House of Commons

Monday 9th November 2015 Commons Chamber

Monday 9 November 2015

The House met at half-past Two o’clock

Prayers

Monday 9th November 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 9th November 2015 Commons Chamber

The Secretary of State was asked—

[Philip Davies (Shipley) (Con)]

1. What estimate he has made of the cost to the public purse of the planned reorganisation of fire station provision in Shipley constituency.

[The Secretary of State for Communities and Local Government (Greg Clark)]

Decisions on the cost of reorganising fire stations are a matter for local fire and rescue authorities. Needless to say, I would expect any such reorganisations to save public money, rather than cost more.

[Philip Davies]

I am grateful to the Secretary of State for that answer. West Yorkshire fire authority has given up two fire station properties to hand over to a social housing provider in exchange for one less valuable piece of land to build a new fire station on. There is a lot of concern, not least from firefighters, that at a time of budgetary pressures, the fire authority is tossing away literally tens of thousands of pounds. Does the Secretary of State have any powers to intervene to ensure the taxpayer gets good value for money, or at least to make sure we know the valuation of these lands so that we can see for ourselves what the impact is on local taxpayers?

[Greg Clark]

Before answering my hon. Friend’s question, may I pay tribute to all firefighters for their hard work on bonfire night last Thursday and over the weekend, and may I say how proud I was to meet firefighters and other members of the civilian services on parade at the Cenotaph yesterday? In the 75th anniversary of the battle of Britain we remember the 800 firefighters who were killed and the 7,000 injured defending us during the last war.

I am very concerned about what my hon. Friend says, and I will ask the chief fire and rescue adviser, who has the powers of an inspector, to meet him to understand his concerns and advise me on next steps.

[Liz McInnes (Heywood and Middleton) (Lab)]

I thank the Secretary of State for his response and pay tribute to the wonderful work that our firefighters do keeping us all safe, particularly on occasions such as the recent bonfire night. The Fire Brigades Union is extremely concerned about the forthcoming round of cuts and my hon. Friend the Member for Shipley (Philip Davies) has highlighted a major concern. Is not the Secretary of State guilty of putting ideology before public safety in Shipley, in Yorkshire and beyond?

[Greg Clark]

I am glad that my hon. Friend the Member for Shipley (Philip Davies) is a friend of the hon. Lady’s too; he is a very popular Member of this House. These proposals are locally given and his concern is that they may not be saving money. Any reorganisation has to save public money, not least because we do need to have value for public money, and fire and rescue authorities have had a good record in achieving that.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

With regard to fire provision in west Yorkshire, in my constituency and in west Yorkshire at Wetherby it would make sense for the police station and fire service to go to a joint services site. What can my right hon. Friend do to encourage authorities to take joint sites?

[Greg Clark]

As my hon. Friend knows, a consultation is out at the moment looking at ways in which the blue-light services can co-ordinate with each other so that they can provide the best possible service to our residents.

[Toby Perkins (Chesterfield) (Lab)]

2. What steps he is taking to ensure that proposals for an elected mayor in Sheffield city region include provisions for democratic oversight by people in Chesterfield.

[The Secretary of State for Communities and Local Government (Greg Clark)]

Sheffield city region’s devolution deal with its elected mayor will enable the area to strengthen its position as a world-class centre for manufacturing and engineering. I am considering carefully the question of wider democratic oversight raised by the hon. Gentleman, as the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stockton South (James Wharton), told the House during the recent Committee stage of the Cities and Local Government Devolution Bill.

[Toby Perkins]

I commend all those involved, including the Secretary of State, in attempting to achieve a political consensus, which has been difficult as this is a complicated situation. We are still left with the situation where people in Chesterfield will have a third tier of local government introduced, with a Sheffield city mayor that at the moment they would not be able to vote on and a Nottinghamshire-Derbyshire one that they probably would. Will the Secretary of State continue to work to achieve clarity on democratic accountability alongside the consensus he is rightly seeking?

[Greg Clark]

I certainly will, and I am grateful for the hon. Gentleman’s attendance to this issue; it is very important. No two places are identical, which is the very insight we are having—we are having bespoke deals in each place—but it is important for his and other Members’ constituents to feel they have enough say in the election of people who are going to provide leadership for them.

[Nigel Mills (Amber Valley) (Con)]

Will the Secretary of State say how flexible he is prepared to be on redrawing the boundaries of certain cities to allow, perhaps, certain districts that may currently be in one area and that might prefer to be in a different area to choose to be in that new area?

[Greg Clark]

As my hon. Friend knows, the principle that runs throughout the devolution Bill that we have been debating is one of consensus, so the Bill gives me powers to give effect to what local people put forward but not to impose something against their will. It is an enabling piece of legislation, and what it does mean is that Members such as my hon. Friend have the chance to shape the debate locally.

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

I thank the Secretary of State for his helpful response. Does he agree that, if the Sheffield city region is to be economically successful, all the districts within it will need to have the right to join the combined authority? Also, if we are to have an elected mayor responsible for transport, should not everyone in that travel-to-work area have the right to participate in the vote for that mayor?

[Greg Clark]

The hon. Gentleman made similar cogent points in the Committee stage of the Cities and Local Government Devolution Bill, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stockton South has committed to reflect on those remarks. It has been my experience, when taking Bills through this House, that we should accept the good sense of Members on both sides, and if we can improve the Bill by listening to them, we will certainly do so.

[Jon Trickett (Hemsworth) (Lab)]

The Secretary of State says that he wants devolution for Sheffield and democracy for the whole city region, but in order to secure that, he must first will the means. Unlike many other Secretaries of State, however, he has already capitulated, without a fight, to the Chancellor’s ideological zeal for cutting local government to the bone in Sheffield, Chesterfield and elsewhere. This is compounded by a funding formula that is rigged against areas of high deprivation. Is it not therefore the case that, despite all his fine words, he would allow the Treasury to strangle full-blown devolution in Sheffield and elsewhere at birth?

[Greg Clark]

The Chief Secretary to the Treasury has joined me on the Front Bench, and I do not think he looks like a strangler. He looks pretty benign to me. Sadly for the hon. Member for Hemsworth (Jon Trickett), he has got this wrong. The agreement that I reached with the Chief Secretary to the Treasury today related to my Department’s budget, not the budget for local authorities. In my view, it is right to lead from the front and to make significant savings in the running costs of my Department before I invite local councils to do the same.

[Mr Alan Mak (Havant) (Con)]

3. What steps his Department is taking to speed up the planning process.

[The Minister for Housing and Planning (Brandon Lewis)]

Significant progress has been made over the past few years on speeding up the planning system, to the extent that some 242,000 homes were given planning permission in the year to June 2015. The Housing and Planning Bill will further improve the performance of the planning system right across the country.

[Mr Mak]

House building is a key element of Havant Borough Council’s economic growth plan, Prosperity Havant. Will the Minister join me in congratulating the council on increasing the number of new homes being built in recent years through working in partnership with local developers and communities?

[Brandon Lewis]

I am happy to thank my hon. Friend’s local authority for taking such a pro-growth, pro-housing approach. It is good to see local councils and others in the local area coming together to work out their housing needs and doing their best to provide for their local residents.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

When will the Minister wake up to the fact that many people in this country are desperate for a home? When will he stop blaming planning and show some leadership? What has happened in Ebbsfleet? It was supposed to become a new town, but it has only a tiny number of Barratt-built homes. Why is it not thriving? Why are there not tens of thousands of new homes there?

[Brandon Lewis]

I thank the hon. Gentleman for giving his support to Ebbsfleet; it is a shame that nothing happened there in a decade and more of Labour rule. I am proud that this Government, and this Chancellor, have put the money into Ebbsfleet, and into the infrastructure there, to enable those homes to be built.

[Huw Merriman (Bexhill and Battle) (Con)]

I support my district councils in their desire to deliver thousands of new homes. Would the Minister be willing to support ideas in planning that could up-front infrastructure delivery, such as requiring developers to pay community infrastructure levy moneys from the point at which planning permission is granted?

[Brandon Lewis]

I am always willing to look at new ideas, and I would be happy to meet my hon. Friend to look at that one. The one challenge for the community infrastructure levy is that the local authorities should pool it so that they can use it within their authority areas. His proposal might not lend itself to that in the way that a section 106 arrangement would, but we are committed to reviewing the levy and I look forward to liaising with him and to hearing his views.

[John Pugh (Southport) (LD)]

As the Minister knows, there is a long-standing chronic shortage of good planners and an over-reliance on consultants. Has he found any real solution to that problem?

[Brandon Lewis]

The hon. Gentleman makes a good point. Local authorities should view their planning departments as the heartbeat of economic regeneration in their communities in terms of designing and building for businesses and homes. I would encourage local authorities to work together and to share services in the same way that some have shared chief executives and other parts of their management structure. They have not done that so much with planning yet, but that would be a good step towards building a strong resource.

[Fiona Bruce (Congleton) (Con)]

Community and business leaders in my constituency are concerned that the lack of an agreed five-year housing supply in Cheshire East means that a presumption in favour of housing development is overriding the designation of much-needed land for employment. Given the Government’s provision of £45 million for a Congleton link road to help promote jobs and growth, will Ministers meet me and community representatives urgently to discuss this matter?

[Brandon Lewis]

I encourage my hon. Friend’s area to get their five-year land supply and their local plan in place as quickly as possible, to make sure that local residents have their voice and the protections that are right for them. When planning decisions are made, both by the local authority and by the inspectors, environmental and other policy constraints in that area will be looked at, but I am happy to meet her and her local council.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

4. What assessment he has made of recent trends in the level of house building.

[The Minister for Housing and Planning (Brandon Lewis)]

Housing starts have almost doubled since 2009. More than 608,000 new homes have been built since 2010, which therefore makes almost 800,000 in England since 2009. Trends in house building are published in the quarterly house building release.

[Jonathan Reynolds]

I am keen to see further new housing built in my constituency but I want it built on derelict, former industrial sites, rather than on the green belt. Some of these sites are very contaminated but the Government offer funds to clean up land only for employment purposes, not for housing. Will the Minister re-examine that, because we could be enabling thousands more homes to be built?

[Brandon Lewis]

I hope that the hon. Gentleman will be joining us in the Lobby in due course when we consider the Housing and Planning Bill, which creates the new zones for the brownfield register and the brownfield fund, which the Government will be putting £1 billion into.

[Jake Berry (Rossendale and Darwen) (Con)]

With the welcome increase in the number of planning applications granted for residential development, will the Minister say what assessment he has made of the number of developers who are getting the planning permission but then failing to develop out, in a practice known as “land banking”?

[Brandon Lewis]

My hon. Friend makes a good point; we do want to see planning permissions built out. I would also like to them to be built out more quickly. We can still go a long way towards speeding up the rate at which our traditional builders develop; it is still taking, on average, 20 weeks to build a home, even though modern technology can do it in just a couple of weeks. Clearly, local authorities have to look at the land they are giving permission for, to make sure that planning permission is viable and can be built out in good time, so that land agents out there do not give the development industry a bad name.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Last week, we heard the bluster from the Minister and Secretary of State about the Government meeting the one-for-one replacement of right to buy sales. Is the Minister aware that to stay on track as a result of the increase in the right to buy, 2,300 house building starts are required per quarter, but only 300 were achieved in the first quarter of this year? The Government are therefore going to be woefully short of that target. Does he agree that it is time for a rethink and that they should copy the Scottish Government, who are building record numbers of council houses?

[Brandon Lewis]

As I am sure the hon. Gentleman knows, here in England we built more council houses in the five years of the last Parliament than were built in the entire 13 years of Labour before that. We are very ambitious for our housing programme and we make no apologies for being very ambitious about having one extra home or more built for every home sold through right to buy. The reinvigorated scheme is on target and in London it is almost at two for one.

[Ben Howlett (Bath) (Con)]

As a young person myself, I am acutely aware of the difficulties of getting on to the property ladder. I, too, have been struggling to get on to it for the past 10 years, because of the lack of housing that was built in 13 years of Labour. Will the Minister join me in celebrating the work that Bath and North East Somerset Council is doing in building 7,000 new homes in Bath, of which 2,300 will be affordable? He will, thus, explain how the Housing and Planning Bill will end up benefiting my local authority.

[Brandon Lewis]

My hon. Friend makes a good point, not least about his age. I do not think anyone in this House would argue with the fact that this country has built far too few homes for far too long. We are ambitious about ensuring that we correct that. On that Bill, I suggest that he looks at the starter homes programme, where we will be looking to build some 200,000 homes for first-time buyers, at a 20% discount.

[Victoria Borwick (Kensington) (Con)]

5. What assessment his Department has made of the potential effect of extending Sunday trading hours on high streets and market towns.

[The Secretary of State for Communities and Local Government (Greg Clark)]

The Government believe that there is a strong case for local areas to be able to decide if and where extending Sunday trading should be permitted. It could help some high streets compete with online shopping, for which Sunday is regularly the most popular day.

[Victoria Borwick]

Is the Secretary of State aware that extending Sunday opening hours by just two hours in London will have a very positive effect on both employment and trade? Will he consider allowing the devolution of Sunday trading hours to the Mayor of London, the other metro mayors, or London councils following the success of such a move during the Olympics 2012?

[Greg Clark]

I am aware of the study to which my hon. Friend refers. Up to 50% of the visitors to the west end are from overseas; they are tourists who are keen to spend their money here, and it is sensible to have arrangements in place that enable them to do so. She is a central London MP, so her residents will also benefit from such a move.

[Rob Marris (Wolverhampton South West) (Lab)]

Will the Minister look at the matter again? Extending Sunday trading will have a deleterious effect on family life, as it already does, and will adversely affect many trade unionists who live in market towns and elsewhere, because the protections that are supposedly afforded to workers working on Sundays, or refusing to do so, are not succeeding very well? Will the Minister please look again and decide not to extend Sunday trading?

[Greg Clark]

There is a consultation out on this at the moment, but the proposal in the consultation is to allow local councils to make those decisions. Councils have a wide remit, social as well as economic, to look after the interests of their area. It could be that allowing some areas or particular stores such as garden centres to open on their busiest day—Sunday—is in the interests of everyone in the area.

[Mr David Burrowes (Enfield, Southgate) (Con)]

The Secretary of State says that there is a good case for devolution and deregulation, but is he not jumping the gun when the consultation has yet to be published? It was 12 pages long, and it closed seven weeks ago. We have eight days before day two of the Committee stage when the plan is to amend Sunday trading laws. Are we not going ahead of that consideration of the consultation, and are we not running the risk of aggravating small businesses, shop workers, families, Churches and many others without great material gain?

[Greg Clark]

No, we have not published the response to the consultation yet, but we would not have had a consultation had there not been a proposal from the Government that having this power in the hands of local authorities would be consistent with the devolution that we have practised. We will of course respond to the consultation in due course. I do know that my hon. Friend has sincere and long-held views on this matter, on which of course we will reflect.

[Alison Thewliss (Glasgow Central) (SNP)]

The Secretary of State will be aware of the concerns raised by the Union of Shop, Distributive and Allied Workers and other organisations that there may be implications on the pay and conditions of shop workers from devolving Sunday trading laws. Can he give those workers any reassurances, and has he met USDAW to discuss the matter?

[Greg Clark]

I am very surprised by the hon. Lady’s question, because Sunday trading is completely deregulated in Scotland. As far as I know, it is operating without problem, but if it does give rise to problems, the hon. Lady’s party is the party of Government in Scotland so has the ability to do something about it.

[Alison Thewliss]

On the contrary, in the Scotland Bill there are no provisions on pay and conditions or on employment law. Specifically on Scotland, will the Secretary of State assure us that there will be no impact on the pay and conditions of Scottish workers as a result of the decision of English local authorities?

[Greg Clark]

We risk jumping the gun in the way that my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) has just said. We have published a consultation proposal. It does not affect Scotland, because it is a devolved power. Of course we will want to ensure that workers have protections so that they are not obliged to work either for the first time on Sundays if they do not wish to, or to be compelled to extend their hours. That would make complete sense in any response to the consultation.

[Sir Simon Burns (Chelmsford) (Con)]

6. What support his Department provides to local authority planning departments to facilitate sharing of services.

[The Minister for Housing and Planning (Brandon Lewis)]

Planning authorities that have introduced new ways of delivering planning services have shown that performance can be improved while reducing costs. I hope that more will follow their lead. We have put support in place through funding the Planning Advisory Service, and we are open to supporting planning authorities to deliver ambitious proposals through devolution deals.

[Sir Simon Burns]

Does my hon. Friend accept that shared services can lead to cost savings and greater efficiency. What can be done about those local authorities that consistently fail to meet their timetables for taking planning decisions, which holds up the development of new housing and economic growth?

[Brandon Lewis]

My right hon. Friend is right to highlight local authorities which do not play their part and thus create a problem. I hope local authorities will be keen to make sure they deliver the housing their communities need. He has the advantage of having a local authority, Chelmsford, which is one of the better performing planning authorities, as I know from my experience as a council leader nearby. It is clear that local authorities that share services can make sure that they protect and improve front-line services, such as planning services, and can see savings of as much as 20% on the work.

[Derek Twigg (Halton) (Lab)]

Many local authorities, including my own, Halton, do a lot of good work through sharing and working in co-operation with other local authorities, but services such as planning have been cut to the bone and have great difficulty meeting requests. When does the Minister think planning and other departments in councils will reach a point where they struggle to deliver their service?

[Brandon Lewis]

Planning is one of the services that councils, particularly small district authorities, have not gone very far in sharing. In some of the shire areas and small district councils in particular, coming together with one strong planning service is not just cost-effective, but will produce a good quality service and interesting work for the planners to do as well.

[Martin Vickers (Cleethorpes) (Con)]

Residents in north-east Lincolnshire have been without a local plan for many years, and it will take another 20 months on a revised timetable to produce one. They would welcome shared services. Will my hon. Friend use his good offices to have a word with the council to see whether it could co-operate more closely with its neighbours to produce a plan much more quickly?

[Brandon Lewis]

My hon. Friend makes a good point. As we have just heard, devolution provides opportunities. My hon. Friend is right to prod, encourage and cajole that local authority to make sure that a local plan is in place in the best interests of local communities, but as we have said and as we are outlining in the Housing and Planning Bill, the Government will make sure that these are done from 2017.

[Stephen Gethins (North East Fife) (SNP)]

8. What assessment he has made of the potential merits of further extending measures on community buy-outs of local assets.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

All over England communities have listed over 2,600 assets with local authorities. I am undertaking a review of the community right to bid, in line with our manifesto commitment. We are consulting a wide range of stakeholders and will report our findings soon.

[Stephen Gethins]

The Community Empowerment (Scotland) Act 2015 passed in June by the Scottish Parliament decentralises power, giving local authorities and public bodies a legal duty to consider transferring property to communities. Will the Minister consider following the lead of the Scottish Government on this issue and on further decentralisation?

[Mr Jones]

In many ways the hon. Gentleman’s party is following the lead from our party and the Localism Act 2011. The hon. Gentleman needs to consider that community rights in England are not centrally driven or managed from the centre. We should recognise and balance the rights of the local community with the rights of property owners and individuals. We do not want red tape which affects businesses and creates additional burdens on local authorities and taxpayers. That is what the hon. Gentleman’s proposal would create.

[Mike Wood (Dudley South) (Con)]

What advice would the Minister give to planning authorities that do not treat the presence of community pubs on the register of assets of community value as a material consideration when planning applications are considered?

[Mr Jones]

Local authorities should certainly take into account community rights and the listing of pubs as assets of community value when they make planning decisions in their local area.

[Neil Carmichael (Stroud) (Con)]

9. What assessment he has made of the likely effect of devolving powers to, and encouraging co-operation between, local authorities on local economies.

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

Co-operation can power economic growth, and devolution is acting as a catalyst for co-operation right across the country. We are seeing local authorities and local authority leadership coming forward with proposals for new combined authorities, working together to identify the powers that they want for their area. A long-lasting sensible devolution settlement can enable economic growth on the scale that we want to see, and deliver for the communities we are all here to represent.

[Neil Carmichael]

Does the Minister agree that we need strong, visible and courageous leadership at that level so that those authorities can provide the strategic plan necessary and harness all the aspects of economic plans and economic activity? That is the only way we will make the policy work. I hope we will have such leadership in Gloucestershire.

[James Wharton]

My hon. Friend is a passionate advocate for Gloucestershire and on this issue he is absolutely right. We need that sharp accountability. We need to ensure that local people can hold to account those who make the decisions that they are empowered to take under devolution. We need to ensure that somebody is in place who can drive forward the growth of the economy in areas that secure devolution deals, because that is how we will make this policy a success and ensure that it lasts for the long term.

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

Through no fault of our own, Hull runs the risk of being excluded from the back-room devolution deals that are being done for Yorkshire at the moment. If that is the case, will the Minister undertake to work with Hull and the Humber to make sure that we really can be part of the northern powerhouse that he wants to see in Yorkshire?

[James Wharton]

The hon. Lady raises a very important point. Many areas across the country recognise what devolution can do and want to be part of it. Discussions continue in Yorkshire and Humber. We want to find deals that work for local areas. They have to be reached by agreement, have to be bottom-up and bespoke, and have to match the economic geographies that exist. When we get those deals—we will continue to work with areas that want them to deliver them—I am sure we can ensure that they last for the long term and drive real difference in the improvements we want to see.

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

In the east midlands we currently have a joint bid by Derbyshire and Nottinghamshire and a separate bid by Leicester and Leicestershire. Does my hon. Friend agree that it might make more sense to have a combined bid of the three counties, previously known as the golden triangle?

[James Wharton]

My hon. Friend puts forward an interesting and important idea. However, I am not going to tell any area what its devolution proposal geography should look like. It is for areas to come together and identify the opportunities and sensible economic areas that exist. I am sure that those who are engaged in the discussions with the Department will have heard his comments, and I am sure that we can ultimately find a solution that will work for everyone.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

One of the great drivers of local economies is education and skills. The Labour party’s London challenge transformed education in the capital. Why will the Secretary of State not show some leadership and push for his new set of combined authorities to gain responsibility for commissioning new schools and raising standards? Why the obsessive centralism in relation to education?

[James Wharton]

I remember standing in this place in the previous Parliament advocating free schools in my constituency and coming up against strong resistance from those on the Opposition Benches, including the hon. Gentleman. This is the ultimate freedom for communities to control the future of their education. We want to ensure that areas get the right devolution packages to deliver for their economies. We will continue to work with all areas on the asks that they have, but this is a bottom-up process that comes from the local leaderships, and we want to work with them to deliver this and ensure that what we deliver is fit to last for the long term.

[Mr Peter Bone (Wellingborough) (Con)]

10. What recent discussions he has had with his ministerial colleagues on proposed changes to business rates.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

By the end of this Parliament, local government will keep 100% of the business rates it collects locally. This represents a major step in devolving powers and responsibilities to local government. In developing the scheme, I will discuss the details with ministerial colleagues, local government and business.

[Mr Bone]

Business rate policy is vital to the continued planned development of Wellingborough. A planning inspector recently said that Wellingborough did not have a five-year land supply and allowed a completely unsustainable development in the village of Isham. How can the council plan for business rates and council tax when its land supply figure is challenged? Is it possible for the Secretary of State to certify whether a council has a five-year land supply?

[Mr Jones]

My hon. Friend will know that under the national planning policy framework all planning authorities must be able to demonstrate a five-year land supply. At this point, I am not able to make a specific commitment in relation to Wellingborough, but I certainly undertake to write to my hon. Friend on this very important issue for his constituents.

[Jo Cox (Batley and Spen) (Lab)]

My local authority, Kirklees, estimates that it would be £32 million short if the proposed business rate changes had been made this year. What plans does the Minister have to make sure that certain authorities, such as mine, are not penalised by the proposed changes?

[Mr Jones]

I thank the hon. Lady for that important question. We are going to work with local government in implementing this policy. I can assure her constituents that there will be some form of redistribution of resources between councils under the new scheme so that areas do not lose out just because they start from a weaker position than others.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

The imposition of business rates on empty properties is increasingly holding back the regeneration of brownfield sites in town and cities. Before any devolution, may I strongly encourage Ministers to revisit and reform this part of the system so that we can build more homes and workplaces?

[Mr Jones]

My hon. Friend will know that a business rate review is currently under way. We will take into account all the factors in relation to business rates, empty property business rates and so forth in that review, which will be updated at the spending review and the autumn statement. Further information should be available by the end of this year.

[Mr Steve Reed (Croydon North) (Lab)]

The Government’s plans to localise business rates are very welcome, but without a clear plan to equalise funding it could simply widen the gap between the most and the least deprived communities. We need to hear what specific measures the Minister wants to put in place to address that question, and councils need to know when he intends to make such an announcement so that they can plan.

[Mr Jones]

The hon. Gentleman will know from my answer to the hon. Member for Batley and Spen (Jo Cox) that we are considering this matter very carefully with local government. We will discuss the new scheme coming forward with local government, and, as he knows, there will be a redistribution of resources. Just to reassure him, under the current business rate scheme brought in by the Government several years ago, areas such as Leeds will benefit from £15 million in additional income from the current scheme this year. That is as a result of the scheme that we have put in place, and I do not think it is disadvantaging the type of areas to which the hon. Gentleman refers.

[Chris Green (Bolton West) (Con)]

11. What support his Department provides to local authorities to encourage development of brownfield land; and if he will he make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

If we are to deliver this Government’s economic plan to achieve and unlock the growth potential that exists in this country, brownfield land must have a part to play in delivering the houses and commercial properties that we need to see built. That is why this Government are establishing a £1 billion brownfield fund and why we are establishing the brownfield register. We want to deliver development in the right places and in the right way, and that is what we are doing.

[Chris Green]

I welcome the Government’s plans to utilise brownfield sites and to require local planning authorities to compile a register of land. Can the Minister assure me and my constituents that the infrastructure needed will be included in the plans and will be introduced in tandem with such developments?

[James Wharton]

My hon. Friend makes an important point. We want to ensure that planning on brownfield sites is as straightforward as it can practically be, but it must go hand in hand with the existing needs in some locations for infrastructure to support those developments. That is exactly what we will do: those requirements will continue to exist, local authorities will still have such powers and controls, and the Government will of course work with them to ensure that we are developing for the long term and sustainably, which of course includes infrastructure as well.

[Robert Neill (Bromley and Chislehurst) (Con)]

The brownfield register of course builds on the welcome work of the Mayor of London’s London land commission, as well as the proposed changes to business rate relief suggested by my hon. Friend the Member for Hertford and Stortford (Mr Prisk). Will the Minister also look at particular changes to the planning regime for brownfield land? For example, the accelerated introduction of in-principle permission would enable developers to go to the market, borrow up front against that permission and therefore accelerate bringing sites forward.

[James Wharton]

My hon. Friend makes a very important point. This is one of the issues that my hon. Friend the Minister for Housing and Planning will cover in the Housing and Planning Bill. We want to ensure that where brownfield sites are identified as suitable for development, the planning system works with local authorities and people who want to invest to unlock the sites and ensure that they are developed in the right way, speedily and at the right time. London is currently under great leadership. We can learn a lot from some of the things that have been done by the Mayor of London. We want to take the best things that he has done and apply them elsewhere.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

12. What plans he has to improve conditions for tenants in the private rented sector.

[The Minister for Housing and Planning (Brandon Lewis)]

The Housing and Planning Bill contains measures to tackle rogue landlords who rent out substandard accommodation. The proposals include the introduction of a database of rogue landlords and letting agents, banning orders for serious or repeat offenders, a tougher fit and proper person test, and the extension of rent repayment orders as well as the introduction of civil penalties.

[Dr Whitehead]

I am sure the Minister will be aware that the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 could have made a great difference to the improvement of tenant conditions by requiring landlords to uprate their properties. I am sure the Minister will also be aware that the regulations were heavily dependent on the operation of the green deal, which was abolished shortly after the regulations were laid. Does the Minister now intend to intervene to get the regulations rewritten so that they actually work when they are introduced and tenants can benefit from landlords uprating their properties?

[Brandon Lewis]

We have no intention of imposing any new regulatory burdens on the private rented sector because that simply pushes up costs, which reduces choice and is bad for tenants, and because we want supply to increase. In the Housing and Planning Bill, we will target criminal landlords who are ignoring their existing legal obligations.

[Judith Cummins (Bradford South) (Lab)]

18. Private renters face up-front letting fees of up to £500 when they move house and charges when they renew their tenancies. Will the Minister tell the House why the Government’s Housing and Planning Bill does nothing to get to grips with the scandal of sky-high letting fees?

[Brandon Lewis]

The measures that we are taking to deal with bad and rogue landlords, whom I am sure we all want driven out of the system, as do the many good landlords out there, have been welcomed by people across the sector, including Shelter, which thinks they provide a good focus to ensure that tenants get the right protection. The changes that we have brought in to bring transparency to letting agent fees have just come into play and we will review them in due course. Being aware of what people are paying is absolutely key.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Research released today shows that since 2005, more than 1.5 million properties have gone from being owner-occupied to privately rented—a sector that is notoriously insecure. Longer tenancies could stabilise the sector, yet most mortgage lenders insist that tenancies are restricted to a year, and freeholders of leasehold properties, many of which are local councils because the properties have been bought through right to buy, often restrict tenancies for a year. What conversations has the Minister held or does he intend to hold with the Treasury and his DCLG colleagues about lifting those artificial barriers to longer tenancies?

[Brandon Lewis]

One of the biggest things that we can do to increase tenancy security is to ensure that we have growing and stronger institutional investment in the private or professional rented sector, so that there is more supply from institutional investors, like elsewhere in the world, where there are one-year tenancies but there is security because the properties stay in the sector. That is why we have the £1 billion build to rent fund, which will see 10,000 homes coming through. There are already 15 schemes under that fund, which are worth more than £450 million and will supply thousands more homes. That is the answer to ensure that more homes are available.

[Clive Lewis (Norwich South) (Lab)]

13. What assessment he has made of recent trends in the level of rough sleeping.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

The Government are committed to protecting the most vulnerable in society. One person without a home is one too many. That is why, since 2010, we have invested more than £500 million to prevent and tackle homelessness in England.

[Clive Lewis]

Across the UK, homelessness has increased by more than a third in the past five years. In my home city of Norwich, it has doubled in the past year alone, with devastating consequences for one rough sleeper, known locally as Sergio, who was found dead on the streets of the city a couple of months ago. Will the Minister tell us why there is nothing in the Housing and Planning Bill to tackle this disgrace?

[Mr Jones]

The hon. Gentleman mentions a significant incident in his constituency. I reassure him that the Government are committed to helping rough sleepers to get off the streets. The “No Second Night Out” scheme that we have supported is delivering that. We are also funding the world’s first homelessness social impact bond, which is reaching 830 entrenched rough sleepers in London who have been sleeping rough for a considerable time, and getting them off the streets and into accommodation.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am assisting a young woman from Syria who on Thursday will be made homeless from her Serco accommodation. She has no prospect of alternative housing because she is not deemed to be a priority housing need. How many single people, including young female refugees like Samia, are at risk of having to sleep rough? What is the estimate for the increase in those numbers if the Welfare Reform and Work Bill is enacted?

[Mr Jones]

As I said in response to the previous question, my Department is working extremely hard to prevent single homelessness. I am committed to doing more to improve services to help people who have complex needs. We are supporting some of the most vulnerable people in society. I am holding a series of round tables with the homelessness sector to support people like the hon. Lady’s constituent.

[Ian Lavery (Wansbeck) (Lab)]

14. What steps he plans to take to ensure adequate funding of fire and rescue services.

[The Secretary of State for Communities and Local Government (Greg Clark)]

The spending review will set out the resources that are available to local government as a whole, and the allocations for each authority will be published in the provisional local government financial settlement later this year.

[Ian Lavery]

Northumberland fire and rescue service made proposals last week further to cut front-line services, which will undoubtedly compromise public safety and the safety of people in the brigade. Can the Secretary of State explain how it is in the best interests of the general public for fire and rescue service budgets to be slashed and slashed to the bone?

[Greg Clark]

The hon. Gentleman gets it wrong. The National Audit Office recently published a report stating that, financially, fire and rescue authorities have coped well with the reductions. We know that there has been a 42% decrease in incidents over the past 10 years, and it is right that all parts of the public sector make savings. As it happens, the fire and rescue authorities have made savings of less than the rest of local government.

[Amanda Milling (Cannock Chase) (Con)]

I welcome the consultation on proposals for greater integration and collaboration between police and fire and rescue services. Will the Minister confirm that that will not mean the end of the distinction between firefighters and police officers?

[Greg Clark]

My hon. Friend is absolutely right, and I read the transcript of the debate that she secured in Westminster Hall. It is right to consider where collaboration can improve safety, which was one of the points that she raised in the debate, but there is absolutely no requirement to eradicate the separate services that our communities so value.

[Michelle Donelan (Chippenham) (Con)]

15. What support his Department provides to people affected by domestic violence who are seeking refuge.

[The Secretary of State for Communities and Local Government (Greg Clark)]

Protecting women and girls from violence and supporting victims of sexual violence is a priority for the Government. Our manifesto committed us to ensuring a secure future for refuges. In the summer Budget we committed a further £3.2 million for refuges, and we will consider the matter further in the spending review.

[Michelle Donelan]

As a trustee of a fantastic Chippenham charity, Helping Victims of Domestic Violence, I welcome the Government funding committed in the July Budget. Will the Minister update the House not only on what work the Government are doing to improve victims’ access to refuges, but on what support they are giving local independent charities that play a vital role in constituencies such as mine?

[Greg Clark]

My hon. Friend makes an excellent point. She supports the charity in her constituency, and I have had the privilege of seeing the fantastic work done by a charity in my constituency. Part of the point of the additional funding that has been made available is for local authorities to work with such voluntary groups to ensure that a service is available to all women who need it at the time when they need it.

[Fiona Mactaggart (Slough) (Lab)]

Every Member will know that depending on charities for that type of service means depending on groups that are working hand to mouth and have no future security. Will the Secretary of State insist that local authorities give them a secure funding future and invest in specialist services, rather than expecting housing associations that are open only between 9 o’clock and 5 o’clock to make refuge provision?

[Greg Clark]

The right hon. Lady is right that voluntary organisations need to work with local authorities. There needs to be a network of provision across the country, because the victims of domestic violence often have to go to a different local authority area to flee the people who have persecuted them and engaged in violence against them. She is right that there needs to be a dependable national system.

[Peter Heaton-Jones (North Devon) (Con)]

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

[The Secretary of State for Communities and Local Government (Greg Clark)]

May I start by wishing a happy Diwali to everyone who will be celebrating the festival of lights later this week?

Since our last oral questions, we have agreed with the housing associations the extension of the right to buy to more than 1 million tenants; we have agreed devolution deals with Sheffield, the Tees Valley and the north-east; the Chancellor has announced that councils will keep 100% of business rates; and we have had Second Reading of the Housing and Planning Bill and the Cities and Local Government Devolution Bill. We will continue to develop new devolution deals with local communities in order to devolve more powers throughout the country, at the same time creating more homes and homeowners.

[Peter Heaton-Jones]

North Devon District Council has just started a final period of public consultation on its local plan. That has been some years in the making, and its absence has caused some difficulties, as the Secretary of State will know, as he kindly attended a meeting with me and a delegation from the council a few weeks ago. Does he agree that it is important for the council to get a local plan, and therefore a five-year land supply, in place, and will the Department give it every assistance in doing so?

[Greg Clark]

We will indeed. My hon. Friend will know that local places have until 2017 to come up with their plans. If they have not done so by then, we will work with local communities to ensure that they have a plan.

[John Healey (Wentworth and Dearne) (Lab)]

In his autumn statement two years ago the Chancellor said that

“we must confront this simple truth: if we want more people to own a home, we have to build more homes.”—[Official Report, 5 December 2013; Vol. 571, c. 1108.]

Will the Secretary of State confirm that the number of new homes built in the best year of the previous Parliament’s five years was still lower than in the worst year out of 13 years of the last Labour Government?

[Greg Clark]

The right hon. Gentleman is having a characteristic bout of amnesia, because the worst year for housing starts was when he was a Minister in the Department for Communities and Local Government. That was the worst year for housing starts in peacetime since the 1920s, and 88,000 new homes were started. He has form on this.

[John Healey]

Never mind the bluster about starts—as the Chancellor said, new homes built are what count. Figures from the Secretary of State’s Department state that 124,980 homes were built in 2009 in the depths of the recession. Five years later in 2014—the Secretary of State’s best year—with a much-trumpeted growing economy, 117,720 houses were built. The answer to that failure was set out in his manifesto pledge, which mentioned 275,000 more affordable homes and 200,000 new starter homes in this Parliament. Will he guarantee that he will not double-count those numbers, and that new starter homes will be additional to affordable homes?

[Greg Clark]

The right hon. Gentleman’s record has gone down in history—he presided over the lowest number of housing starts since the 1920s. This is not just about a collapse in the total number of houses being built, but about affordable housing. During his time in the previous Government, the stock of affordable homes fell by 420,000. I have been doing my research about the right hon. Gentleman because he has form on this issue, and it is a cheek for him to talk about affordable housing. As he might remember, when he was Financial Secretary he published a report that stated that the Government’s No. 1 objective was:

“Freeing up or avoiding social tenancies.”

No wonder there was a collapse in the stock of affordable housing—he wanted to avoid those tenancies.

[Stephen Hammond (Wimbledon) (Con)]

T3. Will my right hon. Friend confirm whether starter homes will be built only on exemption sites, or will new legislation allow them to be built more widely?

[Greg Clark]

As my hon. Friend will know, the Housing and Planning Bill will oblige local authorities building on all significant sites to include a contribution to starter homes, recognising that there are young people across the country who want to get a foot on the housing ladder.

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

T2. The planning policies of Sutton borough and the Mayor of London prioritise development on brownfield sites over greenfield sites and metropolitan open land. Is the Minister as surprised as I am that in a debate on Wednesday, an Education Minister described a site on metropolitan open land as the “preferred” site for a new secondary school, despite a brownfield site having been identified and purchased by the local authority? Will the Minister talk to the Education Minister about the basics of planning, and explain to him why it was perfectly in order for a local authority to prioritise development on brownfield land?

[The Minister for Housing and Planning (Brandon Lewis)]

As the right hon. Gentleman will know, we prioritise brownfield planning permission. He will also know—I am sure I do not need to “educate” him, to use his phrase—that I cannot comment on a particular planning application due to the quasi-judicial role. I am happy to look at some of the details he has outlined.

[Mark Menzies (Fylde) (Con)]

T10. As the Minister will be aware, I am a great supporter of enterprise zones. Will he assure me that before further consideration is given to yet more enterprise zones in Lancashire, we will make every effort to ensure that the two existing zones—one of which is in my constituency —and a further one that may be announced in coming days, are successful?

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

I am happy to give my hon. Friend that assurance. Enterprise zones can be drivers for growth, and the Government have invited bids for a new round of them. We look forward eagerly to seeing which areas will be successful, based on the strength of their economic case, and looking at the potential that areas have to drive that growth. We must ensure that we create new zones where they can bring real benefit, and that existing zones are successful. That is what we intend to do, and I am always happy to discuss any specific concerns with my hon. Friend.

[Melanie Onn (Great Grimsby) (Lab)]

T4. According to the Government’s figures, the homelessness prevention grant has helped councils keep 1 million people from becoming homeless since 2010. Last month, I wrote to the Minister to ask that his Department protect that grant from the forthcoming spending review. In his reply, he failed to give any assurance, so my question now is if the grant is removed, what effect will it have on homelessness in coming years?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

As the hon. Lady has identified, the £400 million that the Government have put into the homelessness prevention grant over the last five years has been part of a significant package to keep 935,000 families from becoming homeless. As she knows, a spending review is coming up, and that is one of the areas that we are considering very carefully: she will learn more about it and other policies on homelessness after the 25th of this month.

[Jo Churchill (Bury St Edmunds) (Con)]

In my Bury St Edmunds constituency, both the district council and the county council have an appetite for building houses. They would like to know what support the Minister will give them for looking at funding arrangements in order to facilitate that growth.

[Brandon Lewis]

Having visited my hon. Friend’s constituency and local authorities over the summer, I know what appetite they and other district and county councils have to build more homes. That is good to see. I am fully aware that they want to move forward and, through the devolution deals—I know that Suffolk County Council and Norfolk County Council are engaged with them—we are looking at what we can do to support more economic development and housing growth to satisfy their ambitions.

[Andy Slaughter (Hammersmith) (Lab)]

T5. Over the three years to 2014, the Mayor of London fell short of his target for building affordable homes by 40%. He was not helped by councils such as Hammersmith and Fulham—then Tory-controlled—which actually managed to reduce the number of social and affordable rented properties by sale or demolition. Those policies are now enshrined in the Housing and Planning Bill: what are they but crude pieces of social engineering?

[Brandon Lewis]

If the hon. Gentleman looks at the extended and reinvigorated right to buy since 2012, he will find that in London roughly two extra homes have been built for every home that has been sold. We have made it clear that we want to see the Housing and Planning Bill increase not only home ownership, but housing supply. I encourage local authorities, including his own, to make sure that they deliver more home development permissions than before.

[Richard Graham (Gloucester) (Con)]

The draft joint core strategy for Gloucester, Cheltenham and Tewkesbury was submitted almost exactly a year ago to the Planning Inspectorate, since when no substantive reply has been received. Without agreement on the JCS, the Gloucester city local plan cannot be finalised. Will the Minister give vigorous encouragement to the relevant inspector to respond to the Gloucester JCS as soon as possible so that local government can then make real progress on both documents?

[Brandon Lewis]

I know that the examination of the plan is ongoing. I also understand that in September the inspector was in touch with the local authority and agreed an extension of time to allow the authority to undertake some further work. I further understand that it has been agreed that a hearing will be scheduled for January 2016 so that consultation can take place on the additional work. I will look into the detail of the case because it is critical that inspectors approach examination from the perspective of working pragmatically with local authorities to achieve a sound local plan.

[Daniel Zeichner (Cambridge) (Lab)]

T6. The Minister wants to punish council tenants who do well by raising their rents. In a high-cost city such as Cambridge, £30,000 is now the Government’s cap on aspiration. He has been vague about what household income means: will he give us a proper definition today?

[Brandon Lewis]

Obviously we will be taking this issue through in the Housing and Planning Bill over the next few weeks, and it will no doubt be discussed. We are clear, as has been welcomed by the housing associations and local authorities, that it is right that high earners pay their way.

[Chloe Smith (Norwich North) (Con)]

Can the Secretary of State give any update on his discussions with local government about the resettlement of Syrian refugees?

[Greg Clark]

I can indeed. The Under-Secretary of State for Refugees, my hon. Friend the Member for Watford (Richard Harrington) has had a close and co-operative dialogue with local authorities to settle, in particular, the refugees who will arrive on planes in the next few weeks. We are in a good place in being able to find good homes for them.

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

T7. The north-east is desperate for a meaningful devolution of powers. I am sure the Secretary of State would agree that they must include powers over transport, at least those London has. Despite the recent ruling of the Quality Contract Scheme board, can we have our buses back?

[James Wharton]

The hon. Lady takes a keen interest in devolution in the north-east. It is no small step that both the north-east and Tees Valley have recently entered into devolution deals with the Government. We want to continue to look at all areas of devolution that local leadership wants to put forward. We will continue to have discussions with them about that. The agreements signed only a few weeks ago are a significant and welcome step in that direction for our shared regions.

[Jason McCartney (Colne Valley) (Con)]

My local Kirklees Council has today begun a long-overdue consultation on its local plan. Does the Minister agree that the council must listen to local communities as well as developers, and must take into account the Government’s £1 billion brownfield first campaign?

[Brandon Lewis]

My hon. Friend makes a very good point. Another area entering into consultation is welcome news. It is vital that local area plans represent and take into account the views of the local community. I encourage the local authority to listen very carefully to residents in his area.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

T8. After the Energy and Climate Change Committee wrote to the Government deploring their lamentable failure to get anywhere near targets on low carbon heat reduction and saying specifically that they had to go beyond part L of the building regulations to get new homes back on track, is the Minister reconsidering his decision to abolish the code for sustainable homes?

[James Wharton]

Significant steps have been taken in recent years in strengthening building regulations to lower the carbon footprint of the homes we build. We have to ensure we work with industry and interested parties and we look at the implications of all decisions taken. We are, of course, always looking at the process by which that can be done and the options available to us. We have to see the effect that changes already made will have in reducing significantly the carbon footprint, and in setting us further on the path to the ultimate goal that I think many in this place share.

[Mr Philip Hollobone (Kettering) (Con)]

I welcome the Government’s recent policy announcement on new planning applications from Gypsies and Travellers in the countryside. Has the Planning Inspectorate been fully briefed on the Government’s programme, and will particular importance be attached to combating the overconcentration of sites in the countryside?

[Brandon Lewis]

My hon. Friend makes a very good point. The short answer with regard to the Planning Inspectorate is yes. We are very keen to ensure that the planning system treats everybody equally and fairly, and that everybody abides by the same rules in a fair and proportionate way.

[Kelvin Hopkins (Luton North) (Lab)]

T9. Will the Government legislate to provide for a substantial programme of municipalisation of private sector housing, especially empty homes, to help to rebuild the local authority housing sector to provide more decent homes at affordable rents for thousands of families languishing on housing waiting lists? If they will not do that, will they explain why?

[Brandon Lewis]

I am very proud of the fact that we have pretty much one of the lowest levels of empty homes on record thanks to the work done and the substantial investment made in the past few years, and to the fact that the new homes bonus applies to empty homes. I encourage local authorities to look at those kinds of properties and think about what they can do with them, and to deliver housing—whether affordable, private rented sector, or, for example through the new starter homes programme, homes for sale to people who want to be able to afford to buy their own home—for their local area.

[Tom Pursglove (Corby) (Con)]

I once again commend the excellent enterprise zone in Corby bid, which is supported by both Corby Borough Council and East Northamptonshire Council. Will the Minister provide us with an update and let us know when we are likely to hear the outcome?

[James Wharton]

My hon. Friend is a passionate advocate for Corby. I have had a number of discussions with him on a whole range of issues relating to his constituency. He is proving himself to be a most diligent Member of Parliament. A large number of enterprise zone bids have been received and are being considered. We will assess the economic case and look at a range of factors that inform those decisions, and an announcement will be made in due course.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

What advice should I give to my constituent, who is currently in a homeless shelter? He came from Jamaica in the early ’60s with his family. He never went abroad, and so has never had to prove his immigration status. He cannot afford to apply for British citizenship right now, but says he cannot be rehoused because there is a requirement for him to prove his immigration status.

[Mr Jones]

I thank the right hon. Lady for bringing that case to the House. If she writes to me with the details, I will certainly look into it.

[Several hon. Members rose—]

[Mr Speaker]

I am sorry to cut off questions at this point, but demand has exceeded supply, as is ordinarily the case.

Speaker’s Statement

Monday 9th November 2015 Commons Chamber

15:34

[Mr Speaker]

Before we move to the next business, I would like to make a short statement. I remind the House that Wednesday is 11 November, Armistice Day. Although the House is not sitting, many of us might well be on the estate, performing our parliamentary duties. I regard it as appropriate that at 11 o’clock on Wednesday, we and staff working for us should join the nation in observing the two-minute silence, so that we might remember those who gave their lives for their country to help to preserve our democratic freedoms. Instructions will be issued to the heads of House departments, so that members of staff who wish to observe the two-minute silence, may do so.

Police Funding Formula

Monday 9th November 2015 Commons Chamber

15:35

[Keith Vaz (Leicester East) (Lab)]

(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the police funding formula calculation errors.

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

It is with regret that the Home Secretary cannot be with us today, as she is attending the extraordinary meeting of the Justice and Home Affairs Council in Brussels.

The Government believe that police funding must be allocated on the basis of a modern, transparent and fair funding formula that matches the funding demands faced by the police, but I think we all agree that the current arrangements are unclear, out of date and unfair. In recent years, many chief constables have called for a new formula. The National Police Chiefs Council, the Association of Police and Crime Commissioners and Her Majesty’s inspectorate of constabulary have all called for a revised model. The issues with the current formula are well known. In 2009, the former Policing Minister, the right hon. Member for Delyn (Mr Hanson), agreed to review the police funding formula—[Interruption.] Sorry, in 2009, he called for it to be reviewed, but sadly it was not. The Home Affairs Committee, the National Audit Office and the Public Accounts Committee have all argued for a new formula as well.

In the previous Parliament my predecessor announced that the Government would review the formula, and in July we went into consultation. That closed in September, having received 1,700 responses. Since then, we have been working with forces around the country on the principle of how their budgets could go forward. I am sad to say that during this process a statistical error was made in the data used. The data do not change the principles consulted on and the allocation provided to the forces was never indicative, but we recognise that this has caused great concern to police forces around the country. I and the Government regret the mistake, and I apologise to the House and to the 43 authorities I wrote to during the extended consultation period as part of the funding formula review.

For that and other reasons, the Government are minded to delay the funding formula changes for 2016-17 that we had previously intended to make, and we will seek the views of the police and crime commissioners and the National Police Chiefs Council before going any further. It is essential that we come to a funding formula that is not only fair, transparent and matched by demand, but supported by the police. I have listened throughout the consultation, and the Government will continue to do so in considering the next steps, in conjunction with police leaders. I will update the House in due course. We should all support the reform of the police funding formula. Police forces and Committees of the House have been calling for it for years. We will bring it forward, but we are delaying the process at the present time.

[Keith Vaz]

Mr Speaker, I thank you for granting the urgent question, and I thank the Minister for his answer. I commend him for being the first Policing Minister in recent years to tackle the problem of police funding, which desperately needed to be addressed.

Last week, the Home Affairs Select Committee took evidence on the funding formula. The testimony we received about the process was damning. Last Wednesday, 34 Members took part in a debate on this subject based on the old criteria, and last Friday in a letter to the Devon and Cornwall police and crime commissioner, the Home Office admitted that its proposed funding formula was based on the wrong data. According to the previous formula, two thirds of police forces would have gained from the proposals and a third would have lost funding. Now, 31 forces will lose out. For example, Northumbria in July was first a loser, then a gainer, and now it will lose out again. The Metropolitan police was expecting to lose £184 million, but it appears that it is now set to gain—or possibly lose—a different amount. Leicestershire constabulary was set to lose £700,000 before last week; it is now set to lose £2.4 million.

This entire process has been described by police and crime commissioners and others as unfair, unjust and fundamentally flawed. What started off with good intentions is rapidly descending into farce. To call it a shambles would be charitable. There is now a very real prospect of a number of forces planning to take the Government to court. Given what has happened, will the Minister agree to a number of suggestions?

I warmly thank the Minister for his apology to the House. It was the right thing to do—it is typical of him to come before the House and say that—because police forces and PCCs spend an enormous amount of time and effort on this subject. The Minister has suggested a delay, which I support, but will he go one step further and establish an independent panel of experts who understand the importance of sharing data and, more importantly, are able to count and understand mathematics, unlike some officials in the Home Office?

The Minister will agree with me that this is a defining moment for policing. Last week at the Dispatch Box he said that he was

“proud to be the Minister responsible for the best police force in the world”.—[Official Report, 4 November 2015; Vol. 601, c. 1074.]

Now is his chance to show it by engaging with the police service. This formula will last a long time. If the Penning formula is to last as long as the Barnett formula, it must be seen to be fair, just and workable.

[Mike Penning]

The Barnett formula seems to be very popular in parts of the United Kingdom.

I wanted to ensure that the House was aware of what we are going to do. Many of the things that the right hon. Gentleman has asked for are exactly what we are going to do. The decision I have made today with the Home Secretary is partly based on some of the submissions to the Home Affairs Committee and its recommendations. I listened carefully to that evidence. Not every PCC and chief constable in the country was unhappy—I noticed that not many of them gave evidence; perhaps they are shy. We will listen carefully, get it right and make sure the mathematics are right, so that I am not in this embarrassing situation again.

[Sir Edward Garnier (Harborough) (Con)]

The right hon. Member for Leicester East (Keith Vaz)—my parliamentary neighbour, who initiated this urgent question —my hon. Friend the Member for Bosworth (David Tredinnick) and I were very kindly met by the Minister not so very long ago, when we discussed this question. How would my right hon. Friend the Minister describe fairness and the time schedule for the new process? It is very important that police and crime commissioners—in particular, the police and crime commissioner for Leicestershire—know the context within which they will be setting their budgets in the spring.

[Mike Penning]

I thank my hon. and learned Friend for his comments. We had a good meeting and I promised to listen, and I hope that the response I am giving today shows that we have listened. The funding formula for 2016-17 will be based on the existing formula and the announcement, as normal, will be made in December, but there will be a lot of work, a lot of listening and a lot of understanding of what the demands are, within the difficult financial situation that we are in. Not everybody will think it is fair, but we will think it is fair and we will not be in the opaque position of the existing formula.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The first thing the Policing Minister should do is apologise to the police service for an omnishambles process—replacing one opaque and unfair formula with another; withholding vital financial information; publishing that information only under threat of legal action; and then publishing the wrong information.

The Policing Minister was right to apologise to Parliament, but I ask him to go one step further. Last Wednesday he dismissed all concerns about his new funding formula. Forty-eight hours later, it was revealed that he had got it wrong and had published the wrong data. Funding allocations varied by up to £181 million and there were 31 losers. When did he know that? What did he know, and when did he know it?

Tony Hogg, the Conservative police and crime commissioner for Devon and Cornwall has summed it up on behalf of the police service:

“We have now lost all trust in the process.”

The Policing Minister should abandon the discredited process, as he has agreed to do; he should start afresh, as proposed by the police and crime commissioners, which I hope he has agreed to do; and acting in an open, transparent and honest way, he should publish all financial data, which should be concluded as soon as possible and be overseen by an independent third party—perhaps the National Audit Office, because there is no longer confidence in the Home Office.

The third and final apology that the Policing Minister should give is to the public. The first duty of any Government is the safety and security of their citizens. People expect their Government to act responsibly when it comes to the policing of their communities and the country. This would be laughable if it were not so serious. I say in all sincerity to the Policing Minister and to the Home Secretary: get a grip, and get it right.

[Mike Penning]

The House will be disappointed in the shadow Minister’s tone. I was informed on Friday, and this is the first opportunity I have had to inform the House about the situation—[Interruption.] I hear shouts from the Labour Benches, “You should’ve known.” At the end of the day, I was not told, and the first I knew about this was when I was in the House on Friday. We will make sure that we have a fair process in place as we go forward. That is only fair. I have apologised and I will do so again if necessary, but I am not apologising when it comes to the hon. Gentleman’s tone, because he has got it wrong as usual.

[Dr Sarah Wollaston (Totnes) (Con)]

I welcome the Minister’s apology and congratulate Tony Hogg and his team on uncovering this inadvertent error. Will the Minister confirm to my constituents and to those across Devon and Cornwall that in reviewing this situation he will take full account of the impact of rural policing and tourism on policing costs?

[Mike Penning]

I have apologised to the 43 authorities and I apologise in particular to Devon and Cornwall, which highlighted the information that was wrong in the letters I sent out to those 43 authorities. Getting the decisions right about rural and other issues within the formula was exactly what we were trying to do in the first place, as it was mostly the rural constituencies that were most upset with the existing formula, but I can assure Members that we will now get it right.

[Mr Dennis Skinner (Bolsover) (Lab)]

Late last week, the Derbyshire police commissioner and chief of police informed me that the settlement was very good. Forty-eight hours later, they were told by none other than Devon and Cornwall police—not the Minister—that the whole thing was wrong. Now Derbyshire has lost £13.1 million. Is there any occasion on which Ministers in this Tory Government would consider resigning because of an almighty mess that they have taken part in?

[Mike Penning]

I congratulate Derbyshire on reducing crime by 21% since 2010. Derbyshire has not lost anything, because the proposals were indicative and no money was allocated. As usual, the hon. Gentleman gets it wrong.

[Mr David Jones (Clwyd West) (Con)]

According to the report in The Times, North Wales police, which was due to gain some £2 million under the formula, now stands to lose some £10 million. Does the Minister agree that although the force will appreciate the frank apology that he has given, it now requires some form of reassurance that the settlement will be arrived at with sensitivity to the morale of the officers of that force?

[Mike Penning]

I am always conscious of the morale of police officers. That is why I say again from this Dispatch Box that I am proud to be the Policing Minister with the best police force in the world. I can tell my right hon. Friend that no money has gone missing from north Wales, because the proposal was indicative and no money was likely to go until a decision was made. However, the existing formula will continue for an extra year while we finish the rest of the proposals.

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

Will the Minister bear in mind what has been said repeatedly, namely that the west midlands police force has suffered drastically as a result of the cuts that have occurred? Representations have been made and debates have been held about the position. Before the Minister tells us about the crime situation, I should say that in the past he has, I believe, accepted the unfairness of what occurred because of the previous formula. Will he bear all that in mind, and let us hope that there will be a fair settlement, at long last, for the west midlands police force?

[Mike Penning]

I usually disagree with most of what the hon. Gentleman says, but this time I do not. I think that the settlement needs to be fair to the West Midlands authority, and to the other 42 authorities, and we delayed the process so that we could get it right.

[Seema Kennedy (South Ribble) (Con)]

I thank my right hon. Friend for meeting me, and other Lancashire Members of Parliament. Will he confirm that he will continue to meet all the Lancashire MPs to establish a fair funding settlement for the Lancashire constabulary?

[Mike Penning]

I congratulate all the Lancashire Members who took the time, and were considerate enough, to meet me. Members of all parties listened to our proposals, and then presented their own ideas. That, too, helped us to make the decision to delay the process.

[Mr David Lammy (Tottenham) (Lab)]

The Metropolitan Police Commissioner will be taking £1.3 billion out of the Metropolitan Police budget. Will the Minister tell us how much the Met needs to save or keep, and what bearing that has on the announcement that he has made today, in the context of borough amalgamations here in London?

[Mike Penning]

Decisions on front-line operations are a matter for the commissioner. He is an excellent commissioner, and we await his proposals for his force. However, no decision has been made because the comprehensive spending review has not been announced. As I said a few minutes ago, the funding formula will be announced in December.

[Nick Herbert (Arundel and South Downs) (Con)]

I welcome the Minister’s statement that the process will be delayed, and I thank him and the Home Secretary for their willingness to engage colleagues on the issue. While there may indeed be problems with the existing formula, it is always going to be difficult to adjust between different forces in an environment in which forces are already having to find ways of reducing their spending, and some forces will have to face double cuts. Is that not an argument for an extended delay while the current situation continues?

[Mike Penning]

I think that, now we have made this decision, we need to sit down and talk to the police authorities, the police commissioners and the police themselves, but it was clear to the Home Secretary and me that we needed to pause so that we could get it right. Surely that is the important thing.

[Graham Jones (Hyndburn) (Lab)]

Is the Minister aware of the amount of time and effort that was wasted in Lancashire over the summer in pursuing this matter and trying to get to the bottom of the funding formula? Lancashire was due to lose £24.9 million, a huge amount, which would make it the biggest loser in percentage terms. Is not the reason for this shambles the Minister’s failure to supply the funding formula to the police and crime commissioners—so that they could dissect it and we could debate it—until only a few weeks ago?

[Mike Penning]

As I said a moment ago, I had what I thought was a very good meeting with Lancashire Members on both sides of the House. We listened, and we listened carefully. The reason for the problem is that data were not transferred in accordance with the new method of calculation. A statistical error was made in the Department. Ministerial responsibility dictates that I am responsible, and that is the way it should be.

[Stephen Hammond (Wimbledon) (Con)]

I commend my right hon. Friend for coming to the House and making his apology, which I think will be welcomed. When the Met police met London MPs, they complained about the opaqueness of the previous formula, and also pointed out that the London police undertook nationally significant policing tasks. Will my right hon. Friend guarantee that the new formula will be more transparent, and that the London settlement will recognise and match the demand for the policing of nationally significant events?

[Mike Penning]

London is one of the greatest capitals in the world, if not the greatest, and it has particular police issues that have to be addressed. One of the reasons we are pausing is to make absolutely sure that all the different funding streams that come into this great capital city are managed correctly, and that it has the resources it needs.

[Paula Sherriff (Dewsbury) (Lab)]

The director general of policing sent the letter outlining the error on Thursday 5 November. Is the Minister honestly telling us he was not made aware of its contents until Friday?

[Mr Speaker]

Order. I entirely understand the rationale behind the hon. Lady’s question, but may I gently say one should not insert the word “honestly” into any question? The working assumption has to be that every Member in this House is always honest. We do not accuse Members of dishonesty or suggest as much; we debate issues. The hon. Lady is a new Member and I understand the purport of her question. I have no desire to get at any individual Member, but I think it is useful for new Members to get to grips with the new procedures—for example, recognising that debate goes through the Chair and that the word “you” is not used, and so on. I hope that is regarded as helpful.

[Mike Penning]

Thank you, Mr Speaker. Even those of us who have been here quite a long time get things wrong as well.

The first I knew of the letter was Friday.

[Richard Drax (South Dorset) (Con)]

I, too, commend my right hon. Friend for halting the process. May I also put in this plea for Dorset police, who have been at the lowest end of the funding for many years, that rurality and tourism in particular will be very much in my right hon. Friend’s mind when eventually we do get to sorting out the formula?

[Mike Penning]

One distinct advantage of being here today and making the statement is that we are starting the process again and everybody will, naturally, put the case for their own parts of the world, which my hon. Friend did really well.

[Richard Burden (Birmingham, Northfield) (Lab)]

In response to my hon. Friend the Member for Walsall North (Mr Winnick), the Minister said he hoped West Midlands would be treated fairly, but is he not aware that under the existing funding formula, which he is maintaining, West Midlands has been hit abnormally hard with cuts of over £100 million in five years? What is he going to do over the next period while he has the pause to ensure that West Midlands and other forces are not hit again in the comprehensive funding review? What is he going to say to the Chancellor to ensure police forces get treated fairly?

[Mike Penning]

We were changing the funding formula to get a fairer, less opaque system. I have been asked to pause; I have paused it. The formula is in place for another year.

[Several hon. Members rose—]

[Mr Speaker]

There is a notable triumvirate at the back; we will take the fellow in the middle: Mr John Glen.

[John Glen (Salisbury) (Con)]

Thank you, Mr Speaker. I thank my right hon. Friend the Minister for his characteristic honesty and integrity in coming to the House today and responding in the way he has. When he comes to contemplate the future funding for Wiltshire, will he make sure that not only is the absolute amount of money considered carefully, but also the freedoms that exist for small rural forces to work collaboratively with larger forces nearby—for example, Avon and Somerset?

[Mike Penning]

My hon. Friend makes an important point. Alongside the funding formula review was a capability review being run by the chiefs. Some of that can be driven by the chiefs, some of it will be done by the regions and some of it through the National Crime Agency, but, as I always say at the Dispatch Box, we can often do things better if we do them together, and I think forces should listen to that.

[Jo Stevens (Cardiff Central) (Lab)]

I welcome the Minister’s apology today, but how can my constituents and my police and crime commissioner and South Wales police have any confidence that when the Home Office undertakes the formula, which the Minister has described, in 2016-17 he will get it right this time?

[Mike Penning]

One of the things we can ensure is that the calculations and modelling within the formula done by the statisticians are looked at very carefully. One thing we are looking at, which has been a recommendation from the Select Committee, is to get an independent peer review towards the end, but whatever happens this formula needs to change so it is fairer for everybody.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate my right hon. Friend the Minister on instigating the police funding formula review, which was promised by the Labour party when in office but never delivered. In pausing this process, which is an inevitability, may I urge him not to wait too long because many authorities, particularly those that deal with sparsely populated communities, feel they have been seen off in a major way for many years and would rather like to see the formula amended in a transparent and open way, and hopefully in a way that will correct the imbalance they perceive in police funding?

[Mike Penning]

One reason that the funding formula was not changed by the previous Administration or any other Administration is that it is so damned difficult. I know that that is not parliamentary language, Mr Speaker, but it is true. I have experienced this in the past couple of months. The fact that it was hard was not an excuse not to do it, however, and we do need to get it right.

[Mr Kevan Jones (North Durham) (Lab)]

I welcome the Minister’s statement today, but he must realise that the buck stops with him and not with his officials. I find it remarkable that it took 24 hours for him to find out about the problem, and that his officials did not tell him sooner. Does he not realise that the Home Office has now lost all credibility among the police and the police and crime commissioners—the police family—over this process? Is it not about time he took up the suggestion of the Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), and established independent oversight of the process?

[Mike Penning]

I do not accept that the whole police family has no faith in the Home Office or in me. The hon. Gentleman is absolutely right, however, to suggest that, so far as ministerial oversight is concerned, I am ultimately responsible. That is why I have not blamed an individual civil servant or any Department. At the end of the day, this is my responsibility, which is why I am standing here now.

[Jake Berry (Rossendale and Darwen) (Con)]

I warmly welcome my right hon. Friend’s approach; his apology to the House is characteristic of the transparent way in which he has approached this entire settlement. When he brought that characteristic transparency to the cross-party meeting of Lancashire MPs, we were hoping that Lancashire would see a fairer formula. It cannot be right that some budgets are going up and some budgets are going down. Every police force should be equally miserable across the country. The formula should be fair.

[Mike Penning]

I thank my hon. Friend for his comments. That was a really good meeting, which we held in the Deputy Speaker’s office. I promised to listen and I will continue to listen. At the end of the day, though, there will be winners and losers with any change to the funding formula. That is why some of the forces that are going to do very well seemed to be quite quiet when they appeared before the Home Affairs Committee, but I understand exactly where they were coming from.

[Several hon. Members rose—]

[Mr Speaker]

Order. A good many colleagues are still seeking to catch my eye, and I am keen to accommodate all of them. If we are to have any realistic prospect of succeeding in doing so without jeopardising subsequent business, we shall require brevity both from Back Benchers and from the Minister. I am sure that we can look for the provision of a textbook question to a distinguished former Minister, Mr David Hanson.

[Mr David Hanson (Delyn) (Lab)]

I thank the Minister for the name check, but this is complicated. The fact is that North Wales police will still receive £10.5 million less than they expected in relation to planning assumptions. Can the Minister give them any confidence that they will be able to deal with their shortfalls?

[Mike Penning]

I have not yet announced the 2016-17 budget; I shall do so in December. As a former Home Office Minister, the right hon. Gentleman will know that he will have to wait until December for the formula decision.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I thank my right hon. Friend for his candour. May I also encourage him to work with the police and crime commissioners to ensure that efficiencies can be made to enable us to change in a different way?

[Mike Penning]

There are more efficiencies that can be done without affecting front-line policing. Actually, some of the technology that is coming through will aid front-line policing, not least the body-worn video cameras. I intend to work with all 43 police and crime commissioners and their chief constables, and with Devon and Cornwall in particular, as they have some very good statisticians.

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

The residents of Dyfed-Powys already contribute far more per head for their policing than those living in large urban areas in England. Will the Minister ensure that the new formula takes into consideration the extra costs of policing an area such as Dyfed-Powys, which covers two thirds of Wales, especially the extra infrastructure required to secure an effective emergency response?

[Mike Penning]

As I said earlier, one reason that people were calling for a new funding formula was the need to take into account the effects of modern policing in rural communities. That is exactly what we will do.

[Mark Menzies (Fylde) (Con)]

I was one of the Lancashire MPs who greatly appreciated the meeting with the Minister a few weeks ago. Can he assure us that, when Lancashire is being considered, we will not be losers in the process, as my hon. Friend the Member for Rossendale and Darwen (Jake Berry) suggested? Speaking as someone with direct experience of a blue-light service, may I also thank the Minister for the open and—I will use the word— honest way in which he has approached this process with us all?

[Mike Penning]

I sometimes get myself in trouble here for being too honest and too forthright, so I thank my hon. Friend very much for those comments. I cannot promise anything as we start a new process, but I will sit down with people from all the constituencies and all the forces to make sure we get the best we can with the modern formula. As I say, that will be suspended for a year.

[Helen Goodman (Bishop Auckland) (Lab)]

Durham was last month ranked the highest-performing force in the country, so it is very worrying that there might be a £10 million cut. Does the delay mean that there will cuts in the autumn statement followed by further cuts in 18 months’ time?

[Mike Penning]

The purpose of my standing here making a statement is to say that the possible losses that Durham would have had with the new formula will not happen because it is going to stick with the original formula. We will have to wait for the autumn statement.

[Nigel Adams (Selby and Ainsty) (Con)]

The Minister will be aware that North Yorkshire is the largest policing area in England, and the force gains approximately £8 million under the current formula because of its rurality. Will he assure me that our police and crime commissioner, who does a fantastic job, will be properly consulted and listened to during this welcome extended process?

[Mike Penning]

I pay tribute to the North Yorkshire force, and I fully understand the pressures on it as a rural force. One reason why I got into this situation was that I was working with the 43 PCCs, writing to them and telling them exactly what was going on. I will continue to do that.

[Phil Wilson (Sedgefield) (Lab)]

I am sure the Minister will join me in congratulating Durham police on being designated the most outstanding force by Her Majesty’s inspector. Does he realise, however, that his flawed formula means that it will have to face an additional £10 million in cuts? If that happens, it would mean a reduction in police numbers from 1,700 in 2010 to 850 in 2020. How does he expect Durham police to continue policing? May I respectfully say to the Minister that he should go back to the drawing board, recalibrate the formula and come back with something that makes sense to the people and the police in County Durham?

[Mike Penning]

I have tried to be very careful in not responding to people who probably were not listening to my statement. I have suspended the formula. As with the other 42 authorities, we will work with Durham on a new formula.

[Henry Smith (Crawley) (Con)]

I congratulate my right hon. Friend on re-examining this issue. Will he commit to speaking to Katy Bourne, the excellent PCC for Sussex, where crime has reduced, when the new formula discussions take place?

[Mike Penning]

Not only will I commit to speaking to the excellent PCC in Sussex, Katy Bourne, but I left her 15 minutes ago.

[Marie Rimmer (St Helens South and Whiston) (Lab)]

Will the Minister commit to give due consideration to low council tax base rate metropolitan districts? Across-the-board cuts have a devastating impact on areas such as Merseyside and other metropolitan districts. To make up the cut that was brought forward before, we would have to have a 24.9% increase in council tax. We collect about £500,00 for 1% council tax, whereas other areas collect about £2.5 million, so there is a different impact because of lower tax base rates. Will he give due consideration to that when reconsidering the formula?

[Mike Penning]

One issue that has been raised consistently by Members from across the House is the precept issue, which I believe is what the hon. Lady is alluding to. Although that is not in my hands, it is part of what we look at when we are doing the formula and as we go forward. In some parts of the country the precept forms a substantial part of the funding, whereas in others it does not. I promise the hon. Lady that I will keep a watch on that.

[David Rutley (Macclesfield) (Con)]

I also congratulate my right hon. Friend on coming to the House today. I fully recognise his commitment to tackling crime across the country; it is absolutely clear. Will he confirm to the House that there will be a very clear communication plan that will be sent to all police forces, from Cheshire police right the way through, so that they are aware of the milestones they will be required to pass to finalise, once and for all, this funding formula in the months ahead?

[Mike Penning]

Yes, we have time now to ensure that we consult across the board and that we work closely together. In my statement, I specifically said that we need to get agreement from the chief constables and the police and crime commissioners to ensure that the formula works, and that, I think, is the way forward.

[Mr Gavin Shuker (Luton South) (Lab/Co-op)]

I congratulate the Minister on making an apology, as it underlines the importance of the matter. In Bedfordshire, we have the fourth highest level of gun crime, the fifth highest level of burglary, and the seventh highest level of knife crime. We also face a real threat from extremism. We face urban challenges, but we are funded today as a rural force. Even Her Majesty’s inspectorate of constabulary has acknowledged that historic underfunding has been a major issue for the force. Under both the new figures and the old figures, Bedfordshire makes hardly any gain. Does not common sense dictate that there was a flaw with the formula, and will it be corrected?

[Mike Penning]

I say to my parliamentary neighbour that I know his part of the world extremely well. Even though Bedford is not my county, I am very conscious of the pressures it is under, particularly from the Luton policing angle. It is something that we will look at as we go forward.

[Mr Alan Mak (Havant) (Con)]

I congratulate my right hon. Friend on his statement, which he delivered with characteristic clarity and integrity. Does he agree that larger urban forces such as Hampshire police, which serves my Havant constituency, deserve a revised funding formula so that they can be funded on the basis of need as well?

[Mike Penning]

Although I cannot comment on exactly how Hampshire will be funded with the new formula, or what it will get in December, may I congratulate it not only on having excellent MPs who have bent my ear extensively over the past couple of weeks—MPs from across the House have done so as well—but on forward thinking and working with the other emergency services brilliantly well? That is something on which other forces from across the country could think.

[Julie Cooper (Burnley) (Lab)]

I welcome the Minister’s apology and his decision to suspend the formula while the correct figures are being calculated. Given the scale of the error—last week Lancashire was due to lose £25 million and today it is due to gain £16 million—does he now acknowledge that Lancashire constabulary was right to maintain reserves to plan prudently for the future?

[Mike Penning]

I think that I agree with most of what the hon. Lady said, but it is an issue that, in the 43 authorities of England and Wales, there are reserves of £2.1 billion.

[Tom Pursglove (Corby) (Con)]

Historically, Northamptonshire has been underfunded, but despite that we have seen many innovative new policing models coming forward in the county. Despite this latest delay in the funding formula, will the Minister commit to continue to provide funding for innovative new models to come forward?

[Mike Penning]

Northamptonshire is one of the most forward thinking authorities in the country, and the work it and its PCC are doing alongside the fire service and other blue-light emergency services is really significant. The police innovation fund is exactly what my hon. Friend was alluding to and that is what the money is for.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I heard what the Minister said about suspension, but the fact is that, under this error, South Wales police would have had, at £15.5 million, the fourth highest loss across the UK. That comes on top of the fact that Cardiff already does not receive the same treatment for the particular challenges that it faces as a capital city as London, Belfast and Edinburgh. So when the Minister is reflecting on the funding formula and thinking on this error, will he address that concern, because Cardiff is not getting the support for its policing that other capitals across the UK are getting?

[Mike Penning]

That is part of the review. We will ensure that we look carefully at what the hon. Gentleman has said, but, at the moment, Cardiff has not lost anything because I have suspended the review and the changes.

