Scotland Bill — House of Commons, 2015-06-29
Topic: Macroeconomics
Ian Murray (Labour, Centre-left): Nothing ever surprises me, although I was a little surprised last week that the 56 SNP MPs went through the Lobby with the Thatcherite arm of the Conservative party. That was because full fiscal autonomy would deliver something that would be fundamentally damaging to Scotland. The hon. Lady is absolutely correct. [Interruption.] I thank her for waking up all the SNP MPs with her intervention The Smith agreement said: "Income Tax will remain a shared tax and both the UK and Scottish Parliaments will share control of Income Tax. MPs representing constituencies across the whole of the UK will continue to decide the UK’s Budget, including Income Tax…Within this framework, the Scottish Parliament will have the power to set the rates of Income Tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers" That is exactly what the Bill does, and it is important to highlight two aspects of that quotation. First, maintaining income tax as a UK-wide tax is critical to the continued pooling and sharing of resources. That facilitates UK-wide redistribution on the basis of need, which underlines the welfare state and the state pension system. The Church of Scotland expressed the same view when it argued for "a degree of solidarity across the United Kingdom, where prosperity is shared and those with broadest shoulders can carry the extra weight of supporting those less fortunate." Secondly, the Smith agreement explicitly mentions the continuing right of Scottish MPs to vote on the Budget within the framework that it sets out. That is equally important, particularly given the Government’s proposals on English votes for English laws. Devolving income tax in its entirety, which the hon. Members for Dundee East and for Gainsborough are advocating, would place that right in doubt and create two classes of MP in this place. That risk was the subject of considerable debate in the Smith commission. As long as one believes in the pooling and sharing of resources, which we certainly do, Smith’s recommendation to retain income tax as a shared tax is critical. That is why we reject amendment 124 and new clause 54, which was tabled by the hon. Member for Dundee East New clause 32 concentrates on the implementation of the powers being transferred and, as I have said a number of times in this Committee, the use of those powers. What we are trying to achieve chimes with much of what the hon. Member for Dundee East said, when he laid out the concerns about how the proposals would be monitored, how the number of income tax payers would be determined, the "no detriment" policies across the United Kingdom and the complicated nature of the fiscal framework The report under new clause 32 would include "a review of the revised fiscal framework", given its complicated nature. It would also include "the tax year to which sections 12 and 13 of this Act will apply, and the day on which they are due to come into force" so that businesses are able to plan. It would include details of the number of staff that both Governments would assign to the implementation of the new Scottish rate of income tax to ensure that adequate resources were deployed to make it happen. It would be useful if the Secretary of State responded to the particular concern that the staffing level to determine the Scottish rate of income tax might be deficient.