Scotland Bill

Lord McAvoy Excerpts

Tuesday 24th November 2015 Lords Chamber

[Lord McAvoy (Lab)]

My Lords, I thank the Minister for the way he introduced the Bill and for the always constructive manner with which he approached initial proceedings. On that basis, I am confident that this House will be able to have a positive impact on the Bill. I look forward to working with Members from across the Chamber to ensure that this happens.

I also thank my noble friend Lord Hollick for the crucial work that he and other members of the Economic Affairs Committee have done in producing this incredibly detailed and important report on the relationship between the proposals outlined in the Bill and the revised fiscal framework. I will address the fiscal framework and outline the Opposition’s position later in my speech, but suffice it to say for now that it is incredibly disappointing for everyone that we do not have draft proposals to consider alongside the Bill. I do not want to pre-empt the debate, but I am sure that if a Joint Committee could redouble its efforts to proceed at the quickest pace possible, without compromising on consensuality and scrutiny, it will be warmly welcomed by colleagues across the House.

By any standards, it has been an extraordinary 18 months for Scotland. Today is yet another milestone in the history of Scottish devolution. The referendum was certainly unlike any political campaign that many of us have ever been a part of, invigorating political debate across party and generational divides. The Scottish people voted to remain part of the United Kingdom, not on the basis of a return to the status quo, but in a belief that they would be a member of the union with an enhanced role in how to govern their lives. Here is also the best place I can think of to record, once again, my and our appreciation for the right honourable Alistair Darling’s chairmanship of Better Together; the absolutely brilliant managerial work carried out by my friend, Frank Roy; and the invigorating intervention by the right honourable Gordon Brown.

I mentioned giving the Scottish people an enhanced role in how to govern their lives. The Bill is that change and it delivers on the promise made. It is important to acknowledge from the outset the unique challenge that this House faces, given that the party of the majority of Scotland’s current elected representatives does not have a voice in this Chamber. It is something to which we must be wise as we debate the Bill. That said, we on this side will not shy away from what needs to be done to ensure that the Bill is as effective and workable as it can be. The decision by the Government to accept so many of our amendments, and those of other opposition parties, on Report in the other place was an essential part of this process. As a result of these concessions, we are confident that the vow has been delivered and that the Bill fulfils the powers promised and agreed by all parties in the Smith commission. The noble Lord, Lord Smith of Kelvin, has stated that the Bill, as amended,

“honours the agreement that was reached”.

The House will be aware that before the Government introduced its amendments we on this side of the House felt that the Bill fell well short of the commitments the main political parties had given to the Scottish people. However, following these crucial concessions—it must be recognised that the Government have moved from their original position, particularly on social security—the Bill now delivers on the vow and the Smith agreement in both spirit and substance. Her Majesty’s Opposition, therefore, fully support the Bill and all it seeks to achieve. As my honourable friend Ian Murray has stated,

“the Bill really matters, because it guarantees not only economic benefits and UK social solidarity, but the scope under devolution to do more, to make different choices and to set a different course for Scotland, distinct from a UK agenda that might not always be … in accordance with the public opinion of Scotland”.—[Official Report, Commons, 8/6/15; col. 933.]

The Scottish Parliament, as has been said, will be one of the most powerful devolved legislators in the world. This presents a huge opportunity for Scotland. Not since the Scotland Act 1998 has there been a bigger transfer of powers. It is now up to the Scottish Government to ensure that these powers are used for the benefit of the Scottish people. The permanency of the Scottish Parliament and Government is now beyond question and, as a result of another Labour amendment, the Government have removed any UK ministerial veto on the new regulation-making powers on universal credit. Along with constitutional changes, the Bill also devolves power over electoral matters to the Scottish Parliament.

I am glad to say that significant headway has also been made on gift aid, following a great deal of concern from Labour and third sector organisations that changes to income tax levels in Scotland could cause considerable confusion among charitable donors, and financial and administrative problems for charities. The Secretary of State has committed to,

“an ongoing dialogue with the charity sector before and after the enactment of the Bill to ensure that gift aid continues to operate effectively”.—[Official Report, Commons, 9/11/15; col. 100.]

We fully endorse this.

From April 2017, the Scottish Parliament will have total control over the rates and thresholds of tax on non-savings and non-dividends income. Following the acceptance of the Labour amendments, the Scottish Government will now be able to create new benefits in devolved areas and top up existing reserved benefits, including tax credits. These substantial new powers will enable Scotland to raise more than 50% of its own expenditure and to design a new social security system. It will allow the Scottish Government to restore, if they so choose, the loss in tax credits for working families, just as the Scottish Labour leader, Kezia Dugdale, has committed to do.

