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Company Taxation

Volume 885: debated on Thursday 30 January 1975

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asked the Chancellor of the Exchequer what assessment he has made of the difficulty and Civil Service manpower involved in separating the raising and spending of company taxation in England from company taxation in Scotland.

The problems, from the point of view of both the Inland Revenue and companies, of trying to allocate company profits to different parts of the United Kingdom are so formidable that any attempt to do so would be quite impracticable.

Does not that answer illustrate the impracticability of giving revenue-raising powers to a Scottish Chancellor of the Exchequer responsible to a Scottish Assembly?

I have a great deal of sympathy with my hon. Friend's point. I am sure he will be aware that the Kilbrandon Commission specifically said that corporation tax was not at all suitable for devolution to regional administrations.

Will the hon. Gentleman recognise that the problem raised by the hon. Member for West Lothian (Mr. Dalyell) is a symptom of the difficulties of the Labour Party in coming to any agreement on devolution? Will he accept that sooner or later we shall have to have separate taxation because there will be an independent State of Scotland?

It is not for me to comment on the likelihood of there being an independent State of Scotland. If there were to be one, I suspect that my hon. Friend the Member for West Lothian (Mr. Dalyell) would be a far more likely candidate than the hon. Gentleman for a Scottish Chancellor of the Exchequer.