Scotland Act 2016
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Lord Steel of Aikwood
To ask Her Majesty’s Government what steps they have taken to co-ordinate the implementation of the Scotland Act 2016 with the Scottish Government.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
The joint ministerial working group on welfare and the Joint Exchequer Committee will oversee the implementation of welfare and tax powers, and a cross-Whitehall programme board has been established to oversee implementation of the Scotland Act. Senior officials from the Scottish and UK Governments meet regularly to identify and resolve issues and, building on the successful implementation of the 2012 Act, I am confident that both Governments will work constructively together to implement these historic new powers.
Lord Steel of Aikwood (LD)
My Lords, I am grateful to the Minister. However, is he aware that in last week’s debate on HS2 only one Peer—my noble friend Lord Glasgow—spoke of the need to extend that line as far as Scotland, and that the same week the First Minister of Scotland announced a feasibility study to extend the successful Borders Railway further south? What, then, are the chances of the two Governments working together to make sure that Scotland gets a modern railway system?
Lord Dunlop
In all issues the two Governments will seek to work constructively. There was a specific review to see how passengers who travelled to Scotland could get the benefits of HS2—that is an example of how the two Governments have been working together.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend agree that the Scotland Act 2016 leaves the power to call a second referendum on independence in Scotland here at Westminster and not in Scotland, and that it is utterly irresponsible for any unionist to argue that a vote to leave the European Union would justify a second referendum when the vast majority of people in Scotland regard this matter as now settled?
Lord Dunlop
I very much agree with my noble friend. The people of Scotland voted very clearly and decisively in 2014 to remain part of the United Kingdom, and at the time Nicola Sturgeon, now First Minister of Scotland, said that this was a “once in a generation” issue. It is incumbent on the SNP to respect the decision that the people of Scotland took and to focus on jobs, prosperity and high-quality public services in Scotland.
Lord Purvis of Tweed (LD)
The Scotland Act transfers very considerable income tax powers across all bands to the Scottish Parliament. Is the noble Lord aware that the Scottish National Party has now abandoned its long-held policy to restore the 50p additional rate because it anticipates that 7% of additional ratepayers in Scotland would configure their tax affairs to avoid paying taxation in Scotland? What are the Government doing to ensure that there is no prospect of tax avoidance within the UK?
Lord Dunlop
HMRC is very focused on tax avoidance. The passage of the Scotland Act 2016 has meant that the debate that is going on for the Holyrood elections is about not what new powers should come to Scotland but how those powers are used. Tax is absolutely central to that, and that is a good and healthy development of the debate in Scotland.
Lord McConnell of Glenscorrodale (Lab)
My Lords, does the Minister agree that the existence of this latest Scotland Act, which devolves significant further powers to Scotland and therefore fundamentally changes much of the governance of Britain, should instigate a serious review of the way in which central government governs the whole country—the four nations of this country? Perhaps in particular the future of the territorial Secretaries of State should be looked at seriously, as surely now, with these further devolved powers, they have become even more obsolete.
Lord Dunlop
The territorial Secretaries of State are a very powerful voice and effective representatives for the home nations of the UK at the heart of the UK Government. They should continue to be so.
Lord McAvoy (Lab)
My Lords, I welcome the reiteration by the Minister of the administrative organisations and committees that have been set up to monitor how we proceed with the consequences of the Scotland Act. Before the passage of the Scotland Act, a great deal of concern was raised across the House about the implementation of devolution. Quite rightly, the process which dealt with the fiscal framework was confidential. However, would the Minister agree that some more transparency in the future deliberations of how the Scotland Act was processed would be useful?
Lord Dunlop
There are regular reports to Parliament on different aspects of the devolution settlement, and we will always look at how these can be improved. We have undertaken to make annual reports to this House and to Parliament on the general operation of the fiscal framework, and that is very positive.
Lord Sanderson of Bowden (Con)
Following on from the last question, when does my noble friend expect to see the first report, post this Act, from the Scottish Fiscal Commission on the projections for Scotland over the next year or two?
Lord Dunlop
I am not sure I can give a specific date for when the first report from that commission will be forthcoming but I am happy to write to my noble friend with further information on that.
Lord Grocott (Lab)
Has the Minister noticed that the Government in Scotland are not keen on laws being made in Westminster, which the Government in Scotland consider too remote, but are very enthusiastic about laws being made in Brussels? Does he agree that, although very many clever people may be running the SNP, they are not very good at geography?
Lord Dunlop
They are not very good at geography and I do not think that consistency is always a strong point with them either.
Lord Selkirk of Douglas (Con)
My Lords, can the Minister confirm that with the increased responsibility will go increased accountability? That must not be forgotten.
Lord Dunlop
At the heart of the Scotland Act 2016 is the transfer of responsibility to the Scottish Parliament, along with greater accountability, so the Scottish Parliament, which has always had great powers to spend money, now has responsibility for determining how that money is raised.
Smith Commission Principles: Railway Policing
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Lord Faulkner of Worcester
To ask Her Majesty’s Government how they will ensure that the fifth principle contained in the report of the Smith Commission that the package of powers agreed through the Smith Commission process “should not cause detriment to the UK as a whole nor any of its constituent parts” will be complied with when railway policing is devolved.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, the Scotland Act devolves responsibility to the Scottish Parliament for the policing of railways in Scotland, and we are working with the Scottish Government to understand their plans. Maintaining high levels of service across the UK is at the forefront of our planning for an efficient and effective transfer of functions. There is absolutely no reason to think that devolution will degrade the level and effectiveness of railway policing.
Lord Faulkner of Worcester (Lab)
My Lords, that is all very well but this is a Question about the no-detriment principle in the Smith commission report. The British Transport Police Authority made it clear in its evidence to the Public Audit Committee of the Scottish Parliament that the safety and security of railway policing in England and Wales could be endangered and its costs increased if that force no longer had a role in Scotland. Surely there can be no greater example of a no-detriment principle applying than that one. Particularly bearing in mind what the noble Lord, Lord Dunlop, said at the Report stage of the Scotland Bill when he shared with us the news that the Conservative Party, in its manifesto for the Scottish elections, had decided that the BTP should continue to police the railways in Scotland after those elections, surely he could be a little more forthright in standing up for the no-detriment principle.
Lord Dunlop
My Lords, the noble Lord is absolutely correct that the Scottish Conservative manifesto supports the devolution of BTP functions in Scotland, as do all the parties that signed up to the Smith agreement. The principle of devolution is that the Scottish Government should be held accountable by the people who elect them, and I assure the noble Lord that the Scottish Conservatives and their leader, Ruth Davidson, will be very vigorous indeed in holding the Scottish Government to account for their decisions on the BTP in Scotland. To take the other aspect of the noble Lord’s question, if the Scottish Government decide to proceed with plans to integrate BTP functions within Police Scotland, the UK Government will of course work very closely with the Scottish Government to put in place robust operational arrangements to ensure that there is no detriment to any part of the United Kingdom.
Lord McAvoy (Lab)
My Lords, at the Report stage of the Scotland Bill the Minister indicated that a senior-level joint programme board to lead and oversee the work to integrate the British Transport Police in Scotland into Police Scotland had been established by the two Governments and that it includes two representatives of the two police authorities. The Minister also indicated that it would report to the UK Parliament about progress and with its implementation proposals. Does the Minister agree that that will give this House the chance to monitor the principle of no detriment?
Lord Dunlop
The noble Lord is absolutely correct. A joint programme board has been established and it includes representatives from the two Governments, the British Transport Police Authority and the Scottish Police Authority. As I said on Report, I am very happy to share with the House the terms of reference of that joint programme board and to do so soon after the Scottish elections have concluded on 5 May. I also renew the commitment to update the House in detail on the implementation plans once the Scottish Government have finalised their operational model, which, although it is in the gift of the Scottish Government, I anticipate will be in the late autumn. That will, I think, give the House the opportunity to monitor progress.
Lord Berkeley (Lab)
My Lords, will the Minister respond to the question from my noble friend Lord Faulkner about the BTP’s evidence to the Public Audit Committee that if this split happens, regardless of the safety and other implications which we have all spoken about previously, there will be extra costs for the British and Welsh Governments for the British Transport Police activities in those countries? If the Scottish Government implement this, will they compensate England and Wales for the extra costs that will be imposed?
Lord Dunlop
I do not think we can be specific on the costs until we know what the structure will be. However, as I said, in the detailed discussions on the implementation plans the UK Government will work very closely with the Scottish Government to ensure that, whatever arrangements are put in place, they do not cause detriment to the other parts of the UK.
Lord Harris of Haringey (Lab)
My Lords, it is of course conceivable in the future that there may be disagreements between the Government here in London and the Scottish Government. Can the Minister give us a guarantee—and, if he can, how can he make such a guarantee—that we are not going to see the spectre of trains pulling up at the border while operatives of the British Transport Police get off and operatives of Police Scotland get on?
Lord Dunlop
There are already collaborative arrangements in place between the BTP and Police Scotland. I think that as we put in place the new arrangements we will be looking to ensure that we build on those collaborative arrangements to ensure that there is a seamless operation of what is a very important service for the whole of the UK.
Lord Faulkner of Worcester
But who, my Lords, is going to decide whether the no-detriment principle applies? Is it going to be the British Parliament or the Scottish Parliament?
Lord Dunlop
As regards this issue, I go back to what my noble friend Lord Empey said. I am not sure whether he is in his place today, but he has great experience of these matters in Northern Ireland. He was absolutely confident that we could put in place effective working arrangements. However, he did caveat that by saying that it would take time to achieve that. It is certainly our view and expectation that it would take two to three years to ensure that there is a proper transfer of these functions.
Lord Wallace of Saltaire (LD)
My Lords, is the Minister sure that we should be making a direct comparison with Northern Ireland in this respect? I understand that trains run between England and Scotland but not between England, Scotland and Northern Ireland.
Northern Ireland (Stormont Agreement and Implementation Plan) Bill
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Lord Dunlop
That the Bill be read a second time.
Relevant document: 24th Report from the Delegated Powers Committee
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, the Northern Ireland (Stormont Agreement and Implementation Plan) Bill delivers key aspects of the December 2014 Stormont House agreement and the November 2015 fresh start agreement. I see our job here this evening as helping to ensure that these agreements are implemented and that another step is taken towards a more peaceful, prosperous and stable Northern Ireland where the devolved institutions continue to work for everyone and paramilitary activity is eradicated once and for all.
By way of context, the Stormont House agreement followed some 10 weeks of talks between the Government, the five largest parties in the Northern Ireland Assembly and the Irish Government on matters for which they have responsibility under the long-established three-stranded approach to Northern Ireland affairs. It dealt with many of the most difficult challenges facing Northern Ireland, including welfare reform, measures to deal with the legacy of the Troubles, improvements to the workings of devolution and new arrangements to examine long-standing issues such as flags and parading.
However, by last summer implementation of the Stormont House agreement—in particular, welfare reform—had stalled. This lack of agreement severely undermined the Executive’s finances, putting increasing pressure on funding for public services. This political and financial impasse was then compounded by two paramilitary murders in Belfast, precipitating a serious breakdown in Executive relations. Confronted by the very real risk of the devolved institutions collapsing and a return to direct rule, my right honourable friend the Secretary of State for Northern Ireland convened a further round of cross-party talks.
Following 10 weeks of discussion, on 17 November a way forward was announced on the two key issues the talks were convened to address: first, implementation of the Stormont House agreement, itself a government manifesto commitment, and, secondly, dealing with the continued and malign impact of paramilitary activity on Northern Ireland society.
The fresh start agreement is a very significant step forward on both counts. The agreement takes the Northern Ireland political parties further than ever before in their determination to see a complete end to paramilitary activity, placing obligations on Assembly Members to work together to rid society of paramilitary activity and to tackle organised crime. It helps to ensure the fiscal sustainability of the Executive, underpinned by up to half a billion pounds of extra spending power on top of the £2 billion in the Stormont House agreement. Crucially, it was instrumental in bringing to an end a crisis that had threatened the survival of the devolved institutions which have remained stable since 2007, the longest period of unbroken devolved government since the old Stormont Parliament was dissolved back in 1972.
Good progress has already been made in implementing the fresh start agreement. In November, this House considered and passed the Northern Ireland (Welfare Reform) Bill and the accompanying Order in Council was passed in early December. A joint agency task force has been set up to tackle cross-jurisdictional organised crime, and a panel of respected figures, including the noble Lord, Lord Alderdice, has been appointed to consider the issue of continued paramilitary activity and to make recommendations on a strategy for disbanding paramilitary groups by the end of May. Work is also under way to appoint a new commission on flags and parades. The Assembly has passed legislation to make significant reforms to its institutions, reducing the number of Executive departments and Members of the Legislative Assembly. The implementation of the fresh start agreement is therefore proceeding apace and the Government, Executive and Irish Government have shown a real commitment to make the agreement work and deliver on their commitments.
This Bill is the UK Government’s next step towards full implementation of the fresh start agreement, and has the support of the Northern Ireland Assembly, which gave cross-party consent on 15 March in respect of the transferred matters contained in the Bill. A number of commitments need to be delivered through legislation, and the Bill achieves that. It makes provision for a new Independent Reporting Commission, an international body to be established through a treaty with the Irish Government, the objective of which will be to promote progress towards ending paramilitary activity. It makes provision to promote fiscal transparency and support the Executive to deliver a stable and sustainable budget; for additional commitments in the pledge of office taken by Executive Ministers relating to tackling organised crime and paramilitarism, and the introduction of a parallel undertaking for Members of the Assembly; and to extend the time available for agreeing a programme for government and appointing Executive Ministers after an election.
Those last two measures are of course linked to the timing of the forthcoming Assembly election. The Government are therefore seeking Parliament’s agreement for the Bill to proceed through its parliamentary scrutiny faster than usual to ensure that the enhanced pledge of office and new undertaking, as well as the extension of the time available for ministerial appointments, are in place in time for the Assembly’s return. I am grateful to the parties opposite for their support on this.
With noble Lords’ permission, before I turn in more detail to the measures in the Bill, I shall address an issue that formed an important part of the fresh start talks but which does not feature in this legislation: the establishment of new bodies to deal with the legacy of the past in Northern Ireland. I reassure noble Lords that this issue is of paramount importance to the Government, and it is clear that it is important to noble Lords from across the Chamber as well. In discussions that I have had in the run-up to today’s debate, many noble Lords have raised this issue. I have therefore written offering an open briefing session, to take place tomorrow afternoon. I hope to see many noble Lords there, and indeed the response has already been very positive.
The Government continue to believe that the provisions outlined in the Stormont House agreement, which themselves build upon the significant work that the noble and right reverend Lord, Lord Eames, took forward in his role as co-chair of the Consultative Group on the Past, represent the best chance for dealing with the past in a way that will deliver significantly better outcomes for victims and survivors. Let us never forget that it was the victims and survivors who suffered more than anyone else as a result of the Troubles. The new institutions will therefore be balanced, proportionate, transparent, fair and equitable. They will allow Northern Ireland to move forward, and have the needs of victims and survivors at their heart. Intensive work therefore continues with victims’ representatives and others on finding a way to build the broad consensus needed to legislate. I hope very much that legislation to establish the legacy institutions in a separate Bill will be brought forward once the necessary consensus has been achieved.
I turn to the measures in the Bill before the House today. Clauses 1 to 5 relate to the Independent Reporting Commission. The objective of this new commission will be to promote progress towards ending paramilitary activity connected with Northern Ireland. It will therefore fulfil an important role in furtherance of this Government’s commitment to challenging all paramilitary activity and associated criminality. The commission will be an international body, established through an agreement with the Irish Government. Work on the agreement is at an advanced stage and, once agreed with the new Irish Government, it will be laid before Parliament for scrutiny under the arrangements in the Constitutional Reform and Governance Act 2010. It will be independent of the sponsoring Governments and will have a significant degree of discretion in fulfilling its functions, which are to report on progress towards ending paramilitary activity, including on implementation of measures taken by the Government, the Executive and the Irish Government to tackle paramilitarism, and to consult a wide range of stakeholders in fulfilling this role. The Bill also outlines both the legal privileges which the commission will enjoy and the duties under which it will operate. Further detail on the establishment and operation of the commission will be set out in secondary legislation in due course.
At this juncture I should also mention that last week I responded to the very helpful comments of the Delegated Powers and Regulatory Reform Committee on the Bill. I have placed a copy of my response in the House Library and have published it on the Northern Ireland Office website.
The Bill also amends the pledge of office for Ministers in the Northern Ireland Executive. The enhanced pledge reflects the commitments in the fresh start agreement to give unequivocal support for the rule of law and to work collectively to achieve a society free of paramilitarism. The Bill will also introduce for the first time a similar undertaking for all Members of the Northern Ireland Assembly.
In the other place, there was much discussion of the question of possible sanctions for breaching the new undertaking. This is an important point and I have absolutely no doubt that we will return to it during discussions in this House. The Government are firmly of the opinion that it would not be appropriate for us at Westminster to pre-empt the Assembly’s own consideration of this issue and prescribe specific sanctions or the means by which they should be taken forward. Rightly, this is a question for the Northern Ireland Assembly and should be decided by that legislative body with the appropriate cross-party and cross-community consensus. There are established mechanisms by which the Assembly holds MLAs to account, including for their adherence to the Assembly code of conduct, and the Assembly has the necessary powers to impose sanctions, should it decide that these are required.
The Bill also extends the time available for the allocation of ministerial positions in the Executive from seven to 14 days after the Assembly first meets following an election. This change was first proposed in the 2014 Stormont House agreement and was confirmed in the recent fresh start agreement. At present, Northern Ireland Executive ministerial positions must be allocated within seven calendar days after the first meeting of the Assembly, as required by the Northern Ireland Act 1998. This extension will therefore allow the parties more time to agree a shared programme for government on a cross-party basis prior to the allocation of ministerial positions following the upcoming elections and all future elections.
Finally, the fresh start agreement contains a clear commitment for the UK Government to legislate to increase fiscal transparency, helping the Executive deliver affordable and sustainable budgets. The Bill therefore requires that, when delivering a draft Budget, the Executive Finance Minister must demonstrate that the amount of government funding required by the draft Budget does not exceed what is available.
