Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Glenamara: My Lords, can my noble friend say whether the Government received any advice, legal or otherwise, before deciding to impose this tax of £1,000 a year on all undergraduates?

Lord Sewel: My Lords, I can assure my noble friend that the Government did indeed receive advice; what he may dispute is its quality.

Baroness Young: My Lords, does not the noble Lord recognise that his Answer is incredibly unhelpful to the House? After all, this is an extremely serious point. When this matter was raised by my noble friend Lady Carnegy in an Unstarred Question, the difference and the unfairness of treatment between English, Welsh and Northern Ireland students in Scottish universities compared with EU students--when we had all assumed that England, Wales and Northern Ireland were in the EU--was shown to be unbelievable. This stonewalling hardly contributes to settling what is an extremely worrying issue.

Lord Sewel: My Lords, I regret that the noble Baroness feels that I am stonewalling. I am bound by the conventions and practices in that the tradition is that the Government do not reveal either whether they have sought advice, whether they have received advice or the content of that legal advice. I recognise that the positions

25 Nov 1997 : Column 863

of both the noble Baronesses, Lady Young and Lady Carnegy, are deeply and sincerely held. Every opportunity will be available for noble Lords to make their contributions on this substantive issue when the Bill is before us.

Lord Beloff: My Lords, will the Minister answer a question of policy? Is it correct that Scottish students in turn are being discriminated against in the extent of the disallowance for parental income in awarding maintenance grants and in the disallowance of their right to a loan to meet costs when they go to English universities? Is that simply a way of separating Scotland from England once and for all?

Lord Sewel: My Lords, I am grateful to the noble Lord for raising that issue, though it may be slightly wide of the Question. I am grateful to be able to resolve the question and, in doing so, declare something of an interest in that one of my children may be attending a Scottish university next year.

I was slightly put off by the report that I read in one of the Scottish papers saying that the parental income figures would be different in Scotland than in England. When I investigated the matter, it became clear that the paper concerned had failed to distinguish between net and gross when looking at parental income. I can therefore assure the noble Lord that the figures in Scotland are the same as the figures in England and Wales. There will be no difference between Scotland and elsewhere in the United Kingdom.

Lord Mackay of Ardbrecknish: My Lords, has the Minister taken anybody's advice on this subject, lawyer or otherwise? Am I right in thinking that, whether they be Scottish or non-Scottish students, on top of the £3,000 or £4,000 they will have to pay in fees, if they come from modest backgrounds they will also run up a debt of £14,000 by the end of their four year honours degree course? Is the Minister and his party comfortable with that?

Lord Sewel: My Lords, of course the Government take advice. We have taken the advice of experts in higher education in coming forward with these proposals. We believe the proposals to be fair. We believe that they address the basic and fundamental issue that we cannot have a mass system of higher education paid for purely out of taxation. Those who benefit from higher education should be expected to make a fair and reasonable contribution. That is the aim of our proposals.

Lord Mackay of Drumadoon: My Lords, the Minister will be aware of the provisions of the Human Rights Bill, which includes a clause to the effect that, when a Minister introduces a Bill into this House, he should make a statement to the effect that in his view the provisions of the Bill are compatible with convention rights. Can the

25 Nov 1997 : Column 864

Minister assure the House that when he introduces the legislation relating to these proposals, he will be in a position to make such a statement?

Lord Sewel: My Lords, I do not know who will be introducing the Bill, but I am sure that whoever does so will do whatever is necessary in the terms that the noble and learned Lord outlines.

Lord Pilkington of Oxenford: My Lords, in view of the fact that the noble Lord said that the Government took advice, why did they reject in such a cursory manner the Dearing recommendations which did not suggest a policy the Government follow?

Lord Sewel: My Lords, in Scotland it was the Garrick Report rather than the Dearing Report. We took what we thought were the best and strongest parts of the Garrick Report and built upon them.

Lord Selkirk of Douglas: My Lords, would it not be easier for the Government to avoid any threat of legal challenge by spending the £1.5 million required for the English students and the £45,000 required for the Welsh students entering into these four-year degree courses? After all, these are very small sums relative to the total education budget.

Lord Sewel: My Lords, the Government are clearly prepared to withstand and rebut any legal challenge on this issue. The noble Lord again goes into areas of wider policy. He will have an opportunity to make his point when the Bill is before us.

EU: Tax Code of Conduct

3.1 p.m.

Lord Bruce of Donington asked Her Majesty's Government:

    What is their policy towards the proposals of the European Commission in its communication Towards tax-coordination in the European Union (COM(97)/495/Final) sent to the Council of the European Union on 6th October 1997, and whether they will indicate their responses to the four requests made at paragraph 23 of the communication.

Lord McIntosh of Haringey: My Lords, the Government deposited an Explanatory Memorandum on 17th November on the Commission communication of 5th November 1997--A Package to Tackle Harmful Tax Competition in The European Union--which superseded the document to which my noble friend refers in his Question.

The four questions posed by the Commission in its communication of 1st October sought the endorsement of the ECOFIN Council to its plans for handling the proposed package of measures to tackle harmful tax competition. The ECOFIN Council, at its 13th October meeting, discussed the Commission's communication, focusing on the code of conduct.

25 Nov 1997 : Column 865

The UK recognised that a voluntary code might play a helpful role in tackling harmful tax competition, but would only agree to a code that respected member states' continued competence in the field of tax. The UK and other member states called for several changes to be made to the draft code. Discussion on the code has subsequently continued in the taxation policy group and in the Council working group. We expect the harmful tax competition package to be on the table for political agreement at the 1st December meeting of the ECOFIN Council.

Lord Bruce of Donington: My Lords, I am most grateful for the noble Lord's reply and his indication of the Government's caution towards proceeding in this matter. He will doubtless be aware that for the past 21 years the European Commission has been seeking to pass measures for tax harmonisation, thereby assuming some control of fiscal matters formerly in the hands of member states. Is he also aware that I have seen the latest memorandum--COM(97)/564--which supersedes the one referred to in my Question? I should like to have the Minister's assurance that he will resist any temptation to accept the agreement with guidelines as being of little policy significance. Is he aware that these guidelines can always be referred to in the preambles and recitals to individual pieces of legislation issued by the Commission and that they are used by the courts--by the European Court in particular--as indicating the drift of the legislation? Will he therefore please give the House an assurance that he will be extra cautious before leading the country into a position where its own fiscal measures in terms of taxation can be determined by the European Commission?

Lord McIntosh of Haringey: My Lords, I hoped that I had made it clear that there is no question of the Government's taxation policy being determined by Europe. That is a matter for all member states. At the same time, I have to say to my noble friend in response to his first question that there are advantages in the harmonisation of taxes between European countries because there would otherwise be the possibility of evasion by potential taxpayers moving their assets and their liabilities from one member state to another. So we do not reject the thrust of the European Commission towards tax harmonisation. However, as I made clear in my first Answer, these matters are within the competence of member states and a code of conduct is advisory only.

Lord Lawson of Blaby: My Lords, will the Minister assure the House that the Government will resist, as indeed I resisted when I was Chancellor, the move within the Community, prompted by the Commission, for a common withholding tax? Does he not agree that if there were to be a common withholding tax the effect would simply be for capital to flow away from the European Union and into tax havens in countries outside the European Union, which would be to no one's benefit within the Union? Will they resist that proposal?

Next Section Back to Table of Contents Lords Hansard Home Page