House of Commons

Thursday 27th January 2011 Commons Chamber

Thursday 27 January 2011

The House met at half-past Ten o’clock

Prayers

Thursday 27th January 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 27th January 2011 Commons Chamber

The Secretary of State was asked—

[Guy Opperman (Hexham) (Con)]

1. What steps he is taking to encourage the take-up of low-emission vehicles.

[The Secretary of State for Transport (Mr Philip Hammond)]

Eighty-four per cent. of journeys are undertaken by car. Tackling car-produced carbon by fostering and supporting the decarbonisation of motoring is therefore one of the Government’s key transport priorities. The spending review announced provision of more than £400 million for measures to promote the uptake of ultra-low carbon vehicle technologies. Those include support for consumer incentives, development of recharging infrastructure and a programme of research and development.

[Guy Opperman]

My local pub, the Battlesteads inn, which is award winning and excellent, has an electric car-charging point. It is one of the few in Northumberland. The problem is that the ability to recharge is dependent on the north-east’s sole recharging point. When will the system be made nationwide?

[Mr Hammond]

As my hon. Friend knows, the north-east is one of the areas that has been selected for support in the plugged-in places pilot, so there will be a roll-out of further charging infrastructure in the north-east. The Government are currently considering the options for a national roll-out of charging infrastructure and how we mandate that. We will publish our decisions in due course.

[Mr Clive Betts (Sheffield South East) (Lab)]

Is the Secretary of State aware of two interesting companies in my constituency? First, ITM Power produces and develops hydrogen-powered cars, with the ability to produce hydrogen in domestic units at home. Secondly, Magnatec attaches electric motors to diesel-powered vehicles, increasing efficiency by 30%. That system has been running on buses in Denver for more than 10 years, but British buses do not seem interested in taking it up. What steps is the Secretary of State taking with the Department to encourage those firms? Would he like to visit the constituency?

[Mr Hammond]

In fact, yesterday, I met a firm developing innovative battery technology in Aberdeen. We are always pleased to talk to companies that are developing low-emission vehicle technology in the UK. We have deliberately made the incentives technology-neutral so that people developing new and innovative systems can get the benefit of them.

[Simon Wright (Norwich South) (LD)]

One of the quickest and cheapest ways in which to reduce vehicle emissions is through more economical driving habits, but I understand that the take-up by businesses of smarter driving training courses has been disappointing. Will the Secretary of State explore the strategies that are open to the Department to increase take-up of those courses?

[Mr Hammond]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) is looking precisely at how to increase take-up of the smarter driving training courses.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

As the Secretary of State knows, the Department turned down a joint private and public consortium bid, including Cardiff and Bristol councils and the Energy Saving Trust, for a network of electric car-charging points between both cities on the M4. Will he explain to the people of south Wales why he turned down that bid?

[Mr Hammond]

The number of bids exceeded the available resources for the second wave of plugged-in places pilot schemes. All the bids were evaluated, and those that represented the greatest value for money were allowed to proceed. The promoters of the unsuccessful bids have been debriefed by the team in the Department, so they will have a detailed understanding of why their bid, on this occasion, failed. I hope that they will be encouraged to resubmit a bid in the next wave.

[Mr Robert Buckland (South Swindon) (Con)]

2. What plans he has for reform of the rail industry; and if he will make a statement.

[Harriett Baldwin (West Worcestershire) (Con)]

8. What plans he has for reform of the rail industry; and if he will make a statement.

[The Secretary of State for Transport (Mr Philip Hammond)]

Sir Roy McNulty’s rail value for money study has identified areas where significant efficiencies can be achieved. It is clear that the most pressing need is to align incentives across the industry to ensure closer working between Network Rail and the train operating companies. Our franchise reform programme is a key strand in the strategy. Those reforms, together with Sir Roy’s final recommendations, will form the basis of a long-term strategy for the industry. We are committed to publishing those proposals by November 2011.

[Mr Buckland]

Peak-time and season-ticket commuters from Swindon to London on the main line have had to face significant fare increases this month. Will the Government’s new rail franchising reform programme put special emphasis on the need for greater capacity and fairer rail fares?

[Mr Hammond]

We are committed to fair rail fares. Unfortunately, to support the rail investment programme, we have had to project faster-than-inflation increases in fares for the next three years. However, let us be clear: we have to get the cost of our railway down so that the burden on taxpayers and fare payers can be alleviated in future.

[Harriett Baldwin]

It takes 45 minutes longer to travel from London to Worcestershire along the Cotswold line now than it did in 1908. Will the Secretary of State agree to meet me and other representatives of the Cotswold line organisations to see how reform of the rail industry could help improve the timing and frequency of that service?

[Mr Hammond]

I understand my hon. Friend’s concern. Of course, there are far more stops and services than there were in 1908, but I am always delighted to meet her and other colleagues and would be happy to do so on this occasion.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

How will the Secretary of State secure better co-ordination, focusing on the interests of passengers rather than for ever dealing with the consequences of fragmentation?

[Mr Hammond]

The hon. Lady is hinting at the fact that, at the moment, far too much time and energy in the rail industry is spent on allocating blame for things that have happened rather than on working out how to prevent them from happening in future. We believe that aligning the financial interests of the train operators and the infrastructure operators, so that they both have a stake in positive outcomes for passengers, is the way forward. We will await Sir Roy McNulty’s final recommendations and set out our proposals for the reform of the industry on that basis.

[Rachel Reeves (Leeds West) (Lab)]

In west Yorkshire, rail fares are set to go up by the retail prices index plus 5% from next year, which is the biggest increase in the country and 2% higher than in other areas. What will the Secretary of State do to avert those crippling hikes for people in Leeds and the rest of the region?

[Mr Hammond]

I cannot avoid the increases in prices to which the hon. Lady refers. They are partly driven by specific increases in rolling stock to alleviate overcrowding in the area. In the medium term, as I said in answer to the previous question, we must drive efficiency in the rail industry, and ensure that the cost base of our railway becomes comparable with those of other European countries, so that the upward pressure on fares can be alleviated.

[Martin Horwood (Cheltenham) (LD)]

I accept what the Secretary of State has said about the cost of the rail network, but does he nevertheless agree that the quality of passenger experience, which goes far beyond mere punctuality, should play a much greater part in the award of future railway franchises, and in their retention by train operating companies?

[Mr Hammond]

My right hon. Friend the Minister of State has published a consultation on franchising reform, in which she referred specifically to considering passenger satisfaction as one of the metrics. My hon. Friend will no doubt have been as delighted as I was to see the Passenger Focus survey this morning which shows that 84% of rail passengers are satisfied with the service that they receive on the railway.

[Maria Eagle (Garston and Halewood) (Lab)]

I welcome the right hon. Gentleman’s decision to continue the rail industry review that was started by the Labour Government. When Sir Roy McNulty publishes his final report in April, the Opposition will support any sensible proposals that take cost out of the industry without reducing the quality of service for passengers. However, does the Transport Secretary agree with me—and with some Conservative Back Benchers, from what I heard in earlier exchanges—that as the cost to the Government of running the railways comes down, the cost to the public of travelling by train should come down as well?

[Mr Hammond]

I am grateful to the hon. Lady for her expression of support for Sir Roy McNulty’s review and I am happy to acknowledge that that process was set in train by my predecessor. I look forward to taking the review forward on a consensual basis. Of course, the objective of driving efficiency in the railway is to reduce the burden on both the taxpayer and the fare payer. I am glad that she recognises that the only realistic way to do that is to reduce the cost base.

[Maria Eagle]

In view of that, does the Secretary of State understand the anger felt by hard-pressed commuters up and down the country who are facing big fare hikes—record fare rises of over 30%—over the next three years, and often worse overcrowding on services that will not really improve over that period? The initial findings of Sir Roy’s review suggested that savings of £1 billion could be found without cutting services, so will the Secretary of State now commit to sharing the benefits of those savings with passengers, and rethink his plan to impose record fare rises?

[Mr Hammond]

Sir Roy McNulty’s suggestion that £1 billion a year could be found refers to 2017-18. It will take some time before we get to that level of achievement, but it must remain our aspiration. In the meantime, the hon. Lady has answered her own question. Overcrowding is a key issue, and if we are to address it we must continue to invest in additional rolling stock and infrastructure on our railways, as we have committed to do. I am afraid that means that the relief that passengers seek will not come in the next couple of years, although it will come.

[Mr John Baron (Basildon and Billericay) (Con)]

3. If he will consider the merits of authorising traffic signals to display only flashing amber aspects in the early hours of the morning to reduce journey times.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

The Department is looking at various options for traffic signalling during quieter periods of the day and the flashing amber signal is just one of the techniques being considered among many others. However, in the interests of safety, it is important to ensure that any signalling technique provides a consistent and unambiguous message to all road users.

[Mr Baron]

May I point out to the Minister that other countries operate such a system, but in a written response to me the Government stated, somewhat condescendingly:

“The British motorist would find this system confusing.”

Will the Minister consider a pilot scheme for such a system, perhaps in my constituency, which would speed journeys and reduce emissions?

[Norman Baker]

As I mentioned, we are having a review of signs generally and that suggestion is being considered as part of that process. The difficulty is that the flashing amber signal already has a specific legal meaning in this country, where it is used to indicate legal precedence for pedestrians at pelican crossings. That means that we could not authorise a trial or the use of the flashing amber signal for any other application without first changing the meaning of the signal in regulations. A dual meaning might not be a very good idea.

[Diana Johnson (Kingston upon Hull North) (Lab)]

4. What assessment he has made of the effect of the outcome of the comprehensive spending review on road improvement schemes in east Yorkshire.

[The Secretary of State for Transport (Mr Philip Hammond)]

There were three road improvement schemes in east Yorkshire under consideration at the time the spending review was announced. Of those schemes, the Beverley integrated transport scheme has been classified as in the development pool and the A164 Humber bridge to Beverley improvement scheme has been classified as in the pre-qualification pool. Both are currently subject to the prioritisation process set out in the document that was made available to Members in this House on 26 October.

The Highways Agency scheme to improve the A63 Castle street in Hull has been identified as a scheme with a positive business case for potential construction in future spending review periods.

[Diana Johnson]

As the Secretary of State has said, in the October announcement the upgrade of the A63 was put back until at least 2015. Since then, we have had the announcement from Siemens that it will develop the green energy industry along the Humber. In light of that announcement, will the Secretary of State think again? The A63 upgrade would have a positive impact on the economic regeneration of east Yorkshire and local businesses are really pushing for it.

[Mr Hammond]

I am aware of the relevance of the A63, having sat in a traffic queue on it not so long ago. The Highways Agency budget for the current spending review period has been allocated to schemes that have been approved to proceed, so there will be no more funding available during the funding review period. However, that scheme is value for money and I expect it to go forward in a future spending review period.

[Angie Bray (Ealing Central and Acton) (Con)]

5. What assessment he has made of the effects of the ending of the west London extension of the congestion charge zone.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The removal of the western extension of the congestion charging zone is a devolved matter for the Mayor of London.

[Angie Bray]

Does the Minister of State agree that one of the beneficial effects will be for those who live or try to run small businesses around the perimeter of the zone, for whom life was made very expensive? However, perhaps the biggest benefit will be for City Hall in the restoration of a reputation for proper democratic governance.

[Mrs Villiers]

My hon. Friend has a strong record in her former capacity as a London Assembly Member for representing the views of residents on this issue, as she has in her current capacity as the hon. Member for Ealing Central and Acton. There are always pros and cons to be considered in relation to the impact on business of congestion charging schemes. No doubt when the Mayor made the decision on the western extension zone he will have taken on board her concerns about the impact on small businesses on the periphery and boundary of that zone.

[Clive Efford (Eltham) (Lab)]

Notwithstanding the fact that this is a devolved matter, the Department provides a great deal of resources to the Mayor of London for traffic issues. His removal of the western extension has cut £70 million annually from his revenue stream. Did the Department express any concerns at any time about the effect of that cut on funding for future transport schemes in London? The rest of us are paying higher charges and fares as a result of that hole in the Mayor’s budget.

[Mrs Villiers]

This is a devolved matter. The settlement was established by the Labour Government, who made it clear that congestion charging matters were rightly for the Mayor of London to decide and not for Ministers in Whitehall.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

6. What plans he has for the reform of rail franchising; and if he will make a statement.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

11. What plans he has for reform of rail franchising; and if he will make a statement.

The Minister of State, Department for Transport (Mrs Theresa Villiers): On 19 January, the Government set out a new approach to franchising, taking account of the consultation that took place last summer. We expect the reforms to deliver a railway that is more responsive to passenger needs and provides better value for taxpayer investment.

[Andrew Jones]

I thank the Minister for that answer. Last week, the east coast main line announced a new direct service from London to Harrogate—the first for 20 years—after some excellent local work promoting the economic case for that service. As the new franchise requirements for the east coast main line are developed, will that economic case see Harrogate-London links built into those requirements?

[Mrs Villiers]

I thank my hon. Friend for his question. I have been impressed with the work done by him, the Harrogate chamber of commerce and Harrogate business interests to make the case for improved rail services between Harrogate and London. I would encourage them to continue that input when the consultation takes place on re-letting the east coast franchise. We will, of course, take those representations into account in our decisions on Harrogate services.

[Eric Ollerenshaw]

Given the announcement last week that the west coast main line franchise will be up for renewal, how soon does the Minister think we will see the extra carriages and, perhaps, the extra trains that we need to relieve the severe overcrowding on the line, particularly for my constituents in Lancaster?

[Mrs Villiers]

The Government will be funding 106 extra carriages on the west coast main line, which are due to come into operation with the new franchise. Some of those carriages will be available in a new train that will be available earlier, once its testing period has been completed. At that point, it will be available for Virgin to sub-lease, if ordinary commercial terms can be agreed.

[Mr David Hanson (Delyn) (Lab)]

Will the Minister give an assurance that under the new franchise services to north Wales, in particular, will not be reduced, especially given the news this week that services from Wrexham to Marylebone will cease as of Friday?

[Mrs Villiers]

We are engaged in a consultation on the level of services and the configuration that will go into the west coast main line. We fully appreciate the importance of the services in Wales, including north Wales, and I would encourage the right hon. Gentleman to take part in the consultation. Of course, we are very much aware of passengers’ disappointment at the closure of the Wrexham and Shropshire service, and we will take that on board in the decisions that we make on the west coast line.

[Alison McGovern (Wirral South) (Lab)]

Could the Minister say how the reform of rail franchising will support infrastructure investment, especially the necessary electrification on the Wrexham to Bidston line, for example, which runs through my constituency?

[Mrs Villiers]

I believe that longer franchises, which are a key part of our reform, will provide stronger incentives for private sector investment in improving stations, rolling stock and—potentially—infrastructure. The current short franchises, through which it was difficult to get a return on significant investments of that sort, made it difficult for the private sector to maximise its investment in the railways. The rail franchising reform will therefore help to deliver the sort of improvements that the hon. Lady talks about.

[Guto Bebb (Aberconwy) (Con)]

As part of the consultation on the inter-city west coast main line, will the Minister consider the negative impacts of the use of power boxes and mechanical signalling on the ability of franchise holders servicing the north Wales coast to provide an enhanced level of service to my constituents?

[Mrs Villiers]

We do not seek to micro-manage Network Rail’s decisions on signalling—we take a technologically agnostic approach to that—but we encourage it to deliver its renewals and upgrades in the most cost-effective way possible, and I am happy to pass on my hon. Friend’s points to Network Rail, so that it can take them on board in its decisions.

[David Wright (Telford) (Lab)]

The demise of the Wrexham-Shropshire service is particularly sad. Local people really valued it, not just because it provided the direct link to London, but because the staff provided a superb service. Would the Minister be willing to meet MPs from all parties with constituencies along the line to discuss how we can consider not just how open-access services operate generally, but how we can put the line through Shropshire and up to north Wales back into the west coast franchise?

[Mrs Villiers]

I would be happy to have that meeting. I encourage the hon. Gentleman, as I did the right hon. Member for Delyn (Mr Hanson), to take part in the west coast main line consultation under way.

[Duncan Hames (Chippenham) (LD)]

How will the Minister’s franchising reforms facilitate much-needed investment, both trackside and on train, in smarter signalling, such as in the world-class systems developed by Invensys in my constituency, which I would be delighted to show her, if she would be so kind as to visit Chippenham?

[Mrs Villiers]

I shall certainly try to fit a visit to Chippenham into my diary. As I said to the hon. Member for Wirral South (Alison McGovern), I believe that longer franchises with more flexibility will encourage private sector investment in the railways. Longer franchises in the past for Chiltern Railways have enabled the train operator to become involved in signalling work. However, we have to acknowledge that major infrastructure works will need to continue to attract public funding, although there is no reason to believe that rail franchising reform could not assist private sector and train operator involvement in improving signalling.

[Gareth Johnson (Dartford) (Con)]

7. What steps he is taking to reduce the incidence of people driving while uninsured.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am pleased to confirm that a new offence of keeping a vehicle with no insurance is being introduced, and that supporting regulations were laid before Parliament on 11 January 2011. Enforcement of the offence is planned to commence in the spring. The scheme for continuous insurance enforcement identifies uninsured drivers by comparing the Driver and Vehicle Licensing Agency’s vehicles database with the motor insurance database.

[Gareth Johnson]

I am grateful to the Minister for his reply. I am sure that he would agree that uninsured drivers are selfish in the extreme. Can he tell the House how much money will be saved for responsible drivers as a result of the changes, and will he also confirm that the police will retain the power to seize vehicles that are uninsured?

[Norman Baker]

I am grateful for my hon. Friend’s welcome for the steps that the Government are taking. I can confirm that the police will continue to have the power to seize vehicles, and he may be interested to know that last year they seized 180,000 such vehicles. Around 1.4 million vehicles are uninsured, which costs responsible motorists around £30 extra in their premiums each year. We think that the measure will save about £6 for each motorist.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Does the Minister not recognise that insurance costs, particularly for young drivers, are reaching ridiculous levels? The AA premium index suggests that they could rise by 40% this year, which he is making worse with the rise in insurance premium tax. Given that fines are so low, will that not mean that people will sometimes be incentivised to avoid paying their insurance? What on earth will he be doing about that?

[Norman Baker]

I understand the hon. Gentleman’s point, and my Department is in discussions with the Ministry of Justice about that specific matter. However, I hope that he would also welcome the steps taken today to clamp down on uninsured drivers, who are costing motorists more money.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

9. When his Department plans to publish its consultation on changing the law to allow UK nationals with diabetes to drive heavy goods vehicles in the UK.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Department for Transport plans to publish the consultation document very soon. We welcome views from anyone interested in the proposed changes and will consider all representations before making our final decisions.

[Mr Kennedy]

I thank the Minister for that reply. She will be aware from correspondence that my question arises from a rather long-running constituency case, which is not untypical of those of other hon. Members across the Chamber. Given that the EU directive dates back to August 2009 and that we have an utterly inconsistent position in the UK—registered diabetic heavy goods vehicle drivers from elsewhere in the European Union can drive on our roads, whereas UK-registered diabetic HGV drivers cannot—can she give some consideration as to how quickly this glaring anomaly can be cleared up?

[Mrs Villiers]

We will certainly be working hard to get the consultation document out as quickly as possible. However, given that what is being contemplated is a relaxation of current road safety rules, I am sure that my right hon. Friend will agree that this is not something to be undertaken lightly. We must ensure that we take the time to consider all the relevant factors to ensure that it is safe to make the change.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

10. When he plans to publish his proposals for the modernisation of Her Majesty’s coastguard.

[The Secretary of State for Transport (Mr Philip Hammond)]

The consultation on proposals to reconfigure coastguard maritime rescue co-ordination centres was launched on 16 December and will run until 24 March 2011. After that all responses received will be reviewed and analysed before we make a decision. At present there is no final timetable for the decision, as the time required for analysis will depend on the volume of responses received. In our view, it is more important to make the right decision than to make a quick decision.

[Gemma Doyle]

I have been contacted by several constituents who are concerned about the proposal to close Clyde maritime rescue co-ordination centre. They are worried that the loss of local knowledge will risk coastal safety in and around the waters of the Clyde. Will the Secretary of State give a commitment to listen carefully to those concerns about the closure of coastguard stations and, in particular, rethink the proposal to close Clyde MRCC?

[Mr Hammond]

Of course we will give careful consideration to all the representations made in the consultation. I should emphasise to hon. Members that we are talking about search and rescue co-ordination centres. They are not front-line delivery points; they are the centres that manage and co-ordinate the calls coming in, and task the front-line rescuers. The driver for the change is managing the work load and interlinking the centres across the country, so that they can best manage fluctuations in work load and provide a 24-hour competent service.

[Mr Adrian Sanders (Torbay) (LD)]

Have not the regional fire centre proposals, which were based on pretty much the same principles, been abandoned? Was not consideration given, before the consultation paper was published, to where this could end?

[Mr Hammond]

Indeed; I looked at precisely that point. The difference is that fire and rescue services are localised—there are different fire and rescue services around the country. Her Majesty’s Coastguard is a national service, operating as such, and the reconfiguration will provide nationally networked co-ordination centres that will deliver across the whole country.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Today’s Liverpool Echo calls into question the genuineness of the consultation on the coastguard service. If we take into account the scrapping of Nimrod, the ending of the emergency towing vessel contracts, the selling off of air-sea rescue, the prospective closure of coastguard stations and the sacking of coastguards, what assurance can the Secretary of State give to shipping, where there is real concern about the future of safety? Can he assure us that there will be no compromising of maritime safety?

[Mr Hammond]

It is a bit rich for the hon. Gentleman to talk about the selling off of search and rescue, when the search and rescue private finance initiative project was initiated by the Government in which he served and had been running for at least three years before the general election. On the specific point about the Liverpool coastguard co-ordination centre, Ministers looked at the proposals made by officials in the Department and judged that the decisions to be made between Belfast and Liverpool and between Stornoway and Shetland were so close that the consultation should go forward while making it clear that there was a judgment call to be made within each of those two pairs of stations. There was not a clear and definitive business case, which I think is what has given rise to the story in the Liverpool Echo to which the hon. Gentleman has referred.

[Mr Iain Wright (Hartlepool) (Lab)]

12. What plans he has for the future of bus services.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

My aim is to improve the entire bus journey for passengers. That means better integration between bus and rail services, better passenger information, smarter and more integrated ticketing, greener buses and better accessibility for people with reduced mobility. That will be achieved through incentives for commercial bus operators, funding local transport schemes through the local sustainable transport fund, but, above all, through operators and local transport authorities working together.

[Mr Wright]

In my area, Stagecoach is blackmailing Hartlepool borough council once again by claiming that it cannot run an evening bus service without getting yet more public money. Stagecoach made £126 million profit from its bus operations last year, but seemingly cannot operate an evening service after 7 o’clock in Hartlepool. It is very clear that the current system is not working, so will the Minister bring forward proposals to re-regulate local bus services?

[Norman Baker]

There is, in fact, a large range of powers available to local authorities, not least through the Local Transport Act 2008, which enables quality partnerships, and even quality contracts, to be established, so if his local authority feels that it has an unsatisfactory relationship with the bus company in question, it is open to it to look at the options available in legislation.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I hope the whole House will join me in extending condolences to the parents, family and friends of the 12-year-old boy tragically killed while crossing the A64 to catch the school bus.

On the wider question of rural buses, what assurance can my hon. Friend give to those living in rural areas that we will have a more extensive service—or at least as good a service as we have at the moment?

[Norman Baker]

I echo the condolences expressed by my hon. Friend about that tragic accident.

We are conscious of the importance of rural areas, which is why the issue was flagged up in the local transport White Paper. I changed the guidance on concessionary fares to ensure that the special position of rural and long-distance routes was specifically recognised in that regard. We have been in touch with local authorities to look at innovative schemes, such as dial-a-ride and so forth, to ensure that local services, which are essential to rural areas, are maintained.

[Andrew Bridgen (North West Leicestershire) (Con)]

13. How many commercial vehicles underwent Vehicle and Operator Services Agency roadside inspections in December 2010.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Approximately 7,000 vehicles underwent Vehicle and Operator Services Agency roadside inspections in December 2010. That was a combination of trucks and trailers, cars, buses and vans. That number comprised just over 17,000 checks of individual areas, such as checks for mechanical defects or drivers’ hours offences.

[Andrew Bridgen]

I thank the Minister for that answer. However, considering that the weather in much of December was so severe that it had a major impact on economic growth in this country and caused major disruption to the transport infrastructure, does he agree that VOSA should have a much more flexible and business-friendly attitude to conducting roadside checks, when hauliers and transport operators are struggling to supply the economy during severe weather conditions?

[Norman Baker]

I sympathise with my hon. Friend’s point, and he may be happy to know that VOSA did take a pragmatic approach to enforcement during the recent unusually difficult weather. In fact, in December 2010 it carried out only 60% of the tests it carried out in 2009. It has also taken account of a number of relaxations that the Government have made to drivers’ hours regulations because of the weather, and it has had regard to the inevitable delays that such weather can cause to journeys. However, we must ensure that all journeys on our roads are safe.

[Kerry McCarthy (Bristol East) (Lab)]

The Minister will be aware that there is real concern among staff who work at VOSA that the testing transformation programme, with the move towards private sector test stations and the closure of the VOSA test station network, is privatisation by the back door. Will he tell the House why there is such a push towards private sector test stations, and will he confirm that privatisation is not on the agenda?

[Norman Baker]

I assure the hon. Lady that the objective of the change is to make the arrangements more accessible. That, not her rather lurid explanation, is driving the changes.

[Mark Lancaster (Milton Keynes North) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Transport (Mr Philip Hammond)]

Since I last answered questions, I have published details of our proposed route for high-speed rail, launched the local transport White Paper, including the bidding guidance for the £560 million local sustainable transport fund, set out our proposals for reforms to the rail franchising system, which will deliver better value for money for taxpayers and better service to passengers, and announced tough new measures to tackle uninsured driving.

[Mark Lancaster]

Investment in the west coast main line is most welcome but mainly benefits long-distance travellers, while short-distance travellers remain overcrowded. Is there any light at the end of the tunnel for Milton Keynes commuters?

[Mr Hammond]

There are two separate lights at the end of the tunnel—[Interruption.] Neither of them is a train coming the other way. First, as my right hon. Friend the Minister of State said earlier, 106 additional Pendolino carriages for the west coast main line have been ordered and will come into service in 2012. Secondly, as the proposed HS2 line, if approved, is built it will provide massive additional capacity on the London-west midlands route, and capacity will be freed up for new high-speed, longer-distance commuter services from places such as Milton Keynes to London.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Ministers have spent weeks creating confusion over fuel prices. Will the Secretary of State say what he plans to do to help hard-pressed motorists? If he is so concerned now, will he say whether he thought it was fair to impose a VAT hike on fuel just three weeks ago?

[Mr Hammond]

The hon. Gentleman is a spokesman for a Government who proposed the fuel price increases that are now coming into effect, and who were planning to put VAT up, as we discovered from leaked documents before the general election. I am pleased to say that it is not my business to do anything about this, as it is a matter for the Chancellor of the Exchequer.

[David Morris (Morecambe and Lunesdale) (Con)]

T3. Some 84% of rail users are currently satisfied with their service. Does my right hon. Friend agree that that is welcome news, and will she elaborate on that statement?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Obviously, we welcome the positive response from the Passenger Focus survey. We are aware that there is always a need to improve provision of services on the railways, and that is one of the main reasons why we are supporting the work of the McNulty review to get costs down, to make it easier to deliver the improvements that people want.

[Mr Dave Watts (St Helens North) (Lab)]

T2. Has the Department carried out a study of the likely effects of massive rail and bus fare increases on the number of people who are able to use such services in the future?

[Mr Hammond]

The Department did, of course, carry out the usual equalities impact study that is required, before making the proposals. There is a hidden premise behind the hon. Gentleman’s question. Nobody increased rail fares ahead of inflation happily or gladly. The decision whether to protect the planned investment in reducing overcrowding by delivering additional rolling stock, or to scrap that programme, was a difficult one. We decided to protect investment for the medium and long term, and unfortunately that means three years of further above-inflation rail fare increases.

[Richard Harrington (Watford) (Con)]

T4. Many of my constituents and those of other Members were severely disrupted by the effects of the weather on airports in London and elsewhere. Does the Minister agree that the Civil Aviation Authority needs more powers to assess the situation and hold airport operators to account?

[Mrs Villiers]

My hon. Friend has raised an important issue. There was real concern about the way in which Heathrow dealt with the severe weather. That is one of the reasons for our plans to reform airport regulation, which include a new licensing system that will indeed give the CAA more powers to ensure that airports are properly prepared for winter.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The marine environment is dangerous, and we are fortunate to have Stornoway coastguard, which is based in my constituency. However, I have been told that the Government’s reorganisation proposals are not accompanied by any proper risk assessment. Is that true?

[Mr Hammond]

Of course the proposals have been risk-assessed. They have been around for more than two years, since before the general election, and there is a long slow-burning fuse behind them. They are now out for consultation, and the hon. Gentleman can and, I am sure, will make forcefully the case for retaining the station in Stornoway.

[Mr Robert Buckland (South Swindon) (Con)]

T5. Can the Minister give us a likely date for the decision on electrification of the Great Western line to Swindon and beyond?

[Mrs Villiers]

My hon. Friend is a staunch campaigner for further electrification. We have already announced electrification of the lines to Oxford, Newbury and Didcot, and we will shortly announce what further electrification of the Great Western line can be achieved in co-ordination with the linked inter-city express programme.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

You will recall, Mr Speaker, the procedural exchange that you and I had earlier this week about the failure of the Department for Transport to answer questions about river and port pilotage. The first question has now been answered inaccurately; as for the second, the Department refuses to publish the advice that it has received. This is a fundamental matter of safety. Will the Secretary of State examine it personally and review the decision to refuse to publish the information, in order to give us confidence that our pilots are properly trained?

[Mr Hammond]

I am not aware of the written answer to which the hon. Gentleman refers, but I will look it up when I return to the Department, and I will write to him.

[Mark Pawsey (Rugby) (Con)]

T6. In my constituency, an average of 27 people a year are killed or seriously injured in crashes involving young people. That includes a tragic accident over the Christmas period involving a friend of my son. Graduated driver licensing, enabling a new driver to proceed to a full licence over a period, has been shown in many countries to reduce the number of casualties in that vulnerable group. What discussions has the Secretary of State had about introducing such an approach to improving road safety in this country?

[Mr Hammond]

My hon. Friend will know that the United Kingdom actually has an enviable record on road safety. Many of the countries that operate graduated licensing suffer worse safety records than the UK. Our policy is to avoid additional regulation whenever possible, and we would be very concerned about imposing any regulation that reduced the mobility of young people who had acquired driving licences, because of the impact that it would have on their participation in the labour market and in further and higher education.

[Dame Anne Begg (Aberdeen South) (Lab)]

Apropos the disruption at Heathrow, the temperature has dropped again today. Ministers need not go abroad to find examples of the way in which airports can cope with snow. Aberdeen airport, which is also owned by BAA, managed to cope perfectly well with 2 feet of snow, while Heathrow was closed for nearly two weeks because of 2 inches of snow. What guarantee will the Government give passengers—not just those like me, but the many people who travel through Heathrow, which is one of the major hubs—that such disruption will not occur again?

[Mrs Villiers]

We must be realistic. When the weather is as severe as that which we witnessed before Christmas, there is bound to be some disruption. I pay tribute to airports such as Aberdeen, which worked very hard to deal with it—as did Gatwick—but we must recognise that Heathrow airport faces special challenges that make it tougher to respond to such conditions. Heathrow is conducting a review, and the Department is carrying out an investigation through the South East Airports Taskforce. There may be lessons that we can learn from measures taken by other transport systems, such as the imposition of emergency timetables when severe weather seems likely to reduce capacity significantly.

[Nicky Morgan (Loughborough) (Con)]

T7. Some of the residential areas in Loughborough face considerable pressure on parking as a result of having houses occupied by students, each of whom brings a car to the town. Can the relevant Minister confirm that under this Government local councils, communities and universities will continue to be able to implement local solutions that suit the local needs of the town?

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am happy to give that assurance. The whole thrust of the Government is to free up councils, remove regulations and make it easier for councils to reach the correct arrangements in conjunction with their communities.

[Mark Tami (Alyn and Deeside) (Lab)]

I heard what the Minister said about uninsured drivers, but what thought has he given to requiring drivers to put details of their insurance on the car windscreen, which works well in a number of other countries?

[Mr Hammond]

The hon. Gentleman may know that the Department has introduced a programme of rolling monitoring of insurance, where anyone whose vehicle is uninsured now has to make what is, in effect, a statutory off-road notice declaration. The police will have access to the database and will be able to monitor, in real time, whether vehicles are insured or uninsured. That will give rise to a much more effective level of enforcement.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T8. I know that the Minister is aware that Fleetwood has a railway line that has been redundant since the 1960s but which has most of its infrastructure intact. What hope can she offer my constituents that there may be a chance of reopening the line and providing much-needed regeneration to the town?

[Mrs Villiers]

I know that my hon. Friend has championed this cause, and I enjoyed my visit to the disused rail line. Programmes such as he outlines can confer significant local benefits, but it is primarily for the local authorities to identify the funding to restore railway lines and, importantly, to identify the funding for any ongoing subsidy that is needed. Local authorities may well wish to consider those options in order to enhance economic growth in their areas.

[Grahame M. Morris (Easington) (Lab)]

What assessment has been made of increasing fuel prices and the rising costs of motoring in rural areas, particularly for lower-income households?

[Mr Hammond]

No specific assessment has been made by my Department, but I can tell the hon. Gentleman that independent assessments suggest that between 1997 and 2010 the real cost of motoring has declined by 7%.

The Minister for Women and Equalities was asked—

[Julian Smith (Skipton and Ripon) (Con)]

1. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the effects on gender equality in the workplace of her proposals for flexible working.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

I have had several discussions with ministerial colleagues on these issues. Flexibility in the workplace is good for all employees—men and women. On gender equality specifically, flexible working allows many women with caring responsibilities to continue in work. Evidence also shows that flexibility is good for business and good for society. This Government are committed to extending the right to request flexible working to all employees, and we expect to begin consulting on the details shortly.

[Julian Smith]

Does my right hon. Friend agree that as we develop important policies in the area of equality we must avoid adding to the regulatory burden on small business? Will she listen carefully to the thousands of very small businesses in Britain that are concerned by some of these proposals?

[Mrs May]

My hon. Friend is a great champion of small businesses and their concerns. I hope that he will have seen from today’s announcement by the Department for Business, Innovation and Skills on the issue of employment tribunals that the Government understand that there is a real difference between how small businesses can cope with regulation and that burden and how a large business with a big human resources department can cope. We have already started discussions with the Federation of Small Businesses on flexible parental leave and flexible working, and we will be taking those issues forward. We are concerned to ensure that anything we do involves the least possible administrative burden for small businesses.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

These measures on flexible working are welcome, but they will not be taken up if people are afraid that their employer can still dismiss them without any consequences. Today, the Department for Business, Innovation and Skills is announcing measures to remove protection against unfair dismissal for people who have been in jobs for less than two years. The right hon. Lady will know that women are more likely than men to be in jobs for less than two years and so, once again, they will be harder hit by these proposals. There is no sign yet of an equality impact assessment from BIS this morning. Can she tell me whether one has been done? Has BIS examined the impact on equality? What is she doing to stand up for women across the Government?

[Mrs May]

I remind the right hon. Lady that the Business Department is today issuing proposals, on which it is consulting, on the future of employment tribunals. It is important that we take action on employment tribunals, because I have discovered from my discussions with businesses that they are often wary of issues such as flexible working and the extension of flexible working, precisely because of the tribunal costs that they could incur, were those regulations to be put in place. The right hon. Lady asked what I was doing to stand up for women. We are going to extend the right to request flexible working to all, which is more than her Government did.

[Pamela Nash (Airdrie and Shotts) (Lab)]

2. What steps she plans to take to address the trafficking of women and girls.

[The Minister for Equalities (Lynne Featherstone)]

Policy responsibility for human trafficking rests with the Minister for Immigration. Combating human trafficking, including the sexual exploitation of women and girls, is a key priority for the Government. We are committed to tackling organised crime groups who profit from this human misery, and to protecting victims. Tackling organised immigration crime, including trafficking, is a high priority for the Serious Organised Crime Agency, of which the UK Human Trafficking Centre is now part.

[Pamela Nash]

I thank the Minister for her answer, and I appreciate that this subject also falls under the category of immigration. Given that the European Union directive on trafficking would ensure that the UK provided further protection and support for victims, does she agree that we should enter into that commitment without further delay?

[Lynne Featherstone]

We have said all along that we would look at what was happening in the European directive. The wording was decided on the 13th, and the member states are now deciding whether to opt in or not. When that has happened, we will take a look, and if there are further things that we think would be helpful, we will make a decision then.

[Mr Peter Bone (Wellingborough) (Con)]

I welcome the Government’s review of the policy on human trafficking. Will the Minister tell us whether all non-governmental organisations with an interest in this field, including the all-party parliamentary group on human trafficking, are being consulted on the review?

[Lynne Featherstone]

As far as I am aware, the NGOs are being consulted, although there is not a public consultation.

[Fiona Mactaggart (Slough) (Lab)]

The Minister says that her Government are making anti-trafficking a high priority. Now that the directive has been completed, is she seriously saying that she is going to wait for other states to make a decision before Britain does so? Should not we be in the lead on this issue? The directive has been supported by Members of the European Parliament of all parties represented in this House. Is it not time for her to adopt the directive? If she is not planning to do so yet, will she tell us why not?

[Lynne Featherstone]

We have to look at it and then make our decision. On 14 October, during the anti-slavery day debate, the Minister for Immigration announced a new strategy to tackle human trafficking that involved disrupting the practice in the country of origin and on the border, as well as supporting the victims. We will have to see what the EU directive adds or does not add, and we will make our decision in due course.

[John Glen (Salisbury) (Con)]

3. What steps she plans to take to increase the number of women on corporate boards.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

Lord Davies has been appointed by the Government to look at how obstacles can be removed to allow more women to make it on to corporate boards. We look forward to his recommendations for a business-led strategy, and we will respond in due course. Measures that we are taking, such as flexible working and shared parental leave, will also help to address some of the barriers to progression that women face in the workplace.

[John Glen]

A recent Crown Prosecution Service report by Dr Catherine Hakim found that women were more likely to reach the top in business in countries such as the United States, where there are relatively few female-specific employee rights, as opposed to Scandinavian countries, which have lots of parental leave and much more job segregation. Will the Government consider putting much more emphasis on support in the workplace, rather than having a quota system, which many women find demeaning?

[Mrs May]

I am grateful to my hon. Friend for pointing out that there is varied experience across the world with regard to what works in ensuring that women can get to the top. The Government have no intention of introducing legislation on quotas in this area. We will listen to what Lord Davies says, and I have been party to some of the round-table discussions that he has had. From what I have seen so far, I am sure that he will come forward with some very practical ways in which we can help to unlock the barriers to women reaching their place on corporate boards. It is this Government’s firm determination to do more to ensure that more women are on corporate boards.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Minister for Women and Equalities confirm that this great panjandrum Lord Davies, who is going to get more women on to boards, is a man?

[Mrs May]

Yes.

[Bob Blackman (Harrow East) (Con)]

4. What her policy is on the hosting of civil partnership ceremonies in religious establishments.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

In June 2010, the Government published “Working for Lesbian, Gay, Bisexual and Transgender Equality”, which made a commitment to talk to interested groups about what the next step should be for civil partnerships, including on this issue. The Government have held a number of meetings on the topic with various groups, including those representing faith groups, lesbian, gay and bisexual people and the registration service. We will announce the next steps in due course.

[Bob Blackman]

I thank my right hon. Friend for that answer. Many religious groups are openly hostile to the concept of civil partnerships because it offends their religious doctrine. Lord Alli’s amendment in the other place would permit ceremonies within religious establishments. Will my right hon. Friend confirm that the Government do not intend to introduce compulsion for religious organisations that do not want to have civil partnerships in their buildings?

[Mrs May]

My hon. Friend raises an important point. This was a significant part of the debate when Lord Alli’s amendment to the then Equality Bill went through in the House of Lords before the general election. It is clear in his amendment that this is a permissive power, and that is the basis on which the Government are operating. We have no intention of introducing any element of compulsion. It will be for religious groups and faith groups to decide whether they wish to take up this opportunity.

[Chris Bryant (Rhondda) (Lab)]

I do not think anybody wants a form of compulsion that forces churches to do anything they do not want to in this field. That is a bit of a red herring. The right hon. Lady has said that the Government are considering allowing the use of religious rituals, ceremony and symbols at civil partnerships. If she is going to do that for civil partnerships, may I urge her to do it for civil weddings? Many people do not want to get married in church but would none the less like to have some religious readings or music.

