Scotland Bill
Lord Lyell Excerpts(12 years, 8 months ago)
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Lord Lyell
My Lords, perhaps my noble friend can assist me. I wonder whether the proposals in the amendment owe something to Monty Python. Proposed new subsection (7)(b) refers to,
“the potential the new tax might create for tax avoidance across the UK”.
My jaw dropped when I read that. I will be fascinated to hear what my noble friend says when he directs his attention to it.
Lord Pearson of Rannoch
My Lords, I, too, take the amendment as a small step in the right direction. I merely ask the noble Lord, Lord Browne of Ladyton, whether he agrees that if the Government do not accept the amendment, it will give great force to the previous amendment of the noble Lord, Lord Forsyth. Of course, if the Government do accept the amendment, it will be a small step in the right direction. However, it does not abrogate the point that I and—much more huffily—the noble Lord, Lord Forsyth, attempted to make when we debated the previous amendment, which remains the best one. I do not know whether the noble Lord, Lord Browne, is in a position to answer that before the Minister replies.
Lord Lyell
My Lords, having waited for seven hours, I am delighted that I am allowed to speak. I thank my noble and learned friend the Minister for the kind letter that he wrote to me about the Scottish taxpayer. I was very relieved to read what he wrote. I had intended to speak on an earlier amendment that was not moved. I thank him for what he wrote about the Scottish taxpayer. I hope that I may write to him about the military because he referred to their residence and what they might be doing. I thank him for that. I am delighted to see that my noble friend Lord Bates is present. He will remember what I had to say at an earlier stage about the mouse that roared; after the Titans who have been speaking, this is the one who spoke.
Lord Eatwell
My Lords, when I spoke on an earlier amendment, I said that I was participating in this debate with considerable trepidation. Having listened to this discussion, my trepidation has turned into a state of serious anxiety. However, I will attempt to proceed. My anxiety is raised particularly by the respect in which I hold my noble friend Lord Barnett and the power of the arguments that he put forward. However, as I listened to the debate, any support which I might have had for these amendments slowly drained away for three major reasons. The first is that there is a debate which centres round the need to devise a scheme to abolish the existing Barnett formula. However, that is not an argument in favour of the amendment; it simply identifies a public policy problem which needs to be dealt with, but which I suggest is not necessarily dealt with by this amendment. As those arguments multiplied, my support for my noble friend’s position started to fade away, as I said.
I put down a warning marker for those who have talked about a needs basis for the funding allocations to different parts of the UK. The noble Lord, Lord Lang, is absolutely right that the calculation of need can be done on a clear and objective basis. It could indeed be done by a commission looking at matters such as the number of people under a certain age and the number of people living in poverty according to a certain definition. However, when you start to attach monetary valuations to those needs, you create a policy because you are then weighting them in monetary terms. By weighting them in monetary terms, you are defining a particular policy which you wish to apply uniformly throughout the UK. If you wish to follow the purely unionist line enunciated by the noble Lord, Lord Deben, that may be a reasonable position. However, if you wish to devolve some elements of social policy to the constituent nations of the United Kingdom, you impose policy on them through the needs-based weighting of the funding associated with the underlying formula—and not only that, this amendment would impose the policy through an independent commission. Therefore, an independent commission would vary the policy. Therefore, for example, if one decided that one did not very much care about, say, care for children between the ages of five and 10, but cared very much about children from birth to the age of five, and changed the financial weighting in those two areas, you would be changing the policy because you would be changing the funding available. Handing out this sort of important policy choice to an independent commission would deny what policy-making is all about.
That is just a warning and is not the basis of my slowly ebbing support for my noble friend Lord Barnett’s position. What really settled it for me was the argument of my noble friend Lord Robertson, who made clear that this was an entirely inappropriate way to deal with an incredibly important question. I should therefore like to invoke the great academic principle of unripe time and suggest that we are facing an amendment that is distinctly unripe. We need a much more ripened argument to deal with this very complex matter.
