Lockdown: Economic Support

David Mundell Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Steve Barclay]

The hon. Lady started by saying that we were disrespecting parts of the United Kingdom. I was on a call yesterday with the Chancellor of the Duchy of Lancaster, the First Secretary of State and the Home Secretary and others, with the First Minister of Scotland, the First Minister of Wales and the Deputy First Minister of Northern Ireland as part of our regular dialogue. That continues across the United Kingdom and, indeed, at official level. The chief medical officers liaise extremely closely together.

Secondly, the hon. Lady’s various grievances are somewhat both surprising and disappointing when the Government have listened and introduced, for the first time, an up-front Barnett guarantee that has provided the Scottish Government with £7.2 billion of funding at an earlier point than would traditionally be the case, recognising the volatility of the situation with covid. It would be good for her to recognise that that is unprecedented and different. Again, on the call yesterday, I signalled to the First Minister that this week we would update with a further uplift—following our unprecedented action—to give more clarity on the Barnett guarantee and the consequentials flowing from that.

Thirdly—[Interruption.] The hon. Lady keeps chuntering. Many of the schemes are UK-wide ones: we have extended the loans, the coronavirus job retention scheme and the self-employed income support scheme. Those can be delivered through the broad shoulders that the United Kingdom offers. It is true that, through that capacity to act as one United Kingdom, we have been able to protect up to 1 million jobs in Scotland. It is important that we work together. That is why we were engaging with the Scottish Government yesterday. More can be achieved if the Scottish Government and the UK Government work together. That is how, to date, we have protected up to 1 million jobs, and that is the best way forward.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

As we have just seen, uncertainty in Scotland is always a basis for grievance for the SNP. My right hon. Friend can end that uncertainty simply by clarifying that, should the scientific evidence demand a further lockdown in Scotland, the furlough scheme at 80% will be available to protect jobs in Scotland.

[Steve Barclay]

My right hon. Friend is right to pick up on that grievance culture. Through our ability to act on a UK basis, we have been able to offer the unprecedented support that we have to date. Furlough has always been a UK-wide scheme and, as the Prime Minister said, the Government will always be there to provide support to all parts of the United Kingdom.

Economic Outlook and Furlough Scheme Changes

David Mundell Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

I am surprised that the hon. Lady should say that. As I recall, she and I have had two telephone conversations with colleagues in which we have discussed in detail the strengths and weaknesses and the potential to improve both the self-employed scheme and the job scheme. I do not recognise the view that she takes at all. It is in the nature of these schemes to seek to be as comprehensive and swift as possible, which, I think I recall, was exactly the language used by the OECD in describing the Government’s response.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

Scotland has benefited from the broad shoulders of the United Kingdom, with well over £10 billion of resources coming to Scotland to help fight this pandemic, from the furlough scheme to Barnett consequentials. Will the Minister commit to continue a UK-wide approach in tackling the pandemic, which will have to recognise that different parts of the United Kingdom will see recovery on different timescales and, of course, will see different sectors needing different levels of support?

[Jesse Norman]

My right hon. Friend is right. I defer to no one in my admiration for Scotland as a country and for its history and people. It is true that in this crisis, as in the crisis of 2007-08, there has been enormous benefit to Scotland from being embedded within a wider Union, where the collective security and financial strength of all can be drawn on. In the case of Scotland, the self-employment scheme alone has 146,000 claims and the job scheme some 628,000 claims, and that amounts to an enormous package of UK Government support for the people in Scotland, and I am very proud of that.

Finance Bill

David Mundell Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con) [V]]

It is a real pleasure to be able to connect to you and to the House of Commons today, Madam Deputy Speaker, and to take part in the Second Reading debate on the Finance Bill. I wish to begin by echoing comments made by the Chair of the Treasury Committee in relation, first, to those who receive a significant part of their income through dividends. I believe that there must be the possibility for the furlough scheme to accommodate a calculation of income that is based on those dividend receipts—that is used for many other income calculations. The second point is that we need to ensure that the banks are playing their part. I receive a lot of emails from the banks telling me what a great job they are doing, but I receive even more emails from constituents about the bureaucracy and difficulty that the banks are putting their way in respect of securing not just the loan guarantees, but wider loans.