[Mrs May]

In response to the hon. Gentleman’s first comment about no compulsion, I am grateful that he supports Government policy on that issue. He is right that extending the ability to have religious elements to a civil partnership ceremony or to hold such partnership ceremonies on religious premises raises an issue about the equality with civil marriage. We are taking steps as regards the Lord Alli amendment and we will make announcements in due course.

[Jo Swinson (East Dunbartonshire) (LD)]

6. What assessment she has made of the effect on the well-being of women and girls of body image representations in the media.

[The Minister for Equalities (Lynne Featherstone)]

I would like to congratulate my hon. Friend on her tireless commitment to this area of work. I, too, remain deeply worried about this issue. I have met too many people, both male and female, whose lives have been affected by negative feelings about their body shape. Recently I convened a group of experts to discuss our shared concerns and the evidence that they had assembled. I am working with them and with relevant industries to identify non-legislative ways of tackling the issue.

[Jo Swinson]

Girlguiding UK regularly surveys young women and girls in the country and consistently shows that girls are unhappy with the prevalence of heavily airbrushed images and the ultra-thin ideal in the media. The Committee of Advertising Practice, which sets the advertising rules, is either oblivious or complacent about this problem, however, recently stating in a letter that it has

“seen very few ads that are targeted at children which appear to have been airbrushed”,

and that it does not think that this is “a widespread practice”. Will the Minister reassure the House that she will not let the advertising industry get away with dismissing this issue?

[Lynne Featherstone]

I can assure my hon. Friend that the advertising industry is more than well aware both of her work and of the Government’s intention to work with interested partners on this issue. I am sure that Members of all parties recognise that it is a real issue for girls, women and young men in this country.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

7. What discussions she has had with the Secretary of State for Work and Pensions on the effect on women of changes to the state pension age.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I wrote to and met the Equality and Human Rights Commission during the Government’s review of the increase in state pension age to 66 to ensure that equality issues were fully considered. A full equality impact assessment was also published as part of the Government’s White Paper, which sets out the effect on women of changes to the state pension age.

[Luciana Berger]

Will the Minister please update the House on the coalition agreement, which committed to make no change to the state pension age for women before 2020?

[Steve Webb]

The hon. Lady is not accurately quoting the coalition agreement. My right hon. Friend the Chancellor made it clear before the election that the pension age would not be 66 for men before 2016 or for women before 2020, and we have kept to that.

[Mr Dominic Raab (Esher and Walton) (Con)]

8. What steps she is taking to eliminate discrimination in employment law on the grounds of gender.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

We are committed to tackling discrimination in the workplace. The Equality Act 2010 makes it unlawful to discriminate against men or women because—the answer I have here says because of “sex at work”, but I think it means on the basis of gender—or when providing an employment service. We will shortly be launching a consultation on the coalition commitment to encouraging shared parenting from the earliest stages of pregnancy, including through a system of flexible parental leave. We want to make changes to ensure that the law better supports real families juggling work and family life and helps businesses that employ them. Some interim measures are already in place. From April this year new parents will be able to share a period of paid leave through the introduction of additional paternity leave.

[Mr Raab]

I thank the Minister for that answer and those clarifications. Does she agree that making maternity leave transferable will help to eliminate anti-male discrimination in the workplace and will give couples greater choice in addressing the career-family balance together?

[Mrs May]

My hon. Friend raises the issue of work-life balance and choices for families. The introduction of flexible parental leave will do two important things. First, it will give families the choice to decide which parent stays at home to look after the child in the early stages, beyond a period that will be restricted for the mother only. Secondly, it means that, in future, employers will not know whether it will be the male or the female in front of them seeking employment who will take time off to look after a baby. I think that is an important step in dealing with discrimination. We should try to get away from gender warfare and the politics of difference, as my hon. Friend has said, but I suggest to him that labelling feminists as “obnoxious bigots” is not the way forward.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Last night’s television programme “Posh and Posher” observed that there are more male Cabinet members from one Oxford college than there are women of any background in the Cabinet. Given that, does the Minister for Women and Equalities agree with the hon. Member for Esher and Walton (Mr Raab) that her work colleagues get a “raw deal” at work because of feminist “bigots” being unreasonable on issues such as equal pay?

[Mrs May]

I think I caught the hon. Lady’s gist in relation to membership of the Cabinet, and I simply point out that she should look at the balance in the previous Cabinet under the Labour Government. The Prime Minister has made it absolutely clear that he has a commitment to ensure that a third of ministerial places are taken up by women by the end of the Parliament.

[David Mowat (Warrington South) (Con)]

9. What discussions she has had with the Secretary of State for Justice on custodial sentences for women with children.

[The Minister for Equalities (Lynne Featherstone)]

No recent discussions have been held on this issue. Sentencing is entirely a matter for the courts, which take account of all the circumstances of the offender and the offence. This will include consideration of whether or not the offender is a primary carer. We have a continuing programme of work under way to divert women away from custody for those who do not pose a risk to the public. We must ensure that women who offend are successfully rehabilitated, whether they serve sentences in custody or in the community.

[David Mowat]

I thank the Minister for that response. She will be aware that, according to the Corston report, one third of custodial sentences for women go to women who are lone parents. That has severe knock-on effects for their children. What further guidelines can the Minister issue in this area?

[Lynne Featherstone]

Yes, we have taken the Corston recommendations very seriously and we are developing a strategy to ensure that the women’s estate is fit for purpose in both custodial and community settings. We are also following on with programmes to divert women away from custody: more than £10 million has been provided to deliver 44 community-based interventions for women to tackle the underlying causes of their offending as part of robust community sentencing.

[Tom Brake (Carshalton and Wallington) (LD)]

Can the Minister say whether the Ministry of Justice is on target to reduce the number of women in custody by 400, as has previously been agreed?

[Lynne Featherstone]

I am not in a position to say, because I have not had that discussion this morning.

Business of the House

Thursday 27th January 2011 Commons Chamber

11:34

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the business for next week?

[The Leader of the House of Commons (Sir George Young)]

The business of the House for next week is as follows:

Monday 31 January—Second Reading of the Health and Social Care Bill.

Tuesday 1 February—Conclusion of consideration in Committee of the European Union Bill (Day 5).

Wednesday 2 February—Opposition Day [10th Allotted Day]. There will be a debate on the performance of the Business, Innovation and Skills Department followed by a debate on the future of the Public Forest Estate in England. Both debates will arise on an Opposition motion, followed by a motion to approve European documents relating to the Court of Auditors’ 2009 report.

Thursday 3 February—Motion relating to consumer credit regulation and debt management, followed by a general debate on reform of legal aid. The subjects for both debates were nominated by the Backbench Business Committee.

Friday 4 February—Private Members’ Bills.

The provisional business for the week commencing 7 February will include:

Monday 7 February—Opposition Day [un-allotted day] [half day] [first part]. There will be a half-day debate on a Scottish National party and Plaid Cymru motion.

Tuesday 8 February—Second Reading of the Education Bill.

Wednesday 9 February—Motions relating to the police grant and local government finance reports.

Thursday 10 February—Motion relating to voting by prisoners. The subject for this debate was nominated by the Backbench Business Committee.

Friday 11 February—Private Members’ Bills.

I should also like to inform the House that the business in Westminster Hall for 10 February will be:

Thursday 10 February—A debate on onshore wind energy.

[Hilary Benn]

I am grateful to the Leader of the House for his statement. Will he clarify what the rest of the business will be on 7 February, apart from the half-day Opposition debate he has just mentioned?

Last Friday, the then Member for Belfast West wrote to you, Mr Speaker, seeking to resign as a Member of Parliament, but as we know, such a letter has no effect, as the only way for a Member to resign is to apply for the Chiltern Hundreds. On Monday, the Treasury told the BBC that no such application had been received, and yet yesterday we were informed by the Prime Minister that the Chancellor of the Exchequer had appointed Mr Adams as Baron of the Manor of Northstead.

The Chancellor’s power effectively to disqualify a Member must be exercised correctly. It does not seem that in this case that long-standing precedent was followed, so can the Chancellor come to the House and tell us when he received a letter from Mr Adams applying for the Chiltern Hundreds or, if he received no such application, explain on what basis he appointed Mr Adams to the post previously mentioned, given that “Erskine May” states that those offices are

“given by the Chancellor of the Exchequer to any Member who applies for them”?

Does the Leader of the House agree that it is time we changed these ancient ways of enabling Members to step down and moved to a simple system whereby a Member can write to you, Mr Speaker, to resign?

Last week, the Leader of the House said in answer to a question that

“this Government did something that the previous Government refused to do—we set up the Backbench Business Committee”—[Official Report, 20 January 2011; Vol. 521, c. 1025.]

I gently point out to him, in the interests of accuracy, that the decision to set up that Committee was in fact taken by the House on 4 March 2010, when we were in government and Members agreed to a motion moved by my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman).

Can we have a debate on the Government’s handling of the economy? Only a few weeks ago, the Chancellor assured us that the recovery was on track. On Tuesday, we discovered that growth has in fact stalled. The Chancellor blamed the snow. It is not the wrong kind of snow; it is the wrong kind of policies. That is why the outgoing director general of the CBI, Sir Richard Lambert, this week warned that the Government have no strategy for growth and criticised Ministers for being

“careless of the damage they might do to business and to job creation”

Yesterday, George Soros said that the cuts could not be implemented without pushing the economy into a recession. Is it any wonder, therefore, that families up and down the country, who are worried about their jobs, rising prices and falling incomes, are beginning to ask themselves whether this lot know what they are doing?

Can we have a debate on the shambolic way in which the counter-terrorism review has been conducted? Last Thursday, the Immigration Minister promised that the draft emergency legislation on detention would be placed in the Library of the House. It has still not appeared. Will the Leader of the House tell his colleagues that when they promise to put something in the Library, Members expect it to be available soon? It is now all too obvious that that legislation is not ready.

In opposition, the Lib Dems criticised the Labour Government’s approach to dealing with terrorism and made another of those firm pledges—a firm pledge to scrap control orders. In the past few weeks there has been a lot of bravado briefing by the Deputy Prime Minister, promising that the orders would go, yet what was announced yesterday? Control orders by another name—with curfews replaced by “overnight residence requirements”. Liberty is very unhappy this morning, saying that control orders have been “retained and rebranded”. Why has that happened? Because the Government have rightly recognised that there is a threat to the public from which we need to be protected, and the responsibility that comes from being in government has finally dawned even on the Deputy Prime Minister.

Following the release of the extraordinary photographs showing the dismantling of the £4 billion fleet of Nimrod long-range reconnaissance and surveillance aircraft, which will then apparently be sliced up in an industrial shredder, can we have a statement from the Secretary of State for Defence on the letter that the six former defence chiefs have sent today, describing the decision to destroy the aircraft as “perverse” and warning that it will create

“a massive gap in British security”

Finally, can we have a debate on the machinery of government? Because it is pretty clear, from what has been going on this week, that this Government are not actually very good at governing.

[Sir George Young]

I am grateful to the right hon. Gentleman for his points. The business for the week after next is always provisional and changes are made, so at this stage I cannot announce the business for the second half of that Monday, but it is unlikely to be Government legislation.

On the substantive issue the right hon. Gentleman raises about Gerry Adams, as the right hon. Gentleman said, Gerry Adams wrote on 20 January making it absolutely clear that he wanted to relinquish his seat and stand in the Irish general election. As Gerry Adams should have known, a Member of Parliament may not resign; there are no means by which a Member may vacate his or her seat during the lifetime of a Parliament, other than by death, disqualification or expulsion. The Chancellor of the Exchequer, therefore, in line with long-standing precedent granted Mr Adams the office of profit under the Crown of steward and bailiff of the Manor of Northstead, so we delivered Mr Gerry Adams to the required destination, although he may have used a vehicle and a route that was not of his choosing.

Yesterday, Mr Speaker, you informed the House that, owing to that appointment, Gerry Adams was thereby disqualified from membership of the House by virtue of section 1 of the House of Commons Disqualification Act 1975. You also stated:

“The Chancellor of the Exchequer has exercised his responsibilities”;

and:

“He has done so in an entirely orderly way.”—[Official Report, 26 January 2011; Vol. 522, c. 405.]

During the subsequent exchanges, Members raised the hypothetical possibility of a future Chancellor appointing a Member without a firm application for a relevant post from that Member. I find it inconceivable that such a situation would occur; it is a matter of constitutional principle that a Chancellor does not act without an unambiguous request from a Member to relinquish his or her seat. In this case, that request was a letter of resignation. In addition, there is a protection in the form of provision in the 1975 Act for a Member not to accept any office that would lead to his or her disqualification. I have to say in response to the right hon. Gentleman’s final point on the matter that this law on resignation from the House has served us well for 260 years—and the Government have no plans to change it.

On the right hon. Gentleman’s next point, I am amazed that he raises the issue of the Backbench Business Committee. The Parliamentary Secretary, Office of the Leader of the House of Commons, my hon. Friend the Member for Somerton and Frome (Mr Heath), and I consistently raised the previous Government’s failure to enact the establishment of such a Committee, but my predecessor as Leader of the House refused to bring forward the relevant motions, so it was indeed this Government who established the Backbench Business Committee. I am surprised that the right hon. Gentleman ventures into that territory.

On the economy, if only the right hon. Gentleman’s party had bequeathed to the coalition what we bequeathed to Labour in 1997, we would not face the problems that we face today. We bequeathed a golden inheritance: fast growth, falling unemployment and decreasing inflation. Let us compare that with what Labour left behind: a trillion pounds of debt for the first time ever, the largest deficit in the G20 and in our peacetime history, and the deepest and longest recession in the G20. He quoted Richard Lambert, who also said that

“the tax and spending policies of the last Government created a substantial structural deficit…That’s what made substantial spending cuts inevitable, irrespective of who won the last election.”

He went on to say that

“public finances in the UK are in a mess, to a degree that threatens our long-term economic stability.”

On counter-terrorism, the Home Secretary made a statement yesterday, as the right hon. Gentleman knows, and answered some of the questions that he has raised. The Government will subject draft emergency legislation on 28-day pre-charge detention to pre-legislative scrutiny. That is currently being drafted and will be deposited in the Library of the House shortly. I was here when my hon. Friend the Minister for Immigration made the statement last week. He did not give a specific time when the draft legislation would go into the Library. We will set out the suggested approach for the scrutiny when the draft Bill has been completed, although that is, of course, a matter for the House.

The decision to cancel the Nimrod project was not taken lightly by Ministers and service chiefs. It is a consequence of the £38 billion deficit in the defence budget that we inherited from the outgoing Government. The project was nine years late and involved a cost increase of 300%. None of the nine aircraft was operational, only one was fully constructed and that one had not passed its flight tests. The cancellation will save £2 billion over 10 years. Since the Nimrod MR2 was taken out of service by the previous Government in March last year, the impact has been mitigated by the use of other military assets, including Type 22 frigates, Merlin anti-submarine helicopters and Hercules C-130 aircraft, and by working with allies and partners where appropriate.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many right hon. and hon. Members are seeking to catch my eye, and I should like to accommodate them all. Single, short questions and the characteristically pithy replies of the Leader of the House will be essential if I am to have a reasonable chance of doing so.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

My constituents in Oxford West and Abingdon value their library services greatly, not just for lending, but for the role that they play in their communities. I have received hundreds of letters and e-mails about the proposals to close the Summertown, Botley and Kennington libraries in my constituency. The recent Westminster Hall debate showed that there is interest in this subject from both sides of the House. Will the Leader of the House provide Government time for a debate not only on the cultural and community value of libraries, but on how we can continue to support them in the difficult economic climate bequeathed to us by the previous Government’s irresponsible fiscal policies?

[Sir George Young]

I am grateful to my hon. Friend. There was a debate in Westminster Hall on library services on 25 January, and she might like to look at that. I spent three years at Oxford and I am afraid that I did not spend nearly as much time in the libraries as I should have.

Public libraries are a hugely valued service, which allows free access to information and services. It is important that her local authority has a strategy for any reorganisation of its library service, which takes into account the needs of local people and the views of the local Member of Parliament. As she may know, the Secretary of State has residual powers. She may wish to contact him if necessary.

[Natascha Engel (North East Derbyshire) (Lab)]

The Backbench Business Committee now meets on a Tuesday at 1 o’clock. As a result, far more Back Benchers come to the Committee with ideas about what debates we should schedule. Another result is that more Back Benchers are asking us why we continue to have to schedule debates on a Thursday. Of the 13 and a half days of debates that we have held in the Chamber, one has been on a Monday, two and a half have been on Tuesdays—two of which were end-of-term debates—and 10 have been on Thursdays. Will the Leader of the House please consider giving us days in different parts of the parliamentary week? Will he also say when he will come up with an answer on how many additional days the Backbench Business Committee will be given to allocate to Members as a result of the extension of the parliamentary timetable?

[Sir George Young]

I am grateful to the hon. Lady for all the work that she is doing with her Committee, and I note her public service announcement about the new time for that Committee’s meeting. About one in three of the days that we have allocated have not been Thursdays. We should not devalue Thursdays—they are important days. However, I understand her request and I hope shortly to be able to make some progress and to shift the centre of gravity a little away from Thursdays. On her final point, we will be having discussions, not only on the allocation of Backbench business time, but on Opposition days and private Members’ days, to reflect the likely extended length of the Session, subject to the Fixed-term Parliaments Bill going through.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I have in my hand a piece of paper, which is the written statement on the future of the public forest estate in England. Does the Leader of the House share my disappointment, and that felt by all of us who are committed to saving the public forests, that there was not an oral statement? Will he explain why there is not to be a debate in Government time on the future of that valuable public asset?

[Sir George Young]

I understand my hon. Friend’s strong feelings on the matter. The Public Bodies Bill is currently in another place, and I hope it will reach this House once the Lords have sorted themselves out. There will be an opportunity then for him to speak on that specific issue, but as I have just announced, there will also be an Opposition day debate on it next Wednesday. I hope that he has read the written ministerial statement and seen that we are ensuring that public benefit is written into the change. The Government have no plans for a widespread disposal of assets in order to raise money. We want community trusts and local organisations to take ownership of some of our valuable woods.

[Mr David Winnick (Walsall North) (Lab)]

Instead of farcical exchanges about stewards and barons in relation to resigning from the House, would it not be better, as my right hon. Friend the Member for Leeds Central (Hilary Benn) has suggested, and as I did yesterday, if a simple letter of resignation were sufficient? Why should we keep a procedure simply because it has been in existence for the number of years that the Leader of the House mentioned?

[Sir George Young]

For the last 13 years we had a Modernisation Committee and, to my knowledge, not once did it consider the procedure for resignation, so it clearly did not think that it was a priority. The procedure has worked perfectly well for 260 years, and given all the pressures on the House’s time, I wonder whether we should really give priority to this matter.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

In Crewe and Nantwich, many families lost significant fees and deposits that they had paid to their children’s nurseries, and had major disruption to their child care arrangements, when the company running them went bust recently. May we have a debate to discuss how parents can be better protected in such circumstances rather than being left exposed both financially and in their home environment by finding themselves in a long queue of creditors?

[Sir George Young]

I am very sorry to hear of the plight of those who have paid up front for child care or nursery places and then found that the provider has gone into liquidation. I shall raise the matter with ministerial colleagues at the Department for Business, Innovation and Skills, who have responsibility for the Insolvency Service, and I would point my hon. Friend’s constituents to the local authority’s family information service, which may be able to help find alternative places for those who have been affected.

[Mr Nigel Dodds (Belfast North) (DUP)]

May we have a debate on the prerogative powers of the Chancellor of the Exchequer? Given that the Leader of the House informed us earlier that there is provision in legislation to refuse appointment to an office of profit under the Crown, will he confirm that since Gerry Adams—or Baron Adams, as he is better known now—has now been disqualified, it follows that he has indeed accepted Crown office?

[Sir George Young]

The right hon. Gentleman is venturing into territory that is occupied by you, Mr Speaker, and you made the announcement yesterday evening. Under the House of Commons Disqualification Act 1975, there is provision to refuse office. No refusal was received, so it was deemed to have been accepted.

[Priti Patel (Witham) (Con)]

The Leader of the House will be aware that yesterday afternoon, the Parliamentary Assembly of the Council of Europe debated and voted on a report containing scathing criticism of the UK for not granting thousands of prisoners their apparent right to vote, and recommending tougher sanctions against the UK Government in respect of the implementation of decisions of the European Court of Human Rights. In view of that, will he explain what action the Government are taking to ensure that decisions concerning our judicial system will be made in Britain by British law-makers?

[Sir George Young]

I am grateful to my hon. Friend. As I announced a few moments ago, there will be an opportunity for the House to debate the issue shortly in Backbench Business Committee time, and the relevant motion is now on the Order Paper. I have seen the report to which she refers, and it actually sets the UK apart from the other states mentioned. It calls on us to implement the judgment of the ECHR on prisoner voting, and notes that the Government have announced that they will do so. We are bound by that judgment and take our legal obligations seriously, but as I have said, we will listen very carefully to the debate in a fortnight’s time.

[Angus Robertson (Moray) (SNP)]

The wasteful destruction of the Nimrod fleet leaves a hole in national security and in the communities around RAF Kinloss, where it should be based. The Secretary of State for Defence assured me personally that the review of military bases would be concluded within weeks of all military recommendations being made at the end of February. We now learn, however, that it has been put back to the summer. That will cause untold economic uncertainty and damage to defence-dependent communities such as Moray, so may we have a full statement and a debate in Government time on the delay and on what concrete financial support the UK Government will provide immediately?

[Sir George Young]

I understand the hon. Gentleman’s deep concern. There will be Defence questions on Monday, at which he might have an opportunity to raise the matter. As he knows, we have concluded that RAF Kinloss and two other bases are not required by the RAF. The review to which he refers is now under way and will assess the overall needs of our armed forces, the long-term future that the bases may have and what alternative military requirements they could meet. I understand the urgency of an early decision, and I will pass that on to my right hon. Friend the Secretary of State for Defence.

[David Tredinnick (Bosworth) (Con)]

The mess in Parliament square is now the subject of part 3 of the Police Reform and Social Responsibility Bill, but as that Bill cannot possibly become law before Easter, will my right hon. Friend consider asking for it to be split? Having taken advice from the Clerks, I understand that it is in order to split the Bill in Committee, so that part 3 could make its own way through both Chambers in that time.

[Sir George Young]

I will put that proposition to my right hon. Friend the Home Secretary, whose Bill it is. My hon. Friend will know that Westminster city council is taking action, which I am sure he welcomes, to remove the tents that are out there. I understand that notices have been served, and I hope that follow-up action will be taken by the courts, and if necessary by the police.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

The Leader of the House is fully aware of the deep angst on both sides of the House about yesterday’s shambles over the resignation of the former Member for Belfast West. Will he ask the Northern Ireland Office to confirm what role, if any, it played in persuading the Chancellor to take the unprecedented steps that we saw yesterday?

[Sir George Young]

I reject the assertion that what happened yesterday was unprecedented. There are precedents for Members who write in to resign without specifically asking for Crown office to then be appointed, so what my right hon. Friend the Chancellor did was perfectly correct in delivering the hon. Member’s wish to resign, and he followed precedent.

[John Stevenson (Carlisle) (Con)]

In the coalition agreement, there is reference to giving Select Committees, the obvious example being the Treasury Committee, the power to approve senior appointments. There is also reference to constitutional change—in other words change to the House of Lords. Given both those points, has not the time now come for the appointment of members of the Supreme Court to have parliamentary approval? Will the Leader of the House agree to a debate on that important issue?

[Sir George Young]

I understand my hon. Friend’s interest in the matter, but I believe that that would run the risk of politicising judicial appointments. He may have seen the Government’s response to the report of, I believe, the Liaison Committee. We are perfectly prepared to broaden the range of appointments that require pre-appointment approval by Select Committees, but my right hon. Friend the Lord Chancellor stated before the Lords Constitution Committee on 19 January that he was against such an approach in the case of the Supreme Court because of the risk of politicising judicial appointments.

[Hugh Bayley (York Central) (Lab)]

This morning, the Yorkshire regional flood defence committee was told that the budget for capital works for flood protection would be reduced by 27%, as a result of which no new flood protection schemes will go ahead in Yorkshire for the foreseeable future. Both the Prime Minister and the Chancellor said that flood protection money would be protected, so may we have an urgent debate to discuss a supplementary estimate to ensure that sufficient funding is made available in Yorkshire and elsewhere?

[Sir George Young]

The hon. Gentleman will have an opportunity to raise his concerns this time next week, at Environment, Food and Rural Affairs questions. The Government have had to make some difficult decisions on public expenditure because of the situation that we inherited.

[Elizabeth Truss (South West Norfolk) (Con)]

Since October, the people of Terrington St John have been forced to use a mobile surgery while a fully kitted-out GP surgery lies empty nearby. Will the Leader of the House ask for a statement from the Secretary of State for Health about how he will address the issue, which is creating distress, inconvenience and cost for local residents?

[Sir George Young]

I understand my hon. Friend’s concerns, which I will share with the Secretary of State for Health. I understand that Norfolk primary care trust has reopened negotiations with the two GPs who own the now disused St John surgery building, with the clear aim of reaching a settlement which would allow the new GP practice to move in.

[Mr Dennis Skinner (Bolsover) (Lab)]

Whatever happened to the oral statement on the wholesale privatisation of forests? Sure we could have expected an oral statement on that matter today. Will the Leader of the House answer the questions? Is it going to be a free-for-all? Will the sleazy bankers be able to buy up large chunks? Shall we have a Fred-the-Shed Goodwin memorial park? Will the supermarkets be allowed to buy: Tesco—“Buy two forests, get one free”?

[Sir George Young]

The short answer is no, no and no. It sounds as though the hon. Gentleman has not read the consultative document. It is not a statement of Government policy. Under the previous regime, the Forestry Commission disposed of some 25,000 acres without the sort of precautions that we are including in the Public Bodies Bill.

[Jo Swinson (East Dunbartonshire) (LD)]

The Leader of the House is to be congratulated on introducing the motions to implement the Wright Committee reforms, such as setting up the Backbench Business Committee, which is widely agreed to be a success under the leadership of the hon. Member for North East Derbyshire (Natascha Engel). Given that success, will the right hon. Gentleman say what progress he is making on another Wright reform—creating a House business committee, so that transparency and democracy can be brought to scheduling Government business?

[Sir George Young]

The House business committee was another commitment to which the previous Government refused to commit themselves. We are committed to it, and it will be introduced within three years of this Parliament. We want the current regime to run for about a year, when we will review it and then have serious discussions about how we move to stage 2 —the House business committee, which will merge my responsibilities with those of the Backbench Business Committee, so that one Committee will deal with the future business of the House.

[Kevin Brennan (Cardiff West) (Lab)]

May we have a debate on the Government’s use of Orwellian language? We have had doublespeak and newspeak, and now we have Mayspeak in the Home Secretary’s renaming as the “Freedom Bill” a measure to keep people under surveillance, and renaming curfews “overnight residence requirements”. Is it true that she is to rename electronic prisoner tags “involuntary pagers”? Frankly, we need some sort of cross-party conversation, otherwise known as a debate, about it.

[Sir George Young]

The hon. Gentleman reiterates an exchange that took place yesterday when his colleagues raised those points, which the Home Secretary dealt with very adequately. She has rebalanced the competing demands of liberty and security in an intelligent way. There will be an opportunity to debate the Bill to which she referred when it is introduced. The provisions may not be in the Freedom Bill.

[Matthew Hancock (West Suffolk) (Con)]

The people of East Anglia and hon. Members of all parties were delighted when the Government decided in the spending review to dual the remainder of the A11. This morning, there was a serious accident on the A11. Can the Leader of the House therefore find time for a debate on when the improvements will begin?

[Sir George Young]

I am only sorry that my hon. Friend was not in his place an hour ago, when we had Transport questions. He might have been able to catch Mr Speaker’s eye and ask the Secretary of State that question. [Hon. Members: “He was here.”] I regret his failure to do so. I will draw to the attention of my right hon. Friend the Secretary of State for Transport the concerns about road safety on the A11 and ask him to write to my hon. Friend.

[Lilian Greenwood (Nottingham South) (Lab)]

We have already heard that defence chiefs have said that scrapping the RAF’s Nimrods leaves a massive gap in British security. I listened to the right hon. Gentleman’s reply to my right hon. Friend the Member for Leeds Central (Hilary Benn), but will he arrange an urgent debate in Government time to discuss the scrapping of planes that are vital to our national security and the consequences for our ability to defend our country?

[Sir George Young]

I understand the hon. Lady’s concerns. The decision was announced in the strategic defence and security review in October. We then had a debate in Government time on precisely the issue that she has raised. The House has therefore had an opportunity to discuss our decision on Nimrod and other assets. Around £2 billion will be saved in the next 10 years by not bringing Nimrod into service. Against the background of the challenging circumstances that the Government face, we had to make difficult decisions about the defence budget.

[Mr Robin Walker (Worcester) (Con)]

Yesterday, my hon. Friend the Member for Redditch (Karen Lumley) raised the question of school funding in Worcestershire. Although, like her, I welcome the impact of the pupil premium on our county, I am concerned that research from the campaign group F40 shows Worcestershire still languishing near the bottom of the league tables for per-pupil funding. Will the Leader of the House tell me what opportunities the Government can provide to debate the need for further reform of the national funding formula?

[Sir George Young]

I am grateful to my hon. Friend. There will be a debate on the Education Bill, which could be an opportunity to raise the matter. I have also announced that we will debate the police grant and revenue support grant settlements, which may provide another opportunity. However, I agree that the system of school funding is unfair and needs reform. We are currently considering the school funding formula to develop a clear, transparent and fairer national funding formula based on pupils’ needs.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

Will the Leader of the House arrange for an urgent statement on what is to replace the education maintenance allowance? Last week, the Education Secretary made several commitments about transport costs and funding for looked-after children, students with learning difficulties and young carers. I understand that Library research, which my right hon. Friend the Member for Leigh (Andy Burnham) commissioned, suggests that fulfilling all those promises could cost as much as £420 million—three quarters of the current budget and a great deal more than the discretionary fund so far proposed. The Education Secretary is raising expectations and causing great confusion. Will the Leader of the House arrange for him to come and explain himself?

[Sir George Young]

My right hon. Friend the Secretary of State for Education will come and explain himself on Monday week, when he answers questions. We have just had a debate on the EMA, so it would not be realistic to expect the Government to find another opportunity, and I am not sure whether the right hon. Gentleman will be able to raise the issue that he has just mentioned on Second Reading of the Education Bill.

[Gavin Barwell (Croydon Central) (Con)]

In the light of the incredible assertion by the shadow Secretary of State for Education that the Government’s focus on young people getting a good GCSE in English, maths, a science, a humanity and a foreign language is elitist, will my right hon. Friend assure me that the debate on the Education Bill will give us the chance to discuss the incredible lack of faith in our young people?

[Sir George Young]

My hon. Friend makes a powerful point, which I hope that he will be able to make at greater length and with even greater force when we debate the Education Bill, if he is successful in catching your eye, Mr Speaker.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The Leader of the House will recognise the good work that the staff of Remploy do throughout the United Kingdom. Will the Government give time for a debate about what they can do to help relations between staff and management, which are obviously in a bad way, and to find out why the staff have now been waiting nearly a year for last year’s pay rise?

[Sir George Young]

I understand the important issue that the hon. Gentleman raises. I do not know whether he is able to go to the Backbench Business Committee next Tuesday and submit a bid for a debate on that important matter, or apply for an Adjournment debate or a debate in Westminster Hall.

[Charlie Elphicke (Dover) (Con)]

In the light of the shadow Chancellor’s assertions that we should have a splurge of new borrowing and spending, may we have a debate on interest rates? Low interest rates keep my constituents in their homes and help small business keep ticking over. It is important for the House to explore whether interest rates would be raised by the Opposition’s policies.

[Sir George Young]

My hon. Friend raises an important issue. Our success in tackling the deficit means that the interest rate regime will be lower than it otherwise would be. If we listened to Opposition Members’ policies, there would be a real risk of interest rates increasing, and home ownership, investment—and, therefore, jobs—becoming more difficult. I would welcome such a debate.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Leader of the House will be aware of some disquiet among Welsh farming unions and the Welsh Government about the UK Government’s position on CAP reform. Will he ask the Secretary of State for Environment, Food and Rural Affairs to make a statement on progress on developing a negotiating position that takes account of the devolved Governments’ views?

[Sir George Young]

I will give my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs advance notice that, next Thursday, she is likely to get a question from the hon. Gentleman on those issues. I will see that she is well briefed.

[Dr Julian Lewis (New Forest East) (Con)]

May we have a statement from the Defence Secretary on the possibility of preserving a proportion of the withdrawn Harrier jump jets on the basis that, over 10 years, some form of conflict might arise unexpectedly, in which the versatility of those valuable aircraft would be needed?

[Sir George Young]

There will be an opportunity on Monday to raise that matter with the Secretary of State for Defence. I understand that following the strategic defence and security review, the Harrier aircraft were retired from service on 15 December, and that at the moment, there are no plans to retain them as a reserve or emergency capability. The decision to retire the fleet was agreed collectively by the service chiefs. As I said, my hon. Friend will have an opportunity on Monday to share his concerns with my right hon. Friend the Defence Secretary.

[Kate Green (Stretford and Urmston) (Lab)]

Will the Leader of the House arrange a statement on the replacement for the financial inclusion fund, which funds independent advice agencies to give debt advice, and which we have learned will close at the end of March? That means that the local citizens advice bureau in my borough of Trafford will be forced to reduce the number of cases that it can handle by 500. Please can we urgently be told what Ministers intend to do to ensure that good-quality debt advice can be continued?

[Sir George Young]

The hon. Lady is quite right that the Government have decided that the fund to which she refers will be wound up. We are in the process of developing a free, national finance advice service, and I should like to write to her, or to ask the Minister responsible to do so, with further details of that service.

[Mr William Cash (Stone) (Con)]

Given the remarks of George Soros yesterday and today on the failure of the economic governance arrangements, will the Leader of the House be good enough to arrange a debate on the reasons for our low growth? They are connected with the failure of the EU and the failure to repatriate powers. Repealing EU social and employment legislation would enable our own small and medium-sized businesses to grow.

[Sir George Young]

I say to my hon. Friend that I honestly think I have provided enough time for the House to debate matters related to the EU. I see that a high proportion of the time that we have made available has been occupied by him—[Laughter.] I mean no discourtesy. The answer is that I will not provide at this stage additional time to debate the matter he raises.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Liverpool city council workers have today been told the terrible news that 1,600 people are to made redundant as a result of the Government’s 22% cut in its funding—that is the hardest hit to any core city. The council has been praised by the Government for the action it has taken to cut the pay of senior managers and reduce administrative costs, but it has so far been unable to secure the Government’s agreement to spread the cuts over the spending period to protect front-line jobs. Instead, harsh, front-loaded cuts are being imposed. May we please have an emergency debate on the impact that the Government’s front-loaded spending cuts are having on employment and local economies?

[Sir George Young]

I understand the hon. Lady’s concern, and when we debate the local government revenue support grant, she will have an opportunity to raise it. However, the plans of the previous Chancellor were for cuts only £2 billion lower than the coalition cuts next year, so the sort of challenges faced by her local authority would have arisen whoever had won the last election.

[Sajid Javid (Bromsgrove) (Con)]

On Tuesday this week, the Office for National Statistics released a devastating economic figure—the revision of our national debt to £2.3 trillion, which at 155% of gross domestic product is higher than that of Portugal, Ireland, Greece and Spain and equal to that of Lebanon and Jamaica. Does my right hon. Friend agree that that is the true economic legacy of the Labour party, and may we have a debate on it?

[Sir George Young]

I would welcome such a debate. My hon. Friend may have seen in The Independent today that the public have no confidence in the Labour party to run our economy. The previous Government’s efforts to forecast growth over the past 13 years—they were out by, on average, £13 billion—are the reason why we now have independent forecasts from the Office for Budget Responsibility. We lost confidence in their forecasts.

[John Cryer (Leyton and Wanstead) (Lab)]

May we have a debate on the Business Secretary’s plans to make it easier to sack people and more difficult to retain the services of employment tribunals, which were announced this morning? That will profoundly affect a very high proportion of employees, particularly in constituencies such as mine, where a number of people are already on very insecure terms of work.

[Sir George Young]

There will be a debate on BIS next Wednesday. However, the current regime actually deters potential employers from taking people on, because of the circumstances that surround their potential dismissal. I honestly believe it right to try to recalibrate the balance of power between employer and employee, in order to encourage employment and remove one of the barriers to it.

[Alun Cairns (Vale of Glamorgan) (Con)]

Will the Leader of the House allow a debate on the progress made on rebalancing the economy? Some excellent manufacturing output data were published recently—they showed strong growth over the last two quarters—and such a debate would give the House an opportunity to reflect on them.

[Sir George Young]

There have indeed been some very encouraging manufacturing figures, to which my hon. Friend refers, and some buoyant export orders, which I also welcome. Coupled with our proposals to cut corporation tax and cancel the increase to employers’ national insurance contributions, and other steps to promote growth and prosperity, the background that he outlines gives us reasons for optimism.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Scotland’s other national drink, IRN-BRU, is headquartered and housed in Cumbernauld in my constituency. It provides hundreds of good local jobs, but the company tells me that it is being affected deleteriously by the substantial increase in the price of sugar over time. May we have a debate on the impact of rising commodity prices on British consumers and British industry more widely?

[Sir George Young]

My hon. Friend the Deputy Leader of the House advises me that that company has today announced record profits. I am delighted that it has managed to overcome the rise in commodity prices. I do not know whether with a bit of ingenuity the hon. Gentleman could develop his point at greater length in the debate on the Scotland Bill later today.

[Neil Carmichael (Stroud) (Con)]

In the light of the situations in Tunisia and Egypt and the Foreign Secretary’s visit to Syria, would it be possible for the House to debate foreign policy on north Africa and the middle east?

[Sir George Young]

I understand my hon. Friend’s request. He may have heard the Foreign Secretary speak on precisely those issues on the “Today” programme. We have no plans at the moment for such a debate. Perhaps the Backbench Business Committee could see whether, among all the bids it receives, there is a slot for a debate on foreign affairs in its future programme. The debate on Afghanistan in the autumn was greatly welcomed, and I hope that the Committee can find a slot for a debate on north Africa and the middle east. My hon. Friend might like to go along next Tuesday and make a bid for such a debate.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Even during the recession, the UK film industry has proved to be very successful. Most notably, “The King’s Speech” has 12 Oscar nominations and receipts to date of—I think—$108 million. May we have a debate on whether the Government’s plans for the UK Film Council are the very best way of nurturing this country’s film industry in such a competitive worldwide market?

[Sir George Young]

I will raise the hon. Lady’s concerns with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport and ask him to write to her, but I commend the work of Colin Firth, Tom Hooper and the others who made “The King’s Speech”, and I wish them all the best in their bid for Oscars in the near future.

[James Morris (Halesowen and Rowley Regis) (Con)]

Given the urgent need to rebalance the economy, especially in areas such as the west midlands, may we have an urgent debate to discuss what the Government are doing to support and develop manufacturing businesses in the black country?

[Sir George Young]

I understand my hon. Friend’s concern. We have acted to improve the environment for manufacturers both nationally and in the midlands through lower and simpler business taxes, investment in apprenticeships, creating wider access to finance, a Government-wide commitment to boosting exports, the £1.4 billion regional growth fund and other improvements. I hope he will intervene in the debate next Wednesday to develop his arguments further.

[Mr Denis MacShane (Rotherham) (Lab)]

Last week, the Leader of the House rather brushed aside my request for a debate on Tunisia, but following on from the question asked by the hon. Member for Stroud (Neil Carmichael), the House must debate more frightening revolutionary changes. A thousand people have been arrested in Egypt and others have been killed. The world is changing fast and we are not debating it in the House. The Government’s decision on the BBC World Service shows the shrinkage of Britain’s influence and status around world. Do not put it off to the Backbench Business Committee or to Foreign Office questions next week. Let us discuss foreign policy seriously in this House of Commons.

[Sir George Young]

The right hon. Gentleman says, “Don’t put it off to the Backbench Business Committee,” but in my view, the House took the right decision when it decided that the Government should no longer have an exclusive monopoly on what subjects were debated. That is why at least 35 days a year are given to the Committee, leaving the Government with responsibility for the legislative programme. It is up to the right hon. Gentleman and my hon. Friend the Member for Stroud (Neil Carmichael), who feel strongly about foreign affairs, to go and make their pitch to the Backbench Business Committee to try to secure time for such a debate.