[Nigel Mills (Amber Valley) (Con)]

I am not sure what was the worst news for Derbyshire. First, there was the news that the proposed new formula was unduly generous to Derbyshire; now there is the news that we are stuck with the outdated, unfair existing formula for at least another year. May I urge the Minister to stick to his guns and press ahead and get a new formula in place as soon as he possibly can?

[Mike Penning]

So many Committees and so many experts outside this House and inside this House—I have met lots of them in the past couple of weeks—believe that we need a new funding formula. There is cross-party agreement on that, so that is what we need to do. I did say that there would be winners and losers, and I apologise to Derbyshire for the delay.

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

The police and crime commissioners and chief constables have made it clear that budget cuts delivered through any revised formula will fundamentally change policing. What is the vision and strategy of the Home Secretary and the Policing Minister for this fundamentally changed policing landscape, and how will this incorporate the possible loss of between 5,000 and 8,000 police officers in London and the possible loss of 1,000 community support officers?

[Mike Penning]

The assumption of any loss of front-line police officers—of course, that is a decision for the commissioner—was based on the original formula, not on my announcement today. Policing is changing, and so is crime. That is something we all have to understand and address. Any offence taking place against the right hon. Gentleman is likely to be while he is asleep in bed tonight, and it will be on his computer; it will not be a robbery or a burglary at his house.

[Mr Philip Hollobone (Kettering) (Con)]

I commend my right hon. Friend for responding to the urgent question with an apology. He is right, of course, to say that the buck stops with him, but I have heard from the exchanges today that the error was discovered by one of the police authorities. I am therefore concerned that the error was made by the Department in the first place, and that the Department itself did not uncover the error. This has wider implications for the protocols used by the civil service on all these funding formulae across Government. Will my right hon. Friend make sure that the lessons he is learning from this are extended to other Departments, including Education, Health and all the others with local funding formulae?

[Mike Penning]

I am deeply conscious that we must make sure that there is confidence in a Department, particularly the two Departments that I represent. I met the permanent secretary this morning, and the Home Secretary, the permanent secretary and I are meeting tomorrow.

[Fiona Mactaggart (Slough) (Lab)]

The Minister will be aware that rapid population growth creates challenges for the police. Violent crime in Slough, which I represent, has increased by 18.5% over the past year. When re-examining the formula, will he work in a transparent way, because that is critical to trust in policing by consent? Will he perhaps adopt the suggestion made by my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Select Committee, and take into account the challenges created in areas of high population growth?

[Mike Penning]

One of the reasons that we need a new formula is the high population growth that has taken place, particularly in Slough. That is why the formula needed to be changed, and because it was so opaque. I rest my case.

[Andrew Stephenson (Pendle) (Con)]

I join my hon. Friend the Member for South Ribble (Seema Kennedy) in thanking my right hon. Friend for meeting Lancashire MPs on a cross-party basis to discuss the issue, allowing us to scrutinise in detail the predicted changes, consequences and formula, unlike our police and crime commissioner, who confused this with much wider issues to do with police cuts. My right hon. Friend mentioned the meeting with Lancashire MPs and the ideas that we submitted. Will he confirm that those ideas can now be fully considered and incorporated, following the delay that he has announced?

[Mike Penning]

Fortunately, the ideas from the cross-party group of Lancashire MPs came before the end of the consultation, so they formed part of it. Along with the evidence of the Home Affairs Committee and other things that have come forward, that is part of the reason for the delay. The misuse of the data—clearly in the wrong place—is the catalyst that created the situation, but we were already listening. I think that is the best way to go forward.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The Minister will know that as things stand, West Midlands police could lose £28 million of his indicative budget. Can he give us an assurance today that nothing on that scale will occur? Will anyone be held responsible for the blunder and the delay in informing the Minister, or are officials, like Ministers, increasingly immune from responsibility for their actions?

[Mike Penning]

I am fully responsible for my actions and I take full responsibility for what has taken place under my brief. I cannot comment on what will happen and what will be announced in December, which will be based on the existing funding formula. We will all have to wait for the autumn statement.

[Richard Graham (Gloucester) (Con)]

The House needed an apology for the statistical errors by the Home Office, and we had one, without reservation, from the Minister. We should welcome that. What matters more to me is that when the results of the spending review are announced in December, forces such as the Gloucestershire constabulary will still have the resources they need to tackle serious crime such as drugs, knife use, and the very sad deaths resulting from both. Will my right hon. Friend give my constituents that reassurance?

[Mike Penning]

My hon. Friend’s constabulary has done fantastically well. It is a statistical error that has caused me to make this decision with the Home Secretary today. The reason for the change in the formula was to address the anomalies that we have heard about from Members across the House on the unfairness of the existing formula. It still needs to be changed and we need to push on with that with the chief constables and the PCCs.

[Wes Streeting (Ilford North) (Lab)]

We have heard from today’s exchanges that not only was there an error in terms of the formula and the failure of the Home Office to pick it up, but a letter was sent on Thursday that the Minister was not informed about until Friday, which I think we would all agree is unacceptable. Given the damage that this has done to the credibility of the Home Office, will he now respond directly to the suggestion by the Chairman of the Home Affairs Committee and others that some independence needs to be brought to the consultation process? May we have a clear, simple answer?

[Mike Penning]

I have already said that when we do the statistical analysis we will almost certainly be looking for some independent guidance on that. That is important. It will be as open as possible. [Interruption.] If that is not good enough, then why did the Opposition not do it when they were in power for 13 years? We are doing it. They did not.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Amid a number of inconsistencies with the process, what has been consistent is that the Minister has always said that he is listening, and he has continued very much to show that at the Dispatch Box today. I welcome the decision he has made. Will he also be consistent—he has hinted at this—in the recognition that London, as the capital city, needs full access to capital city funding, reflecting the fact that it is a national hub for policing and criminality?

[Mike Penning]

As I said, this great capital that we are all in today needs to have the capital city force that it needs. The funding will reflect that and we will make sure that it continues to do so.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This episode raises serious concerns regarding the efficacy of the verification and validation process, particularly in relation to the Minister not being aware of it. Further to the statements that have been made, what will he do to ensure that there is some independence, robustness and credibility in the verification and validation process?

[Mike Penning]

As I said, I met the permanent secretary this morning. We will be meeting the Home Secretary when she returns tomorrow to find out exactly what work goes on, and inquiries will continue.

[Paul Flynn (Newport West) (Lab)]

Taking £12.8 million from Gwent police would not be a cut; it would be an act of butchery that would grievously damage the fine work of the Gwent force, which has recently seen an increase in violent crime in the area. I think we all admire the breathtaking chutzpah of the Minister, who seeks to shift the blame to the previous Government and my right hon. Friend the Member for Delyn (Mr Hanson). Can the Minister give us a clear account, in language we all understand, of how this foul-up was made so that we can measure the ineptocracy that the Home Office has become?

[Mike Penning]

I would like to have thought that we would have a better question from the hon. Gentleman, but clearly not. I was not passing the blame to anybody; I was simply saying that I am being criticised for not doing something that did not happen in the 13 years of the previous Administration. Gwent has not lost anything; no force has lost anything. These are indicative figures. We need to make sure that we get the figures right as we go forward.

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

With the background of the lowest levels of police officers since 1979 and Her Majesty’s inspectorate of constabulary describing the force’s funding as inadequate, Humberside would have been set to get an additional £5.7 million under the right data. Can the Minister assure me and my constituents that under any new formula Humberside will still get that additional sum of money?

[Mike Penning]

No, of course I cannot do that, but I do understand exactly where the hon. Lady is coming from. We are going to pause, look carefully at the funding formula, and make sure we get it right. I am sure she would agree that it has to be fair across the 43 authorities, not just fair for Humberside, although I understand that she wants to push buttons for that region.

[Andy Slaughter (Hammersmith) (Lab)]

Neither the Minister nor the Government are in control of the facts or the policing budget. Standing at the Dispatch Box, he does not seem to understand how incompetent this is. In the case of the Met, the error is of the sum of £180 million. Can we at least have a full written explanation of how this farce occurred, and can we be told the amount of money wasted by the Home Office and the 43 forces in going through the process thus far?

[Mike Penning]

I find it fascinating that, after listening to all the other questions that right hon. and hon. Members have asked, that was the best the hon. Gentleman could do. At the end of the day, when mistakes are made it is right and proper that Ministers stand at the Dispatch Box and tell the House what is going on. We will make sure that the new process is as open and honest as possible, especially for London.

[Several hon. Members rose—]

[Mr Speaker]

Order. Before we come to points of order—there is an expectant House and the appetite is clearly great—I just want to say two things, following the Minister’s observations. First, I am genuinely grateful to the Minister of State, whom I have known for a very long time. It does not surprise me that he has conducted himself with courtesy.

Secondly, because I think it is very important that our proceedings and procedures are intelligible to and meaningful for people beyond this place observing them, it is only right to say that this very welcome apology and dedicated response to questioning by the Minister took place because urgent questions were submitted and because I granted an urgent question. The Home Office itself declared in writing that the matter was not urgent, and it clearly did not think that the urgent question should be granted. It was entitled to its point of view, but I think the House would concur that it suffered from the quite material disadvantage of being wrong.

Points of Order

Monday 9th November 2015 Commons Chamber

16:26

[Pauline Latham (Mid Derbyshire) (Con)]

On a point of order, Mr Speaker. I may be wrong, but I am not aware of any Member of Parliament in this place who is transgender. I have no problem with that, but we have many women who came into the House at this election, and we do not have sufficient toilets in this place for female Members of Parliament. May I ask you to look very carefully at this and make sure that we have sufficient toilets for women, before we look at those for people who are not even here yet?

[Mr Speaker]

I thank the hon. Lady for her point of order and, indeed, for her courtesy in giving me advance notice of it. I mentioned a moment ago that I thought it was important that our proceedings and procedures should be intelligible. It might therefore be helpful if I explain what I think is the context of and the background to the inquiry by the hon. Lady—reports in the media about work that is being done by Professor Sarah Childs on steps that can be taken to make our Parliament a more gender-sensitive Parliament.

It is absolutely true that such work is being done. There are various dimensions to the work, and one part of it is looking at toilet facilities. If memory serves me correctly, that is the only reference to the issue in terms of sensitivity—nothing beyond that—but the scope is there for Professor Childs, supported by others, to look across the piece and come to a view as to what would be good for the House as a whole. I think it is right that we do not jump the gun, but let her do that work in the very studious and serious-minded way that somebody of her intelligence and background would do. I think she will be alerted to the very proper point of order that the hon. Lady has raised.

May I say to the hon. Lady that if she would like either to contact Professor Childs herself or to write to the House of Commons Commission or the Administration Committee, the very important point she has made will be taken fully on board? I do not want to get into the situation at this stage of prioritising this over that; let us look at it all, including her important point.

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

On a point of order, Mr Speaker. We learned today from the Chancellor that four Departments have agreed to swingeing cuts of 30% to their budgets—information that was released, no doubt, as part of his campaign to get the Secretary of State for Work and Pensions to agree to cut his budget substantially. Is that not information that you would expect to hear first in this place?

[Mr Speaker]

When the autumn statement is delivered, the right hon. Gentleman and the House will receive what I suspect might be called an holistic view of the Government’s thinking and plans. As a matter of course, it would be better if specific details of individual agreements were first communicated to the House. It may well be that, because of the number of people involved in the discussions, things have filtered into the public domain in a way slightly less orderly than the right hon. Gentleman would favour. On the Richter scale of discourtesies to the House, this ranks pretty low, but I thank him nevertheless for drawing our attention to it.

[Mr Peter Bone (Wellingborough) (Con)]

On a point of order, Mr Speaker. Earlier today, the BBC reported in a major story that nine new prisons were to be built to replace Victorian jails. Unfortunately and to my horror, one of the prisons to be sold off was Wellingborough, which caused great concern to my constituents. There were two reasons why I thought the story might be doubtful. First, Wellingborough prison was built in 1960, which suggests that the Victorian era went on for longer than I thought. Secondly, only last week, the prisons Minister, the Under-Secretary of State for Justice, my hon. Friend the Member for South West Bedfordshire (Andrew Selous), gave me an assurance that I would be the first to know if Wellingborough prison’s status was to change.

I am happy to say that Wellingborough prison is not being sold and the matter was completely misreported by the BBC. How on earth did the BBC make such a major mistake on an issue that affects my constituents considerably? How can I get it on the record that there has been sloppy journalism by the BBC?

[Mr Speaker]

As people will have noted, the hon. Gentleman is the source of his own salvation. He asks how he can set the record straight. With his usual pertinacity, he has just done that. Beyond that, his point of order reveals three things. First, he cares massively about prisons in Wellingborough. Secondly, he is a notable authority on the Victorian era. Thirdly, he does not like to miss an opportunity to put the boot into the BBC.

[Paul Flynn (Newport West) (Lab)]

On a point of order, Mr Speaker. May I raise a point of order that affects the rights of Back Benchers? On Friday, there were debates on two Bills. The first debate occupied three and a half hours. While every syllable in those speeches was, of course, in order, otherwise they would not have been allowed, some of the comments were peripheral to the subject and all the speeches would have been improved by abbreviation. It was an entirely non-controversial, unopposed Bill.

Sadly, the second Bill had only just over an hour allocated to it. It offered great advantages to patients and the health service, and was approved of by Members of the House. My hon. Friend the Member for Torfaen (Nick Thomas-Symonds) moved the motion and the hon. Member for Central Ayrshire (Dr Whitford) gave a fine expert opinion on the benefits of the Bill. The only objection came from those on the Government Benches, who spoke on behalf of the pharmaceutical industry. Sadly, three attempts at a closure motion were turned down. Although I understand that the Chair does not give reasons for such decisions, one observer suggested that they were turned down because of time. What we have here is the power of Back Benchers coming up against the fact that big pharma and big sugar have a throat hold on this Government.

[Mr Speaker]

I note what the hon. Gentleman has said, but nobody has a throat hold on the Chair. I know that he would not suggest that for a moment. I would never be remotely apprehensive about a big pharmaceutical company, other big institutions, big people or people who think that they are big. They are not bigger than the authority that resides in the Chair, whether I am in the Chair or one of my illustrious deputies is performing the duties.

I take note of what the hon. Gentleman says. As new Members should know—if they do not know, they will come to discover it—he is the author of a well-thumbed tome entitled “How to be a Backbencher”. I am simply reminded that the Chair must always be zealously conscious of its duty to ensure the rights of Back Benchers as a whole. We will keep a beady eye on the length and relevance of speeches on such occasions, whether the hon. Gentleman is present or not.

[Christian Matheson (City of Chester) (Lab)]

On a point of order, Mr Speaker. May I seek your guidance and advice on an incident that took place last week in which I believe I, as a Member of Parliament, was prevented by the actions of public officials from undertaking my duties in supporting my constituents?

The incident took place at Manchester civil courts, where approximately 40 to 50 of my constituents were involved in a case. When I arrived at the security point I was told that I was not to be granted entry. I identified myself as a Member of Parliament. There was a stand-off for a while, and of course I assure you, Mr Speaker, that my manner was courteous, as always, and calm. After about five minutes, a manager came up, pointed his hand towards me and said, “You’re not coming in. I’m now telling you to leave, and the police have been called.” Obviously I had no desire to cause any trouble for Greater Manchester police, but I did have a desire to join my constituents to support them in the court case. I identified myself to the police inspector and had a quick chat with him, and then left.

I believe that the officials of the court, knowing that I was a Member of Parliament, denied me the opportunity to support my constituents. I seek your guidance, Sir, as to the best way in which I might progress the matter further.

[Mr Speaker]

I am grateful to the hon. Gentleman for giving me notice of his point of order. He has made clear, both in what he sent to me and in what he has articulated on the Floor of the House, his concern about the manner in which he was treated on Friday.

While I am always keen to defend Members’ ability to represent their constituents outside as well as inside the House, the question of whether a Member of Parliament should be given access to a court of law in support of constituents is not a matter for me. I say that simply as a matter of fact. Nor is the conduct of court officials a matter on which it would be appropriate for me to comment, having not been present and therefore privy to the circumstances.

That said, I make two other observations. First, the hon. Gentleman has made his point and put his concern on the record. I have a sense that colleagues who know that they could be in a similar position will empathise with him. From personal experience over the past six months, I can confirm that he has always been fastidious in his courtesy—courteous to a fault—in his dealings with the Chair.

Secondly, I think that sometimes people who are not quite conversant with the circumstances, or who perhaps lack directly comparable experience but are anxious to execute their duties in the most zealous way, err on the side of caution. That caution sometimes makes them think that it is easier to say no than to say yes. I was not there, and I make no criticism of any individual, but personally I am very sympathetic to the hon. Gentleman and think it is very regrettable that he has had to bring the matter to the House. I think we will have to leave it there for today.

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

On a point of order, Mr Speaker. On Saturday there was announcement from Downing Street that everyone

“will be given a legal right to request”

a 10 megabits per second broadband connection. That is of immense importance to many businesses and people who are frustrated by current broadband coverage, yet no details were given about how that right is to be exercised, who will deliver it or who will fund it. Can you advise me of whether you have had notice of a written or oral statement on the subject, and whether government apparently by unaccountable press release is in order?

[Mr Speaker]

I say to the hon. Lady that the subject is not new. The adequacy or otherwise of superfast broadband access, in both urban and rural areas, has been extensively debated over a period. It seems to me that the distinction is between disclosing a basic intent and describing a detailed policy. Where the former is concerned, there is nothing particularly unusual about Ministers giving an indication of what they intend in speeches around the country, outside the House. If, however, the Government propose to roll out a specific policy that is different from that which has existed hitherto, the House should be the first to hear about that policy and have the opportunity to question the relevant Minister upon it.

I think we have reached the happy conclusion of points of order for today.

Scotland Bill (Programme) (No.2)

Monday 9th November 2015 Commons Chamber

Motion made, and Question proposed,

That the Order of 8 June 2015 (Scotland Bill (Programme)) be varied as follows:

(1) Paragraphs (5) and (6) of the Order shall be omitted.

(2) Proceedings on consideration shall be taken in the order shown in the first column of the following Table.

(3) 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
New Clauses and new Schedules relating to Parts 1 and 2, amendments to clauses 1 to 18 and Schedule 1	Three hours from the commencement of proceedings on the motion for this order
Remaining new Clauses and new Schedules, amendments to the remaining Clauses of the Bill, amendments to Schedule 2 and remaining proceedings on Consideration	Five hours from the commencement of proceedings on the motion for this order

(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the motion for this order.—(David Mundell.)

16:40

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

rose—

[Mr Speaker]

Does the hon. Gentleman wish to orate?

[Pete Wishart]

I do wish to take the opportunity to orate because we are profoundly disappointed with the time available to discuss significant and important issues, including amendments to the Scotland Bill, which is a critical piece of legislation for our nation. More than 100 amendments have been selected for debate this afternoon, and that follows the 76-page document that listed amendments tabled by right hon. and hon. Members across the House. We now have something like two and a half hours to debate critical amendments on tax powers and the constitution. After that, we will probably have less than two hours to discuss the equally significant welfare powers in the rest of the Bill.

We know how this place works. There will be Divisions, and 20 minutes will be taken up with the 18th-century arcane practice of wandering through a Lobby to be counted. When will this House start to enter the 21st century and leave the 18th century so that Divisions do not eat into our time-limited debates? How can it possibly be right that we have so little time? Realistically, we will have something like four hours, perhaps three and a half hours, which is little more than an hon. Member would get—[Interruption.] Hon. Members are chuntering. Do they not know that this 45-minute debate is time reserved? Even this is eating into time—they cannot even bother looking at their Order Papers.

Scotland is watching these proceedings, and people just will not understand the gross disrespect shown to our nation’s debate and business. It will feel as if Scotland has been given an almighty slap in the face and told just to get on with it in whatever time this House deems fit to provide to our nation—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman is making extremely important points. He says that he needs to be heard, and he needs to be heard not just outside the Chamber but inside it. Members will be quiet while he speaks.

[Pete Wishart]

Scotland is watching. People are observing these proceedings and cannot believe that we have been given such a limited amount of time to debate such critical and significant amendments. The Bill had four days in Committee. We were surprised and delighted that we got all that time, but what a supreme waste of time those four days were, with a Government who were only semi-engaged in that debate. The Government accepted not one amendment from the hundreds that were tabled, and they provided nothing, with no significant amendments of their own. The Secretary of State said that the Committee was a listening and reflecting stage. He was more reflective than a high street mirror shop this summer, but the one thing he did not do was engage properly in the Committee of this House. It was all about listening. If Committee stage of a Bill is about listening, we may as well go round to see the Secretary of State and have a little chitchat over a cup of tea, or perhaps even write to him.

A Committee stage of this House should be the place where amendments are properly debated and considered, with a Government who are engaged in the process. It is not good enough to table hundreds of amendments on Report and have a time-limited debate to consider them. That shows great disrespect to the House, and it is not the way to do business. If this is how we will do business in the House in future, and if the Committee of the whole House is nothing but a listening exercise, we must recalibrate how we do business in this House. It is not good enough that we spent all that time merely being listened to, and then we are given five hours today to discuss serious, significant and important amendments that our nation needs to make its business.

We now have hundreds of amendments since the Government decided to engage with this process. They told us that they were all unnecessary and that we did not need them because the Smith Commission was delivered in full, yet today, all of a sudden and in the limited time available, hundreds of Government amendments are on the Order Paper. We will not have the opportunity to scrutinise properly the proposals that the Government have put before the House today.

We still do not believe that the Smith commission has been delivered in full. We have tabled amendments to ensure that it is delivered in full, but even if those are accepted, the Bill is still significantly behind where the Scottish people are and what they want from the constitutional arrangements for our nation. This is only the start of a catch-up process.

[Ian Austin (Dudley North) (Lab)]

I know that the hon. Gentleman wants to complain about how terribly Scotland has been treated, fuel grievances and wind up the Scots, but instead of whingeing about the process and wasting time, why does he not sit down and allow the debate to take place?

[Pete Wishart]

We have been shown gross disrespect today, and for the hon. Gentleman to say that Scotland should just put up and shut up as usual—

[Ian Austin]

Will the hon. Gentleman give way again?

[Pete Wishart]

I am not giving way to the silly hon. Gentleman again.

What a sham of a process this has proven to be—

[Ian Austin]

On a point of order, Madam Deputy Speaker. It is a disgrace for the hon. Member for Perth and North Perthshire (Pete Wishart) to accuse people of attacking Scotland, when all they are doing is commenting on his ludicrous tactics—him personally, not the people of Scotland.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

The hon. Gentleman knows well that that is not a point of order for the Chair: it is part of the debate. The hon. Member for Perth and North Perthshire has pointed out that there is only a short time available for this debate. I hope that we can soon come to the debate itself and that he will also curtail his remarks.

[Pete Wishart]

I do not want to take up time, but I want the House to understand the rage that my hon. Friends and I feel about the limited amount of time that we have been given today.

I also want to reassure the House that we are not looking to have the Bill certified as English only, even though the Government consider the Scotland Bill to be an English-only Bill. We do not even want it to be certified as Scotland only, even though every single bit of the Bill applies exclusively to Scotland. I just hope that in the few short hours we have for debate that English Members will remember that when they make their contributions and vote. I hope that they listen to the voices of Scottish Members of Parliament on the Bill. It is not good enough to turn up and decide to have their say on Scottish business in this new age of English votes for English laws, but we will not have the Bill certified today.

We want the Bill to be discussed and debated properly, although it is way behind what the Scottish people require. We will not press the programme motion to a Division, even though the House knows how angry we feel about the limited time, because that would take further time from the debate.

[Patrick Grady (Glasgow North) (SNP)]

Does my hon. Friend agree that the real irony is that after today’s truncated debate, the Bill will move to the House of Lords for weeks, possibly even months, of scrutiny with no democratic mandate from any voter in Scotland?

[Pete Wishart]

That is exactly what will happen. The minute the Bill leaves this House it goes to the unelected Chamber of donors and cronies who will seek to impose their views on the business of Scotland. It is an utter disgrace.

If the Secretary of State thinks that the Bill puts a line under the ambition of the people of Scotland, he is gravely mistaken. Scotland has a fuller vision for itself now. Scotland is a more confident, assertive nation and it will never stop asking for more responsibility. The Scottish people know that it is better that they are in charge of their nation’s affairs, instead of a Conservative Government that we did not vote for, with a solitary Scottish Member of Parliament.

16:48

[Ian Murray (Edinburgh South) (Lab)]

I do not want to detain the House either, but I agree with the hon. Member for Perth and North Perthshire (Pete Wishart)—I hope that he does not turn to dust as a result—not on his content, but on the tone with which he has started this debate. It is worth putting on record that the Government, Opposition and SNP Whips—the usual channels—spent an inordinate amount of time on this, and I understand that there was broad agreement on how today’s proceedings would operate.

We would very much like some more time in the Chamber, but unfortunately that will not happen on Report and Third Reading. Given that the Government have accepted most of our amendments on the permanency of the Scottish Parliament, that the Scottish Parliament can now design its own social security system, and that the Government have moved towards the removal of the perceived vetoes—and, indeed, given the equalities section—we think the vow has been delivered. We agree with some of the Government amendments. The Government have come forward with amendments that agree with some of ours. I think we should get on with the debate this afternoon and start to discuss some of these issues. If the Scottish National party press this to a vote, we will see whether the House agrees.

16:50

[Mr Graham Allen (Nottingham North) (Lab)]

The kernel of the argument is about having enough time to debate effectively all the detail in this very comprehensive Bill. There must have been some sort of deal done between those on the Front Benches. I hope that in future, particularly with regard to English devolution when we return to the local government Bill—and thereafter, as there may be other devolution Bills pertaining to Scotland, England, Wales and Northern Ireland—there will be a mixture of time. We should use the Floor of the House, so that we are open and transparent and allow all Members to get involved. We should also ensure that there is a period of time in Committee, so that the detail—particularly in relation to a second or third English devolution Bill—can be considered to every Member’s satisfaction.

16:51

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

I will not detain the House, because I do not want to eat into the time available to debate the Bill. I acknowledge the anger of the hon. Member for Perth and North Perthshire (Pete Wishart). He is always angry at something. Each time we have dealt with the Bill, we have had this sort of stunt. In the newspapers in Scotland at the weekend, the hon. Gentleman called on other Members of the House of Commons to be nicer to him. We will try, but he does make it a bit difficult.

It is clear to me that the hon. Gentleman’s anger is not directed at me or at this House, but directed at the people of Scotland because they voted decisively to remain in the United Kingdom, and that is something he just cannot accept.

Question put and agreed to.

Scotland Bill

Monday 9th November 2015 Commons Chamber

Consideration of Bill, as amended in the Committee

New Clause 12

Permanence of the Scottish Parliament and Scottish Government

“In the Scotland Act 1998 after Part 2 (the Scottish Administration) insert—

Part 2A

Permanence of the Scottish Parliament and Scottish Government

63A Permanence of the Scottish Parliament and Scottish Government

(1) The Scottish Parliament and the Scottish Government are a permanent part of the United Kingdom’s constitutional arrangements.

(2) The purpose of this section is, with due regard to the other provisions of this Act, to signify the commitment of the Parliament and Government of the United Kingdom to the Scottish Parliament and the Scottish Government.

(3) In view of that commitment it is declared that the Scottish Parliament and the Scottish Government are not to be abolished except on the basis of a decision of the people of Scotland voting in a referendum.””

This amendment inserts a new clause into the Scotland Act 1998 and replaces Clause 1. It states that the Scottish Parliament and Government are permanent parts of the United Kingdom’s constitutional arrangements, and that those institutions are not to be abolished except on the basis of a decision of the people of Scotland in a referendum.—(David Mundell.)

Brought up, and read the First time.

16:52

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

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

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Government new clause 13—Functions exercisable within devolved competence: elections.

New clause 1—Independent Commission on Full Fiscal Autonomy—

‘(1) The Secretary of State shall appoint a commission of between four and eleven members to conduct an analysis of the impact of Full Fiscal Autonomy on the Scottish economy, labour market and public finances and to report by 31 March 2016.

(2) No member of the House of Commons, the House of Lords, or the Scottish Parliament may be a member of the commission.

(3) No employee of the Scottish Government or of any government Department or agency anywhere in the United Kingdom may be a member of the commission.

(4) The Secretary of State shall, in consultation and with the agreement of Scottish Ministers, appoint as members of the commission only persons who appear to the Secretary of State to hold a relevant qualification or to have relevant experience.

(5) The Secretary of State shall not appoint as a member of the commission any person who is a member of a political party.

(6) Before appointing any member of the commission, the Secretary of State must consult—

(a) The Chair of any select committee appointed by the House of Commons to consider Scottish Affairs, and

(b) The Chair of any select committee appointed by the House of Commons to examine the expenditure, administration and policy of Her Majesty’s Treasury and its associated public bodies.

(7) The Secretary of State may by regulations issue the commission with terms of reference and guidelines for the commission’s working methods, including an outline definition of the policy of full fiscal autonomy for the commission to analyse.

(8) The Secretary of State must lay copies of the report of the commission before both Houses of Parliament, and must transmit a copy of the report of the commission to the Presiding Officer of the Scottish Parliament.

(9) Regulations under this section must be made by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament.”

The new Clause provides for the establishment of an independent commission to investigate the impact of FFA.

New clause 4—Review of operation of Gift Aid in Scotland—

The Treasury must lay before the House of Commons a review of the operation of Gift Aid in Scotland within a year of Part 2 of this Act coming into force.”

This self-explanatory New Clause would require a review of the operation of Gift Aid in Scotland.

New clause 6—Local Discretionary Taxation—

Individual local authorities in Scotland shall have the discretion to raise additional income by levying a tax, in addition to Council Tax and Non-Domestic Rates, on either residents, occupiers, property owners or visitors in the local authority or within a discrete area of the local authority providing local people consent.”

The power will enable local authorities to introduce tax(es) without the need to seek approval from Scottish Government, with the rates and reliefs being determined locally and the local authority being both granted powers to ensure that those on which the tax is levied have a legal obligation to pay and the local authority having the discretion to determine how the additional revenue is expended.

New clause 7—Local authority’s power of general competence—

‘(1) A local authority has power to do anything that individuals generally may do.

(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise—

(a) unlike anything the authority may do apart from subsection (1), or

(b) unlike anything that other public bodies may do.

(3) In this section “individual” means an individual with full capacity.

(4) Where subsection (1) confers power on the authority to do something, it confers power to do it in any way whatever, including—

(a) power to do it anywhere in the United Kingdom or elsewhere,

(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and

(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.

(5) The generality of the power conferred by subsection (1) (“the general power”) is not limited by the existence of any other power of the authority which (to any extent) overlaps the general power.

(6) Any such other power is not limited by the existence of the general power.”

This new Clause seeks to introduce a general power of competence for Scottish local authorities, putting it beyond doubt that they may do anything that is not expressly prohibited by law. It seeks to go further than the power of wellbeing already afforded to Scottish local authorities. The proposals seek to give councils the capacity to do anything that an individual can do. Therefore, this would not enable a local authority to introduce a tax or wage war, but it would ensure that local government has the ability to use the power of general competence in the most sensible and constructive way for the benefit of the people and communities whom they serve.

New clause 8—Competences of local government in Scotland—

‘(1) The First Minister must, after consultation with representatives from local government in Scotland, publish a list of competences of local government in Scotland.

(2) After the list has been published, the First Minister may not publish any amended list of competences of local government in Scotland without first obtaining approval of the revised list consent from—

(a) the Scottish Parliament, with two-thirds of its membership voting in favour of the amended list, and

(b) the Convention of Scottish Local Authorities.”

This new clause entrenches the independence of local government in Scotland from interference by national government in Scotland.

New clause 9—Subsidiarity—

That subsidiarity as defined by the Maastricht Treaty 1992 Article 5(3) shall apply to the functions of national and local government in Scotland.”

This extends protection of Scottish Local Government’s independence by protecting its subsidiarity behind a European Treaty applicable to the United Kingdom.

New clause 11—Scottish block grant—

The Secretary of State must lay before the House of Commons before the end of the first month of each financial year a full record, including minutes of meetings and correspondence at Ministerial level, of discussions between the Secretary of State, the Treasury and Scottish Ministers relating to the non-budget expenditure to be voted by Parliament authorising the payment of grants to the Scottish Consolidated Fund for that financial year.”

The purpose of this new clause is to ensure transparency and accountability of the process leading to the annual settlement between the Treasury and Scottish Ministers of the block grant to the Scottish Consolidated Fund.

New clause 35—Consent of the Scottish Parliament to certain Westminster Acts—

‘(1) In section 28 of the Scotland Act 1998 (Acts of the Scottish Parliament), at the end add—

“(8) But the Parliament of the United Kingdom must not pass Acts applying to Scotland that make provision about a devolved matter without the consent of the Scottish Parliament.

(9) A provision is about a devolved matter if the provision—

(a) applies to Scotland and does not relate to reserved matters,

(b) modifies the legislative competence of the Scottish Parliament, or

(c) modifies the functions of any member of the Scottish Government.

(10) In subsection (8), “Acts” includes any Act, whether a public general Act, a local and personal Act or a private Act.”

(2) After section 28 of the Scotland Act 1998 insert—

“28A Duty to consult the Scottish Government on Bills applying to Scotland

(1) A Minister of the Crown shall consult Scottish Ministers before introducing any Bill into the Parliament of the United Kingdom for an Act of that Parliament that would make provision applying to Scotland.

(2) Where the Bill is for an Act making provision that would require the consent of the Scottish Parliament by virtue of section 28(8), the requirement to consult under subsection (1) includes a requirement that a Minister of the Crown give the Scottish Ministers a copy of the provisions of the Bill that apply to Scotland no later than—

(a) 21 days before the proposed date of introduction, or

(b) such later date as the Scottish Ministers may agree.”

(3) The requirement in subsection (2) does not apply if—

(a) the Scottish Ministers so agree, or

(b) there are exceptional circumstances justifying failure to comply with the requirement.

(4) The reference in subsection (1) to an Act of Parliament is a reference to any Act whether a public general Act, a local and personal Act or a private Act.”

This new clause would ensure that the UK Parliament can only legislate in devolved areas with the consent of the Scottish Parliament. It puts the Sewel Convention onto a statutory footing, as agreed by the Smith Commission.

New clause 36—Scottish independence referendum

‘(1) Paragraph 5A in Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

(2) In sub-paragraph (1), leave out “if the following requirements are met”.

(3) Leave out sub-paragraphs (2) to (4).”

This New Cause would permit the Scottish Parliament to decide whether and when to hold a referendum on Scottish independence.

Government amendment 34.

This amendment leaves out Clause 1, which is replaced by New Clause 12.

Amendment 195, page 1, clause 1, leave out lines 7 and 8 and insert—

‘(1A) The Scottish Parliament is a permanent part of the United Kingdom’s constitution.

(1B) Subsection (1) or (1A) may be repealed only if—

(a) the Scottish Parliament has consented to the proposed repeal, and

(b) a referendum has been held in Scotland on the proposed repeal and a majority of those voting at the referendum have consented to it.”

This amendment is to ensure that the Scottish Parliament can only be abolished with the consent of the Scottish Parliament and the Scottish people after a referendum.

Amendment 5, page 1, line 7, leave out “recognised as”.

Amendment 196, page 1, leave out lines 12 and 13 and insert—

‘(1A) The Scottish Government is a permanent part of the United Kingdom’s constitution.

(1B) Subsection (1) or (1A) may be repealed only if—

(a) the Scottish Parliament has consented to the proposed repeal, and

(b) a referendum has been held in Scotland on the proposed repeal and a majority of those voting at the referendum have consented to it.”

This amendment is to ensure that the Scottish Parliament can only be abolished with the consent of the Scottish Parliament and the Scottish people after a referendum.

Amendment 6, page 1, line 12, leave out “recognised as”.

Amendment 197, page 2, line 1, leave out clause 2

This amendment signals intent to oppose ‘Clause stand part’ with respect to Clause 2 and to move New Clause (Consent of the Scottish Parliament to certain Westminster Acts) to take its place.

Amendment 7, page 2, line 6, clause 2, leave out “normally”.

Amendment 8, page 2, line 6, after “legislate”, insert “(a)”.

Amendment 9, page 2, line 6, after “matters”, insert “and

(b) to alter the legislative competence of the Scottish Parliament or the executive competence of the Scottish Government”

Amendment 198, page 2, line 7, clause 3, leave out “Section B3 of”.

Government amendments 35 to 46.

Amendment 199, page 11, line 18, clause 10, leave out “the decision whether to pass or reject it” and insert “the motion that the Bill be passed is debated”.

Amendments 199 to 203 to Clause 10 aim to clarify matters around references to the Supreme Court, in particular where the Scottish Parliament resolve to reconsider the Bill.

Government amendment 47.

Amendment 10, page 11, line 28, at end insert—

“() the period between general elections specified in section 2(2)”

Government amendment 48.

Amendment 200, page 11, line 38, after “unless”, insert “it is passed without division, or”.

Government amendments 49 to 53.

Amendment 201, page 12, line 16, at end insert—

‘(2A) He shall not make a reference by virtue of paragraph (a) of subsection (2) if the Parliament resolves that it wishes to reconsider the Bill.

(2B) He shall not make a reference by virtue of paragraph (b) of subsection (2) if—

(a) the Bill was passed without a division, or

(b) the Bill was passed on a division and the number of members voting in favour of it was at least two thirds of the total number of seats for members of the Parliament.”

This amendment establishes that a Bill passed by consensus in the Scottish Parliament (i.e. without a division) automatically meets the super-majority requirement and ensures that a Presiding Officer’s statement is not required if the super-majority requirements are not triggered.

Government amendments 54 to 57.

Amendment 202, page 12, line 23, at end insert—

‘(3A) Subsection (3B) applies where—

(a) a reference has been made in relation to a Bill under this section, and

(b) the reference has not been decided or otherwise disposed of.

(3B) If the Parliament resolves that it wishes to reconsider the Bill—

(a) the Presiding Officer shall notify the Advocate General, the Lord Advocate and the Attorney General of that fact, and

(b) the person who made the reference in relation to the Bill shall request the withdrawal of the reference.”

Amendment 203, page 12, line 25, leave out subsections (11) and (12) and insert—

‘(10A) In subsection (4) after paragraph (a) insert—

(aa) where section 32A(2)(b) applies—

(i) the Supreme Court decides that the Bill or any provision of the Bill relates to a protected subject matter, or

(ii) a reference has been made in relation to the Bill under section 32A and the Parliament subsequently resolves that it wishes to reconsider the Bill.”

(10B) After that subsection insert—

“(4A) Standing orders shall provide for an opportunity for the reconsideration of a Bill after its rejection if (and only if), where section 32A(2)(a) applies—

(a) the Supreme Court decides that the Bill or any provision of the Bill does not relate to a protected subject matter, or

(b) the Parliament resolves that it wishes to reconsider the Bill””.

Government amendments 58 to 60.

Amendment 204, page 13, line 2, clause 11, at end insert—

‘(1A) In paragraph 1 of Part I (The protected provisions, Particular enactments) of Schedule 4 (protection of Scotland Act 1988 from modification), delete “(2)(f) the Human Rights Act 1998””.

This amendment would remove the Human Rights Act 1998 from the list of protected provisions in Schedule 4 of the Scotland Act 1998.

Government amendment 61.

Amendment 205, page 13, line 8, paragraph (a)(ii), leave out “(3)” and insert “(2B)”.

Amendments 205 to 223 to Clause 11 would grant the Scottish Parliament powers to make decisions about all matters relating to the arrangements and operations of the Scottish Parliament and Scottish Government as agreed in the Smith Commission.

Amendment 206, page 13, line 9, paragraph (a)(iii), leave out “11” and insert “12”.

Amendment 207, page 13, line 10, paragraph (a)(iv), leave out “section” to the end and insert “sections 13 to 27,”.

Amendment 208, page 13, line 11, paragraph (a)(v), leave out from “(v)” to the end and insert “section 28(1) to (6),”.

Amendment 209, page 13, line 13, paragraph (a)(vii), leave out “27(1) and (2)” and insert “31”.

Amendment 210, page 13, line 14, paragraph (a)(viii), leave out “28(5)” and insert “32(1) to (3),”.

Government amendments 62 and 63.

Amendment 211, page 13, line 15, paragraph (a)(ix), leave out “(1)(a) and (b) and (2) and (3)”.

Government amendment 64.

Amendment 212, page 13, line 19, paragraph (b)(i), leave out “44(1B)(a) and (b), and (2)” and insert “44(1C), (2) and (4),”.

Government amendment 65.

Amendment 213, page 13, line 20, paragraph (b)(ii), leave out “(3) to (7)” and insert “to 50”.

Amendment 214, page 13, line 21, paragraph (b)(iii), leave out “46(1) to (3)” and insert “51(1), (2) and (4)”.

Government amendment 66.

Amendment 215, page 13, line 22, paragraph (b)(iv), leave out “47(3)(b) to (e)” and insert “52”.

Amendment 216, page 13, line 23, paragraph (b)(v), leave out “48(2) to (4)” and insert “59”.

Amendment 217, page 13, line 24, paragraph (b)(vi), leave out “49(2) and (4)(b) to (e)” and insert “61”.

Government amendment 67.

Amendment 218, page 13, line 25, leave out paragraph (b)(vii).

Government amendment 68.

Amendment 219, page 13, line 26, paragraph (c), leave out “(3)”.

Amendment 220, page 13, line 27, paragraph (d), leave out from “general” to the end of the paragraph, and insert “sections 81 to 85,) sections 91 to 95, and section 97,”.

Government amendment 69.

Amendment 221, page 13, line 29, paragraph (e), leave out from “supplementary” to end of line 38, and insert—

(i) sections 112, 113 and 115, and Schedule 7 (insofar as those sections and that Schedule apply to any power in this Act of the Scottish Ministers to make subordinate legislation),

(ii) sections 118, 120 and 121,

(iii) section 124 (insofar as that section applies to any power in this Act of the Scottish Ministers to make subordinate legislation),

(iv) section 126(1) and (6) to (8), and

(v) section 127,”.

Amendment 222, page 13, line 40, paragraph (g), leave out “6” and insert “7”.

Amendment 223, page 13, line 42, paragraph (h), leave out “paragraphs 1 to 6 of”.

Amendment 224, page 13, line 43, at end insert—

‘(2A) In paragraph 4 of Part I (The protected provisions, This Act) of Schedule 4 (protection of Scotland Act 1988 from modification), insert new sub-paragraph—

(5A) This paragraph does not apply to amendments to Schedule 5, Part II, Head A, Section 1A insofar as they relate to—

(a) taxes and excise in Scotland,

(b) government borrowing and lending in Scotland, and

(c) control over public expenditure in Scotland.””

This amendment would enable the Scottish Parliament to amend the Scotland Act 1998 to remove the reservation on taxation, borrowing and public expenditure in Scotland, with the effect that the Scottish Parliament could then legislate in these areas to provide for full fiscal autonomy in Scotland.

Amendment 27, page 18, line 21, clause 15, leave out “the amount described in subsection (3)” and insert ‘the whole amount’.

The purpose of this amendment is to allow a sum equivalent to all of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 28, page 18, line 26, leave out “the amount described in subsection (4)” and insert ‘the whole amount’.

The purpose of this amendment is to allow a sum equivalent to all of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 29, page 18, leave out lines 28 to 39.

The purpose of this and the linked amendments to Clause 15 is to allow a sum equivalent to all of the revenue raised by both standard and reduced rates of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 30, page 18, line 33, at end insert “Provided that the amount payable is not less than half of the agreed standard rate amount.”

This amendment would ensure that the share of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund never falls below half the of the revenue raised, even if the standard rate of VAT is cut in the future.

Amendment 31, page 18, line 39, at end insert “Provided that the amount payable is not less than half of the agreed reduced rate amount.”

This amendment would ensure that the share of the revenue raised by the reduced rate of VAT in Scotland to be paid into the Scottish Consolidated Fund never falls below half the of the revenue raised, even if the reduced rate of VAT is cut in the future.

Government amendments 81 and 130 to 132.

[David Mundell]

This is a significant day for Scotland, as we move the public debate about our country’s future from questions of constitutional process and on to the real business of using power to improve people’s lives.

The Government’s amendments, which I would like to outline today, will strengthen the Bill’s provisions and clarify the delivery of the Smith commission agreement. With that done, it will be time for Scotland’s political parties to work together to make the new powers a success for everyone in Scotland. My ministerial colleagues, UK Government officials and I have engaged widely with interested parties and civic Scotland to help people to understand the Bill and to listen to their views. We have discussed the clauses with the Scottish Government and Committees of both the Scottish Parliament and this Parliament, and we have reflected on constructive suggestions of how to improve the drafting of the provisions. A number of technical amendments are proposed to ensure that the Bill devolves the powers intended effectively and efficiently, as well as a range of substantive amendments which prove beyond doubt that the Bill fully delivers the Smith commission agreement. I would like to move a number of Government amendments to part 1 of the Bill. We will discuss important amendments on welfare and other parts of the Bill later today.

Building on discussions on the permanence of the Scottish Parliament in Committee, I am bringing forward new clause 12 and amendment 34. The new clause removes the words “recognised as” and makes it clear beyond question that the Scottish Parliament and the Scottish Government are permanent institutions, and that it would take a vote by the people of Scotland in a referendum to ever abolish them. The amendment puts it beyond doubt that, as the Prime Minister has said,

“Scottish devolution is woven into the very fabric of our United Kingdom.”

New clause 13 is a technical provision ensuring that, where legislative competence is being transferred to the Scottish Parliament in relation to elections, executive functions are transferred to the Scottish Ministers in relation to that area. This will minimise the need for the Scottish Parliament to make separate textual changes to legislation after commencement of the Bill. Amendments 81 and 130 to 132 are consequential amendments to new clause 13.

Amendments 35 and 61 would devolve to the Scottish Parliament the subject matter of new subsection (2B) of section 2 of the Scotland Act 1998, inserted by clause 5 of the Bill. New subsection (2B) enables Scottish Ministers to make an order specifying an alternative date for a Scottish parliamentary general election, where otherwise the date would fall on the same day as an ordinary general election or a general election to the European Parliament.

Government amendments 36 and 44 to 45 clarify what is meant by “combined elections”. Amendment 36 makes it clear that the reservation of the rules governing campaign expenditure by political parties applies where there are overlapping regulated periods, even if the actual polls take place on different days. Amendments 44 to 46 ensure consistency of language throughout the Bill by amending other provisions in clause 7 concerned with expenditure in connection with elections.

Amendment 131 inserts a reference to clause 3 and has the effect of applying schedule 3 to the Interpretation and Legislative Reform (Scotland) Act 2010 to any functions that are exercisable within devolved competence by virtue of that clause. The new wording included in amendment 37 makes it clear that the Scottish Parliament will be able to give the Electoral Commission powers as well as duties when reporting on the delivery of its functions in relation to elections to the Scottish Parliament.

Minor amendments 38 and 39 ensure that the Scottish Ministers’ powers to make provision on the conduct of Scottish parliamentary elections are in line with the legislative competence of the Scottish Parliament in this area. Amendment 40 is a minor change to align the subordinate legislation-making powers of the Scottish Ministers with the extent of the reservation of the individual electoral registration digital service, which is the Great Britain-wide service used to process online applications and to verify information supplied in applications. It is used to process applications to the registers used for all GB elections, as well as EU parliamentary elections.

Amendments 41 and 42 ensure that the power in clause 5 to specify a new date for an ordinary Scottish parliamentary election works effectively with the Presiding Officer’s existing power to propose to move the date of such a poll. Amendment 43 has the same purpose as the section of the clause it replaces—to enable the Scottish Ministers to exercise, concurrently with the Secretary of State, certain subordinate legislation-making functions relating to the digital service, which otherwise remains reserved. The effect of this is to allow Scottish Ministers to exercise functions and make regulations about the digital service.

Amendments 47 to 60 seek to clarify the rules on super-majority. A number of these are technical and consequential, but I will draw the attention of the House to the three main amendments in this group. Amendment 47 requires that the Presiding Officer must decide whether any provision of a Bill relates to a protected subject matter, rather than assessing the provisions of the Bill more generally. Amendment 50 has the effect that a Bill passed with a simple majority in respect of which the Supreme Court subsequently decides that a simple majority is sufficient must be reconsidered by the Scottish Parliament before being submitted for Royal Assent. It is important that the Scottish Parliament has the opportunity to reconsider the Bill in this scenario as circumstances may have changed since the Bill was first passed.

Amendment 60, partly consequential on a number of other amendments, means that requirements regarding the final stage for a Bill, and for approval of a Bill following reconsideration to be treated as the passing of the Bill, apply regardless of the ground for reconsideration.

Government amendments 62 to 69 deliver new powers to the Scottish Parliament in relation to the arrangements and operation of the Scottish Parliament and Scottish Government, in response to amendments made in Committee and discussions with the Scottish Government. They include powers in relation to the dating of Royal Assent, the form and nature of certain statements by the Presiding Officer, letters patent, appointments to the Scottish Government, the Auditor General for Scotland and the Queen’s Printer for Scotland. These amendments extend the far-reaching powers in the arrangements and operation of the Scottish Parliament and Scottish Government already provided for by clause 11 and address a number of amendments tabled in Committee and by the SNP today.

17:00

[Ian Murray (Edinburgh South) (Lab)]

The Secretary of State is cantering through the Government amendments. Can he clarify for the House whether, in the current context, they would require a legislative consent motion for the Trade Union Bill?

[David Mundell]

As the hon. Gentleman will know, the Trade Union Bill is still under discussion in this House, and it is the Bill as finalised by this House and the other place that will determine the nature of any legislative consent motion that is required, as is the normal practice.

The amendments I have tabled today fulfil my commitment to reflect on the debate in Committee. It is a bit rich to be criticised both for taking no amendments and, in the same breath, for tabling too many. We took the Committee process seriously and the contribution from the devolved powers committee in the Scottish Parliament very seriously, and that has determined our thinking in lodging these amendments. We will now hear the case for other, non-Government amendments, but the House will not be surprised to hear that the Government still consider that full fiscal autonomy is not in the interests of the people of Scotland. I believe that Scotland’s parties, rather than rerunning the referendum, need to work together to understand how the powers in the Bill will be used for the benefit of the people of Scotland. The UK Government are honouring their commitment in the Edinburgh agreement, accepting the result of the referendum and moving forward to give the Scottish Parliament significant new powers within our United Kingdom.

[Mr Graham Allen (Nottingham North) (Lab)]

It is very nice once again to be talking about Scottish—[Interruption.] I give way to the Clerk. That is the first time I have been heckled from the Clerk’s Table, but I am sure it will not be the last.

There is one thing that concerns me. Much as I welcome the devolution to Scotland that the Scottish people have achieved—owing to the hard work of people such as Donald Dewar, the Scottish constitutional convention, even the Scotland Act 2012 and now this Bill—there are those of us who represent constituencies in England who envy that and would kill for 1% of the effective devolution that has gone to Scotland. I congratulate the Scottish people on their efforts and where they have got to, but I hope we will come very soon to how England can learn some of the lessons of Scottish devolution, because it has taught many of us many lessons. I will perhaps touch on some of the devolution packages now appearing in England, which look puny and weak compared with the proper devolution that has now taken root, quite rightly, in Scotland.

My anxiety is about centralisation. It is not devolution if the powers merely go to the next stage. If they go from Whitehall to Holyrood and stay there—and, some would argue, are perhaps not used as sufficiently as they could be—

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

rose—

[Mr Allen]

If the hon. Gentleman will allow me, I will make my case and happily give way later.

If the powers stay at Holyrood and do not filter down to lower tiers—perhaps local government in Scotland—and, most importantly, to the Scottish people in their communities and neighbourhoods, that is not sufficient devolution. Exchanging centralisation from Whitehall and Westminster to Holyrood is not the bargain that many of us thought we had when it came to devolution in Scotland.

[Ian Blackford]

If the hon. Gentleman had been paying attention to events in Scotland, he would recognise that the Scottish Government have brought forward proposals for further devolution to our island communities. When the Scottish Government came to power, one of the first things we did was to remove the vast amount of ring-fencing that constrained local authorities, so it is the previous Labour Administration who are guilty of centralisation, not the Scottish Government that we have today.

[Mr Allen]

It is always good to hear of examples of further devolution. I say more power to those who want to “double devolve”—and the more that happens, the more those in the other nations of the Union will learn from such examples. I gently warn the hon. Gentleman, however, that it is no good always going back to times before his party controlled and ran the Scottish Parliament with powers that are unheard of in the rest of the Union—and that should be spread to the rest of the Union. There has to be a point where people are clearly using those powers rather than complaining about what they would like to have, do not use or think they ought to have. It is a really important lesson for all of us who believe in devolution that we need to push these things further. In that case, why have my good friends in the Scottish National party not supported or proposed amendments to make sure that local government—in this case, in Scotland—can go further and run much more of its own affairs?

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

As always, the hon. Gentleman makes a coherent argument about constitutional matters on which he possesses great expertise. Does he agree that this is often a two-stage process? The first stage is devolving powers to the Scottish Parliament, after which it is then for the Scottish Parliament further to devolve the powers, to the islands and other communities, as indeed it has done?

[Mr Allen]

It is important to see devolution develop in stages. I mentioned earlier that we have made a start on the devolution proposals for England and that another couple of Bills might be necessary, even in this Parliament, before we can really see what devolution in England looks like. However, there must be a point at which the powers already devolved—in this case to the Scottish Parliament—can be pushed beyond and down to people on the ground. That is why I proposed—I did not hear a great deal of support for it—to ensure that local government in Scotland can, with the local people’s consent, raise its own taxation. If people are won over and convinced of the need, it should be possible to raise levels of a particular tax in an area. I often mention my local circumstances in Nottingham, where we would like to levy a tourist tax or a bed tax in order to do good works, providing that people in the local area consent and agree.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Does the hon. Gentleman not see that the whole point of devolution is to ensure that those decisions are made by the Scottish Parliament in Holyrood, which is already carrying through the Community Empowerment (Scotland) Act 2015? It is not for this place to tell the Scottish Parliament what to do with the power that is devolved—otherwise, the power is not really devolved.

[Mr Allen]

I cannot speak for this place; I can give only my personal opinion. The hon. Lady has heard me say how important it is that powers are devolved to the Scottish Parliament, and as a devolver and a democrat, I would like to see powers devolved out of Whitehall to local areas in England, for example, and on to the ground— even, in my own case, going beyond the Nottingham City Council, good though it is, right down to the localities. It is not a case of someone telling someone else to do this. If we believe in devolution—and I understand why the nationalists may feel that they do not want devolution, because it undermines the nationalist ethic—[Interruption.] That is a perfectly valid position to hold, and it is nothing to be ashamed of, but nationalism is not localism.

[Several hon. Members rose—]

[Mr Allen]

I will give way in a second.

If we believe in localism, or in subsidiarity—a word that I used in one of my new clauses—and pushing power to the lowest possible levels, we cannot stop with nationalism, or the nation state. There must be a whole panoply: there must be a whole view of how power can go to the people rather than merely to another elected set of people in the Scottish Parliament, which, believe it or not, may well seem as remote to some people as the federal Parliament here.

[Kirsty Blackman (Aberdeen North) (SNP)]

In Scotland less than 2% of the money provided for local authorities is ring-fenced, while in England the figure is nearly 10%. We should not be having a discussion about Scotland being more centralised than England, because that is clearly not the case. Will the hon. Gentleman please talk about the Scotland Bill rather than about devolution to England?

[Mr Allen]

I understand why it is sensitive when I talk about issues that colleagues in the Scottish National party would rather not talk about, but I am going to talk about them. [Interruption.]

[Several hon. Members rose—]

[Mr Allen]

I will give way after I have answered the question from the colleague of the Members who are rising.

As I have said before, it is not just the property of people in the Scottish National party, or even—

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

On a point of order, Madam Deputy Speaker. We have five hours in which to debate critical and significant amendments to the Scotland Bill, and the hon. Gentleman has been going on about devolution for England. He has not even tabled any amendments on this particular issue. When can we get back to debating the Scotland Bill and the important amendments that have been tabled to it?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

I understand the point that the hon. Gentleman has made, and I take it very seriously. I have been listening carefully to the hon. Member for Nottingham North (Mr Allen). He is addressing points that are relevant to the precise matters before us and to the amendments and new clauses, in a general way, but I am sure he will accept the feeling of the House that, while it is interesting and generally relevant to discuss these issues in general and as a matter of academic interest, it is also important for the House to have enough time to debate the many amendments and new clauses that are before us. I am not stopping the hon. Gentleman, but I am trusting him to know when he will draw his remarks to a conclusion.

[Mr Allen]

Thank you, Madam Deputy Speaker. Perhaps the hon. Member for Perth and North Perthshire (Pete Wishart) is a little anxious because he is now part of the establishment in this place, and is used to having the privilege of unlimited time in which to address the House. Many of us do not have that privilege, and we are very jealous of the hon. Gentleman when he gets up to speak at length. However, I am rather surprised that he stopped me from answering the question asked by his hon. Friend the hon. Member for Aberdeen North (Kirsty Blackman), which I was in the middle of doing. I am also rather surprised that he had not read the amendment paper, which includes four new clauses in my name. Perhaps if he looked at those rather than repeating the speeches that he made during the previous three days of debate, he would be better informed.

I shall now be very careful to stick closely to the subject of my new clauses, which will obviously be in order. The ability to raise money locally is very important for all our localities, and is a symptom of being freed to a greater extent from Whitehall and Westminster, so that this place and Whitehall do what they should do and our respective nations can govern themselves as much as is absolutely appropriate, which they do not currently do. Scotland is leading the way in showing us how to do that, but I hope that this is not just about Scotland, and that, even for the Scottish nationalists, it is about ensuring that all of us share the benefits of devolution while we remain together in the Union, as I hope we will.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Will the hon. Gentleman give way?

[Mr Allen]

I was going to give way to the hon. Member for Ross, Skye and Lochaber (Ian Blackford), but I will give way to the hon. Lady first.

[Kirsten Oswald]

I thank the hon. Gentleman for giving way. He has just said that this is not just about Scotland. I have to put it to him that this is the Scotland Bill. Can we please discuss Scotland?

[Mr Allen]

I know it is difficult to accept, when one listens to one’s own propaganda that these matters are only ever about the Scottish National party, but the truth is that the Scotland Bill clearly impacts on the rest of the Union. Those of us who will benefit or suffer from matters related to Scotland have a right to express a view. If there was a slightly more outgoing sharing of learning and experience from some colleagues from the SNP, more friends would be won among those of us who very strongly believe in devolution in the other nations of the UK.

17:15

[Ian Blackford]

I just wonder whether the hon. Gentleman sees the irony in the fact that we voted through English votes for English laws but have created second-class MPs in those of us who come from Scotland, because we cannot fully represent our constituents in this place. Scotland returned 56 SNP MPs with a clear mandate to deliver home rule for Scotland, and we are not getting what the Scottish people want because MPs from other parts of the UK are voting against our interests. We should have Scottish votes for Scottish laws in this place.

[Mr Allen]

I have a lot of sympathy with the generality of what the hon. Gentleman is saying, but I have to remind him that there was a Scottish referendum and a majority of Scottish people voted to stay in the Union. There was a general election—

[Ian Blackford]

How did you get on?

[Mr Allen]

The hon. Gentleman asks from a sedentary position how we got on: 50% of Scottish people voted against the SNP and unfortunately 50% of Scotland is represented by three Members of Parliament. The hon. Gentleman should relish his victory, and he thoroughly deserves all the appropriate accolades, but I ask him to be a little careful not to become triumphant, because his party should not be proud of 50% of Scottish people being represented by three Members of Parliament. I hope the desire for proportional representation, which suited the SNP for many years—

[John Nicolson (East Dunbartonshire) (SNP)]

Winding up.

[Mr Allen]

Now one hears very little—

[John Nicolson]

In conclusion—

[Mr Allen]

I am winding up in a way the hon. Gentleman may not approve of—I am getting my first wind.

I hope the SNP will not forget its commitment to proportional representation just because first past the post delivered the gross, disfigured distortion of 56 MPs representing half the population and three MPs representing the other half. I hope that the hon. Gentleman feels that that is not an appropriate allocation and that the SNP renews its vigour when talking about proportional representation, because it has gone rather quiet on that subject.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend detect from the interventions of the SNP Members that they are perfectly happy to talk about devolution down to the Scottish level, but they are very keen not to talk about devolution down to the more local levels of the kind my hon. Friend is outlining?

[Mr Allen]

I hope—[Interruption.] I hope that even those who are heckling and shouting would say that I always try to engage people from the SNP in debate on these issues. Sometimes things get a bit interesting and a bit heated, but that is because we all care passionately about these views. I am trying to put my point of view over now. Perhaps there are shades of opinion in what appears to be a robotic, monolithic Scottish National party. Perhaps some SNP Members acknowledge that others have a different view. It might be the case that that has some resonance, and that not all of them simply wait to be told what to do at their regular Monday meeting.

[Ian Austin (Dudley North) (Lab)]

I take a different view from that of my hon. Friend the Member for City of Chester (Christian Matheson). I agree with my hon. Friend the Member for Nottingham North (Mr Allen) that, now that the SNP is the establishment in Scotland, its members are desperate to avoid any scrutiny of the way in which it runs the Scottish Government. That is because they want to be able to blame everybody else—namely, the wicked people down south—for everything that goes wrong in their country.

[Mr Allen]

I am sure that the Chair would call me to order if I answered my hon. Friend’s very pertinent question, but I know that he will make that point and many others when he is called to speak.

New clause 8 is about defining. It is all very well to sit in Holyrood handing out little bits of largesse here and there, but that is exactly what Whitehall and Westminster do to everyone else. The Scottish people have suffered from that as much as the English people have. One way to get round that is to define the competences of local government and national Government in such a way that no one will be able to unpick the idea, whenever it suits them, that power should be devolved beyond Holyrood or Westminster. Unless that principle is clearly entrenched, the lure of power from the centre—be it Holyrood or Westminster—and the temptation to tell people what to do will be too strong.

New clause 8 proposes that people who want to engage in this debate should sit down and discuss with their local government—wherever it might be—what it is appropriate for local government to do. I do not believe that Scotland, England, Wales or Northern Ireland should be immune from that idea, because otherwise they will find that power gets sucked back up. Some of my friends in Scotland are telling me that power there is becoming ever more centralised. No doubt that will be a matter of debate, but that is what people are saying. Perhaps the easiest way round that is not to say, “Oh yes, but we are very nice to people. We are benign and we give them a little bit more money here and there”, but to allow the people, the drivers who produced devolution in Scotland, to produce devolution lower down than Holyrood.

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

The hon. Gentleman talks about devolving power. As everyone in the Chamber knows, money is power. Will he therefore applaud the Conservative Government for devolving the retention of business rates locally? That policy has been devolved to the Scottish Government and it is now being mimicked there.

[Mr Allen]

I bracket the Scottish National party and the Conservative party together. If they do good things to push power down or push finance down, I am very happy to applaud that. What I am saying is that, in order to avoid a situation in which “the centre giveth and the centre taketh away”, we all need to have a proper written settlement. Even if people do not think that it is happening now, there will be a time when the temptation for those at the centre—in Holyrood or in Westminster—to turn things round, suck power back and tell people what to do will overcome them, even those with the best hearts in the world.

[Mr David Anderson (Blaydon) (Lab)]

May I just gently remind colleagues from Scotland that they were elected to this United Kingdom Parliament and that this is a United Kingdom Bill which will have an impact on my constituents as well as theirs? I would be delighted if my hon. Friend’s new clause would somehow enable measures similar to those in the Bill to be put into an English Bill, so that my council could help me to protect my constituents in the same way as Scottish MPs want to protect theirs. I welcome the fact that he has tabled his new clauses and the fact that they are not critical of the Bill.

[Mr Allen]

That is why, knowing many of my parliamentary colleagues from Scotland, I rely on their generosity of spirit to help those of us who are trying to get a devolved settlement in other parts of the Union, not to pull up the drawbridge and say, “We’ve got what we want. Now we have a load of people in Parliament, we are no longer going to talk about proportional representation. On the back of 50% of the votes in our nation we have 95% of the seats and that’s now all okay. Now we are in control of the Scottish Parliament we are not going to use the powers, but we are going to suck up power from local government.” I know that that is not where many of my parliamentary colleagues from Scotland wish to be, but they need to speak up. They need to make that clear, in their internal meetings and inside their party. They need to be clear with people who are telling them, “Leave it to us, we are the top dogs. Do what you are told. Show up, it is your shift.” We have this in every other party, and people will hope there can be proper debate within parties so that devolution as a whole can move forward. It has to go beyond Scotland. People who really believe in devolution have to take it beyond the one area. I am happy to discuss and debate that with anybody. One area we need to talk about—[Interruption.] I would gladly give way to hon. Members rather than just have shouting, although I am happy to have shouting and gesticulating—it is the parliamentary equivalent of spitting at your opponents in the street. [Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman is very patient, but I am not happy to have shouting and gesticulation—not that I see any that is out of order at present. I say to him that when the House becomes a little vociferous, it is possibly an indication that there is a limited time for debate. He does have four very important amendments down for discussion and he has taken a fair chunk of the time for the debate. As I said previously, I am not stopping him—he has the Floor. He is a senior and much-respected Member of this House and he will know when he has taken the right amount of time in this very short debate.

[Mr Allen]

I will certainly go a lot quicker if people allow me to. As always, not a person in this Chamber can say that I do not give way when people have a real point of debate to make, rather than just wanting to yell from a sedentary position. That will continue to be my policy and I will not move from that, whatever the provocation.

New clause 9 talks about subsidiarity, which was brought to us by the former Lady from Finchley, through the Maastricht treaty. In this Bill, it would enable us to define and keep a very clear perspective on what is local, what is regional, what is national and what is federal. That will help everybody, whichever country they are in within the Union, not just to win small victories here and there, but to sustain a change in our democratic structure that will make it harder for those who so wish to do away with any settlement when they feel it convenient.

Part of the Bill relates very much to the rest of the United Kingdom, and that relates to the possibility of having a citizens convention, modelled on the Scottish convention, whereby people throughout the whole UK can face some of these issues, which are of great importance to us. The debate about EVEL—English votes for English laws— was a diversion. It was an irrelevance and mere procedural issue, and it has very little to do with devolution and greater freedom for our peoples within the UK. I hope that we move on from where we are on Scottish devolution and on the Cities and Local Government Devolution Bill, which is devolution in England, and that we take these issues forward together. All parties need to work together to ensure that there is a citizens convention on devolution, so that we can spread some of the excellent things that have been achieved by the Scottish people, by people such as Donald Dewar, by those in the Scottish citizens convention, by those who worked on the Scotland Act 2012 and by all those parties of the Union that worked together to create this Scotland Bill, which is, quite rightly, the first Bill before this Parliament. I hope that the first Bill in the 2020 Parliament is one that brings devolution to all the nations of the Union so that we all get the benefits that will rightly be enjoyed by the people in Scotland.

17:30

[Sir Edward Leigh (Gainsborough) (Con)]

I wish to speak to new clause 1, which calls for an independent commission on full fiscal autonomy. I have to say to the shadow Secretary of State, who tabled it, that there is a whiff of hypocrisy about this. He may not remember it, but on 15 June, during the Committee stage, I proposed an amendment to achieve immediate full fiscal autonomy. I was supported in the Division Lobby by the Scottish National party and some Conservative colleagues. If Labour Members had voted with us, we could have had full fiscal autonomy that night, but they chose not to do so. I do not know whether they are embarrassed about that—[Interruption.] The shadow Secretary of State is shaking his head and says that he is not embarrassed, but he has now tabled an amendment that would produce another talking shop and another Smith commission on full fiscal autonomy, thus knocking the whole matter into the long grass. Incidentally, he says that no Member of the House of Commons or of the other place should serve on the commission. I do not why that is. He also says:

“The Secretary of State shall not appoint as a member of the commission any person who is a member of a political party.”

That is a process of thinking that suggests that, somehow, politicians should not take decisions and that the fate of nations is decided not by statesmen, but by unelected commissions. The commission will have to meet for many months, but what will it tell us that we do not already know?

The fact is full fiscal autonomy is a well understood concept; it has the virtue of simplicity. I will not repeat all the arguments I made in its favour on 15 June, but Labour could have had it. I give this prediction: at the next general election, either the Conservative party or the Labour party will promise, in their manifestos, full fiscal autonomy. They will have to do that, because otherwise we will continue to be behind the curve.

I was criticised by some on the Conservative Benches for being unhelpful on 15 June, but actually I was helping the Conservative and Unionist cause. I showed to some people in Scotland that there were Unionist politicians who value the Union, and who believe in full fiscal autonomy, because it is the best way to stop the gradual slide towards independence. If we have a Scottish Parliament based on the Smith commission, which involves highly complex procedures on tax and many other matters— they have been debated in the past so we do not need to repeat them all here—we are inevitably leading to a sense of grievance.

The way to solve the grievance is to have full fiscal autonomy immediately. The Scottish Parliament should be held responsible for taxing the people and spending the money. If the SNP controls the Scottish Parliament, it is held responsible by the Scottish people. Furthermore, the arguments for full fiscal autonomy have moved even more in its favour since June following our debate on EVEL.

What is the objection to EVEL by Scottish Members of Parliament and by the SNP? It is that we have the Barnett formula. They are not allowed to vote on all stages of a Bill. A Bill could change English spending, and in doing so it automatically changes Scottish spending, but Scottish MPs are not allowed to vote on all stages of the Bill.

If the Scottish Parliament had full fiscal autonomy—if we did away with the Barnett formula—there would be no need for EVEL. The only reserved matters would be foreign affairs and defence, which account for a very small proportion of total spending. The budget of the Foreign and Commonwealth Office is 0.2% of gross national product, that of the Department for International Development is 7%, as we know, and that of the Ministry of Defence is 2%. Sometimes a whole year will pass without there being any legislation on the MOD or the Foreign Office. If the Scottish Parliament had full fiscal autonomy, and therefore the only legislation that affected the Scottish people was to do with foreign affairs and defence, there would be no need for EVEL.

This whole debate about Barnett and EVEL is in danger of being used by our political opponents. That is not what I want, but they are our political opponents, after all. They oppose the Union. They are entitled to make what arguments they like, and they will use the debate around EVEL to argue against the United Kingdom.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

I do indeed remember the amendment that the hon. Gentleman brought before the House in relation to full fiscal autonomy. He will remember that the shadow Chancellor also voted in the Lobby with him and Scottish National party Members on full fiscal autonomy. Does he agree that it might be progress for the Labour party if it followed the party leadership on this matter?

[Sir Edward Leigh]

I do not know if the new shadow Chancellor voted in our Lobby, but there seems to be an interesting concept nowadays in the Labour party: there is full freedom on the Labour Benches and, apparently, the Labour party leader can oppose Labour party policy on Trident and much else. As we have just heard, the shadow Chancellor opposes Labour party policy on full fiscal autonomy. This is an interesting situation. I have made my point. I do not believe this is a genuine proposal from the shadow Secretary of State.

[Ian Murray]

I respect the hon. Gentleman immensely. If he thinks back to the debate we had on 15 June, he will recall that no one in this Chamber from the SNP or his colleagues on the right wing of the Conservative party believed the figures that were put forward by the Institute for Fiscal Studies or the Treasury, or the Scottish Government’s own figures. New clause 1 is an attempt to bring some clarity to those figures so that full fiscal autonomy could benefit Scotland, rather than being an £8 billion black hole.

[Sir Edward Leigh]

I do not want to get into a debate about a black hole, the deficit and all the rest of it. I remember that I was intervened on by the hon. Member for East Lothian (George Kerevan) and I accepted that there should be transitional arrangements. I made the point that this was not a right-wing Tory trap for the SNP. This was not a device to get rid of Barnett because we were claiming that the Scottish people get £1,600 a year more. I said precisely that if there was full fiscal autonomy and we got rid of Barnett, we should retain the United Kingdom and there should be a grant formula based on need.

If, for instance, Scotland had a particular problem, as we have in Lincolnshire with the sparsity factor in relation to education provision, or with declining industries, we are a United Kingdom Parliament. We are a fraternal Parliament. I believe in the Union, I believe in our standing together. If there is a need for the United Kingdom—I called it the imperial Parliament, as it were—to help out our friends in Wales—[Interruption.] SNP Members do not like that word, but I used it advisedly. That was the term that was used during the debates on Irish home rule. It is a technical term. If our friends in Northern Ireland, Wales or Scotland need extra help from the United Kingdom Parliament, we should give that help, but it should be based on needs, not on an automatic formula based on Barnett, which is an outmoded concept that has outlived its usefulness. It is also, as I have said, very dangerous in the context of the debate on English votes for English laws.

I am sorry to take the Labour party to task, because I respect the shadow Secretary of State. Labour is making some progress, but it is still behind the curve and I do not believe it will ever get back in front of the curve in Scotland unless it is bold. I repeat the point I made back in June: whether we like it or not, we have the election system that we have. We, the Unionist parties, went to the Scottish people. We based our arguments on the Smith commission, and we lost 56 of the 59 seats in Scotland.

The hon. Member for Nottingham North (Mr Allen) can complain about that, but that is the parliamentary system we have. We have to accept that, whether we like it or not, the Smith commission was rejected by the Scottish people. If we want to save the Union—and I am as passionate about the Union as the hon. Gentleman —we cannot be behind the curve on this. We have to be big-hearted, we have to be bold, and we have to move with full fiscal autonomy and move with it now.

[Angus Robertson (Moray) (SNP)]

I rise to speak to the amendments tabled in my name and those of my right hon. and hon. Friends in proceedings which, thus far, most viewers in Scotland will frankly view as a total travesty and a farce. We are told that this is a piece of legislation of amazing proportions and importance, yet there are fewer than 10 Back Benchers on the Conservative Benches and fewer than 10 Members of Parliament on the Labour Benches. What does it say about the Unionist parties in this House that they cannot even be bothered to turn up for a debate about something they think is so important? We are debating the Report stage of the Scotland Bill with 200 or more amendments and new clauses before us—200!—yet we have heard extended speeches about English local government and a whole series of other things that have absolutely nothing to do with today’s proceedings.

The context of these proceedings is clear to people listening and watching in Scotland. First, a promise—a vow—was made. Secondly, we heard day in, day out that devo-max would be delivered, even from Labour MPs of the time. The former Prime Minister, Gordon Brown, said that we were near to federalism:

“Within a year or two, as close to a federal state as…can be.”