I wish to raise two specific points, one of which is access to cash. I raised that in my contribution to the Budget debate on 16 March, which seems like a lifetime ago. The second relates to the Roadchef employee benefits scheme, which the hon. Member for Glasgow Central (Alison Thewliss) mentioned and which is particularly relevant in my constituency. We are seeing during this crisis that access to cash is even more important than it would be in so-called “normal” times. People need cash, often to get others to buy their weekly shop or to get them to do other tasks, or simply to have the reassurance of having cash at home in order to meet unforeseen circumstances. That is why this remains such an important issue.

As I highlighted when I spoke previously, the average cash transaction is £10 or £20. When someone is paying £3 to get £10, that creates a huge distortion in the ability to have cash. It impacts on the most vulnerable in our communities, and that is why I welcomed the fact that the Chancellor has said that he will legislate to ensure access to cash, but that has to be on a fair basis. It has to be on the basis that there are not disproportionate charges and that cash is accessible across the whole of the United Kingdom, particularly in rural areas.

I represent one of the largest rural constituencies in the UK, so I welcome the fact that LINK has made some announcements on how it might approach the issue. I also welcome the fact that NoteMachine, the second largest provider of cash machines—it does so on a charge basis—has indicated that it would go back to free charging if the significant change of a return to the previous interchange rate was put in place. I therefore urge the Chancellor and Treasury Ministers to actively consider making that change, which would make a real and significant difference to people’s ability to access cash machines and to do so on a free basis. The crisis has shown more than ever the need for people to be able to access cash.

I will move on to the issue of the Roadchef employee benefits trust. I will not give a detailed outline of the issue, because it has a long history. I know that the Financial Secretary was able to meet the chairman of the trustees and the hon. Member for Airdrie and Shotts (Neil Gray), who has done so much to pursue the issue. I have a service station in my constituency that you may have used yourself, Madam Deputy Speaker. It is now called Annandale Water, but it was previously under the branding of Roadchef. Roadchef set up the first tax-exempt, all-employee share ownership scheme of its kind, but unfortunately the former chief executive of Roadchef plundered that trust, causing all sorts of difficulties, not least that it was not registered in—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I hope that the right hon. Gentleman is drawing to a close.

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[David Mundell]

I am coming to a close. The trust was not registered. The funds cannot currently be distributed on a tax-free basis. I hope, either by an amendment to the Finance Bill or through the Financial Secretary’s good offices with HMRC, that issue can be satisfactorily resolved.

Economic Update

David Mundell Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

Depending on the particular circumstances of the person who is self-employed, they may well qualify for ESA, which is also available from day one now, rather than day eight.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I was very pleased this evening when Nicola Sturgeon confirmed to me promptly that every penny of the likely £1.9 billion that the Scottish Government will receive as a result of today’s announcement will go directly to businesses and individuals. It is very important that we have that common approach across the United Kingdom from Governments, but it is also important that we have a common approach from banks. The Chancellor has referenced the banks in relation to his loan and grant schemes, but many businesses have existing loan arrangements with the banks. What confirmation does he have from the banks that they will not seek to change those arrangements or to take advantage of the situation where people may be able to get Government money to repay those loans?

[Rishi Sunak]

I can tell my right hon. Friend that we have had extensive discussions with the banks just this week, and they have outlined their forbearance measures. I very much expect them to honour those commitments. He is absolutely right with his point that we will get through this as one United Kingdom.

Scotland Bill

David Mundell Excerpts

Monday 29th June 2015 Commons Chamber

[Nigel Mills]

I have tried to convince the Treasury Minister, my hon. Friend the Member for South West Hertfordshire (Mr Gauke), of various tax reforms over the last five years with, I would have to say, somewhat limited success, so I am not sure my words will help. If we are to achieve a lasting settlement of our constitution, having these tax rules in the right place with everyone understanding them and believing them to be fair will be extremely important. I do not think my constituents will understand how Scotland can set a different rate of income tax from what they pay if Scottish MPs are still able to vote on the English rate of income tax because it applies to passive income and dividend income. I suspect we will get into a constitutional nightmare, and I can foresee a situation in which Scotland chooses a lower rate of income tax than we have in England, and the English taxpayer will, rightly or wrongly, see a subsidy going from England to Scotland through the Barnett formula and then SNP MPs coming here and voting for a higher rate of income tax than their constituents are paying. That is the nightmare we would hate to see.

We need to have a clear devolution of taxes and responsibility, not what I fear we have here: a halfway fudge that we will have to try to fix in a few years’ time.

