The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, the United Kingdom is the most successful multinational state the world has ever known. On 18 September last year, people in Scotland voted in record numbers and by a clear and decisive majority to keep together our United Kingdom. However, last year’s referendum showed that nothing can be taken for granted; our union is precious, to be sustained and cherished day in, day out. There is no national forum more committed to protecting and strengthening the union than your Lordships’ House. Time and again the United Kingdom has shown its resilience and capacity for renewal in order to meet the needs and aspirations of successive generations. This Scotland Bill sits within that tradition. The Bill balances the strong desire of people in Scotland for more decisions to be taken in Scotland, closer to those they affect, while retaining the strength and security of remaining part of the larger UK.
I have only been in this House a short time, but long enough to appreciate the wealth of constitutional knowledge and experience in all parts of the House. This wealth is evident in the quality of those listed to speak today. I look forward to hearing what I know will be thoughtful and well-informed contributions, in particular the maiden speeches of the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Campbell of Pittenweem.
Your Lordships have already made valuable contributions, including in the recently published reports of the Constitution Committee and the Economic Affairs Committees. From the outset of this debate, I want to recognise and acknowledge with respect the strong feelings already expressed, both about process and substance. I accept that the process has been unorthodox. Then again, the events of last September were unprecedented. The very future of the United Kingdom was at stake. In those circumstances, no stone was left unturned in the defence and preservation of our country. Who among us can say honestly that, faced with the same circumstances and responsibilities of national leadership, we would not have responded with the same sense of urgency and determination?
The task now is to help Scotland move on, building on our shared values and experiences, to forge anew the close bonds of kinship and friendship and sense of common purpose and endeavour that is the glue of any successful nation state. In rising to the challenge, we have a clear choice. We can continue either to pump things up, or we can try to calm things down. I confess to being a firm supporter of the second approach, not least because I am certain that those who want separation would prefer the first.
I hope that we all share a strong desire to work together to bring our nation together, and for those of us who believe passionately in the union to be united in delivering, through this Bill, the promises made to the people of Scotland.
Lord Maxton (Lab)
Is the Minister saying that the vow was the way in which the referendum was won? My view is that the vow was not necessary; the no vote would have won anyway.
Lord Dunlop
Fundamentally, I think it was the economic arguments that were decisive in the referendum. When the country is at stake, you want to do everything possible to maximise the no vote. That was what was done.
Lord Forsyth of Drumlean (Con)
Could my noble friend confirm that, according to the article written by the editor of the Daily Record, the vow was all his idea and was put together by Gordon Brown and the editor of the Daily Record as a publicity stunt?
Lord Dunlop
I am not quite clear whether he is saying that it was my idea or Gordon Brown’s. The key point about the vow is that three UK party leaders agreed it.
On the night of the referendum, as I waited for the results to come in, I listened carefully to what my noble friend Lord Forsyth of Drumlean had to say on the BBC’s “Scotland Decides” programme. He cut straight to the chase, as he so often does:
“The three party leaders made a promise—which I think they’ll find very difficult to deliver—but it has to be delivered”.
I agree with him—no one said it would be easy. Indeed, I can safely say to this House in all humility that, today, I am gaining some appreciation of what my noble friend foresaw. This Bill is the fulfilment of that promise. It has to be delivered. Yes, there has been scepticism. Would all parties come to the negotiating table? Would they stay? Would someone walk out before a deal was struck? Could all the milestones be met? For the first time in the history of devolution, all five of Scotland’s main political parties came together, stayed and reached a unique agreement. Every one of the milestones have been met on time.
Here, I want to pay tribute to the noble Lord, Lord Smith of Kelvin. Hot on the heels of leading the fabulous Glasgow Commonwealth Games, he skilfully steered the process to a successful conclusion. We owe him a debt of gratitude. It is good to see him in his place today and back in rude health.
Much has been said about the Smith commission reaching an agreement of such great constitutional significance after only an eight-week process, yet the agreement was the culmination not of an eight-week process but a four-year process which started in 2011 with the election of a majority SNP Government. So the Smith commission agreement did not emerge from a vacuum. It emerged from four years of lively constitutional discussion and debate in Scotland, which was informed by the body of evidence compiled by the Calman commission, and from a discussion punctuated by the publication of numerous reports from Scottish Labour’s devolution committee, the home rule commission chaired by the noble Lord, Lord Campbell of Pittenweem, and the commission chaired by my noble friend Lord Strathclyde, alongside academic and think tank contributions, such as Reform Scotland’s devo plus and IPPR’s devo more reports. Indeed, I believe the Smith agreement was made possible because common ground had already been established by this body of preceding work.