As I have outlined, the measures included in this Bill are the product of extensive cross-party talks conducted over the 10 weeks leading up to the fresh start agreement. They have the support of the Executive and the Assembly, which were involved in the drafting of the provisions, and a legislative consent Motion in respect of the transferred matters in the Bill received cross-party support in the Assembly, as I said, on 15 March.
The Bill is a crucial stage in the full implementation of the Stormont House and fresh start agreements, which, taken together, have the potential to resolve some of the most difficult challenges facing Northern Ireland and help us secure a more peaceful, stable and prosperous future for all the people who live in Northern Ireland. I beg to move.
Lord Dunlop
My Lords, this has been a constructive debate with powerful and moving speeches and I thank noble Lords from all parts of the House for the many and varied contributions they have made. It is fair to say that the speakers list has been short but that the quality of the speakers and the wealth of knowledge and experience that has been brought to bear has more than made up for this. Indeed, as a relative newcomer in this House, I am humbled to be participating in such company. I echo the remarks made by the noble Lord, Lord McAvoy, about the contribution and presence here of the noble Lord, Lord Murphy.
I shall endeavour in my closing remarks to address as many of the points raised as I can. However, perhaps I may first say a few words about the Bill as a whole. As I said earlier, the Bill implements some key elements of both the fresh start and Stormont House agreements. In so doing it takes an important step towards a more peaceful, prosperous and stable Northern Ireland. It is peaceful in that the Bill makes provision for the establishment of an independent body that will both promote and report on progress towards ending paramilitary activity connected with Northern Ireland. It is prosperous in that the Bill will increase fiscal transparency, ensuring that executive budgets are affordable and sustainable. It is stable in that it will allow parties more time to agree a programme for government on a cross-party basis, encouraging a more bipartisan approach, while the additions to the ministerial pledge of office and new undertakings for Assembly Members signal more clearly than ever before the determination of the Northern Ireland political parties to see an end to paramilitary activity once and for all.
Perhaps I may now respond to some of the detailed points raised. The noble Lord, Lord Murphy, referred to the powers of appointment of the First Minister and Deputy First Minister, and expressed the hope that in discharging those powers they would consult more widely. I was encouraged that Minister Pengelly, in the legislative consent Motion debate in the Northern Ireland Assembly, undertook that at the very least there would be consultation with the Minister for Justice. The noble Lord also raised the issue of the role of a new generation, a point echoed by the noble and right reverend Lord, Lord Eames. It is important that the shared future initiatives are very much designed in many respects to engage young people.
I turn now to the contribution of the noble Baroness, Lady Harris. She talked about widening the membership of the IRC. Of course, no decisions on the membership of the commission have yet been made, but it is important to make the general point that the IRC needs collectively to have credibility and to carry confidence across the community. Clearly it is incumbent on the Government, the Irish Government and the First and Deputy First Ministers to consult one another when making their respective nominations to ensure that the criterion laid down in the fresh start agreement is met. The noble Baroness also raised the issue of ring-fencing legacy funding. The Stormont House agreement committed £150 million over five years to fund new legacy institutions. Speaking more widely, I agree with her that it is important that these new institutions are equitable in how they operate. The Government are clear that the new bodies must be transparent, fair and equitable. This is written into the Stormont House agreement and will be in the Bill itself; these are absolutely fundamental values.
The noble Lord, Lord Empey, broadly welcomed the IRC and expressed his hope that it would shine a light into paramilitary activity. Whatever remedial action the IRC might recommend, and it is free to do so, I think that public scrutiny will be a very powerful influence on eradicating paramilitarism in Northern Ireland. The noble Lord also raised the issue of the Executive’s finances, a point raised by my noble friend Lord Lexden, who talked about financial prudence. The Executive have committed to establishing an independent fiscal council for Northern Ireland to increase the transparency of the public finances and it will publish an annual assessment of the Executive’s revenue streams and spending proposals, showing how the Executive’s budget will balance. It is also important that the council will publish a report on the sustainability of the Executive’s finances.
I turn to the contribution of the noble and right reverend Lord, Lord Eames. First, I thank him for his kind remarks. He gave a typically moving and authoritative speech about how to reconcile a divided society. I agree with him that reconciliation cannot be achieved solely through legislation. I very much look forward to introducing a Bill to establish the new institutions to deal with the past. He is absolutely right that more is needed. For this reason, my right honourable friend the Secretary of State is engaging intensively with stakeholders, political parties and civil society organisations to move forward in the best interests of victims.
The noble Lord, Lord Browne, sought clarity on the terms of the treaty. That point was also raised by my noble friend Lord Lexden. Discussions with the Government of Ireland on the contents of the international agreement are at an advanced stage. However, it will not be possible to gain final agreement until after the new Government is formed in Ireland. The treaty will set out the IRC’s functions, as outlined in A Fresh Start, and it will also add further detail on the operations of the commission. I am afraid that, at this point, I cannot be specific or give a date when the IRC will be up and running, but we are aiming for it to be this year. Obviously, the Executive will be publishing their strategy and plans for dealing with paramilitarism by the end of June.
The noble Lord, Lord Lexden, also raised the issue about the legislative consent Motion for this Bill. An LCM was required in the Northern Ireland Assembly for two provisions in the Bill because they alter the competence of a devolved Minister: Clause 1(4), which provides a new power for the First Minister and Deputy First Minister to nominate two members of the IRC; and Clause 9, which seeks to promote fiscal transparency and places a duty on the Northern Ireland Finance Minister to provide statements to the Assembly.
The noble Lord, Lord Bew, raised the issue of the need for an IPSA-style body. Obviously, the Government want to promote the highest standards in public life in all parts of the United Kingdom, including Northern Ireland, but as I said in my opening speech, the Government would not wish to pre-empt detailed Assembly consideration of the most appropriate measures or the most appropriate vehicle to introduce them. Assembly Standing Orders, for instance, exist primarily to regulate the proceedings of the Assembly, and it is not clear that they would be an appropriate vehicle to make provision for investigation by an independent or external person.
The office of the existing Commissioner for Standards was established by separate Assembly legislation, and any new accountability measures will need to have the greatest possible legitimacy among those who will be affected by them. It is therefore right that the Assembly has the scope to debate these matters and seek political consensus among the Northern Ireland parties on their introduction.
The noble Lord, Lord Alderdice, raised the question of when paramilitarism becomes organised crime. The term “paramilitary” coves a multitude of actions, associations and behaviours. The paramilitary assessment carried out by the PSNI and MI5, and reviewed by an independent panel last year, represents the most recent and up-to-date characterisation of the structure, role and purpose of paramilitary groups in Northern Ireland. Much of this was clearly organised crime. Violent dissident republicans continue to resort to brutal assaults on members of their own communities in an attempt to exert fear and control. This Government are absolutely unequivocal. There is no justification for being a member of a paramilitary organisation in the year 2016, and there was no justification in the past. For that reason, we are introducing the IRC.
I turn finally to the points raised by the noble Lord, Lord McAvoy—and if I have not covered all the points, I will obviously return to them. The noble Lord raised the issue of security funding. Obviously, the Stormont House agreement included provision of £160 million, which was new money, for security funding. I can also confirm that the Secretary of State for Northern Ireland will engage with all relevant stakeholders on inquest reform.
The noble Lord raised the issue of the co-operation of the security agencies with the new commission and how the Government will ensure that they do so. The Government are committed to the measures aimed at tackling paramilitarism outlined in the fresh start agreement and to the success of the Independent Reporting Commission. We urge all bodies, including the security agencies, to co-operate fully and meaningfully with the commission from an early stage and to allow the most accurate reporting possible.
Under Clause 2(5), we will issue guidance for the commission in relation to the access to, handling and use of sensitive information. That is intended to ensure that the relevant agencies and public authorities are able confidently to engage and assist the commission in fulfilling its functions. As for when the guidance will be issued, we will do so in advance of the commission starting work. The guidance will be published in line with the Bill and a copy placed in the Library of the House.
In closing, I remind the House that this is an important Bill—everybody who has spoken recognised that. It has the support of the Northern Ireland Executive and Assembly, where—as we already discussed—a legislative consent Motion was recently passed. It will deliver on commitments made in the fresh start and Stormont House agreements, and it plays a significant part in all our efforts to support a stable and workable devolution settlement in Northern Ireland. I very much look forward to discussing the individual provisions of the Bill in more detail in Committee and, tomorrow, to starting the engagement process not on the Bill but on legacy issues. I commend the Bill to the House.
Scotland Bill
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Lord Dunlop
Lord Dunlop
Lord Dunlop
“( ) In paragraph (d) of that reservation, after “the Road Traffic Act 1988” insert “, except so far as relating to the parking of vehicles on roads,”.”
Lord Dunlop (Con)
My Lords, I shall speak also to Amendments 11 to 16 and 19 to 21. As I indicated on Report, a number of technical amendments are necessary to the roads provisions. Amendments 10, 11, 13, 16 and 20 are technical amendments and complement the amendment that the Government brought forward on Report on the issue of responsible parking. That amendment, which commanded cross-party support on Report, gives the Scottish Parliament the power to legislate for parking vehicles on roads, an issue that is of interest to many people in Scotland. That amendment now appears in the Bill at Clause 40(4). Following helpful discussion between the Department for Transport and the Scottish Government, these technical amendments will bring full clarity to the power. I will briefly set out the effect of each of these amendments.
Amendments 10 and 11 amend the amendment made on Report, which gave power to the Scottish Parliament to make provision for parking on roads. Amendments 10 and 11 make clear that on-street parking is excepted from the reservation of the subject matter of the Road Traffic Act 1988 and is not a general exception from all road transport reservations.
Amendment 13 removes a reference to the regulations made by Scottish Ministers being subject to the negative procedure. The reference is unnecessary as it is subsequently replaced by Amendment 20, which amends the Road Traffic Act 1988 to stipulate that regulations relating to parking made by Scottish Ministers will be subject to the negative procedure.
Lord Steel of Aikwood (LD)
My Lords, before the Minister responds perhaps I could repeat a point I made in Committee about Clauses 40 to 42 and Schedule 2, and the amendments that the Minister has rightly laid before us today. I am emboldened to do so by a phone call from the noble Lord, Lord Sanderson of Bowden, who is a former constituent of mine. He wanted me to make it clear that there was never any risk of him voting for me, but on this issue we speak with one voice.
Those of us who live in the borders, whether on the Scottish or the English side, are naturally concerned about the growth of what appear to be quite minor changes in legislation concerning parking, traffic signs, speed limits, vehicle regulations and even the drink-driving laws. There is a danger that these regulations will become self-aggrandising. We have different regulations just for the sake of having different regulations. We find ourselves having to make journeys by road that cover both jurisdictions, and it is extremely confusing if there are too many regulations that differ. The point I want to put to the Minister is this. He referred several times to discussions between the Department for Transport and the Scottish Government. Can we be assured that those discussions will continue so that we can seek to minimise the differences in regulations on each side of the border?
Lord Dunlop
I thank the noble Lord, Lord McAvoy, for his comments and support. This was an issue that the party opposite raised in Committee and the Government are pleased to have been able to address what has been a long-standing lack of clarity in the law. With regard to the noble Lord, Lord Steel, yes of course I can assure him that discussions will continue between the Department for Transport and the Scottish Government. A theme that has run through all our debates on this Bill is the need for close intergovernmental co-operation. That is something which I feel strongly about, given my responsibility for these matters, so anything I can do to improve those intergovernmental relations, I will certainly do.
Before we move to the final group of amendments, as we near the conclusion of the Bill I want to take this opportunity to thank noble Lords for all their work, in particular all those who have moved amendments or spoken to them, and who have taken the time to meet me and my noble and learned friend the Advocate-General to discuss their concerns. I would also like to thank the Constitution Committee, the Economic Affairs Committee and the Delegated Powers and Regulatory Reform Committee for their very careful consideration of this Bill. Indeed, I thank my noble and learned friend the Advocate-General, who is no longer in his place because no doubt he is preparing for the Immigration Bill to come, and my noble friend Lord Younger of Leckie for all their support. Finally, I thank officials from across Whitehall who have provided invaluable support throughout the process. We have covered a lot of ground and many subjects, and their support is much appreciated.
Noble Lords have provided robust challenges at times; I recognise that opinions have been divided on aspects of the Bill and I respect the strong views that are sincerely held. Your Lordships’ House has fulfilled its customary role of providing a thorough and penetrating scrutiny of the legislation. I said at Second Reading that I thought it was a precondition of earning the trust of the Scottish people, after the independence referendum, that we should keep the promises that were made during that referendum. That is exactly what this Bill does, as well as making the Scottish Parliament more financially accountable. I am particularly grateful to the Front Benches opposite for their support. It recognises that the promises made during the referendum were joint ones.
There was much talk during the independence referendum of Project Fear, and I think that it has already been observed elsewhere that the fears raised by the supporters of the union have proved all too justified while the fears put about by those arguing for separation have proved to be groundless. They have proved to be groundless because we have delivered on the promises we have made. I think that we have established beyond any doubt that pulling Scotland out of the United Kingdom could never satisfy the Smith no-detriment principle, and in its heart of hearts I suspect that the leadership of the SNP knows it.
Political discourse in Scotland is already changing as a result of the Bill. Now we must move the debate on from what the powers are to how they are used. I am confident that the new Scotland Act will prove an enduring settlement, strengthening Scotland’s place within the United Kingdom.
Lord McAvoy
My Lords, I echo a lot of what the Minister said. There was a lot of contention and division in our country during the referendum following the vow, thanks to the Daily Record, and the Smith commission, about which a lot of mistrust was put about as to the final conclusions of how we would deal with it. I am proud of the part that my party and its members played in arriving at these conclusions. We have shown Scotland that the people who do not wish to separate from the rest of the United Kingdom can deliver, by all accounts, the demands and wishes of the Scottish people to have more powers for the Scottish Parliament without necessarily separating from our friends and colleagues throughout the rest of the United Kingdom.
Collectively, this House, despite some rumbustious moments, some slight scepticism and very heavy scrutiny, has fulfilled its role in passing the Bill and ensuring that it is a better Bill than when it came here. We will send it back to the other place and hopefully it will be accepted there.
Westminster as a Parliament has delivered the wishes of the Scottish people. We can regain their trust, despite the cynicism put about at the time of the referendum. Collectively—although there have been various differences, which no doubt will continue—I have no doubt that we have delivered for the people of Scotland and we can look them in the face.
Lord Dunlop
Lord Dunlop
“(a) in relation to a function so far as exercisable within devolved competence, within the meaning of the Scotland Act 1998, means the Scottish Ministers;(b) otherwise, means the Secretary of State;”.”
Lord Dunlop
Lord Dunlop
“Roads: parking
(1) The Road Traffic Act 1988 is amended as follows.
(2) Section 20 (parking on verges etc: definition of “heavy commercial vehicle”) is amended as follows.
(3) In subsection (5) for “Secretary of State” substitute “national authority”.
(4) At the end add—
“(8) In subsection (5) “national authority”—
(a) in relation to a function so far as exercisable within devolved competence, within the meaning of the Scotland Act 1998, means the Scottish Ministers;(b) otherwise, means the Secretary of State.(9) Before making any regulations under subsection (5) in relation to vehicles used on roads in Scotland, the Secretary of State must consult the Scottish Ministers.”
(5) Section 41 (regulation of construction, weight, equipment and use of vehicles) is amended as follows.
(6) In subsection (1) for “Secretary of State” substitute “national authority”.
(7) After subsection (2) insert—
“(2A) In subsection (1) “national authority”—
(a) in relation to a function so far as exercisable within devolved competence, within the meaning of the Scotland Act 1998, means the Scottish Ministers;(b) otherwise, means the Secretary of State.(2B) Before making any regulations under this section in relation to the parking of vehicles on roads in Scotland, the Secretary of State must consult the Scottish Ministers.””
Lord Selkirk of Douglas (Con)
My Lords, when the Calman commission sat, the most important principles that it was trying to support were equity and accountability; this echoes what the noble and learned Lord has just said. I remind the House that on 7 September 2004, the day the Scottish Parliament opened at Holyrood, the Reverend Charles Robertson, minister of the Canongate church, was first to speak during the regular time for reflection. He reminded us of the previous uses of the site for the newly-built Parliament. It had been a house of refuge, a soup kitchen for the destitute and Scotland’s largest independent geriatric hospital, not to mention the site of a profusion of well-known and much-loved breweries. Given this history, it is perhaps not surprising that, on that day, the then First Minister, the noble Lord, Lord McConnell, urged MSPs to “raise their game”.
This legislation—the amendment relates to the heart of it—will bring about major changes in the powers and competence of the Scottish Parliament as, for the first time, the majority of funds that the Scottish Government spend will come from revenues raised in Scotland. When the prevailing philosophy has been a culture of spend, spend, spend, popularity is relatively easily won. That will now change as tough decisions will have to be made on how services will be financed.
There seems to be some uncertainty about who observed:
“With great power comes great responsibility”.
Some attribute it to Voltaire. In a debate in the other place in 1817, William Lamb, later Prime Minister Lord Melbourne, made an exhortation to the press. He begged leave to remind them of their,
“duty to apply to themselves a maxim which they never neglected to urge on the consideration of government—‘that the possession of great power necessarily implies great responsibility’”.—[Official Report, Commons, 27/6/1817; col. 1227.]
Similarly, on the same subject, Prime Minister Sir Winston Churchill said:
“The price of greatness is responsibility”.
What Churchill meant was that anyone who aspires to greatness must also be willing to shoulder the accompanying responsibilities. His advice still holds good today.
Lord Dunlop
My Lords, as the noble and learned Lord, Lord McCluskey, said, the Barnett formula has been the subject of significant debate during the passage of the Bill and has been raised in various statements and at other opportunities. I do not propose to go over well-worn ground, but I recognise the strong views that the formula evokes, particularly in this House. As has been said at other stages in the Bill’s progress, the retention of the Barnett formula is a manifesto commitment not just of the Government but of all three of the main UK parties. It will therefore continue to determine changes to the block grant resulting from changes in UK government departmental spending.
However, as my noble friend Lord Selkirk noted, the significance of the Barnett formula will be reduced, as over 50% of the Scottish Government’s budget will, in future, come from taxes raised in Scotland. As has been said before, the size of that budget will be determined increasingly by changes in Scottish taxes.
