Scotland’s Fiscal Framework

George Kerevan Excerpts

Wednesday 24th February 2016 Commons Chamber

[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.

Public Finances: Scotland

George Kerevan Excerpts

Wednesday 3rd February 2016 Commons Chamber

[David Mowat (Warrington South) (Con)]

My remarks will be very brief. I take note of the comment just made on independence and the concern about the Labour income tax. My understanding in terms of what has happened to North sea oil is that independence would require income tax to go up by approximately 20p in the pound. The point I want to make, however, is that we are talking about two terms: “fairness”, which has been mentioned a lot, and “no detriment”, which has also been mentioned a lot. I am not at all sure, having heard the dialogue, that those two things are reconcilable.

My right hon. Friend the Member for Wokingham (John Redwood) said that we accept that the Barnett formula has been conceded and that it means that per capita expenditure in Scotland is 115% of that in England. That was what was agreed and it will presumably be the cornerstone of the agreement. However, it would not be right if, as a result of the agreement currently being negotiated, “no detriment” means that, whatever happens in Scotland and whatever decisions are made by the Scottish Government, the 115% ratio will stay the same indefinitely. I shall have a great deal of difficulty with that, as will my constituents. I should add that my constituents entirely agree with the concept of a Scottish Parliament. They agree that it is right for the people of Scotland to be able to choose their priorities, whether it is a question of prescriptions or tuition fees.

[George Kerevan (East Lothian) (SNP)]

In all his years of learning, has the hon. Gentleman not grasped the fact that the Barnett formula is specifically designed to bring per capita levels of spending in every region and nation of the United Kingdom to the same level?

[David Mowat]

In all those years, I stayed away from the Barnett formula, but since the hon. Gentleman has raised the point, I will respond to it. No one who has seriously considered the Barnett formula thinks that it is an attempt to be a proxy for relative need; nor is it true that the Barnett squeeze to which the hon. Gentleman has just referred really happens. I note that no Welsh Members are present, but the Barnett formula has caused a massive problem in Wales.

It strikes me that the formula presented an opportunity to the Scottish national party to show how progressive and internationalist it was. It seems to me that a progressive party of the left, an internationalist party, would not say, “We in Scotland want every single penny that we can get.” The approach of such a party would take account of need in Wales, in England, in my constituency, and elsewhere.

I ask the Chief Secretary, in the negotiations that he is currently leading, to bear it in mind that, however we interpret the phrase “no detriment”, the ratio of increased expenditure in Scotland—the figure should be higher than it is in England on the basis of need, but not as much higher as it is now—should not be allowed to continue and be built on, no matter what decisions are made in respect of the relative economies over the next few years.

Scotland Bill

George Kerevan Excerpts

Monday 6th July 2015 Commons Chamber

[George Kerevan (East Lothian) (SNP)]

I am surprised that such an ardent and professional monarchist as the hon. Gentleman is unaware that the Crown Estate is divided by jurisdiction, and there are other jurisdictions within the Commonwealth in which Crown property is managed separately. For instance, there is a receiver general for the Crown properties in Jersey. If the Scottish people wished to continue with the monarchy, it would be perfectly sensible for the Crown Estate to be managed separately rather than property being divided, as the hon. Gentleman has suggested.

[Mr Rees-Mogg]

The hon. Gentleman has been more helpful to me than he may have realised. I think that the symbolic importance of this division is that it is symbolic of independence for Scotland rather than further devolution. I think that the indivisibility of the Crown in one nation is such that the Crown Estate ought not to be divided.

--- Later in debate ---

[George Kerevan]

That happened 100 years before.

[Mr Grieve]

The Union of the Crowns happened 100 years before, but in my view it is clear that the constitutional union came about as a result of the Act of Union, and that therefore the Crown Estate is indeed indivisible. The fact that it may be subject to a different jurisdictional framework in Scotland is neither here nor there, and to that extent the example of Canada or Jersey is not relevant to the debate.

Scotland Bill

George Kerevan Excerpts

Monday 15th June 2015 Commons Chamber

[George Kerevan (East Lothian) (SNP)]

May I thank the hon. Gentleman for the spirit in which he is presenting his argument? I also heard his speech on Second Reading and agreed with the analogies he drew with Ireland. If we are to move to a form of, as the hon. Gentleman describes it, benign fiscal freedom for Scotland, surely that requires a degree of transition, given the scale of the UK deficit and the unique circumstances post-2008. Therefore, the issue of division between us is the transitional arrangements, not the issue of fiscal freedom itself.

