Government’s Legislative Programme (Scotland) 2016-17

David Mundell Excerpts

Thursday 19th May 2016 Written Statements

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

Following the passage of the Scotland Act 2016, the Scottish Parliament is now poised to become one of the most powerful devolved Parliaments in the world. Ensuring the smooth transfer of those new powers will be a major priority for the UK Government over the next parliamentary Session and beyond.

A total of 13 of the 21 new Government Bills for this Session of Parliament contain provisions that apply in Scotland, either in full or in part. Elements of others may extend later depending on discussion with the Scottish Government.

The Government’s legislative programme has three clear aims: to deliver security for working people across our country, to increase the life chances for the most disadvantaged, and to strengthen our national security. Some of the Bills announced yesterday apply across the UK, while others cover areas where responsibility is devolved to the Scottish Parliament.

UK legislation on the digital economy will enable the building of world-class digital infrastructure including fast broadband and mobile networks, as well as helping to support new digital industries.

A new Lifetime Savings Bill will create a new help to save scheme to support those on the lowest incomes to save and also a new lifetime ISA, providing savers with a bonus on savings that can be used for a first home, or retirement, or both.

A Better Markets Bill will give UK consumers more power and choice, open up markets and make economic regulators work better. We will also take forward further reforms in a Pensions Bill that will provide greater protections for people in master trusts and remove barriers for consumers who want to access their pension savings flexibly.

This statement provides a summary of the new Government legislation for 2016-17 and its application to Scotland. It does not include draft Bills.

In line with the Sewel convention, the Government will continue to work constructively with the Scottish Government to secure legislative consent motions where appropriate.

The Bills listed in section 1 will apply to Scotland, either in full or in part. Section 2 details Bills that will not apply in Scotland, though some elements could be extended later following discussion with the Scottish Government.

Section 1: Legislation applying to the United Kingdom, including Scotland (either in full or in part);

Better Markets Bill

Criminal Finances Bill

Lifetime Savings Bill

Modern Transport Bill

Overseas Electors Bill

Pensions Bill

Small Charitable Donations Bill

Cultural Property (Armed Conflicts) Bill

Digital Economy Bill

Wales Bill (as a constitutional bill this extends to the UK, but policy will impact on Wales)

Higher Education and Research Bill

Neighbourhood Planning and Infrastructure Bill

Bill of Rights

Section 2: Legislation that will not apply in Scotland, though some elements could be extended following discussion with the Scottish Government.

Counter-Extremism and Safeguarding Bill

NHS (Overseas Visitors Charging) Bill

National Citizen Service Bill

Bus Services Bill

Children & Social Work Bill

Education for All Bill

Local Growth and Jobs Bill

Prison and Courts Reform Bill

[HCWS4]

Scotland Bill

David Mundell Excerpts

Wednesday 23rd March 2016 Commons Chamber

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

I beg to move, That this House agrees with Lords amendment 1.

[Mr Deputy Speaker]

With this it will be convenient to discuss Lords amendments 2 to 62.

[David Mundell]

This is a truly significant day for Scotland. If this Bill completes its parliamentary progress, it will add to the already extensive responsibilities of the Scottish Parliament a range of important new powers. It provides even greater opportunities for the Scottish Government to tailor and deliver Scottish solutions to Scottish issues. The Scottish Parliament that returns in May will be a powerhouse Parliament that has come of age. Crucially, it will be much more accountable to the people who elect it, which is the hallmark of a mature democratic institution.

I am pleased to say that Lord Smith of Kelvin has confirmed that the Bill puts into law the agreement that the five main political parties in Scotland reached, and that the fiscal framework that was agreed means that the recommendations of his commission have been delivered in full.

Last week, the Scottish Parliament debated the motion on whether to grant legislative consent to the Bill before us today, and the agreement was unanimous. Deputy First Minister John Swinney remarked:

“The Smith process delivered an agreement for additional powers that—if they are used in the right way—can benefit the people of Scotland.”—[Scottish Parliament Official Report, 16 March 2016; c. 3.]

I agree with him wholeheartedly on that.

The debate last week demonstrated the consensus among all parties in Scotland that these new powers present a tremendous opportunity for Scotland. That was clear in their unanimous vote to grant legislative consent to this Bill. This process goes to show that both of Scotland’s Governments and both of Scotland’s Parliaments can work effectively together in the interest of the people in Scotland and right across our United Kingdom.

No individual or party held a monopoly of wisdom on how the Smith agreement might best be translated into legislation. Many people, both inside and outside this Chamber, have contributed to the Bill as it stands before us today. I thank hon. Members and noble Lords for their contributions as the Bill passed through this House and the other place.

[John Redwood (Wokingham) (Con)]

I am grateful to the Secretary of State for giving way. When this important work was being done, there were obvious and big consequences for England. Which Minister or Ministers spoke for England during the negotiations?

[David Mundell]

My right hon. Friend has asked that question before. This legislation has been debated on the Floor of this House and on the Floor of the other place. Extensive scrutiny of the Bill has taken place. Indeed, there has been the opportunity to scrutinise the fiscal framework as well, so extensive scrutiny has been delivered in relation to this legislation for the people of England, Wales, Northern Ireland and Scotland.

The Bill has been strengthened by the scrutiny it has received, and I am pleased that the amendments that I will cover shortly are a positive and constructive culmination of that process.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Going back to the previous intervention, it was obvious from the voices on the Scottish National party Benches that all the other Ministers, especially those from the Treasury, spoke for interests other than those of Scotland. Is it not time to move away from this form of devolution, whereby we effectively get the crumbs from the table at Westminster, to a model that Copenhagen shares with the Faroe Islands and Greenland, in which the larder is always open and they get to choose their own powers. Instead of taking the crumbs from Westminster, we should be able to take the powers that we want from Westminster when we want them.

[Hon. Members]

Hear, hear!

[David Mundell]

The hon. Gentleman’s colleagues may agree with him, but I do not think that the people of Scotland do. The people of Scotland made it very clear in September 2014 that they wanted to remain part of our United Kingdom, but they wanted a Scottish Parliament with enhanced powers, which is what this Government are delivering. The hon. Gentleman strikes a rather sour note, given the consensus within the Scottish Parliament and among his colleagues in the Scottish Government—a consensus that recognises the importance of the powers that will be delivered by this Bill if it completes its passage today.

I also acknowledge the work of the Committees of both the Scottish and the UK Parliaments, including those chaired by the hon. Member for Perth and North Perthshire (Pete Wishart) in this place, by the noble Lords, Lord Lang, Baroness Fookes and Lord Hollick, in the other place and by Bruce Crawford in the Scottish Parliament. The broad range of evidence and expertise they marshalled in the Bill’s scrutiny has improved it materially.

I also wish to thank the Deputy First Minister, John Swinney MSP, and Scottish Government officials for their always courteous engagement in this process. Scotland gets the best outcome when its two Governments work together.

I am truly grateful to all my officials at the Scotland Office and the officials from the 10 other Whitehall Departments whose hard work has got us to this stage. My noble Friends Lord Dunlop and Lord Keen of Elie have played an essential role in the Bill’s passage through the other place; I also commend Lord McAvoy and Lord Wallace of Tankerness in particular for their work. The origin of the Bill is the Smith agreement, and I once again pay tribute to Lord Smith of Kelvin and the representatives of all five of Scotland's main political parties for reaching an agreement that redefined the devolution settlement.

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[Angus Robertson (Moray) (SNP)]

I am delighted to follow the hon. Member for Edinburgh South (Ian Murray). It is a calumny that he has been described as negative. He spent much of his time at the Dispatch Box trying to be positive about the Scotland Bill. Parts of his speech were positive and we welcome that, and we also welcome the Secretary of State’s positive comments.

The Scotland Bill is an important step in extending the responsibilities of the Scottish Parliament and in Scotland’s journey towards greater self-government. That journey has quickened in pace since the Scottish National party was first returned to power in 2007. The Bill follows progress including the Scotland Act 2012, the independence referendum and the Smith commission itself. As Deputy First Minister John Swinney has said, the Bill delivers additional powers that can benefit the people of Scotland, including extended powers over tax, new powers over welfare, and responsibilities for the Crown Estate, tribunals and the licensing of onshore oil and gas activity.

The agreement on a fiscal framework published on 25 February increases the Scottish Parliament’s financial responsibility, is consistent with the Smith principles of no detriment, and is fair to the people of Scotland. As the Bill, including the amendments under discussion, provides useful powers and has moved towards delivering more of the recommendations made by the Smith commission reports, and as the agreement on the fiscal framework would be a fair basis for future funding consistent with the principles agreed by the Smith commission, the Scottish Government recommended that the Scottish Parliament should consent to the Bill. On 11 March 2016, the Devolution (Further Powers) Committee published its report on the Scotland Bill and the fiscal framework. Although it makes recommendations on specific policy areas, its overall conclusion is that the Scottish Parliament should consent to the Bill. That is what is before us. On 16 March, the Scottish Parliament consented to the legislative consent motion for the Bill.

The SNP has, of course, governed in Scotland for nine years, and every indication is that the people of Scotland have been delighted with the governance of Scotland under the SNP. I join the Labour party spokesman in paying tribute, as I did earlier today, to every outgoing Member of the Scottish Parliament—not least my right hon. Friend the Member for Gordon (Alex Salmond)—of all political parties, who have worked hard to achieve the best governance that decision-making closer to home can bring.

The outgoing Scottish Government have already acted with pace and creativity, in consultation with others, to be ready to use the limited powers—there are, of course, limits on the powers that are being devolved. That includes introducing a social security Bill within the first year of the new Scottish Parliament, to support the transfer and administration of Scotland’s new, devolved social security benefits. It also includes enhancing opportunities for employment and inclusive economic growth by improving support for people to move into employment through reform of the Work programme and linking employment programmes with training and education.

The outgoing Scottish Government have also committed to abolishing fees for employment tribunals, to reduce the burden of air passenger duty by 50%, and to promote equalities by taking early action on gender balance on public boards. They have also set out longer-term intentions for further income powers, are committed to a progressive taxation policy and have applied that to the decision on existing tax powers. Commencement of most of the new powers will take place in 2016, but new arrangements for the use of major new powers on matters including tax and welfare will not be in place before April 2017 following scrutiny of the proposals by the Scottish Parliament.

On 11 March 2016, the Scottish Parliament’s Devolution (Further Powers) Committee published its final report and gave its unanimous recommendation that legislative consent be given to the Scotland Bill. That was described as

“a significant milestone in a remarkable political process”

by Committee convener Bruce Crawford MSP. I pay tribute to him and his colleagues on the Committee, as I do to my hon. Friend the Member for Perth and North Perthshire (Pete Wishart), the Chair of the Scottish Affairs Committee, for their work. Although the Scotland Bill and the Smith commission could have delivered more effective and coherent powers to the Scottish Parliament, the Bill provides useful additional powers in important areas such as taxation and social security.

The UK Government amended the Bill to reflect some of the comments of the Scottish Government, the Scottish Parliament and its Committees. With an agreed fiscal framework that increases the Scottish Parliament’s responsibility and protects the Barnett formula, the Scottish Government recommended that the Scottish Parliament consent to the Scotland Bill. The final report of the Devolution (Further Powers) Committee also had some important things to say:

“There are still some areas where we feel that the Scotland Bill continues to fall short of the spirit and substance of Smith…Nevertheless, the Bill has been improved during its passage through our detailed scrutiny and we welcome the fact that the Secretary of State for Scotland has been prepared to listen to the evidence we have presented and improve the Bill in other areas…in our view, on the basis of the information provided to date by both governments, we are prepared to endorse the fiscal framework underpinning the powers to be devolved to Scotland as part of this Bill. Therefore, on balance, we recommend that the Scottish Parliament gives its legislative consent to the Scotland Bill.”

UK Government amendments that implement more of the Smith report, including the permanence of the Scottish Parliament, are welcome. However, it needs to be said that the Scotland Bill continues to fall short of the spirit and the substance of Smith in some areas, including the devolution of employment programmes and the future operation of the legislative consent provision. It is important to understand that the UK Government can still effectively veto the exercise of devolved powers over universal credit by inserting their own date for the changes to commence. The social security provisions on discretionary payments and assistance are still subject to restrictions, notably for those who are under sanctions. The Smith report was clear that the Scottish Parliament should have complete autonomy over devolved benefits. The Scotland Bill is many things, but it is not federalism or near-federalism. Anybody who understands the powers of the German or Austrian Länder knows that to be true. It is an improvement, and it is progress.

We in the SNP thank all in the Scottish Government who have been involved, especially John Swinney. We also thank those on the UK Government side, even though—this is an important rider—I see that there is a Minister from the Treasury on the Treasury Bench, and we all know that the Treasury wanted a fiscal framework that would have made Scotland worse off by £7 billion. Thank goodness for the efforts of John Swinney and colleagues in the Scottish Government. I would like to take the opportunity to thank my SNP MP colleagues, who have worked so hard on the Bill throughout the parliamentary process. In fairness, it is also right to place on record the fact that Members in the other place spent a lot of time on the Bill.

Most importantly, I thank all those in Scotland who have believed in more powers. They did not draw lines in the sand or say, “This far, and no further”, as others have done, even in the recent past. Thanks to all those yes voters and all those SNP voters, Westminster has had to take note. This is just the latest stage on Scotland’s journey, and there will be many more. We agree with the amendments, and we wish the Bill to proceed. That is exactly what will happen today.

[David Mundell]

I will not detain the House for long, but I want to respond briefly to some of the points that have been made.

I add my best wishes to all Members of the Scottish Parliament who are leaving at this election, particularly my colleagues and others who were elected to the Scottish Parliament alongside me back in 1999. A number of people who have served in Parliament throughout that period are leaving, and others who are standing in the election will be leaving, although not necessarily of their own accord. We should wish them well.

Inverness and Highland City Region Deal

David Mundell Excerpts

Tuesday 22nd March 2016 Written Statements

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

In March 2015, the Government announced their intention to negotiate an Inverness and Highland city region deal. As well as deals across England, this followed the successful agreement of a city deal in Glasgow and Clyde Valley. An Aberdeen city deal was announced on 28 January 2016.

I can today inform the House that the Government have reached agreement with the Scottish Government, the Highland Council and other partners on a heads of terms city region deal for Inverness.

This heads of terms city region deal agreement provides a transformative opportunity to position the area as a region of digital opportunity and strength, thereby enabling the highlands to be the best digitally connected rural region in Europe.

Central to this will be a significant funding package which invests up to £315 million of public money into the regional economy. As part of this funding package, the UK Government will commit up to £53.1 million, the Highland Council along with regional partners will commit up to £127 million and the Scottish Government will commit up to £135 million. This funding package will be provided over a 10-year period subject to detailed business cases, statutory processes and implementation plans.

The UK Government’s contribution to the fund will support a set of proposals from the region intended to enable the highland area to be the most digitally connected rural region in Europe by investing into extended digital coverage, including superfast broadband and mobile 4G connectivity.

It will also support a package of new innovation measures that builds on existing academic and industry expertise in Inverness, as well as business support networks across the highlands. This will include exploring ways to support a multi-disciplinary centre focused on the commercialisation of new medical products and technologies, and a northern Scotland innovation hub.

[HCWS638]

Points of Order

David Mundell Excerpts

Wednesday 24th February 2016 Commons Chamber

[Mr Speaker]

It is open to any Member who believes that he or she has made a mistake to correct the record voluntarily. It is not the responsibility of the Chair to arbitrate between competing claims about a sequence of events, and nor is it my responsibility to interpret what the Minister might have meant in responding to the hon. Gentleman at the time. The hon. Gentleman has made his point with force and alacrity—we would expect no less of him. If the Secretary of State wishes to respond, he is perfectly at liberty to do so, but he is under no obligation.

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

Further to that point of order, Mr Speaker. I have noted what the hon. Gentleman has said and will have the matter investigated.

[Mr Speaker]

The Secretary of State has kindly said that he will have the matter investigated. I ought to emphasise, for the avoidance of doubt, that he was not the Minister who answered in the debate. I hope that the hon. Member for Ross, Skye and Lochaber (Ian Blackford) is satisfied with his prodigious efforts for the day and that we might now move on to other fare. I know that he will be absolutely delighted that we can now move on to the ten-minute rule motion, to be put forward by his hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I am sure that he is sitting expectantly with that in mind.

Scotland’s Fiscal Framework

David Mundell Excerpts

Wednesday 24th February 2016 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement about the new fiscal framework for Scotland, which was agreed yesterday by the United Kingdom and Scottish Governments.

I begin by paying tribute to everyone who has worked so hard to arrive at this point: my right hon. Friend the Chief Secretary to the Treasury and the Deputy First Minister of Scotland, John Swinney, who have led these negotiations with skill; my colleague the Under-Secretary of State for Scotland, Lord Dunlop, whose contribution has been invaluable; and the dedicated teams of officials from Her Majesty’s Treasury and the Scottish Government who have worked tirelessly on behalf of their respective Governments. They can be proud of what has been achieved and the service they have given.

This is a truly historic deal that will pave the way for the Scottish Parliament to become one of the most powerful and accountable devolved Parliaments in the world. We have respected all the principles set out in the cross-party Smith agreement and delivered a deal that is fair for Scotland and fair for the whole United Kingdom. As Lord Smith said himself yesterday evening:

“When the Smith Agreement was passed to the Prime Minister and First Minister both gave their word that they would deliver it into law—they have met that promise in full”.

Scotland’s two Governments will give more details in the coming days, but I would like to set out a few key elements of the deal.

The Scottish Government will retain all the revenue from the taxes that are being devolved or assigned, including around £12 billion of income tax and around £5 billion of VAT. The Scottish Government block grant will be adjusted to reflect the devolution and assignment of further taxes and the devolution of further spending responsibilities. We have kept our commitment to retain the Barnett formula, extending it to cover areas of devolved welfare. For tax, we will use the UK Government’s preferred funding model. Under that model the Scottish Government hold all Scotland-specific risks in relation to devolved and assigned taxes, just like they do for devolved spending under the Barnett formula. That is fair to Scotland and fair to the rest of the UK.

However, for a transitional period covering the next Scottish Parliament, the Governments have agreed to share those Scotland-specific risks as these powers are implemented. Specifically, the Scottish Government will hold the economic risks while the UK Government will hold the population risks, so the Scottish Government will not receive a penny less than Barnett funding over the course of the spending review simply due to different population growth. By the end of 2021, a review of the framework will be informed by an independent report so we can ensure that we are continuing to deliver Smith in full, with the Scottish Government being responsible for the full range of opportunities and risks associated with their new responsibilities.