Scotland Bill
Lord Lyell Excerpts(12 years, 8 months ago)
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Lord Lyell
My Lords, I was delighted to see my noble friend Lord Attlee here, because I was about to follow some of his grandfather’s advice: that a period of silence from me had been welcome until now. Today, however, I shall break my duck regarding income, in strong support of my noble friend Lord Forsyth. This is a preliminary strike about dividend income and pensions income.
I am sure that my noble and learned friend will be able to give advice at an early stage, but on page 25 of the Bill we come to Clause 31, headed, “Income tax for Scottish taxpayers”. At lines 34 and 35 in Clause 31(3), new subsection (3C) refers to Section 16, which I presume to be that of the Income Tax Act 2007. It says that it,
“has effect for determining which part of a Scottish taxpayer’s income consists of savings income”.
As a non-practising member of the Institute of Chartered Accountants of Scotland, but very much as a consumer who takes advice, I seem to recall that until 10 years ago one’s income tax was classified as earned and unearned income. Indeed, my colleagues with whom I worked then have confirmed that. However, we now have this completely different concept of savings income, earned income and other income being applied to Scottish taxpayers. It would be different from any other United Kingdom definition of what savings income or other income will be. Perhaps my noble and learned friend will be able to take note of that and cover it at some stage. However, I support most strongly what my noble friend Lord Forsyth has said at this stage. I am happy to let your Lordships know that this will be the first of one or two efforts from the mouse that roared, as I call myself—that is, the accountant in the backwoods of Angus.
The Earl of Mar and Kellie
My Lords, my noble friend Lord Forsyth is suggesting that we need another referendum on the use of tax powers. It is my memory that, 12 years ago, the second question in the referendum was along the lines of, “This Parliament should/should not have tax-varying powers”. Do tax-varying powers not strike a lot wider than the Scottish variable rate, which was enacted? Consent has already been given for any form of variation in existing taxes.
Lord Forsyth of Drumlean
My Lords, I do not propose to rehearse all the arguments that we have just had, although I am being encouraged to do so by the Front Bench opposite. However, I shall resist the temptation.
This amendment would require the Scottish Parliament to consult before setting the Scottish rate of income tax if it was intended that the rate should be higher than that of the rest of the UK. This seems to be a perfectly reasonable request. Some people may argue that the Chancellor does not consult before he sets a rate of income tax, but we are not talking about setting a rate of income tax here; we are talking about setting a differential rate of income tax within the United Kingdom, and that will have a profound effect. We are talking about setting a differential rate of income tax which applies to only certain types of income.
Following consideration of these matters in the other place, there are still a lot of uncertainties about what the impact will be. I am not clear about that and perhaps my noble friend will be able to enlighten us. For example, what is the position on tax reliefs with a higher rate of Scottish income tax? Will tax reliefs on charitable contributions apply at the higher rate? Will all allowances based on gross income apply against the Scottish rate or the English rate if there is a differential? If the Scottish Parliament sets a higher rate, I think it is very important that representatives from business, charities, pension funds and other institutions are given an opportunity to be consulted on the likely impact and incidence of the tax.
Lord Lyell
I strongly support my noble friend on this amendment. I hope that I have brought with me the correct route plan for the groupings, because there are several other amendments that I should like to refer to, if I may. I find that with Amendment 53A are grouped Amendments 54A, 54B, 54C and 54D. Am I right?
Lord Forsyth of Drumlean
Perhaps I should have made it clear that these amendments are being degrouped, so we are just discussing Amendment 53A.
Lord Lyell
Shall I be able to refer to them at a later stage? I assume that they will be called and that I shall not lose my chance to speak to them. With regard to Amendment 53A, I strongly congratulate my noble friend. I received a very kind and satisfactory answer from my noble and learned friend about non-savings income but Amendment 53A seems to apply particularly to what I call the ritual dance over whether the Scottish Parliament may or may not do something. I may be enlightened about that when we come to the other amendments that were in this group, and I assure your Lordships that I shall not desist when we come to Amendments 54A, 54B, 54C and 54D. I see my noble friend on the Front Bench giving some form of assent, so I give him warning that I shall raise the matter when we come to those amendments. However, I strongly support what my noble friend Lord Forsyth has said on Amendment 53A.
