Scotland: Draft Legislation

Thursday 22nd January 2015 Lords Chamber

Statement

17:57

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, with the permission of the House I will repeat a Statement made by my right honourable friend the Parliamentary Under-Secretary of State for Scotland in the House of Commons. The Statement is as follows.

“With permission, Mr Speaker, I wish to make a statement to the House about the further devolution process in Scotland and the publication of draft clauses to implement the Smith commission agreement. The draft clauses published today deliver a substantial package of new powers to the Scottish Parliament. We are publishing ahead of the Burns Night deadline, demonstrating this Government’s commitment to honouring the vow made to the people of Scotland during the referendum, and meeting the timetable we set out during the referendum to deliver further powers to Scotland.

The referendum on independence held on 18 September 2014 saw Scotland vote decisively to remain within our United Kingdom family of nations, retaining the strength, security and stability of being part of the UK. But the Scottish people did not vote for no change. During the referendum campaign the Prime Minister, the Deputy Prime Minister and the leader of the Opposition made a joint commitment to deliver more powers to the Scottish Parliament. The Smith commission, chaired by Lord Smith of Kelvin, was the result of that commitment. All five main parties in Scotland came to the table and reached agreement on the proposals for further devolution to Scotland within the United Kingdom. The Government welcomed the fact that this was the first time that all of Scotland’s main parties have taken part in a process to decide the future of devolution, and this landmark agreement was signed by all five parties. I am grateful to Lord Smith and the members of the commission for their work.

The commission’s heads of agreement were published on 27 November and the Government committed to bringing forward draft clauses to implement the agreement by Burns Night, 25 January. This was a challenging timetable, but by publishing a Command Paper and draft clauses today I am pleased to say that the Government have delivered on their commitment in advance of that deadline.

The clauses published today will make it possible to quickly translate the Smith commission agreement into law at the beginning of the next Parliament. The draft clauses provide for an already powerful Scottish Parliament to become further empowered and more accountable to those who elect it. As a result, the Scottish Parliament will become one of the most powerful devolved Parliaments in the world.

I will begin with the constitutional measures. The biggest transfer of powers to the Scottish Parliament and Scottish Minsters since the start of devolution comes with greater flexibility for the Scottish Parliament and the Scottish Government to manage their own arrangements, with statutory recognition of the enduring place of a Scottish Parliament in the UK’s constitutional arrangements. Our commitment to the process has already been evidenced by the steps the Government have taken to enable the Scottish Parliament to extend the franchise to 16 and 17 year-olds in time for the 2016 Scottish Parliament elections, with an order now laid before both Parliaments.

Turning to the fiscal framework, the package gives greater financial responsibility to the Scottish Parliament with an updated fiscal framework for Scotland that is consistent with the overall UK fiscal framework. As the Smith commission agreement set out, the new fiscal framework will be agreed and implemented jointly by the UK Government and the Scottish Government through the Joint Exchequer Committee, with suitable engagement with both the UK and Scottish Parliaments.

For the first time, more than 50% of the money spent by the Scottish Parliament will be funded by the Scottish Parliament. This is an important step, which builds on the measures brought forward by this Government in the Scotland Act 2012 and further increases the financial accountability of the Scottish Parliament to the people of Scotland.

Under the tax clauses Scotland will receive extensive new tax powers without losing the essential elements of our unified tax system that support the single market and make the United Kingdom such an attractive place to do business. The Scottish Parliament will be given the power to set the rates of income tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers. This is the most significant tax in Scotland and a powerful redistributive tool.

The first 10 percentage points of the standard rate and the first 2.5 percentage points of the reduced rate of value added tax will be assigned to the Scottish Government—which means the Scottish Government will retain half the VAT revenue generated in Scotland. The clauses also give the Scottish Parliament the power to charge a tax on air passengers departing from Scottish airports and on commercial exploitation of aggregates in Scotland.

Turning to the welfare clauses, these provide for key welfare measures to be designed by and delivered in Scotland. The Scottish Government will be responsible for a number of benefits, including those for disabled people and carers. Issues relating to long-term unemployment will be tackled with specific consideration of local circumstances. As set out by the Smith commission, universal credit will remain reserved but the Scottish Government will have certain flexibilities, including the power to vary the housing cost element. Scotland will also continue to share the benefits and strengths of the UK-wide system for pensions, labour market benefits and Jobcentre Plus.