We have also agreed that the Scottish Government will have additional new borrowing powers. That will ensure that the Scottish Government can manage their budget effectively and invest up to £3 billion in vital infrastructure. In line with the recommendation of the Smith agreement, we will provide the Scottish Government with £200 million to set up the new powers they will control.

The Government have delivered more powers to the Scottish people, ensuring that they have one of the most powerful devolved Parliaments in the world and the economic and national security that comes from being part of our United Kingdom. That is what we have agreed and that is what we have delivered in full. Now that we have agreed this historic devolution deal, the conversation must move on to how these new powers are to be used.

The Scottish Government will have extensive powers on tax, welfare and spending. They will have control over income tax and be able to change the rates and thresholds. They will be able to create new benefits, and of course the permanence of the Scottish Parliament is put beyond any doubt.

The people of Scotland voted for these new powers, and they deserve to hear from the parties in Scotland how they will use them. They are new powers that, if used well, can grow Scotland’s economy, and indeed population, and bring greater opportunity and prosperity. Now that we have agreed this fiscal framework, I hope and trust that this House and the other place will welcome it, while of course subjecting it to full scrutiny. I commend this statement to the House.

[Ian Murray (Edinburgh South) (Lab)]

I thank the Secretary of State for advance notice of his statement, and indeed for coming to the House yesterday to indicate he would be making it today. I begin by welcoming unequivocally the news that an agreement has been reached on the fiscal framework, and I would also like to echo the thanks to both Governments, the Deputy First Minister, the Chief Secretary to the Treasury, who is in his place, and of course the Secretary of State himself for working so hard to secure this historic deal. Our heartfelt thanks also go out to the officials of both Governments, who we all know are the people who do the real work in these negotiations.

Yesterday’s agreement marks the removal of the final obstacle to the transfer of significant and substantial powers to Scotland, and, as Lord Smith himself has said, the agreement

“sees the recommendations of the Smith commission delivered in full.”

Importantly, the vow stipulated clearly that the Barnett formula should remain the key mechanism for calculating Scotland’s budget. That has now been agreed and Barnett has been secured.

I note the Secretary of State’s commitment to publishing details of the agreement by the end of this week, and I welcome that commitment, but can he indicate whether this House will have time to scrutinise the agreement in detail? I have been saying for some time that greater transparency is required in the way these deals are negotiated. This process has highlighted the fact that future intergovernmental relationships must be improved to make these powers work for Scotland. Lord Smith’s recommendations that both Governments need

“to work together to create a more productive, robust, visible and transparent relationship”

and that the Joint Ministerial Committee

“must be reformed as a matter of urgency”

echo in this process. Can the Secretary of State confirm that this will be done?

We all know that the major stumbling block was the indexation method used for the block grant adjustment. Under the compromise reached, there will be a five-year transitional period, which will cover the full term of the next Scottish Parliament. Towards the end of that period, an independent review and recommendation will be published that will form the basis of a more permanent solution. When he gave evidence to the Scottish Parliament’s devolution Committee last night, the Secretary of State suggested that the period between the review being published and the transitional period ending at the end of March 2022 could be as little as 12 weeks. If no agreement is reached, what happens then?

On the transitional period itself, it is my understanding that the Scottish Fiscal Commission will carry out the necessary forecasts of Scottish GDP and tax revenues. Can the Secretary of State confirm that, under the terms of the fiscal framework negotiations, those forecasts will be fully independent of the Scottish Government? Last week, the Scottish Finance Committee voted against allowing for that independence.

There also seems to be some confusion over the block grant adjustment during the transitional period to 2022. The First Minister said it would be done according to the Treasury’s favoured method but with the Scottish Government’s favoured outcome. Can the Secretary of State confirm what method will be used? Will it be the catchily named tax capacity adjusted levels deduction, which I understand was the Chief Secretary to the Treasury’s latest offer?

Further clarity is also needed on the timeframe for the devolution of powers. The Secretary of State has said that the new income tax powers will be available by April 2017. However, the Deputy First Minister has said he does not agree that that timeframe is realistic. Is the Secretary of State able to confirm that the new tax powers will be transferred by April 2017?

Today the Scottish Government are passing the Scottish budget. Twelve months from now, at the time of the next Scottish budget, we want them to have full control of income tax and air passenger duty and the deployment of 50% of Scotland’s VAT revenues. We also want them to have the considerable powers over welfare, which will allow us to design a new social security system for Scotland.

I welcome the review and the fact that it will be fully independent. I have stated several times that impartial oversight and, if necessary, arbitration should be an established part of intergovernmental relations. Will the Secretary of State tell us how the review body will be chosen, and can he confirm that it will be done in a spirit of consensus with the full agreement of both Governments? Will he also tell us to what extent the recommendations of the review will influence the decision taken on the long-term solution for block grant adjustment?

I close by welcoming once again the agreement that has been reached. Today marks an historic date in Scotland’s devolution journey: the creation of one of the most powerful devolved Parliaments in the world. The promises made to Scotland in 2014 have been met—the Smith agreement implemented, Barnett protected, powers transferred, the vow delivered. Scottish politics will never be the same again thanks to these new powers. We have entered a new and exciting era of devolution. What an opportunity to transform Scotland for everyone—an opportunity that my party will grasp with both hands.

[David Mundell]

I agree with most of what the hon. Gentleman said about the opportunity this presents to change Scottish politics. I think the people of Scotland want us to move on from discussing process to discussing policies and the difference that we can make for them with these extensive new powers. It is my full expectation that the agreement and associated details should be available tomorrow, and I very much hope that that will afford the maximum amount of scrutiny. It will of course be open to Committees of this House to scrutinise the arrangements as they see fit.

For understandable reasons, the hon. Gentleman makes reference to intergovernmental relations, but it is important to look at what Lord Smith said about how this agreement was arrived at. He said:

“It is difficult to imagine a bigger test of inter-governmental relationships and while it was obviously a very tough negotiation, what matters is that an agreement was reached.

He continued:

“This provides an excellent basis for constructive engagement between the governments long into the future.”

I accept that fully. I believe that when the transition period is over and the independent reports have been published, it will be possible for the Governments to reach agreement.

The hon. Gentleman has asked many times why it has taken so long, but many important agreements are reached at the eleventh hour, just by the very nature of doing a deal. I am sure that we will be able, on the basis we have set out, to ensure that that is the case at the end of the transitional period. The independent review, to which he referred, will indeed be a matter for agreement between the two Governments, but as he is well aware, many people in Scotland hold themselves out as being independent but are perhaps not as independent as they superficially seem. It is therefore important that there is agreement between the two Governments as to how that independent review should go forward.

On the Fiscal Commission, the agreement with the Scottish Government is that its forecasts will be fully independent. Finally, this Government will place no impediment on the transfer of powers. Obviously we cannot impose the income tax powers on the Scottish Government, and we would not seek to do so, but I would have thought and hoped that they would want to take them on as soon as possible, and that is the end to which we will be working.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

First, I congratulate my right hon. Friend on his apparent success in achieving a settlement of this difficult issue—we look forward to the details tomorrow. Can he assure the House that when the settlement is implemented, it will not only give a strong Scottish Government the powers they need to conduct their devolved affairs properly, but do nothing whatever to impair the ability of United Kingdom Governments to maintain financial discipline and healthy public finances for the British economy? That, surely, is an essential condition for the future growth and prosperity of the English, British, Welsh, Irish—United Kingdom—economy.

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[David Mundell]

I am very happy to give my right hon. and learned Friend the assurance he seeks. The Scottish fiscal framework will be consistent with the UK fiscal framework.

[Angus Robertson (Moray) (SNP)]

May I begin by thanking the Secretary of State for advance sight of his statement and indeed for the conversations he had yesterday, given the constraints of parliamentary time and being able to make a statement only today? We appreciate his having done so.

I speak on behalf of all Scottish National party Members in welcoming the agreement on the fiscal framework, and we all look forward to the draft heads of agreement being published for parliamentary scrutiny in this place and in the Scottish Parliament later this week. My SNP colleagues in the Scottish Government were clear throughout these protracted negotiations that they would not sign a deal that included a threat to the Scottish budget. Members on the SNP Benches here, too, pursued the UK Government’s commitment to the principle of “no detriment”, a promise made during the Smith commission negotiations and a promise that the SNP has ensured has been delivered.

When negotiations began, Scotland’s budget faced a threat from the Treasury of a cut of £7 billion. This week, it was £3 billion, and yesterday morning it was £2.5 billion, but last night my colleagues in the Scottish Government secured a deal that will ensure that Scotland will not be a pound or even a penny worse off, and that the new powers that were promised will be delivered. I pay tribute to the First Minister, Nicola Sturgeon, and the Deputy First Minister, John Swinney, for their efforts to stand up for Scotland and for being stronger for Scotland.

I welcome the fact that the UK Government will guarantee that the outcome of the Scottish Government’s preferred funding model—the per capita indexed deduction—is delivered in each of the next six years. I understand that a transitional funding arrangement will be reviewed following the UK and Scottish parliamentary elections in 2020 and 2021 respectively. The review will be informed by an independent report, with recommendations presented to both Governments by the end of 2021. In that context, let me say this: the Smith report was crystal clear that the fiscal framework had to be agreed by both the UK and Scottish Governments. The Treasury tried to engineer an agreement that would have allowed it to impose a model of indexation in five years’ time—those are the facts of the matter. That would have seen billions cut from Scotland’s budget. Let me therefore ask the Secretary of State the following questions: will he confirm that the Treasury no longer has the power to impose a method of indexation? Will he confirm that the review will go ahead without prejudice to the outcome? And will he confirm that there is no default indexation option and that the Scottish Government’s agreement is required before any new indexation model can be adopted?

[David Mundell]

I thank the right hon. Gentleman for welcoming the parts of the agreement that he did. This has been a negotiation, and this is the point arrived at in the agreement; it is not possible for the Treasury or the UK Government to have engineered an agreement, as what was needed was the agreement of the Scottish Government, and that is what has been achieved. The two parties have been able to reach an agreement on a fiscal framework that is both fair to Scotland and fair to the people of Scotland.

I can reassure the right hon. Gentleman that the review will go ahead on an independent basis, without prejudice or a predetermined outcome, and it will be concluded by the end of 2021. There will be no imposition of any formula at the end of that period, and what happens will be by way of agreement. As I said in my previous comments, when I quoted what Lord Smith said, I believe that this process, through some of the most difficult types of negotiation, gives us confidence that in a maturing relationship the UK Government and the Scottish Government will be able to reach such an agreement.

[John Redwood (Wokingham) (Con)]

Extrapolating recent population trends, what is the additional cost to England, Wales and Northern Ireland of the transitional arrangements on population?

[David Mundell]

There will be no additional cost to England, Wales and Northern Ireland from the powers being transferred compared with if we were not proceeding with this devolution settlement, because the sum being delivered to the Scottish Government is exactly the same as would have been delivered under the Barnett formula.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Scottish Government have committed to halving air passenger duty in 2018, if still in government. That leaves Newcastle airport, in my constituency, most at risk from cross-border tax competition. Following today’s statement, when can we expect a decision from the Government on support for regional airports, as promised by the Prime Minister? Ongoing uncertainty is very damaging to regional economies, and an approach of “wait and see” is not acceptable.

[David Mundell]

I note what the hon. Lady says. Of course people in Scotland will know that the SNP position used to be to abolish air passenger duty completely, so there is somewhat of a change there. None the less, she makes an important point. There is a review, and I am sure that those issues will be considered as the Budget process goes ahead in this Parliament.

[Sir Edward Leigh (Gainsborough) (Con)]

Is not the measure of statesmanship the imagination to give to others what one demands for oneself? For centuries, the English have demanded full control over our spending and taxation. Why should the Scottish people feel any different? Does the Secretary of State not realise that there must be some merit in the argument that as long as we maintain the outmoded, outdated and unfair Barnett formula, which thoroughly disadvantages the English, we will simply stoke up resentment on both sides of the border, and that will ultimately lead to more calls for independence?

[David Mundell]

My hon. Friend, as we well know, is the staunchest advocate of full fiscal freedom in this Chamber—more staunchly so than those on the SNP Benches when he moved his amendment for complete fiscal freedom. My response is that the people of Scotland would not respond well to having a £10 billion annual black hole in their finances, and that full fiscal freedom is not the answer. Further devolution as set out in the Scotland Bill to create a powerhouse Parliament is what the people of Scotland want and it is what this Government are delivering.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Let me congratulate all the parties involved on managing to agree on a position that got us here, which is that principle of no detriment. I also thank the Chief Secretary to the Treasury and the Deputy First Minister for attending the Scottish Affairs Committee. I hope that the Chief Secretary will agree to attend the Committee again to explain a little bit more about the details of this fiscal framework. At the beginning of the process, we heard that the Treasury intended to cut £7 billion from the Scottish budget. Why did the Treasury intend to cut billions of pounds from the Scottish budget, and what did he, as the Secretary of State for Scotland, attempt to do about it?

[David Mundell]

I know the hon. Gentleman does not understand the concept of negotiation, in which two sides work together to get an agreement. Assertion and soundbites sound good, but they do not deliver for the people of Scotland. What delivers for the people of Scotland is the two Governments working together to produce a sustainable agreement. That is what we have done; we have an agreement that underpins the Scotland Bill, which means that Scotland can get these extensive new powers over tax and welfare. People will now want to move on from the process debate to hear the policy ideas.

[Maggie Throup (Erewash) (Con)]

During the inquiry of the Scottish Affairs Committee into the fiscal framework, we asked searching questions of our witnesses about the new welfare powers that have been devolved to Scotland. Has my right hon. Friend heard any details from the Scottish Government about how they plan to use the new welfare powers?

[David Mundell]

I very much welcome the fact that the First Minister and the Deputy First Minister have indicated that they plan to set out how they intend to use the powers. It was interesting to hear some of the media reports in Scotland that suggest that the SNP plans to increase significantly the tax burden on middle income earners in Scotland. Obviously, we will have to await the detail in the manifesto, but there will be no excuses now. SNP Members can come here and complain about certain welfare changes, but they will have the ability within Scotland to set their own welfare arrangements.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Scottish Government have been able to achieve their chosen deduction method through their vigorous and skilled negotiation strategy. What advice will the Secretary of State give to the Welsh Government when it comes to negotiating the fiscal framework for Wales? Does he think that the Labour Government’s usual passive compliance with the Treasury will work?

[David Mundell]

What I am clear about is that the position in Wales will be as it is in Scotland: the people of Wales will benefit most when the Welsh Government and the United Kingdom Government work constructively together for their benefit.

[Alberto Costa (South Leicestershire) (Con)]

Is it not time that we heard from the Scottish Government detailed plans to devolve power down to the Scottish communities? Devolution should not stop at Holyrood.

[David Mundell]

I absolutely agree with my hon. Friend. I am sure that he will have read my speech of 21 December delivered in Glasgow City chambers making exactly the case for devolution within Scotland. Unfortunately, in recent times, Scotland has become one of the most centralised countries in terms of government. The new Scottish Government that will be elected in May should devolve further powers. The best way to achieve that is to elect more Conservative MSPs under Ruth Davidson’s leadership.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

How great it is to follow that remark from the Secretary of State!

How does the amount agreed by the UK Government for the implementation costs compare with the Government’s current calculations for implementing the deal agreed at last week’s EU summit on benefits for foreign workers in the UK?

[David Mundell]

I welcome the hon. Lady’s question, because of course she and I were both Scottish Conservative candidates for the Scottish Parliament in the dim and distant past—[Interruption.] I am sure that the detail of this agreement and the issues that she raises will stand up to scrutiny.

[Mr Speaker]

Order. It is a moderately unedifying spectacle when such large numbers of Members are quite so vociferous. The saving grace is that all of them do have a very notable smile on their face, so at least there is good humour in the Chamber.

--- Later in debate ---

[Mr Mak]

Thank you, Mr Speaker. I thank the Secretary of State for his statement. Does he agree that the conclusion of this new agreement shows that Scotland’s two Governments can work together? Will he undertake to keep pressing the Scottish Government to reveal details of how they will use these new powers?

[David Mundell]

I certainly do agree with my hon. Friend, and I have, on a number of occasions in this Chamber, paid particular and sincere tribute to the Deputy First Minister of Scotland, John Swinney. He and I have had numerous conversations throughout this process and, although at times we have been in disagreement, they have always been cordial and civil. That is the basis of the relationship that I want to see with the Scottish Government. My hon. Friend is right: what this agreement means is that the Scotland Bill can pass through this House and, hopefully, receive the legislative consent motion at Holyrood. There will then be no hiding place on these issues for the Scottish Government. If they want to spend more, they will have the tax powers to do so, and if they want higher welfare, they will have the ability to achieve that.

[Tommy Sheppard (Edinburgh East) (SNP)]

My constituents will welcome this agreement. In particular, they will welcome the fact that the Scottish Government were able to persuade the Treasury to abandon its initial position, which would have meant £7 billion of cuts to Scottish finances, and to come to the Smith position that there should be no detriment. They will observe though that had that been the original position for the Treasury, we might have been able to get this agreement before Christmas rather than spend all this time on it. Will the Secretary of State confirm that it is now the case, beyond doubt, that the principle of no detriment to the Scottish budget is enshrined in his Government’s thinking both now and in the future?

[David Mundell]

Yes, as is the other element of the Smith commission consideration of no detriment, which is taxpayer fairness—not just in Scotland, but across the UK.

[David Mowat (Warrington South) (Con)]

The vow was very clear that Barnett would be retained. That has been done, and rightly so. The starting point for public spending in Scotland now is 115% of the UK average. Can the Secretary of State tell the House, in terms of his modelling, what that percentage per capita will be at the end of this Parliament?

[David Mundell]

As my hon. Friend asks for complex calculations, I will certainly be happy to write to him in that regard. Although I respect his strongly held views in relation to the Barnett formula, I have to say that the Government’s clear position is that the Barnett formula is being retained.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Following yesterday’s devastating votes on the Lords amendments to the Welfare Reform and Work Bill, can the Secretary of State say a little more about when welfare powers will be transferred to Scotland, so that at least in Scotland we can do something to prevent the appalling effects of poverty on children and disabled people?

[David Mundell]

Obviously, I do not agree with the hon. Lady’s perspective on specific policies, but she is right that the Scottish Parliament will now have specific and detailed responsibilities in relation to welfare. We have a joint ministerial group on welfare, which includes myself and Scottish Ministers Alex Neil and Roseanna Cunningham, and we look to work though that group on the transfer of the specific powers. We do not want a transfer of power without new arrangements being in place, because the people in receipt of the benefits must be our prime concern. We will work closely together. An enormous amount of work has been done by officials to date and I am confident that once we know what the Scottish Government’s proposals are—we do not know fully—we will be able to make an effective transition.

