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The First Deputy Chairman: Order. The right hon. Gentleman should resume his seat while I am talking. He should direct his remarks to the amendment. I am reluctant to interrupt his speech but it is going wide of the amendment.
Mr. Ancram: I thought that I was addressing the amendment. Our amendment No. 145 requires the leaving out of the word "varying" and the insertion of the word, "raising".
The First Deputy Chairman: The amendments, including the right hon. Gentleman's, are about tax-raising powers. That is what he must discuss. The wider issue of devolution is not up for debate. It is not my fault that the amendments are so restrictive, but he must stick to them.
Mr. Ancram: I accept your ruling, Mr. Martin. My difficulty, which I am sure that you share, is whether tax-raising powers are likely to be used. That will be in the minds of voters at a referendum. For them to be able to make a judgment they will need to know what powers a Scottish Parliament is to have. My point--I hope that I am not transgressing--is that if that question is to be posed in that way and is to make any sense to voters at a referendum, they will require that extra information. I am suggesting--within the limits of the amendments, I hope--that the Government have approached the issue as they have because they know that providing that information in detail, or even accepting the substitution of "tax-raising" for "tax-varying", suggested by the hon.
Member for Orkney and Shetland, would damage their chances of getting their proposals accepted in a referendum.
Sir Teddy Taylor (Rochford and Southend, East): Does my right hon. Friend accept that the least that the people of Scotland need is a clear undertaking that the favourable grant formula, which is very beneficial to Scotland, would not be affected by the tax-raising powers? Is it not vital that there should be a yes or no from the new Secretary of State on that point before any referendum?
Mr. Ancram: I am grateful to my hon. Friend for providing another question to add to my list of important questions that need to be addressed if people are to make a reasonable choice in the referendum. The Secretary of State arrived a few minutes ago and raised his eyebrows, but he had not heard the debate. I think that he and I were in the same studio in 1979 when the results of the referendum came through. He arrived in the morning triumphant, expecting an overwhelming vote in favour of devolution. At the end of the day, I think that the figures were 33 per cent. for and 31 per cent. against, with the rest not bothering to vote. That was because the people of Scotland had the information on which to make the judgment. If we are to take seriously his assertion that the referendum is a democratic exercise, we need the information that I have asked for. If the amendments are passed, we shall be able to get it.
Mr. Dalyell: I wonder whether we could have some clarification, perhaps tonight, on who is to pay the tax. Is it to be anyone domiciled in Scotland? Some of us want an early statement on that, because, as I said during the debate on the Queen's Speech, part of the difficulty is that in international taxation, state borders provide the touchstone for separating the taxing rights of one fiscal regime from those of another. Where the border is not real, the imposition of tax by reference to the familiar tests of residence, domicile, source of income and location of trading operations is likely to be complex and expensive at best and unfair and a major brake on business in Scotland at worst.
We must face up to the issue. I listened with great care to the hon. Member for Orkney and Shetland (Mr. Wallace). If we are not careful, England will be, de facto, a tax haven, given that the border is not real in the way that federal states have real borders.
Mr. Wallace:
The hon. Gentleman is raising an important point which, when we come to the White Paper and the devolution Bill, will rightly be dealt with in
At the moment, we have a border that is a legal border because there are important differences between living in Carlisle and living in Dumfries in terms of criminal law and juvenile justice. At the moment, we have a meaningful border. Although there are many advantages in federalism, the border issue will not necessarily be any more clear cut with a federal state than under the proposals that we are debating.
Mr. Dalyell:
These are complicated matters. I reply partly in terms of a problem that the hon. Gentleman raised--the problem of Scots who may spend a considerable time, possibly more than half the year, working outside Scotland. That point is not just an Aunt Sally; it is the problem of those who have rotating jobs. The matter was raised in acute form the other day by one of the major employers, Mr. Stewart of Scottish and Newcastle, who said that it was a real problem for the company's many executives and middle-rank employees. There should be early clarification of the matter because the more information we have the better and the healthier the debate will be.
We must get clear the residency rule. What about those who are on temporary secondment? That is a very real issue because there are lots of people on temporary secondment, which operates in both directions. It is no good saying that this is an arcane issue. For my sins--I do not know whether the Secretary of State has had the same experience--I was a member of nine Finance Bill Committees. One learns that one is legislating not for people of good will or for the mass of people who want to do the right thing, but for those who want to exploit the law to the fullest extent in order to get maximum benefit for themselves. That is part of the reason why laws have to be so tight in this case.
Mr. Fallon:
Is it, therefore, the hon. Gentleman's position that we cannot finalise the details of either clause 1 or the shape of the ballot paper until we receive answers to those questions?
Mr. Dalyell:
I have always taken the view--I have to be totally candid about this--that the meaningful referendum is on the question, "Do you approve of the 1997-98 Scotland Act as passed by Parliament?" Incidentally, throughout the election, that was the answer I made crystal clear to anyone who cared to ask. I am saying nothing in June that I did not say in March and April. I make that quite clear.
The Secretary of State courteously gave me a response in our previous debate on the Barnett formula--on the key question of whether the Barnett formula is to be preserved. I looked carefully at the response and I wish to ask the Minister who will wind up whether he is in a position to add anything to the answer that I was given the last time I asked the question.
Mr. Salmond:
I was interested, as always, in the speech made by the hon. Member for Linlithgow
Mr. Dalyell:
It never occurred to me in my wildest dreams that it would be a pre-legislative referendum. My constituent in Linlithgow, if I may so refer to the hon. Member for Banff and Buchan (Mr. Salmond), is right to say that I was described as lonely and isolated. Various other comments were made at the same time, but we will stick at lonely and isolated. Never did I dream of anything other than a post-legislative referendum on the final outcome of the parliamentary discussions.
Mr. Salmond:
I happily accept the designation as the hon. Member 's constituent. I did not vote for him--after much reflection, I decided to vote in Banff and Buchan--none the less, I am well represented in the House by the hon. Gentleman's efforts, and if I ever have a problem I will beat a path to his door.
I accept that if we are to have a referendum on the proposals, it is more logical to have a post-legislative referendum. That is a reasonable point to make. I would like an assurance from the Minister that, if he has his way in the pre-legislative referendum, we will not also have a post-legislative referendum.
Mr. McLeish
indicated dissent.
Mr. Salmond:
I see a helpful shake of the head from the Minister. Given the litany we heard from the hon. Member for Orkney and Shetland (Mr. Wallace) of the permutations that the policy has gone through in the past year, I am sure that the Minister will accept that we need his firm assurance on that point, much to the disappointment of the hon. Member for Linlithgow and the Conservatives but to the great relief of the rest of us.
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