I beg to move Amendment No. 29, in page 10, line 25 after 'Treasury', insert:
'in consultation with the Department of Finance'.
This clause deals with the procedure by which Northern Ireland's proportionate share of United Kingdom taxation and revenue is calculated. This very much affects the spending moneys available to the new Executive. The previous situation was that there was a Joint Exchequer Board on which the United Kingdom Government and the Northern Ireland Ministry of Finance were represented under an independent chairman.
While obviously the Departments did the bulk of the preparatory work and the regulations about the financial relationship were rather different, there was nevertheless a specific board which worked out the moneys involved. The procedure under this clause is that the Treasury will calculate this proportion of money and may, under subsection (3), make regulations setting out the basis of the calculation. There is much to be said for saying that the Treasury should be specifically requested to make regulations. If I had had time I would have tabled an amendment in those terms.
In my amendment I argue that while the United Kingdom Treasury may work out the share of finance available for the Northern Ireland Departments this should not be done in a vacuum and that words should be put into the Bill saying that there is a specific obligation on the Treasury to consult the Northern Ireland Department of Finance. It is a matter of great importance to Northern Ireland that it should have its full and fair share of revenue and should feel that it has a direct involvement in the calculation.
I agree with my hon. Friend the Member for Belfast, North (Mr. Stratton Mills). It seems that as it is drafted the clause gives authority to the Treasury to make the calculation of the Northern Ireland share. We are specifically abolishing the old Joint Exchequer Board. Whether that board ever met is another matter. I am not sure that it ever did meet but there was some kind of machinery to enable the voice of Northern Ireland to be heard in making the calculation. It would not be unreasonable to say that the Treasury should have the simple duty of consultation laid upon it.
The practical results may not be very dramatic but there would be some kind of reassurance to Members of the Assembly if they thought that the Ministry whose head would eventually be responsible to them had some kind of voice in this. It would permit a degree of discussion in the Assembly on the general subject of what would be a fair share. That would be useful to know and it would be useful for the Assembly to be able to discuss it. The Assembly could discuss it with the head of finance. To that extent I am inclined to go along with my hon. Friend the Member for Belfast, North.
The amendment is important for a variety of reasons. My hon. and gallant Friend the Member for Down, South (Captain Orr) referred to the Joint Exchequer Board, and I was tempted to ask the same question. But so complicated were the fiscal relationships between the erstwhile Northern Ireland Government and the Treasury that they were virtually incapable of being unravelled. I say this with some feeling, having spent intermittent periods over the last eight years in trying to work out exactly what was the basis of the financial relationships with the Northern Ireland Government and the Department.
If we now seek to establish a new constitutional arrangement in Northern Ireland, let us try and work out a fiscal relationship which covers basically two points. The first is that the share of Northern Ireland taxation should be determinable. I realise that this is immensely difficult when dealing with companies whose head and registered office is based on this side of the Irish Sea but with branches in Northern Ireland, profitable or otherwise, and, with the general taxation calculations that arise on the annual profits of these branch companies. But it should be possible, if not to get an accurate figure, to give some reliable idea which can be made public as to roughly the amount of tax revenue raised in Northern Ireland not merely by PAYE in companies registered there but by those companies and institutions which have branches in Northern Ireland, the share of dividends of Northern Ireland investors and so on.
From a general political point of view if such a figure could be ascertained it would be helpful. As long as there is doubt and uncertainty as to the sums involved, so speculation inevitably will be rampant and therefore unhelpful. I am not happy with the idea of the unilateral determination of revenue in Northern Ireland by the Treasury, for this reason: if there are two ingredients in any form of budgeting and accountability, and if the Bill provides, as it does, the new Assembly with a say in the manner in which the overall figure of expenditure should be allocated—in other words, if power is being granted over expenditure—similarly consultation should be granted in relation to revenue. Revenue is every bit as important in the equation as expenditure. Therefore, if expenditure powers are being granted to the Assembly it follows logically that we should also have a certain say about the revenue in the consultations. I therefore hope that the Minister will accept this very reasonable amendment, which covers a most important subject and creates a further degree of logically in the Bill.