Delivering the agreement in full is therefore a manifesto commitment of not only the Conservative Party but the Labour Party, the Liberal Democrat party and the Scottish National Party. So this Scotland Bill is not just a manifesto Bill; it is a super-manifesto Bill. Its provisions were agreed in the other place, where the Government listened to the debate, responded to the scrutiny and tabled more than 100 amendments on Report, and where the Bill was passed unopposed at Third Reading.
The Daily Record declares its famous vow met, and Gordon Brown says that the Smith commission recommendations, which arose from the vow, are delivered. The noble Lord, Lord Smith, has confirmed that the Bill honours what was agreed by the five parties. “A promise made is a promise kept” is surely an absolute precondition for earning the trust of the people of Scotland. Ahead of next year’s Scottish Parliament elections, the debate in Scotland is increasingly turning to how the powers are used, as it certainly must.
This Bill is not simply about keeping a promise. It is about bringing a better balance to Scotland’s devolution settlement and strengthening the union as a result. The Scottish Parliament was created with extensive spending powers—its budget today is around £30 billion— but little responsibility for raising the funds it wants to spend. The result is a fiscal gap and an accountability deficit. Before the Scotland Act 2012 is fully implemented, the Scottish Parliament controls almost 60% of public expenditure in Scotland yet is responsible for raising only some 10% of its funding. Once this Bill comes into effect, the Scottish Parliament will be responsible for raising more than 50% of what it spends. Holyrood will be transformed from a pocket-money Parliament, reliant on an annual cheque from the Treasury, to the powerhouse Parliament the people of Scotland want it to be. If the Scottish Government want a higher level of public services than the rest of the UK, they will have first to explain to voters in Scotland how they intend to pay for them.
Of course, some argue this Bill does not go far enough, yet it will make the Scottish Parliament one of the most powerful devolved Parliaments in the world. No amount of devolution is going to be sufficient for those who believe in independence, but a majority of people in Scotland rejected independence and voted to retain the benefits of being part of the UK: the security of our own shared independent currency, backed by the strength and stability of the Bank of England; the job and business opportunities of a deeply integrated single market; our social union, in which risks and resources are pooled; and common defence and security in an uncertain world. Indeed, I am delighted that Scotland is to be home to the new maritime patrol aircraft and another squadron of Typhoon fast-jets. These are the UK benefits that the Smith agreement and this Bill are careful to protect. We have heard a great deal about full fiscal autonomy. I will be clear: full fiscal autonomy ends the pooling and sharing of risks and resources across the UK. It would be bad for Scotland and bad for the UK as a whole, and that is why we rejected it.
I turn to the provisions of the Bill itself. Part 1 takes forward the Smith agreement that the permanence of the Scottish Parliament and Scottish Government be set out in UK legislation, and that the Sewel convention be put on a statutory footing. This reflects the existing political understanding and does not alter the principle of parliamentary sovereignty. The Scottish Parliament will be very largely responsible for how it runs itself, how it is elected and the people who can vote to elect it. Part 2 covers taxation. Maintaining the integrity of our single market and minimising business burdens means that not all taxes are candidates for devolution. Central to the debate is the devolution of income tax on earnings, building on the Scotland Act 2012 tax devolution, which comes into effect in April, and providing the Scottish Parliament with £11 billion of revenues. Income tax is paid by voters and is highly visible; whoever levies it is accountable to those paying it in the most direct way. While the definition of income remains reserved, the Scottish Parliament will have full control over rates and bands of income tax. It will be able to set a 0% rate, if it can afford to do so.
However, the Smith commission agreed that national insurance contributions should be reserved, so Scottish taxpayers will continue to help fund UK-wide services. Alongside income tax devolution sits VAT assignment. Differential VAT rates inside a member state are against EU law. This Bill assigns half of all VAT receipts raised in Scotland: £4.5 billion of revenue. Assigning a share of VAT was first suggested by the Calman commission. The more the Scottish economy grows, the greater the share of VAT revenue Holyrood will keep. That is an incentive to achieve growth. With the devolution of location-specific air passenger duty and the aggregates levy, the Scottish Parliament will have a mix of taxes and vitally important decisions to make.
