Scotland Bill

Debate between Ian Murray and Tommy Sheppard

Monday 9th November 2015 Commons Chamber

[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.

Scotland Bill

Debate between Ian Murray and Tommy Sheppard

Tuesday 30th June 2015 Commons Chamber

[Tommy Sheppard]

I absolutely understand that. If we get a chance in the years ahead, while welfare remains the responsibility of the UK Parliament, to join the Labour party in voting to apply the measures that we will introduce in Scotland to the hon. Gentleman’s constituents, I will be happy to take the opportunity to do so.

I turn to the Secretary of State’s veto, which has been mentioned. I know he will deny that it is a veto, but everyone else who has looked at the provisions thinks it is a veto, including most third sector organisations in Scotland. It will allow the Secretary of State to object to regulations that the Scottish Parliament might introduce to improve the welfare system in Scotland. How can it be right that a power is devolved yet not devolved, and that the Secretary of State will retain authority to govern such decisions? In an earlier stage of the debates on the Bill, one Conservative Member said that we should all trust each other and that life would be an awful lot better. Could the Secretary of State not find it in his heart to trust the Scottish Government to make regulations? After all, there are fairly closely defined parameters for those regulations, so why on earth burden everyone with the requirement that the Scottish Government have to seek the Secretary of State’s consent? It is absolutely ridiculous.

If there is one way in which Secretary of State could indicate that he is listening to Scotland, it is by saying, “Fair enough—if the Scottish Government take a decision, we will let them get on with it, because we have transferred authority. We do not have to keep looking over their shoulder and checking their homework.” I hope that he will take that on board.

The crux of the whole argument is political authority. We are now halfway through the fourth day of debates on the Bill, and the Government and the Secretary of State have yet to suggest that they will make any substantive change to it. The Minister for Employment suggested earlier that the clauses we were discussing were in line with the spirit and substance of the Smith agreement, but it is strange that everyone else disagrees, including the Scottish Parliament’s devolution committee, on which the Conservative party is represented. That all-party group said that the clauses as drafted did not represent the spirit or substance of the Smith agreement. Something has got to give, unless we are going to rename the Secretary of State the governor-general and accept that we will not have government with the consent of the people in Scotland. I hope that he will listen to the people and accept some amendments.

When I quizzed the Secretary of State yesterday, he leapt to his feet and said that he was listening, and that he was in fact in conversation with the Scottish Government. He cited conversations with my colleague the Deputy First Minister, John Swinney. That caused John Swinney to write to the Secretary of State to say that he considers that his name had almost been taken in vain. He states:

“you cited our ‘productive discussion’…There will have to be clear movement by the UK Government, otherwise it is becoming harder to justify that description.”

Today the Secretary of State has the opportunity to make some minor concessions to show that he is willing to listen to the people who were elected in Scotland—I am not talking just about the 56 SNP MPs; I think we can safely say that 58 out 59 MPs from Scotland do not want the Secretary of State to have a veto over powers that this Parliament might devolve to the Scottish Government. I hope that he will reflect on that and give some ground in his concluding remarks to show that he is listening.

[Ian Murray]

I pay tribute to the hon. Member for Edinburgh East (Tommy Sheppard), and he was right to point out that we need a welfare system that shows compassion to those who have fallen on hard times, whether through illness, disability, economic circumstances or old age. He told the story of a 62-year-old constituent who was affected by the bedroom tax, and I am sure that all Members can recall similar stories from their surgeries of the most vulnerable being hit the hardest by what is probably the most pernicious tax that any Government have ever bestowed on people. It is right that the Scottish Government have been able to mitigate the bedroom tax in Scotland, and this evening we will vote on new clause 31 that would give the Scottish Parliament the power to consider such matters. The hon. Gentleman is right to have given that description of the social security system. That is the fourth time we have agreed today and I hope we will continue in that spirit.

I will speak to amendments 5, 6, 7 and new clauses 28 and 53 in my name and those of my hon. Friends. Amendments 5, 6 and 7 are different from the SNP’s amendments 118 and 119, but if the SNP presses its amendments to the vote we will support it and withdraw our amendments. Clause 24 gives Scottish Ministers regulation-making powers on the housing costs element of universal credit for claimants who rent their homes. The Secretary of State would also retain regulation-making powers, meaning that both the Scottish and UK Governments would have powers in that area and be able to exercise them independently.

