Scotland Bill

Lord Dunlop Excerpts

Tuesday 19th January 2016 Lords Chamber

[Lord Mackay of Drumadoon (CB)]

As my name can be found in some proximity to the amendments that are being discussed in this opening round of speeches, I do not intend to go into any great detail about what we have heard. I am, however, struck by the fact that people are talking as if the best way forward will involve a significant measure of respect and agreement and will not give any excuse for a deterioration in the relationship between the voters, which was to some extent apparent when devolution came along.

It falls to me, in view of one of the speeches that we have heard, to declare an interest that during a period of years when I was actually a Member of your Lordships’ House, prior to becoming a High Court judge in Scotland, I spent quite a lot of my time working with companies in the electricity industry. It fell to me to give them advice when they sought it and to work with them on a practical basis when they set about seeking the erection of a new power station or some other building associated with a power station or the erection of new electricity wires to take electricity to different parts of Scotland and, indeed, further afield.

I appear in this debate having received a brief from the Law Society of Scotland, which takes an interest in these matters. It is clear from what has been suggested to me that it is not alone in encouraging agreement. On that basis, I invite Members of your Lordships’ House to rely on the proposals which, as I say, are proximate to my signature.

[The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)]

My Lords, I thank all those who have contributed to this debate: the noble and learned Lords, Lord Davidson, Lord Wallace, Lord McCluskey, Lord Hope and Lord Mackay; the noble Earls, Lord Kinnoull and Lord Dundee; and the noble Lord, Lord Sanderson, and the noble Baroness, Lady Liddell. We have had some very good contributions and I am very sympathetic to the intent of many of the points that have been raised.

The Bill’s provisions on the Crown Estate were debated at length in Committee in the other place and some of the points raised then have also been raised today. As has already been mentioned by a number of your Lordships, the Law Society of Scotland, which I met last week, has also taken a close interest in these clauses and has suggested amendments, some of which have been taken up by noble Lords. In particular, noble Lords have raised issues around the way in which we have sought technically to give effect to the Smith agreement, the importance of establishing an arm’s-length body, double devolution, and specific issues around Fort Kinnaird and other topics. I welcome this opportunity to set out the Government’s position and approach to these clauses.

As noble Lords will be aware, the Smith commission agreed that responsibility for the management of the Scottish assets of the Crown Estate would be devolved. The agreement also stated that the Scottish Government should receive the revenue generated from the management of those assets, as has already been referred to. The Bill therefore provides for the existing Scottish functions of the Crown Estate commissioners to be transferred to Scottish Ministers by way of a transfer scheme, which will be set out in a statutory instrument made after the Bill receives Royal Assent. The Bill also provides that the revenue from the Scottish assets will be paid into the Scottish Consolidated Fund after the transfer.

In readiness to take over the management functions after the transfer has taken place, the Bill also enables the Scottish Government to make arrangements in advance of a transfer, for example to establish a management body and appointments to that body—I will return to that in a moment to pick up on what the noble Earl, Lord Kinnoull, said—via an Order in Council made by Her Majesty, and subject to the affirmative procedure before the Scottish Parliament. Following the transfer, the Scottish Parliament will have competence to legislate about the management of the Scottish assets, which will enable it to legislate in particular for further devolution to the islands and other areas seeking such responsibilities, as the Smith agreement recommended. At this point I can confirm to the noble and learned Lord, Lord Wallace, that I would be very happy to meet the islands councils. I will come back to double devolution in a moment.

Turning first to some other points that have been raised, in looking at Amendment 43 I liked in particular my noble friend Lord Lang’s comment about dynamic junior Ministers and the distinction, if there is one, between “may” and “must”. The parties opposite are seeking to make it mandatory for the Treasury to make the transfer scheme. Amendment 44 would make it mandatory for the scheme to be made, following agreement with the Scottish Ministers. First, I reassure noble Lords that the clause already provides, at subsection (17) of new Section 90B, that the Treasury cannot make the scheme without the agreement of Scottish Ministers. The majority of the scheme is not expected to be contentious but for those aspects which need to be negotiated, we think it right that agreement is reached between the Treasury and Scottish Ministers.

The clause as drafted, with the use of “The Treasury may” together with the requirement for the consent of Scottish Ministers, provides the right incentives for both parties to reach agreement and for a level playing field in the negotiations. The UK Government represent the interests of all people in the United Kingdom and, if this amendment were made, the ability to represent these interests would be constrained as the Treasury would be under a statutory duty to make a scheme, the discharge of which could be fulfilled only with the co-operation of a body beyond its control. As the scheme contains important protections for defence and national security, it is imperative that both sides are able to come to an agreement on the detail.

