Scotland Bill

Lord Lyell Excerpts

Tuesday 24th November 2015 Lords Chamber

[Lord Lyell (Con)]

My Lords, it is now 44 years since I made my first humble speeches in your Lordships’ House and I think it is the fourth time we have discussed major events dealing with my homeland of Scotland. This evening I seem to be on a downward tide, very happy and content with much of what is in the Bill. It is interesting that the Scottish Parliament is now up and running and is a great success, and we see around us noble Lords who have served, such as my noble friend who spoke before me, and others who are still serving, with a dual hat.

We are discussing a different concept tonight from what I call the constitutional past in that we are doing something fairly quietly but apposite. We are downsizing from what I would call a federal block—known in Scotland as “Waste monster”, or Westminster—and looking at what is, and I hope will continue to be, a very successful devolved system in Edinburgh. We are looking at how these two Parliaments can react well and without too much friction. Before us this evening we have a decent stab—I will use that tactful term—to confirm what already works with the Scottish Parliament, but I worry about some particular gaps in that happy scene.

I commend the noble Lord, Lord Hollick, on his fortitude in having sat here throughout the debate. In fact, he is one of a fairly large number of noble Lords who have not budged from their positions. I also thank him, my noble friend Lord Forsyth and others who sat on the committee that produced this report. My noble friend Lord Forsyth put things far more forcefully, if I may say, than I would be able to. This is a really excellent report on the financial aspects and indeed what I hope may be the fiscal framework. I will just consider two or three small paragraphs from the report of the noble Lord, Lord Hollick. We will be able to discuss them in much more detail when we come to the income tax aspect of the Bill.

If your Lordships glance at paragraph 160 of the Hollick report, there are the immortal words of Professor Holtham, who praises the Barnett formula saying that it is “extremely simple”. I agree with him, since my main motto, both in your Lordships’ House and out, is KISS—it is nothing to do with affection but is “Keep it simple, stupid”; I am only an accountant not a major lawyer. Above all, keep it simple.

I refer to paragraphs 120 to 133 in the Hollick report, which is beautifully put together and has been praised by my noble friend Lord Forsyth. I am very interested in paragraph 122, which points out that so far the Scottish Parliament has made no use of the income tax powers. You might call me a cynical so and so, but I believe that is a mixed blessing since some of the thoughts I have seen in the Scottish media, both in print and in the electronic media, make my blood run cold.

In paragraph 130, there is marvellous advice from PWC, which I understand is one of the leading firms of chartered accountants. It points out, “For goodness sake, get the system right”. In three words, “Don’t rush it”. Those words, I hope, will be taken on board by my noble friend the Minister when he comes to wind up and indeed will colour my thoughts on what is before us this evening.

I come to paragraph 131 in the Hollick report. Although I shall be out of order and my noble friend on the Front Bench may kick my shins or do other things to me, I wish to pay the highest compliment to the noble Lord, Lord Smith of Kelvin, whom I call my noble colleague. I am not too sure about the noble and learned Lord, Lord Wallace of Tankerness, but I think that I and the noble Lord, Lord Smith, are the only two members of the Institute of Chartered Accounts of Scotland actually sitting in your Lordships’ House. As a member of the institute, I cannot praise highly enough anybody in Scotland who has done what the noble Lord, Lord Smith, has done in gathering politicians and every kind of economic outlook. He has seen Scotland on a global basis and what he has managed to do with his Smith agreement is worthy of the very highest praise. Certainly I bask in the mini-glow of the chartered accountants as a junior member with the noble Lord, Lord Smith.

I am interested in looking at the wise words, in paragraph 131, of Ms Charlotte Barbour, one of the tax directors of the Institute of Chartered Accountants of Scotland. She pointed out that, as far as income tax is concerned, which is the main thrust of what I see in front of us this evening, there is the issue of identifying who is a Scottish taxpayer. The definition of that, she says, will be “difficult”. Well, in the words of the Bible, I say, “Verily, verily”—indeed, it will. My noble friend who is right in front of me and, I think, the noble Lord, Lord Sanderson, and others may well remember that I was entitled to lead on the definition of a “Scottish taxpayer” in 1998. If your Lordships go back and look at the Hansard at that time, they will find that the Government had some difficulty in explaining to me and to the House why somebody on a ferry which was tied up at the ports of Cairnryan or Stranraer would, for the purposes of the Scotland Bill, be defined as being resident in Scotland overnight. It is there in black and white. I hope that it has been changed, and indeed there is room for it to be removed.

Paragraph 133 of the Hollick report refers to the fact that the definition of a Scottish taxpayer will be based on an individual’s main place of residence. I think it was the very kind lady from HMRC who pointed out that for the “vast majority” of the population this would be simple. Perhaps she is watching this debate on television this evening. If so, I ask her to look around at your Lordships. Perhaps I may quote a personal example. My tax affairs used to be dealt with in Dundee. I have one or two interests south of the border and, because of that, my tax details were then dealt with at Leeds and Shipley. I am given to understand that, because at some stage in my career I took paid employment as a Minister—in this House, not in the other place; no one elected me there—all my affairs are, and will be, dealt with in Cardiff. At the moment, there are three or four centres that deal with my affairs, and I am just a simple Scottish taxpayer. It is pushing at the limits of reality for an HMRC representative to say that this is going to be quite simple for every Scottish taxpayer. In my case, she might find that it is just a little more than that.

The Bill before us certainly provides the framework for something which is acceptable and reasonable, and which is very practical for Scotland, let alone for Scotland’s finances, and I hope that your Lordships will accept that the further detail can be brought forward in Committee. I congratulate the Minister on what he has done today in bringing everything before us but, above all, I congratulate my noble colleague—if I may call him that as a fellow accountant—the noble Lord, Lord Smith of Kelvin.