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Lord Dubs: I can understand why the noble Lord, Lord Cope, wants a fall-back minister to be able to make recommendations on financial matters, but I do not believe his solution will work. The Treasury may not make nominations to ministerial posts in the Assembly under Clause 15. The Assembly is a devolved government and should not be subject to direct influence or interference from the Executive. Even supposing that the Treasury could play such a role it would not be appropriate. The Minister of Finance and Personnel--or whatever title he may be given--will have a difficult role in needing to obtain cross-community support for major decisions. He must be given the trust and respect which a permanent substitute, standing in the wings, would scarcely allow him to develop.

I hope therefore that the noble Lord will feel able to withdraw the amendment.

Lord Cope of Berkeley: I am glad the Minister understands that I tabled the amendment because of the danger of there being a vacancy. However, he did not suggest a solution to the potential problem. In the phrase he used,

"The Minister of Finance and Personnel--or whatever title he may be given",

the Minister cast doubt on his Bill. If he is called anything else, as I see it he cannot act under this provision. If he was given some other title, then he would not be the person referred to in the section. In that situation a difficulty would arise.

Lord Skelmersdale: Before my noble friend withdraws his amendment, as he is clearly going to do, perhaps I can say that as the nomenclature of departments is in the hands of the First Minister and Deputy First Minister--according to the formula--they may easily come up with a different title. Will the Minister consider within the next few days whether it would be appropriate to substitute the words, "as nominated by the Treasury", for "nominated by the Assembly"? That would address his point and help out my noble friend.

Lord Geddes: I apologise to the Committee for taking any part in this debate; I have not taken part before. This specific point seems to me to be a simple and practical one. As the Minister said, there may not be a Minister of Finance and Personnel as such. Would there then be the ludicrous situation such that primary legislation would be required to change what would then be the Act? Surely there is an easy way around this, such as was suggested by my noble friend.

Lord Dubs: Let me see whether I can help. We cannot prejudge whether there will be specifically a

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Minister of finance and personnel, but the arrangements for allocating ministerial functions and, if necessary, for transferring such functions will ensure that a Minister remains responsible for that function. If a vacancy arises, Clause 15 provides for such a vacancy to be filled by the nominating officer of the party concerned. I believe that we have covered all such contingencies reasonably satisfactorily. As I said earlier, if we assume that the Assembly will fail in some way, we are simply encouraging a mentality of failure, which is surely not helpful. We have to believe that the Assembly will succeed in this as in other matters.

Lord Cope of Berkeley: We have had an exchange on that matter previously. However, I believe that in drawing up the legislation, we must consider some contingencies and the fact that the whole thing may not go entirely smoothly.

With regard to this clause, we still have the difficulty that at some point the Assembly may want to give the Minister fulfilling that role a different title. The Assembly may want the responsibility for personnel to rest with a different department from that with the central responsibility for finance. That has happened here in Great Britain. The Minister responsible for the Civil Service looks after the personnel side. The same could easily happen over there.

Therefore, I shall give further thought between now and Report to the possibility of altering the clause so that it refers to "the Minister responsible for finance" or another such more general phrase because that may cover that aspect of the difficulty.

Lord Dubs: Perhaps I may make one further comment. I am advised that a Minister with a different title cannot act in the way suggested, but the arrangements for the transfer of functions will ensure that a Minister with a different title can inherit the functions of an existing department or Minister. I believe that we have still covered the point.

Lord Cope of Berkeley: That sounds very interesting and I shall consider it between now and Report in deciding whether to table another amendment. However, I shall not pursue that now and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Lord Cope of Berkeley moved Amendment No. 126:

Page 24, line 42, leave out from ("Crown") to end of line 1 on page 25 and insert--
("(2A) Notwithstanding any other provision of this Act and any Order in Council made under the provisions of this Act, the Assembly shall neither impose nor vary taxes.").