Secondly, the Treasury still cannot necessarily make the scheme even after the agreement of Scottish Ministers, since both Houses of Parliament must also approve the draft scheme before it can be made by the Treasury. I reassure the Committee that the Government are committed to making a scheme. Implementing in full the Smith commission agreement is a manifesto commitment; the provisions relating to the Crown Estate are an important part of that. However, actions speak louder than words. For example, we made an outline of the scheme available to the House last summer and in November we placed a copy of a draft scheme and memorandum of understanding in the Libraries of both Houses. Officials are currently in discussion to reach agreement on the detail of the draft scheme. After the draft scheme is agreed, it will be brought before both Houses of the UK Parliament and, if it is approved, it will be made by the Treasury and the transfer will occur on the date specified in the scheme. I hope that I have been able to reassure noble Lords on the Government’s commitment in this regard.

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[Lord Wallace of Tankerness]

I am grateful to the Minister for giving way and for the way he is responding. Does he accept that there is a difference between the amendment moved by my right honourable friend Alistair Carmichael in the other place, Amendment 48, which was withdrawn, and the one we are now debating, which provides that the scheme for double devolution would be a Section 90B scheme, which, as the Minister has been at great pains to emphasise, will take place only with the agreement of Scottish Ministers? The amendment makes subsequent provision that it will be Scottish Ministers who make the transfer. So Scottish Ministers would be very much involved. Indeed, if the Minister were to accept my amendment to,

“leave out ‘C’ and insert ‘A’”,

the Scottish Parliament would have a role, too.

[Lord Dunlop]

I note what the noble and learned Lord says, and I will reflect on his point; I am sure that we will continue to discuss it.

The clause enables the Scottish Parliament to make its own legislation about the management of the Crown Estate in Scotland after the transfer—and beforehand, should it wish to have arrangements in place in readiness for transfer. The Scottish Government have already made commitments to devolution to island communities. In the document Empowering Scotland’s Island Communities, which has already been referred to, the Scottish Government have committed to ensuring that 100% of the net income of the islands’ seabed is passed to island communities. The Scottish Government have also said that they intend to consult on the future arrangements of the Crown Estate. Therefore, as I said, although I am sympathetic to the sentiments that have been raised about this issue, the Government do not believe that it is appropriate for the Bill to set out any onward arrangements for devolution to local communities. That is a matter for the Scottish Parliament. I look forward to hearing more from the Scottish Government on their further plans as they develop them.

I turn to Amendment 46. Clause 34 provides for a transfer scheme that would transfer all the existing Scottish functions of the Crown Estate commissioners to Scottish Ministers or to a person nominated by them. The amendment seeks to change the entity to which the transfer of those executive functions is made from Scottish Ministers to the Scottish Parliament; several noble Lords referred to this.

I note that the right honourable colleague of the noble and learned Lord opposite also tabled this amendment in the Commons in Committee. The Smith commission agreement stated that responsibility for the management of the Crown Estate and the revenue generated from those assets would be transferred to the Scottish Parliament. However, the Scottish Parliament is a legislative rather than an executive body, as I have already said, and for that reason it is not equipped to undertake the management functions that are currently exercised by the Crown Estate commissioners. The Law Society of Scotland also observed that the transfer is to the Scottish Ministers rather than the Scottish Parliament, and noted that there are good practical reasons why this should be so—not least that the Parliament does not exercise its executive powers.

[Lord McCluskey]

The Smith commission report states in paragraph 32 that what was to be transferred to the Parliament was not the management but the “responsibility for the management”, so Parliament would then decide what agency, if other than the Scottish Executive, would manage the estate. Surely, that is the important point.

[Lord Dunlop]

We feel that in the clause, in giving the Scottish Parliament the legislative competence but then facilitating the executive competence of the Scottish Government, we have got the balance right.

As I was saying, the clause transfers management functions relating to the Crown Estate to the Scottish Ministers, which means that the Scottish Parliament has the ability to legislate in relation to such management functions. That gets the right balance and gives effect to the Smith commission agreement in what it intended to achieve.

I turn to some of the specific points that were raised —in particular, Fort Kinnaird, which I believe some people thought was a Ministry of Defence base but turns out to be a shopping centre in Edinburgh. I very much agree with what my noble friends Lord Lang and Lord Sanderson have said about this and the importance of not upsetting joint arrangements built on trust. The management of all the Crown Estates, wholly and directly owned Scottish assets, will be transferred under the transfer scheme. Fort Kinnaird, as has already been said, is not wholly and directly owned by the Crown; it is held by an English limited partnership in which the Crown Estate commissioners manage interests alongside other commercial investors. The partnership owns property in other parts of the United Kingdom, and Fort Kinnaird has never been wholly and directly owned by the Crown. It was brought into the partnership by the commissioners’ joint venture partner, the Hercules Unit Trust, and is managed by British Land. Revenue from the Crown Estate’s interests in Fort Kinnaird will therefore continue to be passed to the UK consolidated fund for the benefit of the UK as a whole.

