Hansard

According to Denis Healey,

“The difference between tax avoidance and tax evasion is the thickness of a prison wall.”

The former chancellor was absolutely right because, although tax avoidance is simply clever financial planning, tax evasion is illegal. It is understandable that, at a time when high-profile millionaire celebrities and multinational companies have been highlighted, the focus of deliberations on taxation is on that issue. It has become apparent that the public care more deeply than ever that we do not have a tax system that permits freeloaders.

The Scottish Government has got the balance just about right in legislating on how revenue Scotland will be tasked with dealing with avoidance and evasion within its responsibilities. There is flexibility in the rules but enough clarity to ensure that the rules are firm enough to follow. The amendments that the cabinet secretary has made and accepted have helped to clarify some areas in which there was originally some doubt. We had to get it right, because tax avoidance could have serious implications for business as a whole. There could also be implications for the public perception of our tax system. The system must maintain public confidence, and the perception that others can avoid their responsibilities can damage that confidence.

The clear view of the tax professionals who gave evidence to the Finance Committee was that the level of public scrutiny 10 years ago was much less than it is now. We heard that tax avoidance is not necessarily any greater than it was in years gone by, but that the greater public awareness of all the issues means that, when certain individuals or companies do not contribute their fair share to the public purse, there is a heightened sense of outrage. Those concerns are justified, which is why, when avoidance occurs, we have to make it easier to take action. I believe that the bill will do that.

In relation to the landfill tax, any avoidance could create economic distortions, as a business could seek a competitive advantage by acting illegally to avoid paying tax. I have visited the new Scottish Environment Protection Agency premises at the Maxim Park development at Eurocentral in my constituency and was pleased to meet the dedicated team of investigators who have been tasked with pursuing companies that, by many and varied means, seek to avoid paying landfill tax. That effort is already bearing fruit and I am confident that, increasingly, we will clamp down on those who try to dodge their responsibilities.

I therefore have no hesitation in endorsing the bill and I congratulate the cabinet secretary on guiding it so effectively to this point. I also thank the convener of and adviser to the Finance Committee for their efforts to ensure that this technical and complex bill passed through the parliamentary process as smoothly as possible.

From an exchange that I had with the cabinet secretary earlier this afternoon, I know that he gets concerned when I break the consensus, so I will not let him down. I will ask a question that has occurred to me. This bill and the two others that resulted from the further devolution of tax powers under the Scotland Act 2012 sailed through the legislative process on a sea of good will and widespread agreement. When the cabinet secretary came to the Finance Committee last week, his exasperation was evident that closure on the technical details of the block grant adjustment that is required under the new tax laws has not yet been achieved.

If the cabinet secretary cannot conclude in 18 months the process for a system that covers only 1.7 per cent of Scotland’s income, with all the parties involved in total agreement on its desirability and efficacy, how on earth does he expect to negotiate, agree and deliver an entire transfer of powers, set up and conclude applications for membership of NATO, the European Union and other bodies and set up a currency union all within 18 months of a yes vote in September? I do not expect the cabinet secretary to answer that, or to have to answer it, because it is a purely hypothetical question.

I thank him for his efforts in bringing the devolved taxes to fruition and I look forward to seeing how revenue Scotland uses the powers that have been given to it to the betterment of our system of taxation in Scotland.