One can call this Bill many things, but it is not a charter for federalism—it is a long, long way from that. We all know about its shortcomings; they have been denied by the Government, but they are clear to pretty much anybody else who cares to look. We know because others who are not in political parties, and do not have a vested interest, have said so, including the Scottish Trades Union Congress, the Scottish Council for Voluntary Organisations, Carers Scotland, Enable Scotland, and—how about this—the cross-party committee of the Scottish Parliament, on which senior Conservative and Labour MSPs served, that had the obligation to look at this. It said that the Scotland Bill “falls short” in some “critical areas”, and that it does not meet the “spirit or substance” of the Smith commission’s recommendations and requires extensive redrafting in other key areas.

What about those who do have a political vested interest? How about—let us pick one—the deputy leader of the Labour party in Scotland, Mr Alex Rowley? He said on BBC Radio Scotland on 18 September 2015:

“No ifs, no buts, Smith has not been delivered”

and

“We will stand shoulder to shoulder with SNP Ministers to deliver Smith.”

How ironic. Where were those voices today—where were the speeches? Perhaps we can hear them later. We have not heard a single one that reflects those realities.

We should not lose sight of the fact that the Smith commission followed the referendum. As I have said in previous debates in this House, we recognise and respect the result of the referendum, and we proceeded to work with the other political parties in the Smith commission. We then went to the country in a general election, and, like other political parties, we stood on a manifesto. The manifesto said:

“We welcome the proposals set out in the Smith Commission, as far as they go. The further watering down of the agreed proposals, by the UK government, is unacceptable. There should be no effective veto for UK ministers on the exercise of the various new powers, in particular over the welfare system. We share the view of many organisations across Scotland that the package, as it stands, does not enable us to deliver fully either the greater social justice or the powerhouse economy that our country demands. As the STUC has said, ‘there is not enough’ in the Smith Commission recommendations ‘to empower the Scottish Parliament to tackle inequality in Scotland’… The Smith Commission proposals were, in many respects, a missed opportunity. Decisions about more than 70 per cent of Scottish taxes and 85 per cent of current UK welfare spending in Scotland will stay at Westminster.”

We also went to the country with the following pledge:

“Scotland should have the opportunity to establish its own constitutional framework, including human rights, equalities and the place of local government. The Scottish Parliament should also have the ability to directly represent its interests on devolved matters in the EU and internationally.”

17:45

We went to the country with those pledges, and what happened? There was an absolute electoral wipeout for the Labour party in Scotland, losing 40 out of 41 seats from right across Scotland. The hon. Member for Edinburgh South (Ian Murray) is pointing to Conservative Members, whom I will move on to next. It was the worst electoral showing in 100 years—since 1865. I must say to the Secretary of State, because I have challenged him before on this, that I would be grateful if he pointed out a single country in the industrialised democratic world where the mainstream centre-right party does as badly as the Scottish Conservative party. Name that country!

[David Mundell]

Since the hon. Gentleman has put that on the record so many times, I want to point out that the Conservative party polled more votes in the 2015 general election than in 2010 election. He has sought to distort those figures. Perhaps he would like to join me in congratulating the new Conservative councillor in Aberdeenshire, who topped the poll in the very constituency of the right hon. Member for Gordon (Alex Salmond).

[Angus Robertson]

Oh dear, oh dear! The right hon. Gentleman had the opportunity to name a single country in the industrialised democratic world where a centre-right party does worse than the Scottish Conservative party, but he could not think of one because there are none. The Scottish Tories polled 14.9%, down two points on the previous general election. To be proud of that—

[David Mundell]

Twenty thousand votes up.

[Angus Robertson]

For the Secretary of State for Scotland to deny the facts just goes to show how far the Conservative party, the Labour party and—[Interruption.] I was going to add the Liberal Democrats—there is not a single one in the Chamber—because they lost 10 out of 11 seats in Scotland.

The point of saying all this is to understand where the democratic mandate lies. We went to the country saying that Smith should be delivered in full and that further powers should be delivered, and the Scottish National party won an overwhelming mandate to come to this place and make our case.

[Ian Austin]

Will the hon. Gentleman give way?

[Angus Robertson]

The hon. Gentleman will have time to make a speech later. There is very little time, and I am the first parliamentarian from the SNP to be called in these proceedings more than an hour after the beginning of this debate.

The sole purpose of the Scotland Bill is to implement the Smith commission in full. The UK Government’s amendments are a welcome admission that the Scotland Bill, as published, did not deliver Smith. However, the Government’s amendments tabled on Report still fail to deliver Smith and still fail Scotland. SNP Members have tabled a range of amendments that will give the people of Scotland the powers they were promised and the powers that they will need. We have tabled amendments on tax credits, which would devolve control over all aspects of working and child tax credits, and on employment rights, which would devolve control over employment rights and industrial relations to the Scottish Parliament. We will debate those in the next group of amendments, when they will be addressed by my hon. Friend the Member for Banff and Buchan (Dr Whiteford).

We have also tabled new clause 36 to devolve the power to hold a referendum on Scottish independence to the Scottish Parliament. There should only be another referendum on Scottish independence when the people of Scotland indicate that they want one, but it is right that the Scottish Parliament—the people of Scotland’s Parliament—should hold the power to react to the wishes of the people of Scotland.

We should not lose sight of the fiscal framework. That is the financial underpinning that will allow the transfer of powers to operate without detriment to the people of Scotland.

[Jim Shannon (Strangford) (DUP)]

I spoke to the right hon. Gentleman before the debate, so he knew that this question was coming. This debate is clearly about the constitution and tax. The Scottish Parliament intends to end tax relief for sporting estates, which bring substantial revenue and many jobs to Scotland. Scotland is famed for its outstanding scenery and tremendous field sports opportunities. This must be about the approach to managing natural resources. Does he agree that, when it comes to recreating tax forms and making sure that the distribution of moneys is correct, this is a great opportunity to enshrine safe ground partnership principles at the heart of government?

[Angus Robertson]

The hon. Gentleman has put his point of view on the record. I encourage him to get in touch directly with the Cabinet Secretary for Rural Affairs, Food and Environment in Scotland, Richard Lochhead. We are proud of the Scottish Government’s rural affairs agenda. Incidentally, I commend the hon. Gentleman’s party for turning up in greater strength to this debate than the Liberal Democrats.

To hold the 2014 referendum, the Scottish and UK Governments were required to agree a section 30 order, which amended schedule 5 to the Scotland Act 1998, to grant the Scottish Government the legislative competence to hold a referendum, providing that a number of conditions were met—namely, that it was held before the end of 2014 and that the ballot paper included one question.

New clause 36 would permanently transfer to the Scottish Parliament the power to legislate for a referendum on Scottish independence. It is right that the Scottish Parliament should decide on that, and not this place. As the First Minister has made clear, the SNP manifesto for next year’s Scottish election will set out our position on a second independence referendum and consider in what circumstances such a referendum might be appropriate at some point in the future. However, the final decision on whether there is another referendum and on whether Scotland ever becomes independent will always be for the people of Scotland.

In the meantime, I observe that support for Scottish independence has continued to grow. If people back home are watching this debate, I have no doubt that it will rise even further. A Panelbase poll for The Sunday Times found that 47% of people in Scotland currently support independence and that more than two thirds believe that the country will be independent by 2045.

Support for independence has risen as the UK Government have failed to meet their promises on more powers; continued with austerity; introduced further welfare cuts; and promoted English votes for English laws. Since the referendum, the UK Government’s attitude towards Scotland has angered a great many people. Those who are watching proceedings today have good reason to be angered yet more. On EVEL, the Scotland Bill and austerity, the UK Government have shown scant regard for the voice of the people of Scotland.

We will not lose sight of the financial arrangements that relate to the Bill. We raised them in Scottish questions last week. We understand that a negotiating process is under way between the UK Government and the Scottish Government. It is critical that that financial framework is negotiated in good faith between both Governments and without detriment to the people of Scotland.

[Ian Murray]

I am grateful that the right hon. Gentleman has got on to the fiscal framework. At Scottish questions last week, I asked the Secretary of State whether we could have a little more transparency about the discussions to prevent anyone or any party in this Chamber from misinterpreting what the fiscal framework is trying to achieve. The Scottish people can then make their own judgment about whether it is detrimental to Scotland or otherwise.

[Angus Robertson]

Without wanting to concern the hon. Gentleman, I agree with him. Transparency is a good thing. Our colleagues in the Scottish Parliament are significantly happier than we are here with the open approach that the Scottish Government are taking on this matter. Obviously the negotiations are between the two Governments, but the Secretary of State could easily come to this House and provide more information to the hon. Gentleman’s satisfaction and mine.

The Smith commission identified that Scotland’s budget

“should be no larger or smaller simply as a result of the initial transfer”

of powers. It recommended that the devolution of further tax and spending powers to the Scottish Parliament

“should be accompanied by an updated fiscal framework for Scotland”

and that

“the Scottish and UK Governments should jointly work via the Joint Exchequer Committee to agree a revised fiscal and funding framework for Scotland”.

The UK and Scottish Governments are negotiating the fiscal framework on an ongoing basis. It should allow the Scottish Government to pursue their own distinct policies that meet the needs and wishes of the people of Scotland. For fiscal devolution to work, it is essential that the Scottish Government have the flexibility to pursue distinct fiscal policies, consistent with the overall UK fiscal framework.

The block grant adjustment should be robust and transparent, deliver a fair outcome for Scotland and be agreed by both Governments. The effect of the adjustment should be to ensure that the Scottish Government’s budget is in broad terms no better or worse off in the long term compared with what the devolved taxes would have raised had they not been devolved. The Scottish Government have said that they will not sign up to any adjustment that is not fair to Scotland. That is in line with the “no detriment” principle set out in Smith.

Before us today, we have 200 amendments and new clauses. They are massively important to people in Scotland. Sadly, they are clearly not important to the Labour and Conservative parties, which are here in such small numbers. I will bring my contribution to a close to ensure that more Members of Parliament for Scotland have the opportunity to take part.

The people of Scotland are watching these proceedings. We are told that this is the mother of all Parliaments. This is supposed to be the most important legislation about the future of our country, yet it has been shoehorned into less than one day of proceedings. Incidentally, for the information of the shadow Secretary of State, that happened against the wishes of the Scottish National party, which pressed for another day of proceedings so that we could look into the proposals in detail. People should look and learn, because if this is the way to legislate, we do not need it. The Scottish Parliament is a 21st-century Parliament. If ever a case was put for the Scottish Parliament to be able to exercise power over all issues that matter to the people of Scotland, this is it.

[Alberto Costa (South Leicestershire) (Con)]

It is a pleasure to follow the right hon. Member for Moray (Angus Robertson)—[Interruption.] I apologise for my pronunciation—I have lived in England for over 15 years and one’s accent does change. It was also a pleasure to listen to the hon. Member for Perth and North Perthshire (Pete Wishart). I agree that this is an important constitutional Bill. We are hearing today about how the Bill will make the Scottish Parliament not just a permanent institution in the United Kingdom’s constitutional arrangements, but one of the world’s most powerful devolved Parliaments.

Crucially, the Bill will allow more decisions that affect Scotland to be taken in Scotland. It will increase the financial responsibility of the Scottish Parliament and its accountability to the Scottish public. Perhaps that is a word that SNP Members do not wish to hear, because accountability is something that has been lacking these last eight years in Scotland, when gripes and grievances have constantly been thrown to London about decisions and powers that already rest with the SNP Scottish Government.

The package that has been brought before the House today by the Secretary of State and his team contains substantial financial powers, including over income tax and VAT, the devolution of substantial elements of the welfare system and a range of other powers, including constitutional powers and powers over transport, such as responsibility for air passenger duty.

[Stewart Hosie (Dundee East) (SNP)]

Will the hon. Gentleman give way?

[Alberto Costa]

It is a pleasure to give way to the hon. Gentleman.

[Stewart Hosie]

That was a very generous way of giving way. The hon. Gentleman said that there will be substantial powers over VAT. Half of VAT will be assigned. There are precisely no powers over VAT. I fear that he has misspoken in his excitement to prove his loyalty to his Front Bench.

[Alberto Costa]

The hon. Gentleman already has extensive powers over income tax. We should ask why, in the past eight years, the SNP has failed to use any of the substantial powers it has, instead blaming London and England for all the problems that it creates back in Scotland.

Along with a powerful and accountable Scottish Parliament—there is that word “accountable” again—Scotland will retain the huge benefits of being part of our United Kingdom of Great Britain and Northern Ireland. The people of Scotland voted for those benefits. Remember those people? That’s right—the democratic majority that voted to stay part of our United Kingdom last year. Sadly, that fact has been lacking.

[Ian Blackford]

It is interesting to hear that the hon. Gentleman has lived in England for 15 years and represents an English seat. I believe he stood in Scotland once. How did he get on?

[Alberto Costa]

It would be fair to say that SNP Members simply do not want to answer the question about accountability. What have they done with the powers that they have had over the past eight years? They have simply blamed England and London for all the problems that they have created in the public sector.

18:00

The Bill will turn the historic all-party Smith agreement, which the SNP agreed upon, into constitutional legislation. From today onwards, the Conservative party will be able to lay claim to being the true party of the Scots who believe in our United Kingdom—that is to say, the majority of Scotsmen and women who voted to stay in the Union.

[Simon Hoare (North Dorset) (Con)]

These are serious and important issues for the constitutional governance of our country. Does my hon. Friend share my disappointment that all we seem to be hearing from nationalist Members is percentages, political polls, who stood where and who lost what, instead of sticking to the facts and telling us how they are going to use the powers in the Bill? [Laughter.]

[Alberto Costa]

My hon. Friend is absolutely correct. The laughter that we are hearing from SNP Members about the discussions that we are having on this constitutional Bill is a disgrace.

It is no surprise that nationalist MPs are true to form and continue to create grievance where there is none. They offer mischief to the people of Scotland when they should be working with all parties in the House. “Better together”—that is what the people of Scotland voted for merely a year ago. They voted for a better United Kingdom of Great Britain and Northern Ireland, not separation. They do not want constitutional uncertainty; nor, for that matter, do the people of my constituency, South Leicestershire. We are a small but great island nation, and the British people are fed up with the constant mischief being created by nationalist MPs.

The truth is that nothing at all will please SNP Members. That should be no surprise, because all they want is the end of the United Kingdom. They will therefore not support any Scotland Bill, no matter what devolved powers might be offered to them. They simply do not want it.

[Chris Stephens (Glasgow South West) (SNP)]

I think my hon. Friend the Member for Edinburgh East (Tommy Sheppard), who owns a comedy club, will have found a new act.

The hon. Member for South Leicestershire (Alberto Costa) keeps mentioning new substantial powers. If his party has its way tomorrow, it will take basic industrial relations powers away from the devolved Administrations.

[Alberto Costa]

We can see that the respect agenda only goes from the Government Benches to the SNP Benches. There is simply no respect from SNP Members, and there is no interest in being respectful, because they simply want the destruction of Great Britain, and we will never permit that.

We must remind the House of another vow, as I did in my maiden speech. I am pleased to see that the right hon. Member for Gordon (Alex Salmond) is in his place, because we will never forget another promise that was given to the people of Scotland, and indeed to the whole United Kingdom. What was the vow that he gave? He told the voters of Scotland that the referendum was

“a once in a generation, perhaps even a once in a lifetime, opportunity”.

What disrespect SNP Members are showing the people of Scotland today. Barely a year has passed, and they are demanding another referendum. We can never again trust the SNP with any agreement on a referendum. The people of South Leicestershire are fed up with faux grievance. They want stability, and the Bill will provide stability for the whole United Kingdom.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The hon. Gentleman has said that one of the biggest issues for his constituents in South Leicestershire is making sure that EVEL goes through so that we cannot vote on English laws. Will the same constituents not be puzzled about why he is here participating in this debate and adding absolutely nothing to it?

[Alberto Costa]

I do not understand the hon. Gentleman’s point. If he is talking about a Member who comes from Scotland representing an English constituency, he forgets that this is the British Parliament. I represent a British constituency in the United Kingdom Parliament, and we must never forget that.

Another argument that we have heard for months now is that SNP Members, perhaps using Uri Geller-style psychic powers, can tell us what was in the minds of the no voters. Let me establish once and for all what was in the minds of the no voters. I campaigned in Scotland and spoke to thousands of no voters, and they voted for one simple thing: no to separation, and yes to the United Kingdom, full stop. Anything else that SNP Members suggest they may have voted for is simply based on no evidence.

SNP Members cannot have it both ways. They cannot tell us why they want independence and at the same time tell us what was in the minds of the no voters. The no voters voted no because they want and love the United Kingdom.

[Dr Whitford]

The hon. Gentleman suggests that we do not know what was in the mind of the no voters. We have spent months knocking on doors and speaking to them, and they have told us, “I regret it. I voted no because I was afraid, but I wish now that I had voted yes.” We are not mind reading; they spoke to us.

[Alberto Costa]

Given the promises that the former First Minister made about oil tax revenues, many yes voters have told me how pleased they are that the no voters won. Look at where Scotland would be today had the people of Scotland voted for separation. I am afraid the hon. Lady is fundamentally wrong; many yes voters are very pleased indeed that the people of Scotland sensibly voted to maintain the United Kingdom.

[John Nicolson]

Will the hon. Gentleman give way?

[Alberto Costa]

Not at this stage.

The truth is that the SNP simply does not want to answer the legitimate questions that we should be asking today about the Bill. It is time for SNP Members to explain to the House, and to the people of Scotland, how they intend to use the extensive powers in the Bill. They are always complaining, but they have not explained that. For example, how will they sort out the mess of the Scottish NHS, which they are in charge of? The SNP gives it less money than the English NHS is given. How will the SNP sort out its centralising tendency? Take Police Scotland, for example. What a clever idea—“Let’s centralise power to Edinburgh.” That is another example of how the SNP holds power to itself, creating a one-party state.

How will the SNP ensure that it properly finances Scotland’s fantastic universities, one of which I was proud to go to? What about answering the questions that university leaders ask the SNP Government about the lack of money, and the problems with governance structures, that the SNP is inflicting on Scottish universities? How will the SNP ensure that it improves the criminal justice system in Scotland rather than blaming London and England and creating gripe and grievance where there is none? The truth is that the SNP has been in government for eight long years, and it is about time it took some accountability rather than blaming London for everything.

The Bill will show the SNP for what it really is, once and for all—a party failing the people of Scotland and ignoring the wishes of the democratic majority who said no to independence.

[Ms Ahmed-Sheikh]

The hon. Gentleman will forgive me if SNP Members do not sit here and listen to him do down our Scottish NHS or our university system, which provides free education for our young people because that is what we believe in in Scotland. He is demonstrating, I think, a wilful lack of understanding of how Scotland works.

We believe in accountability. We win elections in Scotland; in fact, we win elections by majority under a proportional representation system, and we won the general election in Scotland. We are here debating the Scotland Bill, and I would be grateful if the hon. Gentleman began to debate the Bill, so that we can have maximum powers for Scotland and deliver for the people of Scotland where the UK Government have failed them.

[Alberto Costa]

I am shining a light on what is really happening in Scotland under the one-party state that has become the SNP—[Laughter.] Through this Bill, the Secretary of State and his team—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Hon. Members might not agree with what the hon. Gentleman is saying, but it is simply rude to laugh so loudly and make so much noise that he cannot be heard. Just as I defended the right hon. Member for Moray (Angus Robertson) and made sure that he was heard, so I defend the hon. Gentleman. He will be heard.

[Alberto Costa]

What will the people of Scotland make of the laughter coming from the SNP Benches? That is disrespectful, and that is the disgraceful state of affairs with Scottish MPs in this House. The truth is that the Secretary of State and his team are presenting a formidable constitutional settlement for the people of Scotland who want a strong United Kingdom of Great Britain. I believe in Scotland having a strong place in the United Kingdom, but there is no devolved settlement that the Government can offer SNP Members because they simply do not want one. SNP Members want the end of the United Kingdom, but we want to see it stay together. This Bill will settle the argument once and for all.

[Natalie McGarry (Glasgow East) (SNP)]

The hon. Gentleman is concluding on the basis that the Bill goes as far as the Smith commission, but a committee of MSPs in the Scottish Parliament—including those from the Conservative party—said that the Bill does not meet the aspirations of the Smith commission. How does he answer people in Scotland and his own party who do not believe that the Bill goes far enough?

[Alberto Costa]

That is simply not the case. The Scottish Parliament’s committees are stuffed to the gunnels with SNP MSPs, so there is no surprise that they are taking the party line. In conclusion, I offer an olive branch to SNP Members. If they genuinely believe in keeping promises to the electorate, let us start with the promise from the right hon. Member for Gordon. They had the referendum, and they lost. Let us now work better together to strengthen Scotland and our United Kingdom of Great Britain and Northern Ireland.

[Tommy Sheppard (Edinburgh East) (SNP)]

Let me start with some context. We are discussing this Bill because of what happened on 18 September last year when the Scottish people were invited to give their views on whether Scotland should become a self-governing nation. They voted no to that proposition by 55% to 45%. I cannot look into their minds and know the settled will of all those who voted in that referendum, but I know that the 55% who voted no included plenty of people who thought that the Union as it exists today is exactly the type of place they would like to live in. They had no quarrel with it; they liked the constitutional settlement.

Also among that 55%, and the group that made the difference to the outcome, were people who believed what they were told by the leaders of all the Unionist parties, which was that the 18 September vote was a vote not for the status quo, but for a new relationship within the Union, where additional powers would be transferred. That was the vow signed by the leader of the Conservative party, and by two other party leaders who must now be described as “former”. That vow was put front and centre before the electorate, and that is why people voted no in the referendum.

The Smith commission considered what that new relationship would be, and there was a five-party discussion. It is in the nature of such things that if we are seeking consensus, the bar will be pretty low, and the Smith commission published a report on how proposals for greater devolution might be implemented. At the time, the SNP signed off on those proposals, but we said that they were only a floor and not a ceiling to our aspirations for self-government. We also said that Smith did not go far enough to satisfy the vow.

18:15

At the beginning of this year the Government published the first draft of this Bill, and it was clear that the proposals had been watered down even more. The Smith commission is not delivering the vow, and the draft Bill does not even deliver the Smith commission—and that is not just our view. The hon. Member for South Leicestershire (Alberto Costa) would probably say that we would say that, because we would be dissatisfied with whatever happens, and perhaps we would be. The Conservative party might be unfamiliar with the concepts of mandate and consent, but we are quite relaxed about it, so what we did after forming a view and an analysis is put that to the Scottish electorate and the people of Scotland. We do not have to guess what was in their minds, because we know what they did at the May general election.

My right hon. Friend the Member for Moray (Angus Robertson) has explained and quoted from the manifesto on which we stood in that election, but let us be clear: this issue was not No. 97 in our manifesto; it was point No. 1. The main theme of the general election in Scotland, and the central proposition of our party, was that the Scottish Government should receive additional powers, over and beyond what is in this Bill.

[Alberto Costa]

Will the hon. Gentleman give way?

[Tommy Sheppard]

I would be happy to give way if we will get a joke.

[Alberto Costa]

Again, part of the disrespect agenda. Does the hon. Gentleman accept that last year’s referendum was once in a lifetime—yes or no?

[Tommy Sheppard]

I never said that. I accept—every Government should accept this—that no Government have the right to stand in the way of people who wish for a particular direction. We sought a mandate, and we got a mandate. Whatever happens today, let us please understand that the Bill does not satisfy the aspirations of the Scottish people for greater control over their own affairs. The Bill is a response to the Smith commission. We are still waiting for the Government’s response to the general election, when the people of Scotland made their view quite clear. Whatever happens today, this is not over. We shall be coming back during the next five years of our domain in this Chamber to argue again and again for more powers for the Scottish Government to satisfy the aspirations of the Scottish people. If that takes a further Scotland Bill at some later stage, so be it.

[Danny Kinahan (South Antrim) (UUP)]

Does the hon. Gentleman understand that the rest of the United Kingdom would also like a say in this debate? This debate is not just about Scotland; it is about the Ulster Scots, in my case, and about everyone else. SNP Members have a good indication of how the Scottish feel, but the rest of us have not had the chance to discuss the same point with our electorate. The message that I was getting loud and clear from my Northern Irish electorate when knocking on doors—

[Madam Deputy Speaker (Natascha Engel)]

Order. These interventions are very long.

[Danny Kinahan]

The message I got from my electorate is that the Union is in danger and they do not want the Union to fall apart. They want all of us working together.

[Tommy Sheppard]

The hon. Gentleman must speak for the people who elected him, and I will speak for those who elected me. I am discussing the Scotland Bill, as amended—that is what I have been speaking about, and what I intend to speak on. The Bill falls far short of the expectations not just of the SNP, but of the people of Scotland. Civic society, trade unions, Churches and voluntary organisations throughout Scotland are disappointed at the poverty of ambition shown by the Secretary of State and the Government in the Bill.

Let me return to the Bill, because that is all we currently have—I do not normally read when making a speech, but I will read this quote so that I do not get it wrong. The Secretary of State said, on 8 June:

“I am absolutely clear that the Scotland Bill does fulfil in full the recommendations of the Smith commission.”

He has obviously had the benefit of a relaxing summer to consider the situation and determine whether that statement was in fact true. It now seems that it cannot have been true, because we have no fewer than 128 amendments from the Government to their Bill. I submit that never in the field of discussion of legislation has a Bill been so amended by its proposers and still managed to fall so far short of its declared objectives.

None the less, it is welcome that second thoughts are being had and that some improvements are being made. The first improvement is on the question of permanence, although I wonder why it has taken until now to happen. It is good that new clause 12 contains the agreement that the Scottish Parliament will not be taken away, dissolved or otherwise removed without first a plebiscite among the Scottish people to see what they want to do. I am pleased that the Secretary of State, in tabling that new clause, recognises where sovereignty lies on that question. It should lie with the people of Scotland whose government we are discussing. I invite the Secretary of State to support new clause 36 which would enshrine that principle of sovereignty a little more. It provides that in future discussions about the arrangements for the government of Scotland, it should be the people of Scotland’s Parliament that determines what those discussions are and the timetable by which they are put to the people in a referendum. That is only a logical extension once it has been conceded that sovereignty should lie with the people. If it is not the Scottish Parliament that should consider and respond to a future referendum, should there be one, who else should do so? It would be ridiculous for this Parliament to retain that power for itself.

The Smith commission was clear when it said that the Sewel convention should be enshrined in statute. The Bill still—after all this time—does not make that happen. The Sewel convention says that the “imperial Parliament” —to quote the hon. Member for Gainsborough (Sir Edward Leigh)—should not interfere in devolved decisions by the Scottish Parliament or other devolved Assemblies. The SNP’s new clause would enshrine that convention in law and enshrine the principle of subsidiarity—decisions being taken as close to the people as possible.

[Ian Murray]

Given the codification of the Sewel convention in new clause 36, I give the hon. Gentleman—my constituency neighbour—a commitment that we will support him if he presses it to a vote this evening. Perhaps we will attract further support and it will be carried.

[Tommy Sheppard]

I am grateful to the shadow Secretary of State for his support on this matter. The principle is clear: you do not keep a dog and bark yourself. Once power has been devolved to organisations, they must be allowed to get on with it.

I was disappointed that the hon. Member for Nottingham North (Mr Allen) took almost 20% of the time available for this debate not to discuss constitutional principles about the governance of Scotland, but to pursue his concerns about the decentralisation of services. What we are discussing is a change in the constitutional arrangements between Scotland and England within the Union. We are talking about giving more authority and competences to the Scottish Government, and that is not the same thing as the decentralisation and better administration of public services in England. The hon. Gentleman was wrong to do that and is unlikely to have made friends to support his argument as a result.

My final point is on full fiscal autonomy. I think that some of our opponents thought that when we did not get that through the last time, we would forget about it. Believe me, we have not forgotten about it. We want the Scottish Government to have control over the economy in Scotland. We want the ability to grow our economy and for our priorities to be set in line with the aspirations of the people who live in Scotland. I heard some interesting arguments from the hon. Member for Gainsborough and others in favour of full fiscal autonomy, but I have yet to hear a principled argument against it. The hon. Member for Edinburgh South (Ian Murray) often talks of a black hole, but that is not an argument in principle against full fiscal autonomy—against giving the Scottish Government control over economic affairs. It is an argument for saying that we should prepare for that devolution of powers and make sure that we get it right. I hope that the hon. Gentleman will come round to that way of thinking. We will object to the proposal to give a Conservative Secretary of State the power to set up a commission to look into whether full fiscal autonomy could happen, because he has already made his intentions in that regard clear.

We will come back to this issue, and it will be the subject of future debate in Scotland. The grandest commission of all on this debate will be the electorate of Scotland, who will get another opportunity in six or seven months’ time to decide whether they want better economic powers for their Government. We will get another mandate and come back to make that argument again.

My right hon. Friend the Member for Moray referred to the fiscal framework. It is not for us today to get involved, or even seek to influence, the discussions between Scottish and UK Ministers on the fiscal framework, but we have to be clear about what is at stake. The Smith commission was clear: it said that whatever powers are devolved to Scotland in this or any other settlement, it should be at no detriment. In other words, at the point of transfer of the power, the Scottish budget should not suffer as a consequence. I want to hear from the Secretary of State whether he believes in that principle. Is it guiding his discussions with Scottish Ministers? If it is used simply as a device to cut the Scottish budget and not provide adequate funding for the delivery of the new powers, he will do his cause a great disservice and hasten the day that we come back with a new Bill that will be a considerable improvement on this one.

[Ian Austin]

In September 1997, I travelled from Dudley to Glasgow and Edinburgh to support the late Donald Dewar and Scottish Labour’s campaign for a yes-yes vote in the devolution referendum—[Interruption.]

[Madam Deputy Speaker (Natascha Engel)]

Order. There is an awful lot of noise in the Chamber while the hon. Gentleman is on his feet.

[Ian Austin]

Thank you, Madam Deputy Speaker.

I remember helping to organise events at which Donald Dewar, the right hon. Member for Gordon (Alex Salmond), who has just left his place, and Sean Connery spoke at the Old Royal High School building, overlooking what would become the site of the new Scottish Parliament. SNP Members did not object so much then to people from England taking an interest in Scottish politics. That referendum led to the establishment of the Scottish Parliament, and the amendments to the Scotland Bill that Labour has tabled, which I wish to support today, will make it a permanent part of the UK’s constitution.

I promise that my speech will be the shortest we have heard today, but I want to set out some practical arguments in support of the case made for greater decentralisation by my hon. Friend the Member for Nottingham North (Mr Allen). As we have heard, these proposals constitute the biggest transfer of power since the Scotland Act 1998. The Bill will make the Scottish Parliament the most powerful devolved parliament in the world. It will raise 50% of its own expenditure, with power over most of the revenue from income tax and much of social security.

[Stephen Gethins (North East Fife) (SNP)]

Does the hon. Gentleman think that these proposals are—to quote a Scotsman—

“as close to a federal state as you can be”?

A simple yes or no answer will do.

[Ian Austin]

As I have said, the proposals will make the Scottish Parliament the most powerful devolved parliament in the world. Labour has been the driving force behind this Bill. We have pushed to ensure that Scotland has all the extra powers, including powers over welfare, to allow the Scottish Parliament to design a new social security system for Scotland and to ensure the Scottish Parliament will have the opportunity to mitigate the impact of Tory cuts to tax credits. Despite their desperation to be disappointed and their determination to stoke grievance and fuel resentment, SNP Members have said that this will give the Scottish Parliament the powers it needs to create a new social security system in Scotland. When asked whether the Bill gives Holyrood the power to make up any reduction in tax credits, Alex Neil, the SNP welfare spokesperson, said:

“The amendments...should give the Scottish Parliament those powers.”

Despite that, the nats have tabled a series of amendments, including 10 new clauses on national insurance, the living wage, employment legislation, industrial relations, benefits, full fiscal autonomy and the power to decide whether and when to hold another referendum.

18:30

When we consider those powers, we ought first to look at the way the Scottish Administration have exercised the powers they already hold. After all, in 2001 Nicola Sturgeon said that

“a party that is now in the second term of office cannot avoid responsibility for its own failings.”

She is absolutely right. Like her, I think the nats should be judged on their record of running Scotland’s schools and hospitals. I agree with my hon. Friend the Member for Nottingham North. The truth is that in Scotland’s schools the gap between the richest and the rest is growing, its hospitals are struggling and its housing system is in crisis. The separatists are now the establishment.

[Dr Whitford]

Our junior doctors in Scotland are not out on the streets marching and balloting for strike action. The hon. Gentleman might wish to make a direct comparison of performance before he attacks our NHS.

[Ian Austin]

I will come on to the SNP’s record on running the health service shortly, but before I do—[Interruption.]

[Madam Deputy Speaker (Natascha Engel)]

Order. No shouting out, please. A Member is speaking and it is quite difficult to hear what he is saying. It is not appropriate to shout things out. If people want to speak they can intervene or stand up and take part in the debate. Let us have no shouting.

[Ian Austin]

I am afraid they are behaving like nationalist bullies the world over. They try to silence anybody who has a different view. They want to pretend that whether or not you are allowed to take part in a debate in this Chamber depends on where you represent and the accent you have. It is a complete and utter disgrace.

[Alberto Costa]

Is it not a disgrace that the people of Scotland, including Labour supporters and Conservatives who voted decisively to reject separatism, are being completely ignored by SNP Members today?

[Ian Austin]

I completely agree with the hon. Gentleman. It is an absolute disgrace.

An even bigger disgrace is the state of education in Scotland, which is run by the SNP. The gap between the richest and the rest has persisted, meaning that the poorest children in Scotland are not getting the opportunities they should. Young people from deprived backgrounds who get to university are facing grants and bursaries that have been cut, making them the lowest in the UK. Every year, more than 6,000 children in Scotland leave primary school unable to read properly, and pupils from a wealthier background are twice as likely to get a higher A than pupils from deprived backgrounds. Pupils from wealthy backgrounds are twice as likely to go on to higher education as those from deprived backgrounds. In further education, 140,000 fewer students are going to college in Scotland, and funding for Scotland’s colleges has been cut by £53 million. Scotland has the lowest percentage of university entrants from the poorest backgrounds and the lowest proportion of entrants from state schools in the UK. As I said, grants and bursaries for poor students have been cut by 35%.

A moment ago, the hon. Member for Central Ayrshire (Dr Whitford) asked me about the health service in Scotland. The truth is that under the SNP standards have been slipping. Waiting time targets have been missed and pressure is increasing on nurses and doctors. Analysis from the impartial Scottish Parliament Information Centre shows that the SNP has not increased investment in the NHS as much as in England, despite rising demand. The accident and emergency waiting time target has not been met for six years. More than 400,000 people have had to wait more than four hours in A and E since 2011. The new flagship Queen Elizabeth University hospital in Glasgow posted the lowest waiting time targets since its opening: only 77% of patients were seen within four hours.

The hon. Lady asked what Scottish doctors are saying. Only one third of NHS Scotland staff say there are enough staff for them to do their job properly. Despite promising less private involvement in the NHS, spending on private health services is at its highest since devolution.

I also agree with my hon. Friend the Member for Nottingham North on the case for greater decentralisation from Holyrood to local authorities, because that might enable local authorities in Scotland to tackle the housing crisis across the country. Scotland is facing its biggest housing crisis since the second world war, with nearly 180,000 people in Scotland on social housing waiting lists. Audit Scotland estimates that Scotland will need more than 500,000 new homes in the next 25 years. In 2007, the year Labour left office in Scotland, there were 25,741 housing completions. In 2014, there were just 15,000—a 40% reduction.

When I visited Edinburgh for a weekend last month, I was absolutely stunned—[Interruption.] The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) thinks it is funny. The level of rough sleeping on the streets of Edinburgh is an absolute disgrace. His colleagues in the SNP should be thoroughly ashamed. Everyone knows that under the Conservatives rough sleeping is increasing right across the country, but I have to say that I saw many more rough sleepers on the streets of Edinburgh than I have ever seen on the streets of Birmingham, which is a much, much bigger city.

On full fiscal autonomy, I agree with new clause 1 and the case for a commission. The Institute for Fiscal Studies has said that the SNP’s plans would leave a £7.6 billion black hole in Scotland’s finances that the separatists have absolutely no idea how to fill. The nats might deny that, so let us have the full independent review that Labour is calling for and get the facts.

Having listened to the debate, you, Madam Deputy Speaker, would be forgiven for thinking that SNP Members would much rather invent rows with the rest of the UK than improve life for people across Scotland. Their whole approach is designed to drive up resentment and blame everyone else for their failings. Instead of being held to account for their record, they want to blame the nasty people down south for everything that goes wrong: everything that goes right in Scotland is down to the SNP; everything that goes wrong is down to the rest of us. The truth is that SNP Members are not interested in policy. They are obsessed with breaking up the country, but having been rejected in the referendum they are trying to engineer a separation by fuelling grievance in Scotland, winding up the English and undermining Labour, because they know they have more chance of a successful vote in a referendum with a Tory Government in place in Westminster.

They are more interested in breaking up Britain than they are in improving the health service, improving education and providing housing for the poorest people in Scotland. It is much easier to blame everything on a supposedly wicked Westminster than it is to try to use the powers they have to improve things in Scotland. In fact, the last thing they want to do is solve the problems in education, health or housing, because then they would not be able to stoke resentment, fuel grievance and blame the nasty English for causing them. It is, I am afraid, the perpetual nat whinge: blame everyone else for your failings and pretend that everything would be solved if only the country was broken up.

[Joanna Cherry (Edinburgh South West) (SNP)]

In contrast with the previous speech, which was an ill-informed diatribe criticising the Scottish Government, I rise to address the Bill before us today. I am going to use what precious time I have to speak in favour of amendment 204.

Amendment 204 would introduce a subsection to clause 11 that would remove the Human Rights Act 1998 from the list of protected provisions in schedule 4 to the Scotland Act 1998. This would have the effect of removing the Human Rights Act from the list of enactments that cannot be modified by the Scottish Parliament. If the Scottish Parliament was able to modify the Human Rights Act, that would allow the Scottish Government and the Scottish Parliament fully to establish a human rights regime in Scotland regardless of whether the Act was repealed by the UK Parliament in London.

The UK Government, which have no mandate in Scotland, have repeatedly made clear their intention to repeal the Human Rights Act and to replace it with a Bill of Rights. They have made it clear that they scorn European and international norms on human rights and the jurisdiction of the European Court of Human Rights. They have made it clear that they want to replace the Human Rights Act with a watered-down version of the rights and protections that everybody in the UK currently enjoys. We saw that very much trailed in The Sunday Times yesterday.

We in Scotland do not wish to have the terms of the debate on human rights in Scotland dictated by the UK Parliament, because in Scotland we have a very different agenda. There is no mandate in Scotland for repeal of the Human Rights Act. Preserving the Human Rights Act was an issue during the campaigns in both the independence referendum and the general election. The SNP has consistently opposed repeal, and as my right hon. Friend the Member for Moray (Angus Robertson) said, we won the general election in Scotland. Indeed, including Labour’s and the Liberal Democrats’ sole representatives in Scotland, 58 out of 59 Scottish MPs oppose repeal.

[Wayne David (Caerphilly) (Lab)]

Will the hon. and learned Lady give way?

[Joanna Cherry]

I think I will make some progress, if the hon. Gentleman does not mind.

Last year, the Scottish Parliament voted by 100 to 10 to endorse the Human Rights Act, and civic society in Scotland, from the Scottish Trades Union Congress to the Church of Scotland, also opposes repeal. Nevertheless, this UK Government have repeatedly confirmed that they intend to go ahead with repeal and that it will apply equally in Scotland as in England, Wales and Northern Ireland.

In Scotland, we are concerned by repeated statements from Ministers of this Government suggesting they believe they could repeal the Act without consulting the Scottish Parliament. Their argument seems to be that they would not need a legislative consent motion, but that is incorrect. Human rights are not a reserved matter under the devolution settlement. Schedule 4 to the Scotland Act 1998 protects the Human Rights Act against modification by the Scottish Parliament, but human rights per se are not a reserved matter. They are not listed as such among the reserved matters in schedule 5 to the 1998 Act. It was part of the late Donald Dewar’s scheme that all matters would be devolved unless specifically reserved, and human rights are not specifically reserved.

Moreover, human rights and the European convention on human rights are written into the Scotland Act, meaning that the Scottish Parliament and Scottish Ministers cannot pass legislation that is incompatible with the convention.

[Alberto Costa]

Will the hon. and learned Lady give way?

[Joanna Cherry]

No, I will make progress. We have heard quite a lot from the hon. Gentleman already. These are important points of great concern to the Scottish electorate, and I want to make them very clear.

In Scotland, we have a national action plan for human rights, as well as a United Nations-accredited Scottish Human Rights Commission, and our commitment to human rights extends not just to the ECHR, but beyond that to social and economic rights.

[Alberto Costa]

rose—

[Joanna Cherry]

The hon. Gentleman is clearly desperate to get his oar in, so I will give way.

[Alberto Costa]

The hon. and learned Lady raises some important issues, but she is pre-judging what the Secretary of State for Justice might bring before the House. It might well be a beefed-up human rights regime that the Scottish people will want.

[Joanna Cherry]

It is hard to take that seriously. Since we have been in the House, we have, through the judicious questioning of Ministers, established that one of their main concerns about the Human Rights Act is the fear they should have to take account of—that is all the Act says—the decisions of the Strasbourg Court. Given that they fear having to take account of European and international norms, I can only assume they want to replace the Act with a considerably watered-down version of the ECHR and the Act. That is merely a logical deduction.

I wonder if I might give way to the hon. Member for Caerphilly (Wayne David), on the Labour Front Bench, who wished to intervene earlier.

[Wayne David]

It was only about five minutes ago, but I thank the hon. and learned Lady very much indeed. I agree with her comments about the Human Rights Act, but would she accept that what she says about Scotland also applies to Wales and to Northern Ireland especially?

[Joanna Cherry]

I do. As our First Minister has made clear, and as I have made clear in the House several times, we will do everything we can to preserve the Act for the whole of the UK. Were the Government to recognise that human rights are not a reserved matter and that therefore there has to be a legislative consent motion, we in Scotland could help friends across the House by refusing legislative consent for the repeal of the Act, which would be one way of keeping it for the whole of the UK.

18:45

Our amendment 204 would give the Scottish Parliament the chance fully to implement a replacement for the Act in Scotland, were we to fail in our attempt to preserve it for the whole of the UK. The Government have said repeatedly that they do not recognise that human rights are a devolved matter—they say they are reserved—so we have to have a fall-back position in Scotland. I urge the Government—[Interruption.] They do not seem to be listening, but I urge them to remember their respect agenda and to return to the Scotland Act, with some decent lawyers, and look at it carefully. If they do, they will find that human rights are not a reserved matter but devolved. But they need not take my word for it; a sizeable body of academic opinion supports that assertion.

Our amendment recognises, when it comes to the proprieties of the devolution settlement, that the respect agenda, of which the Prime Minister has spoken so often, has been consigned to the dustbin of history, along with the assurance that Scotland is an equal partner in the Union and various other promises, including the vow, made by the Better Together parties during the independence referendum. As I have made clear, the SNP’s primary intention is to fight to retain the Human Rights Act for the whole of the UK, but the disrespect with which our previous amendments were met and the recent exclusion of all Scottish MPs from the Joint Committee on Human Rights gives me and my SNP colleagues no confidence that Parliament will respect the wishes of the Scottish electorate.

[Angus Robertson]

Just now, in response to my hon. and learned Friend’s point about our being excluded from the Joint Committee, the hon. Member for South Leicestershire (Alberto Costa) said, “Good.” Might she take an intervention from him so he can explain why the party that represents almost every constituency in Scotland should be excluded from that important Committee?

[Joanna Cherry]

I am grateful to my right hon. Friend for drawing that to my attention. I would be delighted to take that intervention. Will the hon. Gentleman, whom I believe is a lawyer of sorts, tell us and the people of Scotland why he thinks it acceptable for all Scottish MPs to be excluded from the Joint Committee?

[Alberto Costa]

It is important that we have sensible lawyers on the Committee. The hon. and learned Lady keeps stating that human rights are not a reserved matter, but they are a very obvious reserved matter. That is my point.

[Joanna Cherry]

I am sure viewers in Scotland and everyone reading Hansard tomorrow will be interested to hear that the hon. Gentleman thinks it acceptable to exclude every elected representative of the Scottish electorate from a Joint Committee whose purpose is to scrutinise Bills for human rights compliance across the UK.

[Pete Wishart]

The hon. Gentleman is probably equally delighted that there are six unelected donors and cronies from the House of Lords on that Committee, yet no place for any Scottish MP.

[Joanna Cherry]

I am sure he is. The hon. Gentleman’s interventions and speech underline the reality of our concern that the wish of the Scottish electorate to preserve the Human Rights Act will not be respected. I reiterate that we want to make common cause with the Labour party, the Lib Dems, Northern Ireland Members and Government Members to preserve the Act for the whole of the UK.

[Chris Bryant (Rhondda) (Lab)]

“They” want to?

[Joanna Cherry]

I want to. We want to.

[Chris Bryant]

You said “they”.

[Joanna Cherry]

I said “we”. Listen carefully. I know my accent is a bit difficult to follow, but I said “we”.

In conclusion, our primary intention is to preserve the Act for the whole of the UK, but the amendment would give us the option to implement the settled will of the Scottish people to keep the Act for Scotland, if we fail to keep it for the whole of the UK.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

In the wake of Scotland’s referendum on independence last year, the Prime Minister set up the Smith commission to secure cross-party recommendations for the further devolution of powers to the Scottish Parliament. With regard to the constitutional aspects of the report, the Smith commission recommended that the permanence of the Scottish Parliament and Government be established in statute, ensuring that devolution could not be abolished at the whim of a Westminster Government. Therefore, I sincerely welcome the UK Government’s latest U-turn on this issue. The provision should have been included at the inception of the Scotland Bill, but I welcome the Government’s coming round to our way of thinking—better late than never, some might say.

The Smith commission report also stated that the Sewel convention should be put on a statutory footing by the UK Government. Unfortunately, the UK Government’s proposals in this area fall far short of Smith, despite the Prime Minister’s pledge to implement the commission’s proposals in full. Clause 2 of the Bill states that

“the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament.”

The Government’s current position on the matter is ridiculous and risks weakening, not strengthening the Sewel convention, and it is at odds with the Smith commission report. The Government’s vow that they will “not normally legislate” in devolved areas will simply not suffice and raises serious concerns that it will set a dangerous precedent.

Indeed, from my work on the Immigration Bill Committee, I can already see one instance where the UK Government’s Bill encroaches on devolved areas in Scotland. For example, immigration is of course a competence reserved for the UK Parliament, but housing is not: it is devolved to the Scottish Parliament. Yet, as part of the Immigration Bill, the UK Government will introduce the right to rent. This is legislation that will compel landlords to establish a person’s legal status before they can offer a tenancy, introducing penalties for landlords who fail to comply. The UK Government’s “right to rent” provisions in the Immigration Bill will be extended to Scotland through secondary legislation without a legislative consent, or Sewel, motion being debated and passed by the Scottish Parliament. Furthermore, consultation with the Scottish Government on housing and with housing stakeholders in Scotland ahead of that Bill being introduced is said to have been rushed and extremely limited.

The Scottish Government are very concerned at this development and the Scottish housing Minister wrote to the Immigration Minister asking for a meeting on this very subject, only to be arrogantly rebuffed by him. In his reply, he said:

“The Right to Rent scheme and the new measures in the Immigration Bill relate to immigration control, which is not devolved”—

so far correct—but then said:

“These measures restrict access to housing”.

We have already established that housing is very much a devolved issue. So much for the respect agenda, much lauded by the Prime Minister.

The SNP’s new clause 35, which would place the Sewel convention on a statutory footing, is pragmatic and would ensure that the Bill lived up to the Smith commission’s recommendations. The UK Government’s approach to policy making where there are wider implications for devolved areas can be ignorant and churlish. There is no better example of that than the Conservatives’ much trailed desire to abolish the Human Rights Act.

[Ian Murray]

The hon. Gentleman is making an incredibly compelling argument about legalising and codifying the Sewel convention. If he wishes to push new clause 35 to the vote in a few minutes’ time, we would be more than happy to support him and take this forward. Otherwise, I am afraid it will be down to the other place to deal with.

[Gavin Newlands]

I appreciate the shadow Secretary of State’s support on this matter, which I will take up with my colleagues.

The Human Rights Act is vital to us in many ways. It gives us the right to life, freedom from torture, the right to liberty and security, freedom of thought, belief and religion, the right to private and family life, freedom of expression, assembly and association, and the right to free elections and education, to name a few. The Human Rights Act extends to all public authorities in Scotland—our schools, our local government, our NHS and our police. Amendment 204 would devolve responsibility for human rights to the Scottish Parliament, putting it beyond any doubt whatever, to help to safeguard human rights for those living in Scotland.

The potential abolition of the Human Rights Act will undoubtedly have profound implications for devolution in Scotland and across these islands. It would be an affront to democracy for the Conservative Government to use their slender majority in this House to abolish the Human Rights Acts when they do not command support in Scotland, Wales or Northern Ireland. Our new clause 35 would require the UK Government, regardless of political hue, to seek a legislative consent motion in all instances of Westminster legislation affecting areas devolved to Scotland, and would require the UK Government to consult the Scottish Government on legislation that would have such an impact on Scotland.

The Tory Government—formed by a party to which the people of Scotland delivered a vote of no confidence at the last election; a party with only one MP in Scotland—have rejected every amendment put forward by the SNP Westminster group, a group that has 95% of Scotland’s MPs. That prompts the question: why are amendments to the Scotland Bill that are supported by an overwhelming majority of Scotland’s MPs ultimately rejected? The Conservatives—and, indeed, Labour—must stop ducking, diving and obfuscating when it comes to strengthening the Scotland Bill and must stop playing games with Scotland’s powers. The people of Scotland are watching. It is time they were listened to.

[Ian Blackford]

I rise to support new clause 36, which would give powers to Scotland over whether and when we hold a referendum. If it is right that there is mutual respect—we are told that there is—then the Scottish Parliament, elected by the Scottish people, has the right to determine its own destiny. The Secretary of State, and no doubt other Members, will be familiar with the words of Lord Cooper from 1953, when he stated that

“the principle of unlimited sovereignty of parliament is a distinctly English principle and has no counterpart in Scottish Constitutional Law”.

In other words, it is the people of Scotland who are sovereign. We come to this House with a mandate from the people of Scotland and that ought to be respected. My message to those on the Government Benches is that they drove through English votes for English laws—

[Alberto Costa]

The hon. Gentleman is standing in front of another distinguished Member, the right hon. Member for Gordon (Alex Salmond). Does he agree with him that last year’s referendum was a “once in a generation” affair? Yes or no?

[Ian Blackford]

I always agree with my right hon. Friend the Member for Gordon (Alex Salmond); the point is that it is the Scottish people who are ahead of this Parliament. We have to reflect on what is happening in this Bill. We were promised devo-max—as close to federalism as we could get; home rule in the spirit of Keir Hardie. It is this House and those on the Government Benches who are letting down the people of Scotland, and the people of Scotland will reflect upon that.

[Ian Murray]

I always enjoy listening to the hon. Gentleman making his passionate speeches in this Chamber. I wonder, for the sake of clarity, whether he could read the second line of what the former Prime Minister said about federalism.

[Ian Blackford]

The point is that the Scottish people were promised by Gordon Brown that we were going to get “powers for a purpose”—that we were going to have a powerhouse Parliament—and that is not what is being delivered tonight.

[David Mundell]

We are.

[Ian Blackford]

Despite what the Secretary of State says, the reality of the situation is that 70% of powers over taxation and 85% of powers over welfare will be held here at Westminster. I do not know what that is, but it is certainly not a powerhouse Parliament.

In the light of the challenges we face with the cuts to tax credits, which we will discuss in the second part of tonight’s debate, we need to make sure that the Scottish Parliament has the powers to protect the people of Scotland. We will be saying to the Labour party, “Come with us. Show that resolve,” to make sure that we can protect the people we need to protect in the country of Scotland.

[Ian Murray]

If the hon. Gentleman is truly passionate about protecting the people of Scotland, he will no doubt get to his feet and tell this Chamber and the people of Scotland that he will restore to them any losses from tax credits, as the Scottish Labour party has committed itself to do.

[Ian Blackford]

The Scottish National party in power in Scotland over the last few years has sought to mitigate the cuts that have come from Westminster, with £100 million invested for the Scottish people to offset the impacts of the bedroom tax. We will fight to defend the interests of the Scottish people, as we always have done.

[Ms Ahmed-Sheikh]

I would like to remind the House that, unlike the Labour party on the Benches next to us, we are not prepared to give up the fight on tax credits, which we will take to the very end. The measures have already been rejected by the Lords, but the Scottish Parliament is not a mitigating Chamber; it should be a legislative Chamber, and we will fight to ensure that cuts to tax credits are not inflicted on the vulnerable of this country.

[Ian Blackford]

I am grateful to my hon. Friend.

This is also about our ethos, the kind of society we are and what we will strive to do, because in Scotland we believe not in welfare, but in social security—we believe in offering protection to people—but we also believe in the principle that society is as strong as its weakest link. That is a very different concept from what we have in this Parliament, with the cuts that are coming through and those we know will come in the autumn statement.

[Ian Austin]

Will the hon. Gentleman give way?

[Ian Blackford]

No, I am going to make some progress, if the hon. Gentleman does not mind.

So I say to those in this House: will they respect the sovereignty of the Scottish people, who sent us to this House, or will they ignore the express wishes of the Scottish people? Let me say to Government Members that they have been rejected wholesale at the ballot box in Scotland. They should think very carefully before exercising a veto, which to all intents and purposes will be an English veto against Scotland. Perhaps in that regard the question we should put to the Secretary of State is: is he Scotland’s man in the Cabinet or is he the Cabinet’s man in Scotland? The Secretary of State should do the honourable thing—accept our amendment and stand up for the people of Scotland. What is it to be?

19:00

And what about the Labour party, a party that once dominated the political landscape of Scotland? It is perhaps not yet extinct like the dodo, but more like a beached whale. Labour Members should show us that they want to protect Scotland. If they want to make a difference for Scotland, they should support our amendments tonight—or will they be siding with their colleagues in Better Together?

[Ian Austin]

rose—

[Ian Blackford]

I want to make some progress.

Labour Members need to start learning the lesson that Scotland rejected them for a reason. They had better start to get on side with us and the people of Scotland. Tonight is a chance for the House to understand that Scotland expects powers for the Scottish Parliament to be delivered so that Scotland’s destiny can be put in Scotland’s hands. That will not happen by voting for a Bill that leaves us with a hand tied behind our backs while a Tory Government do their worst to the poor and disadvantaged in our society.

Our amendments allow us to deliver on the interests of our people. We need a Parliament that will allow us to stand up for the people of Scotland and recognise that the people are sovereign. Let me finish by quoting Charles Stewart Parnell:

“No man has the right to fix the boundary to a march of a nation. No man has the right to say thus far shalt thou go and no further.”

It is in that context that we need powers to determine in Scotland when and if we want to have a referendum. It is in that context that the House should listen to the elected Members of the people of Scotland.

[Wayne David]

The acid test of this Bill is whether it delivers on the vow and the recommendations of the Smith commission. Objectively, assuming that all the Government amendments are agreed, we believe that the Bill goes a long way to delivering on the Smith commission. That is not to say that the Government have delivered on absolutely everything. They clearly have not, and I have to say that it is a sad reflection on this Government that they have come to this point kicking and screaming. Since the beginning of the Smith commission’s report in November 2014, the Government have had a long and painful journey.

Nowhere is the Government’s change of heart more clear than in respect of Government new clause 12. It was constantly argued by Opposition Members in Committee that the Scottish Parliament and the Scottish Government ought to be described as “a permanent part” of the United Kingdom’s constitutional arrangements. We argued that the phrase “recognised as permanent” was less than what was recommended by the Smith commission and that, as the Scottish Parliament’s Devolution (Further Powers) Committee correctly argued, the use of the phrase “recognised as permanent” had the effect of weakening the Smith recommendations. I am pleased that the Government have listened.

Some might think that this is all about constitutional navel-gazing, but it is an extremely important point that the Scottish Parliament be placed on a firm constitutional footing and that the sovereignty of the Parliament rests with the people of Scotland. I have, however, a question for the Secretary of State on the issue of the UK’s parliamentary sovereignty.

We all know that a classic theory of UK parliamentary sovereignty is stated in Dicey’s “Introduction to the Law of the Constitution”. According to this classic theory, Parliament can make a law on any subject it pleases, and there are no fundamental laws that restrict its powers. The Government’s new clause 12, I would suggest, is a departure from that theory, which I welcome. Does the Secretary of State agree that in passing new clause 12 we are making modest but significant constitutional history?

New clause 13 is about the functions exercised by Scottish Ministers in respect of elections. It is essentially technical, but on the issue of elections, I refer briefly to amendments 37 and 43. Of course, a vital part of any democracy is free and open elections, and we support Government new clause 13 and Government amendments 35 to 43. I am glad that the Government have recognised the need to devolve some of the responsibilities of the Electoral Commission. It is surely only appropriate that the Political Parties, Elections and Referendums Act 2000 is amended so that the functions of the Electoral Commission are devolved for elections to the Scottish Parliament.

I note that the Government have introduced the significant amendment 43, which deals with the so-called “Digital Service”. As I understand it, this relates to the ability to register online to vote. Given the introduction of individual elector registration, this is very important. I ask the Minister for clarification on two points. First, although there is reference in the Bill to Scottish Ministers making regulations subject to the negative procedure, it is repeated in amendment 43, so I would appreciate it if the Government could explain what exactly this negative procedure is and how it will work?

Secondly, with regard to the online registration system, could there be confusion about which electors are able to vote in which elections? The Scottish Parliament has rightly decided to introduce votes for 16 and 17-year-olds at all Scottish elections, but these individuals will be denied the vote in Westminster elections. Is there not a danger of widespread confusion, particularly if the online registration technology is being used for both Westminster and Scottish elections?

If I am pleased that the Government have listened to the debate, particularly as far as new clause 12 is concerned, I am disappointed that they have not brought forward an amendment on the Sewel convention and its workings. We argued in Committee, as did SNP Members, that we were concerned about the narrow interpretation of the Sewel convention, which concerned the more general devolved competence. Moreover, there is the imprecision of the word “normally”. As I said in the Committee of the whole House:

“How long is a piece of string?”—[Official Report, 15 June 2015; Vol. 597, c. 99.]

The word “normally” is legally imprecise, which is why amendments 7, 8, 9 and 10, to remove the offending word, were tabled by the right hon. Member for Orkney and Shetland (Mr Carmichael), who sadly cannot be with us today.

New clause 35, tabled by the right hon. Member for Moray (Angus Robertson), seeks to place the Sewel convention on a statutory footing. This was, of course, recommended by the Smith commission, and we are happy to support the new clause, if it is pressed to a vote. However, if we are supporting new clause 35, we are certainly not supporting new clause 36, also tabled by the right hon. Member for Moray. It deals with future referendums on Scottish independence. I note that in the right hon. Gentleman’s statement to the press over the weekend, he said:

“Whether or not Scotland has a referendum in the future should be up to the people—and in the hands of the Scottish Parliament—rather than the UK Government.”

[Callum McCaig (Aberdeen South) (SNP)]

Paragraph 18 of the Smith commission report states:

“It is agreed that nothing in this report prevents Scotland becoming an independent country in the future should the people of Scotland so choose.”

If the people of Scotland do not have the power to choose, how is that provision to stand the test of time?

[Wayne David]

I may be mistaken, but I thought the Scottish people had made a decision—a very firm and clear-cut decision. If there is a move towards having a referendum in the future—

[Callum McCaig]

Will the hon. Gentleman give way?

[Wayne David]

I give way a second time.

[Callum McCaig]

On the history of this issue, the referendum happened in September, and the Smith commission from which I have directly quoted, happened after that. All the parties decided that nothing should prevent Scotland from becoming independent, should the people so wish—yet that is exactly what these provisions are trying to do.

[Wayne David]

No one is seeking to deny the people of Scotland anything. I simply remind the hon. Gentleman that a prominent member of the SNP said that the result was gold-plated, and that the Scottish Parliament has the power at present to have a referendum. The amendment seeks to take away the caveats that are based on discussion and all the more reasonable for that.

[Ian Austin]

Does my hon. Friend agree that this obsession with organising another referendum proves the central point made by me and others in this afternoon’s debate—that the SNP is much more interested in breaking up Britain than in getting on and delivering for the people of Scotland by improving the health service, improving education and providing the homes that the people of Scotland need?

[Wayne David]

I could not agree more. In my book, devolution is not about divorce, separation or schism. It is not about balkanising Britain. It is about establishing a new partnership, so that the people of Britain can work together in a constructive and harmonious way.

[Patrick Grady (Glasgow North) (SNP)]

Will the hon. Gentleman give way?

[Wayne David]

I will, for the third time.

[Patrick Grady]

I may have misheard the hon. Gentleman, but it sounded as if he said that the Scottish Parliament had the power to call a referendum. The Scottish Parliament explicitly does not have the power to call a referendum, which is why we want to give it that power by means of our amendment.

[Wayne David]

What the amendment seeks to do is take away caveats that are essential in defining the partnership and the harmonious discussions that must take place. It is not simply a question of the Scottish Parliament deciding by itself what it wants to do.

[Ian Blackford]

Will the hon. Gentleman give way?

[Wayne David]

I will give away yet again.

[Ian Blackford]

I am grateful to the hon. Gentleman for being so gracious with his time. This is a very important point, because it comes down to the issue of whether the Scottish people, in electing a Government who want to have a referendum on independence, have the power to do so. If the House does not accept our amendment, that power will reside with Westminster, and not with the Scottish people or the Scottish Parliament. It has nothing to do with caveats.

[Wayne David]

I think that the obsession with having a referendum at all costs is very sad for the people of Scotland.

[Ms Ahmed-Sheikh]

Will the hon. Gentleman give way?

[Wayne David]

No. I have given way four times already.

Sometimes SNP Members have to be told, and I am telling them now. The situation is as I have described it. We are not prepared to have a referendum, and we are not prepared to allow a constitutional debate to be hijacked by the referendum issue in an attempt to manoeuvre the situation and bring about a break-up of the United Kingdom. That is not what devolution is all about, and it is not what the Smith commission was all about. The Smith commission was all about people working together.

[Several hon. Members rose—]

[Wayne David]

I want to make a bit of progress now.

The fact is that these are not dry constitutional issues, but issues that have an impact on everyday life, as is shown clearly by what is happening in Scotland in connection with the Trade Union Bill. Under the Sewel convention, a legislative consent motion is necessary for Westminster legislation to secure the consent of the Scottish Parliament if it is to apply in Scotland in a devolved area. According to a strict legal interpretation, this Bill seeks to amend the Trade Union and Labour Relations (Consolidation) Act 1992, and therefore, it is argued, does not encroach on areas of devolved competence. In practical terms, however, it will encroach very much on areas of devolved competence by imposing requirements on local authorities in Scotland.

We believe it is wrong that the UK Government are able to legislate for devolved authorities in this way. That is why all Labour-led councils in Scotland—and one led by the SNP— have agreed to a stance of non-compliance. The Westminster Government have not sought a legislative consent motion from the Scottish Parliament, but Labour will present such a motion in order to deny the Bill competence over Scotland’s devolved services.

I have mentioned local authorities. New clauses 7, 8 and 9, tabled by my hon. Friend the Member for Nottingham North (Mr Allen), make the point that true supporters of devolution believe that power should reside at the most appropriate level, as close to the people as possible. They recognise that there is a very real issue in Scotland, namely that, in the view of many, the Scottish Government are more concerned about exercising power itself than about empowering people in their local communities. Members of the SNP claim to be good Europeans, but I am afraid they show little practical support for the adoption of the European principle of bringing power closer to the people. They have a chance to put that right tonight.

As was noted when we discussed it in a Committee of the whole House, part 2 of the Bill devolves significant new powers to Scotland in relation to income tax and other taxes. The Scottish Parliament will have control over income tax rates and thresholds, and complete freedom when it comes to the levels at which those rates and thresholds are set. That is significant, as the estimated devolved income tax liabilities in 2013-14 amounted to nearly £11 billion. The collection and deployment of such a considerable sum confers—rightly—a substantial degree of responsibility on the Scottish Parliament. If they wish, a Scottish Government, whatever their political complexion, can increase or decrease that liability.

19:15

Scottish Labour has already set out how we would use those new powers. We would reset the additional rate to 50p, so that those who earn over £150,000 a year would contribute a little more, as I think most fair-minded individuals would agree they can afford to do. We would not implement the Government’s plans to increase the higher-rate threshold, but we would use the money raised from not doing so—estimated to be over £400 million—to help to mitigate, in full, the impact of the Government’s work penalty: that is, the tax credit cuts. That decision will benefit a quarter of a million Scottish families who, thanks to the Government, must currently pay an average of £1,300 a year. It is an example of what can be done with new powers if we have the courage and conviction, and the political will, to use them correctly.

Labour Members support these powers. It will therefore come as no surprise that we remain utterly unconvinced by, and opposed to, the SNP’s amendment 224, which would go beyond the Smith commission and enable the Scottish Parliament to remove reservations on taxation, borrowing and public expenditure.

Over the past few months, we have learnt how confused members of the SNP are about the issue of fiscal devolution, or autonomy. The depth of their confusion was shown clearly in Committee, when I asked their economic spokesman whether a future SNP Government would increase or reduce corporation tax. The response to that perfectly reasonable question was

“Yes, a future SNP Government would increase it, decrease it, keep it the same and use the amount raised in an intelligent way.”—[Official Report, 15 June 2015; Vol. 597, c. 56.]

In other words, SNP Members are totally and utterly confused. They are interested in taxation power for the sake of it, rather than being interested in what they want to do with it. They have not thought this out, and they do not have a clue about it.

[Sir Edward Leigh]

I refer the hon. Gentleman to his own new clause 1. Do I take it that because the Labour party wants an independent commission to examine the issue of full fiscal autonomy, it is increasingly open minded about the issue, and does the hon. Gentleman think that that would be one route towards getting rid of the grievance mentality among those in Scotland? If they had to take full responsibility for their decisions, it would be very difficult for them to blame a United Kingdom settlement.

[Wayne David]

We believe that the facts should be allowed to speak for themselves. In our view, the case has not been made and cannot be made, but what we want to see is a transparent, independent body that will reach that conclusion, and we are confident that it will do so. That is why we support the proposal for an independent commission.

[Ms Ahmed-Sheikh]

Does the hon. Gentleman agree with the shadow Chancellor, who, earlier this year, walked through the Lobby with us to vote for full fiscal autonomy?

[Wayne David]

He did that for his own reasons, and for different reasons. What was obvious to me, and very telling, was the fact that the Tory right and the Scottish nationalists were at one. Representatives of English nationalism and Scottish nationalism went through the Lobby together in their hordes: the nationalists and the extreme right! That says it all, does it not?

[Nick Thomas-Symonds (Torfaen) (Lab)]

I know that my hon. Friend, like me, is a student of history. He will know of the test set by that great socialist R. H. Tawney, who said of political institutions, “It is not about paragraphs in a constitution; it is about the practical effect that the institutions make.” Does my hon. Friend agree that it would be useful to know from SNP Members what, practically, they intend to do with their new powers?

[Wayne David]

Yes, indeed. They are very strong on rhetoric, as we have heard this afternoon. They have had strong election results, but I suspect that that will not apply for much longer, because the Scottish people will rumble them when they dig beneath the rhetoric and find that there is very little substance there.

[Sir Edward Leigh]

Could it just be that the Tory right, as the hon. Gentleman describes it, and the present Labour shadow Chancellor both recognise that the one way to defeat nationalism is to have a real Parliament in Scotland with full power over what it taxes and spends and that at that stage the SNP will have to take responsibility for its own actions? It will become a grown-up political party and we will start to defeat it in Scotland.

[Wayne David]

One of the key reasons why we are broadly in support of what the Government are belatedly proposing is that we believe it will give new responsibilities to the Scottish Parliament to try to achieve substantial things on behalf of the Scottish people. I think there is a case to say that responsibility and power go together, and that is why these measures are a step forward.

[Ian Austin]

A moment ago my hon. Friend expressed surprise that the SNP and the Tory right were voting together on full fiscal autonomy, but I am bemused about why he is surprised given that it was the SNP who brought down the Labour Government in the 1970s and ushered in 18 years of—[Interruption.] I do not know what the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) is shouting for, given that she was until very recently a Tory herself. They ushered in 18 years of Thatcherism and all the problems about which they are now whingeing. [Interruption.]

[Wayne David]

All I would say is that it is quite clear that the truth hurts sometimes, does it not? They have been rumbled absolutely.

I will make a little progress in a slightly more sedate manner, if I may. Reference has been made to our new clause 1, which would establish an independent commission on full fiscal autonomy to scrutinise the potential impact on Scotland’s economy and public finances. It would require the Secretary of State for Scotland to establish an independent commission of external experts, appointed in consultation with the Treasury Committee and Scottish Affairs Committee, to publish a report by 31 March 2016 setting out an analysis, objectively and fairly, of the impact of the policy of full fiscal autonomy.

VAT is another important issue. Our amendments 27 to 29 would place an additional £5 billion of reserves under the direct control of the Scottish Parliament by assigning 100% of Scottish revenues from the standard and reduced rate of VAT to the Scottish Parliament, as opposed to 50%, for which the Bill currently allows. Of course, under EU regulations, which do not allow for differential rates of VAT in the same state, the actual setting of VAT would have to remain reserved. However, this is not an argument against assigning the revenues generated in Scotland to the Scottish Consolidated Fund. As was said on Report, given that the Scottish Government would have

“no control over VAT, why assign only half of it? Why not assign it all? The Scottish Government could then quite rightly benefit, if there was a benefit, from the entire rise in VAT in Scotland rather than just half of it and could take responsibility if there was a shortfall, not just for half the shortfall.”—[Official Report, 29 June 2015; Vol. 597, c. 1256.]

It was said that that would be a good thing. Those were not my comments, or indeed the comments of another Member of the Opposition; they were the comments of the hon. Member for Dundee East (Stewart Hosie), who also happens to be the SNP’s spokesperson on the economy. Oddly, given his full-blooded support for devolving 100% of VAT, the SNP has not actually got round to tabling an amendment that would produce this effect, and when the Labour party tabled an amendment proposing that, did the hon. Gentleman and his colleagues welcome it? No, they did not. Instead, they issued a press release in which the hon. Gentleman himself denounced it as a “gimmick”. Well, I do not think it is a gimmick and I am sure the people of Scotland do not think so either.

New clause 4 would review the impact of the new income tax powers on the operation of gift aid in Scotland to guard against unintended and negative consequences for charities. Gift aid is worth over £1 billion a year to charities and over £100 million in Scotland. Any threat to its smooth operation must, therefore, be closely guarded against. The problem that Labour’s new clauses seek to address is that gift aid is UK-wide, linked to tax paid, and predicated on a single tax structure. I would welcome in the Secretary of State’s response any assurances he can provide to charities in Scotland on the issue of gift aid.

New clause 11 would require the Secretary of State to lay before the House of Commons a full record, including minutes of meetings and correspondence at ministerial level, of discussions between the Secretary of State, the Treasury and Scottish Ministers relating to the non-budget expenditure to be voted by Parliament authorising the payment of grants to the Scottish Consolidated Fund for that financial year. We would of course be happy to work in partnership with the Scottish Parliament on such a report, although it is similarly in the gift of the Scottish Government to produce their own report, and I hope that they would share it with us as well. We would thereby have regular updates on the health of these negotiations, which currently take place to a large extent behind closed doors. The purpose of this new clause is to ensure transparency and accountability in the process leading to the annual settlement between the Treasury and Scottish Ministers of the block grant to the Scottish Consolidated Fund.

It is worth noting that the Scottish Parliament’s Finance Committee produced a report on intergovernmental relations in late June. It makes for interesting and important reading. It is generally critical of the state of intergovernmental relations, which are described as taking place “below the radar.” It is said that relations should be made

“more formal and more transparent.”

The Committee also recommended that consideration should be given to establishing an independent body to advise on the calculation of the block grant and an independent arbiter to resolve disputes on issues such as the block grant adjustment. The Labour party would certainly support any such moves to that effect, and it is in the interests of introducing greater accountability, transparency and formality to these negotiations that our new clause 11 has been tabled.

I am grateful for being allowed to speak in some detail about some of the amendments, but they are important; these are important issues. I hope that the House will give sympathetic consideration to the points I have made this evening.

[David Mundell]

I think that during at least part of this debate some of the amendments tabled by both the Government and Opposition Members have been addressed and I am very pleased—unless I have picked this up wrongly in the course of the debate—that no one is suggesting they would wish to oppose the Government’s amendments.

I am afraid that today’s debate on full fiscal autonomy has, for me, been an unwelcome case of déjà vu, and I am afraid that even includes the contribution of my hon. Friend the Member for Gainsborough (Sir Edward Leigh). It would certainly be unwelcome to the people of Scotland if this proposal ever came to pass. It will come as no surprise to the House that the Government will not accept the SNP amendment relating to full fiscal autonomy. This Government are clear: it is not in the interests of the people of Scotland.

We do not need a commission either, because the analysis has been done. The Institute for Fiscal Studies has estimated that full fiscal autonomy would mean Scotland having almost £10 billion less to spend by the last year of this Parliament. That is not a good deal for Scotland and this Government will not support it.

[Callum McCaig]

Ironically, what gives us a real, and cruel, sense of déjà vu is that despite barely a dozen Conservative Members having been present during this debate to listen to the concerns of the people of Scotland, the Tories will march through the Lobby denying the people of Scotland what they want.

[David Mundell]

There is not a shred of evidence to suggest that the people of Scotland want full fiscal autonomy. The people of Scotland voted in a referendum—I know that is an inconvenience for the SNP on the road to independence—and voted decisively to remain within the United Kingdom.