I am very happy to confirm for the noble Baroness, Lady Liddell, that I shall take her specific point away and write to her on the offshore renewables catapult. The noble Earl, Lord Kinnoull, talked about protections for the assets of the Crown Estate. The current managers of the Crown Estate commissioners are under an obligation to maintain an estate in land, so it is appropriate to pass on this obligation as part of the transfer of management. The new manager may make changes to the pool of assets that make up the estate under its management; it can sell some assets but must reinvest the proceeds, bringing new assets into the estate. But the new managers must maintain an estate in land; they cannot convert the estate in its entirety to liquid assets to fund public spending. An estate in land in the ownership of the Crown must be retained for the future; that is an important point of stewardship.

I hope I have been able to provide some clarity on the approach and reassurance on the Government’s commitment to make a scheme. Therefore, I ask the noble and learned Lord to withdraw his amendment.

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[Lord Stephen (LD)]

My Lords, I shall speak to the amendments in my name and that of my colleague, my noble and learned friend Lord Wallace of Tankerness. As has been stated, Clause 35 relates to the important issue of protection from discrimination and the promotion of equality of opportunity. These are fundamental markers of a fair and decent society. The protections in the law should be strong, and the meaning and effect of Clause 35 must be clear. I believe that we have not yet achieved the parity that is both important and required.

The Equality Act 2010 is widely held to be perhaps the best anti-discrimination law in the world. Thanks to the Act, wherever you live or work in Great Britain, you have a right to fair treatment regardless of your sex, race, age or sexual orientation or if you are disabled. Clause 35 needs to be explicit that the important protections in the Equality Act will be maintained right across Great Britain, and that modifications should be permitted by the Scottish Parliament only where they enhance the protections in the present legislation. As currently drafted, Clause 35 does not yet achieve that. While there is an attempt to differentiate between modifications to the Equality Act 2010, which are not permissible, and additions, which are, these provisions lack the required clarity. I thank the Equality and Human Rights Commission for its support and advice in framing these amendments.

Amendment 52A would make it absolutely clear that the Scottish Parliament had powers to increase protection from discrimination, harassment and victimisation by Scottish public bodies by, for example, adding new protected characteristics, prohibiting dual or multiple discrimination or enhancing remedies. It would also ensure that existing productions could not be eroded in Scotland.

The public sector equality duty is a positive duty, requiring public authorities and those delivering public functions to have regard to how they can promote equality of opportunity. It has great potential to play a transformative role for those experiencing disadvantage and discrimination. Amendment 52A would give the Scottish Parliament greater freedom to require Scottish and cross-border bodies that deliver public services in Scotland to do more to tackle entrenched inequality. We have already seen how the stronger specific equality duties in Scotland have driven greater transparency on the pay gap, for example, which means that it is clearer where action now needs to be taken. To devolve legislative competence for the general equality duty would give the Scottish Parliament far greater freedom to require its public service providers in Scotland to do even more positively to promote equality of opportunity.

The amendment would also ensure that the Smith commission commitment on gender quotas is delivered, while ensuring that the Scottish Parliament could not go beyond the extent to which positive action is permitted by EU law. We want to increase the efforts made to ensure that women have fair representation on public boards, in Scotland and elsewhere in Great Britain, but this must not be achieved through disproportionate barriers to participation by men.

On political representation, Amendment 52A, taken together with Amendment 52E, would enable the Scottish Parliament to allow political parties to take stronger action to ensure greater diversity in their selection of candidates for the Scottish Parliament and Scottish local government elections. However, the Scottish Parliament would not be able to legislate to extend the use of shortlists restricted to those sharing other protected characteristics. While this approach may be appropriate for women, who make up over 50% of the population, it would be disproportionate if it were to be used for far smaller groups, as it would thereby exclude very large sections of the population from such shortlists. These amendments reflect the position in the Equality Act 2010, which was widely debated and agreed by all parties at the time to be a proportionate, fair and appropriate position.

Amendment 52B relates to diversity on public boards. It would remove an interpretation of the term “protected characteristic” which would limit the ability of the Scottish Parliament to encourage diversity on public boards with regard to any characteristics not currently protected by the Equality Act 2010, such as marital status. The Scottish Parliament should have the power to go further than the current protections, should it wish, on this important issue. Amendment 52C may be covered by the government amendments, and I look forward to the Minister’s clarification on this and his response to the other issues that I have raised.

[Lord Dunlop]

My Lords, I echo what the noble and learned Lord opposite and the noble Lord, Lord Stephen, said. The Government are committed to safeguarding equality, tackling discrimination where it arises and promoting transparency; for example, in pay. That is not to say that supplementary initiatives and protections in addition to those offered by the Equality Act do not have a part to play, as the Smith commission saw.

The equality provisions in the Bill relate to public sector bodies in Scotland and will enable the Scottish Parliament to make provision for the promotion and enhancement of equality in the public sector without any extension to the private sector. That is an important point to make; I know that that issue was raised by the House of Lords Constitution Committee. It is important to remember that the Smith commission was explicit that the Equality Act 2010 as a whole is to remain reserved. The Government are confident that the Bill ensures that the benefits of a cohesive framework of discrimination law remains across Great Britain.

