The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, this is proving to be an education, not least because we have another debate in which there are some points on which I can see the direct relevance to the clause we are discussing and a number of other points on which I am struggling a bit. They are all important points; I am just not quite clear what the connection is with a clause that has to do with the powers of HMRC.
Of course, the football question is directly relevant, and we must deal with football. I declare an interest here as a season ticket-holder of Arsenal Football Club —things are looking very good.
Lord Maxton
The noble Lord might be aware that Mr Ally McCoist, the manager of Rangers, was complaining bitterly because one of the things the new owner of Rangers had done was to sell the shares in Arsenal Football Club which apparently Rangers had held for a very long time.
Lord Sassoon
There is another thing I have learnt this evening. I am very grateful to the noble Lord.
I appreciate that this is very dangerous territory. The important point about the football is that this is a clause about the powers and duties of HMRC in relation to Scottish affairs. I do not know whether the noble Lord, Lord Foulkes of Cumnock, was trying to set a trap for me by getting me drawn into the tax affairs of an individual taxpayer, because of course the powers we are talking about here define, among other things, where information can be shared and what the limits are. If he was setting me a trap, I am doing my best not to walk into it—he was not setting me a trap, good. He will understand that I cannot possibly comment on the tax affairs of any individual taxpayer. I will simply say that there is nothing in the Bill that would change the circumstances of an individual—or a company—who is overdue in paying taxes to HMRC.
My noble friend Lord Lyell asked whether there was a difference between preferred creditor and ordinary creditor status between Scotland and the rest of the UK. I must confess that it is not an issue I have in the front of my mind, and I will write to him. I am sure it is a very important question, not only for football clubs.
Lord Sassoon
I think that probably deals with all the football questions, and with probably just about everything else that was directly relevant to this clause. I will try to deal with some of the other things.
We came back to the big picture question of the legislative consent Motion. It is of course for the Scottish Parliament to choose to bring forward the Motion at any time; it is in its discretion. It must be in the Scottish Parliament’s interest to bring forward an LCM before the last amending stage in this House to allow the House and the Government to reflect on the LCM, and if it wanted to it could choose to pass the legislative consent Motion tomorrow.
Lord Foulkes of Cumnock
Would the Minister like to speculate on why it is not doing that? Why is it deliberately delaying it? My speculation would be that it is playing a cat and mouse game with us, and that it wants to see us move ahead without having to reveal its hand fully. Maybe a better analogy would be a game of poker. This is not something that should be the subject of a gamble. It is a very serious matter. Would he not join me in encouraging the Scottish Parliament to consider the legislative consent Motion at a very early opportunity?
Lord Sassoon
My Lords, I will certainly not be drawn into speculation. I have already said that it must be in the Scottish Parliament’s interest to pass the legislative consent Motion in time for the Government and this House to consider possible amendments in response to anything it comes forward with, and, as I said, it could pass the Motion any day. However, beyond that there is nothing more useful that I can add.
Lord Forsyth of Drumlean
On the point of legislative consent, could my noble friend help me by explaining why we are proceeding with a Bill in the absence of a legislative consent Motion? If the Scottish Parliament decided not to pass it, we would all have been wasting our time.
Lord Sassoon
We have a Bill; it is important that we press on, and the legislative consent Motion could come at any time. This is idle speculation. It is important that the Motion gets passed, and we look forward to it, but it is in the hands of the Scottish Parliament. There is really nothing more I can usefully say. I certainly do not believe for one minute that we are wasting our time considering the important provisions in this Bill.
Let me move on to the question asked by the noble Baroness, Lady Liddell of Coatdyke, about the cost of all of this. The major cost will be to the systems that would support the tax changes and the possible new tax rate in Scotland. It is all set out in the impact assessment that is published alongside the Bill. However, for the Scottish rate of income tax, HMRC’s initial estimate is of £40 million to £45 million over a period of years up to the introduction in 2016-17. Clearly the final cost will be dependent on a number of decisions to be made at the implementation stage; and HMRC, HM Treasury, the Scotland Office, with the Scottish Government, will continue to work to determine the optimal implementation approach. The costs may vary in some way as those decisions are taken, but the indicative estimate at the moment is £40 million to £45 million.
