Category Archives: Human Rights

On Taxes and Turmoil…

…or why reading the interpretation section is always important.


I haven’t blogged (yet) about the Scottish Labour Leadership Race. I probably won’t (until it’s over anyway) – though I did go on a short twitter rant last week about how dreadful the race had been up to that point. It ended with a call for both candidates to  improve themselves and their campaigns, and noted that Anas Sarwar had, just that day, released his tax plan, which is the substance that the campaign had long been lacking.

The week after, Richard Leonard released his tax plan, with the centre-piece being a “1% wealth tax” on the richest 10% – with the aim of raising £3.7billion. That is an eye watering amount.

However – bluntly – this cannot be done in the Scottish Parliament. I want to talk about why.

The Tax

Before I go on, I want to be clear what we are talking about here. It is variously described as a ‘windfall tax’ or ‘wealth tax’ – as opposed to an ‘income tax’. It is not a tax on income (ie. waged, salaries, dividends, investment returns); it is a tax on wealth. It is explicitly differentiated from a tax on income and is explicitly a tax on “…those with over £1million of wealth…”.

So, we are forced to ask, what is wealth?  It is different from assets which enter a person’s hands in a certain period (that’s income). It can be described as the total assets that are in someone’s possession, and indeed, may well have been for many years. I think that that is a fair working definition. But what does this mean? Income is (most of the time) easily determinable. Its a salary, a wage, a return. It has a broadly definable value and is almost always in some cash amount. What a person’s ‘wealth’ is can be is a bit more elusive.

Some of it is simple. My wealth is the money in my Bank Accounts; Houses I own; cars; chattels; investments etc. But there are more complicated areas. What about assets held in trust for someone else? Legally, the trust is separate from the beneficiary – will this still be the same? Similarly, on a practical level, there are those who are money rich but cash poor. How would the policy operate in that regard? I ask these questions, not because I particularly disagree with the policy (nor with the sentiment and aims behind it), but because they have both practical and legal questions and consequences.

The Scotland Act and ‘Devolved Taxes’

The Scotland Act 1998 was amended by the Scotland Act 2016 to give Holyrood some tax powers. It doesn’t have free reign on tax, but it now a much more ‘tax responsible’ Parliament. However, to determine the extent of Holyrood’s Tax power, we muct pay special attention to the way powers held to be devolved or reserved in the Scheme of Scottish Devolution.

The general rule (as laid out in s.29 of the Act) is that a law of the Scottish Parliament is not law insofar as it is outwith the legislative competence of the parliament. s.29(2)(b)  states that a provision is outwith the Scottish Parliament’s competence if it relates to a ‘Reserved Matter’ (outlined in Schedule 5) of the Act. Therefore, it can be inferred that if something is not listed as a ‘reserved matter’ it is ipso facto a ‘devolved matter.

Turning then, to Schedule 5 of the Scotland Act 1998 (as it has been amended by the 2012 and 2016 Acts), we must see if taxes are lists as a reserved matter. If they are not, then the Scottish Parliament’s tax power is unlimited; if they are, then it is limited. Schedule 5, Part II, Head A – Financial and Economic Matters, Section 1A lists “…taxes and excise duties…” as reserved. However, it does state that there are exceptions for “Local taxes to fund local authority expenditure” (i.e Council Tax) & “Devolved Taxes”. So, taxes in general are reserved, however there is a species of tax, “Devolved Taxes”, which are devolved – and so within the legislative competence of the Scottish Parliament.

The question is now, then, ‘What is a Devolved Tax’? To find the answer to that, we must look at a section, and indeed a whole Part of the Act, that was added in 2012 when the Scottish Parliament’s Tax Powers were expanded for the first time. Part 4A of the Act exhaustively details the tax powers of the Parliament and the powers the parliament may exercise in relation to those taxes.

The part starts with s.80A, which is an overview of the part. s.80A(4) states that “In [The Scotland Act 1998 as amended], “devolved tax” means a tax specified in [Part 4A] as a devolved tax”. So, if a tax is a devolved tax, it must be listed in Part 4A as being a devolved tax. There is, however, a corollary to that in s.80B which states that an Order in Council (a kind of Secondary legislation) may amend Part 4A to “specify, as an additional devolved tax, a tax of any description” – meaning there is a possibility that the Scope of Part 4A may be expanded.

