dundee East) (SNP)
It is a pleasure to serve under your chairmanship, Sir David, and to speak to amendment 89, tabled in my name and the names of my hon. Friends.
If amendment 89 is passed, it will deliver full fiscal autonomy for Scotland. That means that Scotland will collect all her own taxes, fund all her own spending—all the spending that is the responsibility of the Scottish Parliament—and pay a subvention for shared spending on Scotland’s behalf, primarily on defence and foreign affairs, by the UK Government. This is not simply about responsibility for taxation; it is about responsibility for all spending outwith limited and agreed areas.
On the question of why we need this, the answer is clear. We need and deserve important decisions to be taken as close to the people as possible and, more importantly, we need those decisions to be taken in line with the aspirations and democratic choices of the Scottish people.
The next question is what we would do with the powers. The answer depends very much on the view of the Scottish Government of the day, the prevailing economic conditions, and the most up-to-date economic forecasts. I will describe what an SNP Government might do with the powers of full fiscal autonomy to grow the economy, improve conditions for business investment and job creation, and start to make society fairer—all of which are vital for Scotland’s economy and future.
We believe in the transfer of more powers to Scotland not as an end in itself but because through it the Scottish Government can exercise those powers to the benefit of Scotland’s economy and society. For example, we would not merely have control over income tax rates and bands for earned income but have responsibility for all tax on income, including definition, the basic rate starting threshold, and tax rates on dividend and investment income. That would allow for every possible policy choice, delivering to future Scottish Governments the flexibility to craft an income tax system. Likewise, the devolution of corporation tax would allow for a comprehensive tax regime, including an intelligent use of allowances to assist business in investing for the future.
Ian Paisley
Does the hon. Gentleman desire air passenger duty to be included in the remit of the amendment? Does he accept that to be fair to all the component parts of the United Kingdom, any change to APD should affect Northern Ireland as well as the north of England?
Stewart Hosie
Air passenger duty is to be devolved to Scotland, as it has been to Northern Ireland, albeit in a limited way. I very much welcome that. It is for each of the component parts that have responsibility for a tax to use it wisely in the interests of the people. I think we would agree that serious, proper and justifiable tax competition to grow our economy and attract investment would be a good thing, and I hope the hon. Gentleman agrees that it is always odd to hear Government Members purport to support tax competition except, of course, when it begins to affect them.
Wayne David (Caerphilly) (Lab)
It is interesting to hear the hon. Gentleman setting out some of the economic and fiscal priorities of a future SNP Government. Would they increase or reduce corporation tax?
Stewart Hosie
Yes, a future SNP Government would increase it, decrease it, keep it the same and use the amount raised in an intelligent way. I know the hon. Gentleman thinks he has asked a really clever question, but we have just had the 2015 election and I am not going to write the 2016 manifesto today.
To answer a little more clearly, we have argued for targeted reductions in corporation tax in order to promote investment in key industries. We have highlighted for many years the relatively low private sector research and development spend in Scotland. However, given that R and D tax credits can be claimed only by companies liable for corporation tax, in order to develop a comprehensive, joined-up approach to encourage more innovation, we need to move to full fiscal autonomy, including the devolution of corporation tax and all related allowances, in order to be able to use that lever.
Mr Rees-Mogg
The hon. Gentleman said that Government Members are not in favour of tax competition, but I am thoroughly in favour of tax competition. It would be an excellent idea for both Scotland and Northern Ireland to have control of their corporation tax, because I think they would suddenly discover the virtues of the Laffer curve and reduce taxes quite sharply.
Stewart Hosie
Our friends in the Labour party have criticised us for understanding the Laffer curve just a little too well.
We also want to see continued downward pressure on the cost of employing people. That is one of the reasons the SNP proposed in our manifesto to increase the employment allowance from £2,000 to £6,000 per business a year. We cannot do that at present, but we would be able to do so with the devolution of national insurance as part of a package delivering full fiscal autonomy.
Stewart Hosie
I will give way in a moment, if the hon. Gentleman keeps calm.
