David Mundell
Main Page: David Mundell (Conservative - Dumfriesshire, Clydesdale and Tweeddale)Department Debates - View all David Mundell's debates with the Scotland Office
(9 years, 2 months ago)
Commons ChamberIt is a pleasure to serve under your chairmanship, Mr Hoyle. I welcome you back to your role. I wish to speak in support of amendment 58, which stands in my name and in the names of my hon. Friends.
The Scottish National party has submitted a series of amendments to the Scotland Bill based on the three-pronged commitment outlined in our manifesto for the UK general election: first, delivering on the Smith agreement in full; secondly, devolving additional powers in priority areas such as job creation and welfare protection; and, thirdly, enabling the Scottish Parliament to move to a position of full fiscal autonomy. This approach was backed in record numbers by voters in Scotland in May, giving the SNP a clear mandate for change, which the UK Government must recognise and must act upon.
The UK Government must live up to the words of the Prime Minister on 10 September 2014, when he said:
“If Scotland says it does want to stay inside the United Kingdom then all the options of devolution are there and are possible”.
If all options are possible, it is the duty of the UK Government to respond to the clearly expressed desire of the Scottish people for more powers in the Scotland Bill. The SNP amendments include effectively entrenching the Scottish Parliament—that is what we are discussing now—placing the Sewel convention on a meaningful statutory basis and giving the Scottish Parliament the legislative competence to remove the reservation on taxation, borrowing and public expenditure, enabling the Scottish Parliament to legislate to deliver full fiscal autonomy. The SNP also proposes amendments for further priority powers at later stages in the Bill, including powers over tax, setting the minimum wage and taking responsibility for welfare decisions. In this first group of amendments, I will speak on issues relating to the permanence of the Scottish Parliament, and my hon. Friend the Member for Dundee East (Stewart Hosie) will speak shortly on full fiscal autonomy.
Amendment 58 relates to the permanency of the Scottish Parliament and Government. Paragraph 21 of the Smith commission report stated:
“UK legislation will state that the Scottish Parliament and Scottish Government are permanent institutions.”
However, in its analysis of the draft clauses published by the UK Government, the Scottish Parliament’s Devolution (Further Powers) Committee raised two main issues. As I stressed in the previous stage, that was an all-party Committee, involving members from the Scottish National party, the Scottish Labour party, the Scottish Conservative party, the Scottish Liberal Democrats and the Scottish Green party.
It is important to get it on the record that Alex Johnstone MSP has made it perfectly clear that his participation on the Committee is not to be conflated with the SNP press release issued at the time of the Committee’s report. He clearly supports the Committee’s report, but not the SNP’s attempt to distort that report.
It will no doubt be a relief to you, Mr Hoyle, that I will confine myself to the words agreed by all Committee members, including Mr Johnstone, when he signed up to the report.
That cross-party Committee found that the form of words on permanency proposed in the Scotland Bill was a weaker formulation than stating simply that the Scottish Parliament and the Scottish Government were permanent. We agree with the view of the Committee—and of Mr Johnstone—in paragraph 47:
“The Committee is of the view that the inclusion of the words ‘is recognised’ in draft clause 1 has the potential to weaken the effect of this clause, which would be unfortunate given the all-party agreement to this recommendation as part of the Smith Commission, and the views expressed to us by the former Secretary of State for Scotland that he perceives that the permanence of the Scottish Parliament and Scottish Government is guaranteed.”
The Committee was also told by the former Secretary of State that he was open to reconsidering the wording of draft clause 1, but changes were not made in the published Bill. This suggests that the Government might be open to the amendment.
Paragraph 49 of the report agreed by Mr Johnstone and all other Committee members states:
“In evidence to the Committee, the former Secretary of State for Scotland commented that he was ‘open to thinking about different ways in which…permanence could be achieved’. The Committee welcomes the openminded approach of the former Secretary of State with regard to this issue. The Committee therefore considers that there is scope to further strengthen the permanency provisions.”
The Committee’s analysis of the published Bill, however, confirmed that there was no change between the draft and the final clause.
