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Baroness Strange: I support my noble friend in the amendment, which is tabled also in my name. I assure the noble Baroness that I shall not speak about rafts, or anything like that, so she should be happy. I say only that the amendment puts forward an easier, more simple clause, as suggested earlier by the noble Lord, Lord Mackie of Benshie.
All Members of the Committee want the new parliament in Scotland to work. That is why we are spending so much time on the Bill. We are fussing with all these amendments because we want to introduce something which will work. We do not want to build in legal complications and have unhappy lorry drivers travelling backwards and forwards in the night.
Clause 71 is enormously complicated and full of traps and pitfalls. I hope that the noble Baroness will consider what has been stated by the chartered accountants, the Law Society and the CBI. We are only their mouthpieces--inadequately, in my case--but we are trying to make the Bill work. I support the amendment.
Lord Selkirk of Douglas: I speak briefly to Amendment No. 285. It has the support not only of the Law Society of Scotland but of the Institute of Chartered Accountants of Scotland and the Scottish CBI. Therefore, there is a strong basis of support for the amendment from a wide range of bodies which have an undoubted expertise in dealing with such matters.
The Committee has already heard the case for subsections (1) and (2). I support the arguments put forward by my noble friends, in particular my noble friend Lord Lyell who so ably argued the case of the lorry driver who will be caught by the midnight provisions if he travels to Scotland every week. As the Bill focuses on midnight, someone living in Carlisle who crosses the Border at 8 a.m. and returns at 6 p.m. does not fall within its ambit, although he or she may have a more substantial connection with Scotland than a lorry driver.
I contend that the provisions put forward in Amendment No. 285 are a more certain test than that in the Bill. It relies on residency in the UK and closest connection with Scotland. It is also a more satisfactory test in the sense that it could be more readily established. The present provisions try to cope with the position of the Scot who maintains a home and family in Scotland but commutes to England on a Monday morning and returns to Scotland on Friday evening. Unless one counts the weekend as four days in Scotland, that person would escape the taxation provisions. The question is: which approach might do more economic harm; a narrow tax base which allows some to escape undeservedly or a wider area which will catch others undeservedly?
The better and more professional approach would be to exempt those who travel to Scotland in the course of work, whether employed or self-employed, unless they are in Scotland for 183 days. For this purpose, a day would count only if one were in Scotland at the start and the end of it. I commend the amendment on the basis of certainty and clarity. The practitioners most directly involved with the subject give it strong support.
Lord Rowallan: I am deeply concerned about Clause 71. It is illogical to introduce a new definition of what is resident in Scotland. The noble Lord, Lord Mackie of Benshie, put the matter succinctly in saying that perfectly good laws already exist which define people as being abroad or at home. Why are we seeking unnecessarily to have a set of totally new rules?
It is interesting that the chartered accountants, the CBI and the Law Society believe that the clause is rather stupid. I can see no reason for changing the 183-day rule. I should like to hear from the Minister one single solitary reason why he believes it is a good idea.
Lord Stewartby: I hope that the Minister will take on board the comments that have been made in Committee tonight and those which have come from quarters outside. The heart of the problem lies in subsection (4) and the asymmetrical nature of what residence in England and Scotland means. As my noble friend Lord Lyell said in opening, the provision could affect a number of those who are temporarily in Scotland. As my noble kinsman Lord Selkirk point out, the weekend definition must have double counting, otherwise it does not offset the part of the week which a person might spend in England.
The simple mathematics are that if one spends 92 nights in Scotland in a year one is deemed to be resident for this purpose in Scotland and not elsewhere in the United Kingdom. That is asymmetrical. It will catch many people who may spend nine months in England and Wales and only three months in Scotland. I do not believe that such an artificial distinction which tilts the ordinary equitable definition of residence will be enforceable. What is more, I doubt whether it will be sustainable in law. I suggest that the Government think seriously about it.
Lord Steel of Aikwood: As my noble friend Lord Mackie hinted earlier, we on these Benches are sympathetic to attempts to redraft the clause before us. In my view, each of the three amendments is more succinct and clearer than the provision in the Bill. I do not know whether it is a pig's breakfast or a dog's dinner, but it is unnecessarily complex. We in this House, as a revising Chamber, ought to be aiming for simplicity in legislation, provided that simplicity brings clarity. We will listen to what the Minister has to say, but we are sympathetic to the amendments.
