Oral Answers to Questions

Alistair Carmichael Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Evennett]

My hon. Friend makes a good point. There is funding for communities to explore local first world war history, through the Heritage Lottery Fund, as well as through the War Memorials Trust for the repair and conservation of local war memorials. Local communities should be commemorating every aspect of their local communities to highlight what happened and remember those who served and gave their lives.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the Minister for acknowledging the contribution of the young people of Orkney to the Battle of Jutland commemorations last week, at which he was present. Is not the lesson that involving young people makes it meaningful and poignant for those of all ages and that, if we want to engage young people, we should involve them, not lecture them?

[Mr Evennett]

I was delighted to be in the right hon. Gentleman’s constituency to experience the moving ceremonies for the Jutland centenary commemorations. It is vital that we engage everybody, particularly young people, so that they might learn about what happened.

Battle of Jutland Centenary

Alistair Carmichael Excerpts

Wednesday 25th May 2016 Commons Chamber

[Mrs Drummond]

I am incredibly lucky to have it in my constituency, and I urge all Members to visit it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[Neil Gray (Airdrie and Shotts) (SNP)]

rose—

[Mrs Drummond]

I will take one last intervention, from the right hon. Gentleman.

[Mr Alistair Carmichael]

The hon. Lady is being remarkably generous in giving way, in a remarkably well attended Adjournment debate. She will know that next week Orkney will be at the heart of the events to commemorate this remarkable episode in our nation’s history, just as we were at the heart of events 100 years ago, when Jellicoe led the fleet from Scapa Flow. I am struck by the range of interventions we have had from Members from right across the country, and it strikes me that what we will be commemorating is not just a memorable naval battle, but an enterprise involving communities right across the length and breadth of this country. That is the spirit in which it should be remembered.

[Mrs Drummond]

Absolutely. I do not think there is a single place that has not contributed to the Royal Navy at some time.

Jutland has always been a difficult battle for lay people to understand, because of the chaos of a naval action in poor visibility and darkness. Despite a massive toll of injury and death, the true impact of the battle was not understood at home, even immediately afterwards. There were some early interpretations of the outcome as a German victory, followed by an understanding that it was in fact a strategic defeat of Germany. Exactly a month later, the horrors of the Somme brought a fresh wave of shock to the population. Although we are here now to commemorate the centenary of the battle, it has spent most of the past 100 years lurking in the shadows of our national consciousness, yet the impact on my city of Portsmouth was profound. Portsmouth provided a major part of the crews of the biggest ships in the fleet. In Portsmouth’s manned ships we lost 3,000 lives in the battle of Jutland, more than we lost at the Somme. The impact of Jutland on families and communities in the city was huge.

The battle of Jutland jerked the Royal Navy out of Victorian complacency about its leadership. It had led the way with the building of Dreadnought and its successors at the insistence of Admiral Jacky Fisher, but over that period, and for long before it, the leadership of the Navy had fossilised ideas and played down the importance of initiative; it was constricted by the Victorian class structure.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

I join my hon. Friend, who is such an excellent voice for Havant in this Parliament, in congratulating the small businesses in the Havant constituency. They are thriving, and we are helping them with major improvements to roads and infrastructure in the area.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

T10. Ministers will have heard the concerns of small business organisations about the change to quarterly tax returns. What are they doing now that that change is in place to monitor its operation and ensure that it does not become unnecessarily burdensome to small businesses?

[Mr Gauke]

Let me be absolutely clear with the House that we are not talking about quarterly tax returns. This is not about having to do a full tax return but about reporting; indeed, the purpose of the changes is ultimately to reduce the burden on businesses. It will start to be introduced in 2018. I hope that we will set out further information about the plans in the coming weeks. The intention is to ensure that we reduce the tax gap and, ultimately, help businesses to comply with the tax system.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 1st March 2016 Commons Chamber

[Mr Speaker]

Thank you.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

7. What assessment he has made of the effects on the economy of the reduction in duty on spirits announced in the 2015 Budget.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

The 2% duty cut at the March Budget 2015 continues to support the 296,000 people across the sector, including such distilleries as Highland Park in the right hon. Gentleman’s Orkney and Shetland constituency.