[George Kerevan (East Lothian) (SNP)]

In his reply to my hon. Friend the Member for Perth and North Perthshire (Pete Wishart), the Secretary of State seemed to confirm that the Treasury’s opening bid in these negotiations—the so-called level deductions approach, which would have led to a £7 billion cumulative cut in Scottish spending—was merely a negotiating ploy. If that is the case, will the Secretary of State confirm that it was disrespectful of the negotiations to start with a position so far from the vow, and will he confirm that that will never happen again?

[David Mundell]

What complete and utter nonsense. A deal is done that is good for Scotland and good for the United Kingdom, and hon. Members on the Scottish National party Benches have to trawl through newspaper reports to find something that they can complain about. This is a good deal for Scotland which gives Scotland new powers. Let us talk about how we use those powers for the benefit of Scotland, and let us put the grievance agenda to bed once and for all.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I have no desire to sour the tone of consensus on an historic day for Scotland, but many of my constituents believe that the funding arrangements for Scotland, and specifically the operation of the Barnett formula, are unfair to northern England. Does the Secretary of State acknowledge that grievance and how does the new fiscal framework change that?

[David Mundell]

I acknowledge that people have those feelings. A number of people on both sides of the House have raised issues about the Barnett formula. That is their job as representatives of different parts of the United Kingdom. My position is clear: the Barnett formula is good for Scotland, and this Government are keeping the Barnett formula.

[Patrick Grady (Glasgow North) (SNP)]

Can the Secretary of State name some of the devolved assemblies around the world that will now be less powerful than the Scottish Parliament?

[David Mundell]

I can produce a list and send it to the hon. Gentleman. I am not focused on other assemblies around the world. I am focused on the Scottish Parliament and making it a powerhouse Parliament with the powers that make a difference in Scotland. That is the state of the debate. The hon. Gentleman’s constituents will not want to hear about Parliaments in South America and other parts of the world: they will want to hear about what his party intends to do on income tax and welfare.

[Kirsty Blackman (Aberdeen North) (SNP)]

We have had a particularly mild November, December and January because the Secretary of State for Scotland promised the Scottish Affairs Committee an agreement by the autumn. Can he let us know when he expects the Bill to complete its passage through the House of Lords; when he expects it to come back to the House of Commons; and when he expects it to get Royal Assent?

[David Mundell]

In respect of the first two questions, I expect that to be March. I hope Royal Assent will be achievable in March but it may be April. I am also respectful of the Scottish Parliament process and the need for a legislative consent motion.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

I thank the Secretary of State for advance sight of his statement. I note that he mentions the UK Government holding population risks. Will he concede that the limited powers available to the Scottish Government do not allow for population growth? Will he now listen to calls for a Scottish post-study work scheme?

--- Later in debate ---

[David Mundell]

On the latter subject, I have had the pleasure of appearing before the Scottish Affairs Committee and being grilled by the hon. Lady on the issue of student work visas. I made it clear that I would look closely at the report produced by the Committee, and I repeat that undertaking. However, I do not accept the premise of her question. I believe that, properly used, the tax and other powers that the Scottish Government have will allow them to grow the Scottish economy, create jobs and grow the population of Scotland.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

The Secretary of State talks about negotiations. This is an important point. When the Treasury first considered making £7 billion worth of cuts to the Scottish budget, can the Secretary of State—Scotland’s man in the Cabinet—tell us what personal interventions he made to the Treasury to protect Scotland?

[David Mundell]

I have been closely involved in these discussions throughout, but they are negotiations—they are not about the Treasury imposing. As Lord Smith recognises, they are about the two Governments coming together in difficult circumstances to negotiate about money, which is often the most contentious thing that is ever the subject of negotiations. We have demonstrated that both Governments had the maturity to reach a deal which is good for Scotland and good for the rest of the United Kingdom.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

The Secretary of State for Scotland has just confirmed that the initial proposal put forward by the Treasury of a £7 billion cut to Scotland’s budget was not an opening negotiation position, but a serious proposal. In the light of that, does he consider himself Scotland’s man in the Cabinet, or the Cabinet’s man in Scotland?

[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

David Mundell Excerpts

Wednesday 3rd February 2016 Commons Chamber

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

Let me add my welcome to this debate this afternoon. A debate on Scottish public spending is important at any time, but it is particularly apposite today, as our colleagues at Holyrood are debating the latest draft Scottish Budget.

I am sure that we will be hearing a lot from SNP members about austerity, even as their counterparts in the Scottish Parliament vote through massive cuts to Scottish local government, while maintaining a council tax freeze which prevents councils from addressing their shortfalls and making use of the new Scottish rate of income tax. Public spending is about choices, and I am proud to be part of a Government who cut tax for over 2.3 million people in Scotland, reducing the tax paid by a typical taxpayer by £825 and taking 290,000 Scots out of paying any income tax at all.

[Ian C. Lucas (Wrexham) (Lab)]

Will the Secretary of State give way?

[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.

[Melanie Onn (Great Grimsby) (Lab)]

Will the Secretary of State give me a little more information about what he considers to be fair? Will he explain the mechanisms that are being discussed?

[David Mundell]

If the hon. Lady is new to this debate, she will be able to find many detailed discussions about all the mechanisms. Under the new proposals, the Scottish Government would benefit from good decisions that they take which produce additional revenue for them, but they would bear some of the risk if they take decisions that lead to less revenue than had been anticipated. That is what I think is at the heart of fairness in the proposals being debated.

[Mr Christopher Chope (Christchurch) (Con)]

Following on from what my right hon. Friend has just said, does he therefore confirm that the per capita indexed deduction is not the right way forward?

[David Mundell]

I do not think even my hon. Friend would expect me to express a view because I am not going to negotiate the arrangement on the Floor of the House. I am happy to comment on a number of aspects of the negotiation, but the Deputy First Minister of Scotland has made it abundantly clear to the United Kingdom Government that it is he who is negotiating these arrangements on behalf of the Scottish Government, not MPs, not the First Minister and not members of the Scottish National party. I have confidence in his wish to reach an agreement and to conduct those negotiations, as we have done so far, on the basis that we committed to—that is, by not giving a detailed running commentary.

[Several hon. Members rose—]

[David Mundell]

I give way to the Chair of the Scottish Affairs Committee.

[Pete Wishart (Perth and North Perthshire) (SNP)]

We have heard from the Labour party that it does not know which index it favours in these negotiations, and I think that the Secretary of State is saying that he does not have a view about the indexation he prefers. Surely we need to know what both respective parties favour. We know what we want. What does he want?

[David Mundell]

The hon. Gentleman has just heard me set out the position. We are in an ongoing negotiation, and I remain optimistic that it will reach a positive conclusion. I must say that I do not recognise some media reports that say there is a gulf between the two Governments. I believe that we are both on the same page—one Government might be at the top of the page and the other might be at the bottom, but it is eminently possible for us both to move to the middle. That is what my colleagues the Chief Secretary to the Treasury and the Deputy First Minister will continue to do when they next meet. The Government are doing all we can to reach an agreement based on the Smith principles.

[Neil Gray (Airdrie and Shotts) (SNP)]

The Secretary of State is unwilling to state his position today, but surely he agrees with Professor Anton Muscatelli, and indeed with the Scottish Trades Union Congress, that these powers cannot come at any cost. He must commit today to a position on non-detriment to the Scottish budget.

[David Mundell]

What I commit to is a fair settlement for Scotland. The discussions are ongoing. I am confident that we will be able to achieve a fair settlement for Scotland. The hon. Member for Edinburgh South (Ian Murray) alluded to the fact that the Joint Exchequer Committee has met eight times, with constant engagement at official level. I have met John Swinney on numerous occasions during this period. Work at official level continues. Senior UK Government officials will meet Scottish Government officials in Edinburgh tomorrow. My right hon. Friend the Chief Secretary to the Treasury has today confirmed that he will be available all day on Monday for further discussions. We stand ready to agree a deal. Our door is open and our efforts continue.

[Stella Creasy]

The Minister is setting out the discussions that have taken place and are taking place. I take him back to the Smith principles, to which he alluded, which state that there should be

“pro-active reporting to respective Parliaments of, for example, the conclusions of Joint Ministerial Committee, Joint Exchequer Committee and other inter-administration bilateral meetings established under the terms of this agreement.”

Is he really telling us that refusing today’s request for the minutes meets that principle, because it does not sound like it, and we have had so little detail of so much work?

[David Mundell]

I am sure that the hon. Lady could find a lot more detail if she studied the Scottish press and looked through the various debates that have been conducted on the issue. We will report what happened in full. I do not recall important negotiations being reported in detail and on a daily basis in the House of Commons or elsewhere when Labour were in government. We do not intend to do that. We intend to reach an agreement that is fair for Scotland and fair for the rest of the United Kingdom. That is where our efforts are focused.

I remain an optimist. We are making progress, and I believe that we will reach an agreement. A deal can and will be reached if both sides want it. I know that the UK Government want a deal, and I believe the Scottish Government when they say that they want one too. The two Governments have agreed to speak again in the coming days. Although there are still some difficult issues to resolve, we remain confident that a deal can be reached that is fair to Scotland and fair to the rest of the UK, now and in the future.

[John Redwood]

I am grateful to the Secretary of State, who is doing a difficult task with great skill. Has a recent model been produced for how the income tax might work, because we have seen in previous debates that the forecasts for oil revenue were grossly exaggerated, and there is an unfortunate danger that with the collapse of the oil price will come the collapse of oil-related incomes in Scotland, which would have a bad impact on income tax receipts?

[David Mundell]

My right hon. Friend makes an important point, which speaks against those who argued just a few short months ago for full fiscal autonomy. It is quite interesting to look back at the amendment launched by the SNP in November to bring about full fiscal autonomy, which the Institute for Fiscal Studies predicted would create a £10 billion gap in Scotland’s finances. When the SNP asked for that full fiscal autonomy, it did not ask for what they now claim are the levers it needs to grow the Scottish population and offset the risk it is being asked to take on in relation to the Smith commission proposals.

The Government have been as open and transparent as possible in these negotiations, and each meeting has been notified to the House. Just this afternoon, the Chief Secretary appeared before the Scottish Affairs Committee. Last month, we responded in detail to the Economic Affairs Committee in the other place on fiscal devolution, having previously submitted written evidence to that Committee.

[Catherine McKinnell]

It is vital that these negotiations have the confidence of not just the Scottish people, but the people of the whole UK. Does the Secretary of State recognise that there is a significant risk of these negotiations suffering from the same problems as the negotiations over devolution in England, which the Communities and Local Government Committee report published today clearly states have lacked openness?

[David Mundell]

I do not recognise, for the reasons I have just set out, that those circumstances characterise the negotiations we have been conducting with the Scottish Government, and I make the case that a degree of privacy for negotiations of this type is required.

The hon. Member for Edinburgh South mentioned deadlines. I do not think in terms of self-imposed or arbitrary deadlines. Personally—keen though I am to have a warm and supportive relationship with the Scottish Government—I have never felt that the St Valentine’s day date had much relevance to this process. I am willing to continue working towards a deal for as long as that takes and for as long as we can. However, the usual channels have agreed to move the next day of Committee on the Scotland Bill in the other place to 22 February, as discussions on the framework continue to progress, to enable us to give their lordships as full an update as possible.

We have shown flexibility in the negotiations. While I cannot, as I have said, give a commentary to the House, Members will have seen via media reports that the UK Government have put compromise proposals on the table. That is a clear signal of our commitment to reach agreement and of our willingness to be as flexible as we can be, within the Smith principles.

Without commenting on the proposals, I would point out that the House will be aware of some of the tenets of those on the table. There are some suggestions that the Scottish Government should retain all income tax raised in Scotland, as well as a guaranteed share of the growth in income tax in England, Wales and Northern Ireland. Professor Muscatelli, who was referred to earlier, told the Scottish Parliament that such an approach would not meet the test of taxpayer fairness. This seems, once again, to be the Scottish Government wanting to have their cake and eat it—indeed, to have a slice of everyone else’s cake while they are at it. That might be understandable enough politics, and an understandable enough position to adopt at the start of a negotiation, but it cannot really be said to be a credible position.

Once the powers are devolved, Scotland

“should retain the rewards of our success, as we will bear the risks.” —[Scottish Parliament Official Report, 16 December 2015; c. 23.]

Those are not my words, but those of John Swinney. Mr Swinney has been very clear in the past about exactly what he meant by “risks”. He meant the risk that Scotland’s population might decline relative to the rest of the UK’s.

When asked at the Scottish Parliament’s Finance Committee by Malcolm Chisholm MSP if the Scottish Government would seek to be protected from the possibility that the rest of the UK’s population will expand more quickly than Scotland’s, John Swinney was very clear:

“That is another of the wider range of risks that we take on as a consequence of gaining the responsibilities.”

The Daily Record newspaper, sometimes brandished by SNP MPs, set this out clearly, finding it hard to see why

“a tax-raising Scotland should benefit from a growth in tax receipts in England and Wales”

and stating that

“there is an undeniable logic”

to opposing that view.

[Kirsty Blackman (Aberdeen North) (SNP)]

The Daily Record completely misunderstood how per capita indexed deduction works. Academics have been clear that the Barnett equivalent is per capita indexed deduction. If the Secretary of State supports anything other than PCID, he is attempting to undermine Barnett. Is he trying to scrap Barnett to appease his Back Benchers?

[David Mundell]

I respect the hon. Lady’s imagination, which, I am afraid, she still sometimes lets run riot. We are committed to the Barnett formula. We are committed to delivering an agreement that is fair to the people of Scotland and fair to the rest of the United Kingdom, and that is what these negotiations are about.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

rose—

[David Mundell]

The position set out in the Daily Record reflects the reality. If the population of the rest of the UK were to rise at a faster rate than Scotland’s, that would cause an increase in demand on public services such as schools and hospitals in the rest of the UK, which would need to be funded. How could it be fair that those services be denied the funding required to sustain them because part of the income tax growth was being transferred to the Scottish Parliament? What would people in Carlisle, Newcastle or Liverpool say if their local services were not able to keep up with demand because the Scottish budget was being increased?

[Ian Blackford]

rose—

[David Mundell]

Let us imagine if the situation were reversed. Does anyone think for a minute that the Scottish Government would accept a deal in which a growth in Scottish income tax relative to the rest of the UK was clawed back by the Treasury in Whitehall, to the detriment of Scottish public services? Of course they would not, and quite rightly. I want Scotland to enjoy the benefits when good decisions are made at Holyrood. As John Swinney said,

“If we take on a responsibility and make a success of it, we should bear the fruit of that; if we get it wrong, we must bear the consequences.”

[Ian Blackford]

I am grateful to the Secretary of State for giving way—I almost thought I had become invisible. We are having a very important debate. He talked about his responsibility to put the Scotland Bill through this House. Surely he has to see that the fiscal arrangements that are put in place are central to that. He must have a view on what is in Scotland’s best interest if we are to avoid detriment to Scotland. Is he really Scotland’s man in the Cabinet or the Cabinet’s man in Scotland?

[David Mundell]

The hon. Gentleman is not invisible, unlike some of his colleagues. He will find that I am very clear on my responsibility, which is to deliver the Scotland Bill and the powers that the people of Scotland voted for comprehensively in the referendum. The fiscal framework underpins that. It is to be based on the Smith principles of no detriment and fairness to taxpayers in Scotland and across the rest of the UK. That is what I am determined to achieve. Because my glass is half full, I have confidence in the Scottish Parliament to do what is right for Scotland—to pass a legislative consent motion to agree a fiscal framework. The powers contained in the Scotland Bill will present the Scottish Parliament elected in May with a great opportunity to show how devolution can really benefit the people of Scotland.

I want to say a couple of things about population risk. I do not accept the counsel of despair that says that Scotland needs a more lax immigration system if it is to address the issue of relative population growth. The Government rightly wish to see net immigration come down, and we are taking steps to achieve that, but I am afraid we do still have some way to go. The latest figures show that annual net migration stands at 336,000 and there were 636,000 migrants coming to the UK in the past year. Those are considerable numbers, and if Scotland is not getting a share of that migration, the Scottish Government have some serious questions to answer.

The levers that the Scottish Parliament has over health and education, among other things, can be used to make Scotland the attractive place to live and work that it should be. The powers contained in the Scotland Bill will give the Scottish Government even more levers to make Scotland even more attractive. If they use the new tax powers in the Bill cleverly, they can attract more taxpayers to Scotland to make a contribution, boost the population and increase the tax take. Of course, if they adopt the frankly ludicrous proposals put forward by the Scottish Labour party this week to increase the income tax bill for most Scottish taxpayers by 5%, they may not succeed in making Scotland a more attractive place to live and work.

Let me conclude as I began. We are negotiating in good faith to deliver on the Smith commission principles, and I am confident that a deal can be reached. I give an absolute undertaking to this House that I will do everything in my power to achieve a deal that is fair to Scotland and fair to the whole United Kingdom. I remain optimistic that we can get such a deal, and that our debates can move on to how those new powers and the existing powers of the Scottish Parliament can be used to improve the lives of the people of Scotland.

[Several hon. Members rose—]

Smith Commission Agreement

David Mundell Excerpts

Monday 11th January 2016 Written Statements

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

On 27 November 2014 the Smith Commission published its heads of agreement on the devolution of further powers to the Scottish Parliament. The Smith Commission agreement was the first time that all five of Scotland’s major political parties came together to agree the constitutional future of Scotland and was an historic achievement.

In addition to the provisions requiring legislation which are being taken forward in the Scotland Bill, the Smith Commission agreement identified a number of areas for further consideration between the UK and Scottish Governments. In the period since the Smith Commission, the UK and Scottish Governments have held discussions on these matters. The attached table provides information on work in these areas.

The agreement also identified a number of areas where non-legislative action was required. Discussions on the agreement of a new fiscal framework for Scotland and work to strengthen intergovernmental working are on-going. The attached table provides an update on other such areas, including the agreement of memorandums of Understanding in relation to the BBC and the Maritime and Coastguard Agency.

Attachments can be view online at:

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statements/

[HCWS458]

Scotland Bill (Programme) (No.2)

David Mundell Excerpts

Monday 9th November 2015 Commons Chamber

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

I will not detain the House, because I do not want to eat into the time available to debate the Bill. I acknowledge the anger of the hon. Member for Perth and North Perthshire (Pete Wishart). He is always angry at something. Each time we have dealt with the Bill, we have had this sort of stunt. In the newspapers in Scotland at the weekend, the hon. Gentleman called on other Members of the House of Commons to be nicer to him. We will try, but he does make it a bit difficult.

