Scotland Bill

Russell Brown Excerpts

Monday 14th March 2011 Commons Chamber

[Stewart Hosie]

It was not that they were simply blind to it; members of the Labour party have said—I believe that their leader recently said this—that Labour found it difficult to implement a fuel duty regulator when they were in power. It was not so much that Labour found it difficult as it actively opposed every attempt to do it.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Will the hon. Gentleman give way?

[Stewart Hosie]

Not at the moment.

Before I get too distracted, let me return to the Bill. The whole point about this amendment and our seeking the devolution of fuel duty powers is that we are not doing this for its own sake. Everyone understands the difficulty, as we have raised it many times, so this is about action. If the UK Government will not act, it is perfectly reasonable for the powers to be devolved so that a Scottish Government can act.

The two significant taxes dealt with in this first group are the aggregates levy and air passenger duty. In written evidence to the Scottish Affairs Committee, Professor Iain McLean said:

“I am not persuaded by the UK Government’s reasons for rejecting Calman’s other two tax devolution proposals, namely Aggregates Levy and Air Passenger Duty. As Scottish Ministers have correctly pointed out, the litigation which is given as a reason for rejecting the transfer of Aggregates Levy was already in progress when Calman reported. If Scotland is willing to take any revenue risk arising from that litigation, it should be allowed to.”

Likewise, the fact that the UK government intends to convert air passenger duty into a ‘per plane’ duty argues for, not against, devolving it. The principle of subsidiarity implies that the Scottish Government, not the UK Government, should decide how to tax flights originating at small Highland or island airports. Airports don’t move. They are a very suitable devolved tax base.”

On aggregates duty, Professor McLean said:

“The shape of landfill tax is obviously complementary to that of (any successor to) Aggregates Levy.”

Landfill tax is being devolved, so the approach being taken here is rather illogical. It is also a key recommendation of the Scottish Parliament’s Committee that aggregates tax is devolved. The final Calman commission report said:

“The Commission has recommended that a number of “green taxes” (Air Passenger Duty, Landfill Tax and the Aggregates Levy) be devolved. As well as helping to increase the financial accountability of the Scottish Parliament, control of these taxes will provide important policy levers in relation to environmental issues, allowing the Scottish Parliament and Government further options in determining policy.”

That makes perfect sense. Excluding two of the three taxes in that “green taxes” category not only makes a mockery of the Calman report, but, more importantly, decreases financial accountability and removes what Calman called “important policy levers”.

--- Later in debate ---

[Iain Stewart]

Not that Mr Hague—this one is spelt Haig. I think the Foreign Secretary is rather preoccupied with matters elsewhere in the world.

My Mr Haig said, of the First Minister’s comments about free tertiary education in his interview on the Andrew Marr programme yesterday:

“What is it the Scots go without that we the English enjoy? More and more people I speak to are seething with this unfairness, especially in the current financial climate. How is it the Scots can afford this, and the English cannot? They even have an extra layer of government, and are able to afford that as well. Mr Stewart, English nationalism is going to rise slowly but surely over this. Your government cannot ignore this, otherwise you are going to create a fracture in the union, and the SNP’s most ardent supporters for independence are going to be the English.”

I agree. I am a Unionist and I want the Union to survive. The hon. Members for Perth and North Perthshire (Pete Wishart), for Dundee East (Stewart Hosie) and for Banff and Buchan (Dr Whiteford) might support our doing nothing to increase support for their ultimate aim, but I do not.

[Mr Russell Brown]

I suggest that the hon. Gentleman responds to his constituent by making him fully aware of what the Scottish block grant is. If the Administration in Edinburgh decide to spend money in one fashion, there is no extra funding for it north of the border. In paying for one thing, we are sacrificing something else. Could that be a starting point for the hon. Gentleman?

[Iain Stewart]

I agree with much of what the hon. Gentleman says, but if the Scottish Parliament were responsible for raising more of its revenue, such arguments would diminish. I think it is right to give it the flexibility to raise additional revenue, if it so wishes, to fund extra programmes in Scotland from which my constituents south of the border may not benefit.

I agree with the incremental steps proposed in clause 24. We are for the first time starting to disaggregate the unitary tax system in the United Kingdom. That will have many consequences, some of which will be unforeseen, so we need to proceed with great care and attention to detail. I strongly welcome the proposal that we should not rush to set up a completely new system in one go. In particular, proposed new section 80B, which clause 24 introduces, contains a provision to allow the subsequent devolution of additional tax powers. That is the right way to go, rather than trying to devolve too much at this stage.

The hon. Member for Dundee East raised perfectly valid points about devolving other taxes, including air passenger duty, fuel duty and corporation tax, and we might well come around to doing that in the fullness of time. The Scottish Parliament’s response to the Bill noted that

“international experience does show some scope for differentiation of corporation tax,”

and we may get to that point. However, there are huge difficulties and intricacies that we must first consider about the operation of corporation tax. A later clause goes into some detail in defining a Scottish taxpayer for the purposes of the Bill and we would have to do something very similar for corporation tax. If a company were primarily located in Scotland but had its tax headquarters elsewhere, we would have to work out exactly which components of its income were liable for corporation tax.

--- Later in debate ---

[Mr Russell Brown]

I did not intend to speak on the amendments tabled by the hon. Member for Dundee East (Stewart Hosie), but I feel that some issues need to be addressed, and I want to put to him one or two questions about fuel duty that I hope he will answer when he responds to the debate.