[Mr Rob Wilson (Reading East) (Con)]

The previous Labour-run local authority in Reading has left huge debts of several thousands of pounds for each of my constituents. May we therefore have a debate in Government time to look at these irresponsible levels of local government debt?

[Sir George Young]

I am sorry to hear of the legacy bequeathed to my hon. Friend’s constituents. As I announced a few moments ago, there will be a debate on the revenue support grant on Wednesday week, and I hope that that will be an opportunity for him to raise those issues at greater length.

[Grahame M. Morris (Easington) (Lab)]

In answer to a written question, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), confirmed that the Government are likely to spend more than £100 million a year on redundancies and cancelling operating contracts made by the regional development agencies. May we have an urgent debate on the impact of scrapping the RDAs in terms of cost to the taxpayer, the impact on growth and the loss of support for functions such as regeneration, which will not be continued by the LEPs?

[Sir George Young]

I believe that the replacement of the RDAs by local economic partnerships will save money and be more effective. I will ask my hon. Friend to write to the hon. Gentleman about the £100 million.

[Harriett Baldwin (West Worcestershire) (Con)]

I note that the outrageous filibustering tactics of Labour Lords in the other place have still not been brought under control by the Leader of the Opposition. Will the Leader of the House please let us know when we might have a chance to debate the amendments to the Parliamentary Voting System and Constituencies Bill?

[Mr Speaker]

Order. Before the Leader of the House replies, I wish to say that I recognise that there are real tensions between the two Chambers on this matter, but I remind the House—and this may be of particular benefit to new Members—that we must preserve some basic courtesies in the way in which we deal with the other place, as we expect them to do with us.

[Sir George Young]

I hope that the Leader of the Opposition will make contact with his supporters in the other place and ensure that that House is not brought into further disrepute by the tactics that are being adopted. The Government very much want to make progress with the legislation. That is our intention and I hope that there will be reflection over the weekend. The second Chamber is a revising Chamber, and I know that it would want to think very carefully before it blocked a Bill that had received the support of this House.

[Henry Smith (Crawley) (Con)]

Last Thursday evening it was my pleasure to take part in the Gatwick Diamond young start-up talent event, which is a “Dragons’ Den”-style event for young people with entrepreneurial ideas. Can we find time for a debate, perhaps through the Backbench Business Committee, to discuss ways in which we can better help young people with entrepreneurial ideas to get ahead?

[Sir George Young]

I understand my hon. Friend’s concern, and I was delighted to hear about what happened. We are putting more resources into apprenticeships and the enterprise allowance scheme. We have made a change this week to the amount of time young people can spend on work experience without losing access to benefits and we are introducing the new Work programme. I hope that we can reduce the large number of young unemployed that we inherited from Labour and encourage them to become entrepreneurs.

[Christopher Pincher (Tamworth) (Con)]

Will my right hon. Friend ask the Chancellor to make a statement on deficit reduction, which would give the House an opportunity to hear what progress is being made? It would also give the shadow Chancellor an opportunity to clarify his Bloomberg speech and state clearly whether he remains a deficit denier.

[Sir George Young]

It is very important that we establish whether the shadow Chancellor is on the same wavelength as his leader on deficit reduction. On that point, I was interested to see that the former Chancellor under the last regime said that the key to getting growth in the long term is first to get the deficit down. That is not exactly what the Leader of the Opposition said yesterday.

[Mr Peter Bone (Wellingborough) (Con)]

Yet another of the Government’s excellent moves to put Parliament first is to allow Government Back Benchers free votes in Committee. When the BlackBerrys go off now notifying a Division, we are not told how to vote. We are no longer lobby fodder. May we have a statement next week from the Chief Whip so that this policy can be expounded further and he can get the congratulation that he deserves?

[Sir George Young]

I would not wish to raise my hon. Friend’s expectations by suggesting that my right hon. Friend the Chief Whip has any plans to come along. In any case, I do not think that my hon. Friend was ever regarded as lobby fodder.

[David Mowat (Warrington South) (Con)]

In 2004, the Lyons report on property strategy, as updated last year by Smith, said that significant savings could be made by transferring up to 15,000 civil servants out of London to the regions. May we have a statement from the Minister for the Cabinet Office on the Government’s property strategy and their progress on this issue?

[Sir George Young]

I understand my hon. Friend’s concern. It is indeed our policy to continue to decentralise from London wherever feasible. I will ask my right hon. Friend the Minister for the Cabinet Office to write to my hon. Friend with details of how we are getting on with our proposals.

[Guy Opperman (Hexham) (Con)]

The renewable heat incentive scheme has been delayed again. When will we have a decision on this and, more specifically, may we have a statement on the point?

[Sir George Young]

I understand my hon. Friend’s concern. We are committed to a massive expansion in renewable energy and supporting renewable heat is an integral part of that. We expect to be in a position to announce shortly the details of the scheme, including renewable heat incentive tariffs and technologies supported, and for it to be open for business later in the year.

[Bob Blackman (Harrow East) (Con)]

Two NHS trusts in my constituency are considering merging. Their letter notifying me of their actions so far reads like a script from “Yes, Prime Minister”. The “options appraisal” leads on to “a Strategic Outline Case” to be followed by the “Outline Business Case”, which will become “the Full Business Case”, which then may or may not lead to a consultation with the public. All that will entail enormous amounts of bureaucracy and consultants, which will take money that should be spent on patient care. Can my right hon. Friend facilitate a statement on doing away with this bureaucratic nonsense and getting the money spent on the front line?

[Sir George Young]

My hon. Friend will know that there is a Health Bill before the House at the moment. It is the intention of the coalition Government to do away with the bureaucracy that he mentions and put the resources into front-line care. He gives a graphic exposition of where economies can be found.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Leader of the House allow time for a debate on economic confidence, especially in light of this morning’s ComRes poll, which clearly shows that my right hon. Friends the Prime Minister and the Chancellor are far more trusted on the economy than their shadows?

[Sir George Young]

My hon. Friend draws attention to the poll in today’s edition of The Independent. My own view is that until Opposition Members accept some responsibility for what went wrong, they will have no credibility with the general public.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

rose—

[Mr Speaker]

The hon. Gentleman assures me that he was present at the start of the business statement. I am grateful for that confirmation and I wish to hear him.

[Mr Stuart]

I am grateful, Mr Speaker, although disappointed that you did not notice me from the beginning. After a collapse in manufacturing employment over the last 10 years or so, there are optimistic signs, not least in Hull, where Siemens is investing in a major renewable energy plant that may employ 10,000 people or more. Other companies are following. May we have a debate on the infrastructure to support that development? The Humber offers huge economic opportunity for this country and we need to ensure that we have the infrastructure in place to support it.

[Sir George Young]

The regional growth fund is set up precisely to support infrastructure in areas such as Hull, and there will be a debate in Opposition time next Wednesday when my hon. Friend may have the opportunity to raise that point. It is worth reminding the House that the Office for Budget Responsibility has forecast an increase in employment of 1.3 million over the lifetime of this Parliament, which puts some of the debate on the economy in a more glowing perspective.

[Mr Speaker]

I am grateful to the Leader of the House and to colleagues for their co-operation, as a result of which, after the exchanges between the Front Benches, 47 Members were able to contribute in 42 minutes. I am very grateful.

Points of Order

Thursday 27th January 2011 Commons Chamber

12:28

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

On a point of order, Mr Speaker. In an answer by the Leader of the House about employment tribunals, he said that all would be revealed next week. I have asked questions of the Ministry of Justice to elicit information about the number of people who have been unfairly dismissed with between one and two years’ service and have gone to a tribunal. I was told that the answer could not be given without disproportionate cost. Surely that is wrong if we are to debate that subject?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order, which of course requires a ministerial reply. I do not know whether he was seeking to elicit something from the Leader of the House, who is welcome to comment, but under no obligation to do so.

[The Leader of the House of Commons (Sir George Young)]

I will pursue this matter with my right hon. Friend the Secretary of State for Justice, but it has always been the practice that where an answer would require disproportionate resources, an answer is not provided.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

rose—

[Mr Speaker]

The morning would not be complete without a point of order from the hon. Member for Dunfermline and West Fife (Thomas Docherty).

[Thomas Docherty]

On a point of order, Mr Speaker. Further to business questions earlier—obviously, we have not yet had a chance to see the official record—I think that I am right in saying that the Leader of the House appeared to indicate that you, Mr Speaker, had some discretion on whether the Member for Belfast West (Mr Adams) had resigned his seat by his new appointment. There clearly continues to be dissatisfaction with the whole process. What options are available to Members of the House to have a proper and thorough discussion of the whole sorry affair?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. All I want and need to say is that the notification of the disqualification of a Member appears on page 641 of yesterday’s Votes and Proceedings. I have nothing further to add to my ruling yesterday, and there are no procedural issues within my discretion on which I can rule. Doubtless, these matters will continue to be discussed, but there are no issues to be decided now.

[Dr Julian Lewis (New Forest East) (Con)]

Further to that point of order, Mr Speaker. Is there any way in which I can, within the rules of order, place on the record my appreciation of the fact that Gerry Adams might not have wanted to accept the authority of the Crown when entering Parliament, but evidently has had to accept its authority in order to leave Parliament?

[Mr Speaker]

The short answer is no, but the hon. Gentleman has done so anyway.

Scotland Bill

Thursday 27th January 2011 Commons Chamber

Second Reading

[Mr Speaker]

I have to inform the House that I have selected the amendment on the Order Paper.

12:32

[The Secretary of State for Scotland (Michael Moore)]

I beg to move, That the Bill be now read a Second time.

Over the past decade, the devolution of power and decision making from this Parliament to the Assemblies of Wales and Northern Ireland and to the Parliament in Scotland has transformed the constitutional arrangements of the United Kingdom. With this Bill, we begin a new phase of devolution in Scotland—a phase that we enter with cross-party support and the support of individuals and organisations across the country. The Scotland Bill is, of course, an important step in the coalition Government’s programme to modernise and reform the United Kingdom’s constitution, but its origins lie in the Scottish Parliament itself and in the support given by the previous Government, which I am happy to acknowledge. The Scotland Bill will further empower the Scottish Parliament and make it more accountable to those who elect it. In doing so, it will strengthen Scotland’s position within the United Kingdom.

Let us reflect on how we got here. The late Donald Dewar famously said, while quoting from the first line of the Scotland Act 1998:

“‘There shall be a Scottish Parliament’…I like that”.

He was not alone. His sentiments were, and continue to be, widely shared in this House and throughout Scotland. It is important to pay tribute to Donald Dewar for his historic role in shaping modern Scotland. He was a true statesman, serving both as Secretary of State for Scotland and as Scotland’s original First Minister. In the creation of the Scottish Parliament, he has a fine legacy. However, he would have been the first to insist on recognising the countless others, across different parties, and, crucially, from many different backgrounds in Scotland, who patiently built the case for devolution over many years, indeed decades. Likewise, we should acknowledge those in this place, the Scottish Parliament and beyond who supported the early years of the devolved institutions, building their capacity and establishing their credibility. Today, we build on that work.

When taking the original Scotland Bill through this place, Donald Dewar said that the creation of a Scottish Parliament was not just for Scotland. Nor was it just routine tinkering with the detail of our political system. Rather, it was a fundamental, radical reform of the UK’s constitution. After more than a decade of devolution, the Scottish Parliament is firmly established as part of the fabric of Scottish life. More than that, however, devolution—not just in Scotland, but right across the United Kingdom—is now part of our national life too. The Parliament was established to bring power closer to the people of Scotland, to make government more responsive to their needs, and to put their priorities at the heart of Scottish governance. It has succeeded: decision making on education, health and the environment, among many things, is closer to the people whom those decisions affect. The experience of Scottish devolution has changed the terms of the debate. Few would seriously now argue that there should be no Scottish Parliament.

The Bill builds on the achievements of the 1998 Act and on the experience of devolution, and it further strengthens Scotland’s place within the United Kingdom. Just six months after being elected, we introduced the Scotland Bill on St Andrew’s day. In doing so we made good the Government’s formal pledge, in our programme for government and the Queen’s Speech, to implement the recommendations of the Commission on Scottish Devolution—the Calman commission, as it is more commonly known. However, this was not our commitment alone. The Labour party also pledged in its manifesto to implement the commission’s recommendations, and I welcome its ongoing support without seeking to compromise Labour Members’ important role in scrutinising the detail of the Bill. Once again, however, measures brought to the House on a major piece of Scottish constitutional legislation are founded on support from across the Chamber and within Scotland.

After the first decade of devolution, it was right to review the Scotland Act, to assess how devolution was working, and to ensure that the Scottish Parliament had the right powers to deliver for people in Scotland. In December 2007, the Commission on Scottish Devolution was established by a vote in the Scottish Parliament. Chaired by Professor Sir Kenneth Calman, the commission included Conservative, Labour and Liberal Democrat representatives, but it was independent of any political party and embraced representatives from business, education, the wider public sector and across civic Scotland. It gathered evidence from a wide range of sources and engaged directly with people in Scotland and elsewhere in the United Kingdom, through detailed consultation, public engagement events, oral evidence from a spectrum of interests in Scottish public and business life and survey evidence. Let me record my thanks to Professor Sir Kenneth Calman and his commissioners for their thorough, inclusive and well-evidenced work. I would also like to acknowledge the impressive and detailed work of Professor Anton Muscatelli and the independent expert group on finance, which supported the commission.

The commission’s final report was submitted jointly to the Scottish Parliament and the UK Government in June 2009, and was widely welcomed. Based firmly on the commission’s findings, the Scotland Bill seeks to implement its key recommendations. The commission’s first and overarching conclusion was that devolution had been a real success; that it was here to stay; and that the balance between reserved and devolved policy powers and functions was, broadly, in the right place. However, it also concluded that there was a shortcoming in how the Parliament was funded, specifically in terms of accountability. At the centre of the commission’s report and the Bill, therefore, are measures to improve the financial accountability of the Scottish Parliament.

The Scottish Parliament can determine policy on a wide range of subjects and how and where money is spent, but at present it cannot be held effectively to account for raising the money it spends. The commission recognised this imbalance. The Bill addresses that imbalance by providing a package of taxation and borrowing powers that will see the Scottish Parliament become accountable for more than a third of the money it spends. In doing so, the Bill represents the largest transfer of fiscal powers from central Government since the creation of the United Kingdom. It is a radical but responsible step. Most significantly, we will create a Scottish income tax. We will create that tax by cutting 10p off the basic, higher and 50p rates for Scottish taxpayers, adjusting the block grant in proportion and allowing the Scottish Parliament—indeed, obliging it—to apply a Scottish income tax at a level of its choosing to meet its spending plans.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Can the Secretary of State tell me and those who have asked me to probe this point what will happen when companies in my constituency or those across the whole of Scotland are paid from south of the border? How will that problem be overcome?

[Michael Moore]

The hon. Gentleman makes a very fair point. Let me reassure him, first, that we have given a lot of attention to the technical issues of implementation, both in a high-level implementation group and, now, technical groups led by Her Majesty’s Revenue and Customs, which are looking at all the different issues. The good news is that the software systems that were created for employees paying the Scottish variable rate under the original legislation were future-proofed and can identify Scottish taxpayers on the payrolls, wherever the company’s head office is, ensuring that the identification of taxpayers is made as painless a process as possible and that the right amounts of tax are taken.

[Mr Donohoe]

But what happens—this is the question that has been asked of me—when the person is domiciled both in Scotland and in England?

[Michael Moore]

They cannot be domiciled in both places. A person’s status as a Scottish taxpayer will be determined as set out in the Bill. If the hon. Gentleman looks more closely at the detail, I hope that he will be reassured.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Before the Secretary of State moves on from this point, can he outline to the House what he expects the costs to the Scottish Government to be of the annual adjustment from HMRC? What will the cost of the variable tax rate be to the Scottish process?

[Michael Moore]

I do not know whether the hon. Gentleman is asking what the costs of running the system will be, but if he is, the draft regulatory impact assessment—I do not know whether he has had a chance to look at it yet—sets out our provisional estimates of the marginal costs of creating this functionality in the system. They are £45 million, with annually recurring costs of around £4 million. However, I should say to him—I am grateful for the chance to emphasise this—that a lot of that will depend on the detail that the Scottish Government and other stakeholders wish to see on documentation such as P60s. That will influence where those costs fall.

[Mr Frank Doran (Aberdeen North) (Lab)]

Following the point that my hon. Friend the Member for Central Ayrshire (Mr Donohoe) made, I can see that there will be formulae for different categories of employees. As a Member of Parliament who is based here in the House of Commons and whose main home is in London, I want to be taxed in Scotland, but will the Bill allow that?

[Michael Moore]

Unfortunately for the hon. Gentleman, he will have to pay the Scottish rate of income tax. Parliamentarians are obliged to pay it regardless of where their main home might be.

As I was saying, the new powers will give Scottish Ministers and the Scottish Parliament a much more significant stake in the performance of the Scottish economy. The level of the Scottish rate will be Scotland’s to decide, and those who set the rates will answer directly to those affected by them. Power will rest with the Scottish people. In addition to income tax, the Scotland Bill will devolve to the Scottish Parliament responsibility for stamp duty land tax and landfill tax. That will complement its policy responsibilities for housing, planning and the environment. The Bill will also allow the Scottish Parliament to propose new devolved taxes, to sit alongside the other powers. However, the fiscal powers are not limited just to tax; they extend to borrowing powers, too. The Bill will allow Scottish Ministers to borrow up to £500 million for current spending when tax receipts fall short of those forecast.

[Angus Robertson (Moray) (SNP)]

Will the Secretary of State confirm that the UK Government are currently negotiating with the Northern Irish Government about the devolution of corporation tax powers to Northern Ireland? Why would a UK Government consider that appropriate for Northern Ireland but not for Scotland?

[Michael Moore]

I would not characterise those discussions as negotiations per se, but people have certainly been raising possibilities in connection with what taxes might be suitable for other parts of the United Kingdom. As I have said, our proposals in the Bill are founded on careful consideration, and on impressive and important academic research that made it clear that if we wish to preserve the United Kingdom—I understand that the hon. Gentleman does not—we should ensure that, in increasing accountability in Scotland, we focus on income tax rather than corporation tax, and I am satisfied with that.

[Stewart Hosie (Dundee East) (SNP)]

The Secretary of State says that all this is part of defending the Union. Obviously his colleague Tavish Scott would share his view, but in his submissions to the Steel commission and then the Calman commission he suggested devolving

“income tax; corporation tax; fuel duty…tobacco and alcohol duties; betting and gaming duties; air passenger duty; insurance premium tax; climate change levy and landfill tax; inheritance tax; and stamp duties”.

Surely the Secretary of State does not disagree with his own colleague in the Scottish Parliament, does he?

[Michael Moore]

What I absolutely agree with is the process that we went through as three different parties that came together in the Calman commission, examining the options, scrutinising them and coming forward with a balanced set of proposals. We look forward to seeing fully costed proposals from the hon. Gentleman and his colleagues. They have had months to produce them— indeed, years—but as yet we have seen nothing. That is something that the House will note and that will perhaps reduce the bluster on the part of some.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

To supplement the extensive list that my hon. Friend the Member for Dundee East (Stewart Hosie) read out, may I add the power of the Crown Estate being returned to the Scottish Parliament? Indeed, four or five years ago five Liberal highlands MPs supported that very proposal in a ten-minute rule Bill. Is that still the position of the Liberal party? If so, will the Liberals try to use the Scotland Bill to ensure that the Crown Estate is returned to Scotland?

[Michael Moore]

The hon. Gentleman is tempting me to get slightly ahead of myself. He will see the proposals that we have set out in the Bill, taking account of the evidence that was supplied to the Calman commission.

[Anas Sarwar (Glasgow Central) (Lab)]

Does the Secretary of State agree that those Scottish National party Members who are getting animated on this issue could easily have made a submission to the Calman commission if they so wished? Instead, they stood for self-interest, rather than Scotland’s interest.

[Michael Moore]

If I may say so, the hon. Gentleman makes the point very neatly. Like him, I await the SNP’s detailed proposals on either fiscal autonomy or the Crown Estate, so that they might be debated. I believe that what we have in the Bill is the right balance, which will give Scotland the powers and accountability that it should have.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

On taxation generally, is not the lesson that we have learned, from the original Scotland Act 1998, through many Standing Orders over two Parliaments, that we are involved in an iterative process? What can be devolved should be devolved, but at a gentle pace, so that we can assimilate what has happened. In that regard, the agreement that the three parties have come to is the correct way to proceed at this time, but does not preclude further devolution when appropriate at a later stage.

[Michael Moore]

I quite agree with my hon. Friend, who puts his point in such an elegant way.

[Sir Menzies Campbell (North East Fife) (LD)]

I hope that my right hon. Friend is not accusing the Scottish National party of inconsistency. Its attitude towards the Calman commission is entirely consistent with its attitude towards the Scottish Constitutional Convention, which it also declined to join.

[Michael Moore]

Once again, my right hon. and learned Friend puts it very elegantly.

As I was saying before that brief diversion, the fiscal powers included in the Bill are not limited to tax; they extend to borrowing as well.

[John Robertson (Glasgow North West) (Lab)]

Will the Secretary of State give way?

[Michael Moore]

I had nearly got back to the point I was at, but I shall give way.

[John Robertson]

On that point, I listened to the Secretary of State on the “Today” programme this morning, when he spoke eloquently about who would foot the bill if borrowing went—shall we say?—awry. What is to prevent a Government in Scotland from borrowing £500 million just before they lost power, to ensure that the incoming Government were saddled with a bill they could not pay?

[Michael Moore]

I would hate to destroy the cross-party consensus by making any inappropriate reference to a £155,000 million deficit, so I will move swiftly on. On the technical point the hon. Gentleman raises, if he looks again at the Command Paper, he will see that there are provisions to ensure that no Government will be able simply to borrow in order to stack up a capital reserve to spend in the future or to land a subsequent Administration in debt.

[Mr MacNeil]

On a point of clarification, would the right hon. Gentleman like to see power over the Crown Estate devolved to the Scottish Parliament?

[Michael Moore]

Those provisions are not in the Bill. That case has not been put forward in detail either by the Government of Scotland, of whom his colleagues are members, or by others. If such proposals were to come forward some time in the future, there could be a public debate, but as far as the Scotland Bill is concerned, it is consistent with the Calman commission and will make sure, formally, that we have a Scottish commissioner. That will ensure that Scottish interests on the Crown Estate are well represented in future.

As Secretary of State for Scotland, I am fully aware of my role in ensuring that we keep the Crown Estate focused on its interests across the whole of the United Kingdom. I have had two formal meetings so far and another is planned. That is probably as good a record as most recent Secretaries of State. I assure the hon. Gentleman and others who are concerned about the Crown Estate that we will continue to work to make it more accountable, more transparent and more focused on Scotland’s and the rest of the UK’s interests.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I thank the Secretary of State, who is generous with his time. He keeps on saying that the provisions were in the Calman proposals, but only 35 out of the 63 proposals are in the Bill. Issues such as immigration, benefits, aviation and aggregates are all out. Why is the right hon. Gentleman so negative about so many of the Calman proposals, and why did he not implement those important measures?

[Michael Moore]

I understand that the hon. Gentleman will seek to catch your eye later, Madam Deputy Speaker. I am sure that he has studied the Command Paper along with the Bill in great detail, in which case he would have seen what we said about the aggregates levy and aviation duty. We made it clear that there is a difficulty with the aggregates levy because of issues before the courts, so it would be inappropriate to bring forward proposals at this stage. However, we make clear in the Command Paper our intention to devolve that area. Likewise on aviation duty, the Government are reviewing the position, and we still intend aspects of it to be devolved. It is the same with welfare. The Command Paper talks about the major reforms we are introducing and the fact that they will fully take account of devolution and reflect the spirit of what was in the Calman report. I hope that that goes some way towards reassuring the hon. Gentleman, although I suspect it will not.

Beyond the power to borrow up to £500 million for current spending, a Scottish cash reserve will be created so that the Government will be able bank and save money where tax receipts exceed those expected. These provisions will allow for effective financial management to deal with fluctuations in the new revenue stream of tax receipts.

We also set out in the Bill a brand new capital borrowing power of up to £2.2 billion. This will provide the Scottish Government with new means to invest in major infrastructure and other projects. It will be for Scottish Ministers and the Scottish Parliament to decide whether to borrow and, if so, for what purpose—a new Forth crossing, new hospitals, new schools or perhaps even a railway—and it will be for them to account to the Scottish people for those choices.

As a consequence of increasing the financial freedom and accountability of the Scottish Parliament to raise its own revenues, there will be a reduction in the existing block grant. The grant will continue to make up the remainder of the Scottish budget, however. That will ensure financial stability; it will ensure continuity of public service provision; and it will maintain the economic union that is so central to our United Kingdom. I know that views differ—both in this House, and further afield—on the broad issue of the block grant and, specifically, on the Barnett formula that underpins it. I do not expect those differences to be resolved today; indeed, the funding formula is not part of the Bill.

The Government have set out their position on the Barnett formula in their programme for government. While recognising the need to review the arrangements in time, our overriding priority is to tackle the deficit, and we will not consider a review until the public finances are returned to good health.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I welcome the fact that the right hon. Gentleman is dealing with the Barnett formula. Will there be anything in the new proposals to prevent a Scottish Government from receiving funding for one purpose and using it for something completely different?

[Michael Moore]

I am not entirely clear what the right hon. Gentleman has in mind, but it is the essence of devolution that the Scottish Parliament be free to spend the money it receives—either through the block grant or as a consequence of its tax-raising powers—on what it wants to spend it on.

[Mr Clarke]

The right hon. Gentleman might have had the opportunity to look at last week’s Sunday Herald, which led on the issue of disabled children in Scotland and their families and carers. It pointed out that £34 million, arising from UK Department for Education funding, had been allocated, but that the money had not been received. In the new approach to these matters, will there be more accountability than can be seen in that case?

[Michael Moore]

First, I pay tribute to the right hon. Gentleman’s distinguished career of campaigning on these issues and to all the hard work and effort he has put into that over many years. The fundamentals of devolution since 1999 mean that the Scottish Parliament and then the Scottish Government are able to decide how to spend all the revenue that comes to them, whether it be directly through the grant or, to use a shorthand term, as a result of the Barnett consequentials. The hon. Gentleman is, of course, entitled to draw a distinction between how the money is spent south of the border and how it is spent north of the border. On occasions, the advantage might be the other way round, but I am afraid that that is the essence of devolution—it is for them to decide. The Bill enhances those principles rather than claws anything back.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The right hon. Gentleman is right that the essence of devolution means that the Scottish Government should not have their funding ring-fenced, as some have suggested it should be. However, the point raised by my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) related to accountability. I do not think that he was suggesting that we should ring-fence the funding transferred to the Scottish Parliament. It is a question of how there can be accountability to the UK Parliament. Perhaps there could be some way of bringing to this Parliament the ability to question the way in which money is spent by the Scottish Parliament. Intergovernmental and inter-parliamentary co-operation should allow such questioning to be pursued and, although my right hon. Friend has been trying to do that, he has not always been successful in getting the Scottish Parliament to respond.

[Michael Moore]

I respect the hon. Gentleman’s interest in these matters and I commend the way he has followed devolution developments over the years. The primary responsibility for accountability is to the Scottish Parliament. Governments of different hues have gone before the committee system and made statements in the Scottish Parliament; there are 129 Members of the Scottish Parliament and that is their primary function. Ultimately, as in this House, all are accountable to the electorate. What we are trying to do with accountability in this Bill is enhance the financial powers so that parliamentarians in Scotland can be made accountable not just for the spending decisions, but for the tax-raising decisions that precede them.

Let me finish my point about the Barnett formula. We do not intend to alter it or review its arrangements at this time. Nothing in the Bill, however, prejudges future changes to the funding formula. Rather, the Bill’s effect will be to make the Scottish Parliament more reliant on its own revenues and less reliant on the block grant to fund public spending in Scotland.

[Stewart Hosie]

In the Secretary of State’s comments on the Barnett formula—before the interventions—he said that he would not seek to change it until the economy has returned to rude health. I presume by that he means that this Government’s priority is to tackle the deficit. I see him nodding to that. It worries me slightly, then, that the additional capital borrowing powers require a consent per project, so will the right hon. Gentleman confirm that when a good, sensible, costed project comes up looking for additional capital consent, this Government will not use the excuse of the deficit in order simply to say no?

[Michael Moore]

I respect the thoroughness with which the hon. Gentleman usually approaches such matters, and he has clearly spotted the bit in the Command Paper that says that, as of 2013, we will introduce the new capital borrowing powers. In the first couple of years, there will be additional Treasury constraints in relation to the feasibility and appropriateness of projects, as a precursor to those capital powers being fully available, in 2015, to the Scottish Parliament and the Government formed from it.

[Stewart Hosie]

The Secretary of State has not quite given me the assurance I seek. The Command Paper also says that the powers will be subject to Her Majesty’s Government limits and controls. Will he confirm that the Government will not use their deficit consolidation plan as an excuse to say no to important new capital investment?

[Michael Moore]

I hoped that I had been clear, but I am happy to refer the hon. Gentleman back to the Command Paper, which is crystal clear on the availability of those powers from 2013, on the annualised basis set out. When the right projects are brought forward—as he and I seem to agree on this occasion, such projects will be those that help growth—such consent will not unreasonably be withheld. I hope that that reassures him.

Aside from the Government’s proposals, another set of financial arguments has been put forward as an alternative to the measures in the Bill. In recent months, there has been some discussion in the Scottish Parliament and the Scottish press about other approaches to fiscal devolution, and specifically about the idea of fiscal autonomy. However, its proponents have failed to come up with any credible proposals, or indeed any detailed proposals at all, while the economic arguments advanced in support of fiscal autonomy lack any firm evidence to support them.

[Stewart Hosie]

This is ludicrous. The Scottish Government have published the document, “Fiscal Autonomy in Scotland: The case for change and options for reform”. Saying that no work has been done is neither helpful nor accurate.

[Michael Moore]

The essence of debates in the House is that we are allowed to have opinions. I carefully used the word “credible”, and credibility is lacking in the Scottish Government’s proposals. The desperate efforts to undermine the proposals in the Bill have now been exposed for what they are.

[Malcolm Bruce (Gordon) (LD)]

Have the Scottish Government given an indication of the share of the national debt, and the share of the underwriting of the bankrupt Scottish banks, that the Scottish Parliament would be willing to undertake under fiscal autonomy?

[Michael Moore]

None whatever.

Implementing our new financial arrangements will require detailed work by the United Kingdom Government, the Scottish Government and a range of other stakeholders. We will approach the task in a carefully planned and phased way. The Bill provides the overall framework for the new arrangements, but more than legislation alone will be needed to give effect to the measures set out.

[Mr MacNeil]

On fiscal autonomy, how is it that tiny places such as the Faroe Islands, with a population of 48,000, and the Isle of Man, with 100,000, have infinitely more power than the Scottish Parliament, which represents more than 5 million people? Does the Secretary of State not see an anomalous situation there? The Scottish Parliament could easily have fiscal autonomy and control our fuel price, which in the Hebrides is £1.45 a litre, but in the Faroe Islands is £1.10 and 94p for petrol and diesel respectively.

[Michael Moore]

If the hon. Gentleman wishes to make his case in that way, people may or may not pay attention to him. What I am suggesting is based on Scotland’s size and where it is within the United Kingdom. I respect the fact that he and I fundamentally disagree about our vision for the future of Scotland. Those of us who are committed to the United Kingdom want a sustainable new financial basis on which Scotland is part of the Union. We believe that the Bill provides that basis, unlike the proposals that his party advocates.

The Bill and the Command Paper are not just about finance. The Calman commission examined the whole of the devolution arrangements and found that the division of policy responsibilities in the original Scotland Act worked well. It did, however, make recommendations to improve it further, which are reflected in the Bill. On justice, we will give the Scottish Parliament the power to legislate on air weapons, and give Scottish Ministers the power to set the drink-drive limit and a Scottish national speed limit. On health, we will give Scottish Ministers the power to decide which doctors in Scotland should be able to use drugs for the treatment of addiction. We will give the Scottish Government a formal role in key appointments to the BBC Trust and the Crown Estate.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

On the question of health, will the Secretary of State explain why the power to make decisions on abortion in Scotland will not be devolved?

[Michael Moore]

If I may say so, that is a delicate subject, which was debated carefully in relation to the original Scotland Act. The decision of the House at the time was that the matter would not be included within that Act, and there was no such proposal brought forward by the Calman commission or in any representations that I have received subsequently.

We will give the Scottish Parliament power to administer its own elections, processes and procedures. There are also some areas where, for good and practical reasons, the Calman commission recommended re-reservation of powers to Westminster. These, too, are included in our Bill: for example, the regulation of health care professions and corporate insolvency.

Finally, we have taken the opportunity to address the question of the official title of the devolved Administration: “the Scottish Executive”, as it is currently styled. The term “Scottish Government” has now become broadly recognised. We propose to make that official.

[Gordon Banks]

On the Secretary of State’s comments about insolvency, the Bill seems to take responsibility for liquidations back to the UK Parliament, and I support that, but why not do the same for receiverships?

[Michael Moore]

The Bill reflects the balance of the representations that we have seen and the different legal basis on which matters have been approached in Scotland to date. If the hon. Gentleman wishes to make the broader case in Committee, we look forward to hearing that.

[Jim McGovern (Dundee West) (Lab)]

On the Secretary of State’s point about the change to the Scotland Act to allow “the Scottish Executive” to become “the Scottish Government”, that term has been quite commonplace since the last Scottish general election. However, if there is no such thing as the Scottish Government in legislation, does he believe that the amendment tabled by the six separatists in the House is competent, as it refers to “the Scottish Government”?

[Michael Moore]

Far be it from me to be drawn into these matters. I can only assume that the amendment is competent, as it is on our Order Paper this afternoon. However, the common parlance is now “the Scottish Government”. It will help if Government Departments no longer feel that, legally, they must refer to the Scottish Executive, when nobody else does. Also, we will be able to refer to “the Scottish Government” in the House, rather than “the Scottish Executive”.

The Bill does not set out every proposal from Calman. In some cases, legislation is not required. For example, the commission recommended much closer co-operation and communication between Administrations and between Parliaments. Many of the proposals require change to working practices, to which the Government are committed. I know that Mr Speaker, the Lord Speaker and the Presiding Officer will determine the appropriate basis on which to develop relationships between our Parliaments.

In fulfilling our commitment to implement the Calman recommendations, there are some cases in which we have deviated from the precise recommendations because the policy content at UK level has changed, for example in relation to air passenger duty, which the Government are reviewing. In other cases, however, we have gone further than the commission, building on and strengthening its recommendations. This is the first time since the creation of devolution that a Government have brought forward legislation with such wide-ranging effect on the current settlement. Indeed, the Bill will fundamentally change the powers and responsibilities of the Scottish Parliament. For that reason, the Government will proceed with the Bill only with the formal and explicit consent of the Scottish Parliament. It is right and proper that the Scottish Parliament should examine the measures that we set out in the Scotland Bill. I welcome the thorough way in which it is going about its business, and I look forward to returning to discuss the provisions with the Bill Committee in the Scottish Parliament next week.

Devolution breathed new life into Scottish politics and Scottish society. It brought government closer to the Scottish people, and it shaped a more confident Scotland in a more secure United Kingdom. The Bill extends that settlement for the future. The first chapter of devolution began with the Scotland Act 1998; the second chapter opened on St Andrew’s day, when we published this Bill. The Bill reflects the work of many across this Chamber and in Holyrood: work that we have undertaken together with consensus, strengthening Scotland’s future within the United Kingdom. I commend it to the House.

[Jim McGovern]

On a point of order, Madam Deputy Speaker. I raised this point earlier with the Secretary of State. Is the amendment competent, given that it refers to a Scottish Government who apparently do not exist at the moment?

[Madam Deputy Speaker (Dawn Primarolo)]

The amendment is in order, otherwise Mr Speaker would not have selected it for debate.

13:11

[Pete Wishart (Perth and North Perthshire) (SNP)]

Now that we have resolved that little matter, I beg to move an amendment, to leave out from “That” to the end of the Question and add:

That this House, while recognising the need to further enhance the powers of the Scottish Parliament, nevertheless believes that the measures the Scotland Bill seeks to devolve are inadequate to meet the ambitions of the Scottish Government for the people of Scotland; considers the measures relating to air weapons, road safety and drink driving to be incomplete; regrets that the Calman Commission’s recommendations to devolve the aggregates levy and air passenger duty, and to devolve responsibility for the marine environment to match the Scottish Parliament’s responsibility for fisheries, as well as its proposal for a Scottish role in welfare benefits, have all been abandoned; regards the proposals for the Crown Estates Commission as inadequate; deplores the proposals in the Bill to re-reserve already devolved responsibilities; concludes that the tax varying provisions would embed a long-term deflationary bias in Scotland’s budget and that the proposed borrowing powers remaining subject to HM Treasury controls and limits render them insufficiently flexible; and therefore considers the Bill as a whole to be unacceptable.

I welcome the Second Reading of this Conservative-led Government’s Scotland Bill, and, like my hon. Friends, look forward to debating the further transfer of powers and responsibilities to the Scottish Government. The House will find the Scottish National party a willing and diligent partner in ensuring that the Bill is debated properly. What we have seen today, however, is remarkable. We have seen a Liberal Secretary of State for Scotland lead, on behalf of a Conservative-led Government, a debate on a Conservative-led Scotland Bill that was initiated in the Scottish Parliament by a former leader of the Scottish Labour party. This is cross-Unionist consensus in all its Conservative-led glory. I believe that, given the consequent lack of scrutiny that will be offered by Her Majesty’s Opposition, along with the disappearance of what remains of independent thought on the Liberal Benches, the task of scrutinising the Bill will be left to the Scottish National party. It is we who will scrutinise the Bill in the interests of the Scottish people, and we will do so most diligently and sincerely.

[Malcolm Bruce]

If that is the attitude of the Scottish National party, why have its members taken no part in the constitutional convention or the Calman commission over the years, and then appeared at the last minute, in a grudging and curmudgeonly fashion, to take part in a debate that they have not entered into for 25 years?

[Pete Wishart]

It is a matter of principle. I know that the right hon. Gentleman knows very little about principle in the context of the Liberal Democrats, but we happen to believe in independence. It may have escaped his attention, but that is what our party is all about. The fact that a reference to independence was not included in—indeed, was intentionally excluded from—the wording of the Calman report meant that if we were to retain our principled position, we could not participate. That is what we call principle, and perhaps that is a little lesson for the right hon. Gentleman.

[Anas Sarwar]

The hon. Gentleman has criticised the Calman process, which involved three parties working together. We rarely agree on much, but we did agree on Scotland’s future. The SNP, however, had the “national conversation”, which cost almost £1 million, asked only seven questions, received a grand total of 222 responses, and has not resulted in a single new power for Scotland. It was nothing more than a vanity project for the SNP. It was not a national conversation, but a national waste of money.

[Pete Wishart]

I thank the hon. Gentleman for his intervention.

[Several hon. Members]

rose—

[Pete Wishart]

I will take interventions in a minute, but, if hon. Members do not mind, I will make a little progress first.

As I was saying, scrutiny will be left to the Scottish National party. Throughout the Bill’s passage, we will support measures that will effectively transfer power from the House of Commons to the Scottish Parliament. We will offer solutions to the inconsistencies and problems that have been identified. We will strenuously oppose the parts of the Bill that suggest the re-reservation of certain matters such as the regulation of health professionals and insolvency. We will also strenuously oppose financial measures that would mean a cost to the Scottish people of £8 billion since devolution.

[Michael Moore]

Will the hon. Gentleman give way?

[Pete Wishart]

I will certainly give way to the Secretary of State.

[Michael Moore]

I want to nail this nonsense about the £8 billion. Of course it is possible to take one particular year, which happens to be the worst year in the middle of the worst recession since the war, and to make assumptions about a 20-year period on the back of it, but that is complete and utter nonsense. It is not the way the figure should be calculated. I refer the hon. Gentleman to the figures from the Scotland Office, which show a £400 million surplus.

[Pete Wishart]

I am grateful to the Secretary of State for that correction. He has conceded that it is possible that this could have happened. However, I heard him say on the radio this morning that the figure was not £8 billion, but £700 million. That makes it all right, does it? That is all that Scotland would have lost over the past 10 years.

[Michael Moore]

The hon. Gentleman is usually fair, and I should hate him to miss the opportunity to be fair on this occasion. [Interruption.] Okay, I am being generous.

