Committee (4th Day)

Part of Scotland Bill – in the House of Lords at 2:00 pm on 15th March 2012.

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Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 2:00 pm, 15th March 2012

Not at all. I do not remember those days but then the noble Lord is a little older than me. However, he is absolutely right. His key point was that 50 per cent of the revenue was raised on the rates. However, the Government are using this dodgy figure of 30 per cent, which excludes capital expenditure from the base line. If one were making a reasonable assumption of how much would be raised in taxation, the figure would be nearer to 15 per cent than 30 per cent, but it is only a small part. Of course, in those days Edinburgh council was run reasonably well. My point is that here we have a whole load of post-dated cheques and expenditure that cannot be afforded. It will fall on Scottish income tax and that will have a catastrophic effect on the Scottish economy in terms of both growth and the living standards of the people of Scotland. That is why I am saying that, if you are going to do this, at the very least make sure that you can blame it on the electorate who voted for it, rather than people stumbling into it without being aware of the consequences.

I do not like playing the part of Cassandra but the numbers are there for all to see, and they do not come only from partisan, political people such as me. Professor Bell at Stirling University has done a lot of work on this, and the numbers simply do not add up. I say to the noble Lord, Lord Browne, that Alex Salmond and the nationalists will use the fact that the numbers do not add up and that income tax will go up to blame Westminster, and we will get into the same old argument about the size of the grant and so on. If the noble Lord's argument is, "Let's not have the distraction of a referendum on Scottish income tax because it will mean that people do not focus on maintaining the union", then it is an argument for which I have some sympathy. It is the most powerful argument that I can think of for dropping the Bill altogether and coming back to it after we have resolved that position. On the same basis, the noble Lord argues that it will be a distraction. Of course, whether it becomes a distraction will ultimately depend on whether Alex Salmond deigns to give us permission to pass it on for Royal Assent, and we wait with bated breath to hear his latest thinking on that.

We have had a good debate. I do not propose to press this to a vote but I urge my noble and learned friend and Members of the House to look at the arithmetic in relation to how this tax is going to work and what it is supposed to cover. I beg leave to withdraw the amendment.

Amendment 53 withdrawn.

Amendment 53A

Moved by Lord Forsyth of Drumlean

53A: Clause 30, page 23, line 6, at end insert-

"( ) If the application of the Scottish Rate would result in a Scottish taxpayer paying a higher rate of tax on non-savings income than an equivalent taxpayer in the rest of the United Kingdom, the Scottish Parliament shall consult interested parties before passing such a resolution."