Lord Forsyth of Drumlean
The noble Lord is unkind. I asked a question about the position of charities and charitable contributions in respect of this Scottish income tax regime. It strikes me as a bit strange that by this stage of the Bill—after all, we are talking about a Bill that has been around this place for more than a year—the various groups that have been consulting and the technical groups that have been grinding on have not reached a conclusion. To be told that this will happen after Royal Assent means that we are being asked to buy a pig in a poke. We are being told to go along with this and, “By the way, after the Bill is law we will tell you what its effect will be”. That is the opposite of what parliamentary scrutiny is supposed to be about. In my day as a Minister, first of all you had to get your policy right; you then had to get your drafting right; then you had to go through the legislative committee. If you turned up and could not answer all the questions, dot all the “i”s and cross all the “t”s, you went back to the bottom of the queue and lost your place in the Queen’s Speech.
Here we are, more than a year on. I am not making a difficult point; it was made by honourable Members on both sides during the passage of the Bill in the other place—almost a year ago. At that time, the answer was the same as that given by my noble friend now—that it will be dealt with by the technical committees, and that the Government hope to report shortly. I will withdraw the amendment on the basis that I will table it again because at the next stage of the Bill my noble friend ought to be able to answer those questions. People in Scotland who are running charities will want to know this. If we are asked what will be the impact of the tax, is the answer, “We are not sure but we will tell you after the legislation has been passed”? If the answer is that, for example, for people paying the Scottish rate of income tax—if it is higher—on the amount that is given to the charities, only the English element will be allowable, and we discover that only after Royal Assent, just think what the nationalists would make of that as an argument and how aggrieved the charities would be.
Lord Lyell
Before my noble friend comes to an excellent conclusion, I say that he is most optimistic about this group. I understand that it is called the high-level group—that is what the Institute of Chartered Accountants of Scotland told me. My noble friend says that we have just spent a year on this. I say with humble duty to the Committee: you ain’t seen nothing yet. When we come to Clause 30 stand part, I shall refer back to 1998. I think that my noble friend and the Committee will be interested to see what was said then. When we see what was said then, what is in the Bill today and the discussions that went on in another place, the word “snail” comes to mind—and makes this look like Concorde. I support what my noble friend has said and look forward to the next amendments, when we come to them under the guidance of my noble friend on the Front Bench.
Lord Forsyth of Drumlean
I think that is mildly critical of my noble friend. However, I accept that the procedures that are adopted for the consideration of the Budget may very well cover the point, and I certainly would like to study them. I beg leave to withdraw the amendment.
Lord Lyell
Will the noble Baroness confirm that? I have the grouping list. Perhaps somebody will be kind enough to give me a new grouping list because what I have on my grouping list contradicts what the noble Baroness said. It shows Amendments 53A, 54A and 54 separately.
Lord Lyell
I strongly support my noble friend and I hope that I might save some time. There was plenty that I was going to say on Clause 30 stand part, but thanks to the excellent and wonderful briefing that my noble friend the Duke of Montrose had from the Law Society of Scotland, I do not need to. I, too, have had a considerable briefing from the Institute of Chartered Accountants of Scotland.
When we discussed this at an earlier stage, I took a dig from my noble and learned friend the Advocate-General about the great singer Mr Andy Stewart. Mr Stewart used to sing, “Take me back”—and perhaps I can take your Lordships back to the Scotland Act 1998. On page 35, Section 75(6) says:
“In this section ‘place’ includes a place on board a vessel or other means of transport”.
I direct the Committee’s attention to page 24 of the Bill before us. New Section 80E(4) says just the same:
“In this section ‘place’ includes a place on board a vessel or other means of transport”.
Both in 1998 and at Second Reading I raised the question of people who are employed on a means of transport—for example, lorry drivers—or at sea on a vessel. In 1998 the government spokesman, the noble Baroness, Lady Ramsay of Cartvale, referred to houseboats. That is absolutely fine. My noble friend has just spoken about people on oil rigs. I made inquiries and I understand that nothing has changed in 14 years, that “on board a vessel”, as in this Bill and Section 75 of the Scotland Act, includes people on ferries. Perhaps I can direct my noble friend the tax specialist’s attention to the ferries at Cairnryan or Stranraer.