Lord Milverton: As an Englishman, I have been interested to hear what has been said. I agree that it is a strange way to deal with the residency issue. It would be good if the Government and the Minister could take on board what has been said by Scottish Peers and try to respond in a helpful way.
Lord Simon of Glaisdale: It requires an apology on my part for intervening in this debate. I do so because I have been concerned in more than one capacity with the revenue law. Our revenue law is extremely complicated, far more so than the codes of the United States and the Commonwealth. A high-powered committee, with the blessing of the Government, is considering a way of restating the law in more simple terms. It is purely to restate the present law in a more intelligible way. But there is a vice in our revenue law in that we try to cover particular cases too precisely. We do so much more than most other comparable codes.
Clause 71 does not add anything to the simplicity of the preceding existing law. The proposed restatement in these three amendments are an improvement and should be acceptable. If I had to choose between them I would choose Amendment No. 283 because it is the most simple and covers everything that the Government needs.
I hope that whoever replies to this debate will desirably accept that amendment. At the very least they should undertake to consider this matter further in view of the arguments which have been put forward.
Lord Mackay of Ardbrecknish: Amendment No. 284 is in my name and that of my noble friend Lord Rowallen. I am delighted and relieved to find myself in total agreement with the noble and learned Lord, Lord Simon of Glaisdale. I am delighted because occasionally in a previous existence I found myself having to argue with him. I can tell the Ministers that it was not an easy experience and that usually the noble and learned Lord, Lord Simon, had more than a point in the arguments he brought forward. Government Ministers should listen to him.
I will not rehearse the argument to any great extent. We have had the argument in this debate and in the debates leading up to it. I know that the Government were beginning to lose patience with these arguments, but I put them forward deliberately in order to illustrate to the Committee the complexities of this clause.
The noble Lord, Lord Mackie, came to my support when he said that there is a perfectly good system already. Why do we not just use it? "What are you bothered about?" he said to me. I paraphrase the noble Lord, but what I am bothered about is that we will not be using the system.
Lord Mackay of Ardbrecknish: The noble Lord, having heard much of the debate since, might agree that perhaps it is not a good system in Clause 71 and 72. Certainly that is what his noble friend Lord Steel of Aikwood suggested. I am happy to say that I find myself in agreement with the noble Lord, Lord Steel of Aikwood, on this one.
These three amendments are all similar. The noble and learned Lord, Lord Simon of Glaisdale, picks the one that is shortest. I am not surprised at him at doing that because he is a great advocate of not only clear but short legislation.
The history of the amendments is that Amendment No. 283 emerged from the accountants in Scotland, Amendment No. 284 came from the CBI and Amendment No. 285 came from the CBI, and then from a combination of all three organisations. All three organisations now think that the clause in the name of my noble friend Lord Selkirk of Douglas is the one that encompasses all their concerns.
This simply takes on board the definitions already well entrenched in UK tax legislation, well entrenched in case law and well understood by the people who have to work the system about who are residents and where they are resident. If the Government could take this on board, take these amendments or one of them--perhaps Amendment No. 285, or even Amendment No. 283, as the noble and learned Lord, Lord Simon of Glaisdale, suggested--we would be delighted.
The definitions in this Bill are a real nightmare. Without doubt this is the most complicated part of the Bill. The Government would be well advised to think again about proceeding in the way that they intend. I cannot speak for my noble friends but what would allow me to withdraw my amendment is if the Government promise to have discussions with these three leading organisations in the field in Scotland. They could then come back to us on Report with their proposals on the way forward and remove these complex clauses which do nothing to help the legislation. If they could do that and go for the simpler and well-honed definitions of residence which are contained in current legislation we would all be mightily relieved. The system would then work far better for the Scottish parliament. A lot of unnecessary argument would be prevented and the position would be much better. The Government would have been shown to have listened.
I regret that one of the features of this Committee stage--and this is the ninth day--is that the Government do not listen. I have long since decided that they are not going to listen to me, but can they not listen to the CBI, the Law Society of Scotland and the Institute of Chartered Accountants? If they cannot listen to me, will they listen to them? I commend these amendments to the Government. Perhaps they can give some indication that they will accept one of the amendments, or at least discuss with these outside bodies and come back on Report. I cannot speak for my noble friends but I give the Government notice that if they do not the House will be asked to test one of these amendments in a very serious way in the Division Lobbies on Report.
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