Scottish Government: Ultra Vires Expenditure

Lord Offord of Garvel Excerpts

Thursday 9th March 2023 Lords Chamber

[Lord Foulkes of Cumnock]

To ask His Majesty’s Government, further to the answer by Lord Offord of Garvel on 7 December 2022 (HL Deb col 171), whether they have received a report from the Cabinet Secretary on ultra vires expenditure by the Scottish Government; and what steps they are taking in respect of this matter.

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

I am sure that the noble Lord, Lord Foulkes, will agree with me that the people of Scotland want their two Governments to work and to concentrate all their attention and resources on the issues that matter most to them. That is why this Government are focused on tackling the cost of living by halving inflation and growing our economy. I hope the new First Minister will have the same ambitions and work constructively with us to deliver for the people of Scotland, with the Scottish Government focusing on devolved matters and allowing the UK Government to focus on reserved matters.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I do agree with the Minister, but does the Minister agree with me that there is outrage in Scotland at the Scottish Government spending an increasing amount of money on reserved areas? I know he shares that concern, but he and the Secretary of State are the only ones who can do anything about it. Could he and the Secretary of State consider some arrangement for monitoring the expenditure of the Scottish Government, to make sure that all of it is spent on devolved areas, which are in great need of expenditure?

[Lord Offord of Garvel (Con)]

Well, I know that the noble Lord is dogmatic on this point, and we agree on many things. He is absolutely right to say that people in Scotland are absolutely focused on this matter as well. I would like to report that, since we last had this discussion, there have been, as there always have, discussions between the Cabinet Secretary and the Scottish Government’s Permanent Secretary. Therefore, issues and concerns have been raised to ensure the independence of the Civil Service. The noble Lord will be pleased to note, for example, that since he last raised this issue, the Scottish Government have reallocated £20 million they had set aside for an independence referendum to their fuel insecurity fund, which is a move I think we both welcome. Furthermore, the leading candidate in the SNP leadership election has just indicated that there will be a pause to any further independence papers—on the grounds that nobody reads them. Lastly, I can confirm that the Secretary of State for Scotland has met with the Foreign Secretary to discuss the Scottish Government’s activities internationally. Both are very clear that any overseas engagements by the Scottish Government should not encroach on reserved matters, and this will be kept under close review.

[Lord Forsyth of Drumlean (Con)]

My Lords, is my noble friend not concerned that the police investigation into the financial conduct of the Scottish National Party, in particular the money raised for a referendum, is taking such a long time?

[Lord Offord of Garvel (Con)]

My noble friend is correct to point out this recent development, and the police have now indicated that they are taking evidence from witnesses under caution. That procedure needs to be allowed to run its course. The wheels of justice grind slowly, but hopefully they grind fine.

[Lord Bruce of Bennachie (LD)]

My Lords, it may be reasonable for the Scottish Government to have overseas representations to promote trade, investment and tourism, but is it not worth reminding them and indeed the wider Scottish public that the UK has an extensive network of high commissions, embassies and consulates which do exactly that for all regions of the UK, including Scotland, and all the citizens of the UK? Are the Government satisfied that, when Scottish Ministers are abroad and they avail themselves of UK diplomatic facilities, they do not do so to promote separatism and the disintegration of the United Kingdom, a role for which they have no legitimacy?

[Lord Offord of Garvel (Con)]

Yes, foreign affairs are a reserved matter under Schedule 5 to the Scotland Act 1998 and are therefore the sole responsibility of the UK Government and UK Parliament. However, the Scottish Government and other devolved Administrations are entitled to conduct some international activity in support of their own devolved responsibilities, such as promotion of cultural exchanges and events, which they often do within the embassy network we have throughout the world. The Scotland Act is clear that foreign affairs are outside the competence of the Scottish Government and therefore they cannot and should not encroach into matters such as separatism or the constitution. We are aware that they have been doing that in recent times. As I just reported to the noble Lord, Lord Foulkes, the Secretary of State for Scotland has met with the Foreign Secretary and that will be very closely monitored in future.

[Lord Watts (Lab)]

My Lords, the Scottish Government are obsessed with a referendum because they do not want to fight an election on their past record in public service.

[Lord Offord of Garvel (Con)]

What is emerging from this very interesting leadership debate—what the newspapers are now calling civil war in the Scottish National Party—is that the obsession with independence has got in the way of their running a competent government to focus on the priorities of the people of Scotland. It might be worth noting that they have been in power for 15 years and during the first seven, First Minister Alex Salmond did manage to move the vote from 30% to 45%, but the second First Minister has actually gone backwards. What is now being debated in this leadership campaign is the need to focus on the priorities of the people of Scotland and get away from this independence obsession.

