Official Report 283KB pdf
Single Use Carrier Bags Charge (Scotland) Regulations 2014 [Draft] (SG 2013/199)
Members have before them a written submission that the committee has received from Mr Bill MacDonald in relation to the regulations. Do members have any comments on the submission or the regulations?
I note that we have received a letter from Mr MacDonald, in which he raises his concerns about VAT and corporation tax—in particular, the incorporation of VAT in the charge and the expense of corporation tax and the ramifications thereof. I would like those issues to be considered by the Scottish Government, in addition to the points that our legal advisers have raised. To set the record absolutely straight, I am in no position to judge whether Mr MacDonald’s views are important, but if there is an issue, it would be better if it were sorted out at the beginning rather than at the end of the process. I think that we should take the opportunity to at least seek the Scottish Government’s views on Mr MacDonald’s letter.
Essentially, the issue that Mr MacDonald raises for the committee is whether the proposed regulations are intra vires or extra vires. I note that our legal advisers suggest that they are intra vires rather than extra vires. The sole reference to VAT is made in regulation 8, which permits any VAT on a charge that a retailer makes to their customer to be a cost that may be deducted from the net proceeds of such a charge. It is very clear that the proposed charge is not a tax, because there are no receipts of financial benefit to the Government. The regulations will not affect the VAT regime and will most certainly not affect the corporation tax regime.
I wonder whether we could pick up on the issues that our advisers have raised and see where that leaves us. Do members agree to that?
First, bags that are used for the supply of medicinal products or listed appliances in accordance with a prescription and bags that are used for the supply of pharmacy medicines will be exempt from the charge that the regulations will impose. The circumstances in which a product is supplied under prescription and other relevant terms are defined in the schedule to the regulations by reference to statutory provisions that have been repealed or amended. Therefore, those references are not accurate and do not achieve the intended legal effect.
Does the committee agree to note that the Scottish Government has undertaken to review the accuracy of all definitions in the regulations before laying a final draft for approval by the Parliament?
The second point that our legal advisers have raised relates to a drafting error. In regulation 13(5), the reference to paragraph (4)(a) should be a reference to paragraph (4)(c).
Does the committee also agree to note that the Scottish Government has undertaken to correct that error in the final draft that is laid for approval by the Parliament?
Does the committee also agree to welcome the Scottish Government’s commitment to review whether the meaning of “domestic premises” is sufficiently clear in regulation 13(5) in light of the consultation responses that it receives?
Having dealt with those matters, let us return to the issue of what we should do with the comments that we have received. I endorse what Stewart Stevenson said on the basis that, if we are content that the regulations are intra vires—which I think our advisers are telling us—all the other issues would appear to be for the policy committee rather than for us.
I note that our advisers have taken the trouble to put Mr MacDonald’s letter in front of us for our consideration. I am certainly not competent to judge whether the regulations are intra vires, but I think that it would be reasonable for the Scottish Government to give us its views on his letter, given that our advisers have thought it sufficiently important to put in front of us. I do not think that that is an unreasonable request, given the stage in the process that we are at, and given that we will seek responses from the Scottish Government on the matters that the convener has raised.
I do not think that that is in any way an unreasonable request.
It is perfectly proper for correspondence of such a nature be put in front of the committee, and I think that that has been done in such a way as to be entirely neutral on its content.
I am in the committee’s hands. Do members have any other thoughts or comments? I do not want us to be divided on the issue, as that will not help.
I have a lot of sympathy with what Stewart Stevenson said about whether the regulations are intra vires—I tend to agree with him on that.
I suppose that my difficulty is that I understand that the correspondent has deliberately chosen not to send his letter to the Government and it is not our job to be his postman.
With respect, it is still a free country and our correspondent can send correspondence to whomever he wishes.
I would like to suggest a way forward, because the last thing that we want to do is be divided on the issue. That would be counterproductive. I suggest that we should write to the Government, note that we have received the letter and pass it on to it with our best wishes—perhaps that is not exactly what we should say, but I am sure that members are with me. We can also point out to the Government and to whoever else might be interested that, as far as we are concerned, we believe that the regulations are entirely intra vires and cause us no concerns whatever. We should say that the Government might like to see the correspondence, for what it is worth.
And to pass comment on it.
Indeed.
No. On the matter of vires, we decide. I think that we should make that decision. We should pass the correspondence on to the Government for information only.
With respect, we do not decide on the matter of vires. The committee has divided on previous occasions on the matter of vires, and I suggest that, the way that we are heading, it will probably do so again.
I endorse the convener’s approach.
I am sorry—I think that what I suggested was what Mr Stevenson is suggesting.
Correct.
I suggested that we should pass on the letter for the Government’s information, but that, as a committee, we are clear—I think—that the regulations are intra vires and that we have no concerns about them.
Yes.
Are we comfortable with that?
It is up to John.
Forgive me, but I am not certain what the convener is saying.
I am saying that I think that, in relation to what the submission says, the committee believes that we do not have a problem, but that we will send it to the Government for information so that it can respond to it, if it feels that it is appropriate to do so.
I think that that is fine.
I still think that we should adopt a belt-and-braces approach and seek comment on the correspondence. I cannot see what harm that would do. I cannot see why the Government would not wish to say—perhaps in one line—that there is no problem. Adopting a belt-and-braces approach and avoiding problems at the earliest opportunity, rather than building them up for the future, is what the committee is all about.
So, all that we have to do is to ask the Government whether it has any comments that might be relevant to us.
Yes.
Indeed.
The correspondent is refusing to send his letter to the Government. If he believes that the issues that he has raised are a matter for the Government, he should correspond with it. As a courtesy, we should make the Government aware of the correspondence, but I do not accept that it is for us to ask the Government for a response on this matter. At the end of the day, the committee will decide what it decides.
I am not suggesting that we ask the Government for a response; I am suggesting that we invite it to comment, should it wish to do so.
If that is the formulation, I would be content.
That is fine.
I accept that.
We should also ensure that we copy in the lead committee. That is the most important thing because, ultimately, it will be for the lead committee to deal with the regulations.
Okay. It has taken us a long time to get here, but if members are comfortable with that, that is the line that we will take.