[The Secretary of State for Scotland (David Mundell)]

May I start by agreeing with the hon. Member for Edinburgh South (Ian Murray) that we should put on record our thoughts for those people who have been caught up in the events in Tunisia, particularly those from Scotland who have perished? Although our debate has been curtailed today, it is right that that matter has been given such due consideration in this House.

I say to the right hon. Member for Orkney and Shetland (Mr Carmichael) that I have considered the various issues raised in the House in the first part of our Committee stage, and I will continue that approach through the further days in Committee.

[Tommy Sheppard]

rose—

[David Mundell]

I would like to make a little progress.

Since the Committee last met, I have had the opportunity to appear before the Devolution (Further Powers) Committee—to give it its full title—and to listen to its views and explain the Government’s stance. I can assure the hon. Member for Dundee East (Stewart Hosie) that that Committee will continue to play a full part in my consideration of the Bill as it progresses through the House, and I have assured the convener of that.

I had a very useful meeting with the Deputy First Minister to look at how we move forward, particularly in relation to the fiscal framework, and I am going to disappoint the hon. Gentleman, but in a good way, because the criticism that was forthcoming from the Committee to both me and the Deputy First Minister was that we both said the same thing to the Committee, which was that we are not going to give a running commentary on the negotiation of the fiscal framework. What I can say is that the list of issues that the hon. Gentleman referred to in his contribution will be part of the discussion of the fiscal framework. We will of course keep this House updated from a UK Government perspective, but it will be for the Scottish Government to keep the Scottish Parliament updated.

I am pleased to start with the clauses on income tax in today’s debate. These are often overlooked, meriting only a few lines in the comments received on the Bill from both Parliaments and from the Scottish Government, but that is because, as has been said, they command widespread support as delivering the central aspect of the Smith agreement in full.

The changes made by clauses 12, 13 and 14 will give unprecedented flexibilities to the Scottish Parliament on income tax and are a significant milestone in Scotland’s devolution journey within the UK. The Scottish Parliament will be able to set income tax rates and thresholds for earned income. This includes the ability to introduce new bands.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

Is the right hon. Gentleman aware of the most recent analysis by the Fraser of Allander Institute, written by Dr Jim Cuthbert? This is not an issue about the individual devolution of income tax; it is about the interaction that will occur between the way in which income tax is proposed and the Barnett formula and the Government’s proposal with the Holtham index, and the conclusion of that analysis is that, when likely shifts in relative population and shifts in relative tax base are taken into account, this will create significant negative dynamic effects. In other words, it will be all over the place and lack consistency, and it will be a source of conflict down the years. Surely, that needs to be avoided by taking a stronger look at making sure the right income tax powers are devolved?

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[The Temporary Chair (Mr David Crausby)]

Order. May I remind the Committee that interventions should be brief?

[David Mundell]

Obviously I am familiar with Cuthbert’s views on a range of issues, and many of the points the hon. Gentleman refers to will indeed be dealt with in the fiscal framework, which is why that is important for delivering a stable settlement.

The Scotland Parliament will retain the receipts from the income tax it is responsible for. This represents a significant devolution of powers, with Scotland retaining around £11 billion of income tax receipts. That accounts for over 90% of income tax receipts collected in Scotland. This gives Scotland greater fiscal autonomy, with incentives to increase employment and increase wage growth.

I emphasise to Members that there are no restrictions on this power. If the Scottish Parliament wants an income tax system with a dozen different rate bands, these powers allow it to do that. Similarly, if it wants to set a zero rate of income tax, it can.

As I said on Second Reading, the devolution of the rates and bands of income tax means we will correct a fundamental imbalance in the devolution settlement. Since 1999, the Scottish Parliament has debated how public money should be spent but not how it should be raised. The Scotland Act 2012 started to change that, giving the Scottish Parliament more tax-raising powers. The Bill goes much further.

As things stand, the Scottish Government still receive the vast bulk of their budget in a block grant from this Parliament and choose how to distribute that budget according to their priorities. When the UK Government have taken difficult decisions to bring our public finances back into order, the Scottish Government have often condemned us for inflicting cuts. Although I believe those spending reductions were necessary to secure our economy and are far preferable to increasing taxation on working families in Scotland, it is true that the Scottish Government took a different view. These clauses will allow them to do something about it.

With control of the rates and bands of income tax in Scotland, the Scottish Parliament will raise over half the money that it spends. If the Scottish Government want more money to spend on their priorities, such as higher welfare payments, they will be able to increase taxes to raise that money. However, they will have to justify that spending to the hard-working men and women in Scotland who will be paying for it out of their wages every month.