What taxes, then, are listed (exhaustively) as devolved taxes in Part 4A? In addition to the Scottish Rates of Income Tax, they are:
– Tax on transactions involving interests in land. [s.80I]
– Tax on disposals to landfill. [s.80K]
– Tax on carriage of passengers by air [s.80L]
– Tax on commercial exploitation of aggregate [s.80M]

It is clear, that for wealth tax purposes, none of these are sufficient. The only one that would be even approximately near to the purposes would be the ‘tax on transactions involving interests in land’  – and even then, we are some way off. It is a tax on the transaction, not on the land itself. If no transaction is made (i.e the land is not sold or gifted) then no tax can be levied. It is not concerned with the value of the land, but the value of the transaction itself (which is what LBTT in Scotland does just now).

Therefore, it is clear, that a ‘Wealth Tax” is outwith the current legislative competence of the Scottish Parliament.

A new Devolved Tax

As noted above, there is a power under s.80B to add new devolved taxes. Let us examine that in more detail:

80B) Power to add new devolved taxes

(1)Her Majesty may by Order in Council amend this Part so as to—
     (a) specify, as an additional devolved tax, a tax of any description, or
     (b) make any other modifications of the provisions relating to devolved taxes which  She considers necessary or expedient.

So by Order-in-Council, a tax may be specified as an additional devolved tax. How, would this be done, then? Schedule 7 of the Scotland Act 1998 states that any subordinate legislation (such as an Order-in-Council) are subject to the ‘Type A’ procedure. This, as detailed in paragraph 2 of Schedule 7, means that a draft Order-in-Council must be laid before and approved by the House of Commons, the House of Lords and the Scottish Parliament.

However, moving into the realms of Statutory interpretation for a moment, would it be competent to specify as a devolved tax, a tax not currently in existence? s.80B(1)(a) does say that a tax “of any description” may be designated as a devolved tax, and Westminster does have the power (reserved) to levy a wealth tax (though it chooses not to exercise it), so the power is there, though dormany. However, it is a novel and possible contentious legal argument which, politically, would lead to a discussion about the proper scope of the Scottish Parliament’s legislative competence.

Human Rights

For all the talk of devolved and reserved powers, it is not only Schedule 4 which bounds the Scottish Parliament’s competence. s.29(d) states that a provision of an Act of the Scottish Parliament is outwith its legislative competence insofar as it is “incompatible with any Convention rights…”. Convention Rights are stated in s.126 of the Act (its Interpretation Section) as being those defined in the Human Rights Act 1998. Section 1(1)(a) and (b) of the Human Rights Act 1998 state respectively that “Articles 2 to 12 and 14 of the [European Convention on Human Rights]” and “Article 1 to 3 of the First Protocol [to the European Convention on Human Rights]” are Convention Rights. This would include Article 1 of Protocol 1 to the ECHR [A1P1].

A1P1 states:

(1) Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

(2) The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

This has the effect that people, companies and other legal entities (e.g trusts) cannot be deprived of their property except when the act is:
– In the public interest; and
– subject to the conditions provided by law; and
– subject to the conditions provided for by the general principles of international law.

One of the principles of International Law, and ‘Convention Law’ is that of legal certainty (i.e that people should know what law applies at a particular time). It is arguable that by taxing wealth held by somebody acquired when there was no (further) tax liability, that they would be a lack of legal certainty and so the provision could not be deemed proportionate. It is certainly true that the European Court of Human Rights (and UK Domestic courts) acknowledge that not all retrospective legislation breaches A1P1, but it is usually accepted in the context of correcting a tax loophole or unintended tax avoidance scheme – not in the imposition of an all new species of tax liability. It is more likely than not that this would be held to be too large a deviation from a principle of legal certainty, and so incompatible with the general principles of international law as applicable to the convention.

