Scotland Bill

Lord Browne of Ladyton Excerpts

Tuesday 28th February 2012 Lords Chamber

Moved by

[Lord Browne of Ladyton]

44B: Clause 22, page 15, line 8, leave out “Scottish Crown Estate Commissioner” and insert “Crown Estate Commissioner for Scotland”

[Lord Browne of Ladyton]

My Lords, I am sure that your Lordships' House is delighted to return to Committee on the Scotland Bill. It seems some time since we discussed these matters—and indeed it is, so we are glad of the opportunity to debate this important piece of constitutional legislation.

The amendments I will move and speak to today are probing in nature. Amendments 44B, 45A and 45B seek to explore the apparent inconsistency between the names and the appointment processes of the Scottish Crown Estate Commissioner and the BBC Trust member for Scotland as they are set out in the Bill. Noble Lords had the benefit of a debate that took place in Committee on 2 February 2012 on Amendment 44A, which was moved by my noble friend Lord Sewel in an attempt to identify the reason for these apparent differences. I shall return to the Hansard report of that debate shortly; I give the Minister notice that I will draw on the words of his colleagues in the debate to support the amendments that I have tabled.

I will say also that I welcome Amendment 45 in the name of the noble Lord, Lord Selkirk of Douglas. I put my name to it as it exactly replicates an amendment tabled in another place by my honourable friend the Member for Rutherglen and Hamilton West, Tom Greatrex, but not debated because of insufficient time.

Amendments 44B and 45A amend the title given in Clause 22 to the new commission role from the “Scottish Crown Estate Commissioner” to the,

“Crown Estate Commissioner for Scotland”.

I recognise that in itself this is a minor change to the Bill, but it raises a wider point about the consistency of the new roles for Scotland that are created by this Bill. The proposal for the change in title is derived directly from the format established in Clause 20 with the,

“BBC Trust member for Scotland”—

not the “Scottish BBC Trust member”. We believe that there should be consistency in the Bill in the naming of the new executive roles in Scotland and we ask the Minister why the decision was taken to use a different configuration for the title of the “Scottish Crown Estate Commissioner”.

The point about inconsistency becomes more important with the issue raised by Amendment 45B. The appointments process for the BBC Trust member for Scotland is that:

“A Minister of the Crown must not exercise without the agreement of the Scottish Ministers functions relating to selection for a particular appointment”.

However, the appointments process proposed for the “Scottish Crown Estate Commissioner” is in,

“the recommendation of the Chancellor of the Exchequer”,

in consultation with Scottish Ministers. This is the exact point that my noble friend Lord Sewel raised in the debate on 2 February. I am looking now at the Official Report and the words of the noble Baroness, Lady Rawlings, in seeing off my noble friend’s amendment. She said that,

“broadcasting remains a reserved matter”.—[Official Report, 2/2/12; col. 1785.]

So does the role of the Crown Estate Commission. She went on to say:

“It is our view that this”—

my noble friend’s amendment—

“does not give the Scottish Government sufficient involvement in the appointment process. Securing the agreement of the Scottish Government is the appropriate way of involving them in the appointment process for the BBC Trust member for Scotland. The existing provision gives the Scottish Government an important and appropriate power and the UK Government do not wish to weaken this. I hope that this satisfies the noble Lord, Lord Sewel, and I urge him to withdraw his amendment”.—[Official Report, 2/2/12; col. 1786.]

I draw exactly on that argument and wish to apply it to the appointment of the new Scottish commissioner for the Crown Estates.

Amendment 45B brings the appointments process for the Scottish commissioner closer into line with that of the BBC Trust member by proposing that Scottish Ministers should make the recommendation,

“with the agreement of the Chancellor of the Exchequer”.

These are not issues on which I will seek to test the opinion of the House. I raise them in an effort simply to elicit further information from the Minister about the reasons for these inconsistencies. I am fully prepared to accept that there may be good ones, but I cannot for the life of me at the moment think of what they are, but I wait with bated breath.