I wish to draw attention to the vague phraseology of the clause encompassed in the words
amount as, in the opinion of the Treasury
may make regulations
It is incumbent on the Government to state the way in which the revenue will be apportioned.
I am sure that the purpose of the vague and permissive phraseology is simply to leave the options open and to cover situations that may not be visualised. But because of the trouble we have had over this matter in the past it is important that the Committee and the public should know how the cake will be sliced.
I shall endeavour to show that in tis part of the Bill the proposals are set out with some pre- cision. When I have explained how it will operate in practice, the Committee may agree that there is not much room for vagueness—nor should there be in this important area of financial provision—and that what is presented makes sense in a way that accords with the best principles of financial practice in public administration.
Under the Bill the Northern Ireland share of United Kingdom taxes will be determined by the Treasury, but in each case the determination must be in accordance with a method of attribution to be set out in regulations that will be contained in a statutory instrument. That is the important point to establish.
The Committee may have the assurance that the intention and aim is that there shall be regulations. They will be in the form of a statutory instrument that will ensure that Parliament is able to satisfy itself about the fairness of the tax share determination, because it will be subject to the negative resolution procedure.
The regulations mentioned in subsection (3) will be a good deal more precise than is indicated by the wording that is necessary to put the procedure in statutory form. There will be an annual determination, which will, in effect, be a mathematical exercise in accordance with the rules and formulae contained in the regulations under subsection (3) which can and will be scrutinised by the House of Commons. In practice, it is extremely likely that the regulations will be broadly similar to those that were adopted by the Joint Exchequer Board, and the Department of Finance will continue to enjoy its close relationship with the Treasury in such matters.
In practice, as my hon. and gallant Friend the Member for Down, South (Captain Orr) shrewdly diagnosed, the actual procedure, the method of calculation and the sums that will be produced will be little different from those produced when there was a Joint Exchequer Board. As my hon. Friend suggested, the board worked in the spirit of approving the calculations already made rather than as a negotiating body to batter out what the share should be. That was not the system in the past, and it is not intended to be the system in future
The determination of the Northern Ireland share of United Kingdom taxes will be a tightly circumscribed process, executed by the Treasury once the regulations have been promulgated. It would be inappropriate and unnecessary for there to be consultations on something that will be closely governed by regulations and will be on the lines of a mathematical exercise. It will be possible to debate the regulations upon which the exercise is based.
No. The regulations can always he discussed in the Assembly. There is nothing to prevent the Assembly discussing anything it wishes to discuss. But the Assembly would not have the power that the House of Commons has to negative the regulations. Certainly, in the Assembly opinions may be ventilated and discussions may be held on the regulations and the way in which they operate, and whether they are operating reasonably.
As we are, by the nature of the amendment, discussing the whole purpose of the clause and the mechanism by which the Northern Ireland share will be determined, I should say that in subsection (2) there is provision for "other appropriate costs" to be deducted when the calculation is being made of Northern Ireland's share, which will be the accepted tax proceeds after deduction of the cost of collection falling upon the United Kingdom. In case any hon. Member should think that there is anything sinister in the phrase "other appropriate costs", I should explain that it is intended to cover a deduction that might represent the Northern Ireland share of European Economic Community levies.
Under this subsection it is not intended to make deductions that are not strictly relevant to the tax-sharing concept. The phrase "other appropriate costs" is not intended to refer to deductions for reserve services—the old Imperial con- tribution that was featured in the previous deductions from the Northern Ireland share of reserve taxes under the outgoing procedure.
I hope that that assures my hon. Friends that they can be confident that the share of United Kingdom taxes attributable to Northern Ireland will be worked out in observable regulations, which may be scrutinised, criticised and discussed and which will be subject to the control that the House of Commons can exercise upon a statutory instrument. For these reasons I believe the amendment to be unnecessary. I advise the Committee that the procedure will work, and will be seen to work, and I hope that my hon. Friend will agree to ask leave to withdraw the amendment.
I am obliged to my hon. Friend for a very full reply, which has clarified our minds as to the way in which the procedure will work.
In the light of my hon. Friend's assurance that regulations will be made which will be published and be available for consideration by this House, so that the basis of the relationship is set out clearly in those published documents, I beg to ask leave to withdraw the amendment.