[Mr Carmichael]

The Minister will recall that, last year, the Red Book estimated that the cuts in alcohol duties would lead to a reduction of £185 million in revenue. In fact, from April 2015 through to January 2016, we have seen a £190 million increase in revenues. Will he therefore look very carefully at the request from the Scotch whisky industry for a further 2% cut in spirits duties this year?

[Damian Hinds]

I know how much the sector values the cut in the duty—it was the first since 1996—and it is great to see the industry in good health, with the number of distilleries and exports to other parts of the world growing strongly. I have received representations from the Scotch Whisky Association among others in relation to the upcoming Budget.

European Union Referendum Bill

Alistair Carmichael Excerpts

Tuesday 8th December 2015 Commons Chamber

[John Penrose]

The hon. Gentleman is right; the referendum will affect all of us, but the argument that he is advancing applies equally to 15-year-olds and 14-year-olds, and to 55-year-olds and 64-year-olds. So he is right, but I am not sure there is a compelling argument for reducing the age just to 16.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[John Penrose]

I will give way once more, then I must make progress.

[Mr Carmichael]

The Minister is being generous in giving way. May I caution him, though, against invoking the somewhat patrician instincts of the Labour Government with regard to the use of sunbeds as a reason for denying 16-year-olds the vote now? He has given us the full list of links, but surely the one link that matters because it comes to the heart of what it is to be represented in this place is that at 16 people pay their taxes.

[John Penrose]

That idea has a long and distinguished history. People were throwing tea into the harbour in Boston, saying “No taxation without representation” a long time ago. However, the argument has grown weaker over time for a number of reasons. First, the number of 16 and 17-year-olds who now pay income tax, though not zero, is a great deal lower than it used to be, partly at least because this Government and the previous one raised the threshold for income tax and also raised the school and training leaving age, so the number of people involved in paying income tax is significantly lower than it used to be. Secondly, there are now many more indirect taxes, so any six-year-old who buys whatever it may be will be paying VAT, among other things. Therefore the advent of indirect taxes rather weakens the logical foundations of that argument, one which I used to cleave to myself. I found myself in slightly uncomfortable positions as a result, because I realised that it was an eroded position.

Even if we were convinced that lowering the voting age was the right thing to do, this Bill would not be the place to do it, for two reasons. First, changing the voting age should not be applied to a single vote, even—or perhaps especially—if it is as important as this referendum. It is something that should be considered for all elections collectively and in the round, not piecemeal on an ad hoc case-by-case basis. Given the understandable sensitivity surrounding the EU referendum, making such a fundamental change to the franchise for this vote alone would inevitably and perhaps justifiably lead to accusations of trying to fix the franchise in favour of either the “remain” or the “leave” campaign. That is why we have chosen to stick with the tried and tested proven general election franchise. If it is good enough for choosing the Government of this country, surely it is good enough for the referendum too, and we should not jiggle around with it for a one-off tactical advantage either way.

--- Later in debate ---

[Mr Alistair Carmichael]

Will the Minister give way?

[John Penrose]

Once more, then I will stop and let others have a go.

[Mr Carmichael]

This is probably the most novel aspect of our debate today. It is, of course, for the Speaker to certify whether financial privilege is invoked or not, but it is for the Government to decide whether they are to take advantage of that. The Government did not take advantage of that in relation to the 2014 Wales Bill for exactly the same issue. What is different now?

[John Penrose]

I think I have just addressed that point. We cannot waive privilege and disagree with the amendment for other reasons. We therefore need to engage financial privilege, but I am taking the opportunity of this speech and this debate to make sure that those other issues are given an airing as well. I hasten to add that there is nothing new in this. There is a long-established precedent in this House. I shall leave it to the procedural experts to lecture us all on the historical antecedents of financial privilege. We are not creating any sort of unusual precedent here.

I have not sought to repeat or rebut every argument. As I said, the subject has been debated many times in the Chamber already. I have, I hope, given everybody a taste of the issues and stated the Government’s position. The House has expressed its view on this matter many times, and I ask us all to repeat that once more.

--- Later in debate ---

[Mrs Main]

I am more than happy to say that I meant SNP Members. It seems that whenever the word “Scotland” is mentioned in this place, an SNP Member feels that he or she must stand up and speak on behalf of the whole of Scotland. The Holyrood Parliament has introduced things in Scotland that I would not support in this House. I do not want to jump up and down and argue that everything should be transported across the border. The SNP’s argument that this House should automatically follow its lead in the Scottish referendum is bogus.