Finally, as I have said, the issue of specific powers and what we might do with them is not all about tax: it is about other decision making, such as the minimum wage. We support a rise in the minimum wage to £8.70 by the end of this Parliament: that is the right thing to do. We do not currently have the power in Scotland to do that. Although we will table amendments to transfer that specific power, the last two examples demonstrate why we need full fiscal autonomy—to deliver a comprehensive, joined-up approach, which would allow us to increase the minimum wage to help those in employment who earn the least, while increasing the employment allowance to help support businesses to pay it.
Alberto Costa
How many times in the past eight years have the SNP Scottish Government exercised their powers to increase or decrease income tax? The hon. Gentleman keeps complaining that this place is restricting them from using powers, so could he please remind Scottish people and this Committee how many times they have used their existing powers?
Stewart Hosie
I welcome the hon. Gentleman to Parliament, but he does not need to jab his finger and point. The small business bonus has cut or reduced business rates for 80,000 people. At £640 million, the Scottish Government are delivering the most effective business rate tax relief across the whole of the UK. One could make a very strong case that we have ended a tax on ill health by removing prescription charges. The hon. Gentleman’s failure to know what he is talking about was why he was defeated in Angus by my hon. Friend the Member for Angus (Mike Weir).
So far, we have not heard a single speech as to why we should not have full fiscal autonomy. I am sure that one will come, but let me focus on that matter now. The objections that we have so far heard are rather odd and almost entirely without principle. In essence, in order to say no, our opponents fall back on one or two flawed analyses of the Scottish economy, which are basically snapshots of one particular point in time.
Mr MacNeil
Was that not an extraordinary intervention from the hon. Member for South Leicestershire (Alberto Costa)? The Conservative party wants to handcuff itself and not use any of its tax powers at all, as we heard from the Chancellor only last week. Does that not show the deep malaise of understanding? When we have tax powers, they are not used all the time. For instance, in the last Parliament, VAT was changed only once. Let us hope that the Conservatives do not use that power again. The point about having tax powers is to use the power that is necessary or important to use at a particular time. Tax powers are not used willy-nilly, as the hon. Gentleman’s own Chancellor has conceded.
Stewart Hosie
I fear that my hon. Friend was intervening less on me than on Conservative Members, but he is absolutely right. There is no argument too odd for them to deploy.
On the opposition to full fiscal autonomy, basing an argument on one or two flawed analyses is using a snapshot in time in order to say no. It is less a case of analysing all the facts to come to a considered view, and more one of finding any reason to oppose for opposition’s sake.
Ian Murray
I have tremendous respect for the hon. Gentleman, but he is letting himself down by how he is conducting this debate. If he is saying that the Institute for Fiscal Studies is wrong, why has the same figure come out of the Scottish Government’s own accounts?
Stewart Hosie
The chief of the snapshot analyses I have just described is the one from the IFS that our opponents pray in aid. They claimed in April that Scotland would face a relative deficit of £7.6 billion, which may rise to £10 billion by 2019-20, and that in itself is enough for them to say no. I also like and respect the hon. Gentleman—I will not finish the rest of that sentence. I would tell him that his argument is fundamentally flawed. In essence, our opponents’ argument is that even if the IFS figures were true, UK Government economic policy has failed Scotland and we should therefore keep economic policy in the hands of a UK Government who have failed. That simply is not credible.
It is of course true that Scotland has a deficit, and so does the UK—borrowing £75 billion this year, almost four times what the Chancellor promised borrowing would be. The majority of advanced economies run deficits, particularly in difficult times. The UK deficit in 2013-14 was £98 billion. Over the five years to 2013-14, the cumulative deficit was £600 billion. The UK was in deficit for 43 of the past 50 years, and 28 of the 34 members of the OECD were in deficit in 2013. If the deficit alone was a reason for a country to surrender its financial independence, the UK economy would be run from Berlin.
Mr Kenneth Clarke (Rushcliffe) (Con)
The hon. Gentleman’s desire for independence of taxation seems to be to lower taxation, while he contemplates raising expenditure and he is fairly indifferent to deficits. Does he contemplate any kind of fiscal discipline? Our neighbours across the channel started a single currency, and they—as we would—have a single currency and a single central bank. Had they stuck to their rules on fiscal discipline, the Maastricht criteria, and to their no bail-out clause, they might have done rather better. What fiscal discipline does he propose, or does he think the English will pick up the bill whatever decisions the Scottish Government make?