The amendments tabled by the noble and learned Lord call for a memorandum to be published within 30 days of the Scotland Act passing, providing additional detail on the future of the Barnett formula. We are already delivering the intent of these amendments. On Friday, the Chief Secretary to the Treasury placed in the Libraries of both Houses a supplementary technical annexe to the fiscal framework agreement. This sets out in detail how Barnett will operate in future, alongside the adjustments for new tax and welfare powers. Much of the detail of how Barnett operates is already published in the Statement of Funding Policy, which was last updated in November. The details of how the devolution settlement operates are also set out at each fiscal event.
In addition, we have listened to the views expressed in this House about transparency and reporting. The UK Government and the Scottish Government have agreed to report annually on the operation of the fiscal framework. Finally, in response to the House of Lords Economic Affairs Committee, the Treasury has undertaken to look at how the whole operation of the Barnett formula can be made more transparent. We on this side of the House fully expect scrutiny to continue beyond the passage of the Bill and therefore I urge the noble and learned Lord to withdraw his amendment.
Lord Dunlop
“8 (1) Section 86 (speed limits for particular classes of vehicles) is amended as follows.
(2) For “national authority” in each place substitute “relevant authority”.
(3) Omit subsection (9).
9 In section 88 (temporary speed limits) for “national authority” in each place substitute “relevant authority”.”
Lord Steel of Aikwood
My Lords, I do not want to detain the House for more than a moment, but the passing of this Act by the House today is a major step in the history of Scotland. Donald Dewar was fond of repeating that devolution was not an event but a process, and so it has proved to be—and I have no doubt will continue to prove to be. This Act completes a process begun correctly in the original Scotland Act 1998. However, as I said at the time, that Act created a Parliament with substantial powers over expenditure but no responsibility for raising any of the money that it spent. This change is therefore of major significance and brings us closer to a quasi-federal relationship in Britain—closer in fact to the ideas in the Solemn League and Covenant way back in 1643.
In his magisterial new book Independence or Union, Professor Tom Devine says that his own preferred choice in the referendum,
“would have been to support a more powerful Scottish Parliament via some form of enhanced devolution. That opinion was in the end not available in the wording of the referendum. Many of those who thought like me were effectively disenfranchised”.
That is what we have delivered and I believe that it now accords with the views of the majority of Scots, recognising as they do that we had a lucky escape in the referendum following the collapse of the global oil price.
That is nothing new. We have always been interdependent in these countries. One of our greatest Secretaries of State, Tom Johnston, put it thus during the great depression:
“What purpose would there be in our getting a Scottish parliament in Edinburgh if it has to administer an emigration system, a glorified poor law and a desert?”.
We needed the strength of the United Kingdom then and we need it now. This Act creates an obligation and indeed an expectation that our two Governments will act together in the best interests of our people. That means that Ministers such as George Osborne need to abandon silly anti-nationalist rhetoric when dealing seriously with annual budgets and that the SNP need to stop blaming London for every one of its own shortcomings. Scottish people expect better than that and this Act provides a sensible foundation for the way forward.
I have one final thought. We in this House have been able to adjust and improve the Bill since it left the Commons. We have had to do that without the assistance of the SNP, which continues its absence from this institution. I hope that that may change, not least so that it can join in the efforts to reform this Chamber and make it even more of a sounding board for the United Kingdom as a whole.
Scotland Bill
Lord Dunlop Excerpts(10 years, 1 month ago)
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Lord Dunlop
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, Clause 44 devolves power to the Scottish Parliament for regulation of licences to search and bore for petroleum in the Scottish onshore area. Clause 45 transfers the functions of the Secretary of State to the Scottish Ministers. However, as consideration payable for such licences is to remain reserved to Westminster, Clause 45(8) retains the power of the Secretary of State to make model clauses on the consideration payable for a licence granted by the Scottish Ministers, and on matters related to the keeping of accounts and the measurement of petroleum.
Amendment 46 would revise Clause 45(8) to ensure that the Secretary of State’s enforcement ability in relation to such reserved matters is preserved for licences in onshore Scotland. This will be achieved by maintaining the Secretary of State’s current power to cancel licences in onshore Scotland, applicable only for infringements in relation to consideration payable for a licence, the keeping of accounts and the measurement of petroleum related to consideration and taxation. Nothing in this amendment changes the powers being devolved to the Scottish Parliament. A definition of “appropriate Minister” under Clause 45(5) is removed, as this is redundant in light of Clause 45(17). I therefore beg to move Amendment 45.
Lord Wallace of Tankerness (LD)
My Lords, I shall speak to Amendment 47 and others in this group which are in the name of my noble friend Lord Stephen and myself. Amendment 47 would in effect devolve legislative competence for consents for electricity generating stations and overhead lines to the Scottish Parliament. The position at the moment is that the Scottish Government have executive power to grant development consent for generating stations of 50 megawatts capacity or more and overhead lines of 20 kilovolts nominal voltage or greater. However, the Scottish Parliament does not have legislative power to reform the law in relation to such development consents. This is the only type of development that the Scottish Parliament does not have legislative power to regulate.
As I have indicated, such consents are governed by Sections 36 and 37 of the Electricity Act. This legislation, which goes back to 1989, is outdated. In fact, it is sufficiently outdated that, in the mean time, in England and Wales, it has been changed so that applications for development consent are dealt with under the Planning Act 2008, a much more suitable system. In Scotland, it has been described as effectively a legislative orphan. The Scottish Parliament has no power to reform it, and when the United Kingdom Parliament reformed it in respect of England and Wales, the opportunity was not taken to reform it in Scotland. Moreover, it is my understanding that the draft Wales Bill is devolving power to the Welsh Parliament, as it will be known, to legislate on consents for almost all energy development there. The aim of this amendment is therefore to devolve to the Scottish Parliament legislative power to reform the system of development consenting for energy infrastructure. The generation, transmission and distribution of supply of electricity is presently reserved although, as I said, the actual power to grant consents has been devolved.
This issue has some practical consequences in the context of the Energy Bill, which is currently in the other place. I was advised last week that a development in the south of Scotland, which I think is of about 65 megawatts, is therefore subject to the present regime under Section 36. However, if the same development had been just several miles further south in Northumbria, it would have been the responsibility of the local authority. If the local authority had refused it in England and Ministers had called it in, the grace period that the Government proposed for onshore wind farm consents would have kicked in. However, that does not cover the situation in Scotland given that it is already subject to ministerial fiat there, so there is a mismatch in practical terms. I apologise that this gap was drawn to my attention after Committee but I have certainly made the noble Lord, Lord Dunlop, aware of these concerns. He has had some notice and I hope that he may be able to give an encouraging reply.
The other amendments, to some extent, go over the ground that we covered in Committee. I appreciate that the Minister has met me since then and we have discussed these amendments. The Government argue that there is already adequate statutory provision for consultation, and the Minister asked why the industry was not satisfied and agreed to meet the industry to find out. My understanding is that, in the event, negotiations on the fiscal framework took over. That is perfectly understandable—there is no criticism there. However, his officials did meet the industry.
The current position is in spite of the fact that a commitment followed a request in the Smith commission for further consultation. Indeed, in the initial response to the Smith commission, the Government’s Command Paper stated:
“The UK Government will work with the Scottish Parliament and Scottish Government to devise a proportionate and workable method of consulting the Scottish Parliament on the strategic priorities set out in the Energy Strategy and Policy statement”.
However, the Government’s position now is that this is not necessary and that there is already a statutory regime there under the Energy Act 2013.
The fact that the industry remains unsatisfied is of some concern. Notwithstanding new Section 90C(4), which states,
“a ‘renewable electricity incentive scheme’ means any scheme, whether statutory or otherwise”,
people in the renewables industry have formed the impression that any consultation with Scottish Ministers is likely to be triggered only by legislative changes. It would therefore be helpful if, in responding to this debate, the Minister could indicate the overarching legal basis for the contract for difference regime being set out in primary legislation, while the main detail as to how it will operate is contained in statutory instruments and any changes to these statutory instruments would trigger the consultation in terms of this Bill and the Energy Act.
The experience of the accelerated closure of the renewables obligation for onshore wind, which went ahead with, I think, minimal consultation with Scottish Ministers, has given rise to the concerns within the industry. It would be useful if the Minister could indicate whether the position with regard to any order to remove specific technologies from the contract for different regime is something about which Scottish Ministers would be consulted. There is no obligation on the Secretary of State to consult on the budget notice issued in advance of each allocation round. However, there is a need to consult Scottish Ministers on other aspects of the contract for difference mechanisms, for example on setting the new administrative strike prices, and it would be helpful if the Minister could perhaps give some clarity on how he sees that operating in the future.
Officials seem content that the issue addressed by Amendment 55 is dealt with adequately under existing provisions, but the view is that the improved consultation mechanism would have been better if a Scottish member could have been appointed to the Gas and Electricity Markets Authority. Again, this is a matter that the Smith commission flagged up. The Bill does a similar thing for Ofcom, and perhaps the Minister could indicate how he intends to improve the consultation and whether there is any further mechanism through the GEMA board which would meet the industry’s concerns.
Finally, one of the amendments gives Ministers the power to bring forward a scheme which effectively would devolve contracts for difference to Scottish Ministers. I stress it is a scheme which UK Ministers could devolve, so the concerns that this could lead to a bigger levy on consumers across the United Kingdom would not necessarily come through. The specific point here is that there is concern in the industry that, under the next tranche or round of contracts for difference, onshore wind may not be included under the technologies, notwithstanding that onshore wind has been at £82.50 per megawatt hour for 15 years, index linked, while offshore wind has been at £114.40 per megawatt hour for 15 years and nuclear is index linked for 35 years at £92.50. There is a very strong argument that Scotland has a considerable abundance of resource in onshore wind and that it could be developed there. This is not in the Smith commission, but had it been known that the Government were going to change the rules on the renewables obligation for onshore wind when the commission was sitting, it may well have made such a recommendation, because it would have been entirely consistent.
I simply remind the Minister that in the Scotland analysis paper for energy, the then Government said:
“The UK Government is now introducing the Contracts for Difference scheme, which will provide long term support for all forms of low-carbon electricity generation. These contracts provide industry with the long-term framework to make further large scale energy investments at least cost to the consumer”.
I stress the words “all forms”, which includes onshore wind. I am sure the Minister would like to take the opportunity to say that the present Administration will stand by the commitment that the previous coalition Government presented to the Scottish people in the run-up to the referendum. I hope the Minister will be able to give us some reassurances when he comes to reply.
Lord Dunlop
My Lords, the noble and learned Lord, Lord Wallace, spoke to a number of these provisions when we considered this matter in Committee. He made some observations about the clauses and I have met him to discuss his thoughts on these areas, as he said. I am also grateful to him for withdrawing the amendments he tabled regarding heat. Again, we spoke about that issue and I was glad I was able to reassure him on the position.
In Committee, we discussed consultation on renewable heat incentive schemes, Ofgem’s Strategy and Policy Statement, and transferring executive powers related to contracts for difference and feed-in-tariffs, which the noble and learned Lord advocates. Similarly, on Ofgem’s energy strategy and policy statement, statutory arrangements are already in place. That remains my position. However, although I do not agree with the amendments, I am grateful that the noble and learned Lord has brought them before the House. As he mentioned, I know that Scottish Renewables have a particular interest in how Ofgem’s statement is produced, and therefore it is helpful to remind the House that these arrangements exist. I was due to meet Scottish Renewables recently but had to postpone the meeting. I very much hope to meet it in the near future and I commit to continuing the dialogue to see how we can improve all aspects of consultation. If the noble and learned Lord will allow me, I will write to him further following those discussions, to see what improvements can be made.
Turning to Amendment 56, I have outlined to the noble and learned Lord why I do not agree with his proposals in relation to contracts for difference and feed-in tariffs. That is not just because they go beyond the Smith agreement but because both CFDs and FITs are GB-wide schemes and do not operate in a regionally specific way. We have a GB-wide, integrated energy system. The costs of both CFDs and FITs are spread across all GB consumers, which helps to keep down the cost ultimately borne by bill payers. If the Scottish Minister were to set separate rates, or directly award CFD contracts, this would create distortions in the market as well as being a duplication of effort. That could also result in decisions taken in Scotland imposing costs on electricity consumers across Britain.
The Scottish Government have the power to set different renewables obligation bands for specific technologies, but the CFD scheme generally awards contracts through a competitive auction open to GB-wide generation. This ensures that for each particular technology grouping only the most cost-effective projects receive support. Moving to a regional allocation would be likely not only to increase the overall costs of meeting our renewables and decarbonisation targets but to lead to an increase in supplier costs being passed on to consumers across GB. I understand that the noble and learned Lord may not accept this argument, but I do not agree that this is a sensible change to make.
I hope I can be more encouraging on Amendment 47, which would introduce a new clause on “Consents for electricity generating stations and overhead lines”. I am grateful to the noble and learned Lord, Lord Wallace, for the clearly thoughtful consideration he has given to this. He expressed the issue very cogently in his remarks, but I am afraid at this stage I am not able to accept it as an amendment to the Bill. However, I commit to him that I am prepared to consider this matter further, outside of the Bill. I am sympathetic to the point he raises and therefore would like the opportunity to consider it further, including the planning points that he raised and the existing balance between executive and legislative competence in this area. Officials in the Department of Energy and Climate Change have already raised the issue with the Scottish Government. Energy consenting is a complicated area and one where any change merits detailed consideration to ensure that any agreed policy is delivered. Far be it from me to prejudge that consideration but, if the proposal were found to have serious merit, there are legislative avenues by which we can take it forward, such as a Section 30 order under the Scotland Act 1998.
Therefore, I hope that the noble and learned Lord will allow me to consider the matter further outside the Bill. I will of course be happy to update him on further discussions. On that basis, I urge him not to press his amendment.
Lord Dunlop
My Lords, it is fair to say that this has been a very wide-ranging debate and I thank all those who have taken part. I recall that at Second Reading my noble friend Lord Forsyth said that he looked forward to giving me a Glasgow handshake. As the House knows, he always makes good on his promises.
Before I address the substance of the amendments, I will try to address as many of the points that have been raised as possible, although there have been so many that I cannot guarantee to cover absolutely all of them. My noble friend mentioned Professor Jim Gallagher. Professor Gallagher, who is well known to many of us, also wrote a long article in the Daily Record, in which he described the Government’s comparable model as an ingenious compromise solution. While it is certainly the case that for a transitional period the UK Government are bearing population risk, I confirm to the noble Lord, Lord Turnbull, that, on the spending side, the population share will not be frozen at the point of devolution. However, this is a transitional period. Even my noble friend Lord Forsyth would prefer to move from the Barnett formula to a needs-based formula. Even in his thinking there is provision for transitional arrangements. Even in the transitional period that is part of this agreement, the Scottish Government bear economic risks. That means that if Scotland’s tax per head grows more slowly than in the UK as a whole, that is a risk the Scottish Government will have to manage even within the transitional period.
Lord Forsyth of Drumlean
I entirely accept the Minister’s argument that if we were to move to a needs base, or whatever, there would have to be transitional arrangements. However, what about the point that this fiscal framework has given the Scottish Government a veto on any new settlement, which means that the transitional arrangements would become permanent?
Lord Dunlop
I am coming to that point. The idea that it would be easy or straightforward to replace the Barnett formula with a needs-based one—or seek to do so—does not stand up to scrutiny. I have read, with great interest, the report of the House of Lords committee on the Barnett formula, published in 2009. John Swinney, now Deputy First Minister of Scotland, gave evidence to that committee’s review and made it absolutely clear that he did not support the move to a needs-based formula. There has been lots of talk about a veto. Another way of putting that is that if you do not have a veto then the UK Government unilaterally imposes something on Scotland. In that situation, we would have to proceed as we have done in this fiscal framework agreement—by negotiation and agreement.
The no-detriment principles have been raised several times in this debate. I have talked directly to people who sat on the Smith commission including the noble Lord, Lord Smith, himself. The commission recognised that these were high-level principles. It was always accepted that the two Governments would have to sit down and decide how those principles were applied in practice. It is not surprising that there is a greater level of detail and a lot of talk about the direct effects, which we want to capture mechanically in the agreement. However, the indirect, spillover effects are very difficult to capture, because of the causality. It is the direct effects which we are seeking to capture in this agreement. Although there is a backstop power to deal with the spillover effects, it will be used rarely. One needs to draw a distinction between the review, where we need to proceed and get an agreement, and the dispute resolution mechanism, which is very much attached to specific issues regarding how spillover effects actually work.
I turn to the review itself. It is obvious and self-evident that this is five years away. The details of the review have still to be determined. I am not going to stand here today and say otherwise, because noble Lords would not accept it. The Government would positively welcome the House of Lords Economic Affairs Committee feeding in its views about how the review should be structured. That would inform the deliberations we will have with the Scottish Government about constructing that review.
Lord McFall of Alcluith
Will the Minister take up the point I made earlier about an annual report on this issue to both Houses, and the Scottish Parliament, so that we get transparency and accountability?
Lord Dunlop
I am very happy to make that commitment. The Government intend to make an annual report to Parliament that will cover how the powers under the Smith agreement are being implemented in practice. That is fundamental to our approach. Regarding the review, I can confirm what has already been confirmed: there is no default position for it. All the evidence that will be built up over the succeeding five years will be on the basis of the Government’s comparable model.
I turn to the prospects of reaching an agreement. This review will be informed by an independent report. We will have had five years of experience of how these powers operate. Instead of seeking to negotiate in the months leading up to an election, this will be a negotiation after an election. Those conditions lead me to believe that an agreement can be reached.
Lord Wallace of Tankerness
The noble Lord has indicated—and the agreement says—that the report has to be received by the end of 2021. What will happen if we are approaching the financial year 2022-23 and there is no agreement? While he is right to say that there is not an election to focus minds, one imagines—although one does not know—that there will not be the passage of a Scotland Bill to concentrate the mind either. Given how close we are to the start of the next financial year, when there is actually a Bill that we hope to pass before the Easter Recess, what happens if that imperative does not exist? What will the position be then? Will it be the transitional arrangements or will it be the Treasury model?