Perhaps noble Lords who are experts in the law will be able to advise me, but I am given to understand that if a UK taxpayer—at Cairnryan or Stranraer it would be a Northern Ireland taxpayer—is on board that vessel, either when the clock strikes midnight or at a relevant time, he or she is deemed to be a Scottish taxpayer. Then you have to calculate how many days you are on board that vessel. You have to do some sums and we still do not know—it is rather like O-level algebra—what will be the proportion of the days you spend in Scotland or elsewhere in the United Kingdom. You have to deduct from that days you have spent outside the United Kingdom. That will come into the mix as well.
When we discussed this in 1998, my late noble friend Lord Mackay of Ardbrecknish said that to classify UK taxpayers from Northern Ireland or elsewhere outside Scotland as being Scottish taxpayers because they were on board a ferry as part of their work would be “plain daft”. He put it much better than I do, and I rest my case.
Lady Saltoun of Abernethy
My Lords, following on from the noble Lord, Lord Lyell, what about people who are either travelling on or employed on the night sleeper?
Lord Sassoon
I am very happy to address the position of the Armed Forces, but, if my noble friend will allow, we should perhaps deal with that when his amendment on that subject—if he wants to move it—comes up a little later.
Lord O'Neill of Clackmannan
The Minister has not addressed the interface of tax and benefit. Tax credits perhaps give rise to some of the most complicated questions. Speaking as a former Member of Parliament, I am aware of the issues that arise when there is the slightest adjustment to the income of some of the poorest people in our community. It would be remiss of us not to address that aspect of taxation being imposed at different rates on different sides of the border.
Lord Sassoon
My Lords, if the noble Lord had heard the richness of this debate he might have understood the context in which all this was raised. I was pointing out that quite a lot of what my noble friend raised, if it relates to bogus companies and other things, will already be under the microscope of HMRC, which will deal with it as part of its normal UK responsibilities.
Lord Lyell
I commend my noble friend and express my enormous gratitude for the huge patience he has shown. He has promised to write to me, but could he please also ask his colleagues to look at col. 250 of our Second Reading debate on 6 September of last year? If he and his colleagues are able to look at it they will find that it is very much at variance with everything that he has said, and with what his colleague down the corridor has said, about lorry drivers. They said that there would be “very few” of those drivers. However, 360 of them drove for this company, as the noble and learned Lord knows well, because it is eight miles from his home and one mile from mine in Kirriemuir. Of those 360 drivers, they had identified 26 straight off as Scottish taxpayers. They had not had the indication, but they thought that 75 would be caught by this legislation. My noble friend and his colleague down the corridor might think that the figure was small, but it was 20 per cent, and that was just one tiny company in Scotland. Will my noble friend consider all the trucks crossing the border transporting food and 20 per cent of the drivers being caught? That is a little more than a few.
Lord Browne of Ladyton
It would be helpful if the noble Lord could clarify the following matter. If in any set of circumstances a serving member of the Armed Forces who is ordered to serve and live in Scotland is thereby made liable to a higher rate of income tax, will the service of which he is a member compensate him for that difference?
Lord Lyell
Before my noble friend replies on that point, perhaps I may say that I also had it in mind. Indeed, 18 miles from my home, and not far from the place of birth of my noble friend Lord Forsyth, is 45 Commando at Arbroath. I took the trouble to ring the electoral office in Angus. I was told that servicemen can vote in Westminster general elections—not Scottish elections—when they nominate their place of residence. Is my noble friend saying that the Government have consulted him, the Treasury and the Scottish Government and are laying down a new law whereby servicemen will be taxable even though they cannot vote in Scotland? Of course, the Scottish Government would like to get more tax from servicemen, even if the latter are not getting a vote there. Will my noble friend please check that?
Lord Sassoon
My Lords, in answer to the first question, there are lots of situations where employers may move people around as a requirement of their employment contract. That is not by any means confined to the Ministry of Defence. People in a number of professions and occupations are moved around from one tax jurisdiction to another. Differential tax rates comprise a factor that needs to be taken into account in the total benefit package. The Armed Forces build that into the packages of servicemen working here or elsewhere.