Stewart Hosie
We were very clear in our manifesto that there would be increased tax yield, perhaps from a 50p rate of tax at a UK level, from a bank bonus tax, from the bankers’ levy and from a mansion tax. We supported a number of policies in our manifesto that clearly would have increased yield. We were also very clear on what we wanted to do about borrowing. We laid out explicitly that borrowing would rise, but that it would fund £140 billion of extra investment across the UK throughout this Parliament, as opposed to the cuts in the order of £146 billion that have been proposed by the Chancellor.
Stewart Hosie
In a moment.
If all the IFS and Treasury analyses do is project forward “Government Expenditure and Revenue Scotland” figures, they do not provide a meaningful description of the fiscal position in a fiscally autonomous Scotland. Whether Scotland’s budget deficit—or surplus—would be larger or smaller under full fiscal autonomy depends on a huge number of factors, not least the transition process that my hon. Friends referred to earlier; the negotiated fiscal framework between Scotland and the rest of the UK; Scotland’s contribution to UK-wide public services, such as defence, debt interest and international aid; the interaction with the UK macroeconomic framework; and, most importantly, the decisions made by the Scottish Government about borrowing, economic policy and public spending.
There would have to be agreement on the past contributions and tax receipts from Scottish taxpayers and corporates, and the shared liabilities that have accrued in terms of entitlements for individuals—for example, pensions that people have paid into through the national insurance system—to maintain the free movement of labour and an integrated single market. On liabilities, it is worth pointing out, in case anybody thinks I have forgotten about this, that we think there would have to be an adjustment to reflect UK-wide costs, such as the decommissioning costs in the North sea, because the UK Government have received the full benefit of all the tax revenue associated with that economic activity so far.
In short, the current economic situation is not a reason to say no to full fiscal autonomy; rather, it is vital, in tackling the deficit, to avoid further cuts by giving Scotland the economic levers that it needs to boost growth and increase revenues.
Ian Blackford
Does my hon. Friend agree that the key reason the UK deficit is sitting at close to £1.5 trillion is the failure to deliver sustainable economic growth over the past few years? The clear agenda behind our attempt to deliver fiscal autonomy to Scotland is that the Scottish Government are focused on innovation and skills, on driving investment into the Scottish economy, on driving productivity growth, on driving up tax receipts and on driving prosperity for the Scottish people. That is why we need these powers.
Stewart Hosie
That is absolutely right. Trend growth in the UK over decades has not been sufficient, and private sector investment and innovation have been lamentable. My hon. Friend is absolutely right that we need these powers for a reason.
Notwithstanding what has been said, it is important to remember that Scotland is a prosperous economy. It is about far more than oil, although to listen to some of our political opponents, one would think that that was all the Scottish economy consisted of.
Ian Murray
Will the hon. Gentleman enlighten the Committee about what level of economic growth he thinks Scotland would require to balance the budget?
Stewart Hosie
We need to get trend growth up and we need to operate within a framework that will see the deficit begin to come down. I do not remember the previous Labour Opposition ever coming up with a cast-iron figure—2.75%, 3%, 3.25%, 4% or 5%—for trend growth. No one would be so silly as to put a figure on it, when it is dependent on so many external criteria.
Our political opponents dismiss the Scottish economy, saying that it is all about oil. They seem to forget that in two of the past four years our deficit was smaller than that of the UK. In the past 34 years, tax revenue per person has been higher than in the UK. Indeed, in the last full year, including our geographic share of the North sea, it was more than £10,000 per head compared with £9,700 in the UK. Even without North sea oil, output per head is almost identical to the UK. We remain the third most prosperous and productive of the 12 so-called regions of the UK, and, including a geographic share of oil and gas, our output per head is higher than the UK average, even today.
Andrew Gwynne
I am listening carefully to the hon. Gentleman’s argument. It is clear that amendment 89, which is in his name and the names of his colleagues, would enable the Scottish Parliament, at some stage, to legislate to allow for those powers to be drawn down, either in part or whole. What timescale does he envisage for the Scottish Parliament to move to full fiscal autonomy, rather than, perhaps, partial fiscal autonomy? What does he envisage being the interim arrangements were it to draw down only some of those powers?
