Scotland Bill

Lord Lyell Excerpts

Wednesday 21st March 2012 Lords Chamber

[Lord Steel of Aikwood]

My noble friend mutters that it was not a tax. However, I am saying that it could be a tax. There is no reason why the Scottish Parliament should not decide, as a matter of good policy, that ownership of dogs, which can be a confounded nuisance in cities and the countryside, should be subject to tax. That is a perfectly sensible proposition and there is no reason why the Scottish Parliament should not decide that it is one way of adding to its tax take and finances. I am totally opposed to the amendment that my noble friend is pursuing. He is making a good case by trying to undermine the basic purpose of the Bill, while I want the Bill to go further than it does.

[Lord Lyell]

My noble friend made a powerful speech; indeed, I am half way to agreeing with him. However, our noble friend the Commercial Secretary to the Treasury referred 36 times to this extraordinary Scottish dance, the close connection; perhaps my noble and learned friend on the Front Bench can tell us whether it is a Canadian barn dance, a military two-step or a three-step. That close connection refers particularly to individual payers of income tax. In describing this close connection, my noble friend admitted more than 30 times that the individual payers who are classified as Scottish taxpayers would be nothing to do with this Bill. They could easily be English or other UK taxpayers. I hope my noble friend will take that on board. You can look at new taxes but, for goodness’ sake, take care over who will be responsible. If they are not Scottish taxpayers or Scottish voters, we will be in ever deeper water.

[Lord Wallace of Tankerness]

My Lords, my noble friend Lord Forsyth indicated that this amendment was a hook on which to hang a wider debate. I listened to the debate on Clause 28, to which my noble friend Lord Sassoon responded and in which the noble Lord, Lord Forsyth, made a number of points. He raised the responsibilities and privileges of the respective Houses of Parliament. The noble Lord, Lord Browne, has given a very clear answer on that. It is also important to point out that our role is in relation to a constitutional question: should the Scottish Parliament have responsibility for a particular tax, or should it remain reserved? It is not about how a tax should be structured, who should have to pay it and exemptions to it. That would all have to be set out in primary legislation by the Scottish Parliament, should a tax be devolved.

I am sure it is accepted on all sides of the House that the question of what should be devolved to the Scottish Parliament is an important constitutional issue. I rather think that if it had been suggested that the House of Lords should not express a view on a power such as that contained in Clause 28, I might be in greater difficulty in trying to respond to an amendment suggesting that it should. However, I hear what my noble friend says about the tax in relation to Clause 28. I do not want to engage in a rerun of the debate that we had when my noble friend Lord Sassoon was responding, or indeed anticipate a debate which the noble Lord, Lord Browne, has indicated he intends to run when we come to Report. I am sure that there will be ample opportunity to do so.

I say to my noble friend Lord Forsyth that I think there is a genuine misunderstanding between us with regard to what the Calman commission meant when it referred to a specific tax. I think there are three other members of the Calman commission in the Chamber at the moment and I am sure that, if I have this wrong, they will jump up. The Calman commission identified some specific taxes such as an aggregates levy, which has been referred to, air passenger duty, landfill tax and stamp duty land tax. These were specified and specific recommendations were made in respect of them. Paragraphs 3.170 and 3.171 of the Calman commission report give a general background as to why we thought there should be a power to devolve other specific taxes in the future. By that, it was not intended that we should nominate in the commission’s report, or indeed in a Bill, what these specific taxes might be; rather, it concerned the concept of a specific tax as opposed to devolving a general power of taxation to the Scottish Parliament. I think there is perhaps a genuine misunderstanding on what the recommendation intended. I may have a better understanding of what that intention was, having been party to it.

--- Later in debate ---

[The Earl of Caithness]

My Lords, I support what has been said so far. The present situation, as is increasingly becoming clear, is untenable. It goes against the principle that I have been arguing all the way along. I am in agreement with the noble Lords, Lord Foulkes of Cumnock and Lord Steel of Aikwood. I believe that the only sensible way for the Scottish MSPs to be accountable is for them to be able to raise revenue as well as spend it. We are prohibiting that accountability and to me that is a very serious mistake which needs to be corrected at a later stage of the Bill. I think it is untenable for the future and unless we nip this in the bud now, it will be of increasing concern and will lead to a distortion of some of the benefits of devolution. It will become a real Achilles’ heel for people. Every time there is a change of allowances in one country that is different from another, we will have these consequences. Now that we know exactly what will happen, we have a real problem ahead of us.

[Lord Lyell]

Perhaps I may put a gloss on what my noble friend has said about these taxes. He refers to accountability. I make the point that in Clause 30 of the Bill, let alone anywhere else, there is no accountability to English, non-Scottish voters, who will be classified by the Bill as Scottish taxpayers. Where is the accountability? It is not there.