[George Kerevan]

Following on from what the Secretary of State is saying, how could the Scottish Government ever be sure of their tax yield if another House were setting the threshold?

[David Mundell]

The Scottish Government already have to manage their finances by building in estimates of revenue. That is part of the system in which we operate and part of the decision to have a United Kingdom-wide tax. I will come on to that point in a moment.

The Deputy First Minister has confirmed that the Scottish Government are already considering using the tax powers that they will shortly receive under the Scotland Act 2012 to put up income tax. The powers contained in these clauses will increase the scope for action considerably. With the SNP in government, Scots might pay the highest income tax in the UK. Perhaps the party will dust down its old “penny for Scotland” policy, although now, with inflation, it might need a little more.

[Stewart Hosie]

Will the Secretary of State please tell the House which person in the Scottish Government has suggested that income tax is going up in Scotland?

[David Mundell]

The Deputy First Minister, Mr John Swinney.

Ruth Davidson, however, has set out the Scottish Conservative position by saying that Scotland would never have higher rates of income tax than the rest of the UK. If people elect Scottish Conservative MSPs next May, that is what they will get. Scots voted decisively to remain within a United Kingdom. The UK is more than just a name and a flag; it is a social and fiscal union in which risks and rewards are pooled and shared. The Smith commission looked closely at a range of tax powers and agreed on a package of devolution that enhances Scotland’s place within the United Kingdom. It strikes the right balance, by empowering the Scottish Parliament, while maintaining the UK’s strength and coherence. There is a good reason for transferring every power that we are devolving in the Bill, and a good reason for keeping in reserve everything that we are not devolving.

Turning to amendment 124, devolution of income tax is a significant step, but it is important to remember that in the independence referendum only last September, the Scottish people decisively opted for the security of being part of the UK family of nations, and part of that is a single, cohesive income tax system. That is why HMRC will administer Scottish income tax for the Scottish Parliament as part of its UK-wide management of income tax, thus minimising the burdens on employers and individuals. It is also why the Smith commission—which it is important to remember all parties present in the Scottish Parliament signed up to—specifically decided after careful consideration not to devolve the personal allowance.

[Tommy Sheppard]

Colleagues here are finding it incredibly depressing that on this, the third day of our debates on this important Bill, the Secretary of State still seems to be resisting completely any amendment to his point of view. What parallel universe is he living in if he thinks that the will of his party, which has one representative in Scotland, should prevail over the wishes of the majority of the electorate in Scotland, who voted decisively for our party and for more powers?

[David Mundell]

The world in which I live is one in which I have had a very productive discussion with the Deputy First Minister of Scotland on how we should take forward these financial measures and reach agreement on a package that will provide stability and financing for the Scottish Parliament within the United Kingdom. That is what I am committed to doing. Of course I will listen to the views expressed in amendments tabled in this House, and that is what we are continuing to do today. It is for those who are tabling amendments to make a case for their being accepted.

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[David Mundell]

As my hon. Friend knows, we had lengthy discussions in the Smith commission on the balance between the respective responsibilities, and it was agreed that while income tax should remain part of the wider UK tax regime, these specific significant powers would be moved to the Scottish Parliament. I believe that that creates the balance we were seeking.

[Pete Wishart]

Will the Minister give way?

[David Mundell]

No, I will not at this stage—[Interruption.] The hon. Gentleman is one of the most frequent contributors to debates in the House, and he does get to have his say, although not as much as his former leader does. The right hon. Member for Gordon (Alex Salmond) is a very frequent contributor.

The SNP’s new clause 54 goes further than amendment 124, tabled by my hon. Friend the Member for Gainsborough (Sir Edward Leigh). However, to go further than the powers set out in the Bill would break the concept of shared tax and be complicated for individuals and employers with activity on both sides of the border, as they would have to understand and comply with two potentially entirely different tax systems. The Law Society of Scotland agreed with us, saying of the proposed change:

“The administrative burden would increase considerably. The complexities regarding the UK savings and investment market may also be particularly problematic”.

That would not be in keeping with a stronger Scotland within the United Kingdom. It is not what the people of Scotland voted for last September, and I cannot accept the new clause.