19:30

[Several hon. Members rose—]

[David Mundell]

I need to deal with the specific issues that have been raised, including gift aid. I commend the hon. Member for Edinburgh South (Ian Murray) for pursuing this issue, because it is important to the charitable sector. It came up when I addressed the Scottish Council for Voluntary Organisations recently. I can confirm that the UK Government remain committed to working with the charity sector to ensure that gift aid works effectively for charities and their donors. This is something that we already do, and something that we will continue to do. We consulted the charity sector fully in advance of agreeing the arrangements for the continued operation of gift aid under the Scottish rate of income tax, which will come into effect in April 2016. Similarly, we are fully committed to consulting the charity sector, in Scotland and the rest of the UK, ahead of agreeing arrangements for the continued operation of gift aid under the devolution of income tax powers as proposed by the Bill.

The Government are fully committed to an ongoing dialogue with the charity sector before and after the enactment of the Bill to ensure that gift aid continues to operate effectively. It is our objective to maximise the amount of gift aid claimed on eligible donations. I hope that, on the basis of those reassurances, the hon. Gentleman will not press his new clause to a vote.

[Ian Murray]

I am grateful to the Secretary of State for his clarification on gift aid. That is a significant concern for the charity sector in Scotland, which will welcome his reassurances. On that basis, we will not press new clause 4 to a vote.

[David Mundell]

I thank the hon. Gentleman for that.

I also thank the hon. Member for Edinburgh East (Tommy Sheppard). I usually disagree fundamentally with his contributions, but I always enjoy them. I also commend him on winning the new MP of the year award from The Spectator. He and the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) touched on the Sewel convention—the legislative consent motion procedure in the Scottish Parliament. I am afraid that I do not agree with their proposals. The Sewel convention has been set out in the Bill, as required by the Smith commission.

[Chris Stephens]

Will the Minister give way?

[David Mundell]

I want to respond to all the points raised on the new clauses and amendments if I can.

The hon. Member for Nottingham North (Mr Allen) has put forward various suggestions on local government. On the one hand, I agree with the SNP that it is a matter for the Scottish Parliament to determine the nature of local government in Scotland. On the other hand, I agree with the hon. Gentleman that as many matters as possible in Scotland should be devolved locally. Indeed, that was one of Lord Smith’s proposals for the Bill.

On the question of permanence, I am glad that the current proposal, which I had previously shared with the Scottish Government and the Devolved Powers Committee, meets everyone’s aspirations. In response to the hon. Member for Caerphilly (Wayne David), this is an important proposal which demonstrates what the people of Scotland have clearly indicated they wish to see in the legislation. I am also pleased that the proposals relating to elections have been relatively uncontentious, as were the measures relating to a super-majority. I therefore hope that the amendments to those measures will not be pressed to a vote.

I am afraid that I cannot agree with Labour’s proposal for the full amount of VAT raised in Scotland to be assigned to Scotland. It was a key part of the Smith agreement that half the VAT revenue should be so assigned, in order to ensure a stable balance between encouraging Scotland’s economy to grow and insulating the Scottish Government’s budget from UK-wide economic shocks. I hope that the relevant amendment will therefore not be pressed to a vote.

The question of human rights was raised by the hon. and learned Member for Edinburgh South West (Joanna Cherry). I have found her previous contributions to this Parliament to be based on fact and not on politics, so it will not surprise her to learn that I was disappointed with her contribution this evening. This is an important issue. The House will be aware that we have outlined our proposal to reform and modernise our human rights framework by replacing the Human Rights Act with a Bill of Rights. Of course I am very aware of the possible devolution implications of reform, and we will engage with the devolved Administrations as we develop these proposals. We spoke about this matter in Committee, and the Government’s view has not changed. The Government are working on proposals for the reform of the human rights framework, and we will bring forward those proposals in due course, in consultation with the devolved Administrations.

The fiscal framework has also been discussed today. I want to put on record the fact that I am absolutely confident that John Swinney, negotiating on behalf of the Scottish Government, will be able to get a good deal for them. I have that confidence in Mr Swinney, and I know that he and the UK Government are absolutely committed to achieving that objective. We have had a number of detailed discussions on the fiscal framework, and we agreed at the start that we would not provide a running commentary on those negotiations. Nothing is agreed until everything is agreed. However, there is no suggestion that agreement cannot be reached, and it will be an agreement that is fair for Scotland and fair for the rest of the United Kingdom. I look forward to Members of this House and of the Scottish Parliament being able to properly scrutinise that agreement.

[Sir Edward Leigh]

Will my right hon. Friend deal briefly with amendment 224, which has been tabled by the SNP? According to its accompanying explanatory statement, instead of asking the House to impose full fiscal autonomy, the Scottish Parliament

“could then legislate in these areas to provide for full fiscal autonomy in Scotland.”

In other words, SNP Members do not actually want full fiscal autonomy yet. They are like St Augustine: they want to stop sinning, but not quite yet. I think we should call their bluff on this one.

[David Mundell]

Throughout the course of these debates it has been clear that the strongest advocate of full fiscal devolution in this House is my hon. Friend the Member for Gainsborough (Sir Edward Leigh). He is willing to put his money where his mouth is. I am not willing to put the livelihoods of people in Scotland on the line just to demonstrate that some scheme would not work.

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

rose—

[David Mundell]

I want to deal with new clause 36, which is an important proposal—at least the hon. Gentleman’s colleagues suggest it is. In September 2014, the people of Scotland voted decisively to remain part of the United Kingdom, and to retain our two Parliaments and two Governments. The SNP reassured us repeatedly in advance of the referendum that it would be a once-in-a-generation or once-in-a-lifetime event. The First Minister herself signed the Edinburgh agreement, which committed both of Scotland’s Governments to respect the outcome of the independence referendum. However much the SNP might dislike the fact, the 2 million people in Scotland who voted no voted to keep our United Kingdom. Their votes should be respected and not set aside as an unfortunate setback on the road to independence. Most people in Scotland support our place in the United Kingdom and do not want a second referendum—that is a fact that the SNP cannot face up to.

This new clause is a distraction from the real powers contained in this Bill. The Bill gives the Scottish Parliament significant new powers, with the strength of the United Kingdom. The SNP needs to tell us how it intends to use those powers for the benefit of the people of Scotland. I will therefore not be supporting new clause 36 and am again proposing that people support my amendments.

Question put and agreed to.

New clause 12 accordingly read a Second time, and added to the Bill.

New Clause 13

Functions exercisable within devolved competence: elections

“(1) The Scotland Act 1998 (“the 1998 Act”) has effect, in relation to any function so far as exercisable within devolved competence by virtue of a provision of section 3, as if references to a “pre-commencement enactment” were to—

(a) an Act passed before or in the same session as the relevant date,

(b) any other enactment made before the relevant date,

(c) subordinate legislation under section 106 of the 1998 Act, to the extent that the legislation states that it is to be treated as a pre-commencement enactment,

but did not include the 1998 Act or this Act (or any amendment made by either of those Acts) or (subject to paragraph (c)) an enactment comprised in subordinate legislation under either of those Acts.

(2) In this section—

(a) expressions used in the 1998 Act have the same meaning as in that Act;

(b) the relevant date is the date on which section 3 comes into force.”—(Stephen Barclay.)

This amendment makes provision for various existing functions of Ministers of the Crown in respect of elections to instead be exercised by Scottish Ministers, so far as such functions are exercisable within devolved competence by virtue of Clause 3.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Independent Commission on Full Fiscal Autonomy

“(1) The Secretary of State shall appoint a commission of between four and eleven members to conduct an analysis of the impact of Full Fiscal Autonomy on the Scottish economy, labour market and public finances and to report by 31 March 2016.

(2) No member of the House of Commons, the House of Lords, or the Scottish Parliament may be a member of the commission.

(3) No employee of the Scottish Government or of any government Department or agency anywhere in the United Kingdom may be a member of the commission.

(4) The Secretary of State shall, in consultation and with the agreement of Scottish Ministers, appoint as members of the commission only persons who appear to the Secretary of State to hold a relevant qualification or to have relevant experience.

(5) The Secretary of State shall not appoint as a member of the commission any person who is a member of a political party.

(6) Before appointing any member of the commission, the Secretary of State must consult—

(a) The Chair of any select committee appointed by the House of Commons to consider Scottish Affairs, and

(b) The Chair of any select committee appointed by the House of Commons to examine the expenditure, administration and policy of Her Majesty’s Treasury and its associated public bodies.

(7) The Secretary of State may by regulations issue the commission with terms of reference and guidelines for the commission’s working methods, including an outline definition of the policy of full fiscal autonomy for the commission to analyse.

(8) The Secretary of State must lay copies of the report of the commission before both Houses of Parliament, and must transmit a copy of the report of the commission to the Presiding Officer of the Scottish Parliament.

(9) Regulations under this section must be made by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament.”—(Ian Murray.)

The new Clause provides for the establishment of an independent commission to investigate the impact of FFA.

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

19:39

Division 110

Ayes: 191

---

Labour: 185
Social Democratic & Labour Party: 2
Liberal Democrat: 2
Conservative: 1
Independent: 1
Green Party: 1

Noes: 341

---

Conservative: 283
Scottish National Party: 52
Plaid Cymru: 2
Democratic Unionist Party: 2
Ulster Unionist Party: 1
Independent: 1

19:52

Three hours having elapsed since the commencement of proceedings on the programme motion, the proceedings were interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 35

Consent of the Scottish Parliament to certain Westminster Acts

(1) In section 28 of the Scotland Act 1998 (Acts of the Scottish Parliament), at the end add—

‘(8) But the Parliament of the United Kingdom must not pass Acts applying to Scotland that make provision about a devolved matter without the consent of the Scottish Parliament.

(9) A provision is about a devolved matter if the provision—

(a) applies to Scotland and does not relate to reserved matters,

(b) modifies the legislative competence of the Scottish Parliament, or

(c) modifies the functions of any member of the Scottish Government.

(10) In subsection (8), ‘Acts’ includes any Act, whether a public general Act, a local and personal Act or a private Act.’

(2) After section 28 of the Scotland Act 1998 insert—

‘28A Duty to consult the Scottish Government on Bills applying to Scotland

(1) A Minister of the Crown shall consult Scottish Ministers before introducing any Bill into the Parliament of the United Kingdom for an Act of that Parliament that would make provision applying to Scotland.

(2) Where the Bill is for an Act making provision that would require the consent of the Scottish Parliament by virtue of section 28(8), the requirement to consult under subsection (1) includes a requirement that a Minister of the Crown give the Scottish Ministers a copy of the provisions of the Bill that apply to Scotland no later than—

(a) 21 days before the proposed date of introduction, or

(b) such later date as the Scottish Ministers may agree.’

(3) The requirement in subsection (2) does not apply if—

(a) the Scottish Ministers so agree, or

(b) there are exceptional circumstances justifying failure to comply with the requirement.

(4) The reference in subsection (1) to an Act of Parliament is a reference to any Act whether a public general Act, a local and personal Act or a private Act.’—(Angus Robertson.)

This new clause would ensure that the UK Parliament can only legislate in devolved areas with the consent of the Scottish Parliament. It puts the Sewel Convention onto a statutory footing, as agreed by the Smith Commission.

Brought up.

Question put, That the clause be added to the Bill.

19:52

Division 111

Ayes: 245

---

Labour: 187
Scottish National Party: 52
Social Democratic & Labour Party: 2
Democratic Unionist Party: 2
Green Party: 1
Liberal Democrat: 1
Independent: 1

Noes: 287

---

Conservative: 284
Independent: 1
Ulster Unionist Party: 1
Liberal Democrat: 1

New Clause 36

Scottish independence referendum

‘(1) Paragraph 5A in Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

(2) In sub-paragraph (1), leave out “if the following requirements are met”.

(3) Leave out sub-paragraphs (2) to (4).’—(Angus Robertson.)

This new clause would permit the Scottish Parliament to decide whether and when to hold a referendum on Scottish independence.

Brought up.

Question put, That the clause be added to the Bill.

20:04

Division 112

Ayes: 56

---

Scottish National Party: 52
Social Democratic & Labour Party: 2
Green Party: 1
Independent: 1

Noes: 269

---

Conservative: 284
Democratic Unionist Party: 2
Labour: 1
Independent: 1
Ulster Unionist Party: 1
Liberal Democrat: 1

Clause 1

The Scottish Parliament and the Scottish Government

Amendment made: 34, page 1, line 4, leave out clause 1.—(Stephen Barclay.)

This amendment leaves out Clause 1, which is replaced by New Clause NC12.

Clause 3

Elections

Amendments made: 35, page 2, line 21, leave out “and (2B)”.

This amendment devolves to the Scottish Parliament the power in new section 2(2B) of the Scotland Act 1998, inserted by Clause 5 of the Bill, for Scottish Ministers to make an order specifying an alternative day on which the poll for a Scottish Parliamentary general election shall be held.

Amendment 36, page 2, line 38, leave out from “elections)” to third “the” in line 40 and insert

“where a limit applies to expenditure in relation to a period determined by reference both to the date of the poll for an election within the legislative competence of the Parliament and to the date of”.

Campaign expenditure by political parties and controlled expenditure by third parties, is regulated for specific periods before certain elections. This amendment provides for competence to be reserved in respect of such expenditure where these periods overlap, even if the relevant election polls are on different days.

Amendment 37, page 3, leave out lines 17 to 19 and insert—

“(a) section 1, except in relation to—

(i) financing the Electoral Commission,

(ii) preparation, laying and publication by the Commission of reports about the performance of its functions, and

(iii) provision by the Commission of copies of regulations made by it or notice of the alteration or revocation of such regulations,”—(Stephen Barclay.)

This amendment amends the exception to the reservation of section 1 of the Political Parties, Elections and Referendums Act 2000 so that the financing, reporting and (for regulations it makes) notification functions of the Electoral Commission are devolved insofar as these matters apply in respect of elections to the Scottish Parliament.

Clause 4

Power to make provision about elections

Amendments made: 38, page 3, line 39, leave out “provision” and insert

“any provision that would be within the legislative competence of the Parliament, if included in an Act of the Scottish Parliament,”.

This amendment would have the effect that the powers of the Scottish Ministers under section 12 of the Scotland Act 1998 would be aligned with the legislative competence of the Scottish Parliament.

Amendment 39, page 4, line 4, leave out from “polls” to end of line 24.

This amendment is consequential on amendment 38, as that amendment renders it unnecessary to specify the particular combinations of polls as regards which the Scottish Ministers may exercise powers under section 12 of the Scotland Act 1998.

Amendment 40, page 4, line 33, leave out “the use of”.—(Stephen Barclay.)

The effect of this amendment is that the restriction on the powers of Scottish Ministers regarding the Digital Service in new section 12(4) of the Scotland Act 1998 (see Clause 4) more accurately reflects the extent of the reservation of the Digital Service set out in Clause 3(5).

Clause 5

Timing of Elections

Amendments made: 41, page 6, line 10, at the end insert

“, unless the day of the poll is determined by a proclamation under subsection (5) as modified by subsection (5ZA).”

This amendment means that where Scottish Ministers make an order under section 2(2B) of the Scotland Act 1998 specifying an election date, and the Presiding Officer proposes a new date for the election under section 2(5) of that Act, the election will be held on the date proposed under section 2(5).

Amendment 42, page 6, line 13, at the end insert—

‘( ) After subsection (5) insert—

(5ZA) Where a day is specified by order under subsection (2B), subsection (5) applies as if the reference to the first Thursday in May were a reference to that day.”—(Stephen Barclay.)

The amendment is linked to amendment 41 and provides that the Presiding Officer’s power at section 2(5) of the Scotland Act 1998 to propose a new date for an election, applies in relation to a date specified for such a poll under new section 2(2B) of that Act.

Clause 6

electoral registration: the digital service

Amendment made: 43, page 6, line 33,leave out subsections (2) and (3) and insert—

‘( ) In section 10ZC (registration of electors in Great Britain) at the end insert—

(4) The power to make regulations under this section, so far as it is exercisable by a Minister of the Crown to make provision about a UK digital service in relation to elections in Scotland, is exercisable by the Scottish Ministers concurrently with that Minister.

(5) The power of the Scottish Ministers to make regulations by virtue of subsection (4) is exercisable in the same ways and subject to the same provisions as their power to make other regulations under this section, except that—

(a) the power is not exercisable without the agreement of a Minister of the Crown, and

(b) regulations made by them in exercise of the power are subject to the negative procedure.

(6) In this section—

“election in Scotland” means—

(a) an election for membership of the Scottish Parliament, or

(b) a local government election in Scotland;

“UK digital service” means a digital service provided by a Minister of the Crown for the registration of electors.”

( ) In section 10ZD (registration of electors in Great Britain: alterations) at the end insert—

(4) The power to make regulations under this section, so far as it is exercisable by a Minister of the Crown to make provision about a UK digital service in relation to elections in Scotland, is exercisable by the Scottish Ministers concurrently with that Minister.

(5) The power of the Scottish Ministers to make regulations by virtue of subsection (4) is exercisable in the same ways and subject to the same provisions as their power to make other regulations under this section, except that—

(a) the power is not exercisable without the agreement of a Minister of the Crown, and

(b) regulations made by them in exercise of the power are subject to the negative procedure.

(6) In this section “election in Scotland” and “UK digital service” have the same meaning as in section 10ZC.”

( ) In section 53 (power to make regulations about registration etc) at the end insert—

“(9) The power to make regulations under this section, so far as it is exercisable by a Minister of the Crown to make provision about a UK digital service in relation to elections in Scotland, is exercisable by the Scottish Ministers concurrently with that Minister.

(10) The power of the Scottish Ministers to make regulations by virtue of subsection (9) is exercisable in the same ways and subject to the same provisions as their power to make other regulations under this section, except that—

(a) the power is not exercisable without the agreement of a Minister of the Crown, and

(b) regulations made by them in exercise of the power are subject to the negative procedure.

(11) In subsection (9)—

“election in Scotland” means—

(a) an election for membership of the Scottish Parliament, or

(b) a local government election in Scotland;

“UK digital service” means a digital service provided by a Minister of the Crown for the registration of electors.””—(Stephen Barclay.)

By this amendment, the Scottish Ministers are given powers relating to the Digital Service, but may not without the Government’s consent require any changes to the Digital Service, prevent the Government from making any changes to the Digital Service, or require the continuation of the Digital Service.

Clause 7

Expenditure in connection with elections

Amendments made: 44, page 8, line 15, leave out from “apply” to end of line 16 and insert

“to a power so far as it relates to circumstances where a limit applies to expenditure in relation to a period determined by reference both to the date of the poll for an election for membership of the Scottish Parliament and to the date of any other election.”

This amendment is consequential on amendment 36 and ensures that the language of Clause 7 is consistent with the language of Clause 3.

Amendment 45, page 8, line 40, leave out from “apply” to end of line 41 and insert

“to a power so far as it relates to circumstances where a limit applies to expenditure in relation to a period determined by reference both to the date of the poll for an election for membership of the Scottish Parliament and to the date of any other election.”

This amendment is consequential on amendment 36 and ensures that the language of Clause 7 is consistent with the language of Clause 3.

Amendment 46, page 9, line 13, leave out from “apply” to end of line 14 and insert

“to a power so far as it relates to circumstances where a limit applies to expenditure in relation to a period determined by reference both to the date of the poll for an election for membership of the Scottish Parliament and to the date of any other election.”—(Stephen Barclay.)

This amendment is consequential on amendment 36 and ensures that the language of Clause 7 is consistent with the language of Clause 3.

Clause 10

Super-majority requirement for certain legislation

Amendments made: 47, page 11, line 19, leave out

“the provisions of the Bill relate”

and insert

“any provision of the Bill relates”.

This amendment has the effect that the Presiding Officer must decide whether any provision of a bill relates to a protected subject-matter, rather than deciding more generally whether the provisions of a bill so relate.

Amendment 48, page 11, line 36, leave out

“the provisions of a Bill relate”

and insert

“any provision of a Bill relates”.

This amendment is consequential on amendment 47, as the Presiding Officer’s statement will now state the Presiding Officer’s decision as to whether any provision of a bill relates to a protected subject-matter.

Amendment 49, page 12, line 1, leave out from beginning to second “in” and insert—

‘( ) Section 32 (submission of Bills for Royal Assent) is amended as follows.

( ) ”.

This amendment is a technical amendment to reformat Clause 10 and introduce amendment 50.

Amendment 50, page 12, line 2, at end insert—

‘( ) After subsection (2) insert—

(2A) The Presiding Officer shall not submit a Bill for Royal Assent if the Supreme Court has decided a reference made in relation to the Bill under section 32A(2)(b), unless since the decision the Bill has been approved in accordance with standing orders made by virtue of section 36(5).” ”

By this amendment, a bill that passed with a simple majority in respect of which the Supreme Court subsequently decides that a simple majority is sufficient, must be reconsidered before being submitted for Royal Assent.

Amendment 51, page 12, line 11, leave out

“the provisions of the Bill relate”

and insert

“any provision of the Bill relates”.

This amendment is consequential on amendment 47, as the Presiding Officer’s statement will now state the Presiding Officer’s decision as to whether any provision of a bill relates to a protected subject-matter.

Amendment 52, page 12, line 15, leave out

“the provisions of the Bill do not relate”

and insert

“no provision of the Bill relates”.

This amendment is consequential on amendment 47, as the Presiding Officer’s statement will now state the Presiding Officer’s decision as to whether any provision of a bill relates to a protected subject-matter.

Amendment 53, page 12, line 16, at end insert

“, unless the number of members voting in favour of the Bill at its passing is at least two-thirds of the total number of seats for members of the Parliament.”

By this amendment a bill may not be referred to the Supreme Court on the question whether the requirement for a two-thirds majority applies to the bill, if the bill passed with at least a two-thirds majority.

Amendment 54, page 12, line 19, leave out from “unless” to end of line 21 and insert

“since the notification the Bill has been approved or rejected in accordance with standing orders made by virtue of section 36(5).””.

This amendment is consequential on amendment 60. It enables a Law Officer to refer a bill to the Supreme Court regarding a protected subject-matter question even if he had previously notified he would not refer the bill, if the bill has since been reconsidered on any ground.

Amendment 55, page 12, line 21, at end insert—

‘( ) Section 33 (scrutiny of Bills by the Supreme Court) is amended as follows.”

This amendment is a technical amendment to reformat the introduction of subsection (9) of Clause 10, in light of the additional amendment to section 33 of the Scotland Act 1998 by amendment 57.

Amendment 56, page 12, line 22, leave out “to section 33”.

This amendment is consequential on amendment 56, which is a technical amendment to reformat the introduction of subsection (9) of the clause.

Amendment 57, page 12, line 23, at end insert—

‘( ) In subsection (2)(b) omit “subsequent”.

( ) In section 35(3) (power to intervene in certain cases)—

(a) in paragraph (b) omit “subsequent”, and

(b) in paragraph (c) after “section” insert “32A(2)(b) or”.”

This amendment is related to amendment 60. It changes the time limits that apply in sections 33 and 35 of the Scotland Act 1998 respectively, so that those time limits apply whenever a bill is reconsidered and regardless of the reason for the reconsideration.

Amendment 58, page 12, line 26, leave out lines 26 to 29 and insert—

“(aa) the Supreme Court decides a reference made in relation to the Bill under section 32A(2)(b),”.”

This amendment is consequential on amendments 47 and 53, by which the key question is whether any provision of a bill relates to a protected subject-matter. It also simplifies the wording of new section 36(4)(aa) of the Scotland Act 1998.

Amendment 59, page 12, line 32, leave out from “if),” to “to” in line 34 and insert

“on a reference made in relation to the Bill under section 32A(2)(a), the Supreme Court decides that no provision that is subject to the reference relates”

This amendment is consequential on amendments 47 and 53, by which the key question is whether any provision of a bill relates to a protected subject-matter. It also simplifies the wording of new subsection 36(4A) of the Scotland Act 1998.

Amendment 60, page 12, line 35, leave out subsections (13) and (14) and insert—

‘( ) In subsection (5) for “any Bill amended on reconsideration” substitute “—

(a) any Bill amended on reconsideration in accordance with standing orders made by virtue of subsection (4)(a), (b) or (c), and

(b) any Bill reconsidered in accordance with standing orders made by virtue of subsection (4)(aa) or (4A),”.

( ) In subsection (6)—

(a) after “28(2)” insert “, 31(2A), 31A, 32A(2)(b)”;

(b) for “which has been amended on reconsideration” substitute “to which subsection (5)(a) or (b) applies”.”—(Stephen Barclay.)

This amendment, which is in part consequential on a number of other amendments, means that requirements regarding a final stage for a bill, and for approval of a bill following reconsideration to be treated as the passing of the bill, apply regardless of the ground for reconsideration.

Clause 11

Scope to modify the Scotland Act 1998

Amendments made: 61, page 13, line 8, after “(2)” insert “, (2B)”.

This amendment gives power to the Scottish Parliament to amend subsection 2(2B) of the Scotland Act 1998, which relates to the power of the Scottish Ministers to set the date of an election for membership of the Scottish Parliament in certain circumstances.

Amendment 62, page 13, line 14, after “28” insert “(4) and”.

This amendment gives power to the Scottish Parliament to amend subsection 28(4) of the Scotland Act 1998, which relates to the Clerks dating of Royal Assent for a Bill.

Amendment 63, page 13, at the end of line 14 insert—

(i) section 31(3),”.

This amendment gives power to the Scottish Parliament to amend subsection 31(3) of the Scotland Act 1998, which relates to determining through standing orders the form and manner of a certain statements by the Presiding Officer.

Amendment 64, page 13, line 16, leave out “39” and insert “38”.

This amendment gives power to the Scottish Parliament to amend section 38 of the Scotland Act 1998, which relates to Letters Patent and proclamations.

Amendment 65, page 13, line 19, leave out “(1B)(a) and (b),” and insert “(1)(a) to (c)”.

This amendment gives power to the Scottish Parliament to amend subsection 44(1)(c) of the Scotland Act 1998, which relates to the Lord Advocate and Solicitor General for Scotland’s membership of the Scottish Government.

Amendment 66, page 13, line 22, after “47” insert “(2) and”.

This amendment gives power to the Scottish Parliament to amend subsection 47(2) of the Scotland Act 1998, which relates to the Scottish Parliament’s agreement to the appointment of ministers.

Amendment 67, page 13, line 24, after “49(2)” insert “, (3)”.

This amendment gives power to the Scottish Parliament to amend subsection 49(3) of the Scotland Act 1998, which relates to the Scottish Parliament’s agreement to the appointment of junior ministers.

Amendment 68, page 13, line 26, leave out “section 69(3)” and insert—

“(i) section 69(2) to (5), and

(ii) section 70(1) to (5) and (7) to (9),”

This amendment gives power to the Scottish Parliament to amend subsections 69(2) to (5) of the Scotland Act 1998, which relate to the Auditor General for Scotland, and subsections 70(1) to (5) and (7) to (9) of that Act, which relate to financial control, accounts and audit.

Amendment 69, page 13, line 28, after “91,” insert

“92(1), (2) and (4) to (6),”.—(Stephen Barclay.)

This amendment gives power to the Scottish Parliament to amend subsections 92(1), (2) and (4) to (6) of the Scotland Act 1998, which relate to the Queen’s Printer for Scotland.

[Bob Blackman]

On a point of order, Mr Deputy Speaker. Last night, on Remembrance Sunday, a picture of a swastika was projected on to the House of Commons with a message saying, “Modi not welcome”. As you will be aware, the Prime Minister of India, Narendra Modi, is visiting here later this week. Can you confirm that this will be thoroughly investigated, that it has nothing whatsoever to do with the Government or the House authorities, and that the perpetrators will be caught and suitably punished?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

On Remembrance Sunday there is no time when it is acceptable to project anything on to the House of Commons without permission, but to project a swastika on the visit of a state leader is totally unacceptable. The point has been made, and it will be taken on board and dealt with. I am absolutely convinced that the police will be looking into it as a matter of urgency.

[Sir Edward Leigh]

On a point of order, Mr Deputy Speaker. Will you just explain the procedure of the House, because I have not been here very long—

[Mr Deputy Speaker]

I know that I do not need to explain it to you, and I do not need to waste any more time because we need to move on to the Bill.

[Sir Edward Leigh]

No, this actually is a genuine point of order.

[Mr Deputy Speaker]

I am surprised.

[Sir Edward Leigh]

I know they are very rare. Am I right, Mr Deputy Speaker, in thinking that it would be in order for any amendment to be moved? I am rather surprised that the SNP has not moved amendment 224 on “full fiscal autonomy but not quite yet”. Is there any reason that would have prevented it from moving that amendment?

[Mr Deputy Speaker]

It is not for the Chair to decide what the SNP does; it is up to the SNP to decide what it moves or does not move. As I said, I knew that it was not a point of order, and I knew that you knew the answer before you asked me.

New Clause 14

“Welfare foods

‘(1) Part 2 of Schedule 5 to the Scotland Act 1998, Section F1 (social security schemes) is amended as follows.

(2) In the Exceptions, after exception 8 (see section 23 above) insert—

“Exception 9

The subject-matter of section 13 of the Social Security Act 1988 (benefits under schemes for improving nutrition: pregnant women, mothers and children).”

(3) In the Interpretation provision, at the end insert—

“The reference to the subject-matter of section 13 of the Social Security Act 1988 is to be construed as a reference to it as at the day on which section [Welfare foods] of the Scotland Act 2015 comes into force (and, accordingly, paragraph 5(1) of Part 3 of this Schedule does not apply to that reference).”

(4) Omit Section J5 (welfare foods).

(5) In the Social Security Act 1988, in section 13(2) (benefits under schemes for improving nutrition: consultation) omit “the Scottish Ministers and”.”—(David Mundell.)

This amendment devolves to the Scottish Parliament legislative competence regarding welfare foods, enabling the Scottish Parliament, in relation to Scotland, to abolish or amend schemes for the provision of welfare foods, as currently made under section 13 of the Social Security Act 1988, or to make new schemes for the provision of welfare foods.

Brought up, and read the First time.

[David Mundell]

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

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss Government new clause 34—Power to create other new benefits.

Government new clause 15—Abortion.

Government new clause 16—Public sector duty regarding socio-economic inequalities.

Government new clause 17—Destination of fines, forfeitures and fixed penalties.

New clause 2—

“New benefits

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 8 (see section 23 above) insert—

“Exception 9

A benefit not in existence at the relevant date provided entitlement to or the purpose of the benefit is different from entitlement to or the purpose of any benefit that is— For the purpose of this exception—

(a) in existence at the relevant date,

(b) payable by or on behalf of a Minister of the Crown, and

(c) otherwise a reserved benefit.

“the relevant date” means the date of introduction into Parliament of the Bill that becomes the Scotland Act 2015;

“reserved benefit” means a benefit which is to any extent a reserved matter.””

The new Clause expands and clarifies the right of the Scottish Government to create new benefits—that is, benefits not in existence on the date on which the bill is passed.

New clause 3—

“Joint Committee on Welfare Devolution

‘(1) There is to be a Committee (to be known as the Joint Committee on Welfare Devolution) to examine the transfer, implementation and operation of the powers devolved to the Scottish Parliament by Part 3 of this Act.

(2) The Joint Committee on Welfare Devolution is to be responsible for ensuring full co-operation, consultation and information-sharing between the UK Government, the Scottish Government, and relevant stakeholders.

(3) The Joint Committee on Welfare Devolution is to publish a report—

(a) on the transfer and implementation of the powers devolved to the Scottish Parliament by Part 3 of this Act at least once every three months for the first three years from the date when this Act is passed, and

(b) on the operation of the powers devolved to the Scottish Parliament by Part 3 of this Act at least once in each calendar year after three years from the date when this Act is passed.

(4) Schedule (The Joint Committee on Welfare Devolution), which makes further provision in relation to the Joint Committee on Welfare Devolution, has effect.”

This new Clause, linked to New Schedule NS1 on the Joint Committee on Welfare Devolution, provides for a cross-Parliament committee to oversee the transition and implementation of welfare powers transferred under this Act. The Committee would include members from both Parliaments and would be required to report frequently in the transition phase and thereafter annually.

New clause 5—

“Childcare element of universal credit

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in Exceptions, after exception 6 (see section 22 above) insert—

“Exception 7

The subject-matter of regulations 31 to 34 of the Universal Credit Regulations 2013.””

This new clause would devolve to the Scottish Parliament the power to make rules about the childcare element of Universal Credit.

New clause 10—

“Commission on social and economic rights

‘(1) The Secretary of State shall appoint a commission on social and economic rights.

(2) The Secretary of State shall invite the Presiding Officers or Speakers of the House of Commons, House of Lords, National Assembly of Wales, Northern Ireland Assembly and the Scottish Parliament each to nominate no more than three persons to the commission on social and economic rights.

(3) The commission on social and economic rights must report on—

(a) the practicality of making the Scottish Parliament and Scottish Government subject to the rights contained in the International Covenant on Economic, Social and Cultural Rights; and

(b) the consequences of Scottish devolution for the attainment of economic and social rights throughout the United Kingdom.

(4) The Secretary of State may by regulations determine the role, composition, organisation and powers of the commission on social and economic rights.”

The purpose of this New Clause is to create a commission to consider whether economic and social rights could be made justiciable in Scotland, and the prospects for achieving fuller attainment of economic and social rights throughout the United Kingdom.

New clause 18—

“Tax credits

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Section F1 is amended as follows.

(2) In the Exceptions, after exception 9 (see section (Welfare foods) (2) above) insert—

“Exception 10

The subject-matter of the Tax Credits Act 2002.””

This New Clause devolves to the Scottish Parliament the power to make provision for child tax credit, and working tax credit.

New clause 19—

“Employment and industrial relations

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Head H (Employment) is amended as follows.

(2) Omit Section H1 (employment and industrial relations).

(3) Insert new Section H1A as follows.

“H1A. National Minimum Wage

The subject-matter of the National Minimum Wage Act 1998.””

This new clause would devolve employment rights and duties and industrial relations, except for the national minimum wage, to the Scottish Parliament.

New clause 20—

“National minimum wage

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Head H (Employment) is amended as follows.

(2) Omit ‘(h) the National Minimum Wage Act 1998’.

(3) For the heading “Exception”, substitute “Exceptions”.

(4) After the heading “Exceptions” insert—

“(none) “The subject-matter of the National Minimum Wage Act 1998.””

This new clause would devolve the subject-matter of the National Minimum Wage Act 1998 to the Scottish Parliament.

New clause 21—

“National Insurance: employers’ contributions

‘(1) Section F1 of Schedule 5 to the Scotland Act 1998 is amended as follows.

(2) In the illustrations, omit “National Insurance;”

(3) In the Exceptions, after exception 11 (see section (Benefits relating to children)) insert—

“Exception 12

National Insurance so far as relating to contributions payable by employers.””

This new clause would devolve employers’ National Insurance contributions to the Scottish Parliament.

New clause 22—

“Job search and support

In Part 2 of Schedule 5 to the Scotland Act 1998, omit Section H3 (job search and support).”

This new clause would devolve employment support programmes to the Scottish Parliament.

New clause 23—

“Working age benefits

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 9 (see section 23A above) insert—

“Exception 10

Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) universal credit under Part 1 of the Welfare Reform Act 2012;

(b) jobseeker’s allowance (whether contributions-based or income based) under the Jobseekers Act 1995;

(c) employment and support allowance (whether contributory or income-related) under Part 1 of the Welfare Reform Act 2007;

(d) income support under section 124 of the Social Security and Benefits Act 1992;

(e) housing benefit under section 130 of that Act and

(f) child tax credit and working tax credit under the Tax Credits Act 2002.

The benefits referred to in paragraphs (a) to (f) above are—(a) in the case of income-based jobseeker’s allowance and income-related employment support allowance, those benefits as they existed on 28 April 2013 (the day before their abolition), (b) in the case of the other benefits, those benefits as they existed on 28 May 2015 (the date of introduction into Parliament of the Bill for the Scotland Act 2015.””

This new clause would devolve working age benefits to the Scottish Parliament.

New clause 24—

“Universal credit: powers to vary other elements

‘(1) A function of making regulations to which this section applies, so far as it is exercisable by the Secretary of State in or as regards Scotland, is exercisable by the Scottish Ministers concurrently with the Secretary of State.

(2) This section applies to—

(a) regulations under section 8(3)(a) of the Welfare Reform Act 2012 (amount in respect of earned income) so far relating to the work allowance (that is, the amount of a claimant’s earned income that is to be disregarded in calculating the amounts to be deducted from the maximum amount in accordance with section 8(3) of that Act),

(b) regulations under section 10 of that Act (amount in respect of responsibility for children and young persons),

(c) regulations under section 12 of that Act (amounts in respect of other particular needs or circumstances) so far as relating to—

(i) the needs or circumstances referred to in subsection (2)(c) of that section (caring responsibilities for a severely disabled person), or

(ii) needs or circumstances of a claimant in paid work relating to childcare costs,

(d) regulations under any of sections 14 to 22, 24 and 25 of that Act (work-related requirements), and

(e) regulations under any of sections 26 to 28 of that Act (sanctions).

(3) The Scottish Ministers may not exercise the function of making regulations to which this section applies unless they have consulted the Secretary of State.

(4) The Secretary of State may not exercise the function of making regulations to which this section applies in or as regards Scotland unless he or she has consulted the Scottish Ministers.

(5) Where regulations are made by the Scottish Ministers by virtue of subsection (1)—

(a) section 43 of the Welfare Reform Act 2012 (regulations: procedure) does not apply, and

(b) the regulations are subject to the negative procedure (see Part 2 of the Interpretation and Legislative Reform (Scotland) Act 2010).””

This new clause would give the Scottish Parliament greater flexibility to make changes in Universal Credit.

New clause 25—

“Benefits relating to children

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 10 (see section (Working age benefits) above) insert—

“Exception 11

Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) guardian’s allowance under section 77 of the Social Security Contributions and Benefits Act 1992;

(b) child benefit under Part 9 of that Act.

The benefits referred to in paragraphs (a) and (b) are those benefits as they existed on 28 May 2015 (the date of introduction into Parliament of the Bill for the Scotland Act 2015).””

This new clause would devolve benefits relating to children to the Scottish Parliament.

New clause 26—

“Health and safety

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998 (“the 1998 Act”), omit Section H2 (health and safety).

(2) The Health and Safety Executive is a cross-border public authority for the purposes of the 1998 Act.

(3) The 1998 Act applies in relation to the Health and Safety Executive in the same way as it applies in relation to cross-border public authorities specified in an Order in Council under section 88(5) of the 1998 Act.”

This new clause would devolve health and safety to the Scottish Parliament and designates the Health and Safety Executive as a cross-border public authority.

New clause 27—

“Equal opportunities

“In Part 2 of Schedule 5 to the Scotland Act 1998, omit Section L2 (equal opportunities).”

This new clause would devolve equal opportunities to the Scottish Parliament.

New clause 28—

“Crown property

‘(1) Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

(2) Omit paragraph 2(3)

(3) In paragraph 3(3), omit paragraph (a).

(4) After paragraph 3, insert—

“(3A) Without prejudice to paragraphs 2 and 3, paragraph 1 does not reserve—

(a) removing or altering functions of, or conferring functions on, the Crown Estate Commissioners in relation to the holding or management of property within paragraph 3(1),

(b) where a function of the Crown Estate Commissioners of holding property is so removed, the transfer of any property held in exercise of the function.”

(5) Functions relating to Crown property are, so far as they relate to Crown property in or relating to the Scottish offshore region, to be treated for the purposes of the Scotland Act 1998 as exercisable in or as regards Scotland.

(6) In subsection (5)—

“Crown property” means property within paragraph 3(1) of Part 1 of Schedule 5 to the Scotland Act 1998, “Scottish offshore region” has the same meaning as in the Marine and Coastal Access Act 2009 (see section 322 of that Act)

(7) In section 1(2) of the Civil List Act 1952 (payment of hereditary revenues into the Scottish Consolidated Fund), omit “from bona vacantia, ultimus haeres and treasure trove”.”

This alternative to clause 31 would reduce the complexity of the current arrangements relating to the Crown Estate by removing the reservation relating to the management of the Crown Estate and provides the Scottish Parliament with full legislative competence in relation to the management of the Crown Estate in or as regards Scotland. It would also transfer any functions of the Crown Estate Commissioners in relation to rights to the continental shelf beyond the 200 nautical mile limit adjacent to Scotland.

New clause 29—

“Party political broadcasts

In Section K1 of Part 2 of Schedule 5 to the Scotland Act 1998 (broadcasting), after the reservation insert—

“Exceptions

(a) party political broadcasts in connection with elections that are within the legislative competence of the Parliament, and

(b) referendum campaign broadcasts in connection with referendums held under Acts of the Scottish Parliament.””

New clause 30—

“Broadcasting

Leave out section K1 in Part 2 of Schedule 5 (Broadcasting) to the 1998 Act.”

New clause 31—

“Levies in respect of agriculture, taking wild game, aquaculture and fisheries etc.

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Section A1 is amended as follows.

(2) In the Exceptions, after the exception for devolved taxes insert—

(3) After the Exceptions insert—

“Interpretation

“agriculture” includes horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, and the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds.

“aquaculture” includes the breeding, rearing or cultivation of fish (of any kind), seafood or aquatic organisms.

“related activity” means the production, processing, manufacture, marketing or distribution of—

(a) anything (including any creature alive or dead) produced or taken in the course of agriculture, taking wild game or aquaculture, or caught (by any means) in a fishery,

(b) any product which is derived to any substantial extent from anything so produced or caught.””

This new Clause would give the Scottish Parliament general legislative competence in respect of agricultural, aquacultural and fisheries levies.

New clause 32—

“Rail Services

In Part 2 of Schedule 5 to the Act, in section E2, after “Exceptions” there is inserted—

This amendment would devolve rail services in Scotland giving Scottish Ministers full powers and flexibility to decide who would run such services.

New clause 33—

“Civil Aviation Authority

‘(1) In Section 1 of the Civil Aviation Act 1982, at end insert—

“(4) The Secretary of State must consult the Scottish Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1), and in relation to activities of the Civil Aviation Authority.

(5) In subsection (4), “Scotland” has the same meaning as in the Scotland Act 1998.””

This New Clause would allow a ‘formal consultative role’ for the Scottish Government and the Scottish Parliament in setting the strategic priorities for the Civil Aviation Authority.

New schedule 1—The Joint Committee on Welfare Devolution

Membership

1 The Joint Committee on Welfare Devolution is to comprise the Secretary of State, who is to be the chair of the Committee, and the following other members—

(a) the Scottish Minister who is responsible to the Scottish Parliament for welfare policy and payments, who is to be the deputy chair of the Committee;

(b) the Member of the House of Commons who is for the time being the Chair of the Work and Pensions Select Committee of the House of Commons;

(c) the Member of the Scottish Parliament who is for the time being the Chair of the Welfare Reform Committee of the Scottish Parliament;

(d) two Members of the House of Commons who are not Ministers of the Crown;

(e) two Members of the Scottish Parliament who are not Scottish Ministers; and

(f) two persons representing local government in Scotland.

2 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1(d) are to be appointed to membership of the Committee by the Speaker of the House of Commons.

3 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1 (e) are to be appointed to membership of the Committee by the Presiding Officer of the Scottish Parliament.

4 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1(f) are to be appointed to membership of the Committee by Scottish Ministers after consultation with the Convention of Scottish Local Authorities.

5 In this Schedule, references to the Work and Pensions Select Committee of the House of Commons are—

(a) if the name of that Committee is changed, to be taken (subject to paragraph (b)) to be references to the Committee by its new name;

(b) if the functions of that Committee at the passing of this Act with respect to welfare policy and payments (or functions substantially corresponding thereto) become functions of a different committee of the House of Commons, to be taken to be references to the committee by whom the functions are for the time being exercisable.

6 In this Schedule, references to the Welfare Reform Committee of the Scottish Parliament are—

(a) if the name of that Committee is changed, to be taken (subject to paragraph (b)) to be references to the Committee by its new name;

(b) if the functions of that Committee at the passing of this Act with respect to welfare policy and payments (or functions substantially corresponding thereto) become functions of a different committee of the Scottish Parliament, to be taken to be references to the committee by whom the functions are for the time being exercisable.

Term of office of Committee members

7 A member may resign from the Committee at any time by giving notice to the Secretary of State.

8 A member may be re-appointed (or further re-appointed) to membership of the Committee.

Committee proceedings

9 The Joint Committee on Welfare Reform may determine its own procedure.

10 The validity of any proceedings of the Joint Committee on Welfare Reform is not affected by—

(a) any vacancy among, or

(b) any defect in the appointment of any of, the members of the Committee.

11 The Joint Committee on Welfare Reform may appoint a member of the Committee to act as chair at any meeting of the Committee in the absence of both the Secretary of State and the Scottish Minster who is deputy chair of the Committee.

Advisory Panel

12 The Secretary of State and Scottish Ministers acting jointly may make regulations appointing an advisory panel on the transfer, implementation and operation of the powers devolved to the Scottish Parliament by Part 3 of this Act, comprising academics, representatives of the third sector and voluntary organisations, and other relevant stakeholders.

13 The Joint Committee on Welfare Reform must consult any advisory panel appointed under paragraph 12 of this Schedule.

This new Schedule is linked to New Clause NC3 (Joint Committee on Welfare Reform) and makes provision about membership and proceedings of the Joint Committee, including the appointment of an advisory panel including third sector and academic experts.

Amendment 194, in clause 19, page 21, line 39, leave out from “of” to end of line 7 on page 22 and insert “a disabled person or person with a physical or mental impairment or health condition in respect of effects or needs arising from that disability, impairment or health condition.”

Government amendments 70, 71, 72, 73, 191 and 192

Amendment 21, in clause 21, page 24, leave out lines 13 to 20.

This amendment would allow the Scottish Parliament to legislate for topping up reserved benefits by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 159, in clause 22, page 24, leave out lines 36 to 48.

This amendment would remove some of the restrictions, including those relating to sanctions, in relation to discretionary housing payments.

Government amendments 76.

Amendment 22, in clause 22, page 25, leave out lines 1 to 8.

This amendment would allow the Scottish Parliament to legislate for making discretionary housing payments by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 23, in clause 23, page 25, leave out lines 30 to 37.

This amendment would allow the Scottish Parliament to legislate for making discretionary payments to meet short-term needs by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 161, in clause 23, page 25, line 40, after “individuals”, insert “—

“(a) ”

Amendment 162, in clause 23, page 25, line 45, at end add “, or (b) who are part of a family facing exceptional pressure.”

Amendment 163, in clause 24, page 26, line 20, leave out from “unless” to end of line 25 and insert “they have consulted the Secretary of State”

This amendment would remove the requirement for the Scottish Government to obtain consent from a UK Secretary of State in relation to Universal Credit and the costs of claimants who rent accommodation.

Government amendments 77.

Amendment 24, page 26, line 25, leave out “unreasonably”

This amendment would make it clear that the UK Government cannot withhold agreement and will have a legal obligation to agree to any changes to regulations made by the Scottish Government using the new regulation-making powers conferred under clause 24.

Amendment 32, page 26, line 35, leave out “negative procedure (see section 28” and insert “affirmative procedure (see section 29”

This amendment would require regulations made by Scottish Ministers under subsection (1) of Clause 24 (Universal credit: costs of claimants who rent accommodation) to be subject to the Scottish Parliament’s affirmative procedure.

Amendment 164, in clause 25, page 26, line 45, leave out from “unless” to end of line 5 on page 27 and insert “they have consulted the Secretary of State”.

This amendment would remove the requirement for the Scottish Government to obtain consent from a UK Secretary of State in relation to persons to who, and time when, Universal Credit is paid.

Government amendments 78.

Amendment 25,  page 27, line 5, leave out “unreasonably”.

This amendment would make it clear that the UK Government cannot withhold agreement and will have a legal obligation to agree to any changes to regulations made by the Scottish Government using the new regulation-making powers conferred under clause 25.

Amendment 33,  page 27, line 13, leave out “negative procedure (see section 28” and insert “affirmative procedure (see section 29”.

This amendment would require regulations made by Scottish Ministers under subsection (1) of Clause 25 (Universal credit: person to whom, and time when, paid) to be subject to the Scottish Parliament’s affirmative procedure.

Amendment 165, in clause 26, page 27, line 22, leave out from beginning to “for” in line 23 and insert “Arrangements”.

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes.

Amendment 166, page 27, leave out lines 27 to 29 and insert—“assisting persons (including persons claiming reserved benefits) who are unemployed or at risk of long-term unemployment to select, obtain and retain employment;”

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes

Amendment 167, page 27, line 34, leave out “another person” and insert “a person other than the person making the arrangements”.

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes.

Government amendments 79, 80, 82, 193 and 83.

Amendment 168, page 30, line 30, leave out Clause 31.

Amendment 11, in clause 31, page 30, line 34, leave out “may” and insert “must following agreement with the Scottish Government”.

Government amendments 84 to 89.

Amendment 12,  page 32, line 25, leave out “C” and insert “A”.

Amendment 13,  page 32, line 31, leave out “then, instead of the type C procedure”.

Amendment 14, page 32, line 31, leave out “I” and insert “A”.

Government amendments 90 to 96.

Amendment 169, in clause 32, page 33, line 44, leave out subsection (2).

This amendment delivers a more explicit reference to the devolution of competence over gender quotas in respect of public bodies in Scotland but ensures that it is “not limited to” gender quotas, as agreed in the Smith Commission report.

Amendment 225,  page 34, line 2, leave out subsection (3) and insert—

‘(3) Under the heading “Exceptions”, at end insert—

(none) Equal opportunities in relation to the Scottish functions of any Scottish public authority or cross-border public authority including appointments to the board of any Scottish public authority. The provision falling within this exception includes provision that reproduces or applies an enactment contained in the Equality Act 2006 or the Equality Act 2010, with or without modification, without affecting the enactment as it applies for the purposes of those Acts. It does not include any modification of those Acts, other than modifications of the types specified in paragraphs (a) to (d)

(a) provision that supplements or is otherwise additional to provision made by those Acts, and which may enhance but may not diminish the protection and promotion of equal opportunities afforded by the provision made by those Acts;

(b) in particular, provision imposing a requirement to take action that the Acts do not prohibit;

(c) provision that extends application of the existing powers and duties of, or grants additional powers to, the Commission for Equality and Human Rights in respect of provisions made under any part of subsection (3)

(d) provision that requires the Commission for Equality and Human Rights to attend the proceedings of the Scottish Parliament for the purposes of giving evidence and to send each annual report of the Commission to the Scottish Ministers and that requires the Scottish Ministers to lay each annual report received before the Scottish Parliament.”

This amendment makes provision for the Scottish Parliament to have legislative competence in respect of the public sector equality duty, and in respect of equality of opportunity in relation to the functions of Scottish and cross-border public authorities, including appointments to public boards. It clarifies that the Scottish Parliament’s power to make modifications to the Equality Acts 2006 and 2010 is limited to making provision that enhances the protection and promotion of equal opportunities. The amendment makes provision for the powers of the Equality and Human Rights Commission to be applied in relation to any modifications to the Acts. It also enables provision to be made to increase the accountability of the Equality and Human Rights Commission to the Scottish Parliament.

Government amendments 97 and 98.

Amendment 171, in clause 32, page 34, line 4, at end insert—

“Equal opportunities in relation to an appointment as a member of a Scottish public authority.”

Government amendments 100 and 99.

Amendment 26,  page 34, line 13, at end insert “including the imposition of minimum quotas for women and other persons with protected characteristics across all levels of public and political representation in Scotland.”

This Amendment is intended to make explicit that, among the exceptions to reserved matters on equal opportunities, the power is being devolved to the Scottish Parliament to set gender quotas.

Amendment 157,  page 34, line 16, at end insert—

“(d) equal opportunity provisions in relation to candidates at an election for membership of the Scottish Parliament and a local government election in Scotland.”

This would allow the necessary competence for gender quotas in relation to the Scottish Parliament and local government to be transferred to the Scottish Parliament.

Government amendment 101.

Amendment 172,  page 34, line 18, leave out “the Equality Act 2010 and Part 1 of that Act” and insert “and the Equality Act 2010”.

Government amendment 102.

Amendment 173, in clause 32, page 34, line 25, leave out subsection (6) and insert—

‘( ) In section 2 (power to amend section1)—

(a) in subsection (7), omit “the Scottish Ministers or”,

(b) in subsection (10), before “Ministers” insert “Welsh””

Government amendment 103.

Amendment 174,  page 34, line 37, leave out subsection (9) and insert—

‘( ) In section 216 (commencement) at the beginning of subsection (3) insert “Subject to subsection (4),” and after that subsection insert—

(4) Part 1 comes into force on such day as the Scottish Ministers may by order appoint so far as it—

(a) confers a power on the Scottish Ministers

(b) relates to a public authority in respect of which such a power is exercisable.

(5) The following do not apply to an order under subsection (4)—

(a) section 207(2) (see instead section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010: powers exercisable by Scottish statutory instrument), and

(b) section 210.””

Government amendment 104.

Amendment 175, page 35, line 2, leave out subsection (10).

Government amendment 105.

Amendment 15,  page 35, leave out lines 18 and 19.

Amendment 16,  page 35, leave out lines 24 and 25.

Amendment 176, page 35, leave out lines 26 to 30 and insert—

‘(nonenone) “This Schedule does not reserve the transfer of all the functions of a tribunal referred to in sub-paragraph (2) to a Scottish tribunal, so far as the functions are exercisable in relation to Scottish cases or a specified category of Scottish cases, in accordance with provision made by Her Majesty by Order in Council.”

This amendment would ensure that all functions exercisable in relation to Scottish cases or a specified category of Scottish cases should transfer to the Scottish Parliament.

Amendment 17,  page 35, leave out lines 26 to 30.

Amendment 177, page 35, leave out from beginning of line 31 to end of line 7 on page 36.

Amendment 178, page 36, line 22, at end insert—

‘( ) For the avoidance of doubt, this Schedule does not reserve—

(a) a Scottish tribunal’s practice and procedure when exercising functions that have been transferred to it by virtue of this paragraph, or

(b) the fees and expenses chargeable for, or in connection with, proceedings before a Scottish tribunal when it is exercising those functions.”

This amendment makes clear that competence over a tribunal’s practice, rules of procedure and fees in relation to transferred cases becomes devolved, as per the Smith Commission recommendation.

Amendment 179, in clause 34, page 37, line 28, leave out from “relating” to “to” in line 29.

This amendment would remove a restriction on the full devolution of speed limits in relation to emergency vehicles.

Amendment 180, in clause 36, page 41, line 15, leave out paragraph (a) and insert—

“(a) in relation to vehicles used on roads in Scotland, means the Scottish Ministers.”

Amendment 181, page 41, line 19, at end insert—

‘(18) In section 130 (application of Act to Crown)—

(a) in subsection (3) for “Secretary of State” substitute “relevant authority”, and

(b) after that subsection insert—

(3A) In subsection (3) “relevant authority”—

(a) in relation to vehicles used on roads in Scotland, means the Scottish Ministers,

(b) otherwise, means the Secretary of State.”

This amendment would amend section 130(3) of the Road Traffic Regulation Act 1984 so that Scottish Ministers are added into the provision as the relevant “national authority”.

Government amendments 106 to 128.

Amendment 182, in clause 45, page 47, leave out lines 4 to 8, and insert—

“The number of relevant gaming machines authorised (if any) in respect of premises licences under the Gambling Act 2005.

A “relevant gaming machine” is a gaming machine (within the meaning of section 235 of the Gambling Act 2005) for which the maximum charge for use is more than £10.”

This amendment replaces the reference to betting premises with a more general reference to gambling premises, giving full effect to Smith Commission recommendation 74.

Amendment 18, page 47, line 7 , leave out “for which the maximum charge for use is more than £10”.

Amendment 1, page 47, line 7, leave out “£10” and insert “£2”.

Amendment 183, page 47, leave out lines 13 to 20 and insert—

“(a) the Scottish Ministers in respect of premises in Scotland in so far as the order varies the number of gaming machines authorised (if any) for which the maximum charge for use is more than £10, or

(b) otherwise, the Secretary of State.”

This amendment replaces the reference to betting premises with a more general reference to gambling premises, giving full effect to Smith Commission recommendation 74.

Amendment 19, page 47, line 17, leave out “for which the maximum charge for use is more than £10”.

Amendment 2, page 47, line 18, leave out “£10” and insert “£2”.

Amendment 3, page 47, line 18, after “£10”, insert—

‘( ) the content and the speed of play,”

Amendment 4,  page 47, line 18, after “£10”, insert—

‘( ) the number of staff required to supervise such machines,”

Amendment 20,  page 47, line 35, leave out subsection (6).

Government amendments 137 to 139.

Amendment 184, in clause 50, page 49, leave out from line 32 to line 50 on page 50 and insert—

‘(4) The Scottish Ministers may not make regulations under section 9 unless they have consulted the Secretary of State about the proposed regulations.

(5) Subsection (1) does not prevent the Secretary of State making a support scheme in relation to Scotland under section 9, or varying or revoking regulations made by the Scottish Ministers under that section with the agreement of the Scottish Ministers.”

Government amendments 140 to 143.

Amendment 185, in clause 51, page 52, line 9, leave out from beginning to end of line 6 on page 53 and insert—

‘(4) The power of the Scottish Ministers under section 33BC does not include power to make provision in relation to the subject matter of sections 88 to 90 of the Energy Act 2008 (smart meters).

(5) The Scottish Ministers may not make an order under section 33BC unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 33BC is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 144 to 147.

Amendment 186,  page 53, line 48, leave out from beginning to end of line 40 on page 54 and insert—

‘(5) The Scottish Ministers may not make an order under section 33BD unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 33BD is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 148 to 150.

Amendment 187,  page 55, line 30, leave out from beginning to end of line 24 on page 56 and insert—

“(5) The Scottish Ministers may not make an order under section 41A unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41A is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 151 to 153

Amendment 188,  page 57, line 17, leave out from beginning to line 9 on page 58 and insert—

“(5) The Scottish Ministers may not make an order under section 41B unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41B is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendment 154.

Amendment 189, in clause 53, page 60, leave out lines 9 to 17.

This amendment removes restrictions on the consultation process with the Scottish Government and Scottish Parliament in relation to renewables incentive schemes.

Amendment 190, in clause 55, page 63, line 17, at end insert—

“() the Scottish Ministers,”.

Clause 55 as currently drafted would allow Scottish Ministers to make a reference to the Competition and Markets Authority only in the most exceptional circumstances. This amendment would enable Scottish Ministers to make a reference without the involvement of the Secretary of State.

Government amendments 129 and 133 to 136.

[David Mundell]

Let me begin by dealing with the specific issue of welfare funds, on which I am accepting an amendment that the SNP tabled in Committee. The Smith commission agreement stated that the devolution of welfare foods should be the subject of further discussion between the UK and Scottish Governments. This has taken place, and I am pleased that new clause 14 and consequential amendments 79, 80, 82 and 83 devolve powers to the Scottish Parliament concerning welfare foods. They will be able to abolish or amend existing schemes, which includes the nursery milk scheme and health start scheme, or make new schemes for the provision of welfare foods.

On welfare more generally, the Government are proposing a number of changes to the welfare clauses, responding to a number of comments made by Members of this House in Committee, as well as the Scottish Parliament and other stakeholders. As a result, it will be beyond doubt that the Scotland Bill fully delivers on the Smith commission agreement and that the Scottish Parliament will have significant responsibilities for areas of welfare. I was pleased to see these changes receiving a full endorsement from Gordon Brown, from the Scottish media, and indeed from all objective observers. The Scottish Government are getting responsibility for disability and carer’s benefits that were worth £2.7 billion in Scotland last year, and they will be able to deliver new benefits in all areas of devolved responsibility if they wish. Amendments 70 and 71 to clause 19 ensure that the Scottish Parliament can, if it wishes, legislate for the payment of a carer’s benefit to a person who is under 16, is in full-time education or is gainfully employed. The Scottish Government will be able to pay anyone on a reserved benefit a top-up payment. That includes being able to top up benefits such as tax credits, child benefit and universal credit.

[Ian Murray]

For the sake of clarity, will the Secretary of State say whether the Scotland Bill, as drafted this evening, will allow the Scottish Parliament to top up tax credits?

[David Mundell]

I have said it on numerous occasions and I am very happy to say it again: the Scotland Bill, as it progresses through the House this evening, will allow the Scottish Parliament to top up tax credits, and indeed child benefit and elements of universal credit. The Scottish Government will be able to pay shorter-term payments to help anyone, regardless of whether or not they are entitled to a reserved benefit, who has an immediate need for them and whose wellbeing is at risk.

I have proposed important changes to the Bill so that the Scottish Parliament can create its own new benefits in any area of devolved responsibility. That will be achieved by new clause 34 and amendments 191 to 193. The Scottish Parliament will be able to do this without any need to consult the UK Government. This power is significant: the Scottish Parliament will no longer be able to say that it is constrained by Westminster in deciding what it does, and it will be able to choose what additional benefits to offer people in Scotland.

I must, however, make very clear a few important points about the new power that the Scottish Parliament will get to create new benefits in devolved areas. Any new benefits that the Scottish Government want to deliver will be in parallel to the benefits that are delivered by the UK Government. The new power does not affect Westminster’s ability to legislate for and to deliver support, and it does not enable the Scottish Parliament to change or amend reserved Westminster legislation in any way. The Scottish Parliament will need to both fund and deliver any new benefits from Scottish funds.

The House will be aware that we have also delivered on other areas of Smith in full. Scottish Ministers will be able to make regulations for certain elements of universal credit, such as the frequency of payments and to whom they are paid.

[Ms Ahmed-Sheikh]

For clarity on the tax credit cuts, what provision is there for those who will lose their tax credits completely, as a result of this Tory Government’s cutting agenda, in the Scotland Bill?

[David Mundell]

I do not know whether the hon. Lady is familiar with the income tax provisions in the Bill, but the Scottish Parliament will have complete control over income tax in Scotland. If it is concerned that people in work are not receiving sufficient income, it will be able to adjust those tax rates. The hon. Lady knows that tax credits are not being devolved, but she also knows that they can be topped up. She and her party have been particularly unwilling to say whether or not they propose to top up those benefits.

[Several hon. Members rose—]

[David Mundell]

No, I will not give way.

SNP Members will have a whole range of benefits, but rather than put any thought into how to evolve a welfare system in Scotland, they are taking the usual SNP position—focus, focus, focus on what we cannot do, rather than telling anybody in Scotland what we can do.

[Ms Ahmed-Sheikh]

Will the Secretary of State give way?

[David Mundell]

No. I have dealt with that issue.

There was much debate in Committee on the universal credit powers. There were many inaccurate accusations that the UK Government would have a power to veto decisions of the Scottish Government. To put this beyond reasonable doubt, I have tabled amendments to clauses 24 and 25 to make it clear that there is no UK veto over decisions that the Scottish Government make in this space. Amendments 77 and 78 will strengthen the drafting of those provisions. The Secretary of State for Work and Pensions will remain legally responsible for the delivery of universal credit, but both Governments will need to work collaboratively to consider any such changes to the elements of universal credit. That is at the heart of clauses 24 and 25, and I know that our officials have already had very constructive discussions with the Scottish Government on this subject. To ensure that the record is crystal clear, let me say that there are no UK Government vetoes anywhere in these welfare and employment clauses.

I would like to emphasise that we have listened to the Scottish Government and to the debate in the House. For example, amendment 72, which enables the Scottish Government to provide non-financial assistance for maternity, funeral and heating expenses, reflects an amendment the SNP tabled in Committee. After full consideration, the Government are happy to make this change. Amendments 73, 76, 191 and 192 also relate to that provision.

All in all, this settlement fully reflects the agreement reached by the Smith commission. It ensures that the areas that the agreement said should remain reserved—pensions, universal credit, sanctions and conditionality, and employment support delivered by Jobcentre Plus—remain the responsibility of the UK Government, but, importantly, it gives the Scottish Parliament full responsibility for many areas of welfare. The Scottish Parliament will have the autonomy to legislate for large areas of welfare, and I look forward to the beginning of the debate on how it intends to use those powers.

The Smith commission agreement also recommended the devolution of abortion legislation, given that the parties to the agreement were strongly of the view that the anomalous reservation needed to be corrected. As I announced last month, UK and Scottish Ministers and officials have held discussions on the matter and reflected very carefully about the practicalities of devolution in this area.

[Ian Murray]

I am grateful to the Secretary of State for accepting a lot of the Labour amendments, and indeed some SNP amendments tabled in Committee. He said quite clearly in Committee back in July that he would not devolve abortion without a proper process and full consultation and discussion with Scottish women’s groups. What has made him change his mind?

[David Mundell]

I do not think that that is an accurate reflection of what I said. I made it very clear that the Smith commission had recommended the devolution of abortion and that we were engaged in a discussion with the Scottish Government. We have of course engaged with women’s groups in Scotland. The groups to whom I have spoken are clear that abortion can be devolved.

[Melanie Onn (Great Grimsby) (Lab)]

Will the Secretary of State give way?

[David Mundell]

Not just at the moment, if the hon. Lady will let me finish.

Those groups are clear that the Scottish Parliament has the capacity to deal with the issue of abortion, but they want its devolution to be handled sensitively. I think that we are in the process of doing that. The First Minister of Scotland has made it very clear that she has no plans to change the existing arrangements in relation to abortion. The hon. Member for Edinburgh South (Ian Murray) will know that devolving abortion to the Scottish Parliament will not simply lead to a change in the law in Scotland; that will happen only if the Scottish Parliament makes such a decision.

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

The Secretary of State will know that it is not in the gift of any one Minister to make such a decision. He is actually proposing a very substantial change to the framework of abortion legislation. In fact, he has done no proper, substantial consultation. We will have just a few minutes in the House to discuss something that is so substantial and such a big change to the Abortion Act 1967. Does he really think that a few minutes’ discussion now, and the limited conversations between Scotland Office and Scottish Government officials, is the right way to do this?

[David Mundell]

My starting point is that I believe that the Scottish Parliament has the capacity to deal with this issue. It is in danger of verging on the patronising to suggest that the Scottish Parliament is not capable of dealing with it. Even though it is an issue of great importance and conscience, I am satisfied that the Scottish Parliament has the capacity to deal with it.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Does the Minister agree that it is extraordinary that, despite all three main parties in Scotland being led by women and the Scottish Parliament having brought in some of the most progressive legislation on equal marriage in the world, the Labour party apparently still feels that Scotland’s people need male-dominated Westminster to protect women’s rights?

[David Mundell]

I do not totally agree with that analysis, either. However, I am strongly of the view that there is no constitutional reason not to devolve abortion. The Scottish Parliament has responsibility for most aspects of the NHS and the criminal justice system.

[Yvette Cooper]

Does the Secretary of State not realise that he is setting up two different systems, one for Scotland and one for England and Wales, when we know from other parts of the world that that leads to women having to travel for abortions at a vulnerable time? That issue of principle—deciding whether it is right for people to have to travel—is important. I hope that many of our Scottish colleagues will agree with us about the importance of the 1967 Act. I know that there is strong agreement from the First Minister. However, there is an issue of principle in whether we think it is right to increase the likelihood of women having to travel at a vulnerable time. Does he think it is right to do that without proper consultation with women across not just Scotland, but England—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Lady is hoping to catch my eye. I want to hear her speech then, rather than now. Shorter interventions would be very helpful.

20:30

[David Mundell]

I do not think that there is any evidence to suggest that what the right hon. Lady describes will be the case. There is considerable evidence that, over the past 16 years, the Scottish Parliament has dealt with sensitive matters in an appropriate way.

[Jess Phillips (Birmingham, Yardley) (Lab)]

My understanding is that this matter was not originally in the devolution plans, but was added after it was raised with a number of Members of the House who are pro-life. Will the Minister please allay my fears?

[David Mundell]

I can confirm that that is absolutely not the case. The Smith commission report makes it clear that devolution of abortion law should take place and that the reservation in the 1998 Act was anomalous in comparison with the health and criminal justice devolution that took place. The commission recognised, and I recognise, that this is a matter that must be dealt with sensitively. That is why there have been discussions with the Scottish Government, why the First Minister of Scotland has made her position on the issue clear and why Scotland’s Health Minister will meet shortly with women’s groups and interested parties in Scotland as the devolution of abortion progresses.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

As was made clear in Committee, the Scottish Government have made it clear in no uncertain terms that there are no planned changes to the legislation. On that basis, does the Secretary of State agree that Labour Members undermine their colleagues in the Scottish Parliament by intimating that they cannot legislate on their own matters?

[David Mundell]

I am sure that the hon. Lady and other Members will have heard me say that I am absolutely satisfied that the Scottish Parliament has the capacity to deal with this issue. Although tonight and on other occasions there have been significant differences between us on what should and should not be devolved to the Scottish Parliament, the basis of my arguments has never been a belief that the Scottish Parliament is not capable of dealing with particular sensitive or difficult issues; it is just that I feel that the balance of responsibilities in the devolution settlement is better served in a different way. I genuinely believe that the balance of the devolution settlement is best served by abortion being devolved, which is consistent with the health and criminal justice devolution in the wider settlement.

[Melanie Onn]

The Smith commission did not say that abortion should be devolved now, but that a procedure should be put in place in order that it could be considered. Before we make this decision tonight, will the Secretary of State explain what procedure has been put in place and what consultation there has been?

[David Mundell]

If the hon. Lady looks at the Smith commission report, she will see that it does not say that the devolution of abortion law is in question or should be consulted on. What is to be consulted on is the process of that devolution, and it will be. The UK Government are committed to that approach and I have assured women’s groups in Scotland that I am committed to it. I know that the Scottish Government are committed to that approach, too. The First Minister could not have made her position clearer.

This issue is about the constitutional balance between the United Kingdom and Scotland, and about where this decision is most appropriately taken. The Smith commission came to the clear conclusion that it appropriately lay with the Scottish Parliament. This measure is being taken forward in a measured way. It is almost a year since the Smith commission reported. There will be no change to the legal position on abortion in Scotland simply by this act of devolution.

[Mark Menzies (Fylde) (Con)]

I agree with the Secretary of State that it is right that we trust the Scottish Parliament on this important issue. It has shown itself to be progressive on issues such as same-sex marriage and has important legislative powers on health and the judicial system, so I urge him to carry on with this measure and ensure that the Scottish Parliament is given the accountability it needs.

[David Mundell]

I think I have made it clear that simply devolving the power does not mean that there will be a change to the position under the 1967 Act. I am sure we will hear views on that, and we will of course listen to them.

[Stephen Kinnock (Aberavon) (Lab)]

Does the Secretary of State agree that a woman’s right to choose should be universal?

[David Mundell]

That is not the nature of this debate. We are debating whether the Scottish Parliament should have responsibility on this issue, and I believe that it has the capacity to make decisions in an informed way. It is becoming offensive to suggest otherwise. When we debate other responsibilities for the Scottish Parliament, we do not do so based on its capacity or the idea that it might fall under undue influence and make the wrong decision.

I think I have made the position clear, but I restate that we will continue to work closely with women’s groups and other interested parties to ensure that the devolution of abortion law is as smooth as possible. As I have repeatedly said, there will be no change simply because of devolution, because the Scottish Government and the First Minister have stated that they do not intend to change the existing provisions.

[Several hon. Members rose—]

[David Mundell]

I am afraid I am going to move on to discuss the Crown Estate, another important issue that has been much debated in the context of devolution. Clause 31 allows for the Crown Estate’s Scottish assets to be managed by the Scottish Government, and states that they should receive the revenue from the management of those assets.

[Alan Brown]

Clause 31(1) actually begins, “The Treasury may make”, which is hardly a ringing endorsement of the commitment to devolve that matter. It may as well say, “Maybe aye, maybe no.”

[David Mundell]

Obviously I do not accept that analysis. The Crown Estate transfer scheme and the memorandum between both Governments have been published and are in the House Library, and copies are available in the Vote Office. I see that the Scottish Government have already come back with their comments on the proposals. The clause clearly means that the Scottish Parliament will have the competence to legislate for the management of the Scottish assets, and to further devolve powers to local authorities and communities should it wish. I hope that, in accordance with the provisions that Lord Smith set out in the agreement, it will do so.

The clause also provides for the protections envisaged by the Smith commission to ensure that the transfer is not detrimental to defence or other UK-wide critical national infrastructure. Amendments 84 to 95 strengthen the delivery of the Smith commission recommendation and the drafting of the clause. They make clear the policy intent of the clause, including the protection to be included in the transfer scheme relating to electricity charges and the obligation to maintain an estate in land, with the proceeds from any disposal having to be reinvested in the estate.

I have also tabled a number of amendments on equal opportunities. Having engaged with stakeholders and the Scottish Government on the equal opportunities provisions and having reflected on the debates in Committee, we have responded to representations that have been made on how clause 32 might be made clearer. New clause 16 and the consequential amendments 102 to 104 and 97 confirm that Scottish Ministers may, by order, commence and implement part 1 of the Equality Act 2010 in Scotland. That provides for the devolution of socioeconomic rights to the Scottish Parliament.

Amendments 96 and 98 to 101 to clause 32 similarly represent a revised and improved drafting approach. They strengthen the clause on appointments to the boards of public bodies that exercise devolved functions in Scotland, and they make clear that the Scottish Parliament could legislate to introduce protections, requirements and positive measures—including gender quotas—for such appointments to boards of public sector bodies. Amendment 105 to clause 33 is intended to make the purpose, effect and operation of the tribunals provision clearer. It removes ambiguity from the drafting, and more clearly sets out the mechanism by which the management and operation of reserved tribunals will be devolved to the Scottish Parliament.

New clause 17 and consequential amendments 134 and 135 will allow the UK Government to change primary and secondary legislation so that fines, forfeitures and fixed penalties imposed by courts and tribunals in Scotland are required to be paid to the Scottish consolidated fund, and therefore retained by the Scottish Government. That delivers the Smith commission agreement.

The Bill devolves to the Scottish Parliament legislative and Executive competence relating to national speed limits and traffic signs in Scotland. Minor and technical amendments 106 and 136 are required to correct the drafting in clause 37 and schedule 2, and do not impact on powers devolved in that area. Amendment 107 to clause 37 ensures that the Scottish Government are able to use the Traffic Signs Regulations and General Directions 2016 once they come into effect.

The Smith commission agreed that the licensing of onshore oil and gas licences in Scotland should be devolved to the Scottish Parliament. Amendments 111 to 113 and 108 improve the intended functioning of the oil and gas clauses that are to bring about a transfer of legislative competence. Amendment 109 ensures that the competence of the Scottish Parliament over given licences in the Scottish onshore area is not affected by geological processes on the coastline. Amendment 110 clarifies the extent of petroleum access powers that are being devolved in relation to land access for the purposes of searching and boring for petroleum under a licence. Amendment 114 allows existing cross-border licences to be split so that Scottish Ministers are granted administration of all licensed acreage in the Scottish onshore area.