Additional clauses build on the already significant powers of the Scottish Parliament and Government in a range of other policy areas. To give a few examples, there are new powers for the licensing of onshore oil and gas extraction, powers to introduce gender quotas in respect of public bodies in Scotland, and powers to police the railways. Together, these clauses give greater responsibility for more decisions affecting Scotland to be made in the Scottish Parliament and paid for by revenue raised by the Scottish Parliament.

Later today, ministerial colleagues will host an event in Edinburgh to present the Command Paper and clauses to representatives of civic Scotland. This will signal the next phase in the work. The clauses are presented today in draft. They will require further preparation to make them ready for introduction in a Scotland Bill in the next Queen’s Speech, and it has been made clear that this will be taken forward by whoever leads the Government after the next general election.

To get the clauses fully ready the Government wish to engage with experts from civic Scotland, and we are committed to engaging with the Scottish Government and Her Majesty’s Opposition ahead of finalising the clauses for introduction. Questions of commencement and implementation will need to be answered, and in order to do this we will need to understand what the Scottish Government intend to do with the new powers.

It will be necessary for the fiscal framework to be agreed alongside the introduction of the Scotland Bill, and of course Lord Smith made further observations to which we need to pay heed. In some areas he recommends further devolution from the Scottish Parliament to local authorities in Scotland. He also recommended better working between the two Governments and the two Parliaments.

The Command Paper and draft clauses provide for a more responsible and accountable Scottish Parliament inside a strong United Kingdom. By publishing ahead of time, the Government are demonstrating that they are meeting their guarantee to the people of Scotland. The clauses ensure a set of proposals that do not cause detriment to the UK as a whole or any of its constituent parts. The Government remain committed to ensuring that Scotland and the whole of the United Kingdom continue to prosper from our single domestic market, our social union and the strength that comes from the pooling and sharing of risks.

People in Scotland made it clear that they want to keep the advantages of a UK pound, UK pensions, UK Armed Forces and a strong UK voice in the world. The clauses allow that to happen. This is what Scotland voted for. It is what all parties in the Smith commission process signed up to. And it is what we are delivering today. I commend this Statement to the House.”

18:05

[Lord McAvoy (Lab)]

My Lords, I thank the Minister for advance sight of his Statement. Today we again mark another milestone in the delivery of the vow made to the people of Scotland before the independence referendum. The timetable set out by my right honourable friend the Member for Kirkcaldy and Cowdenbeath during the referendum campaign has now been exceeded at every stage. A Command Paper on the process towards further powers appeared just 25 days after the referendum. The conclusion of the Smith commission and agreement by all five of Scotland’s political parties happened before St Andrew’s Day, just 10 weeks after the referendum. And today, ahead of schedule, as the Minister said, we see the draft clauses which will form the basis of the next Scotland Bill.

Before I turn to our response to the draft clauses and the Command Paper laid before the House today, I want to provide an absolute guarantee from these Benches. As my right honourable friend the leader of the Opposition has now made clear on a number of occasions, the powers agreed by the Smith commission will be delivered, and the next Labour Government will include a new Scotland Bill in our first Queen’s Speech. Labour created the Scottish Parliament in 1999, we supported more powers for the Parliament in 2012, and we will create a powerhouse Parliament with these new powers when we are in government.

Labour made it clear at the outset of the Smith commission process that we wanted a settlement that: first, respected the decisive outcome of the referendum, with a strong Scotland inside a UK where we pooled and shared risk; secondly, moved the maximum possible power from Westminster to the Scottish Parliament; and finally, did not make Scotland worse off. We are satisfied that the Smith commission delivered this outcome, and we can say with confidence that with these clauses we will be delivering home rule—the full powers Scotland needs.

As the Command Paper notes, the powers that these clauses will confer on the Scottish Parliament mean that it will control around 60% of spending in Scotland and retain around 40% of Scottish tax. This will make it the third most powerful devolved assembly in the OECD.

Before I turn to the detail of the clauses I wish to press the Minister—in a friendly way—on two areas that I hope he can address in his reply. The Command Paper makes explicit reference to the Barnett formula, and the agreement of all five parties during the Smith commission to the continuation of the formula. Can he provide just a bit more clarity about how the adjustment to the block grant will take place, and how discussions with the Scottish Government to agree this are progressing?

