Scotland: Draft Legislation

Lord McConnell of Glenscorrodale Excerpts

Thursday 22nd January 2015 Lords Chamber

[Lord Wallace of Tankerness]

My Lords, picking up on that final point, it means what it says: if there is devolution of income tax, which we are proposing to implement, the UK Government—the Revenue and the Treasury—will not receive the income tax receipts from Scotland on earned income and therefore the block grant will be reduced accordingly. That will be indexed. Box 1 on page 29 of the Command Paper describes how this is intended to work in terms of what we have already passed with regard to the Scottish rate of income tax under the 2012 Act. The noble Lord will see how it is intended to work with regard to the proposal that Parliament has already passed, one that can proceed for income tax as a whole and, indeed, for other taxes.

With regard to the two-thirds majority, it is not such a novel procedure as my noble friend suggests, because, although I suspect that he opposes it, it was nevertheless passed by this House when it introduced the Fixed-term Parliaments Act early in this Parliament with regard to any early general elections that might be called in the other place. We are actually implementing what the noble Lord, Lord Smith of Kelvin, recommended, which is that for matters as fundamental as the franchise, the number of constituencies and the electoral system we will provide “an adequate check”, as he put it in his commission’s report, on the Scottish Parliament. After all, it is a unicameral Parliament and a Government of a single party should not ride roughshod over the interests of other parties on a simple majority and completely change the electoral system. That is why the commission believed that on matters as fundamental as that, given that that power is being transferred from this Parliament to the Scottish Parliament, there ought be an adequate safeguard—and that safeguard is a two-thirds super-majority.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, first, I welcome very much the announcement that a joint arrangement has been put in place between the UK Government and Scottish Government on the implementation of the welfare provisions because that is an area in which there could be real trouble ahead. I wonder whether a similar mechanism is already in place, or is likely to be in place soon, for the recommendations on improved working between the Scottish Government and the UK Government and between the Scottish Parliament and the UK Parliament. I should be interested to hear the Government’s response on that. Secondly, the power to vary taxation—not the power to retain it—falls quite far short of the spending power of the Scottish Parliament under these proposals. Given the current expectations and instability that exist in Scotland and throughout the union, do the Government really believe that this is a recipe for stability in the medium term?

[Lord Wallace of Tankerness]

My Lords, the noble Lord raises an important point about the other recommendations in the Smith commission report on better intergovernmental and interparliamentary relationships. This is something which the Calman commission looked at although, regrettably, nothing much seemed to come of it. At the meeting of the joint ministerial committee which took place in December, the Prime Minister and the First Minister discussed these matters and there was an agreement, as a start, on looking at how to improve the current memorandums of understanding to address that issue. On parliamentary matters, there was a recommendation that the Presiding Officer of the Scottish Parliament should have an early meeting, after these clauses were produced, with Mr Speaker. I am not sure whether that is in place but I endorse the view that there ought to be better parliamentary relationships, at least for better understanding and for less of the misunderstanding that can sometimes arise.

In answer to the second part of the question, this is an enduring settlement. As was reflected in the comments of the noble Lord, Lord McAvoy, from the Opposition Front Bench, 60% of government spending in Scotland will be the responsibility of the Parliament and 40% of the tax raised in Scotland will contribute to that spending. In each case, that is twice the OECD average for devolved administrations. We are building and creating an enduring settlement, but the noble Lord is right to say that it will require a lot of work and engagement between the respective Governments in terms of both the fiscal framework and the welfare provisions.