The Committee called for additional protection in paragraph 50 of its report, supported by Mr Johnstone and all other members:
“The Committee considers that the effect of the clause on permanency, as currently drafted, is primarily declaratory and political rather than legal in effect. The UK doctrine of Parliamentary sovereignty makes achieving permanence problematic. The Committee recommends that the Scottish electorate should be asked to vote in a referendum if the issue of permanency was in question, with majorities also being required in the Scottish Parliament and the UK Parliament.”
That is the purpose of the SNP amendments, which we will be moving.
The hon. Gentleman is right about one thing: we did not win the referendum. There was, however, an election that we did win, so we are not bringing forward another mandate for independence; we are bringing forward provisions for full fiscal autonomy. I hear Tories pontificate right, left and centre about responsibility, but when it comes to full fiscal responsibility for Scotland, all of a sudden there is silence. They just sit on their hands and say no.
Why then did the SNP not table the new clause in the name of my hon. Friend the Member for Gainsborough (Sir Edward Leigh)? If the hon. Gentleman wants that full-blooded proposal, why did he leave it to the Tory Benches to propose what he claims is an SNP policy?
I can almost hear Professor Adam Tomkins, the Tory adviser to this Tory Minister, coming up with that daft question. I say this to the Minister: our amendment 89 would deliver full fiscal autonomy in a way that makes sense.
Our opponents argue that full fiscal autonomy would lead to more cuts to the Scottish budget, which is ridiculous when one considers that between 2009-10 and 2013-14, at a time when the North sea was generating £32 billion in oil revenues, the Scottish Government’s budget was cut by about 9%. According to the Institute for Fiscal Studies, prayed in aid by Tories and Labour alike, the cuts of more than 5% implied in 2016-17 and 2017-18—in this Parliament—will be twice the size of any cuts over the last Parliament. The UK Budget showed that implied cumulative cuts to day-to-day spending on public services in Scotland over this Parliament could amount to £12 billion in real terms compared with 2014-15. In the absence of full fiscal autonomy, therefore, we are not protected from cuts. Rather, we suffer a double blow: continued austerity and an inability to grow the economy and increase tax yields in the way that Scotland requires.
Well, the hon. Gentleman is wasted in this House; he should be in the City, buying and selling futures in oil price shares. I think that is the best way for him to go. The three points that fall from the OBR report are the unpredictability of the oil price, the difficulty of extraction in the North sea and the fact that, whatever way we look at it, oil revenues will be declining sharply over the next 20-year period. It would appear that the hon. Gentleman—[Interruption.] I am happy to take other interventions, but it is quite clear that SNP Members cannot defend their policy for full fiscal autonomy. Indeed, they should listen to their hon. Friend, the hon. Member for East Lothian (George Kerevan), who said that it would be economic suicide. He is an experienced journalist and economist, so they would do well to listen to him.
In conclusion, we will push amendment 38 to the vote because we feel that the permanency of the Scottish Parliament should have the underpinning of the Scottish people by any means that would be appropriate, including a referendum. We will push to a vote new clause 2, which proposes a constitutional convention to resolve some of the larger issues on a constitutional settlement across the country. We will oppose full fiscal autonomy in all its forms, because it would be bad for the Scottish people, bad for the Scottish economy and bad for the future of Scotland.
Today is the first of four days in Committee on the Scotland Bill. I assure the hon. Member for Edinburgh East (Tommy Sheppard), whose contribution I enjoyed, that I will be listening and reflecting. Contrary to the suggestion made by the hon. Member for Perth and North Perthshire (Pete Wishart), this is not the only opportunity for changes to be made to the Bill. I will be meeting the Devolution (Further Powers) Committee of the Scottish Parliament next week to discuss points that it has raised in its report.
I would not normally begin a contribution by suggesting that anyone read one of Gordon Brown’s books, but tonight I will do so. Gordon Brown has been misquoted a number of times in the Chamber today, and it is important to put on the record the fact that in his book “My Scotland, Our Britain: A Future Worth Sharing”, he states that neither his proposals nor those of any of the pro-UK parties involved a federal solution. Although they came close to the idea of home rule, they were not home rule. Therefore, it is a myth, which has been perpetuated this evening, that Gordon Brown has called for either federalism or home rule.
