Scotland Bill

Lord Beamish Excerpts

Monday 15th June 2015 Commons Chamber

[Angus Robertson]

The hon. Gentleman makes an excellent point. Hopefully, the Committee does not need to divide. If there is support from Labour and from the Government, everybody will be satisfied and we can move forward.

In legal terms, there is nothing to stop the Westminster Parliament from repealing clause 1, according to the doctrine of parliamentary sovereignty and the associated norm that one Parliament cannot bind its successors. The Scottish Government produced an alternative clause that includes a double lock—it would require that the clause cannot be repealed without the prior consent of the Scottish Parliament, and without the people of Scotland voting to abolish the Scottish Parliament in a referendum conducted for that purpose. The Scottish Government clause forms the basis of our amendment.

[Mr Kevan Jones (North Durham) (Lab)]

I have no objection to what the hon. Gentleman is trying to achieve, but can he clarify the amendment? It states:

“The Scottish Parliament is a permanent part of the United Kingdom’s constitution.”

The country does not have a constitution, so will he identify the legal definition and what is constitutional?

[Angus Robertson]

The hon. Gentleman knows that the UK does not have such a constitution—we are strong supporters of a constitution, whether for the UK or for Scotland—and that the constitution is based on custom and practice. Legislating on the matter would be an appropriate safeguard.

The SNP approach would strengthen the declaratory and political effect of the clause. It also acknowledges the position of the Scottish Parliament and the long-standing sovereign right of the people of Scotland to determine the form of government best suited to their needs, as recognised in paragraph 20 of the Smith commission report, which states:

“Reflecting the sovereign right of the people of Scotland to determine the form of government best suited to their needs, as expressed in the referendum on 18 September 2014, and in the context of Scotland remaining within the UK, an enhanced devolution settlement for Scotland will be durable, responsive and democratic.”

[Mr Jones]

I am just trying to be helpful. The hon. Gentleman might have the wording “United Kingdom’s constitution” in an amendment, but would it have any legal force? An amendment to the American constitution, or to any other written constitution, is legally binding. What would be the status of the hon. Gentleman’s amendment?

[Angus Robertson]

I am making the point that it would be very difficult for people to go back on legislation with the express wording proposed in the amendment. It is not that difficult a concept to grasp.

The Scottish Government noted in their response to the Devolution (Further Powers) Committee interim report that both the House of Commons Political and Constitutional Reform Committee—I am looking at the hon. Member for Nottingham North (Mr Allen), who served with great distinction as the Chairman of that Committee—and the House of Lords Constitution Committee raised concerns with those aspects of the UK Government’s clause.

The Scottish Government’s alternative clause and the SNP amendments address more minor issues with the UK Government’s clause, using the definite article “the” instead of the indefinite “a”, as that is the language used in the Scotland Act 1998. That was picked up by the right hon. Member for Orkney and Shetland (Mr Carmichael).

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[John Redwood]

Well, it functioned after a fashion, but I would not have wanted to live through that time. The nations were clearly not nearly as rich as they are today. Labour Members sometimes try to pretend that we have gone back to an ancient age, but I am sure that none of them would willingly go back in time and live in that era, because we are obviously so much better off now.

[Mr Kevan Jones]

I do not want to divert from the subject, but was not the reason for the Scots’ enthusiasm in going forward in 1707—[Interruption.] It was not an economic blockade; it was speculation in the colonies of central America.

[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.

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That package was fiscally sustainable, workable and disciplined because the deficit and the debt would have continued to fall in every year of this Parliament. It was a cogent, coherent package that would have brought in revenue yield, spent and invested wisely, and still seen the deficit and the debt fall. That was the right approach. That anti-austerity position, which we took strongly to the Scottish people, was self-evidently supported by the majority of those who voted.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Stewart Hosie]

In a moment.

If all the IFS and Treasury analyses do is project forward “Government Expenditure and Revenue Scotland” figures, they do not provide a meaningful description of the fiscal position in a fiscally autonomous Scotland. Whether Scotland’s budget deficit—or surplus—would be larger or smaller under full fiscal autonomy depends on a huge number of factors, not least the transition process that my hon. Friends referred to earlier; the negotiated fiscal framework between Scotland and the rest of the UK; Scotland’s contribution to UK-wide public services, such as defence, debt interest and international aid; the interaction with the UK macroeconomic framework; and, most importantly, the decisions made by the Scottish Government about borrowing, economic policy and public spending.