As regards voting, I am getting into difficult philosophical discussions concerning tax without representation that could keep us going deep into the night. However, my understanding is that we are talking about a very specific matter to do with a rate of income tax which is quite separate from the law that relates to where people can vote.
In answer to the question from the noble Lord, Lord Browne of Ladyton, I have made the general point that employers need to consider total packages. However, I can give him specific reassurance that in the event that Scottish and UK rates differ at any point in the future, the Ministry of Defence will do what I suggested any employer has to do, which is to explore options to mitigate the effects of different rates of tax by using processes which are currently used for personnel serving abroad. I am glad to confirm that it will do what I rather expected it would.
Lord Lyell
I congratulate my noble friend Lord Forsyth. I want to call him Lord “Bazooka” Forsyth because he aimed at those who do not pay tax. I am sure that he and my noble friend on the Front Bench will be aware that Members of the House of Lords are the only people in the United Kingdom who get their expenses between their home and their place of work—if you call this a place of work, especially on a day like this—paid, yet are not liable for tax. If you are a government Minister, you are liable for tax. I am curious as to why no fewer than seven of our government Front Bench are not paid. Perhaps my noble friend would take care about who is paying tax, and have a look around us. In the words of the good book, “Let he who is without sin cast the first stone”.
Lord Forsyth of Drumlean
Actually, I am not a tax expert. I think that my noble friend is taking us down a diversion, because Members of the House of Lords are not paid, they are reimbursed for their expenses. It is not a taxable benefit. My beef with the Bill is that it singles out elected Members for particular, special tax treatment. It does not really matter whether it is to their advantage or disadvantage. I was not raising a general point about the taxation of travel by Members of Parliament or Members of the House of Lords.
The Earl of Caithness
My Lords, I would like to join in the discussion on this almost Second Reading series of amendments. Twenty minutes to introduce an amendment seems to me a little long.
I support the premise made by the noble Lord, Lord Foulkes. To my mind it is utterly ridiculous for any Government or Executive to have responsibility for 60 per cent of the expenditure but for raising only 4 per cent of the income. That is a certain way in which to upset every other member within the union. If one looks at that 4 per cent, it is quite staggeringly low. When countries such as Germany raise closer to 30 per cent of taxes locally, it seems that a huge amount of leeway can be given to Scotland. It is only by giving Scotland tax-raising powers that one will get accountability. You cannot get it any other way.
The so-called Barnett formula never started off as a formula; it was a device, as the noble Lord, Lord Barnett, has admitted. It has become a formula, and a political formula at that. All that it does at the moment is transfer to Scotland the equivalent of the oil revenues that Scotland is due. It is interesting to note that the needs spending gap in Scotland derived through the Barnett formula over the past 24 years totals about £128 billion in real terms yet the amount of revenue from North Sea oil that Scotland would have been due is about £134 billion. The great advantage that the Barnett formula has given to Scotland is that it has evened out the funds. If Scotland had had to rely on the oil revenue alone, given price fluctuations it would have had much greater difficulty in balancing the books than has been the case.
Therefore, in principle I agree with my noble friend Lord Forsyth that we should amend the Barnett formula. However, in doing so, I follow the noble Lord, Lord Foulkes, in saying that we should give the Scottish Government the responsibility for raising a lot more revenue and thereby make it more accountable.
Lord Lyell
My noble friend, who has far more experience of finance than I ever will have, mentioned Germany; I used to call it the Federal Republic of Germany. In 1983 I took a course in German at the Berlitz language school. I was given excellent advice on how to pay tax. Your Lordships may have heard me refer to this matter on Second Reading. I will quickly go through it again. For every €100 you paid in tax, the local tax office took €15 of that. For the noble and learned Lord, Lord Davidson, and me, the local tax office would probably be in Forfar or Dundee. The balance of €85 was split, with 50 per cent going to the state, which might be Baden-Wurttemberg, Bavaria or North Rhein-Westphalia, and 42.5 per cent going to the federal budget. My noble friend mentioned 30 per cent. I do not know how much of that would go to his Gemeinde—his local area—how much would go to the state, say Baden-Wurttemberg, and how much would go to the federal system. That is one example of how taxes are distributed.