In delivering Smith, the equal opportunities clause strikes the right balance between conferring greater competence on the Scottish Parliament for safeguarding and promoting equalities in public bodies and the importance of preserving a GB-wide legal framework. The Government’s delivery of paragraph 60 of the commission agreement ensures that we continue to reserve the 2010 Act while providing the Scottish Parliament with the ability to legislate for specific provisions such as gender quotas. Through the general exception that we are providing, the Scottish Parliament will be able only to add to and supplement the 2010 Act. It will not be able to reduce protections but, instead, will be limited to increasing and promoting protections in relation to public bodies.

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Moved by

[Lord Dunlop]

52AA: Clause 35, page 37, line 14, leave out “the Equality Act 2006 or”

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Moved by

[Lord Dunlop]

52CA: Clause 35, page 37, line 32, leave out from first “Act” to “are” in line 33 and insert “2010 and any subordinate legislation made under that Act”

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[Lord Berkeley (Lab)]

My Lords, perhaps we need an amendment stating that all road signs about broken pavements should be in two languages.

To return to the issue of broken pavements, I thought that the noble Lord, Lord Lyell, was beginning to imply that there were not many pavements in Scotland and you had to walk on the muddy verges or get splashed by cars. I do not think he meant that. There are just as many muddy roads in England, Wales and everywhere else as there are in Scotland, I am sure. There is an argument for saying that issues such as broken pavements and enforcement should be devolved locally. Why should we here decide on the legislation for parking offences such as causing a broken pavement or double parking? The incidence of it is just as bad in Scotland as in England.

I commend the amendment, and Living Streets for giving us some very good information on it. It is relevant that the consultation in Scotland received the fifth-highest number of responses of any Scottish Parliament Member’s Bill; 95% of responses were in favour of this parking legislation. That demonstrates a lot of interest in having the change proposed in the amendment. I see no reason why the local Edinburgh government should not be allowed to prohibit parking on footways and pavements and at dropped kerbs, and double parking of vehicles. Clarification is needed of what the offences are and who should enforce them.

There is a similar issue in England and the situation is awful, actually. We have had many debates about what enforcement is carried out for various alleged crimes. It is like the PCSOs, who are allowed to fine bicycles for going through stop lines but are not allowed to fine cars. They are all going through stop lines—what is the difference? It would be nice if one day, the UK Department for Transport got on to this but in the mean time, I cannot see any reason why the Scottish Government should not be responsible for these local issues.

[Lord Dunlop]

My Lords, first, I pay tribute to the noble Lord, Lord Foulkes, for his ingenuity in taking the debate in a different direction from the one I was expecting and on which I have been briefed. In social media Twitter-speak, road signs are trending in the House of Lords.

Returning, with the House’s indulgence, to the new clause proposed in Amendment 53, introduced by the noble and learned Lord, Lord Davidson, this seeks to address questions that have been raised about the Scottish Parliament’s ability to tackle the issue of inconsiderate parking on pavements. This issue was raised by the shadow Secretary of State for Scotland, the Member for Edinburgh South, who was at the Bar earlier to listen to the debate. He tabled an amendment in the other place, which has been re-tabled for consideration by this House.

It is clear, as the noble and learned Lord, Lord Davidson, said, that this is a matter of great concern to many people, including people with disabilities, as well as the elderly and parents with pushchairs, who can find their way blocked by vehicles parked without due consideration for others who require access to the pavement.

Your Lordships may be aware that this is a complicated issue for which the devolution settlement has not been clear. There have been a number of attempts to bring legislation forward in the Scottish Parliament to tackle this, but they have not succeeded due to doubts over the legal competence of the Scottish Parliament in this area. In September 2014 the former Member for Edinburgh North and Leith, Mark Lazarowicz, tabled a Private Member’s Bill in the Commons to attempt to address this issue. At the time, the Government gave assurances that we would do what we could to address it, although we explained that the Scottish Government would need to be clear about what measures and powers they would support.

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Finally, can I ask the Minister a question which I do not think anybody else has asked tonight? What discussions have he and his colleagues had with their counterparts in the Scottish Government to be assured that the changeover does not have the teething problems referred to by the noble Earl, Lord Kinnoull?

[Lord Dunlop]

I thank your Lordships for what has been a set of powerful and knowledgeable contributions to this debate. Many of the points raised by noble Lords have great force. To address directly and upfront what the noble Lord, Lord McAvoy, asked, I can say that we meet regularly with Scottish Ministers—later this week the Secretary of State is meeting Deputy First Minister John Swinney—and these matters are obviously the subject of those meetings. I will ensure that the strong feelings that have been expressed in this House are conveyed to the Deputy First Minister and to other relevant Scottish Ministers.