The hon. Gentleman has already spoken a great deal on the subject this evening. I would also like to see empirical evidence to back up the suggestion made by the hon. Member for Edinburgh East that the vow and the offer of additional powers made a significant change to the referendum result, because I do not believe that such empirical evidence exists.
Is the Secretary of State suggesting that they had no effect at all? In that case, what was the point of them?
What I am suggesting is that the hon. Gentleman cannot bring forward a shred of evidence to suggest that those proposals changed the referendum result and that somehow the people of Scotland have been defrauded. The people of Scotland voted decisively no in the referendum. They voted for a strong Scottish Parliament within the United Kingdom. The vow, which was set out in the Daily Record and other outlets, was taken forward on the basis of the Smith commission, of which the Scottish National Party was a part and to which it was a signatory. I received an interesting letter today from John Swinney, the Deputy First Minister of Scotland, who was a signatory to the Smith commission recommendations. He now tells me that the Smith commission recommendations, which he signed, were incoherent. I do not understand how he came to sign those recommendations if he genuinely believed that they were incoherent. If that was the case, he should have been making some of the arguments that we have heard this evening and during the general election campaign.
Not at this stage. The result of the general election represented a call from the people of Scotland for the delivery of the powers in the Smith commission recommendations. The Scottish National party set itself up as the voice of the people of Scotland to ensure that those powers were delivered, and they will be delivered in the Scotland Bill.
Not at the moment. I have heard a number of small speeches from the hon. Gentleman, and I know the point that he wants to make.
I disagree with some of my right hon. and hon. Friends on the idea that conflict and division are inevitable when Governments work together. Despite what we regularly read in the media, see on television or hear in this Chamber, the Government work very closely with the Scottish Government on a range of important matters for the benefit of the people of Scotland. The Government remain committed to working continually for the benefit of the people of Scotland.
When pressed on the possible difficulties of fiscal autonomy, the reaction of Scottish National party Members is to point to the tremendous new levels of growth that will be achieved by the Scottish economy, and the added GDP that will flow from their enlightened measures. They are not the first politicians I have heard attribute those kinds of consequences to their economic policy. If their policy fails, they imply that any deficit would be the liability of the UK Government and the British taxpayer. Will my right hon. Friend assure me that a fiscal framework, which is still to be achieved, will include some real fiscal discipline? We cannot have an unsuccessful devolved Government running up enormous additions to the United Kingdom’s debt and deficit.
I can give that assurance. If it is to meet the various spending commitments that we hear sprayed around not only in the Chamber, but across Scotland, the Scottish National party will eventually have to tell the people of Scotland how much tax will rise to pay for all its proposed measures. The hon. Member for Dundee East (Stewart Hosie) carefully avoided any detail about tax when he set out the case for full fiscal autonomy. He criticised the proposals in the Bill for the devolution of income tax bands and rates, and he criticised the provision for a 0% rate. In fact, all he argued for was to enable the Scottish Government to reduce the personal allowance. I do not quite understand how that would benefit the less well-off in Scotland or the Scottish economy. The full range of other income tax powers worth £11 billion are coming to Scotland as part of the Bill.
When will the Secretary of State be able to share with Members the proposals to adjust the grant formula? Scotland will have higher spending and it will have tax revenues of its own, and my constituents in England are very interested in what the grant formula will look like.
I made it clear earlier that we would, in early course, bring forward details of the full fiscal framework as it is being negotiated.
I was not convinced by the arguments for full fiscal autonomy advanced by the hon. Member for Edinburgh East and others. I was not convinced by the red-blooded version that my hon. Friend the Member for Gainsborough (Sir Edward Leigh) set out for delivering the Scottish National party’s manifesto commitments, and I was not convinced by the SNP full fiscal-lite proposals—sometime, somewhere, somehow.
The hon. Member for Gainsborough (Sir Edward Leigh) gave an eloquent speech, in which he explained how the debate in Scotland had moved on. We won the election in Scotland, and the people of Scotland have demonstrated their desire for powers, for a purpose and for a Parliament. Is it not the case, as the hon. Gentleman said, that the Government are playing with the future of their own Union, which they want to defend? It really is about time that they listened to the Scottish people and delivered what the people of this country have asked for.
