My Lords, I do not propose to rehearse all the arguments that we have just had, although I am being encouraged to do so by the Front Bench opposite. However, I shall resist the temptation.
This amendment would require the Scottish Parliament to consult before setting the Scottish rate of income tax if it was intended that the rate should be higher than that of the rest of the UK. This seems to be a perfectly reasonable request. Some people may argue that the Chancellor does not consult before he sets a rate of income tax, but we are not talking about setting a rate of income tax here; we are talking about setting a differential rate of income tax within the United Kingdom, and that will have a profound effect. We are talking about setting a differential rate of income tax which applies to only certain types of income.
Following consideration of these matters in the other place, there are still a lot of uncertainties about what the impact will be. I am not clear about that and perhaps my noble friend will be able to enlighten us. For example, what is the position on tax reliefs with a higher rate of Scottish income tax? Will tax reliefs on charitable contributions apply at the higher rate? Will all allowances based on gross income apply against the Scottish rate or the English rate if there is a differential? If the Scottish Parliament sets a higher rate, I think it is very important that representatives from business, charities, pension funds and other institutions are given an opportunity to be consulted on the likely impact and incidence of the tax.