[Mr Alistair Carmichael]

Surely the distinction is that it was this House that gave the Scottish Parliament the power to extend the franchise to 16 and 17-year-olds in the Scottish independence referendum. We gave it that power knowing exactly how it was going to be used. We may not have made the change ourselves, but, as the hon. Lady’s noble Friend Lord Dobbs puts it, we acquiesced in it. What is the difference now?

[Mrs Main]

The majority of Members in this House do not support extending the franchise, as has been shown in numerous votes. As my hon. Friend the Minister has said, if every 16, 17 and 18-year-old is allowed to do one thing, there is no obvious logical extension that allows them to do something else. We accept that some bizarre rules apply. On voting, however, many of us believe that it is a step too far to extend the franchise to 16 and 17-year-olds while at the same time exempting them from other things. I have not heard an SNP Member arguing for 16-year-olds to be Members of Parliament. For me, that is the logical extension of extending the voting franchise to them. I do not believe that a 16-year-old would have the experience, life skills or maturity to represent a constituency.

--- Later in debate ---

[Mr Alistair Carmichael]

After my experience in the previous Parliament, the irony of hearing Conservative Members arguing for reform of the House of Lords is never lost on me.

In the brief time available, the point I am making is that there is a fundamental inconsistency in the Government’s position. In the previous Parliament the Prime Minister gave power to the Scottish Parliament to extend the franchise for the Scottish independence referendum to 16 and 17-year-olds. We knew what they were going to do with it and, as Lord Dobbs put it in the other place, the Prime Minister acquiesced in it, and he did so for a number of reasons. He did it because it was the most important vote that we would ever face, because it was to be a once-in-a-generation decision, and because referendums are different. That is exactly the situation that confronts the House today.

On financial privilege, it appears that having lost the argument, the Government now want to play their trump card or pull out a joker to thwart a very laudable aim. The hon. Member for St Albans (Mrs Main) said that we were opposing the use of financial privilege because we do not care about where the money comes from. We do care about where that money comes from because it is paid by—among others—16 and 17-year-old taxpayers. They pay it, so they are entitled to a say.

[Stephen Kinnock (Aberavon) (Lab)]

In the 20 seconds that remain to me—[Interruption.] It is now 19 and counting, so I will not take any interventions. I wish to argue that this measure makes sense. We need to trust our young people and empower them. Let us give them this vote and this chance.

Question put, That this House disagrees with Lords amendment 1.

Tax Credits

Alistair Carmichael Excerpts

Tuesday 20th October 2015 Commons Chamber

[Mr Clarke]

I do not want to take as long as the Front Benchers, so I will make a little progress.

Why do this now? There is never going to be a better time again to make more substantial progress in loosening our dependence on this subsidy to pay. I will not repeat what the Minister said admirably from the Dispatch Box about all the other things that are being done in more sensible areas, where we support the income and help with the expenditure of working families. That of course has to be key. That is the alleviation that everybody is demanding of what is bound to be difficult when we move forward. I am not naive. Politically, I point out to my Conservative colleagues that this is early in a Parliament, six months in, and my guess is that if we do not take this decision now, everybody will run for the hills if we decide we are going to do it in two years’ time. If we are looking, as a governing party should do, to what we are going to be able to show to the public by way of a successful economy when we next face them in five years’ time, we will see that now is the time to take the necessary decisions to get on with this.

More substantially, as has been mentioned by, among others, my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), the former Solicitor-General, the employment situation is extraordinarily strong. This is the time to do it, because we are never going to get all the full compensating reactions in the labour market if we do not get them at a time when employment is at a record-breaking high, unemployment is very low and real incomes are rising at an amazing 3% a year.

