Sunday Trading (London Olympic Games and Paralympic Games) Bill [HL]

Lord Steel of Aikwood Excerpts

Thursday 26th April 2012 Lords Chamber

Tabled by

[Lord Steel of Aikwood]

A1: Clause 1, page 1, line 4, leave out subsection (2)

[Lord Steel of Aikwood]

My Lords, the noble Lord, Lord Kakkar, and I have decided that we will not be moving any of our amendments to the Bill today. Last night I had a courteous and positive meeting with the Leader of the House of Commons and we seemed to be making progress towards an agreement that would allow our simple internal housekeeping measure to proceed separately from all the debates on fundamental Lords reform. That, I think, would be the wish of the House and I am ready to try to accommodate that.

Yesterday, some of my friends and colleagues accused me of throwing my toys out of the pram. I plead guilty to that. I am prepared to put them back in the pram on the clear understanding that I might throw them out again on Monday if we do not get these assurances firmed up between now and then. Therefore, I shall not move the amendment.

Amendment A1 not moved.

Scotland Bill

Lord Steel of Aikwood Excerpts

Wednesday 28th March 2012 Lords Chamber

The plain fact is that there is little case for opposing this amendment. If it is not necessary, or it should not be in this Bill, it will not do any harm. We should do it now and bring pressure to bear on future Governments, which I hope will not be the same one as now after 2015. I beg to move.

[Lord Steel of Aikwood]

My Lords, the noble Lord, Lord Barnett, is held in great affection and respect in this House and he has given us a very good history of his formula, for which he deserves great credit. The reason I am opposed to this amendment is not financial; it is simply the politics of the situation that we are in today. With great respect to the noble Lord, he is now out of date. Subsection (4) of his amendment says:

“The new Barnett formula should be implemented no later than 1 April 2016”—

so we have new Labour, new Barnett; it goes on.

My argument is that by 2016, if politics develops as I expect it will in Scotland, the Barnett formula will not need to be amended; it will be abolished. We decided in 1997-98 to devolve financial powers to the Scottish Parliament—powers over expenditure but no powers over raising the money to meet that expenditure. I have said right from the beginning that that process could not exist for ever. This Bill moves us slightly in the direction of allowing the Scottish Parliament more financial responsibility for raising the money that it spends.

The three political parties in Scotland have recently appointed groups to do more work on implementing what the Prime Minister himself has referred to as future steps of devolution. At their recent conferences, all the parties set up groups to do more work. It would be ideal if they were co-operating, but at least a lot of work is going on to put flesh on the words of the Prime Minister. By the time of the referendum—which should it be as late as 2014 I would regret, but at least it would be no later than 2014—we will have, I hope, a decision against independence. We will then have to turn our attention to how we put flesh on the words of the Prime Minister and transfer financial responsibility for raising the money in Scotland to the Scottish Parliament for the subjects on which it spends. If we succeed in doing that, in the years to come, the Barnett formula sadly will disappear but the noble Lord will always have his name attached to that useful instrument.

[Lord Richard]

My Lords, I apologise to my noble friend Lord Barnett for not being here at the beginning of this debate. I am afraid that I missed it on the Annunciator and I realised only after my noble friend had started speaking. I listened to what the noble Lord, Lord Steel, said. As I understand it, the object of my noble friend’s amendment is to get this House to declare quite firmly that the Barnett formula’s days are done. We went into it in great detail in the Select Committee. I do not want to refer to that in detail except to say that it was a unanimous report and that the membership of that committee included a former Chancellor of the Exchequer, two former Secretaries of State for Scotland, and two other Ministers, I think, who had served in Scottish departments. We went into it in considerable detail and all came to the conclusion that the so-called formula had been instituted by my noble friend Lord Barnett casually—I hesitate to use that word—or at least without any thought that it would subsist for generation after generation or would become enshrined with the term “formula”.

My noble friend is right. What is wrong with the so-called Barnett formula is the baseline, which is now about 40 years out of date. In those circumstances, how can one justify its continuation? We asked ourselves very firmly the question: could you have a formula which is based on needs? We came to the conclusion that you could. Indeed, we set out in some detail in the report the way in which you could arrive at a needs-based formula and the result of applying it. In those circumstances, how can the Government project an amendment which says that something that has been in existence for 40 years—it is clearly out of date and way past its sell-by date—and is designed only to preserve a situation, which, as I say, is 40 years gone? It is being done on spurious grounds when in reality we know exactly what is going on; namely, that the Government do not want to stir the pot in Scotland because they think that it may prove to be politically disadvantageous. I am sorry to say it but the pot should be stirred. After 40 or 50 years, it is time for this to be resolved.

I totally support my noble friend in what he is trying to do, which is to get this House to put a marker down that the days of the Barnett formula have gone and that we should look at a needs-based formula rather than the existing one. If my noble friend chooses to divide the House on this matter, I, for once—very rarely for me—would support him.

Scotland Bill

Lord Steel of Aikwood Excerpts

Thursday 15th March 2012 Lords Chamber

[Lord Foulkes of Cumnock]

My Lords, the noble Duke has raised a very important issue. I had indicated my intention to oppose Clause 30 stand part, and this is grouped with the noble Duke’s amendments.

The noble Duke has raised one or two of the anomalies. My noble friend Lord Maxton intervened with another. I hope that the Minister will listen carefully to this because this whole issue is bristling with anomalies. There are all sorts of difficulties that could happen. When we got an informal briefing from the Minister and some of his staff, I raised the question of students—postgraduate and undergraduate students, researchers. There are all sorts of people who would be difficult to identify as Scottish taxpayers or not. There are diplomats and civil servants who move up and down regularly who might be difficult to identify. We have heard about people on the ferries and the sleepers. There are fishermen who could be classified in this way. There are all sorts of difficulties that arise.