I also wish to press the Minister on an item on page 40 of the Command Paper, which reproduces the commitment in Smith that:

“MPs representing constituencies across the whole of the UK will continue to decide the UK’s Budget, including Income Tax”.

Given the Chancellor’s comments at the Treasury Select Committee on Tuesday, can the Minister provide an absolute reassurance that this part of the Smith agreement will be respected, as it is not addressed in the Command Paper?

I now wish to turn to the detail and the precise powers that the clauses will confer, specifically over job creation, tax and social security. The clauses confer full power over income tax and a number of other taxes. We welcome the clarity provided by the Command Paper on the areas to be devolved.

We welcome the extension of powers over VAT going further than the Smith commission, but will the Minister explain why this change was made? On welfare, the clauses have the effect of transferring extensive new powers to the Scottish Parliament, in the region of £2.5 billion of welfare spending, in addition to the powers to create new benefits. Will the Minister confirm that the clauses as drafted respect the spirit and letter of the Smith agreement and allow the Scottish Government to create new benefits? Will he also explain the process that will now be taken forward to examine in more detail the consequential arrangements to adjust the Scottish block grant to reflect what will now be devolved to the Scottish Parliament?

My honourable friend the Member for Glasgow East has already raised with the Secretary of State, and at Scottish Questions, our desire to see the job-creating powers of the Work Programme passed to Scotland at the earliest opportunity. It continues to be our view that this could be achieved using a Section 106 order to transfer responsibility to the Scottish Government immediately. This would reduce any uncertainty about the effect of continuing contracts in Scotland and would allow others to start to remedy what we regard as a failure of this Government’s Work Programme in Scotland, which sees only one in five people into a job. Will the Minister again consider bringing forward these powers now?

Finally, I would welcome more clarity from the Minister on the devolution of the Crown Estate. Will he clarify the process that will be followed to determine the transfer scheme, and how long this process might take? Will he also explain to the House how the Government will ensure that the Smith commission’s recommendation that the powers are further devolved to our island communities will be seen through? Many in our rural and island communities will want guarantees about the devolution of the Crown Estate and that powers will be passed to the islands, as both the UK and Scottish Governments promised during the referendum.

This is another milestone in Scotland’s home rule journey. Today, we on this side of the House welcome the Command Paper and the draft clauses. I am pleased that the Government have stated their commitment to further consultation with us and with Civic Scotland. There is still work to be done, and we commit to carry this work through if it is not concluded by the election and we form the next Government. On 18 September 2014, the clear will of the people of Scotland was expressed. The Smith agreement was the response to that call for change that we heard. Today, one thing is clear—Scotland will have a powerhouse Parliament.

[Lord Wallace of Tankerness]

My Lords, I thank the noble Lord very much for his comments and for his welcome of these clauses, which, as I think he acknowledged, implement ahead of time the spirit and letter of the Smith commission agreement. It is also particularly welcome that he indicated that any future Labour Government would take these clauses forward in the Queen’s Speech. It is important to note that that has been said today by all three parties which signed the pledge prior to the referendum, so those who might try to cast doubt on the commitment are just mischief-making. There is a very clear commitment on the part of all the parties that that should be done.

The noble Lord asked about the Barnett formula and the adjustment to the block grant. There is within the Command Paper, in the section dealing with the fiscal framework, an indication as to how the block grant will develop. As tax will be the responsibility of the Scottish Parliament, the amount of tax generated will be deducted from the block grant. The Smith commission said that there had to be some means of indexation; it was quite good at saying that, but did not actually set it out. However, this will be discussed. The Command Paper sets out how it is intended to be done with regard to the devolution of income tax agreed in the Scotland Act 2012. There clearly will have to be discussions and I am pleased that the Deputy First Minister, Mr John Swinney, has already indicated to my right honourable friend the Secretary of State a willingness on the part of the Scottish Government to engage in these discussions on the fiscal framework. Whereas at the moment roughly 90% of the Scottish Parliament’s funding comes from the Barnett formula, once the 2012 Act arrangements and the Smith proposals are implemented it will reduce to 35%.

The noble Lord also asked about MPs’ voting and accurately quoted the passage from the Smith commission. There clearly is an issue, which has been raised, not only in regard to tax but on a number of issues. He is aware that the Government published a Command Paper on 16 December that looks at those issues. It is very difficult sometimes to disentangle what is devolved and what is not devolved. I certainly remember when—I was the Minister responsible for higher education in Scotland—this Parliament passed laws in relation to tuition fees in England and Wales, which had very direct consequences for Scotland. Sometimes it is too simplistic to say that just because it is not devolved it does not have implications for Scotland. But there is a legitimate debate to be had.