What I was doing was correcting the hon. Gentleman’s colleague in the Scottish Parliament, who had suggested that the figure could be £700 million. Again, it would depend on where the line in the sand was drawn. Conveniently, in this instance the line was drawn in 2010-11. When we roll forward to 2014-15, we arrive at a £400 million surplus rather than the nonsense of the £8 billion that the hon. Gentleman is talking about.

[Pete Wishart]

And the Secretary of State accuses me of being selective! It is not possible to be more selective than he has just been.

We will never agree on these issues. What we have seen as a result of the work of the Scottish Government is an £8 billion loss to the Scottish budget since devolution in 1999. The Secretary of State, making the same assumption, said that £700 million would be lost to the Scottish people over the past 10 years. That is unacceptable to us, and we will have nothing to do with it.

[Stewart Hosie]

I think that the Secretary of State is confused. He has talked of basing the figure on a single year, which was the worst year, and has said that there would not be an £8 billion shortfall. Of course he is right, but no one has ever said that. We are talking about the cumulative impact had the Bill been in operation between 1999 and 2011-12, not 2014-15. I am disappointed, because the Secretary of State is normally fair, but on this occasion he has failed even to understand the argument that has been advanced against him.

[Pete Wishart]

I am grateful to my hon. Friend, who knows about these issues and understands the difficulties that the Bill would create.

Why are we giving the Scottish Parliament new fiscal responsibilities that would damage it? That is one of the proposals that we will seek to correct during the Bill’s passage. We will be making suggestions about how it could be dealt with. We are prepared to work with the Government, because we want to improve and strengthen the Bill. We want to make it a powerhouse Bill that will serve our nation and be a credit to the communities that we serve.

As we have heard, the Bill has already been debated in the Scottish Parliament, and has been subject to what has been described as an independent Bill scrutiny Committee. I certainly hope that the proceedings in the House of Commons will be a bit more useful and relevant than what we have seen in the Scottish Bill Committee thus far. We have seen a Labour convener haranguing and harassing independent witnesses, as a result of which several have decided not to take part in the proceedings because of what they feel is an in-built bias. The Scottish Bill Committee seems to be more interested in considering options that are not even in the Bill than in examining the dangerous tax plans that it contains. I hope that we can do a bit better than that down here, Madam Deputy Speaker. As you know, and as we are already observing, Scottish debates in the House of Commons are always characterised by their good nature and conviviality.

[Fiona O'Donnell (East Lothian) (Lab)]

The hon. Gentleman cannot have it both ways. He cannot say that he wants rigorous scrutiny, and then say that we were too hard on people who provided false information in support of his case.

[Pete Wishart]

I do not know what the hon. Lady is referring to. I have never said anything about false information.

In a spirit of consensus and co-operation, let us start with the issues on which we all agree, for obviously there are such issues. We all agree with the Secretary of State and with our Labour colleagues that devolution is, in the words of Donald Dewar, a process and not a one-off event, and that is important. We may disagree on the conclusion of that process—we believe in independence, and my Labour colleagues believe in something else—but we all agree that devolution is a process, and that we will continue to see a transfer of powers from the House of Commons to the Scottish Parliament.

A point was made earlier about the reference to the Scottish Government in the amendment. When I first came to the House 10 years ago, Labour Members were appalled at the prospect of a Scottish Government. The Secretary of State probably remembers the debates in which they expressed their view. They helpfully said, “They can call themselves ‘The White Heather Club’ if they want, but they will never be a Government.” We are a Government now, thank goodness, and the Labour dinosaurs, some of whom I see in their places, will never go back to having an “Executive” running Scotland. That is a good thing too.

An important new development is that we all agree now that some financial powers—fiscal powers—should be devolved to the Scottish Parliament. We never had that important source of agreement before. We fundamentally disagree on the measures in the Bill, but we agree that financial responsibility should be a feature of the Scottish Parliament. I look forward to that, and that is another area of agreement. We will oppose measures in the Bill, but it is good that we now all agree that financial powers are required for the Scottish Parliament.

The most important thing that everyone in this House can agree on—this ran through everything to do with Calman—is that the Scottish Parliament has been an overwhelming success. The Secretary of State is of course right to say that there is no question—only people on the fringes of politics in this House would even suggest this—of ever going back to having no Scottish Parliament again. What typifies that more than anything is the fact that a Conservative-led Government are legislating for more powers and responsibilities to be given to the Scottish Parliament, because only 12 short years ago the Tories campaigned so energetically against the Scottish Parliament. That shows the progress that we have made, and there will be areas of agreement as we go through the Committee stage in this House.

Although we agree on many things in the Bill, there are many things with which we fundamentally disagree.

[Margaret Curran (Glasgow East) (Lab)]

rose—

[Pete Wishart]

This is probably one of them.

[Margaret Curran]

The hon. Gentleman’s contribution seems to contain an inherent contradiction, because he is saying that he welcomes the Government’s introduction of this Bill, yet it is widely observed that they are doing this because of the work of the Calman commission and his party has criticised and refused to participate in its work. The Calman commission has led to great progress for Scotland but, yet again, the Scottish National party has opposed the Calman commission and held it back.

[Pete Wishart]

That was an unfortunate intervention, because I give the hon. Lady more credit than that. I was trying to think of issues on which we agreed and I thought that we would hear a more helpful intervention. It was just the Labour party resorting to type and it was unfortunate that we had to hear it.

Although we agree on much, there are a few areas where we disagree.

[Mr Donohoe]

Then give us some.

[Pete Wishart]

I will oblige the hon. Gentleman. The Bill is a massive wasted opportunity for Scotland, because so much could have been included in it and we could have done so much to improve the position of Scotland. The Bill could have included measures to help our economic performance and increase growth. The Bill seems to contain a wee modest set of proposals that lack any real ambition to propel Scotland forward; it offers few solutions to provide Scotland with what it needs to take our nation forward; and, as I have said, it offers nothing in the way of a framework to increase economic growth in Scotland.

[Anas Sarwar]

Will the hon. Gentleman give a direct answer to something? Why did the SNP not make a submission to the Calman commission?

[Pete Wishart]

The Calman commission was proposed by the three Unionist parties, and discussions have gone on all the time with the Scottish Government about implementing the Calman proposals. Who put two of the main Calman proposals—on airguns and speed limits—before the Scottish Parliament? We could have legislated on those last year. The SNP said that it was prepared to take forward the Calman proposals where they were useful and helpful to the people of Scotland. Who refused to allow us to take those proposals forward? It was the Labour party, so I will take no lessons about trying to ensure that the Calman proposals are taken forward.

[Dame Anne Begg (Aberdeen South) (Lab)]

Does the hon. Gentlemen agree that had the SNP been more engaged with Calman and taken part in the coalition building that was necessary to come forward with the Scotland Bill, it might have got more of its views reflected in the Bill? By not taking part in that process, the SNP ensured that those views were inevitably not considered.

[Pete Wishart]

Why was independence excluded in the setting up the Calman commission? Why could we not have included everything? Had we done so, everyone would have taken part and put forward their own proposals to move Scotland forward. But, with their legendary cunning, the oh-so-clever Unionists said, “How do we trap the Nats when it comes to looking at how devolution continues?” They resorted to type, as they did on the constitutional commission. These cunning Unionists sitting around the table said, “What we’ll do is exclude independence from any discussion about the future of Scotland,” and that is what they did.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

May I ask the hon. Gentleman what happened to his party’s cunning plan: the referendum on independence?

[Pete Wishart]

The right hon. Gentleman asks a fair question, and he will find out the response in May, when a Conservative-led Government attempt to secure and save their seats in Scotland. Then we will have a debate about full powers for the Scottish Parliament and then we will see the result in his constituency and area.

I shall try to get back to what I was discussing. Believe it or not, I was still talking about areas of agreement, although I was moving on to areas of disagreement. As I said, the Bill contains modest ambition for Scotland but it also contains a range of very dangerous tax plans that could significantly hurt the Scottish economy and short-change the Scottish people. As we have seen in today’s exchanges, the tax plans are the most hotly contested, keenly debated and contentious part of these proposals. As I have said to the Secretary of State, by way of figures that he keenly and hotly disputes, this approach would have cost the Scottish people some £8 billion since the establishment of Scottish devolution in 1999. I heard him on the radio saying, “It would only have been £700 million”, but what we are starting with is devolving a series of measures—

[Michael Moore]

rose—

[Pete Wishart]

I think we have been through all this before, but the Secretary of State might want another shot.

[Mr Donohoe]

On a point of order, Madam Deputy Speaker. May I suggest, Madam Deputy Speaker, that you gently remind the hon. Gentleman that he should speak to his amendment? He has been talking for some 15 minutes and I have not heard anything about the amendment.

[Madam Deputy Speaker (Dawn Primarolo)]

I am grateful for your assistance in this matter, Mr Donohoe. I will decide whether the hon. Gentleman is in order. At the moment he still is and he is taking interventions. I am listening to all the contributions keenly, and I believe that the Secretary of State was about to give a response.

[Michael Moore]

Thank you, Madam Deputy Speaker. The hon. Member for Perth and North Perthshire (Pete Wishart) cannot keep repeating this figure of £700 million. I was pointing out how it was slightly unfortunate that his colleague in the Scottish Parliament, Fiona Hyslop, chose to use one figure and ignore the £400 million surplus, which is the more relevant figure.

[Pete Wishart]

I am grateful to the Secretary of State for finally clearing that up.

I was talking about a measure that is actually a Tory budget cut to the Scottish Parliament and, unfortunately, the nodding dogs of the Labour party are supporting the Conservative-led Government’s cuts and assault on the Scottish budget. Why have they taken us into this measure, which is to the great detriment of the Scottish budget? The SNP will not accept a Tory cut of this magnitude.

[Gordon Banks]

May I try to bring the hon. Gentleman back to his amendment, or even encourage him to start discussing it? Does he intend to vote against the Bill? After all, his amendment states that he

“considers the Bill as a whole to be unacceptable.”

Is he going to support new powers for Scotland or rule against them?

[Pete Wishart]

Hon. Members seems to want to hear so much about our amendment. It states that the Bill is unacceptable; a cut of this magnitude to the Scottish budget is unacceptable. As I said, the SNP will scrutinise the Bill as it goes through Committee. I am not expecting any scrutiny of the Bill from Labour Members; I just expect them to sit there agreeing, complicit with the Conservative-led Government. We have tabled a reasoned amendment and, thankfully, Mr Speaker has accepted it. However, we will allow the Bill to proceed to Committee and seek to improve it there. Right now, the Bill is a broken Bill that needs to be fixed. There are serious difficulties with it and we will try to improve it. The challenge for the Labour party is this: will it support us in trying to improve the Bill?

[Sir Menzies Campbell]

In the interests of clarity, will the hon. Gentleman tell the House whether he intends to divide the House on his amendment?

[Pete Wishart]

We would not table a reasoned amendment if we did not intend to divide the House. Of course we are going to divide the House. The Bill is unacceptable, as we have said. If the right hon. and learned Gentleman wants to go home, he can do so, although I would suggest that he hang around.

[Anas Sarwar]

rose—

[Pete Wishart]

I am going to make a bit of progress because, to be fair, I have taken a number of interventions from the hon. Gentleman.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Will the hon. Gentleman give way?

[Pete Wishart]

No, I am going to try to make progress, if the hon. Lady will allow me.

[Mrs Anne McGuire (Stirling) (Lab)]

rose—

[Pete Wishart]

I will give way to the right hon. Lady later, but I now wish to get through my speech.

Parts of the Bill are unacceptable to us, but, in other ways, it is merely perplexing. We shall, thank goodness, finally get devolution on the regulation of airguns. I have campaigned on that issue, as have colleagues in the Scottish Parliament. Airguns cause such a blight to so many communities.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I want to make some progress.

Airguns blight so many communities in Scotland, but it is perplexing that we shall get devolution on all airguns except the most dangerous ones. I am sure that the less dangerous ones also have an impact on communities, but surely, by definition, the most dangerous ones must cause most of the damage. Similarly, we are going to get devolution on speed limits.

[David Mundell]

Will the hon. Gentleman give way?

[Pete Wishart]

I am going to try to make a bit of progress, even though it is the Minister’s good self who wishes to intervene.

Thank goodness we are getting devolution on speed limits, because we have long argued for that. Some of my colleagues in the Scottish Parliament have campaigned hard for it. However, we find that we are not going to get control over freight, heavy goods vehicles or anything that is towing a caravan. The most perplexing thing of all—you will like this one, Madam Deputy Speaker—is that the regulation of activities in Antarctica are to be reserved to this House. Just in case anyone was in any doubt, Antarctica is now listed as being reserved to the Westminster Parliament. Colonies of penguins are already pulling down the saltire and hoisting the Union Jack in joyous celebration of that fact. Thank goodness for the Scotland Bill letting us know that fact about Antarctica!

[Mrs McGuire]

Will the hon. Gentleman please explain what the Scottish Government would do in their relationship with Antarctica if he had his way and the matter remained devolved to Scotland?

[Pete Wishart]

I know that it has been a feature of the Labour party in Scotland, particularly through its leader, to upset and antagonise friendly nations around the world. If you will excuse me, Madam Deputy Speaker, I will refrain from making any more comments about Antarctica.

How has the Bill been met in Scotland? There has been a curious sort of disappointment about it, and an “Is that it?” shrug of the shoulders. There has been no bunting hung out in the streets of Edinburgh, and no images of the Secretary of State emblazoned from the flagpoles of the nation. There is a real sense of frustration that civic Scotland has effectively been excluded from any proceedings on the Bill. We have heard many people ask why they were not consulted on it and brought on board. There has been very little consultation on the Bill, and there is a great deal of frustration about that.

This Bill is what happens when a cross-Unionist consensus gets put through the wringer by a Tory Government in Westminster. It was a Labour Government who initiated the Calman proposals, and it will be a Tory-led Government who will conclude them. In that process, the stuffing has been knocked out of some very good Calman proposals. As I have said, only 35 of the 60 proposals have survived.

[Mr Donohoe]

The Calman report proposed that air passenger duty should be included in the provisions, but it has been excluded for very good reasons. Can the hon. Gentleman give an estimate of the amounts that would be raised through air passenger duty from Scottish airports? And, just as an aside, can he tell us what the level of duty is at the moment for people travelling from Scotland to England?

[Pete Wishart]

The Secretary of State said in response to an intervention that air passenger duty could not be considered because it is being considered by Europe just now, but it was being considered by Europe when Calman was looking at these matters as well. There is no real difference between then and where we are now.

I am not just talking about aviation duty. I am talking about the fact that only 35 of the 60 Calman proposals have survived. This is a question not so much of Calman-plus, as the Secretary of State and the Liberals like to say, as of Calman-half. Useful Calman proposals such as those on the devolution of welfare measures—including much-needed measures on immigration—on the marine environment and on taxes on aviation and aggregates have been left out of the Bill. Other Calman proposals have been significantly watered down. They include the proposals on the administration of elections, which will still effectively be reserved to this House, on appointees to the BBC and on the Crown Estate, about which we have growing concerns.

We will be constructive in trying to get this Bill through, but I really hope that the Tory-led Government will take seriously our attempts to improve it. I do not know whether Labour Members will continue to be nodding dogs as the Bill goes through, or whether they will join us in trying to improve and strengthen the Bill to ensure that we get better legislation for the people of Scotland. It most definitely needs improvement if it is to meet the aspirations and ambitions of the Scottish people.

[Mrs Laing]

The hon. Gentleman is making an important point about the aspirations of the Scottish people. He also made an important point about the financial position. Is he arguing that £800 million—or a similar figure, whatever it might be—was spent in Scotland over the past decade and that, had the provisions of the Bill already been in place, it would not have been spent in Scotland? If that is his argument, where did that money come from?

[Angus Robertson]

Scottish taxpayers.

[Pete Wishart]

As my hon. Friend has just said, it came from Scottish taxpayers. I am grateful to the hon. Lady for asking that question, because that is exactly what would have happened: we would have been deprived of that budget if these proposals had been in place. That is why we are saying that they are so dangerous, and why they should be considered once again.

When the 1998 Scotland Bill went through, the then Labour Government were prepared to accept only one amendment. It related to the devolution of the regulation of stage hypnotists. I am sure that stage hypnotists were delighted that they were going to be regulated from Scotland. As we take this Bill through the House, let us try to do a bit better than that. The fact that we are having this debate at all shows that we are on a journey down the road of constitutional reform. We will be having the debate in the run-up to May this year, and I know where I want it to conclude. We have the opportunity to strengthen the Bill.

[Anas Sarwar]

The hon. Gentleman has said repeatedly that he agrees with parts of the Bill, and he accepts that 35 new powers are being devolved to Scotland, but his amendment ends by proposing that the House

“considers the Bill as a whole to be unacceptable.”

Will the hon. Gentleman, who believes in independence, be voting against new powers for Scotland?

[Pete Wishart]

Of course we will not be voting against new powers for Scotland. We will be raising, throughout the Committee stage of the Bill, the dangerous proposed tax powers and the £8 billion that would have been lost to the Scottish people over the past 10 years had they been in place.

[Mr MacNeil]

Surely the big question for Labour Members is whether they want a strong Scottish Parliament to protect Scotland from any cuts that will come from the Tories and the Liberals. In the 1980s, we saw the Conservatives preferring Margaret Thatcher to independence; this time, we see Labour preferring a Tory Government to an independent Scotland. That is the reality.

[Pete Wishart]

rose—

[Madam Deputy Speaker (Dawn Primaralo)]

Order. Perhaps we could now return to the amendment, Mr Wishart.

[Pete Wishart]

Thank you very much, Madam Deputy Speaker. My hon. Friend has made his point in his typical and obligatory forthright manner.

[Mr Alan Reid (Argyll and Bute) (LD)]

I am not sure whether the hon. Gentleman understands the procedures of the House. Does he not realise that, if his amendment were successful, these 35 new powers would not be transferred to the Scottish Parliament? He and his colleagues are trying to prevent the Scottish Parliament from getting the new powers.

[Pete Wishart]

This is a reasoned amendment. We are inviting the House to look at the many difficulties in the Bill and to consider how it might be improved.

[Graeme Morrice (Livingston) (Lab)]

rose—

[Gordon Banks]

rose—

[Pete Wishart]

I will not give way because I am about to finish my speech.

We have the opportunity to strengthen the Bill, and I want Labour colleagues to work with us to—

[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I am about to conclude, if the hon. Gentleman will allow me.

This is clearly an insufficient Bill, a broken Bill, a Bill that does not serve the interests of the Scottish people. There are many things that we could do if we could work together, but we have to hear from Labour Members that they accept that the proposed tax powers are dangerous and that we have to do something about them. We cannot have this Tory-led Government bringing forward a budget cut in disguise. We need Labour’s support if we are to try to prevent that.

[Anas Sarwar]

On a point of order, Madam Deputy Speaker. Before the hon. Gentleman concludes, may I point out that I do not feel he has spoken about the amendment? I wonder whether he will do that before he concludes.

[Madam Deputy Speaker (Dawn Primarolo)]

Fortunately, it is not for the Chair to remind Members that they have not necessarily referred to every point in their amendments. Members of the House can draw their own conclusions.

[Pete Wishart]

Thank you very much, Madam Deputy Speaker. I am sure that the hon. Member for Glasgow Central (Anas Sarwar) will get to make his own point in his own forceful way if he catches your eye.

I was about to conclude, Madam Deputy Speaker, and I shall conclude on the subject of the reasoned amendment. I want right hon. and hon. Members to support our amendment. We want to try to improve this Bill. It is a broken Bill; it is a Bill that does not serve the people of Scotland. The tax powers will be dangerous if they are implemented. I hope that hon. Members will support our approach as the Bill goes through. Let us strengthen it and make it a powerhouse Bill that serves the people of Scotland. As it stands, it is a broken Bill that cannot serve the people of Scotland because of the financial powers in it. I urge everybody to support our reasoned amendment.

13:39

[Mrs Eleanor Laing (Epping Forest) (Con)]

It is always a pleasure to speak after the hon. Member for Perth and North Perthshire (Pete Wishart)—and sometimes at the same time as him. I always admire his passion and his genuine belief that he is doing the best thing for Scotland. I hope he does not mind me saying that his heart is in the right place, but unfortunately his head and his fiscal understanding are not.

The hon. Gentleman made some important points, particularly about tax-raising powers and the effect of this Bill. I was much perplexed by his response to my intervention a few moments ago. Whether the amount is £800 million or £600 million—or whatever the very large sum is that he and his party argue was spent in Scotland over the past decade but would not have been if the Bill had been in place—his answer was that that money came from the Scottish taxpayer. That is not correct: the money came from the UK taxpayer.

With equal passion, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who has unfortunately just left the Chamber, begged a few moments ago that the people of Scotland should be protected from cuts. The people of Scotland cannot be protected any more than the people in the rest of the United Kingdom from the effects of 13 years of bad financial management of our country’s economy by the Labour Government.

[Mr Donohoe]

Oh come on now, Eleanor.

[Mrs Laing]

The hon. Gentleman seeks to disagree with me, in a mild way and from a sedentary position, but the facts speak for themselves. The country’s finances are in a mess. Yes, we all want to protect people in all parts of the country, but there is no argument for protecting Scotland to a greater extent than the rest of the United Kingdom.

[Iain Stewart (Milton Keynes South) (Con)]

Does my hon. Friend agree that the operation of the Barnett formula in its strictest sense will protect the Scottish budget at times of reduction in the overall UK level of public spending? A population change is taken on the basis of a higher-than-average base line, so in times of public expenditure reductions, that will protect the Scottish block.

[Mrs Laing]

I entirely agree with my hon. Friend and I am grateful to him for making that point at this stage in the debate. I am glad to say that he is something of an expert on this subject, having been steeped in it for many years. He is absolutely right; it is also very important, for the reasons he has just stated, that we keep the Barnett formula. That is the way to protect the people of Scotland not from the effects of the Conservative-led coalition but from the effects of 13 years of Labour mismanagement of the economy.

[Stewart Hosie]

I am grateful to the hon. Lady, who is sadly wrong, as is her hon. Friend the Member for Milton Keynes South (Iain Stewart). Barnett is of course a convergence formula and, far from protecting in the way that the hon. Gentleman suggests, it squeezes. More importantly, the hon. Lady was making the case that we should not do things differently, but of course that is the nature of devolution. If the Scottish Government had proper fiscal and economic control, they could well take steps different from those taken throughout the UK to protect and grow the economy. What would be so wrong with that?

[Mrs Laing]

That is exactly why the provisions of this Bill, which give more accountability and power to the Scottish Parliament, are absolutely right. The hon. Gentleman makes a good argument in favour of the Bill.

Until a few moments ago, I was going to say that it is good to see such cross-party consensus on the Bill. Of course, we have cross-most-party consensus, but not consensus with those in the Scottish National party. We understand that however much they seem to be stepping back from their long-held belief that we ought to move towards an independent Scotland—I do not understand why they do not have the courage of their convictions and go ahead and ask the people of Scotland—they want to go on a different path from the rest of us on protecting and helping Scotland, and giving it the best chance for the future.

I want to pay tribute to Donald Dewar, who did a wonderful job in setting up the Scottish Parliament. That was not what I said in 1997 and 1998 as we debated the original Scotland Bill for hour after hour, day after day and week after week. It was strange that the hon. Member for Perth and North Perthshire said at the beginning of his speech that this Bill would not be properly scrutinised. I can assure him that those of us who spent weeks and months scrutinising the Bill that became the Scotland Act 1998 will find this nice little Bill a piece of cake in comparison. Of course it will receive proper scrutiny.

Back in 1997 and 1998, we properly scrutinised the Scotland Bill. Many of us said over and over again that the devolution settlement that was being created would not work in the long term and would have to be amended and improved. I am very pleased to see this Bill make the improvements that some of us have thought necessary for a long time.

[Mrs McGuire]

I am one of the campaign veterans from those long days and nights spent scrutinising the Scotland Act 1998. Will the hon. Lady remind us of the position of the Conservative party at that time? I am not sure whether it was so much about scrutiny as about opposition.

[Mrs Laing]

It was; the right hon. Lady is right. As I said when I paid tribute to Donald Dewar a moment ago, that was not what I said in 1997 and 1998. The position of the Conservative party at that point was to oppose devolution. Of course it was; it is no secret. I for one thought that that was the best settlement for Scotland. I appreciate, however, that the Scottish Parliament has grown in stature and become an important part of the lives of the people of Scotland. It is there, it performs an important duty and it defends the law of Scotland—the right hon. Lady will agree that I always defend that. The Scottish Parliament performs an important function in our new constitutional settlement in the United Kingdom.

Although I would originally have preferred to have seen an enormous amount of taxpayers’ money saved by our not setting up the Scottish Parliament, I now appreciate—I speak only for myself, not for my party—that it performs an important duty. As I have said for more than 12 years, however, it is essential that the constitutional settlement be improved. Donald Dewar, to whom I am still in the middle of paying tribute, worked for decades to achieve the Parliament and I am sure that all hon. Members will agree how sad it is that he did not live to see the complete fruition of his labours. Had he done so and remained the First Minister for a longer term, I believe the standing and status of the Scottish Parliament would have grown more quickly. However, it is where it is now.

[Mr McCann]

I might not agree with the hon. Lady’s view of the economic situation, but does she share my view that the difference between the parties in this House that back the Union and those on the nationalist Benches is that we want to finesse the devolution settlement to make it better, while they see this as a foot in the door to move further towards independence?

[Mrs Laing]

I am very pleased to agree entirely with the hon. Gentleman—this is an unusual debate.

During the passage of the original Scotland Act, many of us argued that it would work in that form only if one made the assumption, as the then Government understandably wanted to, that there would always be a Labour Government in Westminster and a Labour majority in the Scottish Parliament. That is how the settlement was set up. Now that the situation has, happily, changed, it is important that the whole constitutional settlement should be updated to take account of that.

[Mrs McGuire]

I respectfully suggest to the hon. Lady that that was not how the settlement was established. I do not think that any Labour or Liberal Democrat Member at that time would have expected that, for ever and a day, there would always be a convergence of the same political parties in both Westminster and Scotland. I would have hoped that the hon. Lady would give us credit for having established a far more robust devolutionary settlement than that. I think the past few months have vindicated the work that was done at that time.

[Mrs Laing]

It would be wrong to go back over arguments that we had more than a decade ago, but I stick to my point: it is necessary to make updates because of assumptions that were made then.

[Mr Donohoe]

Will the hon. Lady explain why, if the Labour party was so self-centred at that time, we allowed proportional representation?

[Mrs Laing]

I have never understood that and it is not for me to give the answer.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The hon. Lady’s memory has been clouded through the years because at no point was the Scotland Act set up for a time when there would be solely Labour government at Westminster and Holyrood.

[Mrs Laing]

We are going back over old arguments now. I merely make the point that we always said that the devolution settlement would have to be improved and I strongly welcome the Bill, which does improve it.

The Calman commission is to be praised for the many years of work that were undertaken and for the careful and studied way in which its proposals were brought forward. This has not been a rushed job; I pay tribute to the previous Labour Government for setting the commission up and to the current Government for taking its recommendations forward. It has produced the right answers. By giving greater power to the Scottish Parliament, the Bill also gives a greater say to the Scottish people about how our democracy works. That is the most important point. It is right that greater power should require greater accountability and responsibility, as the Secretary of State has eloquently explained. If democracy is to work properly and if the people who vote and choose a Government are to be treated responsibly and have their opinions properly translated into action, it is very important that a Parliament such as the Scottish Parliament should not only be responsible for spending taxpayers’ money, but be held responsible, at least to some extent, for raising it.

I welcome the better clarification of the balance between devolved and reserved policy matters—those which ought to be taken at Holyrood and those which ought to be taken in this House. If we do not have that clarity, the whole constitutional settlement will lack the gravity I would like it to acquire, so the new clarity that comes from the Bill is very welcome.

I promise that when we scrutinise the Bill in Committee, it will, contrary to the assertions of the hon. Member for Perth and North Perthshire, be properly scrutinised, and I look forward to our scrutinising it in great detail. The best thing about the Bill and the changes it will make to the constitutional settlement is that it strengthens and entrenches Scotland’s position within the United Kingdom, which most people in the House and, I fervently believe, in Scotland want to see entrenched, protected and encouraged. Although this is 27 January and not 25 January, I hope I will be forgiven for invoking the bard, as this is the week that we celebrate our national poet, Rabbie Burns. I shall not quote his best-known works, which are often so badly misquoted south of the border.

[Mr Donohoe]

On a point of order, Madam Deputy Speaker. I must correct the hon. Lady. Rabbie Burns was never known as Rabbie Burns. Rabbie, in Ayrshire parlance, is the village idiot: Robert was never known as Rabbie.

[Madam Deputy Speaker (Dawn Primarolo)]

We will take that as a point of clarification rather than a point of order.

[Mrs Laing]

I entirely take the hon. Gentleman’s point—I was being far too familiar and colloquial. Let me be more formal. This week, we celebrate the anniversary of the birth of our great Scottish national poet Mr Robert Burns, and one of his best poems makes the point that he was a true Unionist. “The Dumfries Volunteers” says clearly, at the end of its second verse:

“Be Britain still to Britain true,

Amang oursels united;

For never but by British hands

Maun British wrangs be righted!”

Long may it continue, Madam Deputy Speaker. We welcome the Scotland Bill because it totally strengthens Scotland’s position within the United Kingdom.

13:58

[Ann McKechin (Glasgow North) (Lab)]

It is now more than 12 years since the then Labour Government guided the pioneering Scotland Act 1998 through this House. I was proud to join thousands of fellow Scots of different political persuasions and of none in campaigning for its creation. It was undoubtedly one of Labour’s most important achievements. It has strengthened our democracy and brought government closer to the people and it works well in practice.

However, we recognised the need to review the challenges that the Scottish Parliament had faced in almost 10 years in operation—first, in how it could meet people’s desire to strengthen its functions, and secondly, in how to increase its financial accountability to the people of Scotland. The resulting Calman commission report was a serious, balanced and thorough analysis of Scotland’s constitutional arrangements. I would like to take this opportunity to commend Sir Ken Calman and his fellow commissioners for their work and the manner in which it was conducted. Despite the fact that the call for the establishment of the commission was initiated by a clear majority at Holyrood, it was rejected by the SNP Government, who preferred instead to engage in a costly, unpopular and one-sided so-called “national conversation” on a wholly independent Scotland.

[Pete Wishart]

Will the hon. Lady remind us how much the Calman commission cost?

[Ann McKechin]

The hon. Gentleman will no doubt remind us how much his national conversation cost, which resulted in not one piece of legislation and no change for the betterment of Scotland, whereas the Bill, we recognise, will strengthen our democracy and will be to the benefit of the people of Scotland.

[Pete Wishart]

The Calman commission cost £614,000, which is an extraordinary amount of money. It is what David McLetchie called “unionists talking to unionists”.

[Ann McKechin]

Sadly, the hon. Gentleman has not informed the House that his national conversation—the big blether with Alex—cost more than £1 million, and we have not had one single benefit as a result. That is a test that the very sensible people of Scotland will apply. They deserve better.

The Caiman commission agreed with our fundamental view, set out in our 2009 White Paper “Scotland’s Future in the United Kingdom”, that together the nations of the United Kingdom are stronger and that together we share resources and pool risks. Nowhere was that more apparent than in 2008 with the vital bail-out of our major banks by the Labour Government, which included two major Scottish institutions. The cash injected to salvage our Scottish banks was the equivalent of £10,000 for every man, woman and child in Scotland. Without the Union and the intervention of the UK Labour Government, Scotland would have been plunged into the depths of economic despair that smaller countries such as Iceland and Ireland, the previous poster boys of independence for the SNP, are sadly still suffering from.

[Mr Frank Roy]

Will my hon. Friend tell the House what would have happened had Scotland at that point been part of an “arc of prosperity”?

[Ann McKechin]

SNP Members have made no mention today of an analysis of what would have happened under fiscal independence during the period from 2007 to 2009. In fact, the SNP has produced no governmental analysis for that period. Recent estimates by experts indicated that Scottish tax income would have dropped by nearly £2.5 billion—and that includes a per capita share of North sea oil, before the Secretary of State and his colleagues on the Front Bench ask about that. The SNP Government have continually failed to produce detailed modelling of their case for separation. The analysis has to be done not only in the good times but in the bad times as well.

Indeed, the SNP’s case for fiscal autonomy is so weak and unconvincing that its Ministers in Holyrood are now accused of having had to resort to playing fast and loose with the facts of economic research to substantiate any case at all. We are firmly of the view, based on sound, independent evidence, that the economic union is Scotland’s greatest economic opportunity and that together we are stronger.

Let us be clear that the Scotland Bill was born of consensus and consultation and is a model example that Government should always follow, whether here in Westminster or at Holyrood, before laying legislation on such fundamental constitutional reform. While in government, we sought political consensus from the start. We initiated independent commissions and reports, embarked on a robust consultation with the public, civic society and experts, and we listened carefully when those people spoke. There is no such consensus and there was no such consultation prior to the Parliamentary Voting System and Constituencies Bill or, indeed, the Fixed-term Parliaments Bill, and the result has been rushed and biased legislation, which insults our democracy. The Tory-led Government have steamrolled those Bills through this House of Commons and into the House of Lords, showing scant regard for proper scrutiny and completely disregarding the opportunity to engage with interested parties and experts or the electorate whom they serve.

However, the Bill we are debating today is the antithesis of the Government’s other shoddy constitutional efforts. On the whole, it reflects most of the Calman commission’s recommendations, and accordingly there is much that we agree on. As the official Opposition, however, we will rigorously scrutinise the Bill to ensure that it represents the best deal for the people of Scotland. There are some areas of concern and issues that will require further clarification and amendment as we continue into the Committee stage, although I can assure the Secretary of State that we will not press the Antarctica clause to a vote. I am astonished that the dogma of the SNP is such that this one simple clause, which was clearly a mistake in the original legislation and has now, I understand, been corrected, will enable one of our finest universities to mount an expedition to Antarctica. Instead, the hon. Member for Perth and North Perthshire (Pete Wishart) seems to be more concerned about where the First Minister might spend his summer holidays.

[Pete Wishart]

I am relieved that we will see no Labour amendments on Antarctica. I am grateful that the hon. Lady said that the Labour party will be engaged in scrutinising the Bill, which is good news. What sort of amendments can we expect to see tabled in Committee?

[Ann McKechin]

Unlike the hon. Gentleman, who wants to stop this process in its tracks this evening, I believe that the Bill requires a proper period of thorough examination. There will be amendments that we believe are appropriate on technical issues and on the substance of the Bill.

[Gordon Banks]

Will my hon. Friend confirm that any amendments that we table in Committee will have more bearing and substance than the amendment that has been spoken about by SNP Members today?

[Ann McKechin]

I am happy to provide my hon. Friend with that assurance. Unlike some other parties, we are already listening carefully to and speaking with people and bodies in Scotland, as we have done throughout this process, which has already lasted three years.

There has been much discussion, both in the Scotland Bill Committee in Holyrood and beyond, of the effect of the proposed devolution of the fiscal powers set out in the Bill to the Scottish Parliament. We urge the Secretary of State to set out and make transparent at the earliest opportunity the precise plans that the Government intend to introduce to ensure operational stability during the transition and the measures he intends to put in place to control the costs incurred during those changes. In particular, it is imperative that the Scotland Office, the Scottish Government and Her Majesty’s Revenue and Customs are in full and frank consultation and that operational systems are put in place to ensure that changes are fully effective so that Scottish taxpayers do not see public moneys wasted during a period of difficult financial constraint. What discussions has the Secretary of State held with HMRC and the Scottish Government on the initial planning required to implement those substantial changes, and will he undertake to report regularly to the House on progress during the preparation period leading up to the next general election?

We also seek clarity on the definition of “Scottish taxpayer”, which experts have already highlighted could lead to a series of what we suspect are unintended anomalies. According to the Institute of Chartered Accountants of Scotland, a worker who spends 101 days in Scotland, 99 days in England and 165 days working overseas, for example, will still be deemed to be a UK resident and a Scottish taxpayer, despite spending less than half the calendar year in Scotland. A person who lives in Scotland but works in England would derive all their income from their activities in England but still be classified as a Scottish taxpayer because that is where they end their day. As the Secretary of State and his No. 2, the Under-Secretary of State, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), both represent border constituencies, that issue might be of direct relevance to their constituents. We understand that HMRC currently has no intention of introducing a concession to split the tax fiscal year to deal with the movement of workers across the border. None of those consequences seems particularly sensible, so we urge the Government to look carefully at the definition.

We are disappointed that the Government have not taken the opportunity to tackle the problems caused by the different approaches to the definition of “charitable purposes” and “charity” in the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Act 2006, which applies to England and Wales. They have failed to use this opportunity to introduce measures to reduce the regulatory burdens on UK charities that operate in both Scotland and other parts of the UK —particularly in difficult times when charities are already affected by the spending review cuts and bearing the brunt of the economic downturn. The Bill is the ideal place to address the issue, and to quote the Secretary of State’s right hon. Friend the Prime Minister, “If not now, then when?”

Let me conclude by reminding the House that the Bill is intended to preserve the political and economic union that has benefited both great countries over the past three centuries. The case for fiscal autonomy has disintegrated around the SNP, and its vision for Scotland is small, isolated and weak. Conversely, the Bill is designed to ensure that Scotland’s future in the United Kingdom is strong, enabling the Scottish Parliament to flourish further and to carry on improving the lives of people in Scotland.

[Mark Lazarowicz]

A large number of charities are headquartered in my constituency, and they regret the fact that the opportunity has not been taken to deal with this anomaly. Does my hon. Friend agree that, to allow the point to be dealt with, the Government could well consider tabling amendments in Committee? I myself am a director of a Scottish charity, but it is a local one that is unlikely to be affected by the provisions.

[Ann McKechin]

I am grateful to my hon. Friend. On that point, I agree that it would be helpful if the Government reconsidered their response to that recommendation by the Calman commission, because there is an additional burden on many very good charities that operate not only in Scotland but in other parts of the UK. They face two licensing processes and two sets of regulatory burdens, and, for a Government who always lecture people on reducing the regulatory burden, this is a good opportunity, working with the consensus among charities, to try to alleviate the amount of time they have to spend on paperwork and to increase the amount of time they have to spend on charitable purposes.

We will support the Bill’s Second Reading, not the Scottish National party’s amendment, if it is put to a vote. That does not mean we will not scrutinise the Bill carefully and closely, but, after almost three years of study and engagement with the Scottish public and with experts, and given the express will of the Holyrood Parliament, whose Committees are currently considering the matter in close detail, it is now important to get on with business and to put the Calman commission into legislation.

14:12

[Malcolm Bruce (Gordon) (LD)]

I am very happy to follow the hon. Member for Glasgow North (Ann McKechin), who made a fair analysis of the co-operation and consensus that have characterised the process over many years. She presented a constructive role for the Opposition, as is right and proper, in scrutinising and trying to improve the legislation, and in addressing some of the issues. I certainly hope that matters are proceeded with in that spirit.

I am very happy also to welcome the Bill, as someone who has been involved in the process since its very early days—indeed, for 25 or more years. Frankly, however, I see it as a further step along the way to home rule within the United Kingdom. I never thought, any more than others did, that the Scotland Act 1998 was the end of the process; most of us recognise that the constitution is evolving. The first Act, which established the Scottish Parliament, was seminal legislation, but it was always work in progress, and this Bill falls into the same category.

I hope that my right hon. Friend the Secretary of State for Scotland does not find any discomfort in that, but I completely understand that his role in government, operating on an agreed cross-party consensus, is to put forward a Bill that commands the support of the House and the Government and does not prevent any of us from arguing the case for further reform and development. That puts the SNP in a difficult position, but that is precisely where it wants to be.

For many of us who have been through this debate a few times, my previous point might sound ponderous, but we are making history because we are shaping the evolution of the United Kingdom’s constitution, and this stage will be monitored for many years to come as one of the stages along the route. It will represent the foundation of a much more radical and decentralised United Kingdom over time.

[Stewart Hosie]

I respect the right hon. Gentleman’s view that this is a process, and that he wants to reach what he calls home rule within the UK. I suspect that that probably means, in his mind and those of his honourable colleagues, effectively a federal position with full fiscal autonomy. I respect that position, but we do not have that before us, so why is he prepared to settle for a Bill that, while devolving speed limits for cars, will not allow the devolution of speed limits for cars drawing caravans? Why is he prepared to accept something so weak?

[Malcolm Bruce]

If the hon. Gentleman will let me proceed with my speech, he will receive the answer, precisely because I took part in the constitutional convention when it was set up in the 1980s. At that time, we and the Labour party were in opposition, but the Conservative party largely ignored the convention and the SNP boycotted it. Yet that constitutional convention carried out detailed and thoughtful work that laid the foundations for the first Scotland Bill and, in my view, for this Bill and probably the next one. The difference between my party’s approach and that of the SNP is that we, as a single party with an ambition, recognise that we cannot achieve on our own everything that we want; we have to work with others who do not necessarily share all our views. By working with them, however, we can progress towards what we want to achieve; if we refuse to co-operate, we cannot.