In all the figures that keep being cited about what will happen to those who lose tax credit, there is one great incalculable, although people have tried to estimate it: what will employers do as they realise that their staff are losing their tax credit? We have already seen various firms lining up to say that they are going to pay my right hon. Friend the Chancellor’s living wage, some straightaway. That is because the labour market has changed, they do not want demoralised staff and they want to race ahead of the Government and say that they are giving a big pay rise. I accept that not everybody will be able to do that, but I think that employers, finding that the subsidy of tax credit is being drained away again, are in a better position now than they have been for years to say, “Perhaps we are going to have to give—perhaps we ought to give—a reasonable pay rise to the staff working for us because we can no longer rely on the Government setting in behind us.” Again, if we do not do it when the employment market is so strong, we will never do it at all—now is the time.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the right hon. and learned Gentleman for giving way, because I agree with an awful lot of his analysis of the problems caused by the whole system of tax credits. The difficulty is that we do not start with a blank sheet of paper. The fact is that the cuts are in the here and now, whereas the possible increase in wages will come only in the future. Can he really see any employer giving somebody a wage rise because they have just had a third child who will not be eligible now for tax credits?

[Mr Clarke]

Quite a lot of low-paying employers will realise the effect on the morale of their staff, some of whom will tell them that they are losing their tax credits. I am not naive and know that this will not mean that nobody loses. Not everyone will be able to do that. The downsides of the change—my hon. Friends on the Front Bench explained the upsides that will affect a lot of these working families—may not be totally eliminated, but there will be fewer problems now if we go ahead with this. I have already said that getting rid of electoral bribes, which most parties have given over the years, always proves to be terribly difficult. I have seen some dreadful things introduced and then nobody has the nerve to vote against them. Perhaps I should not worry. I receive a free bus pass, free television on which I do not pay a licence, and a winter fuel allowance to save me from winter poverty. I know that I was meant to say to the previous Labour Government, “God bless you, Mr Brown. You are a worthy man, and I shall vote for you from now on.” My political views are more complicated than that. Tax credits were about the Labour Government bumping up people’s income on the eve of an election.

Tax Credits

Alistair Carmichael Excerpts

Tuesday 15th September 2015 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is unfortunate that we have only 90 minutes to debate the regulations, but it is absolutely right that we should debate them on the Floor of the House. The right hon. Member for Birkenhead (Frank Field) has done us a great service in bringing this matter to the Floor of the House. It is worth reflecting, however, that the reason why there is not more public outrage about the proposed changes is a reflection of the sheer complexity of our tax and benefit system. That will have to be addressed—not in this way—in the medium to long term.

There was a lot in the Minister’s speech with which I could agree quite easily. When he spoke about the importance of raising the personal tax allowance, the very welcome increases to the minimum wage and the importance of providing better childcare provision, those are all things with which I could have no difficulty. The difficulty I have with the regulations is that at a stroke they negate the benefits the Minister outlined. It ought surely to be a matter of common consensus in all parts of the House that the best route out of poverty is through work, but what the Government are doing today is giving with one hand and taking away with the other.

[Jim Shannon (Strangford) (DUP)]

Will the right hon. Gentleman give way?

[Mr Carmichael]

I am sorry, but I am short of time.

The average household in social housing could lose up to £1,700 a year under the changes. That means for every extra £1 earned, they will lose up to 93p in benefits. That is why the Government are not true to their stated intent to encourage people off welfare and into work by bringing forward changes of this sort.

To understand why today’s statutory instrument is the wrong measure at the wrong time, it is worth reflecting on what happened to people’s employment circumstances after the 2008 crash. We expected steep rises in unemployment, and sure enough it went up, but not to the extent we expected, because employers kept people in work. However, their wages were frozen or reduced and those in part-time employment saw their hours cut. We can now see the light at the end of the tunnel—at last, we are seeing some wage inflation—but surely at this moment the Government should be encouraging people to take more hours, not removing the incentives to do so.

The hon. Member for Waveney (Peter Aldous) made a characteristically thoughtful contribution, and one of the most significant. He said the Government’s proposals were strategically correct. He might well be right about that, but what he said thereafter in the rest of his contribution indicated they were tactically inept. I address myself to him and other Government Members who share his concerns, because they are part of the most powerful group in the House: Government Back Benchers. The Government have a majority of 12, so it needs only six of them to vote with us to take this down and make them think again. I say to him, because I know he is a genuine man, that if he has not had his assurances and compensations before the vote, he will not get them after it.

Scotland Bill

Alistair Carmichael Excerpts

Monday 29th June 2015 Commons Chamber

[Ian Murray]

I think that the hon. Gentleman is confusing two issues. We fundamentally agree with the clauses relating to the devolution of income tax, but these are hugely complex matters, as is demonstrated by the complicated nature of the devolution of the 10p income tax provision in the Scotland Act 2012. The new clause would not prevent the Bill from proceeding; it would merely allow the Secretary of State to bring to the House a report on the progress of implementation.