The White Paper sets up a number of options that the Conservative Party put forward and ones that my own party put forward. I am sure that the noble Lord’s party has its own view on this. The important point to make on this, however, is that the proposals that we are discussing today stand alone. They are not contingent—as we have made abundantly clear on a number of occasions—on any arrangement or Motions that might come forward with regard to “English votes for English laws”, as it is sometimes referred to.

With regard to VAT, the noble Lord asked why we went beyond the Smith commission—as well as the first 10% of the standard rate we will also assign 2.5% of the reduced rate of VAT. The answer is that, obviously, if the reduced rate is 5% one cannot assign 10%. We did, however, think it was in keeping with the spirit that we would assign half the revenue that comes from the reduced rate of VAT.

The noble Lord asked about welfare and it is certainly our belief that we have honoured the spirit of the Smith commission. In this, he is quite right to say that some £2.5 billion of welfare spending will be devolved to the Scottish Parliament. He asked about the detail of that, which is clearly considerable; none of us shies away from that. A ministerial working group on welfare has been established, which will be jointly chaired by my right honourable friend Mr David Mundell, Parliamentary Under-Secretary of State, and Mr Alex Neil, who is the Scottish Government’s Cabinet Secretary with responsibilities in this area.

The noble Lord asked about the Work Programme. There have been discussions between his honourable friend the shadow Secretary of State for Scotland and my right honourable friend the Secretary of State on this. We take the view that this is a package. The only measure we have accelerated is the Section 30 order in relation to votes for 16 and 17 year-olds because of the necessity of getting that on the statute book in good time for the 2016 election. The Government support the devolution of the Work Programme but it must be done in a way that reflects the fact that Smith will mean that we have a shared welfare and unemployment support system between Scotland and the rest of the United Kingdom. That is why we believe it has to be taken forward as a package. We do not know what the Scottish Government would do, and therefore do not think it would be right to take the risk that there would be no alternative programme or adequate transitional arrangements if we were to do it in very quick order. That is why we believe it should go forward as a package.

Finally, we have tried to devise a way in which we can devolve the Crown Estate, as the Smith commission recommended. I certainly share the noble Lord’s view that devolution does not stop in Edinburgh. He might expect me to say that, as I am a former parliamentary representative for the Northern Isles, which had very strong views on the Crown Estate. But, of course, further devolution is a matter for the Scottish Parliament. It is important, however, to put on record and remind the House that in his report the noble Lord, Lord Smith of Kelvin, as well as talking about further powers to the Scottish Parliament, made the point that it was important that the Scottish Parliament looked at ways in which it could devolve further powers to Scotland’s many communities.

18:19

[Lord Forsyth of Drumlean (Con)]

My Lords, I thank my noble and learned friend for repeating the Statement. He said that this is what the people of Scotland voted for, but it is certainly not what I voted for. I regard it less as a milestone; it is probably more likely to be a tombstone for the United Kingdom if we continue in this way by making piecemeal constitutional reform.

I wish to ask my and learned noble friend about the draft clauses in a constructive manner. Clause 4 introduces the extraordinary new concept of a “super-majority”, whereby matters can be passed by the Scottish Parliament only by a two-thirds majority. That includes, according to the draft clause,

“the persons entitled to vote as electors at an election for membership of the Parliament”.

As I understand it, we have just given the Scottish Parliament the power to alter the election franchise for 16 year-olds. Before the ink is even dry on this, we are already changing it. Why are we introducing this concept of a two-thirds majority being required to alter,

“the number of constituencies … the number of regions …the number of regional members”,

and,

“the systems by which members of the Parliament”,

are to be introduced? Is that going to apply to Westminster and the Welsh Assembly? This is a huge constitutional innovation. What is the justification for it?

To reflect the points made by the noble Lord, Lord McAvoy, why is there nothing in these draft clauses that sets out how the Barnett formula funding will be affected by the implementation of these powers? Surely that has to be there in primary legislation so that there is no question about how that will operate. As to the narrative on the paper, all that it says about funding is that,

“the Scottish Government’s Barnett-based block grant will be reduced to reflect the tax revenues that the UK Government will forgo as a result of devolution”.