I would also like to speak in support of Amendment 45, which replicates a provision tabled by my honourable friend the Member for Rutherglen and Hamilton West to probe the appointments criteria intended for the new role of the Scottish Crown Estate commissioner. At present, there has been no discussion and no detail presented about the sort of qualifications expected of this important role. I look forward to hearing from the noble and learned Lord what conversations the Government have had with the Crown Estate Commission with regard to the proposed new role and the appointments process and qualifications expected. In anticipation of this debate, I had inquiries made of the commissioner’s office as to what qualifications would be expected. With all due respect to the answer I received, it did not make it any clearer to me exactly what would be expected of a commissioner, never mind the one who represented Scotland.

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[Lord Wallace of Tankerness]

My Lords, I shall explain. The BBC Trust is constituted in a very different way and using the expression “the BBC trustee for Scotland” makes sense in that context. The amendment would not affect the appointments process—

[Lord Browne of Ladyton]

I am grateful to the noble and learned Lord the Advocate-General for Scotland for giving way. When I came into the Chamber of your Lordships’ House today, the Advocate-General for Scotland was answering a Question about Wales.

[Lord Wallace of Tankerness]

Because I have been asked to answer to your Lordships' House on matters relating to the Wales Office, as indeed I am asked to answer on matters relating to the Scotland Office, although I am not a Scotland Office Minister, and on matters relating to the Attorney-General’s Office as well. It would be unfortunate if it were suggested that the Crown Estate commissioner for Scotland was only for Scotland and did not have responsibilities. To answer the noble Lord’s point, I do not exercise any functions as Advocate-General for England because it does not have an Advocate-General.

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[Lord Wallace of Tankerness]

I am grateful to my noble friend for the shoring up. The very fact that we have had this debate on the wording suggests that if we had proposed something else, I can imagine that he would have been one of those saying, “Of course, you mean that this person can make a contribution only in respect of Scotland and that is not acceptable as that person needs to have a wider remit”. As I indicated to the noble Lady, Lady Saltoun, her suggestion is worthy of further consideration and I shall consider it. If it answers the key point, which is that the person should have knowledge of Scotland and should not be restricted in terms of their qualifications—the broad totality of what is required for the board should be a factor in that person’s appointment, but the person might also have a special responsibility for Scotland or particular interests there—then that might well address the need without being unduly restrictive or indeed giving a misleading description of what that person’s role would be. I thank the noble Lady for that suggestion, to which I will most certainly give consideration.

Because of that wider responsibility, it is important that the appointment of all commissioners should be made by the sponsoring Minister, in this case the Chancellor of the Exchequer. I reassure noble Lords that he will make a recommendation for the appointment of this particular commissioner only after consulting Scottish Ministers and listening carefully to what they say. That appropriately balances the need for both a Scottish interest and a UK-wide perspective on the appointment process.

There is particular concern over why there has been a different process for that appointment from that for the Scottish member of the BBC Trust. The BBC Trust has a different constitution from the Crown Estate. Under its charter, the BBC has obligations to broadcast to all parts of the United Kingdom and to have a member of its trust for each of the nations that make up the United Kingdom. That is very distinct from the position of the Crown Estate, which has no such requirements. Indeed, as I indicated a moment ago, it does not even have to have a presence in any particular part of the United Kingdom.

The appointment of all Crown Estate commissioners is by Her Majesty on the recommendation of the Chancellor, reflecting the UK-wide responsibility of every commissioner. The UK Government will still need to discuss the Scottish appointments of both organisations with Scottish Ministers to ensure that the best people to represent Scottish interests are appointed.

The noble Lord, Lord Browne, asked about the status of the Crown Estate in the Bill. It is certainly the Government’s intention to consider the report of the Scottish Affairs Committee alongside the request that was made by the Scottish Government for further powers in relation to the Crown Estate. The Government believe that the Crown Estate operating on a UK-wide basis offers the best value across the whole of the United Kingdom, but we recognise the role that the Crown Estate plays in local communities and wish to work with it to ensure that it operates most effectively with them.

Particular to that is the coastal communities fund, which was mentioned by my noble friend Lord Selkirk. The Chief Secretary to the Treasury announced the establishment of that fund, which will be financed by the Government through the allocation of funding equivalent to 50 per cent of the revenue from the Crown Estate’s marine activities. It is linked to revenue that is raised by the Crown Estate’s marine activities each year and the funding will be available on a bid basis. The Government will welcome bids from charities, businesses, social enterprises and local organisations. In that way, we can build a stronger link between the activities of the Crown Estate, particularly in coastal communities, including those that are affected by such activities. It is a very positive step, which recognises the role of the Crown Estate.

