The Rt Hon Malcolm Bruce MP

Mid-March Column

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Scotland only local income tax presents a challenge

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I have long campaigned for the unfair council tax to be replaced by a fairer system based on ability to pay. There is probably a majority in the Scottish Parliament for such a change but it is going be a major challenge to introduce it on a Scotland only basis.

I have already stated my view that freezing the council tax may be a short- term populist measure, especially when coupled with cuts in capital spending, that could lead to damaging cuts in services.

The problem that also then arises is that the benefit and tax credit system is administered by Westminster, where ministers have said that the £400 million paid in council tax benefit is not money for the Scottish Parliament to spend.

That means that replacing the council tax with a local income tax using the Scottish Parliament's 3p in the pound tax-raising powers, will be difficult and will require top up grants to compensate for the loss of benefits and the shortfall between 3p and the 5p to 6p which straight replacement of council tax will require.

An additional problem will arise if the SNP insists that the tax rate is set centrally rather than locally as this would negate the major point of the tax.

Within this constrained framework councils would have even less control over their own resources.

Personally, I favour a more radical solution that would leave more of the taxes we pay going directly to our local councils and health boards rather than being 'laundered' by the Treasury.

But a radical reform such as that would need to be introduced UK wide and that requires the removal of centralising parties from their present dominance.

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Scotland's pig producers deserve sustainable deal

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I met a delegation of local pig farmers lobbying Parliament last week. Unlike other agriculture sectors raising pigs has never attracted subsidies and the farmers are not looking for any now.

The problem is that the industry lost money when movement restrictions were imposed following last year's foot and mouth outbreak resulting from negligence for which they have received no compensation.

What has made matters worse is a sharp rise in cereal prices increasing feed costs. So production costs have increased but there has been no corresponding increase to the farmers meaning they are all losing money on every pig that goes to market.

This is clearly unsustainable and is causing further contractions in Scotland's already much reduced pig herd.

From the consumer's point of view this means that we will have less opportunity to buy British pig meat which is subject to the highest welfare standards in Europe and will be buying pork and bacon reared in conditions that we in the UK have outlawed.

Government and supermarkets should act now to avoid further decline.

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End discrimination against North Sea investment

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Last week the Scottish Liberal Democrats adopted a motion calling on the Government to end its tax discrimination that is depressing investment in the UK oil and gas industry.

The industry is vital to our local economy but also supports hundreds of thousands of jobs across the UK as well as contributing to our balance of payments which, without the North Sea, would move from disastrous to dire.

Yet the Government, along with the majority of public opinion sees only record profits for the oil majors, $100 a barrel oil and up to 110p a litre at the pumps.

What they do not recognise is that the North Sea is an expensive province and the UK tax regime is seen to be capricious compared with other areas.

Many of the oil and gas jobs are in small and medium companies operating in a highly competitive environment, which is vulnerable to short term changes. Projects for long term exploration and development look at average prices and the cost of alternatives. The threat of unexpected adverse tax changes could be enough to derail a marginal development.

In the coming decades we will need to reduce our dependence on fossil fuels and develop alternatives some of which will adapt the subsea and offshore technology in which the North Sea excels.

Nevertheless, we need to maximise long term production from our own oil and gas reserves using more sustainable methods. The Government's opportunist tax grabs show scant understanding of this.

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Case for compulsory ID cards losing support

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The Government announced the start of the first phase of identity cards last week, starting with foreign workers, who, of course, have no votes and no right to protest. They then move onto airport workers, who all have identity cards as a condition of employment, anyway.

The whole approach shows that the Government is now on the back foot on the whole issue. The project, which could cost £19 billion is hugely expensive and fails to inspire public confidence.

Recent losses of millions of personal records from Government databases have reinforced most people's views - and certainly mine - that Government cannot be trusted with our information that most of us don't want them to have.

Government computer date processing schemes have to date proved expensive and unreliable. It is not credible that ID cards will defeat determined terrorists or criminals. They will however cause inconvenience and limit the freedoms of most law-abiding citizens.

Government has now said they will not be made compulsory without a vote in Parliament, clearly recognising that Tony Blair's previous gung ho determination to steamroller them through won't wash and that Parliament, in its present mood is unlikely to vote them through in the face of public scepticism.

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Parliaments and voters can't negotiate treaties

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I spoke in the debate on the amendment proposing a referendum on the Lisbon Treaty making it clear why I wouldn't support it.

I am not an enthusiast for the referendum as an instrument of policy making because I am not convinced it does lead to the wide, deep and considered debate people claim.

Nevertheless, when the EU was considering sweeping away all the accumulated treaties since the Treaty of Rome and replacing it with one over-arching constitution, I was persuaded this would have been a radical re-launch of the European Union, warranting a watershed referendum - especially as constitutional requirements necessitated this in a number of member states.

However, this project fell at the first two fences in France and the Netherlands taking us back to the traditional way of updating the rules of the EU by negotiating an amending treaty.

That was a difficult and painful process, requiring long negotiation among 27 member states under first the British and then the German presidency.

It is not possible for Parliaments to negotiate treaties still less voters. Lisbon has actually returned some powers, strengthened the role of national Parliaments, granted key opt-outs to the UK and other members and set out the basis to leave the EU.

If member states had a referendum and voted no it would be impossible to know what to do next as individual voters would have had different reasons for voting.

It would be possible for voters to vote for a re-launched EU with a constitution or to vote as to whether we want to stay in the EU as amended by the Lisbon Treaty.

So I can accept the case for a referendum for Yes/No to the EU but voting on the Lisbon Treaty would cause chaos and confusion. After the pain of the last two years the enlarged EU needs the working arrangements of the new Treaty.