Lord Dunlop
I am not sure I will be able to satisfy the noble and learned Lord on that point because I have learned not to deal in hypotheticals or to speculate about what might happen in five years’ time. As I say, I think the conditions that pertain then will be favourable to reaching an agreement and I am confident that we will reach an agreement at that time.
On the amendments relating to the fiscal framework being approved by Parliament, the Government do not believe it would be appropriate to subject the framework as a whole to approval by both Houses. Many aspects of the fiscal framework are administrative, not legislative, and the need to update these aspects requires a degree of flexibility. There is also no precedent for these non-legislative aspects to require parliamentary approval; for example, the block grant adjustment mechanism arising from the power to devolve under the Scotland Act 2012 was not subject to separate parliamentary approval.
Lord Higgins
This is a matter of enormous importance. Would it not be absurd if the central part—the heart—of the Bill were to go forward with the House of Commons not having had any opportunity at all to debate it? It is inconceivable that that should be right. It is really important that the other place should have a chance to express a view.
Lord Dunlop
My noble friend is of course quite right that the fiscal framework should receive detailed scrutiny from this Parliament. I know that this House will play a full part and I anticipate that the House of Commons will do the same. What the House is being asked to do today is to scrutinise and approve one of the most significant aspects of the framework: the capital and resource borrowing powers. The noble Lord, Lord Empey, raised this issue and we will have an opportunity to debate it in detail in the next group of amendments. Dr Angus Armstrong of NIESR told the Lords Economic Affairs Committee that the question of borrowing is,
“the most important question in the whole debate”.
In due course, this Parliament will also be asked to approve changes to tax legislation as a result of the fiscal framework and the Smith commission. That legislation will be scrutinised by Parliament in the usual way. Likewise, the legislation required in Westminster to establish the Scottish Fiscal Commission on a permanent footing by means of an order under the Scotland Act will receive scrutiny in both Houses before it is approved. As I said to the noble Lord, Lord McFall, the Government have committed to report annually to Parliament on the operation of the framework. I know that these reports will receive full scrutiny.
At the end of the day, the fiscal framework has been agreed between the two Governments. To introduce a further process at this stage would not only delay the transfer of powers, it would mean that the UK Government—
Lord Wallace of Tankerness
I understood the Minister to say that the establishment of the Scottish Fiscal Commission will require an order of the United Kingdom Parliament. I understood it to be a Bill that was going through the Scottish Parliament to establish the Scottish Fiscal Commission and put it on a statutory basis. Can he elaborate? What would be the content of an order in relation to the Scottish Fiscal Commission that would have to be passed by both Houses of the United Kingdom Parliament?
Lord Dunlop
I think I am right in saying that it does require this Parliament to establish the Scottish Fiscal Commission as a statutory body but I am happy to clarify that in more detail, perhaps in succeeding debates that will deal with this issue. That is certainly my understanding.
Lord Forsyth of Drumlean
Presumably my noble friend is anticipating using the Henry VIII clause for that purpose. Can he just explain to me how it can be right that the Scottish Parliament—in my view, quite rightly—and the Scottish Government have insisted that the fiscal framework should be available to the Scottish Parliament before it gives approval to this legislation but he is maintaining that that should not apply to the House of Commons?
Lord Dunlop
I am not sure that is what I am maintaining. The fiscal framework is available to this House and to Parliament and we are having a debate about it now.
Lord Cormack
My noble friend’s answer to the noble Lord, Lord Forsyth of Drumlean, beggars belief. The House of Commons has dealt with this Bill. The only part of this Bill that would go back to the House of Commons would be any amendment passed by your Lordships’ House. That is unlikely, for all sorts of reasons. Surely this most important, central element of the Bill, which the other place has not had a chance to look at, should be sent to it so that it can look at it?
Lord Dunlop
My Lords, perhaps I can deal with the point that in some way the Scottish Parliament and the UK Parliament are being treated differently. As the House knows, if the Bill is to reach the statute book before the Holyrood elections, the Scottish Parliament needs time to consider and pass a legislative consent Motion. But to be clear, this is not consent for the fiscal framework itself but consent for the Bill, having seen what the fiscal framework is. This Parliament is in exactly the same position: it is being asked to approve this Bill informed by the publication of the fiscal framework, which we have now done.
Baroness McIntosh of Pickering
Did I understand my noble friend to say that this House and the other place will be able to debate the annual reports on the fiscal framework, which will have been adopted by the Scottish Parliament, but will not be allowed to debate the fiscal framework itself now? That seems rather bizarre.
Lord Dunlop
I think that we are debating the fiscal framework at this moment. As to whether there will be debates on the annual reports, it will up to each House to decide what debates it wants to have on them and what scrutiny it wants to give. Given the interest in the subject, I anticipate that there will be detailed scrutiny.
Lord Forsyth of Drumlean
I am sorry, but my point to my noble friend is this. The Scottish Parliament will decide whether it is going to give legislative consent to this Bill, which will have the effect of making the Bill reach the statute book. It has the opportunity of discussing the fiscal framework because we now have one.
Lord Forsyth of Drumlean
Yes, it has the opportunity of approving it, whereas the House of Commons has not had the opportunity to do that. What possible justification can there be for not giving the elected Members of the House of Commons the opportunity to consider the fiscal framework, which has implications for the whole of the United Kingdom, when the Scottish Government have quite rightly insisted that they would not give legislative consent without the Members of the Scottish Parliament having an opportunity to consider it? I honestly think that my noble friend has to concede that there has to be an opportunity for the House of Commons to be treated in exactly the same way as the Scottish Parliament.
Lord Dunlop
That is a matter for the House of Commons; it is not a matter for the House of Lords. The House of Commons has decided to pass the Bill through its stages, in full knowledge of what the state of play was on the fiscal framework.
Lord Higgins
It had absolutely no knowledge of what the state of play was on the fiscal framework and it ought to have an opportunity to debate it.
Lord Dunlop
That really is a matter for the House of Commons, and not for this House of Lords. That House has to decide how it wants to deal with these matters and has done so.
Lord Dunlop
I will give way one more time but throughout the passage of the Bill, I think that I have taken every intervention and I really need to make progress.
Lord Forsyth of Drumlean
We are all extremely grateful to my noble friend and very sympathetic to the position in which he finds himself. However, he says that it is a matter for the House of Commons. If we were to pass my amendment then it would go back to the House of Commons, so it is a matter for the House of Lords whether the House of Commons will get the chance to consider it.
Lord Dunlop
For the reasons that I have explained, the Scottish Parliament is giving its legislative consent to the Bill and this House is being asked to approve the provisions of the Bill, so we are absolutely on the same footing.
Turning to the review of the fiscal framework, this is an agreement between Governments and it will be operated by Governments. Ultimately, therefore, the formal review should be conducted by Governments. However, as I have said, there is plenty of room for independent contributions. We have built an independent report into the review process for the first time for Scotland’s fiscal framework and, as I have said, I hope that the House of Lords Economic Affairs Committee will contribute its views on how this report should be structured. In addition, there is nothing to prevent other independent voices giving their views to either Government at any stage.
Let me reassure the House on one final aspect of Amendment 57AA. It is already our stated intention to have an independent report for the end of 2021. My expectation is that report will be published, although it will be for the Government of the day to determine that.
Finally, I turn to Amendment 57AC, tabled by my noble friend Lord Forsyth. I fully support the principle behind this amendment, as Governments should be accountable for all the public money that is spent, in whatever context. However, the Scottish Parliament already has an important scrutiny role over more than £30 billion-worth of spending. I therefore think it is primarily for the Scottish Parliament to monitor how the Scottish Government use the funds they will have to implement devolution following the Smith commission. I hope and expect that it will fulfil this role vigorously.
To reassure the House, I point to the scrutiny afforded to implementation of the Scottish rate of income tax following the Scotland Act 2012. The Scottish Parliament has taken on a significant role here, holding the Scottish Government to account. However, this does not mean that the UK Government and this Parliament are without a role. As I have said, we have committed to report annually to Parliament on the operation of the framework. I know those reports will receive full scrutiny. I therefore ask my noble friend to withdraw his amendment.
Lord Dunlop
“(17) Regulations under this section must be made by statutory instrument.”
Lord Dunlop
My Lords, I shall speak also to Amendments 56K, 56L, 71AB and 71AC which are tabled in my name. Amendments 71B and 71C have been replaced by Amendments 71AB and 71AC.
Amendments 56K and 71AB set out clearly, consistent with the existing legal framework, new borrowing powers for the Scottish Government. In line with the Smith agreement, the fiscal framework sets out agreement to change the powers available to the Scottish Government for both resource and capital borrowing.
For resource borrowing, a new power will be granted in this amendment to enable the Scottish Government to borrow should their tax revenues decline as a result of an economic shock which adversely or solely affects Scotland. The Scottish Government will be able to borrow up to £600 million per year. To ensure sustainable public finances, the total aggregate amount of resource borrowing debt will be set at £1.75 billion. In addition, the administrative limit on borrowing for forecast error will be increased to £300 million to reflect the volatility of the taxes as well as the welfare responsibilities that are being devolved.
For capital borrowing, we have agreed an increase in the maximum capital borrowing that Scottish Ministers can make. The limit will be increased to £3 billion. Additionally, the annual limit will also be increased. Scottish Ministers will be able to borrow up to 15% of the maximum limit—that is, £450 million a year.
Taken together, the borrowing powers that are increased by this amendment will boost the capacity of the Scottish Government to manage the additional risks to their budget from devolution and to expand their capacity to invest in Scotland.
Amendments 56L and 71AC address independent fiscal scrutiny in Scotland and the UK. Section 96 of the Scotland Act 1998 requires Scottish Ministers to provide information to the Treasury on the forecast when requested. However, since 2010, the OBR produces the UK’s official economic and fiscal forecasts. To produce comprehensive and detailed economic and fiscal forecasts for the UK, the OBR needs to produce forecasts for the taxes and spending measures devolved to Scotland. Access to Scottish government information is necessary to produce the Scottish forecasts that feed into the wider UK forecasts.
To date, the OBR has worked closely with the Scotland Office and the Scottish Fiscal Commission to ensure that all relevant information is brought to bear in producing its forecasts for devolved taxes. However, the OECD recommends that independent fiscal institutions have a legislative guarantee that they will be able to access all government information relevant to their forecasts. Adhering to this principle contributes to the institution being able to remain fully independent from Governments.
The recent Ramsden review of the OBR responded to this by recommending that the Government should use opportunities to amend relevant devolving legislation to ensure that the OBR has appropriate access to information, explanation and assistance to carry out its functions. The passage of the Scotland Bill provides an excellent opportunity to amend the Scotland Act 1998 and secure in statute the mutually beneficial information-sharing relationship between the Scottish Government, public bodies and the OBR.
Clause 13 contains the provisions extending further income tax powers to the Scottish Parliament and those relating to the manner and timing of the commencement of those powers. As currently drafted, the Bill allows for the commencement of the powers by way of a Treasury order but does not, as would be usual and was the case in the 2012 Act, stipulate that the order itself must be made by way of a statutory instrument. Amendment 56A adds the stipulation that the order be made by way of a statutory instrument. Making the order by way of such an instrument ensures that the order is a public document, numbered, printed and published by the Treasury Solicitor’s Department and laid before Parliament in a manner that facilitates anyone who is interested being able to find it relatively easily.
It was never the Government’s intention that the order be made other than by way of a statutory instrument. The Government have tried wherever possible to use the 2012 Act as a template for the current Bill. The clause draws on the wording of the 2012 Act income tax clause. However, while the 2012 Act included a general provision stipulating that all orders be made by way of a statutory instrument, the current Bill does not, so it has been identified that this specific provision is required. The oversight was brought to parliamentary counsel’s attention by the House of Lords Delegated Powers Committee, and the committee’s report and our response to it set that out in more detail. Both are available to noble Lords. I beg to move.
Lord Sanderson of Bowden (Con)
My Lords, I strongly support Amendment 56L, produced by my noble friend. I consider the work of an independent fiscal commission to be vital for the future not just of the Scottish Parliament but of the whole United Kingdom in this new arrangement where so many powers are being devolved. I said at Second Reading that I believed the OBR was a great initiative of the coalition Government, and it was. I am pleased to see in Amendment 56L that, if the amendment is passed, the OBR will have access to the sort of information that it needs to help the Scottish Fiscal Commission come to the right conclusions. I am still smarting from the reports that came out from the SNP just before the referendum that oil was going to be $112 a barrel. If a Government in Scotland are to do their own forecasting and that is the sort of answer that we will receive, no one, but no one, will believe them.
The amendment moves the OBR and the Scottish Fiscal Commission closer together. I have seen a very useful letter from the Chief Secretary to the Treasury to, I think, the committee in the other place. This is what he said about what the committee had said:
“There is a clear consensus”—
that is, a consensus in the Scottish Parliament—
“that forecasting should be done by a body independent of government. We agree with the conclusions of the Finance Committee of the Scottish Parliament and recommend that an enhanced Scottish Fiscal Commission be made responsible for forecasting in Scotland”.
My question for the Minister is: how far has the Scottish Parliament gone in legislating in this matter? May I have an assurance that those words will come true and we will have a proper Scottish Fiscal Commission? A commission, of course, is only as good as its membership. Let us hope that its membership is very understanding and knowledgeable, because I believe this to be crucial to the future success of the new arrangements.
Lord McAvoy (Lab)
I shall speak to Amendment 57A which seeks to create a new clause to ensure that the process leading to the annual settlement between the Treasury and Scottish Ministers of the block grant to the Scottish Consolidated Fund is both transparent and accountable. It could have related to some of the earlier amendments which sought more transparency.
After eight months of negotiations behind closed doors of the Joint Exchequer Committee, the Scottish and UK Governments have now reached agreement on the revised fiscal framework. We gave the Scottish Government our full support in their efforts to get a fair deal for Scotland and we are glad that an agreement has been reached, albeit belatedly. It may not be perfect and the timing may not be perfect but it is essential that this Bill meets the requirements of the Scottish Parliament in terms of consideration, in terms of the calling of the election and in terms of leaving this House. We wanted an agreement on the fiscal framework and both the UK and Scottish Governments have done their best to achieve one.
However, we now need clarity on when the new powers will be available and what the SNP Government and the other major parties in Scotland plan to do with them. The Secretary of State for Scotland has said that the new powers over income tax will be available by April 2017. We want as many new powers as possible, including those over airport duty, 50% of VAT revenues and social security, to be available by the same date in time for the first budget of the new Scottish Parliament.
The Labour Party moved this amendment in the House of Commons and since that time it has continued to advocate that a more open and transparent means of communication should have taken place. Documents have not been disclosed because we were told that this would constitute providing a running commentary. We understand that of necessity the process had to be carried out to achieve success, but it was marred on some occasions by negotiating positions being leaked to the press.
The amendment has taken on new significance since the publication of the fiscal framework, which suggests that the calculation of the block grant adjustment will take place on a transitional basis over the next five years and that at the end of the transitional period an independent review will take place. We believe in the discipline of transparency. Making the discussions and results of meetings transparent will help the Scottish and UK Governments. There is nothing like the discipline of public opinion and it will help both Governments to come to satisfactory conclusions.
Lord Dunlop
My Lords, again a number of points have been raised and I shall try to address each in turn. If I do not address them now I will be happy to write to noble Lords.
The noble Lord, Lord Kerr, said that his amendment sought to include annual limits on the borrowing and debt that can be undertaken by the Scottish Government. As he acknowledged, the Governments have now agreed the fiscal framework and, as a result, the Government are now bringing forward amendments to the Bill which will put the new borrowing arrangements into effect. I am grateful to the noble Lord for his view that the Government’s amendment addresses the intent of his own amendment. The noble Lord also raised a number of specific questions, and if I may I will write to him about them.
The amendments spoken to by the noble Earl, Lord Kinnoull, raise a number of specific points that I shall seek to address. On the need for separate limits for capital and resource borrowing, the agreement already sets separate limits and the UK Government are therefore proposing to amend the Scotland Bill accordingly. As is clear, the Scottish Government’s aggregate borrowing limit for capital spending is being increased from £2.2 billion to £3 billion, while the aggregate borrowing limit for resource spending is being increased from £500 million to £1.75 billion, reflecting the additional risks that the Scottish Government will take on. On the definition of how these limits are calculated, I can confirm that they are based on the principal, with interest payments not included.
On the issue of currency, the amendments proposed to the Scotland Bill by the Government require the Scottish Government to borrow in sterling to fund additional capital spending. As the Scottish Government can only borrow from the National Loans Fund for current spending, this will also therefore be in sterling.
On the issue of responsibility, I reiterate that the Scottish Government are responsible for all of their borrowing. But while the UK Government do not explicitly stand behind Scottish Government borrowing, the borrowing limits have been set at a level that the Scottish Government should be able to manage. I would like to remind the House of what the Chancellor of the Exchequer said when giving evidence to the Treasury Select Committee last Session:
“the UK stands behind its citizens wherever they live. The fiscal credibility of the UK is one of our most precious assets and we have had lots of debates in this Parliament about how we preserve that credibility. Of course we would not allow Scotland to go bust, but in order for that situation not to arise we will have to agree fiscal rules, independently verified, that make sure that that does not happen, so that we never reach that situation where the sovereign backstop has to be deployed”.
Again the noble Earl raised a number of specific points on which I will write to him.
The noble and learned Lord, Lord McCluskey, did not move his amendment but a number of points were raised. My noble friend Lord Sanderson asked about independent forecasts. I can confirm that as part of the fiscal framework agreement, amendments will be made to the Scottish Fiscal Commission Bill that is currently going through the Scottish Parliament, and there is no reason to think that the Scottish Government will not act with anything other than good faith in that regard. The noble and learned Lord, Lord McCluskey, also raised a specific point about the OBR’s right of access and asked whether there is any uncertainty in that. I think that there is a good understanding between the Governments about the information exchange that is required and I do not anticipate this being an area of great dispute between the two Governments. The provisions in this Bill will be underpinned by a memorandum of understanding as to how in operational terms this will work in practice.
I turn now to the amendments tabled by my noble friend Lord Higgins. Smith set out that extensive new tax powers should be devolved to the Scottish Parliament and Part 2 of this Bill does exactly that. Amendment 56B deals with whether we need two consequential powers in the Bill with regard to the income tax clauses. As has been referred to, this was covered in the Government’s response to the Delegated Powers Committee report which is now available online.