It is clear to me that the hon. Gentleman’s anger is not directed at me or at this House, but directed at the people of Scotland because they voted decisively to remain in the United Kingdom, and that is something he just cannot accept.

Question put and agreed to.

Scotland Bill

David Mundell Excerpts

Monday 9th November 2015 Commons Chamber

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

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Government new clause 13—Functions exercisable within devolved competence: elections.

New clause 1—Independent Commission on Full Fiscal Autonomy—

‘(1) The Secretary of State shall appoint a commission of between four and eleven members to conduct an analysis of the impact of Full Fiscal Autonomy on the Scottish economy, labour market and public finances and to report by 31 March 2016.

(2) No member of the House of Commons, the House of Lords, or the Scottish Parliament may be a member of the commission.

(3) No employee of the Scottish Government or of any government Department or agency anywhere in the United Kingdom may be a member of the commission.

(4) The Secretary of State shall, in consultation and with the agreement of Scottish Ministers, appoint as members of the commission only persons who appear to the Secretary of State to hold a relevant qualification or to have relevant experience.

(5) The Secretary of State shall not appoint as a member of the commission any person who is a member of a political party.

(6) Before appointing any member of the commission, the Secretary of State must consult—

(a) The Chair of any select committee appointed by the House of Commons to consider Scottish Affairs, and

(b) The Chair of any select committee appointed by the House of Commons to examine the expenditure, administration and policy of Her Majesty’s Treasury and its associated public bodies.

(7) The Secretary of State may by regulations issue the commission with terms of reference and guidelines for the commission’s working methods, including an outline definition of the policy of full fiscal autonomy for the commission to analyse.

(8) The Secretary of State must lay copies of the report of the commission before both Houses of Parliament, and must transmit a copy of the report of the commission to the Presiding Officer of the Scottish Parliament.

(9) Regulations under this section must be made by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament.”

The new Clause provides for the establishment of an independent commission to investigate the impact of FFA.

New clause 4—Review of operation of Gift Aid in Scotland—

The Treasury must lay before the House of Commons a review of the operation of Gift Aid in Scotland within a year of Part 2 of this Act coming into force.”

This self-explanatory New Clause would require a review of the operation of Gift Aid in Scotland.

New clause 6—Local Discretionary Taxation—

Individual local authorities in Scotland shall have the discretion to raise additional income by levying a tax, in addition to Council Tax and Non-Domestic Rates, on either residents, occupiers, property owners or visitors in the local authority or within a discrete area of the local authority providing local people consent.”

The power will enable local authorities to introduce tax(es) without the need to seek approval from Scottish Government, with the rates and reliefs being determined locally and the local authority being both granted powers to ensure that those on which the tax is levied have a legal obligation to pay and the local authority having the discretion to determine how the additional revenue is expended.

New clause 7—Local authority’s power of general competence—

‘(1) A local authority has power to do anything that individuals generally may do.

(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise—

(a) unlike anything the authority may do apart from subsection (1), or

(b) unlike anything that other public bodies may do.

(3) In this section “individual” means an individual with full capacity.

(4) Where subsection (1) confers power on the authority to do something, it confers power to do it in any way whatever, including—

(a) power to do it anywhere in the United Kingdom or elsewhere,

(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and

(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.

(5) The generality of the power conferred by subsection (1) (“the general power”) is not limited by the existence of any other power of the authority which (to any extent) overlaps the general power.

(6) Any such other power is not limited by the existence of the general power.”

This new Clause seeks to introduce a general power of competence for Scottish local authorities, putting it beyond doubt that they may do anything that is not expressly prohibited by law. It seeks to go further than the power of wellbeing already afforded to Scottish local authorities. The proposals seek to give councils the capacity to do anything that an individual can do. Therefore, this would not enable a local authority to introduce a tax or wage war, but it would ensure that local government has the ability to use the power of general competence in the most sensible and constructive way for the benefit of the people and communities whom they serve.

New clause 8—Competences of local government in Scotland—

‘(1) The First Minister must, after consultation with representatives from local government in Scotland, publish a list of competences of local government in Scotland.

(2) After the list has been published, the First Minister may not publish any amended list of competences of local government in Scotland without first obtaining approval of the revised list consent from—

(a) the Scottish Parliament, with two-thirds of its membership voting in favour of the amended list, and

(b) the Convention of Scottish Local Authorities.”

This new clause entrenches the independence of local government in Scotland from interference by national government in Scotland.

New clause 9—Subsidiarity—

That subsidiarity as defined by the Maastricht Treaty 1992 Article 5(3) shall apply to the functions of national and local government in Scotland.”

This extends protection of Scottish Local Government’s independence by protecting its subsidiarity behind a European Treaty applicable to the United Kingdom.

New clause 11—Scottish block grant—

The Secretary of State must lay before the House of Commons before the end of the first month of each financial year a full record, including minutes of meetings and correspondence at Ministerial level, of discussions between the Secretary of State, the Treasury and Scottish Ministers relating to the non-budget expenditure to be voted by Parliament authorising the payment of grants to the Scottish Consolidated Fund for that financial year.”

The purpose of this new clause is to ensure transparency and accountability of the process leading to the annual settlement between the Treasury and Scottish Ministers of the block grant to the Scottish Consolidated Fund.

New clause 35—Consent of the Scottish Parliament to certain Westminster Acts—

‘(1) In section 28 of the Scotland Act 1998 (Acts of the Scottish Parliament), at the end add—

“(8) But the Parliament of the United Kingdom must not pass Acts applying to Scotland that make provision about a devolved matter without the consent of the Scottish Parliament.

(9) A provision is about a devolved matter if the provision—

(a) applies to Scotland and does not relate to reserved matters,

(b) modifies the legislative competence of the Scottish Parliament, or

(c) modifies the functions of any member of the Scottish Government.

(10) In subsection (8), “Acts” includes any Act, whether a public general Act, a local and personal Act or a private Act.”

(2) After section 28 of the Scotland Act 1998 insert—

“28A Duty to consult the Scottish Government on Bills applying to Scotland

(1) A Minister of the Crown shall consult Scottish Ministers before introducing any Bill into the Parliament of the United Kingdom for an Act of that Parliament that would make provision applying to Scotland.

(2) Where the Bill is for an Act making provision that would require the consent of the Scottish Parliament by virtue of section 28(8), the requirement to consult under subsection (1) includes a requirement that a Minister of the Crown give the Scottish Ministers a copy of the provisions of the Bill that apply to Scotland no later than—

(a) 21 days before the proposed date of introduction, or

(b) such later date as the Scottish Ministers may agree.”

(3) The requirement in subsection (2) does not apply if—

(a) the Scottish Ministers so agree, or

(b) there are exceptional circumstances justifying failure to comply with the requirement.

(4) The reference in subsection (1) to an Act of Parliament is a reference to any Act whether a public general Act, a local and personal Act or a private Act.”

This new clause would ensure that the UK Parliament can only legislate in devolved areas with the consent of the Scottish Parliament. It puts the Sewel Convention onto a statutory footing, as agreed by the Smith Commission.

New clause 36—Scottish independence referendum

‘(1) Paragraph 5A in Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

(2) In sub-paragraph (1), leave out “if the following requirements are met”.

(3) Leave out sub-paragraphs (2) to (4).”

This New Cause would permit the Scottish Parliament to decide whether and when to hold a referendum on Scottish independence.

Government amendment 34.

This amendment leaves out Clause 1, which is replaced by New Clause 12.

Amendment 195, page 1, clause 1, leave out lines 7 and 8 and insert—

‘(1A) The Scottish Parliament is a permanent part of the United Kingdom’s constitution.

(1B) Subsection (1) or (1A) may be repealed only if—

(a) the Scottish Parliament has consented to the proposed repeal, and

(b) a referendum has been held in Scotland on the proposed repeal and a majority of those voting at the referendum have consented to it.”

This amendment is to ensure that the Scottish Parliament can only be abolished with the consent of the Scottish Parliament and the Scottish people after a referendum.

Amendment 5, page 1, line 7, leave out “recognised as”.

Amendment 196, page 1, leave out lines 12 and 13 and insert—

‘(1A) The Scottish Government is a permanent part of the United Kingdom’s constitution.

(1B) Subsection (1) or (1A) may be repealed only if—

(a) the Scottish Parliament has consented to the proposed repeal, and

(b) a referendum has been held in Scotland on the proposed repeal and a majority of those voting at the referendum have consented to it.”

This amendment is to ensure that the Scottish Parliament can only be abolished with the consent of the Scottish Parliament and the Scottish people after a referendum.

Amendment 6, page 1, line 12, leave out “recognised as”.

Amendment 197, page 2, line 1, leave out clause 2

This amendment signals intent to oppose ‘Clause stand part’ with respect to Clause 2 and to move New Clause (Consent of the Scottish Parliament to certain Westminster Acts) to take its place.

Amendment 7, page 2, line 6, clause 2, leave out “normally”.

Amendment 8, page 2, line 6, after “legislate”, insert “(a)”.

Amendment 9, page 2, line 6, after “matters”, insert “and

(b) to alter the legislative competence of the Scottish Parliament or the executive competence of the Scottish Government”

Amendment 198, page 2, line 7, clause 3, leave out “Section B3 of”.

Government amendments 35 to 46.

Amendment 199, page 11, line 18, clause 10, leave out “the decision whether to pass or reject it” and insert “the motion that the Bill be passed is debated”.

Amendments 199 to 203 to Clause 10 aim to clarify matters around references to the Supreme Court, in particular where the Scottish Parliament resolve to reconsider the Bill.

Government amendment 47.

Amendment 10, page 11, line 28, at end insert—

“() the period between general elections specified in section 2(2)”

Government amendment 48.

Amendment 200, page 11, line 38, after “unless”, insert “it is passed without division, or”.

Government amendments 49 to 53.

Amendment 201, page 12, line 16, at end insert—

‘(2A) He shall not make a reference by virtue of paragraph (a) of subsection (2) if the Parliament resolves that it wishes to reconsider the Bill.

(2B) He shall not make a reference by virtue of paragraph (b) of subsection (2) if—

(a) the Bill was passed without a division, or

(b) the Bill was passed on a division and the number of members voting in favour of it was at least two thirds of the total number of seats for members of the Parliament.”

This amendment establishes that a Bill passed by consensus in the Scottish Parliament (i.e. without a division) automatically meets the super-majority requirement and ensures that a Presiding Officer’s statement is not required if the super-majority requirements are not triggered.

Government amendments 54 to 57.

Amendment 202, page 12, line 23, at end insert—

‘(3A) Subsection (3B) applies where—

(a) a reference has been made in relation to a Bill under this section, and

(b) the reference has not been decided or otherwise disposed of.

(3B) If the Parliament resolves that it wishes to reconsider the Bill—

(a) the Presiding Officer shall notify the Advocate General, the Lord Advocate and the Attorney General of that fact, and

(b) the person who made the reference in relation to the Bill shall request the withdrawal of the reference.”

Amendment 203, page 12, line 25, leave out subsections (11) and (12) and insert—

‘(10A) In subsection (4) after paragraph (a) insert—

(aa) where section 32A(2)(b) applies—

(i) the Supreme Court decides that the Bill or any provision of the Bill relates to a protected subject matter, or

(ii) a reference has been made in relation to the Bill under section 32A and the Parliament subsequently resolves that it wishes to reconsider the Bill.”

(10B) After that subsection insert—

“(4A) Standing orders shall provide for an opportunity for the reconsideration of a Bill after its rejection if (and only if), where section 32A(2)(a) applies—

(a) the Supreme Court decides that the Bill or any provision of the Bill does not relate to a protected subject matter, or

(b) the Parliament resolves that it wishes to reconsider the Bill””.

Government amendments 58 to 60.

Amendment 204, page 13, line 2, clause 11, at end insert—

‘(1A) In paragraph 1 of Part I (The protected provisions, Particular enactments) of Schedule 4 (protection of Scotland Act 1988 from modification), delete “(2)(f) the Human Rights Act 1998””.

This amendment would remove the Human Rights Act 1998 from the list of protected provisions in Schedule 4 of the Scotland Act 1998.

Government amendment 61.

Amendment 205, page 13, line 8, paragraph (a)(ii), leave out “(3)” and insert “(2B)”.

Amendments 205 to 223 to Clause 11 would grant the Scottish Parliament powers to make decisions about all matters relating to the arrangements and operations of the Scottish Parliament and Scottish Government as agreed in the Smith Commission.

Amendment 206, page 13, line 9, paragraph (a)(iii), leave out “11” and insert “12”.

Amendment 207, page 13, line 10, paragraph (a)(iv), leave out “section” to the end and insert “sections 13 to 27,”.

Amendment 208, page 13, line 11, paragraph (a)(v), leave out from “(v)” to the end and insert “section 28(1) to (6),”.

Amendment 209, page 13, line 13, paragraph (a)(vii), leave out “27(1) and (2)” and insert “31”.

Amendment 210, page 13, line 14, paragraph (a)(viii), leave out “28(5)” and insert “32(1) to (3),”.

Government amendments 62 and 63.

Amendment 211, page 13, line 15, paragraph (a)(ix), leave out “(1)(a) and (b) and (2) and (3)”.

Government amendment 64.

Amendment 212, page 13, line 19, paragraph (b)(i), leave out “44(1B)(a) and (b), and (2)” and insert “44(1C), (2) and (4),”.

Government amendment 65.

Amendment 213, page 13, line 20, paragraph (b)(ii), leave out “(3) to (7)” and insert “to 50”.

Amendment 214, page 13, line 21, paragraph (b)(iii), leave out “46(1) to (3)” and insert “51(1), (2) and (4)”.

Government amendment 66.

Amendment 215, page 13, line 22, paragraph (b)(iv), leave out “47(3)(b) to (e)” and insert “52”.

Amendment 216, page 13, line 23, paragraph (b)(v), leave out “48(2) to (4)” and insert “59”.

Amendment 217, page 13, line 24, paragraph (b)(vi), leave out “49(2) and (4)(b) to (e)” and insert “61”.

Government amendment 67.

Amendment 218, page 13, line 25, leave out paragraph (b)(vii).

Government amendment 68.

Amendment 219, page 13, line 26, paragraph (c), leave out “(3)”.

Amendment 220, page 13, line 27, paragraph (d), leave out from “general” to the end of the paragraph, and insert “sections 81 to 85,) sections 91 to 95, and section 97,”.

Government amendment 69.

Amendment 221, page 13, line 29, paragraph (e), leave out from “supplementary” to end of line 38, and insert—

(i) sections 112, 113 and 115, and Schedule 7 (insofar as those sections and that Schedule apply to any power in this Act of the Scottish Ministers to make subordinate legislation),

(ii) sections 118, 120 and 121,

(iii) section 124 (insofar as that section applies to any power in this Act of the Scottish Ministers to make subordinate legislation),

(iv) section 126(1) and (6) to (8), and

(v) section 127,”.

Amendment 222, page 13, line 40, paragraph (g), leave out “6” and insert “7”.

Amendment 223, page 13, line 42, paragraph (h), leave out “paragraphs 1 to 6 of”.

Amendment 224, page 13, line 43, at end insert—

‘(2A) In paragraph 4 of Part I (The protected provisions, This Act) of Schedule 4 (protection of Scotland Act 1988 from modification), insert new sub-paragraph—

(5A) This paragraph does not apply to amendments to Schedule 5, Part II, Head A, Section 1A insofar as they relate to—

(a) taxes and excise in Scotland,

(b) government borrowing and lending in Scotland, and

(c) control over public expenditure in Scotland.””

This amendment would enable the Scottish Parliament to amend the Scotland Act 1998 to remove the reservation on taxation, borrowing and public expenditure in Scotland, with the effect that the Scottish Parliament could then legislate in these areas to provide for full fiscal autonomy in Scotland.

Amendment 27, page 18, line 21, clause 15, leave out “the amount described in subsection (3)” and insert ‘the whole amount’.

The purpose of this amendment is to allow a sum equivalent to all of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 28, page 18, line 26, leave out “the amount described in subsection (4)” and insert ‘the whole amount’.

The purpose of this amendment is to allow a sum equivalent to all of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 29, page 18, leave out lines 28 to 39.

The purpose of this and the linked amendments to Clause 15 is to allow a sum equivalent to all of the revenue raised by both standard and reduced rates of VAT in Scotland to be paid into the Scottish Consolidated Fund.

Amendment 30, page 18, line 33, at end insert “Provided that the amount payable is not less than half of the agreed standard rate amount.”

This amendment would ensure that the share of the revenue raised by the standard rate of VAT in Scotland to be paid into the Scottish Consolidated Fund never falls below half the of the revenue raised, even if the standard rate of VAT is cut in the future.

Amendment 31, page 18, line 39, at end insert “Provided that the amount payable is not less than half of the agreed reduced rate amount.”

This amendment would ensure that the share of the revenue raised by the reduced rate of VAT in Scotland to be paid into the Scottish Consolidated Fund never falls below half the of the revenue raised, even if the reduced rate of VAT is cut in the future.

Government amendments 81 and 130 to 132.

[David Mundell]

This is a significant day for Scotland, as we move the public debate about our country’s future from questions of constitutional process and on to the real business of using power to improve people’s lives.

The Government’s amendments, which I would like to outline today, will strengthen the Bill’s provisions and clarify the delivery of the Smith commission agreement. With that done, it will be time for Scotland’s political parties to work together to make the new powers a success for everyone in Scotland. My ministerial colleagues, UK Government officials and I have engaged widely with interested parties and civic Scotland to help people to understand the Bill and to listen to their views. We have discussed the clauses with the Scottish Government and Committees of both the Scottish Parliament and this Parliament, and we have reflected on constructive suggestions of how to improve the drafting of the provisions. A number of technical amendments are proposed to ensure that the Bill devolves the powers intended effectively and efficiently, as well as a range of substantive amendments which prove beyond doubt that the Bill fully delivers the Smith commission agreement. I would like to move a number of Government amendments to part 1 of the Bill. We will discuss important amendments on welfare and other parts of the Bill later today.

Building on discussions on the permanence of the Scottish Parliament in Committee, I am bringing forward new clause 12 and amendment 34. The new clause removes the words “recognised as” and makes it clear beyond question that the Scottish Parliament and the Scottish Government are permanent institutions, and that it would take a vote by the people of Scotland in a referendum to ever abolish them. The amendment puts it beyond doubt that, as the Prime Minister has said,

“Scottish devolution is woven into the very fabric of our United Kingdom.”

New clause 13 is a technical provision ensuring that, where legislative competence is being transferred to the Scottish Parliament in relation to elections, executive functions are transferred to the Scottish Ministers in relation to that area. This will minimise the need for the Scottish Parliament to make separate textual changes to legislation after commencement of the Bill. Amendments 81 and 130 to 132 are consequential amendments to new clause 13.