I have indicated that I will certainly give further consideration to nomenclature and thank the noble Lady for her helpful suggestion. However, I have also indicated that there is a distinction between the constitution of the Crown Estate on the one hand and that of the BBC Trust on another. The latter has a specific requirement to serve specific parts of the United Kingdom, which is why not only the nomenclature but the mode of appointment is different. On that basis, I urge the noble Lord to withdraw his amendment.

[Lord Browne of Ladyton]

I am very grateful to all noble Lords who have taken part in what proved to be a much more interesting debate than I expected. I made clear in my introductory remarks that these are probing amendments, which implied that I had no intention of dividing the House. Having listened to the argument, I am severely tempted to do so because it may turn out to be the high point of my career in the House of Lords but I will resist the temptation.

I am grateful to the noble Lord, Lord Forsyth of Drumlean, who immediately got the point that underpinned the argument about nomenclature. However, I agree with the noble and learned Lord, Lord Wallace of Tankerness: I always thought that the adjective qualified the “Crown Estate” commissioner, rather than “Crown”, which is exactly what led to the confusion that has been apparent in the debate. I have to say that I am far from totally persuaded that,

“Crown Estate Commissioner for Scotland”,

bears the narrow interpretation or function that the noble and learned Lord has attributed to it. Try as I might to apply that argument consistently to many other titles, at least one of which I have held as a former Secretary of State for Scotland, it did not seem to me to stand the test of that destructive analysis.

However, I am pleased that the noble and learned Lord has, on behalf of the Government, indicated that he is prepared to take away the issue of nomenclature and think about it. There needs to be clarity of language in the politics of Scotland. We may sometimes misinterpret and play with words for the purposes of debate but people in Scotland use these words very carefully. I have learnt in my political career that where there are strong divisions of opinion—for example, in Northern Ireland—vocabulary and phraseology matter to people and are used in particular ways. Therefore, I am grateful to the noble and learned Lord for agreeing to take this issue away.

I am persuaded by the noble and learned Lord’s explanation of the reason for the different phraseology as regards the process of identification, selection and appointment. I was not aware of that difference and had not uncovered it in my researches. I am grateful to all noble Lords, and particularly to the noble Lord, Lord Selkirk of Douglas, for tabling an amendment, the style of which may have been influenced by one of my colleagues. That was helpful as it gave the noble and learned Lord the opportunity to put on the record information about the appointments process which will benefit that process and the openness of government. This has been a worthwhile debate. As usual with this Bill, issues which are apparently comparatively straightforward turn out to be interesting and educational. I beg leave to withdraw the amendment.

Amendment 44B withdrawn.

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[Lord Browne of Ladyton]

My Lords, I speak only because of my support for a previous amendment that was withdrawn, and I shall explain that position. As the noble Lord, Lord Selkirk of Douglas, explained, the effect of the amendment is to impose upon the Home Secretary an obligation to consult,

“with such persons as he or she considers appropriate”—

I suppose in this case it is “she”—when making regulations under Section 10 of the Misuse of Drugs Act but, peculiarly, only when such regulations apply to Scotland.

At first, I was attracted to the idea of a statutory requirement to consult. I was so attracted that I and my noble and learned friend sought to move a complementary amendment imposing a similar obligation on Scottish Ministers in the exercise of the new powers relating to licensing that they will enjoy when the Bill in enacted. However, after more detailed research, I have come to the conclusion that the imposition of such an obligation is not necessary in either case, which is why I have withdrawn from the Marshalled List the amendment that stood in my name and that of my noble friends.

I will not detain the House further, but the reason for that is because my research has revealed an extensive commitment to consultation by the UK and Scottish Governments and the Scottish Parliament that it would appear has been rigorously observed over a long period. As noble Lords would probably agree, whether voluntarily or by practice that does not require regulation or legislation, good practice can be developed and it is best left that way. That is my view but I shall leave the noble and learned Lord, Lord Wallace, to explain the detail.