Part 3 of the Bill means that the Scottish Government will be responsible for welfare provision in Scotland, worth approximately £2.7 billion last year, and able to take decisions for a number of types of social security benefit, discretionary payments, and employment support. Universal credit and its legacy benefits, such as pensions, remain reserved, although Scottish Ministers will be able to vary certain limited aspects. Devolving labour market benefits would undermine their role as automatic stabilisers and potentially put undue pressure on Scotland’s finances in the event of a localised economic shock. What the Bill does devolve are benefits strongly linked to powers already exercised by Scotland, such as social care and health. The Scottish Parliament will have responsibility for benefits to meet extra costs paid to carers, disabled people, those who are ill, and those who require help with winter fuel, funeral, and maternity payments. When people most require help, the Scottish Government will be able to tailor that help to particular Scottish circumstances.
The Smith agreement was also of the view that the Scottish Government should be able to top up reserved benefits: the Bill allows this to happen. On Report, the Commons approved a new government clause enabling the Scottish Parliament to create new benefits in devolved areas of responsibility. We must be clear about these new welfare powers. If the Scottish Government wish to make supplementary payments to people in receipt of a state pension or universal credit, for example, or create new benefits in devolved areas, they should be able to do so. However, crucially, they must be able to pay for it from their own revenues.
Lord Forsyth of Drumlean
I am sorry to interrupt again, but can my noble friend explain what the second no-detriment principle contained in the Smith commission report means—the idea that both sides, north and south of the border, should compensate each other for changes in policy—and how that relates to the welfare and other provisions in the Bill?
Lord Dunlop
I shall come on to speak about the fiscal framework. The Government of Scotland and the UK Government are negotiating the fiscal framework and exactly how we put those principles, including the no-detriment principles, into practice. I will come back to that.
The Bill also enables the devolution of many other responsibilities, from the management of the Crown Estate’s economic assets in Scotland to the management and operation of reserved tribunals. The Commons also agreed the devolution of abortion policy, which the Smith agreement concluded was an anomalous reservation. There are also significant measures relating to transport and energy.
I want to say something about the fiscal framework, to which my noble friend has alluded, the importance of which is rightly recognised by many of your Lordships. I am particularly grateful for the work done on this by the Economic Affairs Committee. The Government agree with the committee that the relationship between the fiscal framework and the legislative powers in the Bill is critical. It underpins the transfer of tax and welfare powers to Holyrood. The issues raised by the committee’s report are exactly those being addressed in the detailed negotiations between the UK and Scottish Governments. Both Governments have agreed not to provide a running commentary—negotiating in public is not conducive to reaching an agreement.
We are committed to reaching an agreement as soon as we can after tomorrow’s spending review and the draft Scottish budget on 16 December. We cannot guarantee when the negotiations will end—that is not in our gift—and to try unilaterally to set a specific date risks weakening our negotiating position. I hope the House will understand both Governments need time and space to reach an agreement that is right for Scotland and the UK as a whole and is built to last.
Lord Foulkes of Cumnock (Lab)
I am sure the House will recognise that, but can the Minister help us? If, during the discussions on the fiscal framework, the Scottish Government’s representatives conclude, as they may well do, that they are better off with a block grant based on the current arrangement of the Barnett formula than raising money through the tax powers on a low tax base, and if they do not accept the proposal from the UK Government on the fiscal framework and the Scottish Parliament fails to give legislative consent to this Bill, what is the Government’s plan B?
Lord Dunlop
I seem to have heard “plan B” somewhere before. I say to the noble Lord that we are planning for success here. We working for success and the UK and Scottish Governments are saying the same thing. We are working constructively together to reach an agreement as soon as we can and good progress is being made.
Lord Reid of Cardowan (Lab)
I would just like to probe a little on the Government’s view that it is unhelpful to have a timeline for this and to envisage potentially indefinite discussions. I heard what the Minister said about unilateral declarations of times being unhelpful, which surprised me because the vow, of which he has spoken very much, unilaterally declared three timetables: St Andrew’s Night, Burns Night and so on. I wonder why the Government have changed their mind. Would it not be helpful at least to have some indication of the timescale in which they would hope to reach agreement? I declare an interest as a former Secretary of State for Northern Ireland, where things tended to drift on for years rather than months.
Lord Dunlop
I thank the noble Lord. In broad terms, the Scottish Government and the UK Government are working in sync on this. On Friday, the Deputy First Minister, John Swinney, said,
“I think fundamentally we need to make progress on the Scotland Bill so that the Scottish Parliament can take its final decision on whether the bill is to be adopted before we get to the Scottish Parliament elections next May”.
Our firm intention is for the fiscal framework to be available to both Parliaments before the Bill completes its passage.