There is another difficulty. The hon. Gentleman is absolutely right—the Scottish Parliament could produce a report and submit it—but I cannot, in the House of Commons, command a different Parliament to do something, which is why I am asking the Secretary of State to produce the report.

It is right for these issues to be raised. I hope that the Scottish Parliament will also examine them in great detail, and will present a full report to both Houses. Our aim is to protect Scottish taxpayers rather than to create a political divide. It is disappointing that, although we agree on the broad principles of the devolution of income tax, Members are trying to bring about division between us. We are trying to be a responsible Opposition in calling for a report on the implementation of income tax rates.

New clause 32 calls for

“a report on the identification of Scottish taxpayers”.

The aim is to ensure that individuals are either Scottish or UK taxpayers but not both, to prevent the double taxation that was mentioned by the hon. Member for Dundee East, and to deal with cross-border mid-financial year movements, which is important in the context of where people may live or work.

The review must include the rates and bands at which the Scottish income tax will be set, and a projection of the impact of the tax on revenues generated in Scotland and across the United Kingdom. That is primarily designed to ensure that Scotland does not become worse off over time owing to the relative tax bases and demographic or behavioural changes in the United Kingdom overall. Such a review would allow us to assess the transitional process, and to ensure that the projected rates and bands accorded with the principle of no detriment for both Scotland and the rest of the United Kingdom. That would protect Scottish taxpayers, as well as taxpayers in the rest of the UK.

Critically—the Smith agreement restates this—any updated fiscal framework should secure the Barnett formula, with the Scottish budget bearing the full costs of policy decisions that reduce or increase revenues or expenditure. That is crucial to the fiscal framework.

My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) mentioned gift aid, and I hope that the Minister will be able to respond to what he said.

I think it important for the people of Scotland to know what their Government are doing about these substantial income tax powers, whatever the colour of that Government. Those powers are worth £11 billion, and they are fundamental to the working lives of people in Scotland. As I have said all along, this is about transparency: transparency in regard to whether additional powers should be devolved, and transparency in regard to the use and impact of those that are devolved. That is what our new clauses 1, 21 and 32 seek to foster.

All I ask is that the United Kingdom Government, and, indeed, the Scottish Government, approach the Bill in the same spirit of transparency and openness as us, and agree to new clause 32. We shall be pressing it to a vote later this evening.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

As others have said, the genesis of the clause lies in the report of the Smith commission. I have supported the commission since the day, indeed the hour, when it reported, but we cannot ignore the fact that the process was undertaken at great speed. Necessarily, given that five parties were engaged in the process, it involved a degree of compromise all round. It is for that reason that all of us undertook to ensure that there would be consultation following the publication of the report and, subsequently, the draft clauses.

In a debate in which consensus is not always easy to come by, I am pleased to note that there is consensus on the fact that the clause is a faithful replication of the agreement that was reached under the chairmanship of Lord Smith. However, the consultation that has been conducted since the publication of the draft clauses at the end of January has highlighted, and generated, a substantial number of important matters, some of which are technical and some of which go to the heart of the issue of taxation itself.

I suggest to the Secretary of State that further consideration may be necessary. He has the ability, through the good office that he holds, to bring all the parties together again to consider the representations that have been made during the consultation, and to consider whether, given the complexities and possible areas of conflict that could arise, it is actually worth implementing the tax power in the way that is currently envisaged. If the consultation is to be carried out in good faith—and, for my part, it always has been—there are sufficient matters about which we should be talking. That would still allow us—if it were necessary, and if it were possible to construct a consensus—to return to the issues on Report.

[Nigel Mills]

I rise as a reluctant supporter of the devolution of income tax to the different countries of the Union. I agree with the hon. Member for Edinburgh South (Ian Murray) that people throughout the United Kingdom should feel that they are paying the most important tax—the tax that puts the largest amount of money into the UK pot—and seeing it redistributed. We are where we are, however, and we are talking about devolving income tax to Scotland.