[Lord Wallace of Tankerness]

My Lords, Clause 23 gives Scottish Ministers the power to license Scottish doctors to prescribe three controlled drugs—cocaine, diamorphine and dipipanone—for the treatment of addiction. The Calman commission recommended that responsibility for the licensing of controlled substances used in the treatment of addiction should be devolved to Scottish Ministers as part of their responsibility for health and well-being. The UK Government consider that Scottish Ministers are best placed to consider the particular circumstances in Scotland when deciding which doctors should have the authority to prescribe or administer the three controlled drugs used in the treatment of addiction. That relatively narrow devolution is set out in Clause 23.

I am grateful to my noble friend Lord Selkirk for his interest in this clause. As I have indicated, the Government certainly want to ensure that the Scottish Government have the necessary powers and abilities to tackle drug misuse effectively. That is why we have introduced Clause 23. However, it is perhaps important to indicate that while Scottish Ministers can consider the particular circumstances in Scotland when deciding which doctors based in Scotland should assume the responsibility to prescribe or administer specific drugs, they do so pursuant to regulations made under the Misuse of Drugs Act 1971 by the Secretary of State—the Home Secretary.

My noble friend’s amendment would require the Secretary of State to consult the appropriate persons before such regulations were made. The power to make regulations and the responsibility for the form of those regulations is reserved to the Secretary of State. The Secretary of State is already required by statute to consult the Advisory Council on the Misuse of Drugs before making regulations made under the 1971 Act. As a matter of good practice, the Secretary of State will consult key partners, and often the public, before implementing changes to regulations made under the 1971 Act. The Home Office has recently completed a three-month public consultation on proposed changes to, and the consolidation of, the Misuse of Drugs Regulations 2001. I am afraid that I cannot tell my noble friend Lord Maclennan whether NICE was consulted but, as I can ascertain, that would seem to be one of the bodies that might have been consulted. In the context of the consultation, officials from the department met their counterparts from the Scottish Government to discuss the proposals.

The Bill is devolving the licensing function to Scottish Ministers, and they will consult whoever they think appropriate while exercising that function to license doctors in Scotland. The making of the regulations remains reserved to the United Kingdom and the Home Secretary and I respectfully ask my noble friend to withdraw his amendment. I am sure that this point will have been noted by others, not just in the UK Government but by Ministers in the Scottish Government.

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[Lord Lang of Monkton]

My Lords, I had not intended to take part in this debate because I have not had the opportunity to do the groundwork in order to understand what my noble friend Lord Forsyth’s amendments are all about. The House is greatly in his debt for bringing to our attention the most extraordinary proposal contained in the Bill. Listening to the noble Lord, Lord Steel, I got the impression that he was arguing that we should support the Bill because we know that it is a bad Bill and that the financial provisions will not be adequate for Scottish needs. I am happy to let him intervene and correct that if I am wrong, but if he does so I know that several other people have now argued almost exactly the same point. Personally, I believe that if a Bill is bad you should not pass it, which is why in my Second Reading speech I called for it to be withdrawn. To pass a Bill because you know it is bad seems to be fundamentally wrong.

We know that the Bill will not meet the needs of the Scottish finances because in order to do so it would have to ensure that as the Barnett formula was withdrawn over time, Scottish incomes rose at the same level at least as UK public expenditure has done over the years. Research done by a couple of academics, Professor Hughes Hallett and Professor Scott, discovered that in the eight years to 2008 there was a differential between those two measurements of 0.21 per cent per annum. Over a period of time, Scottish incomes were not rising as fast as UK revenue.

There are countless arguments which could explain why the Bill cannot work and that the finances provided by this 10 per cent tax discretion will be inadequate, but that alone seemed to be a telling one. I noticed that the answer given by the Treasury in previous discussions in another place—I would be grateful if my noble friend Lord Sassoon addressed this matter in his wind-up—was that that had been true over the past eight years but would not be true over the next five years because public expenditure has been heavily reined in. I suspect that incomes in Scotland are also being pretty heavily reined in, particularly because there is a higher preponderance of public servants whose numbers are likely to be reduced and whose incomes are being controlled, and partly because the Scottish economy is in a very much poorer state than the rest of the United Kingdom’s.

One could dilate on a whole load of other reasons why the finances will not work, but the provision in the Bill to create a new tax seems to have been inserted subtly and quietly by the Government because they, too, know that the provision will be inadequate. With the Bill we are not talking about a provision to help Scotland take control of its finances and create a new accountability; in fact it is to demonstrate the complete inadequacy of provisions of this kind for Scottish accountability. That means that it is not a Bill at all but a Trojan horse.

