Oral Answers to Questions
Stewart Hosie Excerpts(12 years, 2 months ago)
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Stewart Hosie (Dundee East) (SNP)
In the discussions that the Scottish Secretary had in the run-up to the Budget, did he make a case for re-profiling capital investment for funding shovel-ready projects, which would be the most effective thing we could do to build gross domestic product growth, or did he simply roll over, have his tummy tickled and accept the tax cut for millionaires?
Michael Moore
The hon. Gentleman should reflect carefully on the case he is trying to make. Perhaps, in a rare moment of generosity, he would welcome the fact that since the spending review, we have announced £1 billion of further spending allocations to the Scottish Government. We are continuing to create the conditions for sustainable growth to support businesses, and in Dundee there are now enterprise zones that get 100% capital allowances. I had hoped that the hon. Gentleman would welcome that.
Oral Answers to Questions
Stewart Hosie Excerpts(12 years, 4 months ago)
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Michael Moore
The hon. Lady highlights an important part of the world in which it is important that the UK Government have a role to play. May I point out that through the Scotland Bill, which is passing through their lordships House, we are delivering the biggest transfer of powers to Edinburgh since the Act of Union and tidying up some of the inconsistencies of the devolution settlement?
Stewart Hosie (Dundee East) (SNP)
When the Scottish Secretary and the Prime Minister met the First Minister, the Prime Minister offered a proposal for enhanced devolution but failed to spell out what that might be. What does the Scottish Secretary envisage a package of devolved financial powers might look like? Would it include corporation tax, all of income tax and the aggregates levy?
Michael Moore
It is incredible that the SNP wants to ask a question about further devolution when it has not set out what the fundamentals of independence would be. One would think that after decades of having that as its main reason for existing, it might have some clear ideas on the issue.
Stewart Hosie
That was a very instructive answer because it failed entirely to answer the question. There was no detail about what the Prime Minister proposes. Is that because there is no detail, is it because the announcement was made simply to capture one day’s news headlines, or is it meant to cover the embarrassment of this Government, who voted against the devolution of any further powers in the Commons debates on the Scotland Bill last year?
Michael Moore
Honestly, the hon. Gentleman has a bit of a cheek talking about a lack of detail when his party cannot spell out what the currency situation would be in an independent Scotland, what the national debt might look like and how it might deal with pensions and financial regulation. It is absolutely clear that we must make the most fundamental decision on Scotland’s future in a clear-cut and decisive way. The debate about devolution will be ongoing and I very much look forward to being part of it.
Scotland’s Constitutional Future
Stewart Hosie Excerpts(12 years, 5 months ago)
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Michael Moore
As ever, my hon. Friend has been assiduous in his homework, for which I commend him. Indeed, the late sadly lost leader, Donald Dewar, when he debated it from the Dispatch Box all those years ago, set out clearly what he believed would or would not be allowable within the law. I think the Act was well written. It is clear and I invite everybody to scrutinise it. I believe that when they do, they will come to the same conclusion as we have. Therefore we need to get on and provide a legal basis for the referendum.
Stewart Hosie (Dundee East) (SNP)
The Scottish Secretary made great play of what he called uncertainty threatening business investment, so he will be aware of the Wood Mackenzie report today, which shows record North sea investment planned for 2012 and consistently high investment going beyond 2014, which rather gives the lie to the allegation that he made. Will he come clean with the House? Can he name one company that has threatened not to invest, or will he finally do the right thing and apologise for his scaremongering?
Michael Moore
The hon. Gentleman is not usually so churlish. He should understand better than almost anyone else, because he studies these things carefully, that businesses take decisions on a very long time scale. They are looking for certainty. They want confidence in the future, and as we have seen with the Citigroup report, the Institution of Mechanical Engineers and the CBI, which the last time I looked spoke for many businesses across Scotland and the UK, uncertainty is bad for business and bad for jobs. Let us get rid of that uncertainty. I cannot understand why the hon. Gentleman and his friends do not want to resolve this and get on with the real debate.