My noble friend and the noble Lord, Lord Foulkes, are right to suggest giving the Scottish Parliament the power to raise taxes. However, the whole system should be looked at. As my noble friend Lord Forsyth has pointed out, we are planning what I call an asymmetric federal system. I am delighted to warn my noble friend on the Front Bench that we have hardly started to have a proper dig into the matter of who is a Scottish taxpayer. It is rather like a sort of dance that he goes on about; he talks about a close connection as if one is dancing with someone. When we consider who is a Scottish taxpayer, we should be aware that that will affect masses of English people, but we will come to that matter another day. In replying to my noble friend Lord Forsyth, will my noble friend the Minister take on board his idea that this Bill may go through but at least we can look at having a better tax system than that which is planned—certainly in the Bill before us—possibly on the lines of what happens in the Federal Republic of Germany or Switzerland? You can look at how this is done elsewhere, but what is proposed in the Bill is a mishmash that will provide eternal difficulty, eternal grounds for gripe, and screams of, “We are not satisfied”. There will be all this and more. There is a problem, and I hope that when the Minister winds up he can give me some reassurance and take on board the point made by my noble friend Lord Forsyth.
Lord Maclennan of Rogart
My Lords, I have listened to this debate with fascination and I agree with the basic view of the noble Lord, Lord Barnett, and my noble friend Lord Forsyth about the injustice and unfairness of the Barnett formula. The aspect of the amendment that I appreciate and support most is the notion of establishing a commission, but it should go wider than one that is charged with the task of looking at only Scottish needs—it should look at the needs of the United Kingdom as a whole. The amendment, in so far as it suggests that the first report should be completed by April 2015, is also sensible.
The general view is that the Barnett formula is unjust. This is becoming the backdrop to consideration of devolution in other parts of the United Kingdom. There is a serious risk that this will turn a large part of our population into a very angry opposition to devolution or any advance in self-government or self-taxation. This is not the right time to decide precisely how far these matters should go. Since the Calman commission reported, there has been a considerable widening of the debate due to the success of the Scottish National Party in the previous Scottish election. It may well be that many who would not have taken seriously what is now called devo-max will now take it more seriously. However these things need to be looked at in the round and I would not go down that line at this time.
What is given out by public funds to all parts of the United Kingdom is a matter for the United Kingdom Government, and they do not need specifically to be empowered in the Bill to base their decisions on a needs assessment. As I understand it, the Barnett formula is not based in statute, and it would be perfectly possible for the Government of the day to advance a change. I say yes to a commission to enable us to make a decision, if appropriate, at the right time. When I say that the decision should be made by us, I mean the Government of the United Kingdom. The postponement of consideration of ways and means—the process for changing the allocation of public funds—has been delayed for too long. We have had all kinds of academic input into this discussion. The committee on which my noble friend Lord Forsyth served was absolutely clear on this, and there has been too much delay in taking this issue seriously and getting down to the small print. Only when we have that nexus of information are we going to be able to make a judgment—against the backdrop of what has been decided about tax—as to what would be the appropriate way to deal with the Scottish question.
Lord Lyell
The noble Lord has been very kind in referring to me. He made a passionate comment but he was very much on to something, as was my noble friend Lord Forsyth. I have heard some encouraging noises from the Minister about looking at a federal tax-raising system. I definitely take the initials CB to stand not necessarily for Companion of the Bath but for “cynical something else”. I worry that we will complete our discussions on the Bill and all its mechanisms but, at some stage, this discussion will be kicked into the long grass. It is very much on the side, along with my noble friend Lord Forsyth and the noble Lord, Lord Foulkes, of looking at a federal tax system that will be fair and agreeable and will work. I am worried that, when we finish the Bill, we will have come up with a system that is asymmetric and will not work.
Lord Forsyth of Drumlean
My noble and learned friend is losing his voice; Members of the House are losing their stamina; we are dwindling.
Lord Forsyth of Drumlean
Indeed, but I think it might be helpful if my noble and learned friend would indicate how much longer he proposes to go on with this, because the utility of the debate seems somewhat limited as we lose people one by one.