Stewart Hosie
I would like the Scottish Government to be in a position to draw down the powers as quickly as possible. Obviously, to draw them all down and use them would require transitional arrangements to be in place.
Stewart Hosie
I will come back to that in a moment.
It would require the tax system to be fully functioning and for there to be an agreed macroeconomic fiscal framework across the whole of the UK. That would require agreement between the Scottish Government and the UK Government—that is to say, there would be other people at the table who had to say yes to things—so it is not possible to put a hard and fast timetable on the powers. If, however, we can agree on full fiscal autonomy tonight, and the Scottish Government’s ability to draw down the powers at the right time, then with good will we can get agreement on the fiscal agreement and the overarching framework, and we can all get to work.
Ian Murray
The hon. Gentleman is being incredibly generous with his time. Will he tell the Committee why, if full fiscal autonomy is so good for the Scottish budget, he will not support new clause 3, tabled by the hon. Member for Gainsborough (Sir Edward Leigh)?
Stewart Hosie
I want maximum power for Scotland. I want it as quickly as possible. I am not like the British Labour party, which keeps saying no and, in the absence of no, says delay with yet another commission. If the hon. Member for Gainsborough (Sir Edward Leigh) presses new clause 3 to a vote, we will support it. Here is the thing: I hope the hon. Member for Edinburgh South (Ian Murray), who is grinning like a Cheshire cat, will now get to his feet and tell us whether he intends to back the Government tonight in opposing powers for Scotland. The silence is deafening.
Let me continue with more of the arguments our opponents deploy against full fiscal autonomy. When they argue against more powers they say that they would require further cuts, but that argument is completely flawed. It would suggest that the Scottish Government are protected from Westminster cuts at present, which simply is not true. Cuts in the previous Parliament actually took place at a time of rising North sea revenues.
Alberto Costa
I thank the hon. Gentleman for his generosity in giving way to me a second time. In the lead-up to the Scottish referendum, he very articulately and eloquently put all those points to the Scottish electorate, yet the Scottish electorate resoundingly rejected them. Had the referendum gone his way and there was a yes vote, he would have had to have been in a position today to set a timescale for everything he is arguing for.
Stewart Hosie
The hon. Gentleman is right about one thing: we did not win the referendum. There was, however, an election that we did win, so we are not bringing forward another mandate for independence; we are bringing forward provisions for full fiscal autonomy. I hear Tories pontificate right, left and centre about responsibility, but when it comes to full fiscal responsibility for Scotland, all of a sudden there is silence. They just sit on their hands and say no.
David Mundell
Why then did the SNP not table the new clause in the name of my hon. Friend the Member for Gainsborough (Sir Edward Leigh)? If the hon. Gentleman wants that full-blooded proposal, why did he leave it to the Tory Benches to propose what he claims is an SNP policy?
Stewart Hosie
I can almost hear Professor Adam Tomkins, the Tory adviser to this Tory Minister, coming up with that daft question. I say this to the Minister: our amendment 89 would deliver full fiscal autonomy in a way that makes sense.
Our opponents argue that full fiscal autonomy would lead to more cuts to the Scottish budget, which is ridiculous when one considers that between 2009-10 and 2013-14, at a time when the North sea was generating £32 billion in oil revenues, the Scottish Government’s budget was cut by about 9%. According to the Institute for Fiscal Studies, prayed in aid by Tories and Labour alike, the cuts of more than 5% implied in 2016-17 and 2017-18—in this Parliament—will be twice the size of any cuts over the last Parliament. The UK Budget showed that implied cumulative cuts to day-to-day spending on public services in Scotland over this Parliament could amount to £12 billion in real terms compared with 2014-15. In the absence of full fiscal autonomy, therefore, we are not protected from cuts. Rather, we suffer a double blow: continued austerity and an inability to grow the economy and increase tax yields in the way that Scotland requires.