Perhaps I may explain the Government’s approach in this regard. The powers are separate and different, and both are required. Clause 15(8) allows the Treasury to make consequential amendments that arise in connection with changes made to the Scotland Act 1998 and the Income Tax Act 2007 by Clauses 13 and 14. The power in Clause 13, amending Section 80G of the Scotland Act 2012, allows the Treasury to make consequential amendments that are needed in consequence of or in connection with the exercise of the new income tax powers by the Scottish Parliament through a Scottish rate resolution. Income tax powers within this Bill are more extensive than those in the 2012 Act, so it is entirely natural that the changes made by Clauses 13 and 14 to the structure and terminology of the Income Tax Act 2007 that facilitate this devolution may give rise to the need for consequential amendments elsewhere in the taxes Acts.
I now turn to Amendments 56D, 56E, 56H and 56J, which deal with whether all SIs should be via the affirmative procedure. This is not an issue unique to the Scotland Bill; the approach is common across legislation. The Government agree that substantial changes to primary legislation should be made using the affirmative procedure. However, non-textual and minor technical changes should be possible under the negative resolution procedure. This minimises the burden on the House and also on government resources.
On Amendments 56C and 56G, which would deny the Treasury the power to amend by order the Scotland Bill, or Act itself, there will be a length of time between the Bill receiving Royal Assent and the Scottish Parliament exercising the new powers conferred by this Bill for the first time. The gap will be longer in some cases than in others. Income tax will be the shortest. We expect this to come into effect in 2017, then APD in 2018 and finally the aggregates levy. In the case of the aggregates levy, the length of time is uncertain as it will depend on resolution of the levy’s legal challenges.
There may be circumstances where changes are made to the UK structure of those taxes in the intervening period which would require amendment to the Bill in the period between Royal Assent and the commencement of devolved powers. For example, given the outstanding litigation on the aggregates levy, we must have flexibility to respond to future judgments to ensure the levy and the powers that we are devolving remain fully lawful. Similarly, there may be future enactments relating to the taxes which would need amendment. Any amendments to an enactment will be subject to the affirmative resolution procedure. On that basis, the Government cannot accept the amendments tabled by my noble friend.
Turning to the amendment moved by the noble Lord, Lord McAvoy, the Government have listened very carefully to concerns, such as those raised in the context of Amendment 57A, on the transparency of how we operate the Barnett formula. In our response to the Lords Economic Affairs Committee’s valuable report on this Bill, the Government committed to look into what more we could do. We are currently doing that and I hope to be able to report progress to the House in due course. This is not an issue just for Scotland; it impacts across the UK, so we have not tied this work to the Scotland Bill alone.
In the mean time, I reassure noble Lords that the Government have already set out changes to the devolved Administrations’ Barnett-calculated block grant allocations at every spending review, as well as twice a year—at Budgets and Autumn Statements, as required. In November, at the spending review and Autumn Statement, tables were included setting out the overall impact on the block grant of that important event. Alongside this, the Treasury has also recently published an updated version of its Statement of Funding Policy, copies of which have been placed in the House Library. This document outlines the principles underlying the calculation of the block grant. On that basis, I ask noble Lords not to press their amendments.
Lord Forsyth of Drumlean
My Lords, I will speak briefly in support of Amendment 60, tabled by the noble Lord, Lord Kirkwood of Kirkhope. I am sure the Minister will be advised that it is not necessary to include this in the Bill but it would be excellent if he were to give an undertaking at least to produce a draft Bill. I am not a lawyer, but I have certainly found it extremely difficult to cope with the piecemeal changes that have been made over the years and to follow the cross-references back to the 1998 Act. The noble Lord has made probably the most sensible suggestion of the evening.
I presume the noble Lord, Lord McAvoy, will not press his amendment to a Division or anything of that kind. The Labour Party is in its debating society mode at present. When the Minister responds to the amendment, which is about setting up this welfare monitoring joint committee, will he answer a question I asked earlier, arising from the fiscal framework? Paragraphs 16 and 17 appear to contradict each other. Paragraph 16 says:
“For welfare, and all other spending unless stated otherwise in this agreement, the chosen method will be the Barnett formula”.
However, paragraph 17 says that,
“whilst achieving the outcome delivered by the Indexed Per Capita (IPC) method for tax and welfare”.
This is very important, because it makes a considerable difference to the amount of money that is available for welfare purposes in Scotland. Will the Minister indicate which I am to believe: paragraph 16, which would involve a substantial cut in the current budget, or paragraph 17, which appears to contradict it?
Lord Dunlop
My Lords, I thank the noble Lords, Lord McAvoy and Lord Kirkwood, for their amendments. I turn to Amendments 56F and 57B, moved and spoken to, respectively, by the noble Lord, Lord McAvoy. We had a good debate in Committee on similar amendments and I hope I was able to provide much detail on the joint working and scrutiny that will govern the transition and implementation of the new welfare powers. The Government are clearly sympathetic to the intent behind the amendments and the importance of a seamless transition that makes sure that the ultimate clients for welfare services are not in any way disadvantaged.
At the heart of the UK and Scottish Government scrutiny and implementation of these welfare powers is the Joint Ministerial Working Group on Welfare, which, as I said in Committee, has met four times since February 2015 and will meet again soon after the Scottish parliamentary elections. I have also given the assurance that I will explore how we can make the work of the Joint Ministerial Working Group on Welfare more visible in this place. I am already acting on that promise. Scottish and UK government officials will discuss the issue tomorrow at the next meeting of the joint senior officials group before it is then raised at the next joint ministerial group, which will take place after the Scottish parliamentary elections.
Beyond the range of work I have already outlined, there are other committees, both in the UK and the Scottish Parliament, which will have a role in the scrutiny of the new powers being devolved. For example, the Minister for Employment will be appearing in front of the UK Parliament’s Scottish Affairs Committee on 9 March to give evidence on the welfare and employment powers that are being devolved through the Bill. Ministers also often appear before committees in the Scottish Parliament to aid the scrutiny of Scottish Government proposals. Most recently, the Secretary of State for Scotland appeared before the Scottish Parliament’s Devolution (Further Powers) Committee just seven days ago to discuss issues such as the fiscal framework and the role of the Joint Ministerial Committee on welfare.
Lord McAvoy
Just in the interests of having all the information, is the Minister in a position to name some of the organisations?
Lord Dunlop
For example, we have worked to build a strong relationship with the Convention of Scottish Local Authorities to ensure that universal credit is implemented and delivered in a way that best reflects the views of Scottish local authorities. Citizens Advice Scotland is another organisation that we have engaged with. This has been a genuinely joint approach to improve delivery in Scotland and is just one example of many.
As I said in Committee, I am sympathetic to the noble Lord’s intention in what his amendment proposes to achieve but we believe that robust, strong and effective mechanisms are already in place. We will absolutely put the customer at the heart of any change and will work with the Scottish Government to ensure that the transition and implementation of powers is simple, clear and effective. This will protect the delivery of existing benefits and customer interests, and ensure a great future for all the people in the UK, including those in Scotland.
Turning to Amendments 58 and 59, spoken to by the noble Lord, Lord Kirkwood, Clause 29 gives the Scottish Parliament legislative competence to establish employment programmes to support disabled people and those at risk of long-term unemployment. It devolves power over support for unemployed people through employment programmes currently centrally contracted by the DWP; this is mainly but not exclusively the Work Programme and Work Choice. These two programmes represent virtually all funding across these contracted employment programmes and therefore, in our view, provide the Scottish Government with a significant policy space within which to operate.
The powers are very broad in scope and concurrent with the UK Government’s powers. Any claimant on a reserved benefit at risk of long-term unemployment can be addressed in this way, so the Scottish Government have the ability to create schemes, programmes or grants in this space as the UK Government can. It gives the Scottish Government the ability to better align with the employment support they already provide through the devolved skills system. That is a very substantial package of powers which the Scottish Government can already use. I think the estimated annual spend in this area is some £600 million.
Support for those at risk of long-term unemployment must last for at least a year. The three restrictions seek to define the space which Smith said that the Scottish Government should have in designing new programmes. This creates clear lines of accountability between what the Scottish Government are able to do and what Jobcentre Plus is required to do. It is also important for there to be a clear handover point, so that Jobcentre Plus and Scottish Government programmes do not try to deliver different support to the same claimant at the same time. Jobcentre Plus will continue to deliver smaller-scale support, with the Scottish Government delivering more significant interventions.
The amendment of the noble Lord, Lord Kirkwood, would remove the limitations that assistance should be for persons claiming reserved benefits and be for at least a year. These limitations are necessary safeguards to ensure that those who need support over and above that provided by the enhanced Jobcentre Plus offer receive assistance for an intense period. Smith was clear that Jobcentre Plus and the conditionality regime “will remain reserved”. As I have said, there needs to be a clear handover point so that Jobcentre Plus and the Scottish Government’s programmes are not overlapping in that sense.
It is vital that the Jobcentre Plus work coaches have the right tools to support claimants into work and smaller-scale employment programmes at their disposal, such as mandatory work activity or locally commissioned support via the flexible support fund. If responsibility is split, the result could be people spending longer on benefits and employment support, and if we remove these restrictions, it will in the Government’s view create a confused, muddled system of support which claimants and third sector organisations would struggle to understand or navigate. That would be a much worse system and have unintended consequences. We have sought to strike the right balance: enabling the Scottish Government to provide employment support for people who are at risk of long-term unemployment, and giving the Scottish Government the opportunity to take clear responsibility over a substantial portion of the claimant journey.
Finally, I turn to Amendment 60, which concerns “Consolidation of the Scotland Act 1998”. We addressed points in Committee about the scope of the powers in the Bill related to welfare. Once the Bill is passed, it will be available on legislation.gov.uk, alongside the Scotland Act 1998 and the Scotland Act 2012. In the Government’s view, it would not be a good use of Parliament’s time to bring forward another Bill simply to repeat what is included in previous Scotland Acts. The dynamic nature of the devolution settlement means that the two Governments work together on Section 30 orders, which adjust the terms of Schedule 5 from time to time, so any consolidated version would quickly be out of date. That is no bad thing; it is testimony to the devolution settlement working responsively.
However, the points made by the noble Lord, Lord Kirkwood, raise an interesting question about knowledge of the devolution settlement more generally. I think that the noble Lord, Lord Smith, referred to it in his personal recommendations. The Government very much support the objective and have taken steps to improve the knowledge in UK government departments and beyond. For example, in March 2015 the UK Government published a leaflet explaining the changes to devolution in Scotland. The Secretary of State has also undertaken visits to local authorities and is keen to ensure that they know what powers are coming to the Scottish Parliament. The Scotland Office communications directorate’s work will also seek to make clear the Scottish Government’s existing powers—powers coming into force from the Scotland Act 2012 and those being delivered by the Scotland Bill. Its work raises awareness not just of the debate on what powers may or may not be devolved in future but on where the existing powers are today. With that, I ask the noble Lord to withdraw his amendment.
Lord Forsyth of Drumlean
Before my noble friend sits down, could he possibly answer the question I asked him about the welfare funding and the two paragraphs in the fiscal framework? If he does not have that information now, perhaps he could write to me.
Lord Dunlop
We have agreed that welfare will be funded through the Barnett formula and that tax deductions will be calculated through the comparable model. However, during the transition period, we will reconcile both to index per capita.
Lord Forsyth of Drumlean
Perhaps my noble friend could help me. Does that mean that if the Barnett formula model resulted in a shortfall in the resources available in Scotland for welfare, it would be topped up?
Lord Dunlop
It means that if you look across the total Scottish budget, it would deliver the outcome that we discussed earlier. It is up to the Scottish Government to decide how to use the resources within that: it is not ring-fenced within that total figure.
Lord McAvoy
We welcome the further response about involving the principles that we have included in previous Bills around transparency, involving people and all the rest of it. We are reasonably happy with that and I beg leave to withdraw the amendment.
Lord Dunlop
“Borrowing
(1) The Scotland Act 1998 is amended as follows.
(2) Section 66(1) (borrowing by the Scottish Ministers from the Secretary of State) is amended as follows.
(3) At the end of paragraph (b) omit “and”.
(4) In paragraph (c)—
(a) after “devolved taxes,” omit “or”;(b) after “Scottish rate resolution,” insert “or from amounts payable under section 64A,”.(5) After paragraph (c) insert—
“(d) any sums which in accordance with rules determined by the Treasury are required by them to meet current expenditure because of an excess of welfare payments over forecast welfare payments, and(e) any sums which in accordance with rules made by the Treasury are required by them to meet current expenditure because of a Scotland-specific negative economic shock.”(6) After that subsection insert—
“(1ZA) In subsection (1)(d) “welfare payments” means—
(a) payments under any provision relating to matters within exceptions 1 to 10 in Section F1 of Part 2 of Schedule 5 or exception 1 in Section H3 of that Part, and(b) payments attributable to regulations made by the Scottish Ministers by virtue of section 27 or 28 of the Scotland Act 2016 (powers in relation to universal credit).”(7) In section 67(2) and (3A) (lending under section 66(1)) for “£500 million” substitute “£1.75 billion”.
(8) In section 67A (lending for capital expenditure) in subsections (1) and (3) for “£2.2 billion” substitute “£3 billion”.
(9) The Treasury may by regulations make transitional or saving provision in connection with the coming into force of the amendments made by this section.
(10) Regulations under subsection (9) must be made by statutory instrument.
(11) A statutory instrument containing regulations under subsection (9), if made without a draft having been approved by a resolution of the House of Commons, is subject to annulment in pursuance of a resolution of the House of Commons.”
Lord Dunlop
Lord Dunlop
“( ) For the purposes of making provision in connection with, or with the coming into force of, a provision of Part 3, subsection (2) applies to an enactment, instrument or document whenever passed or made.
“( ) Otherwise, subsection (2) applies to—
(a) an Act of Parliament passed before or in the same session as this Act;(b) an Act of the Scottish Parliament passed, or an instrument or document made, before the end of the session in which this Act is passed.”
Lord Dunlop
Lord Dunlop
“( ) sections 3 to 12;”
Lord Dunlop
Scotland Bill
Lord Dunlop Excerpts(10 years, 1 month ago)
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Lord Dunlop
I am grateful to all noble Lords who have spoken, and in particular to my noble friend Lord Dundee and the noble Earl, Lord Kinnoull. We had a very useful discussion, and we all agreed that it is an important principle that we improve intergovernmental relations. While it is the differences of opinion between Governments that attract the headlines, behind the headlines a lot of very good co-operation is going on between Ministers and the officials of the Governments of all the devolved Administrations. A very good example of that was referred to by my noble friend Lord Dundee, who highlighted the recent co-operation between the two Governments to deliver an Aberdeen region city deal. That is a very good example of good practice, and how the political differences of the Governments can be set aside and people can come together and work together to deliver for the people of Scotland.
As noble Lords are aware, are aware, intergovernmental working is an important element of the Smith commission agreement, and one that this Government take very seriously. As I set out on the first day in Committee, the Government are working collectively with all three devolved Administrations to review the intergovernmental arrangements that we have in place and ensure that they make for effective working relationships. As part of the quadrilateral review, we are jointly considering options for improving parliamentary scrutiny and wider transparency of intergovernmental relations. However, this must be considered in a way that ensures we reach a lasting agreement suitable not just for Scotland but for all four Administrations of the United Kingdom. I shall update the House as that work progresses. I understand that this House and, in particular, the House of Lords Constitution Committee is anxious to see the results of that thinking, and I assure my noble friend Lord Lang that we are thinking very thoroughly. My hope is that a review will conclude shortly. However, final agreement will not be reached until the recommendations can be considered by the heads of each Administration at the next JMC(P). A date for that has yet to be agreed.
The Government recognise the desire of noble Lords and the UK public to understand the relationships between the four Administrations, and we note the importance of ensuring that appropriate processes are in place to do so. None the less, it is sometimes necessary to allow for private space, in which open and honest policy discussions can take place. As part of the ongoing review, we are jointly considering options to ensure that the appropriate balance is struck to meet both those needs.
As noble Lords will appreciate, it would not be possible to report on every aspect of intergovernmental relations. However, regular reports are already made to Parliament, including under the Scotland Act 2012—in particular, on the implementation of the tax provisions. More generally, the Scotland Office and the office of the Advocate-General outline engagement, both routine and exceptional, that they have with the Scottish Government in their annual report, which is of course laid in Parliament. I note the ambition and sentiments expressed by noble Lords, and will take that very much into account when producing these reports. I undertake to the House tonight to look at how we can further improve what information we provide to Parliament.
On the third day in Committee, we had a very interesting debate about welfare, which is obviously a key aspect of the Smith agreement. We are breaking new ground in that area, where there will be concurrent powers. I was somewhat surprised that noble Lords were not aware of the joint ministerial group on welfare, but I take that very much to heart. It is our responsibility to make sure we look at how we can make the process of how these groups work more transparent.
I hope I have given some indication of the Government’s commitment to transparency and co-operation within intergovernmental relations. A statutory duty to report on or implement such measures is unnecessary and would be too prescriptive. For example, the memorandum of understanding has been amended on six occasions. There is a need for flexibility here. I accept the spirit behind this amendment, but I urge the noble Earl to withdraw it.
The Earl of Dundee
My Lords, I am very grateful to all those who have contributed to this debate. To summarise, there are three aspects which colleagues have picked up. First, there is the strong support and recommendations of commissions, not least the Smith commission and the Calman commission, to which my noble friend Lord Lindsay referred. It is almost a sine qua non that intergovernmental support should always be canvassed to make things work properly. Indeed, my noble friend Lord Norton pointed out that there is the extra benefit of the discipline that this inculcates so that there can be an efficient focus. Secondly, we have the precedent to which the noble Earl, Lord Kinnoull, referred when he pointed out that in Canada intergovernmental approaches and feedback are most productive. The noble and learned Lord, Lord Wallace of Tankerness, mentioned the third aspect, which is building up good practice, and that the culture of so doing can be part of the proceedings, quite obviously for the better. I am very grateful to the Minister for his undertaking, in the context of the way in which things are moving; in the light of that, I beg leave to withdraw the amendment.