There would have to be agreement on the past contributions and tax receipts from Scottish taxpayers and corporates, and the shared liabilities that have accrued in terms of entitlements for individuals—for example, pensions that people have paid into through the national insurance system—to maintain the free movement of labour and an integrated single market. On liabilities, it is worth pointing out, in case anybody thinks I have forgotten about this, that we think there would have to be an adjustment to reflect UK-wide costs, such as the decommissioning costs in the North sea, because the UK Government have received the full benefit of all the tax revenue associated with that economic activity so far.

In short, the current economic situation is not a reason to say no to full fiscal autonomy; rather, it is vital, in tackling the deficit, to avoid further cuts by giving Scotland the economic levers that it needs to boost growth and increase revenues.

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[Stewart Hosie]

I would like the Scottish Government to be in a position to draw down the powers as quickly as possible. Obviously, to draw them all down and use them would require transitional arrangements to be in place.

[Mr Kevan Jones]

Subsidies.

[Stewart Hosie]

I will come back to that in a moment.

It would require the tax system to be fully functioning and for there to be an agreed macroeconomic fiscal framework across the whole of the UK. That would require agreement between the Scottish Government and the UK Government—that is to say, there would be other people at the table who had to say yes to things—so it is not possible to put a hard and fast timetable on the powers. If, however, we can agree on full fiscal autonomy tonight, and the Scottish Government’s ability to draw down the powers at the right time, then with good will we can get agreement on the fiscal agreement and the overarching framework, and we can all get to work.

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[Stewart Hosie]

No. I have been very generous. I think I will stop being generous now.

In order to deliver full fiscal autonomy, amendment 89 would allow the Scottish Government to remove the reserved status of certain key areas, and allow that Government to have legislative competence over them. It would do so at an appropriate time, ensuring that the systems and the framework under which full fiscal autonomy would operate are fully in place.

We know we need full fiscal autonomy. We know how full fiscal autonomy will work. The Scottish people have voted for maximum powers, and we are here representing that view. Amendment 89 is the way forward to deliver the fairness, the justice and the economic levers that the Scottish Government need. I hope there will be huge support for it tonight. I commend the amendment to the Committee.

[Mr Kevan Jones]

It is a privilege to serve under your chairmanship, Sir David.

We have seen a remarkable event tonight—I never thought I would see such an event. The Scottish National party is having a love-in with the hon. Member for Gainsborough (Sir Edward Leigh) and the right hon. Member for Wokingham (John Redwood). Love does not come to mind very often when we think of the right hon. Gentleman, but tonight he is the darling of the SNP. The hon. Member for Dundee East (Stewart Hosie) has just lectured the Labour party about voting with the Conservatives. If he supports new clause 3, tabled by the hon. Member for Gainsborough, he will vote with them.

The hon. Member for Dundee East should cut the general election rhetoric and get down to the details. The debate is a serious one, as my hon. Friend the Member for Nottingham North (Mr Allen) has said. It is not just about Scotland, but about the devolution of powers and how we settle them for the rest of the United Kingdom. The hon. Member for Gainsborough put the SNP behind the eight ball. His is a clear proposal for moving to full fiscal autonomy or responsibility. I notice that the hon. Member for Dundee East changes things—he goes from “autonomy” to “responsibility” whenever he wants—but the hon. Member for Gainsborough is very clear that he is proposing full fiscal autonomy.

The argument being put forward is that that is what the Scottish people said at the general election. I do not accept that. In the referendum, the Scottish people said that they wanted to be part of the United Kingdom. A responsibility of being part of the United Kingdom is that certain things will be done across the four nations of this great nation of ours.

It is difficult for Scottish National party Members. If something is said by Scottish nationalists, it has to be true, and no one dare ever say that something they are saying is not true. The hon. Member for Dundee East argues that amendment 89 is a movement to full fiscal autonomy or responsibility, but it is not. It would give the power to the Scottish Government to draw down those powers. Why is amendment 89 not framed as clearly as the proposal of the hon. Member for Gainsborough? His proposal would give the powers straight away, with the consequences for the Barnett formula and the support that that gives to the Scottish Government.