I fear that we have one foot in each camp, with part of the tax in this Parliament and part of it in the Scottish Parliament, and that we will end up in a real mess. I am not sure how it is possible to make a tax work when a Parliament can set the rate, the bands and the starting point, but not the actual rules. A particular policy issue in Scotland may mean that the Scottish Parliament rightly wants to incentivise certain employment and income activities. That may not be not a priority for the United Kingdom as a whole, perhaps for reasons of scale or owing to a different approach, but there will be no mechanism enabling income tax in Scotland to promote that certain activity. A new tax relief for people working in the offshore oil and gas industry, for instance, might not be a priority for the UK as a whole, but it might be a priority in Scotland.

The record of our income tax code is cluttered with examples of the use of the tax code to promote certain types of behaviour. I am not sure that we can secure the full and effective use of a tax code if our Parliament is not setting the rate and looking after local activities.

The flipside will be that tax avoidance as a result of a loophole may become material for the Scottish Parliament in the case of a certain piece of exploitation, but will not become material to the budget of the whole UK. It may be extremely important in Scotland to get that loophole closed, but in the UK there may be several others that are ahead of it in the queue, because it does not represent a large loss to the Westminster Parliament. An action that ought to be taken on something that has a material impact in one part of the UK will not be taken because of the strange disparity that exists.

If we are going to start devolving taxes, we should step back and have a look at what a federal UK tax system would be like. We should work out which taxes are federal and which are devolved, and then try to bring about some consistency in Wales, Scotland and Northern Ireland so that similar taxes can be devolved in the same way, rather than adopting a piecemeal approach in regard to corporation tax in Northern Ireland, income tax in Scotland, and so forth. I do not think that anyone in the country will know to which Parliament they are paying what tax, and who has complete control of it. That means that we will not get all the advantages that we expect, such as the ownership and the accountability that my hon. Friend the Member for Gainsborough (Sir Edward Leigh) mentioned.

I do not think that we are achieving the sharing and the pooling that the hon. Member for Edinburgh South wanted, the coherent use of income tax that the SNP wants, or the full devolution that would make sense. We appear to have become involved in a strange halfway fudge which we may regret in a few years’ time. I think it would be better to step back and try to get this right from the start, rather than trying to find a way of clearing up the mess.

I accept that there are always good reasons why the line is drawn where it is. We must be very careful about tax avoidance through the use of residency, or pretend residency. If I am working full-time in Scotland, to get the Scottish rate—which may be higher or lower than the rate in the rest of the UK—I shall probably have to go and live in Scotland. I suspect that I cannot achieve that artificially. If I have large dividend flows, I can probably pretend that I am in Edinburgh when I am in London and vice versa in order to obtain the tax advantage. I can see why there is an attraction in having one UK-wide passive income tax, rather than an active tax.

--- Later in debate ---

[Stewart Hosie]

We did not table an amendment because there was not an amendment that we could table to fix the problem. As I have just said, that requires an amendment to a Finance Bill. One might have thought that an experienced old hand like the hon. Gentleman might have known that and advised his younger and less experienced colleague, the shadow Secretary of State, on how things work. Having said that, and that we are happy to support new clause 20, I will sit down and hopefully we can move on.

[Mr Alistair Carmichael]

I rise to say a few words in support of new clause 20, tabled by the hon. Members for Edinburgh South (Ian Murray) and for Caerphilly (Wayne David). When considering schemes such as those that lie at the heart of the new clause, it is worth starting with the principle that underpins them. Is it, as the Financial Secretary to the Treasury suggested, the principle that local government finance should not go straight into Treasury coffers? I can understand that principle and it holds water in so far as it relates to the scheme for police and fire services across the UK, as originally envisaged. The difficulty for the Minister, however, is that there are other schemes of a similar nature that go beyond the ambit of police, fire and other rescue services. The hon. Member for Caerphilly mentioned one related to the national health service.

The principle that underlines such schemes is fairly sensible—that for public services to pay money back into the Treasury is essentially an exercise in robbing Peter to pay Paul. It only creates work for accountants and achieves no public good. There is a more fundamental principle at stake, however, in the proposal before the Committee and in the new clause tabled by the Labour party. That is the principle that there should be equality of treatment across the board and across the United Kingdom. The hon. Member for Aberdeen South (Callum McCaig) hit the nail on the head when he referred to the pooling and sharing of risks. I think I have perhaps a greater commitment to that principle than he has, but I must say in all candour to those on the Treasury Bench that if they are sincere in their belief that risks and rewards should be pooled and shared across the UK, whatever the technicalities this situation should not be allowed to continue. Whether it is done through the review in the new clause or through action in the forthcoming Finance Bill, amendments for the sake of the continued constitutional integrity of the United Kingdom should be produced in early course.