Amendments 35 and 61 would devolve to the Scottish Parliament the subject matter of new subsection (2B) of section 2 of the Scotland Act 1998, inserted by clause 5 of the Bill. New subsection (2B) enables Scottish Ministers to make an order specifying an alternative date for a Scottish parliamentary general election, where otherwise the date would fall on the same day as an ordinary general election or a general election to the European Parliament.

Government amendments 36 and 44 to 45 clarify what is meant by “combined elections”. Amendment 36 makes it clear that the reservation of the rules governing campaign expenditure by political parties applies where there are overlapping regulated periods, even if the actual polls take place on different days. Amendments 44 to 46 ensure consistency of language throughout the Bill by amending other provisions in clause 7 concerned with expenditure in connection with elections.

Amendment 131 inserts a reference to clause 3 and has the effect of applying schedule 3 to the Interpretation and Legislative Reform (Scotland) Act 2010 to any functions that are exercisable within devolved competence by virtue of that clause. The new wording included in amendment 37 makes it clear that the Scottish Parliament will be able to give the Electoral Commission powers as well as duties when reporting on the delivery of its functions in relation to elections to the Scottish Parliament.

Minor amendments 38 and 39 ensure that the Scottish Ministers’ powers to make provision on the conduct of Scottish parliamentary elections are in line with the legislative competence of the Scottish Parliament in this area. Amendment 40 is a minor change to align the subordinate legislation-making powers of the Scottish Ministers with the extent of the reservation of the individual electoral registration digital service, which is the Great Britain-wide service used to process online applications and to verify information supplied in applications. It is used to process applications to the registers used for all GB elections, as well as EU parliamentary elections.

Amendments 41 and 42 ensure that the power in clause 5 to specify a new date for an ordinary Scottish parliamentary election works effectively with the Presiding Officer’s existing power to propose to move the date of such a poll. Amendment 43 has the same purpose as the section of the clause it replaces—to enable the Scottish Ministers to exercise, concurrently with the Secretary of State, certain subordinate legislation-making functions relating to the digital service, which otherwise remains reserved. The effect of this is to allow Scottish Ministers to exercise functions and make regulations about the digital service.

Amendments 47 to 60 seek to clarify the rules on super-majority. A number of these are technical and consequential, but I will draw the attention of the House to the three main amendments in this group. Amendment 47 requires that the Presiding Officer must decide whether any provision of a Bill relates to a protected subject matter, rather than assessing the provisions of the Bill more generally. Amendment 50 has the effect that a Bill passed with a simple majority in respect of which the Supreme Court subsequently decides that a simple majority is sufficient must be reconsidered by the Scottish Parliament before being submitted for Royal Assent. It is important that the Scottish Parliament has the opportunity to reconsider the Bill in this scenario as circumstances may have changed since the Bill was first passed.

Amendment 60, partly consequential on a number of other amendments, means that requirements regarding the final stage for a Bill, and for approval of a Bill following reconsideration to be treated as the passing of the Bill, apply regardless of the ground for reconsideration.

Government amendments 62 to 69 deliver new powers to the Scottish Parliament in relation to the arrangements and operation of the Scottish Parliament and Scottish Government, in response to amendments made in Committee and discussions with the Scottish Government. They include powers in relation to the dating of Royal Assent, the form and nature of certain statements by the Presiding Officer, letters patent, appointments to the Scottish Government, the Auditor General for Scotland and the Queen’s Printer for Scotland. These amendments extend the far-reaching powers in the arrangements and operation of the Scottish Parliament and Scottish Government already provided for by clause 11 and address a number of amendments tabled in Committee and by the SNP today.

[Ian Murray (Edinburgh South) (Lab)]

The Secretary of State is cantering through the Government amendments. Can he clarify for the House whether, in the current context, they would require a legislative consent motion for the Trade Union Bill?

[David Mundell]

As the hon. Gentleman will know, the Trade Union Bill is still under discussion in this House, and it is the Bill as finalised by this House and the other place that will determine the nature of any legislative consent motion that is required, as is the normal practice.

The amendments I have tabled today fulfil my commitment to reflect on the debate in Committee. It is a bit rich to be criticised both for taking no amendments and, in the same breath, for tabling too many. We took the Committee process seriously and the contribution from the devolved powers committee in the Scottish Parliament very seriously, and that has determined our thinking in lodging these amendments. We will now hear the case for other, non-Government amendments, but the House will not be surprised to hear that the Government still consider that full fiscal autonomy is not in the interests of the people of Scotland. I believe that Scotland’s parties, rather than rerunning the referendum, need to work together to understand how the powers in the Bill will be used for the benefit of the people of Scotland. The UK Government are honouring their commitment in the Edinburgh agreement, accepting the result of the referendum and moving forward to give the Scottish Parliament significant new powers within our United Kingdom.

[Mr Graham Allen (Nottingham North) (Lab)]

It is very nice once again to be talking about Scottish—[Interruption.] I give way to the Clerk. That is the first time I have been heckled from the Clerk’s Table, but I am sure it will not be the last.

There is one thing that concerns me. Much as I welcome the devolution to Scotland that the Scottish people have achieved—owing to the hard work of people such as Donald Dewar, the Scottish constitutional convention, even the Scotland Act 2012 and now this Bill—there are those of us who represent constituencies in England who envy that and would kill for 1% of the effective devolution that has gone to Scotland. I congratulate the Scottish people on their efforts and where they have got to, but I hope we will come very soon to how England can learn some of the lessons of Scottish devolution, because it has taught many of us many lessons. I will perhaps touch on some of the devolution packages now appearing in England, which look puny and weak compared with the proper devolution that has now taken root, quite rightly, in Scotland.

My anxiety is about centralisation. It is not devolution if the powers merely go to the next stage. If they go from Whitehall to Holyrood and stay there—and, some would argue, are perhaps not used as sufficiently as they could be—

--- Later in debate ---

We went to the country with those pledges, and what happened? There was an absolute electoral wipeout for the Labour party in Scotland, losing 40 out of 41 seats from right across Scotland. The hon. Member for Edinburgh South (Ian Murray) is pointing to Conservative Members, whom I will move on to next. It was the worst electoral showing in 100 years—since 1865. I must say to the Secretary of State, because I have challenged him before on this, that I would be grateful if he pointed out a single country in the industrialised democratic world where the mainstream centre-right party does as badly as the Scottish Conservative party. Name that country!

[David Mundell]

Since the hon. Gentleman has put that on the record so many times, I want to point out that the Conservative party polled more votes in the 2015 general election than in 2010 election. He has sought to distort those figures. Perhaps he would like to join me in congratulating the new Conservative councillor in Aberdeenshire, who topped the poll in the very constituency of the right hon. Member for Gordon (Alex Salmond).

[Angus Robertson]

Oh dear, oh dear! The right hon. Gentleman had the opportunity to name a single country in the industrialised democratic world where a centre-right party does worse than the Scottish Conservative party, but he could not think of one because there are none. The Scottish Tories polled 14.9%, down two points on the previous general election. To be proud of that—

[David Mundell]

Twenty thousand votes up.

[Angus Robertson]

For the Secretary of State for Scotland to deny the facts just goes to show how far the Conservative party, the Labour party and—[Interruption.] I was going to add the Liberal Democrats—there is not a single one in the Chamber—because they lost 10 out of 11 seats in Scotland.

The point of saying all this is to understand where the democratic mandate lies. We went to the country saying that Smith should be delivered in full and that further powers should be delivered, and the Scottish National party won an overwhelming mandate to come to this place and make our case.

--- Later in debate ---

[Ian Blackford]

The point is that the Scottish people were promised by Gordon Brown that we were going to get “powers for a purpose”—that we were going to have a powerhouse Parliament—and that is not what is being delivered tonight.

[David Mundell]

We are.

[Ian Blackford]

Despite what the Secretary of State says, the reality of the situation is that 70% of powers over taxation and 85% of powers over welfare will be held here at Westminster. I do not know what that is, but it is certainly not a powerhouse Parliament.

In the light of the challenges we face with the cuts to tax credits, which we will discuss in the second part of tonight’s debate, we need to make sure that the Scottish Parliament has the powers to protect the people of Scotland. We will be saying to the Labour party, “Come with us. Show that resolve,” to make sure that we can protect the people we need to protect in the country of Scotland.

--- 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.

[Several hon. Members rose—]

[David Mundell]

I need to deal with the specific issues that have been raised, including gift aid. I commend the hon. Member for Edinburgh South (Ian Murray) for pursuing this issue, because it is important to the charitable sector. It came up when I addressed the Scottish Council for Voluntary Organisations recently. I can confirm that the UK Government remain committed to working with the charity sector to ensure that gift aid works effectively for charities and their donors. This is something that we already do, and something that we will continue to do. We consulted the charity sector fully in advance of agreeing the arrangements for the continued operation of gift aid under the Scottish rate of income tax, which will come into effect in April 2016. Similarly, we are fully committed to consulting the charity sector, in Scotland and the rest of the UK, ahead of agreeing arrangements for the continued operation of gift aid under the devolution of income tax powers as proposed by the Bill.

The Government are fully committed to an ongoing dialogue with the charity sector before and after the enactment of the Bill to ensure that gift aid continues to operate effectively. It is our objective to maximise the amount of gift aid claimed on eligible donations. I hope that, on the basis of those reassurances, the hon. Gentleman will not press his new clause to a vote.

[Ian Murray]

I am grateful to the Secretary of State for his clarification on gift aid. That is a significant concern for the charity sector in Scotland, which will welcome his reassurances. On that basis, we will not press new clause 4 to a vote.

[David Mundell]

I thank the hon. Gentleman for that.

I also thank the hon. Member for Edinburgh East (Tommy Sheppard). I usually disagree fundamentally with his contributions, but I always enjoy them. I also commend him on winning the new MP of the year award from The Spectator. He and the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) touched on the Sewel convention—the legislative consent motion procedure in the Scottish Parliament. I am afraid that I do not agree with their proposals. The Sewel convention has been set out in the Bill, as required by the Smith commission.

[Chris Stephens]

Will the Minister give way?

[David Mundell]

I want to respond to all the points raised on the new clauses and amendments if I can.

The hon. Member for Nottingham North (Mr Allen) has put forward various suggestions on local government. On the one hand, I agree with the SNP that it is a matter for the Scottish Parliament to determine the nature of local government in Scotland. On the other hand, I agree with the hon. Gentleman that as many matters as possible in Scotland should be devolved locally. Indeed, that was one of Lord Smith’s proposals for the Bill.

On the question of permanence, I am glad that the current proposal, which I had previously shared with the Scottish Government and the Devolved Powers Committee, meets everyone’s aspirations. In response to the hon. Member for Caerphilly (Wayne David), this is an important proposal which demonstrates what the people of Scotland have clearly indicated they wish to see in the legislation. I am also pleased that the proposals relating to elections have been relatively uncontentious, as were the measures relating to a super-majority. I therefore hope that the amendments to those measures will not be pressed to a vote.

I am afraid that I cannot agree with Labour’s proposal for the full amount of VAT raised in Scotland to be assigned to Scotland. It was a key part of the Smith agreement that half the VAT revenue should be so assigned, in order to ensure a stable balance between encouraging Scotland’s economy to grow and insulating the Scottish Government’s budget from UK-wide economic shocks. I hope that the relevant amendment will therefore not be pressed to a vote.

The question of human rights was raised by the hon. and learned Member for Edinburgh South West (Joanna Cherry). I have found her previous contributions to this Parliament to be based on fact and not on politics, so it will not surprise her to learn that I was disappointed with her contribution this evening. This is an important issue. The House will be aware that we have outlined our proposal to reform and modernise our human rights framework by replacing the Human Rights Act with a Bill of Rights. Of course I am very aware of the possible devolution implications of reform, and we will engage with the devolved Administrations as we develop these proposals. We spoke about this matter in Committee, and the Government’s view has not changed. The Government are working on proposals for the reform of the human rights framework, and we will bring forward those proposals in due course, in consultation with the devolved Administrations.

The fiscal framework has also been discussed today. I want to put on record the fact that I am absolutely confident that John Swinney, negotiating on behalf of the Scottish Government, will be able to get a good deal for them. I have that confidence in Mr Swinney, and I know that he and the UK Government are absolutely committed to achieving that objective. We have had a number of detailed discussions on the fiscal framework, and we agreed at the start that we would not provide a running commentary on those negotiations. Nothing is agreed until everything is agreed. However, there is no suggestion that agreement cannot be reached, and it will be an agreement that is fair for Scotland and fair for the rest of the United Kingdom. I look forward to Members of this House and of the Scottish Parliament being able to properly scrutinise that agreement.

[Sir Edward Leigh]

Will my right hon. Friend deal briefly with amendment 224, which has been tabled by the SNP? According to its accompanying explanatory statement, instead of asking the House to impose full fiscal autonomy, the Scottish Parliament

“could then legislate in these areas to provide for full fiscal autonomy in Scotland.”

In other words, SNP Members do not actually want full fiscal autonomy yet. They are like St Augustine: they want to stop sinning, but not quite yet. I think we should call their bluff on this one.

[David Mundell]

Throughout the course of these debates it has been clear that the strongest advocate of full fiscal devolution in this House is my hon. Friend the Member for Gainsborough (Sir Edward Leigh). He is willing to put his money where his mouth is. I am not willing to put the livelihoods of people in Scotland on the line just to demonstrate that some scheme would not work.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

rose—

[David Mundell]

I want to deal with new clause 36, which is an important proposal—at least the hon. Gentleman’s colleagues suggest it is. In September 2014, the people of Scotland voted decisively to remain part of the United Kingdom, and to retain our two Parliaments and two Governments. The SNP reassured us repeatedly in advance of the referendum that it would be a once-in-a-generation or once-in-a-lifetime event. The First Minister herself signed the Edinburgh agreement, which committed both of Scotland’s Governments to respect the outcome of the independence referendum. However much the SNP might dislike the fact, the 2 million people in Scotland who voted no voted to keep our United Kingdom. Their votes should be respected and not set aside as an unfortunate setback on the road to independence. Most people in Scotland support our place in the United Kingdom and do not want a second referendum—that is a fact that the SNP cannot face up to.

This new clause is a distraction from the real powers contained in this Bill. The Bill gives the Scottish Parliament significant new powers, with the strength of the United Kingdom. The SNP needs to tell us how it intends to use those powers for the benefit of the people of Scotland. I will therefore not be supporting new clause 36 and am again proposing that people support my amendments.

Question put and agreed to.

New clause 12 accordingly read a Second time, and added to the Bill.

New Clause 13

Functions exercisable within devolved competence: elections

“(1) The Scotland Act 1998 (“the 1998 Act”) has effect, in relation to any function so far as exercisable within devolved competence by virtue of a provision of section 3, as if references to a “pre-commencement enactment” were to—

(a) an Act passed before or in the same session as the relevant date,

(b) any other enactment made before the relevant date,

(c) subordinate legislation under section 106 of the 1998 Act, to the extent that the legislation states that it is to be treated as a pre-commencement enactment,

but did not include the 1998 Act or this Act (or any amendment made by either of those Acts) or (subject to paragraph (c)) an enactment comprised in subordinate legislation under either of those Acts.

(2) In this section—

(a) expressions used in the 1998 Act have the same meaning as in that Act;

(b) the relevant date is the date on which section 3 comes into force.”—(Stephen Barclay.)

This amendment makes provision for various existing functions of Ministers of the Crown in respect of elections to instead be exercised by Scottish Ministers, so far as such functions are exercisable within devolved competence by virtue of Clause 3.

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

New Clause 1

Independent Commission on Full Fiscal Autonomy

“(1) The Secretary of State shall appoint a commission of between four and eleven members to conduct an analysis of the impact of Full Fiscal Autonomy on the Scottish economy, labour market and public finances and to report by 31 March 2016.

(2) No member of the House of Commons, the House of Lords, or the Scottish Parliament may be a member of the commission.

(3) No employee of the Scottish Government or of any government Department or agency anywhere in the United Kingdom may be a member of the commission.

(4) The Secretary of State shall, in consultation and with the agreement of Scottish Ministers, appoint as members of the commission only persons who appear to the Secretary of State to hold a relevant qualification or to have relevant experience.

(5) The Secretary of State shall not appoint as a member of the commission any person who is a member of a political party.

(6) Before appointing any member of the commission, the Secretary of State must consult—

(a) The Chair of any select committee appointed by the House of Commons to consider Scottish Affairs, and

(b) The Chair of any select committee appointed by the House of Commons to examine the expenditure, administration and policy of Her Majesty’s Treasury and its associated public bodies.

(7) The Secretary of State may by regulations issue the commission with terms of reference and guidelines for the commission’s working methods, including an outline definition of the policy of full fiscal autonomy for the commission to analyse.

(8) The Secretary of State must lay copies of the report of the commission before both Houses of Parliament, and must transmit a copy of the report of the commission to the Presiding Officer of the Scottish Parliament.

(9) Regulations under this section must be made by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament.”—(Ian Murray.)

The new Clause provides for the establishment of an independent commission to investigate the impact of FFA.

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

--- Later in debate ---

[Mr Deputy Speaker]

It is not for the Chair to decide what the SNP does; it is up to the SNP to decide what it moves or does not move. As I said, I knew that it was not a point of order, and I knew that you knew the answer before you asked me.

New Clause 14

“Welfare foods

‘(1) Part 2 of Schedule 5 to the Scotland Act 1998, Section F1 (social security schemes) is amended as follows.

(2) In the Exceptions, after exception 8 (see section 23 above) insert—

“Exception 9

The subject-matter of section 13 of the Social Security Act 1988 (benefits under schemes for improving nutrition: pregnant women, mothers and children).”

(3) In the Interpretation provision, at the end insert—

“The reference to the subject-matter of section 13 of the Social Security Act 1988 is to be construed as a reference to it as at the day on which section [Welfare foods] of the Scotland Act 2015 comes into force (and, accordingly, paragraph 5(1) of Part 3 of this Schedule does not apply to that reference).”

(4) Omit Section J5 (welfare foods).

(5) In the Social Security Act 1988, in section 13(2) (benefits under schemes for improving nutrition: consultation) omit “the Scottish Ministers and”.”—(David Mundell.)

This amendment devolves to the Scottish Parliament legislative competence regarding welfare foods, enabling the Scottish Parliament, in relation to Scotland, to abolish or amend schemes for the provision of welfare foods, as currently made under section 13 of the Social Security Act 1988, or to make new schemes for the provision of welfare foods.

Brought up, and read the First time.

[David Mundell]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss Government new clause 34—Power to create other new benefits.