It is nothing new for the Scottish nationalists to want to have their cake and eat it, but many of my constituents—and, I am sure, those of other Members—will not accept an arrangement that would allow the Scottish Government to legislate for full fiscal autonomy for which they were expected to pay. That would be not only wrong, but totally unfair on the rest of the United Kingdom.

[Dr Whitford]

We await the granting, in 2016, of the powers that were recommended by the Calman commission in 2009. The devolution of small amounts of power will have taken seven years. It is not as if, having voted for full fiscal autonomy, we would get it next week—it is simply a matter of common sense that the process takes time—but we want it as quickly as possible. The delay following the Calman report happened here.

[Mr Jones]

What the hon. Lady has said is not unusual. It is part of the blame culture. Apparently, if things do not happen in Scotland, it is because wicked Westminster—meaning parliamentarians, among others—is somehow preventing them from happening. At the time of the independence referendum, the SNP stood on its platform arguing that Scotland could be a separate, independent nation in 18 months. What has changed?

Amendment 89 is rather mealy-mouthed. As I have said, the Scottish Government will draw down the powers when they want them. There will be what the hon. Member for Dundee East described as a transitional period, and we all know what that means. It means a period during which the Scottish Government could draw down powers that would enable them to make changes in Scotland, while retaining elements such as the Barnett formula. Well, I am sorry, but that will not happen—and the hon. Member for Dundee East, and the rest of the SNP, will blame big bad Westminster because it has prevented them, or the Scottish people, from being given those powers. The proposal from the hon. Member for Gainsborough is very simple. It means full fiscal autonomy along with all its consequences, rather than a “drip, drip, drip” process over a period during which the rest of the United Kingdom would be expected to fill any gap resulting from the Bill.

[Andrew Gwynne]

I suspect that my hon. Friend is right in his analysis of where amendment 89 would lead us. To be fair to the hon. Member for Dundee East (Stewart Hosie), he was very candid about the transitional arrangements that he envisaged, which would involve the Westminster Government, the Scottish Government and, perhaps, others sitting around a table with the aim of agreeing on a framework for the drawing down of partial powers. But would we not expect the framework to be specified in the Bill, so that people in all four parts of the United Kingdom could be certain about what those transitional arrangements would be?

[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.

[Andrew Gwynne]

My hon. Friend is making an important point. We must focus on the nature of the transitional arrangements that would lead to full fiscal autonomy, and I am none the wiser about what the SNP is proposing. Is it proposing a proportionate change in the Barnett formula, aligned with the amount of tax that they will draw down in their move to full fiscal autonomy?

[Mr Jones]

I agree with my hon. Friend that the position is not clear, but I think that the SNP wants to move to full fiscal autonomy while retaining the majority of Barnett, and I am afraid that that is not going to happen. Of course, when a United Kingdom Government say no to it, we will hear what we usually hear from the Scottish nationalists: wicked Westminster is preventing Scotland from getting what it needs. That is the nub of the problem. That, I think, is why the SNP has retreated from its 18-month target for full independence, and now wants a fudge that will get them through the next few years.

The real issue, for me, is this. I support the people of Scotland in their wish for more devolution, but I do not support a system that is not good for individual members of the Scottish public, and is also unfair on my constituents and others.

My hon. Friend the Member for Nottingham North raised the broader issue of whether we need to have a debate about devolution in this country. I think that we do. I do not take his dewy-eyed approach; I think that there are times when, in any type of organisation, responsibility must stop at a certain level. If we did not take that approach, we would be devolving power to something like a French commune, and creating a system of street-level decision-making. However, it could be argued that in a country such as ours, which has a very centralised system, there is a need for a movement towards the devolution of powers.