On new clause 32, tabled by Opposition Front Benchers, I hope that I can provide some reassurance to the House. The new clause is intended to provide the House with a report on the implementation of the Scottish rate of income tax and the further income tax powers in the Bill. That is a laudable aim, but I can reassure hon. Members that current legislation already provides for annual reports on the implementation of devolved tax powers to Scotland.

Section 33 of the Scotland Act 2012 requires the Secretary of State and Scottish Ministers to lay before both Houses of Parliament and the Scottish Parliament annual reports that broadly cover the areas suggested in the new clause. Three reports have already been produced, the most recent in March, and HMRC’s accounting officer for the Scottish rate and the Comptroller and Auditor General have both given evidence to the Scottish Parliament on the progress of tax devolution to Scotland. Of course, Westminster Committees have the opportunity to call for evidence, too. Alongside that existing requirement and to ensure that Parliament can have confidence in the implementation and operation of the Scottish rate, the Comptroller and Auditor General is required to report annually on HMRC’s administration of the Scottish rate.

I can also tell the hon. Member for Edinburgh South that I am satisfied that adequate resources are being brought forward to deal with the issues relating to the transfer of these powers to Scotland and to HMRC’s involvement in that process. I would further reassure Members that reporting requirements are a feature of the negotiations currently under way between the two Governments on the fiscal settlement that accompanies the Bill.

I have set out the rationale behind the Government’s drafting of the Bill, which, as has been widely acknowledged, fully implements the Smith commission’s recommendations on income tax. The fiscal framework will be an important part of the discussions, and we are giving this exercise the focus and priority that it deserves.

[Sir Edward Leigh]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 12 to 14 ordered to stand part of the Bill.

Clause 15

Assignment of VAT

Question proposed, That the clause stand part of the Bill.

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[Stewart Hosie]

So we have confirmation—Labour and UKIP hand in hand, empowering the Tories to run the rule over Scotland again.

As for new clause 21 on a Scottish OBR, we already have one—it is called the Scottish Fiscal Commission. The consultation on its expanded power closed on Friday. One would have thought that Scotland’s sole Labour MP might actually have known what was going on.

New clause 33 would have the Scottish and UK Governments enter into an economic agreement that set up a plan for the implementation of full fiscal autonomy and establish a framework within which the two Governments would co-ordinate their economic and fiscal policies in the context of full fiscal autonomy. That would mean the Scottish Parliament and the Scottish Government having competence for determining revenues raised in Scotland through taxation and borrowing, and for all of the spending, paying compensation to the UK for shared services. This is the right approach to take. I am just disappointed that we did not have proper time to debate it rather than being subject to the nonsensical rant and talking Scotland down by the so-called shadow Secretary of State. By taking responsibility for key areas of Scottish life, we can improve the Scottish Parliament’s ability to deliver real progress for the Scottish people. New clause 33 does that. It rejects the miserablist approach of the Labour party, and I commend it to the Committee.

[David Mundell]

I do not need a commission to tell me what a disaster full fiscal autonomy would be for Scotland. The hon. Member for Dundee East (Stewart Hosie) set out the facts, and the facts are clear—a £10 billion black hole for Scottish taxpayers to fill. We do not need a commission to tell us that.

I do not accept the new clause on a Scottish OBR, because one thing that the hon. Gentleman said is correct—it is for the Scottish Government to determine for the people of Scotland how they will ensure independent oversight of fiscal policy. The UK Government would like legislation brought forward by the Scottish Government to be consistent with OECD principles for best practice in independent fiscal institutions. We therefore look to have those discussions during the negotiation of the fiscal framework.

I therefore reject the new clauses and propose that we pass the clauses as stated.

Question put, That the clause be read a Second time.

Scotland Bill

David Mundell Excerpts

Monday 14th March 2011 Commons Chamber

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Now, then.

Clause 32 ordered to stand part of the Bill.

Clause 33

Maximum penalties which may be specified in subordinate legislation

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I beg to move amendment 31, page 25, line 31, leave out ‘the amount specified as’.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss Government amendment 32.

[David Mundell]

The Government have identified the need for these minor technical amendments to clause 33, which updates the maximum penalties that can be applied to criminal offences created in subordinate legislation made under the Scotland Act 1998. The amendments are sensible additions that will ensure consistency across the different legal systems within the UK. The first amendment is a minor technical amendment to ensure consistency in the terminology used to refer to fine limits for different jurisdictions, which are provided for in the amendments to section 113 of the Scotland Act made by clause 33.