I said at the start of my remarks that I was listening to the Scottish people. The only people who are playing games are those who threaten another referendum in Scotland every time they do not get what they say they want.
The principal issue raised in relation to full fiscal autonomy is that it would mean Scotland having almost £10 billion less to spend by the last year of this Parliament. That is not good for Scotland, and that is why this Government will not support it. I am afraid that the only argument we have heard in support of these proposals was that heard during the referendum campaign—basically, “It will be all right on the night: trust us.” The people of Scotland decided on 18 September last year that they did not trust that argument, and I still do not trust it. Full fiscal autonomy would mean an end to the Barnett formula. It would mean that the Scottish Government had to fund all public spending in Scotland from their own resources. The Scottish Government would therefore be fully responsible for raising all the tax from Scottish taxpayers required to fund all spending in Scotland on public services, benefits and pensions.
Can the Secretary of State confirm that in terms of the principles underlying Smith, we have no detriment and no advantage simply because of devolution itself, and that there will be a negotiated financial framework between the Scottish and UK Governments for the devolution in this Bill? Of course, we already have limited borrowing consent under the Scotland Act 2012 to fill holes in revenue, notwithstanding that the repayment terms were too short. Can he confirm that under the “no detriment, no advantage” principles there will be a negotiated financial framework for this Bill, and that there are already revenue-borrowing powers in statute?
I can confirm that the Scottish National party signed up to the Smith commission agreement, this Government are committed to delivering the Smith commission agreement, and the hon. Gentleman will therefore get what he is looking for in respect of the Smith commission agreement. There is not a shadow of a doubt about that.
Full fiscal autonomy would mean the end of Scotland pooling resources and sharing risks with the rest of the United Kingdom, and an end to Scotland being part of the UK’s hugely successful single market, which generates jobs, growth and prosperity. To all intents and purposes, the fiscal union between Scotland and the United Kingdom would end entirely, and the lesson of the eurozone is that it is extremely difficult to have a successful currency union without fiscal union.
I understand the Secretary of State’s desire to protect the Scottish people, but whether or not there is a £10 billion shortfall, if this is what the people of Scotland and the bulk of their representatives want, then why do not the rest of us, in the interests of the rest of the UK that we represent, let them have it, provided that we have a guarantee that we will not have to bail them out?
I do not accept the hon. Gentleman’s argument. A £10 billion shortfall in spending in Scotland would affect every school, every hospital, and every family by £5,000. I am not going to countenance that, and I am not going to support any amendments that would promote it.
We have had a lengthy discussion on full fiscal autonomy.
I will. [Hon. Members: “Oh!”] I will take my hon. Friend’s intervention because he proposed an amendment.
Let me be quite clear: those of us who propose full fiscal autonomy and the scrapping of the Barnett formula are also arguing that there should be a block grant based on Scotland’s needs and not on England’s spending, so that there is a real Parliament making real decisions, which is what the Scottish people want.
I have noted what my hon. Friend has said. At times today, I am sure that he will have been an honorary member of Team 57.
I want to make very clearly a point that echoes the evidence I gave to the Select Committee chaired by the hon. Member for Nottingham North (Mr Allen). I regard a Scottish Parliament as a prerequisite of a United Kingdom. There will not be a United Kingdom if there is not a Scottish Parliament. I can understand why there is a lot of debate about the exact wording, and I will continue to listen to it, but I am absolutely clear that without a Scottish Parliament there will not be a United Kingdom, and that it is not sustainable to argue about lots of preconditions on that basis.
I thank the Secretary of State for listening to the proposal by the Political and Constitutional Reform Committee. Will he take away the idea that what he is saying are to be in the Bill, in so many words? What those words are to be should be left to him, and perhaps he can return to that on Report.
I said that I would reflect on a number of the issues raised by the right hon. Member for Orkney and Shetland (Mr Carmichael) relating to proposals by the Law Society of Scotland. Among those is the debate on the wording currently in part 1, and we will certainly look at that.
