Committee (4th Day)

Part of Scotland Bill – in the House of Lords at 6:00 pm on 15th March 2012.

Alert me about debates like this

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative 6:00 pm, 15th March 2012

My Lords, the effect of the amendment is to increase the tax-raising powers of the Scottish Parliament to include air passenger duty as part of its revenue. It is a probing amendment. I do not want to go back over earlier debates which provided for an order-making power for Ministers to designate new taxes as devolved taxes, which is a thoroughly undesirable innovation. It is dangerous because it is so open-ended in its commitment-notwithstanding the procedure, which is also undesirable.

In responding to the question of why there should be a general power for Ministers to allow the Scottish Parliament to introduce completely new taxes, my noble friend said that Calman said that there should be a general power to provide for specified taxes. Of course, in the Bill, that has been turned into any tax anybody can think of. I would like to see the Bill amended to bring it back to specified taxes. My noble friend will have spent longer reading all the consultation documents and the other material that has been produced than I have, but it seems that the aggregates levy and air passenger duty are two taxes that were specified by Calman but are not implemented. I thought it might help the Minister to include air passenger duty and the aggregates levy. There would then be no need to have the power to deal with the specified taxes, because they would already be in the Bill and we would have an opportunity to consider their merits.

I look forward to hearing the reasons why the Minister thinks that air passenger duty should not be devolved to the Scottish Parliament and provided for in the Bill. This is an example of where the Scottish Parliament might cut rather than increase taxes. It is a tax in a country that is highly dependent on tourism and on people who commute from Scotland to London-I suppose I ought to declare an interest here. It may very well make sense to get rid of air passenger duty, or not to tax aeroplanes rather than passengers, which has resulted in us all paying huge fares and being crammed into planes that are packed to the gunnels. The number of flights to Scotland is being cut, the fares are now astronomical-more than £500-and the air passenger duty is going up. I have been going to the car park at Edinburgh airport and observing it for the past 29 to 30 years. They have expanded it but I now see lots of spaces where there were none before. Air passenger duty has an economic impact not only on the business community but also on tourism and so on.

This is exactly the kind of tax that the Scottish Parliament might cut or reduce for economic benefit, although these are obviously arguments for the Scottish Parliament. I hope my noble friend will forgive me if I embarrass him, but I observed him answering a Question on the impact of air passenger duty on international flights, when he had to justify the way that tax bands operate in terms of countries and distance. It was one of those occasions when the Minister has a brief that will not stand up to scrutiny because clearly a mistake has been made somewhere along the line.

The Government seem to be very concerned about this, but if the Scottish Parliament was given these powers, it would also help-I note the noble Lord, Lord Foulkes, is not in his place-to change the position that we have at the moment where there is excessive dependence on a section of a narrow part of the tax base: the 10p on income tax. At every stage of this Bill, both the noble and learned Lord, Lord Wallace, and my noble friend have repeatedly told us that they are implementing the Calman recommendations-and that doing so was a manifesto commitment. This was a Calman recommendation and was consulted on. For all these reasons, I am longing to hear from the Minister on why it is not in the Bill.

I can see arguments against it. Indeed, someone sent me an e-mail from Newcastle asking me what I thought the effect would be on Newcastle airport. That is an important point. If the Scottish Parliament gets control of air passenger duty, I think that it will cut it and perhaps Newcastle airport will be able to persuade the Government that, worthy as the green agenda may be, this kind of tax is hugely damaging to our economy and to tourist interests. But that is a debate from another day. I beg to move.