The second amendment ensures that the correct terminology is used in relation to fine limits in section 113 for either-way offences created in relation to the law of England and Wales and Northern Ireland, with the statutory maximum rather than level 5 on the standard scale on summary conviction. Level 5 has meaning only in relation to summary-only offences by virtue of the definition in the Interpretation Act 1978. Clause 33, as introduced, makes this terminology change in relation to fine limits for Scots law offences, and the amendment makes the same change for offences that form part of the law of England and Wales and Northern Ireland.

The amendments will ensure consistency in the terminology used to describe the fine limits for offences created in the Scotland Act orders for each of the legal jurisdictions in the UK.

Amendment 31 agreed to.

Amendment made: 32, page 26, line 2, leave out from second ‘exceeding’ to end of line 3 and insert—

(i) in the case of a summary offence, level 5 on the standard scale,

(ii) in the case of an offence triable either way, the statutory maximum,’.—

(David Mundell.)

Clause 33, as amended, ordered to stand part of the Bill.

Clauses 34 to 37 ordered to stand part of the Bill.



Clause 38

Commencement

Amendments made: 65, page 28, line 5, leave out ‘made by statutory instrument’.

Amendment 66, page 28, line 9, leave out ‘made by statutory instrument’.—(David Mundell.)

Clause 38, as amended, ordered to stand part of the Bill.

Clause 39 ordered to stand part of the Bill.

New Clause 18

Orders

‘Any power to make an order conferred by this Act is exercisable by statutory instrument.’.—(David Mundell.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Abolition of regional members of Scottish Parliament

‘(1) The Scotland Act 1998 is amended as follows.

(2) In section 1—

(a) in subsection (2) “Two members” is substituted for “One member”; and at the end there is inserted “save for those identified in paragraph 1(a) to (c) of Schedule 1, each of which shall return one member,”;

(b) subsection (3) is omitted.

(3) In section 5, subsections (1) and (3) to (9) are omitted.

(4) Sections 6, 7, 8 and 10 are omitted.

(5) In section 11, subsection (2) is substituted by—

“(2) A person is not entitled to vote as an elector in more than one constituency at a general election, and may cast no more than two votes at a poll for the return of constituency members.”.

(6) In section 12—

(a) in subsection (2), paragraphs (e) and (f) are omitted;

(b) subsection (3) is omitted;

(c) after subsection (4) the following subsection is inserted—

“(4A) The provision to be made under subsection (1) must include provision for—

(a) each elector to cast one or two votes of equal value, with no more than one vote to be given to any one candidate, in constituencies returning two members;

(b) the two candidates with the most valid votes to be elected in such constituencies.”.

(7) In Schedule 1—

(a) for paragraph 1 there is substituted—

“(1) The constituencies are—

(a) the Orkney Islands,

(b) the Shetland Islands

(c) the Western Isles [Na h-Eileanan An Iar], and

(d) the parliamentary constituencies in Scotland at the time of an ordinary or extraordinary general election for the Scottish Parliament, except the constituencies of Orkney and Shetland and Na h-Eileanan An Iar”;

(b) paragraphs 3 to 14 are omitted.’.—(Mr Donohoe.)

Brought up, and read the First time.

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[Mr Donohoe]

I am sure the hon. Gentleman knows that there are varying views on the subject, as there are on many subjects. As far as my constituents are concerned, however, there is no doubt: to a person, they support the argument that I am making tonight that there should be a fundamental change to how we elect our MSPs. There was immense resistance to the fact that the person who came fourth under first past the post was eventually elected to the Scottish Parliament. That seems to me to be wrong.

[David Mundell]

Will the hon. Gentleman give way?

[Mr Donohoe]

Oh, go on then.

[David Mundell]

The hon. Gentleman has been very consistent on this issue, and I respect his views even though I do not necessarily agree with him. However, I am confused about the Labour party position. For many years, those of us who were list MSPs heard the arguments that he is making about how the list was an assisted places scheme for people who failed to be directly elected under first past the post. Now I find that Labour party first-past-the-post candidates are on the list, and some of them are even topping lists when there is a fear that they will lose in the first-past-the-post constituency. How does he feel about that?

[Mr Donohoe]

I had the greatest respect for Phil Gallie, the former MP for Ayr, who was also a list MSP. He hated every minute of his time in the Scottish Parliament, because he knew that as a list Member, he had absolutely no powers. I will develop that argument later in my speech, but even Tory MSPs were opposed to the concept of the list system.