Scotland’s Fiscal Framework

Callum McCaig Excerpts

Wednesday 24th February 2016 Commons Chamber

[David Mundell]

What complete and utter nonsense. This was a negotiation. Of course, it was conducted not by SNP MPs, but by John Swinney, who adopted a completely different tone—a civil and cordial tone—throughout. I respect his objective of getting the best deal for Scotland. That is my objective too, but we had to get an agreement, and we got one. It is a good agreement. It is an opportunity to move away from the grievance agenda, but this afternoon’s proceedings leave me in doubt that, even with these extensive new powers, the SNP will be able to leave that grievance agenda behind.

[Callum McCaig (Aberdeen South) (SNP)]

The Secretary of State has repeatedly criticised the SNP for allegedly failing to set out how it will use the new powers contained in the legislation, yet barely an hour ago the Prime Minister floundered badly when asked whether the Scottish Conservatives would reduce the tax rate on high earners. I am sure the Secretary of State will want to avoid suggestions of hypocrisy and extend his criticism to his boss.

[David Mundell]

I have nothing but admiration for Ruth Davidson. She is the one person in the Scottish Parliament who can stand up to the SNP and hold it to account. If people do not want a one-party state in Scotland, the way to achieve that is by voting Scottish Conservative. The Prime Minister did not flounder; he told us exactly what the position was. Ruth will set out the tax proposals and they certainly will not be the same as the SNP’s proposals, revealed in the Scottish press today to hit middle earners hard.

Public Finances: Scotland

Callum McCaig Excerpts

Wednesday 3rd February 2016 Commons Chamber

[David Mundell]

I have not started yet. I will give way to the hon. Gentleman in due course.

On the motion and the amendment, let me start by reminding the House what the Government are working on in relation to the fiscal framework. We are implementing the Smith commission—a cross-party agreement for the future of Scotland. I am determined to deliver the legislation required to implement the Smith agreement in full. That is why we are negotiating a new fiscal framework agreement for the Scottish Government. That is what the people of Scotland voted for—a stronger Scottish Parliament in a strong United Kingdom. They did not vote for independence. As the SNP’s former adviser Alex Bell has noted,

“the SNP’s model . . . that it was possible to move from the UK to an independent Scotland and keep services at the same level, without either borrowing a lot more or raising taxes”

is “broken”.

We base our position on the principles set out in the all-party Smith agreement. Smith stated that a fiscal framework needed to be agreed—that there should be no detriment at the initial point of devolution, that there should be appropriate indexation to adjust the block grant in future years, that this should be fair to taxpayers across the UK, and that we should address so called “spillover effects”. That means that the Scottish Parliament and Government will take on more economic responsibility and accountability.

[Callum McCaig (Aberdeen South) (SNP)]

The Secretary of State quoted the Smith agreement as stating that, at the point of devolution, there should be no detriment to the Scottish public finances, but does he agree that the key to that is ensuring that the fiscal agreement does not build in detriment in the coming years, which is the crux of the deal and the problem in reaching agreement?

[David Mundell]

The crux of the deal is to deliver a settlement that is fair to Scotland and fair to the United Kingdom. As the hon. Gentleman knows, a number of mechanisms have been set out that could achieve that and they are part of the ongoing negotiation.

Scotland Bill

Callum McCaig Excerpts

Monday 9th November 2015 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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—

Scotland Bill

Callum McCaig Excerpts

Monday 6th July 2015 Commons Chamber

[Callum McCaig (Aberdeen South) (SNP)]

Low pay is one of the key problems of our age, as has been said. The minimum wage is in need of being undermined because it undermines people’s lives. I would be happy for the Scottish Parliament to increase the minimum wage in Scotland and to fundamentally undermine the minimum wage, so that the embarrassment of poverty wages is eradicated right across the United Kingdom.

[Ian Murray]

That is exactly what we want to see. We want the issue of poor wages across the United Kingdom to be resolved in its entirety. The hon. Gentleman will remember that in 1998, many of my colleagues and former colleagues sat all night for three nights in a row to ensure that the National Minimum Wage Act was passed by this House. It eradicated the worst of low pay in our country, such as security guards being paid 60p an hour. As I said, the national minimum wage has become a maximum wage for too many people and we have to drive it up across the United Kingdom to eradicate poor pay. I caution the hon. Gentleman that there is a danger that we will undermine the national minimum wage across the United Kingdom if we fragment it.