This would mean that the Legislation imposing a new tax liability on wealth accumulated would be held as in contravention of A1P1. It would, therefore breach convention rights and so, therefore, be outwith the scope of the Scottish Parliament’s legislative competence.

Conclusion

In conclusion it would appear that, as the Scotland Act stands, Richard Leonard’s proposal to create a ‘Wealth Tax’ of 1% on those who own more than £1million in wealth is outwith the Legislative competence of the Scottish Parliament as it is an attempt to create a new tax which is not a “Devolved Tax”as currently defined.

It is possible that ‘a tax on accumulated wealth” may be created an “additional devolved tax” by an Order-In-Council which is approved by the House of Commons, House of Lords and Scottish Parliament. However, any such steps would most likely be challenged on the grounds of its compatibility with Convention Rights (as defined in the Scotland Act 1998 and Human Rights Act 1998), specifically, Article 1 or Protocol 1 to the European Convention on Human Rights due to the legislation not meeting with the general principle of International law, which is that of Legal Certainty.

 

 

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A Love Letter to the European Right…

              With Europe taking beating after beating, and Theresa May seemingly wanting to make #GE2020 a fight over the ECHR and the scrapping of its partner, Human Rights are in need of some love. I am and will always be, one of the many giving it to them. We, as whatever nation, should be hearing EHCR protects the our fundamental individual rights, but also helps us ensure our government works as it should.

Anti-ECHR arguments come into two flavours; the “Human rights aren’t British values” kind (overlooking the part the UK played in drafting the ECHR), and those of the “GAH EUROPE!/UKIP” kind. The latter group often equates the ECHR with the omnipresent terror of the European Union (I’m looking at you “The Sun”), but, in the words of my public law professor (and now MSP) Adam Tomkins, “There are two legal Europes! TWO!” The European Union – for the most part – doesn’t care about human rights, so here it is as unimportant as the Scottish Christian Party, but I do want to address the idea that Human Rights are European, not British, values. Winston Churchill helped form the Council of Europe, the ECHR’s body, in the aftermath of WW2. The Document protected people from torture and defended their right to free speech and thought. How can these not be British values?

The former argument is worth addressing more fully. The EHCR has, over its nearly 50 year history, raised some uncomfortable questions for successive British governments and has seen the UK go to the Strasbourg court (The European COURT of Human Rights) many times. What is rarely reported, however, is that the UK has lost just 0.5% of Strasbourg Cases!

But 99.5% successes are, perhaps, not as contentious as that losing 0.5%. One of the longest running spats is the issue of prisoners’ voting rights. The Court agreed that depriving all prisoners of the vote runs contrary to the ECHR and therefore the UK must lift its ban. This has irked many on all sides, so successive governments have attempted to kick the issue into the long grass. But, contrary to some reports (I haven’t looked away “The Sun”), saying “not all prisoners should lose the vote” is not the same as saying “all prisoners should have the vote”.  The court has repeatedly said that it is only the universal ban is illegal. For many, this tension is a reason to scrap the ECHR, but for me it shows it’s working, by forcing parliament, government, ministers, and most of all the public to ask difficult questions and, sometimes, give difficult answers.

Even though the success of certain human rights arguments has sometimes been bitter, the ECHR has helped the UK modernise and become a 21st century nation. It was human rights that led to the scrapping of the ban on gay and lesbian people in the army. Despite warnings at the time that it would disrupt troop morale and was a prime example of a European attack on British sovereignty – does such a decision seem controversial now? It has also forced the question on women’s rights and equal marriage – concepts now not so un-British or Anti-Scottish as they perhaps once were. The UK generally, and Scotland in particular, now has some of the highest LGBT+-friendliness rating in Europe. Human Rights helped get us there.

But, irrespective of all these achievements – the spectre of terrorists having rights will always fan the anti-ECHR flames. The idea that a suspected terrorist, like the former bane of Theresa May’s life, Abu Qatada, can use these ‘European’ human rights arguments to stave off deportation to Jordan is ghastly to many. But how radical a suggestion is it that a man should not be convicted using evidence that stands a high chance of being obtained under torture? Would we accept that in the British justice system? It was, after all, a UK body that accepted the human Rights argument, not some “Mickey Mouse court” (Tony Bone MP). When it was suggested that planes used in US extradition flights landed on UK soil, there were immediate massive outcries. So why is this decision so controversial?

