Scotland Bill

Lord Mackay of Drumadoon Excerpts

Tuesday 19th January 2016 Lords Chamber

[Lord Hope of Craighead (CB)]

Just as a footnote to the point that noble Lords have made about Fort Kinnaird, one can see from the Crown Estate commissioners website the structure of the venture that has been described. The Crown Estate commissioners themselves have,

“a 50 per cent interest in an English Limited Partnership which owns Fort Kinnaird Retail Park in Edinburgh”.

The venture is a partnership. The ownership and presumably the management of Fort Kinnaird are in the hands of the partnership and I take it that the commissioners draw a revenue out of that arrangement.

That takes one to the essence of the role of the commissioners, as described on their own website, which is one of management of the resources in order, as they put it,

“to deliver the best value over the long term”.

Of course, the interest for the UK Government at present is in the revenue. The commissioners make it clear that their function is to pay all the “annual revenue profit” to the Government. I would have thought it absolutely crucial to maintain that position, that in so far as the assets are concerned, they are managed in the broad interest of maintaining the assets for the best value. Of course, the revenue would then be transmitted to the Scottish Government, as would be consistent with the present position. That distinction between capital and revenue management and payment is absolutely crucial to the point that various other noble Lords have been making.

[Lord Mackay of Drumadoon (CB)]

As my name can be found in some proximity to the amendments that are being discussed in this opening round of speeches, I do not intend to go into any great detail about what we have heard. I am, however, struck by the fact that people are talking as if the best way forward will involve a significant measure of respect and agreement and will not give any excuse for a deterioration in the relationship between the voters, which was to some extent apparent when devolution came along.

It falls to me, in view of one of the speeches that we have heard, to declare an interest that during a period of years when I was actually a Member of your Lordships’ House, prior to becoming a High Court judge in Scotland, I spent quite a lot of my time working with companies in the electricity industry. It fell to me to give them advice when they sought it and to work with them on a practical basis when they set about seeking the erection of a new power station or some other building associated with a power station or the erection of new electricity wires to take electricity to different parts of Scotland and, indeed, further afield.

I appear in this debate having received a brief from the Law Society of Scotland, which takes an interest in these matters. It is clear from what has been suggested to me that it is not alone in encouraging agreement. On that basis, I invite Members of your Lordships’ House to rely on the proposals which, as I say, are proximate to my signature.

[The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)]

My Lords, I thank all those who have contributed to this debate: the noble and learned Lords, Lord Davidson, Lord Wallace, Lord McCluskey, Lord Hope and Lord Mackay; the noble Earls, Lord Kinnoull and Lord Dundee; and the noble Lord, Lord Sanderson, and the noble Baroness, Lady Liddell. We have had some very good contributions and I am very sympathetic to the intent of many of the points that have been raised.

The Bill’s provisions on the Crown Estate were debated at length in Committee in the other place and some of the points raised then have also been raised today. As has already been mentioned by a number of your Lordships, the Law Society of Scotland, which I met last week, has also taken a close interest in these clauses and has suggested amendments, some of which have been taken up by noble Lords. In particular, noble Lords have raised issues around the way in which we have sought technically to give effect to the Smith agreement, the importance of establishing an arm’s-length body, double devolution, and specific issues around Fort Kinnaird and other topics. I welcome this opportunity to set out the Government’s position and approach to these clauses.

As noble Lords will be aware, the Smith commission agreed that responsibility for the management of the Scottish assets of the Crown Estate would be devolved. The agreement also stated that the Scottish Government should receive the revenue generated from the management of those assets, as has already been referred to. The Bill therefore provides for the existing Scottish functions of the Crown Estate commissioners to be transferred to Scottish Ministers by way of a transfer scheme, which will be set out in a statutory instrument made after the Bill receives Royal Assent. The Bill also provides that the revenue from the Scottish assets will be paid into the Scottish Consolidated Fund after the transfer.

In readiness to take over the management functions after the transfer has taken place, the Bill also enables the Scottish Government to make arrangements in advance of a transfer, for example to establish a management body and appointments to that body—I will return to that in a moment to pick up on what the noble Earl, Lord Kinnoull, said—via an Order in Council made by Her Majesty, and subject to the affirmative procedure before the Scottish Parliament. Following the transfer, the Scottish Parliament will have competence to legislate about the management of the Scottish assets, which will enable it to legislate in particular for further devolution to the islands and other areas seeking such responsibilities, as the Smith agreement recommended. At this point I can confirm to the noble and learned Lord, Lord Wallace, that I would be very happy to meet the islands councils. I will come back to double devolution in a moment.

Turning first to some other points that have been raised, in looking at Amendment 43 I liked in particular my noble friend Lord Lang’s comment about dynamic junior Ministers and the distinction, if there is one, between “may” and “must”. The parties opposite are seeking to make it mandatory for the Treasury to make the transfer scheme. Amendment 44 would make it mandatory for the scheme to be made, following agreement with the Scottish Ministers. First, I reassure noble Lords that the clause already provides, at subsection (17) of new Section 90B, that the Treasury cannot make the scheme without the agreement of Scottish Ministers. The majority of the scheme is not expected to be contentious but for those aspects which need to be negotiated, we think it right that agreement is reached between the Treasury and Scottish Ministers.

The clause as drafted, with the use of “The Treasury may” together with the requirement for the consent of Scottish Ministers, provides the right incentives for both parties to reach agreement and for a level playing field in the negotiations. The UK Government represent the interests of all people in the United Kingdom and, if this amendment were made, the ability to represent these interests would be constrained as the Treasury would be under a statutory duty to make a scheme, the discharge of which could be fulfilled only with the co-operation of a body beyond its control. As the scheme contains important protections for defence and national security, it is imperative that both sides are able to come to an agreement on the detail.

Secondly, the Treasury still cannot necessarily make the scheme even after the agreement of Scottish Ministers, since both Houses of Parliament must also approve the draft scheme before it can be made by the Treasury. I reassure the Committee that the Government are committed to making a scheme. Implementing in full the Smith commission agreement is a manifesto commitment; the provisions relating to the Crown Estate are an important part of that. However, actions speak louder than words. For example, we made an outline of the scheme available to the House last summer and in November we placed a copy of a draft scheme and memorandum of understanding in the Libraries of both Houses. Officials are currently in discussion to reach agreement on the detail of the draft scheme. After the draft scheme is agreed, it will be brought before both Houses of the UK Parliament and, if it is approved, it will be made by the Treasury and the transfer will occur on the date specified in the scheme. I hope that I have been able to reassure noble Lords on the Government’s commitment in this regard.