The task of policing the railways in Great Britain is carried out by the British Transport Police, as has already been discussed, the priorities of which include tackling crime on the railways, minimising disruption to the railway as a result of crime or other incidents, and ensuring that passengers feel safe and secure on the network.

I was going to touch on history, but the noble Lord, Lord Faulkner, has already beaten me to it, and when it comes to railway or transport history I am very wary of tangling with him.

The BTP currently polices the national rail network in England, Scotland and Wales, as well as the London Underground and some other light rail networks. It operates under a divisional structure, comprising three geographically defined areas: Scotland, London and the south-east, and the remainder of England and Wales. Today a large proportion of the rail network in Scotland is self-contained and is currently policed by just over 200 BTP officers out of a total BTP staff of 3,000 officers.

[Lord Wallace of Tankerness]

The Minister said “other light rail networks”. Does the BTP have any responsibility for the Edinburgh trams?

[Lord Dunlop]

That is a very good question to which I do not know the answer, but I will be very happy to clarify that point for the noble and learned Lord. Noble Lords have raised a range of important issues, and I will try to cover as many of these as I can in my response.

[Lord Forsyth of Drumlean]

Could my noble friend tell the House what he thinks is meant by the words in paragraph 67 of the Smith commission report:

“The functions of the British Transport Police in Scotland will be a devolved matter”?

I read them to mean that the British Transport Police will continue and that its functions will be subject to some kind of oversight by the Scottish Parliament, which is not what the Bill provides for. Does he have a different interpretation?

[Lord Dunlop]

If my noble friend will let me continue, I hope to set out what our approach is here and address some of the points that were raised by the noble and learned Lord, Lord Wallace.

[Lord Forsyth of Drumlean]

Of course I want my noble friend to address the points that have been made, but could he just answer that point? The noble Lord speaking for the Opposition said that whatever the Smith commission report says is written in stone, but what is in the Smith commission is not consistent with that. Can my noble friend explain what he thinks the commission meant?

[Lord Dunlop]

What the Smith commission meant is precisely what it said. If my noble friend will allow me to continue, I will expand upon that. To return to the point that was raised about the Edinburgh trams, I understand that they are not obviously policed by the BTP.

The Smith commission agreed that the functions of the BTP in Scotland should be a devolved matter and, as the noble Lord, Lord McAvoy, has already said, that was supported by all five of the political parties which took part in the commission, including the parties opposite. Clause 42 devolves legislative competence in relation to railway policing in Scotland to the Scottish Parliament by adding an exception to the Scotland Act 1998 for the policing of the railways and railway property. Clause 43 specifies the BTP bodies as cross-border public authorities. The designation of the BTP bodies as cross-border public authorities will result in functions relating to those bodies being modified so that future appointments to the BTP bodies will be made in consultation with Scottish Ministers. Other functions with regard to the BTP bodies will similarly be exercised in consultation with the Scottish Ministers unless their effect on Scotland would be wholly in relation to reserved matters.

The designation of the BTP bodies as cross-border public authorities is to ensure continuity before the Scottish Parliament legislates for policing of railways in Scotland. Enacting the clause will not impact on the current operational arrangements for policing of the railway. The BTP will continue to police the railways in Scotland until such time as a transfer of functions is effected. If and when the Scottish Parliament exercises the new legislative competence conferred by Clause 43, it would be necessary that the BTP bodies be designated cross-border public authorities so as to facilitate the appropriate transfer of BTP property, staff, liabilities and contracts in Scotland.

The noble and learned Lord, Lord Hope, asked for other examples of cross-border authorities; one that comes to mind is the Forestry Commission, although I will write to him with other examples.

Upon the completion of the transfer of policing of railway functions to the new Scottish model devised by the Scottish Government, the designation of the BTP bodies as cross-border public authorities will be removed and the BTP will exercise functions of policing for railways only for England and Wales.

[Lord Faulkner of Worcester (Lab)]

On that point, can the Minister describe to me what will happen with trains that travel between England and Scotland, of which there are hundreds a day? Does the policing of that train change at the border? Does the British Transport Police no longer have any responsibility for ensuring order on that train, and does it then have to rely on Police Scotland to do that?

[Lord Dunlop]

We anticipate that the BTP will continue to have limited functions in that scenario; I will come on to address that later in my remarks.

Amendment 53A was tabled by the noble Lord, Lord Empey, who spoke with great authority from his Northern Ireland experience. Regardless of how the Scottish Government legislate with regard to railway policing, the British Transport Police and the British Transport Police Authority will continue to exist in England and Wales. There is no question of abolishing or dissolving the British Transport Police. We also anticipate, as I have just said, a limited but continuing role for the BTP in Scotland, particularly in relation to cross-border services—a point raised by the noble Lord, Lord Faulkner—working alongside the new Scottish model. There is already existing co-operation and collaboration between the BTP and Police Scotland. The BTP uses Police Scotland police stations, for example, and Police Scotland can be first responders to rail-related incidents. Inter-force co-operation will be one of the many important issues to be agreed between the UK and Scottish Governments before the BTP’s current role and function are changed. The need for this sort of collaboration between different police forces is not confined to railways; it happens every day in other fields.