[Mr Mike Weir (Angus) (SNP)]

Will the right hon. Gentleman give way?

[Malcolm Bruce]

I shall make a little progress, if the hon. Gentleman will allow me.

At the time when the constitutional convention was established, there was a minimalist position. Many people in the Labour party were prepared to consider an assembly. I accept that many were passionately in favour, but others had reservations, and the minimalist position involved an assembly, elected by first past the post, funded by a block grant and operating with even fewer powers than the then Scotland Office.

The process—this is the real point that the SNP should take on board—of the constitutional convention meant that we finished up with a Parliament, with all the powers of the Scotland Office at that time, with a proportional voting system to make it much more nationally acceptable and, in fact, with non-defined reserved powers attached to the Parliament. That was a much more radical outcome than the original agenda, and one that would not have been achieved if my party and others had not engaged. At the time, I challenged the SNP to take part, because I wanted it to be there, knowing that it wanted independence but accepting that the party probably would not get it. The SNP’s involvement, however, might have helped us to gain more powers than we did. That is why I continually regard its all-or-nothing approach as damaging to Scotland and, ultimately, to the party’s own interests.

We got quite a lot of agreement, and that is relevant to this debate. Indeed, I think we got agreement in the convention on tax-raising powers, but they did not follow through into the original Scotland Bill. I remember that Donald Dewar even renewed his passport to travel to Germany, and Jim Wallace, Ray Michie and I went to Spain to look at that country’s arrangements. On our return, we more or less agreed on the proposal to assign half of all income tax revenues, and VAT and excise duties, to the Scottish Parliament. The fact that those proposals did not carry through into the first Scotland Bill—I think; I suspect—owes a lot to the resistance of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). The convention largely agreed to them, however, so I am particularly pleased that the Bill before us moves in that direction and will allow them to be introduced.

I also firmly believe—the Scottish National party ought to give thought to this—that those of us who have brought forward and will take forward this legislation are working with the grain of majority opinion in Scotland, in terms of wanting both more power and a step-by-step approach. Those of my constituents who are sympathetic to the SNP cause are puzzled as to why it cannot work with other people and take a step-by-step approach. We could all decide at what point we wish to get off, but that does not happen because the SNP knows that the majority of people in Scotland would get off long before it did.

[Stewart Hosie]

The right hon. Gentleman makes the interesting assertion—it is only an assertion—that he believes he is working with the grain of Scottish public opinion. I doubt that a single person has said to him, “That’s right Malcolm, we want 50% of the basic rate of income tax, 25% of the 40p rate and 20% of the 50p rate—that’s the grain in my street.” I do not think he is right when he says that.

[Malcolm Bruce]

No, but people have said to me, “I want independence, as long as I can still be a British citizen.” There is confusion in the minds of many people about what independence is. Two facts are clear: the majority of people vote for Unionist parties, and the majority of people say repeatedly that they want more power, but that they want to take it in an orderly and measured fashion. It is up to the politicians, to some extent, to work through what the priorities are and how they should be worked up. That is precisely what this legislation does.

In the end, the SNP’s position is anti-democratic, because it does not represent the majority. More to the point, it is unproductive. Frankly, it is downright lazy, because many of us have done an awful lot of work to bring these proposals forward. Having done nothing to create the Scottish Parliament, the SNP is happy to use it and abuse it. It takes a similarly curmudgeonly approach to this legislation. Of course it will not provide fiscal autonomy, which is, of course, a technical term for separation from the UK, as was pointed out by the Steel commission, of which I was a member. There is no mandate for that. The proposals do not go as far as I want them to go, but I have no hesitation in welcoming them as a constructive step forward that will allow us to test how greater responsibility and accountability will work. In my view, as and when that does work, it will justify future extension.

The Bill will give Scotland control over about 35% of its budget, which I hope will increase over time. It will ensure that Scotland has the capacity to demonstrate responsibility and accountability to justify more devolution. In an ideal world, I would like each tier of government to have access to part of the taxes that broadly finance its operations. In other words, each tier should be able to get more or less all its revenue from its own tax base, subject to the recognition that the UK Government have fiscal transfer responsibilities. Perhaps on a smaller scale, the Scottish Government should have some internal fiscal transfer responsibilities. That would be my ideal in the long run, but one has to take these things a step at a time and by negotiation.

I want to pick up on the point on which the Secretary of State has intervened two or three times. On a few occasions, I have heard the assertion—stated as a matter of absolute fact—that had this arrangement already been in place, Scotland would have lost £8 billion. As has been pointed out, if that were true—which it is not—it would be a clear demonstration of the benefit of being part of the United Kingdom, because that £8 billion would have been a transfer from the UK taxpayer to Scotland. Of course, the assertion is perverse nonsense. It is also retrospective, at a time when the balance is changing. It showed that, at a time of rising public spending, the Barnett formula delivered for Scotland at a faster rate than the rate at which incomes rose. Of course, at a time of public spending constraint, the reverse will be the case—the income tax take will rise faster than the Barnett formula consequentials. Over time, that can be averaged out—that is what the cash borrowing is for. That is the way that we should look at it.

The proposals give the Scottish Government the capacity to benefit from economic success, which grows the tax base and can potentially grow the revenue base. If they use their powers well, they will benefit from the buoyancy of the revenues. Of course, if they mismanage the economy, the reverse will be the case. The advantage of the Bill is that the transitional arrangements and the cash borrowing adjustments will provide a cushion to minimise the extremes of that effect. However, they will not deny a bit of pain if it goes wrong and a bit of benefit if it goes right. Over time, one hopes that that will become a more substantial amount.

[Stewart Hosie]

The right hon. Gentleman is simply wrong about this matter. Although the Scottish Government will control 15% of the taxes raised in Scotland, if GDP rises and the tax take rises, the rise in the income tax take will be lower than the average. That will have a deflationary effect on the Scottish budget and will not allow the Scottish Government to benefit in the way that he describes.

[Malcolm Bruce]

On the models that I have seen, the reverse is the case, particularly at a time of public spending constraint. The point is that it will depend on changes over time—some years it will be up and some years it will be down. However, the proposals provide the potential for successful economic management to provide genuine benefit.

I would give more credibility to the SNP claims that the measures are inadequate to grow the Scottish economy if its record in government showed that it was using the powers it currently has in ways that will grow the Scottish economy, but it has not done that. We have seen a succession of populist consumer gimmicks; almost a complete collapse in public investment; and the slow strangulation of local autonomy. Local councils have less and less control and more and more centralised management through the freezing of council tax. There is effectively less flexibility across Scotland to gear responses to meet local needs.

[Margaret Curran]

Will the right hon. Gentleman comment on the Scottish Futures Trust? Does he see that as a model for using the levers appropriately to grow the Scottish economy?

[Malcolm Bruce]

My next paragraph relates to my constituency, and I am sure the hon. Lady can predict the answer to that question. I did not have a problem with the SNP saying that there were weaknesses in the public-private partnership method of financing, and that it wanted to look for a better method. I had a big problem with it abandoning all those projects and failing to come up with a better method, leaving us in total limbo. That has been catastrophic for investment in Scotland—catastrophic, not just seriously bad.

I am fortunate, privileged and honoured to represent the dynamic economy of the north-east of Scotland, which is probably the most dynamic economy in the whole of the United Kingdom at the moment. I and my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) represent the constituencies with the lowest unemployment rates in the United Kingdom. I appreciate that other hon. Members face serious problems of unemployment in their constituencies, so I am not boasting about this; I am simply acknowledging it. The point is that Scotland has a region with the capacity to deliver economic growth, yet the Scottish Government have conspicuously failed to deliver what they should have been doing to facilitate that growth.

There is no Aberdeen bypass. The Scottish Government today announced the go-ahead for an upgrade of the A90 north of Aberdeen. I am glad about that, but all they have done is to announce, a year after the public inquiry, that they intend to go ahead with it. There is no date, and it is dependent on the resolution of the western peripheral route, which is still subject to legal argument. When the SNP loses office in May, not one stretch of tarmac will have been laid and not one ditch will have been dug—nothing will have happened on the ground.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

What did the right hon. Gentleman’s colleagues in the previous Scottish Administration do to progress the Aberdeen western peripheral route? When did they make a decision to go ahead with it?

[Malcolm Bruce]

They published the line of route for both that and for the A90. It took the SNP four years to make no progress at all. It has not indicated how it will find the money or when the scheme will ever start.

I do not know what it is about the SNP, but it has a total hostility to railways. It either scraps, delays or fails to take forward every rail project. Part of the transport needs of Aberdeen, and part of the proposal for our bypass, was a commuter rail service to restrict the growth of road traffic and give people choices. Progress was being made with that, but not even the provision of one additional station has progressed under the SNP, in spite of cross-party support from all other quarters. We have had an SNP Government for four years, and they have had the powers to do things to grow the Scottish economy—limited those powers may be, but they have had them—and they have not done so. They should prove that they can do that before they demand more powers that they do not appear competent to use.

[Mr Weir]

The right hon. Gentleman has just made an outrageous attack on the subject of rail. He should ask the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) about the reopening of Laurencekirk station, for example. What about the Bathgate rail line? What about the Alloa-Stirling line stations? All those things happened under the SNP Government. What he said is simply incorrect.

[Stewart Hosie]

Withdraw! You said “no new stations”. Withdraw now!

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Mr Hosie, I think that is my business, not yours, and I would be very grateful if you did not shout across the Chamber.

[Malcolm Bruce]

I acknowledge that some of those things have happened, but the SNP has been very good at cutting the ribbons on projects that were announced, organised and set in motion by previous local or national Administrations.

[Gordon Banks]

The hon. Member for Angus (Mr Weir) mentioned the Sterling-Alloa railway line. The right hon. Member for Gordon (Malcolm Bruce) is exactly right—the SNP came and cut the ribbon, but the hard work was done under the previous Administration, not the current one.

[Madam Deputy Speaker]

Order. Many speakers have gone very wide of the subject in illustrating the points that they wish to make. Mr Bruce, I would be grateful if you came back to the subject of the Bill in responding to the intervention.

[Malcolm Bruce]

I will of course observe your strictures, Madam Deputy Speaker, but when we are talking about powers, it is important that we also discuss our capacity to use those powers effectively. My contention is that the points I have made show why we need to take a step-by-step approach and demonstrate how well we can use our powers, and then hopefully take more of them.

Those who want to go faster have to acknowledge that Scotland’s capacity to take on the full responsibility for its own financial affairs is beyond credibility in the present circumstances. The UK is struggling to tackle a massive financial problem, and Scotland has a disproportionate share of that problem in its needs, its share of the national debt and its share in the underwriting of the banks, which has brought us to this pass. The reality is that Scotland’s future lies absolutely within the UK, but it is important that we have the power to take appropriate decisions, accountable to the people of Scotland, in ways that can help us make our own contribution to solving those problems in our own way.

As one or two Members have mentioned—it was alluded to by Calman—the transfer of benefits policy to Scotland has been suggested. That might happen in the longer term, but most people would acknowledge that the administration of certain aspects of benefits could be devolved or shared. At the moment, however, Scotland’s benefits bill is disproportionate, so the matter is much better shared across the UK, especially during these particularly difficult times.

We have embarked on a fundamental and radical welfare reform, which, leaving aside any controversial aspects, many people recognise has merit if it can deliver responsive benefits, value for work and so on. In the longer term it might be possible for Scotland to take a role in administering welfare, but now would hardly be the right moment to do so, as we are in the middle of a major funding deficit and a major reform programme. We must make common-sense decisions, taking on board what can practically be done now and acknowledging that further transfers could happen in the short term, when we are good and ready. Consideration at a later date can take us further forward.

I should like clarification on two questions that have been raised with me. One relates to the progressive commitment that the coalition Government have made on the threshold level of tax. As a former Treasury spokesman for my party, our commitment to raising the level at which people pay tax to £10,000, starting with £1,000 in the current year and progressing during this Parliament, is dear to my heart. I wonder whether the Under-Secretary in his reply can explain how that will be accommodated in calculating the tax revenues that would accrue to Scotland, or compensated for so that it does not create a disadvantage out of a good and progressive reform.

My second question relates to some aspects of charity law, which are not just peculiar to Scotland. When public authorities are looking to charities and the voluntary sector to take on more responsibilities for delivering public services, it raises questions about their status, and particularly their VAT liabilities. If a local authority or a health board provides services, there is no VAT, whereas if such services are provided by a voluntary organisation, there may be VAT liabilities. That may inhibit the transfer arrangements, which might otherwise be welcome. I acknowledge that that probably involves the Treasury and the Scotland Office, but I would appreciate some clarification if possible.

In the past 20 years, we have embarked on a process of restructuring the UK in a radical and decentralised way. As has been said in the past, devolution is a process, not an end product. No piece of legislation ends it. The Scottish National party wants the end to be independence. That is a perfectly respectable position, but for that, it has to win the support of the people of Scotland, which it is conspicuously failing to do. In the meantime, for those of us who want a stronger Scotland, with more control over its affairs and playing its full part in the United Kingdom, the Bill represents a major and significant step forward. It will, in my view, strengthen the United Kingdom, strengthen Scotland’s role and accountability, and perhaps enable the people of Scotland to look to their destiny and say, “We cannot always blame London and other people, we have to use the instruments that we have to help ourselves, and co-operate with others to ensure that we tackle the bigger problems together.” That is what the United Kingdom is about, and also what the devolution home rule settlement is about. They are not incompatible; both are essential. The Bill is a positive step forward, and will be beneficial to Scotland and the United Kingdom.

14:36

[Fiona O'Donnell (East Lothian) (Lab)]

I pay tribute to the right hon. Member for Gordon (Malcolm Bruce) for an illuminating and useful contribution to today’s debate. I am afraid that mine will not be as lengthy, but I humbly hope that it will also illuminate the debate.

I am sorry that the love of Scotland of the hon. Member for Epping Forest (Mrs Laing) could not hold her in the Chamber longer, because she expressed disappointment that today’s debate is not taking place on the birthday of Mr Robert Burns. However, I can confirm that it takes place on my birthday, and I can think of no better way to celebrate than to speak in support of the Scotland Bill.

[John Robertson]

How sad!

[Fiona O'Donnell]

I expect that it is a reflection of what has happened to my life since coming to this place.

I begin, rather unusually, by apologising to the hon. Member for Perth and North Perthshire (Pete Wishart) for my rather bad-tempered intervention. It makes me angry when I hear the SNP, given its record, complaining about the process that has brought us here today, and the Calman commission. It also makes me angry when the hon. Gentleman questions whether the Bill will receive due scrutiny. I hope that, now he has heard the comments of my hon. Friend the Member for Glasgow North (Ann McKechin), he realises that Labour will give the Bill due scrutiny, and that he will also welcome the inquiry by the Scottish Affairs Committee, on which the hon. Member for Banff and Buchan (Dr Whiteford) serves. That will give us further opportunities to examine the Bill.

I remind the hon. Member for Perth and North Perthshire that the Calman commission consulted the public, experts and interested groups at 12 local engagement events all over Scotland. It received 300 written submissions, and held 50 public and 27 private evidence sessions. That compares more than favourably with the national conversation. The hon. Gentleman asked my hon. Friend the Member for Glasgow North how much it had cost. A conversation among Unionists is a far bigger conversation than one just among nationalists.

I am particularly pleased to be speaking in today’s debate because I follow in the footsteps of John P. Mackintosh. His approach was one of integrity and commitment, and he wanted genuine constitutional reform and the flourishing of the democratic expression of the Scottish people. I should like to remind Members who have visited the Scottish Parliament, and to inform those who have not, that the Donald Dewar room at Holyrood carries this quote from John P. Mackintosh:

“People in Scotland want a degree of government for themselves. It is not beyond the wit of man to devise the institutions to meet these demands.”

Labour finally devised the institution to meet those demands and delivered on Keir Hardie’s original aim of home rule. Another of my predecessors, John Home Robertson, not only believed in home rule, but lived and breathed it as he served East Lothian in both the House of Commons and the Scottish Parliament.

Constitutional reform should rise above party politics. The SNP has shown throughout today’s debate not only that its politics are separatist, but that its approach to politics—the way it does politics—is separatist. The Labour way is to work with other parties to achieve consensus, which is what it has done through the Scottish Constitutional Convention and the Calman commission. SNP representatives were absent from both, which must make theirs the longest political huff in history. They are less outside the tent than squatting on a different campsite altogether. Indeed, they have not been happy campers, although there have been an unusual number of references to caravans.

We today take Scotland forward to a new era. It is right and it is time that the Scottish Parliament takes greater responsibility for its expenditure and matches that with accountability. Of course, the Bill goes further than that in giving substantial borrowing powers to Scotland. I hope that we can now move away from a time when the SNP Government used every capital building programme as an opportunity to fight at Westminster, rather than as an opportunity to fight for Scotland.

SNP Members have still to tell us whether they will vote for the Bill or seek to wreck it today. They have an opportunity to see Scotland move forward, but they appear to be unwilling even now to rise to give us clarity on that question—[Interruption.]

[Pete Wishart]

I just got bored listening to this. I’ve heard it all before.

[Fiona O'Donnell]

If the hon. Gentleman is bored, he could make the debate more interesting by intervening to answer that question, but he remains silent.

The SNP has argued for full fiscal autonomy for Scotland, but that is not what Scotland needs. Scotland needs the security that is offered by remaining part of the Union, which is what the Bill gives it.

What would the SNP have done with the banks in an independent Scotland? [Interruption.] Yes. I am afraid that it is all fantasy and Brigadoon on the SNP side. I urge SNP Members to think again—in the words of another Scottish poet—and to consider giving their support to the Bill. I also I urge them not to press to a Division an amendment that seeks to deprive Scotland of an opportunity to move forward.

I thank the House for the short time that it has indulged me, and urge hon. Members to support the Bill.

14:44

[John Stevenson (Carlisle) (Con)]

I am grateful for the opportunity to participate in this debate. My contribution will be modest, given that I am not versed in the intricacies of the politics of Scotland, although I am learning quite a lot this afternoon. As a Scot who has family in Scotland, I have a great interest in what happens there and I would like to see Scotland succeed. I am also interested in the continuing relationship between the devolved Government and the national Government. Most importantly, I represent a constituency on the border, so I want to be aware of the implications of the Bill for my constituents.

I appreciate that the Bill is primarily relevant to Scotland, but it does have a potential impact in England, and that impact will be most pronounced in the border area, affecting seats such as Berwick-upon-Tweed, Hexham, Penrith and the Border, Workington and, of course, Carlisle. Indeed, in my part of the country, we have an unusual relationship with Scotland in that we were not in the Domesday book because we were part of Scotland at the time. Subsequently, we had the “Debatable Lands”, the reivers, and the movement of the border to Hadrian’s wall and so on. Indeed, that continues to this very day with the invasion of Carlisle every Saturday by people coming over the border to shop and for entertainment. I therefore have a slightly different perspective on this debate from that of many hon. Members north of the border.

There will no doubt be some concern in my area about the Bill and the impact, in particular, of the tax-raising powers. In reality, many of the issues already exist: there are separate laws on housing, inheritance and planning. In some ways, the planning laws have been beneficial to parts of Scotland, with Gretna being an example. Traditionally, licensing laws were different. I remember when I moved to Chester from Scotland, I got a shock when the pub closed at 10.30 rather than 12, but England has since progressed. Scotland was also ahead of the curve on the smoking ban, to its credit. At times, Scotland can be more progressive and innovative. Indeed, those who live on the border are often more aware of the differences between the two countries and the various laws that affect them.

I welcome the Bill and its proposals. They are very much in line with the recommendations of the Calman report, which has broad support in this Chamber. It is also in line with my own philosophical viewpoint and that of the Conservative party—and of the Liberal Democrats—including a belief in localism, decentralisation and financial accountability. Devolution is now an accepted part of our political culture and is generally accepted by most people. Therefore, the issues that we now have to debate are the workings of devolution, how to make it better, how to achieve the right balance and the powers that we give to the devolved Assembly. Giving powers away is very much in line with the localism agenda, including the need for responsibility and the link between spending and taxation. Indeed, in many respects, that link has been missing in the English local government debate as well as in the Scottish one, but I am delighted that the Government are starting to address that issue for English councils just as they are for Scotland in this Bill.

The aim of the Calman commission was to recommend changes to the present constitutional arrangements in three ways—to serve the people of Scotland better, to improve the financial accountability of the Scottish Parliament and to continue to secure the position of Scotland in the UK. It is in terms of those three key points that we must consider the Bill.

As Calman said, the devolution settlement is a “real success” and “works well in practice”. In many respects, that outcome is supported by the Bill, which does not dramatically rewrite the devolution settlement, but fine-tunes and adds to it. As hon. Members have said, the key aspect of the Bill is the changes on tax, but it also includes drink-driving limits, speed limits and other measures. I suspect the drink-driving limits and speed limits will be of more interest to those of my constituents who travel over the border.

One omission from the Bill is welfare and social security. It will be interesting to see how the Government approach that in due course, but I appreciate that a national debate on that subject is going on. The reforms that the Government are proposing nationally must have priority.

Income tax is the obvious area that could have an impact on cross-border relationships. There are people who live in Scotland and work in England and vice versa. However, I believe that there is nothing wrong in having different tax rates between different places—we see it at local government level with domestic rates—and allowing the Scottish Parliament to be able to set its own income tax rate creates accountability, responsibility and transparency.

The tax that I am probably most interested in, and the one that gives Scotland a real opportunity to be innovative, relates to old-fashioned stamp duty land tax and how it could be applied to commercial and residential property. If the Scottish Parliament is innovative, that will give it the opportunity to gain a commercial advantage, which could be beneficial to the local economy. However, the Bill is not just about transferring powers; it is also about providing the tools for Scotland to improve itself. The really exciting part of the Bill is that the Scottish Government and Parliament will receive incentives and control over their own economic destiny.

In my view, the Scottish economy needs to have a smaller public sector and a much larger private sector. Scotland needs to grow its private sector, and by doing that it needs to increase its population, build more houses and create more businesses. It will now have some of the tools to achieve that, via business rates, SDLT and income tax. This is a real opportunity for Scotland. If it can grow its tax base, it can reap the benefits. So I welcome the Bill. It achieves the key objectives of the Calman commission. It gives Scotland a greater opportunity to do things differently and, perhaps, better, and interestingly enough, the 2015 election will give the political parties an opportunity to offer different visions of a future Scotland. That is healthy for Scottish democracy and the Scottish Parliament, and will help to strengthen the Union.

[Anas Sarwar]

I welcome the hon. Gentleman’s comments and am pleased that he supports the Bill. I just want to highlight the irony of a Tory Back Bencher supporting more powers for Scotland, but the Scottish National party voting against it.

[John Stevenson]

There is certainly a degree of irony in that. I welcome the Bill.

14:51

[Graeme Morrice (Livingston) (Lab)]

I congratulate my hon. Friend the Member for East Lothian (Fiona O'Donnell) on her excellent and entertaining contribution. I would also like to congratulate her—on behalf of the whole House, I am sure—on it being her birthday. She tells me that she is 21. That is 21 plus VAT at a rate of 30%—do the math! [Interruption.] She is the same age as me—well, slightly younger.

I am grateful for the opportunity to speak in this debate. There can be no matter of greater importance to Scotland than the question of how we strengthen the devolution that has helped to improve the lives of our constituents over the past 11 years. Nor should we forget that it was a Labour Government who brought devolution to Scotland, through the creation of a Scottish Parliament with a significant and comprehensive range of statutory powers. Now, after more than a decade of devolution, the time is right to take the next steps in developing Scotland’s democracy and its relationship with the other nations of the United Kingdom.

That opportunity was provided, of course, only through the establishment by the previous Labour Government of the Calman commission. The proposals in the Bill, which are rooted in Calman’s cross-party work, reflect the overwhelming desire of the Scottish people to anchor Scotland’s future firmly in the United Kingdom. On that basis, I support the principles in the Bill. There are differences of detail, of course, between Labour’s approach and the plans in the Bill. For instance, the aggregates levy, food labelling and charity registration have been omitted from the Bill. Matters of considerable detail will need to be thrashed out, but the principles are the right ones. Greater magnitude of fiscal autonomy and improved accountability and transparency will ensure that Scotland’s stability and her place in the United Kingdom remain strong.

There are those who say that the Bill is part of the slippery slope to independence. There are those who said the same thing about creating a Scottish Parliament, but 10 years on, support for independence is at an all-time low. Strengthening devolution does not undermine the United Kingdom; it makes it stronger. The importance of that strength could not have been demonstrated more acutely than by the economic events of the past three years, yet the SNP still preaches separation. Rescuing the Scottish banks could never have transpired under independence, and the turmoil in the Irish economy demonstrates how vulnerable independence would have left the Scottish people.

The question of devolution is settled; how we make it work better for Scotland is the challenge that the vast majority of Scottish people want us to address. It is perverse that the SNP, which stands on a platform of autonomy, has refused to engage with the Calman commission to create and shape new powers for Scotland. There is an incredible irony at the heart of the SNP position. It rejects the Calman commission because it exposes Scotland to falling tax receipts. The SNP talks about full fiscal autonomy as an answer to Calman, but exposure to falling tax receipts would apply to Scotland’s budget whatever the degree of financial powers it acquired. Far from improving, the position under independence would be considerably worse.

[Stewart Hosie]

The hon. Gentleman is wrong. Any country will see its tax revenues fall or rise with the economic cycle—the one that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) said he had ended. The difficulty with the proposals in the Bill is not that tax revenues may go up or down, but that they embed a deflationary bias in the Scottish budget.

[Graeme Morrice]

I am obviously aware of the objection to the Bill from the SNP—it is an objection that we often hear—which is that it would mean less money for the Scottish Parliament. Indeed, the First Minister claims that the Scottish budget would have been considerably worse under Calman, compared with the current regime, yet Alex Salmond refuses to publish the numbers setting out what his plans for fiscal autonomy would have meant for the Scottish budget in the last 10 years.

[Pete Wishart]

It is not just the First Minister who has said that there is a fiscal drag with the current plans— £7 billion is what we argue—but the Secretary of State, who said that the figure would be £700 million, so we are in pretty good company. If that was the loss to the Scottish budget, would the hon. Gentleman object to these tax proposals?

[Graeme Morrice]

The reality is that Government expenditure in Scotland is considerably greater than the sums raised in taxes. In fact, in 2008-09, the last year for which figures are available, total public sector revenue in Scotland was £43.5 billion, whereas total public sector expenditure was £56.5 billion. Under the separation that Mr Salmond wants, that would lead to a fiscal deficit of £13 billion. Let us turn to the fallacy peddled by the SNP that only under a system of full fiscal autonomy would Scotland’s economy be able to generate growth. There is little evidence to suggest that this is the case. Professor Lars Feld, one of the world’s leading authorities on decentralisation, has concluded:

“We do not find any robust significant effect of decentralisation on economic growth”.

Professor Anton Muscatelli of Glasgow university has said that

“there is absolutely no statistical relationship between fiscal autonomy and growth, nor can there be.”

The Scottish Parliament’s competencies are already substantial, but we need to do more to increase accountability. Unlike the funding of most devolved regions by national Governments around the world, Scotland’s block grant is unconditional and can be spent in whichever way chosen. Voters in Scotland and Members of the Scottish Parliament are therefore not exposed to the choice between public expenditure and additional taxation. The Bill ensures that those choices are made. More shared taxes; new devolved taxes; greater borrowing; greater transparency; a fair balance of shared risk across the United Kingdom—that is a fair balance of new powers to create the accountability that the Scottish Parliament needs. The Scottish Parliament will be answerable to the Scottish people for the money that it raises and spends. That is what the vast majority of Scottish people want. They do not want separation, but they do want a Scottish Parliament that is responsible for the decisions that it takes, and that is why I am supporting this Bill.

14:59

[Iain Stewart (Milton Keynes South) (Con)]

I welcome the opportunity to speak in this debate. Although I represent a seat south of the border, I have a long-standing interest in devolution matters. I not only spent my formative years in Hamilton, but when the original Scotland Bill passed through the House in 1998, I acted as an adviser to the then shadow Front-Bench team, which included my hon. Friend the Member for Epping Forest (Mrs Laing). I have thus gained a probably unhealthy level of detailed knowledge of the Scotland Act 1998, and I hope to draw on it a little in my contribution.

I trust that the House will not object if I draw on a book on the Barnett formula and fiscal autonomy, which I co-authored in 2003 with the eminent Scottish lawyer, Professor Ross Harper. For the avoidance of doubt, let me say that I am not seeking to advertise the book: it is no longer for sale and I received no royalties for it at the time. Let me just say that it was not troubling “Harry Potter” for the No. 1 spot on the best-seller list. Nevertheless, I hope that the research we did for the book will help our deliberations today.

I want to put on record the fact that I was sceptical about devolution at the time of the referendum in 1997. I campaigned and voted against the devolution measures. I am happy to say that many of the doubts I had at that time have not been borne out by events. I believe that the Scottish Parliament reflects the settled will of the Scottish people and that, on the whole, it has been a success. Our job today is to improve and strengthen it, thereby strengthening the Union. The Scottish Parliament is not perfect, however, as there are some deficiencies, but I believe that the Bill goes a long way towards improving them.

I want to focus, as much of the debate has, on the transfer of fiscal powers. It is right that the Scottish Parliament is more accountable for the money it spends—a flip of the old adage, “No taxation without representation”. It is right for the Scottish Parliament to be held accountable to its electors for its own spending decisions. Going back to the 1997 referendum, I was intrigued by the option that did not get much coverage at the time, when the debate centred on the “yes/yes” or the “no/no” campaign. Some people believed in the “no/yes” option—they did not want a Scottish Parliament, but thought that if there was to be one, it should have proper fiscal powers and be held accountable.

I hope that the Bill will improve participation in Scottish Parliament elections. Although the turnout is higher than for local government, it is lower than for elections to this place, in which turnout is in no way at a particularly high level. Part of the reason for that lower turnout is that Members of the Scottish Parliament can make spending decisions without being directly accountable to their taxpayers and electors for them. I strongly support the Bill’s principles in addressing that point.

Speaking as an English Member, I want to put on record the fact that I often hear representations from constituents about why Scotland has free tuition, free prescriptions and so forth, which people do not have in England. I explain that the financial relationship between Scotland and England is much more complicated than the Barnett formula, which people often use as a shorthand to explain the whole fiscal relationship between Scotland and the United Kingdom. The point is nevertheless an important one, because if that concern is left unchecked, the Union will suffer. If people in England think that Scotland is getting an unfair advantage from the financial arrangements, the Union will suffer. As a Unionist, I make no apology for saying that; as a Unionist, I say that the Union suffering is the last thing I want to see. If Scotland wants to increase spending in a particular area, or introduce free care, tuition fees or whatever, the Scottish Parliament will now have to find more of that money, and that is an important point for strengthening the Union.

[Mr Weir]

I am listening carefully to the hon. Gentleman. He talks about the financial responsibility of the Scottish Parliament, but why does he feel that that should be confined to income tax? Does he not agree with Lord Forsyth, a former Tory Secretary of State for Scotland, who said:

“The SNP quite rightly argues that you can’t just limit it to income tax and stamp duty if you want to manage the economy. You can’t play golf with just one club”?

The point is that if the Scottish Parliament is to have responsibility, it must have responsibility not just for varying income tax, but for managing the economy.

[Iain Stewart]

I beg the hon. Gentleman’s patience, as I will turn to those points in a moment.

[David Mowat (Warrington South) (Con)]

My hon. Friend makes a powerful point about the threat to the Union posed by a perception of unfairness in relative funding, and giving Scotland control over its tax revenue raising will partially address that. However, it is widely accepted that the baseline, under the Barnett allocation, is 15% to 20% higher than it would be in equivalent places in England, and that is an issue for the Union.

[Iain Stewart]

I am grateful to my hon. Friend. I am not sure whether his birthday is coming up, but I will happily send him a copy of my book, which goes into the matter in some detail. The baseline funding for Scotland is an important point, but whether to have a needs-based assessment is not part of the Bill, although the Bill opens up the possibility that that will be reviewed in future.

[Malcolm Bruce]

No one can deny that these are legitimate issues for debate, but does my hon. Friend not acknowledge that when we look at the matter detail by detail—my right hon. Friend the Member for Yeovil (Mr Laws), when he was adviser to my party, did some work on this—we see that a high proportion of the spending differential is justified by remoteness, the different balances, benefits and so forth? A part of it is not accounted for, but the gap is nothing like as big as my hon. Friend the Member for Warrington South (David Mowat) suggests.

[Iain Stewart]

My right hon. Friend makes an important point. The whole subject is difficult and complex, given the shorthand of Barnett and the vast difference between public spending in Scotland and England. In some areas, however, for the reasons that he has set out, there is a big difference, and those reasons will also be found in England. For instance, in remote parts of Cumbria or Devon, spending per head will be higher than in central London or Manchester.

[Pete Wishart]

If the hon. Gentleman looks at the study by Oxford Economics, he will find that London secures more public spending than any region or nation in the UK. If he and the hon. Member for Warrington South (David Mowat) are concerned about grant formula and Scotland’s spending relative to England’s, I have good news for them: they can vote to change that in the next few weeks and allow Scotland to have full fiscal responsibility. That would allow all the Barnett issues to disappear. If we were allowed to have the economic levers to grow our economy, we would be self-reliant on taxation.

[Iain Stewart]

As I said to the hon. Member for Angus (Mr Weir), if the hon. Gentleman allows me to make a little progress, I will come to the issue of full fiscal autonomy in a moment.

Clearly, the existing Scotland Act contains some fiscal powers for the Scottish Parliament: principally, the ability to vary the basic rate of income tax by 3p higher or lower than the UK rate. That has never been used, partly because the SNP Administration in Edinburgh has allowed the levy required each year for the mechanism to stay in place not to be paid. There is a more fundamental point, however: the administrative and set-up costs for making that small change in the income tax rate are disproportionate to the revenue that would be raised.

When the House was considering the Bill that became the Scotland Act 1998, it was calculated that it would raise, at the most, an additional £450 million. Given a total Scottish Office budget of over £22 billion, it was a tiny measure and would involve considerable start-up and administrative costs and not generate enough revenue. I can understand why it has not been introduced so far.

[Stewart Hosie]

The hon. Gentleman talks of the amount that might be raised if the tax rate were put up. There is, however, a built-in perverse disincentive to lower the tax rate. If the income tax rate, for example, were lowered and that stimulated economic growth, and if the benefit were paid from higher corporation tax receipts, the Scottish Parliament would take the hit of reduced income tax, while the United Kingdom Government would gain the advantage of enhanced corporation tax.

[Iain Stewart]

I am explaining why I do not think the provisions in the current Scotland Act are sufficient, and why I welcome the measures to increase substantially the power of the Scottish Parliament to raise a significant chunk of its own revenue. There are still concerns about how they will be implemented, and I raised that point during Scottish questions yesterday. I have been reassured that proper consultation is taking place with members of the business community in Scotland, who will have to administer many of the new arrangements, but I urge my colleagues on the Front Bench to keep a close watch on the increased regulatory burden on businesses at a time when they can ill afford much additional bureaucracy.

I think the HMRC bodies should consider the possibility of certain unintended consequences. There is, for instance, the question of how payments into personal pension plans which attract the adding back on of basic or higher-rate tax contributions should be treated. If in the past contributions have been made at the United Kingdom rate and added back on, a different Scottish rate will create potential anomalies when it comes to how that income is treated. I suspect that a fairly small amount is involved overall, but it is an important detail that ought to be clarified before the Bill is implemented.

I welcome the move to devolve some taxes, and I hope that more can be devolved in time. I hope that, for instance, the issues surrounding the aggregates levy and air passenger duty issues will be resolved. I do not believe that this is the end of the story; I trust that those two taxes will eventually be devolved, and that the Scottish Parliament will be given greater fiscal autonomy.

I referred earlier to the book that I co-authored. Part of our research involved international comparisons.

[Mrs Laing]

I hesitate to interrupt my hon. Friend, but he has just demonstrated that he is one of the few people who understand, and have carried out an in-depth study of, the relationship between United Kingdom and Scottish finance. He is being modest about his book, but I need not be modest on his behalf. It is an excellent publication, which I have consulted on many occasions. May I ask him to show the House his book and tell us its title, so that every Member in the Chamber—[Interruption.] I do not think he will make any money from it. However, some Members might be better educated in future if they knew more about it. I believe that it is called “It’s Our Money! Who Spends It?”

[Madam Deputy Speaker]

Order. That was a very long intervention. I think that the hon. Lady has given the hon. Gentleman his advertisement; perhaps we can now return to the debate.

[Iain Stewart]

Thank you, Madam Deputy Speaker. I sense a rising demand for my book. Next Christmas is a little way off, but I have a couple of boxes of back copies which I will happily distribute.

As I was saying, part of our research involved examining the way in which other countries—Australia, Germany and Canada—operated financial relationships between state Governments and federal Governments, or provincial Governments, or whatever the term was in those countries. What struck us was that each of those countries has a system that comes close to what the Scotland Bill is proposing to introduce. Certain taxes are levied at the federal level. The example in each country varies, but some taxes are levied at the provincial level—the state level—and sometimes the state level has the power to introduce specific taxes of its own. That is balanced by a form of fiscal transfers between the federal level and the state level. There are perpetual arguments in all those countries about what the right level of spending, taxes, transfers and so on is—we will never get away from those—but on the whole the arrangements are stable. We can draw some comfort from the fact that the lessons from abroad point to the sort of system that the Bill is trying to introduce.

Conversely, there are few examples of a federal or devolved system of government where the lower level has full fiscal autonomy. Our research encountered only one example that came quite close to such an arrangement, which was in the Basque part of Spain. Since we did our work Catalonia has also adopted such an arrangement, but it is still fraught with difficulties. I do not believe that there is sufficient evidence from abroad to warrant the type of policy that the Scottish nationalists wish to introduce.

[Stewart Hosie]

The hon. Gentleman says that the approach of the Basque country and others may be fraught with difficulties, but that country’s gross domestic product growth is now 30% higher than that of Spain as a whole and its credit rating is stronger than that of Spain as a whole. Although that sort of model may need to overcome obstacles, it clearly has had some success.

[Iain Stewart]

The hon. Gentleman has a more detailed knowledge of the current state of the Basque economy than I do, but our research showed that there were specific problems there. I shall discuss them in a moment, as they are directly relevant to the example in Scotland.

[Malcolm Bruce]

Does my hon. Friend acknowledge that joining the inland revenue contribution club is not a popular sport in Spain? The Spanish have found that devolving this responsibility results in the tax collection rate increasing substantially. No comparison can be made with the situation in this country, because one cannot escape the Inland Revenue.

[Iain Stewart]

My right hon. Friend makes a powerful point.

[Mark Lazarowicz]

Perhaps I should add that the Basque country and Catalonia have always had higher gross national product rates than the rest of Spain, so I do not think that the point made by the hon. Member for Dundee East (Stewart Hosie) has much weight.

[Iain Stewart]

I am grateful for that intervention. I think it is unhelpful to make an exact analogy with a particular model. Spain has a very curious multi-speed system of devolution between its different constituent parts.

I promised to discuss why I do not believe, certainly at this point, that fiscal autonomy is feasible or desirable for the Scottish Parliament. There are huge unknowns in the fiscal relationship between Scotland and England, for the simple reason that we have never assigned tax revenues or allocated public spending on a straight territorial basis—that just has not happened. As part of our research for the book, I spent many hours enjoying and analysing the various forecasts and documents that the Scottish National party had published over the years giving its view on what Scotland’s net contribution to or net borrowing from the United Kingdom had been.

Part of the SNP’s criticism was that the official Government figures, as published in the annual Government Expenditure and Revenue Scotland survey, were based on assumptions about what Scotland’s share of corporation tax or income tax should be. However, the SNP’s own figures are based on assumptions and projections. They disagree with the assumptions made, but they could not analyse particularly and exactly what the Scottish revenues were.

[Stewart Hosie]

rose—

[Iain Stewart]

Before the hon. Gentleman intervenes, I wish to illustrate that point by discussing two SNP publications that examined the period between 1979 and 1997. In one document, published in October 1996, the SNP estimated that Scotland had contributed £91 billion to the UK over that period. Three months later, however, it published a separate report covering the same period which calculated that the figure had been £27 billion. Well, what is £60 billion between friends? The point is that anyone wanting to analyse this has to do it on the basis of assumptions, not hard facts.

