20 January 2011

S3M-7735 Protecting Public Services

The Presiding Officer (Alex Fergusson): Good morning. The first item of business is a debate on motion S3M-7735, in the name of Patrick Harvie, on protecting public services.

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Stewart Stevenson (Banff and Buchan) (SNP):

Michael McMahon rehearsed a very old calumny about the SNP’s inability to work with Westminster. I put on record my gratitude for the letters from a UK Government minister and from three members of the Labour Party at Westminster that I received on my recent departure from office. That shows that I, for one, was able to work with Westminster, but I know that there is nothing unique about my experience. Early in my ministerial career, I met a UK Labour minister who said that after a considerable number of years in office, I was the first Scottish minister they had met. Co-operation is the name of the game, and the SNP knows how to play it.

I want to cover just two issues in my short contribution. The Green motion contains the phrase

“rejects the Scottish Government’s decision simply to hand on these cuts to Scottish public services”

and goes on, essentially, to demand tax rises. A more “economically illiterate”—to use another phrase from the Green motion—approach would be hard to find.

Let us remind ourselves what tax powers we have, because the Calman powers, if they come at all, certainly will not be with us for years, nor would a land value tax, were we to conclude that we wanted such a thing. We can raise or lower the basic rate of income tax by 3p and we can tune the council tax, but raising taxes would not make the cuts go away. It would move them to cuts in personal incomes across Scotland, and it would not even do so in a progressive way. The council tax, in particular, hits the elderly hard. That is why we sought to build a coalition of interests in this place to replace it with a new, fair, income-determined tax.

Patrick Harvie: Will the member give way?

Stewart Stevenson: I will give way to the member if he takes 10 seconds.

The Presiding Officer:
We have some flexibility on time, Mr Stevenson.

Patrick Harvie: I understand the overall question of cuts versus taxes but I believe that it is possible to take a progressive approach that means that the poor pay less and the rich pay more, and that untaxed business assets pay their share, too. If the member does not accept that, surely he must accept that if we are not willing to raise revenue, we are handing on the cuts. The numbers do not add up any other way.

Stewart Stevenson: It is a question of who pays for the cuts. The cuts are the reality that the cabinet secretary and all members of this Parliament have to engage with. If we take an approach that takes money out of individuals’ pockets, we affect the whole economy, diminish the prospect of economic recovery and prolong any difficulties that arise from the cuts. I will talk about business in a moment.

We know that the Green party is essentially an anti-growth party and taking money out of ordinary peoples’ pockets would support that objective. I am not sure that it is a sure-fire election winner and, as Patrick Harvie said in his opening remarks, using the SVR is unlikely to be popular. It would certainly create difficulties.

My second point is about business rates. Again, screwing down on business would support the anti-growth agenda. If we were to tinker with business in the wrong way and unravel the huge amount of support that we have given to small business—a vigorous small business sector is the very heartbeat of our economy—we would find ourselves in difficulties.

In recent weeks, the Green party has been rehearsing the idea of introducing a tax on empty properties. Let us look at the effect that that tax has had south of the border. Properties are being demolished and roofs are being taken down, because the burden on a shrinking business with a fixed cost associated with its property leads to such behaviour. It is hardly green to destroy property that could be brought back into use at a later date. That will not improve the economy and it is not the kind of response that will help us to grow our way out of the difficulties that we are in.

This debate has been timely because we are in the run-up to next week’s stage 1 debate on the budget, but I fear that the Greens’ proposals to increase taxes are simply a road that would make things more difficult, not less.


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