As part of this welfare package, we were pleased that the restricted definition of carer’s allowance was removed from the Bill. This will mean that there is significant additional scope for the creation of a new, more generous and more expansive, benefit. However, it was disappointing that the Government did not table a similar amendment with regard to disability benefit. That brings me to the areas of the Bill where we still think improvements can be made.

Although the Government’s welfare concessions are warmly welcomed, there remain further measures which, if introduced with enhanced provisions, would clear up some of the Bill’s inconsistencies. One area of concern is the definition of disability benefit, as I mentioned. At present, that definition is overly restrictive and could place unnecessary limitations on the kind of replacement benefit the Scottish Government have the power to introduce. Despite the similarity between the amendment and the one pertaining to carer’s allowance, the Government failed to table the requisite amendment in this area—we are not certain why. The devolution of the Access to Work scheme is another area where there should be further debate.

Beyond the two specific measures that I have highlighted, it is paramount that a smooth transition is afforded for all the welfare provisions that are to be devolved with the passing of this Bill. Labour believes that the most effective means of ensuring this is the establishment of a Joint Committee on welfare devolution. The committee would oversee the transition and implementation of welfare powers and include Members from both Parliaments. Such a committee would be completely open, impartial and transparent. Transparency is something we regard as having been lacking in discussion so far, particularly in the negotiations surrounding the fiscal framework, an issue I expect to dominate much of our debate today and the remaining stages of the Bill. The Scottish Government have been quick to claim that the Bill will be rejected if the accompanying funding is “not fair to Scotland”. However, they have been slow to produce accounts of the meetings that have taken place so far.

The Joint Exchequer Committee between the United Kingdom and Scottish Governments promised that an agreement would be reached by the autumn. However, as has been said, we now understand that the negotiations will not be completed until January at the latest. This is disappointing. It is vital that agreement on the revised framework is reached on a consensual basis and in a timely manner, as well as being made more formal and transparent. This is something that we will be looking to pursue and explore during the passage of the Bill through your Lordships’ House.

[Lord Reid of Cardowan]

I congratulate my noble friend on his presentation. He has tiptoed through some very big thistles—with some aplomb, if I might say so. On the question of reaching an agreement on the fiscal framework, I think the whole House would be unanimous, whatever view we take on the amendment, that that is desirable. Should it not be reached by the time we get to the latter stages of the Bill, does he have a view on how we should address it?

I fully understand that we are caught between a rock and a hard place because we have made a promise. Some of us take the view that that was a strategic masterstroke; some of us, like me, think it was a tactical ploy that turned into a strategic disaster, and we are now facing up to it. Nevertheless, whatever view we take—I am personally of the view that we are where we are now and we have to go on with this—how do we go on with it if we do not have the fiscal framework, which, it seems, would lead not to a sustainable agreement but to years and perhaps decades of future grievances? I hope I have given my noble friend the time to respond to me.

[Lord McAvoy]

My noble friend is as helpful as ever.

[Lord Forsyth of Drumlean]

Keep going.

[Lord McAvoy]

Once again, the noble Lord, Lord Forsyth of Drumlean, shouts encouragement to me. The facts of life are that we are in a very complicated situation. It would be foolish for anyone—me, my noble friend Lord Reid of Cardowan, or even, dare I say, the noble Lord, Lord Forsyth of Drumlean—to make specific, hard-line declarations of what is to be expected, when it should happen and what we do if it does not happen.

I believe that there is good faith—I have no reason to think otherwise—in the discussions between the United Kingdom Government and the Scottish Government. Your Lordships’ House should remember that the onus is on the UK Government to come up with a negotiated deal but the onus is also on the Scottish Government to come up with a deal. The people of Scotland voted to stay in the United Kingdom—not unanimously but there was a lot of support for the vote—so there are strictures awaiting anyone who plays games with these very important negotiations. It is not often I say this but I believe we have to trust the Government and the Scottish Government to deliver for the Scottish people.

The Labour Party supported many of the amendments that the Government brought forward in the other place, not least because the concessions had been debated thoroughly. However, that was not true for all the amendments, particularly those concerning the devolution of abortion law. I put on record that our concern is not about the issue of abortion—as we all know, that is different from constitutional matters—but about process. We will be calling for extensive consultation with relevant groups and representatives in Scotland to see what support there is for this proposal. This is not a reflection on the Scottish Government; this is about following the advice of the Smith commission.

Beyond these issues, we will be keen to debate a number of the transport provisions, most notably those surrounding the British Transport Police. Clause 43 follows the recommendation of the Smith commission that the functions of the British Transport Police should be devolved; but not to abolish them, which is what is being proposed by the Scottish Government, who want to transfer the existing functions of the British Transport Police to Police Scotland—more centralisation. This news has been met with strong criticism from trade unions and British Transport Police itself. This is something that we will explore in Committee.