Baroness Liddell of Coatdyke
I thank the noble Lord for giving us that figure. Does that figure include the 31,000 civil servants in reserve departments who operate in Scotland, and the impact of the HMRC element of those 31,000? Will they continue to be in Scotland? Could he also perhaps give an indication of where that cost will be levied? Will Scottish taxpayers or UK-wide taxpayers take up the cost of disaggregation?
Lord Sassoon
My Lords, on the first point, this will be the cost in isolation of the changes necessary to enable the introduction of the Scottish income tax provision. Of course, for fully devolved taxes, the cost will depend on decisions taken by Scottish Parliaments on the design of those taxes, and of course who should administer them. It is therefore a cost estimate that relates essentially to income tax. It assumes that nothing changes in the deployment of other people. It is the necessary cost related to the introduction of the new Scottish income tax regime. As the noble Baroness will know, it is a principle of devolution that costs that are to the benefit of the devolved Administration fall on the devolved Administration, so that is where these costs will fall.
The noble Lord, Lord Browne of Ladyton, asked important questions relating to the Scottish Government’s readiness for implementation, the high-level implementation group and the joint Exchequer committee. I very much agree with him that these are important issues about the capacity of all sides, particularly the Scottish Government, to carry out what is necessary. I have already addressed the mechanics of the processes. We have the high-level implementation group, as the noble Lord has set out, and below that the technical groups established by HMRC to work out the detail.
The Scottish Government have focused on pressing for further powers in the Bill. Of course, while one respects their different views on other matters that they might want in the Bill, we would welcome greater attention on implementation from them. I appreciate the point that the noble Lord is making. Close attention has been shown to issues, such as the block grant adjustment mechanism. There is work to do and we should like to see the Scottish Government set out how they will use the powers provided to them in the Bill. My right honourable friend the Secretary of State for Scotland yesterday called for clarification in particular of the stamp duty land tax, and I very much agree with him on that point.
The high-level implementation group was established by the UK Government. It is chaired jointly by the Secretary of State for Scotland and the Exchequer Secretary to the Treasury. It has met four times since July 2010 and the role of the group is to oversee the implementation of the financial provisions of the Bill. As I have just said, the technical groups established by HMRC report to the high-level implementation group, and they provide detailed consideration and advice to inform implementation.
On the progress that has been made, the high-level implementation group is a UK Government group. It is entirely within the capacity and the direction of Ministers in London to press on with the work of that group. It is clear that the Scottish Government want their powers increased. To do that, clearly we would welcome more progress to begin setting out how the powers will be used. From that, many more questions will flow about implementation. That is where things stand at the moment.
The Duke of Montrose
On a slightly peripheral question, I am getting very worried that we are setting a precedent here. This may not be quite the moment to raise it with this Minister at the Dispatch Box but I still think that it is extremely relevant. The first indication of a legislative consent Motion was taken when the Scotland Bill was going through this House. It was dubbed the Sewel Motion thereafter. That was to allow Westminster to legislate on devolved matters.
We were told that a legislative consent Motion would be required not when the Bill started here or in the other House but when it reached the “second House”. We could not progress further until the legislative consent Motion was in place. Now we are dealing with a convention that was established outwith Parliament whereby Westminster is asking for a legislative consent Motion for a reserved matter, which this is. Are we establishing a precedent that Westminster goes ahead and produces legislation without legislative consent Motions—admittedly it is quite within its powers to do so because this is the sovereign Parliament—because it appears that the legislative consent Motions are getting slightly out of sync with each other. There is a danger that this is a precedent.
Lord Sassoon
My Lords, we need the legislative consent Motion. I am not sure I can help my noble friend much further on this. As I have said, it is in the interests of the Scottish Government to get on with the legislative consent Motion if they want consideration of any possible amendments to be taken in this House. I am repeating myself, but that really is as far as it goes. I do not think that these are questions of precedence so much as of practicality. As I said just now, there are a number of matters on which the Scottish Government would wish the provisions of the Bill to go further, so it is in their interests to bring forward the Motion.