What on earth does that mean?

[Lord Wallace of Tankerness]

My Lords, picking up on that final point, it means what it says: if there is devolution of income tax, which we are proposing to implement, the UK Government—the Revenue and the Treasury—will not receive the income tax receipts from Scotland on earned income and therefore the block grant will be reduced accordingly. That will be indexed. Box 1 on page 29 of the Command Paper describes how this is intended to work in terms of what we have already passed with regard to the Scottish rate of income tax under the 2012 Act. The noble Lord will see how it is intended to work with regard to the proposal that Parliament has already passed, one that can proceed for income tax as a whole and, indeed, for other taxes.

With regard to the two-thirds majority, it is not such a novel procedure as my noble friend suggests, because, although I suspect that he opposes it, it was nevertheless passed by this House when it introduced the Fixed-term Parliaments Act early in this Parliament with regard to any early general elections that might be called in the other place. We are actually implementing what the noble Lord, Lord Smith of Kelvin, recommended, which is that for matters as fundamental as the franchise, the number of constituencies and the electoral system we will provide “an adequate check”, as he put it in his commission’s report, on the Scottish Parliament. After all, it is a unicameral Parliament and a Government of a single party should not ride roughshod over the interests of other parties on a simple majority and completely change the electoral system. That is why the commission believed that on matters as fundamental as that, given that that power is being transferred from this Parliament to the Scottish Parliament, there ought be an adequate safeguard—and that safeguard is a two-thirds super-majority.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, first, I welcome very much the announcement that a joint arrangement has been put in place between the UK Government and Scottish Government on the implementation of the welfare provisions because that is an area in which there could be real trouble ahead. I wonder whether a similar mechanism is already in place, or is likely to be in place soon, for the recommendations on improved working between the Scottish Government and the UK Government and between the Scottish Parliament and the UK Parliament. I should be interested to hear the Government’s response on that. Secondly, the power to vary taxation—not the power to retain it—falls quite far short of the spending power of the Scottish Parliament under these proposals. Given the current expectations and instability that exist in Scotland and throughout the union, do the Government really believe that this is a recipe for stability in the medium term?

[Lord Wallace of Tankerness]

My Lords, the noble Lord raises an important point about the other recommendations in the Smith commission report on better intergovernmental and interparliamentary relationships. This is something which the Calman commission looked at although, regrettably, nothing much seemed to come of it. At the meeting of the joint ministerial committee which took place in December, the Prime Minister and the First Minister discussed these matters and there was an agreement, as a start, on looking at how to improve the current memorandums of understanding to address that issue. On parliamentary matters, there was a recommendation that the Presiding Officer of the Scottish Parliament should have an early meeting, after these clauses were produced, with Mr Speaker. I am not sure whether that is in place but I endorse the view that there ought to be better parliamentary relationships, at least for better understanding and for less of the misunderstanding that can sometimes arise.

In answer to the second part of the question, this is an enduring settlement. As was reflected in the comments of the noble Lord, Lord McAvoy, from the Opposition Front Bench, 60% of government spending in Scotland will be the responsibility of the Parliament and 40% of the tax raised in Scotland will contribute to that spending. In each case, that is twice the OECD average for devolved administrations. We are building and creating an enduring settlement, but the noble Lord is right to say that it will require a lot of work and engagement between the respective Governments in terms of both the fiscal framework and the welfare provisions.

[Lord Stephen (LD)]

My Lords, despite the low-key nature of the title of today’s Statement, does my noble and learned friend agree that these detailed clauses are of crucial importance to the future constitutional arrangements for the whole of the United Kingdom? They not only deliver on the vow of the party leaders, but they deliver, for Scotland, the most radical home rule measures ever seen in this country. These measures are now supported, quite remarkably, by the leaders—and the vast majority of the membership—of the major parties in all the Parliaments of the United Kingdom. Does he agree that it is vital that these measures must now be delivered, not only in the Queen’s Speech in May of this year but also in an Act of this Parliament in a new Scotland Act that should be delivered, if at all possible, by the end of 2015? I wonder whether my noble and learned friend can comment on the timetable for the shortest possible time for delivery of these proposals into legislation. Finally, does my noble and learned friend accept that, after home rule for Scotland, the next challenge is to deliver real devolution of powers, right across our regions and nations, in a federal United Kingdom?