Clause 43 devolves power to the Scottish Parliament over the provision of consumer advocacy and advice in Scotland. Amendments 115 to 128 correct minor and technical errors in the clause and clarify the drafting of the provision that relates to the levy on gas and electricity companies and the postal sector, to fund relevant consumer advocacy. That levy will continue to be raised across the UK, and funds will continue to be apportioned to Scotland.

Amendments 137 to 142 to clause 50 will enable Scottish Ministers to design and implement schemes for reducing fuel poverty in Scotland by imposing obligations on energy providers. The amendments transfer an additional power to Scottish Ministers so that they can set out in regulations the rules for determining the value of any benefit provided under a Scottish fuel poverty scheme, and set different benefit amounts for different categories of eligible consumers. The amendments also remove duplicate requirements on Scottish Ministers, and clarify that the Secretary of State can continue to exercise powers that are not transferred to Scottish Minsters.

Amendments 143 to 154 to clause 51 take into account the debate in Committee. They seek to ensure that costs are clear and equitable, by placing a duty on Scottish Ministers to design the Scottish energy company obligation in a way that should keep the costs of the obligations in Scotland within the share of any carbon emission reduction or home-heating cost reduction target apportioned to Scotland. Technical amendments 129 and 133 are needed to ensure that the member appointed to the Ofcom board by Scottish Ministers has the same functions and responsibilities as other board members.

In conclusion, I am confident that the amendments I am proposing will be seen by objective observers as positive drafting changes that will strengthen the provisions and make clear that the Bill fully delivers the Smith commission agreement in words and in spirit.

20:45

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

I rise to speak to the amendments tabled by my hon. Friends and I, and I am just sorry that we do not have more time to debate them more fully this evening. Like the Secretary of State, I have a sense of déjà vu, because many of the amendments tabled today are very similar to those we debated in Committee. So far, the Government have accepted only one Opposition amendment to the Bill, but we have at last seen Government amendments being tabled in the last few days that will take us a wee bit closer to what was originally pledged.

I welcome the Government’s tacit admission that the Bill as it stood failed to meet the letter or the spirit of the Smith recommendations. I welcome many of the belated amendments, including the lead new clause and the amendment on abortion that we debated earlier, because they address some of the Bill’s most obvious shortcomings. However, the SNP’s amendments in this group—there are more than quite a few of them—seek to equip the Scottish Parliament with the powers it needs to build a fairer society, strengthen employment prospects, improve governance and create a better future for our people.

No issue encapsulates why we need home rule better than that of tax credits. That is why we have tabled new clause 18, which would amend schedule 5 to the Scotland Act 1998 to devolve to the Scottish Parliament the power to make provision for child tax credit and working tax credit—

[Melanie Onn]

Will the hon. Lady give way?

[Dr Whiteford]

Perhaps a bit later.

I intend to test the will of the House on the new clause later. More than any other in recent times, the issue of tax credits highlights the contrast between a UK Government who are willing to put low-income families with children on the frontline in their ideological war of austerity and a Scottish Government determined to tackle inequality and to give those children a decent start in life.

[John Stevenson (Carlisle) (Con)]

If the SNP ever had control of tax credits, would it increase income tax to pay for them?

[Dr Whiteford]

I am glad that the hon. Gentleman has asked that question so early. Had he been listening to events in the Scottish Parliament last week he would know that Nicola Sturgeon has made clear commitments to mitigate the impact—

[Ian Murray]

Will the hon. Lady give way?

[Dr Whiteford]

Let me answer this question.

Nicola Sturgeon has made a clear commitment to mitigate the impact of the tax credit changes, but—like the Prime Minister—she is in the dark about the exact proposals. George seems to be still writing them on the back of an envelope. We are clear that it will not be possible to quantify them for two and a half weeks yet.

[Wes Streeting (Ilford North) (Lab)]

rose—

[Melanie Onn]

rose—

[Christian Matheson]

rose—

[Dr Whiteford]

I will not give way at the moment as I want to make some progress, but I will come back to this and take more interventions.

The changes announced by the Chancellor have the power to cut the incomes of 4.5 million families across the UK. The SNP has been resolute and consistent in its opposition to those cuts. I wish the same could be said of other parties in this House.

[Melanie Onn]

I thank the hon. Lady for her sorority in giving way. The Scottish Government have accepted that the Bill gives them the power to restore the money lost from the Tories’ tax credit cuts. Will she commit the Scottish Government to restoring in full the money lost from tax credit cuts?

[Dr Whiteford]

The hon. Lady really needs to stop reading her briefing sheet and listen to the debate. It is simply wrong to ask those in the lowest paid jobs, bringing up their children on very tight budgets, to pay the lion’s share of the price for the economic failures of successive UK Governments.

As the UK Government’s tax credit proposals stand, 250,000 working households in Scotland will lose on average £1,500 a year each from April. In the longer term, once all the tax credit changes have been fully implemented—including the restrictions under the two-child policy—many of those families will lose up to £3,000 a year each. That is not pocket money: it represents an enormous proportion of household income and will cause real deprivation and hardship.

[Ian Murray]

I am delighted that the hon. Lady has given way, but she did not quite answer the question put to her by my hon. Friend the Member for Great Grimsby (Melanie Onn). Is the hon. Lady committing tonight to restore all the losses from the pernicious tax credit cuts by this Tory Government? Her party voted against that in the Scottish Parliament last week.

[Dr Whiteford]

I really wish that the shadow Secretary of State had voted against the tax credit proposals when they came before this House on 20 July, because that would have killed them dead. Labour Members did not, however, and that is why we are back where we are. Nicola Sturgeon has made it crystal clear that she intends to bring forward costed, credible plans once the autumn statement has been made.

For low-paid working families, tax credits are an essential source of income. They put food on the table and shoes on the feet of children. They heat homes during winter. By the end of this Parliament, the Government’s proposed tax credit cuts would take £3.2 billion out of the Scottish economy from the pockets of the poorest families. That will undermine economic recovery. The austerity measures already enacted are set to push 100,000 more children in Scotland into poverty by 2020. Under the tax credit measures, 350,000 Scottish youngsters are set to lose out further. No wonder the Tories have abandoned any attempt at measuring child poverty.

There is a broad consensus in Scotland that cutting tax credits is the wrong thing to do. Even the leader of the Tory party in Scotland has called for a rethink and said that it is wrong for low-paid workers to lose out. It is recognised that the proposals will disincentivise work, hit children who are already disadvantaged and punish those in lower paid jobs.

The House of Lords put a proper spanner in the works of the proposals the other week, when it forced the Government back to the drawing board on their tax credit plans. Like millions of families across the UK who are facing uncertainty, we are all in a degree of limbo at the moment. We will have to wait until the autumn statement to learn what the Government intend to bring forward to make their plans more palatable to their own Back Benchers, who seem rather thin on the ground tonight.

We in the SNP have been very consistent in our opposition to tax credit changes. We have made the case at every single opportunity for alternatives to regressive austerity cuts. We will continue to fight tax credits tooth and nail in this House to force the Government into a climbdown. I hope we can rely on the support of other Opposition parties to stand firm, too. Labour abstained on 20 July, when we debated the general principles of the Welfare Reform and Work Bill that ushered in these proposals. The Government’s new clause 34, tabled last Wednesday, represents some progress. I am grateful for that, because it acknowledges that there was a veto and it manages to deal with that to some extent. New clause 34 would partially mitigate the impact of the tax credit cuts, but our new clause 18 is much stronger. It would fully devolve control of our tax credits to the Scottish Parliament, including eligibility thresholds and tapers. Government new clause 34 will give the Scottish Parliament the power to top up benefits. That is fine as far as it goes, but it will be no help whatever to those people who have lost their tax credits entirely as a consequence of the changes. If someone is not in receipt of a benefit, it cannot be topped up.

[Patrick Grady]

Is my hon. Friend aware that in Committee the Secretary of State for Work and Pensions refused to give a guarantee that, if the Scottish Government did top up benefits, especially tax credits, that money would not be taken away as if it was extra earned income?

[Dr Whiteford]

My hon. Friend makes a critical point. We have not had clarity from the Government that they will not means-test the top-ups. I am looking forward to clarification from the Secretary of State for Scotland tonight. [Interruption.] I am glad he is nodding and confirming that that is the case.

About 80,000 families in Scotland are going to lose entitlement altogether under the existing proposals. That is roughly the same number as were affected by the bedroom tax in Scotland. The Scottish Parliament may have the power to create a new benefit, but that seems an inordinately complex way to go about things. It is theoretically possible but, like the bedroom tax mitigation, the money would have to be found from other devolved budgets. It would be an admission from the Government that their proposals have not worked.

As I have said, Nicola Sturgeon has made it absolutely clear that she will bring forward proposals. Labour Members need to be clear tonight: will they back our new clause 18? Will they once again cosy up with the Tories, or will they sit on their hands in the face of crushing austerity cuts coming down the line?

[Several hon. Members rose—]

[Dr Whiteford]

I am very conscious of time and I need to move on.

The bottom line is that we would rather not be at the mercy of the UK Government. I would rather that we had the powers in Scotland not simply to mitigate the worst side effects of Tory policies, but to develop better alternatives.

With the very limited welfare powers in the Bill, the Scottish Government have already made a range of commitments about how they will use them and develop ways forward. They have committed to ensuring that carer’s allowance matches jobseeker’s allowance; to abolishing the bedroom tax; to replacing the Work programme, which is just not working; and to using the flexibilities in universal credit to offer people more choice about how they manage the money, and they have consulted more than 70 stakeholders about how the new powers can best be used in the interests of our people.

Our new clause 19 would devolve control over employment rights and industrial relations, including trade union law—another area where the Bill falls far short of the Smith commission recommendations. Once again, the new clause is extremely topical, given that tomorrow we will conclude our consideration of the Trade Union Bill. Last week, I met trade union members from my constituency who left me in no doubt about the harm the Bill could do to industrial relations in Scotland and throughout the UK. By contrast, the new clause would allow the Scottish Government to take a different approach and maintain the benefits of the largely stable and constructive relations we have in Scotland.

[Chris Stephens]

Will my hon. Friend confirm that Scotland’s workers’ parliament, the STUC general council, supports the devolution of employment law and industrial relations? One reason for that is so that we can do more work with the Scottish fair work convention and stop the scandalous situation of 46,540 cases of unfair treatment in the workplace?

[Dr Whiteford]

My hon. Friend makes a pertinent and important point. In calling for the transfer of powers of employment law, health and safety, trade union law and the minimum wage, the STUC has noted the appetite in Scotland for reducing income inequality and the desire to forge a more positive relationship with trade unions.

[Wes Streeting]

rose—

[Jo Stevens (Cardiff Central) (Lab)]

rose—

[Dr Whiteford]

I will not give way because I am conscious of time and we have a lot of amendments to get through.

It is inevitable that Governments will face tough negotiations with employee representatives from time to time, and there will sometimes be disagreements, but we should not lose sight of the enormously beneficial role that trade unions have played in the past and the present day in encouraging fair work and wages, good employment practices and improved working environments.

[Ian Lavery (Wansbeck) (Lab)]

What happened to the great trade union saying, “Workers of the world unite”?

[Dr Whiteford]

The hon. Gentleman should address that question to the STUC, because it is the one calling for the devolution of these powers.

[Wes Streeting]

Will the hon. Lady give way?

[Dr Whiteford]

I will not because I just gave way.

The Scottish Government see trade unions as key social partners and an important part of civil society. It is not okay for the UK Government to restrict trade unions’ ability to represent their members effectively, so I will oppose the Bill tomorrow, but we also need those powers devolved. Tonight, we have an opportunity to do that.

I have tabled several new clauses and amendments on employment and social security, not all of which I have adequate time to talk about fully tonight, but our new clause 22 would devolve employment support programmes to the Scottish Parliament and would complement existing provisions in the Bill. At present, there are significant restrictions on employment support in the Bill, particularly regarding programmes that last at least 12 months, and their full devolution would enable the Scottish Government to take more coherent, stronger and earlier action to support people into work.

Our new clause 23 would devolve all the working-age benefits to be replaced by universal credit and any benefit introduced to replace universal credit. Civic Scotland has overwhelmingly said that social security powers should be in the hands of the Scottish Parliament, to allow us to tailor policies in line with our own priorities and values and to enable us to protect children and low-income families under attack by the UK Government. The full devolution of universal credit would allow us to establish a much fairer social security system for Scotland.

Our new clause 24 would broaden the powers of administrative flexibilities over universal credit and devolve power over the conditionality and sanctions regime. The SNP has consistently highlighted the shortcomings of the sanctions regime and its manifest failure to protect some of the most vulnerable people in our communities —we have all witnessed the unacceptable explosion in the number of food banks in the last couple of years, which is its most obvious symptom. The Government know perfectly well that the system is not working, which is why they have announced changes, including the new pilot scheme, in recent days, but they are tinkering around the edges of a punitive, bureaucratic and inhumane sanctions regime that is driving sick and vulnerable people to destitution and despair.

The Scotland Bill is our opportunity to take these powers into Scotland’s hands. All progressive forces should join the growing calls from the third sector to deliver a more effective approach. Leaving powers on sanctions and conditionality in the hands of the Tories is simply not good enough.

Our new clause 27 would amend schedule 5 to the Scotland Act 1998 and give the Scottish Parliament competence for equal opportunities in their entirety. Taken with the SNP’s other amendments on gender quotas and equality—amendments 169, 171, 157 and 172 to 175—the new clause would give the Scottish Parliament the powers to improve equality provisions in Scotland, including through legislation and regulation.

21:00

[Angela Crawley]

Does my hon. Friend agree with me and the Equality and Human Rights Commission that devolving power over all equalities to the Scottish Parliament will enable it to legislate to give people an ability to do things that they have never had before?

[Dr Whiteford]

My hon. Friend makes her point well. I note that in the previous debate we talked quite a bit about the Human Rights Act and the role that it, too, plays in securing equalities.

[Jo Stevens]

Can the hon. Lady explain to the House how devolving employment law will work? How will trade union recognition work in practice where there are cross-border bargaining units or collective redundancies spanning both jurisdictions?

[Dr Whiteford]

The hon. Lady needs to remember that a great deal of the public sector is already devolved and these issues have been worked out. We already have devolution of a whole range of public services, with some issues negotiated at a national level and some at a UK-wide level, so her point seems rather redundant, frankly.

The Scottish Parliament has a good track record of advancing progressive equality measures, and our proposals would enable further progress in gender, disability, LGBTI and race equality—for instance, by improving protections from discrimination and by ensuring a more balanced representation of women in public life and on boards. It is worth pointing out that the full devolution of equality and equal opportunities has been supported by leading equality organisations such as Engender, Inclusion Scotland, the Equality Network and the Coalition for Racial Equality and Rights, whose executive director, Jatin Haria, said:

“Devolution brings power closer to people—and this is particularly important for marginalised and discriminated groups. In addition, many areas which intersect with equality law are already devolved and different in Scotland (e.g. policing or health) and further devolution of equality legislation would better allow the Scottish Parliament to push for specific outcomes which could lead to real improvements in the life chances and experiences for all people living in Scotland.”

New clause 28 and amendment 168 relate to the vexed and long-standing question of the Crown Estate. Amendment 168 would leave out clause 31 and new clause 28 would replace it. Clause 31 is not true to the spirit of the Smith commission, which recommended the full devolution of responsibility for the management of the Crown Estate’s economic assets in Scotland, including the Crown Estate’s seabed, and mineral and fishing rights, and the revenue generated from these assets. Clause 31 is also overly complicated and excludes certain Crown Estate assets, such as Fort Kinnaird, over which my hon. Friend the Member for Edinburgh East (Tommy Sheppard) has raised concerns.

[Tommy Sheppard]

Will my hon. Friend give way?

[Dr Whiteford]

After that I cannot really refuse.

[Tommy Sheppard]

One of the largest investments of the Crown Estate in Scotland is in the Fort Kinnaird retail park in Edinburgh East. I have been pressing the Secretary of State on why it is excluded from the transfer. Does my hon. Friend agree that his explanation so far is not very convincing? He says that it cannot be transferred because it is part of a commercial arrangement, but we are only talking about the transfer of the Government’s responsibilities and the Government component in the relationship.

[Dr Whiteford]

I agree with my hon. Friend, who makes his point well.

As someone who represents coastal communities that have for many decades been held back by the shortcomings of the way that the Crown Estate has operated in Scotland, I for one cannot wait to see those public assets brought under proper democratic accountability and working for the good of those communities. New clause 28 would reduce complexity by removing the reservation relating to the management of the Crown Estate and provide the Scottish Parliament with full legislative competence in relation to the management of the Crown Estate in Scotland. It would also transfer any functions of the Crown Estate Commissioners in relation to rights to the continental shelf beyond the 200 nautical mile-limit adjacent to Scotland. Up to now, Parliament has not made a good job of scrutinising the activities of the Crown Estate. We have an opportunity today to put that right by opening the Crown Estate to better public accountability and putting its assets at the service of our communities.

There are a number of amendment on a miscellaneous range of subjects, all of which would strengthen the Bill, and I want to touch on those before concluding. New clause 29 would give the Scottish Parliament control over the regulation of party political broadcasts for local elections and Scottish elections as well as any referendums held in Scotland in devolved competences, as per the Smith commission recommendation at paragraph 23. That seems to have been missed out of the legislation to date.

New clause 30 devolves broadcasting by amending schedule 5 to the Scotland Act 1998. This would not impact directly on the delivery of the Smith commission proposals on the BBC and Ofcom, both of which are being delivered through memorandums of understanding. Rather, if passed, it would provide for a wider role for the Scottish Parliament and the Scottish Government in broadcasting policy in future.

Amendments 182 and 183 relate to gaming machines and licensed betting premises, and replace the reference to “betting premises” with the more general reference to “gambling premises”, giving full effect to the Smith commission recommendation in paragraph 74.

New clause 31 would give the Scottish Parliament general legislative competence over agriculture, aquaculture and fisheries levies. For me, this reform cannot come soon enough. It would bring to an end the absurd and unacceptable situation whereby Scottish fishermen are paying levies that are used to promote their Norwegian competitors’ fish instead of being used to promote Scottish seafood and to develop new products and markets. For instance, the UK Sea Fish Industry Authority currently organises the UK fish and chip shop awards, which is used by the Norwegian Seafood Council to promote frozen Norwegian fish into the UK market. The finalists of the 2016 awards are even being taken to Norway to learn about the supply of fish from Norway to the UK.

I have no problem at all with fair competition, but I have a massive problem with fishermen in my constituency being forced to pay levies that are then used by a publicly funded body to undermine their own businesses. It needs to end. That is just one reason why the Scottish Seafood Association and others support the devolution of these levies, which could be much better used to promote our locally sourced top-quality produce.

New clause 32 would give Scottish Ministers full powers and the flexibility to decide who would run rail services, in line with paragraph 65 of the Smith commission recommendations, and would allow public sector operators to bid for rail franchises.

Amendments 184 to 188 all relate to fuel poverty support schemes in clause 50, and would provide scope to reshape fuel poverty programmes in Scotland, while amendment 189 removes restrictions on the consultation process with the Scottish Government and Scottish Parliament in relation to the renewables incentive scheme. Again, this would bring the Bill into line with the Smith commission recommendation for a formal consultative role and enable the development of the intergovernmental concordat that we believe is necessary.

Lastly, new clause 33 would enact a formal consultative role for the Scottish Government and the Scottish Parliament in setting the strategic priorities of the Civil Aviation Authority, which I know is a very important issue for my hon. Friend the Member for Livingston (Hannah Bardell).

[Hannah Bardell (Livingston) (SNP)]

Does my hon. Friend agree that the time for debating and voting today is woefully inadequate, given the magnitude and importance of the issues and the number of amendments —more than 100 from the Government? Does she agree that new clause 33, enabling the Scottish Parliament and Government to have power over the Civil Aviation Authority, is very important, particularly to my constituents in Uphall, Broxburn and many other areas of Livingston who have been affected by the first new flight path in 40 years in Scotland—yet the Scottish Government and Parliament have no power over how the CAA operates in that regard?

[Dr Whiteford]

My hon. Friend makes an important point, and that new clause would make a huge difference to her constituents. She highlights the current lack of democratic accountability in respect of some of these decisions.

We have heard a lot of grandiose language about the Scotland Bill today—that it represents an historic departure and creates a powerhouse Parliament. I welcome the changes that the Government are belatedly introducing, but all the flowery rhetoric in the world will not hide the fact that the Scotland Bill still falls some way short of the Smith commission proposals. More than that, it falls a long way short of the promises made to the people of Scotland.

The SNP amendments would significantly strengthen the Bill and bring it closer to the expectations and aspirations of the people who voted in unprecedented numbers for real powers and meaningful change. As things stand, it will be those on low and average incomes, especially families with children, who will pay the price of these missed opportunities as they continue to suffer under Tory austerity. Big claims have been made for the very modest proposals in this Scotland Bill. Hon. Members could beef it up immeasurably by backing the amendments that I have tabled. I ask them to stand with us tonight in the interests of the Scottish people.

[Yvette Cooper]

I want to comment briefly on the proposal to devolve abortion law to the Scottish Parliament.

Since 1967, a framework has allowed women to make personal decisions with their doctors. Those decisions are often very difficult, but they should rightly be made by women. I fear that new clause 15, which is being rushed through without proper consultation, will allow the existence of different frameworks in Scotland and in England and Wales. We know that when similar arrangements have operated in Ireland, and also in parts of the United States, many women who may be very vulnerable have often had to travel in order to gain access to the abortion services, advice or healthcare that they need. We do not think it right for women in those circumstances to have to travel far from home and family to secure the services and support that they need, but new clause 15 would allow that to happen.

The new clause also opens the door for deliberate campaigning against a fragmented system. In the United States, anti-abortion campaigners have deliberately targeted individual states and legislatures, and, having failed to change abortion law at federal level, have been able to do so at state level. In fact, they have introduced 200 changes and restrictions on women’s access to abortion over just three years.

[Deidre Brock]

I think it is a very sad reflection of Labour Members’ mistrust in their party that they do not trust Kezia Dugdale and her colleagues in the Scottish Parliament with any action that might require some thought and care. Why have Labour Members in Westminster such low opinions of their Scottish colleagues?

[Yvette Cooper]

I think that, sadly, the hon. Lady is missing the point completely. The issue is whether there are to be different frameworks, and whether women will be expected to travel because the jurisdictions are different.

We know that there is a significant chance that the anti-abortion campaigners will campaign in this instance, because we know that they already want to do so.

[Dr Whiteford]

Will the hon. Lady give way?

[Yvette Cooper]

I have no time.

The new clause was not initially tabled by the SNP or the Scottish Secretary. It was initially tabled by Members of Parliament who, for a long time, have campaigned for much greater restrictions on abortion. I think the whole House should consider the fact that anti-abortion campaigners want the opportunity—

[Several hon. Members rose—]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Members cannot just stand there waiting. I should say, in fairness to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), that she gave way earlier. If she wishes to give way again, I will call whoever wishes to intervene, but Members should not stand there waiting on the off chance that she may do so. I should also say that I am sure the right hon. Lady wishes to face the Chair.

[Yvette Cooper]

We have been given too little time for such an important debate, so I cannot give way, but I urge Members to bear it in mind that anti-abortion campaigners want this opportunity to fragment and divide us. All of us who support the 1967 Act ought to agree that we should stand together and not allow anti-abortion campaigners to divide us, pick us off one by one, and target us differently. I urge the House to reconsider. We should consult properly, we should take the interests of women and their families into consideration, and we should vote against the new clause tonight.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I agree with what has been said by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). Let me remind the House of our earlier considerations of this issue. When the original devolution legislation of 1997-98 was being put together, the decision not to devolve the legislative framework for abortion was not an accident or an afterthought. We examined the issue carefully at the time, and concluded that it did not make good legislative sense to allow for two different legislative frameworks in two different parts of the country.

[Angela Crawley]

Will the right hon. Gentleman give way?

[Mr McFadden]

The House is very pressed for time.

We have had experience of what happens in those circumstances. We know that 10 women a day have travelled here from the Republic of Ireland because of the different legislative frameworks. I do not predict that that will happen in this instance, but the new clause allows for the possibility. The logic was right before. There is no logic in allowing for two legislative frameworks 18 years on.

[Ian Murray]

It is a pleasure to talk to our new clauses and amendments on this part of the Bill. We have a lot of ground still to cover in this short debate, but it is important to state at the outset that crucial welfare clauses in this Bill deliver on the vow and the Smith agreement in both spirit and substance. That was not the case before the Government tabled their latest tranche of amendments last Monday. That is why, as my SNP colleagues rightly highlighted earlier, the deputy leader of the Scottish Labour party said that the vow had not been met, and indeed the architect of the vow, the right hon. Gordon Brown, the former Prime Minister, made exactly the same points. However, now that the amendments are before the House, we believe that the benefits issue has been resolved and that therefore the vow has been delivered. This is a crucial victory for the Scottish Parliament, the importance of which cannot be overstated. I said at the end of the Committee stage that if the Government did nothing else they should concede to my amendment 31 to allow the Scottish Parliament the power effectively to design its own social security system. Their new clause 34 does that, and we will support them on it.

[Stephen Gethins]

Does the hon. Gentleman think that the proposals are as close to federalism as we can get? Yes or no will do the trick for me.

21:15

[Ian Murray]

I am delighted that the hon. Gentleman intervenes with that question, as it allows me to put the record straight. What SNP Members do not mention is the second part of the sentence that the right hon. Gordon Brown said. That was: as close to federalism as we can get in the context of 85% of it being one block called England. That is what he said, and SNP Members never ever talk about that when they talk about “as near to federalism as possible.” The right hon. Gordon Brown can speak for himself when he says these things, and that is exactly the context in which he put this Bill.

The right hon. Member for Gordon (Alex Salmond) agreed with the amendments on welfare proposed by the Secretary of State. We agree as well, and I would have thought that there would be some kind of consensus across the Chamber on these amendments.

Let me turn to new clause 2 and Government new clause 34. Part 3 of this Bill devolves to the Scottish Parliament new and substantial powers over welfare, transferring to it £2.5 billion-worth of welfare responsibility. As I said when we debated this part in Committee, this presents a real opportunity for Scotland and the Scottish Parliament. Today we will pass amendments that will fundamentally transform the Scottish Parliament’s relationship with the social security system. That is why the Bill is so important. According to the House of Commons Library, if the Bill were passed in its present form, the Scottish Parliament would be responsible for 62% of all public expenditure, but our new clause 2 and the Government new clause 34 will give the Scottish Parliament total freedom to create new benefits in all devolved areas. It would then be up to the Scottish Government of the day to design the system they want and the Scottish people have voted for, and to find the resources to pay for that system.

The same goes for Government new clause 14, which devolves the Scottish Parliament’s legislative competence regarding welfare foods. I believe that was an SNP proposal, and, again, we support it.

The power to create new benefits in devolved areas was a Smith agreement recommendation and delivering on that commitment has been an absolute priority for the Opposition. We tabled the initial new clause in Committee, which the Government voted against, but I am delighted that the Secretary of State and Government have now come over to our way of thinking, as they have on the veto and the carer’s allowance. As the SNP finally conceded halfway through a Scottish Labour debate in the Scottish Parliament last week, and as we have heard again tonight, the original clause 21 and this new clause also afford the Scottish Parliament the power to top up any reserved benefit. There can now be no doubt that the Scotland Bill will allow the Scottish Government to compensate fully the Scottish families affected by the Government’s pernicious cuts to tax credits.

[Callum McCaig]

The reality is that Scotland will pay for the administration of tax credits and it will also pay for the administration to top-up tax credits. Rather than just devolving the provision, why should we pay for its administration twice under what the hon. Gentleman is proposing?

[Ian Murray]

The proposal would allow for the top-up of any reserved benefit and for the introduction of any devolved benefit. So, although we use the term “restoration”, it would actually create a new top-up reserved benefit, as does the Bill. There is a lot of misunderstanding relating to the fact that a lot of these benefits are not being devolved; they are effectively being switched off. The Scottish Government would therefore have to introduce new proposals in relation to any of the provisions in the Bill.

[Callum McCaig]

rose—

[Ian Murray]

We are running out of time, so I shall press on.

We will not cut tax credits for Scottish working families. Kezia Dugdale, the Scottish Labour party leader, has made that quite clear, and we have been very clear about how we would pay for that. It is interesting to note that on four different occasions tonight we heard nothing from the SNP about whether it would match that commitment—

[Ms Ahmed-Sheikh]

Twice!

[Ian Murray]

The hon. Lady says “twice”, but the record will show that ours is a clearly costed policy that would be delivered using the new powers in the Bill.

[Several hon. Members rose—]

[Ian Murray]

I shall move on, because we are running out of time—[Interruption.] We have already heard complaints about the restricted time for the debate. I would have thought, given that we agree on the welfare provisions, that the braying mob on the SNP Benches would have taken a little time to run through some of them.

Now that the Secretary of State has come round to Labour’s way of thinking on the power to create new benefits, the Bill strikes the right balance between reserved and devolved areas. The Smith agreement said that the welfare state and the social security system should remain shared across these islands. New clause 3, whose provisions are linked to new schedule 1, would provide for a cross-Parliament Committee on welfare devolution to oversee the transition and implementation of welfare powers transferred by the Bill. That would go some way towards resolving the point raised by the hon. Member for Aberdeen South (Callum McCaig). The Scottish Council on Voluntary Organisations has welcomed the new clause, stating that it is a

“pragmatic proposal given the need to ensure continuous, timely delivery of social security payments to those who receive them.”

It goes without saying that any new Committee must be open and transparent. We have already seen the Scottish Government claiming that they might reject the Scotland Bill if the secretive fiscal framework is not to their liking. We cannot afford for that to happen with these important welfare provisions.

Turning to new clause 5, I have said that Labour’s key aim is to deliver in full on the recommendations of the Smith agreement, but we are prepared to go beyond it if we see a reasonable argument for doing so. The new clause goes beyond the agreement in seeking to devolve the childcare element of universal credit to the Scottish Parliament.

Amendments 21, 22 and 23 cover another area in which I believe we should go beyond the Smith agreement’s recommendations—namely, making payments to individuals who have been sanctioned. The hon. Member for Banff and Buchan (Dr Whiteford) mentioned this in her eloquent speech. The Labour party is committed to reviewing the UK sanctions regime, the punitive nature of which is beginning to spiral out of control, forcing people into destitution on the back of draconian DWP targets. That is why we believe that the Scottish Parliament should have the power to make payments to individuals who have had payments unfairly reduced, suspended or withdrawn due to the UK Government’s sanctions regime.

We have also tabled amendments 24 and 25, which I shall address alongside Government amendments 77 and 78. These all concern the perceived existence in the Bill of a UK ministerial veto in relation to the regulation-making powers for universal credit being transferred to the Scottish Parliament. I am grateful that the Secretary of State has again listened, not only to the Labour party but to the SNP, on this issue. The Government have now redrafted the relevant clauses and removed the perceived veto. When I wrote to the Secretary of State asking him to confirm this, he gave me an assurance that the UK Government would have a “legal obligation” to implement any changes made by Scottish Ministers.

I welcome the Secretary of State’s amendments 70 and 71, which will remove the restrictive definitions relating to carer’s allowance, but I am disappointed that he has not removed the similar definitions in relation to disability allowance, as many of the disability charities in Scotland requested. Amendment 194 offers an alternative broader and more flexible definition of disability benefits, and I hope that if the Secretary of State cannot give us a satisfactory answer on this matter tonight, we will pursue it in the other place at the Bill’s next stage.

Let me deal briefly with the issue of abortion, making it clear from this Dispatch Box that nobody in this Chamber is saying that the Scottish Parliament does not have the capacity or indeed the responsibility to deal with abortion. The Smith agreement said that there would be a process, and, as we have heard eloquently this evening from my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), the devolution of abortion has to be dealt with properly and sensitively. The Secretary of State avoided my intervention earlier. He said in this House in July that the Smith agreement did not allow for the devolution of abortion at this stage and it would not be in this Bill, but that a proper process would be put in place to ensure that it is done sensitively, properly and in consultation with women’s organisations in Scotland. I do not think that his frantically calling round women’s organisations in Scotland on the day he tables the amendment is satisfactory consultation or that it takes into account the issues that many women in Scotland have contacted me about.

This is not about the time limit for abortion; this relates to the entire complex matrix of the legislation that sits behind abortion. It is about the issues relating to the criminality of abortion, the authorisation of abortion and where abortions can be carried out. It is not just about 24 weeks; it is about much more than that. The Secretary of State should reflect on the fact that a proper consultation needs to be put in place, otherwise he is in danger of doing something incredibly dangerous to abortion in this country.

[Mr McFadden]

The Secretary of State has said time and again when taking interventions that the Scottish Parliament has the capacity to legislate on abortion. Does my hon. Friend agree that it is a question not of whether there is capacity, but of whether or not it is desirable to have two different legislative regimes for this in Scotland and England?

[Ian Murray]

Regardless of who legislates for it, we may end up with different legislative regimes on either side of the border. I am perfectly confident in the Scottish Parliament, and I take the First Minister’s word that she will not change the regulations, but that is not to say that the regulations down here might not change and we end up with abortion tourism. Nobody wants that across the United Kingdom, and my right hon. Friend, who took the Scotland Act through this place—

[Mr McFadden]

No, I did not.

[Ian Murray]

My right hon. Friend did not take it through this place but he was heavily involved in it, and he knows about the issues relating to abortion and the position taken.

Amendment 26 makes it explicit that, among the exceptions to reserved matters on equal opportunities, the power to set gender quotas is being devolved to the Scottish Parliament. The Labour party takes this issue very seriously, and we thank Women 50:50 for helping us with these issues. I also commend amendment 225.

We now have a welfare section in this Bill that is in line with the Smith agreement. Everyone in this Chamber should be incredibly proud of that achievement and now we must move on to the debate about how we use these powers.

[David Mundell]

I do not want to say too much more at this stage, other than to welcome the fact that, other than in relation to the issue of abortion, to which I shall return, the Government’s proposals have been accepted. I am grateful for that.

In Committee, I said we would listen to sensible proposals made in the context of the Smith agreement, and that is what we have done. That is why I am not persuaded by some of the amendments, particularly those set out by the hon. Member for Banff and Buchan (Dr Whiteford) on the welfare system. They do not relate to areas that form part of the agreement. As we have mentioned on other occasions during this debate, the SNP was of course part of the Smith commission process and it signed up to an agreement that at that point did not seek to devolve tax credits to the Scottish Parliament. What was devolved were extensive powers that allow the topping up of tax credits and other benefits; the creation of new benefits in devolved areas; the topping up of child benefit; and changes to be made to income tax—

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I asked this question of the Secretary of State for Work and Pensions in Committee but did not receive an answer, so will the Minister assure us now that, in the event of the Scottish Government deciding to top up any benefit, it will then not be considered income and clawed back at a later stage when universal credit is being claimed?

21:30

[David Mundell]

The Scottish Government will have to take into consideration all the decisions that they make, because they will be responsible and accountable. I suspect that we will see a change in them. They will move from a position of making uncosted promises to one where they are held to account for where the money is coming from.

I do not agree with the Scottish Labour party’s commitment to put up the taxes of hard-working people in Scotland, but at least it is honest about it. It wants to put up tax to pay for additional benefits in Scotland. That is a fair position for it to adopt, but the Scottish National party has said nothing about how it will deploy these significant new powers.

Once again, in relation to welfare, the focus has been solely on what cannot be done rather than on applying thought and rigour to exactly what can be achieved. Benefits in Scotland can be completely redesigned in areas such as disability and carers’ benefits. They are reserved benefits that the Scottish Parliament can top up. Changes in income tax is another such matter. However, that is not where the thought process is; the thought process is entirely on what cannot be done. As we have heard in the various statements on benefits, it really has been a case of “grievo-max” rather than devo-max.

I know that the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) does not agree with my position on abortion, and that she is minded to oppose this measure. However, if my amendment is carried, I will meet her and any of her concerned colleagues to discuss how we can best proceed to ensure that the matters that she set out do not come to pass. I do not believe that they will. I strongly believe that the Scottish Parliament has the capacity to deal with this issue. There is no constitutional reason why this amendment should not be made, and the Smith commission did indeed recommend that it be done. It said that it should be done sensitively and that there should be a process. I am happy to talk about that process. I know that the Scottish Government are happy to talk about that process and to engage with interested parties. On that basis, I do hope that the House will not divide on these issues.

The Government have set out their amendments—

[Ms Ahmed-Sheikh]

Will the Minister give way?

[David Mundell]

No, I will not.

The amendments set out by both Labour and the SNP in relation to this group go beyond what the Smith commission proposed. The Government amendments deliver the Smith commission in full. On that basis, I hope that the House will support the Government amendments.

Question put and agreed to.

New clause 14 accordingly read a Second time, and added to the Bill.

New Clause 34

Power to create other new benefits

‘(1) The Scotland Act 1998 is amended as follows.

(2) In Section F1 of Part 2 of Schedule 5, in the Exceptions, after exception 9 (see section [Welfare foods] above) insert—

Exception 10

Schemes which provide assistance for social security purposes to or in respect of individuals by way of benefits and which—

(a) are supported from sums paid out of the Scottish Consolidated Fund,

(b) do not fall within exceptions 1 to 9, and

(c) are not connected with reserved matters (other than matters reserved only by virtue of this Section).

This exception does not except providing assistance by way of pensions to or in respect of individuals who qualify by reason of old age.

This exception does not except providing assistance where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct (for example, non-compliance with work-related requirements relating to the benefit) unless—

(a) the requirement for it also arises from some exceptional event or exceptional circumstances, and

(b) the requirement for it is immediate.

For the purposes of this exception “reserved benefit” means a benefit which is to any extent a reserved matter.

In this exception the reference to schemes supported from sums paid out of the Scottish Consolidated Fund does not include schemes—

(a) in respect of which sums are at some time paid out of the Scottish Consolidated Fund, but

(b) which are directly supported from payments out of the Consolidated Fund, the National Insurance Fund or the Social Fund, or out of money provided by Parliament.”

(3) Schedule 4 (enactments etc protected from modification) is amended as follows.

(4) In paragraph 2, at the end insert—

“(5) Sub-paragraph (3) does not affect sub-paragraph (1) as it applies to an Act of the Scottish Parliament so far as any matter to which a provision of the Act relates falls within exception 10 of Section F1 of Part 2 of Schedule 5.”

(5) In paragraph 3, at the end insert—

“(3) Sub-paragraph (1) does not affect the application of paragraph 2 to modifications which are incidental to, or consequential on, any provision, if it is only by virtue of exception 10 of Section F1 of Part 2 of Schedule 5 that the provision does not relate to reserved matters.”” ..—(Stephen Barclay.)

This amendment creates a new exception to the social security reservation to provide the Scottish Parliament with new powers to create new benefits. It provides competence to legislate for social security benefits the cost of which is to be met from the Scottish Consolidated Fund.

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Abortion

“In Part 2 of Schedule 5 to the Scotland Act 1998 (specific reservations) omit Section J1 (abortion).” —(Stephen Barclay.)

This amendment removes the specific reservation of abortion in part 2 of schedule 5 of the Scotland Act 1998 thereby devolving legislative competence on the subject-matter of abortion to the Scottish Parliament.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

21:35

Division 113

Ayes: 350

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Conservative: 287
Scottish National Party: 52
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 2
Democratic Unionist Party: 2
Ulster Unionist Party: 1
Green Party: 1
Liberal Democrat: 1

Noes: 183

---

Labour: 182

New clause 15 read a Second time, and added to the Bill.

21:47

More than five hours having elapsed since the commencement of proceedings on the programme motion, the proceedings were interrupted (Programme Order, this day).

The Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 16

Public sector duty regarding socio-economic inequalities

“(1) Part 1 of the Equality Act 2010 (socio-economic inequalities) is amended as follows.

(2) Section 1 (public sector duty) is amended as follows.

(3) In subsection (2) for “by a Minister of the Crown” substitute “in accordance with subsection (2A)”.

(4) After subsection (2) insert—

“(2A) The guidance to be taken into account under subsection (2) is—

(a) in the case of a duty imposed on an authority in relation to devolved Scottish functions, guidance issued by the Scottish Ministers;

(b) in any other case, guidance issued by a Minister of the Crown.”

(5) Section 2 (power to amend section 1) is amended as follows.

(6) In subsections (7) and (9) omit “the Scottish Ministers or”.

(7) In subsection (10) for “the Ministers” substitute “the Welsh Ministers”.

(8) In subsection (11) for “section” substitute “Part”.

(9) In section 216 of that Act (commencement) at the beginning of subsection (3) insert “Subject to subsection (4),” and after that subsection insert—

“(4) The following provisions of Part 1 (socio-economic inequalities) come into force on such day as the Scottish Ministers may by order appoint—

(a) section 1, so far as it applies to a relevant authority as defined by section 2(5);

(b) section 2, so far as it confers a power on the Scottish Ministers;

(c) section 3, for the purposes of section 1 to the extent mentioned in paragraph (a).

(5) The following do not apply to an order under subsection (4)—

(a) section 207(2) (see instead section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010: powers exercisable by Scottish statutory instrument), and

(b) section 210.”

(10) In the Interpretation and Legislative Reform (Scotland) Act 2010, in section 30(4) (other instruments laid before the Parliament: exceptions) after paragraph (i) insert—

“(j) section 216(4) of the Equality Act 2010 (c.15).””—(Stephen Barclay.)

This new clause enables the Scottish Ministers to commence Part 1 of the Equality Act 2010 in respect of public bodies exercising devolved functions in Scotland. It also enables the Scottish Ministers to issue guidance to public authorities in Scotland exercising devolved functions and makes consequential amendments.

Brought up, and added to the Bill.

New Clause 17

Destination of fines, forfeitures and fixed penalties

“(1) The Scotland Act 1998 is amended as follows.

(2) After section 65 (payments out of the Scottish Consolidated Fund) insert—

“65A Destination of fines, forfeitures and fixed penalties

Where an Act of Parliament or subordinate legislation under an Act of Parliament requires or authorises a sum to be paid into the Consolidated Fund, and the sum appears to the Secretary of State to be a fine, forfeiture or fixed penalty, the Secretary of State may with the consent of the Treasury by regulations modify the Act or subordinate legislation so as to require or authorise the sum to be paid instead into the Scottish Consolidated Fund.”

(3) In Schedule 7 (procedure for subordinate legislation), in paragraph 1(2) insert at the appropriate place—

“Section 65A

Type K”.”

—(Stephen Barclay.)

This clause will allow the Secretary of State, with the Treasury’s consent, to amend primary and secondary legislation, so that fines, forfeitures, and fixed penalties imposed by courts and tribunals in Scotland are retained by the Scottish Government by changing the destination from the Consolidated Fund to the Scottish Consolidated Fund.

Brought up, and added to the Bill.

New Clause 18

Tax credits

“(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Section F1 is amended as follows.

(2) In the Exceptions, after exception 9 (see section (Welfare foods) (2) above) insert—

“Exception 10

The subject-matter of the Tax Credits Act 2002.””—(Dr Eilidh Whiteford.)

This New Clause devolves to the Scottish Parliament the power to make provision for child tax credit, and working tax credit.

Brought up.

Question put, That the clause be added to the Bill.

21:48

Division 114

Ayes: 56

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Scottish National Party: 52
Social Democratic & Labour Party: 2
Green Party: 1
Independent: 1

Noes: 477

---

Conservative: 286
Labour: 184
Democratic Unionist Party: 3
Independent: 1
Ulster Unionist Party: 1
Liberal Democrat: 1

New Clause 27

Equal opportunities

“In Part 2 of Schedule 5 to the Scotland Act 1998, omit Section L2 (equal opportunities).” —(Dr Eilidh Whiteford.)

This new clause would devolve equal opportunities to the Scottish Parliament.

Brought up.

Question put, That the clause be added to the Bill.

22:04

Division 115

Ayes: 61

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Scottish National Party: 52
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Independent: 2
Green Party: 1
Liberal Democrat: 1

Noes: 288

---

Conservative: 287
Ulster Unionist Party: 1

Clause 19

Disability, industrial injuries and carer’s benefits

Amendments made: 70, page 22, line 43, leave out “relevant carer” and insert “person”.

To enable the Scottish Parliament to legislate for the payment of a carer’s benefit to a person who is under 16, is in full-time education or is gainfully employed, this amendment removes the defined term “relevant carer” and replaces it with “person”.

Amendment 71, page 22, leave out lines 45 to 48.—(Stephen Barclay.)

This amendment removes the definition of “relevant carer” which, as consequence of amendment 70, is no longer required.

Clause 20

Benefits for maternity, funeral and heating expenses

Amendments made: 72, page 23, line 27, after “financial” insert “or other”.

This amendment and amendment 73 will give the Scottish Parliament the competence to legislate for forms of non-financial assistance to support people with a view to reducing maternity expenses, funeral expenses or expenses for heating in cold weather.

Amendment 73, page 23, line 27, at end insert “or reducing”.

See the explanatory statement for amendment 72.

Amendment 191, page 23, line 33, leave out “8” and insert “10”.

This amendment is consequential on NC14 and NC34. It adjusts the numbering in the heading to a provision inserted by clause 20.

Amendment 192, page 23, line 34, leave out “8” and insert “10”.—(Stephen Barclay.)

This amendment is consequential on NC14 and NC34. It provides that nothing in the exceptions inserted by those New Clauses is to be read as excepting the National Insurance Fund, the Social Fund or the provision of budgeting loans.

Clause 22

Discretionary housing payments

Amendment made: 76, page 24, leave out lines 38 to 48.—(Stephen Barclay.)

This amendment removes the limit on the amount of discretionary financial assistance an individual who is in receipt of a reserved benefit to assist with rental costs can receive. The discretionary financial assistance must still be provided to help the individual with their housing costs.

Clause 24

Universal credit: costs of claimants who rent accommodation

Amendment made: 77, page 26, line 22, leave out from “regulations” to end of line 25 and insert—

‘( ) If—

(a) the Scottish Ministers make regulations to which this section applies, and

(b) the Secretary of State considers that it is not practicable to implement a change made by the regulations by the time that change is to start to have effect,

the Secretary of State may by regulations made by statutory instrument amend the regulations so that the change is to start to have effect from a time later than the time originally set.

( ) The altered time must be no later than the Secretary of State considers necessary, having regard to the practicability of implementing the change.”—(Stephen Barclay.)

This amendment replaces the provision that prevents regulations being made by the Scottish Ministers unless the Secretary of State has agreed the start date of any changes with a power for the Secretary of State to postpone the start date if this cannot be met.

Clause 25

Universal credit: persons to whom, and time when, paid

Amendment made: 78, page 27, line 2, leave out from “regulations” to end of line 5 and insert—

‘( ) If—

(a) the Scottish Ministers make regulations to which this section applies, and

(b) the Secretary of State considers that it is not practicable to implement a change made by the regulations by the time that change is to start to have effect,

the Secretary of State may by regulations made by statutory instrument amend the regulations so that the change is to start to have effect from a time later than the time originally set.

( ) The altered time must be no later than the Secretary of State considers necessary, having regard to the practicability of implementing the change.” —(Stephen Barclay.)

This amendment replaces the provision that prevents regulations being made by the Scottish Ministers unless the Secretary of State has agreed the start date of any changes with a power for the Secretary of State to postpone the start date if this cannot be met.

Clause 27

Functions exercisable within devolved competence

Amendments made: 79, page 28, line 12, leave out “or 26” and insert “, 26 or [Welfare foods]”.

This amendment ensures that functions of Ministers of the Crown in relation to welfare foods transfer to Scottish Ministers along with legislative competence.

Amendment 80, page 28, line 24, leave out “or 26” and insert “, 26 or [Welfare foods]”.

This amendment makes a necessary consequential change flowing from the devolution of executive competence effected by amendment 79 to make clear that, in Clause 27 the relevant date is the date on which the relevant provision of New Clause 14 comes into force.

Amendment 81, page 28, line 29, after “sections” insert

“[Functions exercisable within devolved competence: elections],”. —(Stephen Barclay.)

This amendment is consequential to the amendments made to New Clause 13.

Clause 29

Information-sharing

Amendments made: 82, page 29, line 32, after “pensions,” insert—

“( ) welfare foods,”.

This amendment ensures that the Secretary of State and Scottish Ministers may share information during the course of devolving welfare foods functions and subsequently.

Amendment 193, page 29, line 38, after “8” insert “and 10”.

This amendment is consequential on NC34. It provides that a function exercisable by the Scottish Ministers within devolved competence by virtue of the exception inserted by that New Clause is a relevant Scottish social security function for the purposes of sharing information under clause 29.

Amendment 83, page 29, line 45, at the end insert—

‘( ) a function of the Scottish Ministers relating to welfare foods;” —(Stephen Barclay.)

This amendment is consequential on New Clause 14 and ensures that the meaning of “relevant Scottish social security function” includes the Scottish Ministers’ functions relating to welfare foods.

Clause 31

Crown Estate

Amendments made: 84, page 31, line 12, at end insert—

“(4A) The property, rights and interests to which the existing Scottish functions relate must continue to be managed on behalf of the Crown.

(4B) That does not prevent the disposal of property, rights or interests for the purposes of that management.

(4C) Subsection (4A) also applies to property, rights or interests acquired in the course of that management (except revenues to which section 1(2) of the Civil List Act 1952 applies).

(4D) The property, rights and interests to which subsection (4A) applies must be maintained as an estate in land or as estates in land managed separately (with any proportion of cash or investments that seems to the person managing the estate to be required for the discharge of functions relating to its management).”

The inserted subsections replace subsection (10) of the Clause. They clarify how the requirement to maintain as an estate in land will operate after the transfer: that there may be separately managed estates; that management is on behalf of the Crown; and that this does not prevent disposals but includes all acquisitions.

Amendment 85, page 31, line 30, leave out

“the existing Scottish functions relate”

and insert “subsection (4A) applies”.

This amendment is consequential on amendment 84.

Amendment 86, page 31, line 35, leave out

“the existing Scottish functions relate”

and insert “subsection (4A) applies”.

This amendment is consequential on amendment 84.

Amendment 87, page 31, line 37, leave out

“other functions of the Commissioners”

and insert

“the Commissioners’ functions other than the existing Scottish functions”.

This amendment amends new section 90B(8)(d) to clarify the wording in this provision.

Amendment 88, page 32, line 20, leave out from beginning to “after” in line 21 and insert—

‘( ) Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

( ) In sub-paragraph (3) of paragraph 2,”.

This is consequential on amendment 89.

Amendment 89, page 32, line 22, at end insert—

‘( ) After that sub-paragraph insert—

(3A) Sub-paragraph (1) does not affect the reservation by paragraph 1 of the requirements of section 90B(4A) to (4D).””

This amends Schedule 5 to the Scotland Act 1998 to provide for the reservation of the subject-matter of subsections (4A) to (4D) of new section 90B (inserted by amendment 84).

Amendment 90, page 32, line 39, leave out “the transferred functions relate” and insert “section 90B(4A) applies”.

This is consequential on amendment 84.

Amendment 91, page 32, line 40, leave out “the Secretary of State or”.

Clause 31(5) applies a modified version of the Crown Estate Act 1961 to the transferee. This amendment omits “the Secretary of State” from Clause 31(5)(b), since there will be no references to the Secretary of State in that Act as modified.

Amendment 92, page 33, line 7, at end insert—

“in section 4, the words “with the consent of Her Majesty signified under the Royal Sign Manual”;”.

Clause 31(5) applies a modified version of the Crown Estate Act 1961 to the transferee. This amendment omits the reference to the Royal Sign Manual in the modified Act, so that Her Majesty will not be required to consent to certain post-transfer transactions by the transferee.

Amendment 93, page 33, line 14, after “1998” insert

“(subject to subsections (4A) to (4D) of that section)”.

This makes the power to make an Order in Council in Clause 31(7) subject to subsections (4A) to (4D) of new section 90B, which are inserted by amendment 84.

Amendment 94, page 33, line 15, at end insert—

‘( ) An Order in Council under subsection (7) may in particular—

(a) establish a body, including a body that may be nominated under that section as the transferee;

(b) amend, repeal, revoke or otherwise modify an enactment, an Act of the Scottish Parliament, or an instrument made under an enactment or Act of the Scottish Parliament.”

This clarifies the scope of the power to make an Order in Council in Clause 31(7). A body can be established by such an order and the order can include amendments to, in particular, an Act of Parliament or an Act of the Scottish Parliament.

Amendment 95, page 33, line 26, leave out subsection (10).—(Stephen Barclay.)

This is consequential on amendment 84 which replaces the provision in subsection (10) about the requirement to maintain an estate in land.

Clause 32

Equal opportunities

Amendments made: 96, page 33, line 44, leave out subsection (2) and insert—

‘(2) Omit the words from “, including the subject-matter of” to “1995”.”

This amendment removes any reference to legislation from the equal opportunities reservation in Section L2 of Part 2 of Schedule 5 to the Scotland Act 1998.

Amendment 97, page 34, leave out lines 3 and 4.

This amendment removes the exception to the reservation on socio economic inequalities as this area is already devolved.

Amendment 98, page 34, line 4, at end insert—

“Equal opportunities so far as relating to the inclusion of persons with protected characteristics in non-executive posts on boards of Scottish public authorities with mixed functions or no reserved functions.”

This amendment makes specific provision for the Scottish Parliament to have legislative competence to enact positive measures in appointments to the boards of Scottish public authorities, including the modification of existing reserved legislation.

Amendment 100, page 34, line 6, after second “authority” insert

“, other than any function that relates to the inclusion of persons in non-executive posts on boards of Scottish public authorities with mixed functions or no reserved functions.”

This amendment is consequential to amendment 98.

Amendment 99, page 34, line 8, after second “or” insert “of”.—(Stephen Barclay.)

This amendment corrects a typographical omission.

Amendment proposed: 26, page 34, line 13, at end insert

“including the imposition of minimum quotas for women and other persons with protected characteristics across all levels of public and political representation in Scotland.” .—(Ian Murray.)

This Amendment is intended to make explicit that, among the exceptions to reserved matters on equal opportunities, the power is being devolved to the Scottish Parliament to set gender quotas.

Question put, That the amendment be made.

22:16

Division 116

Ayes: 242

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Labour: 182
Scottish National Party: 52
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 2
Green Party: 1

Noes: 287

---

Conservative: 286
Ulster Unionist Party: 1

Amendments made:101, page 34, line 17, leave out “at the end insert” and insert

“at the appropriate places insert—

““Board” includes any other equivalent management body.”

““Non-executive post” in relation to an authority means any position the holder of which is not an employee of the authority.”

““Protected characteristic” has the same meaning as in the Equality Act 2010.””

This amendment defines the key terms used in amendment 98.

Amendment 102, page 34, line 19, leave out “Part 1 of that Act, and to”.

Consequential on amendment 97.

Amendment 103, page 34, line 25, leave out subsection (6).

Subsection (6) of Clause 32 is superseded by New Clause 16.

Amendment 104, page 34, line 37, leave out subsections (9) and (10).—(Stephen Barclay.)

Subsections (9) and (10) of Clause 32 are superseded by New Clause 16.

Clause 33

Tribunals

Amendment made: 105, page 35, line 10, leave out from beginning to end of line 38 on page 36 and insert—

“2A (1) This Schedule does not reserve the transfer to a Scottish tribunal of functions of a tribunal that relate to reserved matters, so far as those functions are exercisable in relation to Scottish cases.

(2) “Scottish cases” has the meaning given by an Order in Council made by Her Majesty under this sub-paragraph.

(3) Sub-paragraph (1) does not apply where a function is excluded from transfer.

(4) Where a function is not excluded from transfer but is subject to qualified transfer, sub-paragraph (1) applies only if the transfer of the function is in accordance with provision made by Her Majesty by Order in Council.

(5) An Order in Council under sub-paragraph (4)—

(a) must specify the function to which it relates,

(b) must specify the Scottish tribunal to which the function may be transferred, and

(c) may make any other provision which Her Majesty considers necessary or expedient for the purposes of or in consequence of the transfer of the function and its exercise by the Scottish tribunal.

(6) The functions that are subject to qualified transfer are the functions of the following tribunals—

(a) the First-tier Tribunal or the Upper Tribunal that are established under section 3 of the Tribunals, Courts and Enforcement Act 2007;

(b) an employment tribunal or the Employment Appeal Tribunal;

(c) a tribunal listed in Schedule 1 to the Tribunals and Inquiries Act 1992;

(d) a tribunal listed in Schedule 6 to the Tribunals, Courts and Enforcement Act 2007.

(7) Sub-paragraph (6)© and (d) include a tribunal added to the Schedule concerned after this paragraph comes into force.

(8) Provision made by virtue of sub-paragraph (5)© may—

(a) include provision that—

(i) modifies the function;

(ii) imposes conditions or restrictions (including conditions or restrictions relating to the composition or rules of procedure of the Scottish tribunal, or to its staff or accommodation);

(b) be made with a view to purposes including—

(i) securing consistency in any respect in practice or procedure or otherwise between the Scottish tribunal and other tribunals;

(ii) promoting judicial co-operation in the interests of consistency.

(9) Sub-paragraph (8) does not limit the provision that may be made by virtue of sub-paragraph (5)©.

(10) The following functions are excluded from transfer—

(a) functions of a national security tribunal;

(b) functions of a regulator, or of a person or body that exercises functions on behalf of a regulator;

(c) functions of the Comptroller-General of Patents, Designs and Trade Marks.

(11) In this paragraph—

a “national security tribunal” means—

(a) the Pathogens Access Appeal Commission;

(b) the Proscribed Organisations Appeal Commission;

(c) the Special Immigration Appeals Commission;

(d) the tribunal established by section 65(1) of the Regulation of Investigatory Powers Act 2000 (investigatory powers tribunal);

(e) any other tribunal that has functions relating to matters falling within Section B8 of Part 2 of this Schedule, except a tribunal mentioned in sub-paragraph (6);

a “regulator” means a person or body that has regulatory functions (within the meaning given by section 32 of the Legislative and Regulatory Reform Act 2006);

a “Scottish tribunal” means a tribunal in Scotland—

(a) that does not have functions in or as regards any other country or territory, except for purposes ancillary to its functions in or as regards Scotland, and

(b) that is not, and does not have as a member, a member of the Scottish Government.

(12) The powers conferred by this paragraph do not affect the powers conferred by section 30 or section 113.” —(Stephen Barclay.)

The amendment reorganises paragraph 2A. Provisions previously covered in both paragraphs 2A(1) and (4) are brought together in paragraph 2A(1). Part of paragraph 2A(8)(a) (previously in paragraph 2A(6)(a)(iii)) is omitted as unnecessary because section 113(2) of the 1998 Act allows different meanings of “Scottish cases” to be provided for under paragraph 2A(2) for different purposes.

Clause 37

Roads: consequential provisions etc

Amendments made: 106, page 41, line 24, at end insert “(1) to (16)”.

This amendment would clarify that clause 37(2) does not change the person who is to exercise ministerial functions under section 87 of the Road Traffic Regulation Act 1984 (as inserted by section 19 of the Road Safety Act 2006), so far as relating to Wales.

Amendment 107, page 41, line 26, at end insert—

‘(3) Subsection (4) applies if the Secretary of State makes a statutory instrument revoking the following instruments in relation to England and Wales—

(a) the Zebra, Pelican and Puffin Pedestrian Crossing Regulations and General Directions 1997 (S.I. 1997/2400);

(b) the Traffic Signs (Temporary Obstructions) Regulations 1997 (S.I. 1997/3053);

(c) the Traffic Signs Regulations and General Directions 2002 (S.I. 2002/3113).

(4) Despite anything in section 35 or 36 or Schedule 2, the Secretary of State may by that instrument exercise one or more of the traffic signs powers to make provision in relation to roads in Scotland (including provision revoking one or more of the instruments mentioned in subsection (3) in relation to Scotland), with the consent of the Scottish Ministers.

(5) The traffic signs powers are—

(a) the power to make regulations under section 25 of the Road Traffic Regulation Act 1984 (pedestrian crossings);

(b) the power to make regulations under section 64 of that Act (traffic signs);

(c) the power to give general directions under section 65(1) of that Act (placing of traffic signs);

(d) the power to give general directions under section 85(2) of that Act (traffic signs for indicating speed restrictions);

(e) the power to make regulations under section 36(5) of the Road Traffic Act 1988 (traffic signs: discretionary disqualification for failure to comply).

(6) The Secretary of State may not by virtue of subsection (4) exercise any power in a way that the Secretary of State could not have exercised that power immediately before the coming into force of sections 35 and 36 and Schedule 2.” —(Stephen Barclay.)

This amendment would mean that if the Secretary of State replaces the current regulations and general directions on traffic signs, the new provisions can, if the Scottish Ministers consent, apply in relation to Scotland, in addition to England and Wales. Replacement provisions are currently being prepared for Spring 2016.

Clause 40

Onshore petroleum

Amendments made: 108, page 42, line 12, after “granting” insert “and regulation”.

This amendment makes a minor and technical change, clarifying that both the granting and regulating of licences fall within the matters no longer reserved.

Amendment 109, page 42, line 12, at end insert

“that, at the time of the grant of the licence, is”.

This amendment makes a minor and technical change, clarifying that the access powers being transferred are those to land for the purposes of searching or boring for or getting petroleum.

Amendment 10, page 42, leave out line 15 and insert—

“Access to land for the purpose of searching or boring for or getting petroleum under such a licence.” —(Stephen Barclay.)

This amendment clarifies that for a given licence, the definition of onshore Scotland shall be that which applies at the time the licence is granted. This is to prevent a change in onshore-offshore delineations due to geological processes from impacting an existing licence.

Clause 41

Onshore petroleum: consequential amendments

Amendments made: 111, page 43, line 34, leave out

“Minister in section 4 of that Act included”

and insert

“Secretary of State (or the Minister) in sections 4 and 9 of that Act included references to”.

This amendment makes a minor and technical change, clarifying the effect of the Mines (Working Facilities and Support) Act 1966 within the Petroleum Act 1998 for the Scottish Ministers in relation to onshore Scotland.

Amendment 112, page 43, leave out line 40 and insert—

““8A Interpretation of Part 1

( ) This section applies for the purposes of this Part.

( ) The “appropriate Minister” means—

(a) in relation to the Scottish onshore area, the Scottish Ministers;

(b) otherwise, the Secretary of State.”—(Stephen Barclay.)

This amendment makes a minor and technical change, clarifying that for the entirety of Part 1 of the Petroleum Act 1998, the “Appropriate Minister” refers to Scottish Ministers in relation to onshore Scotland.

Clause 42

Onshore petroleum: existing licences

Amendments made: 113, page 44, line 31, after “40” insert “or 41”.

This amendment makes a minor and technical change, clarifying that the new power for the Secretary of State to amend existing licences is framed by the necessity to make changes in relation to the provisions brought forth in both Clause 40 and Clause 41 of the Scotland Bill.

Amendment 114, page 44, line 35, at end insert—

‘( ) In the case of an existing licence granted in respect of an area (“the licence area”) of which part only was within the Scottish onshore area at the time the licence was granted—

(a) the Secretary of State may direct that it is to have effect as a licence in respect of an area comprising that part and a separate licence in respect of an area comprising the rest of the licence area, and

(b) subsection (1) applies in relation to each of those licences as it applies in relation to the existing licence.” —(Stephen Barclay.)

This amendment enables the Secretary of State to split cross-border licences between Scotland and England so as to transfer the administration of acreage in Scotland to Scottish Ministers while maintaining the administration of acreage in England with the Secretary of State.

Clause 43

Consumer advocacy and advice

Amendments made: 115, page 45, line 24, at end insert—

“, but not any related compulsory levy on postal operators.”;

() under the heading “Interpretation”, before ““postal services”” insert “postal operator”,”.”

This amendment has the effect of reserving powers to raise levies on postal operators for the purpose of funding consumer advocacy and advice.

Amendment 116, page 45, line 30, at end insert—

“, but not any related compulsory levy on persons supplying, generating, transmitting or distributing electricity.””

This amendment has the effect of reserving powers to raise levies on those supplying, generating, transmitting or distributing electricity for the purpose of funding consumer advocacy and advice.

Amendment 117, page 45, line 32, after “provision” insert “in relation to gas”.

This amendment makes a minor and technical change, correcting an omission from the Bill print at Introduction.

Amendment 118, page 45, line 33, at end insert—

“, but not any related compulsory levy on persons supplying gas to premises or conveying gas through pipes.””

This amendment has the effect of reserving powers to raise levies on those supplying gas to premises or conveying gas through pipes for the purpose of funding consumer advocacy and advice.

Amendment 119, page 45, line 40, leave out “at the end insert “or to such proportion of” and insert—

“(a) after “payment by the licence holder of sums” insert “— (a)”;

(b) at the end insert “, or

(b) relating to”.

This amendment and amendment 124 make minor and technical changes to the drafting to avoid duplication.

Amendment 120, page 46, line 2, leave out second “or” and insert “and”.

This amendment makes a minor and technical change to the drafting, correcting a grammatical error.

Amendment 121, page 46, line 6, leave out paragraph (b).

This amendment makes a minor and technical change to the drafting to avoid deleting references needed to collect historical costs.

Amendment 122, page 46, line 9, leave out from “words” to end of line 10 and insert ““(bb),” and “, (cb)”;”.

This amendment makes minor and technical changes to the drafting to avoid deleting references needed to collect historical costs and to delete extraneous references.

Amendment 123, page 46, line 13, leave out paragraph (f).

This amendment makes a minor and technical change to the drafting to avoid deleting references needed to collect historical costs.

Amendment 124, page 46, line 13, at end insert—

‘( ) In subsection (9) after “(3A)” insert “or to amounts mentioned in subsection (2)(b)”.”

See explanatory statement for amendment 119.

Amendment 125, page 46, line 17, leave out “such proportion of”.

This amendment makes a minor and technical change to the drafting to avoid duplication.

Amendment 126, page 46, line 25, leave out paragraph (b).

This amendment makes a minor and technical change to the drafting to avoid duplication.

Amendment 127, page 46, line 27, at end insert—

“() in subsection (4A) the words “or Citizens Advice Scotland, or by them jointly,”.”

This amendment makes a minor and technical change to the drafting to avoid duplication.

Amendment 128, page 46, line 28, leave out paragraph (e). —(Stephen Barclay.)

This amendment makes a minor and technical change to the drafting to avoid deleting references needed to collect historical costs.

Clause 50

Fuel poverty: support schemes

Amendments made: 137, page 49, leave out lines 18 to 20 and insert—

(1A) Subject to the following provisions of this section the power under section 9 to make a scheme in relation to Scotland is exercisable by the Secretary of State so as to make only—

(a) provision as to the licensed suppliers to whom the scheme applies,

(b) provision as to the aggregate amount of benefits to be provided under it by scheme suppliers, and

(c) any other provision within section 9(4) or (9)(a) or (c)(v) or (vi).

(1B) The power to make other provision under that section for the purposes of the scheme is exercisable by the Scottish Ministers.”

The amendment clarifies that those powers not transferred to Scottish Ministers remain exercisable by the Secretary of State. It also transfers an additional power to Scottish Ministers to make provision for determining the amount of any benefit provided by an energy supplier under a scheme in relation to Scotland.

Amendment 138, page 49, line 24, leave out “, (3)”.

The amendment removes the requirement for Scottish Ministers to seek the consent of the Treasury before exercising their powers in relation to fuel poverty support schemes provided by energy suppliers.

Amendment 139, page 49, leave out lines 25 and 26.

The amendment removes text no longer required as it has been incorporated into amendment 137.

Amendment 140, page 49, line 37, leave out from beginning to “varying” in line 38 and insert

“Subsections (1A) and (1B) do not prevent the Secretary of State from making any provision under section 9 for the purposes of a scheme in relation to Scotland, or from”.

The amendment is consequential on amendment 137.

Amendment 141, page 50, line 6, leave out from first “to” to end of line 7 and insert

“make any provision not mentioned in subsection (1A)(a) to (c).”

The amendment is consequential on amendment 137.

Amendment 142, page 50, leave out line 46 to 50 and insert—

“(12) Section 14(5) does not apply to regulations by which the Secretary of State makes provision by virtue of subsection (5), with or without other provision under section 9.” —(Stephen Barclay.)

The amendment is consequential on amendment 137.

Clause 51

Energy company obligation

Amendments made: 143, page 51, line 27, leave out “subsection” and insert “subsections (5A) and”.

Amendments 143, 145, 146, 148, 149, 151, 152 and 154 clarify that those powers not exercisable by the Scottish Ministers remain exercisable by the Secretary of State.

Amendment 144, page 52, line 11, at the end insert—

‘(4A) Where an overall carbon emissions reduction target has been apportioned under section 103(2A) of the Utilities Act 2000, the Scottish Ministers must—

(a) when making any order under section 33BC, comply with the duty in subsection (4B), and

(b) if the Secretary of State amends any order under that section, make any provision they think necessary, in consequence of the amendment, to comply with that duty.

(4B) The duty of the Scottish Ministers where subsection (4A)(a) or (b) applies is to exercise their powers under section 33BC (subject to subsection (5)) in the way they think most likely to secure that the proportion of compliance costs that is represented by costs relating to Scotland is no greater than the proportion of the overall carbon emissions reduction target that is represented by the part of it apportioned to measures carried out in Scotland.

(4C) In subsection (4B)—

(a) “compliance costs” means the total costs to gas suppliers of complying with carbon emissions reduction obligations that, in relation to any period, are imposed by order under section 33BC, and

(b) “costs relating to Scotland” means the total costs to gas suppliers of complying with obligations that, in relation to the same period, are imposed in relation to Scotland.”

Amendments 144, 147, 150 and 153 place a duty on Scottish Ministers, to exercise their powers in the way most likely to secure that the costs of the obligation relating to Scotland, when expressed as a proportion of total costs of the obligation, do not exceed the share of any overall target apportioned to Scotland.

Amendment 145, page 52, leave out lines 17 to 20 and insert—

‘(5A) Subsection (1) does not prevent the Secretary of State from making provision under—

(a) section 33BC(1A), (3), (5)(a) or (7)(a), or

(b) section 33BC(2A) where an overall carbon emissions reduction target has not been apportioned under section 103(2A) of the Utilities Act 2000.

(6) Subsection (1) does not prevent the Secretary of State from making any other provision under section 33BC or from varying or revoking an order made by the Scottish Ministers under that section—”.

See explanatory statement for amendment 143.

Amendment 146, page 53, line 14, leave out “subsection” and insert “subsections (5A) and”.

See explanatory statement for amendment 143.

Amendment 147, page 53, line 47, at the end insert—

‘(4A) Where an overall home-heating cost reduction target has been apportioned under section 103A(3A) of the Utilities Act 2000, the Scottish Ministers must—

(a) when making any order under section 33BD, comply with the duty in subsection (4B), and

(b) if the Secretary of State amends any order under that section, make any provision they think necessary, in consequence of the amendment, to comply with that duty.

(4B) The duty of the Scottish Ministers where subsection (4A)(a) or (b) applies is to exercise their powers under section 33BD (subject to subsection (5)) in the way they think most likely to secure that the proportion of compliance costs that is represented by costs relating to Scotland is no greater than the proportion of the overall home-heating cost reduction target that is represented by the part of it apportioned to measures carried out in Scotland.

(4C) In subsection (4B)—

(a) “compliance costs” means the total costs to gas suppliers of complying with home-heating cost reduction obligations that, in relation to any period, are imposed by order under section 33BD, and

(b) “costs relating to Scotland” means the total costs to gas suppliers of complying with obligations that, in relation to the same period, are imposed in relation to Scotland.”

See explanatory statement for amendment 144.

Amendment 148, page 54, leave out lines 4 to 7 and insert—

‘(5A) Subsection (1) does not prevent the Secretary of State from making provision under—

(a) section 33BD(3),

(b) section 33BC(3), (5)(a) or (7)(a) as applied by section 33BD(4), or

(c) section 33BD(2)(a) where an overall home-heating cost reduction target has not been apportioned under section 103A(3A) of the Utilities Act 2000.

(6) Subsection (1) does not prevent the Secretary of State from making any other provision under section 33BD or from varying or revoking an order made by the Scottish Ministers under that section—”.

See explanatory statement for amendment 143.

Amendment 149, page 55, line 1, leave out “subsection” and insert “subsections (5A) and”.

See explanatory statement for amendment 143.

Amendment 150, page 55, line 29, at the end insert—

‘(4A) Where an overall carbon emissions reduction target has been apportioned under section 103(2A) of the Utilities Act 2000, the Scottish Ministers must—

(a) when making any order under section 41A, comply with the duty in subsection (4B), and

(b) if the Secretary of State amends any order under that section, make any provision they think necessary, in consequence of the amendment, to comply with that duty.

(4B) The duty of the Scottish Ministers where subsection (4A)(a) or (b) applies is to exercise their powers under section 41A (subject to subsection (5)) in the way they think most likely to secure that the proportion of compliance costs that is represented by costs relating to Scotland is no greater than the proportion of the overall carbon emissions reduction target that is represented by the part of it apportioned to measures carried out in Scotland.

(4C) In subsection (4B)—

(a) “compliance costs” means the total costs to electricity suppliers of complying with carbon emissions reduction obligations that, in relation to any period, are imposed by order under section 41A, and

(b) “costs relating to Scotland” means the total costs to electricity suppliers of complying with obligations that, in relation to the same period, are imposed in relation to Scotland.”

See explanatory statement for amendment 144.

Amendment 151, page 55, leave out lines 35 to 38 and insert—

‘(5A) Subsection (1) does not prevent the Secretary of State from making provision under—

(a) section 41A(1A), (3), (5)(a) or (7)(a), or

(b) section 41A(2A) where an overall carbon emissions reduction target has not been apportioned under section 103(2A) of the Utilities Act 2000.

(6) Subsection (1) does not prevent the Secretary of State from making any other provision under section 41A or from varying or revoking an order made by the Scottish Ministers under that section—”.

See explanatory statement for amendment 143.

Amendment 152, page 56, line 32, leave out “subsection” and insert “subsections (5A) and”.

See explanatory statement for amendment 143.

