Standing Orders (Public Business) — Clarification that Setting Income Tax Rates is a Devolved Matter — 7 Mar 2017 at 17:29

The majority of MPs voted to make clear that setting of income tax rates is to be considered a devolved matter, so a majority of MPs from England, Wales and Northern Ireland as well as a majority of all MPs, will be required to set income tax rates for England, Wales and Northern Ireland.

Powers for the Scottish Parliament to set income tax rates and thresholds for Scotland were included in the Scotland Act 2016

The motion approved by the majority of MPs in this vote was:

• 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)”.

During the debate David Lidington MP (Conservative, Aylesbury) explained the purpose of the amendment saying^[1]:

• 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.

During debate Kirsty Blackman MP (Scottish National Party, Aberdeen North) stated^[2]:

• I first saw these proposed changes to Standing Orders on the Order Paper last Tuesday and, as any competent, capable parliamentarian would do, I decided to find out what they meant. I spoke to the Clerks and to the more senior members in my group. I also went to the Leader of the House’s office and asked his officials to produce an explanatory memorandum so that we could understand the changes that were being made and the reasons behind them. Having spoken to the Clerks, I realised that these were in fact fairly innocuous changes that were intended to tighten up the language.

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• [1] David Lidington MP (Conservative, Aylesbury), House of Commons, 7 March 2017
• [2] Kirsty Blackman MP (Scottish National Party, Aberdeen North), House of Commons, 7 March 2017

Debate in Parliament |