It is the BTP’s Scottish division—its functions, staff and contracts—which would be transferred if the Scottish Government decided to implement a new operational model, and which would be legislated for by the Scottish Government once the necessary legislative competence had been provided through Clause 42 in order for us fully to deliver the Smith commission agreement.

The debate this evening has highlighted the complexities. Both Governments are aware of the complexities of such a transfer and of the need for close collaboration and engagement to work through the details. I reassure your Lordships that this work is already under way and we will keep the House informed as it progresses. The starting point is for the Scottish Government to determine the operating model and to legislate for future policing of the railways. The aim of both Governments, working together, is to ensure an orderly transfer of property, assets and liabilities. Clearly the UK Government will work to ensure continued co-operation during the transfer and afterwards to achieve the best possible outcome. Many of the issues raised by noble Lords this evening—in particular, the noble and learned Lord, Lord Wallace—will be determined as part of this process.

The need to maintain high levels of service should be at the forefront of any planning for an efficient and effective transfer of functions. As the noble Lord, Lord Berkeley, mentioned, BTP officers have a wealth of knowledge and important skills, which it will be important to retain and ensure are reflected in any new Scottish structure. The expectation from the discussion we have had so far with the Scottish Government is that a specialist transport policing unit will be established within Police Scotland. The transfer of experienced officers from the BTP will help ensure that these valuable capabilities are appropriately shared, and we will continue working with the Scottish Government during this important period.

I note what my noble friend Lord Forsyth said about Police Scotland, but I make it clear that, as is consistent with the nature of devolution, it will be for the Scottish Parliament to legislate in relation to the policing of the railways in Scotland and for the Scottish Government to decide how they want the new structure to operate in practice. I think that this echoes what the noble Lord, Lord McAvoy, said. The Scottish Government will be held to account for that by the people of Scotland, as they are currently being held to account for the performance of Police Scotland. That is leading to a review of the governance of Police Scotland.

The noble Earl, Lord Kinnoull, talked of teething problems. The importance of getting this right, both for maintaining the standards of railway policing in Scotland and for preventing any adverse effect on the BTP regarding the rest of England and Wales, will not be overlooked. Given its importance, we expect the transfer of the BTP’s property rights and liabilities to take between two and three years.

The noble Lord, Lord Empey, raised an important practical point when he asked whether the BTP would have powers to operate and arrest in Scotland, should it need to follow a criminal across the border. It is a point that I am confident both Governments will discuss and on which they will agree an effective approach as part of the transfer and set-up of new collaborating arrangements so that criminals can effectively be pursued across the border.

I accept that the devil will be in the detail. However, there is no reason in principle why the high standards of railway policing in Scotland cannot continue under a devolved model, and the Government will continue to work with the Scottish Government to achieve this. For those reasons, I urge noble Lords not to press their opposition to the clause.

[Lord Wallace of Tankerness]

I raised a number of questions, one of which concerned funding. I know that the devil is in the detail but, from his discussions thus far with the Scottish Government, can the noble Lord give us some indication of the United Kingdom Government’s ideas regarding the funding arrangements that will be put in place?

[Lord Dunlop]

As I have just said, this is about devolution to the Scottish Parliament. Following devolution—and this matter will form part of the discussions—it will be for the Scottish Parliament to determine what the charging arrangements will be. However, perhaps I may end on this point. Democratic accountability is absolutely key here. I do not think that the voters of Scotland would be very pleased if the Scottish Government, through the train operating companies, increased costs to the travelling public in Scotland. For all the reasons I have given, I urge noble Lords to agree to the clause.

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[Lord McCluskey]

Perhaps the Minister would take a short question from me. Is he advising the Committee that Clauses 42 and 43 enact the provision contained in paragraph 67 of the Smith commission report and nothing else?

[Lord Dunlop]

I am saying that these clauses provide the framework that allows us to go forward, but the Scottish Government have to decide what operating model they want for the policing of the railways in Scotland. I said that I anticipated that it would take two to three years before these functions were devolved, and that is because all sorts of contracts with third parties are involved here—the noble Earl, Lord Kinnoull, talked about pensions. I do not underestimate the complexity involved and I hope the Committee will understand if I do not have specific answers to all the questions; we will be working with the Scottish Government to clarify them over the next two to three years.