[Lord Howell of Guildford (Con)]

My Lords, I do not quite know how this Question got on to Scottish foreign policy. Will my noble friend bear in mind that although foreign policy is a reserved matter and not devolved, the Scottish international footprint is colossal and its influence very great? I think there is some justification in the feeling that Scotland has not in the past had adequate consultation and co-operation with foreign policy-making here in London. Will he therefore remind his colleagues in the Foreign, Commonwealth and Development Office that they should take full account of the power of the Scottish imprint and its influence on the international scene in promoting the United Kingdom generally?

[Lord Offord of Garvel (Con)]

I thank my noble friend for pointing that out. The Scottish diaspora is large and international, but international engagement is mostly focused on trade and is done by the Department for Business and Trade. Trade is a reserved matter, but it is also legitimate for Scottish companies to promote their activities internationally, along with the cultural aspect we have talked about. They can legitimately do that within the machinery of the UK Government, and we must allow them to continue to do so. We are just making sure that we do not have a separatist agenda being promoted to countries that I have to remind that the United Kingdom is still united.

[Lord Reid of Cardowan (Lab)]

My Lords, the Scottish Administration are embarking on courses of action that are not only clearly ultra vires, but which have grievous implications for the rest of the United Kingdom. Indeed, one of them has already been questioned and opposed by the Prime Minister, quite correctly, but they continue to do so. Has the Minister had a chance to look at this daft bottle deposit scheme? Given that all three candidates for the SNP leadership, whatever we may think of them, have criticised that scheme—indeed, Kate Forbes has described its effect on the British retail industry as “carnage”—are the Government intending to allow that to go through or are they waiting for the SNP to ditch yet another policy?

[Lord Offord of Garvel (Con)]

This is one of a number of Bills coming down the track that we need to monitor quite carefully. We have already had the Gender Recognition Reform (Scotland) Bill, in respect of which we have pressed the Section 35 button—for the first time in 437 Bills—and now we have the bottle deposit scheme. The UK Government received notification of a formal exemption to the United Kingdom Internal Market Act on 6 March, whereas producers were given a deadline of 1 March to sign up for the scheme. That feels to me like building a house first and then applying for planning permission. What we need to do is emphasise the importance of the United Kingdom Internal Market Act. Whether you like Brexit or not, we were previously in a single market of 28 European states and we are now in a single market of the four countries of the UK. What all our businesses say to us is that they do not recognise borders, and given that 60% of Scotland’s trade is with England, we do not want different terms of trade in Scotland and in England. There are a number of things coming down the track in respect of which we have to remind ourselves that certain things are done better as one United Kingdom.

[Lord Wigley (PC)]

My Lords, far be it from me to pass judgment on the expenditure patterns of the Scottish Government; the Scottish electorate are quite capable of doing that, as they have done in the past. On the question of overseas trade, is there not a case for every UK embassy having a nominated person who can deal with requests or agendas from Scotland, Wales or Northern Ireland, so that the devolved Governments know exactly how they can work in co-operation with those embassies?

[Lord Offord of Garvel (Con)]

That does exist, and in the Scottish case it is through SDI—Scottish Development International. That system has been working very well over the 26 years of devolution; only in the past two years have we had this encroachment and a different attitude from the Scottish Government. That is what noble Lords are referring to today.

[Baroness Smith of Basildon (Lab)]

My Lords, I thank the Minister for his thoughtful answers. I take issue with one, however. He described my noble friend Lord Foulkes as “dogmatic”, but we on this side regard him as a cuddly pragmatist.

May I take the Minister back to my noble friend’s question? He said in response that the Government will monitor legislation—he later mentioned the GRA and the bottle deposit scheme—but my noble friend asked the Government to monitor expenditure to ensure at an early stage that it is not ultra vires. The Minister did not really address that point. Will he do so?

[Lord Offord of Garvel (Con)]

The devolution settlement was put in place in this House long before I arrived, and the machinery of government was set up in the devolution Act. It does not allow the UK Government to look over the shoulder of the Scottish Government regarding money sent from the Treasury to Scotland. The scrutiny exists in the Scottish Parliament, and Members of the Scottish Parliament rightly scrutinise the Scottish Government and hold them to account. The Auditor General for Scotland, the Accounts Commission and Audit Scotland work together to deliver public audits in Scotland, and the National Audit Office provides independent assurance that public money is spent properly and provides value, and it scrutinises public spending for Parliament. These are the checks and balances in place. If the noble Baroness would like to go further, we would need to bring another Bill to this House.