Many noble Lords seem keen to use the failures of the Bill, which they all discern, as a springboard to bring in another Bill to create devo-max, if you like to call it that, more high taxation and other measures. Almost every measure that the Scottish Government might like to control in due course, like pensions responsibility and social welfare, will reveal further inadequacies in the Scottish capacity to provide for them once they are transferred out of the United Kingdom. Noble Lords are creating this springboard towards separation where, under what they call devolution, we shall be independent in Scotland in all but name, and possibly ultimately in name as well. That would create a situation that is not what we are supposed to be debating, so the whole debate is being conducted under a cloud of self-deception in the hope that no one will notice that failure is built into the provisions of the Bill.

My noble friend Lord Forsyth has put his finger on this point extraordinarily effectively, and I am ashamed that I had not noticed it myself when reading the Bill. I ask my noble friend on the Front Bench to address this issue and explain why the provision is there and how he thinks it will be used in future.

[Lord Browne of Ladyton]

My Lords, I agree with the noble Lord, Lord Lang of Monkton, that we owe a debt of gratitude to both my noble friend and the noble Lord, Lord Forsyth of Drumlean, for the amendments that they have brought forward to this part of the Bill and for the way in which they have put forward the arguments that have opened this debate.

This is the heart of the Bill. It is an important constitutional Bill, as I said in my opening remarks today when the Committee convened. I also said that noble Lords could be forgiven for thinking otherwise, given the management of its passage through the Houses of Parliament. I regret that. To the extent that I have agreed on occasion to days and dates for the management of the Bill, on reflection I now regret doing that because it is such an important constitutional Bill. No Members of the Committee should be mistaken that this is not a Bill of constitutional significance and of potential practical significance for the people of Scotland. However, without the provision that noble Lords seek to delete with their respective amendments, I do not believe that the Bill could be described in these terms at all. What was left of the Bill would be far less significant. Indeed, the Secretary of State for Scotland, Michael Moore, said in his evidence to the Scottish Affairs Select Committee that without this provision, this would be,

“a smaller, less impressive Bill”.

Those are the words that he used and they are recorded not only in the evidence that he has given but quite clearly in volume I of the fourth report of Session 2010-12 of the Commons Scottish Affairs Committee, to which I shall refer later on because it raises a number of other important and serious issues that need to be addressed before we conclude our deliberations on the Bill. He said that it would be a smaller and less impressive Bill, and that view is reflected in the Select Committee’s report.

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[Noble Lords]

Lord Sewel.

[Lord Browne of Ladyton]

I thought my noble friend Lord Maxton said that. I am sorry; it was my noble friend Lord Sewel. If I had had a private conversation with the noble Lord, I might have been able to reveal that beforehand. The noble Lord, Lord Kerr, in part of his contribution that was very helpful, blew that out of the water. States in the United States of America have, within the federal structure, the ability to raise taxes without being sovereign. Across the world, I am sure there are many other examples that I do not know about of devolved Administrations having the power to raise taxes within constitutions that deny them sovereignty. I am certain that I could find them if I had the research facilities available to me.

[Lord Forsyth of Drumlean]

I will not make a smart-alec point—although I should not say “Smart Alec” in this context in this debate—about other states that can raise taxes. I follow the noble Lord’s argument, which I absolutely respect. However, I respectfully suggest that he needs to distinguish between the ability to raise taxes and the ability to create new taxes. The point that his noble friend and I were making is that this clause gives the Scottish Parliament the power to create completely new taxes. His noble friend argued, as I did, that that is distinct from being able to raise taxes. There are states in the US that can set the sales tax but, as far as I am aware, do not have the freedom to invent completely new taxes. However, I might be wrong about that.

[Lord Browne of Ladyton]

Someone had to create the sales tax in the first place. I might be wrong but I do not think that in the United States the creation of a sales tax is a federal function that is then devolved to the states.

[Lord Sewel]

My Lords—

[Lord Browne of Ladyton]

May I just answer this point first, if noble Lords will allow me? I am perfectly willing to try to dredge up examples as I stand here, but it would be pointless. I fundamentally disagree, as does the noble Lord, Lord Kerr, that the difference between creating new taxes and raising taxes is as fundamental as the noble Lord, Lord Forsyth, says it is. There is very little meeting of minds between us in this, but there is no meeting of minds even in relation to that.

