Scotland Bill

Ian Murray Excerpts

Wednesday 23rd March 2016 Commons Chamber

The Government made substantial amendments to the Bill on Report in this House. The Lords amendments are largely technical, but nevertheless include important provisions related to the fiscal framework and responsible parking. I am pleased that they were accepted in the other place. I urge the House to accept the Lords amendments.

[Ian Murray (Edinburgh South) (Lab)]

The Secretary of State’s description of the road traffic changes had me mesmerised. I could have listened to him all evening. We thank him for that.

It is a great pleasure to speak on behalf of the official Opposition. I am not going to pretend that the passage of the Bill has been entirely enjoyable, smooth or stress-free, but we are where we are and it has definitely been worth getting to this place. Every Member of this House and the other place should be incredibly proud of what has been achieved in such a short time. Some will say the Bill does not go far enough, and some will be disappointed that it does not contain what they wanted, but I think today marks a historic day in the devolution journey of our Scottish Parliament.

When this Bill is passed—there is no longer any doubt that it will be passed today—Scotland will have one of the most powerful devolved Parliaments in the world. That is what the Labour party has always wanted from that process. It was the former Prime Minister, the former Member for Kirkcaldy and Cowdenbeath, who devised the vow that promised more powers. Let us pay tribute both to him and to the Daily Record for publishing it at the time. [Interruption.] I knew I would get a reaction to that. If only I had said The National, the response from the SNP Benches might have been different.

That paved the way for the Smith commission, skilfully chaired by Lord Smith of Kelvin, who managed to negotiate cross-party agreement on the form that those powers should take. That in turn laid the foundations for the Bill before us today. It has now passed through this place and the other place. A revised fiscal framework has been agreed, crucially with the Barnett formula at its heart. As promised, the vow has been delivered, with Barnett protected. That was always a Labour party priority, as we recognise the integral role played by the Barnett formula in maintaining public spending in Scotland. That said, and as the Institute for Fiscal Studies astutely observed, during the fiscal framework negotiations it was, ironically, the SNP Government who insisted upon Barnett as sacrosanct. With the zeal of the convert, they argued vociferously for an approach

“which ensures the ongoing pooling and”

sharing

“of some proportion of ‘devolved’ revenues across the UK.”

Of course, as long-standing advocates of the Barnett formula and the principle of pooling and sharing resources that it enshrines, we gave the Scottish Government our full backing in those negotiations. I wonder whether that now means that the Scottish National party has renounced its No. 1 policy priority of full fiscal autonomy—perhaps we will hear this evening.

However, at least for the time being we have an agreement. The irony is that this Bill will wing its way to Her Majesty to receive Royal Assent, hopefully later tonight, on the eve of what would have been separation day in Scotland. It creates one of the most powerful devolved Parliaments in the world, as opposed to the White Paper prospectus promised by the SNP in 2014.

Some of the Lords amendments speak directly to that agreement, delivering, for example, the strengthened borrowing powers and the enhanced fiscal oversight of Scotland’s public finances that this fiscal framework provides for. Now that the last impediment to the Bill has been removed, we must focus on the powers that the Scottish Parliament is receiving. As the Secretary of State has said, the legislative consent motion has been passed by the Scottish Parliament.

Given that today is the last day of the current Scottish Parliament, it would be remiss of me not to pay tribute to all the MSPs, from all parties, who have served since 2011. With your indulgence, Mr Deputy Speaker, I will say a word or two about those MSPs, particularly Labour MSPs, who are retiring from the Scottish Parliament, having done so much in the process of getting this Bill here today. They include Hugh Henry, Duncan McNeil and Richard Simpson, who have served since 1999. There is my old university friend Richard Baker, who was first elected in 2003, and Margaret McDougall, Graeme Pearson and Drew Smith, who were elected in 2011. They all retire with our best wishes, especially Malcolm Chisholm, who was also a long-standing Member of this House. He retires leaving a distinguished record of public service to his constituents. We wish him well. It would also be remiss of me not to mention the right hon. Member for Gordon (Alex Salmond), who is not in his place. The Scottish Parliament’s loss is this place’s gain. Are we not lucky indeed?

With the passing of this Bill and the dissolution of the Scottish Parliament, we can today lay the old arguments of the referendum to rest, alongside any doubt that the vow has not been delivered. The conversation must now move on to how these powers are used—or not used in some cases. It is worth briefly reminding ourselves what those powers are, because they are considerable, and their Lordships looked at them in great detail, for which we thank them. The Scottish Parliament has power over rates and bands of tax on all non-savings and non-dividend income. That means it can put taxes up or bring them down; it can increase or reduce the thresholds at which the different rates are paid; or it can choose to do nothing and keep things pretty much as they are, short of affording a tax break to higher earners—champions of the status quo perhaps—even if, in so doing, some people are abandoning a manifesto pledge to reintroduce the 50p rate for those earning over £150,000. That is what some have chosen to do, but that is not what we would do

I wonder how commentators have looked on that process. Owen Jones, who is often quoted by the SNP Members now beside me, called it

“a huge blow to their credentials”.

What does the Scottish Trades Union Congress think of the Scottish Government’s grand plans for devolved taxation in Scotland? It calls them

“a disappointingly timid approach to tax policy…Breaking the consensus on increasing the additional rate is difficult to fathom.”

It said it was an approach that is

“difficult to reconcile with the Scottish Government’s”

so-called

“social and economic objectives.”

For the past five years, many people had the mantra “more power for Scotland.” Today, when the Bill is passed, we will have a powerful Scottish Parliament—power not as a point of principle, but power to be used for positive, progressive change. I can tell the House, in no uncertain terms, that the Scottish Labour party will not settle for power for power’s sake. We will not settle for the political choice of austerity. This Bill goes straight to the heart of how we would do that. We will oppose austerity in the UK and we will oppose it in Scotland, and when we get into government we will reverse it. We will build a better and fairer Scotland for all, and taxation will not be our sole tool for doing so.

Lords amendment 22 strengthens the borrowing powers available to the Scottish Government, as agreed in the fiscal framework, allowing them to invest more in capital infrastructure or to smooth out fluctuations in devolved taxes.