I do not accept amendments 58 and 59 because they refer to the term “constitution” whereas clause 1 refers to the term “constitutional arrangements”. The term “constitutional arrangements” is used to reflect the fact that the United Kingdom does not have a written constitution. That is a well-established constitutional arrangement of which a Scottish Parliament is a crucial and enduring part.
In new clause 2, the hon. Member for Edinburgh South (Ian Murray) proposes a constitutional convention. I have said at this Dispatch Box previously that I, and this Government, do not support a constitutional convention for reasons that have been well rehearsed, not least because—on this one matter I am in agreement with the Scottish National party—it would slow down the progress of this Bill, which I am committed to taking through Parliament as quickly as possible.
Other matters have been raised and we have debated them fully but they do not fully relate to the Bill. On that basis, I propose that we move to vote on the amendments.
I am mindful of the fact that we have spent a considerable amount of time on this group of amendments, so I will not detain the Committee for long at this stage.
We have had a very good debate; in fact, two very good debates. On the first, there is among the three Opposition parties a broad measure of consensus that the Bill is capable of improvement. I will hold the Secretary of State to his word when he says that he will take that away and look at it. I remind him that while he might win a majority quite easily in this House, the Bill will also be scrutinised in the other place. I urge on him further consideration and suggest that the proposals brought forward by me and others tonight—I do not intend to press mine to a vote, but others who choose to do so will have my support—are reasonable.
I was very disappointed by the Secretary of State’s response on the constitutional convention. Ultimately, if we are to continue with this Union, a federal structure is inevitable. That will have to be grasped sooner or later, and the way in which that will be done is through the calling of a constitutional convention.
There has not been the same level of consensus on our other debate about the proposals for full fiscal autonomy. It has not been a particularly good debate: it has been characterised more by the heat it has generated than the light. Like the hon. Member for Edinburgh East (Tommy Sheppard), I favour the idea of evidence-based policy. I am not without sympathy for those on the SNP Front Bench when they say that they could do things differently with the extra powers that would be given to them. However, to simply say that it could all be done by generating extra economic growth is not good enough.
The hon. Gentleman’s point of order is noted.
I am happy to respond to the points made and to restate, as I did on the previous group, that I will be meeting the Scottish Parliament’s Devolution (Further Powers) Committee next week, which will be an opportunity to explore some of the issues it raised in its report.
The Government’s starting point is that the Smith commission’s intention was not that the current constitutional position should be changed. Instead, the commission’s intention was that legislation should accurately reflect the political understanding of the convention, and that is exactly what I see the clause as doing.
Currently, the Government do not normally legislate in devolved areas without the consent of the Scottish Parliament. Clause 2 sets out that practice. In doing so, it puts on a statutory footing a convention that has been consistently adhered to by successive United Kingdom Governments. I understand the desire to put beyond doubt that we will seek the consent of the Scottish Parliament when legislating on devolved matters. However, in effect, amendment 56 seeks to limit the sovereignty of this Parliament by removing the word “normally” to state that the Parliament of the United Kingdom cannot legislate with regard to devolved matters without the consent of the Scottish Parliament.
In reality, the amendment would directly contradict section 28(7) of the Scotland Act 1998, which states that the section, which relates to Acts of the Scottish Parliament,
“does not affect the power of the Parliament of the United Kingdom to make laws for Scotland.”
The amendment would radically alter the way in which the practice was intended to operate as envisaged by Lord Sewel.
The Secretary of State is making a compelling case for codification. On a number of occasions and in different ways, the House has limited its sovereignty, particularly in relation to the European Communities Act 1972. As I recall, there is judicial authority on that from the Factortame case. Surely he accepts that the mere act of putting a convention on a statutory footing is a change. For that reason, the adherence to the word “normally” is not appropriate.
It is not a change to how things are normally done, but a change to how they are set out on the face of legislation. As part of the Smith process, it was clear that people wanted the convention set out in the Bill, but I do not accept that they want a change to the convention as envisaged by Lord Sewel.
Surely not even the Smith commission wanted mere commentary to be dressed up as a clause. That is all clause 2 is—mere commentary. There is no binding or cogent constitutional governance in it.