The noble Lord said: I believe that this amendment is fairly clear. It seeks to place beyond peradventure the fact that the Assembly and the Northern Ireland Government cannot impose or vary taxes. We shall come later to some slightly confusing or at least oddly

21 Oct 1998 : Column 1500

worded provisions on taxation. I note that the Government have tabled some amendments to those provisions which will probably improve them.

I believe that it is clear--I am suggesting in the amendment that it should be made very clear--that the Assembly will not be a tax-raising body. The particular form of devolution chosen for Scotland provides for a tax-raising body although that for Wales does not. I believe that we need to make clear what we are doing in this case. I beg to move.

Lord Holme of Cheltenham: I am not persuaded of the necessity for this amendment. It seems redundant to insert into the Bill references to those things that the Assembly shall not do. However, to the extent that this is a philosophical issue, I think that there is probably a difference between the Conservative Benches and our own. I believe that ultimately the logic of devolution is that there should be greater tax-raising--or at least tax-varying--powers in the bodies to which power is devolved to the nations of the United Kingdom, including Northern Ireland. However, I am content for the present because we are all clear that the Assembly shall not have such powers in the short and medium term. I do not like the amendment, however, because I would not like it to appear that that option is closed for ever when it seems to me to be the logical development over time of the principle of devolution.

Lord Molyneaux of Killead: I referred to this thorny subject at an earlier stage. I am not in favour of a devolved assembly, wherever it may be in the United Kingdom, having tax-varying powers, because ultimately everything depends on Treasury decisions. However, the problem is that in the early years of the existence of this Assembly--the same would apply to an even greater extent in Scotland--extra funding will be required (from whatever source) for the simple reason that so much is expected of the devolved structures. So much is being promised by those who in Northern Ireland have stood for election and by those who--Heaven help them!--will stand for election in Scotland that they will make promises which they cannot possibly deliver when they come into office. It might be a salutary safeguard to have on the face of the Bill a clear statement that, however great the pressure applied, Members of the Assembly cannot be expected to find an easy way out by increasing taxation.

I believe that it has been estimated that in Scotland taxation may vary--may be raised--by up to 3p in the pound and that, on current calculations, that is intended to produce about £450 million. However, having read the Scottish papers, I believe that about three times that amount will be required if all the promises being made by the parties which are striving for electoral support are to be fulfilled. I support the amendment because it is important clearly to establish that however great the needs, the demands and the clamour, such a power will not be available.

Lord Desai: Perhaps I may raise one small point. On an earlier occasion, the noble Lord, Lord Rathcavan, pointed out that when attracting investment Northern

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Ireland is competing with the Republic, which has a much lower rate of taxation. That is why it may be necessary to consider such powers. Why, therefore, seek to put such an amendment on the face of the Bill when it merely makes life difficult?

Lord Dubs: I think that this amendment reflects a misunderstanding. The reference in Clause 49(2)(d) to,

"imposes or increases a tax",

does not give the Assembly power to impose general taxes of a type which are normally levied on a UK basis such as income tax. It refers only to local taxes and in practice to the regional rate--there is no community charge in Northern Ireland--which, as a purely local tax, it is perfectly suitable for the Assembly to levy.

If your Lordships look at Schedule 2(9) to the Bill, which I hope will be slightly amended to cover duties as well as taxes, you will see that taxes under any law applying to the United Kingdom as a whole are in the excepted category, which means that they are permanently outside the competence of the Assembly. They cannot change category by order. They can be changed only by a subsequent Act of this Parliament. So there is no possibility of the Northern Ireland Assembly being able to levy, for example, income tax, but it can levy taxes which are not levied on a UK basis such as rates. This is the power which the Assembly has had in the past and it is right that it should continue.

Reference has been made to the possibility of the Assembly having tax-varying powers generally. There is no provision in the agreement for the Assembly to have a wider tax-varying power so that it could, for example, vary income tax. The issue was put to the parties both during the talks and afterwards but there was no great degree of support for it. It will be open to the Assembly to ask for such a power in future if it wishes. I hope, therefore, that the noble Lord will feel able to withdraw the amendment.

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