There are some people in Scotland who may have a residence in England, Wales or Northern Ireland, but also a third residence overseas. How do the days resident overseas come into the calculation? This question was raised when we used to have residence qualifications for Peers’ allowances and I recall that it created tremendous problems, which was one of the many reasons why we moved to the arrangement we now have. This is an absolute minefield of anomalies.

If the theory of the noble Lord, Lord Forsyth, is right—he has been arguing it very carefully—that Scotland is inevitably going to be a much more highly taxed area than England, imagine the situation that could arise on the border. The noble Lord, Lord Steel, might look at this; it might be a way of regenerating the borders. More and more people could live just over the border, living in England to pay English tax but coming into Scotland to take advantage of the better services in Scotland. There are all sorts of difficulties that could arise.

We were most grateful to the noble and learned Lord, Lord Wallace, and the noble Lord, Lord Sassoon, for organising the seminar. I do not know about other people who went to it, but I came away with more questions at the end than I had at the beginning. Again, the noble Lord, Lord Forsyth, raised a lot of the questions in that seminar. In his reply, perhaps the noble Lord, Lord Sassoon, can tell us whether, following that seminar and the genuine points of concern that were raised, some further consideration has been given to trying to make a simpler system for identifying who Scottish taxpayers are. The arrangement in the Bill is far too complicated to implement effectively.

[Lord Steel of Aikwood]

The noble Lord, Lord Foulkes, may not know that there are already people living just south of the border who take advantage of the services in the borders. I refer particularly to people from the Berwick-upon-Tweed area who make good use of the Borders General Hospital because it is a very good facility. I have a simple question for the Minister. How does Section 80F operate? It is about the number of days that people spend in Scotland or the rest of the UK. If we do not have any border controls we do not know who is coming in and out. I am assuming that we are not having that even under Mr Salmond’s proposals. Therefore, I simply do not see how it will work. Perhaps the Minister will enlighten us.

[Lord Maxton]

My Lords, quite properly everyone has been raising the issue of those people who live and work across borders, work on ships and trains, or are lorry drivers. My concern to some extent is those people—I could be one of them—who live in Scotland but whose sole income is a pension from the other place, and whose tax office is Cardiff and not East Kilbride or anywhere in Scotland. I am still not quite clear how that tax office will know that I am a resident in Scotland. As far as I know, it does not have to know my home address. I would accept that if this debate was back in the 1990s. Of course, technology has moved on and it may be that we now have a database that allows the Inland Revenue to know exactly where you live. I rather doubt whether it has ever bothered to update the records and keep them up to date. What happens to someone who lives in Scotland and should be paying tax in Scotland but whose sole source of income and tax office are outside Scotland? How does that person know what tax they should pay in Scotland?

--- Later in debate ---

[Lord Sassoon]

Forgive me, my Lords, I thought that we were straying into questions about tax status and Members of this House. We are talking about Members of another place with a constituency in Parliament, Members of the European Parliament and Members of the Scottish Parliament. Most Scottish parliamentarians will already meet conditions A and B in new Section 80D, but there may be circumstances where this may not apply. For example, a Member may have gained or lost a seat at a recent election—it could have happened when an election was held early in the tax year—and decided to move elsewhere in the UK. The test here is that there should be clarity. If the person has been a Member of one of these Parliaments for a Scottish seat for some part of the year and has chosen to be so, they should be Scottish taxpayers for the year, but I appreciate that, depending on whether they come in or go out at different points of the year, the situation could be different. However, this is consistent with what I have been saying today: that the basic test is a close-connection test and that it should be simple and clear. Members of both Houses of the UK Parliament are deemed to be UK-resident for tax purposes if they are a Member for any part of the tax year. If the noble Lord, Lord Foulkes, wants to draw a parallel between the two Houses of this Parliament and what we are applying through the Bill as it stands, I say to him that the situation would be entirely lined up. If you are a Member of either House of the UK Parliament for any part of the year, you are deemed to be UK-resident for tax purposes. That is completely consistent with what is proposed in the Bill for Members who sit for Scottish constituencies. That is how the Bill should stand.

[Lord Steel of Aikwood]

My Lords, I suspect that there is nobody listed in the category in the Bill who does not live in Scotland, but the Minister is right in one respect: it was not always so. My predecessor as MP for Roxburgh, Selkirk and Peebles lived in London—I do not say that critically; that was a fact. He did not come from Scotland but he had a Scottish constituency. He came to visit the constituency dutifully from time to time, but he certainly would not have been regarded as having a close connection with Scotland, nor would he have spent the majority of days in Scotland. So, although I cannot think of anyone who would be excluded by taking this out, as my noble friend Lord Forsyth suggests, it could happen.

It reminds me of a story that Jo Grimond used to tell about coming across one of the knights of the shires at King’s Cross station at the start of the Summer Recess. He was putting his trunk into the guard’s van on the train and he was in a very bad mood. Jo Grimond said to him, “Why are you so upset?”. He said, “It is not the thought that I am going to my constituency; it is the thought that I shall have to go next year as well”. Fortunately those days have gone and I do not think that that would apply now. None the less, it is a reasonable safeguard to have this clause in the Bill.

[Lord Kerr of Kinlochard]

The noble Lord, Lord Forsyth, has drawn attention to a point of principle here. Creating special categories is, by definition, undesirable. It is probably the case that every single person who meets the three categories listed here would qualify as having a close connection under the other tests of what a close connection is. It is very unlikely that any of them would not meet the test of residence and the number of days resident, so why create this special category? I cannot see a practical argument for it but I see an argument of principle against it.