That was a very helpful explanation. It shows how out of date I am that I had not realised that the local government surcharge provisions had been withdrawn. I accept his point. If the Whip is suggesting that we adjourn shortly, I do not wish to interrupt that conversation.
I have one question for my noble and learned friend, which relates to the point on the referendum. I realise that that is a sensitive subject. If, for the sake of argument, the First Minister had decided to go ahead with the referendum without having the relevant legal powers and had spent £10 million on it, what sanction would be applied, and by what mechanism? In other words, can my noble and learned friend translate what he has just read out into what it would mean in practical terms?
Scotland Bill
Lord Lyell Excerpts(12 years, 8 months ago)
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Lord Lyell
My Lords, I declare an interest as honorary patron of another Titan of the Scottish football game, which I call “Athletico Forfar”—Forfar Athletic. I get a trifle worried when I hear outpourings in the media in Scotland along the lines that something must be done to help Rangers Football Club. A great football club it may be, but I wonder how it got into that condition. The answer to that can wait, but perhaps my noble friend could write to me with an answer to the following question. Why in the winding up of a football club such as this—perhaps under Scottish insolvency law; I am not sure—is Her Majesty’s Revenue and Customs not a preferred creditor? South of the border, HMRC is an ordinary creditor. However, I had understood that north of the border HMRC was a preferred creditor and would therefore get the first bite in relation to the sums owing. If my noble friend could write to me on that at some stage, I should be most grateful. I thank him for his patience.
Lord Browne of Ladyton
My Lords, for all the reasons that I set out in my first contribution to this Committee when it convened some time ago to consider the Bill, I want to see this Bill passed. Consequently, I support the devolution of the tax powers to the Scottish Parliament and I want to see Clause 29 stand part of the Bill because, without that mechanism, the amendments relating to the commissioners for Revenue and Customs will not be able to work. I do not intend to delay the Committee with any debate or argument about what I think is genuinely a technical part of the Bill in terms of the mechanism for the implementation of its provisions.
My second point is by way of a bit of advice to the noble Lord, Lord Sassoon, whom I welcomed to the Committee earlier. He had an interesting baptism in the Committee. I am sure that he enjoyed the hour that he was at the Dispatch Box engaging, as he did, with my noble and learned friends and noble Lords around the Chamber. If he thought that that had a distinct quality about it, then he ain’t seen nothing yet if he succumbs to the invitation to engage in a discussion about the position of Scottish football clubs. We have already had a reference to behaviour on the internet with cyberattacks and so on, but the nature of the comments that will be unleashed on the internet if he is unwise enough to be attracted into debate and discussion about the health or welfare of any Scottish football club will be worse than he has ever seen.
Lord Sassoon
I think that probably deals with all the football questions, and with probably just about everything else that was directly relevant to this clause. I will try to deal with some of the other things.
We came back to the big picture question of the legislative consent Motion. It is of course for the Scottish Parliament to choose to bring forward the Motion at any time; it is in its discretion. It must be in the Scottish Parliament’s interest to bring forward an LCM before the last amending stage in this House to allow the House and the Government to reflect on the LCM, and if it wanted to it could choose to pass the legislative consent Motion tomorrow.
Economy: Government Policies
Lord Lyell Excerpts(13 years, 8 months ago)
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Lord Lyell
My Lords, I thank my noble friend Lord Lawson for giving us a chance to discuss the economy. He may be startled, since normally in debates like this there is a welcome period of silence from me. However, today I humbly put my toe in the water and refer to one particular part of industry.
Thirty-three years ago, I was sitting roughly where the noble Lord, Lord Davies of Oldham, is sitting. Early in January 1977, I was suddenly advised that the Patents Bill was going to start in your Lordships’ House. I was the junior member of the Front Bench, something in the nature of a reserve scrum-half at Murrayfield with the Titans wishing to seize the ball from him. I was told that part of the law on patents was applicable directly to industry. Lord Belstead suggested to me that I should take consultations—take lessons, indeed—from the pharmaceutical industry. I thought that that was ripe stuff—certainly from him—to a Member of your Lordships’ House with not one O-level in science, although it is fair enough that I did grind out the yardage as a chartered accountant. I went to speak to the pharmaceutical industry and through the years have followed everything that has gone on in that industry. The last figures that I had were that the UK had a £7 billion balance in overseas trade in our favour from that industry. It is the best of nine major industries, which will bring a glow to the heart of my noble friend Lord Lawson, let alone the Minister.