Amendment 153, page 57, line 16, at the end insert—

‘(4A) Where an overall home-heating cost reduction target has been apportioned under section 103A(3A) of the Utilities Act 2000, the Scottish Ministers must—

(a) when making any order under section 41B, comply with the duty in subsection (4B), and

(b) if the Secretary of State amends any order under that section, make any provision they think necessary, in consequence of the amendment, to comply with that duty.

(4B) The duty of the Scottish Ministers where subsection (4A)(a) or (b) applies is to exercise their powers under section 41B (subject to subsection (5)) in the way they think most likely to secure that the proportion of compliance costs that is represented by costs relating to Scotland is no greater than the proportion of the overall home-heating cost reduction target that is represented by the part of it apportioned to measures carried out in Scotland.

(4C) In subsection (4B)—

(a) “compliance costs” means the total costs to electricity suppliers of complying with home-heating cost reduction obligations that, in relation to any period, are imposed by order under section 41B, and

(b) “costs relating to Scotland” means the total costs to electricity suppliers of complying with obligations that, in relation to the same period, are imposed in relation to Scotland.”

See explanatory statement for amendment 144.

Amendment 154, page 57, leave out lines 22 to 25 and insert—

‘(5A) Subsection (1) does not prevent the Secretary of State from making provision under—

(a) section 41B(3),

(b) section 41A(3), (5)(a) or (7)(a) as applied by section 41B(4), or

(c) section 41B(2)(a) where an overall home-heating cost reduction target has not been apportioned under section 103A(3A) of the Utilities Act 2000.

(6) Subsection (1) does not prevent the Secretary of State from making any other provision under section 41B or from varying or revoking an order made by the Scottish Ministers under that section—”—(Stephen Barclay.)

See explanatory statement for amendment 143.

Clause 57

Office of Communications

Amendment made: 129, page 64, line 16, at the end insert—

‘( ) In subsection (5) after “(3)(a)” insert “, (aa)”. —(Stephen Barclay.)

This amendment provides that the member of Ofcom appointed by the Scottish Ministers pursuant to Clause 57 has the functions of determining the number of executive members of Ofcom and making those appointments under section 1(5) of the Office of Communications Act 2002.

Clause 59

Subordinate legislation under functions exercisable within devolved competence

Amendments made: 130, page 65, line 24, after “section” insert “3,”.

This amendment inserts a reference to Clause 3 and has the effect of applying Schedule 2 of the Interpretation and Legislative Reform (Scotland) Act 2010 to any functions that are exercisable within devolved competence by virtue of that Clause.

Amendment 131, page 65, line 31, after “section” insert “3,”.

This amendment inserts a reference to Clause 3 and has the effect of applying Schedule 3 of the Interpretation and Legislative Reform (Scotland) Act 2010 to any functions that are exercisable within devolved competence by virtue of that Clause

Amendment 132, page 65, line 41, after “section” insert “3,”. —(Stephen Barclay.)

This amendment inserts a reference to Clause 3 and has the effect of making sure that a reference to the relevant date for the purposes of Clause 59 also applies to Clause 3.

Clause 63

Commencement

Amendments made: 133, page 67, line 37, at the end insert—

“(e) section 57”.

This amendment allows the provisions of Clause 57 to be commenced by regulations under Clause 63.

Amendment 134, page 67, line 37, at end insert—

‘(4A) Section [Destination of fines, forfeitures and fixed penalties] comes into force on such day as the Treasury may appoint by regulations made by statutory instrument.”

This is consequential on New Clause 17.

Amendment 135, page 67, line 38, after “(4)” insert “or (4A)”. —(Stephen Barclay.)

This is consequential on New Clause 17.

Schedule 2

Roads: consequential and related amendments

Amendment made: 136, page 76, line 21, leave out paragraph (a). —(Stephen Barclay.)

This amendment would ensure that the Bill does not affect the powers of the Scottish Ministers under section 14 of the Road Traffic Regulation Act 1984, as expanded by section 22C of that Act, that were previously devolved by Order in Council.

Third Reading

Queen’s consent signified.

22:30

[David Mundell]

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

I thank all Members for their participation in the debates that have taken place as the Bill has passed through the House. I believe the Bill has been strengthened by the scrutiny it has received, and the number of positive and constructive amendments that have been agreed to today is testimony to that. I particularly want to acknowledge the work of Bruce Crawford MSP and the Scottish Parliament’s Devolution (Further Powers) Committee, which has proved invaluable. Although I have not agreed with them on everything, I respect enormously their contribution to the Bill’s passage.

I thank John Swinney MSP and the Scottish Government officials for their always courteous engagement in the process. Scotland obtains the best outcome when its two Governments work together. I also thank my own officials and those in other Departments throughout Whitehall for their contributions.

The origin of the Bill was the Smith agreement, and I again pay tribute to Lord Smith of Kelvin and the representatives of all five of Scotland’s political parties for reaching an agreement which represents the new devolution settlement for Scotland. I also pay tribute to everyone who has worked so hard since then to enable us to reach this point today. I sincerely believe that the Bill delivers what the people of Scotland voted for decisively last September: one of the most powerful devolved Parliaments in the world, with the strength and security that come from being part of our United Kingdom.

No individual or party holds a monopoly of wisdom in respect of how the Smith agreement might best be translated into legislation, and the six days of debate that we have had on the Floor of the House have allowed me to listen to a variety of points of view and suggestions for further improvement. The Government have responded with the package of amendments that was presented on Report, and the Bill will proceed to the other place with its provisions clarified and strengthened.

There can be no reasonable doubt that the Bill delivers the Smith agreement in full, and the debate now moves from constitutional arguments to the important decisions that will affect the lives of people in Scotland. Will the Scottish Government create new benefits, or top up existing ones? What kind of schemes to address fuel poverty best suit the particular circumstances of Scotland? Will local communities be given a greater say in the management of assets such as the Crown Estate? How can Scotland’s public sector boards show the way forward for gender equality? Each of those decisions will now form a direct part of Scotland’s vigorous public debate, and each of them will be made in Scotland for the first time.

The Scottish Parliament and the Scottish Government will be more responsible and more accountable to the people of Scotland. That is what the Bill means for Scotland: the vow delivered, and a powerhouse Parliament within a strong United Kingdom. Now is the time for us all to work together to make these new powers a success for Scotland.

22:33

[Ian Murray]

I echo the Secretary of State in thanking everyone who has been involved in the Bill’s passage, including his officials and the people who have been so supportive to Labour Members. I thank my Parliamentary Private Secretary, my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth), and, of course, my hon. Friend the Member for Caerphilly (Wayne David), who has spoken on many parts of the Bill, but I also thank the Clerks in the Public Bill Office, who have been incredibly helpful in putting the Bill together. It has been like wading through treacle at times, but they have always been courteous, and their advice has always been well received.

Let me be absolutely clear at the outset about the Labour party’s position. We fully support the Bill and all that it seeks to achieve. [Interruption.] One would think that SNP Members would just stop for two minutes during the Third Reading debate. When the Conservative Secretary of State spoke, there was complete silence, but when the Labour party speaks, the braying mob starts. That tells us all that we need to know about this place.

With the amendments that have been accepted this evening, the vow has been delivered in full. The Bill delivers on the powers promised and agreed by all parties, including the SNP, in the Smith commission.

In 1998 Donald Dewar said:

“There shall be a Scottish Parliament”—[Official Report, 12 January 1998; Vol. 304, c. 25.],

and it was Labour, with the consent of the Scottish people, that delivered that Parliament. This Bill will make the Scottish Parliament one of the most powerful devolved legislatures in the world. It meets not only the terms of the vow, but the timetable laid out by Gordon Brown last year. We promised a process by the end of October; it was delivered. We promised it would conclude by St Andrew’s day; it was delivered. Draft legislation was promised by January; it was delivered. Second Reading of the Scotland Bill was promised straight after the election, regardless of who won; that was delivered. We promised that, no matter what parties formed the Government after the election, we would deliver a Bill to meet what the Smith commission set out; and thanks to the Secretary of State’s amendments put forward on Monday, that has been delivered. It is absolutely clear that this Bill, as amended, will place at the Scottish Government’s disposal the powers to make Scotland the fairer and more equal country that we all aspire for it to be.

[Patrick Grady]

Will the hon. Gentleman give way?

[Ian Murray]

I am not going to take interventions because I want the SNP opposition spokesman to speak, and if I take interventions he will be talked out.

From the establishment of the Scottish Parliament to the Calman commission to the Scotland Act 2012, Labour has supported more powers for the Scottish Parliament, but we are absolutely clear about what we stand for: we believe in devolution, not separation. That is what the people of Scotland voted for last year, and we respect the sovereign will of the Scottish people. They said they wanted to remain part of the United Kingdom but with a strong Scottish Parliament. They said they wanted to continue to pool and share resources across these islands. They said that they wanted the continued security that being part of a bigger union of nations and family of nations brought.

The Bill provides an historic opportunity for our politics in Scotland to turn from talking about the constitution to talking about the country, and about what we can do to make Scotland the fairest nation on earth, instead of what we cannot. Let’s grasp that opportunity. Let’s build that fairer nation. Let’s give the people across Scotland the politics they deserve. In the words of Donald Dewar, there shall be a powerful Scottish Parliament.

22:37

[Angus Robertson]

As is customary, it is appropriate to put on record the appreciation of all parties, and I do so on behalf of the effective opposition in this Chamber, the Scottish National party. I thank, too, colleagues in the Westminster SNP group who have taken part in the debate, and colleagues in the Scottish Government, with whom we have worked closely throughout the passage of this Bill.

Those watching at home, as opposed to those sitting in the Chamber—for those who are not aware of it, our proceedings are trending among the top 10 most discussed issues on Twitter tonight; a great many people in Scotland have been watching our proceedings—will have noted a number of things. They will have noted that for the first half of proceedings there were more SNP Members in the Chamber than those of all other parties combined. They will have noticed that, with less than six hours allocated for debate—notwithstanding the fact that an offer was made by the SNP for a second full day on Report—the Government tabled 200 new clauses and amendments, and we had an opportunity for only seven Divisions. On an issue that is supposed to be defining for Scotland’s constitutional future, that is no way to legislate. The idea that legislating as we just have is worthy of the mother of all Parliaments, as some people choose to call it, is way out of place.

We have heard a great many claims about the delivery of the vow. This evening, we have seen Labour Members agreeing with the Conservatives, as they have so often over the last years—[Interruption.] Indeed, they are signalling their co-operation and that they work closely together. That has been noted. In particular, it has been noted that this evening, the Labour party voted with the Tories against tax credits being devolved to the Scottish Parliament. On a defining issue—

22:40

Six hours having elapsed since the commencement of proceedings on the programme motion, the debate was interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83A(9)), That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed, with amendments.

Business without Debate

Monday 9th November 2015 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 9(6)),

That the Universal Credit (Work Allowance) Amendment Regulations 2015 (S.I., 2015, No. 1649), be referred to a Delegated Legislation Committee.—(Stephen Barclay.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 9(6)),

That the Rent Officers (Housing Benefit and Universal Credit Functions) (Local Housing Allowance Amendments) Order 2015 (S.I., 2015, No. 1753, be referred to a Delegated Legislation Committee.—(Stephen Barclay.)

Question agreed to.

Business of the House

Ordered,

That at the sitting on Monday 16 November—

(1) notwithstanding the provisions of paragraph (2) (c) of Standing Order No. 14 (Arrangement of public business), the business determined by the Backbench Business Committee may be proceeded with for three hours, and shall then lapse if not previously disposed of, and

(2) notwithstanding the provisions of Standing Order No. 20 (Time for taking private business), the Private Business set down by the Chairman of Ways and Means shall be entered upon after the conclusion of backbench business (whether before, at or after 7.00pm), and may then be proceeded with, though opposed, for three hours, after which the Speaker shall interrupt the business; the business may be entered upon after the moment of interruption; and Standing Order No. 41A (Deferred Divisions) shall not apply.—(Stephen Barclay.)

JOINT COMMITTEE ON CONSOLIDATION, &C., BILLS

Ordered,

That James Cleverly, Mims Davies, Peter Grant, Imran Hussain, Mr Stewart Jackson, Amanda Milling, Grahame Morris, Melanie Onn, Kate Osamor, Amanda Solloway, Julian Sturdy and Tom Tugendhat be members of the Select Committee appointed to join with a Committee of the Lords as the Joint Committee on Consolidation, &c., Bills.—( Bill Wiggin, on behalf of the Committee of Selection.)

European Scrutiny

Ordered,

That Nia Griffith be discharged from the European Scrutiny Committee and Stephen Kinnock be added.—( Bill Wiggin, on behalf of the Committee of Selection.)

Human Rights (Eritrea)

Monday 9th November 2015 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Barclay.)

22:41

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I am pleased that time has been found to debate this important and, sadly, overlooked issue and I thank the Minister for coming to the House to respond at the end of what I know has been a long day.

Until recently, like most of my constituents and most fellow Britons, I knew little of Eritrea, its people or its Government. Conditions in the country were brought to my attention a little over a year ago by one of my constituents, Habte Hagos, who owns and runs the award-winning Blue Nile restaurant in Woolwich, among other ventures. Like many Eritreans, Habte lost family members in the struggle for a free, democratic Eritrea and he has worked over many years to raise awareness about human rights violations in his homeland. I am delighted that Habte and others are in the Gallery this evening to watch the proceedings.

Desperate human beings are moving across our continent on a scale not seen since the second world war. As we know, a significant proportion are fleeing civil war and sectarian violence in Syria, but large numbers of Eritreans are also leaving the land of their birth in the horn of Africa. An estimated 5,000 people leave Eritrea every month and almost as many men, women and children left that country last year as fled from Syria. This human exodus is all the more staggering when we consider that it is from a country of just 6 million people that is not presently at war.

[Patrick Grady (Glasgow North) (SNP)]

I congratulate the hon. Gentleman on securing such an important debate. I have a number of Eritrean constituents who will welcome the fact that it is taking place. I acknowledge that a Foreign Office Minister will be responding to it, but a number of my constituents are concerned about the country guidance that the Home Office uses to determine whether asylum should be granted. Does the hon. Gentleman agree that that guidance should be updated to take into account the findings of the recent report from the United Nations commission of inquiry on human rights in Eritrea, rather than the discredited report from the Danish Government on the same subject?

[Matthew Pennycook]

The hon. Gentleman makes a good point. The methodology of the Danish Government’s report has been questioned. It remains the basis for the Danish Government’s guidance, but our Government should continue to review our own guidance to ensure that we are not refusing asylum to people who are genuinely being persecuted.

Most Eritreans who flee end up in neighbouring countries such as Sudan and Ethiopia, but many make the dangerous trek north towards the Maghreb and the Sinai peninsula in the hope of finding sanctuary in Europe. In doing so, each must evade: capture by their own security forces, who operate a shoot-to-kill policy against those leaving without permission; violence and extortion at the hands of desert gangs; death from dehydration in the Sahara; detention in Libya or Israel; and the lethal risks of crossing the Mediterranean. What dread leads so many, not just adults, but thousands of unaccompanied minors, to risk everything to leave their homeland behind? Words such as “tyranny”, “oppression” and “cruelty” are regularly used to describe conditions within all manner of distasteful regimes across the globe, to the point where sometimes they risk becoming stale with overuse. Yet if anything, those words fall short when applied to Eritrea under the rule of President Isaias Afwerki.

Isaias’s Eritrea is regularly described as “Africa’s North Korea”. That is a hackneyed phrase but in this instance the comparison is pardonable, because ruthless repression is the norm for those living under the rule of this isolated, hermetic and authoritarian regime. It is a far cry from what so many Eritreans fought for, heroically and for decades, and from the hopes of those who supported the struggle for liberation. Instead of democracy and the rule of law, Eritreans are ruled by a culture of fear and absolute obedience: fear that they or their classmates will be sent to carry out national service in a remote location for an unknown number of years; fear that a trusted co-worker who yesterday openly expressed an opinion may not turn up at work tomorrow; fear that a friend arrested arbitrarily will be incarcerated in a vastly overcrowded metal container or a simple hole dug in the desert ground, with little prospect of release; and fear that a disappeared family member might never be seen again.

There have been no elections since 1993, and no independent press since a Government clampdown in 2001. We have seen the pervasive and ongoing restriction of all freedoms—movement, expression and association. People have been subjected to arbitrary arrest, with no fair trials or no trials at all; indefinite compulsory military conscription; forced labour; and torture, including widespread sexual violence against women and girls. That is the situation in Eritrea today.

An extensive and detailed report published in June by the United Nations Commission on Human Rights describes, in horrifying detail, a siege state where control is absolute and where

“systematic, widespread and gross human rights violations”

are being committed. It says that these violations

“may constitute crimes against humanity”.

The crimes taking place today in Eritrea add themselves to old, but not forgotten, and still raw, abuses. Politicians, journalists, faith leaders and business owners who once proudly set out to build a prosperous post-independence future for their country instead find themselves languishing in one of the country’s numerous detention centres—or they have died there, suffering like thousands of ordinary citizens punished for refusing an order, being a member of the wrong religious domination or expressing sympathy with the wrong person.

[Jim Shannon (Strangford) (DUP)]

I sought the hon. Gentleman’s permission to intervene before this debate. Is he aware that since 2002, when the Government in effect banned all but three denominations, thousands of Christians from unregistered Churches have been arrested and detained indefinitely? Does he share my concern that 13 years later not only are the Eritrean Government continuing this campaign of arrest, but followers of registered religious communities also suffer maltreatment?

[Matthew Pennycook]

I thank the hon. Gentleman for his intervention. I share his concern about the persecution of particular minority groups, including religious groups, and of countless individuals, whose names many of us could mention. Many of the Eritreans to whom I have spoken could name friends, journalists and others from minorities who have been persecuted. Sadly, the repression has worked. Those who remain in Eritrea dare not speak up, for fear of reprisal, while diaspora communities are subtly infiltrated by agents of the state. Those who have fled abroad and who strive still to promote human rights are systematically intimidated.

[Anne McLaughlin (Glasgow North East) (SNP)]

I congratulate the hon. Gentleman on securing this important debate. Will he join me in asking the Minister whether he will work with his colleagues in the Home Office to offer further protection to those people? In Glasgow, I, too, have a number of Eritrean friends who have found that when they have tried to campaign against the human rights abuses, their family members and friends still suffer in Eritrea. They have been infiltrated by Government supporters and threatened and abused, and they are supposed to be here for safety.

[Matthew Pennycook]

I would certainly join the hon. Lady in asking for that. As she says, it is not just the family members who remain in Eritrea who are affected, but the communities that live here and that face fragmentation and abuse by these agents, much of which is online by anonymous trolls who target critics using everything from abusive emails to fully fledged death threats.

I have experienced this phenomenon myself, in a token way, in the lead up to this debate. If the regime is true to form, I can no doubt expect more of the same in the hours and weeks to come, but it is nothing—and that is the important point—compared with the intimidation experienced by Eritrean dissidents.

Intimidation of the diaspora is compounded by exhortation in the form of the so-called rehabilitation tax that the Eritrean Government impose on their countrymen and women living abroad. This 2% tax on the income of Eritrean émigrés is a diminishing, but still important, source of revenue for the regime. The previous coalition Government voted in favour of UN Resolution 2023 that condemned the tax and called on all states to ensure that it ceased.

Other countries have taken robust steps to enforce that resolution. In May, the Canadian Government expelled the Eritrean consulate-general in Toronto for continuing to levy the tax. Yet there are credible reports that collection of this tax continues unabated in the UK. Will the Minister assure the House that the collection of the 2% tax on Eritreans living in the UK has ended or, if he cannot give that assurance, can he outline what steps the Government plan to take to ensure that it is?

Beyond the narrow issue of the rehabilitation tax, I wish to touch on three distinct issues that I hope the Minister will be able to respond to and to influence. The first is the Ethiopian-Eritrean border dispute. In December 2000, a comprehensive peace agreement between Ethiopia and Eritrea was signed in Algiers that ended a two-year border war. The Algiers agreement established a boundary commission to demarcate the border. Both countries had agreed to accept the commission’s decision as final, but when the details were published in April 2002, Ethiopia disputed the findings.

The unresolved border tension remains a source of regional instability. It is also a very real grievance in Eritrea and one that is used by the regime to justify keeping the country on a permanent emergency military footing. Will the Minister therefore outline what recent steps the UK Government have taken, bilaterally, with key regional and international partners, and through the UN system, to help overcome the current stalemate and ensure the Algiers agreement is adhered to by both sides?

The second issue relates to sanctions. As the Minister knows, a UN and EU arms embargo is in force on Eritrea. In addition, there is also a travel ban and an asset freeze imposed on listed individuals deemed a threat to peace and the national reconciliation process. In the past, the UN has toughened sanctions on the regime by requiring foreign companies involved in Eritrea’s mining industry to ensure that funds from the sector are not used to destabilise the region.

If the Government accept—I hope that the Minister will confirm that they do— that the mass exodus of people from Eritrea is a reaction, in large part, to human rights abuses taking place there, then surely there is a case for considering a toughening of sanctions against the regime to deny it the means to persecute its people and thereby destabilise the region?

Will the Minister let us know what consideration the Government have given to widening sanctions against the Eritrean Government? Specifically, will he let the House know whether he agrees with me that, given the severity of the human rights abuses in Eritrea and their impact on regional stability, there is a convincing case for an expansion of targeted sanctions on those mining projects in Eritrea in which the Afwerki Government have a significant stake and that provide the regime with much-needed foreign exchange?

The third and final issue is EU development aid. The EU has responded to the flood of Eritreans fleeing their homeland by offering hundreds of millions of pounds in development aid in return for assurances from the Eritrean Government that they will address the social and economic exclusion that it is adamant are the root causes of irregular migration and human trafficking. In doing so Europe has, at best, given the impression that it believes that a lack of economic opportunity is the root cause of the population outflow, rather than repression. At worst, it risks the perception that the European Union would be content to see human rights abuses continue in the country, if only the regime would stem the growing tide of Eritreans heading toward this continent.

Money will not alter the simple fact that repression, rather than economic prospects, is the main driver of migration from Eritrea. In any case, money and the appalling human rights abuses that have been documented by the UN are inextricably interlinked, because Eritrea’s economy now is almost completely dominated by the state and the ruling PFDJ party. In such circumstances, aid will simply entrench the regime. The Minister will know that aid to Eritrea under the European Union budget will have to take account of the country’s human rights record under the terms of the Cotonou agreement, but can the Minister reassure the House that demonstrable proof of improvements in the human rights situation in the country will be an absolute prerequisite for the release of any EU development funding for Eritrea?

Eritreans have been and are being terrorised and oppressed by their own Government. The hermetic seal that the regime has attempted to enforce is well and truly broken. Eritreans are fleeing persecution at the hands of their rulers in record numbers, and they will not stop until meaningful progress on human rights in their homeland is under way. If there is one thing that history teaches us, it is that the struggle against the totalitarian mindset is an endless one that must be fought and refought in every generation. Eritrea is a central battleground in that conflict in our generation. Our own national interest, as well as our credentials as a bastion of human rights, demand that we give the victims of the Afwerki regime not only our solidarity, but clear and unequivocal support to alleviate the very real suffering they face.

22:56

[The Minister for Europe (Mr David Lidington)]

I congratulate the hon. Member for Greenwich and Woolwich (Matthew Pennycook) on securing this timely debate, and on speaking with such eloquence and passion.

The debate is timely because later this week, as the House will know, European and African leaders will gather in Malta to discuss how we can work together to reduce the number of people risking their lives in perilous journeys across the Mediterranean. This year alone more than 32,000 Eritreans have made that crossing, and others have lost their lives in the attempt. More Eritreans still are living in refugee camps in Ethiopia and Sudan, so the question has to be, as the hon. Gentleman asked, why are so many leaving and what can be done to improve the situation within Eritrea?

A large part of the answer, as the hon. Gentleman argued, relates to human rights. The Government, like the hon. Gentleman and others who spoke this evening, are well aware of the shockingly bad human rights record of the Government of Eritrea. That is why the Foreign and Commonwealth Office’s most recent human rights report listed Eritrea as a priority country and made it clear that its Government fell short of their international human rights commitments. I could give the House a very long list, but because of the time constraints I will confine myself to saying that we have concerns, for example, about allegations of widespread arbitrary detention, shortcomings in the rule of law, and a lack of respect for fundamental human freedoms.

We are troubled also by the United Nations commission of inquiry’s findings that widespread human rights violations had been committed in Eritrea. It is unfortunate that the commission has so far been unable to visit Eritrea to see the situation at first hand. In July this year at the UN Human Rights Council, the United Kingdom supported an extension of the commission’s mandate so that it could further investigate these allegations. We have made it clear to the Government of Eritrea that they must co-operate with the UN commission, including allowing its members to visit Eritrea to see matters for themselves, and that they must co-operate also with other UN human rights bodies.

[Jim Shannon]

I want it recorded in Hansard, please, that this year marks the eighth anniversary of the illegal removal of Patriarch Antonios from his position as head of the Eritrean Orthodox Church, the country’s largest religious community. Does the Minister agree that it is unacceptable that the patriarch, an octogenarian with severe diabetes, has been under house arrest since 2007?

[Mr Lidington]

Yes, I do. I hope that the attention the hon. Gentleman has drawn to the case will be noticed in the Eritrean embassy and that there will be some relenting in the position that the Government have adopted hitherto.

At the UN Human Rights Council and in our bilateral discussions, the British Government have set out very clearly to the Eritrean authorities the other steps we believe the country needs to take to improve its human rights record. They include expecting the Government of Eritrea to commit to doing something as apparently straightforward as implementing its own constitution, to release all those who have been arbitrarily detained, and to hold responsible the people who ought to be accountable for various violations and abuses of human rights. We shall continue to press those matters on the Eritrean authorities bilaterally and through our multinational work in Europe and elsewhere.

Alongside the very real concerns shared by everyone in the House this evening, we should not ignore any signs of progress, even small ones. I welcome the fact that Eritrea took part in the UN universal periodic review process at the Human Rights Council and in article 8 dialogue with the EU. Last year, Eritrea ratified the convention against torture and other cruel, inhuman or degrading treatment or punishment, and voted in favour of a global moratorium on the use of the death penalty. I also welcome its co-operation in efforts to tackle the human trafficking and smuggling that puts people’s lives at risk. These are indeed small steps, but they are steps in the right direction. The test now is for the Eritrean Government to follow through on their commitments with concrete action to improve the human rights situation on the ground, and the onus is on them to demonstrate progress.

A key part of that action should be to amend Eritrea’s system of indefinite national service. A system without a clear end date drives many young people to leave the country, and this needs to change. I welcome the fact that earlier this year the Eritrean Government made a public pledge to limit national service to 18 months, but Ministers here have been very clear when talking to the Government in Asmara that it is not enough for Eritrean officials or Ministers simply to make that pledge in Europe—the commitment needs to be publicised widely within Eritrea itself, and it should apply to all conscripts and not just those who have been enlisted recently.

As the House knows, the challenges that ordinary Eritreans face are not about human rights alone: they are also about a lack of economic opportunity. Eritrea is facing the effects of the El Niño weather phenomenon, which is now causing severe food insecurity across many parts of Africa. Many young Eritreans leave the country because they have no job, and no hope of finding one, to support themselves and their families. While we will all continue to work assiduously for an improvement in human rights in Eritrea, the fact will remain that if an educated young man in Asmara were to see his human rights situation improve but still be unable to find work to support his family, he might yet feel compelled to leave and put his life in the hands of unscrupulous criminal gangs that profit from people’s desperation.

The hon. Member for Glasgow North (Patrick Grady) asked about the Home Office’s approach to asylum policy. In this country we have a proud history of granting protection to those who need it. All asylum claims are carefully considered on their individual merits in accordance with our international obligations, particularly the 1951 United Nations convention on refugees. The Home Office’s country guidance on handling Eritrean asylum claims was updated in September this year. It recognises that there are indeed persistent human rights challenges in Eritrea but stresses also the need to consider each claim on its individual merits. We take those international responsibilities seriously, and we grant protection to Eritreans in genuine need.

The hon. Member for Greenwich and Woolwich raised a number of specific questions, and I will try to provide him with answers. He asked about the imposition of the expatriate tax. The levy of a tax on nationals living in a foreign country is not in itself illegal—in fact, many countries do it—but the UN resolution made it clear that using coercive measures to try to collect such a tax would be illegal. We have made it clear to the Eritrean embassy in London that coercive measures will not be accepted in the United Kingdom. We urge any such cases to be reported to the relevant police force without delay, so that an investigation can be made and action taken.

The hon. Gentleman asked about increased development assistance to Eritrea, including through the EU’s European development fund 11. That fund is still under discussion, and I completely understand the reasons behind the hon. Gentleman’s concerns. At the same time, however, we face the reality that Eritrea is one of the poorest countries anywhere in the world, and there is scope to help to improve and save the lives of Eritrean people. For example, Eritrea has begun to make some progress towards the health outcomes embodied in the millennium development goals. We should bear that in mind when we consider the pros and cons of a particular aid measure.

Aid does not mean providing funding to the Government of Eritrea. Greater EU assistance could, for example, be provided through United Nations agencies and international non-governmental organisations. I give a commitment that any further Department for International Development assistance will be carefully assessed against Eritrea’s commitment to its partnership principles, including on civil and political rights.

[Matthew Pennycook]

I want to press the Minister on how we can know, with a regime that has no financial accountability and does not let in international observers, that any development aid will be spent on health or economic outcomes, rather than on lining the pockets of party officials or the regime’s supporters.

[Mr Lidington]

That is precisely why aid is often best spent via reputable international agencies and NGOs with a track record of ensuring that help goes to those who are genuinely in need and which will shout very loudly if the Government of the recipient country try to interfere in that progress.

The hon. Gentleman referred to the Cotonou agreement. In my time in ministerial office, I have certainly approved a United Kingdom position for the Council of Ministers that supported the suspension of Cotonou agreement measures to more than one African country because of abuses of human rights or the suspension of the rule of law. As he said, those disciplines are available within the system that the EU deploys.

The hon. Gentleman talked about the UN arms embargo. Last month, the Security Council noted in resolution 2244 that, during the course of its current and previous mandates, the sanctions monitoring group had not found any evidence of the Government of Eritrea supporting al-Shabaab. I welcome that, but the resolution was also clear on what Eritrea needed to do if it wanted a serious discussion on the overall appropriateness of sanctions—that is, to deepen its engagement with the monitoring group and facilitate its entry into Eritrea.

I have to confess that I am not at the moment persuaded by what the hon. Gentleman urged in respect of mining companies, although I will report what he said to my colleagues in DFID and the Foreign Office. Despite all the problems in Eritrea, the mining companies provide one of the few sources of employment for people. It may be a matter of weighing up our wish to penalise the Government against the fact that we might inadvertently penalise people who are themselves suffering.

[Matthew Pennycook]

There are documented instances of forced labour at more than one mine, with compulsory military conscription being used. It is not a process whereby an international mining company goes in there legitimately. These sites are the sites of some of the abuses that I have talked about.

[Mr Lidington]

I will write to the hon. Gentleman after the debate with chapter and verse, but the advice I have received is that Nevsun, the leading international mining company in Eritrea, has a firm policy of refusing to accept on to its workforce people who have been conscripted in the way he describes. Undoubtedly, the Eritrean Government have tried to use conscripted labour in mines at various times.

Finally, the hon. Gentleman mentioned the ongoing border dispute between Eritrea and Ethiopia. I agree that that needs to be resolved and that the responsibility for that lies with the two countries concerned. We will continue to encourage, bilaterally and through the European Union, Eritrea and Ethiopia alike to talk to each other and engage through the various appropriate international forums to overcome the current stalemate. We hope that progress can be made towards demarcation, in accordance with the decision of the Eritrea-Ethiopia Boundary Commission.

Overall, while there has been limited progress, there is a great deal more that the Government of Eritrea need to do to tackle human rights abuses. The problems of Eritrea are all interlinked. It cannot fulfil its potential without genuine respect for human rights. Efforts to improve economic opportunities in Eritrea must go hand in hand with improvements in human rights and the rule of law. We will not only continue to monitor the situation closely, but seek always to support improvements in our bilateral and multilateral work. It is by being clear and firm on the need for change, and about the advantages to Eritrea and its people of making that change, that we stand the best chance of securing some improvement in the lives of ordinary people living in Eritrea. That, I hope and believe, is a goal that all hon. Members in the House tonight will share.

Question put and agreed to.

23:11

House adjourned.

House of Lords

Monday 9th November 2015 Lords Chamber

Monday, 9 November 2015.

14:30

Prayers—read by the Lord Bishop of Southwark.

Introduction: Viscount Hailsham (Lord Hailsham of Kettlethorpe)

Monday 9th November 2015 Lords Chamber

14:38

The right honourable Douglas Martin, Viscount Hailsham, QC, having been created Baron Hailsham of Kettlethorpe, of Kettlethorpe in the County of Lincolnshire, was introduced and took the oath, supported by Lord Garel-Jones and Lord Goodlad, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Robathan

Monday 9th November 2015 Lords Chamber

14:44

Andrew Robert George Robathan, having been created Baron Robathan, of Poultney in the County of Leicestershire, was introduced and took the oath, supported by Lord Astor of Hever and Lord Spicer, and signed an undertaking to abide by the Code of Conduct.

Dog Breeding

Monday 9th November 2015 Lords Chamber

Question

14:49

Asked by

[Baroness Parminter]

To ask Her Majesty’s Government whether they have plans to update legislation related to dog breeding and boarding, including the Pet Animals Act 1951.

[Lord Gardiner of Kimble (Con)]

My Lords, the Government are reviewing the legislation relating to the licensing system for dog breeding, animal boarding, riding establishments and pet shops. The intention is to update the legislation, streamline the licensing process and improve animal welfare. Over the summer, we consulted informally with local authorities, business interests and animal welfare charities, which are all largely supportive of change. We are planning a public consultation on this issue shortly.

[Baroness Parminter (LD)]

I thank the Minister for that reply. We need new legislation to tackle the appalling conditions that thousands of puppies suffer in the UK when they are bred for sale. Do the Government agree that no puppies should be sold under eight weeks and that all people selling puppies and dogs should have a licence, which will then give local authorities the resources to tackle puppy farming?

[Lord Gardiner of Kimble]

My Lords, this is clearly a very important issue. It is already an offence for licensed breeders to sell puppies aged under eight weeks, except to pet shops. Clearly, the current arrangements are that if you are in the business of breeding and selling dogs, you must be licensed. Anyone producing five or more litters at the moment should be licensed, but we are consulting on this. We think that a lowering of the threshold to three litters per annum would be a sensible way forward. But we are consulting on these matters and I would very much welcome an opportunity to discuss them with the noble Baroness.

[Lord Trees (CB)]

My Lords, in recent years we have seen the emergence of major new threats to our pet animal health. We have seen the growth of the internet trade, which can be easily exploited by unscrupulous sellers, to the detriment of the health of the animals; we have seen the growth in the fashion for exotic animals as pets, which for the most part are totally unsuitable; and we have seen the emergence of puppy-smuggling, mainly from eastern Europe, under the guise of the pet travel scheme, which is detrimental to the health of the puppies, and a threat to our biosecurity and, indeed, to public health. Many feel that our current legislation is inadequate to control these threats. What are the Government planning to do to counteract these threats?

[Lord Gardiner of Kimble]

My Lords, one of the reasons we wish to update the Pet Animals Act 1951, which sets controls on pet animals, is that pets are of course now traded online. We would make it clear that anyone trading pets online as part of a business is indeed operating a pet shop and should be licensed accordingly. On the question of pet imports, there is both the pet travel scheme for dogs, cats and ferrets and the Balai directive, which is about the rules governing the commercial trade and import of animals. We are working on this: the Chief Veterinary Officer has been in dialogue with Lithuania, Romania and Hungary, and we are seeking improvements.

[Lord Lexden (Con)]

Is my noble friend aware that the situation with regard to the breeding of cats is even worse than it is for dogs, because they enjoy no special protection under the law? What has happened to the regulations promised under the Animal Welfare Act which would help deal with this terrible crisis?

[Lord Gardiner of Kimble]

My Lords, although microchipping of dogs is compulsory, we do not require it for cats. Nevertheless, we strongly advise that owners microchip their cats. The point is that cats often do not represent quite the same challenges as dogs in terms of straying and other matters, but I will bear what my noble friend has said in mind.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister has told us that the regulations may be extended so that more potential vendors of pets will come under the ambit of local authorities. Can he tell us how local authorities will be expected to enforce these regulations, given that the area of enforcement and the regulatory officers concerned have probably suffered cuts of 40% over the last five years, with more to come?

[Lord Gardiner of Kimble]

My Lords, local authorities are required to enforce dog-breeding legislation and have powers to charge a fee to applicants on a cost-recovery basis. Indeed, there have been some very good examples of local authorities and the police working together with animal welfare bodies. There was a case in Manchester, for instance, in which the perpetrators have not only been jailed and fined but banned from keeping animals for life.

[Baroness Miller of Chilthorne Domer (LD)]

My noble friend mentioned the very high volume of trade that takes place over the internet. Do I understand from the Minister that the Government intend to make sure that anyone advertising puppies for sale on the internet will have to have a licence number?

[Lord Gardiner of Kimble]

There is a Pet Advertising Advisory Group. It is voluntary, and co-ordinated by the Dogs Trust. That is where we think great work can be done. Already, 130,000 inappropriate advertisements have been taken down. We are trying through the consultation to direct all the energies of local authorities at those breeders who are not playing by the rules.

[Lord Christopher (Lab)]

My Lords, I am glad to hear that two issues are being reviewed, but two have not been mentioned. Puppies have been mentioned, yes, but no one has mentioned how many litters a bitch might have in a year. I have seen bitches in a dreadful state because they have produced one litter after another. Secondly, it is not just the condition of the puppies that is important but their age and exactly what is being imported.

[Lord Gardiner of Kimble]

My Lords, it is absolutely clear and one of our three pieces of advice for prospective owners that they should never buy a puppy that is younger than eight weeks. Indeed, part of the agreements on the importation of pets is precisely a requirement that no animals for commercial sale are imported aged under eight weeks. That is a very important part of the equation.

[Baroness Seccombe (Con)]

My Lords, does my noble friend agree that if you are a lonely person, having a dog can be a great boon, and that responsible caring for a puppy, or even a rescue dog, can bring great happiness to both?

[Lord Gardiner of Kimble]

My Lords, I am delighted to endorse what my noble friend said. Many of us who have enjoyed the partnership and friendship of dogs will know that they are a vital part of many people’s lives. Whether working dogs, guide dogs or pets, they are a great joy. It is very important that we are responsible owners.

[Lord Foulkes of Cumnock (Lab)]

My Lords, will the Minister now answer the question put by my noble friend Lord Harris of Haringey? How will local authorities be able to carry out their duties, given the cuts that the Government have imposed on them?

[Lord Gardiner of Kimble]

Precisely as I said: they can charge a fee to applicants on a cost-recovery basis.

UK Territorial Space: Spanish Incursions

Monday 9th November 2015 Lords Chamber

Question

14:57

Asked by

[Lord Hoyle]

To ask Her Majesty’s Government what steps they are taking to prevent incursions by Spanish vessels and aircraft into United Kingdom waters and airspace.

[The Earl of Courtown (Con)]

My Lords, incursions are an unacceptable violation of British sovereignty, and we take them seriously. The Royal Navy challenges all unlawful maritime incursions, and the Government protest to Spain at an appropriate level following all air and maritime incursions.

[Lord Hoyle (Lab)]

I thank the Minister for that reply, but I must tell him that things can change rapidly. For instance, another bone of contention is border controls, with people having to queue at the border. An inspection took place on 27 October which was supposed to be secret but which had been in the Spanish press. Not surprisingly, there was no queue on that day, but the day after, people were waiting for four hours at the border. Can Gibraltarians be present at all times in discussions with the Spanish, and will the Government bear in mind the health, safety and welfare of the people of Gibraltar?

[The Earl of Courtown]

My Lords, the noble Lord mentions the border issue between Gibraltar and Spain. We noted that delays increased the day after the European Commission visit. The welfare and security of Gibraltarians must come first. The noble Lord also mentioned that any discussion about the future of Gibraltar must include all parties—and when I say all parties, I mean the United Kingdom, Gibraltar and Spain.

[Lord Anderson of Swansea (Lab)]

My Lords, given that the queues increased to three hours after the visit by the EU inspectors, should we not insist that such visits not be announced in advance but be spot checks?

[The Earl of Courtown]

The noble Lord makes a good point. I noted that there was an increase in time but if we go back to 2013, the Spanish were accused of queues of almost seven hours at the border. It is a little less than that now. The noble Lord is quite right in drawing attention to delays that happened after the visit of the European Commission.

[Baroness Smith of Newnham (LD)]

My Lords, in light of the some 300 or so incursions into British Gibraltan territorial waters in the first nine months of this year, are Her Majesty’s Government using all possible methods to liaise with the Spanish Government? Would matters be made better or worse were the United Kingdom not a member of the European Union?

[The Earl of Courtown]

I do not see the relevance of whether the United Kingdom is a member of the European Union. On the relationships between Spain and the United Kingdom over these incursions, the Spanish ambassador is summoned frequently. Summoning is a very serious form of diplomatic protest. The extent to which we have employed it is particularly unprecedented when we talk about an EU and NATO partner.

[Baroness Butler-Sloss (CB)]

What will happen when the current two Royal Navy ships finish their work in 2017? Do the Government intend to have some decent ship to deal with the incursions by the Guardia Civil on their much faster boats?

[The Earl of Courtown]

My Lords, our assessment is that the assets, structure and procedures of the Royal Navy’s Gibraltar Squadron are enough for the job but I take very careful note of what the noble Baroness said. We want to make sure that these challenging maritime incursions can be dealt with by our assets there.

[Lord West of Spithead (Lab)]

My Lords—

[Lord Ashdown of Norton-sub-Hamdon (LD)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, it is the turn of the Labour Benches.

[Lord West of Spithead]

My Lords, the Minister will be well aware that the ships we have in Gibraltar are in fact very tender, do not have very long range and are not nearly fast enough. Of course, the people manning them are very proud of them and do their best but it is their job to say that they are doing their best and they are good. The reality is that they are not good enough for the job and because of that there will be an incident where someone may be killed or badly injured. The Government of Gibraltar have said that they are willing to pay for faster, bigger craft. That has been done before with other countries we have been responsible for. Could we look at this very closely, so that we can get these new craft and then be able to do things that will not risk injury or death for our people there?

[The Earl of Courtown]

I listened very carefully to what the noble Lord said concerning our naval assets in Gibraltar. I will ensure that that is drawn to the attention of the department.

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, since we are discussing preventing people from straying on to territory where they should not be, can anything be done to stop senior serving military officers appearing on television?

[The Earl of Courtown]

No.

[Baroness Morgan of Ely (Lab)]

My Lords, what consideration have the Government given to the impact on Gibraltar of possible withdrawal from the EU? What guarantees can the Government give to the people of Gibraltar that there will be no border closure and that they will continue having access to the EU single market if the people were to vote to leave the EU?

[The Earl of Courtown]

My Lords, as I have said before, my right honourable friend is focused on delivering successful renegotiation but I see the United Kingdom and Gibraltar’s future as being part of a reformed EU. In my view, it is in the interests of Gibraltar, the UK and the European Union as a whole that our work on improving the competitiveness, fairness and accountability of the EU is successful.

[Baroness Wilcox (Con)]

My Lords, that being the case, I am delighted to think that the Prime Minister will go in and fight for our fishing vessels. The rest of the Question was to do with them. We all know for sure that the Spanish fleet, which is bigger than the rest of the fleets put together in the whole of the European community, abuses at all times its quotas. We have only self-policing in the European community now. No country can report another for cheating. Is it not time that our Prime Minister looked at this and came back with something for the British fisherman?

[The Earl of Courtown]

My Lords, the fishing policy in the Gibraltar waters is the concern of the Government of Gibraltar. We will take careful note of what my noble friend says.

Syrian Refugees

Monday 9th November 2015 Lords Chamber

Question

15:04

Asked by

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government how many refugees have entered the United Kingdom under the vulnerable persons relocation scheme for Syrian nationals, and what, if any, are the advantages of that scheme as compared to entry under normal immigration regulations.

[The Minister of State, Home Office (Lord Bates) (Con)]

My Lords, the last published figures show that, by June 2015, 216 people were resettled in the UK under the Syrian resettlement scheme. Additionally, we have granted 5,000 Syrians protection under the normal asylum procedure since 2011. The Government will resettle 20,000 Syrians this Parliament. Resettlement provides exceptional protection routes for vulnerable cases whom the UNHCR judges are unable to access adequate support in the region, providing help by resettling them to the UK.

[Lord Roberts of Llandudno (LD)]

I thank the Minister for his Answer, but is it not really rather difficult, when the Prime Minister has promised that we shall have 1,000 refugees settled here by Christmas and only 216 were resettled in the summer? Also, how are you going to make sure that the promise of 1,000 refugees is fulfilled? The 20,000 in five years does not compare very well with Canada, which is taking 25,000 by Christmas. How are the people who come going to be accommodated? Have the Government been in touch with local authorities? Even this morning, I had a text message from somebody in my own valley who said, “We want to accommodate Syrian refugees”. What are you doing about that?

[Lord Bates]

Specifically on the last point of the local authorities, Richard Harrington, a Member in the other place, is the Minister with responsibility for the Syrian refugees who are coming to this country, and he is working very closely with the local authorities and devolved Administrations on this important issue. The Prime Minister has repeated his claim that he wants to see 1,000 here by Christmas, and the Home Office and all other groups are working to ensure that that happens. A key part of this is that the resettlement scheme comes through the UNHCR, and we want the UNHCR to identify the people who are most vulnerable to ensure that those who are most at risk get the protection that we want to give them.

[The Lord Bishop of Southwark]

My Lords, how close are Her Majesty’s Government to announcing the details of a third route in addition to the two mentioned in the noble Lord’s Question—namely, the introduction of a private sponsorship scheme, in which many faith and community groups have expressed strong interest? This would enable faith communities to work in partnership with the Government and reflects a desire to do this, as expressed by the Bishops in their recent letter to the Prime Minister.

[Lord Bates]

That is under active consideration at the moment. Of course, many of the people on whom we are focusing at present are the most vulnerable and in need, particularly of medical care and what have you, so they may not be appropriate for the type of generous offer that has been made. But we have talked about creating a register for charities, churches and faith groups to get involved; there is also a page on the government website that tells people how they can get involved. Once the immediate urgency is over and the first group is brought to the UK safely, we will very much want to take up those offers of great generosity by others.

[Lord Higgins (Con)]

My Lords, would my noble friend agree that, with regard to the Answer to this Question and more generally, it would be immensely helpful if the Government had a means of communicating with refugees? Would they therefore consider very carefully setting up an app on the web so that refugees using their phones—which seems to be true across the whole of Europe and beyond—could access this information in a way that would be cost effective and extremely helpful both for them and for the Government?

[Lord Bates]

That is an intriguing idea. Of course, the key point is that we want to get the message out to people who are thinking of travelling and taking these dangerous routes to the UK that there is now a better chance of their actually achieving the resettlement that they seek by going through the UNHCR and staying where they are. However we can communicate that information to them, we need to do that. The use of technology is one answer. The topic is seriously on the agenda and is the main focus of the summit in Valletta on Wednesday and Thursday this week. I shall follow that up with my noble friend.

[Lord Reid of Cardowan (Lab)]

My Lords, it is obviously right and proper that the Government respond to the terrible plight of the Syrian refugees, but in order that the people of this country who might have any fears that such a system would be misused by those who would wish to damage this country and the people of this country, could the Minister say something about the security screening that accompanies the acceptance of the refugees?

[Lord Bates]

The noble Lord is absolutely right. That is one of the reasons why we want the application and vetting processes to happen under the auspices of the UNHCR in the refugee camps rather than having a group of people attempting to enter the UK so that we have to make those judgments at the border. We want it to take place in the Middle East so that the right people can be brought to this country and the wrong people cannot.

[Baroness Hamwee (LD)]

My Lords, I heard this morning of an asylum seeker from Syria who has been told by the Home Office at Croydon that he cannot even make an application for asylum for another two months, which means that he cannot access Section 95 benefits and is dependent on the charity sector for clothing, food and so on. Can the Minister assure the House that, even though the vulnerable persons scheme is working in conjunction with the UNHCR, there is not a backlog growing in the Home Office as a result of the work which is being done? The person who told me about this also commented that it would be a pity if a backlog grew up because the Home Office seems to be getting much better at processing applications more quickly.

[Lord Bates]

As the noble Baroness knows, many of the people arrive at our border without any identification documents. To come back to the previous point, we need to make those checks and be absolutely sure that we are not putting the people of this country at risk by allowing people in. If there is a specific case, I am happy to take it up with the noble Baroness later. It underscores the importance of getting the message out that the way to approach Syrian refugees is through the UNHCR and the Syrian vulnerable persons resettlement scheme.

[Baroness Butler-Sloss (CB)]

Will the Government reconsider taking some of the unaccompanied children who have crossed into Europe? We have had a very good record, particularly at the beginning of the war, in terms of looking after the children. There are some who really do need our help as well as that of other countries.

[Lord Bates]

I am aware of that; that is Save the Children’s proposal, which it has talked about. The UNHCR has cautioned against taking unaccompanied children into the country because they are particularly vulnerable. The scheme we are proposing in Syria would enable not only children but their parents and brothers and sisters to qualify. We think that that is a better route.

[Lord Rosser (Lab)]

Will the Minister clarify the situation a little more? How many councils in the United Kingdom have finalised agreements, including financial arrangements with the Government, to take 1,000 Syrian refugees before the end of the year under the scheme? How many Syrian refugees are covered by agreements that have already been finalised?

[Lord Bates]

We have issued guidance on this for local authorities. The Prime Minister made the announcement on 7 September and it is up to local authorities to come forward and volunteer to be part of the scheme, and they are coming forward. That is important because they need to make sure that they have the ability, through schools and social care, to do it properly. This is a fast-moving situation. We do not have a number on the specific local authorities, but 140 individuals have arrived since 7 September. The Prime Minister has given a commitment that we will seek to get 1,000 here by Christmas. We will do that, providing we work in partnership with local authorities.

NHS: Costs of Operations

Monday 9th November 2015 Lords Chamber

Question

15:13

Asked by

[Lord Naseby]

To ask Her Majesty’s Government whether the National Health Service will publish the average cost of all operations and procedures undertaken (1) by general practitioners, and (2) in hospitals.

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

My Lords, the department has published the average cost of operations and procedures in hospitals for the past 17 financial years. These reference costs are the average unit costs to NHS hospital trusts of providing acute, ambulance, mental health and community services, covering £58 billion, or 55%, of revenue expenditure in 2013-14. Reference costs for 2014-15 will be published this month. There are currently no plans to collect similar information from general practitioners.

[Lord Naseby (Con)]

Does my noble friend recall that one of the features of GP fundholding was that GPs had a budget, the patient could choose what hospital they went to and the hospital to which they were referred then sent a bill to the GP? If we introduced a new system whereby GPs and hospitals actually knew the cost of what they were or should be charging, would that not enable GPs and hospitals to stick to their budgets, and some of the overspend would then disappear?

[Lord Prior of Brampton]

My Lords, hospitals do know their costs; they know their reference costs and their HRGs. Increasingly, we will want to get patient-level costing into all our hospitals, as is already the case in some hospitals. If you know the actual cost by patient, the hospital management can have a much better discussion with hospital clinicians. Patient-level costing is important going forward in hospitals. For GPs, we have a calculated payment, as my noble friend will know: currently £75.77 per capita on the list, adjusted for various matters. A capitated figure for GPs is probably better than a much more detailed breakdown of costs.

[Baroness Walmsley (LD)]

Do the figures for hospitals discriminate between those that have to service expensive PFI contracts and those that do not? If so, and if the former are more expensive than the latter, is the department funding them appropriately to enable them to pay those costs?

[Lord Prior of Brampton]

The noble Baroness makes an important point. We have what we call a “market forces factor”, which is applied to the tariff to make adjustments for unavoidable differences in costs—for instance, providing care in London compared to providing it in a cheaper place. The way we measure the cost of capital is not entirely satisfactory, though, and if an individual trust has a very expensive PFI, that is not properly compensated for by the market forces factor. We should spend some more time looking at that issue.

[Baroness Wall of New Barnet (Lab)]

My Lords, is the Minister aware of the new system brought in by the department to measure every activity that goes on in a hospital, including the consultant’s time and all the extra things that are used? He talks about reference costs and even tariffs, but they are not actually a very good measure of the cost of materials and services that are already used in the health service.

[Lord Prior of Brampton]

The reference costs try to pick up all the costs attributable to certain procedures. As I was saying earlier, a patient-level costing system would probably be more accurate. I did not catch the first part of the noble Baroness’s question, so perhaps we could deal with this outside the Chamber. Hospitals are incredibly complex and picking up all the costs, particularly allocating overhead costs to individual procedures, is difficult. Compared to any other hospital costing system I have seen in the world, though, the NHS reference-cost system is pretty comprehensive.

[Lord Ribeiro (Con)]

My Lords, one category not included in the list is the independent sector treatment centres. Are these proving as cost-effective as we would like? If so, is it not time that NHS consultants have greater access to them to deal with their elective cases, many of which are often cancelled because of the need to bring in emergencies?

[Lord Prior of Brampton]

My noble friend raises an interesting question about independent treatment centres, which are for elective cases, not emergencies. They are able to plan their case mix more accurately, and are much choosier about the case mix they take. They can be extremely efficient, and if they have the volumes coming through, they are. Because of the case mix they take, they ought to be able to deliver significant cost advantages over providing such surgical care in a normal NHS hospital. The argument for ring-fencing orthopaedic procedures, for example, is overwhelming in terms both of cost and the quality of care delivered.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, I have heard consultants getting very cross not with patients, but with patients with complications being referred from private hospitals when the procedure got too complicated for them to deal with. Could the Minister write to me detailing the available information he has about this? I stress that in both cases, the consultants were genuinely caring of the patients; but both said that in their view, this happened too often.

[Lord Prior of Brampton]

I will certainly look into this and write to the noble Baroness, as she requests. There is no question but that in complex cases, the NHS is better equipped than most private hospitals to deal with such complexity; and of course, even when a simple case is handled in a private hospital and something goes wrong, that may lead to a referral back to an NHS hospital. However, I will certainly look into this and write to the noble Baroness.

Bank of England and Financial Services Bill [HL]

Monday 9th November 2015 Lords Chamber

Committee (1st Day)

15:20

Relevant document: 11th Report from the Delegated Powers Committee

Amendment 1

Moved by

[Lord Eatwell]

1: Before Clause 1, insert the following new Clause—
“The Bank: definition
(1) For the purpose of this Act, “the Bank” has the same meaning as in section 41 of the Bank of England Act 1998 (general interpretation).
(2) In section 41 of the Bank of England Act 1998—
(a) For “In this Act” substitute “For the purposes of this Act”; and(b) After “England;” insert “for the purpose of this Act, powers delegated to “the Bank” may be exercised by, or be limited to, any or all of—(i) the staff of the Bank of England,(ii) The court of directors,(iii) The committees of the court of directors, (iv) The Governor,(v) the Deputy Governors,(vi) the executive staff; and”.”

[Lord Eatwell (Non-Afl)]

My Lords, as was evident in the speeches around the House at Second Reading, there is a feeling in this House that the Bill is a serious retrograde step from the measures taken in 2012 and 2013 following the financial crisis to strengthen the accountability and oversight of the Bank of England. The purpose of my Amendment 1 is to exemplify the argument that I made at Second Reading that the Bill renders the governance structure of the Bank of England opaque and not fit for purpose. Many measures in the Bill that we will come to discuss later on this afternoon serve the cause of making the governance structure opaque. One device for achieving this obscurantist outcome is to use the term “the Bank” in an active sense; that is, where an entity labelled “the Bank” is to act, notably to make policy or policy decisions, without ever defining who might be responsible for those actions since, as my amendment seeks to make clear, “the Bank” could refer to anyone involved in the institution: the governor, deputy governors, various committees, or even the doorkeepers in their pink coats.

I read carefully through the Bank of England Act 1998—the version as amended by subsequent legislation, which the Bill seeks to amend further. In all clauses within that Act that provide the power to make policy, the active entity is clearly identified. So in Section 9A the financial stability strategy must be determined by the court. In Section 9C, the Financial Policy Committee has clearly defined functions and powers. In Section 13 the formulation of monetary policy is clearly defined as the role of the Monetary Policy Committee.

There are a few instances in the existing Act where the vague term “the Bank” is used in an active sense. However, as far as I can tell, in all such instances it is clear from the context which entity within the organisation might perform the relevant function. For example, Section 9Y of the Bank of England Act provides “the Bank” with powers to enable the pursuit of the financial policy objective. These powers are to seek information to enable the Financial Policy Committee to do its job. Clearly, the active entity would be the Financial Policy Committee asking for information. Section 18 of the Bank of England Act requires “the Bank” to produce reports on the activities and objectives of the Monetary Policy Committee. The active entity would presumably be the MPC, although I admit that in this case it is not entirely clear.

Generally, up until now the vague term “the Bank” is used within the Bank of England Act, where the context is such that the active entity can be identified and consequently, and crucially, can be held to account. If this Bill were to be enacted as currently drafted, that would no longer be the case. In new paragraph 13B(2) introduced under Clause 8(6) of the Bill, the Bank is given the power to revise and replace the code of practice to which members of the Monetary Policy Committee must comply. Can the Minister tell us exactly who “the Bank” is in this context? Who can revise and replace the code of practice with which members of the Monetary Policy Committee must comply?

The most extraordinary example of deliberate obfuscation is to be found in Clause 5, where we find amendments to the Bank of England Act that would make “the Bank” responsible for the determination of strategy with respect to the financial policy objective. Indeed, Clause 5(2) amends Section 9A of the Act with the extraordinary statement that “the Bank” must consult the Financial Policy Committee about that strategy. Will the Minister tell us precisely who is doing that consulting?

I remind the Minister that the financial policy objective and the role of the FPC arose out of the experience of the financial crisis, when it was evident that the Bank of England’s attention to questions of financial stability was woefully inadequate, yet now this vital piece of policy-making is to be handed over to—we know not whom. The Treasury has connived in this obscurantism. In its impact assessment of the Bill, it states with respect to Clause 5:

“Making the Bank responsible for setting the strategy”,

within the Bank,

“will ensure that Court is responsible for the running of the Bank and that the Bank’s policy committees are responsible for making policy”.

Really? How does it know? It is not in the Bill. Nothing in the Bill identifies the division of responsibilities with respect to the financial stability objective in the terms set out in the impact assessment. I remind the Minister of the words of the Treasury Select Committee in another place:

“The Bank is a democratically accountable institution and it is inevitable that Parliament will wish to express views and, on occasion, concerns about its decisions”.

Does the Minister agree with that view? If he does, will he tell us how it will be possible for Parliament to hold the Bank to account when the Bill sets out to obscure where within the institution responsibility for the exercise of vital powers may actually lie?

My amendment—which is, if you like, a probing amendment—is intended to expose what is being done in the Bill. The amendment makes it clear that the term “the Bank”, when used in the active sense, is an empty, amorphous expression and hence is designed to obscure. If the Minister disagrees with my definition of “the Bank”, perhaps he would be good enough to provide his own definition. I beg to move.

15:30

[Lord Tunnicliffe (Lab)]

My Lords, I thank my noble friend Lord Eatwell for this amendment, which takes us to the central problem with the Bill. His words are powerful: he calls the Bill opaque and obscure, and he says that it leaves unclear who makes policy. I thank him for his review of the previous legislation and his assurance that, broadly speaking, it works. I thank him for the concept of an “active entity”, which I shall adopt. However, he comes back to the point: who is doing what?

Perhaps before I go on, I should explain where the Opposition stand on the Bill. We feel that the role of the Bank of England is quite central to the economy and that it needs to be reviewed and probably reformed. We believe that, to do that, we have to have a period of reflection and study. My noble friend the Shadow Chancellor in another place has announced those reviews. Nevertheless, in respect of this Bill, we have a role to review the Bill, ensure that it makes sense and do all that we can to help the Government bring it back to a more sensible position.

Like my noble friend, having read the Bill, I ended up feeling that I understood less about how the Bank works than I did when we were in the very painful position in 2012—I say painful because it took so long to get there—when we created the legislation that created the present situation. Largely speaking, there is a question around why we are changing it from something that is clear to something that is significantly less clear. I thank the Minister for all his help in trying to help me understand the Bill—I wish that he had had more success. I am very grateful for the consolidated document that his staff have produced, and that has made studying the Bill and the Acts that it affects so much more straightforward. I also thank the Minister for the meetings he arranged, with himself and with the chairman of the court.

Those two meetings had an interesting effect: they produced two letters. One was dated 4 November and the other was dated November; noble Lords will have to take my word for it that it came after 4 November. I will quote selectively from the letters and am very happy to circulate them to anybody who is interested. Under a large paragraph labelled “Court of Directors and Financial Stability Strategy”, the Minister says:

“The Court, as the governing body of the Bank, is responsible for managing the Bank’s affairs except for the formulation of monetary policy. The Court is also responsible for determining the Bank’s objectives and strategy, and, in line with the Court’s role overseeing the Bank, the Bill makes the Court responsible for the oversight functions. The Court is therefore ultimately responsible for deciding how power given to ‘the Bank’ should be exercised, and how duties given to ‘the Bank’ should be fulfilled. This includes the Bank’s recovery and resolution powers”.

When I read that, I thought that it was pretty straightforward and sounded like any other company: power rests with the board—we happen to call it “the court”—except for where it is either taken out by statute, which it clearly is in the formation of monetary policy, or where the court has decided to delegate that power.

Unfortunately, after I met the chairman of the court, I got another, shorter letter. Under a paragraph labelled “Powers and duties conferred on the Bank”, it said:

“As the governing body of the Bank, the court is responsible for deciding how powers given to the Bank should be exercised and ensuring that the Bank fulfils its duties”.

That sounds okay. It then goes on to say that:

“These include powers and duties in relation to note issuance, resolution, and supervision of financial market infrastructures”.

It does not quite say that it shall have no other duties, but I put it to noble Lords that they are a pretty thin number of duties, given the tremendous responsibility that the Bank has in our monetary affairs. In the next paragraph, under the heading, “Powers and duties conferred on statutory committees”, the letter states:

“Powers and duties conferred on a statutory committee are for that committee to exercise, according to the terms of their legislation. The Court cannot exercise the powers conferred on a statutory committee”.

Because there was no legislation passed between 4 November and the something of November, I assume that the two letters say the same thing; I just have a lot of trouble seeing how. If the first letter is right, as I read it, then I am relatively comfortable. Unlike the Bill—and we can clear that up with some amendments—it restates my understanding that the court is in charge, except where responsibility is taken out by legislation. The second letter rather implies that there are four entities in the Bank: the Financial Policy Committee, the Monetary Policy Committee and the Prudential Regulation Committee—I think I have got them roughly right—which have clear powers and lots of authority and are all, incidentally, chaired by the governor; and then there is something called “the Bank”, which is left with note issuance, resolution and supervising infrastructure. We all know that no committee is going to have much to do in a resolution situation, since it will happen over a weekend in 48 hours We have moved from a position where the court is central to the Bank to one where it seems almost irrelevant.

There are two points here. First, is that move the Government’s intention and, secondly, is it clear? We are going to worry elsewhere about the standards for senior management in banks. If a bank came along with its roles and responsibilities as obscurely set out as we now have in the proposed legislation, it would be denied a licence to operate. What are we asking from these organisations? It is absolute clarity of who does what, with what authority. This does not meet those standards and it would not get a licence. I hope the Minister will ponder on what my noble friend, Lord Eatwell, and I have said. If he agrees that the Bill produces more obscurity than light, I hope he will pause and bring forward some amendments on Report, first to make absolutely clear what the Bill does.

[Lord Flight (Con)]

My Lords, when the Bill was published, I wrote to the Economic Secretary to the Treasury on this territory, because I could not really understand how the reorganisation of the Bank was intended to operate, or what it intended to achieve. Part of the reply I got was:

“The Governor has said that: ‘Our strategy will be to conduct supervision as an integrated part of the central bank and not as a standalone supervisory agency that happens to be attached to a central bank’. De-subsidiarisation, together with the organisational changes being put in place by the Bank as part of its ‘One Bank’ strategy, is an important element of this, and will help to break down any remaining barriers that could stand in the way of a unified culture and impede flexible and coordinated working across the Bank”.

I thought about this and looked at the structure. In answer to the points raised by the noble Lord, Lord Eatwell, what struck me was that “the Bank” actually means “the Governor”.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

I begin by thanking noble Lords who have spared the time to meet and discuss aspects of the Bill. I am grateful to the noble Lord, Lord Tunnicliffe, for his kind words, but it was clear that some of my epistles have caused more confusion than I would wish. I will try and address that, and the points made by the noble Lord, Lord Eatwell. I am conscious that the noble Lord, Lord Eatwell, like so many others in your Lordships’ House, has a lot more experience in this, so bear with me as I set out the Government’s case on this specific point.

It is a good point to start with because we are, as a Committee, seeking to answer the question, which the noble Lord posed very eloquently, of “What is the Bank of England?”—which is a good place to start with in a Bank of England Bill. As he rightly said, during Second Reading he worried that this definition might be an amorphous entity and I completely agree that a full answer to his question is overdue. Let me try to answer it.

The noble Lord referred to the 1998 Act. The Bank of England is defined in the Interpretation Act 1978, which tells us:

“Bank of England means, as the context requires, the Governor and Company of the Bank of England or the bank of the Governor and Company of the Bank of England”.

Acts amended by this Bill either refer to “the Bank” and define that expression as “the Bank of England”, or refer initially to “the Bank of England”, so that it is clear what the subsequent references to “the Bank” mean.

This is all well and good for making sure that the corpus of legislation functions neatly, but I know that it does not quite get to the nub of the noble Lord’s question, which is: what does it mean when legislation such as this Bill names “the Bank”, who does the work and, as the noble Lord rightly said, who is responsible? Legislation generally confers powers and duties on the Bank of England in two ways: either directly on the Bank or on a statutory committee of the Bank. Sometimes legislation grants roles directly to court, and we will get on to what that means when we discuss Clause 5.

However, for now I want to focus on the question of what it means when powers and duties are conferred on the Bank. Who is responsible for the Bank in relation to these powers and duties? The answer is: the court is. As the governing body of the Bank, the court is responsible for deciding how powers given to the Bank should be exercised and ensuring that the Bank fulfils its duties. Powers and duties granted to the Bank include, as the noble Lord said, those in relation to note issuance, resolution and supervision of financial infrastructures. As he rightly said, he should take the first letter he received as the position on this.

The court may delegate these powers and duties within the Bank as it deems fit, a situation the noble Lord’s amendment would try to replicate. However—this is the heart of the matter—the court remains responsible for that delegation, and where it decides to delegate powers and duties the court still retains ultimate responsibility for the exercise of those powers and duties. I hope that gives some shape to what the Bank is and who is responsible within the Bank for determining how it fulfils the responsibilities conferred on it.

Some powers and duties are not conferred on the Bank but on statutory committees. Powers and duties conferred on a statutory committee are for that committee to exercise according to the terms of its legislation. The court cannot exercise the powers conferred on a statutory committee. That said, even when powers and duties are conferred on a statutory committee, the court still has responsibilities. As the governing body of the Bank, the court is responsible for ensuring that the statutory committees exercise their statutory roles and responsibilities effectively, including that they are adequately resourced and supported to do so.

The Bill reinforces this role of court by making the oversight functions the responsibility of the whole court, a point we will come on to. For example, the oversight functions include keeping under review the Bank’s performance in relation to the duty of the FPC.

I am conscious that the noble Lord may have further questions in regard to what I have said. Let me pick up on one point. He asked about the FPC and who is doing the consulting. It is for the court to approve changes to the code of practice for, I think it is, the MPC because it is responsible for managing the affairs of the Bank. I hope that addresses his point.

[Lord Eatwell]

Why has the court’s responsibility been taken out of the Bill and replaced with “the Bank”? The Bill originally said that the court should consult the FPC, but now it says that the Bank must do so. The noble Lord is saying that that means the court, so what is the point of this amendment?

15:45

[Lord Bridges of Headley]

My Lords, we will come to address that. Responsibility for these functions still rests with the court, and I think that is perfectly clear. I am happy to meet the noble Lord to address these points in more detail, and we will come to the FPC in due course. I hope I have begun to provide further clarity on the Bank’s governance, but I can see from the noble Lord’s face that I may not have done. Even so, I hope he will withdraw his amendment.

[Lord Eatwell]

My Lords, I am grateful to those noble Lords who have spoken, and in particular to my noble friend Lord Tunnicliffe for his exposition of yet further confusion in letters from the Bank of England, or from whoever, attempting to explain what the Bill is really about. I must say that I am sympathetic to the suspicion in the mind of the noble Lord, Lord Flight, that “the Bank” means “the governor”.

The noble Lord, Lord Bridges, has said that the answer is that the court is responsible for deciding what “the Bank” means, and the court may delegate those purposes how it might wish. This House spent many hours working carefully with the noble Lord, Lord Deighton, who I am delighted to see in his place, to define precisely the roles of different committees within the Bank of England and their responsibilities. It is very striking that in the crucial role of financial stability, this definition is lacking. For the Monetary Policy Committee the definition is clear and, in respect of other activities within the Bank, if one reads the Bank of England Act 1998, one can see that the responsible entity is clear. In respect of the vital role that arose from the financial crisis and the failures of the Bank of England during that crisis, however, there is to be no clarity or clear definition of role.

I think it will be necessary to amend the Bill to make the position clear, because if it is not amended, parliamentary scrutiny has less insight than it requires to perform the role of ensuring that the Bank is democratically accountable. At this time, I will say that unless the noble Lord amends the Bill appropriately on Report—he may be encouraged to do so—I will produce appropriate amendments myself. In the mean time, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 1: Membership of court of directors

Amendment 2

Moved by

[Lord Sharkey]

2: Clause 1, page 1, line 7, at end insert—
“( ) In section 1(2) (court of directors), in paragraph (e) omit “not more than”.”

[Lord Sharkey (LD)]

My Lords, I start by thanking the Minister and his officials for meeting us to discuss the provisions in the Bill. It was helpful and I look forward to further meetings between Committee and Report. The purpose of the amendment is to set the number of non-executive directors of the court of the Bank to nine. The helpful Treasury briefing note to the Bill is a little ambiguous in this area. It states on page 1 that, alongside these changes, the number of NEDs on the court will be reduced from nine to seven, although the legislation will leave flexibility for up to nine NEDs. But as far as I can see, there is no measure in the Bill to reduce the number of NEDs from nine to seven. I understand that this reduction is within the gift of the governor, who has simply decided that the number should be seven and not nine. As far as I know, there has been no consultation on this measure.

According to the Bank’s website as of this afternoon, the court has four executive members and nine non-executive members. The governor proposes to reduce the number of non-execs to seven, while at the same time the Bill proposes to increase the number of Bank officials on the court from four to five. Together, this would radically change the composition of the court. As I say, at the moment the court consists of four Bank officials and nine NEDs. The new structure would mean that there are five Bank officials and seven NEDs. This seems unsatisfactory and possibly even dangerous. The Bank’s tendency to groupthink is well known, and of course the Bank is famous for its intellectual humility and capacity for self-doubt. It is important that the tendency to groupthink and arrogance is resisted. The last two financial services Acts gave much more power to the governor than to the Bank but, at the same time, they provided for more robust oversight. The officials/non-executive director balance on the board is a critical part of that. It is absolutely critical if the court succeeds, later in the Bill, in abolishing the oversight committee and assigning its functions to the court itself, which I hope it will not. We will look at that later.

I pressed the Minister at Second Reading, and in a subsequent meeting, to explain why the number of non-executive directors is to be reduced, and I have had no real answer. I have heard something about administrative convenience and transition arrangements, whatever they may be, but that is certainly not a proper answer. I again ask the Minister why the number of non-executive directors on the court is being reduced.

A lot in the Bill seems to be aimed at reducing the influence of non-executive directors, and we will come to discuss the composition of the various sub-committees. A lot in the Bill seems aimed at reducing external influence on the Bank’s processes and deliberations. There is also a lot in the Bill that weakens the supervisory regime that the Bank is charged with enforcing, and we will come to all that. For now, our amendment seeks to maintain the balance of NEDs and officials on the court of the Bank. That is obviously vital if we are to avoid a repetition of groupthink and introspective and arrogant behaviour. The Bank will have five officials on the court—one more than it has now. We need to retain nine non-executive directors to be certain of strong, uncaptured, independent voices on the court. I beg to move.

[Lord Flight]

My Lords, I support the points made by the noble Lord, Lord Sharkey. If the number of independent directors on the court is reduced to seven, and is not far off being equal to the number of resident directors, I am not sure what role the court has. I also raise the point as to what should independent directors of the court be. What sort of people should be there and how should they be appointed? I was surprised when exploring this to be told that there was now a ruling that a member of the court must not be any NED of any form of bank. It seems that, by and large, NEDs on the boards of banks are, in today’s world, almost an extension of regulators. One of their prime governance tasks is to make sure that the banks are run properly, in accordance with regulatory requirements. I would have thought that the independent members of the court ought to be a cross-section of NEDs from banks and other financial institutions, and that to say, “Oh no, you mustn’t have anybody who is an NED of a bank because there is a conflict of interest”, is a complete misunderstanding of the role of the court.

Obviously, if the bank of the individual NED were being discussed, they could leave the room and behave as in the normal arrangements when any conflict of interest arises. However, I repeat: if the court is to do a useful job, it should have on it independent representatives who have first-hand experience of the banking system in this country.

[Lord Davies of Oldham (Lab)]

My Lords, I am grateful to the noble Lord, Lord Sharkey, not just for his amendment but for the arguments that he put forward, with which we have a great deal of sympathy. I still find it difficult to understand the Government’s case for reducing the number of the non-executive directors in the Bill from nine to seven. I am sure that this issue will run like a—I almost said a golden thread, but certainly a constant thread throughout our discussions because we are concerned about the issues of accountability and openness, as well as the effectiveness of the Bank. I know that the Government want to achieve all those objectives. At the moment, I am afraid we have not, despite the assiduous work of the Minister. I pay due regard to that and to the meetings we have had identifying aspects of the Government’s case. However, we are still not persuaded of the merits of this argument, although the Minister obviously thought that we would be, and we probably anticipated that we would be.