Government new clause 15—Abortion.

Government new clause 16—Public sector duty regarding socio-economic inequalities.

Government new clause 17—Destination of fines, forfeitures and fixed penalties.

New clause 2—

“New benefits

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 8 (see section 23 above) insert—

“Exception 9

A benefit not in existence at the relevant date provided entitlement to or the purpose of the benefit is different from entitlement to or the purpose of any benefit that is— For the purpose of this exception—

(a) in existence at the relevant date,

(b) payable by or on behalf of a Minister of the Crown, and

(c) otherwise a reserved benefit.

“the relevant date” means the date of introduction into Parliament of the Bill that becomes the Scotland Act 2015;

“reserved benefit” means a benefit which is to any extent a reserved matter.””

The new Clause expands and clarifies the right of the Scottish Government to create new benefits—that is, benefits not in existence on the date on which the bill is passed.

New clause 3—

“Joint Committee on Welfare Devolution

‘(1) There is to be a Committee (to be known as the Joint Committee on Welfare Devolution) to examine the transfer, implementation and operation of the powers devolved to the Scottish Parliament by Part 3 of this Act.

(2) The Joint Committee on Welfare Devolution is to be responsible for ensuring full co-operation, consultation and information-sharing between the UK Government, the Scottish Government, and relevant stakeholders.

(3) The Joint Committee on Welfare Devolution is to publish a report—

(a) on the transfer and implementation of the powers devolved to the Scottish Parliament by Part 3 of this Act at least once every three months for the first three years from the date when this Act is passed, and

(b) on the operation of the powers devolved to the Scottish Parliament by Part 3 of this Act at least once in each calendar year after three years from the date when this Act is passed.

(4) Schedule (The Joint Committee on Welfare Devolution), which makes further provision in relation to the Joint Committee on Welfare Devolution, has effect.”

This new Clause, linked to New Schedule NS1 on the Joint Committee on Welfare Devolution, provides for a cross-Parliament committee to oversee the transition and implementation of welfare powers transferred under this Act. The Committee would include members from both Parliaments and would be required to report frequently in the transition phase and thereafter annually.

New clause 5—

“Childcare element of universal credit

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in Exceptions, after exception 6 (see section 22 above) insert—

“Exception 7

The subject-matter of regulations 31 to 34 of the Universal Credit Regulations 2013.””

This new clause would devolve to the Scottish Parliament the power to make rules about the childcare element of Universal Credit.

New clause 10—

“Commission on social and economic rights

‘(1) The Secretary of State shall appoint a commission on social and economic rights.

(2) The Secretary of State shall invite the Presiding Officers or Speakers of the House of Commons, House of Lords, National Assembly of Wales, Northern Ireland Assembly and the Scottish Parliament each to nominate no more than three persons to the commission on social and economic rights.

(3) The commission on social and economic rights must report on—

(a) the practicality of making the Scottish Parliament and Scottish Government subject to the rights contained in the International Covenant on Economic, Social and Cultural Rights; and

(b) the consequences of Scottish devolution for the attainment of economic and social rights throughout the United Kingdom.

(4) The Secretary of State may by regulations determine the role, composition, organisation and powers of the commission on social and economic rights.”

The purpose of this New Clause is to create a commission to consider whether economic and social rights could be made justiciable in Scotland, and the prospects for achieving fuller attainment of economic and social rights throughout the United Kingdom.

New clause 18—

“Tax credits

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Section F1 is amended as follows.

(2) In the Exceptions, after exception 9 (see section (Welfare foods) (2) above) insert—

“Exception 10

The subject-matter of the Tax Credits Act 2002.””

This New Clause devolves to the Scottish Parliament the power to make provision for child tax credit, and working tax credit.

New clause 19—

“Employment and industrial relations

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Head H (Employment) is amended as follows.

(2) Omit Section H1 (employment and industrial relations).

(3) Insert new Section H1A as follows.

“H1A. National Minimum Wage

The subject-matter of the National Minimum Wage Act 1998.””

This new clause would devolve employment rights and duties and industrial relations, except for the national minimum wage, to the Scottish Parliament.

New clause 20—

“National minimum wage

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Head H (Employment) is amended as follows.

(2) Omit ‘(h) the National Minimum Wage Act 1998’.

(3) For the heading “Exception”, substitute “Exceptions”.

(4) After the heading “Exceptions” insert—

“(none) “The subject-matter of the National Minimum Wage Act 1998.””

This new clause would devolve the subject-matter of the National Minimum Wage Act 1998 to the Scottish Parliament.

New clause 21—

“National Insurance: employers’ contributions

‘(1) Section F1 of Schedule 5 to the Scotland Act 1998 is amended as follows.

(2) In the illustrations, omit “National Insurance;”

(3) In the Exceptions, after exception 11 (see section (Benefits relating to children)) insert—

“Exception 12

National Insurance so far as relating to contributions payable by employers.””

This new clause would devolve employers’ National Insurance contributions to the Scottish Parliament.

New clause 22—

“Job search and support

In Part 2 of Schedule 5 to the Scotland Act 1998, omit Section H3 (job search and support).”

This new clause would devolve employment support programmes to the Scottish Parliament.

New clause 23—

“Working age benefits

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 9 (see section 23A above) insert—

“Exception 10

Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) universal credit under Part 1 of the Welfare Reform Act 2012;

(b) jobseeker’s allowance (whether contributions-based or income based) under the Jobseekers Act 1995;

(c) employment and support allowance (whether contributory or income-related) under Part 1 of the Welfare Reform Act 2007;

(d) income support under section 124 of the Social Security and Benefits Act 1992;

(e) housing benefit under section 130 of that Act and

(f) child tax credit and working tax credit under the Tax Credits Act 2002.

The benefits referred to in paragraphs (a) to (f) above are—(a) in the case of income-based jobseeker’s allowance and income-related employment support allowance, those benefits as they existed on 28 April 2013 (the day before their abolition), (b) in the case of the other benefits, those benefits as they existed on 28 May 2015 (the date of introduction into Parliament of the Bill for the Scotland Act 2015.””

This new clause would devolve working age benefits to the Scottish Parliament.

New clause 24—

“Universal credit: powers to vary other elements

‘(1) A function of making regulations to which this section applies, so far as it is exercisable by the Secretary of State in or as regards Scotland, is exercisable by the Scottish Ministers concurrently with the Secretary of State.

(2) This section applies to—

(a) regulations under section 8(3)(a) of the Welfare Reform Act 2012 (amount in respect of earned income) so far relating to the work allowance (that is, the amount of a claimant’s earned income that is to be disregarded in calculating the amounts to be deducted from the maximum amount in accordance with section 8(3) of that Act),

(b) regulations under section 10 of that Act (amount in respect of responsibility for children and young persons),

(c) regulations under section 12 of that Act (amounts in respect of other particular needs or circumstances) so far as relating to—

(i) the needs or circumstances referred to in subsection (2)(c) of that section (caring responsibilities for a severely disabled person), or

(ii) needs or circumstances of a claimant in paid work relating to childcare costs,

(d) regulations under any of sections 14 to 22, 24 and 25 of that Act (work-related requirements), and

(e) regulations under any of sections 26 to 28 of that Act (sanctions).

(3) The Scottish Ministers may not exercise the function of making regulations to which this section applies unless they have consulted the Secretary of State.

(4) The Secretary of State may not exercise the function of making regulations to which this section applies in or as regards Scotland unless he or she has consulted the Scottish Ministers.

(5) Where regulations are made by the Scottish Ministers by virtue of subsection (1)—

(a) section 43 of the Welfare Reform Act 2012 (regulations: procedure) does not apply, and

(b) the regulations are subject to the negative procedure (see Part 2 of the Interpretation and Legislative Reform (Scotland) Act 2010).””

This new clause would give the Scottish Parliament greater flexibility to make changes in Universal Credit.

New clause 25—

“Benefits relating to children

In Section F1 of Part 2 of Schedule 5 to the Scotland Act 1998, in the Exceptions, after exception 10 (see section (Working age benefits) above) insert—

“Exception 11

Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) guardian’s allowance under section 77 of the Social Security Contributions and Benefits Act 1992;

(b) child benefit under Part 9 of that Act.

The benefits referred to in paragraphs (a) and (b) are those benefits as they existed on 28 May 2015 (the date of introduction into Parliament of the Bill for the Scotland Act 2015).””

This new clause would devolve benefits relating to children to the Scottish Parliament.

New clause 26—

“Health and safety

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998 (“the 1998 Act”), omit Section H2 (health and safety).

(2) The Health and Safety Executive is a cross-border public authority for the purposes of the 1998 Act.

(3) The 1998 Act applies in relation to the Health and Safety Executive in the same way as it applies in relation to cross-border public authorities specified in an Order in Council under section 88(5) of the 1998 Act.”

This new clause would devolve health and safety to the Scottish Parliament and designates the Health and Safety Executive as a cross-border public authority.

New clause 27—

“Equal opportunities

“In Part 2 of Schedule 5 to the Scotland Act 1998, omit Section L2 (equal opportunities).”

This new clause would devolve equal opportunities to the Scottish Parliament.

New clause 28—

“Crown property

‘(1) Part 1 of Schedule 5 to the Scotland Act 1998 (general reservations) is amended as follows.

(2) Omit paragraph 2(3)

(3) In paragraph 3(3), omit paragraph (a).

(4) After paragraph 3, insert—

“(3A) Without prejudice to paragraphs 2 and 3, paragraph 1 does not reserve—

(a) removing or altering functions of, or conferring functions on, the Crown Estate Commissioners in relation to the holding or management of property within paragraph 3(1),

(b) where a function of the Crown Estate Commissioners of holding property is so removed, the transfer of any property held in exercise of the function.”

(5) Functions relating to Crown property are, so far as they relate to Crown property in or relating to the Scottish offshore region, to be treated for the purposes of the Scotland Act 1998 as exercisable in or as regards Scotland.

(6) In subsection (5)—

“Crown property” means property within paragraph 3(1) of Part 1 of Schedule 5 to the Scotland Act 1998, “Scottish offshore region” has the same meaning as in the Marine and Coastal Access Act 2009 (see section 322 of that Act)

(7) In section 1(2) of the Civil List Act 1952 (payment of hereditary revenues into the Scottish Consolidated Fund), omit “from bona vacantia, ultimus haeres and treasure trove”.”

This alternative to clause 31 would reduce the complexity of the current arrangements relating to the Crown Estate by removing the reservation relating to the management of the Crown Estate and provides the Scottish Parliament with full legislative competence in relation to the management of the Crown Estate in or as regards Scotland. It would also transfer any functions of the Crown Estate Commissioners in relation to rights to the continental shelf beyond the 200 nautical mile limit adjacent to Scotland.

New clause 29—

“Party political broadcasts

In Section K1 of Part 2 of Schedule 5 to the Scotland Act 1998 (broadcasting), after the reservation insert—

“Exceptions

(a) party political broadcasts in connection with elections that are within the legislative competence of the Parliament, and

(b) referendum campaign broadcasts in connection with referendums held under Acts of the Scottish Parliament.””

New clause 30—

“Broadcasting

Leave out section K1 in Part 2 of Schedule 5 (Broadcasting) to the 1998 Act.”

New clause 31—

“Levies in respect of agriculture, taking wild game, aquaculture and fisheries etc.

‘(1) In Part 2 of Schedule 5 to the Scotland Act 1998, Section A1 is amended as follows.

(2) In the Exceptions, after the exception for devolved taxes insert—

(3) After the Exceptions insert—

“Interpretation

“agriculture” includes horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, and the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds.

“aquaculture” includes the breeding, rearing or cultivation of fish (of any kind), seafood or aquatic organisms.

“related activity” means the production, processing, manufacture, marketing or distribution of—

(a) anything (including any creature alive or dead) produced or taken in the course of agriculture, taking wild game or aquaculture, or caught (by any means) in a fishery,

(b) any product which is derived to any substantial extent from anything so produced or caught.””

This new Clause would give the Scottish Parliament general legislative competence in respect of agricultural, aquacultural and fisheries levies.

New clause 32—

“Rail Services

In Part 2 of Schedule 5 to the Act, in section E2, after “Exceptions” there is inserted—

This amendment would devolve rail services in Scotland giving Scottish Ministers full powers and flexibility to decide who would run such services.

New clause 33—

“Civil Aviation Authority

‘(1) In Section 1 of the Civil Aviation Act 1982, at end insert—

“(4) The Secretary of State must consult the Scottish Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1), and in relation to activities of the Civil Aviation Authority.

(5) In subsection (4), “Scotland” has the same meaning as in the Scotland Act 1998.””

This New Clause would allow a ‘formal consultative role’ for the Scottish Government and the Scottish Parliament in setting the strategic priorities for the Civil Aviation Authority.

New schedule 1—The Joint Committee on Welfare Devolution

Membership

1 The Joint Committee on Welfare Devolution is to comprise the Secretary of State, who is to be the chair of the Committee, and the following other members—

(a) the Scottish Minister who is responsible to the Scottish Parliament for welfare policy and payments, who is to be the deputy chair of the Committee;

(b) the Member of the House of Commons who is for the time being the Chair of the Work and Pensions Select Committee of the House of Commons;

(c) the Member of the Scottish Parliament who is for the time being the Chair of the Welfare Reform Committee of the Scottish Parliament;

(d) two Members of the House of Commons who are not Ministers of the Crown;

(e) two Members of the Scottish Parliament who are not Scottish Ministers; and

(f) two persons representing local government in Scotland.

2 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1(d) are to be appointed to membership of the Committee by the Speaker of the House of Commons.

3 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1 (e) are to be appointed to membership of the Committee by the Presiding Officer of the Scottish Parliament.

4 The members of the Joint Committee on Welfare Devolution mentioned in paragraph 1(f) are to be appointed to membership of the Committee by Scottish Ministers after consultation with the Convention of Scottish Local Authorities.

5 In this Schedule, references to the Work and Pensions Select Committee of the House of Commons are—

(a) if the name of that Committee is changed, to be taken (subject to paragraph (b)) to be references to the Committee by its new name;

(b) if the functions of that Committee at the passing of this Act with respect to welfare policy and payments (or functions substantially corresponding thereto) become functions of a different committee of the House of Commons, to be taken to be references to the committee by whom the functions are for the time being exercisable.

6 In this Schedule, references to the Welfare Reform Committee of the Scottish Parliament are—

(a) if the name of that Committee is changed, to be taken (subject to paragraph (b)) to be references to the Committee by its new name;

(b) if the functions of that Committee at the passing of this Act with respect to welfare policy and payments (or functions substantially corresponding thereto) become functions of a different committee of the Scottish Parliament, to be taken to be references to the committee by whom the functions are for the time being exercisable.

Term of office of Committee members

7 A member may resign from the Committee at any time by giving notice to the Secretary of State.

8 A member may be re-appointed (or further re-appointed) to membership of the Committee.

Committee proceedings

9 The Joint Committee on Welfare Reform may determine its own procedure.

10 The validity of any proceedings of the Joint Committee on Welfare Reform is not affected by—

(a) any vacancy among, or

(b) any defect in the appointment of any of, the members of the Committee.

11 The Joint Committee on Welfare Reform may appoint a member of the Committee to act as chair at any meeting of the Committee in the absence of both the Secretary of State and the Scottish Minster who is deputy chair of the Committee.

Advisory Panel

12 The Secretary of State and Scottish Ministers acting jointly may make regulations appointing an advisory panel on the transfer, implementation and operation of the powers devolved to the Scottish Parliament by Part 3 of this Act, comprising academics, representatives of the third sector and voluntary organisations, and other relevant stakeholders.

13 The Joint Committee on Welfare Reform must consult any advisory panel appointed under paragraph 12 of this Schedule.

This new Schedule is linked to New Clause NC3 (Joint Committee on Welfare Reform) and makes provision about membership and proceedings of the Joint Committee, including the appointment of an advisory panel including third sector and academic experts.

Amendment 194, in clause 19, page 21, line 39, leave out from “of” to end of line 7 on page 22 and insert “a disabled person or person with a physical or mental impairment or health condition in respect of effects or needs arising from that disability, impairment or health condition.”

Government amendments 70, 71, 72, 73, 191 and 192

Amendment 21, in clause 21, page 24, leave out lines 13 to 20.

This amendment would allow the Scottish Parliament to legislate for topping up reserved benefits by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 159, in clause 22, page 24, leave out lines 36 to 48.

This amendment would remove some of the restrictions, including those relating to sanctions, in relation to discretionary housing payments.

Government amendments 76.

Amendment 22, in clause 22, page 25, leave out lines 1 to 8.

This amendment would allow the Scottish Parliament to legislate for making discretionary housing payments by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 23, in clause 23, page 25, leave out lines 30 to 37.

This amendment would allow the Scottish Parliament to legislate for making discretionary payments to meet short-term needs by providing financial assistance in any case where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct.

Amendment 161, in clause 23, page 25, line 40, after “individuals”, insert “—

“(a) ”

Amendment 162, in clause 23, page 25, line 45, at end add “, or (b) who are part of a family facing exceptional pressure.”

Amendment 163, in clause 24, page 26, line 20, leave out from “unless” to end of line 25 and insert “they have consulted the Secretary of State”

This amendment would remove the requirement for the Scottish Government to obtain consent from a UK Secretary of State in relation to Universal Credit and the costs of claimants who rent accommodation.

Government amendments 77.

Amendment 24, page 26, line 25, leave out “unreasonably”

This amendment would make it clear that the UK Government cannot withhold agreement and will have a legal obligation to agree to any changes to regulations made by the Scottish Government using the new regulation-making powers conferred under clause 24.

Amendment 32, page 26, line 35, leave out “negative procedure (see section 28” and insert “affirmative procedure (see section 29”

This amendment would require regulations made by Scottish Ministers under subsection (1) of Clause 24 (Universal credit: costs of claimants who rent accommodation) to be subject to the Scottish Parliament’s affirmative procedure.

Amendment 164, in clause 25, page 26, line 45, leave out from “unless” to end of line 5 on page 27 and insert “they have consulted the Secretary of State”.

This amendment would remove the requirement for the Scottish Government to obtain consent from a UK Secretary of State in relation to persons to who, and time when, Universal Credit is paid.

Government amendments 78.

Amendment 25,  page 27, line 5, leave out “unreasonably”.

This amendment would make it clear that the UK Government cannot withhold agreement and will have a legal obligation to agree to any changes to regulations made by the Scottish Government using the new regulation-making powers conferred under clause 25.

Amendment 33,  page 27, line 13, leave out “negative procedure (see section 28” and insert “affirmative procedure (see section 29”.

This amendment would require regulations made by Scottish Ministers under subsection (1) of Clause 25 (Universal credit: person to whom, and time when, paid) to be subject to the Scottish Parliament’s affirmative procedure.