Chris Philp (Croydon South) (Con)
The hon. Gentleman mentioned that tax receipts in Scotland are on average 3% higher per head than in the rest of the UK. Public spending in Scotland, however, is more than 10% higher. The reason, of course, is the Barnett formula. Will he confirm that under his proposals the Barnett formula would be done away with, and will he explain where the extra money would be found? Would it be tax increases or spending cuts? If so, where from?
Stewart Hosie
It is extraordinary! UK debt is £1.5 trillion and the Government are borrowing £75 billion more this year than UK tax revenue would allow, and they have the audacity to question whether the Scottish Government, who have balanced the books every year, could do so in the future. If we have the right tools and levers, of course we can do the job. The hon. Gentleman’s argument is fundamentally that there would be a cost to Scotland of full fiscal autonomy. As we have seen, our opponents tend to quote figures for this financial year, whereas we would move to full fiscal autonomy only over the medium term.
The second key issue, as the IFS has said on many occasions, is that our opponents fail to take account of the potential positive impact on Scotland’s economy of full fiscal responsibility. The entire point of FFA is to empower our Parliament to take decisions for the benefit of Scotland’s economy to deliver full tax and investment powers and to enable Holyrood to make better spending decisions.
Wayne David
This is an important point. The hon. Gentleman says he is in favour of moving towards fiscal autonomy, but only in the medium term. How long is the medium term?
Stewart Hosie
I support moving to full fiscal autonomy because, as the N-56 think-tank said, it produces an opportunity, not a threat. There was a time when there were 40 Scottish Labour MPs sitting behind the Opposition Front Bench shouting their heads off, but now there is barely a whimper, barely a squeak—not a cogent, credible argument from a party about to get into bed with the Tories to say no to Scotland.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
The hon. Gentleman said that he will increase the deficit to spend to invest—where have I heard that phrase before?—but while Scotland is a member of the sterling area, would he expect the Bank of England to guarantee whatever sterling debt his party incurs?
Stewart Hosie
First things first: the central bank does not guarantee debt. It sets the base rate, but the gilts are issued by the UK Government. It would be UK debt, which is precisely why we need an agreed fiscal framework within which we operate. I would have thought that that is just common sense.
Stewart Hosie
No. I have been very generous. I think I will stop being generous now.
In order to deliver full fiscal autonomy, amendment 89 would allow the Scottish Government to remove the reserved status of certain key areas, and allow that Government to have legislative competence over them. It would do so at an appropriate time, ensuring that the systems and the framework under which full fiscal autonomy would operate are fully in place.
We know we need full fiscal autonomy. We know how full fiscal autonomy will work. The Scottish people have voted for maximum powers, and we are here representing that view. Amendment 89 is the way forward to deliver the fairness, the justice and the economic levers that the Scottish Government need. I hope there will be huge support for it tonight. I commend the amendment to the Committee.
Mr Kevan Jones
It is a privilege to serve under your chairmanship, Sir David.
We have seen a remarkable event tonight—I never thought I would see such an event. The Scottish National party is having a love-in with the hon. Member for Gainsborough (Sir Edward Leigh) and the right hon. Member for Wokingham (John Redwood). Love does not come to mind very often when we think of the right hon. Gentleman, but tonight he is the darling of the SNP. The hon. Member for Dundee East (Stewart Hosie) has just lectured the Labour party about voting with the Conservatives. If he supports new clause 3, tabled by the hon. Member for Gainsborough, he will vote with them.
The hon. Member for Dundee East should cut the general election rhetoric and get down to the details. The debate is a serious one, as my hon. Friend the Member for Nottingham North (Mr Allen) has said. It is not just about Scotland, but about the devolution of powers and how we settle them for the rest of the United Kingdom. The hon. Member for Gainsborough put the SNP behind the eight ball. His is a clear proposal for moving to full fiscal autonomy or responsibility. I notice that the hon. Member for Dundee East changes things—he goes from “autonomy” to “responsibility” whenever he wants—but the hon. Member for Gainsborough is very clear that he is proposing full fiscal autonomy.
The argument being put forward is that that is what the Scottish people said at the general election. I do not accept that. In the referendum, the Scottish people said that they wanted to be part of the United Kingdom. A responsibility of being part of the United Kingdom is that certain things will be done across the four nations of this great nation of ours.