Baroness Liddell of Coatdyke (Lab)
I am very grateful to the noble Lord for giving way; he has been very generous. One of my concerns following what he has just said is that we are going to be legislating in this Chamber on a wing and a prayer. I have taken Finance Bills through the other place. Changes to taxation have to be looked at meticulously because they have an impact on other parts of the taxation system. I can appreciate the difficulty that the Minister is in because of the commitments made by the leaders of the three parties, but I am extremely worried that we will end up taking decisions that we cannot back out of and that will have a negative effective not just on Scotland but on the whole of the United Kingdom. Can he give me any reassurance on this?
Lord Dunlop
As I said, we are working very hard to get this fiscal framework agreed as quickly as we can. This House considered the tax provisions of the previous Scotland Bill on their merits but, when it did so, aspects such as the block grant adjustment had not been agreed, so there is a precedent here. However, as I said, these two processes need to come together, and that is what we are working hard to achieve.
This House will be involved in the normal way if legislation is needed to implement aspects of the framework. To help the House fulfil its scrutiny role, the order of consideration for Committee will ensure that Parts 2 and 3 of the Bill—its tax and welfare clauses—are scrutinised at the end of Committee, giving more time for the negotiations to progress. As I have already said, it is the firm intention of the UK Government that the fiscal framework should be available to both the Scottish Parliament and both Houses of the UK Parliament before the passage of the Scotland Bill is completed. I shall be happy to say more about the fiscal framework in my closing speech and I particularly look forward to listening to what the noble Lord, Lord Hollick, has to say.
The Government believe that the new powers contained in the Smith agreement provide the basis for a stable devolution settlement for Scotland. Both Governments will need to work together to ensure that the powers are used effectively. The powers in the Bill are substantial and offer real opportunities to develop Scottish solutions to Scottish issues. This is not devolution in isolation but part of a broader process that recognises the need to reflect changes in other parts of the UK and that one size does not fit all.
Lord Lamont of Lerwick (Con)
I get the impression that the Minister is getting towards the end of his speech. If I heard him correctly, he said that he would give an explanation of the second no-detriment principle, and I very much hope that he is going to do that.
Lord Dunlop
I need to make progress, as a lot of noble Lords want to speak. I have a closing speech and will say more about the fiscal framework in response to points made during the debate.
At this stage, let me conclude by saying that I am confident that the settlement agreed by the Smith commission, as set out in the Bill, will show itself in time to be durable. I beg to move.
Lord Dunlop
My Lords, this has been a lively debate, to say the least. It has been a good, informed and productive debate, and has demonstrated once again the important role of this House in scrutinising legislation. The House has had the benefit of the experience and wisdom of many of your Lordships who have helped shape the destiny of Scotland over many years—before the Scottish Parliament, at its birth and in the years since—including the noble Lords, Lord Steel and Lord Reid, my noble friend Lord Lang, the noble and learned Lord, Lord Wallace, the noble Baroness, Lady Liddell, and of course my noble friend Lord Forsyth, who delivered another tour de force today. I have to say that the prospect of being given a Glasgow kiss by my noble friend does not bear thinking about. The prospect of spending many hours with him in the coming weeks in Committee is something I hope I can look forward to.
The Scotland Bill implements the Smith commission, and the House has benefited enormously from the participation of the noble Lord, Lord Smith, himself and his fellow commissioner, my noble friend Lady Goldie—two people who were actually in the room as the agreement was reached. I am sure, once again, that the whole House would wish to express thanks to them for their work. I also congratulate, as others have done, my noble friend Lady McIntosh of Pickering and the noble Lord, Lord Campbell of Pittenweem, on their superb maiden speeches.
A number of viewpoints on the Bill and the Smith commission agreement have been expressed in the debate, and the House has benefited from a broad range of views. Noble Lords have indicated areas of the Bill to which they will return as it proceeds through the House. I am pleased that, whatever the views on the particulars of the Bill, the debate has shown that delivering the Smith commission agreement is a commitment of the three principal UK parties represented in this House and the other place. Indeed, the Government were elected on this commitment, and I am grateful to noble Lords who have recognised this and indicated their support, in particular for the support from the two Front Benches opposite. It is right and proper that the House scrutinises the Bill, and I am sure we will return to many of the points raised in the debate.
I now turn to the points that have been raised. There are so many that I apologise in advance that I will not be able to do justice to them all, but I will try to pick up the main themes that have been raised in the debate. There was some discussion this afternoon and evening about the constitutional provisions. My noble friends Lord Lang and Lord Norton, and the noble and learned Lord, Lord Hope, mentioned these provisions specifically, as did other noble Lords. The Advocate-General and I look forward to engaging with noble Lords on these matters in more detail in Committee.