Why is that the case? First, there is the excellence of the people and facilities in research and development in the industry. It is also an example of a tremendous partnership between the public and private sectors. Since 1948 and the institution of the National Health Service, the industry has worked well with it. I understand that there is something called the VPRS, the voluntary price restriction scheme; my noble friend Lady Hooper may be able to correct me. There is another, the PPRS; I do not think that is a reference to pill-poppers, but she might be able to advise me on that later. The schemes have been enormously successful in providing tremendous and outstanding service—one that is unique in the world—to the United Kingdom for health. They are clearly something in the nature of a ritual dance between the Department of Health and Ministers in your Lordships’ House and the other place, let alone representatives of the industry either in your Lordships’ House or outside. The schemes seem to be something like a bean-bag or a squeegee: the Government push them in one direction and the beans scoot out in another. However, there seems to be a unique relationship between the Government, the public sector and the area of the private sector connected with health and outstanding success in production and industry.
Your Lordships may not be surprised that I have a blue tie today; I am from Scotland. I understand that 11,000 people are directly employed in full-time high-quality jobs in the pharmaceutical industry and the health industry in Scotland. In the United Kingdom, 72,000 full-time jobs are applicable directly to the pharmaceutical industry, and 27,000 of those are highly qualified persons in research and development. It is a huge sector of our economy, and it has interests throughout the community. Two companies give all sorts of little advice on a very local level. Certainly in my area of Dundee, as well as elsewhere in Scotland, one can find enormous help from two companies—enormous health companies—that give advice to Girl Guides, Scouts and other voluntary organisations.
Time is limited and, above all, there are many more important speakers than myself on these massive macroeconomic details, so I shall return to what I call the retail or consumer side of health. I take medicines. I declare an interest, that I am no stranger to the hospital ward, mainly thanks to what is so well known to my noble friend Lord Hodgson: winter sports. I have spent a good time on the ward with broken legs—both—shoulders, hands and other things; I tell him that it has been due more to orthopaedics than to liver problems or overindulgence in Switzerland. One day in June 2006, I was looking forward to taking part in your Lordships’ House and suddenly I was struck down with something called an ischemia—a light stroke. My noble friend Lady Hooper may be able to explain it, but not today. Within one month, I was back at home in Scotland watching the final of the football World Cup. That shows the enormous and matchless service that the health industry gives to everyone, and it gave it to me that month. It was perhaps luck on my part—I might even say divine intervention since I do not know many Members of your Lordships' House who have taken what I did but have been back in your Lordships' House in eight weeks—but perhaps your Lordships have mixed feelings on that.
I understand that the budget for the National Health Service is £120 billion each year. I believe that that is very well spent. Perhaps I may conclude by making a plea to the Minister. There is a very well known and widely respected worldwide company that has had some difficulties recently. He will know that it is in Sandwich in Kent. I am sure that he and his colleagues will attempt to alleviate the problem. Indeed, we found in yesterday’s Budget—I am not too sure in which section; I know that it was on page 18 of the guidance—references to innovation parks and research. My noble friend Lord Northbrook referred to this, too. The Babraham Institute in Cambridge and Norwich Research Park will share in a £100 million boost for science research funding. Any help that the Minister can give to this particular firm would be gratefully received.
I conclude with two mottos, both of which will be familiar to my noble friend Lady Hooper. One is nil satis nisi optimum—only the best will do. That applies to the pharmaceutical industry, and I hope that my noble friend the Minister will be able to give enormous help to it. The second motto refers to pill-poppers such as me, retailers and consumers: every little helps. It is because of the eternal watchfulness of my noble friend the Minister and the Government that we have in the United Kingdom some of the cheapest but best-value medicines in the world. Your Lordships have been very kind. I am very grateful and in good health. I look forward to listening to what the Minister has to say. I am especially grateful, for once, to my noble friend Lord Lawson for this debate.