Scotland Bill

I agree with much of what the hon. Gentleman says, but if the Scottish Parliament were responsible for raising more of its revenue, such arguments would diminish. I think it is right to give it the flexibility to raise additional revenue, if it so wishes, to fund extra programmes in Scotland from which my constituents south of the border may not benefit. I agree with the incremental steps proposed in clause 24. We are for the first time starting to disaggregate the unitary tax system in the United Kingdom. That will have many consequences, some of which will be unforeseen, so we need to proceed with great care and attention to detail. I strongly welcome the proposal that we should not rush to set up a completely new system in one go. In particular, proposed new section 80B, which clause 24 introduces, contains a provision to allow the subsequent devolution of additional tax powers. That is the right way to go, rather than trying to devolve too much at this stage. The hon. Member for Dundee East raised perfectly valid points about devolving other taxes, including air passenger duty, fuel duty and corporation tax, and we might well come around to doing that in the fullness of time. The Scottish Parliament's response to the Bill noted that"““international experience does show some scope for differentiation of corporation tax,””" and we may get to that point. However, there are huge difficulties and intricacies that we must first consider about the operation of corporation tax. A later clause goes into some detail in defining a Scottish taxpayer for the purposes of the Bill and we would have to do something very similar for corporation tax. If a company were primarily located in Scotland but had its tax headquarters elsewhere, we would have to work out exactly which components of its income were liable for corporation tax.