Lord Dunlop
Lord Dunlop
Lord Dunlop
Lord McFall of Alcluith (Lab)
My Lords, I endorse the comments of the noble and learned Lord, Lord Wallace, the noble Earl, Lord Kinnoull, and my noble friend Lord MacKenzie. I also pay tribute to the work of the noble and learned Lord, Lord Wallace of Tankerness, on that over the years, and to the local knowledge—the boyhood experience—of my noble friend Lord MacKenzie of Culkein on that.
I remember that at the time of the Scottish referendum there was an interview with a farmer from Shetland. The BBC interviewer asked him if he liked Westminster, to which the answer was, “No, I’ve not much time for Westminster”. He was then asked, “What about Edinburgh?”. He said, “Oh, we hate them. Our wrath is reserved for Edinburgh”. Therefore that makes a point on that quite eloquently, although in common language. It is no surprise that we support the principles behind these amendments and sincerely hope that the Scottish Government are listening. In fact, in the 2014 Scottish Labour Devolution Commission we were very clear that:
“Devolution is not just about powers for the Scottish Parliament. It is about the distribution of powers within Scotland to bring them closer to people”.
If I have any quibble about what has happened in Scotland, it is that we have provided devolution to Edinburgh but we ain’t done very much to disseminate that devolution outwith Edinburgh. Therefore it is time that we did this, and this is quite a timely amendment on that.
In the 1990s, when I was on the Opposition Front Bench for the Labour Party, one of my responsibilities was the Highlands and Islands. I developed a great affection for the isles and for the communities in that area. The point that was made by the noble and learned Lord, Lord Wallace, the noble Earl, Lord Kinnoull, and others, is that these communities are very fragile, and the support we need to give them is essential if we are to generate that community spirit.
In the Labour Party devolution commission that I mentioned we also made reference to local authorities, which,
“should have increased scope to influence economic development”.
When I was an MP along the Corridor I chaired a commission on the closure of the J&B bottling plant in Dumbarton, in my area. I did not want it to be exclusively local authority but wanted it to be public/private. I chaired the task force, and eventually it developed into what was called Lomondgate. Now, 15 years later, it has the BBC and Aggreko, which is a small generator company that was started in Dumbarton, but which is now a FTSE 100 company. We did that with local people and local involvement. I used to say to people in Scottish Enterprise in Glasgow that they did not understand my area even though it was 20 miles away. Therefore that need for that economic development and the need to have those powers in those hands is extremely important. Not only have I been a proponent of that but I have been a practitioner and have seen its success. Therefore with that spirit in mind I support these amendments so that we give the power to the communities and give the support to the Western Isles and others. If there is a lesson and a message here tonight, it is that the Scottish Government must deliver on their promises.
Finally, can the Minister clarify a point that was raised in Committee and which was also raised with him in writing, regarding the timescale of the transfer process of the Scottish Crown Estate to the Scottish Parliament? At the time, the Minister was unable to answer when or how long he anticipated the transfer scheme would take. Perhaps he has an update for the House today. At the very least, I hope he will be able to say when the detailed discussions which he referred to in the correspondence to us are likely to commence. With that in mind, I am delighted to support the principles of these amendments and I look forward to a positive response from the Minister.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, I thank the noble and learned Lord, Lord Wallace, the noble Lords, Lord MacKenzie and Lord McFall, and the noble Earl, Lord Kinnoull, for their contributions. Let me begin by saying that I understand and sympathise with the intention of this amendment and with the island authorities. I also commend the noble and learned Lord, Lord Wallace, the noble Lord, Lord Stephen, the noble Earl, Lord Kinnoull, and my noble friend Lord Dundee, who have shown such resolute commitment to this important issue.
As the noble and learned Lord, Lord Wallace, has said already, I had the opportunity to meet the island authorities and other stakeholders. I found it an enlightening and informative experience to talk through this issue with them. I hope that I have further opportunities to meet them, and I certainly encourage others to do so. When he and I met the representatives of the Western Isles Council recently, it was clear how much appetite they had for the management responsibilities of the Crown Estate to be devolved with as little delay as possible. However, the Smith commission agreement was absolutely clear that:
“Responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, will be transferred to the Scottish Parliament … Following this transfer, responsibility for the management of those assets will be further devolved to local authority areas”,
such as Orkney, Shetland and the Western Isles or other areas that seek such responsibilities. The Smith commission chose these words with good reason. I believe that the devolution of management responsibilities will be quicker, simpler and come with fewer practical difficulties if the UK Government devolve these responsibilities in a single transfer to Scottish Ministers. A consultation can then take place in Scotland to determine the best way to further devolve these assets. I stress that the UK Government’s view is that this should be a consultation about how, not whether, the management of those assets will be further devolved to the island councils.
I note that the Scottish Government are never shy of saying how they will hold the UK Government’s feet to the fire on how they live up to the commitments under the Smith agreement. I assure noble Lords that the UK Government will take every opportunity to press Scottish government Ministers to deliver on the commitments made by the SNP as part of the Smith process. I was glad to note, and to hear the noble and learned Lord, Lord Wallace, repeat today, that the island councils met the Scottish Government on Monday and that some progress, although not complete progress, was made in those talks.
However, the Government do not believe it would be in keeping with the principle or spirit of devolution for the UK Government to determine how the management of the Crown Estate in Scotland should be further devolved. But I take this opportunity to assure noble Lords that the UK Government take this issue seriously. The Exchequer Secretary to the Treasury, who has policy responsibility for the Crown Estate, will make a Written Ministerial Statement to Parliament six months after the transfer of Crown Estate assets. This statement will outline the progress that the Scottish Government have made on the onward devolution of these assets. This is a new commitment which the Government are prepared to make, having been persuaded by the arguments in this House and having met and listened to the group Our Islands Our Future and other passionate voices. I hope that this commitment gives noble Lords comfort. As I have said, we will continue to press the Scottish Government to deliver what was promised to the island communities and other communities in the Smith agreement. I have no reason to suspect that the Scottish Government will not deliver the onward devolution of these assets.
The noble Lord, Lord McFall, asked about timing. Conversations between officials are ongoing, and it is envisaged that Ministers of the UK and Scottish Governments will commence further detailed discussions after the Scottish Parliament elections about the precise timing.
In conclusion, I reiterate that although I respect and understand the intention of this amendment, the Government cannot support it. I ask the noble and learned Lord to withdraw this amendment.
Lord Wallace of Tankerness
My Lords, I am grateful to all noble Lords who have taken part in this relatively short debate. I particularly thank the noble Lord, Lord MacKenzie of Culkein, who speaks with personal experience and knowledge about the challenges that face many of our islands communities and about the opportunities that those communities wish to have to be masters or mistresses of their own destiny.
The noble Earl, Lord Kinnoull, made an important point. Oban would certainly be outwith the immediate scope of the provision, but of course, as the Smith commission said, the measure could then go on to cover other coastal communities. He made the important point that in such circumstances, you have officials who know the individual concerned. Also, if you are a developer, you will then have to deal with only one regulatory body and will not have to get planning permission from an islands council and separate permission from the Crown Estate or the body that the Scottish Ministers set up after devolution.
I am grateful, too, for the very constructive and positive response from the noble Lord, Lord McFall. I think it was Lomondgate that he and I went to together during the referendum campaign. It was a very impressive set-up that he had had a considerable hand in developing and promoting.
I welcome the very understanding and sympathetic views of the Minister. He quoted the Smith commission quite properly, saying that following the transfer there would then be a transfer to the islands. That is precisely what our amendment says—that there would be a transfer and, following that, another transfer. However, the significant point is that he said that he would not hesitate to hold the Scottish Government’s feet to the fire, and that it was a question of how rather than whether. I fear that at the moment the Scottish Government have not taken that step. They are still talking about net revenues and not about management. Therefore, it might be helpful in holding the Scottish Government’s feet further to the fire if your Lordships were to agree to the amendment.
If the Minister was able to hold the Scottish Government’s feet to the fire and was able to tell us that they are now committed to the management and not just the transfer of assets, giving some indication of a timetable, no one would be happier than me to accept that positive outcome from the Minister’s efforts. In those circumstances, I think it would be helpful to test the opinion of the House.
Scotland Bill
Lord Dunlop Excerpts(10 years, 1 month ago)
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Lord McFall of Alcluith
Actually, I remember, at the beginning of the day, the noble Lord being very robust about Clause 1 and threatening to bring the house down; then he did not press his amendment. Why is he so vigorous at one stage and then so weak and wobbly-kneed? He should stay by his conviction and put the vote to the House, so that he can find out what their measure is. What is sauce for the goose— I will let him finish it.
The Minister mentioned in Committee that devolving the competence to the public sector itself would be a step too far. The Government should look at these amendments to see what can be done. We would like to think that the measured reason we have at this Dispatch Box could influence the Minister before the end of the day. That is why we are standing here, doing our public duty after 10 pm, and I am sure that I will get acclamation from all sides of the House for that.
I agree with the Minister that we must be cautious about creating excessive burdens on private and voluntary groups. I urge the Government not to simply dismiss the idea out of hand. There will clearly be challenges—we accept that—but these have to be weighed against the outcome of fundamentally altering our society’s approach to equality. Our Amendment 30, which takes the somewhat unusual step of amending an amendment, increases the scope of Amendment 29. As I have made clear, we support Amendment 29, but we believe it could go further. Indeed, it needs to go further to ensure that the Scottish Parliament reflects the society it represents.
Amendments 31 and 34 would require political parties to publish diversity information in relation to Scottish elections. Of course, transparency is important and we expect the Minister to agree with us in mentioning the initiative when it comes to pay. However, from experience we are aware that, despite this action, the problem remains a negative feature of our culture and society. Indeed, when it comes to pay, at the current rate of progress it will take nearly half a century for women to be paid the same as men. This demonstrates that we need to go further than Her Majesty’s Government are apparently prepared to go. The Scotland Bill provides a vehicle to do just that.
More can be done to promote gender equality in politics. In fact, the intent of Amendment 30 is to give the Scottish Parliament the ability to set quotas for candidates at Scottish parliamentary and local elections. Under the leadership of Kezia Dugdale, Labour has made substantial progress on this issue. Research from Women 50:50, which I thank for its continued support and guidance, revealed that 52% of the constituency Labour candidates and 50% of the Labour list candidates in the upcoming elections are women, compared with just 15% and 14% respectively for the Conservatives. So a determined and committed leadership shows what can be achieved by introducing candidate quotas. I hope that we can make this the norm across Scotland. It is an extension of the principles of the Smith commission since Smith advocated that the Scottish Parliament should have more autonomy over equality provisions in society. If they are good enough for the public bodies in Scotland, it is surely illogical to argue that we would not want the same for the Government who represent Scotland. Indeed, as Women 50:50 says:
“We need a fair number of women in parliament so that women’s lived experiences exist in policy-making. The system and the policies it creates disadvantage women if there are not enough women round the table to actually represent their views. It is crucial to democracy and to women across Scotland to be represented fully”.
This amendment, combined with amendments already referred to, would help to continue to challenge this fundamental disparity which we have in our political structures. With these amendments we invite Scottish society to play its part in bringing about the more equal, fair and inclusive society that everyone wishes for Scotland. We should hold our elected representatives to those same high standards. In accepting these amendments, the Government would bring about such parity. I hope that, even at this late hour, debating these issues can stimulate the Government to think differently and perhaps result in a changed outcome before we next meet next week. With that, I beg to move.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
I thank noble Lords who have spoken—the noble Lords, Lord Stephen and Lord McFall. These provisions and amendments were also debated in Committee. The Government are committed to safeguarding equality, tackling discrimination where it arises and promoting transparency. However, that is, of course, not to say that 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 purpose of Clause 35 is to devolve greater equal opportunities powers to the Scottish Parliament. The Scottish Parliament can introduce new equality protections and requirements on Scottish public authorities and cross-border authorities exercising devolved functions, provided these do not conflict with or change the existing provisions of the Equality Act 2010.
The Scottish Parliament can, however, amend the 2010 Act in regard to appointments to the boards of Scottish public authorities by, for example, enabling the imposition of quotas on grounds of gender or other protected characteristics, but this does not apply to cross-border bodies.
In delivering Smith, the equal opportunities clauses strike the right balance between the need to confer greater competence on the Scottish Parliament for safeguarding and promoting equalities in public bodies—a key concern of the Scottish Government—and the importance of preserving a GB-wide legal framework.
The Government’s interpretation of paragraph 60 of the commission report ensures that we continue to reserve the subject matter of the 2010 Act, while providing the Scottish Parliament with the ability to legislate for specific provisions such as gender quotas in line with the Smith agreement. Through the general exception we are providing, the Scottish Parliament will be able only to supplement the 2010 Act. The Scottish Parliament will not be able to subtract any protections but will instead be limited to increasing and promoting protections.
Lord Stephen
I very much welcome the information that the Minister has had consultation with the Scottish Government on these issues but I wonder what consultation and discussion have taken place with the Equality and Human Rights Commission on all these matters.
Lord Dunlop
The Government consult the Equality and Human Rights Commission on an ongoing basis and I am happy to write to the noble Lord to address the specific point about what consultation there has been on this.
Scottish Ministers may specify Scottish public authorities which are to be subject to the PSED; for example, under their devolved powers in relation to the PSED they can require gender pay gap information to be published by Scottish public authorities, something that the Government are now also planning to implement for larger private employers across Great Britain. To devolve the duty risks the creation of additional burdens for private and voluntary sector bodies that provide some public services, through excessive contractual requirements imposed by Scottish public bodies on their suppliers; for example, requiring Scottish public bodies to ensure that private sector providers report on their gender pay gaps or carry out gender pay audits as a contractual condition would be burdensome, especially to smaller employers. It would also alter the careful balance we have struck between delivering a package of measures to implement the Smith commission and maintaining a coherent, GB-wide framework for the duty as a whole. I therefore urge noble Lords to withdraw their amendments.
Lord Stephen
My Lords, I thank the Minister for his response and the Labour Party for supporting these amendments. I welcome the support of the noble Lord, Lord McFall, alongside his colleagues, the noble Lord, Lord McAvoy, and the noble and learned Lord, Lord Davidson. The important point here is that these are good, detailed and well-argued amendments that were submitted with the advice and support of the Equality and Human Rights Commission. They were notified in Committee and it seems disappointing that there has not been consultation between the Government and the commission, which is the body given statutory responsibility for these matters. The idea here is not to be controversial or difficult but to be entirely constructive on matters of detail. These good amendments are very much in keeping with the spirit of the Smith commission. I am not minded to divide the House on the matter this evening. I do not think that much divides us and what the Minister said has been extremely helpful. However, on balance, the Equality and Human Rights Commission has indicated that there was a need for greater clarity in these areas. These amendments would have strengthened the Bill and it is disappointing that they will, it seems, not now appear on its face. I beg leave to withdraw Amendment 29.
Lord Dunlop
Lord Dunlop
My Lords, I am pleased to move Amendment 35 and to speak to Amendments 36 to 40. In Committee in the other place, the Labour Party brought forward an amendment on responsible parking which was also raised in Committee in this House. At that stage, I committed to updating the House on Report. I am therefore pleased to bring forward Amendments 36 and 37 to the Bill to address this long- standing issue.
These amendments seek to address an issue that is of interest to many people in Scotland: the irresponsible parking of motor vehicles. This issue has particular impact on people with disabilities, parents with pushchairs and the elderly, especially when vehicles have been badly parked on pavements. A number of attempts have been made to bring forward legislation in the Scottish Parliament to regulate this area, but they have failed due to questions of that Parliament’s legal competence in this area. As the debate on this issue in Committee on 19 January demonstrated, there is widespread confusion as to why the Scottish Parliament cannot regulate in this area when it otherwise has the competence to deal with much transport-related policy.
The Secretary of State for Scotland has been committed to seeking a solution to this constitutional question for some time and, as I told this House on 19 January, UK and Scottish Government officials have been discussing the detail of how this can be achieved. We have been mindful of the need to take on the Scottish Government’s views to ensure that the way forward is workable and appropriate. As a consequence of those discussions we have tabled these amendments, which will clear up the constitutional questions on this matter. These amendments will make it clear that the Scottish Parliament has the powers to regulate the parking of vehicles. Amendments 36 and 37 amend the Bill to except the subject matter of the Road Traffic Act that relates to the parking of vehicles on roads from the roads reservation. Consequently, the Scottish Parliament will have the power to regulate the parking of vehicles but driving remains reserved.
For what appears a relatively straightforward policy aim, I am aware that there have been a number of complex considerations. To that end, I am grateful to the officials in both the Scottish Government and this Government for their contribution and input. It is possible that a small number of minor and technical amendments may need to be made at Third Reading to ensure that any associated executive functions are transferred to the Scottish Ministers. This is being explored by officials. Nevertheless, today’s amendments have addressed the key issue at stake.
The amendments make it clear that the Scottish Parliament has the competence to bring forward legislation to regulate parking in Scotland. I believe that this move will be welcomed by people across Scotland who wish to see the Scottish Parliament take steps to address inconsiderate and irresponsible parking. I beg to move.
Lord McFall of Alcluith
My Lords, I very much welcome the government amendments on pavement parking. As the Minister just said, the amendments to Clauses 38 and 41 and to Schedule 2 relate to road provisions. They alter the timing of when regulations come into force to give vehicles used for various purposes connected with devolved matters exemptions from both speed limits and certain road signs, and remove references to exemptions from speed limits for vehicles used in connection with reserved matters.
The Government have finally tabled amendments relating to parking on pavements, an issue which we raised in Committee. We support these amendments, in particular Amendments 37 and 38, which reflect those we tabled in the other place and in your Lordships’ House in Committee. We are obliged to the Secretary of State for Scotland and the Ministers for their work on this matter. We also thank the Secretary of State for graciously noting that this initiative was started by Mark Lazarowicz, former Member of Parliament for Edinburgh North and Leith.
Although we are very grateful that the Government have moved these amendments, we understand that there may be some outstanding amendments to be tabled at a later stage, and I would be grateful if the Minister outlined that in more detail. We also put on record our thanks to both Living Streets and Guide Dogs Scotland for their support and briefing on this matter. They made it very clear to us why these amendments were needed. Pavement parking can be and is dangerous for pedestrians, especially people with sight loss, parents with pushchairs, wheelchair users and other disabled people. Those with sight loss are particularly affected, as they can be forced into oncoming traffic which they cannot see.