Clause 25 gives Scottish Ministers regulation-making powers in Scotland to provide for alternative payment arrangements for universal credit, including

“the person to whom, or the time when, universal credit is to be paid”.

That will allow universal credit payments to be split between household members, and for payments to be made more frequently than under the UK Government’s current monthly plan. Although I am sure that we all welcome the devolution of those powers, that part of the Bill has caused considerable controversy by affording UK Ministers what some have interpreted as a veto over the Scottish Government’s regulation-making powers. That relates to the requirement in clauses 24 and 25 that, before exercising their regulation-making powers, Scottish Ministers consult the Secretary of State on the practicability of implementing proposed changes to universal credit, and obtain his agreement on when those changes are to happen. It is worth examining whether that amounts to an effective veto.

The Deputy First Minister John Swinney—he has just been mentioned by the hon. Member for Edinburgh East—has detected in what he calls those “pretty innocuous requirements” a sinister intent on behalf of the UK Government to exercise “a blocking power” that would act to

“prevent the Scottish Government from doing something”.

What does the UK Government seek to do with these provisions? I do not believe that the current provision is intended as a veto, but it could be more clearly worded to remove any ambiguity.

As I said on Second Reading, the Government have an opportunity to clear up any ambiguity, and if they are intent on saying that there is no effective veto in the Bill, they should remove that ambiguity once and for all. Amendments 5, 6 and 7 seek to allay the concerns of the Deputy First Minister and the charitable organisations that have been mentioned, by clarifying that Scottish Ministers need only “consult” the Secretary of State about the timing and—crucially—the delivery mechanisms of any new regulations.

Scotland Bill

Debate between Ian Murray and Tommy Sheppard

Monday 29th June 2015 Commons Chamber

[Ian Murray]

Nothing ever surprises me, although I was a little surprised last week that the 56 SNP MPs went through the Lobby with the Thatcherite arm of the Conservative party. That was because full fiscal autonomy would deliver something that would be fundamentally damaging to Scotland. The hon. Lady is absolutely correct. [Interruption.] I thank her for waking up all the SNP MPs with her intervention.

The Smith agreement said:

“Income Tax will remain a shared tax and both the UK and Scottish Parliaments will share control of Income Tax. MPs representing constituencies across the whole of the UK will continue to decide the UK’s Budget, including Income Tax…Within this framework, the Scottish Parliament will have the power to set the rates of Income Tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers”.

That is exactly what the Bill does, and it is important to highlight two aspects of that quotation.

First, maintaining income tax as a UK-wide tax is critical to the continued pooling and sharing of resources. That facilitates UK-wide redistribution on the basis of need, which underlines the welfare state and the state pension system. The Church of Scotland expressed the same view when it argued for

“a degree of solidarity across the United Kingdom, where prosperity is shared and those with broadest shoulders can carry the extra weight of supporting those less fortunate.”

Secondly, the Smith agreement explicitly mentions the continuing right of Scottish MPs to vote on the Budget within the framework that it sets out. That is equally important, particularly given the Government’s proposals on English votes for English laws. Devolving income tax in its entirety, which the hon. Members for Dundee East and for Gainsborough are advocating, would place that right in doubt and create two classes of MP in this place. That risk was the subject of considerable debate in the Smith commission. As long as one believes in the pooling and sharing of resources, which we certainly do, Smith’s recommendation to retain income tax as a shared tax is critical. That is why we reject amendment 124 and new clause 54, which was tabled by the hon. Member for Dundee East.

New clause 32 concentrates on the implementation of the powers being transferred and, as I have said a number of times in this Committee, the use of those powers. What we are trying to achieve chimes with much of what the hon. Member for Dundee East said, when he laid out the concerns about how the proposals would be monitored, how the number of income tax payers would be determined, the “no detriment” policies across the United Kingdom and the complicated nature of the fiscal framework.

The report under new clause 32 would include

“a review of the revised fiscal framework”,

given its complicated nature. It would also include

“the tax year to which sections 12 and 13 of this Act will apply, and the day on which they are due to come into force”

so that businesses are able to plan. It would include details of the number of staff that both Governments would assign to the implementation of the new Scottish rate of income tax to ensure that adequate resources were deployed to make it happen. It would be useful if the Secretary of State responded to the particular concern that the staffing level to determine the Scottish rate of income tax might be deficient.