[Mr Gauke]

Let me address the issues that have arisen during the debate, starting with new clause 20 and the refund situation. It is correct to say that there is a refund scheme for Government Departments and the NHS. This scheme refunds the VAT incurred on certain outsourced services. It was introduced to ensure that irrecoverable VAT does not dissuade Government Departments from contracting out services where this results in greater efficiencies of scale. There is also —this is relevant to the discussion—a refund scheme in respect of matters that can draw funding directly from local taxation. The Scottish Fire and Rescue Service is funded by the Scottish Government, rather than through any legal call on local taxes, so it does not meet this criterion.

That was not the case prior to the reforms brought in by the Scottish Government. I stress that this was a choice of the Scottish Government, with their eyes wide open to the fact that the VAT refund scheme would not be available in the event of that reform. They decided, as they were perfectly entitled to do, to proceed with those reforms, notwithstanding that loss.

The Economy

Alistair Carmichael Excerpts

Tuesday 6th December 2011 Commons Chamber

The House divided: Ayes 79, Noes 213.Division No. 408][9.59 pmAYESAdams, NigelAfriyie, AdamAldous, PeterAlexander, rh DannyBaker, SteveBaldry, TonyBaldwin, HarriettBeith, rh Sir AlanBlackman, BobBradley, Karen Bruce, FionaBurley, Mr AidanCarmichael, rh Mr AlistairCash, Mr WilliamClark, rh GregCoffey, Dr ThérèseCollins, DamianCrockart, MikeDavey, Mr EdwardDavies, David T. C. (Monmouth)Davies, GlynDavies, PhilipDorrell, rh Mr StephenDunne, Mr PhilipEllison, JaneEllwood, Mr TobiasElphicke, CharlieEvans, GrahamFarron, TimFrancois, rh Mr MarkFuller, RichardGauke, Mr DavidGeorge, AndrewGilbert, StephenHancock, MatthewHands, GregHarris, Rebecca Harvey, NickHaselhurst, rh Sir AlanHeaton-Harris, ChrisHinds, DamianHollingbery, GeorgeHollobone, Mr PhilipJackson, Mr StewartJavid, SajidJenkin, Mr BernardJohnson, GarethJones, AndrewKnight, rh Mr GregLamb, NormanLeigh, Mr EdwardMills, NigelMoore, rh MichaelMorris, DavidMosley, StephenMulholland, GregMunt, TessaMurrison, Dr AndrewOllerenshaw, EricOsborne, rh Mr GeorgePercy, AndrewPerry, ClairePrisk, Mr MarkRedwood, rh Mr JohnReid, Mr AlanRogerson, DanRuffley, Mr DavidRussell, BobRutley, DavidSelous, AndrewSkidmore, ChrisSmith, Miss ChloeStanley, rh Sir JohnStevenson, JohnStunell, AndrewTyrie, Mr AndrewVickers, MartinWatkinson, AngelaWilliams, StephenWright, SimonTellers for the Ayes:James Duddridge andMr Shailesh VaraNOESAbbott, Ms DianeAbrahams, DebbieAinsworth, rh Mr BobAlexander, HeidiAli, RushanaraAllen, Mr GrahamAnderson, Mr DavidAustin, IanBailey, Mr AdrianBain, Mr WilliamBalls, rh EdBanks, GordonBarron, rh Mr KevinBeckett, rh MargaretBegg, Dame AnneBenn, rh HilaryBenton, Mr JoeBerger, LucianaBetts, Mr CliveBlackman-Woods, RobertaBlears, rh HazelBlenkinsop, TomBlomfield, PaulBlunkett, rh Mr DavidBradshaw, rh Mr BenBrennan, KevinBrown, LynBrown, rh Mr NicholasBrown, Mr RussellBuck, Ms KarenBurnham, rh AndyByrne, rh Mr