One final example. The “BA Crucifix” case – where British Airways employee Nadia Eweida went to the European Court of Human Rights to confirm her right to wear a cross on a chain . British Employment tribunals had, on two occasions, held that there was no breach of UK law (and by extension her convention rights), but when she went to Strasbourg she got the confirmation she was looking for. Surely this was met with outrage by the right as European judges over-ruling British judges? Quite the opposite. One Tory MP even tweeted that he was “[d]elighted that principle of wearing religious symbols at work has been upheld – people shouldn’t suffer discrimination due to religious beliefs.” The MP was David Cameron.


This was first written back in 2012 for an old site called scotspolitics.com – which has since closed. It has been minimally amended to fit 2016’s new political circumstances.

Repealing the HRA…

…or why we need to get a grip on multi-level legislature.


It has long been the Conservative Party’s intention to repeal the Human Rights Act 1998 [the ‘HRA’] and replace it with a British ‘Bill of Rights’ (which would actually be an ‘Act of Rights’). Now that there is a Conservative government, this is very likely to happen. But what would getting rid of the HRA mean? Would it achieve what proponents of the move believe it would, and what would it mean in a Scottish Context? When you explore these questions, and untangle the myriad of interwoven Human Rights protections in the UK Constitution, it appears that repealing the HRA alone would be of very limited effect and could cause serious constitutional issues in a devolution context.

The HRA was passed in 1998 and changed the UK’s relationship with Human Rights in three major ways.

  1. The European Convention on Human Rights [The ECHR] could now be relied on in domestic courts. It made international law an inherent part of the domestic law as well. This means people can use ‘Human Rights arguments’ just as easily in the Supreme Court in London (or the Court of Session in Edinburgh) as they can in the European Court of Human Rights in Strasbourg. [s.2 HRA]
  2. Public Authorities in the UK could no longer act in a way that was contrary to ECHR Rights unless they absolutely had to because the law made them. This includes public hospitals and local councils, but also courts and tribunals, which means that judges and decision makers have to consider the Human Rights implications in all of their judgements. [s.6 HRA]
  3. Courts are bound to interpret legislation in a way which is compatible with ECHR rights, so far as it is able to do so. If, it finds, there is no way a law can ever be read in a Human Rights compliant way, then the law still applies but the court is able to issue a “declaration of incompatibility” which…declares the law is incompatible. [HRA ss.3 & 4]

Using the example of a prisoner wanting to vote in an election; Article 3 of Protocol 1 [A3P1] provides for free and fair elections, where people are allowed to vote, which has been interpreted to include prisoners (or at least exclude a blanket ban on all prisoners). Point 1 allows our hypothetical prisoner to argue the A3P1 case in Scotland, and not have to have the expense of a European legal trip. Point 2 means that it were there any doubt in the law, the Electoral Commission would have to act in accordance with A3P1 and give our prisoner the vote – but unfortunately the Act of Parliament depriving out prisoner of the vote is very clear. But Point 3 means that, even though there is no way the law can be read as complying with the UK’s A3P1 duties, the court can still issue a Declaration of Incompatibility, bringing the problem to Parliament’s attention and showing the issue. Unfortunately for our prisoner, however, the law remains enforceable and they still can’t vote in the election.
The HRA makes Human Rights a central part of our legal framework in many situations. The above steps would apply if it was someone who felt they’d not been respected at work; mistreated in an NHS hospital; not had their immigration application properly considered; or felt their religious freedoms were under attack. Underpinning all of this is the fact the UK was one of the founding members of the Council of Europe and signed up to the ECHR in the 1950s after playing a key role in drafting it. The ECHR protected Human Rights from a far away place for those who could afford it; the HRA brought Human Rights home and allowed British Judges a lot more room in applying European Jurisprudence in a British context. It also ensures that, as a nation, we do all we can, in our laws and in our institutions, to uphold the norms and values we claim to cherish.