Lord Forsyth of Drumlean
I am grateful to my noble friend. So that we are clear about this, am I not right in saying that we do not need a legislative consent Motion? It may be that the courteous convention is that we take account of legislative consent, but that is a courtesy. This House is sovereign, and that is one of the reasons I asked my noble friend whether we were wasting our time. I was hoping that he would say that we are committed to this policy and that whether the Scottish Parliament passes the legislative consent Motion is not relevant. It would still become law and that is where we are or, alternatively, as part of our respect agenda we would not proceed without a legislative consent Motion. We seem to be in a rather fuzzy position where we are not really saying what our position is in respect of legislative consent, but when my noble friend said that we need a legislative consent Motion, that is clearly not correct.
Lord Sassoon
I am grateful to my noble friend for picking me up on that because the technical position is just as he states. However, in substance I stand by the remarks I made because just as we respect the conventions here, I would expect the Scottish Parliament and the Scottish Government to respect them as well, and we look forward to receiving the legislative consent Motion in due course and ahead of Third Reading. However, my noble friend has set out the constitutional position perfectly correctly.
Lord Forsyth of Drumlean
Perhaps I may add to that one other point that we will come to at a later stage in the Bill. There are clauses that deal with the issue of the referendum. The Scottish Parliament has set a date on its consultation period that falls after the likely date when Parliament will be prorogued, so it will not be possible to take account of the consultation process because of the timetable it has chosen.
Lord Sassoon
My Lords, I really cannot comment on the date for Prorogation. We will see it when it comes, so that is pure speculation. Perhaps I may get back to the clause, albeit that that is an important matter. I want to finish my response to the questions about implementation put by the noble Lord, Lord Browne of Ladyton. Earlier I touched briefly on his questions about the joint Exchequer committee, but to complete the picture in the context of this discussion, as I said, the committee met on 27 September. It was a useful first meeting, which agreed the principles relating to the mechanism for the block grant adjustment, as I think the noble Lord knows. It is important to stress again that discussions continue, outside the meetings of the joint Exchequer committee, on a bilateral basis on a range of issues across the Bill including the block grant. I repeat again that, although there are certain aspects on which we would like more progress and more focus, we are making good progress and I remain confident that we will agree on the measures set out in the Bill.
In conclusion, I believe that the provisions in Clause 29 are necessary and sensible as part of further tax devolution. I move that this clause stand part of the Bill.
Lord Browne of Ladyton
Sorry, I meant my noble friend Lord Foulkes. Maybe I should start again.
The reason I do not support the amendment is not that it gives us an opportunity, as my noble friend Lady Liddell of Coatdyke has indicated, to celebrate devolution—I intend to do a bit of that myself—nor that it created the opportunity for what I thought was an excellent contribution from my noble friend Lord Maxton on the reasons for devolution and why we should support it in principle. But over the course of this Parliament, I have been surprised by the ability of people to make the most detailed and engaging speeches about the concept that has become known as localism while at the same time resisting devolution. I do not really understand how people can hold those two concepts together in their head, as localism is just a form of devolution. As my noble friend Lord Maxton has suggested, we ought to start looking at the powers that we as politicians in government of any description exercise over people. We should look at the appropriate level to exercise them that is relevant to people. Given the experience that the political classes have had in the United Kingdom over the past few years of the deterioration of their relationship with the people they govern and legislate for, getting their relationship with the people of the country back would be very helpful.
I am a passionate supporter of devolution. I do not have anything like the history that some of my noble friends and other Members of this House have, but I have been committed to it for the whole of the shorter political life that I have had, and I was committed to it in my membership of the Labour Party before I had a public life in politics. At some stage in this debate we need to move away from arguments about what other people are doing or personalities—I include the noble Lord, Lord Forsyth, in this; he ought not to be the manifestation of a particular type of politics that we define ourselves against, any more than we should be obsessed by what other people are doing—to a collective narrative for devolution and for the union that describes the sort of United Kingdom that we want for the young people of today in Scotland and their future. That will be, as the people of Scotland demand, a Scotland in which there is significant devolved power, exercised by a Parliament that they elect independently of the United Kingdom Parliament.
We have to recognise that whether we have conditioned people into that expectation because of their dissatisfaction with the previous settlement and the sense of disfranchisement that there was between the people who governed them and the exercise of their votes, whether we have conditioned them into it by their expectations of devolution, or whether they have just been conditioned into it by their espousal in significant numbers of the concept of nationalism, it does not really matter what the motivation is—that is where the people of Scotland are. The sooner we get a collective narrative that describes the sort of Scotland that we want our children or our children’s children to live in, and what powers the people who govern them will have, how they will be able to use them and how they will be accountable, the more chance that we have of preserving the union. I passionately believe that the best way of describing that is in the context of the union.