LiamCampbell, Mr AlanCampbell, Mr RonnieCaton, MartinChapman, Mrs JennyClark, KatyClarke, rh Mr TomClwyd, rh AnnCoaker, VernonCoffey, AnnCooper, RosieCooper, rh YvetteCorbyn, JeremyCrausby, Mr DavidCreagh, MaryCreasy, StellaCruddas, JonCryer, JohnCunningham, AlexCunningham, Mr JimCunningham, TonyCurran, MargaretDakin, NicDanczuk, SimonDarling, rh Mr AlistairDavid, Mr WayneDe Piero, GloriaDenham, rh Mr JohnDobbin, JimDobson, rh FrankDocherty, ThomasDodds, rh Mr NigelDonohoe, Mr Brian H. Doran, Mr FrankDowd, JimDoyle, GemmaDromey, JackDugher, MichaelDurkan, MarkEagle, Ms AngelaEagle, MariaEfford, CliveElliott, JulieEllman, Mrs LouiseEngel, NataschaEsterson, BillEvans, ChrisFlello, RobertFlint, rh CarolineFlynn, PaulFovargue, YvonneFrancis, Dr HywelGapes, MikeGilmore, SheilaGlass, PatGlindon, Mrs MaryGodsiff, Mr RogerGoggins, rh PaulGoodman, HelenGreatrex, TomGreen, Kate Greenwood, LilianGriffith, NiaHamilton, Mr DavidHanson, rh Mr DavidHarman, rh Ms HarrietHavard, Mr DaiHealey, rh JohnHendrick, MarkHermon, LadyHeyes, DavidHillier, MegHilling, JulieHodge, rh MargaretHodgson, Mrs SharonHoey, KateHopkins, KelvinHosie, StewartHowarth, rh Mr GeorgeHunt, TristramIrranca-Davies, HuwJamieson, CathyJarvis, DanJohnson, rh AlanJohnson, DianaJones, GrahamJones, HelenJones, Susan ElanJowell, rh TessaKeeley, BarbaraKendall, LizKhan, rh SadiqLammy, rh Mr DavidLavery, IanLazarowicz, MarkLeslie, ChrisLewis, Mr IvanLong, NaomiLove, Mr AndrewMacNeil, Mr Angus BrendanMactaggart, FionaMahmood, ShabanaMarsden, Mr GordonMcClymont, GreggMcDonagh, SiobhainMcDonnell, JohnMcFadden, rh Mr PatMcGovern, JimMcGuire, rh Mrs AnneMcKechin, AnnMcKenzie, Mr IainMcKinnell, CatherineMeacher, rh Mr MichaelMearns, IanMichael, rh AlunMiliband, rh DavidMiliband, rh EdwardMiller, AndrewMitchell, AustinMoon, Mrs MadeleineMorden, JessicaMorrice, Graeme (Livingston)Morris, Grahame M. (Easington)Mudie, Mr GeorgeMunn, MegMurphy, rh Mr JimMurphy, rh PaulMurray, IanNandy, LisaNash, PamelaO'Donnell, FionaOnwurah, ChiOsborne, SandraOwen, AlbertPearce, TeresaPerkins, TobyPound, StephenRaynsford, rh Mr NickReed, Mr JamieReeves, RachelReynolds, EmmaReynolds, JonathanRiordan, Mrs LindaRitchie, Ms MargaretRobertson, JohnRobinson, Mr GeoffreyRotheram, SteveRoy, LindsayRuane, ChrisRuddock, rh JoanSeabeck, AlisonShannon, JimSheerman, Mr BarrySheridan, JimShuker, GavinSkinner, Mr DennisSlaughter, Mr AndySmith, rh Mr AndrewSmith, AngelaSmith, NickSmith, OwenSpellar, rh Mr JohnStraw, rh Mr JackStuart, Ms GiselaTami, MarkThomas, Mr GarethTimms, rh StephenTrickett, JonTurner, KarlTwigg, StephenUmunna, Mr ChukaVaz, rh KeithVaz, ValerieWhiteford, Dr EilidhWhitehead, Dr AlanWilliamson, ChrisWilson, SammyWinnick, Mr David Winterton, rh Ms RosieWishart, PeteWood, MikeWright, DavidWright, Mr IainTellers for the Noes:Phil Wilson andJonathan AshworthQuestion accordingly negatived.

[The Comptroller of Her Majesty's Household (Mr Alistair Carmichael)]

On a point of order, Mr Speaker. I seek your guidance. Is there any means by which tomorrow’s record can record that the sort of meaningless gesture that we have just seen is as good as it gets?