I am sure that no one in the Chamber does not recognise how difficult this issue has become for motorists in any part of the UK—particularly, I recognise, for those in the northern and western isles. However, when I look at the whole concept of devolving this additional tax on fuel duty, I wonder, in all honesty, whether the proposal would have been before us if fuel prices at the pumps were not so expensive. The hon. Gentleman has not given the slightest indication how this additional income would be used. More importantly, does he have even a ballpark figure on how much would be raised in additional taxation going to the Scottish Parliament? In a previous debate, he and I discussed the fuel duty stabiliser, of which he has been a great advocate. As I pointed out to him, his advocacy has not always been consistent, as there was one year when the SNP dropped the proposal. If he had his way and managed to get the amendment through, and the fuel duty charge became a devolved issue, would he totally abandon the whole concept of a fuel duty stabiliser?

I am not in favour of a fuel duty stabiliser, as I have made clear to constituents who have corresponded with me over recent weeks. I need only point to the campaign run by FairFuelUK, which has not given the slightest indication of what it thinks is a reasonable price for fuel and a reasonable level of duty. The wider public might think that this is a tremendous idea, but I warn the Committee, as I have warned my constituents, to be very careful. With the current fluctuating price of fuel—crude oil—and the way that the marketplace is at the moment, if a fuel duty stabiliser were suddenly introduced, we would end up with fuel pegged at a price that is unsustainable. People filling up their cars are already baulking at the whole concept of what they have to pay, and it is completely wrong to peg pump prices at a level that is unsustainable.

I will also briefly mention the rural fuel derogation, about which the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who is not with us, might have some idea. I hope that the hon. Member for Dundee East will indicate the average mileage of someone living in the northern or the western isles. I recognise how painful it must be for people living in those localities to pay 10p or 15p per litre more than people on the mainland. However, the pain that such people suffer if they do 5,000 or 8,000 miles a year is comparable to that suffered by people in areas such as mine who have to do 15,000 or 20,000 miles a year, or more. Fuel prices are only one element of motoring costs. People in some places pay an astronomical price because of the miles that they have to cover. On an annual basis, people on the islands might not pay more; they might even pay less if they have a low mileage.

[Mr Alan Reid (Argyll and Bute) (LD)]

The hon. Gentleman should not denigrate the fuel duty derogation in the way that he has. On large islands such as Mull and Islay, people do a significant mileage. The use of fuel is not just about the number of miles one drives; if one drives on single track roads and has to stop and start all the time, one uses a lot more fuel. The important thing is to get the derogation established on the islands and to make it workable. It can then be extended to remote parts of the mainland.

[Mr Brown]

The hon. Gentleman, like so many people, has merely used the terminology of significant mileage. We need clarification. Will somebody in this Committee please put figures on this? To a person on the islands, significant mileage may mean 5,000 or 6,000 miles. I appreciate how difficult it is for people living in remote, rural localities. However, we are talking about finance—something that I am not an expert on, as I am sure hon. Members know. We need to be clear in our minds about what we are doing here.

[Mr Reid]

Perhaps I can give the hon. Gentleman an indication of the distances involved. The distance from Fionnphort on Mull to the largest town on the island, Tobermory, is 50 miles. Somebody driving from Fionnphort to the largest town on the island and back therefore travels 100 miles.

[Mr Brown]

I appreciate the hon. Gentleman’s clarification of the distances that people travel. I believe that that will be important in the case that the Government are trying to make for a rural fuel derogation. I am not demeaning anyone, but saying that we need to be clear when discussing finance what the situation will be.

Those are the brief points that I wanted to make, and I hope that we can get clarification before we vote on these issues this evening.

[Fiona O'Donnell]

You may not have been present the last time I spoke on the Scotland Bill, Mr Walker, but it was my birthday. Every time I speak about the Scotland Bill, it feels like my birthday.

In contrast to the amendments tabled by the hon. Member for Dundee East (Stewart Hosie), the Bill offers real progress for Scotland and a recognition of all that has been achieved at Holyrood. At the same time, it offers the stability of remaining as part of the Union, which protects Scotland against some risks. The hon. Gentleman seemed to be disappointed by what he called the politics in the report of the Scottish Parliament’s Scotland Bill Committee. Perhaps, however, we should look at the history of how we have come to this point.

We had the Scottish constitutional convention and the Calman commission, both of which the hon. Gentleman’s party declined to be part of. Those things stand in sharp contrast to the SNP’s own record, because the national conversation, which my hon. Friend the Member for Glasgow North (Ann McKechin) spoke about at some length, has delivered nothing for the people of Scotland or the Scottish Parliament. That contrasts with what is on offer before the Committee today. Of course there is detail in the Bill that we need the Government to iron out, but even the Bill Committee in the Scottish Parliament—I believe it is the first time that a Committee of that type has been established, to give the Bill the scrutiny that it deserves and merits—has acknowledged that there is time to work on some of the details.

We could fair see how all puffed up with pride the hon. Gentleman was about all the amendments that he had brought before us, but I have to say that I found his arguments unconvincing. The SNP had all the time that Calman was discussing a way forward to come up with some detailed proposals, and it had some weeks of the Scotland Bill Committee’s work in Holyrood, yet what do we see? A single piece of paper containing its proposals for lasting change and progress in Scotland. I am afraid that is the sum total of its contribution.