I answered the hon. Gentleman’s questions when he was part of the Constitutional and Political Reform Committee, and I understand the strength of his views, but it was the view of the Smith commission that the convention should be set out in such a Bill, which is what the UK Government are doing. It is a fundamental principle of United Kingdom constitutional law that the United Kingdom Parliament is a sovereign legislature. The people of Scotland voted last September to remain part of that United Kingdom. Therefore, it is right that this Parliament, while respecting the Scottish Parliament and its right to legislate, continues to be able to legislate for all matters without restriction on its sovereignty.
Furthermore, I believe amendment 56 is unnecessary. The Bill adopts the language that formed the basis of the Sewel convention. When Lord Sewel said that he would
“expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament”,
he did not intend his words to carry a technical meaning. The same expectation exists in clause 2. The wording used will take the convention’s ordinary English language meaning.
The Smith commission recommended that the Sewel convention be put on a statutory footing—no more, no less. That is what the Bill seeks to achieve. Accepting amendment 56 would be to go further than was recommended, radically alter how the convention was intended to operate, and attempt to limit the authority of the UK Parliament. For those reasons, I urge hon. Members to resist it.
Amendments 41 and 45 seek to make additional stipulations to the Sewel convention. I reiterate that the Bill already establishes that the UK Parliament will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament. That convention operates effectively at present. The amendments would add unnecessary bureaucracy to the procedure. I do not believe that the statutory requirements that would be placed on Members of the UK Parliament by the amendments would add any value to a process that operates well, and that is being placed on a statutory footing by the Bill.
On amendments 19 and 20, and new clause 10, as I have said, the Bill adopts the language that formed the basis of the Sewel convention. As I said in previous remarks, when Lord Sewel said that he would
“expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament”,
he did not intend those words to carry a technical meaning. We have established that the Bill clearly states that the UK Parliament
“will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament.”
That is what the well-established Sewel convention does, and it has been consistently adhered to by successive UK Governments. We have had more than 15 years of good practice of the convention. It has not been breached. In the context of my earlier remarks, I do not accept that it could be. I believe that that current good practice will continue.
The hon. Member for Nottingham North (Mr Allen) referred to the Government’s plan to reform the Human Rights Act and its incompatibility with the devolution settlements. Amendment 5, which he tabled, would make it more difficult for the UK Parliament to repeal the Act. Let me be clear about the Government’s intentions: we are committed to human rights and have pledged to bring forward proposals for a Bill of Rights. The protection of human rights is vital in a modern and democratic society. This Government will be as committed as any to upholding those human rights. The purpose of a Bill of Rights is not the diminution of rights, but to reform and modernise our system, and to restore credibility to the human rights legal framework.
The Government know that our proposals for reform are likely to be significant. As such, we will consult widely on the reforms. We are aware of the potential devolution implications of reform and will engage with the devolved Administrations as we develop proposals. We are currently developing our proposals and it would not be sensible to prejudge that process at this stage through the amendment. I hope the hon. Gentleman reconsiders his statement that he wishes to press it to a Division.
I believe I have addressed all the proposals. The Government are not persuaded by them at this stage but, as I have indicated, I will discuss the report of the Scottish Parliament Devolution (Further Powers) Committee when we meet next week.
We shall not be pressing any of our amendments to a vote. I note that the Secretary of State has said that he is not convinced “at this stage”, and I take that to mean that he is open to persuasion and willing to listen. I hope he will be persuaded by arguments that will be put to him in the other place, and, indeed, by Members of the Scottish Parliament, which he will visit shortly.
There is something of a mismatch between theory and practice here. Theory has it that this Parliament is absolutely sovereign, but, in practice, the very existence of devolution puts constraints on that sovereignty, as does the very fact that we are members of the European Union. I think that we have reached a point at which that needs to be legally recognised. There is no doubt that the word “normally” is legally imprecise, and if it ever arose in a court of law, enormous difficulties would result because of that conflict between theory and practice.
I take on board what the Secretary of State has said, and I hope that we shall see some movement. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3
Elections