I come to the issue of the use of the word “devolved”. The people of Scotland do not actually need that word attached to anything. They understand that their Parliament is a devolved Parliament and the Scottish Government are a devolved Government. Whether or not the people who happen to have charge of that Government or that executive power for a particular period have other ambitions and behave in a particular way, as they do, that is designed to give some alternative impression, the people of Scotland are not fooled. The people of Scotland want an Executive who address the issues that Scotland faces, which are manifest to anyone who lives there. We have problems in relation to unemployment, particularly youth unemployment, health, the abuse of alcohol, sectarianism and a lot of issues that have their roots in decisions made by previous generations, such as the movement of people, the death of economic drivers, changes in economic circumstances and the movement of jobs from these islands. There is a whole series of things, over many of which we have not had any real control.
Of course, the people of Scotland do not want a First Minister who is more interested in consorting with people who give the impression that he is somehow much more important than he is. They do not want that and they see through it. We do not need to spend much time describing all that. However, they definitely want politicians who can address the issues and challenges of their everyday lives. They want people to explain to them why these issues are best addressed in the context of the United Kingdom, wider Europe and the world. They understand that.
Traditionally, Scots knew and understood their position in the world. That is why, while there are approximately 5 million people in Scotland who claim to be Scots, there are in excess of 40 million people around the world who claim Scots heritage in one way or another. We are a nation of people who have an understanding and concept of our place in the world. I honestly do not think that we need to spend any more time in this Committee or on the Bill debating these issues. We need to start describing the future of Scotland in the context of devolution and celebrate what we have already achieved by being a template for genuine localism in the United Kingdom.
It has not been perfect. We have a very young Parliament in which people are growing up. Members of the Scottish Parliament who were not politicians at all when we devolved powers to it are becoming significant politicians in the United Kingdom. I simply do not support my noble friend’s interesting amendment, which has led to a short but interesting debate, because the last thing that the people of Scotland need is for their politicians to spend another few hundred thousand pounds on changing the name of their Government.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, can I perhaps be somewhat boring and brief at this time of night by focusing on the amendment? It would insert the word “Devolved” into Clause 30, Clause 37 and Schedule 4, where the reference would become to the devolved Scottish Government. Clause 15 changes the formal name to the Scottish Government from the Scottish Executive. It was felt that the Executive were increasingly widely known as the Scottish Government and that it made sense to amend the Act to reflect public perception and to avoid confusion. However, the fact that the Scotland Act refers to “Scottish Executive” prevents the use of “Scottish Government” in legislation, contracts and other legal matters. Therefore, Clause 15 is designed to prevent inconsistencies in what the Scottish Executive are called by the public and in the legal name.
The noble Lord, Lord Foulkes, wishes to insert “devolved” in front of “Scottish Government”. That is unnecessary and may even lead to further confusion. Altering the name of the Scottish Government to “the devolved Scottish Government” would in no way strengthen the position of devolution. Indeed, it is important to note that no such prefix attaches to the devolved Administrations in Wales and Northern Ireland. It would look very odd and lopsided if it happened just in Scotland.
That said, this has been a useful debate on devolution. I will not go into all the highways and byways but some important points were made. Some of us who very much support what has happened over the past 12 years sometimes miss a trick because so often, ahead of the debates in 1997 and the referendum leading up to that, we talked about devolution in terms of the Scottish Parliament dealing with matters related to the domestic agenda of the people of Scotland and the United Kingdom Parliament being responsible for macroeconomic policies, defence, foreign policy, social security and pensions. Although we will undoubtedly debate where the boundaries should be—the Bill seeks to address some of these issues—I nevertheless believe that the idea of a Scottish Parliament within a United Kingdom still commands the support of the vast majority of the people in Scotland. I hope that the noble Lord will withdraw the amendment.
Lord Foulkes of Cumnock
I am convinced by the eloquence and brevity of both Front Benches. I beg leave to withdraw the amendment.