Scotland Bill

Debate between Lord Austin of Dudley and Wayne David

Monday 9th November 2015 Commons Chamber

[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.

--- Later in debate ---

[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.