I am unclear as to why the Government want to reduce the number to seven; they must recognise that that will change the balance of the court. What is the argument for reducing this crucial number of non-executive directors? I hear what the noble Lord, Lord Flight, said about a certain qualification for non-executive directors, but he would be the first to recognise that we need on this body people with a breadth of experience and understanding, not just of banking issues but of the most fundamental aspects of the operation of the economy.

What seems to underpin the Government’s position is the view that plenty of academic evidence exists which indicates that smaller boards are preferable to the more extensive boards that obtained in a great deal of City institutions in the past. I am not against that consideration as I hold academics in some regard. I probably ought to, given the well-informed contribution of the noble Lord, Lord Eatwell, who discussed the preceding Bill to which this one obviously relates, so of course I respect academic opinion on size. However, unless the Government make their case with greater clarity than they have done so far, I am not prepared to accept that the Bank of England is exactly like any other City institution. It is not. It has responsibilities and duties that go beyond those of any other institution and because of that we have to look carefully at the balance of forces on the Bank’s board. I almost use the word “cavalier” with regard to what the Government are doing, although I am not sure that they are being cavalier. However, they are seeking to reduce the size of the court and are claiming that this is good practice on the basis of some fairly thin arguments. We want to see good practice on the part of the Bank. We are well aware that the present position is the product of the legislation that was taken through after the crisis. We are all well aware of the criticisms and failures that occurred during the 2007-08 financial and economic crisis. However, we do not believe that the Government’s proposition for the Bank is based on secure arguments or that it will result in improvements.

We would like to know how the Government reached their decision to reduce the number of executives while increasing the official side of the Bank. We are not sure what consultation was undertaken on these matters, what advice was taken or who the prime mover behind such a striking and significant change was. The Minister is working hard on the Bill. We value that and the expertise he brings to it. This is only a limited aspect of the whole issue of the accountability and effectiveness of the Bank. However, on this point, the Government have thus far not established their case. Therefore, Her Majesty’s Opposition broadly support the amendment in the name of the noble Lord, Lord Sharkey.

16:00

[Baroness Kramer (LD)]

My Lords, I completely support my noble friend Lord Sharkey in this. Although I greatly respect the noble Lord, Lord Flight, I hope that the House will resist his blandishments. I think non-executive directors of banks finding themselves on the Court of the Bank of England would be constantly facing conflicts of interest, and the public perception would be appalling—that the Bank had become the captive of the industry that it is there to regulate. That does not seem to be a sensible principle.

With the changes that are now proposed—for there to be five inside members, if you like, of the court and seven outside—the inside members would need to persuade only one outside member to join them to achieve stalemate. That is an unacceptable balance in any institution which is so important to the economic life of this country. If the argument cannot persuade more than one non-executive director, it cannot have the standing that would allow it to prevail.

Like my noble friend Lord Sharkey, I am still struggling to understand why this change is being made. The only reason that has been presented to me is the issue of transition. If there are only seven members of the board, for a period of time there could be an incoming and an outgoing member on the board at the same time. Perhaps that is a good practice; it sounds reasonably attractive. But for that to be the reason that the board should be reduced on a normalised basis to seven seems extraordinary. I also suggest that an outgoing member might be very hesitant to exercise their rights, knowing that they were about to depart the board. Transitional arrangements could be put into the Bill, and we would be quite supportive of the idea that there might be a period when an outgoing member of the court could remain on the board in certain roles, or perhaps even in a full role, for a brief transitional period to achieve the goals that the Minister is attempting to achieve.

I hope very much that we can resist this set of issues. The Bank of England is sufficiently important and outsiders are absolutely necessary. This House has made sure over the past several years that that is central to legislation and I think we will continue to hold to that importance.

[Baroness Noakes (Con)]

My Lords, I agree with the noble Baroness, Lady Kramer, that the Bank of England is an important institution but I am not sure that that importance needs to translate itself into how the court is constituted. The important activities of the Bank are carried out in what will be the three major committees: monetary policy, financial stability and prudential regulation. The activities carried out by the court are relatively few in number. The question then is: what size of court is going to be efficient for carrying out the functions it is there for?

The model that well serves both the plc community in this country and much of the public sector that is modelled on corporate lines is to have a majority of non-executives. That is being kept in here. I have never heard it suggested that the number of non-executives is somehow important to the quality of governance in plcs. Many have more than a bare majority of non-executive directors but a lot operate strictly within the rules to have just a bare majority. I have not seen any studies anywhere that the ratios have any correlation with the quality of governance that is capable of being exercised.

The noble Lord, Lord Davies, referred to the academic evidence that smaller boards are effective boards—that is one of the things that came out of Sir David Walker’s review into the governance of banks—and that committees should be 4:5 and boards 8:10 or something like that. That is because in a smaller organisation, all members can have a proper voice and there can be a proper discussion, whereas in large boards often it is relatively simple for an inner group to dominate the larger group. That is what the behavioural studies have shown.

[Baroness Kramer]

I respect the views of the noble Baroness, Lady Noakes, very much but is she saying that the current Court of the Bank of England is ineffective because it is too large, and that the effect has been that many of the non-executive directors are not having their voice heard? That is a very serious comment to lay on the table. If that is the case, we really need that evidence because we will want to effect a cure, if this is an answer to a board that the Government have essentially decided is ineffective.

[Baroness Noakes]

My Lords, I have absolutely no knowledge of how the Court of the Bank of England works and have not had that knowledge since 2000, when my tenure on the court ceased. At that time I think that we were a court of 16, of whom 13 were non-executives. I will not claim that we were a very effective board at that. All I am trying to say is that what the Government are proposing is perfectly sensible and in line with general corporate practices. It seems to be entirely defensible.

[Lord Eatwell]

My Lords, the Bill reeks of the feeling that non-executive directors are a nuisance. Everywhere, we find the role of the non-executive directors in the Bank being reduced. This simple numerical reduction is something like arguing about the number of angels who can dance on a pin. None the less, let us remember why legislation was brought to this House and argued for so forcibly by the noble Lord, Lord Deighton. It was because the Bank of England was seen to have significantly failed during the financial crisis: in particular, that the Bank of England had not had sufficient alternative voices or challenge within its decision-making process. That is what underlay the Financial Services Act of, let me remind the Committee, 2012—just three years ago. From its vesting date to today, that Act has been in force for about two and a half years. How, after that period, can it be decided that the experience of the Act and the structures put in place by it were misconceived? This seems to be simply an attempt for the Bank to return to business as usual, ex ante—before the financial crisis. If the size of the court is too large then that should be the subject of a careful review and the evidence should be presented to this House. That has not been done. Where is the evidence?

The noble Baroness, Lady Noakes, said that what the court does is of course not very much. I wonder whether she was listening to the noble Lord, Lord Bridges, just now when he said that the court is responsible for deciding delegation of powers within the Bank. That seems to me to be quite a lot. With respect, perhaps in the day of the noble Baroness the court did not do very much, but the 2012 Act was specifically designed to empower the court and to produce on it a variety of views and the potential for challenge. There is not much of an issue between seven and nine. The issue is: why is this being changed now? What was wrong in 2012 that is now to be righted and what evidence is there that the decisions which this House made in 2012 were misconceived?

[Lord McFall of Alcluith (Lab)]

My Lords, I would like to make a couple of points in support of the views of the noble Lord, Lord Sharkey. The noble Baroness, Lady Noakes, made the case that the court did not do very much; that was precisely the problem. It had the job of oversight and it is a matter of record that it did not do that job well. The feeling was therefore that the Bank was engaged in groupthink. It did not allow the doors of the Bank to be opened and for the outside world to understand what the Bank was doing. That closed community failed. Evidence to the Treasury Committee acknowledged that it had failed; the current governor acknowledged that it had failed in a speech at Mansion House a number of months ago, when he made three detailed points about the areas in which it failed.

This body has failed. It therefore needs to ensure that that groupthink and closed mentality is disposed of, but that cannot be disposed of by shrinking. It has to ensure that there is a wider community looking over the Bank. After all, society depends on the decisions that the Bank makes, and it is extremely important that society has confidence in the Bank. This is not just a matter for the Bank, the directors and the governor or how he feels; this is a matter of democratic accountability to Parliament and societal involvement. As the noble Lord said, two years after a change with no examination is an unacceptable way to go about business. Let us get the doors of the Bank open and ensure that we have a wider engagement and a wider debate. That will do both the Bank and society good.

[Lord Ashton of Hyde (Con)]

My Lords, I thank noble Lords who have participated in this short debate. The general theme has been that the Government have not put forward a sufficient case for reducing the number of non-executives. I hope that by the end of the debate, we will have been able to elaborate on that. The noble Lord, Lord Eatwell, said that there seemed to be a pervasive feeling through the Bill that non-execs are a nuisance. That could not be further from the truth—good ones are essential, but too many non-execs are not effective. It is crucial to have very high-quality non-execs. I will come on to that as far as the court is concerned.

I agree with the noble Lord, Lord Sharkey, that we have got the figures right in terms of what we have at the moment and what we are going to have, but I come to completely the opposite conclusions as a result of that. I will try my best to outline the Government’s feeling and will also refer, to a certain extent, to some of the points my noble friend made about the academic evidence and the experience of commercial firms, which show that sometimes reduced numbers are more effective.

As noble Lords are aware, the Bank of England Act 1998 states that the court can contain,

“not more than 9 non-executive directors”.

This Bill does not make any alteration to this provision. Before I dive into the detail, it may be helpful to remind the Committee what we are seeking to achieve: a court that is effective in scrutinising the actions of the Bank, holding executives to account, challenging their thinking and exercising its statutory functions. A number of noble Lords have cast this debate in terms of avoiding groupthink, which I agree is very important.

Given that, there are two important factors to bear in mind about the issue we are discussing here, both of which mitigate the risk of groupthink. The first is the number of non-executive directors on the court, which the noble Lord’s amendment focuses on. The second, but no less important, factor is the quality of non-execs on the court. Let me first address the issue of numbers. Within the terms of the current legislation as written, the Government plan to reduce the number of non-execs to two. This will not weaken the court; instead, it will strengthen it.

[Baroness Kramer]

By two.

[Lord Ashton of Hyde]

Yes—by two, to seven. We think that will strengthen it, because the governance of the Bank will be enhanced by enabling the court to become a smaller, more focused unitary board, as several noble Lords have mentioned.

A smaller court is something the Treasury Select Committee advocated in its 2011 report, Accountability of the Bank of England. It recommended that the court’s membership be reduced to eight, emphasising that a smaller court would allow a diversity of views and expertise while still being an efficient decision-making body.

Our proposals exceed the size of court recommended by the Treasury Select Committee, but a court of 12 is significantly smaller than both the court’s original size of 24 and its size more recently, during the financial crisis, of 19.

16:15

[Lord Eatwell]

I am intrigued by the Treasury Select Committee’s recommendation of eight. Can the Minister tell us what would have been the composition among those eight recommended persons?

[Lord Ashton of Hyde]

I fear I cannot. Can the noble Lord help us? The answer is, no, I cannot tell noble Lords that.

[Baroness Kramer]

Perhaps I could be helpful on that point. As the noble Lord will remember, this legislation is adding one more insider, so the balance with eight would have been five insiders versus three outsiders.

[Lord Ashton of Hyde]

The balance would change if we do what the Chancellor has decided to do—to reduce it to seven—but, as I will come on to, the flexibility is maintained to have nine. The legislation says “up to nine”, and nothing in the Bill changes that. We are still operating on the original number of “up to nine”. The amendment would make it exactly nine and reduce any flexibility.

My original point was that our suggestion is smaller than the Treasury Select Committee’s original number of 12, the court’s original size of 24 and its size during the crisis of 19. The size of the court was identified as a barrier to its effective functioning during the financial crisis. We think that a smaller board will better scrutinise the executive. With fewer non-executive directors, each member has greater opportunity to pose questions to executive members and to debate with them. A larger court can encourage a round table of individual speeches, rather than enabling back and forth discussions and challenge to the executive.

As Professor Capie, former official historian of the Bank of England, noted in his evidence to the Treasury Select Committee, historically, larger boards have often consisted of “simply observers or rubber-stampers”. This was supported by independent evidence from the Walker report, which suggested that the ideal size for a board tends towards 10 to 12 people. Our proposal for five executive and seven non-executive members sits within this range. The Walker report notes that boards larger than 12 people become less manageable and less effective.

The Bank itself has highlighted the benefits of reducing the size of the court. In its 2014 report, it said that,

“consistent with best practice in the private sector, the Bank sees the value of continuing to evolve towards a slightly smaller body, with a non-executive chair and majority”.

Undoubtedly, board sizes in the private sector are on average relatively small. For example, according to the Spencer Stuart board index, the average sizes of boards in 2014 in the US and UK were 10.8 and 10.5 respectively.

Our proposals therefore align the court with current best practice for a unitary board. However, I accept that best practice can, and often does, evolve over time. Therefore, as I said, the current wording provides flexibility, but no compulsion, to increase the number of non-executives up to nine if future evidence suggests that this would be beneficial. Similarly, and importantly, this flexibility will ensure continuity and transfer of knowledge during periods of flux between departing and joining non-executive directors, as the noble Baroness, Lady Kramer, mentioned. But that is not the only reason for the change. We will retain the flexibility, but the normal number will be seven. Specifying that the court must contain an exact number of non-executives, as the amendment does, would lose those benefits.

Let me now turn to the quality of non-execs on the court, which is critical and was mentioned by several noble Lords, including my noble friend Lord Flight. The court has been transformed over the last three years. The Chancellor sought to appoint the highest quality team with significant experience of running large organisations and expertise in matters relevant to the Bank. All non-execs are appointed by the Queen on the recommendation of the Prime Minister and the Chancellor of the Exchequer. The appointment process is run by the Treasury and regulated by the Office of the Commissioner of Public Appointments. It is in line with best practice, with open competitions held for all positions. The Government look far and wide for the best candidates, with roles advertised in the international press. The result is a board of the highest quality non-execs chaired by Anthony Habgood, one of the most experienced and respected company chairmen in the country.

I was asked by the noble Lord, Lord Davies, what consultation took place on reducing the number of non-executive directors. In its December 2014 publication, Transparency and Accountability at the Bank of the England, the Bank made the case for reducing the size of the court. The Government included the proposal to reduce the size of the court to seven in the July consultation paper, with the consultation closing in September. No respondents opposed the proposed reduction in the size of the court.

[Baroness Kramer]

Would the Minister remind us how many responses there were to that consultation?

[Lord Ashton of Hyde]

There were not that many, but I cannot tell the noble Baroness the exact number.

[Baroness Kramer]

I think the number was 14. Most people did not know it was there.

[Lord Ashton of Hyde]

So clearly it was not a burning issue. As my noble friend Lord Flight said, no member of the court is from a regulated firm—that is absolutely true—which ensures no conflicts of interest. We think that that is the correct way forward. Of course, they bring a wide amount of experience and there are many members of the court whose description is a “former” director of relevant parties, including banks.

Finally, who made the decision to reduce the number from nine to seven? That was made by the Chancellor, on the advice of the non-executive chairman of the Bank. The proposed composition of the court, as recommended by the Treasury Select Committee, was a total of eight: the governor, two deputy governors, an external chair and four other external members.

[Lord Sharkey]

Does that not make the point that it would give a clear majority to the external members?

[Lord Ashton of Hyde]

It would also be considerably smaller than what we propose today—which is one of the problems brought up by noble Lords. We are not going with that exact number but we will have a majority of externals with the flexibility to increase those by two—something the noble Lord’s amendment would remove.

We agree that the ability for independent scrutiny and challenge should not be compromised. We think that with seven high-quality non-executive directors this will not change. There will still be a majority of external members on the court, well equipped to scrutinise the actions of the Bank and hold the executive to account. My noble friend Lord Bridges and I are happy to meet with the noble Lord, Lord Sharkey, if he would like to discuss this further, but in the mean time I hope that my explanation of the Government’s thinking will allow him to withdraw his amendment.

[Lord Sharkey]

I am afraid we have not heard any kind of compelling explanation as to why this reduction should take place or what its benefits might be. It is simply not enough to pray in aid, as the Minister did, the alleged size and efficiency ratio of commercial company boards. That is simply a category mistake. The Bank is not a commercial company. It has duties that no commercial company has, and it is more important in our national life than any private sector company.

The reduction proposed in the number of non-execs would completely change the culture in the court. But what is worse, as the noble Lord, Lord Eatwell, has said, there is simply no evidence to support the case for the reduction. Evidence may arise out of the consultation, but I am not quite clear about that—and that may need at some later stage a little more explanation. I am happy to take up the Minister’s offer to meet, but I am certain, too, that we will want to return to this issue on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3

Moved by

[Lord Davies of Oldham]

3: Clause 1, page 1, line 10, leave out “Treasury” and insert “Chancellor of the Exchequer”

[Lord Davies of Oldham]

My Lords, in moving Amendment 3, I shall speak also to Amendment 4. Amendment 3 would ensure that any alteration to the Court of Directors, and in particular the role of the deputy governor, would be the Chancellor’s responsibility, rather than Treasury’s, as stated in the Bill. Amendment 4 would require the Treasury to,

“publish in such a manner as it thinks fit the reasons for any changes to”,

the membership of the Court of Directors, and lay it before Parliament.

The House will recognise that these are not the most epoch-making amendments I have ever had occasion to advance, but they are a cunning device to give us the opportunity to explore further the Government’s position on guaranteeing that we have the necessary level of accountability, and to gain some real insight into the Bank’s decision-making operations and its relationship to the Treasury. The amendments are far from perfect but, as the House will appreciate, in Committee I am undertaking somewhat informally to withdraw any amendments that we table at this stage. I am sure the Minister will respond to them in his usual meticulous way in the context of the issues that arise, rather than the validity of the amendments themselves.

The Bill gives the Treasury the power, after consulting the governor, to add or alter the title of the deputy governor. This, along with the reduction of the number of non-executive directors from nine to seven, which we have just discussed, will alter the structure of the court. Also, under the Bill, alterations to the Court of Directors will be made in secondary rather than primary legislation. The amendments give the Minister an opportunity, which he will seize with enthusiasm, to place on record how this process will work in practice and what the Government consider to be the benefits of these alterations.

It is clear that accountability and transparency must be the cornerstone principles of any public institution, and that applies with great significance to the Bank, while at the same time recognising that the sensitivity of some decisions it has to take require special provision. It is crucial that we get the relationship right. These amendments were tabled in the context of the Government’s decision to make future changes in secondary rather than primary legislation. However, we consider, as evidenced by today’s discussions, that alterations to the Court of Directors are very significant indeed. The first amendment simply identifies that the Chancellor is the individual responsible for making the change. At least there would then be a clear line of accountability to Parliament, which we are not sure the Bill as drafted safeguards. Has the Minister envisaged who at the Treasury would be making such recommendations, if not the Chancellor? It must be unexceptional that we are stating that a clear line of responsibility runs through to the Chancellor.

We are not satisfied that this provision should come under secondary legislation. Following a meeting between the Minister, my noble friend Lord Tunnicliffe and me, the Minister wrote the following in a letter:

“I think I should start with the reassurance that the Government does not expect that the number or the title of Deputy Governors will be altered frequently”.

Nor do we, and we gain some reassurance from that letter. However, if it is an infrequent occurrence marked with some considerable experience, why is it proposed that it be dealt with in secondary legislation? In what circumstances does the Minister imagine such a change would be necessary, and why should it be made through secondary legislation?

16:30

Our related amendment, Amendment 4, would add another opportunity for scrutiny. Ideally, reasons would be published before any legislation was moved, giving Members of both Houses an opportunity to examine the proposal. I hope the Minister will seize this opportunity to clarify that which lacks clarity at present. I assure him that the moment he says these amendments are poorly drafted, I will be the first to concur.

[Lord Bridges of Headley]

My Lords, the noble Lord does himself a great injustice by saying that these amendments are not epoch-making. I see this process as a form of legislative acupuncture—not that I have ever gone through acupuncture, but I am reliably informed that every needle makes a difference. I am delighted to answer these points.

Clause 1 makes the deputy governor for markets and banking a member of the Court of Directors. Following the expansion of the Bank’s responsibilities through the Financial Services Act 2012, a deputy governor for markets and banking was appointed, as noble Lords will know, with responsibility for reshaping the Bank’s balance sheet, including ensuring robust risk-management practices. This important position, currently filled by Dame Minouche Shafik, is not a statutory member of court. This clause amends the Bank of England Act 1998 to make this position statutory, ensuring equal status for all the Bank’s deputy governors and simplifying the Bank’s governance structure.

In addition, Clause 1 provides enhanced flexibility to add or remove a deputy governor or to alter the title of a deputy governor. Correspondingly, it provides the ability to make changes to the composition of the court, the FPC, the MPC or the new PRC where a deputy governor is added or removed. It should be noted that this power will not permit the Treasury to remove a deputy governor or change his or her title while that deputy governor is in office. This is a measure to ensure flexibility for future need. The Government will be able, by order—a point I will return to—to adapt the size and shape of the court to bring in new expertise when necessary. Thus the Bank’s senior management team can be easily adjusted to meet future requirements.

The Bill also provides for the continued balance of internal and external members on the FPC, the MPC and the PRC. When a deputy governor is added or removed from a policy committee, the Bill enables a comparable change in the number of appointed members to that committee. In a little more detail, if one or more deputy governors is added to the FPC or the PRC, there may be an equal increase in the number of members appointed by the Chancellor. Similarly, if one or more deputy governors is removed from the FPC or the PRC, an equal number of members appointed by the Chancellor may be removed. The situation is comparable for the MPC. If one or more deputy governors is added to or removed from the MPC, then there may be an equal increase or decrease in the number of members appointed by the governor of the Bank. External expertise on these committees is important to ensure a range of views are considered. This provision is necessary to facilitate a diversity of opinion and counter the risk of groupthink.

The noble Lord raises a number of issues in the amendments and I will try to address them. The first issue is where the responsibility for adding, removing or altering the title of a deputy governor lies. In the Bill, this power is conferred on the Treasury rather than specifying, as the noble Lord’s amendment wishes, the Chancellor of the Exchequer. This does not mean that the Chancellor is not consulted. Obviously the Chancellor would be kept fully informed of anything as important as adding or removing a deputy governor, but where a more minor administrative change is made, such as the title of a deputy governor, it may be more appropriate for a junior Treasury Minister to take the lead. Retaining the existing drafting provides this element of flexibility but—I think this is the key point—the Chancellor remains accountable, whatever the phrasing of the Bill, to the public and to Parliament for the decisions and actions in his department.

Secondly, the noble Lord proposes that the Treasury should publish the reasons for making changes to the composition of the FPC, the MPC or the PRC. This gives me the opportunity to clarify the process of making changes to the membership of these bodies following a change to the deputy governors. If the need to alter, add or remove the position of a deputy governor is identified, the Treasury will discuss this with the governor of the Bank. The need for the change could initially be identified by either the Treasury or the Bank. If, following these discussions, the Treasury believes that the change is required, along with any associated changes to the membership of the MPC, the FPC and the PRC, the Treasury will present secondary legislation to Parliament. It will then be for Parliament, as the noble Lord said, to determine whether the change goes ahead. I therefore hope it is clear that Parliament plays a key role in this process. It is the ultimate decision-maker and, in passing an order on the membership of these committees, the Government will need to outline their reasoning to this House and the other place in order to pass our and their acute scrutiny and debate. It is in this context that the reasoning will inevitably be published.

In short, it seems that the noble Lord’s amendments, while worthy of debate, are unnecessary, and I hope that he will feel able to withdraw them.

[Lord Davies of Oldham]

As I indicated, my Lords, we tabled these amendments in order to clarify the thinking behind these proposals, and I am reassured on the crucial aspect that the answerability to Parliament is contained accurately within the Bill. It therefore gives me great pleasure to beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendment 4 not moved.

Clause 1 agreed.

Clause 2 agreed.

Clause 3: Abolition of Oversight Committee

Debate on whether Clause 3 should stand part of the Bill.

[Lord Sharkey]

My Lords, I do not believe that Clause 3 should be part of the Bill. Clause 3 abolishes the oversight committee and transfers its functions and responsibilities to the court itself. This is a significant weakening of the oversight of the Bank. The oversight committee consists only of the non-executive directors of the Bank; there are quite deliberately no bank officials on the committee. Parliament arranged this in order to be certain that oversight was truly independent and to avoid the possibility of undue bank influence in assessing the performance of the Bank itself in its various roles.

There is an irony in the proposal to abolish the committee. As the noble Lord, Lord Eatwell, pointed out at Second Reading, the Court of the Bank was opposed to the original proposal to create a supervisory board. It was the Bank itself that proposed an oversight committee composed exclusively of non-executive directors.

The reasons given by the Government for the abolition of the oversight committee are extraordinarily weak. The Minister’s letter to me, received last Thursday, says about the oversight committee:

“The new oversight functions and transparency measures have been successful, but the extra layer of governance imposed by the oversight committee has proved unnecessary”.

It goes on to say:

“There is effectively an oversight committee overseeing the work of an oversight board”.

That is emphatically not the case. It was precisely because Parliament found oversight by the board to be unsatisfactory and defective that it introduced the non-executive director-only oversight committee.

In exercising oversight of the Bank there is a completely obvious difference between having that oversight carried out by the Bank itself sitting as five officials and seven NEDs, and having it carried out by an oversight committee composed only of non-executive directors. Anyone with experience of corporate governance in the commercial world would immediately recognise the difference and the danger to independent scrutiny in the current proposal.

The Minister also says:

“The non-executive chairman of the Court has found the division of responsibilities between the Court and the Oversight Committee difficult to operate and unnecessarily complex since, to ensure that the meetings are effective, the Oversight Committee has often required the presence and engagement of the executive members of the Court”.

As a reason for abolishing the oversight committee, this is very feeble. Does the chair of the court imagine that the oversight committee could function without calling on the executive directors? How could any oversight committee function without evidence from the executives it is charged with overseeing? Does the chairman not understand the obvious and critical difference between court executives being called to give account to a committee of nine non-executive directors, and these same court executives giving an account of their actions and decisions to a full court meeting of five bank executives and seven non-executives? When you come right down to it, the main reason advanced by the Government for abolishing the oversight committee seems to be that the chair has diary and scheduling issues.

Perhaps I should remind the Committee—although seeing those present in the Chamber this afternoon, I probably do not need to—that Parliament considered the oversight committee a vital part of the reform of the Bank’s structure of governance. It was intended to prevent a recurrence of groupthink and as a check on the tendency to arrogance. It was intended as a means of ensuring a cool, independent view of the Bank’s operation, as a means of ensuring proper scrutiny and transparency and, as the Minister says, it has been successful in doing exactly this.

The Government have made no meaningful case for abolition. Abolition would reduce oversight and transparency and reinstate the Bank’s influence over oversight itself. It would ignore all the reasons Parliament advanced for the establishment of the oversight committee in the first place and, in common with other measures in the Bill, it would increase the influence of the governor and the Bank in areas where Parliament has taken deliberate steps to decrease it. Abolition is a retrograde and dangerous measure. The Government have given no compelling reasons—in fact, hardly any reason at all—for abolishing the oversight committee. This clause should not stand part of the Bill.

[Lord Tunnicliffe]

My Lords, I support the noble Lord, Lord Sharkey, in his contention that the clause should not stand part of the Bill. This whole issue is about holding the executive to account. In these situations it is very difficult to make a speech which does not sound as though you are criticising the current executive and governor. Oversight mechanisms are in place for when things go wrong. They are largely irrelevant when things are going right but they are there in case they go wrong. I contend that the Government’s proposals significantly reduce the power of the non-executives to hold the executives to account.

Those of us who sat through those long days of Committee on the Financial Services Act 2012 will remember that the Government stated that they,

“fully recognise the importance of strong lines of accountability for the Bank, given its expanded responsibility and powers”.—[Official Report, 26/6/12; col. 184.]

I am not sure whether the Government took that view immediately in the debate, but it was the consensus in the Chamber at the time, after an enormous amount of discussion.

Anybody doing what you have to do in the modern world to see how the Bank functions and looking it up on the Bank’s website will find a very good page—except that we are about to change it all—labelled “How we are governed”, which says:

“The Oversight Committee of Court, consisting solely of non-executive directors and supported by an Independent Evaluation Office, reviews and reports on all aspects of the Bank’s performance”.

That is very convincing for anybody with a proper interest in the banking structure and all the various banking responsibilities. There is a process whereby people who know what is happening can call the executive to account.

16:45

The result of the previous legislation was, very simply, that not only could a majority of non-executives call for a report on virtually anything—or, more accurately, carry out an investigation themselves—but they had the resources to do it. Indeed, the Bank has created—it is referred to on its web page—the Independent Evaluation Office in order to secure the right support for the non-executives. A majority of NEDs is all that is required to call for a report and they have the resources to do it. Let us compare that with the situation proposed by the Bill. If there were a concern among the non-executives, all of them, in a contested vote, would have to vote for a report and an investigation to go ahead. With a strong executive leader, that would be extremely difficult. It would be extremely difficult even to call for a vote in the first place. However, if real concerns were building and if the strong executive leader—the governor—almost always took his executives with him, a considerable confrontation would be needed before a report could be called for. If the Act is left unamended, it merely needs a majority vote by the non-executives to carry forward a report.

Furthermore, the very words “Independent Evaluation Office” suggest that the office has some power to conduct investigations into the Bank. Those of us who were privileged to attend the Treasury Select Committee scrutiny of the Bill heard the chairman, Andrew Tyrie, question Mr Carney on this matter. He confirmed that the IEO cannot independently decide to start an inquiry; instead, it gets its priorities from the court. This is central. In a difficult situation—which we have experienced within living memory—independence is central to the NEDs having the power to hold the executive to account. I hope that the Government can explain why they have decided to so significantly weaken the oversight role of the court’s NEDs.

[Lord Eatwell]

My Lords, I find this a somewhat naive and shocking part of this small Bill, in the sense that the clause under debate has two objectives. The first is to reduce the powers of the NEDs and the second is to reduce the powers of Parliament. Both of those goals I regard as reprehensible. As the noble Lord, Lord Tunnicliffe, set out, these issues were debated extensively in this Chamber with respect to the Financial Services Act 2012. We went through them in great detail and, in particular, we followed the advice of the Treasury Select Committee of another place.

It is obvious that this measure is designed to reduce the powers of the non-executives, but perhaps I may comment on the second point that I made about the powers of Parliament. That derives from the statement by the Treasury Select Committee of another place, which at that time was referring to a new supervisory board. That, in debate, was transformed into the oversight committee. The Select Committee said:

“Our recommendation that the new Supervisory Board have the authority to conduct retrospective reviews of the macro-prudential performance of the Bank should, if operating successfully, provide”,

Parliament,

“with the tools for proper scrutiny”.

Those “tools for proper scrutiny” are being removed in this clause. I think that Mr Carney’s explanation of the role of the Independent Evaluation Office, which can be summoned into action only by the oversight committee, is particularly revealing.

It has also been argued that, in some sense, the Bank now has two boards—the court and the oversight committee—and that this is causing confusion and reducing the effectiveness of the Bank. That is a very foolish argument. The notion that there should be an independent non-executive committee reviewing the activities of a main board is commonplace, particularly given that the reviews are specifically defined by legislation to be retrospective and not to question the contemporary acts of the court. That process is one that the best unitary boards have embodied in their codes of practice. I am amazed and, as I say, shocked that the Government are attempting to reduce the powers of non-executive directors in this way and, in particular, to reduce the powers of Parliament.

[Baroness Kramer]

My Lords, I will make just a few comments, if I may. I join my noble friend Lord Sharkey, and the noble Lords, Lord Tunnicliffe and Lord Eatwell, in their concern about the changes being proposed and the implications that would follow from them.

Will the Government confirm that, under the arrangements to reduce the number of non-executive directors to seven and increase the number of officials on the board to five, it would take co-operation from only one non-executive director with those officials to effectively prevent any investigation into any area of Bank activity? That is, I feel, a completely unacceptable balance that is being proposed today. The Government will have to come up with a very great justification for why the hurdle must be so low—four current officials—to prevent investigation of historical activity.

Clause 4 effectively falls if Clause 3 falls. Clause 4 makes the situation yet worse, because it contemplates not that the whole court will act as an oversight committee but that a sub-committee can be created in order to carry out that work, comprised of as few as two non-executive directors. For two non-executive directors to be considered sufficient for the important work of investigation, review and oversight of the Bank of England strikes me as completely extraordinary. It is also noticeable that the number two applies to the sub-committee responsible for the remuneration of officials at the Bank.

We are moving into a “two best friends” provision here, and I find it exceedingly disturbing. The Government will have to come up with some justification for why a sub-committee of two NEDs is sufficient to carry out a crucially important task that was absent during the many years in which the Bank of England essentially failed to meet the necessary standards to prevent a systemic crisis in finance in this country. I would like to hear their justification for the number two.

[Lord Bridges of Headley]

My Lords, I thank all the noble Lords who have made very powerful contributions and thoughtful points.

I will not detain your Lordships with lots of history; you know it much better than I do. However, to remind the Committee how this came about, I will repeat something that has already been said. The Financial Services Act 2012 gave rise to the Oversight Committee, largely in response to recommendations made in the report Accountability and the Bank of England from the Treasury Select Committee in the other place. That report recommended that the court should be reformed into a board, with powers to conduct ex-post reviews of the performance of the Bank; that board members should be authorised to see all the papers submitted to the MPC and FPC; and that the board should be responsible for reviewing the processes of the Bank’s policy committees.

The Treasury Select Committee argued that the new board should be called the Supervisory Board of the Bank of England but, despite this name, the structure that was proposed was in fact a unitary board. As has been said, the Financial Services Act 2012 took steps to implement these recommendations, by creating a set of statutory oversight functions. However, instead of conferring powers on the court itself, the powers were conferred upon a new statutory Oversight Committee, made up exclusively of the non-executive directors.

[Lord Sharkey]

Would the Minister agree that it was the Bank itself that suggested that?

[Lord Bridges of Headley]

That is my understanding. If I am wrong, I will correct myself.

The noble Lord, Lord Sharkey, made his points very forcefully and I fear we may still have to have further discussions—if he can bear it—but let me restate the Government’s position. The problem now faced by the Oversight Committee is simple. As the noble Lord said, for the non-executives to hold the executive to account effectively, they need to meet together, not separately. There needs to be full and frank discussion between the governors and the non-executives on how best to exercise the court’s oversight functions. I am sure the noble Lord would agree that the challenge and recommendations of the non-executives need to be informed by in-depth knowledge of the Bank’s operations. Effective oversight needs to be carried out by the executive and non-executives in partnership, not in silos.

It bears repeating that the key powers of oversight, which are necessary and working, are not lost as a result of their transfer to the whole court. The court will continue to be able to commission reviews as it sees fit. Moreover, the non-executives will continue to be a majority on the court and will also continue to meet together as a group after each meeting of court, in line with best practice. As was discussed earlier today, court contains a high quality non-executive majority and is therefore well placed to oversee the work of the Bank.

It is entirely appropriate that court, as the governing body of the Bank, should be responsible for exercising these oversight functions.

[Baroness Kramer]

I hate to stop the noble Lord, Lord Bridges, in his flow, but could he confirm that, under the proposed structure, if the officials of the Bank collectively believe that an area is not appropriate for investigation, they need the support of only one non-executive director?

[Lord Bridges of Headley]

As the noble Baroness points out, that would obviously be the maths. We will probably have to have further discussion on this, but I would like to come back to the powers.

It is entirely appropriate that court, as the governing body of the Bank, should be responsible for exercising these oversight functions. The Bill is putting in place a model which is widely regarded as best practice in the United Kingdom. It also completes the model that the Treasury Select Committee recommended in 2011, and was subsequently endorsed by the PCBS in 2012. That model is a streamlined unitary board, with express powers to commission performance reviews. Parliament would still see copies of the reports of any performance review published by the court, just as would be the case for reports published by the Oversight Committee. Parliament’s powers are not being reduced and the Treasury Select Committee can summon any non-executive director to give evidence.

17:00

On the point that has consistently been raised about groupthink, I agree that we need to ensure that the Bank is not susceptible to groupthink. The changes that have been made since the financial crisis and the changes we have proposed in this Bill will help to ensure those mistakes are not repeated. Let me run through a few of them. First, the minutes of every court meeting are now published. Secondly, any one non-executive director on court is now able to attend every meeting of the MPC, FPC and PRA boards. Thirdly, the MPC will in future publish transcripts of every meeting. Fourthly, the Bank has established an Independent Evaluation Office, as has been mentioned, to support the non-executive chair in exercising the court’s oversight functions. Noble Lords may have seen that the IEO published a detailed report last week into the accuracy of the Bank’s economic forecasting. Finally, the Bank’s court has been strengthened with a number of new appointments with expertise across a wide range of industries.

Furthermore, we should not assume that groupthink can be avoided in a small group which meets without being able to challenge or be challenged by executive directors. It could equally be argued that a committee of seven people may be just as susceptible to groupthink as a committee of 12. Once again I would argue that it is not only the number of people that matters but their quality and the forum in which they are debating and scrutinising issues.

I strongly believe that there is nothing gained from having an oversight board as well as an oversight committee.

[Lord Tunnicliffe]

Surely there is a world of difference between the phenomena of groupthink in either one of the policy committees or on the court than the phenomena of the seven NEDs meeting alone. If they do produce a piece of groupthink, the most harm they will do is require a part of the activities of the Bank to be examined. It is very unlikely that they would do that, but it would do no great evil and cause little inconvenience. We are talking about a radical difference in balance when it comes to the powers of the NEDs to question the executives of the Bank.

[Lord Bridges of Headley]

My Lords, it is clear that I still have some persuading to do. I would argue that those powers have not changed in the sense that they have been transferred from the committee to the court.

[Baroness Kramer]

The Minister said that the powers have not changed, but would he agree that who exercises the powers has changed significantly? Officials had no opportunity to exercise those powers; they were the powers only of non-executive directors. Now they can be easily exercised by the officials plus one NED.

[Lord Bridges of Headley]

As the noble Baroness rightly points out, obviously her maths is correct and there would be robust discussion. This comes back again to the quality of those who are on the court and their ability to persuade people that such a review is necessary.

That is all I wish to say on this matter.

[Lord Eatwell]

The noble Lord, having not been present at our discussions, sadly, three years ago, has not appreciated the loss of confidence in this House in the general accountability of the Bank of England.

Given the structure of the Bank of England and its role in national and international life, the position of the governor is extremely powerful, and quite rightly so. He needs to carry the gravitas and status of his or her office. However, in those circumstances, it is important that an Oversight Committee, charged with retrospective evaluation of the performance of the Bank with respect to its objectives, should not include the governor or the deputy governors. That is a crucial element of our thinking which underpinned the 2012 Act. In repeating that powers have now been simply transferred but still remain, the noble Lord has failed to take that aspect into account and has failed to reflect on the experience of the financial crisis of 2008 and the Bank of England’s performance during that crisis.

[Lord Bridges of Headley]

Once again the noble Lord makes a powerful intervention. I am sorry that I was not here for what were obviously those interesting debates and I heed what he has to say. I would simply repeat that I am more than happy to meet with him if he so wishes to discuss these points in more detail. Clearly the court would continue to be able to delegate and to meet as a sub-group of non-executives to look into matters as they see fit, but I believe that this Bill will put in place a more transparent, accountable, effective and recognisable board structure for the Bank, and I hope that I have been able to convince noble Lords that this clause should not stand part of the Bill.

[Noble Lords]

It should stand part.

[Lord Bridges of Headley]

I am sorry. It should stand part of the Bill.

Clause 3 agreed.

Clause 4 agreed.

House resumed.

Police Funding

Monday 9th November 2015 Lords Chamber

Statement

17:05

[The Minister of State, Home Office (Lord Bates) (Con)]

My Lords, with the leave of the House I would like to repeat the Answer to an Urgent Question in another place by my right honourable friend the Minister for Policing, Crime and Criminal Justice and Victims, Mike Penning. The Statement is as follows:

“The Home Secretary regrets that she cannot be here today as she is attending an extraordinary meeting of the Justice and Home Affairs Council in Brussels.

This Government believe that police funding must be allocated on the basis of a modern, transparent and fair funding formula that matches funding with the demands faced by the police. The current arrangements are unclear, out of date and unfair. In recent years, a great many chief constables have called for a new formula. The National Police Chiefs’ Council, the Association of Police and Crime Commissioners and Her Majesty’s Inspectorate of Constabulary have all called for a revised model. The issues with the current formula are also well known to the House. In 2009, the then Policing Minister, the right honourable Member for Delyn, agreed to review the police funding formula—a review that did not happen. Since then, the Home Affairs Select Committee, the National Audit Office, and the Public Accounts Committee have all argued for new funding arrangements.

The new formula is what we have been doing. During the last Parliament, my predecessor announced that the Government would review the existing formula. In July of this year the Government published a consultation on the principles of a new formula, to achieve one that is fair, robust and transparent. That consultation closed in September, with 1,700 responses. Since then we have been working with forces to understand what those principles mean in practice to force budgets. Within this process, a statistical error was made in some of the data used. While this error does not change the principles that we consulted on, and the allocations provided to forces were always indicative, we recognise that this has caused concern among police forces. The Government regret the mistake and I apologise to the House for it, as well as to the 43 forces that I wrote to when we shared the exemplification data and launched a second, informal consultation period of the police funding formula review.

The Government are therefore minded to delay the funding formula changes for 2016-17, as we had previously intended, in order to give more time to consider their impact. We will seek the views of the Association of Police and Crime Commissioners and the National Police Chiefs’ Council before going any further. It is essential that we come to a funding formula that is fair, transparent and matched to demand, but is also one that is supported by policing as a whole. So the Government will continue to listen, and we will consider the next steps in conjunction with police leaders. We will update the House in due course.

Reform of the police funding formula is something we should all support. Police forces and police and crime commissioners have called for it, as have committees of this House. It is especially important now, at a time of savings, that scarce resources go where they are needed most”.

17:08

[Lord Rosser (Lab)]

My Lords, the responsibility for the sorry Answer which has just been repeated lies not at the door of officials, but at that of Ministers. The Government’s serious mistake came to light only because of work commissioned by individual police forces which had to pay to get access to data used by the Home Office in the new formula proposals because they are owned by a private company. The Home Office sent a letter dated 5 November to Devon and Cornwall Police acknowledging the error. When did Ministers first know about the statistical error referred to by the noble Lord just now? The funding formula changes are being delayed,

“to give more time to consider their impact”.

For how long, the Minister did not say, so perhaps he can confirm the situation.

So that there is full transparency in considering the impact of any changes, will the Government ensure that any data on which they are basing funding decisions from next year onwards is fully in the public domain, and will they agree to independent oversight of the review in which there is now a lack of confidence? On what basis will police funding be determined for 2016-17 and when will police forces know how much they have been allocated? Finally, will the Government reimburse the costs that forces have already incurred in arguing against and challenging what the Government now admit is an erroneous formula?

[Lord Bates]

My Lords, first, the responsibility lies with Ministers. I have repeated an apology, which as Minister in the Lords I make to this House, for the error. Ministerial responsibility is clear on that.

On the specifics, the letter was sent on 5 November to Devon and Cornwall Police and the first the Policing Minister knew of that was when it was drawn to his attention on Friday 6 November and the decision was taken today, on Monday. The proposal put forward to address this error is that the proposed introduction of the new formula, which was to come into effect in the new financial year—April 2016-17—will now be delayed. The initial plan is that it will be delayed for a year, but at this point we are talking about very soon after. We realise that we have shaken a lot of confidence in the process, and it is very important that we talk to police and crime commissioners, chief constables and others, to make sure that we get this absolutely right.

On the cost issue, that will be looked at as part of the overall review into how this happened, but more importantly, how we move forward with the system that will command the confidence of the police. On the question of when people will know, the comprehensive spending review will report in the Autumn Statement on 27 November, and traditionally the police grant is announced on about 17 December. The specific force allocations will be known on 17 December and the broad envelope will be known on 27 November.

On independent oversight, which is very important, my right honourable friend the Policing Minister has indicated that he will seek independent oversight of the statistical process and the input of data into the system, but again we are genuinely contrite about the error and want to make sure that we get it right.

[Lord Paddick (LD)]

My Lords, does the Minister not agree that at a time when forces have already faced a 19% cut in their budgets, and could face a further 30% cut as a result of the comprehensive spending review, this is not a good time to introduce a new police funding formula that would, by definition, reduce the funding for some forces by even more than potentially 30%? However flawed the existing funding formula is, should it not be a case of better the devil you know?

[Lord Bates]

With the benefit of hindsight, of course, there is an element of that. Going back to the initial point when we started the review process, before July, most police forces, as the noble Lord will know very well, complained that the existing funding formula was opaque and nobody quite knew how it was put together. It seemed that in terms of funding allocations there was an inbuilt unfairness to certain forces over others, which did not actually mean that scarce resources were being focused on where crime was happening and, therefore, where resources were needed most by the police to respond to it. So everybody is in favour of the review. The consultation went very well, with 1,700 responses. The letter went out on 21 July and was reflected on. Again, in an effort to be transparent, my right honourable friend the Policing Minister then issued a provisional calculation of what the effect might be on police force budgets for the 2016-17 year. The error came to light at the conclusion of that. Therefore, I think there is still a case for looking at a simplified formula but a lesson has been learned. We need to go away, look at it again and come back with broader proposals that address the concerns the police have.

[Lord Alton of Liverpool (CB)]

My Lords, I thank the Minister for the way in which he has spoken to the House. Will he confirm receipt of the letter I sent him last week from the Merseyside police and crime commissioner, the right honourable Jane Kennedy, who talked about the serious repercussions for the Merseyside force? When he considers further the impact that the changes might have, will he bear in mind that they have already cut some £77 million from the Merseyside police budget since 2010, and that if these proposals had gone ahead in their current form, it would have lost 700 community support officers? Given that Ms Kennedy talked in her letter of “the serious repercussions”—to use her words—does not the noble Lord agree that it was unfair and unjust of his colleague, Mike Penning MP, the Minister in another place, to describe her complaint about the original proposals as scaremongering? Is it not indeed the case that these are perfectly legitimate questions for the Merseyside police and crime commissioner to raise? Indeed, some 11,000 people on Merseyside have now signed petitions, which only goes to underline the concern that the public have. Will he take all that into account as he gives this matter further thought?

[Lord Bates]

I will certainly do that. I am grateful for the letter, which I recall receiving and drafting a response to. Merseyside has done a lot of innovative things in working with other blue light services to decrease response times and reduce costs. I hope that will be taken into account when future responses and changes are made.

[Lord McKenzie of Luton (Lab)]

My Lords, in the recent Peel efficiency inspection, Her Majesty’s Inspectorate of Constabulary said of Bedfordshire police that it was concerned that the force’s,

“long-term financial position is not sustainable”.

Regardless of whether the correct data are being used, it appears that the formula review totally fails to address the viability of Bedfordshire police. What will the Home Secretary and the Minister do to ensure that Bedfordshire police are adequately and properly funded to deal with the many challenges that they face?

[Lord Bates]

I am conscious that Bedfordshire has a particular case because it covers a large rural area and the centre of Luton. That makes policing and the allocation of the budget particularly difficult. I know that, like Merseyside, it has been innovative and has recently sought to raise the precept through a local referendum. Bedfordshire is a difficult case, which is one of the reasons why we proposed transitional funding arrangements under the old plan, but now we are back to square one and have to look at that again.

[Lord Lawson of Blaby (Con)]

My Lords, does my noble friend understand that many people in this country are rather puzzled by the fact that at a time when the financial resources of the police are evidently so stretched, they are still able to find such substantial resources to devote to following up wholly unsubstantiated allegations of historic sex abuse?

[Lord Bates]

That obviously is an issue. However, the allocation of time and resources is a matter for local police and crime commissioners. In a broad sense, the fact that crime has fallen by a quarter since 2010 is to the credit of the police, as HMIC found. However, it is also very important that the police allocate their resources in a way that is targeted on reducing crime.

Bank of England and Financial Services Bill [HL]

Monday 9th November 2015 Lords Chamber

Committee (1st Day) (Continued)

17:20

Clause 5: Financial stability strategy

Amendment 5

Moved by

[Lord Tunnicliffe]

5: Clause 5, page 4, line 26, leave out subsection (2)

[Lord Tunnicliffe (Lab)]

My Lords, in moving Amendment 5 I will speak also to Amendment 6. Amendment 5 would omit the subsection that transfers the power for the creation of the financial stability strategy from the court to the Bank. Amendment 6 would specify in the Bank of England Act 1998 that the Chancellor of the Exchequer should be consulted in relation to the development and production of the financial stability strategy.

The maintenance of financial stability is arguably the overwhelming role of the Bank of England and its committees. If you look at what has gone wrong in the recent past, it has overwhelmingly been issues of financial stability that have impacted on the financial system and, much more importantly, on society as a whole, both in our country and across the world.

It is interesting to look at what is supposed to happen now. The appropriate part of the Act, which I can read from the consolidated document that the Treasury was kind enough to provide us with, is Section 9A—“Financial stability strategy”—which says:

“The court of directors must … determine the Bank’s strategy in relation to the Financial Stability Objective (its ‘financial stability strategy’), and … from time to time review, and if necessary revise, the strategy … Before determining or revising the Bank’s financial stability strategy, the court of directors must consult about a draft of the strategy or of the revisions … the Financial Policy Committee, and … the Treasury”.

That seems quite straightforward. It seems to put the court at the centre of the creation of the stability strategy, and to invite the right other parties to be involved.

Indeed, the importance of that process is demonstrated by the fact that it gains a place on my favourite piece of paper, which is a print-out of a splendid one-page summary on the Bank’s website, called “How we are governed”. It says:

“The FPC is a sub-committee of Court and its objectives are set by reference to the Bank’s Financial Stability Objective. The Bank’s Court is required by statute to prepare and publish a Financial Stability Strategy, in consultation with the FPC and HM Treasury”.

That is all very straightforward. Sadly, it has not been a great event so far. A strategy document was produced in 2013, called The Strategy for the Bank’s Financial Stability Mission 2013/14. It was five pages long and it was approved by the court on 25 September 2013. The strategy was revised and published in the 2014-15 report, which was signed by the chairman on 4 June 2014. If I read that document correctly, the strategy was reduced to one column and, while asserting a negative is always rather difficult, in the Bank’s 2015-16 report I could find no mention of a financial stability strategy in the ownership of the court.

It looks as though the Executive have to some extent pre-empted this part of the Bill by letting the responsibility of the court wither on the vine. My amendments are really simple and probing. What has happened to the financial stability strategy and what will happen under the new arrangements? Who will produce the financial stability strategy or have the Government effectively decided that the role of producing it should be subsumed into the FPC and, if it is being subsumed, where in the Bill or in the subsequent amended Act is that enabled?

My other area of concern about the situation is that, reading through the document, we find increasing references to HM Treasury’s input to the strategy. So on the one hand, you have responsibility for the strategy clearly drifting away from the court. As far as I can see, the Bill intends to take it away totally from the court and I would value confirmation of whether that is true. On the other hand, one seems to be having increasing input from Her Majesty’s Treasury. I do not wish to comment particularly strongly on whether that is a good or bad thing but I would certainly value the Minister confirming whether the Government intend to take this role away from the court and increase the role of HM Treasury in this important area. I beg to move.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

My Lords, I thank the noble Lord, Lord Tunnicliffe, for his introduction to his amendments. We discussed the Bill’s changes to the arrangements for the financial stability strategy at Second Reading. I hope to address the issues raised during that debate and some of the points that the noble Lord has just raised again. As I said earlier, legislation generally confers powers and duties on the Bank of England in two ways: either directly on the Bank or on a statutory committee of the Bank, such as the Financial Policy Committee. Consistent with this approach, Clause 5 moves responsibility for determining and revising the Bank’s financial stability from the court to the Bank. I reassure the noble Lord and the Committee that the court, as the body responsible for managing the Bank’s affairs, will retain ultimate responsibility for determining the financial strategy. But by naming the Bank instead of the court, we would grant the court the ability to delegate production of the financial stability strategy to those best placed within the Bank.

I argue that this flexibility is important given the broad range of policy that the financial stability strategy covers, which obviously extends beyond the responsibilities of the Financial Policy Committee. For example, responsibility for resolution policy, regulation of financial market infrastructure, note issuance and macroprudential policy are held within separate parts of the Bank, but the financial stability strategy will need to cover all these areas and others to be truly comprehensive. The clause as drafted does not affect the court’s ultimate responsibility for determining the Bank’s strategy, while granting the court additional flexibility as to who within the Bank undertakes the work to pull together the actual document. As I have said, the court will be able to delegate production of the strategy within the Bank but, as the noble Lord, Lord Tunnicliffe, asks, who will be left holding the pen? It is for the court to determine who is best placed to produce the strategy, and this may shift over time as the Bank decides to prioritise particular elements of its responsibilities. However, it is clear that a document of this importance will require significant engagement by the Bank’s senior management. I expect that the Bank’s governors will all be heavily involved when the strategy is determined or revised. I should add that there is no intention to increase the role of the Treasury in the Bank’s financial stability strategy. As I have just said, the court will be responsible for the strategy, although it will be required to consult Her Majesty’s Treasury, as now.

17:30

Amendment 5, put forward by the noble Lords, Lord Tunnicliffe and Lord Davies, would undo the changes I have outlined. The amendment would limit the court’s powers to delegate the production of the strategy elsewhere within the Bank, as the court may not delegate any duty or power expressly conferred on it by statute. As the ultimate responsibility for determining the strategy would rest with the court in both cases, the amendment would have little impact on the governance or accountability of the Bank, but would curtail the flexibility of the court in determining who should produce the strategy. I hope that my remarks have reassured your Lordships that the court—I repeat, the court—will remain ultimately responsible for determining the Bank’s financial stability strategy and that all concerns about “amorphous entities” have been purged. For that reason I ask the noble Lord to withdraw the amendment.

The second amendment tabled by noble Lords seeks to ensure that the Chancellor must be consulted before the strategy is set or revised. The existing provision requires the Treasury to be consulted, and this is the more usual provision. This does not mean that the Chancellor is not consulted: the Chancellor would obviously be kept fully informed of anything as important as the adoption of a new financial stability strategy by the Bank. However, where the Bank is proposing a minor revision of the strategy, it may be more appropriate for a junior Treasury Minister to take the lead in considering the Bank’s proposals. Retaining the existing drafting provides this element of flexibility. The Bank is required to produce a financial stability strategy not every year but every three years, so the 2013-14 strategy is still current. Given that, the amendment is unnecessary, and I ask that noble Lords do not press it.

[Lord Tunnicliffe]

I thank the Minister for that response. He says that the court has delegated this to the Bank. The minutes of the court are now published, but when your total staff resource is half of one person, actually finding the information is quite difficult. I am not criticising the Bank, because I am all in favour of producing lots of information, and it is very open and all that sort of thing. However, the Minister has the machinery, while I do not, and I wonder whether he could dig out for me the appropriate minute which shows that transfer of responsibility and whether he can provide evidence that the court is responsible. The wording of the Act, as it stands before amendment, seems to suggest that this is an active responsibility, but I do not get a sense of that active responsibility. I am sure that could be evidenced with the publication of the minutes. I would be grateful for that.

I am sure the Minister is right to say that the 2013-14 statement is the current strategy, but there is a column in the 2014-15 account labelled, I think, “Strategy”. It would be good if he could look at these points and produce a letter which, like his first letter, references back into the parent documents to convince me about what he is saying and whether, although I am sure it is accurate, it is actively accurate in the way it involves the court. With those few comments, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6 not moved.

Clause 5 agreed.

Clause 6: Financial Policy Committee: status and membership

Amendment 7

Moved by

[Lord Sharkey]

7: Clause 6, page 5, line 11, leave out “5” and insert “6”

[Lord Sharkey (LD)]

My Lords, I will be very brief. This amendment would increase the number of non-executive directors of the FPC from the five proposed in the Bill to six. Exactly as with our proposal to preserve the NED balance on the court and our proposal to reject the abolition of the oversight committee, this amendment aims to preserve or strengthen the influence of the non-executive directors.

The Treasury has supplied a very helpful chart showing the current composition of the Bank’s governance structures. As things stand, the FPC consists of the governor, three deputy governors, the CEO of the FCA, one governor appointment—the executive director for financial stability—and four appointments by the Chancellor. These four people are the external members, the equivalent of non-executive directors. This means the FPC consists of five Bank officials, the CEO of the FCA and four non-executive directors.

The Bill before us changes this. It adds a deputy governor and one external member. In the words of the Treasury briefing note, it adds the latter to,

“maintain the existing balance between existing executive and non-executive members”.

Under the new arrangements, the composition of the FPC will be: six Bank officials, the CEO of the FCA and five NEDs. As the Treasury note says, this preserves the preceding balance, but it also highlights the position of the CEO of the FCA. We do not argue that she should not be a member of the FPC—on the contrary—but we are not convinced that she could be described as an external member, with the same independence of thought and action as the other truly external FPC members. Indeed, the Treasury note does not describe her as an external member. It simply lists her as “the CEO of the FCA”.

In many respects, the CEO is more like a Bank official than an external member. She depends for her job on the confidence of the governor and the Chancellor. What her organisation can or cannot do is in many respects controlled, or can be controlled or constrained, by the Bank or one of its organs. We saw what happened to the current FCA CEO’s predecessor: Martin Wheatley was summarily sacked by the Chancellor. I assume the governor, at the very least, did not oppose this. On balance, it would be entirely reasonable to conclude that the CEO of the FCA is not as independent of Bank influence as the truly external members of the FPC. In practice, that means that in the current and proposed FPC compositions, there will be a majority of Bank officials and Bank-dependent officials, and a minority of external members. We believe that that is unhealthy. We believe that accountability and scrutiny will be improved by having a more truly independent member on the FPC. It should also be true for the PRA, incidentally, and I will argue that case in Amendment 19. This amendment would raise the number of independent members of the FPC from the five proposed in the Bill to six. It does that to ensure a sufficiency of truly and unquestionably independent members on the FPC. I beg to move.

[Lord Tunnicliffe]

My Lords, I will try not to make this a habit, but I find the case persuasive.

[Lord Ashton of Hyde (Con)]

My Lords, this has been a brief debate. I am sorry that it falls to me yet again to argue numbers with the noble Lord, Lord Sharkey, and I am afraid to disagree with his argument.

This is a superficially simple amendment which seeks to change the balance of the membership of the Financial Policy Committee by increasing the number of external members from five to six. The noble Lord, Lord Sharkey, was again correct in outlining the numbers on the FPC as they stand today: namely, the governor, the three deputy governors and the executive director for financial stability strategy and risk, who are the internal members; and the five other members, who I would describe as external, who are the chief executive of the FCA and the four members appointed by the Chancellor. There is also a non-voting member from the Treasury. This gives an equal balance of voting membership between the Bank executives and those from outside the Bank. The Bill adds two new members to the committee—the deputy governor for markets and banking and an additional external member—which preserves the existing balance between the executive and non-executive members of the committee.

We think that that is appropriate: it strikes the right balance between ensuring sufficient input from the Bank of England’s executive and internal expertise and supporting the external, non-executive members’ role of providing a challenge to members’ thinking. Crucially, the committee can draw on the expertise and resources of the Bank, while the non-executive members provide a strong challenge function by bringing outside perspectives and expertise to the committee’s discussions and preventing groupthink.

[Baroness Kramer (LD)]

Although this has been a brief debate, it is an important one. Can the Minister describe why he takes the view that the chief executive of the FCA is not inherently different from a fully outside member of the FPC, particularly when prior legislation would indicate that there is a close family relationship?

[Lord Ashton of Hyde]

I am certainly able to do that; I was just coming to that very point, I assure the noble Baroness.

We think that the balance of membership is appropriate, as the work of the FPC is one of the key elements of the Bank’s strategy to meet the financial stability objective. It is therefore essential that the Bank can be held accountable for its performance against that objective. The effect of the amendment would be to place the committee outside the Bank’s control.

[Baroness Kramer]

I am sorry to interrupt the Minister again, but he said that the effect of this would be to place the committee outside the Bank’s control, so he is describing the chief executive of the FCA as part of the Bank family. That is the logic of that sentence.

[Lord Ashton of Hyde]

I am sorry, but I do not think it is. If we say that the CEO of the FCA is one of the external members, that places it outside. I am coming to the question of whether you can describe the non-executive member as also external; I promise that I will come to that in a minute.

We should also consider the overall size of the committee. The noble Lord’s amendment would bring the number of voting members on the FPC to 13. Setting aside any superstitious concerns, there is a risk that the committee could become unwieldy and cumbersome. This could be particularly problematic for the FPC, as it is required to seek to make decisions via consensus, which of course becomes more difficult as it grows in size. The amendment would make the FPC the largest of the Bank’s policy committees. The MPC has only nine voting members and the PRC is likely to have 12 members. I believe that the additions to the FPC will be a net benefit to the FPC, but further expansion risks tipping the scales toward a detrimental impact on the workings of the committee.

I come to the question of the CEO of the FCA, to which the noble Baroness, Lady Kramer, referred. We are in no doubt that the FCA CEO should be counted as an external member of the FPC. The CEO of the FCA is not an executive of the Bank, and the FCA is entirely separate from the Bank.

There is no doubt that having the FCA CEO on the FPC is of huge value to the committee. It is true that her membership of the FPC brings particular benefits in terms of regulatory co-ordination, but she also has extensive relevant expertise, and, crucially, she brings an independent viewpoint and external challenge from outside Threadneedle Street, because the FCA is a completely independent body with a different set of objectives. It is also worth noting that this reciprocates the arrangement on the FCA board, where the chief executive of the PRA is counted, alongside the Treasury-appointed chair and the other members, as a non-executive. The CEO of the FCA is therefore eminently qualified to operate as an external, non-executive member of the PRA board.

In summary, the Government believe that it is appropriate to have an equal number of internal and external members, as the committee has today. This will ensure sufficient input from the Bank of England as executive and internal Bank of England expertise, while supporting the external, non-executive members’ role of providing a challenge to members’ thinking.

With those explanations in mind, I should be grateful if the noble Lord would withdraw his amendment.

17:45

[Lord Sharkey]

I thank the Minister for that response. There is no argument about the value of the CEO of the FCA being on the FPC. I fear that I was completely unconvinced by the argument that one more external member would make the FPC collapse into chaos and disorder; that seems a bit far-fetched.

The difference between us is whether the independence that the noble Lord maintains that the CEO of the FCA has is true independence. The test he seems to apply is simply that, well, the FCA itself is kind of independent, so she is obviously independent. In fact, the Minister did not mention my major concern, which is the influence that the Bank itself has over the CEO of the FCA. I give way to my former noble friend.

[Baroness Noakes (Con)]

My Lords, can the noble Lord explain why he thinks that the Bank has any influence whatever over the chief executive of the FCA? There are no provisions in statute that give any sense of influence, even, and I struggle to find where in practice you could point to where that influence could be deemed to exist.

[Lord Sharkey]

There are two partial answers to the noble Baroness’s question. The first is, as I mentioned, that the chief executive of the FCA can be summarily dismissed, presumably either at the instigation of the governor or at least with his permission and consultation—

[Baroness Noakes]

I ought to say two things to that. The chief executive of the FCA was not summarily sacked; as I understand it, he was informed that his contract would not be renewed, and there is a world of difference. As far as I am aware, there is no practical issue of the Governor of the Bank of England or any other senior official of the Bank of England having any locus in the decision whether to renew the chief executive’s contract. If the noble Lord has evidence of that, I should be happy to see it.

[Lord Sharkey]

The fine distinction between being summarily dismissed and not having his contract renewed temporarily escapes me, but I am sure that it will come to me. The point I am trying to make is that I believe that the Bank has influence over the CEO of the FCA. I was asking the Minister—because he did not deal with this—to explain why he clearly believes that it does not have influence over the head of the FCA.

I also point out, as I did in my initial speech, that the PRA itself can act to restrain and constrain the activities of the FCA, as I am sure the noble Baroness knows. The PRA is an organ of the Bank, so the actual independence of the FCA is somewhat compromised by that arrangement. That was the point that I was trying to make.

However, having said all that, and not being terribly convinced by the Minister’s arguments—I am sure that we will want to return to this later—in the mean time, I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

Clause 6 agreed.

Amendment 8

Moved by

[Baroness Worthington]

8: After Clause 6, insert the following new Clause—
“Long-term systemic risk
After section 9C(3)(c) of the Bank of England Act 1998 (objectives of the Financial Policy Committee) insert—“(d) systemic risks to the long-term stability of the UK financial system attributable to long-term fundamental change, such as climate change, demographic change, and technological change.””

[Baroness Worthington (Lab)]

My Lords, today we are discussing a Bill that should have the long-term sustainability of the financial system at its heart. To that end, we are discussing provisions that would open up the Bank to further scrutiny, maintain existing scrutiny and guard against the possible repetition of groupthink. Amendment 8 would change the list of risks, as set out in the Bank of England Act 1988, that the Financial Policy Committee must consider in order to include long-term systemic risks to our financial stability.

These risks may arise from fundamental structural changes that have important implications for our financial system and therefore our long-term sustainable economic growth. There are some risks to longer-term financial stability that do not emerge within the typical time horizons of financial markets or the monitoring of the Bank. The time horizon of the Financial Policy Committee’s stability activities is not set in statute but according to the governor; it typically extends a little further than that of the Monetary Policy Committee, which is one to three years, but certainly no further than the outer boundaries of the credit cycle—around five to seven years. The danger is that, by the time fundamental structural changes that have been developing in the background are acknowledged by markets and regulators as an important issue for financial stability, it may be already too late. Unsustainable investments may have become embedded in institutions’ balance sheets, with capital locked into enterprises and business models that may have been rendered uneconomic as a result of long-term changes.

I will touch on three areas where risks are apparent over longer-term time horizons. The rise of new technology, which has already radically and permanently reshaped both the real economy and the financial industry, and future innovations such as machine learning, artificial intelligence and the rise of digital currencies, will have important implications for the wider economy and the robustness of our financial sector. Demographic change around the world is also reshaping economies, and with them their financial services industries. The increasingly ageing populations in developed economies will have implications for the pensions and the insurance industries. An IMF report found that if people live just three years longer than expected, in line with past underestimations, such an increase in longevity would add 9% to pension liabilities for private pension plans in the United States. These demographic changes have important implications and we must not be caught in just short-term thinking.

Lastly, we face the profound challenge of long-term changes in our natural environment, including the overarching risk of global climate change. This challenge has two elements: the implications of physical changes in the environment for the real economy, and the responses to that change from governments and other key actors as impacts become more apparent and policies are introduced. The financial services industry, like every other industry, will have to respond and adapt to climate change. The risk it presents, though relatively long term, should be integrated into prudential regulation now.

In recognition of these risks, Defra invited the Bank of England in 2013 to take part in an adaptation reporting cycle under the Climate Change Act. The Bank took part on a voluntary basis, and that is welcome. However, it was the PRA that undertook to respond to Defra’s request. The Financial Policy Committee’s response to the invitation was recorded in its minutes of the meeting of March this year:

“The committee’s central expectation was that the risks to financial stability were likely to be beyond the FPC’s typical policy horizon”.

That is precisely the problem that governor Mark Carney highlighted when he referred to the “tragedy of the horizon”. It is the problem I wish to raise by moving this amendment.

Of course, it is to be welcomed that the Bank is looking into the implications for the insurance industry, but as I said, this goes far beyond just insurance. Researchers from Oxford and Cambridge universities estimate that between 5% and 20% of the average diversified equity investment portfolio is at risk of re-evaluation as a result of climate change. The UK, although home to only 0.2% of the world’s coal, oil and gas reserves according to Carbon Tracker in 2013, listed in London alone reserves equivalent to 18.7% of the remaining global carbon budget. The over-representation of fossil fuels in our markets is a subject that I hope we can return to on Wednesday, as I have tabled another amendment on this theme.

To sustain economic development regulators must take into account long-term trends and changes that markets may fail to see. That means allowing time horizons to be determined not by the credit cycle, market behaviour or the Bank’s price stability objectives, but by the unknown future risks our financial stability regulators must be equipped to guard against. As global leaders will meet less than a month from now in Paris to discuss the long-term sustainability of the planet and climate change, it is right that, across all areas of policy, we ask what the implications are of this historic meeting. Making our financial sector more attuned to the risks of climate change and other long-term threats is something the UK can and should show global leadership on. Our current governor is already making the case. The Government can and should do more. I look forward to hearing the Minister’s response. I beg to move.

[Baroness Kramer]

My Lords, I added my name to this amendment because this is a crucial discussion and an important opportunity to draw the Government’s attention to these issues. This Government, like many others and almost every speaker on financial issues in this House, have expressed their frustration with the short-termism that dominates the British financial services industry: a search for short-term profits rather than understanding the longer term perspective. Indeed, the Chancellor has often voiced frustration at the fact that UK pension funds are very unlikely to invest in the kind of long-term infrastructure projects he sees as essential for our country. Canadian pension funds will gladly invest, but not UK ones. We suffer from this ongoing blight. Of course, the ultimate frustration is that many of those who put their money into such pension funds would be absolutely delighted to see it invested in infrastructure, renewable energy and sustainable projects, because they are often looking for a 30 to 40-year horizon regarding the return on the money they invest. However, that is not the way the system works.

When the Bank of England was given responsibility for financial stability, there was an assumption that part of the thinking would then extend into that long-term arena, and that the Bank would be freed from the narrow and short-term issues of stability. In fact, I think the Chancellor talked about avoiding the stability of the graveyard and looking at the much longer term horizon. So far, the Bank has not used its wide range of powers or its influence to enter into that territory. Whether it is sustainability as defined by projects such as renewable energy, rail infrastructure or broadband, a wide range of projects need a response from the UK’s financial services. That surely requires the Bank to take some role, and to take cognisance of this issue. I hope that debates such as this will persuade the Treasury and Government to engage much more extensively in those conversations with the Bank in its various and many parts, and to consider whether the relevant committees should at least have regard to those priorities, and potentially see them as obligations and duties, given the important role that long-term investment plays in the future of the UK.

[Baroness Wheatcroft (Con)]

My Lords, listening to the debate this afternoon, it is clear that many have concerns about the power and influence of the Bank of England. However, I cannot help but feel that this amendment takes that concern a step too far. Much as I have great admiration for Mark Carney, I cannot imagine how he is expected to predict the effect of artificial intelligence. The duties we are putting on the Bank are already extremely far-reaching. The responsibilities now placed on the Financial Policy Committee are deep and will have a huge impact, but to ask it to range as far as this amendment is surely to demand something beyond common sense.

The role of ensuring financial stability is crucial. It means keeping our financial institutions on the straight and narrow, and watching out for problems. However, to ask for those decisions to be taken in the light of what may be happening 20 or 25 years from now is surely a step too far. The role of Government in thinking about such issues is clear, but we would be in very dangerous territory if we thought of the FPC as the arm of government to influence such decisions.

[Lord Davies of Oldham (Lab)]

My Lords, I would like to join in this debate because, although I respect the expertise of the noble Baroness who has just contributed, I am rather more in sympathy with the arguments of my noble friend Lady Worthington and the noble Baroness, Lady Kramer. I hear what was said about placing obligations on the Bank, but we should also appreciate that we have the benefit of the present governor—on whom I have not lavished many plaudits this afternoon as I was rather concerned about the future structure of the Bank, for which he will be responsible. Nevertheless, we all recognise the governor’s merits in taking a wider perspective on aspects of the economy than has perhaps been the case heretofore. Certainly, the speech that he made not so very long ago, in September, to Lloyd’s of London, in which he said that climate change is the “tragedy of the horizon”, ought to wake all of us with alarm, but also make us ask how we can adjust and make responsive our institutions to the anxieties that obviously flow from the developing and clearly established dangers of climate change.

18:00

I realise that I may not be pressing at an open door when I deal with the Minister in his area. After all, he belongs to an Administration who have been presenting a series of closed doors to green policies in recent months, with the end of subsidies for offshore wind production; the granting of the right for fracking to be conducted in our national parks; the end of the Green Deal insulation for our homes; and the end of the zero-carbon standard for housebuilding. All those may look like small beer against the general perspective, but they are an indication that the Government are still far from persuaded of the significance of climate change, which stands somewhat in contradistinction to what the Governor of the Bank of England said in September. On this occasion, my support is with the governor.

Although the Financial Policy Committee will take into consideration systemic risks attributable to structural features, those attributable to the distribution of risk within the financial sector, and unsustainable levels of leverage, debt or credit growth—and I would not in any way, shape or form detract from the significance of those cardinal objectives that the committee is obliged to consider, which are well within the rubric that it has had for some time—I hope that, just as we seek to establish a somewhat longer-term perspective for our financial institutions on investment and the development of the economy, in that longer term we will also look at systemic risk which is some distance away but which, unless we take action now, will have calamitous implications for the economy and, of course, the wider world. While the Minister stresses the committee’s significance in its work of managing financial risks in the shorter term, as I am sure he will, I hope he will also accept that it would be nothing but advantageous for the committee to accept the signal from the governor himself that everyone concerned with the future welfare of our country needs to take into account the issues of climate change and how we can moderate it, because a failure to do so will render a great deal of our short-term measures wholly and totally inappropriate.

[Lord Bridges of Headley]

My Lords, I begin by thanking the noble Baroness, Lady Worthington, for sparing the time to meet me to discuss this amendment before today and repeat my offer that, should she wish to have further meetings with me or the Bank of England I am sure that I can happily facilitate it. I thank the noble Baroness, Lady Kramer, for once again making a very eloquent contribution to this debate.

I am sympathetic to the motives behind this amendment. Climate change, demographic change and technological change are important structural issues, as the noble Lord has just said, which could indeed have a very significant impact on financial stability. It is right that the macroprudential authority should be alert to these, and other, long-term systemic risks. However, as I hope other noble Lords will agree, in the light of what I am about to say, the amendment is unnecessary, so I do not feel able to accept it.