[Tommy Sheppard (Edinburgh East) (SNP)]

I am just trying to understand the point that the hon. Gentleman is making. As I understand it, this is an opportunity to discuss whether the Scottish Parliament should have enhanced powers over income tax. His position seems to be that, rather than take that step, we should have a review of the situation. I can understand the logic of having a review of the powers, but why does he think that the review would be better in the hands of the Tory Chancellor, rather than the representatives of the people of Scotland in the Scottish Parliament? Surely the time has come to allow the Scottish people to determine these matters for themselves, rather than a Tory Government who have only one single representative in Scotland.

[Ian Murray]

I think that the hon. Gentleman is confusing two issues. We fundamentally agree with the clauses relating to the devolution of income tax, but these are hugely complex matters, as is demonstrated by the complicated nature of the devolution of the 10p income tax provision in the Scotland Act 2012. The new clause would not prevent the Bill from proceeding; it would merely allow the Secretary of State to bring to the House a report on the progress of implementation.

There is another difficulty. The hon. Gentleman is absolutely right—the Scottish Parliament could produce a report and submit it—but I cannot, in the House of Commons, command a different Parliament to do something, which is why I am asking the Secretary of State to produce the report.

It is right for these issues to be raised. I hope that the Scottish Parliament will also examine them in great detail, and will present a full report to both Houses. Our aim is to protect Scottish taxpayers rather than to create a political divide. It is disappointing that, although we agree on the broad principles of the devolution of income tax, Members are trying to bring about division between us. We are trying to be a responsible Opposition in calling for a report on the implementation of income tax rates.

New clause 32 calls for

“a report on the identification of Scottish taxpayers”.

The aim is to ensure that individuals are either Scottish or UK taxpayers but not both, to prevent the double taxation that was mentioned by the hon. Member for Dundee East, and to deal with cross-border mid-financial year movements, which is important in the context of where people may live or work.

The review must include the rates and bands at which the Scottish income tax will be set, and a projection of the impact of the tax on revenues generated in Scotland and across the United Kingdom. That is primarily designed to ensure that Scotland does not become worse off over time owing to the relative tax bases and demographic or behavioural changes in the United Kingdom overall. Such a review would allow us to assess the transitional process, and to ensure that the projected rates and bands accorded with the principle of no detriment for both Scotland and the rest of the United Kingdom. That would protect Scottish taxpayers, as well as taxpayers in the rest of the UK.

Critically—the Smith agreement restates this—any updated fiscal framework should secure the Barnett formula, with the Scottish budget bearing the full costs of policy decisions that reduce or increase revenues or expenditure. That is crucial to the fiscal framework.

My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) mentioned gift aid, and I hope that the Minister will be able to respond to what he said.

I think it important for the people of Scotland to know what their Government are doing about these substantial income tax powers, whatever the colour of that Government. Those powers are worth £11 billion, and they are fundamental to the working lives of people in Scotland. As I have said all along, this is about transparency: transparency in regard to whether additional powers should be devolved, and transparency in regard to the use and impact of those that are devolved. That is what our new clauses 1, 21 and 32 seek to foster.

All I ask is that the United Kingdom Government, and, indeed, the Scottish Government, approach the Bill in the same spirit of transparency and openness as us, and agree to new clause 32. We shall be pressing it to a vote later this evening.

Scotland Bill

Debate between Ian Murray and Tommy Sheppard

Monday 15th June 2015 Commons Chamber

[Tommy Sheppard]

I am a Derry man as it happens. If the hon. Gentleman wants to make a point of such substance, perhaps he should indicate to the Chair and take part in the debate. What we are talking about is a matter of political principle. It is about the direction in which we want to go forward. It is entirely possible, with good will, to put in place proper fiscal arrangements.

I wish to turn to the amendment of the hon. Member for Gainsborough (Sir Edward Leigh). I have not been in this job long—

[Ian Murray]

rose—

[Tommy Sheppard]

May I deal with this point, and then take an intervention? I have not been in this job long, but I am surprised—I expect I will be surprised by various things over the next five years—to find such a passionate and eloquent exposition from the Conservative Back Benches of a position with which I agree. I suspect that there is little else on which the hon. Gentleman and I would agree. On this point, he makes his case very well. However, I wonder whether there is an element of mischief at the back of his mind. Perhaps he believed the propaganda from his own Front Bench several weeks ago that we were weakening in our commitment to full financial autonomy, and he thought that he might embarrass us in this debate today. I must reassure him that we are not lukewarm and our commitment is not weakening. In fact, we like the idea so much we have brought our own amendment before the Committee. I am intrigued at the suggestion that all we need to do is vote for it—

--- Later in debate ---

[Tommy Sheppard]

If the new clause is moved, the hon. Gentleman will see me there, for sure. I hope that I will see him in the Lobby to vote on our amendment.

