Chamber
Meeting of the Parliament 15 September 2011
15 Sep 2011 · S4 · Meeting of the Parliament
Item of business
Scotland Bill (Corporation Tax)
When the First Minister announced the Scottish Government’s calls for the Scotland Bill to be extended to give new powers to his ministers, we made it clear that we would not simply reject all the proposals but would judge them on the evidence that was brought forward on how they would benefit the Scottish economy. That is the test: not new powers for their own sake, but whether they will boost our economy, particularly at this time of low growth and cuts in public spending.
On borrowing powers, we have made common cause with the Scottish Government and—I hope—with other parties in the chamber, particularly given the comments by Nick Clegg yesterday on infrastructure. We support the calls for the Scottish Government's borrowing powers to be increased and accelerated beyond the current provisions in the Scotland Bill so that we can invest in new infrastructure and, through that, boost our economy. We are still scrutinising the other calls for new powers. For example, we have yet to hear from the Scottish Government the detail of the case for devolution of excise duty.
On corporation tax, the Scottish Government has failed to make its case. It has pointed to some prominent individuals who support devolution and the cutting of corporation tax, which we heard again today. However, for every supporter of the cause, a cast of others are unconvinced or downright opposed. As Iain Gray said earlier, the Government managed to build a consensus against the proposal between the Confederation of British Industry Scotland and the Scottish Trades Union Congress, which is no mean feat.
Why does the Scottish Government’s case break down? It is because, not for the first time, the sums do not add up. Cutting corporation tax is not a panacea for our economic tribulations. The Scottish Government’s case must be examined and it often rests on the example of the Republic of Ireland.
On borrowing powers, we have made common cause with the Scottish Government and—I hope—with other parties in the chamber, particularly given the comments by Nick Clegg yesterday on infrastructure. We support the calls for the Scottish Government's borrowing powers to be increased and accelerated beyond the current provisions in the Scotland Bill so that we can invest in new infrastructure and, through that, boost our economy. We are still scrutinising the other calls for new powers. For example, we have yet to hear from the Scottish Government the detail of the case for devolution of excise duty.
On corporation tax, the Scottish Government has failed to make its case. It has pointed to some prominent individuals who support devolution and the cutting of corporation tax, which we heard again today. However, for every supporter of the cause, a cast of others are unconvinced or downright opposed. As Iain Gray said earlier, the Government managed to build a consensus against the proposal between the Confederation of British Industry Scotland and the Scottish Trades Union Congress, which is no mean feat.
Why does the Scottish Government’s case break down? It is because, not for the first time, the sums do not add up. Cutting corporation tax is not a panacea for our economic tribulations. The Scottish Government’s case must be examined and it often rests on the example of the Republic of Ireland.
In the same item of business
The Deputy Presiding Officer (Elaine Smith)
Lab
The next item of business is a debate on motion S4M-00856, in the name of Fergus Ewing, on the Scotland Bill and corporation tax.15:23
The Minister for Energy, Enterprise and Tourism (Fergus Ewing)
SNP
I welcome this opportunity to debate a key policy lever that should be at the heart of our strategy for sustainable economic growth in Scotland: corporation ...
Gavin Brown (Lothian) (Con)
Con
I agree entirely that we ought to have a detailed and mature discussion, but why has the Scottish Government not published the modelling that it claims to ha...
Fergus Ewing
SNP
We do not agree with that proposition. We believe that we have published proper detail on the principle of our proposals, and I will come on to address some ...
James Kelly (Rutherglen) (Lab)
Lab
What would the impact of the minister’s corporation tax proposals be on the Scottish budget?
Fergus Ewing
SNP
I am coming on to that. We believe that the impact will be positive for Scotland, which is why we propose it, as opposed to the impact of the Westminster Gov...
David McLetchie (Lothian) (Con)
Con
Will the minister give way?
Fergus Ewing
SNP
Not just at the moment; I want to cover the matters that I know will be of interest to all members.It is the lack of economic levers that is important to our...
Gavin Brown
Con
Will the minister give way?
Fergus Ewing
SNP
I will move on. There are other matters that Mr Brown would expect me to cover, and I wish to do so within the time that I have available.Clearly, parts of t...
Patrick Harvie (Glasgow) (Green)
Green
Will the minister give way?
Fergus Ewing
SNP
Not just yet. I am in the middle of this point, but I will give way to Mr Harvie later on.HM Treasury has stated that, in Northern Ireland,“A lower corporati...
Patrick Harvie
Green
What safeguards does the minister think ought to be in place, if corporation tax were devolved, to prevent the already scandalous problem of corporation tax ...
Fergus Ewing
SNP
No, we would not. I accept that there is a serious problem with the avoidance of corporation tax as it is administered by the London Treasury. The problem ha...
Gavin Brown
Con
Will the minister give way?
Fergus Ewing
SNP
I must make progress to cover the important matters that Mr Brown and others are interested in.I am confident that there would be far greater benefits to Sco...
Richard Baker (North East Scotland) (Lab)
Lab
When the First Minister announced the Scottish Government’s calls for the Scotland Bill to be extended to give new powers to his ministers, we made it clear ...
John Mason (Glasgow Shettleston) (SNP)
SNP
Does the member agree that the debate goes much wider than the headline rate? There is also the opportunity to target particular industries or small business...
Richard Baker
Lab
I do not agree with the analysis put forward: there appears to be scant evidence that taking that step will achieve the additional economic activity in areas...
Kevin Stewart (Aberdeen Central) (SNP)
SNP
Can Mr Baker provide one international example of a country that cut its corporation tax rate and did not generate an overall increase in corporation tax rev...
Richard Baker
Lab
The Institute of Chartered Accountants of Scotland tells us that there is very little evidence indeed to suggest that corporation tax cuts in this country ha...
Patrick Harvie
Green
I do not argue that safeguards against avoidance behaviour are impossible to achieve; I am concerned that the Government does not seem to place a high priori...
Richard Baker
Lab
Such ambitions could be achieved if the Scottish Government used the powers that it has on, for example, business rates. It could be counterproductive to cha...
David McLetchie (Lothian) (Con)
Con
The purpose of the Scotland Bill is, first and foremost, to improve the financial accountability and responsibility of the Scottish Parliament by extending i...
Fergus Ewing
SNP
In that case, can Mr McLetchie explain why the UK Government recognises why it would be advantageous for Northern Ireland to have the power to reduce its cor...
David McLetchie
Con
If Mr Ewing followed the subject more carefully, he would know that the UK Government has just completed the consultation on the matter and has not yet taken...
John Mason
SNP
Will the member give way?
David McLetchie
Con
No, I will not; I would like to move on to my next point.The central proposition behind the Government’s proposal—which is that the lowering of the rate of c...
Willie Rennie (Mid Scotland and Fife) (LD)
LD
I apologise to the Presiding Officer and members in the chamber for arriving marginally late; I need a better alarm clock in order to arrive on time.Legislat...
John Mason
SNP
I accept the historical account that Willie Rennie has given us, but does he accept that the election in May this year somewhat changed the political landsca...