[Lord Sewel]

I am grateful to my noble friend for giving way. The comparison to the United States is very ill judged. The United States is a federal system. The United Kingdom is a unitary state with devolved Administrations, which is fundamentally different when you talk about sovereignty.

[Lord Browne of Ladyton]

We have already had the benefit of a very interesting contribution from my noble friend Lord Morgan, which I will read with care, about the Protean nature of sovereignty. I merely responded to the point that I understood my noble friend Lord Sewel to make—that the defining characteristic of sovereignty relates to taxation. He seems to be conceding the point that it does not. I am sure that if we all read what the noble Lord, Lord Morgan, said this afternoon and perhaps read more extensively what he has probably written on the subject, we will conclude that it does not. I make the point in passing that I do not think taxation is the defining issue of sovereignty.

On the genesis of the power, the noble Lord, Lord Forsyth, asked whether it was recommended by Calman. The true answer to that is that it was not, but the power has its roots in the recommendation of the Calman commission, which concluded:

“The Scottish Parliament should be given a power to legislate with the agreement of the UK Parliament to introduce specified new taxes that apply across Scotland”.

I am not entirely sure whether that statement has a sufficient shock effect for the noble Lord, Lord Forsyth, as I think he indicated that he would be surprised if Calman recommended that. However, there can be no doubt that the Bill goes further than this. As I said, the power was not recommended by Calman but it has its roots in the recommendation of the Calman commission.

The Bill goes further than the recommendation, not only prescribing a much wider power for the creation of new Scottish taxes, which is the concern of the noble Lord, Lord Forsyth, but allowing for the future devolution of existing UK taxes, as Scottish Financial Enterprise and the Scottish Affairs Select Committee, to which I have previously referred, have pointed out. However, there is also no doubt that the breadth of this provision answers a specific call for the further flexible development of the devolution settlement. That is why it is so important to the Bill and of such great significance and cannot be dismissed as a small step. I say that with all due respect to the noble Lord, Lord Steel. It is a very significant step in the devolution settlement. I agree with the noble Lord, Lord Forsyth, that it is a pity that this measure has not been accorded due significance in public debates by those who should have known about it.

The significance of the Calman commission’s recommendations as a whole lies in providing a framework for the continued development of devolution in a legitimate and managed way. I support that. However, I argue that if we agree with the principle of greater financial accountability for the Scottish Government—we on these Benches broadly agree with that; I do not think there is much discontent about that on our Benches—the decision over whether additional taxes should be devolved in the future comes down to a decision about the practical impact of such a devolution for Scotland and for the United Kingdom as a whole. To that extent I agree with the noble Lord, Lord Kerr.

Thus, this is not in my view an issue of constitutional principle. The issue of constitutional principle is whether we agree to the devolution of taxes, which is what the Bill is specifically about. Thereafter, it is a matter of the practical requirements of such a power. I hope that noble Lords who think they disagree with me will bear with me as I think that I will answer the point that is milling round in their heads about why this argument is deficient. It is for this reason that we have tabled Amendment 51B, which would place a duty on the Secretary of State to seek parliamentary approval for draft regulations on the conditions that must be met by any proposed tax for it to be devolved and the specific consultative procedure that must be followed by the Scottish and UK Governments. It has become a habit in this Committee for noble Lords to say that the drafting of measures may be deficient. The drafting of the relevant amendment may indeed be deficient, but this is the best that I could do. If the Committee and the Government are inclined to support it, we can make it much better between now and Report.

I believe that much of the concern expressed by my noble friend Lord Sewel and others about the wide-ranging nature of the power in new Section 80A could be allayed if the Government set out in more specific detail the criteria that will be expected of any new candidate for devolution and a clear process by which those criteria will be applied. I regret that we have got this far without that becoming apparent for the reasons that I am about to go into. The big problem is that Parliament is being asked to approve the allocation of a significant and wide-ranging power to the Executive with practically no information about how this will be used in practice and the safeguards that will exist to constrain it.

Indeed, the Select Committee, to which I have already referred, understood this well. It concluded in its report that it was,

“disappointed that, when pressed, the Secretary of State could not give us examples of the type of tax which could potentially be acceptable … We are also concerned by the absence of any clear process or mechanism by which the criteria will be applied”.