I start by stressing one point. The current legislation places no limit on the time horizon of the systemic risks that the FPC must consider in its assessment of the risks to the resilience of the UK financial sector. Therefore, the current legislation already provides for the consideration of long-term systemic risks such as those listed in the amendment. Indeed, at its meeting of March 2015, the FPC discussed precisely one of those risks: the risks to financial stability from climate change. This is evidence that the FPC has previously considered longer-term systemic risks, and may do so again in future, should it see fit. Although the FPC concluded that the risks from climate change would not materialise within its typical policy horizon, the Bank is also taking action on longer-term systemic risks through other channels, given the importance of these issues. I shall draw noble Lords’ attention to just three, although I am happy to meet to discuss the issue further.

First, the issue of climate change has been added to the Bank’s One Bank Research Agenda. I would be very happy to arrange for the noble Baronesses, Lady Worthington and Lady Kramer, to meet with Bank officials to discuss this issue in more detail. Secondly, the governor of the Bank is using his chairmanship of the Financial Stability Board to consider the risks that climate change poses for financial stability and the steps that could be taken to mitigate them, including through improved disclosure. I remind your Lordships of what the governor said in the speech to which the noble Lord referred. He said:

“With better information as a foundation, we can build a virtuous circle of better understanding of tomorrow’s risks, better pricing for investors, better decisions by policymakers, and a smoother transition to a lower-carbon economy”.

He set out in quite a lot of detail what he considered the most effective disclosures are—they are,

“consistent, comparable, reliable and clear”,

and “efficient”.

Thirdly, the Bank’s open forum will host a public discussion of some of the types of risks raised in this amendment, such as how financial innovation and technology can support the economy and how financial markets can regain their social licence. Those are just three of the steps that I would like to highlight. I would be more than happy to meet the noble Baroness again. I hope that what I have said addresses some of her points and that she will withdraw her amendment.

[Baroness Worthington]

My Lords, I am genuinely grateful for how the Minister has responded to this amendment. It was intended to stimulate debate and elicit a reassuring response and, indeed, the Minister’s words have been reassuring. It is clear that the stakes are very high when it comes to climate change, and every aspect of government policy needs to think through the implications so that we do what we can in the time that we have to avert and limit the risk. It has been a significant new intervention from the governor to make this part of the Bank’s One Bank Research Agenda, and we hope that that will bear fruit.

I know that the governor is pursuing initiatives with the FSB that are international in nature. My point was to try to stress the fact that the UK sits at the global table when it comes to financial services, and the City of London makes such a valuable contribution, not only to our economy but globally, that we can show leadership here. We should not simply say that this can be sorted out by an international process. There are things that we can do as the UK Government and as we sit here now, with the legislation in front of us, to send a strong signal. But as I say, I am reassured.

On the issue of disclosure, more can be done now for us to start to think through what those standardised reporting requirements might be. I have tabled an amendment today that will enable us to have a further, more detailed discussion on that point.

Although there is no limit on the time horizons considered by the committee, I hope that over time the culture of the Bank will change through as many efforts as we can make and that in future, if there is a need for legal change, we might revisit this. Changing culture is a difficult thing. As the Minister said, every needle makes a difference, and I hope this needle will hit the mark and cause this debate to continue because this needs to be thought through now because it is incumbent upon us to act. I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Clauses 7 and 8 agreed.

Clause 9: Audit

Amendment 9

Moved by

[Lord Davies of Oldham]

9: Clause 9, page 7, line 12, leave out “reasonable”

[Lord Davies of Oldham]

My Lords, I shall speak also to the other amendments in this group. I will be brief. If ever I were cast before the Lord Mayor’s Show, it is in moving this rather marginal amendment when a huge, significant debate on the relationship of the Audit Commission to this legislation will take place as soon as we finish debating these rather minor amendments. I shall keep my remarks necessarily brief on this because I want to hear the more weighty contributions that are likely to be made on more fundamental aspects of the relationship of the Audit Commission to this Bill.

I think I can anticipate the Minister’s response to these amendments, particularly when he is at his most constructive, as he has been today. He will say that “reasonably” is used to limit excess, that it is a common legislative tool and that I have been at Westminster long enough to recognise that. I do, but I make no apology for the fact that I have introduced these amendments centred on “reasonably” merely to get some locus with regard to the important consideration of the National Audit Office. The Bill will allow the National Audit Office to initiate value-for-money studies across the entire Bank, other than for the financial audit of the prudential regulation functions of the Bank. It ought to be compatible with the—I hesitate on this word—desubsidiarisation of the PRA. The National Audit Office will be able to conduct any value-for-money study and is not to be concerned with the merits of the Bank’s general policy. It will consult the Bank of England regarding any proposed study.

Our amendments deal only with the practical arrangements between the National Audit Office and the Bank. They do not try to deal with conflicts that may present themselves between the Court of Directors and the National Audit Office or the proposed means by which various resolutions could be achieved. Nor am I seeking in any way, shape or form to pre-empt the much more substantial debate which is to take place in a few moments. However, we had a harbinger of that debate in the contributions by the noble Lord, Lord Bichard, at Second Reading, and the chair of the National Audit Office, Sir Amyas Morse, has also spoken publicly about his concerns. The issue is made more sensitive because of the Bill’s general approach to oversight and scrutiny, which we have covered in a series of discussions today. The National Audit Office’s concern with regard to its work mirrors many of the worries that we have already expressed about the Bill in its current form.

I hope it will be recognised that I am not going to press these amendments today. I am not even going to ask the Minister to give much more than a cursory reply to them. They were tabled against the background that at Second Reading we had an expression of real concern about the role of the National Audit Office as conceived in the Bill, and I cannot wait for that debate to take place. I promise the Committee I will play, if any, a small, supportive role. I beg to move.

18:15

[Baroness Noakes]

My Lords, the noble Lord, Lord Davies of Oldham, is being rather modest about these amendments. I think they are rather good. However, I do not understand why he has proposed amendments to Clauses 9 and 10 but not to new Section 7G introduced by Clause 11, which relates to the main value-for-money study power. Not being limited in the way that these amendments imply would be at least as important to the new powers introduced by Clause 11.

I hope the Minister’s reply is not cursory because this is quite an important point. We do not very often legislate on public audit matters. I can remember doing the Public Audit (Wales) Bill, and there was no restriction on the Comptroller and Auditor-General for Wales reasonably requiring certain information. Reasonable time was in the Bill, but not a requirement to demonstrate that he reasonably required the information. It seems to me that the more you try to constrain an auditor, the more you allow an organisation which is being audited to run rings around that auditor. Having been in the auditing profession, I feel rather strongly that we should not try to restrict auditors but should make it as easy as possible for them to get whatever information they want.

[Lord Higgins (Con)]

My Lords, the noble Lord, Lord Davies of Oldham, is always modest, but on this occasion he is excessively so. I agree with my noble friend because the implication of putting the words “reasonable” and “reasonably” in these clauses is that somehow the National Audit Office would act unreasonably, and I do not believe that that is the case. Perhaps the Minister will tell us where else in the legislation governing the National Audit Office such clauses are applied. These are quite unnecessary words. It may well be that, given the more formal auditing functions of the National Audit Office, as against the value-for-money provisions, there might be some occasion when it is necessary to get hold of documents at an unreasonable time. I hope the Minister will respond to this and agree to delete the words which appear in the amendments.

[Lord McFall of Alcluith]

My Lords, I support the noble Lord, Lord Higgins, and the noble Baroness, Lady Noakes. I was a member of the Parliamentary Commission on Banking Standards which looked at the word “reasonable” and concluded that it is a lawyer’s word. If it is a lawyer’s word, it costs a lot of money, and if it costs a lot of money, it can obscure the truth. Let us get rid of it and invest the authority in the Comptroller and Auditor-General which will save everyone time and money.

[Lord Bridges of Headley]

My Lords, as my noble friend Lady Noakes said, the noble Lord, Lord Davies, is once again being incredibly modest and reasonable about his reasonableness amendment. I think the amendments merit a full response, so I hope he will forgive me. I will try my best, and I will pick up on the point made by the noble Lord, Lord McFall. I heed what he said about this in the past.

I shall set out the Government’s position. Clause 9 gives the Comptroller and Auditor-General a new role in the financial audit process of the Bank. The Comptroller and Auditor-General will be consulted on the appointment of the financial auditor and on the work programme that that auditor sets out to deliver. The Comptroller and Auditor-General will have the right to attend the relevant parts of the meetings of the Bank’s audit and risk committee. This is intended to assist the NAO in conducting value-for-money examinations of the Bank under Clause 11.

Clause 10 provides for increased public scrutiny in circumstances where a Treasury indemnity has been granted to the Bank, or to a company of the Bank. Fortunately, times when a Treasury indemnity is deemed necessary are rare, but it is right that where there is a direct risk to public funds the Treasury can require the Bank to prepare a financial report on any activities that have been indemnified, so that the extent of the risk to public funds can be assessed, and that this report is subject to review by the Comptroller and Auditor-General. I agree that in both of these contexts the question of access to information is critical. It is central to the ability of the Comptroller and Auditor-General, assisted by the National Audit Office, to carry out effectively the roles defined for him in the Bill. So I am pleased that the noble Lord, Lord Davies, has tabled the amendments and that the issue has been raised, but I am unable to accept them.

To address my noble friend Lord Higgins’s point, the language used in the Bill regarding the Comptroller and Auditor-General’s access to information mirrors the relevant wording from the National Audit Act 1983, which provides in Section 8 that,

“the Comptroller and Auditor General shall have a right of access at all reasonable times to all such documents as he may reasonably require, for carrying out any examination under section 6 or 7”,

in the National Audit Act,

“and shall be entitled to require from any person holding or accountable for any such document such information and explanation as are reasonably necessary for that purpose”.

As far as I am aware, the inclusion of requirements of “reasonableness” in this section has not created difficulties for the Comptroller and Auditor-General in the context of value-for-money examinations carried out in relation to other public bodies, and I see no reason why it should cause a problem now.

Some may argue that the Bank would be able to use this reasonableness requirement to delay examinations, but if the Bank did not comply with its obligations under this clause then the Comptroller and Auditor-General would be able to seek an injunction from the courts to enforce his rights. As such, it seems to me that the amendment is unnecessary, and I ask the noble Lord to withdraw it.

[Lord Davies of Oldham]

My Lords, I am not going to withdraw it without first expressing my enormous appreciation for the support from the government Benches for what I had regarded as modest amendments. The noble Baroness, Lady Noakes, often expressed herself with great vigour against any proposals that I put forward when we were in government, but today I have found some favour with her when I did not quite anticipate it. Obviously the noble Lord, Lord Higgins, is always reasonableness itself, so I knew that he would speak very well on this matter.

The issue was not so much that I did not think it was worth airing the question of reasonableness. I accept very much the Minister’s coherent and proper response to this very short debate, and I think that we very much appreciated the tone that he adopted. The reason why I was concerned about these amendments at this stage was against the background that they are immediately before what we all recognise is a pretty substantial issue regarding the Bill, and I know that others are going to present that argument with considerable force. It seemed only reasonable if on this occasion I couched my expressions in modest terms. I promise not to make a habit of that, and beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Amendment 10 not moved.

Clause 9 agreed.

Clause 10: Activities indemnified by Treasury

Amendments 11 to 13 not moved.

Clause 10 agreed.

Clause 11: Examinations and reviews

Amendment 14

Tabled by

[Lord Bichard]

14: Clause 11, page 9, line 27, leave out from “section” to end of line 28 and insert “shall not be construed as entitling the Comptroller to question the merits of the policy objectives of the Bank, including in relation to monetary policy.”

[Lord Bichard (CB)]

My Lords, if I might be allowed a moment of personal explanation, I was advised earlier today by the clerks that the Addison rules of 1951, of which I have to admit I was not previously closely informed, might be argued to preclude someone who holds the position that I do of chair of the board of the National Audit Office from speaking on these issues or indeed from moving the amendment. I do not wish to put myself in the position of appearing in any way to act inappropriately or against the rules of the House so I readily, albeit reluctantly, agreed not to speak further in this debate. I hope, however, that the House will allow others who have supported the amendments that I tabled in good faith to move them.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I take that as a kind of personal statement.

[Lord McFall of Alcluith]

My Lords, I shall move Amendment 14, which is in the group Amendments 14 to 18, concerning Clause 11 and the proposed audit arrangements for the Bank of England. As it stands, the Bill provides for the NAO to carry out value-for-money studies at the Bank, but it also imposes a number of constraints on this. First, before carrying out a study, the Comptroller and Auditor-General would have to consult the Court of Directors at the Bank. Secondly, if the court is of the opinion that an examination is concerned with the merits of the Bank’s general policy in pursuing the Bank’s objectives, then it can ultimately prevent the Comptroller from proceeding with an examination.

These provisions contrast sharply with the terms under which the NAO undertakes value-for-money studies in every other public body under the National Audit Act. That legislation gives the Comptroller and Auditor-General,

“complete discretion in the discharge of his functions … in determining whether to carry out any examination … and as to the manner in which any such examination is carried out”.

The National Audit Act prohibits the NAO from questioning the merits of policy objectives. As I will mention later, the NAO has never sought to cross that line. However, the Bill extends this prohibition to cover the Bank’s general policy in pursuing the Bank’s objectives, as well as giving the Bank an effective veto over which studies are undertaken.

That presents the NAO with several major problems. First, as the Comptroller and Auditor-General has said, it therefore gives an impression of greater accountability on the part of the Bank that is at odds with reality. Secondly, it undermines the independence of the NAO to decide what should be examined, and that independence is key to holding public bodies to account. Thirdly, if these provisions are agreed for the Bank, it will encourage others to challenge the independence of the office; perhaps every new body and many existing ones wish for the same ability to veto or limit the NAO’s work—to the great disadvantage of Parliament and the taxpayer, for both of which the NAO has long performed an invaluable function. This is not an issue, therefore, that can be limited to the particular circumstances of the Bank of England.

Why would anyone wish to impose these kinds of constraints on the NAO? Perhaps there is a concern that the Bank should not have its policy decisions examined. That would be entirely understandable, but the fact is that the NAO has had decades of experience of operating without questioning the merits of policy objectives. It has done so without any difficulty in the Ministry of Defence, including the security services, or indeed the Foreign Office, where it has recently been looking at how crises in Tunisia, Libya and Yemen have been handled. It is difficult to argue that if the NAO is capable of dealing satisfactorily with this level of sensitivity, it could not be trusted to steer clear of questioning policy objectives at the Bank.

I know it has been argued that there are no precedents for the equivalent of the NAO being involved with a national bank, but the Government Accountability Office in the US audits the Federal Reserve Board and the Federal Reserve Banks, with exceptions to the scope of their audits being made explicit, and including transactions for and with a foreign central bank; deliberations, decisions or actions on monetary policy matters; and transactions made under the direction of the Federal Markets Committee. The Comptroller and Auditor-General has made clear from the outset that he would be content it agree similar such exceptions in this country. These amendments seek in the case of Amendments 14 and 16 to bring the definition of “policy” into line with that used in the National Audit Act, Amendment 15 would delete the need for the Comptroller to consult the court before undertaking an examination, and Amendment 17 would remove the veto of the Bank’s Court of Directors over examinations.

18:30

[Lord Higgins]

I am having a slight problem with Amendment 14. It seems, effectively, simply to put back again the lines which the noble Lord seeks to leave out. That is to say, in each case it seems to say that the Comptroller will not question the merits of the policy objectives of the Bank.

[Lord McFall of Alcluith]

I did not quite pick up on the noble Lord’s point.

[Lord Higgins]

I will try again. Amendment 14 says,

“leave out from ‘section’ to end of line 28”,

which is concerned with the question of whether the Comptroller can question the merits of the policy objectives of the Bank, and which effectively says, “No; the NAO can’t”. However, Amendment 14, which I may have totally misunderstood, seems effectively to put it back in the same way, except with the addition of the words,

“including in relation to monetary policy”.

[Lord McFall of Alcluith]

In fact, the Comptroller and Auditor-General made it clear to me that he does not want to question the merits of the policy of the Bank, so if there is a misunderstanding there, we should sort it out, particularly when it comes to Report. However, that is certainly not the case, and he would not want to do that.

Amendment 18 deletes a provision which would apply Section 353A of the Financial Services and Markets Act 2000, which would restrict the ability of the Comptroller and Auditor-General fully and openly. As the Government have said on many other occasions, transparency is an essential ingredient of accountability. These amendments seek to ensure that the Bank is subject to a level of transparency necessary to ensure its proper management of its resources. Parliament and the taxpayers have the right to expect nothing less.

An article in the Financial Times at the weekend said that, globally today, central banks exercise unparalleled power and independence. Willem Buiter used to come before the Select Committee quite regularly and was a former member of the policy committee. He is now the chief economist at Citi and stated that presently, central banks,

“are punching well above their weight … This could lead to a backlash and to central banks losing their operational independence, even where this independence makes sense—in the design and conduct of monetary policy”.

When the former Governor King came before the Treasury Select Committee, which I chaired, he was very clear both in formal and informal settings that the integrity and credibility of the bank is essential if society is to have confidence in its monetary policy decisions. That being the case, the Bank should not be marking its own exam paper. It should be honest in its intentions and transparent in its actions, and it cannot tie the hands of the Comptroller and Auditor-General with the court holding a power of veto. In the short and even the long term, that does not serve the best intentions of the Bank or society. In that spirit, I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I will make a brief intervention in this debate as a former Treasury Minister and ex officio member of the PAC. As we have heard, Clause 11 sets up a new interface between two public institutions, both of which are independent: on the one hand the Bank of England, independent since 1997, and on the other the Comptroller and Auditor-General, who has been independent for a lot longer. In establishing this new interface, clearly one has to get the balance right.

From the exchange before the Treasury Select Committee last month, it is quite clear that the original drafting caused difficulties for the Bank of England and was amended. If one looks at Mr Roxburgh’s answer to a question posed by Helen Goodman, it is clear that there was an agreement that there had been a change in the drafting because of the reservations of the Bank of England. However, it is quite clear that the clause as now drafted causes difficulties for the other partner, namely the Comptroller and Auditor-General. The briefing note says that it “greatly limits” the Comptroller and Auditor-General’s freedom of action and that it does not provide him with,

“the independence that is essential to accountability”.

If one looks back at the C&AG, there is no history of him looking at policy issues in his investigations. There is of course concern that if the Bank of England is given an exemption of this nature, other institutions subject to audit by the C&AG might seek a similar exemption—the BBC is a possible example. At Second Reading my noble friend who wound up the debate said that the concerns that were ventilated then were,

“well argued and should be taken very seriously”.—[Official Report, 26/10/15; col. 1082.]

Obviously, it is important to avoid a public spat between two important independent institutions. The sensible way forward is for the Minister to promote bilateral discussions between the NAO and the Bank of England to see if they can come up with a memorandum of understanding, which, if necessary, might then be incorporated into the Bill if an amendment is necessary. However, there should be some discussions before Report so that there can be an agreement on the appropriate terms of trade between these two public bodies.

[Baroness Kramer]

My Lords, I will briefly join in the debate. We have two very highly regarded independent organisations—the Bank of England and the NAO. I say to the Government that it is unfortunate that legislation has come forward without resolving the relationship between the two of them. This House should not be in this position today, and neither should either of those two institutions. I very much hope that the Government will take the advice proffered and bring these various parties together to get a resolution here. Both are key institutions that need to have their independence appropriately protected.

In answer to the question asked by the noble Lord, Lord Higgins, the two lines about which he was concerned a moment ago, which are taken out and replaced by what he read as almost two identical lines, almost get to the crux of this matter. The amendment strengthens that assurance that the NAO and the Comptroller and Auditor-General do not in any way seek to question the merits of policy objectives. It is trying to make that absolutely clear by putting in a stronger statement to that extent. The problem the NAO has, as the noble Lord, Lord McFall, said, is that due to the way in which the language is now drafted, the Bank effectively now has a veto over which studies are undertaken. Frankly, that is, I think, unacceptable to every party.

We in Parliament depend very much on the NAO and the reports it provides to us. It is very important for us to be able to receive that information, knowing that it is impartial and independent, for us to be able to perform the role we play. All the discussions today have talked of the importance of oversight. While we very much respect the Bank of England, we are all incredibly conscious that it has made very serious mistakes in the past which have cost us dear, and that we all need to play a role in interacting and making sure that we understand and are appropriately taking on our responsibilities toward that institution. Frankly, it is very hard to see how we in this House or in the other place can do that without effective reporting from the NAO.

I hope that the Government will take this matter away for reconsideration because these are significant concerns. I take great heart in hearing from the noble Lord, Lord McFall, that the Federal Reserve board in the United States is one of the bodies on this globe that most asserts its independence and integrity. The Federal Reserve accepts a similar kind of oversight from the US Government Accountability Office, and it seems to me that we have a template there. If it works for the Federal Reserve, surely it can work for the Bank of England.

I hope that these amendments will be taken exceedingly seriously. While the noble Lord, Lord Bichard, is not in a position to speak himself, there are many in this House, including the noble Lord, Lord Higgins, and the noble Baroness, Lady Noakes, who will be able to appreciate the importance of the points that he would have made had he had the opportunity.

[Baroness Noakes]

My Lords, I support the amendments. I was deeply shocked to see that the Government proposed to give the Bank of England a veto over whether the Comptroller and Auditor-General could undertake a particular value-for-money study. I have believed for a long time that it has been an anomaly that the Bank of England has not been within the remit of the Comptroller and Auditor-General. I do not believe that any public body, however great and however independent, should be able to stand on that greatness and independence and say, “I do not want the National Audit Office or the Comptroller and Auditor-General to examine what I have been doing”. Public audit can be effective only when it is unfettered, and the concept of fettering the Comptroller and Auditor-General is, frankly, unacceptable.

[Lord Higgins]

My Lords, first, I express regret that I was not able to speak at Second Reading. I was preoccupied with the European Union Referendum Bill and other matters. However, I am certainly deeply concerned, as are other noble Lords, about the situation that now seems to have developed in the relationship between the Bank of England and the National Audit Office. I am sure that my noble friend was right in saying a moment or two ago that this ought to be resolved on Report. If necessary, that is what we will need to do.

I have a long history of involvement in this matter. I was much involved—this shows how long ago it was—when it was first suggested that the National Audit Office should carry out value-for-money investigations. However, it is very important to ensure that the NAO remains completely independent. I share the view expressed a moment ago that it would be wholly wrong for the NAO to have to get the permission of the people being investigated to carry out a review. I am extremely grateful to the noble Baroness, Lady Kramer, for explaining what I did not previously understand about the relationship between the amendment and the words being left out. I now understand the point that she made, which was extremely subtle, if I may say so.

Having said that, I am a little puzzled. I chaired the Treasury Select Committee for a decade or so and was succeeded by the noble Lord, Lord McFall. I was also a long-standing member of the Public Accounts Commission, which I chaired for some time. It is extremely important that we preserve the position of the NAO, and, as I said, I agree with those who say that it ought not to have to seek permission to carry out reviews.

I am just a little doubtful about what is meant by “policy”. This may turn out to be a rather fine line. For example, at the moment it seems to be the policy of the Bank, and indeed the governor, to give forward guidance on interest rates. That certainly needs inquiry as far as value for money is concerned, because the forecasts have been extraordinarily wrong on a number of occasions and a lot of people—for example, those renewing their mortgages—may have suffered considerably. In passing, I hope that the governor will reconsider whether that is an appropriate policy and perhaps no longer give forward guidance on interest rates.

The other points in relation to this matter have been made at Second Reading and in today’s debate. This is something that we have to resolve. We have to make sure that the relationship between the two bodies is maintained, otherwise the Comptroller and Auditor-General, very understandably, will have to think personally—the office of Comptroller and Auditor-General has always been a very personal one—about whether he can really operate in a situation where his independence is being questioned.

18:45

[Lord Davies of Oldham]

My Lords, I do not enjoy the role of opposition a great deal but, just for once, in the light of this debate I am glad that I am here this evening and not where the Minister is sitting. He has been presented with a very difficult situation. I assure him that it is not often that in this House we have not just the Official Opposition presenting a strong case on an issue but two very experienced Members on his own Benches—on this occasion, the noble Baroness, Lady Noakes, and the noble Lord, Lord Higgins—pressing the need for change in a Bill. The equally experienced—although more so in the other place than here—noble Lord, Lord Young, indicated that there has to be some way out and that it is time the Government pursued it. It certainly is.

What a mess the Government are in and what great difficulty, I am sure, the Minister will have in defending how they arrived at this ridiculous situation. Time is of the essence. Even if the Government stagger through this House without too much challenge—I am still not convinced about how sharp that challenge should be—the other place will consider this matter shortly and there will certainly be a great deal of difficulty down there unless change is effected. I accept what the noble Baroness, Lady Noakes, suggested: it is best to get it right in this House before Report, so the Minister does not have too much time.

[Lord Bridges of Headley]

My Lords, it is always nice to start off with some sympathy for my position from the noble Lord, Lord Davies. I thank all noble Lords who have spoken and made some very thoughtful contributions. I start by letting your Lordships know that detailed discussions are ongoing between the Bank, the NAO and the Treasury to find a way forward on this issue that all sides find acceptable. These discussions have not yet concluded but I hope to be able to update the Committee before Report.

I should like to set out the Government’s position and will address the amendments and the stand part debate relating to Clause 11 in one fell swoop. However, before I continue, I thank the noble Lord, Lord Bichard. He met me last week and talked me through the amendments that he had hoped to table for today. I thank him for engaging so constructively and I very much hope that that dialogue with me can continue, even if he is unable to contribute to this debate in Committee.

I begin by emphasising that by extending, for the first time, the NAO’s ability to conduct value-for-money reviews of the Bank, the Bill will deliver a significant increase in the transparency and accountability of the Bank to the public and Parliament. The Government are strongly of the view that enhancing the accountability of the Bank of England is in the public interest but it is also in the Bank’s interest—strengthening public trust in the Bank will only add to its credibility.

The issue of how the Bank uses public resources is long running, as my noble friend Lord Higgins said. There has been debate on it ever since the Bank was nationalised in 1946. While researching this debate, I came across correspondence on this issue from my grandfather, who happened to be a Permanent Secretary at the Treasury in 1946 and during the 1950s. So something in the Bridges genes means that we have to deal with these things, although I do not know quite know what that is.

Since the 1950s, the relationship between the Bank and the Government has clearly evolved. Now, we regard the independence of the central bank as critical to our economic security and prosperity. As the noble Lord, Lord McFall, said, independence has been an issue of debate not just here but elsewhere. As Ben Bernanke, a previous chair of the Board of Governors of the Federal Reserve System, said:

“A broad consensus has emerged among policymakers, academics, and other informed observers around the world that the goals of monetary policy should be established by the political authorities, but that the conduct of monetary policy in pursuit of those goals should be free from political control”.

As a number of your Lordships have said, today the Bank of England occupies unique territory in the foundation of the UK economy, and policy decisions by the Bank are of vital importance to everyone. To deliver its mandate effectively, it is essential that the Bank’s independent status is preserved.

The NAO also plays a vital role as Parliament’s auditor. Its own independence is crucial to ensuring that there is effective review of the effectiveness and efficiency of the public sector and for maximising public accountability. Parliament, and in particular the Public Accounts Committee, relies on the work of the NAO to scrutinise properly the value for money of taxpayer-funded activities. It is therefore important that the NAO be allowed to do its work in as unfettered a way as possible.

[Lord Higgins]

The Minister referred to the PAC. On the whole, we seem to be rather short of any input from the PAC, although it is, crucially, using the results of the NAO studies. Would the Minister at least consult them as to whether they have any views on the debate that we are considering now? The PAC has a very definite interest.

[Lord Bridges of Headley]

My noble friend makes a good point and I will be happy to mull it over.

Turing to the Bill, a number of your Lordships expressed concern that the provisions in Clause 11 fetter the independence of the Comptroller and Auditor-General. As your Lordships know, this view is shared by the NAO. Others, including the Bank, have been concerned to ensure that the proposals do not undermine the role of court and infringe upon the vital independence of our central bank. The position put forward in this Bill is therefore one of compromise, as my noble friend Lord Young of Cookham eloquently pointed out. It is a unique arrangement that seeks to strike a balance and protect the independence of two vital public bodies that, unsurprisingly, approach this issue from very different vantage points.

There are two main areas where the arrangements set out in the Bill are different from those that are typically put in place between the NAO and its counterparties. In both cases, the purpose of these special arrangements is to protect the operational independence of the Bank’s policy-making.

First, a bespoke carve-out has been designed to ensure that the Bank’s policy functions are out of the scope of the NAO’s value-for-money reviews. This reflects the differences between the policy objectives of the central bank versus those of a government department. I will turn to this issue in more detail when we come to specific amendments.

Secondly, we have designed the process to unlock disagreements between the Bank and the NAO over what constitutes policy. This is particularly important given the complexity of the Bank’s functions, which makes drawing this distinction especially challenging. To be clear, the process is this: if the court is of the opinion that an NAO review is seeking to examine policy, the court must notify the Comptroller and Auditor-General of its concerns. If, following consultation, the court is still of this opinion, the Comptroller must not proceed with the examination of that area. The Bill also requires that any such disagreement be made public to ensure transparency and to facilitate public and parliamentary scrutiny.

The arrangements set out in Clause 11 seek to increase the accountability of the Bank, while protecting its independent status and recognising the complex nature of its activities. I believe that the proposals are effective and transparent, but this is, as we know, a complicated area. This is why discussions between the Bank, the NAO and the Treasury are ongoing.

I will now turn to the tabled amendments. Amendments 14 and 16 seek to replicate the language of the National Audit Act 1983. It is well understood that the NAO is bound not to consider the merits of the policy objectives of any body with which it engages, but the Government believe this language to be difficult to apply in this specific instance. This is because, as a number your Lordships have said, the Bank of England has a unique role in the United Kingdom economy. The intent of the Bill is to convey the same meaning as set out in the National Audit Act 1983 but phrased in a way that is more applicable in the context of the Bank. Indeed, the policy carve-out is very similar to that which currently applies in the case of NAO oversight of the PRA. The Government do not believe, therefore, that this confuses or obfuscates the boundaries of the Comptroller and Auditor-General’s oversight.

Amendment 15 seeks to remove the requirement that the Comptroller and Auditor-General consult with the court of the Bank before the NAO initiates a value-for-money study. I understand that such consultation is standard practice and consistent with the normal manner in which the NAO goes about its work. The reason why it is particularly important here is due to the role that this Bill establishes for the court of the Bank in determining what constitutes policy. New section 7E in Clause 11 provides that the court may inform the Comptroller and Auditor-General if it considers that a proposed value-for-money study is concerned with the merits of the Bank’s general policy in pursuing its objectives. Consistent with this, the Bill provides that the court must be consulted prior to the initiation of any value-for-money study that the NAO wishes to carry out.

Amendment 17 is concerned with what happens when there is disagreement between the Comptroller and Auditor-General and the court. Clause 11 provides that, should the court continue to be of the opinion that an element of the Comptroller and Auditor-General’s review constitutes policy, the Comptroller and Auditor-General will be unable to proceed with the examination in relation to that policy, and will be unable to include the results of the examination which relate to that policy in any report produced. However, in order to provide the appropriate balance and to protect the role of the Comptroller and Auditor-General, where there is an unresolved disagreement, the nature of this disagreement must be published. This again will open up any disagreements to full parliamentary scrutiny.

A number of your Lordships referred to precedent. I do not believe that this sets a precedent for the NAO. The Bank of England is truly unique, in that no other organisation can claim to be the central bank of the UK or to play such a critical role in our economic prosperity and security.

Finally, I turn to new Section 7H. This does not place any restriction on the Comptroller and Auditor-General’s access to information. Therefore, I do not agree with those who argue that it would restrict the ability of the Comptroller and Auditor-General to examine the Bank fully and openly. This section would be relevant only in narrow circumstances in which the disclosure of certain types of information would be of serious detriment; this includes sensitive information on monetary policy and financial stability, for instance. Both these roles of the Bank are obviously highly market sensitive, and it is straightforward to imagine circumstances in which disclosure of information, even in aggregated form, would undermine financial or economic stability. Section 7H is included in this Bill to protect against such eventualities, while ensuring that the Comptroller and Auditor-General has full access to information held by the Bank. These same limitations apply to the regulators and, indeed, to the external auditors of the Bank. For these reasons, I reject the amendments to Clause 11 and beg that they should not be pressed.

The noble Lord, Lord McFall, raised the issue of the Federal Reserve and its audit. I would like to say briefly that it is important to note that, in the US, the debate is, as I mentioned, far from closed. Indeed, legislators, policymakers and commentators in the US have been engaging for a long while in similar discussions to those that we are having today. Just as in this debate, there are those who want a greater sense of accountability for the central bank and there are those who argue that the sufficient protection of central bank independence is important. Of course, there may be valuable insights to gain through inspecting the accountability frameworks of international central banks. That is something that the Government have done in drafting the legislation, and will continue to do as the Bill develops. But to suggest that there is an easy solution that we can transplant into this system from elsewhere is wrong.

To summarise, the provisions in this clause have rightly attracted a great level of debate. This level of debate is only proper because the provisions concern two incredibly important public bodies, and I expect that we will continue this debate as the Bill progresses. These clauses are an important step in increasing the accountability of the Bank. I ask that this clause stand part of the Bill.

19:00

[Lord McFall of Alcluith]

My Lords, I thank the Minister for his reply. He made a point about the Federal Reserve, in respect of which there is a huge amount of engagement in the United States at the moment. Congressional members are knocking it about like mad. The status of the Federal Reserve is more in question than that of the Bank of England—that is accepted here. The point of these amendments is to ensure that the status of the Bank is maintained and that its independence is not questioned. The analogy with the Federal Reserve is a bit off the mark on that issue.

As my noble friend Lord Davies said, the Government are in a pickle. There has to be a lot of consideration before Report. The noble Lord, Lord Young, made a point about facilitating engagement between the Comptroller and Auditor-General and the Bank of England. According to my information, they have met but there is still a gap. To give an example from my own experience, when I was chairman of the Treasury Committee I was approached by the Treasury to ensure that the Bank of England was audited. I said to them, “Do your own business: I am not doing it for you. Engage in it”. I notice that three distinguished former Permanent Secretaries are sat on the Benches. I do not know what you call a trio of Permanent Secretaries, but the noble Lords should not worry: it would have to be something complimentary. My question to the Minister is: are the Treasury the fly in the ointment at this stage?

The noble Baroness, Lady Noakes, said that the Bank of England should be audited and that it can be effective only if it is. We are here to ensure that that effectiveness is maintained. The noble Lord, Lord Higgins, talked about value for money and the NAO being independent. This arrangement could end up in a public squabble between the Bank and the NAO, and that is not going to serve anyone’s interest, particularly when it comes to parliamentary scrutiny. That does not serve the Bill. A lot of thinking needs to be done on this issue. The noble Lord also made a quite radical point about the value for money of forward guidance. The Comptroller and Auditor-General does not want to go near that. He has been very reasonable—I have used that word before—in his ambitions and it is important to see where he comes from on this issue.

The Minister talked about increasing transparency, but where will it increase?

[Lord Higgins]

The Minister has suggested that there was a compromise. It would not appear to be a compromise as far as the release of information is concerned. The Comptroller and Auditor-General appears to take the view that the Government’s position on that issue is unacceptable. Can we be sure that that is not taken as settled? We also need to consider the question of releasing information.

[Lord McFall of Alcluith]

There cannot be a compromise when the court has the veto at the end of the day and this has been public. We do not know where this is going to lead. I do not think there is a compromise at this stage.

Thinking off the top of my head—and I am in good company, because the Government are doing the same—given the need to bring people even further together, why can the Comptroller and Auditor-General not engage with the Governor of the Bank of England? Perhaps there could also be some third parties: wise heads such as the noble Lord, Lord Higgins, who has tremendous experience, and the former Permanent Secretaries. Why can they not sit down and say which areas the Comptroller and Auditor-General should have an opportunity to go over? Can we get that wise counsel before Report, so that we do not end up with a squabble? At the moment, there is a big gap between the governor and the Comptroller and Auditor-General that should be narrowed before Report. There is an opportunity to introduce a bit of common sense so that, on Report, we can all agree that the independence of the NAO and the Bank of England are important. Both institutions have a job to do in the best interests of the country, and the authority and integrity of both would thereby be increased. I seek the co-operation of the Minister in achieving a compromise before Report. I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

Amendments 15 to 18 not moved.

Clause 11 agreed.

House resumed.

House of Lords: Questions

Monday 9th November 2015 Lords Chamber

Question for Short Debate

19:06

Asked by

[Lord Hunt of Chesterton]

To ask the Leader of the House what plans she has to change the arrangements for the tabling of parliamentary questions to give priority to those who ask few questions, so that more members of the House can ask questions.

[Lord Hunt of Chesterton (Lab)]

Parliamentary Questions are an essential and valuable part of parliamentary procedure. They probe the Government and hold them to account. However, what is not in the official version is that these Questions have a much broader role in this House and in the other place. They also enable the Government to respond by querying the possible policies of the Opposition, as we have been seeing recently, although this is generally done politely and discreetly. I have also found that parliamentary Questions enable Peers to learn about the concerns, experiences and knowledge of other noble Lords. It is not clear whether they can be asked about constitutional or procedural issues. I was not allowed to ask one for clarification on the Pepper v Hart rule, which is an arcane but important part of our procedure. However, Questions are part of the glue which binds our Chamber together.

This is now a topical issue: with the House expanding as rapidly as it is, we need to think about PQs. If we accept this broader point of view, we could look at the procedures of the House for selecting Questions. We should review our procedures to encourage more noble Lords to ask Oral and Written Questions. I am grateful to the House of Lords Library research services for some statistics. During 2014-15, the 444 lead oral Questions were asked by only 181 noble Lords, who asked at least one each. Given that there are 760 to 790 eligible Members, nearly 600 therefore did not ask a Question. However, about 314 asked Written Questions, so some 100 asked Written Questions but not oral ones. The media criticism of the House of Lords, which is justified only to a limited extent, is that many Members are not sufficiently visible. Since it is a great honour to be in this House, the view from the outside is that people should be seen. When I joined this House, some people said they looked forward to watching television and seeing a person they knew perform. Even my colleagues in the United States asked what I was doing and why I was not performing more often. That is a slightly trivial remark but it is part of what is being discussed.

The procedure for Oral Questions is that they are tabled up to four weeks before they are asked. They have to be accepted by the Table Office and improved. I do not make any criticism of the Table Office—it is helpful and often makes good suggestions about how Questions should be written—but we need to find a way in which more Questions can be asked by the non-askers. One way, perhaps, is that the non-askers and the people who ask very seldom, should be given priority. That is not the case at the moment.

Members, of course, can ask one Oral PQ and a Topical Question if chosen. The staff of the Opposition and the Government offices help their Members to promote questions. This facility is not as available to Peers from other parts of the House. The maximum number of questions is up to seven Oral Questions/PQs per year. It is a theoretical maximum because few people get up to that level. When Questions are asked, priority is given to Members who apply in person, which is reasonable, but they can also be asked by phone and email. That needs to be well understood.

Topical Questions are an important part of our procedures and are normally the fourth Question asked on Tuesdays, Wednesdays and Thursdays. From my experience, the Table Office operates some selectivity in suggesting what constitutes a Topical Question. There is a tendency to see Topical Questions as the kind liked by the more popular parts of the media—questions not necessarily about boring, serious events such as critical meetings of international bodies, which may well be rather more important.

What is the result of the procedure that we have? I will not go through the whole list, but 85 Peers asked one question per year; 21 asked three questions; and five asked seven questions.

It is interesting to note whether there is any correlation with the number of years that someone has been in the House. The total number of lead Parliamentary Questions from people who have been here from nought to 10 years, and 10 to 20 years, is about the same, so there is no dropping off. That is rather encouraging. However, beyond 20 years and up to 50 years, the statistics, not surprisingly, show some falling away. Nevertheless, there are finite numbers even after so many years.

The few points I have made need to be considered. I suggest that the arrangements be reviewed in order to enable greater involvement of Peers and more issues to be covered. One way to perhaps do that is to have a survey of Peers, something I have not seen since I have been here.

[Baroness Chisholm of Owlpen (Con)]

My Lords, as this is last business, each Back-Bench Peer has up to 10 minutes to speak rather than seven—except for the noble Lord, Lord Tyler, who is speaking in the gap, who has only four minutes.

19:13

[Lord Trefgarne (Con)]

My Lords, I am glad to have an opportunity to contribute to this debate and I thank the noble Lord, Lord Hunt, for raising the issue this evening.

I come to this topic with a degree of expertise—or a degree of experience, at least, if not expertise—as I think I am entitled to say that I am still the Minister who has answered more Questions from the Dispatch Box than any other. I answered more than 1,000 between 1979 and 1990. Since then, of course, I have not been able to ask anything like as many.

I want first to touch on Private Notice Questions, which are very rare. This is unfortunate because there are often issues which ought to be—and could be—raised by Private Notice Questions. We are allowed one additional Question by private notice each day but the criteria under which Private Notice Questions are allowed are very strict and often when they are submitted to the Lord Speaker they are disallowed—no doubt entirely correctly—because they do not meet the criteria. I understand that the Lord Speaker inquires of officials in the House, including the Government Whips, as to whether she should allow the question. It is unfortunate that the Government Whips should have a say on whether a Private Notice Question is allowed because they would say no, would they not, given the circumstances that often prevail if the question is of a sensitive nature. The criteria by which Private Notice Questions are allowed or disallowed ought to be reviewed. I have made that proposition to the Lord Chairman of Committees and I hope he will take it to the appropriate committee when he has an opportunity to do so.

As for Oral Questions, I suggest that we have five instead of four a day. We tried that experiment in the past but it did not work out then. The problem is that when asking their supplementary questions, noble Lords and noble Baronesses go on for too long; and, I am sorry to say, Ministers sometimes go on for too long, not only with the original Answer but with their supplementary answers too. If all noble Lords and noble Baronesses could be persuaded to keep their answers shorter, there might be more scope to have a fifth Question, which would be a good innovation.

I also suggest that when we sit on Fridays we could perhaps allow two Oral Questions—at present we have none on Fridays—which would provide a few more spaces in the year for that purpose.

On Questions for Short Debate, we now have Grand Committees in which those questions can be asked. This is an excellent innovation because more Questions for Short Debate can now be asked in the Grand Committee, although I am told that the list is not full. There are still plenty of gaps in that arrangement and not enough such questions are tabled. Again casting back on my memory, I recall answering what we used to call Unstarred Questions, which are now Questions for Short Debate. I remember having the privilege of answering one in white tie and tails many years ago before we went off to a diplomatic reception or some such event. I have not seen that recently from noble Lords and noble Baronesses speaking from the Government Front Bench, but perhaps that will happen in the future.

Finally, I do not have too much to say about Questions for Written Answer. They work well. Ministers might try to answer them more quickly occasionally but the arrangement is basically sound. I hope that it will continue and that noble Lords will continue to use that facility.

19:17

[The Earl of Clancarty (CB)]

My Lords, I thank the noble Lord, Lord Hunt of Chesterton, for the opportunity to speak in this debate.

The beauty of the system as it stands is that if you have a burning question you know you will get to ask it if you are willing to put in a little effort. People say, “I do not have time to queue”, but it is a privilege to ask Oral Questions in this House. It is a service we perform on behalf of the public. If we feel the question we wish to ask is important, then, quite honestly, we should make time to queue. All of us should be humble enough to do that.

The current system is simple and open. Those first in the queue get their questions asked. The problem with the method of the ballot, if it were adopted for regular Oral Questions, is that it could introduce the temptation to game the system because it would become less transparent and more complicated. What worries me particularly is the possibility that Peers might get together to submit the same Question or a variation on it to increase its chance of winning the ballot. I am not saying that Members would do that but it is a temptation that would then exist which was not there before. Would we be getting a daily list of every entry into every ballot for every Question to ensure that this could not happen? Frankly, that sounds like an administrative nightmare and a waste of public money, if the ballot system were to be introduced. In the end, the system would be frustrating for those who continually have to resubmit their Question and might never get to ask it or have any control over the day on which they do get to ask it.

The same problems do not exist for the excellent balloted topical Questions element, because at any one time there is a limit to the number of topical Questions, and there is a small window of time in which to ask them. The Table Office, as we know from experience, takes seriously the decision of whether a Question is topical or not, so with topicals you either win or lose without the worry of continually having to resubmit your Question more than perhaps once or twice. There is of course a way of dealing with the problem, as the noble Lord sees it, without changing the system. If we feel that too many of the same people are asking Oral Questions, we should limit further the number of regular Questions an individual can ask from the current seven to perhaps five a year. It might be helpful if that would significantly increase the number of questioners. From the stats kindly provided by the Table Office for last year, by my calculation that would have freed up 25 regular Questions—a week and a half’s-worth, so not that many—but perhaps having some taken up by new questioners. The fact remains, however, that there will always be some people who want to ask Oral Questions more than others. Although Oral Questions are important, they are still only one way to participate in the business of the House.

If there is some tweaking to be done, it is regarding supplementary questions. I think that the House is correctly tolerant about the use of notes for asking supplementaries. The ability to ask a good Question is not the same as the ability to learn lines, and if there is one thing that would markedly reduce the number of people participating at Question Time, it would be to enforce the non-reading guidance. The House is also correctly intolerant of overly long supplementaries, of which we have too many, and often asked by those without notes in hand. Many of us have on occasion pushed it to the limit, but there is some unspoken boundary that does get crossed, and it sometimes feels as though we could have got in another two or even more speakers during a Question if we had not had those especially long supplementaries. Does the Minister think that enough guidance, either formal or informal, is given on this, particularly to new Members?

The popularity of Oral Questions for Members is one valid measure of their success. At four, we have the right number of Questions, and here I disagree with the noble Lord, Lord Trefgarne. There is a good balance between regular and topical and they last for the right length of time. Only a minority of Members leave before the end, but if they lasted for more than 30 minutes, that would not be the case.

[Lord Trefgarne]

My suggestion was that we keep Question Time to 30 minutes, but have five Questions instead of four.

[The Earl of Clancarty]

That may be slightly different, but we have tried five Questions in the past and I do not think it worked. I believe that, as it stands, we have the right system for generating questions. We should not tamper with a system unless we are confident that it can be improved.

19:22

[Lord Sherbourne of Didsbury (Con)]

First, I thank the noble Lord, Lord Hunt, for initiating this debate. I am grateful to him because Question Time is clearly one of the most important events in the House. The Chamber is always packed and it is one of the best ways of holding the Government to account. It also gives people a chance to jump in with questions, and there is much more opportunity for spontaneity than is perhaps the case in other debates, so it is important that a debate is taking place on the issue of Question Time.

I come to the debate with an initial thought. Many odd things struck me when I came into this House two years ago, but I have got used to most of them. However, the oddest thing I found was the fact that to table an Oral Question, you have to queue for two or sometimes three hours in a very dark corridor. Initially I was attracted to the idea of having a ballot. People should table Questions, put them into a ballot and have them picked out. But the more I looked into this, the less persuaded I became. It is true that the present system disadvantages those Peers who are not full time in the House. Many of the Cross-Benchers, for example, have important outside interests and therefore they do not have the chance to queue. That is a problem.

I think that a ballot was tried out for a short time in the past, but the danger is that the ballot will be flooded with lots of Questions, and it may just be that the business managers encourage their colleagues to do exactly that. But the most important reason I am opposed to a ballot is this. When one tables a Question in the present system, whereby you have to write it out and take it to the Table Office, you take some care over the Question. You make sure that it is reasonably drafted and the clerk will also look at it carefully. With a ballot, people will become much more casual about their Questions and the quality would not be as good. I have a suggestion which perhaps the Minister could respond to favourably by saying that it could go up before the Procedure Committee at some stage. Could there be a ballot, at least for the first three Questions under the present system, which would give a noble Lord the right to table a Question? You would not have to queue because you would not be submitting a Question at that point. The system would work like this: you would put your name in to ask a Question on a particular date, and you are then told by the Table Office that you have won the right to table one. You would then take the Question in person to the Table Office, as you do now, perhaps up to two weeks in advance of the Question being answered. I think that that could be a way of dealing with the problem of having to queue.

I have two other thoughts which take the subject a little wider, one of which I am not sure will meet with the approval of the noble Lord, Lord Hunt of Kings Heath. It is whether there should be a self-denying ordinance that supplementaries should not come from the Front Benches, thereby giving all Back-Benchers more opportunity to speak. That is a thought which I put forward in a very tentative way indeed.

My other thought about keeping Questions and indeed Ministers’ responses crisper is this. I suggest that the digital clocks in the Chamber should run down rather than run up. I would like to move to a policy of having eight minutes for each Question, so we do not have any query about when the time has come to an end. A Question would start at eight and you would see the clock running down to zero. When people who are asking questions, and indeed Ministers, see the clock reaching four or three minutes, they would realise that they have to be a bit crisper. Indeed, I would have the same system for people making speeches in debates so that they know that their time is running down.

I have looked at some of the debates on Questions that we have had in the past. There are a million opinions about them, so I will end by saying simply that any thoughts which are taken forward to the Procedure Committee would also involve, I hope, a great deal of consultation with noble Lords.

19:28

[Lord Berkeley of Knighton (CB)]

My Lords, just on that last point, if we had a count-down, noble Lords might be like football match attenders counting down, “Five! Four! Three! Two! One!”. I am not sure that we want to go down that path.

I must make a confession before I say anything else. When I saw that the noble Lord, Lord Hunt, had tabled this Question, for which I am very grateful, I thought to myself, “I must be here this evening because I might at last begin to learn about one or two things I have totally failed to comprehend”. Unlike the noble Lord, Lord Trefgarne, I am completely inexperienced in this field, having been a Member of your Lordships’ House for only a couple of years, but having managed to speak in debates for which I am deeply grateful. I agree with my noble friend Lord Clancarty that it is a great privilege.

However, I am confused. The Companion, which often is very companionable, is very uncompanionable on this subject of Oral Questions. Let me give an example. A few months ago I wanted to ask a Question and went into the Table Office. As usual the clerks were incredibly helpful. I gave them my Question which they put down, and a week or so later I asked it. Last week I went to the Table Office—I know this shows my ignorance—and said, “I have a Question, but I am not sure whether I can just give it to you”. She said, “No, you will have to join the queue on Monday”. That had not happened last time—hence my failure to understand. Fair enough I went along. She then asked, “Is it a topical question?”. This is probably a good example, especially for the noble Earl, Lord Howe, who is very well versed in this subject. I wanted to ask whether the Government had any opinion on the recent national health statistics about female genital mutilation, which over a three-month period had been rather shocking. However, these figures came out during the recess, so was this topical or not? We had quite a long debate about it.

I suppose where I would love a bit of clarity as a new boy is: what exactly is the procedure on putting a Question down and when you have to queue and when you do not? While I accept my noble friend’s strictures about being prepared to queue because it is an honour, I cannot help feeling slightly that, with today’s technology, it is a rather archaic way of doing it. I found it slightly awkward. I was sent away by a noble Lord who was at the back of the queue, but just in the right place. He had a slightly soured, wistful air about him but also a note of triumphalism because in fact his Question would get in.

I ask these questions because I would like to learn a bit more about this process. The Companion could be a little clearer. After all, what we want, and what the noble Lord, Lord Hunt, wishes to achieve, is to tap the wider experience of the House. I am not sure, as the noble Lord, Lord Sherbourne, has just said, that getting into the queue is necessarily the best way of doing that.

19:33

[Lord Tyler (LD)]

My Lords, I am delighted to have an opportunity to contribute in the gap, very briefly, and particularly to at least half support the noble Lord, Lord Trefgarne. I hope that this will not surprise him. The real demand in the House is not for more Questions but more opportunities to contribute to Question Time. That is what we should be thinking about. I think that the noble Lord, Lord Trefgarne, will regard it as a compliment if I regard him as a traditional Tory. I hope that the noble Earl may take the same view. That is where it seems to me the demand is. It is a traditional Tory approach that supply should meet and reflect demand.

I am in favour of five tabled Questions, whether it is within 40 minutes, 30 minutes or 45 minutes. That can be a matter of discussion. Clearly, the real demand in the House is to contribute to those very useful mini-debates that we have. I am probably the only Member in your Lordships’ House this evening who has experienced Questions at the other end of the building, where there are no real discussions, no dialogue and no proper debate. There is a bit of a row from behind the Minister to egg him on, like a football crowd, and there is the opposite from the Opposition Benches. It is not the same quality of real discussion or real exchange and follow-up that we have in your Lordships’ House. The original Question is often followed by a question that is absolutely spot on because the Minister’s reply has not developed the discussion in any positive way.

An interesting point was made earlier tonight. I think that reading the Question often means a shorter supplementary rather than a rather wordy one from some of our more experienced Members who tend to be more loquacious. I also think that it would be useful if we got away from this absurdity of referring to this lucky dip, this raffle, as a ballot. In my view, a ballot is something you vote in. Every time I am asked, “How did you manage to get that Question?” I say, “It was a lucky dip, you know”. They say, “But it was a ballot”. The origins of the word ballot as I understand it from the Oxford English Dictionary is that people actually express a preference for something. That is what a ballot is for. It would be helpful if we got away from that.

The contrast with the Commons means that we have something rather special in those 30—or 35, or 40, or even 50—minutes. We have an opportunity for a real exchange across the House. That is what I am in favour of. That is where people seem to want to be. I did not read the brief from the Lords Library in quite the same way as the noble Lord, Lord Hunt of Chesterton, who made an excellent opening speech. I thought that he was underrating the extent to which Members are involved. When we had a big Division in your Lordships’ House a fortnight ago, about 500 people voted. If a third to a half of our Members are regularly putting down an Oral Question each Session, that is not bad. That does not seem to be the issue. The issue is that we do not have enough time for that exchange across the House. That is why I think there should be more attention to the time that is given to those supplementary questions.

It is time for a more comprehensive review. Everything that has been said in your Lordships’ House this evening, and which I suspect may well be said by the noble Lord, Lord Hunt Kings Heath, in a moment suggests that the increasingly active participation of Members—it is not so much the total number but the fact that we have more active Members on all sides of the House—means that they want to contribute in a meaningful, positive way. I hope, therefore, that the noble Earl, Lord Howe, will be able to say that it will be the policy of those who have influence in the usual channels to look again at this issue.

19:37

[Earl Attlee (Con)]

My Lords, I agree that we have a problem. About 10 years ago, if I had got fed up with a Minister regarding his Written Answers, I would roll into the Minute Room and say: “Starred Question—next available slot to ask Her Majesty’s Government about it”. We cannot do that now, so we have a problem.

I think that the Opposition Front Bench should be able to ask supplementary questions at Question Time on behalf of Her Majesty’s Opposition, but not necessarily all the time. We did try five Questions in 35 minutes a few years ago but it was a failure because your Lordships got bored with it. I think that four Questions in 30 minutes is right. It is long enough to expose the Minister’s difficulty, or for the Minister to convince the House.

I have two observations. The first one is that asking an Oral Question is perhaps the most challenging procedure in your Lordships’ House, especially when you are on the opposition Benches, because the Minister holds all the cards. The Minister knows what his response will be but the person asking the Question does not know what he will say and has only milliseconds to decide which supplementary to use. It is a very difficult procedure. That may be why some noble Lords are reluctant to table Oral Questions.

My second observation is in answer to my noble friend Lord Trefgarne, and I would like to boast a little bit, because I am told that I hold the record for the number of supplementary questions answered by a Minister—I think it is at least 12 and may even be 13. I told my officials that I would answer very briefly because noble Lords want to be able to say at a dinner party, “I asked the supplementary question about that”; they do not want to say, “I listened to a long Answer from the Minister”.

19:39

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is a great pleasure for me to congratulate my noble friend on initiating this debate. Although I do not agree with everything that he said, I very much agree with his final words when he asked for a general review of Oral Questions. I think that there is a general view in your Lordships’ House that that would be a very good thing. I hope that the noble Earl, and indeed the Chairman of Committees, will be sympathetic. Certainly from the Opposition’s point of view, we would be very sympathetic to a more general discussion which allows Members of the House to give their views.

I think that this is the first opportunity I have had to welcome the noble Earl, Lord Howe, to his new role as Deputy Leader of the House. I very much look forward to our further debates.

My noble friend was absolutely right to talk about the importance of Oral Questions. We start the day with them and the House is full, unlike the other place. At their best, Oral Questions are excellent, with very sharp questions posed to Ministers on key issues of the day. We are not always at our best at Oral Questions, but when we are, we should be very proud of them. We should do everything we can to protect the best aspects of them and try to eradicate the worst.

I must confess to being a serial offender as regards the number of Oral Questions that I try to table. However, I say to the noble Earl that I think my role as an opposition spokesman on health is to try to put the Opposition’s point of view across, and Oral Questions are one of the best ways I can do it. Although I think we should come in on supplementaries, we should not come in on every supplementary. As I have discussed with my noble friend, in the main we try to wait, allow noble Lords to ask questions and come in later on. I think that is the best way of doing it. The noble Earl, Lord Howe, was a role model in that regard in that he did not come in on every Question when in opposition. It was all the more telling when he did come in because of that, so we have some good role models in this respect.

I know some noble Lords feel that queuing is not the best way to tackle this issue. But the fact is you know that if you want to table an Oral Question, you turn up early and that if three noble Lords are there, you go away. It seems to me that is a rough and ready system but at least it is fair, except in recesses. I will come back to that point. One can also have the most delightful conversations. On such an occasion, the noble Earl, Lord Clancarty, and I talked about the merits of Birmingham Opera, which is having a reception here tonight at this very time. I am sure that the noble Lord, Lord Berkeley of Knighton, would also be at that reception if we were not debating this issue.

The problem with a ballot is essentially that it can be manipulated. Not only would it be a lottery but we would risk getting either Questions that are not very topical or such a system would be manipulated one way or another through slates or the usual channels. We need to avoid that at all costs.

However, other issues around this are very relevant. I totally agree with the noble Lord, Lord Trefgarne, about Private Notice Questions. The Companion is pretty ambiguous about the advice that the Lord Speaker is given on whether or not to accept a Private Notice Question. It is clear that the advice is very conservative, if I can use that word to the noble Lord, Lord Trefgarne. Essentially, the Lord Speaker rarely allows Private Notice Questions. We are much more dependent on Mr Speaker in the other place, who is much more generous in allowing Urgent Questions, which are then repeated as 10-minute Questions here. I do not think that is right. Surely, if we really want to make Oral Statements here as effective as possible, we should be anxious to allow topical Questions to be tabled. I hope that any review will look at what the Companion says about issuing advice to the Lord Speaker.

As regards the clock running down, I think what has been proposed is a good idea but the risk is that Ministers will play to the clock and, if they simply look at the clock, will spin out their remarks so that another supplementary cannot be asked. That brings me to the big question of long-winded questions and answers. I was a Minister for 10 years and what I most enjoyed were long-winded supplementaries. First, it gave you time to think of an answer or to find it in your file. Secondly, you could choose which bit of that long-winded question to answer. However, I dreaded the noble Baroness, Lady Sharples, getting up because she asked questions that lasted about 10 seconds. Usually, they were factual questions and there was no time to find out the answer. My noble friend Lady Farrington has developed her own capacity to do that and it is very telling. Why on earth do noble Lords feel the need to ask such long-winded questions? I just do not understand it. It is as if they have come here, seen what goes on, then almost ignore it as, willy-nilly, they are going to make a speech. I say to the noble Lords on the Government Front Bench that they are also somewhat guilty of this. Instead of giving a 70-word first Answer, why not make it 30 words? That would get the House in a better frame of mind. Of course, the reason why government Ministers do not do that is because they know that if they gave a short Answer, it would encourage a lot more questions. I am afraid I have to inform the House that Ministers do not like lots of questions. They love long-winded questions but if we were to sharpen up our practice we would sort this out.

As regards whether we should have more Oral Questions, the noble Lord, Lord Strathclyde, very much supported the move to five Oral Questions, which I think lasted 40 minutes. However, that did not work and lots of noble Lords left after 30 minutes. There was a feeling that somehow we had lost the sharpness, so we went back to having four Oral Questions. I like the idea of having five Oral Questions in 30 minutes, but the deal has to be that we completely rule out long-winded questions and answers. It would be interesting to try that out for a few weeks to see whether we could make it work.

There is a problem as regards what happens during Oral Questions. Apart from the issue of Front Bench opposition interventions, I am concerned by some noble Lords’ behaviour during Oral Questions. When noble Lords who may not be very experienced attempt to get up and ask a supplementary question, they can be drowned out by more experienced and assertive noble Lords. When I first came to your Lordships’ House in 1997, noble Lords rather quaintly tended to give way to other noble Lords. I am afraid that that does not happen very often now. It also counts against female Members of this House. There are, of course, some feisty Members who do not have any problems at all but, frankly, some of the behaviour is tantamount to bullying. We have not been able to agree to give authority to the Lord Speaker to intervene. We rely on the Leader and the Deputy Leader to do so. I held that role for two years and know that is not always an easy one. If we will not give the Lord Speaker the authority to intervene, as a self-regulating House we are entitled to ask noble Lords to behave rather more appropriately. I encourage the Leader and the Deputy Leader to be somewhat more assertive in intervening on bad behaviour and long-winded questions and answers. I think they would find that the House would generally support them.

Overall, this has been an absolutely splendid debate. I hope the noble Earl will say that, like us, he is sympathetic to a more general review. I am sure that many noble Lords would be willing to take part in discussions.

19:48

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, I am very pleased to be the Minister responding to what has undoubtedly been an extremely worthwhile short debate on a topic that we all care about very much. I think all noble Lords will agree that Question Time is a valued opportunity for noble Lords from across the House to hold the Government to account, often in a very immediate way when we think of topical Questions in particular. That is why I begin by saying that I am right behind the noble Lord, Lord Hunt of Chesterton, in wanting to encourage a broad range of contributions at Question Time, and indeed in our work more generally.

I think, too, that this House sets itself apart from other legislative Chambers with its range of expertise and range of experience in numerous fields. It is through that expertise and experience that we best complement the work of the other place. It is undoubtedly important that we should always encourage as broad a range of contributions as we can to inform and guide our business. I think that is common ground.

Certainly, that is something that the previous coalition Government and we as the current Government have sought to do over the past few years. For example, we have expanded the opportunities available for Peers to ask Questions for Short Debate by introducing a slot for topical QSDs, which provides a fresh opportunity for a timely debate on the Floor of the House each Thursday, and by committing to set aside regularly a day in the Moses Room for five Back-Bench Members to ask QSDs. I am pleased to say that from where we sit that has been a success: no fewer than 104 Members of the House were able to ask QSDs in the last Session. We have also increased opportunities to serve on Select Committees, having supported the establishment of two net additional units of committee activity since 2012, four of which are devoted to ad hoc committees.

Turning to Question Time itself, I should perhaps start by making the point that we already hear from a broad range of contributors. Indeed, in the last Session more than 430 Members asked one or more Questions or supplementary questions. That is nearly 90% of our average daily attendance. Limiting Members to no more than seven Questions in a calendar year is another way in which we have sought to foster even greater diversity; indeed, 10 Members were caught by that limit last year.

Naturally, that does not mean that we should not look at what more might be done and I well appreciate the concerns that have been raised this evening. In particular, there is no doubt that we hear from some voices around the House considerably more often than others. There has been unanimity this evening that we should try to do something about that, and I will say more on that topic in a moment. Looking at the last Session, for instance, 16 Members made more than 25 contributions each at Question Time. Of the total number of questions asked, one in five were asked by the 20 most frequent contributors. I would just add that with three-quarters of the 20 most frequent contributors coming from the opposition side, there is certainly no danger that the Government are not being held to account. We certainly feel that we are. I also know, as we have heard in this debate, not least from my noble friend Lord Sherbourne, that some Members find it hard to succeed in tabling an Oral Question; others find it hard to intervene with supplementaries.

Some speakers this evening, including my noble friend Lord Sherbourne, were concerned that Front-Benchers tend to dominate at Question Time. I sympathise with that point—after all, 30% of the 25 most frequent contributors in the last Session sat on the Opposition Front Bench, and more than 10% of all questions were asked by the Opposition Front Bench. If we are to continue the practice of the Opposition Front Bench having a supplementary on nearly every Question—and I welcomed the comments of the noble Lord, Lord Hunt of Kings Heath, on that point—it is worth considering whether Questions themselves should only or usually be tabled by Back-Bench Members. For what it is worth, that was generally the rule when my party was last in opposition. The Front Bench was under standing instructions to defer to Back-Benchers other than in the most burning circumstances.

What changes might ensue from this? If we can make changes for the better, of course it is worth finding a way to consider those ideas. Several ideas have been raised today, which I will come on to. Before I do, I emphasise one thing, which is that noble Lords who want to change the way that things are done should feel empowered to propose it, and indeed it is open to any Member with a proposal to write to the Chairman of Committees, as chairman of the Procedure Committee, to look to take it forward, whatever it may be. I know that my noble friend Lord Trefgarne would welcome that process.

[Lord Trefgarne]

My Lords, I have already written to the Lord Chairman, and he has referred me to the noble Earl, Lord Howe.

[Earl Howe]

Well, clearly a conversation needs to ensue from that. I am grateful to my noble friend. I can tell him and other noble Lords that my noble friend the Leader of the House is always keen to facilitate the consideration of any new ideas. Some noble Lords this evening raised the idea of a ballot for Oral Question slots. If I understood him correctly, my noble friend Lord Sherbourne was against a ballot of Questions but in favour of a ballot of Peers. The noble Earl, Lord Clancarty, raised some cogent objections to the whole proposition.

The idea of a ballot has been raised frequently before, and my noble friend the Leader of the House facilitated a suggestion to this end from the noble Lord, Lord Avebury, at a Procedure Committee meeting earlier this year. However, there was no consensus within the committee at that point, as there appeared not to be in 2013 when, despite the agreement of the Procedure Committee and government support, the Procedure Committee’s proposal to allocate Questions by ballot was withdrawn by the then Chairman of Committees when it became clear that there was no support on the Opposition Benches for the change.

We see merit in the idea of a ballot for the allocation of Oral Questions if we can avoid the pitfalls highlighted by the noble Earl, Lord Clancarty, and the noble Lord, Lord Hunt of Kings Heath.

[Lord Hunt of Kings Heath]

I welcome what the noble Earl has been saying. I have a suggestion to make. There is a problem in recess where clearly the queuing is always stacked in favour of people who live in London. If one wanted to pilot a different approach, why not pilot it during recess periods so that we could see how it worked and whether there were some more general lessons to be learned? It is just a suggestion.

[Earl Howe]

I think that is a very creative idea. Worries have been expressed this evening about what rules apply during recess and what counts as a topical Question, as the noble Lord, Lord Berkeley, pointed out. However, I do not think that we are likely to find total unanimity on the idea of a ballot—as the contributions this evening have demonstrated—but if there is one message that has come through it is that we should think through this idea rather more carefully, as there might be some underlying balloting system that would work.

The benefit of the present system is that it gives the House four weeks’ notice of upcoming Questions. The one thing we do not want to do is add complexity to the system or reduce the notice period to, say, two weeks, as I think my noble friend Lord Sherbourne suggested. However, I am in favour of the principle of what my noble friend wants to achieve and I would not wish to discourage him from putting his ideas to the noble Lord, Lord Laming, as chairman of the Procedure Committee.

The pros and cons of the queuing system have been referred to. For clarity, I say that if there is a slot available, noble Lords do not have to queue; they can take that slot on the spot. But if no slot is available and one is to become available, as they do four weeks ahead of the period being considered, it is allocated on a first-come, first-served basis, hence the queue that tends to form. I fear that the noble Lord, Lord Berkeley, was lucky in the first instance that he referred to and slightly unlucky in the latter instance.

[Lord Berkeley of Knighton]

I thank the noble Earl as that has explained something which I have been trying to fathom. As I suggested, the Companion could be a little clearer about this, because if you are a new Member of this House, it is quite difficult to work these things out.

[Earl Howe]

I am quite sure that that is a very good general point to make. I am not at all sure that new Members of the House receive enough guidance when they arrive—on a variety of issues, this being one of them.

My noble friend Lord Trefgarne favoured introducing a slot for a fifth Oral Question. As other noble Lords pointed out, that was trialled in the past—I think it was in 2002 to 2004—but not taken forward after that. It was also not supported in the Procedure Committee when its revival was proposed in the last Parliament. I agree with my noble friend Lord Attlee that, rather than adding to our proceedings, the perception was that a fifth Question tended to switch people off, and that the energy and momentum of Question Time, which I think we all appreciate, rather dwindled as a result.

Another point to be made here is that we now often have Urgent Question repeats taken in the slot immediately after Questions. I would be surprised if the House wanted effectively to take six Questions before starting on the day’s business. For similar reasons—and I agree with the noble Lord, Lord Hunt of Kings Heath, on this—I would not support extending Question Time to 40 minutes.

My noble friend Lord Trefgarne raised some issues about Private Notice Questions. As my noble friend knows, the system for PNQs has been considered several times without any changes being agreed. I certainly believe that there is a case for bringing forward the deadline by which decisions about PNQs are made. However, I am not sure that there is wide-ranging support for changing the decision-making approach as such, although I know that my noble friend is trying to put this forward for the Procedure Committee’s consideration. The key point here is that the decision on whether to grant a PNQ is one for the Lord Speaker. The Government provide the policy background to assist the Lord Speaker but do not have a say as to whether the PNQ is allowed—and that presupposes that the PNQ relates to a matter of government responsibility. The Companion states:

“The decision … rests with the Lord Speaker, after consultation”.

My noble friend Lord Trefgarne also raised the possibility of having Oral Questions on a Friday. We sit for only around five hours on a Friday if we are to rise at 3 pm, which is generally the time when noble Lords are keen to make tracks homeward. Fridays are a particularly valuable time for noble Lords to discuss Private Members’ Bills and, although it is worth a discussion, I am not convinced that people would want the time to be taken up by Oral Questions.

My noble friend Lord Sherbourne came up with the interesting idea of a countdown approach, with eight minutes per Question. Maybe it should be seven and a half minutes, if we are not to exceed the 30 minutes in total. I was very struck by that idea. The Clock already indicates the time taken during Oral Questions and the current system allows some flexibility in the lengths of those Questions, some of which run short of eight minutes as well as running over the seven minutes. My personal view is that there are some merit in the existing system over the one that my noble friend suggested, because it has flexibility built into it. We have to allow some measure of flexibility. It is always difficult for the Clerk of the Parliaments to judge this but in general he does it very well indeed.

The noble Lord, Lord Hunt of Kings Heath, proposed a general review. I am not personally averse to that idea, although we have reviewed the whole system of Oral Questions in a series of forums, including the Leader’s Group at the start of the last Parliament and in the Procedure Committee on repeated occasions in the course of that Parliament. We have also had several votes on aspects of Questions: for example the issue around reading out Questions in full. I would very much welcome a general conversation about this. I am not sure we need to go as far as having a formal, full review. We have had a number of good ideas put forward this evening and we could encapsulate those in a general conversation of the kind that I am proposing.

My noble friend Lord Trefgarne, the noble Earl, Lord Clancarty, and the noble Lord, Lord Hunt of Kings Heath, with whose points I very much agreed on this subject, bemoaned the tendency for supplementary questions to be over-lengthy. The Companion is very clear about this, stating:

“Supplementary questions … should be short and confined to not more than two points”,

and where they are not, the House should make its views heard. Again, I received with sympathy the suggestion of the noble Lord, Lord Hunt, that the Leader and Deputy Leader should perhaps be more proactive in the way that we guide the House on this issue. We can only urge noble Lords to respect the guidance in the Companion but, again, there may well be greater scope for new Peers to have this point impressed more firmly upon them. For that matter, Ministers’ replies to supplementaries should also be short and crisp.

[Lord Hunt of Chesterton]

Does the Minister not think that some survey of all the many tens of new Peers who have come would be a good idea? How else is he going to find out this information? There is a small group of people here. People may write in or read Hansard, but some signal needs to be given that we really want to hear what all the new people joining the House of Lords think about this.

[Earl Howe]

Yes, I am sure that that idea deserves full consideration. I think we would all agree that it is getting to a stage where we must impress on all Members of the House, not just the new arrivals, that we have rules which are here for a purpose and have been carefully thought through over the years—and that it is in all our interests to adhere to them.

[Lord Tyler]

I wonder if I am alone in observing that the shouting at Members—and new Members, too—who are reading notes tends to lengthen the whole process rather than shorten it. If somebody has a good note and refers to it in a short, sharp question, that is surely preferable to those who waffle on without notes to guide them.

[Earl Howe]

I totally agree with the point that the noble Lord makes.

What this useful debate has shown is that there are some changes which we could helpfully consider. But I would add that, regardless of what procedural changes we might wish to consider, we also need to look at how we can work together to enable more voices to be heard at Question Time. One of the concerns raised with me is that the Chamber of the House can feel an intimidating place in which to intervene at Question Time and that the louder voices are heard more often. That is something we all can change, if we are minded to do so.

Self-regulation is a cherished feature of this House and one that we should guard jealously. It means that we are in control of our own affairs and can work together to make our business work. That is a responsibility on us all. It is not just for the Leader, incidentally, or for that matter the party and group leaders; it is for each and every Member of the House. If we want to hear from a broader range of people—and from the debate today, I clearly sense that we all do—we need to encourage those who speak less to speak up. That means making sure that we allow those with particular expertise to get in when they seek to do so and look for ways of helping those from whom we hear less to take part.

One way would be to keep supplementary questions brief, to allow other noble Lords to get in, but more generally it is about making sure that being self-effacing does not mean not being heard. Fostering that culture could be the single biggest step that we could take to hear from more noble Lords and to make our Question Time an even better forum for us to showcase the contribution that this House can make to the world outside.

Although I welcome any further discussion with those who want to consider procedural changes, we should remember also that cultural change must follow in step if we are to really make the best use of the talent around the House. I look forward to working with those here today to make progress in that regard.

Draft Investigatory Powers Bill

Monday 9th November 2015 Lords Chamber

Message from the Commons

A message was brought from the Commons that they have come to the following resolution to which they desire the agreement of the Lords:

That it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on the draft Investigatory Powers Bill;

That a Select Committee of seven Members be appointed to join with any committee to be appointed by the Lords for this purpose;

That the Committee shall have power:

(i) to send for persons, papers and records;

(ii) to sit notwithstanding any adjournment of the House;

(iii) to report from time to time;

(iv) to appoint specialist advisers; and

(v) to adjourn from place to place within the United Kingdom; and

That the quorum of the Committee shall be two.

House adjourned at 8.10 pm.