[Lord Forsyth of Drumlean]

I do not understand why the Government are bringing proposals to this House which have not been thought through. It is no good saying, “Oh well, the Scottish Government will need to work this out over the next two years”. Does my noble friend not recognise that this matter affects the rest of the United Kingdom? This is about maintaining a perfectly adequate system of policing upon which the larger proportion of the population depends. My noble friend is a Minister in the United Kingdom Government. If he brings forward legislative changes, surely he has a responsibility to explain to us how they are going to affect the United Kingdom. It is a case of the tail wagging the dog if we say, “This is a matter for the Scottish Parliament to decide. You just pass the legislation and we’ll try to work something out”. Surely my noble friend can see that he is not responding to the points that have been made, which concern the security of the United Kingdom and England in particular.

At the beginning of his speech I asked him a specific question, which has been asked again by the noble and learned Lord. It was whether he thinks that these clauses provide for what is contained in the Smith commission report, which says simply:

“The functions of the British Transport Police in Scotland will be a devolved matter”.

It does not say that there will be legislative control over the British Transport Police or that the British Transport Police will be broken up and there will be a separate Scottish force—it does not say that at all. The noble Lord, Lord Empey, indicated earlier that it would be perfectly possible to give the devolved Parliament some involvement in the British Transport Police without breaking the BTP up.

The clauses we are being asked to support tonight are completely vague as to the outcome. Does my noble friend recognise that he has not responded to the debate and has not dealt with the fundamental question that is being put: what will happen to England and Wales and the rest of the country, and why is it necessary to break up a perfectly efficient organisation in order to meet the requirements of paragraph 67 of the Smith commission report? As the noble Lord, Lord Empey, said, the Smith commission report is not a treaty; it is advice to Parliament and we are discussing a Bill.

[Lord Dunlop]

In answer to my noble friend, the function of the BTP is the policing of railways, which is the subject matter of these clauses and what we are devolving in this Bill. That is what the Smith report stated and we are committed to delivering that agreement.

[Lord Berkeley]

Will the Minister answer the question that I put to him a few minutes ago, please, on the financing of the British Transport Police north of the border?

[Lord Dunlop]

I did answer it, to the extent that there is a plethora of detail that lies behind this. However, it requires, as I said, the Scottish Government, in discussion with the UK Government, to specify what their operating model is. Until we have that, we cannot answer in a lot of detail. I come back to the fundamental point that we are devolving something, and it is for the Scottish Government and Parliament to decide how that will work within Scotland.

[Lord Wallace of Tankerness]

On that point, and in reflecting on his answer to the noble Lord, Lord Berkeley, and his earlier answer to me, which he has just repeated, does that mean that the Scottish Parliament and Government could load up the charges on Network Rail, which is a pan-UK body, and would that therefore have implications for transport rail users in England and Wales, as well as in Scotland? Does he not think that that is a matter on which the United Kingdom Government should have a view?

[Lord Berkeley of Knighton (CB)]

Just before the Minister answers that question, and at the risk of throwing another Berkeley into the hat and confusing life still further, I have listened to the debate this evening and am confused by the point that the noble Lord, Lord Forsyth, wishes to clarify: how this will affect members of the United Kingdom. I do not really feel that I have got an answer to that. It seems to me that it will affect them, and I wonder what the Minister feels about that. Although I understand it, the answer he gave does not quite elucidate the problem we have here.

[Lord Dunlop]

I hesitate at this point in the evening to introduce the concept of no detriment, and I look forward to Committee day 3, when I am sure we will cover this in great detail. However, the UK Government absolutely have an interest in ensuring that whatever devolution takes place in this space does not cause detriment to the rest of the United Kingdom.

[The Earl of Kinnoull]

The noble Lord, Lord Empey, and I suggested that a solution to this could be a dual reporting structure. I would be happy to explain that afterwards, as I am sure the noble Lord would be. In view of the fact that three or four years of work is stretching before us, which sounds very expensive to me, it might be cheaper just to ask the opposite numbers at Holyrood at one of the forthcoming meetings in the next few weeks whether the pragmatic suggestion of going down the Empey/Kinnoull route might cut the mustard. If it does, it would be a heck of a lot cheaper and, I believe, much more effective. It is a free question. Will the Minister consider at least asking, to see whether they might accept this slightly different approach?

[Lord Dunlop]

I will certainly reflect on the points that have been raised in this passionate debate. No doubt we will return to this subject.

[Lord Empey]

My Lords, the noble Lord, Lord Dunlop, is a very capable Minister but, throughout his contribution this evening, not even he has been able to offer one scintilla of rationale for doing this. There is no advantage to be gained; we all know that. It is an ideological path that people have set themselves on and we are dealing with the consequences of that. This is not the opportunity to elaborate on the point that the noble Earl, Lord Kinnoull, made. However, the solution we found was to have the police authority receive regular reports, including personal questioning, and to have responsibility for the actions that would be taken by the NCA in Northern Ireland, which would be answerable to the authority but ultimately under the control of the national Government. A solution can be found somewhere in there. As I said, it is not a matter of depriving the Scottish Parliament of any interest—of course it has an interest—but I feel that we should now proceed to Report. I hope that the Minister will wish to discuss the matter with some of us between now and then. In those circumstances, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Dunlop]

My Lords, perhaps I may set the scene for Clause 49, which refers to gaming machines in licensed betting premises. The provision will give the Scottish Parliament the power to vary the number of high- stakes gaming machines permitted by betting premises licences in Scotland. This power applies to all gaming machines on which players can stake more than £10 per play, which was referred to by the noble and learned Lord, Lord Davidson. At present this is possible on sub-category B2 gaming machines only. These are the machines that are widely referred to as fixed-odds betting terminals. Further, the power conferred by the Gambling Act 2005 on the Secretary of State to vary the number of such machines permitted by new betting premises licences will be transferred to Scottish Ministers.