We also intend to extend the Scottish Government’s capacity to bring about equality, particularly in relation to the functions of Scottish and cross-border authorities. That means increasing the accountability of the Equality and Human Rights Commission to the Scottish Parliament. This House has an excellent record of bringing about greater levels of equality in public life.

The final point to make on specific areas of the Bill that we hope to improve is about the Crown Estate, which again will be the subject of much debate in Committee. Although we are largely supportive of the measures the Government have brought forward, we seek clarification on a number of issues, which we will do in Committee. There are issues that need to be examined.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord—I can tell he is reaching the end of his remarks. Could he have a go, on behalf of the Official Opposition, at explaining to us how the second no-detriment principle will work?

[Lord McAvoy]

Your Lordships’ House should be aware that I was sitting here a few minutes ago, before I started, wishing that the noble Lord, Lord Forsyth of Drumlean, would ask that question. The noble Lord was a driving force in imposing the poll tax in Scotland, which was certainly to the detriment of Scotland. He did not give any consideration to the detriment to his country then. I am really glad that the noble Lord asked that question.

[Lord Forsyth of Drumlean]

And the answer is?

[Lord McAvoy]

The answer is that we will not support anything that we know is detrimental to our nation—unlike the noble Lord during the poll tax debacle.

The passage of the Bill through your Lordships’ House was always going to strike a different tone from its passage in the other place—the noble Lord has confirmed that—for a variety of reasons that I mentioned during the start of my speech. However, the concessions made on Report and the acceptance of amendments from Labour and other opposition parties has meant that the Bill, as drafted, delivers the vow in full. That has to be stated time and time again.

Your Lordships’ House has a genuine opportunity to focus on the detail of the Bill and to ensure that it meets the standards that the Scottish people deserve. This is what your Lordships’ House does best, and I caution those on the outside who snigger at or demonise the work that we can do in this Chamber, with insults such as “unelected cronies” and all the rest of it. As we set out to engage in a thorough, detailed and thoughtful debate, which has at its core the very best interests of the Scottish people, I am sure your Lordships’ House will live up to that. I am proud of a lot of what the House of Lords can achieve through the scrutiny and revision of legislation. I am also a proud Scot. Whatever people may say, these two facts are not contradictory.

The Bill is a real opportunity to provide a stable, durable devolution settlement and gives the Parliament the capacity to create a fairer, more prosperous Scotland. Once it has finished its passage through your Lordships’ House, we must turn our attention to ensuring that all these new powers are devolved and, crucially, to how they can be used. In the mean time, as always, there is more that can be done. We support the Bill.

--- Later in debate ---

[Lord Forsyth of Drumlean]

Yes, and I am proud of that, just as the noble Baroness is proud of her origins. My mother used to polish the cars so that they were gleaming in the sunlight, in the hope that someone would come in to buy them.

So we have the Bill: all beautifully presented and put together. I do not think that my father would have got very far if he had tried to sell a car by saying, “I am terribly sorry, you can’t look at the engine. I can’t tell you about the gearbox. In fact, there might not be an engine—actually, it is confidential. But once you’ve bought the car, we can tell you whether the engine works, whether the gearbox works and whether the software works”. That is what we are being asked to do on the Bill: “We can’t possibly tell you about the fiscal framework”, which is the guts of the Bill, “because it is confidential. We are discussing it with the SNP. By the way, we are getting on very well; we have a long record of getting on very well with them”.

I thought that my noble friend Lord Dunlop had given me an assurance, in a private meeting back in the early part of the summer, that the Bill would not be introduced to this House without the fiscal framework. However, because I know the ways of the Civil Service, and of the Treasury and Governments, I thought that I would table a Written Question. I tabled it on 9 July—remember July? It was a long time ago. I asked Her Majesty’s Government,

“when they plan to publish the new fiscal framework agreed with the Scottish Government”.

The Answer I got was:

“The Chancellor of the Exchequer, the Chief Secretary to the Treasury and the Deputy First Minister met on 8 June where they agreed that they would aim to conclude negotiations on the fiscal framework that will underpin the financial provisions of the Scotland Bill by the autumn, in tandem to the timetable for the Bill”.

I thought that Answer was not quite consistent with what I thought my noble friend Lord Dunlop had said, so I put down another Question. I asked,

“whether they plan to take any stages of the Scotland Bill in the House of Lords before the fiscal framework has been agreed and published”.

The Answer I got on 22 July was:

“The Government intends to progress the negotiations on the fiscal framework in parallel with the Scotland Bill. At their meeting on 7 July, the Chief Secretary to the Treasury and the Deputy First Minister re-affirmed their aim to conclude negotiations on the fiscal framework by the autumn”.