It is difficult for Scottish National party Members. If something is said by Scottish nationalists, it has to be true, and no one dare ever say that something they are saying is not true. The hon. Member for Dundee East argues that amendment 89 is a movement to full fiscal autonomy or responsibility, but it is not. It would give the power to the Scottish Government to draw down those powers. Why is amendment 89 not framed as clearly as the proposal of the hon. Member for Gainsborough? His proposal would give the powers straight away, with the consequences for the Barnett formula and the support that that gives to the Scottish Government.
It is nothing new for the Scottish nationalists to want to have their cake and eat it, but many of my constituents—and, I am sure, those of other Members—will not accept an arrangement that would allow the Scottish Government to legislate for full fiscal autonomy for which they were expected to pay. That would be not only wrong, but totally unfair on the rest of the United Kingdom.
Ian Murray
It seems to me that the SNP, in its fantastic victory, on which I have congratulated and complimented its Members on a number of occasions from this Dispatch Box, does not want any scrutiny at all. Just because the SNP has made a proposal for full fiscal autonomy does not mean that we should not scrutinise that proposal. In fact, if it was not for the hon. Member for Gainsborough (Sir Edward Leigh), we probably would not even be discussing full fiscal autonomy today. He forced the hand of the Scottish National party so that it brought forward its manifesto commitment, which it was rowing back on incredibly quickly.
Ian Murray
Let me make a little progress and then I will give way, as the hon. Gentleman was generous in giving way to me.
In the past couple of years it has become increasingly apparent that devolution is a matter not just for Scotland, Wales and Northern Ireland, but for England and the United Kingdom as a whole. The Labour movement has always been an engine of reform and the party of devolution. People want to see power devolved and exercised at local level, affording greater decision making and enhanced accountability.
Ian Murray
I am not sure of the entire detail of the proposal that the hon. Gentleman refers to, but there is a general consensus across Scotland that the Scottish Parliament has been one of the most centralist Parliaments in the world by grappling power away from local government. What we are trying to do as part of this Bill, which I think is a major positive, and I hope the Government—
Ian Murray
Will the hon. Gentleman allow me to answer the previous intervention first? He is a seasoned professional in this Chamber, so he should allow me to get at least halfway through the response to his hon. Friend’s intervention.
One of the key questions—I hope the Secretary of State and those on the Treasury Bench look at some of these principles in the context of the Bill—is whether those principles go further towards double devolution. There is no point in sending powers from one Parliament to another. [Hon. Members: “Give way!”] Those powers also have to be spread across Scotland from Holyrood to local authorities. Without that process, hon. Members cannot take power closer to the people they seek to represent.
I will give way to the hon. Member for Dundee East (Stewart Hosie) and then to the hon. Member for North Ayrshire and Arran (Patricia Gibson). [Interruption.] The hon. Lady can blame her boss if she likes; he wants to come in first.
Stewart Hosie
The hon. Gentleman suggested about 10 minutes ago that the Scottish National party was not going to table an amendment to deliver full fiscal autonomy, and he suggested that it happened only because of the amendment tabled by the hon. Member for Gainsborough (Sir Edward Leigh). That is completely false. Amendment 89 is on the amendment paper to deliver full fiscal autonomy. Will the hon. Gentleman withdraw that daft allegation from the Labour Front Bench and, more importantly, confirm that Labour Members intend to go through the Lobby with members of the Tory Front-Bench team to stop power coming to Scotland?
Ian Murray
The Bill before us will transfer nearly 50% of tax and 60% of spending to the Scottish Parliament. We promised to make it the most powerful devolved Parliament in the world, and that is a promise we will keep. As I have always said, we will ensure that the Bill is delivered in full, both in spirit and in substance. We will go further, as we will debate in Committee in due course.
Let me return to the £7.6 billion deficit—[Interruption.] I know that SNP Members do not like to talk about the £7.6 billion deficit, but it is important to get it on the record. It is unfortunate that they have consistently misquoted the figures from the Institute for Fiscal Studies, and indeed it has had to ask them to retract what they have said about its figures.
