17:36 - The House divided: - Ayes: 287 / Noes: 239 - Question accordingly agreed to.
The Leader of the House of Commons (Mr David Lidington)
I beg to move,
That:
(1) In Standing Order No. 83S(3)(c), after the paragraph (4A) treated as inserted in
Standing Order No. 83J, insert-
“(4B) In addition, a clause or schedule-
(a) relates exclusively to England, Wales and Northern Ireland, and
(b) is within devolved legislative competence,
if it does nothing other than set one or more of the main rates of income tax for a
tax year.”;
(2) In Standing Order No. 83S(3)(d), at the end insert “and”;
(3) In Standing Order No. 83S(3), omit sub-paragraph (f), and the “and” preceding it;
(4) In Standing Order No. 83T(2)(c), for “, (7) and (12)” substitute “and (7)”; and
(5) In Standing Order No. 83U(8), for “(4A), (7) and (12)” substitute “(4B) and (7)”.
As hon. Members will be aware, the Scotland Act 2016 received Royal Assent last year. The Act provides the Scottish Parliament with the power to set its own rates and thresholds of income tax. For that reason, the Government announced in the 2016 Budget changes to the structure of income tax intended to ensure that from the Finance Bill 2017 onwards, a clause setting the main rates of income tax would be certified under the English votes procedures. In other words, the consent of hon. Members from constituencies in England, Wales and Northern Ireland would be required for any income tax matters that affected their constituents and that did not affect Scottish taxpayers. The necessary legislative changes to achieve this were made in the Finance Act 2016, and mean that from April this year, these UK main rates will no longer affect Scottish taxpayers.
The technical amendments to Standing Orders before us will ensure that provisions setting the main rates of income tax will be subject to a certification decision by the Speaker now that the Scottish rates of income tax are set by the Scottish Parliament. It will mean that the Standing Orders on which Parliament has already voted will work as originally intended, but now taking account of the new element of the Scotland Act 2016.
Ian Murray (Edinburgh South) (Lab)
I am grateful to the ever-generous Leader of the House. If the Chancellor were to come to the Dispatch Box and deliver a Finance Bill in which he said that the rates of income tax in England and Wales would alter and that, on that basis a different set of taxes, which were still reserved, would be altered—national insurance, for example—would this English votes for English laws clause be appropriate?
Mr Lidington
It would be a matter for certification by the Speaker. As in all other such matters as provided for already under our Standing Orders, the Speaker’s test has to be whether the content of the clause or amendment under discussion is devolved to Scotland—or, for that matter, to another part of the United Kingdom—and then, in addition, whether the subject-matter before the House at that time is the sole province of English, Welsh or Northern Irish Members.
Mr Lidington
I shall not give way again; I am sure that the hon. Gentleman will have a chance to catch your eye, Madam Deputy Speaker.
It is important that this small technical change is made in time for this year’s Budget and Finance Bill. As hon. Members know, the Budget statement is due tomorrow, so that is why we are bringing this change to the Standing Orders before the House now.
Mr Lidington
With the leave of the House, the hon. Member for North Down (Lady Hermon) enjoys huge respect on both sides of the House for the way in which she has championed peace and political reconciliation in Northern Ireland. We all take seriously her concerns about the current fragile political situation there. Both the Prime Minister and my right hon. Friend the Secretary of State for Northern Ireland are working as hard as they can to bring about reconciliation, and they will want to listen to her views and the views of other Northern Ireland colleagues in the days and weeks ahead.
The hon. Members for North Down and for Aberdeen North (Kirsty Blackman) both asked about the application of the Standing Order No. 83 tests to the repeal Bill. One reason for my reluctance to go into great detail is simply that the repeal Bill has not yet been published. I can give a measure of reassurance that the repeal Bill will seek to repeal the European Communities Act 1972 and convert European law into UK law, which is not a matter that could relate only to England or only to England and Wales. It therefore strikes me as very unlikely that EVEL would apply to the Bill, and even more so when one considers the tests that Mr Speaker is required under the Standing Orders to apply to Bills, or to clauses of Bills, when considering the application of Standing Order No. 83.
To be treated under the EVEL procedures, a Bill or a clause has to deal with a devolved matter—in most cases, the procedures apply to matters devolved to Scotland. The repeal Bill will address the cessation of the application to the UK of an international treaty, and international treaties, as the whole House knows, are expressly reserved to the United Kingdom Government and Parliament in all three devolution settlements.
It is difficult to see how the EVEL procedures could apply to matters under the repeal Bill, but I will be cautious about that until the day when the repeal Bill is published and everybody can inspect it.
Kirsty Blackman
I appreciate that the Leader of the House is giving us more clarity on the issue than we have previously received, but I still ask him seriously to consider suspending the Standing Order when the great repeal Bill comes to the House, to ensure that it cannot possibly be subject to the EVEL procedures.
Mr Lidington
I take note of the hon. Lady’s representation.
It is always good to hear familiar riffs. Like putting Eric Clapton on the turntable and hearing the golden oldies from one’s younger days, the speech of the hon. Member for Perth and North Perthshire (Pete Wishart) is familiar to me. He puts his finger on the truth that I am not sure the hon. Member for Edinburgh South (Ian Murray) or the shadow Leader of the House, the hon. Member for Walsall South (Valerie Vaz), really grasped. This is a narrow, technical change.
On the question before the House, it is true that all UK MPs will still be able to continue voting on Budgets and on all aspects of income tax. But English, Welsh and Northern Irish MPs will have an opportunity expressly to approve matters that primarily affect their constituencies, such as the main rates of income tax. That simply reflects the fact that it is Members of the Scottish Parliament who vote on devolved matters, including the main rates of income tax, in so far as they affect Scottish taxpayers.
Why are we making this change? We are making the change because of a degree of uncertainty in the current Standing Orders when we have to take into account the implications of the Scotland Act 2016. As the hon. Member for Aberdeen North pointed out, our Standing Orders already provide for certification in relation to Finance Bills, so we are not debating some new extension of the EVEL procedures. The 2016 Act presents us with a particular problem. The main rates of income tax are paid by residents of the United Kingdom who are not subject to the Scottish main rate of income tax. That means that in future no Scottish taxpayer will be affected by the UK main rate, but there is a theoretical possibility that the main rate of income tax could affect an individual who is not a Scottish taxpayer but has some connections to Scotland—perhaps they have a second home there. Because of that possibility, it was unclear whether, subsequent to the 2016 Act, a clause that set the main rates of income tax would relate exclusively to England, Wales and Northern Ireland and therefore trigger a vote under the English laws procedures according to the existing Standing Orders.
The narrow amendment we are considering will remove the element of doubt and ensure what was always intended when the House approved the Standing Orders, the 2016 Act and the measures in last year’s Finance Act—namely, that a vote on the main rates of income tax will attract an EVEL vote. This will ensure that English, Welsh and Northern Irish MPs have the final say on setting income tax rates when no Scottish taxpayer will be affected. That seems to be a perfectly fair way to proceed, so I invite the House to support the amendment.
Question put.