15 November 2001

S1M-2260 Rural Economy

Scottish Parliament

Thursday 15 November 2001

[THE DEPUTY PRESIDING OFFICER opened the meeting at 09:30]

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Rural Economy

The Deputy Presiding Officer (Mr George Reid): The final item of business today is a member's business debate on motion S1M-2260, in the name of Annabel Goldie, on the rural economy. The debate will conclude without any question being put.

Motion debated,

That the Parliament notes the economic challenges confronting the rural and more remote parts of Scotland and recognises the specific implications of the Aggregates Tax for the quarrying industry in those areas.


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Stewart Stevenson (Banff and Buchan) (SNP): I congratulate Annabel Goldie on securing this debate.

As Elaine Murray declined to explain how the environment will benefit from the tax, allow me to do so. The answer is simple: quarries will close in rural areas of Scotland, which will remove the inconvenience of having people work in them. If we clear people off the land, we will not damage the environment in those areas. That is not a helpful way of protecting the environment.

I turn to a matter that affects my constituency, Banff and Buchan. The Peterhead Bay Authority has a project, which is in the late stages of planning, to construct a breakwater for the harbour. We are talking about 1 million tonnes of new aggregates. We cannot reuse the aggregates that are already in circulation, as we require a particular specification for the breakwater, which will dissipate the energy of the waves in a particular way. A solid wall will simply reflect the energy into the harbour and do more damage than good. As a result of the tax, my constituents will pay £1.6 million plus VAT of additional tax. The national insurance reduction is 0.1 per cent of the employers' national insurance contributions, so in my constituency we will receive in return—thank you very much—£50,000 to £60,000 per annum.

The effect of the tax is to transfer £1.6 million from the Banff and Buchan constituency. The constituency is not overburdened with advantages. Peterhead and Fraserburgh are, respectively, the largest and second largest towns in Scotland that have no railway station—we have no railways. With the closure of quarries, we will have even more traffic on our inadequate roads as aggregates are brought to the breakwater project. That is if the project goes ahead at all, because the £1.6 million in tax has to be paid upfront and may destroy the whole rate of return.

If the project does not go ahead in Peterhead bay, we will lose a further £25 million project that the local authority is likely to sponsor in the area. The economic effect of the tax in one constituency is dramatic and totally adverse. I am confident that that situation will be repeated throughout Scotland. Money is being transferred from a rural area simply to pay for bankers to create new jobs in Edinburgh and other cities.

What of the sustainability fund? The House of Commons library tells me that it will be £35 million—less than 10 per cent of what is raised. There will not even be the opportunity to transfer back into rural areas a reasonable amount of the money that is raised by the new tax.

To put it simply, we have to follow the Northern Ireland model. Politicians should stand up for Scotland and look for a derogation that will not damage the economy. Let us encourage the Executive to talk to its colleagues in Westminster and to get the same for Scotland.


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