[Stewart Hosie]

I certainly agree that the Government Expenditure and Revenue Scotland—GERS—survey is based on certain assumptions and calculations. Most of the documents, certainly over the past decade, have effectively taken the GERS assumptions and, if they have differed from them, have always explained why. Those differences tended to be marginal. The key question here is not SNP figures versus those of another party; it is the work done by organisations such as Oxford Economics or, about a year ago, Reform Scotland, which calculated a broadly balanced budget of about £50 billion out and £50 billion in. Those seem to be generally accepted pre-recession figures.

[Iain Stewart]

But surely the point is that, if we want to set up new fiscal arrangements between the constituent parts of the United Kingdom, we should not do it on the basis of assumptions. We should do it on the basis of hard facts, and one of the conclusions of the book is that we need to do more hard research and assign revenues and spending on a territorial basis. Such proposals are not in the Bill, but I hope that the Government will take those matters forward.

I shall give the House an example to illustrate why there would be a huge debate about the revenue. Let us take Standard Life, which is headquartered in Edinburgh. If corporation tax were devolved, the company would be domiciled as Scottish, yet it trades throughout the United Kingdom and has many policyholders in England who contribute to its profits. How would we determine which profits were Scottish and which were English? These are huge issues and they would have to be resolved before a full system of fiscal autonomy could be introduced.

[Mr Weir]

Surely that is a problem that affects all companies that operate across national borders, of which, in this globalised world, there are many thousands. Why would that present a particular difficulty for Scotland?

[Iain Stewart]

I believe that it would be a difficulty, and I have seen no evidence from the Scottish National party that properly costs this or assesses what the split would be.

[Mark Lazarowicz]

Are not the economies of England, Scotland and the rest of the UK so closely integrated and dependent on each other that the consequences would not be the same as might be the case for, say, Germany and France? On the hon. Gentleman’s point about Standard Life, I am not normally someone who tries to air scare tactics about what might happen to the financial services sector under independence, but would there not be a danger that some companies, faced with the choices and difficulties that he has outlined, might choose to move their headquarters out of Scotland precisely because of the consequences of a differential in corporation tax rates?

[Iain Stewart]

That is exactly the point. The relationship between Scotland and England is so interwoven that to start to unpick it now would be hugely complicated and difficult. On the point about pensions, I have mentioned the potential difficulties under the current proposals that would need to be clarified. If there were full fiscal autonomy, those problems would be magnified many times over. People might have made national insurance contributions all through their lives. How would all that be untangled to sort out the different rights and contributions? The process would be enormously complicated. I am not saying that it would be impossible, but I do not believe that it is practical at this point in time. I hope that my right hon. Friends on the Front Bench will take up my point that we should move towards assigning revenues and spending on a straight territorial basis, so that in time we might be able to move to a system involving much greater devolution of fiscal power down to the Scottish Parliament.

[Stewart Hosie]

The hon. Gentleman’s speech is throwing up practical issues that would have to be resolved in any circumstances. On his first concern, would the broad principle not be accepted that the tax liability would follow the economic activity? On his second concern about corporation tax rising, I would prefer to see corporation tax falling. Is it not odd that we have a party that is very keen on tax competition until it comes to Scotland’s competing? Is that not slightly contradictory?

[Iain Stewart]

It is not a contradictory at all and I am not saying that I rule out that possibility. My book does not rule it out. All I am saying is that at this point in time it would be an enormous leap in the dark that would throw up so many unintended consequences that it would be a foolhardy move. I welcome the sensible incremental step that the Bill is taking.

I have probably been indulged by the House rather longer than I intended. I want to move briefly to one other point before I resume my seat. It concerns another part of the Bill about which I have a specific concern, and that is the proposal to devolve down to the Scottish Parliament the power to set the drink-driving limit. I am a member of the Select Committee on Transport and we have just concluded an investigation into the drink-driving limit. Part of the evidence we received was a strong representation from the police that we should not have a different drink-driving limit in different parts of the United Kingdom. I am not against the power’s being devolved, but want to put it on the record that I would not wish the consequence of that devolution of power to be a marked difference in the Scottish and English drink-driving limits. That might cause some practical problems in border constituencies such as that represented by my hon. Friend the Member for Carlisle (John Stevenson), who is no longer in his place.

In conclusion, I welcome the Bill. It is a huge step forward, even for people like me who were devolution sceptics to begin with. It will do an enormous amount to strengthen the Scottish Parliament and the Union. I look forward to supporting it in the Lobby tonight.

15:27

[Mrs Anne McGuire (Stirling) (Lab)]

It is a great pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart). I listened carefully to his analysis and, 13 years on, I now realise why the hon. Member for Epping Forest (Mrs Laing) was so well briefed in some of the intricacies of the Barnett formula. The hon. Gentleman has posed some fascinating and interesting questions this afternoon.

I made my maiden speech in 1997 on the Referendums (Scotland and Wales) Bill, which paved the way for the Scottish Parliament. It is fair to say that both the hon. Gentleman and the hon. Lady recognised that, collectively, we have travelled a long way in this House—at least, most of us have. I shall come on to those who are still stuck at the station a wee bit later.

We have travelled a long way and in many ways the Members who are participating in today’s debate reflect that. We have a former Member of the Scottish Parliament, who, as the Under-Secretary, will be helping to drive this Bill through along with most of us. Of course, we have two current Members of the Scottish Parliament, my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Glasgow East (Margaret Curran), both of whom have extensive experience not only of the workings of the Scottish Parliament but of the workings of government in Scotland, as they are both former Ministers.

Collectively, in the Chamber today we have a unique opportunity to discuss the importance of the Scotland Bill. I recognise its importance and identify with the statement made by Donald Dewar—devolution was

“a process and not an event”.

We are all part of that process. In my opinion, there is no doubt that the relationship between the UK and Scotland and their governmental institutions has matured to a point where there is widespread recognition that the devolved approach has strengthened the United Kingdom and its four nations, working together. There are still some cynics among us—the ultra-Unionists, who perhaps do not see this as a way forward for the United Kingdom, and their uneasy bedfellows, the nationalists, who have a fundamental view. I fully accept their right to hold that view. I do not have any problem with their ultimate aim of independence; I just thank God every day for the sanity of the Scottish people, who have never accepted that analysis, but that analysis is obviously still there. The majority of people in Scotland want good government that brings decisions closer to them, so I welcome the principle of the Bill. I particularly welcome the strengthening of the Scottish Parliament’s fiscal powers.

[Anas Sarwar]

Is it not alarming, given the Scottish National party’s amendment, that those Members will be voting against the new powers for Scotland? Does that not show that they are now the conservatives in Scotland, supporting the status quo over new powers for the Scottish Parliament?

[Mrs McGuire]

I do not wish to interpret the SNP’s tactics, but it is certainly bizarre that their amendment says that the “Bill as a whole” is “unacceptable”, given that the mover of the amendment, the hon. Member for Perth and North Perthshire (Pete Wishart), tried to appear consensual on some of the areas on which there is agreement. I do not know which part of the brain was not working when the amendment was tabled, but it definitely calls on the House to vote against something that SNP Members agree with in some way. That is a question for them to answer, but I am delighted that my hon. Friend the Member for Glasgow Central (Anas Sarwar) has raised it.

The Bill, like the Scotland Act 1998, was developed as a result of consensus, as the right hon. Member for Gordon (Malcolm Bruce) has highlighted. The engagement of civic society, communities and individuals, as well as of political parties, is the hallmark of the legislation—as it was of its 1998 predecessor. In terms of political party consensus, there have been positive developments over the years. As the hon. Member for Epping Forest has clearly shown, the Conservative party in Scotland and across the UK boycotted the Scottish Constitutional Convention in the early 1990s, campaigned for a no vote in the 1997 referendum and voted against the first Bill when it came through Parliament. However, it is now working in partnership with other political parties that see the strength of the Union as key to the future of our country. I always welcome the sinner that repenteth.

Some things never change, though. The SNP stood apart from the consensus building up to 1998 and boycotted the Calman commission for reasons that I cannot understand and have not heard properly explained. I think the SNP amendment is somewhat churlish and flies in the face of all the views that have been expressed by the Scottish people through elections and consensus. If the SNP wants an independent Scotland, its first aim must be to prove its case to the Scottish people.

[Fiona O'Donnell]

As the SNP has fallen silent, will my right hon. Friend tell us why she thinks the party bottled it when offered the chance of a referendum by Labour in Holyrood?

[Mrs McGuire]

I gave up many years ago trying to get into the political mind of the SNP and I do not know if I want to revisit some of those early nightmares I had in trying to understand it.

I want to concentrate on the additional fiscal powers. Some of us in the House are old enough to remember the 1978 proposals of the then Labour Government, one weakness of which was that they contained no taxation powers—no variation to what was then called the Scottish Assembly was to be allowed. To an extent, that lesson was learned when the 1998 legislation was introduced. The plus or minus 3% provision was intended to deal with the flaw in the earlier legislation, which of course failed the somewhat artificial 40% referendum test. The discussion around Calman recognised that the time was right to build on the 1998 Act and devolve more responsibility for revenue raising to the Scottish Parliament.

In addition, the Bill gives us a package of other changes that will enhance the Scottish Parliament’s fiscal responsibility, including new borrowing powers, a stamp duty land tax, a landfill tax and, of course, the power to create new taxes, subject to the approval of both the Scottish and UK Parliaments, which I think is a responsible way forward. The assessment of those new taxes, however, must be open and transparent so that it does not feed into the arguments of the conspiracy theorists who will interpret anything less as an attempt to undermine Scotland. However, the Scottish Parliament should recognise, as I am sure it will, that any proposed new tax must be assessed according to its potential impact on economic incentives in Scotland.

I want to raise one area of concern on the new Scottish rate proposals. The implementation and impact of that power must be thoroughly tested and developed, and not only with Her Majesty’s Revenue and Customs, important though that is. I know that the qualification for liability for the Scottish rate will be the same as or similar to those already set out in the Scotland Act 1998. Although we can easily see the implications for the basic and higher rate taxes, people in Scotland must also have clear information on the impact on their tax liability of pension contributions, to which the hon. Member for Milton Keynes South referred, and any unearned income, such as dividend receipts and bank interest. That sounds as though it concerns only a small group of people, but many people in Scotland earn interest through bank accounts and from dividends. I ask the Minister, both today and throughout the Bill’s scrutiny, to consider how the current regime of tax credits on dividends, for example, will be managed if there are different tax rates in different parts of the UK.

What discussions have there been about the implications of variable tax? What will happen if someone uses an address for their unearned income, such as a bank based in London, Cardiff, Halifax or wherever, that is different from that used for their individual taxation north of the border? I know that those problems are not insurmountable. There might be issues of detail, but frankly, we want the system to be robust and watertight from the beginning, otherwise the Bill will be nothing other than a job creation scheme for accountants—having been married to an accountant for 39 years, I have no problem with that in principle. The Secretary of State, given his previous career as an accountant, will have some knowledge of how accountants can take a piece of legislation, dissect it and then work their way around it. I hope that those issues can be solved properly so that we can ensure a robust system.

The Bill certainly makes some common-sense adjustments to the devolution settlement, such as the licensing of controlled substances and appointments to the BBC Trust, and there are other changes that are welcome in principle. However, greater discussion and clarification will be needed as the Bill goes through the House. For example, the power to set drink-driving limits, which has been mentioned by several hon. Members, should be considered. Different limits north and south of the border could cause confusion. Again, that is an issue not of principle, but of clarity. If we are to devolve power on the licensing system for air weapons, we will undoubtedly need a clearer definition of what constitutes an air weapon than that currently specified in the Firearms Act 1968. I assume that the Secretary of State will be having discussions with ministerial colleagues in the Home Office to ensure that the power that is being handed over will take account of how technology has changed in the intervening years in the manufacture of air weapons.

Let me deal briefly with some of the attacks that have been made on the Bill, which are crystallised in the SNP amendment. It has been criticised for not giving meaningful economic powers, and yet the Scottish Parliament will now be able to raise significantly more income as a result. In addition, there will be additional borrowing powers of up to £3 billion. When there is a cyclical fall in tax receipts, which we might see during a recession, there are powers to manage that problem.

I know that the hon. Member for Dundee East (Stewart Hosie) is, or appears to be, an expert on all things fiscal, but, although he might be able to identify some of the problems, his analysis and conclusions are sometimes questionable. I advise him that not all of us agree with his suggested outcomes. Of course, we know that all that is code for fiscal autonomy, which in turn is camouflage for independence. I have no problem engaging with that argument, but we have to be realistic and admit that that is what the debate is all about: it is a debate for those who want to see the United Kingdom broken up and those of us who want to see it strengthened through the greater devolution of powers.

I am delighted to support the Bill, and I resent what almost amounts to rivialisation of some of its elements. The Scotland Act 1998 was one of the most complicated pieces of legislation ever to go through this House. It had to unpick legislation dating back over 300 years, since the union of Parliaments, so it was not straightforward. Stage hypnotists might not have been at the top of the political agenda, but legislation on stage hypnotists had to be dealt with as part of the Act. Indeed, given the number of hours we spent on it, I wonder how we did not realise that we had given Scotland power over Antarctica. I do not quite know how that slipped through in all those hours, but we should not trivialise the detailed work that had to be done to present that Act and to deliver a Scottish Parliament, or suggest that it somehow undermines the Scottish people’s right to autonomy through devolution.

Issues of detail and clarification will undoubtedly need to be debated in the Chamber over the next few weeks, but the Bill is a natural progression along the road that we set down in 1998, and if Donald is up there on his cloud, he will definitely see that it is part of the process, and that 1998 was not just an event.

15:42

[David Mowat (Warrington South) (Con)]

Before I get into my remarks, may I apologise to the House for three things? First, it is not my birthday; secondly, I have not written a book; and thirdly, I think I am the first speaker in the debate not to have a Scottish accent. I do have a Scottish name, however, so I shall do my best with that.

I really have only one point to make about the Bill to those on the Government Front Bench. Overall, it is a good Bill that takes what Calman recommended and implements it sensibly. Indeed, a whole set of well-made recommendations will be introduced. The principal part of the Bill, as others have said, relates to fiscal autonomy, the change in the level of the block grant and the compensatory change to income tax. The theory behind it is absolutely spot-on, because it is right that Scotland is given an incentive to nurture its own tax base and to become accountable for how it spends that money. The important issue, which is not directly in the Bill but an unintended consequence of it, however, is the baseline for that allocation, the current Barnett settlement. The Barnett formula is not a subject for today’s debate, but others have spoken about it, and I shall put in my tuppence-worth.

The formula has been going for 35 years, and the most recent review of it was last year by the Lords Barnett Formula Committee, which produced an excellent report that received a poor response from the then Government. People accept that the formula no longer represents a needs basis for the allocation of moneys. The Calman report accepted that point, too, but the reason why we persevere with the formula is inertia. In the response to the Lords Committee, it was accepted that the formula was straightforward, but there are two reasons why it provides the wrong result. First, there has been no attempt to make any changes based on relative population movement over the past 35 years between the three countries in the Union which are most affected, Wales, England and Scotland. The result, as Holtham stated, is that the settlement for Scotland is about £4 billion more than it would be if it was worked out on a needs basis.

How does that relate to the Bill? The baseline will use that higher amount to set income tax, and to flex it up and down. In consequence, it will be harder to change the Barnett formula in future, because it will be linked directly to the level of income tax in Scotland in a way that it is not at the moment. From a political point of view, it would be hard for people to accept that the UK Government, while making a fairer allocation, were forcing up income tax in Scotland.

A second unintended consequence of the current baseline is that Scotland will for ever have a larger public sector in its economy than in England. I say to colleagues on the Government Benches, of whom there are not many, that it is wrong for us to go on about Scotland having to rebalance its economy towards the private sector and away from the public sector if we approve a formula that makes it arithmetically impossible for that to happen.

[Mrs Laing]

Does my hon. Friend accept the point made by my hon. Friend the Member for Milton Keynes South (Iain Stewart) that the Barnett formula works in the way it does not just because Scotland is Scotland, but because Scotland has certain features, such as areas of deprivation in its inner cities and very rural areas where transport costs are enormous, that mean that it deserves greater spending in certain areas? Such areas are also found in certain parts of England and Wales.

[David Mowat]

I thank my hon. Friend for that intervention. She made two points, the first of which was about sparsity. Scotland is more spread out than the rest of the UK. Page 18 of the Holtham report takes that sparsity into account. The Scottish national health service has to take sparsity into account in the allocation of money. Parts of Scotland are very spread out, such as the highlands and islands, Orkney and the Hebrides. The Scottish NHS adjustment in respect of that, which was validated by the Holtham formula, was 1.5%. We are dealing with a figure of 20%.

The second point that my hon. Friend made was about deprivation. There are areas of deprivation all over the country. That is why it is so important that the formula is based on need. There can be no argument about that.

[Anas Sarwar]

When discussing the rights and wrongs of the Barnett formula, would it not be sensible to compare the averages for Scotland and Wales to different regions of England, because the north of England receives almost the same amount per head as Scotland?

[David Mowat]

Paradoxically, the part of England that receives the most per head is London.

[Pete Wishart]

The hon. Gentleman said that London secures the most identified public spending—that is before we get into unidentified public spending. I am grateful to him because he has been very consistent in his view, which is a valid view held by Conservative Back Benchers, that Scotland’s budget should just be cut. Those on the Government Front Bench, with Labour support, want to cut Scotland’s budget through the financial measures in the Bill. The hon. Gentleman and I can surely agree that the way to resolve this is to give Scotland full financial autonomy on these issues—he would benefit and I would benefit. Surely that is the right way forward.

[David Mowat]

What I think we would agree about—I think this has been the consensus—is that we should have a needs-based formula. What possible objection could anybody have to a formula based on need? Members have mentioned adjustment for deprivation, and fine, let us go with that, but the difficulty that we have got into is that we have never adjusted the Barnett formula for population change.

[Iain Stewart]

I must correct my hon. Friend. The Barnett formula has been adjusted in the past to take account of population changes. He is quite correct to suggest that it was not adjusted for the first 15 or 16 years, which led to a more generous settlement year on year than a strict population count would have allowed, but I believe that it was Michael Portillo, when he was Chief Secretary to the Treasury, who introduced a mechanism by which the percentage by which Barnett changes each year would be directly related to Scotland’s share of the UK population.

[David Mowat]

My hon. Friend is right to say that the Barnett consequentials each year take the correct, current relative population into account. However, the formula does not do that to the body of spending that is adjusted by those consequentials. He will find that very clearly in the reports of the House of Lords Select Committee and the Holtham commission.

[Iain Stewart]

One of my bugbears in this debate is that when we talk about the Barnett formula, we forget that Barnett does not change the baseline lock, it aggregates the annual changes in UK Departments’ spending and then adds on a population share percentage and a relevance factor percentage. My hon. Friend’s point is about changing the baseline. I believe that the Government have opened up the possibility of that in future, but we must be careful to point out that the Barnett formula deals only with year-on-year changes.

[David Mowat]

I thank my hon. Friend, but I have two points in response. First, the Government have said that they will not review the formula in the lifetime of this Parliament. Secondly, the outcome allocation that is consequent on what we call the Barnett formula takes into account two things—the spending brought forward and the Barnett consequentials. The first of those is not adjusted for population, and the second is.

Since I have nearly got to the end of my remarks, I will not take any more interventions on this subject, but—

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

rose—

[David Mowat]

Maybe one more.

[Gemma Doyle]

I am very grateful. Is the hon. Gentleman aware that the proposals to which he refers, which he seems to support, could actually lead to a £4.5 billion cut in the amount of money spent on Scotland? Is that what he proposes, and does he want to see it happen?

[David Mowat]

What I propose is that the allocation be done on a needs basis that is fair to the constituents whom I represent as well as to hers.

[David Mundell]

I very much respect what my hon. Friend says. He took part in a Westminster Hall debate on the issue, and I am sure the Chancellor and other colleagues are listening to him. We need to be clear, though, about whether he is arguing for a needs-based assessment across the whole UK. The hon. Member for Glasgow Central (Anas Sarwar) drew attention to the fact that there are significant differentials within England. The difference between the highest and lowest per capita public spending in England is £2,537, which is much greater than the difference between the Scottish and English average. We need to be clear about whether my hon. Friend and those who make the same argument want a change in spending within England, or just between the constituent parts of the UK.

[David Mowat]

The difference that we are really talking about today is the one between the constituent parts of the UK, but I have no difficulty with also applying that to the constituent parts of England. As I said, a needs-based formula is fair.

If my constituency of Warrington South, which has areas of great deprivation and some better-off areas, were in Scotland, the average constituent would receive £900 more. That is not fair—I get a considerable postbag about it. Today’s debate is not on the Barnett formula, but unless we address the matter at some point, it will become a tension in the Union from the other direction. We need to be cognisant of that, and we need to be careful.

[Ann McKechin]

The hon. Gentleman mentions basing the determination on needs. In last Wednesday’s Adjournment debate, to which the Under-Secretary referred, there was some discussion about the system in Australia. It is based on needs, and there is a commission that makes a judgment. There is frequent argument between the federal states about the definition of needs, and some commentators are now saying that they want to move back to a per capita formula, just like the Barnett formula. Does the hon. Gentleman agree that stability might be a better prize?

[David Mowat]

I do not agree that stability is a better prize if it is based on something that is wrong. I agree that it is difficult to compute need, but that is no reason not to try. We have let the matter drift. One of the determinants is relative population movement—I repeat that, notwithstanding the comments of my hon. Friend the Member for Milton Keynes South (Iain Stewart); I guess we can discuss that later in the bar.

I ask the Under-Secretary to table a simple amendment to the Bill to provide for revising the block grant allocation to take account of relative need, in the way that the House of Lords Committee on the Barnett formula and the Holtham commission recommended last year and in previous years.

15:56

[John Robertson (Glasgow North West) (Lab)]

It is a pleasure to follow the hon. Member for Warrington South (David Mowat). I also enjoyed the contribution of the hon. Member for Milton Keynes South (Iain Stewart). I have not read his book and, having listened to his speech, I do not think that I will buy it. [Hon. Members: “Oh!”] Let us face it, anyone who campaigned on a no/yes vote in the referendum for a Scottish Parliament meant, “I don’t want a Scottish Parliament, but give us the money anyway.” I have some problems with the economics of that position and wonder what the hon. Gentleman was thinking of at the time.

I am a unionist—with a small “u”. I am also a member of the Labour party. In the past 10 years, the Labour party has been the Unionist party in the House. We have supported the United Kingdom more than any other party. Around 2005 to 2010, the then Opposition, who now lead the coalition, had an anti-Scottish slant. I found it sad that we were treated in such a manner, but I have noticed that, since they came to power, we do not seem to hear the same anti-Scottishness from them. I am pleased about that, if nothing else.

Many hon. Members know that I followed Donald Dewar into the House. I had the pleasure of being his election agent in the 1997 and 1999 elections and of representing him in his constituency while he was away campaigning in 1998. Those of us who fought hard for a Scottish Parliament and an excellent vote, particularly in Donald Dewar’s constituency, had the reward of getting the Parliament. That is not to say that I agree with everything that has happened. I do not agree with hon. Members who said that this is the first time that we have revisited the Scotland Act 1998, because we have done that a couple of times. Yet Donald Dewar said to me that the Act was not to be played about with. Devolution might be a process and a project that will develop, but the Act should not have been tweaked as often as it has been. I hope that, if we tweak it this time, we will leave it to settle in properly. Ten years is not a long time for a political institution.

We still have to grow up when it comes to Scottish politics, as can be seen by some of the bunfights between the party that will remain nameless—I know that its Members count the number of the times that it is named—and Labour. It should not be a bunfight; we should think of the people of Scotland and try to do what is best for the nation.

The Bill goes a way along that road. Everything in it is not necessarily right, and some things that are not in it should be. Let me concentrate on those for a moment. The voting system for the Scottish Parliament is wrong. I particularly dislike the top-up of Members, and the votes of the people of Glasgow, part of which I have the honour of representing, are not proportionately counted.

There was a great deal of talk in debates on other Bills—they were not consulted on, just as this Bill was not consulted on—about how one person’s vote in one constituency is worth more than someone else’s vote in another. However, the second votes of 45,000 people in the Glasgow area do not count for the top-up list. Not one Member is elected by those 45,000 votes, which I believe is inherently wrong. It is not right to conduct a parliamentary election on first past the post and then, just because a party is so successful in gaining seats, for 45,000 votes to be discounted. I expect that 45,000 to be a lot more come the next election.

[Pete Wishart]

The hon. Gentleman is the epitome of reason, and his speech differs greatly from some of the incoherent rants from his colleagues—we are likely to hear more such rants from the next few speakers. Is he really suggesting that we get rid of proportional representation for the Scottish Parliament? Surely we cannot go back to the old days of Glasgow council, when Labour members gained majorities on vast minorities of support.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Before the hon. Member for Glasgow North West (John Robertson) resumes his speech, I should say that he is now going through things that are not in the Bill. If he goes on at length on those matters, he is clearly going to make a lengthy speech before he even gets on to measures that are in the Bill. Will he now direct his comments towards what is in the Bill?

[John Robertson]

Thank you for your guidance, Mr Deputy Speaker; I am hoping to speak to amendments in Committee that might deal with those matters, and to develop that argument and discussion in greater detail. To answer the hon. Member for Perth and North Perthshire (Pete Wishart), I have never been spoken to so nicely. He called me reasonable. I have always thought I am reasonable, but sometimes people say that I rant.

It is important for people to have representation. I do not believe that voting for a loser to represent me is right. I want to vote for a winner, and I believe the person who wins the vote should look after me. That is how I was elected. I like to think that I have done a good job. Admittedly, when someone gets over 50% of the vote, they would say that, but they might not if things were a bit closer. I still believe that people would like to vote for a winner and not a loser to be their elected representative; sometimes even somebody who comes in third place will be elected. I hope to set out that position in Committee.

Consensus is important. The SNP has tabled a reasoned amendment, but at the end of the day, SNP Members want the same thing that I want: the best for the people whom they represent. However, you have to listen to the other side. The right hon. Member for Gordon (Malcolm Bruce) made a very good point when he said that the fact of the matter is that the Scottish people do not agree with the SNP. If 70% or 80% of the Scottish people do not agree with you, you might be wrong. You should actually listen to that 80% and find out why they disagree with you. You might want to persuade them in the years to come, but we are not at that stage. To go back to my initial point, we are developing and broadening out what the Scottish Parliament does and trying to make it better. That will not be achieved in one go.

[Stewart Hosie]

The hon. Gentleman is being unreasonably reasonable. The amendment is not only reasoned, but reasonable, and it specifically fails to seek to decline to give the Bill a Second Reading. If he reads the amendment carefully, he will quickly appreciate that we seek to improve those areas in the Bill that we believe are weak, and that we are criticising the exclusion of recommendations by the Calman commission, which was the genesis of the Bill.

[John Robertson]

The hon. Gentleman sounds very reasonable, but I do not believe he is being reasonable, and I shall explain why—[Interruption.] Let me explain why you are not being reasonable. You have put forward an amendment that—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I have not put forward any amendment to the Bill. The hon. Gentleman has used the word “you” several times and I would be grateful if he could speak through the Chair.

[John Robertson]

Thank you, Mr Deputy Speaker. The “you” is, of course, a Scottish phrase that you have misunderstood—[Laughter.]

The hon. Member for Dundee East (Stewart Hosie) has put forward an argument that is wrong, because it would wreck what we are trying to do today. It would be much better to table amendments to improve the Bill. I hope that the amendment will not be accepted so that we can carry on—and that is probably what will happen. The amendment tabled by the hon. Member for Perth and North Perthshire is ill conceived. It is a mistake and he should not have tabled it.

[Ian Murray (Edinburgh South) (Lab)]

My hon. Friend is making a powerful argument about the amendment tabled by the Scottish nationalists. The amendment concludes that the Bill is considered

“as a whole to be unacceptable.”

The amendment therefore suggests that the Scottish nationalists do not want the Bill to go forward.

[John Robertson]

My hon. Friend makes my point. That is why the amendment was a mistake, and I think that the Scottish nationalists did not really mean to go down that road. If they put that in deliberately, I am wrong and will admit as much. We have to fight them on that point.

Another aspect of the Bill that needs amendment is the provisions on energy. It is a reserved matter, but if we wished to build a nuclear power station in Scotland, the present Administration say that they would use the planning rules to stop it. By the middle of this decade, we might be short of electricity, so we have to make decisions now. In fact, we should have decided years ago—my party must take much of the responsibility for failing to do so—what we should do in relation to energy, and we cannot have a devolved Administration with the power to stop developments that are happening everywhere else. Each power station that is built is the result of billions of pounds of investment in jobs and future jobs after the station has been built. Some 9,000 jobs are created when a new nuclear power station is built. We should consider having legislation to make such planning issues a reserved matter, with the Secretary of State having the power to put forward reasons why such issues should go ahead.

[Dr Whiteford]

I wonder whether the hon. Gentleman’s constituents would like a nuclear power station in their backyard.

[John Robertson]

The hon. Lady has obviously not consulted people in areas where nuclear power stations have been built. They want new stations built, because of the investment that that brings for local infrastructure. If the lights were about to go out, people in Anniesland probably would want a new power station. They would like any power station allowing us to keep the lights on. We are digressing on to a subject that has nothing to do with the Bill, and I know that you would stop me talking about it if I continued, Mr Deputy Speaker. However, I hope that the hon. Lady gets my point.

Overall, I welcome the Bill. It has some good points. Fiscal powers have always been a wee bit of a problem. Why is that? Let us have a look: in the mid-1990s, the Conservative party did away with the two-tier system north of the border—we had local government in local and regional areas. Cities such as Glasgow did very well under the old Strathclyde regional council, but once we did away with it, the money started to drift away from the centre of where the work was being done. Under the present incumbent north of the border, business rates for Glasgow were taken into a central pool and spread over the rest of Scotland, so that, in effect, the business rates in a city that created wealth and employment for people living outside Glasgow did not pay for anything. Those people came into Glasgow and used all the facilities, roads and everything else that the city council now had to pay for. I cannot remember the exact figures for now, but of £180 million collected in business rates, Glasgow used to get back £100 million.

In effect, Glasgow—the biggest area for employment—was taking £80 million out of its city centre and giving it to the rest of Scotland. I believe that that was done out of political expediency. It was agreed before the last election that the money would be returned to Glasgow, but we have since seen even more attacks on the city from the Scottish Government. If we are to go down the fiscal road, we have to consider very carefully the political stance, the areas where the money should go and the areas of high deprivation. For deprivation, Glasgow rates higher than any other city in the United Kingdom. Six of Glasgow’s constituencies—in those days, it had nine—used to be among the top 10 worst in the UK, and certainly plenty of its now seven constituencies are still among them.

Yes, we do need help, and we do need money. What we do not need is money disappearing. The fiscal powers must be used very carefully to ensure that the money taken in goes to the areas that need it. The hon. Member for Milton Keynes South (Iain Stewart) talked about how we could do that. If the Scottish Government are to have such powers, however, I want to be able to know where the money is going. Why am I saying this? There has to be an audit trail if the UK Government are to give to the Scottish Parliament money and the means to collect taxes. For example, if this Parliament is to give the Scottish Parliament Barnett formula increases—my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) mentioned this earlier—of about £34 million for disabled children, but that money does not go there, I want the ability to ask where it went. If I were told, “It just went into the budget, and we do not know exactly how it was spent,” that would be fine, as I could use it for political purposes. However, I want to know where the money is, and I want the House to be able to audit every penny that comes from the UK taxpayer.

[Mr Weir]

Is the hon. Gentleman seriously suggesting that the Scottish Government can spend money from the block grant only on whatever this place determines? In effect, does he want to export changes in this place, for example in the NHS, into the Scottish system? That is ridiculous.

[John Robertson]

What I think is ridiculous is £34 million not going to disabled children.

[Mr Weir]

It did.

[John Robertson]

Well, I think that the money went to trying to support a Scottish Parliament and a Scottish Government who were trying to keep councils’ payments down, and that people were getting bought off with it. I do not believe that one thought was given about a disabled child going short or a home not getting the money it needs. I take that view, and I am entitled to my opinion. I believe that we have to go ahead with this.

I have ranted on long enough. I support the Bill. I believe that scrutiny has to happen, and that there are areas where we can make it better. I also believe that there are probably areas where we are thinking about making things better where we may have to reign in, but the most important thing is for the Bill to proceed and for the Committee to look at it even more closely.

16:15

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to follow my near parliamentary neighbour, my hon. Friend the Member for Glasgow North West (John Robertson). Before I address the substance of the Bill, let me place on record my thanks for the great work done by the previous Government. In particular, I thank my hon. Friends the Members for Rutherglen and Hamilton West (Tom Greatrex)—I thank him in the capacity in which he assisted that Government— and for Glasgow North (Ann McKechin), and my right hon. Friend the Member for East Renfrewshire (Mr Murphy), along with those Members from other parties who took part in the Calman process and the leaders of the parties in Scotland. A great deal of thanks for the impetus behind the Bill, as for the original Scotland Bill, should go to Wendy Alexander. It is important that we should thank her from the Labour Benches in this debate for her great efforts on devolution.

The key principle of the constitutional reforms that were adopted by the previous Government was cross-party support. As my hon. Friend the Member for Glasgow North stated, there is a real contrast between the great cross-party consensus that has been achieved in the preparation and discussion of this Bill, and some of the frankly gerrymandered changes that we have seen in the Parliamentary Voting System and Constituencies Bill and the Fixed-term Parliaments Bill. I hope that right hon. and hon. Members on the Government Benches will recognise that when they bring forward further constitutional legislation in this Session, such as the House of Lords Reform Bill.

This Bill is good for Scotland, and that is why Labour Members will support it. As paragraph 2.34 of the Calman report states:

“the Scottish Parliament controls 60% of identifiable public spending in Scotland,”

but is directly responsible for

“only 10% of the taxation levied in Scotland.”

If the Bill is passed, thankfully that will change. The Bill will increase the level of taxes levied in Scotland to 35%, which is comparable to the level in devolved legislatures in Belgium, Italy, Spain and Australia. Added to that, the Bill provides for welcome revenue and capital borrowing powers, which will extend borrowing from £500 million a year, under the Scotland Act 1998, to £2.2 billion. That will release proceeds for much-needed capital projects in Scotland, such as a Glasgow airport rail link—a matter on which I have spoken a great deal in the past and on which I will continue to speak—and will raise the opportunity for investment in high-speed rail track between the major cities of Scotland and the Scottish border. That will be a helpful economic lever for Scotland. Added to that, the detail of the tax powers will see a variation of plus or minus 10% from 2016, and the welcome devolution of stamp duty land tax and landfill tax.

I welcome the fact that income tax is the principal lever being used to give the Scottish Parliament extra fiscal powers. Giving evidence to the Scottish Parliament on 18 January, Sir Kenneth Calman set out an important principle for where our economy should be going:

“If you change the financial levers, that in itself will not change anything; what you…need is to have in place the right policies.”

That is right. Speaking about those levers, Professor François Vaillancourt of Montreal university, also giving evidence on 18 January, said:

“I believe that the instrument that has been chosen, personal income tax, is the best one for the purpose. Corporate income tax is difficult to administer at a personal level, because of tax shifting between various jurisdictions…Personal income tax allows people to see a relationship between what they pay and what they get, and it is linked to the responsibilities of the Scottish Parliament, such as education, social services, health, long-term care and so forth. It is, therefore, an appropriate tool.”

I agree.

What we have also seen in the last two weeks is a real weakening of the argument for fiscal independence as propounded by some Scottish National party Members. Professor Muscatelli, whom I believe my hon. Friend the Member for Livingston (Graeme Morrice) has already referred to, makes it clear that the Bill does not seek to adopt some of the more volatile taxes, such as corporation tax and other taxes that would inject more risk into the Parliament’s revenues. He expressed the view at Holyrood on 18 January:

“Income tax has less impact in terms of tax spillover or tax competition, so it is the obvious place to start.” [Scottish Parliament, Official Report, Scotland Bill Committee; 18 January 2011, c.200-40]

Again, this is someone who speaks with real expertise, so the House would do well to take note of his views.

Some issues will have to be scrutinised closely as the Bill progresses, particularly if it receives a Second Reading and proceeds into Committee. It will be important to probe the precise detail of the definition of “a Scottish taxpayer” and to deal with some issues that my hon. Friends and Government Members raised earlier.

It is important to emphasise the necessity of proper economic forecasting in Scotland. Given the frankly lamentable performance we have seen from the Scottish Government and their ill-starred cast of economic advisers put together by the First Minister, we need a proper and robust system for forecasting growth and the impact of increases or reductions in income tax that the Bill, if enacted, will permit. I was impressed by the idea set out by the Scottish Council for Development and Industry when I went to meet its representatives in central Glasgow last week. It recommended the establishment of a Scottish office for budget responsibility—a devolved office that would examine the effect of devolved Government policies on growth and would be able to forecast properly and stress-test the impact of varying income tax, up or down, which I think is an idea with many attractions. I hope the House will be able to explore it further in Committee.

As my hon. Friend the Member for Glasgow North West mentioned, it is important for the Scottish Parliament to make the most of the totality of powers it has from the Scotland Act 1998, which it will still have if the Bill is passed. That must mean a real emphasis on growth. It is true that the income tax-varying power in itself will not necessarily produce additional growth, but it will be a tool, allied with investment in capital projects and skills and with diversifying the Scottish economy by providing more manufacturing and more help for construction, which the stamp duty tax might afford. All these are important if we are to avoid seeing the gap in employment and growth in Scotland widen in comparison with the UK as a whole over the last couple of years.

This is a good Bill, but by no means a perfect Bill. We shall scrutinise it closely if it reaches Committee, but it has the support of my constituents and it will have the support of all the key political parties that are in favour of a decent and decentralised system of government within the United Kingdom.

16:24

[Margaret Curran (Glasgow East) (Lab)]

I apologise for not being able to stay to hear the concluding remarks today. This is explained by the fact that, along with my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), I have current responsibilities as a Member of the Scottish Parliament. We are still trying to juggle some of those responsibilities, so I hope I can be forgiven by my colleagues, friends and opponents on these Benches. I obviously do not have to apologise to too many of my hon. Friends—although there is a valiant crowd left.

I am in a privileged position as I have the honour of representing the people of Glasgow East in this august institution that has such great traditions, but I can also participate in this debate with the benefit of my experience as a Member of the Scottish Parliament for 12 years, since its inception. This is a significant debate, on which we will all look back in years to come, as we are at a key stage in the devolutionary process. The Scottish Parliament is firmly established in the governance of Scotland and has addressed the fundamental democratic deficit that generations of Scots felt. Many of us campaigned long and hard for the establishment of a Scottish Parliament, and are proud of many of its achievements, as it empowered us to address problems and galvanise responses to meet challenges, within the framework and partnership of the United Kingdom. Perhaps we are in a position where we get the best of both worlds.

My experience is that the Scottish Parliament has, as the right hon. Member for Gordon (Malcolm Bruce) said, acted within the mainstream of Scottish opinion. The Scottish people have strongly supported the Scottish Parliament, which has kept their faith as it has developed. In some ways, its operation is in the character of Scotland. We criticise the Parliament and keep it on its toes, and many of its Members have faced criticism, but the Scottish people would never tolerate its abolition and would wish to protect it.

The Scottish Parliament has not been without its controversies and weaknesses, which we hope to address through the Bill, but it has had notable successes. I am pleased that this august Chamber has also learned from the Scottish Parliament, which led the way on the smoking ban and on free public transport. Scotland has what is called the most progressive legislation on homelessness. With the housing stock transfer, in which I was particularly involved, we managed to develop the means to have perhaps the highest level of housing investment, in the needier parts of Scotland, that has ever been achieved. That speaks to one of the great successes of the Parliament, which is the focus on the experience of Scottish people: to be hard-nosed and hard-edged; to focus always on the Scottish people’s interests; not to allow ourselves to be diverted into eccentric political debate; and always to keep the mainstream of Scottish interests at the forefront of our minds. I hope that the Scotland Bill will allow that to continue.

I am sure that my hon. Friend the Member for Kilmarnock and Loudoun, who shares my privileged position, has also often been asked to draw parallels between the experience at Westminster and in the Scottish Parliament. Although I would not want to digress, I make two comments about that. In the early days of the Scottish Parliament, the worst thing that we could do, and that we would be chastised for—I am sure that the Under-Secretary, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), would agree—was to emulate Westminster. If we behaved in any way that was comparable to Westminster, we were criticised enormously. We saw ourselves as a more consensual, transparent and accessible Parliament. I would argue that the high number of women in the Parliament helped to establish that, although I am less on the consensual end of the spectrum than some others, such as perhaps my hon. Friend the Member for Kilmarnock and Loudoun.