Clause 1 delivers paragraph 21 of the Smith commission agreement which sets out that the UK legislation will state that the Scottish Parliament and the Scottish Government are permanent institutions. Last September, more than 2 million Scottish people voted to remain part of the United Kingdom and to retain Scotland’s two Parliaments and two Governments. This clause is set within that context and underscores the permanence of the Scottish Parliament and the Scottish Government while at the same time remaining loyal to the fundamental principles of the UK’s constitutional arrangements.
This clause states in law that the Scottish Parliament and Scottish Government are a permanent part of the UK’s constitutional arrangements. The constitution of the UK Parliament cannot bind a successive Parliament. The sovereignty of Parliament remains. The Smith commission’s intention here was not that the constitutional position be changed but that legislation should accurately reflect what the political understanding already is, that the Scottish Parliament and Scottish Government are permanent parts of the UK’s constitutional arrangements. This clause therefore delivers the Smith commission agreement while respecting the UK’s constitutional arrangements. The amendments made to this clause in the other place put that beyond all doubt.
Clause 2 delivers paragraph 22 of the Smith commission agreement which sets out that the Sewel convention will be put on a statutory footing. The Sewel convention was never intended to change the sovereignty of the UK Parliament—nor was it intended to prevent the UK Parliament from making laws across the United Kingdom. As with Clause 1, the intention of the Smith commission was not that the constitutional position be changed but that legislation reflects accurately what the political understanding already is. Clause 2 simply sets out that where legislation in the UK Parliament relates to a devolved area consent will normally be obtained. Since the Scottish Parliament came into existence, the UK Government have consistently adhered to the Sewel convention. A legislative consent motion is always sought before Westminster passes legislation for Scotland in relation to devolved matters. The practice set out in the devolution guidance note 10 works well and we expect this to continue but if the Smith commission had intended for the guidance note to be placed on a statutory footing it would have specified that and it did not. The convention is that the UK Parliament will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament. The Sewel convention is a political convention which does not give rise to justiciable rights. It is right that this Parliament, while respecting the views of the Scottish Parliament and its right to legislate, continues to be able to legislate for all matters without restriction on its sovereignty.
A number of noble Lords raised the question of a constitutional convention; the arguments have been well rehearsed in this House. This Government are ensuring that we work hard to govern in the interests of one nation and one United Kingdom. It has already been made clear many times before that the Government do not believe that there is a popular demand for a convention. Our priority is to deliver Smith, the St David’s Day agreement and the Stormont House agreement in full.
Another important element of the Smith commission agreement that has been raised—in particular by the noble Lords, Lord Lang and Lord Kirkwood—is the need to improve intergovernmental working. As noble Lords will be aware, historically the arrangements for intergovernmental relations within the United Kingdom have certainly not been perfect. The noble Lord, Lord Smith of Kelvin, drew our attention to this in his personal recommendations and the work of the Constitution Committee of this House, chaired by my noble friend Lord Lang, highlights the value of ongoing evaluation of our formal structures to ensure their relevance. None the less, your Lordships will be aware that there are already many positive examples of intergovernmental working at both bilateral and multilateral levels. I can testify from my own personal experience that whatever the public differences, the two Governments work constructively together on a whole range of issues. A good practical example of improved intergovernmental working is the joint ministerial group on welfare which was established to provide a forum for discussion to ensure the effective implementation of welfare-related aspects of the Smith agreement and has facilitated increased engagement. This group is tackling the practical issues of implementation, and the noble Lord, Lord Kirkwood, talked about concurrent powers. A good example of this close working is on the universal credit flexibilities in the Bill.
In addition, the Prime Minister and the heads of the three devolved Administrations agreed at the Joint Ministerial Committee last December that existing intergovernmental mechanisms should be reviewed. This is an important part of the agreement, and one that this Government take seriously. That work is ongoing, and the outcomes of that review will be considered by the heads of the four Governments at the next plenary meeting of the Joint Ministerial Committee. I will of course be happy to update the House with any developments. The Government are clear that positive intergovernmental relations, whether through formal or informal structures, will be absolutely key to making the powers a success for the people of Scotland.
Turning to more specific matters, the Crown Estate has been raised by several noble Lords. The noble Earl, Lord Kinnoull, the noble and learned Lord, Lord Wallace, and my noble friend Lord Sanderson raised the issue of whether the Bill should provide for further double devolution of Crown Estate management. The Smith commission agreement stated that following the transfer of the management of the Crown Estate’s Scottish assets, responsibility for the management of those assets would be further devolved to local authority areas.