One of my close boyhood friends has become blind in the past seven or eight years. He has shown me the dangers of parked cars at a very practical level and the limitations he has. One of his pleasures now—a simple one—is leaving his house and going down to the British Legion club for his lunch. However, there are certain days, particularly on weekends, when he cannot move and is on his own, simply because of the cars that are parked there. The quality of one’s life is very much affected by that. I know, from my own family having a disabled child, the impediments there are to living a life like ordinary people if there is this lack of consideration with parking. This measure is not before time.
On the issue of blind people and people with sight loss being forced into oncoming traffic, a survey by Guide Dogs showed that 90% of blind or partially sighted people encounter problems with street obstructions and 90% of those had experienced trouble with cars parked on pavements. Everyone should know that pavements are not designed to take the weight of vehicles, which can cause paving to crack and the tarmac to subside—and cracked and subsiding pavements are a further danger to blind people walking on them. It causes trip hazards for pedestrians and has a particular impact on blind and partially sighted people. The cost of repairing pavements is a burden for local authorities.
In the light of the previous remarks of the noble Lord, Lord Forsyth, this is a great example of the Government and Opposition working together, taking up issues in Committee, the Government going back, engaging in further consultation and, without a vote or any chagrin, agreeing amendments which are for the better for society, particularly people who are disadvantaged. I congratulate the Secretary of State and Ministers on listening to us on this issue.
Lord Lyell (Con)
Perhaps my noble friend can give me some guidance. I think Amendment 40 is in this group. Reference is made in new Clause 33(1)(a) to a puffin pedestrian crossing regulation. We do not have puffin crossings in Kirriemuir. Do the regulations apply to Scotland? The amendment refers to revoking English and Welsh legislation on puffin crossings. Will my noble friend write to me to tell me what a puffin crossing is and what it is about?
Lord Dunlop
I am very happy to respond in writing to my noble friend.
I thank the noble Lord, Lord McFall, for his contribution. Before I respond to his remarks, when I spoke previously, I inadvertently omitted to speak to some technical amendments. With the leave of the House, I shall do so briefly now.
The amendment to Clause 38 removes the words,
“vehicles used in connection with any reserved matter”,
as they are unnecessary. Even without these words, exempting vehicles used for reserved purposes would still be reserved. The deletion of these words will help to avoid any potential for misunderstanding arising from their unnecessary inclusion.
The amendment to the interpretation provision in Clause 38 is designed to devolve to the Scottish Parliament the subject matter of Section 87 of the Road Traffic Regulation Act 1984 as amended by Section 19 of the Road Safety Act 2006.
The other amendments relate to work being done by the UK Government to prepare, as part of a long-standing project, a new set of regulations which will prescribe speed limit exemptions for vehicles used in a variety of circumstances which require a fast response. These amendments are designed to ensure that, with Scottish Ministers’ consent, the new secondary legislation includes exemptions from speed limits for vehicles used in connection with non-reserved matters and that those exemptions apply GB-wide. A considerable amount of work has already taken place to develop those regulations. If they are to be truly effective, change to relevant traffic signs will also be needed. The amendments will enable the Secretary of State, with Scottish Ministers’ consent, to make regulations which are GB-wide in their application and allow vehicles used for various purposes connected with devolved matters to have exemptions from road signs and general directions such as “keep left” and red traffic lights. The aim is to assist stakeholders and avoid duplication of the work already carried out by the Department for Transport. As with the amendments on parking, it is possible that there may need to be a small number of minor and technical amendments at Third Reading in this area. This is being explored by officials.
The Department for Transport will work closely with Transport Scotland on these regulations, so there is input from Transport Scotland. It would be unhelpful if they could not take advantage of the work already carried out due to a timing issue. The amendments are intended to resolve this, and allow Scotland to benefit from the new regulations as a starting point for speed limit and road traffic sign law post-devolution. I commend those amendments.
In conclusion, the amendments address an important issue which has been on our radar for some time, and I am grateful to the noble Lord, Members of the other place and stakeholders who have brought this issue to a head. As I said, I am also grateful to the officials in both Governments, who have worked in discussion to pursue a drafting solution to this issue. These provisions will clarify the competence of the Scottish Parliament to legislate to regulate parking in Scotland. I also note the organisations Living Streets and Guide Dogs Scotland, who have recognised the amendments as bringing to a close the question of the Scottish Parliament’s competence in this area.
The Living Streets director said:
“The last minute amendment to the Scotland Bill removes the final barrier to outlawing pavement parking. Finally, the Scottish Parliament will have the power to protect older, disabled and vulnerable pedestrians from inconsiderate parking, which is fantastic news”.
Guide Dogs Scotland said:
“This is great news for people with sight loss, guide dog owners, wheelchair or mobility scooter users, and families with pushchairs. People with reduced mobility have been waiting a long time for legislation that can take inconsiderate parking off our streets, and allow them to get out and about safely in our communities”.
The response to these amendments reinforces the importance of this issue to the people of Scotland, and I am glad that the Scottish Parliament can now take steps to address inconsiderate and irresponsible parking.
Lord Dunlop
Lord Dunlop
Lord Dunlop
Lord Dunlop
I particularly thank the noble Lord, Lord Faulkner. He always speaks on railway matters with such authority. I thank noble Lords for the other informed and authoritative contributions we have heard during this debate.
I think one thing is clear: all sides of the House are agreed that the British Transport Police does an excellent job of policing our railways. That is not in doubt. However, the issue this evening is whether this House will agree to devolve to the Scottish Parliament the functions of the British Transport Police in Scotland. As has already been said, the Smith agreement says:
“The functions of the British Transport Police in Scotland will be a devolved matter”.
The functions of the British Transport Police in Scotland are the policing of the railways in Scotland. The Smith Commission also stated in paragraph 19:
“Where the agreement provides that powers or competence in relation to a matter will be devolved, this is intended to mean a transfer of full legislative competence to the Scottish Parliament along with that of the associated executive competence to the Scottish Government”.
Clauses 42 and 43 devolve legislative competence in relation to railway policing in Scotland and designate the British Transport Police bodies as cross-border public authorities. This is devolution. It has been argued tonight that this aspect of the Smith agreement could be implemented in a different way by retaining the BTP as a single body but making it jointly accountable to Scottish Ministers and the Scottish Parliament. There is nothing in this Bill to prevent that outcome being achieved. The Bill does not dissolve the BTP. It does not mandate that the BTP should no longer operate in Scotland. It does not prescribe a model by which policing of the railways in Scotland should be carried out in future.
What the Bill does do is ensure that the BTP continues to operate in Scotland as now, unless and until the Scottish Parliament decides to pursue an alternative approach, and it ensures that Scottish Ministers are consulted on appointments to the BTP bodies. It will be for the Holyrood parties to set out in advance of the elections what their approach to the BTP in Scotland will be. The Scottish Conservative manifesto for the Holyrood elections will contain a clear commitment to retain a single nationwide British Transport Police—not absorbed into Police Scotland—but a BTP made more accountable to Scottish Ministers and the Scottish Parliament.
Lord Forsyth of Drumlean
I very much hope that the Scottish Conservatives will win more seats at the election but I am not anticipating them becoming the Government of Scotland. My noble friend must know that Scottish Ministers have made it clear that they intend to break up British Transport Police if they have the power to do so, and to amalgamate it into Police Scotland. Therefore, is it not a little disingenuous to imply that what the Bill provides will not threaten the integrity of the British Transport Police? It will indeed.
Lord Dunlop
I can assure my noble friend that I will not turn myself into Mystic Meg tonight and make a prediction about the Scottish elections. I am making a broader point because I think the real point is that embracing devolution means trusting the Scottish Parliament to act responsibly with the powers it is given, and respecting the ability of people in Scotland to hold its representatives to account. I fear that for this House to decline to support this provision would send out a clear message to Scotland that we do not trust its Parliament and the ability of people in Scotland to hold it to account. Should the Scottish Government and Scottish Parliament press ahead to legislate for, and implement, a different model for policing the railways in Scotland, and to integrate the functions of the BTP with Police Scotland, I believe it is reasonable to expect the two Governments, working together, to be able to put in place the necessary arrangements to ensure that the service remains as effective as it is today, that the transition is seamless and protects the interests of people on both sides of the border, and that there is no detriment.
Counterterrorism has been specifically referred to. I want to address that directly. The BTP currently undertakes counterterrorism policing of the railway. This includes a range of operational measures and deployments designed to mitigate and manage the terrorist threat. General policing is already devolved and arrangements already exist between Police Scotland, the BTP and Home Office police forces to ensure the effective delivery and co-ordination of policing, and we would clearly expect these to continue under any new model. The Scottish Government already work with a range of partners, including the United Kingdom Government, Police Scotland and the British Transport Police, to ensure that Scotland is protected from a range of threats, including terrorism. There are well-established national procedures in place for policing across regional and functional boundaries, and these will certainly continue to apply.
Going back to what I was saying about ensuring that the service remains as effective as it is today, that is what has happened with every act of devolution since the Scottish Parliament was set up in 1998. Officials are meeting regularly and both Governments are committed to working constructively and effectively on the detailed arrangements needed to enable the transfer of functions to take place. A senior-level joint programme board to lead and oversee the work to integrate the BTP in Scotland into Police Scotland, should the Scottish Government decide to press forward after the election in May, has been established by the two Governments and includes representatives of the two police authorities. The terms of reference for the joint programme board will be formalised following the Scotland Bill receiving Royal Assent, and I will be happy to share these with noble Lords. Once the Scottish Government have finalised their plans for the future model of railway policing, I will be happy to update the House on implementation plans. Before this, the Scottish Government have made clear their intention to engage with key partners and staff representatives to ensure that the specialist railway policing skills and expertise of British Transport Police officers and staff in Scotland are maintained.
I hope noble Lords will not press their amendments and will allow this provision to proceed. Of course, I will reflect on the discussions that have taken place but I cannot undertake to commit to any amendments.
Lord Empey
If I understood the Minister correctly, does he seriously believe that even after efforts have been made to fix something that is not broken, the service provided subsequent to the Scottish Parliament taking over this function is going to be better than the service that is provided now? I accept that civil servants, working together, will patch something up. They are good at that and they will do their job to the best of their ability but nobody can say that the service will be better. The problem is ensuring that it is even as good and that will take years because of the personnel movements, the skill loss—people will have to be retrained. This is all totally nugatory work, for no good purpose to the people of these islands.
Let us call a spade a spade. This is a political thing through and through. There is no other dimension to it. The Minister may have given no undertaking but he has at least agreed to reflect on this. We ought to at least take that into account. This will not produce a better service than we have. What we are trying to do is prop up and secure something close to what we already have.
Lord Dunlop
I will repeat what I said: it is entirely possible to put in place the necessary arrangements to ensure that the service remains as effective as it is today.
Lord Faulkner of Worcester
My Lords, this has been an extraordinary debate. The hour approaches midnight and we have been debating the British Transport Police in Scotland for more than an hour, with an extraordinary range of very well-informed, powerful speeches on these amendments. I thank everybody who has taken part in the debate.
Obviously, there is not time to go through each of the speeches but the most important point the noble Lord, Lord Forsyth, made was that this is a United Kingdom issue, not just a Scottish issue. The noble Earl, Lord Kinnoull, talked about the no-detriment principle. I do not think that we got an answer on that from the Minister. The noble Earl also asked for a commitment to some form of government amendment at Third Reading; we were told that that will not be offered.
I should thank the noble Lord, Lord Empey, for bringing this issue up in the first place in Committee because it was not spotted in the other place when the Bill went through there. It was his tabling of the amendment in Committee that allowed us all to realise what was actually being proposed for transport policing in Scotland. His point is that this is an attempt to fix a problem which does not exist and that there is nothing wrong with the operation of transport policing at the moment. To make these changes is free of neither risk nor cost.
The noble and learned Lord, Lord Wallace, talked about the functions not being properly safeguarded and the possibility of security being diminished. The noble and learned Lord, Lord Mackay, made a very important point about what the Smith commission said on the subject, which is not consistent with what is being proposed in the Bill. My noble friend Lord Berkeley, using his great experience from the railways, talked about the specialism of the British Transport Police.
I would like to be able to say that the Minister came some way towards meeting all these very important points but I honestly do not think that he did. If we allow the Bill to go through in its present form, and do not make our voices clear tonight that we are very unhappy with what is to happen not just in Scotland but to transport policing throughout the United Kingdom as a result of this change, we will regret that. With great reluctance at this very late hour, I therefore beg leave to test the opinion of the House.
Scotland’s Fiscal Framework
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The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, with the leave of the House I will now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows.
“Mr Speaker, with permission I would like to make a Statement about the new fiscal framework for Scotland, which was agreed yesterday by the United Kingdom and Scottish Governments.
I begin by paying tribute to everyone who has worked so hard to arrive at this point: my right honourable friend the Chief Secretary and the Deputy First Minister, John Swinney, who have led these negotiations with skill, and the dedicated teams of officials from Her Majesty’s Treasury and the Scottish Government who have worked tirelessly on behalf of their respective Governments. They can all be proud of what has been achieved and the service they have given.
This is a truly historic deal that will pave the way for the Scottish Parliament to become one of the most powerful and accountable devolved parliaments in the world. We have respected all the principles set out in the cross-party Smith agreement and delivered a deal that is fair for Scotland and fair for the whole United Kingdom. As the noble Lord, Lord Smith, himself said yesterday evening:
‘When the Smith Agreement was passed to the Prime Minister and First Minister, both gave their word that they would deliver it into law - they have met that promise in full’.
Scotland’s two Governments will give more details in the coming days, but I would like to set out a few key elements of the deal.
The Scottish Government will retain all the revenue from the taxes that are being devolved or assigned, including around £12 billion of income tax and around £5 billion of VAT. The block grant to the Scottish Government will be adjusted to reflect the devolution and assignment of further taxes and the devolution of further spending responsibilities. We have kept our commitment to retain the Barnett formula, extending this to cover areas of devolved welfare. For tax, we will use the UK Government’s preferred funding model. Under this model, the Scottish Government hold all Scotland-specific risks in relation to devolved and assigned taxes, just like they do for devolved spending under the Barnett formula. That is fair to Scotland and fair to the rest of the UK.
However, for a transitional period covering the next Scottish Parliament, the Governments have agreed to share these Scotland-specific risks as the powers are implemented. Specifically, the Scottish Government will hold the economic risks while the UK Government will hold the population risks. So the Scottish Government will not receive a penny less than Barnett funding over the course of the spending review simply due to different population growth. By the end of 2021, a review of the framework will be informed by an independent report so that we can ensure we are continuing to deliver Smith in full, with the Scottish Government responsible for the full range of opportunities and risks associated with their new responsibilities.
We have also agreed that the Scottish Government will have additional new borrowing powers. This will ensure that the Scottish Government can manage their budget effectively and invest up to £3 billion in vital infrastructure. In line with the recommendation of the Smith agreement, we will provide the Scottish Government with a £200 million share to set up the new powers that they will control.
The Government have delivered more powers to the Scottish people, ensuring that they will have one of the most powerful devolved parliaments in the world and the economic and national security that comes with being part of our United Kingdom. That is what we have agreed and what we have delivered in full. Now that we have agreed this historic devolution deal, the conversation must move on to how these new powers are to be used.
The Scottish Government will have extensive powers over tax, welfare and spending. They will have control over income tax and be able to change the rates and thresholds. They will be able to create new benefits. The permanence of the Scottish Parliament is also put beyond any doubt.
The people of Scotland voted for these new powers and deserve to hear how parties in Scotland will use them—new powers that, if used well, can grow Scotland’s economy and population, and bring greater opportunity and prosperity. Now that we have agreed this fiscal framework, I hope and trust that this House and the other place will welcome it while of course subjecting it to full scrutiny. I commend this Statement to the House”.
Lord Dunlop
My Lords, I thank the noble Lords, Lord McAvoy and Lord Stephen, for their support and their response to the Statement. This deal provides an opportunity to move the debate in Scotland on from process to policy, as the Secretary of State for Scotland said in the House of Commons earlier. The noble Lord, Lord McAvoy, talked about the rules for Report, and that is a matter to be discussed through the usual channels.
Turning directly to the point about time to scrutinise the deal, again, as the Secretary of State made clear to the House of Commons, my strong expectation is that the agreement will be published tomorrow and available to noble Lords. I will write to all Peers making it available to them. I also take this opportunity to offer an all-Peers briefing tomorrow with the Treasury.
The issue of intergovernmental relations was raised. I know that this is a matter of great interest; the Constitution Committee has issued a report on it. The noble Lord, Lord Smith, said:
“There should be no doubt that this was a highly complex package of measures to agree. It is difficult to imagine a bigger test of inter-governmental relationships … This provides an excellent basis for constructive engagement between the governments long into the future”.
That is what gives me hope that it will be possible to reach agreement when we come to the review in five years’ time. We must use the time in between to build those intergovernmental working relationships. The fact that this review will be informed by an independent report will help in that process. To address directly what the noble Lord, Lord McAvoy, asked, this will be a review without prejudice and a review by agreement, and it will not be imposed.
The noble Lord, Lord Stephen, talked about full fiscal autonomy, and I have to say that I look forward to the day when the SNP tries to reconcile the no-detriment principle with separation.
Lord Dunlop
On that last point, absolutely I believe that this is a deal that is fair to all parts of the United Kingdom. That is what the Smith agreement was all about—being fair to Scotland and fair to the UK as a whole. That is what this deal delivers.
To address directly the first of the two points that the noble Lord raises—and this was a point that came up in the House of Commons—on the cost of the deal to England, Wales and Northern Ireland, there is no additional cost to the taxpayers of England, Wales and Northern Ireland. This deal produces the same outcome as Barnett set out in the comprehensive spending review. There is no adverse impact on UK taxpayers.
On the noble Lord’s other issue—I forget what it was; oh yes, it was the point about transition—the Scotland Bill, that delivers the Smith agreement, is a significant act of devolution. It represents a new world and an opportunity for a new politics in Scotland, one in which blame can no longer be heaped at Westminster’s door. It is absolutely right to have a review on how the far-reaching arrangements are working in practice to ensure that, as my right honourable friend says, they are fair, transparent and effective in line with the Smith agreement.