[Lord Wallace of Tankerness]

My Lords, I am sure my noble friend would expect me to agree and I do, as my own party aspires to a federal United Kingdom. He rightly used the words “home rule”. This has been a campaigning issue for our party for more than 100 years. I am sure that Mr Gladstone would be very proud of what we have delivered today. He is right that we need to move on from here. There is a lot of work still to be done and we will ensure that today is not the end of the process. At official and ministerial level there is recognition of what more must be done so that a Bill is in preparation and ready to be brought forward after the Queen’s Speech following the election. The legislative timetable is not entirely in my hands, but it must be feasible to deliver this by the end of this year or, if not, in the early months of 2016. Having done it, I think all of us would want the issue to be about how the Scottish Parliament is going to use these powers. For so long we have had debates about what the powers are, whereas many people are asking how the powers can be used to improve the lot, and the social and economic well-being, of the people of Scotland.

Finally, I agree that the devolution of power is something which my noble friend and I in our party aspire to. But, as I have already said, the comments coming from some leading members of the Scottish National Party MSPs in recent weeks about centralising power and the attacks that there have been on local government in Scotland are very alarming. We have seen too much centralisation in the last two or three years in Scotland. I very much hope that a fresh wind of decentralisation will sweep through Scotland.

[Baroness Adams of Craigielea (Lab)]

My Lords, I also welcome the Statement that the noble and learned Lord has made today. I am glad to hear him say once more that all five parties signed up to this. But he will forgive me a little wobble because, on the day after the Smith commission reported, four SNP councillors in Renfrewshire burned that report outside the council offices. I have to wonder just what the commitment of the SNP is to this agreement. Will he clarify further what discussions have been made on further devolution to local Government? As he has already said, the Scottish Parliament has already sucked much of the power from local government to the centre. How far have the talks got on devolving some of that power back?

[Lord Wallace of Tankerness]

Any of us following the Scottish media, and probably even further than the boundaries of Scotland, saw that appalling scene when the report was burned. In fact, I have an instinctive gut horror at people burning any literature or writing and I find it very insidious. The SNP members of the commission signed that report and should be held to that. If they start complaining, they should be reminded of that. Nor was it signed at a low level: the Deputy First Minister signed on behalf of the SNP, along with Miss Fabiani. Therefore, it was signed at a high level and backsliding will be exposed.

What can be done about local government is a matter for the Scottish Parliament, which we can pursue within our respective parties. I do not think that it is really a matter for this Parliament to start legislating for local government in Scotland but we can create some of the mood music. I know from debates we have had in your Lordships’ House that from all parts of the United Kingdom and all parts of the House there has been a strong view of the need to decentralise more power in this country.

[Lord Cormack (Con)]

My Lords, if we are to have stability and if this is going to be an enduring settlement, would it not be reasonable, particularly bearing in mind what the noble Baroness said a few moments ago, to have within the final Bill a clause which rules out a referendum for at least 10 years?

[Lord Wallace of Tankerness]

My Lords, my noble friend will recall that the referendum required a Section 30 order to be passed by this House. It was certainly the view of the United Kingdom Government that there was no legal competence within the Scottish Parliament to do so and there is nothing in these draft clauses that would change that. It would still be a matter for this House and the other place to pass a Section 30 order if there were to be a further referendum.

[Lord Maxton (Lab)]

My Lords, unlike the noble Lord, Lord Forsyth, I am a supporter of devolution and have been for a very long time. I also want to make it clear that, like the noble Lord, Lord Forsyth, I voted by post; I voted before the vow; and I did not vote necessarily for further change or devolution to Scotland. I voted no to the simple question of whether Scotland should be an independent country. That is my first point.

My second point is that it is all right to say, “It’s a matter for the Scottish Parliament and the Scottish Government to deal with local government” but that was part of the Smith commission report, which the SNP accepted. What guarantees does the Minister have from the Scottish Government that they will implement further devolution to local government rather than just say that it is a matter for the Scottish Government and the Scottish Parliament to do that? It is not enough to say that. It has to be a guarantee before we start legislating on anything else.

