Scotland Bill

Andrew Gwynne Excerpts

Monday 29th June 2015 Commons Chamber

[Ian Murray]

The Scottish Parliament will have a significant ability to adjust the zero rate in particular. I hope that the Secretary of State responds to that point, because the House of Commons Library was quite clear on it. However, there has to be some pooling and sharing. Income tax is the biggest tax that everyone pays. Everyone who works pays a proportion of their income in income tax, above the basic allowance. It is important that everyone has a stake in that game. We could get to a situation in which people who did not have a stake in that game asked what the United Kingdom was for. I fundamentally believe in pooling and sharing, and the Smith agreement struck a reasonable balance.

We need a full analysis of how all the proposals will work. That is why we tabled new clause 32. Some adjustment of the powers might be needed in the future. We do not yet know what effect the implementation of the Scotland Act 2012 will have, because it does not come into force until 2016. The question that the hon. Member for Gainsborough raises relates to what we are trying to achieve with new clause 32, because the report would examine the consequences of this transfer of powers.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Is not one of the unintended consequences of the devolution of income tax to the Scottish Parliament that it will affect UK-wide facilities such as gift aid, which reimburses charities on the basis of the basic rate of income tax that is set at a UK level? If there were two different basic rates, might that not cause complexity for donors in tracking what they pay to HMRC and to Revenue Scotland? Does my hon. Friend think that that issue should be considered by the review that would be conducted under new clause 32?

[Ian Murray]

I am delighted by that intervention, because I was going to speak about that issue later. Given the time constraints, I will take that point out of my speech, because my hon. Friend has made it well. The Scottish Council for Voluntary Organisations has raised the relationship between income tax and gift aid. Although that matter is not mentioned in new clause 32, I hope that if there is a reporting mechanism, it will look not only at gift aid, but at pension relief. That is another matter that was not mentioned by the Smith agreement, but which has been raised by many of the organisations that have been in touch with us about the Bill. Gift aid is worth £1 billion a year to charities, so we must ensure that it is considered properly.