I am struck by my experience in this place, however, and I think that the Scottish Parliament now does need to learn from Westminster’s much more sophisticated mechanisms for ensuring that Government, as opposed to Parliament, are held to account. The Bill begins to address that. This Parliament’s treatment of its authority and reach is also much more thorough than that of the Scottish Parliament. That might be explained to some extent by the Scottish Parliament’s youth, but the time is right to consider those big issues. The Scotland Bill allows us to do some of that.

According to international research and assessment, one of the strongest features of the Scottish Parliament is its Committee system. That system allows people to be interrogated about legislation and research to be consulted. It is based on the principles of evidence, engagement and analysis, and serves as a model in that regard. The Calman commission could be said to have copied that system, and to have done so very effectively. Evidence-led policy development must be centre stage.

Like others, I thank and congratulate those who served on the commission. They devoted time to taking stock of where we are in Scotland, and to outline an agenda for taking Scotland forward. I hope that, as we examine their conclusions and the extent to which they have been incorporated in the Bill, we will learn from a process that managed to bring the broader body politic into the detail of some of the commission’s discussions, because I think it can enhance democracy considerably.

One of the principles of such a process is that it is cross-party. As those who are familiar with Scottish debate will know, that is not easy to achieve in Scotland, as the current operations of the Scottish Parliament illustrate. The Scottish Government rarely command a majority vote in the Parliament: education motions, for example, are regularly defeated, and the Government pay no attention. I think that that is very serious, but it contrasts starkly with the majority support for Calman’s work, which is highly significant.

I recognise the work that the Government have done in the Bill in relation to borrowing powers and financial accountability, which will advance the Scotland debate significantly. However, I want to draw attention to a very important issue that is particularly relevant to my constituency. As many Members will know, it was the death of a very young child that triggered—if the House will forgive the expression—the debate in Scotland about the use of airguns. A young boy, Andrew Morton, who was only two years old, was shot dead in my constituency with an airgun. I pay tribute to the Morton family, who have campaigned for many years. They have lived with terrible tragedy, but ,with great dignity, have managed to pull themselves together and argue the case for the banning of airguns.

I have listened carefully to what many people have said about the difficulties of legislating on such matters. Let me take this opportunity to thank my hon. Friend the Member for Kilmarnock and Loudoun, who at the time of that terrible death was Minister for Justice in Scotland. She met the Morton family, and worked closely with them to see what could be done. We appreciate that there is no easy solution, and that simply banning something does not mean that the problem will go away. I do not necessarily want to cause difficulties for sporting communities in Scotland, and I realise that we must test the legislation as we go through it in order to ensure that it is proportionate. However, I plead with the Minister to bear in mind the experience of the Morton family, to bear in mind the fact that 11,000 people signed the petition they delivered, and to understand the basic, essential, human emotion involved.

That airgun was not the most dangerous kind available, and it was a kind that is easily available. However, although it was not particularly dangerous in itself, in the wrong hands it caused terrible tragedy. We must do all that we can to protect people from the worst excesses caused by the use of such guns.

The other key aspect of the Mortons’ experience was that they saw the Scottish Parliament as the place to go to protect their family. That was right and understandable, because at the time crime and justice were the subject of a huge debate in Scotland, led by my hon. Friend the Member for Kilmarnock and Loudoun. I think that we too should have that debate, and I plead with the Minister to allow it to take place.

In conclusion, the Bill is a key stage in the development of devolution in Scotland, and I believe that it speaks to majority Scottish opinion. We perhaps need to test some of the powers more thoroughly to ensure that they properly address the economic interests of Scotland, but I emphasise again that on some of the more significant human experiences we have within our grasp the powers to act to address things that matter fundamentally to Scots. I hope that we take the opportunity to do so.

16:34

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I am particularly pleased to have the opportunity to speak in this debate. As the hon. Member for Epping Forest (Mrs Laing) said, this is Burns week, when people across the world celebrate their Scottish roots. I always enjoy this time of year because people are asking me for advice on how to pronounce particular Scots words, rather than gently—or perhaps not so gently—mocking my native Ayrshire accent. Some of my Scottish Parliament staff have found the transition to Westminster slightly more difficult. At one point, my diary secretary had to explain what was meant by the fact that my diary was “stappit” and I was therefore unable to make a particular event. For the benefit of the Hansard reporters and any translators, I should say that “stappit” simply means very full.

In the past week, the new Burns museum opened in Alloway, in the constituency of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne), and that superb new venue hosted the Burns humanitarian award ceremony, with Linda Norgrove being a very worthy posthumous winner. With due deference to my hon. Friends the Members for Ayr, Carrick and Cumnock and for Dumfries and Galloway (Mr Brown), we Mauchline residents are fond of saying that although Robert Burns was born in Alloway and died in Dumfries, he lived in our village. It was therefore a pleasure to join the Mauchline Burns club to lay a wreath at the Burns national memorial in Mauchline on Burns day this week.

I reassure you that I am not about to continue a treatise on Robert Burns, Mr Deputy Speaker, as there will be other opportunities for that. However, the references to him are relevant, because Burns was intensely concerned about Scotland and the Scottish people and, despite what some SNP Members might claim, not from a narrow nationalist perspective. Burns was an internationalist who looked beyond geographical boundaries and got to the heart of humanity, and that is very much the spirit of Scotland today. We are all proud to be Scots and we will be passionately patriotic at football and on the full range of other areas, but we all know that Scots have made a much wider contribution to the world than simply looking after our own backyard. The vast majority of working-class Scots certainly know that we have more in common with our neighbours who live south of the border in similar communities than divides us.

So when we take forward the debate on the Scotland Bill we must focus on what we can deliver for people in Scotland; this cannot simply be an academic exercise that bears no relation to the lives of the people who send us here to represent their views. I am proud to have represented the Scottish Parliament constituency of Carrick, Cumnock and Doon Valley for more than 10 years, and I will continue to represent it for the next 54 days as I count them down. I hope that, rather than that simply being a matter for the public record, it might help to offer a distinct perspective to the matter in hand, as was the case with my hon. Friend the Member for Glasgow East (Margaret Curran).

As a number of hon. Members have said, the Bill is broadly based on the Calman commission report, and I, too, wish to put on record my appreciation for what was a thorough and robust process involving a broad section of Scottish civil society. Sir Kenneth Calman has produced a significant body of work in which all those associated with it can take pride. I am in broad agreement with the aims of the Bill—perhaps people will say that that is no surprise—and I will be supporting it. However, as I shall set out, I believe that some aspects of it should be thoroughly and robustly examined, not least by the Select Committee on Scottish Affairs, and scrutinised in this Chamber.

In the foreword to the White Paper on devolution, Donald Dewar wrote:

“The Government’s aim is a fair and just settlement for Scotland within the framework of the United Kingdom—a settlement which will be good both for Scotland and the United Kingdom. The Scottish Parliament will strengthen democratic control and make government more accountable to the people of Scotland.”

That was the basis of the Bill that fundamentally altered the structure of power in the United Kingdom.

On 11 September 1997, just over five months after Labour came to power, 74% of Scots voted in favour of the establishment of a Scottish Parliament. On 1 July 1999, the Scottish Parliament was officially convened. That date marked the transfer of powers and devolved matters to Scottish Ministers, and it was a time of immense pride for the vast majority of the Scottish people. As my hon. Friend the Member for Glasgow East has observed, those of us who were fortunate enough to be part of that day will forever feel that we were part of the history of Scotland. So quick and seamless were the transfer of powers and their incorporation into Scottish life that the enormity of the development and the significance of the change in a relatively short time might not always be acknowledged in the manner that it should be.

Notwithstanding the controversy over the Parliament building, my right hon. Friend the Under-Secretary—I will call him my right hon. Friend in recognition of the days that we spent in the Scottish Parliament—will recall that some of the other debates in those early days were passionate and had a real energy and enthusiasm for the change that was taking place. That was due in no small part to the work of the Scottish Constitutional Convention over almost two decades, as was acknowledged by the right hon. Member for Gordon (Malcolm Bruce). The convention was established in 1989 and consisted of representatives of civic Scotland and of most of the political parties. It drew up a detailed blueprint for devolution and outlined the proposals for the directly elected Scottish Parliament, crucially with the legislative powers that were finally achieved. That also formed the basis for the further proposals that were introduced by the UK Government in 1997.

I am proud to associate myself with the achievements of the Scottish Parliament over the past decade. As a Parliament, we set out to change Scotland for the better. A substantial body of work was undertaken, starting with the abolition of a millennium of feudal tenure, with communities being given the right to buy and manage the land on which they lived and worked. This was symbolic as well as practical. We also ensured that our elderly people could live with dignity and respect by introducing free personal care. We led on public well-being in the UK by introducing the smoking ban in public places, which represented a step change in the way we dealt with health issues in Scotland.

The Scottish Parliament also introduced an unprecedented programme of school and hospital building, ensuring that our children no longer had to be taught in substandard buildings and that our sick would no longer be abandoned to Victorian conditions in hospitals. We abolished up-front tuition fees and introduced bursaries for the less well-off students, which resulted in more young people going on to further education in Scotland than ever before. We also introduced a ban on fox hunting. I was particularly pleased with the establishment of a Children’s Commissioner for Scotland, for which I had campaigned for about 10 years before I even thought of becoming a full-time politician. The repeal of section 28 was controversial at the time, but now it is completely accepted as having been the right thing to do in the pursuit of equality. It was a Parliament that challenged Scotland to think about its future. It tried to engage every Scot in the challenges that we faced, and it led public debate in civil society. It is a Parliament that continues to ensure that there is a focus on protecting the most vulnerable, and it has made a real difference to the lives of everyone in Scotland.

The Calman commission came along at the right time, however. It published its findings after just a decade of the devolution settlement, and that seems an appropriate length of time after which to offer an initial assessment of how the Parliament has worked, as well as how we need to move on. Since 1999, the devolution settlement has remained relatively static, but I think that that was right at the time, as it allowed things to bed in and allowed the Parliament to take shape. Some minor changes were made. The Scottish Parliament (Constituencies) Act 2004 retained the current level of representation at 129 MSPs. That was done in recognition of the youth of the Parliament as well as the range of work that it was undertaking at the time. We have heard other examples of minor tweaks, not least the Railways Act 2005—perhaps not so minor a tweak—which allowed Scottish Ministers to prepare a strategy for carrying out their functions in relation to railways and railway services. That was another practical and sensible change.

It is now time, of course, to consider the future. The task that the Calman commission was set was:

“To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better”—

for me, that is the critical point—as well as to

“improve the financial accountability of the Scottish Parliament”.

That is what I want to talk about now.

The Calman analysis of the current settlement, notwithstanding some of the criticisms we have heard in the Chamber today, is persuasive. England and Scotland have been part of the Union for three centuries but Scotland maintains its own identity and now has its own devolved political institutions. Overall, people would say the devolution settlement has been shown to work pretty well. It has not led to the convoluted or confused relationship with other partners in the United Kingdom that some people thought it might; nor has it led down a one-way street towards independence, as others feared. There are changes that we can and must make in order to take forward this work in the future.

There is cross-party understanding that the financial arrangements lack the financial accountability we will want to see as the Parliament progresses. By depending wholly on the Westminster grant, the budget bears no relation to economic performance in Scotland. As we have seen in recent years with differing strands of opinion in power at Holyrood and Westminster, that can result in friction between Governments. The premise of the Calman commission was that election to the Scottish Parliament should be accompanied not just by being there to divide up the block grant but by having fiscal accountability, too. Under the proposed arrangements, Scotland will become more dependent on and more accountable for the tax revenue it raises.

As we have heard, the Bill replaces the Scottish variable rate of income tax with a new Scottish rate of income tax that will be decided by the Scottish Parliament annually and applied consistently to the basic, higher and additional rates of income tax. The grant from the UK Government will automatically be reduced by 10p in the pound and the Scottish rate will be added to it. In principle, I support the proposed measures, but we must ensure that there is proper and thorough scrutiny of what they will mean as the Bill goes through Parliament.

Under the proposals, the UK will retain control of exemptions and reliefs and Scottish tax revenues will be subject to Westminster control. One concern that has been raised is that when the UK takes decisions such as increasing the personal allowance to £9,000 or eliminating the 50% top rate, that will affect Scottish revenues. We have heard criticisms of that today as well as some attempted reassurances. A critical point that we must reach in Committee will involve ensuring that we receive reassurances about how that will work as well as assurances that it will not cause further problems or lead to unintended consequences, as has been suggested in Scotland.

Borrowing powers will also be introduced, another move that I broadly support. We have heard that from 2015, Ministers will be allowed to borrow up to 10% of the Scottish budget in any one year subject to an overall limit on capital borrowing of £2.2 billion. In principle, that will be a positive step that should allow key infrastructure projects to proceed as and when the Parliament believes they are necessary. The Bill also provides, however, that the Scottish Parliament will be able to borrow £500 million through new revenue borrowing powers when tax receipts fall short of those anticipated. At first glance, that offers limited flexibility and would mean that Scotland could be under pressure to make spending cuts should a significant shortfall arise. I am sure that that will be considered further as the Bill makes progress.

As scrutiny takes place, we must ensure that we consider the financial calculations and the financial implications of Calman in light of our present economic circumstances. That is the right and responsible approach as we continue to scrutinise the Bill. It is not enough simply to say, as SNP Members appear to be saying, that the Bill does not go far enough, so they are going to vote against the extra powers it will give. That is a rather odd stance for them to take. I might have misunderstood them, and no doubt they will correct that misapprehension if I have, but it certainly sounded like that to me.

I hope that one option we will consider during our scrutiny of the Bill is whether the proposal regarding the Scottish Parliament’s borrowing powers can be brought forward slightly more quickly than the Bill proposes. That is up for debate and would be useful to allow the planning of key infrastructure. It would also have the benefit of assisting what is currently a pretty beleaguered construction sector in Scotland.

Several issues have not been mentioned and I shall mention them briefly before concluding. The measures on licensing the prescription of controlled substances to deal with certain addiction problems make sense and I am sure we will want to consider that issue in more detail in Committee.

As my hon. Friend the Member for Glasgow East has highlighted, the devolution of the competency over air weapons to the Scottish Parliament will potentially allow the introduction of a different approach and licensing system there. She mentioned my time as Scotland’s Justice Minister. In that role, I had discussions with different Home Secretaries—four at the last count—to decide how best to ensure that people in Scotland were protected from those who would use air weapons irresponsibly. We agreed that our approach should not be taken forward in an ad hoc way and should not simply be a soundbite solution that would please a few people but would not actually deliver. That is why I am pleased that we will have the opportunity to scrutinise that issue properly and come up with a workable solution.

As I have said, the financial relationship between the Scottish Parliament, the people of Scotland and the rest of the UK is vital. Let me respond to some of the comments from SNP Members about our scrutiny of the Bill. I do not recall being given much quarter by Labour Back Benchers when I was a Labour Minister in the Scottish Government—I have no problem calling it that although it is technically called the Scottish Executive—and I am sure that during our debates on this Bill, Labour Members will properly seek to scrutinise every clause and line of the Bill to ensure that we are doing the right thing.

We should keep at the forefront of our minds the reason why we are doing all this. It is not a dry, academic exercise only for text books and discussion in learned tomes. It is about making a difference for the people of Scotland whom we represent. We must make the Bill relevant to people, because nothing will drive them away faster from engaging in the process than if they believe it is not a Bill for them—that it is only for politicians and will not affect their lives. If that happened, we would lose a considerable amount because we would be moving away from the intention of the late Donald Dewar, which was to make the Government more accountable to the people of Scotland.

There is plenty of public opinion and evidence in Scotland that people want a stronger form of devolution than at present, and they look to us to find the way forward. They might not know exactly the chapter and verse—where they want the t’s crossed and the i’s dotted in the legislation—but they look to us to take forward the principles and spirit of devolution and to come up with solutions. We have a unique opportunity in this Parliament to reshape how devolution works with a more comprehensive approach, so I welcome the Bill and look forward to our continued scrutiny of it as it goes through Parliament.

16:54

[Stewart Hosie (Dundee East) (SNP)]

It is a genuine pleasure to follow the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who said a number of things with which I agree entirely. Twice she said that this should not be a dry, academic exercise, the first time stating that it was not about the powers, but the policies that they are used for.

On the Bill’s proposals for enhanced financial powers, with which we agree, I wish to set out in a little detail precisely what we would do with them and why we back them. I would also like to clear up a slight misunderstanding: we will absolutely not stand in the way of the Bill. The SNP will never stand in the way of additional powers coming to Scotland. The reason for the reasoned amendment, and for the amendments that we will table in Committee and beyond, is our desire to strengthen the Bill by ironing out some of the flaws and making it better. That is what we should all be doing. Notwithstanding the fact that we are only 100 days away from the Scottish election, at heart we all want the Bill to be as good as it can be.

[David Mundell]

I am afraid that I do not understand the logic of the hon. Gentleman’s argument, because his so-called reasoned amendment suggests that the Bill is “unacceptable”. The logic of his argument is that if he does not succeed in making the amendment—and he must accept that he is unlikely to do so—he will be unable to support the Bill in an unamended form.

[Stewart Hosie]

It is rather obvious that we are seeking to make the Bill better. In its current form it will not work, and I will explain why in a moment. I do not believe that it will meet even the honourable objectives that the Government have set out.

[David Mundell]

I think that the House deserves some clarification from the hon. Gentleman. If the amendment that he is promoting does not prevail and the Bill progresses in essentially the same form, perhaps with only some minor amendments, is he saying that his party will not accept it?

[Stewart Hosie]

I now see what the Minister is asking. I have every confidence that, when we coalesce in Committee, the common sense of Members from all parties will lead to a number of successful amendments that will improve the Bill, perhaps by addressing the weaknesses in the financial powers, for example, to which the hon. Member for Kilmarnock and Loudoun alluded. We will wait until the subsequent stages before deciding on the Bill, which might have been changed substantially by then.

[Cathy Jamieson]

Will the hon. Gentleman give way?

[Stewart Hosie]

I will take one more intervention before starting line 1 of my speech.

[Cathy Jamieson]

My understanding was that the hon. Gentleman indicated earlier that he would divide the House on the amendment, the last line of which states that the House

“considers the Bill as a whole to be unacceptable.”

Given the spirit of consensus that appears to be breaking out, will he now consider withdrawing the amendment so that we can move forward on the basis of consensus?

[Stewart Hosie]

The arguments in favour of the reasoned amendment will be made and they will explain, I hope with some support, why there are flaws in the Bill.

The Bill contains two fundamental fiscal measures: first, the reduction in the basic higher and additional rates of income tax by 10p, and the setting of a Scottish rate to compensate for that; and secondly, the availability of limited revenue and capital borrowing powers. Revenue borrowing will fill a part of the gap left when revenue decreases and a limited increase in capital borrowing will enhance direct capital investment.

However, the income tax powers are inadequate and include an in-built, long-term deflationary bias in the Scottish budget. The borrowing powers, particularly the revenue powers, are so tightly controlled that they are unlikely to be effective in delivering the sensible outcomes that many of us want. It is also worth noting that even the devolution of the income tax, the small stamp duty land tax and the landfill tax means that the Scottish Parliament will still have direct control of only 15% of the taxes raised in Scotland, with the remaining 85% accruing directly to London. I do not intend to talk about full fiscal autonomy, which there has been some talk of, but as a comparator we can look to the Basque country, which has been mentioned. It controls around 86% of its revenue.

I want to concentrate on the specific problems with income tax provisions. Receipts are sensitive to changes in economic circumstances and might fall dramatically in a downturn, as I will explain later. That presents an instability to the budget in Scotland, because we are talking mainly about income tax and the shortfall that would not be matched by the Bill’s provision of very limited borrowing powers. Growth in income tax revenue is low when compared with that of total tax revenue, and that is obviously deflationary, because only the modest growth in income tax will accrue to the Scottish Parliament, with the higher growth in total tax accruing still to London.

The figures between 2004-05 and 2008-09, for example, show that total tax revenue increased by £13.7 billion, but under the proposed plan the Scottish Government, although they control 15% of the tax, will receive only 9% of the increase. That automatically begins to squeeze the Scottish budget. Even within income tax, the most significant growth comes from the higher rates, and most of that growth will not be available to Scotland.

Historically, higher rate taxpayers account for a larger share of the growth in tax receipts, and therefore most of the growth in income tax receipts will accrue directly to Westminster, not to Scotland. We might, in fact, receive a declining share of Scotland’s income tax yields, because we are assigned half the basic rate, one quarter of the 40% rate and only 20% of the 50% rate. The impact of that deflationary bias can best be demonstrated by assuming that the powers had been in place since 1999-2000. Since then, the impact of the shortfall against forecast departmental expenditure limits would have represented an accumulative cut of about £8 billion.

[David Mowat]

I understand the hon. Gentleman’s point about a deflationary bias vis-à-vis the total tax take, but, in comparing the proposal before us with the status quo, what is relevant is the increase in income tax versus the increase in public spending. That is the basis on which the current Barnett allocation works, and on that basis Scotland is likely to do better in the short term.

[Stewart Hosie]

That is not necessarily true, and we need to look at both these measures: the growth in income tax versus the growth in total tax, and the percentage of the share of growth that we receive from income tax alone, owing to how it will be assigned to Scotland, with most of the higher parts being accrued still by the UK, where growth is likely to be higher.

[Anas Sarwar]

Does the hon. Gentleman accept that, under the arrangement imposed by the Bill, we would share not only the potential benefits, but the potential risks?

[Stewart Hosie]

Notwithstanding the deflationary bias, there might be growth in some elements of income tax revenue, but in terms of sharing risks the downsides for Scotland are much greater. In an intervention, I said that, if a future Scottish Government chose, for example, to reduce income tax to stimulate economic growth and it worked, they would take the hit in reduced income tax revenue, but the UK Government would benefit from the additional corporation tax yield. There are probably more downsides than upsides, because the range of devolved taxes is limited and, in cash terms, involve almost exclusively income tax.

The other problem is that the provisions fall foul of not being fully devolved. Income tax rates do not stand on their own; they must be looked at alongside allowances and thresholds, neither of which is being devolved. So the consequence of a significant change, in particular the UK Government’s plan to increase personal allowances to £10,000, which in principle is a very good policy, could mean a reduction in funding to Scotland of between £800 million and £1 billion a year.

[Iain Stewart]

Will the hon. Gentleman give way?

[Stewart Hosie]

One second.

I am sure that such a change will not be allowed to happen, but UK Governments have announced 17 changes to income tax since 2007, and they would have affected the proportion of income tax revenue or receipts assigned to the Scottish Government. Those changes included not only the big headline splash on the £10,000 threshold, but 16 others, each of which would have affected the assignation of receipts to Scotland.

Even if the provisions did not result in a real-terms cut to the Scottish budget, which I believe they do, and even if they did not create an in-built deflationary bias, which I believe they do, they would still provide an unstable platform for the Scottish Government, precisely because of the volatility of income tax receipts in difficult times. At no time was that clearer than between 2007-08 and 2009-10, when income tax receipts fell by 7.3%. Over those two years, that would have led to a drop in Scottish revenue in excess of £1 billion, and that is presumably the point at which the revenue-borrowing powers are meant to kick in and help. I shall take the hon. Gentleman’s intervention now, because the next part of my speech is complicated.

[Iain Stewart]

I want to return to the hon. Gentleman’s point about changes to income tax allowances and other changes to the UK rates of income tax that would have a consequential effect. If I have read the Command Paper correctly, there will be a no-detriment rule. Therefore, if a change in the allowance structure has a consequential effect, the block grant will be adjusted appropriately.

[Stewart Hosie]

That is what the Command Paper says, but because the Barnett rules have the effect of squeezing income, we will have to see precisely how the no-detriment clause works. Will it be an up-front no-detriment clause that pays against forecasts, or will it be retrospective and pay only if the estimate be lower than the forecast? None of that is at all clear yet. That is precisely the kind of issue that we want to probe with more detailed amendments in Committee.

The limited borrowing powers are slightly poorly designed and would constrain the Scottish Government, rather than assist them. Fundamentally, the borrowings can be made not against forecast reductions in revenue, but against reconciled outturn receipts 12 months after the end of the financial year. That means that revenue borrowing cannot even act as an automatic stabiliser to fill the tax gap during a downturn—something that every party accepts is necessary and supports. In short, the powers will expose the Scottish Government to the full negative impact of the economic cycle, rather than present them with the ability to mitigate those problems.

Secondly, revenue borrowing will be capped at £200 million in a single year and at £500 million in total. Therefore, even if the timing of the borrowings could have been sorted out, the limits would have been inadequate to close the revenue gaps in 2008-09 and 2009-10, when the calculated budget shortfalls were £400 million and £800 million respectively. That might be what the hon. Member for Kilmarnock and Loudoun meant when she referred to the economic parts of the Bill.

Thirdly, the repayment of borrowings within four years almost certainly means that repayments will have to be made at precisely the wrong point in the economic cycle. To make that point more solid, I should explain that the proposals would have required the revenue borrowing needed to cover the shortfalls between 2008-09 and 2009-10 to be repaid in the current comprehensive spending review period, when the Scottish block grant is already under pressure from proposed cuts of more than £3 billion. Borrowing and repayment should be possible over the entire economic cycle and should not have arbitrary timelines attached to them. Cyclical borrowing can mitigate volatility, but the proposals will generate additional volatility in future budgets.

The highly limited revenue borrowing powers that are proposed will be further constrained because the first 0.5% of any shortfall—about £127 million in 2014-15—will have to be found from cuts in the cash reserve before retrospective revenue borrowings can even be found.

The second borrowing power in the Bill is for capital expenditure. It is welcome, but could be improved. The cumulative borrowing total that is set out is £2.2 billion. That is quite low compared with recent Scottish Government investment of more than £3 billion a year. Borrowing in any year will be limited to 10% of the capital DEL—approximately £230 million by 2014-15—not the total budget. For example, a replacement Forth crossing costing between £1.7 billion and £2.2 billion would use up the entire additional capital borrowing, if we were able to secure it under the constrained limits set out by the Treasury. The only way to increase the limit to allow additional borrowing would be for the UK Parliament to agree to a legislative amendment. I am not sure that that is the best approach for securing long-term sustainable capital investment.

The borrowing powers in the Bill will limit the Scottish Government to certain types of borrowing. They will be able to use loans, rather than bonds or other instruments that would provide greater flexibility. Transport for London, which is a local authority in respect of its borrowing powers, is currently issuing commercial paper worth £7 billion for Crossrail and other projects. Birmingham city council issued paper to the tune of £250 million in 2006, and it seems passing strange that what should be seriously enhanced powers for the Scottish Parliament would not even put it on a par with TFL or Birmingham city council in its ability to raise cash through commercial paper for important national infrastructure works.

We are also concerned, like the hon. Member for Kilmarnock and Loudoun, that the Bill might not provide access to capital quickly enough to meet Scotland’s needs. The proposal is that access will commence from 2013, subject, as we heard earlier, to Treasury approval on a per-project basis. In the face of the budget cuts and the urgent need to invest in infrastructure, that is not soon enough.

The remaining tax proposals in the Bill are limited, although welcome. I have to say, however, that the Conservatives appear to have U-turned on some of the taxes that Calman said should be devolved. As I said, this is not a dry, academic exercise, and we would like stamp duty to be incremental, so that people do not pay the full whack for hitting the threshold. I am glad that responsibility for that is being devolved. It was worth £593 million in Scotland in 2008-09, but that was only 1.4% of all the non-North sea revenue raised in Scotland.

[Fiona O'Donnell]

The hon. Gentleman has been very reasonable in acknowledging the parts of the Bill of which he approves. Would his amendment not therefore have been more reasonable if it had said “on the whole” rather than “as a whole”?

[Stewart Hosie]

There are forms of words that can be accepted, tabled and selected and forms of words that cannot. I stand by the amendment, because it is important to challenge the Bill in areas in which we do not believe it comes up to scratch, and it would appear that many of our concerns are shared among the parties. To have a dry, sterile debate about the words in the amendment rather than its substantive nature does the Labour party no good. That is the only time I have been partisan in my entire speech, and I will stick to that.

[Ian Murray]

rose—

[Anas Sarwar]

rose—

[Stewart Hosie]

I am going to go on with my speech.

We would like the landfill tax to be used to support waste separation at source, recycling, waste minimisation and packaging reduction, so we welcome its being devolved. However, at £85 million, it represents only 0.2% of Scotland’s non-North sea revenues. We welcome parts of the Bill, but there are significant weaknesses and flaws in it, and I believe that I have explained the potential deflationary bias in its main economic powers.

I have said that there are bits of the Bill that we like and bits that we need to change, and it is hugely disappointing that some of the Calman tax proposals have been excluded. The Government have decided not to devolve air passenger duty or aggregates duty. They argue that since aggregates duty is subject to challenges at EU level it cannot be devolved, but had it been devolved, the Scottish Government would have been required to take exactly the same cognisance of an EU decision as the UK Government. The same applies to other taxes. The Government argue that air passenger duty is under review and cannot be devolved, but the whole purpose of devolving responsibility is to allow the system to be different if it is sensible or necessary. They should devolve the matter first and then have the review in England. If the Scottish Government decided that they needed to have a review, they could do so in their own good time.

I am further disappointed that, as the right hon. Member for Stirling (Mrs McGuire) said, the Calman proposal on revenue from savings and dividend income was not included in the Bill. That would have been extremely important because of the link with income tax, and because of the complexity of the rates about which she spoke.

We will not stand in the way of the Bill, although we have set out a series of issues in our reasoned amendment.

[Anas Sarwar]

The hon. Gentleman has been very generous in giving way. He says that he will not stand in the way of the Bill, but the amendment clearly states that the SNP

“therefore considers the Bill as a whole to be unacceptable.”

That means that if the amendment is not accepted, he will vote against the Bill and against new powers for the Scottish Parliament. Is that the wording in the amendment wrong, or is it just the wrong politics from the SNP?

[Stewart Hosie]

We are 10 years into devolution. We have a Scottish Parliament, of which everyone speaks highly. The Bill purports to devolve some significant powers and give additional responsibility, which is good. However, those powers are not good enough. If all Labour can do is snipe, “They didnae do that, they didnae do this,” rather than consider the substantive issues—[Interruption.] I shall tell hon. Members what we will do: we will press our reasoned and reasonable amendment to a vote, but we will not oppose the measure. I hope that, when we deal with the matter seriously, through amendments on issues that we have identified in common, we will have less Second Reading, pre-election banter and make the Bill much better.

17:14

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The hon. Member for Dundee East (Stewart Hosie) mentioned banter, and before I deal with the substance of the debate, I wish my hon. Friend the Member for East Lothian (Fiona O’Donnell) a very happy birthday. She made an excellent speech, despite the rather churlish sedentary comments of another hon. Member. It was not quite as good a speech as she made last night—but for those who missed that particular speech, I am afraid that it is not in Hansard, which is probably just as well.

I welcome the opportunity to speak about the Bill, which will strengthen devolution and increase the accountability of the Scottish Parliament to the people of Scotland. It will build on the historic work of the Labour Government in establishing the Scottish Parliament.

I campaigned for a Scottish Parliament as a teenager in 1997, even though I was not old enough to vote in the referendum. In the past decade, devolution has proved to be the right form of governance for Scotland. The Parliament has delivered free personal care for the elderly, guaranteed a nursery place for every three and four-year-old and led the way for the rest of the UK, as my hon. Friend the Member for Glasgow East (Margaret Curran) said, by introducing the smoking ban, among other measures.

The Scottish Parliament has been a great success, but after a decade of devolution, it was time to review how it works in practice. That is why the Labour Government established the Calman commission in response to the cross-party calls in the Scottish Parliament. The exception was, of course, the Scottish National party, which refused to have anything to do with those much-needed discussions.

Calman made several recommendations, including on tax-raising powers and responsibilities for capital borrowing. The Scottish Government have been accountable for spending taxpayers’ money for the past 12 years, and it is now appropriate that they will be accountable for how it is raised. The powers will increase the proportion of revenue that the Scottish Parliament raises from around 15% to 35% and give the Parliament the ability to borrow nearly £3 million in capital and revenue expenditure. Greater powers over taxation will give Members of the Scottish Parliament a significant ability to stimulate sectors of the Scottish economy.

[Pete Wishart]

I am sure that the hon. Lady listened carefully to my hon. Friend the Member for Dundee East (Stewart Hosie) when he explained his problems with the Bill. He described a deflationary bias that is built into the heart of its financial provisions. Why does the hon. Lady not think that there is a deflationary bias? How is there no deflationary bias in the proposals as they stand?

[Gemma Doyle]

If the hon. Member for Dundee East (Stewart Hosie) would like to discuss that with me, I would be happy to do so when he is in the Chamber or on another occasion.

In addition to new powers on funding, Calman also recommended devolving powers to regulate air weapons, set the drink-drive limit and determine national speed limits. The inclusion of the transfer of those powers in the Bill is welcome. However, some points of concern obviously remain, such as the aggregates levy, food labelling and charity registration. We would welcome an update from the Under-Secretary on those matters. On the whole, the Bill is the right approach to strengthening devolution and preserving the Union.

In addition, the vast majority of Scots want that approach. Polls show that most want more powers for their Parliament while remaining within the UK. Indeed, some might say that Scottish people know that they have the best of both worlds: an effective Parliament that enables them to find Scottish solutions to Scottish problems while being part of the fifth largest economy in the world.

As the nationalists encourage us to engage in flag waving and sentimentalism, we should keep sight of the vital importance of our economic and cultural partnership in the UK. As I have already mentioned, Calman was established as a consequence of cross-party support, but it did not receive unanimous backing. Far from seeking to strengthen devolution within the Union, it is the ultimate goal of the SNP to break up Britain and to break the historic, cultural and economic ties that bring strength to Scotland and breadth to Britain.

Rather than engage in the process of making the Parliament stronger, the SNP chose to indulge in its own national conversation, as my hon. Friend the Member for Glasgow Central (Anas Sarwar) mentioned. By its own admission, it spent nearly £2 million on a conversation with itself on the terms of a referendum on full independence, which would have cost £9 million but was later abandoned anyway. That was a complete waste of money.

So obsessed is the SNP with its separatist agenda that it refused to accept that most Scots do not want independence. The SNP does not understand that the priorities of ordinary Scots are protecting and creating jobs, better schools and hospitals, and making our communities safer. That is why Scots are not listening to the SNP any more.

[Ian Murray]

My hon. Friend mentioned the SNP obsession with independence. Does she agree that it is a sad indictment of the SNP that it was so desperate for a Conservative Government—against the wishes of the Scottish people—further to advance its independence agenda?

[Gemma Doyle]

That is very worrying. Before the general election last year, Alex Salmond in fact said that he would prop up a Tory Government if necessary, and as such I agree with my hon. Friend. When I talk to people in my constituency in West Dunbartonshire—

[Mr MacNeil]

Will the hon. Lady give way?

[Gemma Doyle]

Not at the moment.

People in my constituency tell me that their biggest concerns are about jobs. There are reports that there could be 1,700 local redundancies—[Interruption.] That illustrates the difference between Labour and SNP Members. I am talking about jobs in my constituency and not about independence, which is why I am not giving way at the moment. My constituents are concerned that there could be 1,700 local redundancies in my constituency alone as a result of the actions of this Tory-led Government. They are concerned about the impact of the VAT increase, spiralling fuel price increases, and the effects of cuts in tax credits and child benefits on their families. They fear the impact on local hospitals and their children’s schools of the SNP’s cuts in teachers and NHS staff.

[Mr MacNeil]

Would the hon. Lady prefer that powers over aspects of Scottish life that are important for keeping jobs in her constituency and my constituency were controlled in the Scottish Parliament, or would she prefer them to be controlled by the Tory-Liberal Government here in London? Does she prefer the Scottish Parliament or the Tory-Liberal Government?

[Gemma Doyle]

At the moment, I am afraid that I am not too keen on either, but we must work in both Parliaments.

People in my constituency do not share the SNP’s obsession with the constitution, which is another reason why Scots do not listen to the SNP anymore. Who can blame them, given its record in government? Before the Scottish election in 2007, the SNP promised the earth to the people of Scotland, but it has broken promise after promise. It broke promises on schools and promises to scrap the council tax. Its promise to write off student debt and many others were also broken.

People are furious that the SNP Government are doing the Tories’ job for them in Scotland. They are repeating the mistakes of the Thatcher years by cutting key economic budgets, and by cutting teachers and NHS staff by thousands.

[Mr MacNeil]

Will the hon. Lady give way?

[Gemma Doyle]

I have already given way to the hon. Gentleman, so may I make some progress please?

One reason why Scots voted for devolution in ’97 was that they lived through a Tory Government in the ’80s who did not care about us, and who indeed used Scotland as a testing ground for their most reviled policy—the hated poll tax. The establishment of the Scottish Parliament should mean that we in Scotland have some defence against the worst excesses of any Tory Government, but that will not happen now that we have an SNP Government in Scotland.

People in my constituency have been hit by an SNP double whammy. An SNP-run council is mounting an attack on the most vulnerable by imposing unfair charges on the elderly and disabled, and an SNP Government are making cuts to local services that are deeper in my area than across the rest of Scotland. The figures bear that out. The SNP in government has seriously failed the people of Scotland and Scots continue to reject separation in massive numbers. As the SNP continues to pursue its obsession with separation, it becomes more and more out of touch by the day. That was highlighted by the hon. Member for Perth and North Perthshire (Pete Wishart) when he spent his time failing to speak to his amendment, but talking about Antarctica and caravans.

[Pete Wishart]

It is really sad that we are back to incoherent ranting in interchangeable speeches from Labour Members. Will the hon. Lady talk about the Bill? What amendments would she like to see to improve the Bill? Where can we achieve cross-party consensus to achieve a powerhouse Bill? What valuable contribution will she make in Committee to improve the Bill?

[Gemma Doyle]

Just before I gave way, I mentioned the hon. Gentleman’s amendment, which I think was very generous of me, given that he did not speak to it at all.

The Calman commission concluded that the real way to strengthen devolution to make a real difference to the everyday lives of Scots is to give the Scottish Parliament some specific additional powers and some more responsibility for tax raising. The test of this Bill is whether it delivers those things effectively. I remain concerned about a few particular aspects of the Bill, but I hope that detailed scrutiny will make it stronger. On the whole, I believe that it will consolidate devolution and build on the transformation of the governance of Scotland delivered by Labour in 1999, and I look forward to supporting its progress through Parliament.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

On a point of order, Mr Deputy Speaker. Could you clarify the procedural consequences if the House were to vote in favour of the SNP amendment? Would it mean no Second Reading for the Bill and, therefore, no Committee stage?

[Mr Deputy Speaker (Mr Nigel Evans)]

If the amendment were passed, the Bill could go forward—[Interruption.] I know what the hon. Gentleman is saying, but we would still go on to the main motion. He is talking about hypothetical situations. Let us see whether the amendment is pressed to a Division and what then happens.

17:27

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to be able to make some remarks following this interesting and wide-ranging debate, which has been sometimes informed and often lively. I am sure that the Minister will wish to respond to specific points raised by hon. Members, so I shall endeavour to be concise.

In the opening speech, the Secretary of State set out the background to this Bill and the Calman commission that preceded it. Some hon. Members, in various capacities, have had some familiarity with the Calman commission over recent years, including the motion in the Scottish Parliament to establish the commission; its interim report; the report of the expert group on finance led by Anton Muscatelli; the final report by the commission; the White Paper before the general election; and the Bill published late last year. I pay tribute to the contribution made by the Secretary of State’s officials in the Scotland Office and the often complex work that they have done to get to where we are today.

As my hon. Friend the Member for Glasgow North (Ann McKechin) made clear, the Labour party here and in the Scottish Parliament supports and welcomes the work of the Calman commission which underpins this Bill. That process was, by and large, an extensive exercise in basing recommendations on evidence, something that is not always apparent in debates on this issue, which understandably arouse passionate views.

In his usual lively and energetic—albeit lengthy—manner, the hon. Member for Perth and North Perthshire (Pete Wishart) spoke of his concerns about the level of scrutiny of the Bill. I hope that he was reassured by contributions from many other Members. The fact that we have made clear our broad support for the Bill does not mean that there are not issues that we wish to press further in Committee and reflect upon. That is a much more mature approach at this stage than a blanket dismissal of the Bill. Points have been made by Members representing all parties that we will look to test in Committee over the next few weeks.