FOBT machines are located almost exclusively in high street betting shops, and it is these machines with a maximum stake of £100 and a maximum prize of £500 on which recent public interest and debate have centred. This implements paragraph 74 of the Smith commission report which was explicit in saying that the Scottish Parliament should have,

“the power to prevent the proliferation of Fixed-Odds Betting Terminals”,

and this clause achieves that.

The Smith commission agreement was explicit in saying that the Scottish Parliament should be able to exercise new functions under the Gambling Act 2005 to increase or decrease the number of FOBTs which are authorised by new betting premises licences. The power is sufficiently broad to permit the Scottish Parliament or Scottish Ministers to reduce the number of FOBTs authorised to zero in a new betting licence. The Scottish Parliament will be able to prevent increases in the number of FOBTs created by the opening of new betting premises, as Smith proposed. Gambling and its impact on society is a topic which the Government understand and take seriously, and we remain alert to the changing dynamics of the wider debate and will act in this area as appropriate.

I turn to Amendments 54 and 56, which seek to extend the scope of gaming machines covered by the clause. These proposals go substantially further than what the Smith commission referred to. They would bring within the scope of the clause all gaming machines regardless of stake size. At present, a betting premises licence issued under the Gambling Act 2005 authorises its holder to make up to four gaming machines available for use. The Categories of Gaming Machine Regulations 2007 provide that this entitlement is limited to gaming machines which fall within sub-categories B2, B3 and B4 and categories C and D. The Smith commission agreement relates only to FOBTs, and the term FOBT cannot be found in the Gambling Act 2005, but it is commonly used to describe category B2 machines by the Government as well as the Scottish Parliament’s Local Government and Regeneration Committee. The Smith commission’s use of the term FOBT is not shorthand for all gaming machines. FOBT machines are located almost exclusively in high street betting shops, and it is on those machines that the recent debate has centred. As such, the Government consider that the intentions of the Smith commission agreement have been delivered and that it is unnecessary to bring other gaming machines, which have far lower stakes and prizes, within the scope of this clause.

I am grateful for the contribution that was made on Amendment 58. As I have said, the Smith commission sought powers to prevent the proliferation of FOBTs, and the Government have interpreted this to mean the ability to restrain any future increase in the number, thus preventing proliferation—and hence the focus on new licences. Amendment 58 would extend this power to include existing licences as well as new ones. In conjunction with the extensive planning powers which have already been devolved, the clause as drafted will give the Scottish Parliament sufficient levers to tackle high street gambling and the extent of FOBT terminals, as Smith envisaged and which is the focus of public debate. The Government’s approach is appropriate and therefore I hope that the amendment will not be pressed.

The noble and learned Lord, Lord Davidson, proposed Amendments 55 and 57, which would allow the Scottish Parliament to include licensing standards officers in Scotland as authorised persons who may exercise inspection and enforcement functions under the Gambling Act 2005. There is already a well-used and straightforward mechanism in Scotland whereby licensing standards officers may be authorised persons for the purposes of the inspection and enforcement of functions under the Gambling Act 2005. The Gambling Commission has very helpfully issued guidance on this. Local authorities are already responsible for determining how their existing officers discharge their duties. Clause 49 does not change that. As such, we consider that the amendments are not necessary.

Again, I urge the noble Lord to withdraw his amendment.

[Lord Bruce of Bennachie]

I am grateful to the Minister. As he will know, these amendments were proposed by the Law Society. While his response has made clear that he believes, in accordance with the Smith commission, that it is giving the power to regulate new licences for high-value machines, it creates a dilemma, which means that some machines in Scotland will be regulated by the Scottish Government and others would still be regulated by the UK Government. Would it not be more sensible to have a single Government, the Scottish Government, responsible for the regulation of all machines rather than have certain machines over which the Scottish Government have power and others which remain with the United Kingdom Government, causing potential confusion and future conflict?

That was the purpose of the amendment. All I ask of the Minister is that he reflects on the fact that, while I understand the reasonings for the amendments—I am happy to withdrawn mine on that basis—he should recognise that this could create an anomaly in the future which might require him to come back with future legislation. There is some logic in doing it all in one rather than having to come back on another date. I beg leave to withdraw the amendment.