Further devolution within Scotland is a matter for the Scottish Parliament to determine. Clause 34 enables the Scottish Parliament to make its own legislation about the management of the Crown Estate in Scotland after the transfer—and beforehand, should it wish to have arrangements in place in readiness for the transfer. It would not be in keeping with the principle or spirit of devolution for the UK Parliament to determine how the management of the Crown Estate in Scotland should be further devolved.
The noble Earl, Lord Kinnoull, also raised concerns that the management is being transferred to a political body. The Bill provides for the transfer of the management of the Scottish assets to Scottish Ministers or to a person nominated by them. I would expect the Scottish Government to want an arm’s-length body to take over the management, but it will be a matter for the Scottish Parliament to decide. This is not entirely dissimilar to the current arrangements. The current managers of the Crown Estate are the Crown Estate commissioners, which is an independent commercial organisation established under statute. It is not an instrument of government policy; nevertheless, it is a public body. The Treasury is its sponsor department and has general oversight of the Crown Estate’s business.
I turn to the fiscal framework and the timing of Committee. Noble Lords’ important points about the fiscal framework and the next stages of the Bill’s passage through this House have been a consistent thread running throughout the debate. I reaffirm my thanks to the Economic Affairs Committee and the Constitution Committee of this House for their reports —in particular to the noble Lords, Lord Lang and Lord Hollick, who set out so clearly the conclusions of their committees. I can, however, reassure noble Lords, as I said in my opening speech, that the negotiations absolutely address the issues raised in the Economic Affairs Committee report, including the point raised by my noble friend Lord Sanderson about the robustness of the independent fiscal scrutiny.
My noble friend Lord Forsyth raised the second no-detriment principle, and the Smith agreement says that there should be:
“No detriment as a result of UK Government or Scottish Government policy”.
The negotiations between the UK and Scottish Governments are discussing how this principle and others outlined in the Smith agreement can be applied in practice. This is all about fiscal responsibility and a proper allocation of risk between the UK Government and the Scottish Government, so that the Scottish Government reap the rewards of good policy choices and accept the costs and consequences of poor ones. This is not just an objective of the UK Government. John Swinney has said publicly that that is his objective, too. He said recently before the Scottish Parliament’s Finance Committee:
“Scotland should retain the rewards of her success in the same way as we must bear the risks of the policies and actions that we pursue”.
Lord Reid of Cardowan
Before the Minister leaves this subject, let us get to the heart of the matter. The thread that has been running through tonight’s discussions has not been about the coherence or otherwise of each individual element of the fiscal framework. It has been the question of whether this Parliament can possibly proceed with the Bill without knowing the fiscal framework that is the crucial, central element that determines all its other aspects, particularly in view of the fact that the Scottish Parliament has, very sensibly, under the leadership of the SNP, taken the view that it cannot and will not ratify the terms of the Bill without first knowing the fiscal framework. That is the question—not any individual, tactical item of the framework, but whether we are flying blind. Will the Minister therefore address the question that I put to my noble and learned friend on the Front Bench, which he generously offered to share with the Minister: why is it that, if we can envisage simultaneous negotiations outside Parliament with proceedings inside Parliament, we cannot envisage simultaneous conduct and conclusion of the Bill, including the financial framework, on terms that the Scottish Parliament itself thinks are reasonable? Would he respond to that? I hope he will say that he will inject this into the cordial and constructive negotiations that are going on, but if he is not prepared to do that, will he tell us why not? Is this just a matter of parliamentary timetabling, or is there some matter of principle that the Scottish Parliament should be encouraged and permitted to make a decision in the full light of all the facts while the British Parliament should be asked to make a decision with half the facts missing?
Lord Dunlop
The noble Lord anticipated what I was going to talk about. He is always very prescient about these matters. I want to explain why the Government believe that the Bill can proceed without delay and without compromising the detailed scrutiny of the fiscal framework, which Parliament rightly expects to carry out. First, there are the practicalities around delivering the promises that we made. People in Scotland made a decisive choice to remain part of the United Kingdom. They voted for a more powerful Scottish Parliament with the strength that comes from our union of nations. To achieve this, voters in Scotland will expect to go to the polls next May knowing what powers the Scottish Parliament and the Scottish Government will have, so they can cast their votes knowing how the parties will use those powers.
It is important to get the Scotland Bill to Royal Assent before the Scottish Parliament elections next year. A number of noble Lords have made that point in this debate. That is for a very good reason. It is not just a political priority for the Government. I believe—this has been confirmed in the debate today—it is a priority shared by the Labour Party and the Liberal Democrats, too. If we seek to delay the Bill now, it will be very difficult to meet that timetable, which is one that Scottish voters expect and one that the UK Parliament has adhered to every step of the way so far.
