David Cameron is claiming that the so-called devolution of tax powers to Scotland announced yesterday will mean that Scottish MPs should not vote on English tax matters. This is absurd, and pure political hypocrisy on his part.
As I made clear yesterday, the amount of actual tax power being devolved is tiny. To be precise, the only two taxes where it is true that power is being devolved are the aggregates levy and air passenger duty. That is it. And if anyone thinks those two issues are enough to create a reason for constitutional change then they have lost all sense of political reality.
The reason why Scottish MPs do still need to vote on income tax does need to be explicitly stated though. In doing so I should note that tax paid is not just a function of the tax rate, but of the tax base to which that rate is applied. In other words, you can vary the tax rate however much you like but if there is no tax base there is still no tax. Therefore, and in many ways most importantly, control of the definition of the tax base is much more significant than control of the tax rate when it comes to determining tax yield. And under the deal agreed yesterday every single definition of the tax base to be used in Scotland remained with Westminster. To put it in proportion, defining the tax rate takes about a page of Westminster law each year: defining the tax base takes many hundreds.
But, and vitally, Scottish MPs have also to vote on the 'English' tax rate too because under the deal agreed this 'English' tax rate will directly or indirectly apply to savings and dividend income in Scotland (quite absurdly). So of course Scottish MPs will have to vote on it - or there would be taxation without representation.
In that case Cameron might politely ask Scottish MPs not to vote on the aggregates levy and airport duty in England, Wales and Northern Ireland if he wishes, but if he went further he'd be seeking to disenfranchise a large proportion of the UK on the key issue of defining the taxes that they pay - and that would take us back, constitutionally, hundreds of years and in some ways to an era pre Magna Carta. I have long thought Cameron's a fan of neo-feudalism, but this claim that the Scots should not vote on the taxes that they pay should promote something more than a Tea Party: it's a call to revolution if he gets his way because it would, in my view, trigger a constitutional crisis of quite staggering scale. This one has to be fought, long and hard because, if anything, it resolves the West Lothian question once and for all by making clear that in a United Kingdom there is nothing that an MP should be denied the chance to vote upon when the chance that it will be of relevance to their constituents is bound to exist.
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SO should the English and Welsh Mps vots on Scottish matters as well???
No, not if they have voted to devolve them
The truth is we have a “massive constitutional crisis” already. Independence is only a matter of time.
On that we agree
The transfer tax for transactions in land has already been devolved: Scotland will have its own separate Land and Buildings Transaction Tax (LBTT) from 1 April 2015, while rUK keeps Stamp Duty Land Tax.
Of course Scottish MPs should continue to vote on tax matters that directly affect their constituents, including the income tax base and income tax on savings income and dividends. You suggest that Scottish MPs could be asked to refrain from voting on rUK aggregates levy and air passenger duty. What about SDLT, or the rates and thresholds of income tax that apply to savings income and dividends received by non-Scottish taxpayers? There is a nasty can of West Lothian worms here.
As I understand it, although the Westminster Parliament retains the ability to legislate on devolved matters, under the Sewel Convention (now to be enshrined in legislation, I believe) it won’t do so without the consent of the Scottish Parliament.
Scot Nats never vote on English matters
SDLT is not a big deal (let’s get real) and there will no savings rates different from England
There are no West Lothian issues of any significance at all in there – unless you make mountains out of the smallest mole hills
SDLT not a big deal? It raised nearly £10 billion in 2013-14! (Much of that in London, of course, rather than Scotland.) I think that is somewhat more than CGT and IHT combined. Sure, it is not in the same league as the £100bn plus raised by each of income tax, NICs and VAT, but the other taxes account for about a third of the total tax take.
(Sorry, should have said “rates and thresholds of income tax that apply to *non*savings and *non*dividend income received by non-Scottish taxpayers” – savings income and dividend will be the same in Scotland and rUK so, they should have a vote, but Scotland will have its own rates and thresholds for earned income, so why should they vote on “our” rates and thresholds?)
So it’s a devolved tax
So are business rates, already
But it’s not enough to create a constitutional issue
Shall we keep matters in perspective?
Oh, should also have added that landfill tax will also be devolved from 1 April 2015.
And I believe council tax and business rates are already devolved – another significant source of tax revenues, about £26bn each year across the UK for each tax.
Hardly surprising these are devolved, is it?
All local authorities control their council tax and business tax is to be partly devolved in the rest of the UK whilst landfill tax hardly justifies the name – it’s a charge
It should be simple.
All Westminster MPs should be equally able to vote on all legislation that arises at that parliament.
Similarly, all Scottish MPs should vote on legislation at that parliament.
The question then is what laws are voted on by which parliament.
If the English are foolish enough to put forward legislation that applies only to England in a legislature that contains Scottish MPs in the absence of an English or regional parliaments then that is their problem.
The English need to wake up.