Amendment 165, in clause 26, page 27, line 22, leave out from beginning to “for” in line 23 and insert “Arrangements”.

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes.

Amendment 166, page 27, leave out lines 27 to 29 and insert—“assisting persons (including persons claiming reserved benefits) who are unemployed or at risk of long-term unemployment to select, obtain and retain employment;”

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes

Amendment 167, page 27, line 34, leave out “another person” and insert “a person other than the person making the arrangements”.

Amendments 165, 166 and 167 make provision for the Scottish Parliament to have power to legislate on arrangements for employment support programmes.

Government amendments 79, 80, 82, 193 and 83.

Amendment 168, page 30, line 30, leave out Clause 31.

Amendment 11, in clause 31, page 30, line 34, leave out “may” and insert “must following agreement with the Scottish Government”.

Government amendments 84 to 89.

Amendment 12,  page 32, line 25, leave out “C” and insert “A”.

Amendment 13,  page 32, line 31, leave out “then, instead of the type C procedure”.

Amendment 14, page 32, line 31, leave out “I” and insert “A”.

Government amendments 90 to 96.

Amendment 169, in clause 32, page 33, line 44, leave out subsection (2).

This amendment delivers a more explicit reference to the devolution of competence over gender quotas in respect of public bodies in Scotland but ensures that it is “not limited to” gender quotas, as agreed in the Smith Commission report.

Amendment 225,  page 34, line 2, leave out subsection (3) and insert—

‘(3) Under the heading “Exceptions”, at end insert—

(none) Equal opportunities in relation to the Scottish functions of any Scottish public authority or cross-border public authority including appointments to the board of any Scottish public authority. The provision falling within this exception includes provision that reproduces or applies an enactment contained in the Equality Act 2006 or the Equality Act 2010, with or without modification, without affecting the enactment as it applies for the purposes of those Acts. It does not include any modification of those Acts, other than modifications of the types specified in paragraphs (a) to (d)

(a) provision that supplements or is otherwise additional to provision made by those Acts, and which may enhance but may not diminish the protection and promotion of equal opportunities afforded by the provision made by those Acts;

(b) in particular, provision imposing a requirement to take action that the Acts do not prohibit;

(c) provision that extends application of the existing powers and duties of, or grants additional powers to, the Commission for Equality and Human Rights in respect of provisions made under any part of subsection (3)

(d) provision that requires the Commission for Equality and Human Rights to attend the proceedings of the Scottish Parliament for the purposes of giving evidence and to send each annual report of the Commission to the Scottish Ministers and that requires the Scottish Ministers to lay each annual report received before the Scottish Parliament.”

This amendment makes provision for the Scottish Parliament to have legislative competence in respect of the public sector equality duty, and in respect of equality of opportunity in relation to the functions of Scottish and cross-border public authorities, including appointments to public boards. It clarifies that the Scottish Parliament’s power to make modifications to the Equality Acts 2006 and 2010 is limited to making provision that enhances the protection and promotion of equal opportunities. The amendment makes provision for the powers of the Equality and Human Rights Commission to be applied in relation to any modifications to the Acts. It also enables provision to be made to increase the accountability of the Equality and Human Rights Commission to the Scottish Parliament.

Government amendments 97 and 98.

Amendment 171, in clause 32, page 34, line 4, at end insert—

“Equal opportunities in relation to an appointment as a member of a Scottish public authority.”

Government amendments 100 and 99.

Amendment 26,  page 34, line 13, at end insert “including the imposition of minimum quotas for women and other persons with protected characteristics across all levels of public and political representation in Scotland.”

This Amendment is intended to make explicit that, among the exceptions to reserved matters on equal opportunities, the power is being devolved to the Scottish Parliament to set gender quotas.

Amendment 157,  page 34, line 16, at end insert—

“(d) equal opportunity provisions in relation to candidates at an election for membership of the Scottish Parliament and a local government election in Scotland.”

This would allow the necessary competence for gender quotas in relation to the Scottish Parliament and local government to be transferred to the Scottish Parliament.

Government amendment 101.

Amendment 172,  page 34, line 18, leave out “the Equality Act 2010 and Part 1 of that Act” and insert “and the Equality Act 2010”.

Government amendment 102.

Amendment 173, in clause 32, page 34, line 25, leave out subsection (6) and insert—

‘( ) In section 2 (power to amend section1)—

(a) in subsection (7), omit “the Scottish Ministers or”,

(b) in subsection (10), before “Ministers” insert “Welsh””

Government amendment 103.

Amendment 174,  page 34, line 37, leave out subsection (9) and insert—

‘( ) In section 216 (commencement) at the beginning of subsection (3) insert “Subject to subsection (4),” and after that subsection insert—

(4) Part 1 comes into force on such day as the Scottish Ministers may by order appoint so far as it—

(a) confers a power on the Scottish Ministers

(b) relates to a public authority in respect of which such a power is exercisable.

(5) The following do not apply to an order under subsection (4)—

(a) section 207(2) (see instead section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010: powers exercisable by Scottish statutory instrument), and

(b) section 210.””

Government amendment 104.

Amendment 175, page 35, line 2, leave out subsection (10).

Government amendment 105.

Amendment 15,  page 35, leave out lines 18 and 19.

Amendment 16,  page 35, leave out lines 24 and 25.

Amendment 176, page 35, leave out lines 26 to 30 and insert—

‘(nonenone) “This Schedule does not reserve the transfer of all the functions of a tribunal referred to in sub-paragraph (2) to a Scottish tribunal, so far as the functions are exercisable in relation to Scottish cases or a specified category of Scottish cases, in accordance with provision made by Her Majesty by Order in Council.”

This amendment would ensure that all functions exercisable in relation to Scottish cases or a specified category of Scottish cases should transfer to the Scottish Parliament.

Amendment 17,  page 35, leave out lines 26 to 30.

Amendment 177, page 35, leave out from beginning of line 31 to end of line 7 on page 36.

Amendment 178, page 36, line 22, at end insert—

‘( ) For the avoidance of doubt, this Schedule does not reserve—

(a) a Scottish tribunal’s practice and procedure when exercising functions that have been transferred to it by virtue of this paragraph, or

(b) the fees and expenses chargeable for, or in connection with, proceedings before a Scottish tribunal when it is exercising those functions.”

This amendment makes clear that competence over a tribunal’s practice, rules of procedure and fees in relation to transferred cases becomes devolved, as per the Smith Commission recommendation.

Amendment 179, in clause 34, page 37, line 28, leave out from “relating” to “to” in line 29.

This amendment would remove a restriction on the full devolution of speed limits in relation to emergency vehicles.

Amendment 180, in clause 36, page 41, line 15, leave out paragraph (a) and insert—

“(a) in relation to vehicles used on roads in Scotland, means the Scottish Ministers.”

Amendment 181, page 41, line 19, at end insert—

‘(18) In section 130 (application of Act to Crown)—

(a) in subsection (3) for “Secretary of State” substitute “relevant authority”, and

(b) after that subsection insert—

(3A) In subsection (3) “relevant authority”—

(a) in relation to vehicles used on roads in Scotland, means the Scottish Ministers,

(b) otherwise, means the Secretary of State.”

This amendment would amend section 130(3) of the Road Traffic Regulation Act 1984 so that Scottish Ministers are added into the provision as the relevant “national authority”.

Government amendments 106 to 128.

Amendment 182, in clause 45, page 47, leave out lines 4 to 8, and insert—

“The number of relevant gaming machines authorised (if any) in respect of premises licences under the Gambling Act 2005.

A “relevant gaming machine” is a gaming machine (within the meaning of section 235 of the Gambling Act 2005) for which the maximum charge for use is more than £10.”

This amendment replaces the reference to betting premises with a more general reference to gambling premises, giving full effect to Smith Commission recommendation 74.

Amendment 18, page 47, line 7 , leave out “for which the maximum charge for use is more than £10”.

Amendment 1, page 47, line 7, leave out “£10” and insert “£2”.

Amendment 183, page 47, leave out lines 13 to 20 and insert—

“(a) the Scottish Ministers in respect of premises in Scotland in so far as the order varies the number of gaming machines authorised (if any) for which the maximum charge for use is more than £10, or

(b) otherwise, the Secretary of State.”

This amendment replaces the reference to betting premises with a more general reference to gambling premises, giving full effect to Smith Commission recommendation 74.

Amendment 19, page 47, line 17, leave out “for which the maximum charge for use is more than £10”.

Amendment 2, page 47, line 18, leave out “£10” and insert “£2”.

Amendment 3, page 47, line 18, after “£10”, insert—

‘( ) the content and the speed of play,”

Amendment 4,  page 47, line 18, after “£10”, insert—

‘( ) the number of staff required to supervise such machines,”

Amendment 20,  page 47, line 35, leave out subsection (6).

Government amendments 137 to 139.

Amendment 184, in clause 50, page 49, leave out from line 32 to line 50 on page 50 and insert—

‘(4) The Scottish Ministers may not make regulations under section 9 unless they have consulted the Secretary of State about the proposed regulations.

(5) Subsection (1) does not prevent the Secretary of State making a support scheme in relation to Scotland under section 9, or varying or revoking regulations made by the Scottish Ministers under that section with the agreement of the Scottish Ministers.”

Government amendments 140 to 143.

Amendment 185, in clause 51, page 52, line 9, leave out from beginning to end of line 6 on page 53 and insert—

‘(4) The power of the Scottish Ministers under section 33BC does not include power to make provision in relation to the subject matter of sections 88 to 90 of the Energy Act 2008 (smart meters).

(5) The Scottish Ministers may not make an order under section 33BC unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 33BC is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 144 to 147.

Amendment 186,  page 53, line 48, leave out from beginning to end of line 40 on page 54 and insert—

‘(5) The Scottish Ministers may not make an order under section 33BD unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 33BD is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 148 to 150.

Amendment 187,  page 55, line 30, leave out from beginning to end of line 24 on page 56 and insert—

“(5) The Scottish Ministers may not make an order under section 41A unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41A is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendments 151 to 153

Amendment 188,  page 57, line 17, leave out from beginning to line 9 on page 58 and insert—

“(5) The Scottish Ministers may not make an order under section 41B unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41B is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

Government amendment 154.

Amendment 189, in clause 53, page 60, leave out lines 9 to 17.

This amendment removes restrictions on the consultation process with the Scottish Government and Scottish Parliament in relation to renewables incentive schemes.

Amendment 190, in clause 55, page 63, line 17, at end insert—

“() the Scottish Ministers,”.

Clause 55 as currently drafted would allow Scottish Ministers to make a reference to the Competition and Markets Authority only in the most exceptional circumstances. This amendment would enable Scottish Ministers to make a reference without the involvement of the Secretary of State.

Government amendments 129 and 133 to 136.

[David Mundell]

Let me begin by dealing with the specific issue of welfare funds, on which I am accepting an amendment that the SNP tabled in Committee. The Smith commission agreement stated that the devolution of welfare foods should be the subject of further discussion between the UK and Scottish Governments. This has taken place, and I am pleased that new clause 14 and consequential amendments 79, 80, 82 and 83 devolve powers to the Scottish Parliament concerning welfare foods. They will be able to abolish or amend existing schemes, which includes the nursery milk scheme and health start scheme, or make new schemes for the provision of welfare foods.

On welfare more generally, the Government are proposing a number of changes to the welfare clauses, responding to a number of comments made by Members of this House in Committee, as well as the Scottish Parliament and other stakeholders. As a result, it will be beyond doubt that the Scotland Bill fully delivers on the Smith commission agreement and that the Scottish Parliament will have significant responsibilities for areas of welfare. I was pleased to see these changes receiving a full endorsement from Gordon Brown, from the Scottish media, and indeed from all objective observers. The Scottish Government are getting responsibility for disability and carer’s benefits that were worth £2.7 billion in Scotland last year, and they will be able to deliver new benefits in all areas of devolved responsibility if they wish. Amendments 70 and 71 to clause 19 ensure that the Scottish Parliament can, if it wishes, legislate for the payment of a carer’s benefit to a person who is under 16, is in full-time education or is gainfully employed. The Scottish Government will be able to pay anyone on a reserved benefit a top-up payment. That includes being able to top up benefits such as tax credits, child benefit and universal credit.

[Ian Murray]

For the sake of clarity, will the Secretary of State say whether the Scotland Bill, as drafted this evening, will allow the Scottish Parliament to top up tax credits?

[David Mundell]

I have said it on numerous occasions and I am very happy to say it again: the Scotland Bill, as it progresses through the House this evening, will allow the Scottish Parliament to top up tax credits, and indeed child benefit and elements of universal credit. The Scottish Government will be able to pay shorter-term payments to help anyone, regardless of whether or not they are entitled to a reserved benefit, who has an immediate need for them and whose wellbeing is at risk.

I have proposed important changes to the Bill so that the Scottish Parliament can create its own new benefits in any area of devolved responsibility. That will be achieved by new clause 34 and amendments 191 to 193. The Scottish Parliament will be able to do this without any need to consult the UK Government. This power is significant: the Scottish Parliament will no longer be able to say that it is constrained by Westminster in deciding what it does, and it will be able to choose what additional benefits to offer people in Scotland.

I must, however, make very clear a few important points about the new power that the Scottish Parliament will get to create new benefits in devolved areas. Any new benefits that the Scottish Government want to deliver will be in parallel to the benefits that are delivered by the UK Government. The new power does not affect Westminster’s ability to legislate for and to deliver support, and it does not enable the Scottish Parliament to change or amend reserved Westminster legislation in any way. The Scottish Parliament will need to both fund and deliver any new benefits from Scottish funds.

The House will be aware that we have also delivered on other areas of Smith in full. Scottish Ministers will be able to make regulations for certain elements of universal credit, such as the frequency of payments and to whom they are paid.

[Ms Ahmed-Sheikh]

For clarity on the tax credit cuts, what provision is there for those who will lose their tax credits completely, as a result of this Tory Government’s cutting agenda, in the Scotland Bill?

[David Mundell]

I do not know whether the hon. Lady is familiar with the income tax provisions in the Bill, but the Scottish Parliament will have complete control over income tax in Scotland. If it is concerned that people in work are not receiving sufficient income, it will be able to adjust those tax rates. The hon. Lady knows that tax credits are not being devolved, but she also knows that they can be topped up. She and her party have been particularly unwilling to say whether or not they propose to top up those benefits.

[Several hon. Members rose—]

[David Mundell]

No, I will not give way.

SNP Members will have a whole range of benefits, but rather than put any thought into how to evolve a welfare system in Scotland, they are taking the usual SNP position—focus, focus, focus on what we cannot do, rather than telling anybody in Scotland what we can do.

[Ms Ahmed-Sheikh]

Will the Secretary of State give way?

[David Mundell]

No. I have dealt with that issue.

There was much debate in Committee on the universal credit powers. There were many inaccurate accusations that the UK Government would have a power to veto decisions of the Scottish Government. To put this beyond reasonable doubt, I have tabled amendments to clauses 24 and 25 to make it clear that there is no UK veto over decisions that the Scottish Government make in this space. Amendments 77 and 78 will strengthen the drafting of those provisions. The Secretary of State for Work and Pensions will remain legally responsible for the delivery of universal credit, but both Governments will need to work collaboratively to consider any such changes to the elements of universal credit. That is at the heart of clauses 24 and 25, and I know that our officials have already had very constructive discussions with the Scottish Government on this subject. To ensure that the record is crystal clear, let me say that there are no UK Government vetoes anywhere in these welfare and employment clauses.

I would like to emphasise that we have listened to the Scottish Government and to the debate in the House. For example, amendment 72, which enables the Scottish Government to provide non-financial assistance for maternity, funeral and heating expenses, reflects an amendment the SNP tabled in Committee. After full consideration, the Government are happy to make this change. Amendments 73, 76, 191 and 192 also relate to that provision.

All in all, this settlement fully reflects the agreement reached by the Smith commission. It ensures that the areas that the agreement said should remain reserved—pensions, universal credit, sanctions and conditionality, and employment support delivered by Jobcentre Plus—remain the responsibility of the UK Government, but, importantly, it gives the Scottish Parliament full responsibility for many areas of welfare. The Scottish Parliament will have the autonomy to legislate for large areas of welfare, and I look forward to the beginning of the debate on how it intends to use those powers.

The Smith commission agreement also recommended the devolution of abortion legislation, given that the parties to the agreement were strongly of the view that the anomalous reservation needed to be corrected. As I announced last month, UK and Scottish Ministers and officials have held discussions on the matter and reflected very carefully about the practicalities of devolution in this area.

[Ian Murray]

I am grateful to the Secretary of State for accepting a lot of the Labour amendments, and indeed some SNP amendments tabled in Committee. He said quite clearly in Committee back in July that he would not devolve abortion without a proper process and full consultation and discussion with Scottish women’s groups. What has made him change his mind?

[David Mundell]

I do not think that that is an accurate reflection of what I said. I made it very clear that the Smith commission had recommended the devolution of abortion and that we were engaged in a discussion with the Scottish Government. We have of course engaged with women’s groups in Scotland. The groups to whom I have spoken are clear that abortion can be devolved.

[Melanie Onn (Great Grimsby) (Lab)]

Will the Secretary of State give way?

[David Mundell]

Not just at the moment, if the hon. Lady will let me finish.

Those groups are clear that the Scottish Parliament has the capacity to deal with the issue of abortion, but they want its devolution to be handled sensitively. I think that we are in the process of doing that. The First Minister of Scotland has made it very clear that she has no plans to change the existing arrangements in relation to abortion. The hon. Member for Edinburgh South (Ian Murray) will know that devolving abortion to the Scottish Parliament will not simply lead to a change in the law in Scotland; that will happen only if the Scottish Parliament makes such a decision.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Secretary of State will know that it is not in the gift of any one Minister to make such a decision. He is actually proposing a very substantial change to the framework of abortion legislation. In fact, he has done no proper, substantial consultation. We will have just a few minutes in the House to discuss something that is so substantial and such a big change to the Abortion Act 1967. Does he really think that a few minutes’ discussion now, and the limited conversations between Scotland Office and Scottish Government officials, is the right way to do this?

[David Mundell]

My starting point is that I believe that the Scottish Parliament has the capacity to deal with this issue. It is in danger of verging on the patronising to suggest that the Scottish Parliament is not capable of dealing with it. Even though it is an issue of great importance and conscience, I am satisfied that the Scottish Parliament has the capacity to deal with it.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Does the Minister agree that it is extraordinary that, despite all three main parties in Scotland being led by women and the Scottish Parliament having brought in some of the most progressive legislation on equal marriage in the world, the Labour party apparently still feels that Scotland’s people need male-dominated Westminster to protect women’s rights?