Lord Wallace of Tankerness
I am very grateful to the Minister for picking up the question of when we will see the fiscal framework. Everyone without exception said that it was really required. Will he explain what he means when he says that the Bill must “be there” before the Scottish elections? Does he literally mean the Scottish elections, or does he mean when purdah starts before the Scottish elections? Is the deadline the first Thursday in May or the last week or March?
Lord Dunlop
To answer the noble and learned Lord’s last point, we absolutely need the Act by the time the Scottish Parliament breaks for the election.
The second point I wanted to make is on ensuring that the fiscal framework receives detailed scrutiny. There has been widespread support around the House for that concept. I reassure noble Lords that both Governments aim to complete the framework as soon as possible to give both the Scottish Parliament and the UK Parliament time for due consideration of it. As mentioned by several noble Lords, the Government will keep updating Parliament after each negotiation session, as we have done. We will invite all relevant committees to look at the framework, including Lords committees and the Scottish Affairs Committee in the Commons. We will welcome their comments.
If legislation is needed to implement the framework, both Houses would be involved in that in the normal ways. There was such legislation in 2012, with primary legislation debated in both Houses. As I said in my opening speech and reaffirm now, the Government’s firm intention is for the fiscal framework to be available to the Scottish Parliament and both Houses of this Parliament before the Bill completes its passage. In response to my noble friend Lord Griffiths, I confirm that the intention is for this to be a detailed written agreement.
Lord Forsyth of Drumlean
Forgive me but, as I mentioned in my speech, my noble friend answered a Written Question in July saying that he expected the fiscal framework to proceed in parallel with the consideration in both Houses. He told us that the relations with the Scottish Government are very cordial and doing well. Why, then, is it taking so long to reach agreement? I listened to his words very carefully. Is he saying that he would be prepared for this Bill to complete all its stages without the fiscal framework being known because it is just so politically important to have it on the statute book before the elections? I cannot believe that he is.
Lord Dunlop
On my noble friend’s first point, it has been evident from the debate today that the framework is of critical importance. It raises very complex issues that need to be worked through to get it right. That is exactly what we are doing. I repeat what I said: the Government’s firm intention is for the fiscal framework to be available to the Scottish Parliament and both Houses of this Parliament before the Bill completes its passage. Clearly, a range of procedural options are available. We will need to consider them nearer the time in light of how negotiations progress.
Lord Wallace of Tankerness
I would be grateful for further clarification from the Minister because he said, I think, in the very useful briefing he gave for Peers last week, “If the fiscal framework gives rise to further legislation”. Could he elaborate on what he has in mind there? What kind of legislation would that be? Would it be amendments to this Bill, or fresh primary or second legislation?
Lord Dunlop
That all depends on what is agreed in the fiscal framework. For example, if you look at the last Scotland Bill, there were issues to do with borrowing that needed to be put in primary legislation. The outcome of the fiscal framework will determine what legislation we need to underpin that.
The third point I wanted to make was on the legitimacy of the process. Given the degree of cross-party consensus on the devolution of further powers to Scotland, whatever the result of the general election in May there would have been a UK government Minister standing here arguing for the Smith agreement to be implemented in full. That is the nature of the cross-party agreement. The Scotland Bill and delivering the Smith commission agreement in full was, as I said, a manifesto commitment of all three UK parties. Against that background, I ask the House to consider how it would play with voters of Scotland, six months out from important Holyrood elections, if your Lordships were seen to hold up the passage of this Bill.
Lord Foulkes of Cumnock
I wonder if the Minister could answer the question I asked right at the start. I have waited patiently for the last seven hours for him to do so. If there is no agreement on the fiscal framework —that is entirely possible—and, as a result of that, the Scottish Parliament refuses to give consent to this Bill, what is his alternative?
Lord Dunlop
I am afraid that I am going to give to the noble Lord the same response that I gave earlier. We are working very hard to get a success and an agreement on this fiscal framework.
I think that the noble Lord, Lord Foulkes, was one of those who suggested that the Scottish Government do not want a fiscal framework agreed or to take on the new powers in this Bill. I do not accept that—and I have to say that I think there has been a tension in this debate. On the one hand, the noble Lord, Lord Lang, and others, have called for improving intergovernmental relations and, on the other hand, we have heard it said that actually we should not trust the Scottish Government. We have to operate on the basis that the Scottish Government are negotiating in good faith.
Lord Foulkes of Cumnock
Could the Minister answer the question that I put to the noble Lord, Lord Smith? John Swinney signed the Smith agreement, which was meant to be agreed by all parties. Then he came out immediately and denounced it. How can you describe that as good faith?