But, the HRA is not the only use of the ECHR in our domestic constitution. The Scotland Act 1998 [the “SA”] states in s.29(2)(d) that the Scottish Parliament cannot legislate contrary to Convention Rights, and any provision which professes to do so is not law. This is clearly a much stricter regime than the HRA imposes on the UK Parliament. The HRA says “you shouldn’t legislate contrary to the ECHR, and we’ll try our hardest to read the law in line with the ECHR, but if you do it anyway, the law will still apply”, while the SA takes an approach much more akin to the US Constitution, “these are the limits of your power and you cannot cross them, because if you do the law you attempt to pass will not be law at all”. This provision is separate to the HRA – repealing the HRA will not change this.
What it would change would be, say, Glasgow City Council’s duties re. Human Rights. Local authorities, like all public authorities, as I said in Point 2 above, bound to act in accordance with ECHR rights at all times, unless it is required to act otherwise by law. If the HRA was repealed, Glasgow City Council, like all other councils across Scotland and the UK, would no longer be burdened by this duty. It could, then, act to ban all parades of a religious or political nature in the city centre – as is within its power as a local authority. It would arguably go against the ECHR (particularly Articles 9 and 10), but it is now able to take decisions that do not respect Human Rights.
The Scottish Parliament, however, if it attempted to take that very same decision, would be acting outwith its power by virtue of the provisions in the Scotland Act 1998, because Acts of the Scottish Parliament would still have to comply with the ECHR compatibility obligation.

There is, however, a further constitutional twist in the Human Rights tale. Under the Scotland Act 1998, the Scottish Parliament is unable to amend or repeal the Human Rights Act (as it is a ‘protected provision’ under Schedule 4 p.1(2)(f)). HOWEVER, ‘Human Rights’ more generally are not listed as a reserved competence in Schedule 5, meaning that the Scottish Parliament could competently legislate re. Human Rights. This has two important implications:

  • Under the Sewel Convention, the UK Parliament will seek consent from the Scottish Parliament when it will legislate re. a devolved matter. If Holyrood (as it most likely would) withholds its consent to HRA repeal, then the UK Parliament could still legislate [SA s.28(7)] but would likely experience major political fallout, at a time when that could stretch Scots-Anglo tensions more than ever. This is a fallout that would be increased because Clause 2 of the ‘Draft Scotland Clauses 2015’ will also “…recognise that the Parliament of the UK will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament” – linking HRA repeal into the almighty and ever-pervasive vow!
  • Even if the UK Parliament did repeal the HRA 1998, because ‘Human Rights’ is a devolved matter, there would be nothing to stop the Scottish Parliament introducing a Scottish Human Rights Act to replace it in Scotland. This would bring Scottish public authorities (Local Authorities, Scottish Government Organs etc) back into the scope of the ECHR – but would have a limited effect on UK public Authorities operating in Scotland (such as the Asylum Tribunals, where Human Rights have played an increasingly important part over the last 20 years). This would also, inevitably, lead to a rash of cases about the Scottish Parliament’s competence and where the ever-fuzzier lines between UK and Scotland exists.

I’ve not even touched the important part the HRA plays in the Good Friday Agreement…but from a purely Scottish perspective, it’s already clear to see how difficult it will be to separate out the ‘European Rights’ from our domestic law. Some would argue, and I am one of them, that this is because, fundamentally, these are British Rights. Others would say that this serves as proof of just how much British sovereignty has been lost since the Human Rights Act came into being. You can make of this situation what you will, but I leave you with this: the UK wins 99.5% of all Human Rights cases it faces in the ECtHR, and as decade and a half long issue of prisoners’ rights to vote shows, even those we lose don’t make us change anything quickly – it is at home the HRA and Human Rights have had the largest effect. Is that really a problem?


If you want more info on what the Human Rights Act, the ECHR and Human Rights more generally mean to you, then visit the brand new RightsInfo.org, which has stories, graphics and stories about how human rights have shaped and improved the UK. It’s brilliant.