My hon. Friend the Member for Glasgow North West (John Robertson) mentioned similar points, and the hon. Member for Epping Forest (Mrs Laing) reminded us of her memories of the scrutiny of the Scotland Act 1998 as it progressed through the House. I am sure that the Government Front-Bench team will look forward to her continued involvement in Committee over the next few weeks. Importantly, we will also reflect on the scrutiny work being carried out by the Scottish Parliament committee and the report of the Select Committee on Scottish Affairs on the Scotland Bill. My hon. Friends the Members for East Lothian (Fiona O'Donnell) and for Kilmarnock and Loudoun (Cathy Jamieson) are members of that Committee, as is the hon. Member for Banff and Buchan (Dr Whiteford), and no doubt they will provide robust scrutiny of the views and opinions of some of those whose work is prayed in aid by those who are against aspects of the Bill.

I would like to touch on a few of the points made during the debate. The hon. Member for Carlisle (John Stevenson) spoke from the perspective of a Scot who represents an English constituency. As an Englishman with a Scottish family and a Scottish constituency, I share his view that differences arising from devolution are not to be scoffed at, and in fact provide an opportunity for jurisdictions in different parts of the United Kingdom to learn from each other. He mentioned the cross-border issues that will particularly affect his constituents, and I know that they will affect the constituents of both Scotland Office Ministers as well. In particular, he mentioned drink-driving and speed limits. I am concerned that the largely thorough evidence brought to Calman might not have been as comprehensive in that area as in others. I am sure that we will need to consider in Committee the lack of evidence in those areas from key organisations and get some reassurances from Ministers, particularly on how the practical arrangements for cross-border issues will work.

The right hon. Member for Gordon (Malcolm Bruce) and my hon. Friend the Member for Livingston (Graeme Morrice) made the important point that there is not currently—and nor has there ever been—any appetite in Scotland for separating from the rest of the United Kingdom. The Scottish National party might think that there is, but as yet it has failed in every electoral test to convince the public to follow that course. From that perspective, it is therefore important that we use this opportunity to strengthen the Scottish Parliament as a part of the United Kingdom. That is in the interests of our constituents and accords with their views every time it has been tested.

My hon. Friends the Members for Edinburgh North and Leith (Mark Lazarowicz) and for Glasgow North referred to the omission of the Calman commission recommendation on charity regulation. I understand that the Command Paper makes it clear that a review of charity law is being undertaken, but that recommendation was present in the White Paper and is another point that we will wish to consider in Committee. My hon. Friend the Member for Livingston also referred to the omission of the Calman recommendation on food standards. As I am sure that Ministers are aware, the Scottish Retail Consortium has expressed its disappointment on that point. Again, we will look at the outcome of the scrutiny of both the Holyrood committee and the Scottish Affairs Committee to see how that can be rectified in due course.

My right hon. Friend the Member for Stirling (Mrs McGuire) and my hon. Friend the Member for Glasgow East (Margaret Curran) highlighted the concerns that remain about the lack of detail in the definition of firearms. That will also require further work; again, I hope that we will obtain assurances from Ministers in Committee.

The hon. Member for Milton Keynes South (Iain Stewart), who has spent some time in my constituency—he stood there unsuccessfully in the Scottish Parliament elections in 1999—rightly highlighted an important point about how the Barnett formula is used as shorthand for other issues. I am sure that he will spend some time speaking to his hon. Friend the hon. Member for Warrington South (David Mowat) about that. Importantly, those issues arise from a concern about the lack of accountability for the Scottish Parliament, an issue that the Bill seeks to address.

My hon. Friend the Member for Glasgow North East (Mr Bain) referred to the detailed examination that underpins the financial propositions in the Bill. He was right to do so, and I would recommend that those Members who are interested look at the detailed work of the finance group on that issue. Importantly, my hon. Friend also drew the distinction between this constitutional Bill, which has been the subject of lengthy cross-party discussion and a process that translated across from one Government to another, and some of the other constitutional measures that this Government have introduced. I hope that the Government will reflect on that in all seriousness, because the best way of looking at detailed constitutional issues is to seek to take people along, rather than rushing things through quickly and then finding oneself in difficulty elsewhere.

My hon. Friends the Members for Kilmarnock and Loudoun and for Glasgow East spoke reflectively and knowledgeably from their perspective as sitting Members of the Scottish Parliament and former Ministers in previous Administrations in Scotland. They also reflected on the important issue—an issue that, although not in the Bill, is reflected in the Command Paper—of the relationships between the UK Government and the devolved Administration, and between the Parliaments. Those are important issues for us all to reflect on and get right, because at various points in the past there have been some perhaps rather more political interventions in those relationships and how they have worked, which have not always been to the good of the people of Scotland. My hon. Friends also both spoke about issues of key importance to their constituencies, on the basis of a great deal of experience.

The Labour party in Scotland believes in a strong Scottish Parliament and a strong Scotland. I hope that we will have the opportunity in a few short weeks to elect a strong Scottish Administration, but to do so as part of the United Kingdom, sharing risks and resources, as others have said, and because that reflects the views of the vast majority of the people of Scotland. As my right hon. Friend the Member for Stirling and my hon. Friend the Member for Kilmarnock and Loudoun rightly pointed out, that is what the people of Scotland have confirmed at every electoral test, including and since the referendum.

We will support the Bill on Second Reading. We support the process that underpins it and the degree of involvement that led to that, but there are also issues that we wish to test. There are issues that we will wish to reflect on following the scrutiny of the Holyrood committee and the Select Committee on Scottish Affairs. We will look to test those in Committee, perhaps by way of amendments, but we will do so in a serious, reflective and responsible way. We come to this measure as a party that believes in a Scottish Parliament as part of the United Kingdom, seeking not to undermine devolution, but to support and develop it. We look forward to the opportunity of doing so in the weeks to come.

17:38

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I begin by thanking all right hon. and hon. Members for their contributions to the debate. I shall try to deal with the detail raised in individual contributions as time allows.

Today’s debate is a testament to the significance of the Scotland Bill for the future of Scotland and the United Kingdom. Although the opening of the Scottish Parliament in 1999 was quite rightly greeted with much fanfare—I was pleased to play my part in that day, along with the hon. Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Glasgow East (Margaret Curran)—there was, as has been said, a recognition at that time of the view, which was personified by the then First Minister, Donald Dewar, that devolution was a process rather than an event.

Equally, it must be recognised that this Bill is part of a process within that process of devolution. It is part of the Calman process. The Calman process is one that I have been involved in from the very beginning. It began back in 2007, when I joined the then Scottish Secretary, now Lord Browne of Ladyton and the Government deputy Chief Whip, and the three parties’ leaders at Holyrood, Wendy Alexander, Annabel Goldie and Nicol Stephen—I pay tribute to them, as did the hon. Member for Glasgow North East (Mr Bain)—in seeking to establish an independent review of Scottish devolution, 10 years on. I want to put on record the Government’s thanks not just to them, but to the right hon. Member for East Renfrewshire (Mr Murphy) and all those who worked with him, to Iain Gray MSP and Tavish Scott MSP, who joined us over subsequent months in the cross-party steering group to lay the groundwork on how to implement the recommendations that emerged from the review.

It gives me great personal satisfaction to be part of a new coalition Government who are seeing Calman through. I know that the Opposition remain behind the process, too, and I was pleased to learn that on his visit to the Scottish Parliament on 30 June last year, the current Labour leader said that

“we also recognise the need for Scotland to have an ability to vary its tax rates on the basis of the Calman commission proposals.”

I am glad there is at least one thing on the blank sheet of paper.

I welcome the considered remarks of the hon. Members for Glasgow North (Ann McKechin) and for Rutherglen and Hamilton West (Tom Greatrex). It was clear not just from their remarks but from many Back-Bench contributions from both sides of the House that this Bill will indeed receive due scrutiny in this House. Any suggestion to the contrary would be quite wrong.

Let me pick up on one or two of the points about taxation that the hon. Member for Glasgow North raised. I emphasise particularly that the Government, the Scottish Government and Her Majesty’s Revenue and Customs are working together through the high-level implementation group and other forums to ensure that the tax system works in a way that minimises administration for business and makes it is as easy as possible for Scottish taxpayers to operate.

Our clear view is that the system that allows people resident in Scotland for tax purposes to have a distinct Scottish tax code will deal with many of the issues that have been reported. For example, the notion that everyone in Scotland will be required to fill in an income tax return when they do not do so currently is without foundation. I am sure that we will be able to return to these issues when we get into detailed examination of the Bill and debate the precise definition of “a Scottish taxpayer”. I am sure that hon. Gentlemen and, indeed, my hon. Friends, will come forward with the many and varied occupations that could provide a basis for challenging the definition of being resident in Scotland. I was not expecting to hear a reference to stage hypnotists today, but this shows the variety of issues in respect of which we can debate whether they should be devolved or not.

[Pete Wishart]

Antarctica!

[David Mundell]

Of course, Antarctica is another issue—it became of interest to the Scottish National party only when it discovered that it might no longer be devolved. As became clear in the debate, SNP policy on it is not exactly clear.

The Calman process provides a great example of different political parties working together in the national interest, and I am sure that Opposition Members will in due course come to see the coalition Government in a similar light. If the Bill benefits from being cross-party, it also benefits from being cross-Parliament. I have no doubt that the Bill, and support for it, will be enhanced through being tested by the unique tricameral scrutiny to which it is subject—in this House, in the other place and in the Scottish Parliament.

I was extremely disappointed by the way in which Scottish National party Members derided the Scottish Parliament process of scrutiny, about which the hon. Member for Glasgow East spoke eloquently, and which is accepted as one of the great assets of the Scottish Parliament. As ever with the Scottish National party, however, the issue is not the level of scrutiny but whether the scrutineers agree with it.

[Stewart Hosie]

The Minister is wrong: there was no criticism of the process of Scottish Parliament committee scrutiny, which is a model, an exemplar, a fantastic system. The difficulty was the shameful way in which certain witnesses and potential witnesses were treated. I am happy to defend them against the committee involved, which treated some of them appallingly.

[David Mundell]

Anybody who reads the transcripts will realise that it was the way in which the evidence was given, and its quality, that was the issue in the sessions concerned. I look forward to the evidence of Scotland’s Finance Secretary when he is recalled to that committee. Given some of the comments of the hon. Member for Perth and North Perthshire (Pete Wishart), we will not take too many lessons from his party on respect within the context of a debate.

The commission’s initial task was to review

“the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom.”

As we have heard today, there is an overwhelming consensus in the House and in Scotland that the Bill lives up to that vision. It builds on the success of the first 11 years of the Scottish Parliament, and addresses Holyrood’s one critical flaw: the lack of revenue-raising power to match its spending power.

On the amendment, I defer to the House and the Speaker, who selected it, but I am not sure how to respond. It clearly states that the Bill, in its present form, is unacceptable, yet when Scottish National party Members are asked whether they support the Bill, and whether they will support it if it emerges from the parliamentary process in broadly the same terms, they are unable to give an answer. I am afraid that the amendment strikes me as no more than a stunt—an opportunity to say, “We opposed it,” while agreeing with it. It is absolutely ludicrous that a party, which has some worthy people in it—the worthiness of the views of many members of the SNP has been acknowledged—should come to the House and say, when additional powers for the Scottish Parliament are proposed, “No, we don’t want them. Because we can’t have our own way, we’re not going to support the Bill.”

[Stewart Hosie]

The Minister has not listened to the debate. We made it extremely clear that we will not stand in the way of any powers being devolved to Scotland. As the Bill stands, however, it has huge flaws and needs to be improved. That is a rather sensible thing to say, one would have thought, on Second Reading.

[David Mundell]

In that regard, the hon. Gentleman’s comments are as incoherent as his comments in relation to the financial provisions. The SNP stands against the Bill, and will divide the House on the basis that the Bill is unacceptable. If the motion is carried, that, as Mr Deputy Speaker has indicated, would be the basis on which the Bill went forward. The position set out by the SNP is incoherent not just financially but constitutionally.

Let me now deal with some other, more sensible contributions. We heard from a number of old hands—old in terms of the devolution process, although not, of course, in terms of years. We heard from my hon. Friend the Member for Epping Forest (Mrs Laing), who described her experience of the scrutiny of the original Scotland Act. We also heard from the hon. Member for Central Ayrshire (Mr Donohoe), who is no longer in the Chamber, but who is a great supporter of devolution whenever the opportunity arises.

The right hon. Member for Gordon (Malcolm Bruce), who has campaigned on these issues for a long time and with some success, made a thoughtful speech. I can inform him that the United Kingdom Government as a whole will review charity law, and that, as we have made clear in the Command Paper, we felt that it would be better to enact the spirit of the Calman recommendations once that review had been completed in the rest of the UK.

A number of Members raised the question of changes in the income tax threshold. The Command Paper makes it clear that the Government would proceed on the basis of no detriment, and that any such changes would be accommodated in the block grant settlement.

I congratulate the hon. Member for East Lothian (Fiona O'Donnell) on the fact that she is celebrating her birthday, although I am slightly concerned that she should enjoy doing so in combat with some members of the SNP. During the course of the debate, I realised that there was an obvious gift for her: the book by my hon. Friend the Member for Milton Keynes South (Iain Stewart). As he revealed that he had a large number of copies, not only the hon. Lady but most of her constituents would be able to receive one.

My hon. Friend the Member for Carlisle (John Stevenson) made some important points about cross-border relations. As both the Secretary of State and I are well aware, people living in the border regions have long been able to cope with the differences on either side of the border. For instance, the well-established difference in the licensing laws that used to prevail did not cause any particular difficulties. The existing devolution settlement does not cause any difficulties, and the revised settlement will not cause any either.

The hon. Member for Livingston (Graeme Morrice) made the important point that strengthening devolution does not undermine the United Kingdom, but strengthens it. As well as giving us a précis of his book, my hon. Friend the Member for Milton Keynes South raised significant points about, for instance, pension plan payments. I can reassure him that the high-level implementation group involving HMRC is examining those issues at this moment.

My hon. Friend the Member for Warrington South (David Mowat) intervened on my hon. Friend the Member for Milton Keynes South on the subject of the Barnett formula, and was subsequently involved in a discussion of the subject. I accept that concern has been expressed about the system of devolution funding, but tackling the deficit is the Government’s top priority, and any changes would await stabilisation of the public finances. The current funding arrangements—in essence, the Barnett formula—are set out in an administrative agreement rather than in statute, but the financing mechanism in the Bill would apply equally well to another way of calculating the block grant. The Bill does not fix the Barnett formula in stone for the future. It neither rules in nor rules out reform of the Barnett formula in the future; indeed, it is designed to be flexible in relation to alternative approaches to funding.

The right hon. Member for Stirling (Mrs McGuire), a seasoned campaigner on these issues, made a number of important points. I can reassure her that the Government are not devolving taxation in relation to savings and unearned income, so most of the things about which she expressed concern will not come to pass. The hon. Member for Glasgow North West (John Robertson), who is no longer in his place, has always been a staunch supporter of the nuclear industry, and he is to be commended for that. However, he will be aware that, after due consideration, the Calman commission concluded that there should be no change to the arrangements for new nuclear power stations in Scotland.

The hon. Member for Glasgow North East made an interesting point about a Scottish office for budget responsibility, and I look forward to hearing more about that in the next stage of the debate. As I have said on previous occasions, I very much welcome the hon. Members for Glasgow East and for Kilmarnock and Loudoun to this House, because they bring a great depth of experience of the Scottish Parliament and of being in government in Scotland—in coalition with the Liberal Democrats, of course. I reassure the hon. Member for Glasgow East, in her absence, that the Government are committed to the Bill’s proposals on airguns and that I listened to the powerful case she made in that regard. Finally, I did welcome the contribution of the hon. Member for West Dunbartonshire (Gemma Doyle). However, although she is one of the younger Members of this House, it appeared that she was somewhat stuck in the 1980s.

My final remarks are for those people who have opposed this process, who have sat on the sidelines every time they have had an opportunity to contribute to this process and who are only able to come forward at the last minute with carping complaints. What I say to them is—

[Mr MacNeil]

rose—

[David Mundell]

I have no time to give way.

I ask those people to reflect, in the few minutes left, on the fact that if they support this process and if their party supports more powers for the Scottish Parliament, they should not press their amendment to a Division. Interestingly, we heard a lot of quotes about academics who support the Calman process but, as Scottish Members will have noted, certain academics were very absent from today’s debate.

I want to finish on a specific financial point. It is absolutely essential that we scotch the idea of an £8 billion deflationary bias that been mentioned repeatedly but has no factual basis. There is no deflationary bias about the financing mechanism that is at the heart of the Scotland Bill. The Scottish Government’s assertions are based on a period when public spending rose faster than tax receipts—the very activity that resulted in record levels of borrowing and debt. That is unsustainable, and it is simply incorrect to infer that the result from that period equates to a deflationary bias. If implemented now, the means of financing would in fact benefit Scotland during the fiscal consolidation. I urge hon. Members to support the Bill.

Question put, That the amendment be made.

17:59

Division 184

Ayes: 5

---

Scottish National Party: 5

Noes: 252

---

Conservative: 191
Labour: 32
Liberal Democrat: 28

Question put forthwith (Standing Order No. 62(2)), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Scotland Bill (Programme)

Thursday 27th January 2011 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Scotland Bill:

Committal

1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee

2. Proceedings in Committee of the whole House shall be completed in three days.

3. The proceedings shall be taken on the days shown in the first column of the following Table and in the order so shown.

4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

TABLE

Proceedings	Time for conclusion of proceedings
First day
Clauses 1 to 9, Schedule 1, Clauses 10 to 12, Schedule 2, Clauses 13 to 23.	The moment of interruption on the first day.
Second and third days
Clauses 24 to 26, Schedule 3, Clauses 27 to 29, Schedule 4, Clauses 30 and 31, Schedule 5, Clauses 32 to 39, new Clauses, new Schedules, remaining proceedings on the Bill.	The moment of interruption on the third day.

5. Standing Order No. 83B (Programming committees) shall not apply to the proceedings on the Bill in Committee of the whole House.

Consideration and Third Reading

6. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

7. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which those proceedings are commenced, or one hour after they are commenced, whichever is the earlier.

8. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

9. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr Vara.)

Question agreed to.

SCOTLAND BILL (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purpose of any Act resulting from the Scotland Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided, and

(2) any increase attributable to the Act in the sums payable under the Scotland Act 1998 out of the National Loans Fund.— (Mr Vara.)

Question agreed to.

SCOTLAND BILL (Ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Scotland Bill, it is expedient to authorise—

(1) the imposition by virtue of a rate-setting resolution of the Scottish Parliament of charges to income tax in relation to the income of Scottish ratepayers,

(2) the making of provision, by Act of the Scottish Parliament, for imposing a tax to be charged on—

(a) the acquisition of an estate, interest, right or power in or over land in Scotland, or

(b) the acquisition of the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power,

(3) the making of provision, by Act of the Scottish Parliament, for imposing a tax to be charged on disposals to landfill made in Scotland,

(4) the amendment of the Scotland Act 1998 by Order in Council so as to—

(a) specify, as an additional tax about which provision may be made by Act of the Scottish Parliament, a tax of any description, or

(b) make any other modifications of the provisions relating to such taxes which Her Majesty considers necessary or expedient, and

(5) the payment of sums into the Consolidated Fund or the National Loans Fund.

In the Resolution, ‘rate-setting resolution’ means a resolution providing for a number which is to be added to the rate which would otherwise be paid by Scottish taxpayers, after the deduction of ten percentage points, to calculate the basic rate, higher rate or additional rate payable by those taxpayers for any tax year on income other than savings income and which is either a whole number or half a whole number.—(Mr Vara.)

Question agreed to.

Western Sahara

Thursday 27th January 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Vara.)

18:14

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I must first declare my interests, which are entered in the overseas visits section of the Register of Members’ Financial Interests. I am also chair of the all-party group on Morocco and the parliamentary link for the British Moroccan Association. I have been in touch with Western Sahara Campaign UK and Polisario and am grateful for their insights. I should make plain at the outset my admiration for Morocco, its history and people, and I am proud to represent the largest Moroccan expatriate community outside London.

I will spare the House the history and background of the Western Sahara dispute, which should be taken as read. I know that my hon. Friend the Member for Monmouth (David T. C. Davies) and the hon. Member for Islington North (Jeremy Corbyn) wish to speak in the debate, and my hon. Friend the Member for Hendon (Mr Offord) would have liked to contribute, as he attended the recent visit to Morocco and Western Sahara, but unfortunately he is unwell.

It seems to me that there are broadly three options for Western Sahara: the status quo, which has been described as “untenable” by the current UN special envoy, Christopher Ross; independence, which is unrealistic, according to Peter Van Walsum, the previous UN special envoy; and autonomy, which is the option we are left with. I will go through those options one by one.

I agree with Christopher Ross that the status quo is not an option. It is not an option for the inhabitants of the Tindouf camps or of the wider Maghreb, who continue to pay the price economically and socially. Violence in and around Laayoune in November, apparently whipped up by grievances over Sahrawi social conditions, left 11 officials and two civilians dead. We are told that the fingerprints of al-Qaeda in the Islamic Maghreb are not on that, just as there is no confirmed evidence of its complicity in the unrest in Tunisia and Algeria. Nevertheless, the status quo in Western Sahara offers an opportunity for fundamentalist terror groups to move out of their operating bases in the vast, barely governed spaces of Mali, Niger and southern Algeria.

There is no firm evidence of links between the Polisario and AQIM. Indeed, it seems unlikely that Algeria would be keen to support an organisation with formal links to AQIM. Nevertheless, the potential for fundamentalist terrorists to feed off poverty and grievance is clear. We simply cannot be complacent. In December, an arms cache attributed to AQIM was discovered by the Moroccan authorities in Western Sahara. It is vital that we shrink the space available to insurgents. We must always be vigilant for the sorts of opportunities that have been offered elsewhere.

I agree with Peter Van Walsum that independence is no option at all. We understand that the American and French Governments are at least sympathetic to Van Walsum’s position, and the UK considers Western Sahara’s status to be undetermined and disputed and has lined up behind the official UN position. Van Walsum was apparently replaced as UN special envoy because he said that independence was not realistic, which rendered him unacceptable to Polisario. Even if we agreed hypothetically with the principle of independence, we must consider whether it is practical or achievable. It would mean a country the size of Britain with a population smaller than that of Bristol. How could its Government guarantee internal and external security in a highly challenging environment without relying indefinitely on benign or malign foreign agencies? Would we be comfortable with such an entity becoming the client state of the People’s Democratic Republic of Algeria, which many human rights campaigners see as militaristic, closed and repressive? We must be careful about supporting the creation of states that are inherently unstable. We must also be cautious because of the security threat highlighted by the terrorism and insurgency centre run by Jane’s. Although it ranks Morocco’s counter-terrorism measures as “moderately effective”, it remains concerned about frontier security and unregulated migration.

In Europe, we are not disinterested bystanders. We have a stake in getting this right. Since the UK’s treaty obligations have rendered our borders porous, for practical purposes the southern Mediterranean coastline is our frontier. The recent trouble in Tunis and Algeria does not read across directly to Morocco, but in the Maghreb and in Egypt we have seen significant civil unrest in recent days, which is a reminder of the fragility of countries with young populations, high youth unemployment and poor living standards.

The third option is autonomy. In April 2007, Morocco unveiled its autonomy plan for Western Sahara. In part, it represented a compromise and, in part, it reflected wider governance changes involving the greater devolution of powers within Morocco itself. The UN Security Council, in its resolution of 30 April 2010, noted the proposal and commended the

“serious and credible Moroccan efforts to move the process forward towards resolution.”

In 2009, that was backed by the majority of US Congressmen and, in 2010, by the majority of the Senate.

America, which prides itself on being Morocco’s oldest ally, has been understandably supportive. It knows very well the benefits of a federal model and has in its history incorporated, annexed and otherwise acquired territory on a grand scale. The plan that remains on the table would establish a Sahara autonomous region within the Kingdom of Morocco. It would have considerable autonomy and certainly move in the direction of the UN’s support for what it calls

“self-determination of the people of the Western Sahara.”

Some have even said that the powers over matters excluding foreign affairs, defence and the national judiciary exceed those devolved to Scotland and Wales. My hon. Friend the Member for Monmouth might wish to comment on that in due course.

There are, however, problems. Enumerating the Sahrawis, the Sahrawi diaspora and the resident Moroccan population is a challenge that seems almost overwhelming. It failed completely in 2000, but the job has to be done under both the independence and autonomy options. The only way we get out of it is if we are prepared to accept the status quo.

The Moroccan Government have said that they will not entertain a referendum with independence as an option, but unless we exclude those people who have migrated since 1975, with the presumption that if we do so they will not enjoy the citizenship of any Western Saharan state, it seems unlikely that such a referendum will result in support for independence. That suggests that for Morocco the question of independence as an option is one mainly of principle, rather than avoidance.

Another sticking point is the extension of the UN mandate to include human rights. I think my Moroccan constituents would concur with the sentiments of two precepts in that respect, one secular, the other divine: “Be sure you’ve sorted the beam in your own eye before the mote in your brother’s”; and “Don’t make the perfect the enemy of the good.”

There was outrage here when the US tried to suggest that there should be UN human rights monitoring in Northern Ireland, so we can begin to see how Morocco, a proud country, should also resist, particularly when it perceives that its eastern neighbour with a more questionable record is left alone. The major human rights movements have a presence in Western Sahara, and both Malcolm Smart of Amnesty and Eric Goldstein of Human Rights Watch say that they have not been restricted in investigating the November violence. Morocco has come a long way, but perhaps the time has come in the interests of facilitating a lasting settlement for it to swallow hard and allow human rights monitors, thus defusing the claims of its opponents.

Morocco has earned much respect for its autonomy plan, and Rabat might do well to accept an extension of the mandate of the United Nations Mission for the Referendum in Western Sahara, or MINURSO, but it would be ludicrous if that happened without including the Tindouf camps in southern Algeria, where light desperately needs to be shone on darkness. The UK has a money interest, as it has contributed to the €165 million in humanitarian aid through the European Community humanitarian aid office, with the promise of more to come. We should worry, in the context of reported hardship in the camps, about aid money that might not end up where it is supposed to, because aid falls into disrepute when that happens—whether it is bilateral or through the fingers of Brussels.

We have a duty to ensure that we know much more about the camps, and who and how many people are in them, if that money is to continue to be spent safely and effectively. The King of Morocco has issued reassurances to the refugees of the camps and undertaken to treat them well, and we understand that there has been a significant trickle back to Western Sahara, a process that is likely to develop as confidence is built up on all sides.

Can the Minister say what actions the UK has taken to ensure the safety of the high-ranking Polisario official, Mustapha Salma? We have only unconfirmed reports that he has taken refuge in Mauritania, and his family are allegedly unable to be united with him, as they are confined to Tindouf. What are we doing to clarify the position with Algeria? Whatever our position on the autonomy plan, we must recognise that Mustapha Salma’s bravery, in defying Mohammed Abdel Aziz in order to support proposals that he believes are in the interests of his people, is admirable. His witness is a substantial contribution to what I believe to be gathering support for the autonomy plan.

So far, the UN special envoy process has presided over the status quo. Christopher Ross convened a meeting in December in New York and another last weekend, the outcome of which was another fixture for Geneva in February. We understand that that will focus on how family visits from the camps can more readily be achieved. What is the Minister’s view on monitoring in the camps? How can the UK help to facilitate the safe passage of refugees who wish to visit family members in Western Sahara?

What have Baroness Ashton and her EU External Action Service been doing to move matters on? If we have to have it, it might as well do something useful. Given that Morocco counts as Europe’s near abroad and that it has an association agreement with the EU, what progress has been made on security, migration and welfare?

Given that MINURSO’s mandate is up for reaffirmation in April, what discussions have the UK Government had with the permanent members of the UN Security Council on the Moroccan Government’s autonomy plan? What is the Minister’s attitude to that plan? I hope that the UK Government can join France and the US in being sympathetic.

18:26

[Jeremy Corbyn (Islington North) (Lab)]

I thank the hon. Member for South West Wiltshire (Dr Murrison) for allowing me three minutes to speak, given that this is a time-limited Adjournment debate.

I am the chair of the all-party parliamentary group on Western Sahara. I first raised what I believe to be the plight of the Sahrawi refugees in the House in 1984, and have raised the matter consistently ever since. This is possibly one of the longest-running sores in the world, although the Palestine situation is even longer running. For a moment, we should spare a thought for the people who have been living in refugee camps in Algeria for this whole time—we are now on the third or fourth generation of such families. We must recognise that they have a functioning elected Government in exile, a functioning parliamentary system, and effective representatives in this country and around the world through their political party, Polisario. Indeed, Lamine Baali is a very effective representative of the Polisario in this country.

When I last raised this matter in the House, I sought a meeting with the Minister. I am grateful to him for replying. I received a letter from him today in which he made one or two important points that I will refer to quickly. First, he said that MINURSO needs to continue. I think I am right in saying that that is the only remaining UN-mandated organisation that does not have a human rights requirement. I think that it must have a human rights agenda that it observes, so that the issues of human rights abuse, at least, can be dealt with.

Secondly, the Minister visited Morocco recently and I believe that he is due to go there again—I am sure he will tell me if I am wrong about that. What is his perception and that of our ambassador on the current position in el-Aaiun, where unfortunately there was a great deal of violence last year? I understand that a number of parliamentarians from Europe and elsewhere were refused access to the city, as were a number of media people. I sought and obtained a meeting with the Moroccan ambassador to discuss those issues, and I was assured that in future, parliamentarians would not be prevented from visiting el-Aaiun.

Thirdly, the EU fisheries agreement with Morocco expires on 27 January. I do not have a problem with the EU having a fisheries agreement with Morocco; I do have a problem with the idea that fish in the waters of Western Sahara should be taken by international fishing vessels, with the money being paid to Morocco and none of the benefits going to the Sahrawi people. That is an untenable position, which is of very questionable legality. I hope that this time, Britain will be prepared to block the EU fisheries agreement until it is recognised that without a resolution to the Western Sahara issue, the international community should not be making arrangements to take away the natural resources of Western Sahara any more than Morocco should be encouraging international companies to take away the mineral-rich resources in Western Sahara.

This is a post-colonial issue. It is the last remaining unresolved issue in Africa. The Government of Western Sahara are supported by Western Sahara Campaign UK and the African Union. By law, there has to be a resolution of the conflict in agreement with the wishes of the people of Western Sahara. There have been delays, obstructions and obfuscation about getting a referendum of the people of Western Sahara to bring about a solution, and I hope that the Minister will say that Britain is going to stand up for the rights of those people so that there can be a resolution based on international law, respect for the rights of the Sahrawi people and a free-standing referendum.

18:30

[David T. C. Davies (Monmouth) (Con)]

I will, of course, be extremely brief, because I know that the Minister wants to respond.

I should like to declare that I was in Laayoune about two weeks ago as a guest of the Moroccan Government, along with several other parliamentarians. There were no problems at all with getting access and moving around, and in our discussions with MINURSO, it made it clear that at no time had it had any problems in that regard. It made it pretty clear to us that it felt the Moroccan Government had behaved well on human rights issues in the area. That came from a completely independent body, and we should take it seriously.

The dispute is long running, and it is important for all of us that it is settled. I may not be an expert on north Africa, but I know a thing or two about devolution and the need to compromise sometimes. That is why it is important that we look very favourably at the autonomy agreement, which would provide far more autonomy than has been granted to Wales or Scotland. In fact, I would definitely have opposed it had it been offered in Wales or Scotland, because it is a big step on the route to independence. If that is what is required to settle the problems of the region, and to allow the Sahrawi people the access to human rights and growing wealth that we have seen around the rest of Morocco, we should view it favourably.

18:31

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

I congratulate my hon. Friend the Member for South West Wiltshire (Dr Murrison) on securing the debate and on allowing the contributions of the hon. Member for Islington North (Jeremy Corbyn) and my hon. Friend the Member for Monmouth (David T. C. Davies). All three contributions indicated the seriousness with which the issue is taken on both sides of the House and the long-standing commitment to it of a number of Members. As the hon. Member for Islington North said, the problem is long running and difficult, and it exercises us all. I appreciate the way in which the House is dealing with it tonight.

The disputed territory of Western Sahara seems, in many ways, an intractable problem. However, the fact that it is difficult does not mean that we should not try to make progress. I share the concern of my hon. Friend the Member for South West Wiltshire about the unresolved status of Western Sahara, because the absence of a settlement prevents regional integration and co-operation on a range of important issues. The Government are committed to the United Nations Security Council position, calling for a just, lasting and mutually acceptable political solution that provides for the self-determination of the people of Western Sahara.

Sovereignty over Western Sahara has been contested between Morocco and the Polisario Front, the Sahrawi movement for independence, since 1975. The UN brokered a ceasefire in 1991 and set up MINURSO, the United Nations Mission for the Referendum in Western Sahara, as a peacekeeping operation with the intention of facilitating a public vote on the future of the territory within six months. Some 20 years later, that referendum is yet to be held and MINURSO’s mandate continues to be renewed on an annual basis by the UN Security Council.

The UK fully supports the right of the Sahrawi people to exercise their right to self-determination and applauds the efforts of the UN Secretary-General’s special envoy, Ambassador Christopher Ross, to encourage the parties to enter dialogue without preconditions. I have followed closely the progress of the negotiations convened by Ambassador Ross and am heartened that the atmosphere between the parties is one of cordiality and respect. However, the fact remains that as yet, neither party is prepared to countenance the proposal of the other as the single basis for any future negotiations. For Morocco, the solution is autonomy; for the Polisario, it is a referendum with independence as a possible outcome.

Where Ambassador Ross has succeeded is in delivering results in the important area of confidence-building measures. We are pleased that on 7 January, the programme of family visits by air between Moroccan administered Western Sahara and the Polisario-controlled refugee camps in Western Sahara was able to resume after a 10-month hiatus.

I would also like to congratulate the parties on their agreement to meet officials from the Office of the High Commissioner for Human Rights in Geneva from 9 to 10 February to discuss further confidence-building measures, such as the construction of a land bridge to facilitate visits by road. We wish these talks, which have the potential significantly to improve the lives of ordinary Sahrawis, every success.

However, those meetings alone are not sufficient to address the myriad voices that are gravely concerned about the accusations of human rights abuses made by both sides. The United Kingdom Government support the idea of independent verification of the human rights situation. The UN currently has no role on the ground in monitoring human rights, nor is human rights monitoring built into the MINURSO mandate. Without an independent monitor, it is rarely possible to follow up allegations of human rights violations.

While remaining neutral on the political outcome of the disputed territory, the UK has played an active role in bringing the humanitarian aspects of the conflict to the forefront of the debate. To that end, we have considered a range of monitoring options, which we have circulated to the parties and the members of the Group of Friends, with the full support of Ambassador Christopher Ross. We have also held detailed talks with other members of the Group of Friends and Morocco on the substance of those proposals. I shall briefly summarise the components, which, we believe, a human rights monitoring mechanism requires to operate effectively and credibly. I note the remarks that my hon. Friend the Member for South West Wiltshire was good enough to make about the human rights mechanism.

It is essential that any human rights monitoring should apply in equal measure to the Moroccan-administered territory of Western Sahara and the Polisario-controlled refugee camps in Tindouf, Algeria. The mechanism must be, and be seen to be, independent. Its aims and objectives should be clearly set out and measurable to ensure that monitoring activities are effective and accountable. It would also be strongly preferable for the monitoring body to report to a body able to act on its findings. That is closely linked to the issue of the mandate, since MINURSO, Ambassador Ross, or the Security Council would be well placed to respond.

We are aware that the human rights situation cannot be discussed in isolation from the political sensitivities of the conflict, and I am genuinely grateful to Morocco for the spirit of engagement in which it has responded to the non-paper, which circulated the proposals. I am particularly grateful to my hon. Friend the Member for South West Wiltshire for his comments. It is sometimes difficult to accept an independent human rights monitoring aspect to any national state’s work, but it can make a significant difference in confidence building, particularly in an area of disputed territory. The United Kingdom will continue to ensure that human rights and the human dimension of the conflict remain at the forefront of the debate, including during discussions on the MINURSO resolution at the UN in April.

That is all the more pressing in the light of recent developments in the disputed territory. As I am sure hon. Members know—it has already been mentioned—in early October, a large number of Sahrawis set up a protest camp just outside Laayoune. Their mass protests appear to have focused on socio-economic problems rather than on the question of Western Sahara’s status. On 8 November, following failed negotiations and warnings to the protestors to disperse, the Moroccan royal gendarmerie and auxiliary forces carried out an operation to dismantle the camps. That resulted in the deaths of 12 security personnel at the camps and two civilians in the subsequent unrest in Laayoune.

We were deeply saddened to hear of those violent events and regret the loss of life. As the hon. Member for Islington North pointed out, we were also concerned to learn that, following those events, Morocco restricted access to the territory to several international observers. However, we were encouraged to learn that a confidence-building meeting between all parties, which was due to be held shortly afterwards in New York, went ahead, despite the difficulties.

It is our hope that the regrettable event—the incident at Laayoune—will underline to the international community the importance of taking a proactive approach to this year’s Security Council negotiations on the renewal of MINURSO’s mandate. Neither party must assume that the mandate will roll over as a matter of course. The UK has been active in calling for greater transparency, and we will continue to pursue this approach.

In answer to a question by my hon. Friend the Member for South West Wiltshire about our activity in relation to that, we used our November presidency of the UN Security Council to chair a Council meeting to gather evidence about the events in Western Sahara from Ambassador Ross and the assistant secretary-general for peacekeeping operations. We were disappointed to learn that, in the immediate aftermath, Morocco denied access to a number of international observers, including journalists, parliamentarians and NGOs, on security grounds. However, having visited Morocco shortly afterwards, I understand why the Moroccans felt that some elements of the international press markedly misrepresented the facts of the situation.

Our understanding now is that there are no restrictions on access to Western Sahara, and that members of civil society and international observers have been able to visit. An official from the British embassy in Rabat visited the territory in December 2010 and met a range of Moroccan officials, international bodies, UN agencies and local non-governmental organisations. I understand that the all-party parliamentary group was granted a similar level of access on its recent visit.

As hon. Members are rightly aware, I too have had the opportunity to travel to the region. During my visit to Morocco in December, I made clear to my interlocutors the benefits of a monitoring presence on the ground as the best way to ensure a balanced picture of events. I appreciate the serious, proper and open manner of our conversation, and that there was much concern about recent events. I also raised the matter during my visit to Algeria in November, where I communicated the UK’s interest in a secure and prosperous region working well together. Again, I appreciated the Algerian Minister’s response and understanding of the seriousness of the situation. As the world is showing us, such long-standing disputes have a habit of popping up at the least expected times, and it as well to continue to pay serious attention to them and try to get things moving.

Until the question of Western Sahara can be resolved, there is little chance of a significant improvement in Morocco-Algeria relations. The Maghreb is an emerging market and of growing strategic importance to the UK. We are also interested in encouraging greater political openness throughout the region, but perhaps that is happening of its own accord.

On the worrying hypothesis put forward by my hon. Friend the Member for South West Wiltshire, he rightly conjects that Western Sahara is potentially vulnerable to exploitation from extremists. The discovery earlier this month of a significant al-Qaeda in the Maghreb arms cache at Amghaha, 220 km from Laayoune, is of particular concern. We share the Moroccan Government’s concerns that AQIM is increasingly becoming involved in criminal activity throughout the region, although we must stress, as my hon. Friend said, that we have no evidence to suggest a link between AQIM and the Polisario. We are carefully monitoring the activities of AQIM and its links with other organisations. As in the case of other terrorist groups, the issue of Western Sahara continues to prevent meaningful co-operation across the Maghreb on combating the shared threat from extremist groups.

The hon. Member for Islington North referred to the fishing agreement. We believe that the EU-Morocco fisheries partnership agreement is consistent with international law, but we are aware of concerns about how the agreement is implemented, particularly in relation to its impact on the people of Western Sahara. The FPA is due to expire in February 2011, and we expect the negotiations on a new agreement to take into account any changes in the situation since it was first agreed.

My hon. Friend the Member for South West Wiltshire mentioned the EU External Action Service. The EU’s partnership with Morocco is based on a commitment by the latter to uphold our common values. Respect for democratic principles, human rights and fundamental freedoms form the cornerstone of relations between the EU and Morocco. The consequences of the Western Sahara situation are discussed at all meetings between the two. The EU has emphasised to Morocco the importance that we attach to improving the human rights situation in the territory of Western Sahara. The matter was discussed at the latest meeting of the EU-Moroccan association committee in Rabat in October 2010, and Baroness Ashton is well sighted on it.

My hon. Friend referred to Mr Mustapha Salma. Officials from the British embassy in Rabat have met his family, and officials in London raised his case with the Polisario representative to the UK, so we are sighted on the issue. This matter will run—

18:44

House adjourned without Question put (Standing Order No. 9(7)).