The interesting thing about the debate so far is that the case has not been made against full fiscal—

[Ian Murray]

rose—

[Tommy Sheppard]

Is this perhaps on the subject of the hon. Gentleman’s misrepresentation of my views?

[Ian Murray]

I am grateful to the hon. Gentleman, who has just confirmed that he will walk through the Lobby with the hon. Member for Gainsborough (Sir Edward Leigh). He said on the radio—I was on with him—that the delivery of full fiscal autonomy for Scotland would be utterly devastating. Does he stand by those comments?

[Tommy Sheppard]

The hon. Gentleman must apologise for misquoting me. I said—[Interruption.] Yes, I have the transcript as well as the hon. Gentleman. I said in the context of a debate that if this was done wrongly it would be possible to get it wrong. To my mind, that is a tautology: if we do not do something right, we get it wrong. The hon. Gentleman then decided that that somehow meant that I was against the whole principle of full financial autonomy and took to the Twittersphere to promote that. It does not, I am not and the fact that he had to do that shows the paucity of the arguments against our proposals.

We have yet to hear the argument against full financial autonomy for the Scottish Government, and I hope that we shall before the debate concludes. We have heard talk of a black hole, which other people will regard as a deficit when in fact it pertains to all economies at this point in time. We have heard that a policy of principle should be based on a snapshot from one point of time in an academic survey of what might happen in a year that will not even be covered by the process. That has somehow been extrapolated into an argument of principle against the proposal. It is not. If it was, would that mean that if there was not a deficit but a surplus in the Scottish budget, as there has been on many occasions, the policy would be flipped again and autonomy would suddenly become okay? We need to hear the arguments of principle against the proposal.

The difference between us is that, although there is a deficit in the Scottish budget, the SNP believes that it is possible for Scotland to prosper if it has control of its own resources, if it can manage its own economy, if it can grow its own revenue base and if it can steward its own budgets properly. Full financial autonomy would mean that the people of Scotland could get the benefits of that economic growth. That seems a laudable objective.

[Tommy Sheppard]

I am sorry, but I am just coming to the end of my speech.

My hon. Friend the Member for Dundee East (Stewart Hosie) has given some clear examples of how economic powers could be deployed. If Members, many of whom are on the Labour Benches although some might be on the Government Benches, are against that in principle, they need to tell us. If they are against it just because of the economics that might pertain to it, it is entirely possible to make an argument about equalisation measures and other mechanisms that could be introduced if we wanted it to happen. They need to tell us why on principle they do not want it to happen. I hope that we will hear that before the night is out, but in the meantime I commend the amendments to the Committee.

[Ian Murray]

May I personally congratulate the hon. Member for Edinburgh East (Tommy Sheppard) on his stunning victory at the general election? I miss my colleague, Sheila Gilmore, whom I wish well, but I congratulate him.

It is a great pleasure to speak in support of our amendments. I could not help noticing that Lionel Richie was in the Gallery earlier, and I hope he enjoyed the first part of our debate as much as we enjoy his music.

These days in Committee are important in ensuring that the Smith agreement is delivered in full in both spirit and substance, as we said consistently on Second Reading. It is also essential to ensure that we go further than the Smith agreement, as Labour has said time after time, and we have set out a number of clear improvements.

Scotland has had an in-depth and passionate debate about its future and concluded that a fair and more prosperous Scotland is best delivered by shared tax and spending across the UK, with Scotland taking more control over the levels of tax and spending alongside greater accountability. I agree with the hon. Member for Perth and North Perthshire (Pete Wishart) that if anyone is under any illusion that the centre of political gravity in Scotland is not at Holyrood, they have not grasped the modern political landscape in Scotland. That is why the clauses and amendments recognise the Scottish Parliament as the seat of political power and the catalyst for change in Scotland. Our amendments attempt to deliver that change. This is a great responsibility on us all, but in the end it is much more important that we debate how powers are used than where they lie. We have tried to tease out some of those issues in interventions today, but without much success.