[Lord Wallace of Tankerness]

My Lords, I too voted by post before the vow was made. However, it is also fair to say that the vow raised an expectation, and if a vow which was made was not honoured then that would be a serious destabilisation of the United Kingdom. With regard to the second point on devolution from the Scottish Parliament, in fairness that appears not in the report itself but in the foreword by the noble Lord, Lord Smith. I seem to recall that when he delivered his report he indicated that those were personal reflections, and those reflections have chimed well with many people. That is why it is incumbent on us within our respective parties to try to make sure that the drive for greater decentralisation and devolution within Scotland is carried forward.

[Lord Steel of Aikwood (LD)]

My Lords, the speed with which the Secretary of State for Scotland and others have managed to put together this package is quite remarkable. It is certainly very welcome that the first signs are that the Scottish Government will co-operate in implementing these proposals. In the previous 10 days I have come across a number of people who voted yes in the referendum, who feel now that they had a narrow escape from what could have been a disaster. We could be sitting here discussing an independent Scotland based on oil revenues which are nothing like those anticipated at the time of the referendum. Therefore, is the noble and learned Lord surprised to learn that a lot of people are now realising that we had a very narrow escape? Finally, is there any sign yet that we will get an all-party agreement on a constitutional commission or convention after the election?

[Lord Wallace of Tankerness]

My Lords, my noble friend is right to say that we had a very narrow escape. I dread to think what kind of discussions we would be having now if the vote had gone the wrong way on 18 September. There have been indications of support across parties with regard to a constitutional convention, although I do not think that there is any concrete proposal in place, or any plans at the moment to set one up prior to the election. I endorse my noble friend’s comments about the speed involved. I pay particular tribute to officials in many departments of government, not least in the Scotland Office and in my own office. They were given 37 working days. When the pledge was made with the deadline of Burns Night no one had worked out that it was a Sunday, so that de facto reduced the number of days that were available. They did a tremendous amount of work, and I am very conscious too that there is more work to be done.

[Lord McFall of Alcluith (Lab)]

My Lords, like other noble Lords I voted by post, and I voted for the fiscal integrity of the United Kingdom. I was very pleased to see that the Smith commission unanimously endorsed that fiscal integrity, whereby there would not be two classes of Members of Parliament, and said explicitly that all Members should vote on the Budget. I am asking the Minister a simple question: is that the case? Will all Members vote on the Budget: yes or no?

[Lord Wallace of Tankerness]

My Lords, I cannot say what will happen in a future Parliament. All Members will vote on the Budget that will take place in this Parliament, for which I have collective responsibility as a member of the Government. I do not know what will happen in a future Parliament. There is a debate, but the noble Lord is right to point out what the Smith commission said on that. The noble Lord knows as well as anyone just how difficult it would be on—for example—income tax. That is a shared tax because, while rates and bands will be devolved, personal allowances will remain a matter for the United Kingdom Parliament. The definition of income and what constitutes a tax base will be a matter for the United Kingdom Parliament, and I do not know how to disentangle that.

[Lord Empey (UUP)]

My Lords, is it not the case that this is the fourth set of constitutional proposals in the past 12 months? Is this therefore not a case of constitutional crazy paving where there is no plan? Each proposal is a different shape and serves a different purpose. The point I want to concentrate on is the first part of these clauses covering the issues of the constitutional composition, and in particular the Sewel convention. When is a devolved Parliament not a devolved Parliament? As a result of these clauses, can the Minister confirm that this Parliament will still be able to vote and decide on devolved matters if and when it felt that that was required?

[Lord Wallace of Tankerness]

My Lords, what we have done is put the Sewel convention on to a statutory basis. The noble Lord can see how it has been set out, although it may not immediately be clear from the clause. However, it has been added after Section 28(7) of the Scotland Act 1998, which makes it clear that the Westminster Parliament can still legislate.

[Lord Lexden (Con)]

My Lords, is it not obvious that today’s proposals are bound to increase the demand for English votes for English laws, on which the Government have produced no firm proposals at all? As to Mr Gladstone and home rule all round, that was not his plan. It was the brainchild of the great unionist, Joe Chamberlain.

[Lord Wallace of Tankerness]

I think he changed his mind after that, but I salute my noble friend’s historical knowledge. There is a legitimate issue here. As I have indicated, last December the Government published a Command Paper, but there would not appear to be any consensus. Three versions have been produced by the Conservative Party, including one from my noble friend Lord Norton of Louth, and there was one from the Liberal Democrats. It is clear that there is no consensus, but there is consensus on what we are proposing today.