Lord Foulkes of Cumnock (Lab)
While I join in the welcome given to the Statement and the agreement, is the Minister aware that at this very moment HMRC offices in Scotland are being closed and thousands of people put on the dole? Is not this a stupid thing to do at a time when there are going to be more responsibilities on revenue and customs in Scotland?
Lord Dunlop
I assure the noble Lord that we are very confident that the delivery of these powers will go ahead as intended.
Lord Selkirk of Douglas (Con)
In view of the fact that I asked the second Question yesterday, I feel entitled to give the Minister warm congratulations on his part in securing this agreement on the fiscal framework. Does not this pave the way for the debate in Scotland to move forwards and focus fully on how the new and extensive powers should be used?
Lord Dunlop
I thank my noble friend for his words. We are months away from elections to the Holyrood Parliament and, as I said earlier, the deal opens the way to make sure that that debate is on the right terms—about how each of the political parties competing in that election will use those powers, and not the perpetual debate about what those powers are.
Lord McCluskey (CB)
At the risk of mixing my metaphors, although they will be well understood by all Members of this House, have we not, for the duration of this Bill, been burying our heads, ostrich-like, in the sand, while turning a blind eye to the elephant in the room? Did we awaken yesterday from our slumber to kick a hornets’ nest into the long grass where we hope that the English will not notice it and the Welsh will be ignored? I shall translate that for those who have not followed this debate. The elephant in the room is, of course, the Barnett formula. The hornets’ nest is also the Barnett formula because if anyone disturbs the Barnett formula, the hornets will fly out. The blind eye is the decision by tame Scottish politicians, supported by the UK Government, to continue Barnett without discussion of its inequities or its notorious unfairness, particularly to Wales. The long grass is the five or six-year period. The question simply is this: will the documents to be published now or in the next five years show clearly the extent to which the rest of the UK is contributing towards this expenditure by the Scottish Government?
Lord Dunlop
As I said earlier in answer to another question, there is no additional cost to taxpayers in other parts of the United Kingdom. We have had many debates in this House about the Barnett formula. There are many former Secretaries of State who, when they had the opportunity to get rid of the Barnett formula, did not do so. Indeed, some of those Secretaries of State take great pride in arguing for more resources for Scotland. They were very effective at doing it, and I pay tribute to them for that. However, when proposing a move away from the Barnett formula, with the idea that there is some easy solution that would do away with the hard negotiation that is required with the Scottish Government, I am at a loss to know why we would expect the SNP to fight Scotland’s corner any less strongly than former Secretaries of State did.
Lord McConnell of Glenscorrodale (Lab)
My Lords, given that the Prime Minister was able to publish the details of a far more complicated deal with the European Union when he made his Statement to the House of Commons on Monday, why is the full fiscal framework not in front of this House this afternoon? I do not understand why in the light of that the Government cannot be more specific about what will happen in five years’ time if agreement is not reached on this independent review. What will be the status quo at that time should an agreement not be reached?
Lord Dunlop
As I said, today is the final day of the Scottish Budget. That is why we do not have the fully published document today. There are a few minor technical and implementation issues from the agreement that need to be finalised. However, I have given a commitment to the House, and my strong expectation is that that agreement will be published tomorrow.
Lord Tebbit (Con)
My Lords, will there be anywhere a cash limit upon the amount of money which English taxpayers will be required by this agreement to pass across the border for the benefit of Scottish consumers?
Lord Dunlop
I can only repeat what I said earlier: there is no additional cost to the taxpayers of England, Wales and Northern Ireland.
Lord Beith (LD)
My Lords, while there is general support in the north-east of England for Scottish devolution and its progress to date, does the Minister recognise that there will be real resentment if it becomes apparent over time that there is substantially more money available for public services on the Scottish side of the border than on the English side and that that resentment will undermine English support for the maintenance of the United Kingdom, which would be very unwelcome if it happened?
Lord Dunlop
I absolutely understand what the noble Lord is saying. That is why we have sought a deal that is fair to Scotland and to the rest of the UK.
Lord Lang of Monkton (Con)
My Lords, I compliment my noble friend on his modesty on leaving out of the Statement the one line in which the Secretary of State for Scotland in another place complimented him on his invaluable contribution to these matters. I welcome the fact that the conclusion of the negotiations has been reached, at least to the extent that it now enables the legislation to pass into law once it has finished its progress through this House and, at long last, bring the Scottish Government to a degree of accountability for their actions before the Scottish people. My noble friend referred to the review to take place in five years’ time. Can he confirm that when that review is produced by this independent body, it will be implemented without any further interruption or interference by either the Scottish Government or the UK Government?
Lord Dunlop
Once the review is complete, it will be for the two Governments to reach an agreement. However, I need to say to my noble friend that this is a very significant act of devolution. In future, more than 50% of the Scottish budget will be financed from taxes that are raised in Scotland, and that is a major development.
Lord Anderson of Swansea (Lab)
My Lords, with the current concentration on Scotland, there is a danger that Wales will be sidelined. Perhaps we too should have had a referendum. Is the Minister aware that Cardiff University has just produced research for the Welsh Government suggesting that Wales will lose out massively as a result of the Chancellor’s personal tax allowance changes? Will we be compensated for that?
Lord Dunlop
Obviously discussions are going on between the UK Government and the Welsh Government about the fiscal arrangements for Wales. I am sure, as this deal has been successfully concluded, that they will be successfully concluded as well.
Lord Higgins (Con)
My Lords, the Statement concludes by saying that the fiscal framework should be subject to full scrutiny. How is that to be achieved in your Lordships’ House when the Scotland Bill has already reached Report stage and we will be operating under the restrictions that we always do on Report and at Third Reading? Should those restrictions not be removed, given the situation that we are now in? Secondly, the perpetuation of the Barnett formula means that the injustice between England and Scotland is going to be perpetuated as well. That cannot possibly be regarded as fair.
Lord Dunlop
I think I have covered the rules of Report in an earlier answer. As I say, with the funding arrangements we have sought to strike a balance that enables these powers to be transferred to the Scottish Parliament while respecting the “taxpayer fairness” principle that applies across the rest of the UK.
Baroness Janke (LD)
My Lords, in the light of what others have said, along with the fact that the Barnett formula is seen to be extremely unjust and unfair to other parts of the UK, will an analysis be produced of the impact of the new fiscal arrangements in Scotland on the other parts of the UK? Many local authorities are now suffering such dire cuts that public services are in severe danger of being lost in many parts of England, to my knowledge. With this announcement, there ought be a proper analysis of what impact it will have on local services in England and the rest of the UK.
Lord Dunlop
The review will look at how the funding arrangement is operating against the Smith agreement. I remind the House, because this is often forgotten, that the Smith agreement says that it should,
“aim to bring about a durable but responsive democratic constitutional settlement, which maintains Scotland’s place in the UK and enhances mutual cooperation and partnership working”,
and should,
“not cause detriment to the UK as a whole nor to any of its constituent parts”.
That is something that the review in five years’ time is going to have to take into account.
Baroness O'Neill of Bengarve (CB)
My Lords, is the implication of this agreement that the Barnett formula is, as it were, the acquis communautaire which provides the baseline against which fairness is judged?
Lord Dunlop
During this transitional period, the protection that is put in place ensures that what was the case with regard to the numbers in the comprehensive spending review will be delivered over this period.
Baroness Goldie (Con)
My Lords, I, too, commend my noble friend Lord Dunlop for his perseverance, stoicism and patience in bringing these important negotiations to a conclusion. Does he consider that the real clout to be delivered to Scottish politics by the Bill and this fiscal framework agreement is to relish the prospect of a very reluctant SNP Government being compelled to accept fiscal and economic responsibility for their political decision-making, and that one of the most important components of any review will not be what happens in this place, the other place or in the Scottish Parliament but will be the views and expressions of the Scottish electorate, who may be suffering from the impost of some of the Scottish Government’s policies?
Lord Dunlop
I very much agree with my noble friend. The whole purpose behind this is that the Scottish Government should be held fiscally accountable for the decisions they take so that they should be able to reap the rewards of the good decisions they take and bear the risks and costs of their bad decisions.
Lord Elder (Lab)
My Lords, on that last point, the Calman commission, of which I was a member, tried to find a way to ensure that the success of the economy in Scotland led to an increase of government funds and tried to tie in revenue for the Scottish Government to the success of the Scottish economy. The Statement appears to be saying that whatever goes on in the background, it is all down to Barnett and that however the numbers are made up, it ends up being Barnett. In what substantive terms is that a change?
Lord Dunlop
As the Statement made clear, if the Scottish economy grows more slowly than the UK economy as a whole, that risk will be borne by the Scottish Government.
Lord Kirkwood of Kirkhope (LD)
My Lords, can the Minister help us by expanding a little on set-up costs; he mentioned a figure of £200 million. Would that apply to the departmental expenditure limit from the DWP on the costs of the administration of the new social security powers that will be available to the Scottish Government in the future?
Lord Dunlop
The figure I mentioned is a one-off implementation cost to transfer the powers over and the systems that go with them. It is not an ongoing cost.
Lord Elton (Con)
My Lords, I leave policy to others better qualified than myself, but process is important. So that my noble friend shall not forget the intense interest on this and other sides of the House in that process and the ability of this House to scrutinise what will be put before it, I remind him that a simple procedure and a way of satisfying that would be to take parts of the Bill in the same order as they were in Committee, and that when we get to Parts 2 and 3, the Bill should be recommitted to Committee for those two parts.
Lord Dunlop
I thank my noble friend but I cannot commit to what he asks. We have already moved a Motion to consider on Report the Bill in the same order in which we considered it in Committee, which was precisely to allow time for this agreement to be reached and published, and to allow your Lordships’ House to scrutinise it.
Lord Berkeley (Lab)
My Lords, in answer to a previous question the Minister rather proudly announced that 50% of the revenue under the new arrangement would come from the Scottish taxpayer. Does that mean that the rest of the revenue will come as a subsidy from the UK Government?
Lord Dunlop
No. It has always been the case—right from the start of these discussions—that a block grant would continue. However, we are providing for more of the budget to be financed from the tax revenues raised in Scotland.
Lord Sutherland of Houndwood (CB)
My Lords, I live on the other side of the border from my noble colleague Lord Beith but not far from the border. I share his perception from that side of the border of the impact of not talking about Barnett. Will the review’s terms of reference include looking at the consequences of retaining the Barnett formula?
Lord Dunlop
As I said earlier, this is an open review and it does not establish a default position. It will be for the Governments to set the terms of reference and the remit, and those will be decided in due course.
Scotland Bill
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Lord Dunlop
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 12, Clauses 34 to 41, Schedule 2, Clauses 42 to 64, Clauses 13 to 18, Schedule 1, Clauses 19 to 33, Clauses 65 to 70, Title.
Lord Higgins (Con)
My Lords, my noble friend the Minister has not given any explanation as to why the clauses of the Bill should be taken in that particular order. More particularly, in the earlier exchanges, he declined—I think that would be the right way to put it—to give a guarantee that, before we proceed to debate amendments on Report, the fiscal framework will be before the House in such a way that we can appraise the extent to which it is fair between the various parts of the United Kingdom.
The Minister will be well aware that the suggestion was made in the debate yesterday that, if we do go straight to Report, we should alter the way in which proceedings go ahead on that occasion so that we could at least speak more than once, and perhaps one should give further consideration to the situation. We will not, of course, have the opportunity to debate any clauses stand part on Report.
The way in which this matter has been proceeded with is quite intolerable. Parliament is being prevented from holding the Government to account in the proper way, and we are not being given the information on which we are bound to rely in deciding whether this is a sensible measure or not. It has gone through the House of Commons with no scrutiny at all of the fiscal framework, as I understand it, and we have had no discussion on the details of the framework in this House. It is really dreadful, given the magnitude of what is at stake here, in terms of the effect on individual constituencies and constituents, that we should not have a proper debate on this issue.
I hope that the Government can come forward with a clear assurance that we are not going ahead. I understand all the political implications with Scotland and so on, but the fact of the matter is that we are not being allowed to carry out our duty properly. I believe that this is an appalling state of affairs and has to be put right.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
I thank my noble friend, and will make three points in response. First, the purpose of the Motion that I have just moved is to ensure that we take Report in the same order that we took Committee. Secondly, to address the central point that he makes, we have done that precisely to meet the intent of what he is seeking: to give more time to reach agreement on the fiscal framework and to ensure that, when we come to the second day of Report on 29 February, we have an opportunity to scrutinise that framework. Thirdly, it was suggested yesterday that the rules of Committee should apply to Report, and I know that is being discussed through the usual channels.
Scotland Bill: Fiscal Framework
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Lord Selkirk of Douglas
To ask Her Majesty’s Government what progress has been made on the Fiscal Framework that accompanies the Scotland Bill.
The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)
My Lords, significant progress has been made, not least over the course of the last week, in the discussions with the Scottish Government. As I told the House yesterday, although nothing is certain, a deal is within reach. Discussions between the two Governments are continuing this afternoon and are at an advanced stage. The UK Government remain focused and committed to delivering a fiscal framework that is fair to all parts of the UK. We all want to see the debate in Scotland move from what the powers of the Scottish Parliament are to how those powers can be used. The UK Government are confident that, used well, these powers can further help Scotland to prosper within our United Kingdom.
Lord Selkirk of Douglas (Con)
In light of the Statement being made by the First Minister in the Scottish Parliament at 2.30 pm today, which may still be going on, will the Minister continue with discussions, however difficult the circumstances may be? Will he keep in mind that this House wishes all parts of the United Kingdom to be treated with fairness and that, if there are to be increased powers, these have to be matched by increased accountability? Finally, I wish to say that I have known the Minister for 30 years as a person of great integrity and ability and I wish him every success in whatever discussions lie ahead.
Lord Dunlop
I thank my noble friend for his kind words. I am aware that Scotland’s First Minister is making a Statement in the Scottish Parliament as we speak. The Government will obviously take very careful note of what she says and we will continue to engage constructively until a deal is done. That is what people in Scotland and all parts of the United Kingdom expect us to do. I very much agree with my noble friend that any deal must be fair to Scotland and all parts of the United Kingdom. It is in the interests of all parts of the United Kingdom to have a Scottish Parliament that is more responsible and accountable to the taxpayers of Scotland. I think that, in this House, we can all agree that with power comes responsibility.
Lord Bruce of Bennachie (LD)
My Lords, can the Minister acknowledge that, while he negotiates quietly, the Scottish Government are orchestrating their responses in the full glare of the Scottish media? In those circumstances, there are people in Scotland, including those who want the union to continue, who have some suspicion of the UK Government. Does he not agree that when an agreement is reached—and I hope it will be soon—we have to ensure that an independent commission can assess the fairness across the UK, so that the whole of the UK, including Scotland, can be reassured that a deal will not just be agreed but will be monitored to ensure that it is fair to all sides?
Lord Dunlop
On the noble Lord’s first point, in any negotiation there is always a balance to be struck between keeping the public informed and providing the private space to get the deal done. Our priority has been to do all we can to reach an agreement, rather than to adopt public positions that in some way make it more difficult to reach agreement. With regard to independent scrutiny, I very much agree with the noble Lord, and I am sure that that will be part of any agreement we reach.
Lord Higgins (Con)
Will my noble friend guarantee that we will not proceed with further consideration of the Scotland Bill until we have a clear idea about the financial framework and can judge whether it is fair? It would be quite monstrous, given the history of this affair so far, if we were not to have adequate time to debate the matter.
Lord Dunlop
Obviously, this is a negotiation between two parties, and I cannot give a guarantee on an outcome to a specific timetable. What I can say is that both Governments understand the pressing parliamentary timetables, both here and in Holyrood, and our desire and commitment to see full scrutiny of this fiscal framework.
Lord McCluskey
Can the Minister confirm that the United Kingdom Government will not agree to a deal on the fiscal framework that makes permanent the benefits to Scotland of the Barnett formula, while preserving the disbenefits of that formula to taxpayers in the rest of Great Britain?
Lord Dunlop
My Lords, as I said at the outset, we are very conscious that this deal must be fair not only to Scotland but to the other parts of the UK. We will certainly not, because of the pressure of parliamentary time, do a deal at any cost.
Lord Wigley
My Lords, with regard to the fairness to all parts of the UK, will the Minister accept that no deal will be regarded as acceptable in Wales unless it does away with the iniquitous Barnett formula, as has been recommended by a committee of this House, and replaces it with a needs-based formula as soon as possible?
Lord Dunlop
The noble Lord will be aware of the commitments that were made by all of the UK parties at the time of the last election with regard to the Barnett formula, and I do not have anything to add to that.
Lord McAvoy (Lab)
My Lords, it is accepted that this is a difficult and complicated situation, but there is a duty on the UK Government and the Scottish Government to come to an agreement. We in the Labour Party are confident that a deal will be made in good faith by the UK Government and the Scottish Government and, in the words of Ian Murray, we urge both parties to “get on with it”.
Lord Dunlop
I say to the noble Lord that we in the UK Government are determined to go the extra mile to ensure that we get a deal.
Lord Lawson of Blaby (Con)
Will my noble friend confirm his answer to my noble friend Lord Higgins? Will he give an undertaking that the Scotland Bill will not proceed any further until the fiscal framework has been published?
Lord Dunlop
Our priority is to get a deal done so that we have a fiscal framework that this House can scrutinise. That is our first priority.
Lord Spicer (Con)
Is my noble friend aware that, in the end, the one person who did not agree with the Barnett formula was Joel Barnett himself?
Lord Dunlop
I understand that that is a matter of public record, so I will certainly not disagree.
Lord Grocott (Lab)
The Minister referred to a timetable that must be recognised and adhered to. The one part of the timetable that is within the Government’s control is the passage of legislation through Parliament—not entirely of course, because one can never predict debates, but it is within the Government’s power to decide when legislation will be brought forward and even to extend legislation from one Session to the next. Can he please explain that aspect of the timetable, to which he referred earlier?
Lord Dunlop
We are absolutely committed to getting the Bill through in this Session, and I think that we need to operate to a timetable that will achieve that outcome.