Scotland Bill

No. That would be extraordinarily cynical, and not something that even the hon. Gentleman in his daftest moments would actually believe to be true—[Interruption.] The hon. Member for Central Ayrshire (Mr Donohoe) says from a sedentary position that the hon. Gentleman does believe it. That worries me even more. I suspect that that kind of attitude from Labour sends a signal that Britain and Scotland are not open for business, which is a dreadful signal to send out. We also believe that corporation tax can be used to support the development of new industries, which is vital. As it stands, the Bill contains no new effective levers for economic growth. The UK Government have made it clear that the Bill is primarily about improving financial accountability and political governance. There is no problem with either of those things, but we need economic development as well—and the tools to do the job. We are firmly of the view, as are the Scottish Government, that any transfer of powers to Scotland must include real economic levers to promote jobs and growth. The argument from the UK Government that we cannot have corporation tax powers might appear rather contradictory. Clearly, there is increasing support for the principle of devolving the responsibility for corporation tax—not least to Northern Ireland, where it is currently under active review. With those points in mind, I back the Scottish Government in seeking devolved competence for corporation tax to be used as a key policy lever to promote economic activity in Scotland. We are seeking the responsibility to vary both the corporation tax base and the tax rate, with the base defining the element that is subject or liable to be taxed—the bulk of profits, netting out allowances and so forth—and the tax rate being the amount of taxable profit required to be paid during each accounting period. At the moment, that is estimated to be about £2.8 billion for Scotland on 2008-09 figures— and for very good reason that excludes North sea corporation tax. It comes in at about 6.5% of the total tax revenue in Scotland. We believe that the full devolution of corporation tax with an appropriate reduction in the block grant, which covers the Azores issue, would provide the Scottish Government with a new lever to promote growth and jobs. The position of the Scottish Parliament Scotland Bill Committee was established in a very clear conclusion:"““The Committee's view is that if a scheme to vary corporation tax were to be available in some of the devolved countries of the UK as a tool of the UK Government's regional economic policy, it should be available as an option for a Scottish Government to use also.””" That is incredibly important. Now that it is clear that such a tool is being considered for Northern Ireland in the UK Government's consultation on ““Rebalancing the Northern Ireland economy””, it follows that consideration must now be given to devolving corporation tax to Scotland.