Lord Dunlop
I thought that the noble Lord, Lord Smith, answered that question very well. He put it in the context of an agreement, every aspect of which they signed up to—but, clearly, the SNP is a party that believes in independence, and therefore the whole context should be seen in that light.
The Deputy First Minister has agreed that finalising the fiscal framework is essential to delivering the Smith commission proposals. To touch on what the noble Lord, Lord Smith, said earlier, in the debate, he has spoken to both Governments and is confident that talks will deliver a fiscal framework in line with the principles set out in the agreement. As I said in my opening speech, talks have been constructive. We have agreed every step jointly with the Scottish Government and are working hard to agree a fiscal framework that is built to last, and is fair for Scotland and for the UK as a whole.
Lord Gordon of Strathblane
Without in any way wishing to hold up the Bill, is it not possible to increase the work rate of those working on the fiscal agreement? Meeting once a month seems pretty leisurely to me.
Lord Dunlop
I assure the noble Lord that these are ministerial meetings of the Joint Exchequer Committee. In between those meetings, very intensive work is going on to agree the fiscal framework. If, unlike me, you believe—
Lord Purvis of Tweed
I know that the hour is late and do not want to prolong the debate, but could the Minister address the question that I put in my speech? What standing will the agreement or framework have? Is it a revision of the statement of funding policy, which is a Treasury policy, or will it be a stand-alone agreement between the two Administrations? What standing will that have, as a document, and will it require ratification by the Scottish Parliament, which obviously involves a timetable entirely in its hands?
Lord Dunlop
The Deputy First Minister has made it clear that, for the Scottish Parliament to give its legislative consent to the Bill, it would have to be satisfied that there was an agreed fiscal framework in place.
I return to the argument that I was making. If, unlike me, you believe that the Scottish Government are not serious about reaching agreement, that is not a good reason to delay the Bill—far from it. Doing so would hand the Scottish Government a get-out-of-jail-free card, which is not right for the people of Scotland, who expect these powers to be implemented.
Lord Forsyth of Drumlean
Could the Minister explain to me—perhaps I am being a bit thick—whether he thinks that the Scottish Parliament is right to insist on considering the Bill with a fiscal framework? I do. If so, why does he think that it is okay to have the House of Commons consider it without the fiscal framework and, perhaps, to have this House consider it without the fiscal framework?
Lord Dunlop
As has been clear from everything I have been saying, we want to get a fiscal framework agreed so that this House and the House of Commons can look at that agreement. This is what we are working to achieve.
The Smith commission secured the cross-party agreement of all five of Scotland’s political parties. The parties subsequently included manifesto commitments to deliver it and supported the introduction of the Scotland Bill. While there are those in the other place who do not consider the Scotland Bill goes far enough, there is support for it and for further powers for the Scottish Parliament. As the noble Baroness, Lady Liddell, pointed out, the nationalists like nothing better than to talk about process. We want political debate in Scotland to move on to a debate about policy and how the powers in this Bill that rebalance the devolution settlement by reintroducing real fiscal responsibility to the Scottish Parliament will be used. The Government look forward to engaging with this in full and I commend this Bill to the House.
Lord Hollick
My Lords, I thank all noble Lords for their contributions to this debate. In particular, there have been two outstanding maiden speeches from the noble Lord, Lord Campbell of Pittenweem, and from the noble Baroness, Lady McIntosh of Pickering. As one of the few English speakers in the debate, it was a privilege for me to hear our Scottish brothers and sisters—all part of the union, I am pleased to say—making such fine speeches, analysing the issues very well and intervening in a pugnacious way—all laced with good humour. It has been a privilege to be part of it.
I think the Minister has struggled to answer the question which has been put to him on a number of occasions. He has heard everybody in the House say that the fiscal framework is necessary for the proper scrutiny of the Bill. I think he accepts this. If the fiscal framework is delayed—and it has been delayed so far—what steps will the Government take to ensure that both Houses of Parliament will have the opportunity to scrutinise the Bill in the light of the fiscal framework?
My noble friend Lord Reid has come up with an interesting proposal. The noble Lord, Lord Forsyth, has intervened on a number of occasions. The question still hangs in the air and it is one that we will continue to follow closely. If the fiscal framework is not available and the Government seek to pass this legislation, this House will need to look at it very carefully, because I do not think it is the wish of this House. It may well be, on that occasion, that the House will need to divide and give its decision. On this occasion I do not think that is necessary. I beg leave to withdraw the amendment.