[David Mundell]

I do not totally agree with that analysis, either. However, I am strongly of the view that there is no constitutional reason not to devolve abortion. The Scottish Parliament has responsibility for most aspects of the NHS and the criminal justice system.

[Yvette Cooper]

Does the Secretary of State not realise that he is setting up two different systems, one for Scotland and one for England and Wales, when we know from other parts of the world that that leads to women having to travel for abortions at a vulnerable time? That issue of principle—deciding whether it is right for people to have to travel—is important. I hope that many of our Scottish colleagues will agree with us about the importance of the 1967 Act. I know that there is strong agreement from the First Minister. However, there is an issue of principle in whether we think it is right to increase the likelihood of women having to travel at a vulnerable time. Does he think it is right to do that without proper consultation with women across not just Scotland, but England—

--- Later in debate ---

[David Mundell]

I do not think that there is any evidence to suggest that what the right hon. Lady describes will be the case. There is considerable evidence that, over the past 16 years, the Scottish Parliament has dealt with sensitive matters in an appropriate way.

[Jess Phillips (Birmingham, Yardley) (Lab)]

My understanding is that this matter was not originally in the devolution plans, but was added after it was raised with a number of Members of the House who are pro-life. Will the Minister please allay my fears?

--- Later in debate ---

[David Mundell]

I can confirm that that is absolutely not the case. The Smith commission report makes it clear that devolution of abortion law should take place and that the reservation in the 1998 Act was anomalous in comparison with the health and criminal justice devolution that took place. The commission recognised, and I recognise, that this is a matter that must be dealt with sensitively. That is why there have been discussions with the Scottish Government, why the First Minister of Scotland has made her position on the issue clear and why Scotland’s Health Minister will meet shortly with women’s groups and interested parties in Scotland as the devolution of abortion progresses.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

As was made clear in Committee, the Scottish Government have made it clear in no uncertain terms that there are no planned changes to the legislation. On that basis, does the Secretary of State agree that Labour Members undermine their colleagues in the Scottish Parliament by intimating that they cannot legislate on their own matters?

[David Mundell]

I am sure that the hon. Lady and other Members will have heard me say that I am absolutely satisfied that the Scottish Parliament has the capacity to deal with this issue. Although tonight and on other occasions there have been significant differences between us on what should and should not be devolved to the Scottish Parliament, the basis of my arguments has never been a belief that the Scottish Parliament is not capable of dealing with particular sensitive or difficult issues; it is just that I feel that the balance of responsibilities in the devolution settlement is better served in a different way. I genuinely believe that the balance of the devolution settlement is best served by abortion being devolved, which is consistent with the health and criminal justice devolution in the wider settlement.

[Melanie Onn]

The Smith commission did not say that abortion should be devolved now, but that a procedure should be put in place in order that it could be considered. Before we make this decision tonight, will the Secretary of State explain what procedure has been put in place and what consultation there has been?

[David Mundell]

If the hon. Lady looks at the Smith commission report, she will see that it does not say that the devolution of abortion law is in question or should be consulted on. What is to be consulted on is the process of that devolution, and it will be. The UK Government are committed to that approach and I have assured women’s groups in Scotland that I am committed to it. I know that the Scottish Government are committed to that approach, too. The First Minister could not have made her position clearer.

This issue is about the constitutional balance between the United Kingdom and Scotland, and about where this decision is most appropriately taken. The Smith commission came to the clear conclusion that it appropriately lay with the Scottish Parliament. This measure is being taken forward in a measured way. It is almost a year since the Smith commission reported. There will be no change to the legal position on abortion in Scotland simply by this act of devolution.

[Mark Menzies (Fylde) (Con)]

I agree with the Secretary of State that it is right that we trust the Scottish Parliament on this important issue. It has shown itself to be progressive on issues such as same-sex marriage and has important legislative powers on health and the judicial system, so I urge him to carry on with this measure and ensure that the Scottish Parliament is given the accountability it needs.

[David Mundell]

I think I have made it clear that simply devolving the power does not mean that there will be a change to the position under the 1967 Act. I am sure we will hear views on that, and we will of course listen to them.

[Stephen Kinnock (Aberavon) (Lab)]

Does the Secretary of State agree that a woman’s right to choose should be universal?

[David Mundell]

That is not the nature of this debate. We are debating whether the Scottish Parliament should have responsibility on this issue, and I believe that it has the capacity to make decisions in an informed way. It is becoming offensive to suggest otherwise. When we debate other responsibilities for the Scottish Parliament, we do not do so based on its capacity or the idea that it might fall under undue influence and make the wrong decision.

I think I have made the position clear, but I restate that we will continue to work closely with women’s groups and other interested parties to ensure that the devolution of abortion law is as smooth as possible. As I have repeatedly said, there will be no change simply because of devolution, because the Scottish Government and the First Minister have stated that they do not intend to change the existing provisions.

[Several hon. Members rose—]

[David Mundell]

I am afraid I am going to move on to discuss the Crown Estate, another important issue that has been much debated in the context of devolution. Clause 31 allows for the Crown Estate’s Scottish assets to be managed by the Scottish Government, and states that they should receive the revenue from the management of those assets.

[Alan Brown]

Clause 31(1) actually begins, “The Treasury may make”, which is hardly a ringing endorsement of the commitment to devolve that matter. It may as well say, “Maybe aye, maybe no.”

[David Mundell]

Obviously I do not accept that analysis. The Crown Estate transfer scheme and the memorandum between both Governments have been published and are in the House Library, and copies are available in the Vote Office. I see that the Scottish Government have already come back with their comments on the proposals. The clause clearly means that the Scottish Parliament will have the competence to legislate for the management of the Scottish assets, and to further devolve powers to local authorities and communities should it wish. I hope that, in accordance with the provisions that Lord Smith set out in the agreement, it will do so.

The clause also provides for the protections envisaged by the Smith commission to ensure that the transfer is not detrimental to defence or other UK-wide critical national infrastructure. Amendments 84 to 95 strengthen the delivery of the Smith commission recommendation and the drafting of the clause. They make clear the policy intent of the clause, including the protection to be included in the transfer scheme relating to electricity charges and the obligation to maintain an estate in land, with the proceeds from any disposal having to be reinvested in the estate.

I have also tabled a number of amendments on equal opportunities. Having engaged with stakeholders and the Scottish Government on the equal opportunities provisions and having reflected on the debates in Committee, we have responded to representations that have been made on how clause 32 might be made clearer. New clause 16 and the consequential amendments 102 to 104 and 97 confirm that Scottish Ministers may, by order, commence and implement part 1 of the Equality Act 2010 in Scotland. That provides for the devolution of socioeconomic rights to the Scottish Parliament.

Amendments 96 and 98 to 101 to clause 32 similarly represent a revised and improved drafting approach. They strengthen the clause on appointments to the boards of public bodies that exercise devolved functions in Scotland, and they make clear that the Scottish Parliament could legislate to introduce protections, requirements and positive measures—including gender quotas—for such appointments to boards of public sector bodies. Amendment 105 to clause 33 is intended to make the purpose, effect and operation of the tribunals provision clearer. It removes ambiguity from the drafting, and more clearly sets out the mechanism by which the management and operation of reserved tribunals will be devolved to the Scottish Parliament.

New clause 17 and consequential amendments 134 and 135 will allow the UK Government to change primary and secondary legislation so that fines, forfeitures and fixed penalties imposed by courts and tribunals in Scotland are required to be paid to the Scottish consolidated fund, and therefore retained by the Scottish Government. That delivers the Smith commission agreement.

The Bill devolves to the Scottish Parliament legislative and Executive competence relating to national speed limits and traffic signs in Scotland. Minor and technical amendments 106 and 136 are required to correct the drafting in clause 37 and schedule 2, and do not impact on powers devolved in that area. Amendment 107 to clause 37 ensures that the Scottish Government are able to use the Traffic Signs Regulations and General Directions 2016 once they come into effect.

The Smith commission agreed that the licensing of onshore oil and gas licences in Scotland should be devolved to the Scottish Parliament. Amendments 111 to 113 and 108 improve the intended functioning of the oil and gas clauses that are to bring about a transfer of legislative competence. Amendment 109 ensures that the competence of the Scottish Parliament over given licences in the Scottish onshore area is not affected by geological processes on the coastline. Amendment 110 clarifies the extent of petroleum access powers that are being devolved in relation to land access for the purposes of searching and boring for petroleum under a licence. Amendment 114 allows existing cross-border licences to be split so that Scottish Ministers are granted administration of all licensed acreage in the Scottish onshore area.

Clause 43 devolves power to the Scottish Parliament over the provision of consumer advocacy and advice in Scotland. Amendments 115 to 128 correct minor and technical errors in the clause and clarify the drafting of the provision that relates to the levy on gas and electricity companies and the postal sector, to fund relevant consumer advocacy. That levy will continue to be raised across the UK, and funds will continue to be apportioned to Scotland.

Amendments 137 to 142 to clause 50 will enable Scottish Ministers to design and implement schemes for reducing fuel poverty in Scotland by imposing obligations on energy providers. The amendments transfer an additional power to Scottish Ministers so that they can set out in regulations the rules for determining the value of any benefit provided under a Scottish fuel poverty scheme, and set different benefit amounts for different categories of eligible consumers. The amendments also remove duplicate requirements on Scottish Ministers, and clarify that the Secretary of State can continue to exercise powers that are not transferred to Scottish Minsters.

Amendments 143 to 154 to clause 51 take into account the debate in Committee. They seek to ensure that costs are clear and equitable, by placing a duty on Scottish Ministers to design the Scottish energy company obligation in a way that should keep the costs of the obligations in Scotland within the share of any carbon emission reduction or home-heating cost reduction target apportioned to Scotland. Technical amendments 129 and 133 are needed to ensure that the member appointed to the Ofcom board by Scottish Ministers has the same functions and responsibilities as other board members.

In conclusion, I am confident that the amendments I am proposing will be seen by objective observers as positive drafting changes that will strengthen the provisions and make clear that the Bill fully delivers the Smith commission agreement in words and in spirit.

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[Ian Murray]

My right hon. Friend did not take it through this place but he was heavily involved in it, and he knows about the issues relating to abortion and the position taken.

Amendment 26 makes it explicit that, among the exceptions to reserved matters on equal opportunities, the power to set gender quotas is being devolved to the Scottish Parliament. The Labour party takes this issue very seriously, and we thank Women 50:50 for helping us with these issues. I also commend amendment 225.

We now have a welfare section in this Bill that is in line with the Smith agreement. Everyone in this Chamber should be incredibly proud of that achievement and now we must move on to the debate about how we use these powers.

[David Mundell]

I do not want to say too much more at this stage, other than to welcome the fact that, other than in relation to the issue of abortion, to which I shall return, the Government’s proposals have been accepted. I am grateful for that.

In Committee, I said we would listen to sensible proposals made in the context of the Smith agreement, and that is what we have done. That is why I am not persuaded by some of the amendments, particularly those set out by the hon. Member for Banff and Buchan (Dr Whiteford) on the welfare system. They do not relate to areas that form part of the agreement. As we have mentioned on other occasions during this debate, the SNP was of course part of the Smith commission process and it signed up to an agreement that at that point did not seek to devolve tax credits to the Scottish Parliament. What was devolved were extensive powers that allow the topping up of tax credits and other benefits; the creation of new benefits in devolved areas; the topping up of child benefit; and changes to be made to income tax—

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I asked this question of the Secretary of State for Work and Pensions in Committee but did not receive an answer, so will the Minister assure us now that, in the event of the Scottish Government deciding to top up any benefit, it will then not be considered income and clawed back at a later stage when universal credit is being claimed?

[David Mundell]

The Scottish Government will have to take into consideration all the decisions that they make, because they will be responsible and accountable. I suspect that we will see a change in them. They will move from a position of making uncosted promises to one where they are held to account for where the money is coming from.

I do not agree with the Scottish Labour party’s commitment to put up the taxes of hard-working people in Scotland, but at least it is honest about it. It wants to put up tax to pay for additional benefits in Scotland. That is a fair position for it to adopt, but the Scottish National party has said nothing about how it will deploy these significant new powers.

Once again, in relation to welfare, the focus has been solely on what cannot be done rather than on applying thought and rigour to exactly what can be achieved. Benefits in Scotland can be completely redesigned in areas such as disability and carers’ benefits. They are reserved benefits that the Scottish Parliament can top up. Changes in income tax is another such matter. However, that is not where the thought process is; the thought process is entirely on what cannot be done. As we have heard in the various statements on benefits, it really has been a case of “grievo-max” rather than devo-max.

I know that the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) does not agree with my position on abortion, and that she is minded to oppose this measure. However, if my amendment is carried, I will meet her and any of her concerned colleagues to discuss how we can best proceed to ensure that the matters that she set out do not come to pass. I do not believe that they will. I strongly believe that the Scottish Parliament has the capacity to deal with this issue. There is no constitutional reason why this amendment should not be made, and the Smith commission did indeed recommend that it be done. It said that it should be done sensitively and that there should be a process. I am happy to talk about that process. I know that the Scottish Government are happy to talk about that process and to engage with interested parties. On that basis, I do hope that the House will not divide on these issues.

The Government have set out their amendments—

[Ms Ahmed-Sheikh]

Will the Minister give way?

[David Mundell]

No, I will not.

The amendments set out by both Labour and the SNP in relation to this group go beyond what the Smith commission proposed. The Government amendments deliver the Smith commission in full. On that basis, I hope that the House will support the Government amendments.

Question put and agreed to.

New clause 14 accordingly read a Second time, and added to the Bill.

New Clause 34

Power to create other new benefits

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

(2) In Section F1 of Part 2 of Schedule 5, in the Exceptions, after exception 9 (see section [Welfare foods] above) insert—

Exception 10

Schemes which provide assistance for social security purposes to or in respect of individuals by way of benefits and which—

(a) are supported from sums paid out of the Scottish Consolidated Fund,

(b) do not fall within exceptions 1 to 9, and

(c) are not connected with reserved matters (other than matters reserved only by virtue of this Section).

This exception does not except providing assistance by way of pensions to or in respect of individuals who qualify by reason of old age.

This exception does not except providing assistance where the requirement for it arises from reduction, non-payability or suspension of a reserved benefit as a result of an individual’s conduct (for example, non-compliance with work-related requirements relating to the benefit) unless—

(a) the requirement for it also arises from some exceptional event or exceptional circumstances, and

(b) the requirement for it is immediate.

For the purposes of this exception “reserved benefit” means a benefit which is to any extent a reserved matter.

In this exception the reference to schemes supported from sums paid out of the Scottish Consolidated Fund does not include schemes—

(a) in respect of which sums are at some time paid out of the Scottish Consolidated Fund, but

(b) which are directly supported from payments out of the Consolidated Fund, the National Insurance Fund or the Social Fund, or out of money provided by Parliament.”

(3) Schedule 4 (enactments etc protected from modification) is amended as follows.

(4) In paragraph 2, at the end insert—

“(5) Sub-paragraph (3) does not affect sub-paragraph (1) as it applies to an Act of the Scottish Parliament so far as any matter to which a provision of the Act relates falls within exception 10 of Section F1 of Part 2 of Schedule 5.”

(5) In paragraph 3, at the end insert—

“(3) Sub-paragraph (1) does not affect the application of paragraph 2 to modifications which are incidental to, or consequential on, any provision, if it is only by virtue of exception 10 of Section F1 of Part 2 of Schedule 5 that the provision does not relate to reserved matters.”” ..—(Stephen Barclay.)

This amendment creates a new exception to the social security reservation to provide the Scottish Parliament with new powers to create new benefits. It provides competence to legislate for social security benefits the cost of which is to be met from the Scottish Consolidated Fund.

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

New Clause 15

Abortion

“In Part 2 of Schedule 5 to the Scotland Act 1998 (specific reservations) omit Section J1 (abortion).” —(Stephen Barclay.)

This amendment removes the specific reservation of abortion in part 2 of schedule 5 of the Scotland Act 1998 thereby devolving legislative competence on the subject-matter of abortion to the Scottish Parliament.

Brought up, and read the First time.

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

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[David Mundell]

I beg to move, That the Bill be now read the Third time.

I thank all Members for their participation in the debates that have taken place as the Bill has passed through the House. I believe the Bill has been strengthened by the scrutiny it has received, and the number of positive and constructive amendments that have been agreed to today is testimony to that. I particularly want to acknowledge the work of Bruce Crawford MSP and the Scottish Parliament’s Devolution (Further Powers) Committee, which has proved invaluable. Although I have not agreed with them on everything, I respect enormously their contribution to the Bill’s passage.

I thank John Swinney MSP and the Scottish Government officials for their always courteous engagement in the process. Scotland obtains the best outcome when its two Governments work together. I also thank my own officials and those in other Departments throughout Whitehall for their contributions.

The origin of the Bill was the Smith agreement, and I again pay tribute to Lord Smith of Kelvin and the representatives of all five of Scotland’s political parties for reaching an agreement which represents the new devolution settlement for Scotland. I also pay tribute to everyone who has worked so hard since then to enable us to reach this point today. I sincerely believe that the Bill delivers what the people of Scotland voted for decisively last September: one of the most powerful devolved Parliaments in the world, with the strength and security that come from being part of our United Kingdom.

No individual or party holds a monopoly of wisdom in respect of how the Smith agreement might best be translated into legislation, and the six days of debate that we have had on the Floor of the House have allowed me to listen to a variety of points of view and suggestions for further improvement. The Government have responded with the package of amendments that was presented on Report, and the Bill will proceed to the other place with its provisions clarified and strengthened.

There can be no reasonable doubt that the Bill delivers the Smith agreement in full, and the debate now moves from constitutional arguments to the important decisions that will affect the lives of people in Scotland. Will the Scottish Government create new benefits, or top up existing ones? What kind of schemes to address fuel poverty best suit the particular circumstances of Scotland? Will local communities be given a greater say in the management of assets such as the Crown Estate? How can Scotland’s public sector boards show the way forward for gender equality? Each of those decisions will now form a direct part of Scotland’s vigorous public debate, and each of them will be made in Scotland for the first time.

The Scottish Parliament and the Scottish Government will be more responsible and more accountable to the people of Scotland. That is what the Bill means for Scotland: the vow delivered, and a powerhouse Parliament within a strong United Kingdom. Now is the time for us all to work together to make these new powers a success for Scotland.

Women in the Scottish Economy

David Mundell Excerpts

Thursday 5th November 2015 Written Statements

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

The Government will be responding to the recommendations in due course and discussions between Professor Sawers and the UK Government are continuing on this matter.

[HCWS296]