Now is the winter of our discontent not made glorious summer by my noble friend. When I was in school, “in parallel” meant “alongside each other”. How can it be “in parallel” with the House of Commons when the Bill has left that House? In his speech, my noble friend said that the Bill was unopposed at Third Reading. Third Reading in the other place took all of 10 minutes, with the fiscal framework not known.

Of course, I understand the political difficulties that afflict my noble friend and the Government. We have heard a great deal about this amazing vow. I do not normally recommend the Daily Record for reading, but I recommend looking at its report on the anniversary of the vow on 17 September, where the editor says that it was all his idea. It was invented by him: he rang up Gordon Brown and said, “Gordon, can you get the other party leaders to do this and we will put it on the front page?”. Indeed, the description of the vow was not that of the party leaders but invented by a tabloid journalist. Noble Lords can imagine my astonishment on hearing this when we got evidence to our committee from a distinguished academic who told me that the vow was the nearest thing we had in Scotland to Magna Carta. So there we have it: the Daily Record is better than Magna Carta.

If we look at this vow—this vow which is of such importance—it contains the sentence:

“And because of the continuation of the Barnett allocation for resources and the powers of the Scottish Parliament to raise revenue, we can state categorically that the final say on how much is spent on the NHS will be a matter for the Scottish Parliament”.

That is what it said when it was signed by David Cameron, who is still a leader, Ed Miliband and Nick Clegg—both of whom have since disappeared, leaving us to sort out the problem. It is illiterate and completely wrong. How can you say that spending on the health service would be “protected” because of the Barnett formula and the tax-raising powers? The whole point about the Barnett formula is that the amount of money that goes to Scotland for health is determined by what is decided in England. That is why the report of the Economic Affairs Committee is right to emphasise that we need to move away from Barnett towards a needs-based system if Scotland is to get the share of grant that represents its needs. The whole thing—this clash between the Barnett formula and the impact of the tax-raising powers—is based on something put together by a tabloid journalist.

We then had the argument that we cannot delay the Bill and need to get on with it. This has been the problem all along. I pay tribute to the noble Lord, Lord Smith, the Smith commission and the work that he did on it. However, I cannot think of any time in our history—perhaps we could go back to Henry VIII—when three privy counsellors could sit down and agree something that then had the force of law. Normally, Governments—the Executive—have to go to Parliament: it is a matter for Parliament, not Governments, to decide the fiscal framework. The only part of our parliamentary process in these islands now that seems to understand that—irony of irony—is the Scottish nationalists, who are saying, “We want to see the fiscal framework and the Bill. We are only prepared to consider them together and if we don’t think it works in a fair way, we will reject it”. It is a situation that has been denied to the House of Commons.

I would like to pick up the noble Lord, Lord Smith, on one point. In his foreward to the Smith commission report—there is a picture of him on the front—he says, under “A more autonomous Parliament”:

“The Scottish Parliament will be made permanent in UK legislation and given powers over how it is elected and run … The Parliament will also have the power to extend the vote to 16 and 17 year olds—”

So it goes on, using “will”. I am sorry, but it should perhaps say “should” or “we recommend that it might”. Whether or not it does is a matter for this Parliament—not for the Smith commission or the Government, but for Parliament. It is right that Parliament should have the opportunity to look at it.

I will make one final comment, because I realise that I am over my time. By the way, that is another disgrace: for us to be limited to six minutes on a major constitutional change is quite ridiculous.

[Lord McAvoy]

Before he sits down, could the noble Lord perhaps give us his understanding of no detriment?

[Lord Forsyth of Drumlean]

God bless the man: I have an excuse to speak for another six minutes. First, all the evidence that we had from our witnesses—it is all on the internet; people can read it and it is available in the Printed Paper Office—is that no detriment is completely unworkable. The report says that if on either side of the border, a change of policy results in a change in the money available to either side, the other side should compensate it. I will give an example. When I was Secretary of State, they privatised water in England. In Scotland, my noble friend Lord Lang decided that we were in enough trouble; he did not privatise water. As a result, of course, Scotland no longer got the Barnett consequences of the public expenditure on water in England, because it was charged, and we had to find from within the Scottish block the money to pay for water.

My understanding of the no-detriment principle, if it means what it says on paper, is that in similar circumstances under the new arrangements, if in England they decided to privatise or stop doing something and that resulted in a lesser grant to Scotland through the part related to the Barnett formula, then England would have to send Scotland a cheque. That seems to be rather unworkable. The idea that because England, say, had privatised water, it should send a cheque to the Scots to enable them to continue with a state-run, inefficient system, does not seem to be practical politics. I might have got this completely wrong, but every time I ask the Minister or the author or its exponents what it means, they say, “This is a matter for negotiation and we cannot possibly comment, because it has all been done on a secret basis”. It is just not acceptable to proceed beyond Committee until we have answers to this and many other questions that I will seek to elucidate for my noble friend by tabling lots of amendments.