What we saw in the north-east in 2005 was a clear decision by the people that they did not want another tier of government when they rejected the regional assembly approach, and I have to say I think most places do not want more politicians. The Chancellor’s proposal is to devolve certain things to the north-east of England only if it has an elected mayor whose jurisdiction stretches from Berwick all the way down to the Tees. Again, that is looking at the structure of things, rather than asking people. The Conservative party machine in the north-east has gone into overdrive this weekend with Mr Jeremy Middleton, a failed Conservative parliamentary candidate who cannot get elected anywhere in the north-east under the Conservative banner, now leading 60 business leaders saying the north-east’s elected councillors and others need to sit up and listen to the Chancellor and get on with having an elected mayor for that huge region. Well, I am sorry but we in the region need to have a debate about how we devolve those powers and I gently say to business, “Do not be used by someone like Mr Jeremy Middleton who clearly has a political agenda of his own. Get involved and work with local councillors and others to determine and support the future.” [Interruption.] There is a cynical side to the Government’s approach to the devolution debate, which is—[Interruption.]

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[Mr Jones]

I would not want to insult my hon. Friend the Member for Nottingham North in that way.

There is a cynical side to the Government’s approach to devolution and it goes like this: “You devolve powers because you devolve responsibilities, but you don’t devolve the funds to actually undertake them.” The Government want to contract Whitehall but they are not going to devolve the money to the English regions; they are going to devolve the responsibilities and then say to the various local bodies concerned that they are responsible for the failure to deliver at the local level.

[Andrew Gwynne]

We are here today primarily to debate the Scotland Bill, which we support, but my hon. Friend is right to point out that it has far-reaching consequences for every part of the UK, including his constituency and, indeed, mine as the Government are proposing quite extensive devolution powers to Greater Manchester. Is that not precisely why we need to have a proper debate within the framework of the constitutional convention to decide what the English answer to the English question is, as well as deciding what this place is going to do on the UK-wide question?

[Mr Jones]

I agree, and we need to get away from the cynical approach of this Government who talk about devolution and about devolving decision making but with no funds attached to that.

[Ian Paisley]

Getting back to the Scotland Bill, I agree with the thrust of what the hon. Gentleman is saying in that we should know what this costs. We have a proposal tonight to devolve all these fiscal powers, but we do not know what the cost will be for the ordinary Scot or indeed for the rest of us. When corporation tax powers were devolved to Northern Ireland, we were shown the bill of fare, and it is going to cost us £250 million a year to do that. What is it going to cost the ordinary Scot if there is devolution of all these fiscal powers?

[Mr Jones]

The hon. Gentleman raises an interesting point, which illustrates why the later amendment seeking to quantify the cost is needed. If we are going to take these decisions in the long-term interests of the Scottish economy and its people, they need to know that. I am a former trade union official and I never went into negotiations without knowing what the costs of the outcome would be. The problem with the Scottish nationalists’ proposals is that they do not know what the ultimate costs will be.

Amendment 58 in the name of the hon. Member for Moray (Angus Robertson) proposes that the phrase that the Scottish Parliament is recognised as

“a permanent part of the United Kingdom’s constitution”

replace the current wording in clause 1, which states:

“A Scottish Parliament is recognised as a permanent part of the United Kingdom’s constitutional arrangements.”

We have a problem with that, as I tried to tease out in my interventions on the hon. Gentleman: what is the definition of the United Kingdom’s constitution, because we do not have anything called that? If that amendment passes, there would be a feast day for lawyers in trying to identify what the constitution is. If we had a written constitution, the Scottish Parliament could be a permanent part of it, but we do not have a written constitution and I am at a loss to know how this would be interpreted as things currently stand. The amendment has been tabled so it is in order, but I am not sure of its practicality and uses, and I am not sure that the hon. Gentleman understands how this would be interpreted and whether it will be left to a court to decide how the UK constitution is to be defined.

[Patricia Gibson]

Does the hon. Gentleman agree that the best time to raise any concerns and questions about costs and the definition of the word “constitution” would have been when Gordon Brown was going around Scotland making a vow about creating a powerhouse Parliament?

[Mr Jones]

I am not sure what the point of that intervention was. I am talking about an amendment proposed by the hon. Lady’s party, and I think it is deficient. The onus is on the hon. Gentleman who moved it to explain to the Committee what its reference to the United Kingdom’s constitution actually means. He clearly does not have a clue what that means, and the danger is that there could be a challenge and that would lead to lots of work for lawyers—and as Members know from me of old in this place, I am not one for feeding lawyers.

This Bill is a major move forward.

