Scotland Bill

Well, that is a hard one, isn't it! Yes, clearly the way to improve the Scottish economy is to create jobs, and as far as I am aware not even the Conservatives are against that. The arguments to which the hon. Lady refers were so complex that it seemed at some points that even ““Hughes”” and ““Hallett”” were disagreeing. [Laughter.] We did reach conclusions, however. I think everyone agreed that there were risks in devolving corporation tax, and, as we said,"““not least in that this could lead to competition which could result in the 'cannibalisation' of the UK's tax base.””" There was a political difference there, because we went on to say:"““We recognise that this is not necessarily a concern for those who wish to consider the financial position of Scotland in isolation.””" I understand why a nationalist would not be concerned about the cannibalisation of UK taxes if there were a minor gain to Scotland, but for those of us who take a wider perspective across the whole of the UK, that is a valid point to take into account. It is generally agreed that a reduction in corporation tax in Scotland would result in some drawing in of business from the rest of the UK; I have heard no serious opinion suggesting anything else. If we accept that, we can do no other than recognise that that is not likely to improve relations between the jurisdictions, and as we would hope that in the event of an independent, or further devolved, Scotland there would be an ongoing relationship, beggar-my-neighbour politics on corporation tax is not helpful. The risk of driving that divide between England and Scotland by achieving a marginal gain in corporation tax revenue in the short term is not worth the candle.