--- Later in debate ---

[Mr Allen]

If other hon. Members wish to speak—forgive me, but I did not see anyone else rising—it is a very good reason for me to shut up and sit down.

[Callum McCaig]

Amendment 154 addresses the consultation process on the renewable electricity incentive schemes. Paragraph 41 of the Smith commission report states:

“There will be a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives”.

Clause 53 provides that that would not apply in relation to

“any levy in connection with a renewable electricity incentive scheme”—

or to anything that the Secretary of State deems to be a minor, technical or administrative change. In the light of recent matters that certain parties seem to think are minor, administrative or technical, but that my party views as a major attack on Scotland’s renewable energy industry, the inclusion of those words gives some cause for concern, as does the rowing back on what was promised in the Smith report.

The fundamentals of this are clear. The all-party devolution committee, about which we have heard much in the last few days of debate, said:

“Clauses 56 and 58 are identical to draft clauses 42 and 44 but Clause 53”—

the one I am talking about—

“has been changed, and does not require the Secretary of State to consult the Scottish Ministers about any levy in connection with a renewable electricity incentive scheme, it is understood that this relates to Contract for Difference—Supplier Operational Levies and Capacity Market—Settlement Cost Levies. These are levy payments made by Suppliers to cover the operational cost of administrating Contract for Difference and Capacity Market.”

Such levies are fundamental to designing renewable incentives. The spirit and letter of Smith demand formal consultation with the Scottish Government. Frankly, I do not understand what the consultation on renewable incentives will be about if it does not include the money required to enable them to happen.

I want to hear from the Minister on this issue, but I have one final point to make about the message that will be sent to the renewable industry in Scotland and beyond if amendment 154 is rejected. Investors are already on edge because of the disastrous handling of the early closure of the renewables obligation. If the promise of meaningful consultation is withdrawn, it prompts the question of what else the Government have in store to wreck Scotland’s renewables potential.

--- Later in debate ---

[Andrea Leadsom]

I think the hon. Gentleman means an interconnector. I am absolutely a huge fan of interconnectors. That is not a part of the Bill, but I can assure him that I am happy to discuss that at any time and to facilitate conversations with the Scottish Parliament. I am, however, quite sure he will not need me to do that and is able to discuss that with them directly.

Our proposals on energy company obligations and fuel poverty are fair to all consumers and align with the Smith commission agreement. I urge hon. Members not to press amendments 149 to 153.

Let me turn to renewables incentives. Amendment 154 would remove subsections (2) and (3) of new section 90C of the Scotland Act 1998, in clause 53, such that changes of a minor, technical or administrative nature would no longer be excluded from the requirement to consult Scottish Ministers, nor those made by the Secretary of State that are not subject to parliamentary procedure. The hon. Member for Aberdeen South (Callum McCaig) has raised his concerns about this area of consultation. Removing subsection (3) would remove the exclusion to consult the Scottish Ministers on any levy in connection with a renewable electricity incentive scheme. Amendment 154 would require consultation not just on the design of renewable incentive schemes, but on their operation. This would not be in keeping with the Smith commission agreement and would lead to over-complex and time-consuming consultations that would affect the smooth operation of the schemes.

[Callum McCaig]

The Smith commission refers to

“a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives”.

I simply cannot understand or fathom how excluding levies gives the Scottish Parliament a consultative role in designing those incentives.

Scotland Bill

Callum McCaig Excerpts

Monday 8th June 2015 Commons Chamber

[David Mundell]

The Scottish Parliament will have the capacity to top up welfare benefits. It could be said that it would have the final say on the level of benefit. UK benefits will obviously be determined in this House, but the Scottish Parliament will have the opportunity to top them up, as is clearly set out in the Bill.

[Callum McCaig (Aberdeen South) (SNP)]

Does not the notion of “topping up” benefits suggest that in and of themselves they are deficient?

[David Mundell]

What I think it suggests is the requirement for responsibility. If the Scottish Government believe that benefits are not at the level they should be, they will be able to ask the Scottish taxpayer for the funds to increase them. That is what I would regard as responsibility within a Parliament.

--- Later in debate ---

[Callum McCaig (Aberdeen South) (SNP)]

I pay tribute to the hon. Member for Swansea East (Carolyn Harris) for her welcome and expert maiden speech. It is not a place that I have been to, but I feel almost as though I have lived through the wonders of Swansea.