[Sir Edward Leigh]

I hear what the hon. Gentleman says and nobody is suggesting that, even if my new clause 3 were passed tonight, full fiscal autonomy would start immediately. Of course there has to be a discussion and, inevitably, if oil revenues are declining, there has to be some sort of support mechanism from the United Kingdom Government. I say to SNP Members that they can have this new clause. Parliament is a democratic Assembly. I do not want to overplay my importance—I suspect the Whips might ensure that my new clause is defeated—but this is an historic opportunity to give full home rule to, and to establish that principle for, Scotland, which is what the Scottish people want.

--- Later in debate ---

[John Redwood]

Yes, it was a kind of early version of the banking crash, which also reminds us that Scottish banks can sometimes get into trouble, and that the Union’s insurance can be quite helpful to them.

[George Kerevan]

May I return the discussion to the here and now? I should like to clarify something that the right hon. Gentleman said, because I think I agree with him. Is he saying that there was a clear desire in the debate that took place in Scotland post-Smith for a fuller measure of complete domestic fiscal control within the UK, but that achieving it would require serious discussions about how it would work in Scotland and how it would affect the fiscal arrangements in the rest of the UK? Does he agree that it could be done reasonably quickly, but would require transitional arrangements? It cannot be done overnight, but it is the way to go. If we do not do this, we will end up having endless piecemeal discussions, which would produce more friction than light.

[John Redwood]

I am making an even more urgent point than that. I am saying that that discussion is going on in parallel with our debates on this Bill. I hope that its content will be shared with Members at some point, because it is a matter of great importance to the United Kingdom, to England, to Scotland and so forth. As I understand it, those taking part in the negotiations are up against these very issues. If, for example, too much independence is given to Scotland on spending patterns, would there be a Union guarantee to pay for it all? How would it be fair to other parts of the Union if Scotland could increase her spending without having to take responsibility for raising the money for it? If Scotland starts to raise more of her own money, how do we adjust the block grant? In the current negotiations, nobody is suggesting getting rid of the block grant and saying that Scotland can have all her own money and just spend her own money. I am not even sure that is what the SNP wants. Negotiation is going on about how far—[Interruption.] If the SNP genuinely wants all that, that is fine. We then have to have a serious discussion, before it could be agreed to, over the borrowing. I will call it “borrowing”; I do not think “black hole” is a terribly useful term.

--- Later in debate ---

[Mr Jones]

I entirely agree. If we are to give the Scottish Government more powers over entire areas of taxation, including the raising of money that they will actually spend, we cannot do that twice. They cannot have the ability to raise revenue and, in addition, a top-up power allowing them to make some of the difficult decisions that they will have to make. The hon. Member for Dundee East seems to think that, overnight, Scotland will be turned into some beautiful paradise on a par with Switzerland—[Hon. Members: “Hear, hear.”] I must say that, in terms of beauty, it already is.

[George Kerevan]

The SNP won the majority of the vote on 7 May on the basis of a clear commitment to go beyond the proposals of the Smith commission. What we are trying to decide now is how far beyond Smith we should go. The hon. Gentleman seems to be rejecting that, while not coming up with a positive argument about what we should be doing.

[Mr Jones]

I am not, actually. I agree with the hon. Gentleman. I doubt that most people were thinking about the Smith proposals when they voted. That is not the way in which the debate in Scotland has been portrayed over the last few years. Romanticism has taken over, obscuring the practical issues that will face the Scottish economy whether we like it or not.

The hon. Gentleman cannot have it both ways. He cannot argue that he wants Smith-plus without making clear what that means. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) pointed out, what the hon. Member for Dundee East has proposed in his “trickle-down” amendment cannot be done in a vacuum by people who have no idea what the transitional framework is.

Whether we like it or not, the Scottish economy faces issues that have nothing to do with who is in either Holyrood or in this place. Those issues are an ageing population and the decline in the working population, which is expected to drop by 3% over the next 15 years in Scotland while rising by 5% in the rest of the United Kingdom. If that does happen, the tax base in Scotland will contract when it has full fiscal autonomy, and if there is no backdrop of Barnett money, or some other pool of money on which to draw, hard decisions will have to be made. When working people in Scotland wake up to the fact that what is being proposed is not Barnett plus full fiscal autonomy, but full fiscal autonomy or independence on its own without the existing safety net, and when they become aware of some of the tough decisions that the Scottish Government will have to start making, they may think differently about what is being recommended tonight by the Scottish nationalist party. [Hon. Members: “Scottish National party.”] I am sorry. I am not known for my delicacy when it comes to not wanting to offend people, but the over-victimised mentality that some Members bring to the Chamber, and to this debate in particular, is irritating, to say the least.