In his evidence, the Secretary of State for Scotland, Michael Moore, set out extensive and broad criteria that he said would need to be applied to any tax for it to overcome the hurdles necessary for devolution.

The Select Committee went on to ask the Government,

“to provide a more thorough and detailed explanation of how this process would work, during the passage of the Bill through this House”.

We should bear in mind that the committee is talking about the other place. I commend the report of the Scottish Affairs Select Committee more generally to noble Lords. I do not know how many of them have had the opportunity to read it, but I commend it. I particularly commend paragraphs 92 to 96, although I do not intend to read them out at this time of night, and the evidence of the Secretary of State, Michael Moore, because it reveals significantly the basis of a mechanism for dealing with this issue.

Noble Lords should not underestimate the importance of the power provided by Clause 28, and I do not think that they will do so after this debate. It provides a real and tangible mechanism for the continued strengthening of the devolution settlement and the devolution of further powers. In many ways it is the antithesis of the further undefined devolution that has been alluded to by the Prime Minister of late and, indeed, by the First Minister in his flirtation with the concept of devo-max, whatever that might be.

[Lord Forsyth of Drumlean]

I hope that the noble Lord might help me. Is he saying that he thinks this clause is too broad in its scope and that there should be some kind of constraint by way of criteria as to which taxes could be invented? As it stands, a wealth tax, a further tax on inheritance or a roof tax could be implemented, although a poll tax is probably less likely. Is he saying that, speaking for the Opposition, he favours some kind of procedure that would constrain the ambitions of a devolved Administration in this respect, or is he saying that this measure goes to the heart of the whole Bill and that it constitutes devo-max?

[Lord Browne of Ladyton]

I am not saying that this is devo-max; I am saying that this is the Bill. The Bill is a very significant piece of legislation and a remarkable advance in the potential devolution in Scotland. However, as the noble Lord has pointed out, it is misunderstood and has not been properly explained. Broadly, it is not supported or championed in the observations of those who have brought it to this Parliament. More specifically, it has not been championed by the Prime Minister, who has suggested in fact that it is just a small step and that greater steps can be taken in future.

The people who drafted the Bill and are responsible for it may not have intended to do this, but they have given us the answer to the challenge for the future post the referendum on the issue of separation. They may not know that they have given us the answer but they have. Now they need to build the other part of the mechanism that allows this Parliament—the sovereign Parliament—to play its proper role in deciding what the criteria are in advance of specific proposals of the sort of devolution that can take place. In other ways, they should spell out, as Michael Moore did in his evidence to the Select Committee, the criteria that need to be applied and would need to be met before a tax—either a new one or a part of the United Kingdom’s existing taxation—could be devolved.

We need to amend the Bill to provide that mechanism. I believe that it can be provided by regulation, which is why the amendment has been drafted in the way that it has. At the risk of boring noble Lords, particularly the noble Lord, Lord Forsyth, I do not think it is an issue of principle, once we establish the principle, as we will by passing the Bill, that taxation can be devolved in this way to the Scottish Parliament. It is a mechanism to make sure that that is done properly and in a way in which the various parts of this deal take their proper responsibilities. That is the bit that we are missing because this Parliament is entitled to be confident that any devolved taxes will be used for the benefit of the Scottish people and the union. It is for this reason that we believe the Government have a duty to enshrine conditions to this effect in some form of legislation—regulations would be quite sufficient. This would provide a clear regulatory framework that can be approved by this Parliament and then used flexibly in the future in the context of a changing settlement between the United Kingdom Parliament and the Scottish Parliament —between the United Kingdom and the people of Scotland.

I say to the noble Lord, Lord Sassoon, whom I welcome to our Committee’s deliberations—I do not know how much previous experience he has had of Scottish political matters, but over the next few hours he is in for a crash course—that the Scottish Affairs Select Committee raised these issues in its report on the Bill almost a year ago today. I therefore hope that having had the benefit of a year to consider the matter further—and I am sure the noble Lord has been thinking of nothing else—at the very least he will be able to provide this House with some sort of detailed explanation of the mechanism and criteria to be applied on the use of this power. If he cannot do so, it would be helpful if he provided us with at least some hypothetical examples of taxes that could meet such criteria.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, one thing on which I think we are all agreed is that we are getting to the heart of the Bill. There is a range of views about how significant the changes are in Clause 28, but we all recognise the importance of what we are discussing.