It is a great pleasure to take part in this debate and to give my maiden speech. It seems that the force of argument from the SNP Benches has cleared the ranks of the Scottish Conservative and Unionist party from the Chamber, which is to a degree regrettable.

Aberdeen South is in many ways the classic three-way marginal seat—a three-way marginal that I and the SNP won last month from fourth place. That signifies why we are here: the people of Aberdeen South and Scotland have a desire for change and progress, for the Scottish Parliament to be empowered and for the country we live in to be made a stronger and fairer place to live.

My immediate predecessor, Dame Anne Begg, made her maiden speech in this Chamber during the debate on the Referendums (Scotland and Wales) Bill, which gave the people of Scotland the opportunity of re-establishing the Scottish Parliament. History has shown that that Bill was not enough to satisfy the Scottish people’s desire for control over their own affairs, and I have little doubt that the same will be said of this Bill in years to come. At that time, there was much talk about the settled will of the Scottish people, but I do not think that the people of Scotland are willing to settle for this Bill.

I know that it is customary to pay tribute to one’s predecessor, but for me it is easy. Dame Anne Begg served Aberdeen South with great spirit, enthusiasm and passion for 18 years. She paved the way as the first full-time wheelchair user in this House since the 19th century and campaigned tirelessly for the rights of people with disabilities. Her defeat was in no way a reflection of her work or her dedication to her constituents, but part of the strong desire in Scotland for a more distinctive Scottish voice in this place and a stronger and more accountable Parliament in Edinburgh. I pay tribute to Anne for her work on behalf of her constituents. I have no doubt that she still has a major contribution to make to public life, and I wish her well.

Aberdeen is fondly known as the granite city. The stone from the quarries in and around the city has been used to great effect all over the world. Stone from the biggest of these, the Rubislaw quarry in my constituency, is in the Terrace here in Westminster. Rubislaw quarry, which might be brought back to life as a visitor centre, is known as the biggest man-made hole in Europe. I have some concerns that that title might be in jeopardy given some of the actions of this Government, but for the sake of the country as a whole I hope that it is one that we retain.

Aberdeen South has many distinct and proud communities, from the picturesque village of Cove at the southern point of the constituency, round the mighty headland of Girdle Ness to the former royal burgh of Torry. My constituency follows the course of the beautiful lower reaches of the River Dee, the mouth of which forms a natural harbour that founded the development of our city as the economic powerhouse that it is today. Such is the demand for space at the harbour, even with low oil prices, that there is a prospect of expanding the harbour outwith its present realms, showing the might and resilience of our city.

The constituency is home to two wonderful Victorian gardens, Hazlehead and Duthie parks. It hosts the main campus of the young, ambitious and upwardly mobile Robert Gordon University in Garthdee as well as some of the finest state schools in Scotland. It is a constituency of growing diversity with people from across the globe enhancing and enriching a culture that is proudly Scottish but distinctively Aberdonian. In short, and to borrow from the Doric, it is an afa bonnie place and well worth a visit.

Aberdeen South is one of the wealthiest constituencies in Scotland, but among that great wealth lies great poverty: 10% of the children in the seat live in poverty, in a city with essentially full employment that is home to a world-leading oil and gas industry. I and my party want to address that, but I do not think that the Bill gives us the tools to do so. It might go some of the way, but more work needs to be done.

The low oil price is of course concerning, but Aberdeen remains that resilient city. Those who want to find work will by and large find it. The problem is for those earning the minimum wage. In a wealthy city like Aberdeen it is nigh on impossible to have a decent standard of life on the minimum wage. For me, the biggest failing of the Bill is that it does not give the Scottish Parliament the power to implement a genuine living wage.

Aberdeen proudly boasts the title of Europe’s oil capital and we are in the transition to becoming a truly global energy city as we diversify into new markets and into a hub for renewable energy. Over the coming weeks and months I look forward to championing the industries of Aberdeen and ensuring they get the support that they need from Government.

As I said, I feel that the Bill will not be judged kindly by history. It does not live up to the Smith agreement, it falls way short of the modern form of home rule promised before the referendum and it takes scant account of the election result in Scotland. The people of Scotland want a Parliament and a Government that care for the most vulnerable in society, that promote sustainable economic growth, and above all stand up for the weak in the face of the powerful. If this place is unwilling or unable to do that job, there is another place up the road that is ready, willing and able to take on that mantle.