[Andrew Gwynne]

Will my hon. Friend give way?

[Mr Jones]

No, as I am about to finish.

My hon. Friend made the point about the rest of the United Kingdom and there is a need for that convention. If we do not get that, we will have this patchwork quilt of so-called devolution which will not be in the interests not only of all of our constituents but of the UK as a whole.

[Mr Christopher Chope (Christchurch) (Con)]

The last two and a half hours have been fascinating, and show what this Chamber should be about. The Government and the Opposition Front Benches have come in with their own ideas and during the course of the debate it has become apparent that the new clause of my hon. Friend the Member for Gainsborough (Sir Edward Leigh) has captured the imagination of the Committee and has superseded amendment 89 proposed by the Scottish nationalist party, and I say to the hon. Member for Dundee East (Stewart Hosie)—[Interruption.] I say to the hon. Member for Dundee East that I think he has made a very wise decision in saying he is going to bring the full weight of his party in Parliament behind my hon. Friend’s new clause. It is much clearer than his party’s amendment. The hon. Gentleman should get credit for that. Governments and official Oppositions are often reluctant to change the line they have taken when faced with strong arguments against it.

In the course of this debate, my hon. Friend has shown that new clause 3 finds favour with a large number of Members across this Committee. I support it because it would do what is stated in the explanatory statement:

“entirely remove the remaining reservations over financial and economic matters, home affairs, trade and industry, energy, transport, social security, regulation of the professions, employment, health and medicines, media and culture and other miscellaneous matters. The consent of the Treasury would be needed for any changes in old age pensions which would affect the liabilities of the National Insurance Fund.”

So, by giving full fiscal autonomy to the Scottish Parliament, we would also be giving it full fiscal responsibility. As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), the former Chancellor of the Exchequer, said in an intervention, that is an important and worthwhile matter.

My constituents are worried about the mix and match approach, however. When I had the privilege of being a member of the Political and Constitutional Reform Committee, we took evidence in Scotland. One of the most telling pieces of evidence came from an academic—I cannot remember which university he came from—who said that shared responsibility would be a recipe for conflict. That has been the problem: for too long, we have been sharing these responsibilities between one part of the United Kingdom and another, with one part being played off against the other. That has meant that those wanting to promote a particular agenda have been given ammunition, because they have been able to argue that the sharing of the responsibility has been ill defined. It is almost invariably ill defined and open to interpretation. Indeed, some of the evidence we heard suggested that such disputes would ultimately have to be determined by the courts. It was suggested that the courts in the United Kingdom would determine what Parliament had decided on a particular split or shared responsibility. What a recipe for conflict and division!

The new clause tabled by my hon. Friend the Member for Gainsborough has great clarity and takes the debate forward by leapfrogging other proposals. Obviously it could not be implemented instantly, but it would not leave the matter of when to introduce full fiscal autonomy to the discretion of the Scottish Parliament, as amendment 89 proposes. Instead, new clause 3 would ensure that this Parliament would agree now on full fiscal autonomy for the Scottish Parliament. That would be a good way for this Parliament to say to the Scottish people that we respect their decision in the recent general election and that we respect the decision of their elected representatives, as enunciated by the hon. Member for Dundee East, to support this new clause.

I hope that new clause 3 will also find favour with the Secretary of State for Scotland, whom I am delighted to see sitting on the Front Bench preparing to respond to the debate. He gave evidence to the Political and Constitutional Reform Committee on several occasions during the last Parliament. At that stage, only some members of the Committee—I included myself among the optimists—thought that it would not be long before he became a fully fledged Secretary of State for Scotland. It is wonderful that that has come to pass.

This is an important debate, not least because it will sort out the problem of the Barnett formula by effectively abolishing the need for it. The formula is very unpopular with my constituents because, whenever they argue for free prescriptions, free long-term care for the elderly or free university tuition, they are told that these things cannot be afforded in England, yet they somehow can be afforded in Scotland. At the same time, however, they point out that they are paying £1,600 a head to Scotland, so it cannot be a matter of those things being unaffordable in England; rather, it is something to do with the Barnett formula. The new clause would resolve that issue and help to bring the United Kingdom back together with less conflict than there would be if we allowed the “too little, too late” agenda to be perpetuated.