The Government are quite clear that the Bill delivers substantial new powers to the Scottish Parliament—powers that have been included as a result of careful and detailed consideration. I want to focus on what is in the Bill, not on what hypothetically might be in it. The Government have been clear that any consideration of further powers to be devolved is for after a referendum on independence. Let us therefore concentrate for now on what we have in front of us.

I should also say at the outset that as an intruder from outside Scotland and a Briton from elsewhere, as the noble Lord, Lord Browne of Ladyton, suggested, my observation is that to date devolution in Scotland, of which the Bill is part of a continuing process, has been delivered as a result of lengthy discussion, analysis of evidence and cross-party consensus. That was how the settlement was delivered in 1997 and that is how the measures in the Bill have been developed. I am grateful for the noble Lord’s confirmation at the outset that he believes that the tax-raising powers granted in this clause are appropriate.

--- Later in debate ---

[Lord Sassoon]

My Lords, recommendation 3.3 of the Calman report states:

“The Scottish Parliament should be given a power to legislate with the agreement of the UK Parliament to introduce specified new taxes that apply across Scotland”.

In Calman, certain taxes were specified. In this Bill, we are building on that and building in a procedure which is proportionate and would require the agreement of both Parliaments in future to deal with specified taxes—taxes that might be specified in future. I have explained to the Committee what the criteria are. We have an amendment that sought to tease out what they are and I explained them. The critical one relates to the macroeconomic effect. It is entirely right that we take the Calman recommendation and think about how there might be new taxes to be specified in future. It is not some open-ended invitation for the Scottish Parliament to introduce things. There are very clear safeguards, including an appropriate parliamentary procedure in London.

[Lord Browne of Ladyton]

I intervene with some trepidation in this fashion because I made clear in my remarks in this debate that I seek to support this Bill. However, the noble Lord is making it more difficult for me to support this Bill for a few reasons which I will explain, because I want to pose a significant question to him. First, he said in his introductory remarks—which I passed over but I come back to—that these matters were specifically debated and passed by the other place. He should be careful about deploying that argument, given the paucity of debate there was on any of these provisions in the other place because they were timetabled. Quite large chunks of this Bill were never scrutinised at all.

Secondly, he has repeatedly characterised my amendment—which I will not press this evening—as seeking further and better explanation. It is actually not: it is seeking a part of a construct which translates what he has said on criteria and mechanism—which he says is good and is in the White Paper and the Command Paper, and was in the evidence of the Secretary of State—into regulations that this House and this Parliament can debate and decide upon. That is different.

Thirdly, he encourages us to believe that the construct of co-operation between the Scottish and UK Governments that has been put in place is already starting to address some of these issues. The joint Exchequer committee that he refers to has met once, on 27 September, which was after the Second Reading debate in this House. This was an issue that I raised on Second Reading; his noble and learned friend the Advocate General for Scotland sent me a detailed letter about what happened about these co-operative processes, but they are not functioning at all. They are barely functioning and no significant progress is being made in relation to the co-operative work that is necessary. The Minister shakes his head. Perhaps he will address the two issues that I have raised in this intervention. The first was about criteria and process translated into regulation. The second was a question: what is happening between the United Kingdom Government and the Scottish Government about preparing for the devolution of this power?

[Lord Sassoon]

I think that the noble Lord made at least three points. The first concerned the degree of scrutiny in another place. It highlights the very valuable, indeed essential, role that this House customarily plays. It is no different with this Bill. Of course, there was committee scrutiny as well as scrutiny in the formal stages of the Bill.

[Lord Browne of Ladyton]

My Lords—

[Lord Sassoon]

Perhaps I may answer the questions that the noble Lord has already raised.

[Lord Browne of Ladyton]

I refer to scrutiny and point out, again with some diffidence to the noble Lord, that this is a constitutional Bill. Everything that happened in relation to the Bill happened on the Floor of the other place. The Bill went into Committee there. It was timetabled by the Government and many of these provisions were not debated.

[Lord Sassoon]

My Lords, I will not stand here and criticise or question the way that another place goes about its business. We are now giving the Bill—and this clause in particular—appropriate scrutiny, and I will take as long as I need to give appropriate answers to the questions that were raised.