We have also heard no mention of the Office for Budget Responsibility’s oil report, which was published last week. It showed that the reliance on oil as an underpinning of the Scottish economy is no longer a viable projection. The collapse of revenues from oil will see the tax take from that source drop from £37 billion to just £2 billion over the 20-year period to 2040. That would be catastrophic for Scottish public finances. The question, then, is this: will SNP Members vote with the Tories to deliver what they want, as they have said they will do, or will they finally admit that their flagship policy of full fiscal autonomy is economically illiterate?
Ian Murray
And there is no better time to go to the hon. Member for Dundee East.
Stewart Hosie
The hon. Gentleman is extremely generous. He mentioned the OBR. He will want to confirm, for the sake of completeness, that the OBR itself has said that the forecasts were very uncertain, even over the short term. It implies 8 billion barrels of oil extracted, rather than the normal industry 14 billion to 24 billion, and of course the figures it uses are contradicted by other expert groups that have higher prices and higher forecast extraction figures.
Ian Murray
Well, the hon. Gentleman is wasted in this House; he should be in the City, buying and selling futures in oil price shares. I think that is the best way for him to go. The three points that fall from the OBR report are the unpredictability of the oil price, the difficulty of extraction in the North sea and the fact that, whatever way we look at it, oil revenues will be declining sharply over the next 20-year period. It would appear that the hon. Gentleman—[Interruption.] I am happy to take other interventions, but it is quite clear that SNP Members cannot defend their policy for full fiscal autonomy. Indeed, they should listen to their hon. Friend, the hon. Member for East Lothian (George Kerevan), who said that it would be economic suicide. He is an experienced journalist and economist, so they would do well to listen to him.
In conclusion, we will push amendment 38 to the vote because we feel that the permanency of the Scottish Parliament should have the underpinning of the Scottish people by any means that would be appropriate, including a referendum. We will push to a vote new clause 2, which proposes a constitutional convention to resolve some of the larger issues on a constitutional settlement across the country. We will oppose full fiscal autonomy in all its forms, because it would be bad for the Scottish people, bad for the Scottish economy and bad for the future of Scotland.
David Mundell
I said at the start of my remarks that I was listening to the Scottish people. The only people who are playing games are those who threaten another referendum in Scotland every time they do not get what they say they want.
The principal issue raised in relation to full fiscal autonomy is that it would mean Scotland having almost £10 billion less to spend by the last year of this Parliament. That is not good for Scotland, and that is why this Government will not support it. I am afraid that the only argument we have heard in support of these proposals was that heard during the referendum campaign—basically, “It will be all right on the night: trust us.” The people of Scotland decided on 18 September last year that they did not trust that argument, and I still do not trust it. Full fiscal autonomy would mean an end to the Barnett formula. It would mean that the Scottish Government had to fund all public spending in Scotland from their own resources. The Scottish Government would therefore be fully responsible for raising all the tax from Scottish taxpayers required to fund all spending in Scotland on public services, benefits and pensions.
Stewart Hosie
Can the Secretary of State confirm that in terms of the principles underlying Smith, we have no detriment and no advantage simply because of devolution itself, and that there will be a negotiated financial framework between the Scottish and UK Governments for the devolution in this Bill? Of course, we already have limited borrowing consent under the Scotland Act 2012 to fill holes in revenue, notwithstanding that the repayment terms were too short. Can he confirm that under the “no detriment, no advantage” principles there will be a negotiated financial framework for this Bill, and that there are already revenue-borrowing powers in statute?
David Mundell
I can confirm that the Scottish National party signed up to the Smith commission agreement, this Government are committed to delivering the Smith commission agreement, and the hon. Gentleman will therefore get what he is looking for in respect of the Smith commission agreement. There is not a shadow of a doubt about that.
Full fiscal autonomy would mean the end of Scotland pooling resources and sharing risks with the rest of the United Kingdom, and an end to Scotland being part of the UK’s hugely successful single market, which generates jobs, growth and prosperity. To all intents and purposes, the fiscal union between Scotland and the United Kingdom would end entirely, and the lesson of the eurozone is that it is extremely difficult to have a successful currency union without fiscal union.