Public Sector Pensions
Stewart Hosie Excerpts(12 years, 6 months ago)
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Hywel Williams
Government Members have deployed such arguments time and again, which is strange given that in other contexts, such as that of education, they always deny that they are lowering standards. It is not about levelling down, they say, but about levelling up—yet when it suits them, it is the other way around. The hon. Gentleman clearly was not listening when I made that point earlier.
Stewart Hosie (Dundee East) (SNP)
The hon. Member for Skipton and Ripon (Julian Smith) has advanced a spurious argument. There are some very good private sector schemes and some very good public sector schemes. Some private sector schemes have gone bust, and some public sector schemes require an in-year top-up. This is not about “private good, public bad”, or the other way around. It is about having good schemes, full stop. It is about fairness, and about not levelling down in either the private or the public sector.
Hywel Williams
My hon. Friend has made a good point. If Government Members are concerned about the private sector, they should be concerned about the large number of people who have no pensions at all. That is what concerns me, and concerns my colleagues.
Hywel Williams
Again, I do not want to go down that particular avenue—[Interruption.] I have some things to say that the Minister might like to listen to. My hon. Friends will be responding to his point later, but let me say now that the possibilities to which he alludes constitute a broad spectrum of theoretical options for consideration, and that the Scottish Government have expressed no preference. I am sure that others will say more about that later.
Stewart Hosie
The Minister said that a number of choices were available to the Scottish Government. As he will know, the choices are rather limited by the UK Government’s threat to withdraw £8 million a month— £100 million a year—from the Scottish budget if we do not stick to their timetable. I am sure he agrees that that rather limits the choice of manoeuvre for a Government who do not want to go down that path.
Hywel Williams
I am sure that the £100 million cut that the UK Government are dangling before them is proving very persuasive for the Scottish Government, given the difficult position that they are in. I am sure that more will be said later about that as well.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Does the hon. Gentleman not accept that the Labour-run Scottish Executive also had to make choices? When they undertook to introduce free travel for the elderly, they had to do so on the basis of the block grant, and the SNP would have to take a similar hit if they did what the motion suggests.
Hywel Williams
As my Scottish colleague says, the budget was going up then.
Iain Stewart (Milton Keynes South) (Con)
Although it is always a pleasure to follow the hon. Member for Glenrothes (Lindsay Roy), I must confess some disappointment that I have not yet heard from a member of the Scottish National party. In my short contribution to this debate, I should like to focus on what I think is the Scottish nationalists’ real motive behind the motion and the debate on public sector pension reform—their ambition for the Scottish Parliament to have full control over public sector pensions as part of its drive towards fiscal autonomy and full separation. Let me draw the House’s attention to the words last week of the First Minister, Alex Salmond:
“The way to stop this Parliament and Government being hamstrung by the policies of the UK Government is to give us the financial independence that we require in order to do that.”
That is clearly his aim. [Interruption.] And from a sedentary position, Scottish nationalist Members endorse it. That aim is at the heart of the motion.
Notwithstanding the local variation within the devolved Administrations over the administration of pension funds, to which my right hon. Friend the Minister referred, it would be a hugely retrograde step to move away from a unified United Kingdom public sector pension scheme.
Stewart Hosie
There is no unified public sector pension scheme, but there is a police pension scheme, a firefighter pension scheme, a Scottish teachers’ scheme, a local government scheme and an NHS superannuation scheme. They are all different; there is no unified scheme. The hon. Gentleman is simply wrong.
Iain Stewart
If the hon. Gentleman forgives me, I was using shorthand. I am well aware that there are different schemes for different professions within the public sector, but in a UK context they are broadly similar between Scotland and England.
Paragraph 5.26 of the Hutton report reads:
“There has been scope for some variations in terms to meet local circumstances, but the resulting pension schemes have essentially been the same as those established by the UK Government. That has, for example, helped to prevent pension terms becoming an obstacle to transfers of staff and skills within a sector of the public service. It seems reasonable to continue with this approach.”
Paragraph 5.27 reads:
“The key design features should be part of a UK-wide policy framework that extends to Scotland, Wales and Northern Ireland, with limited adaptations of other features to meet local circumstances.”
I agree with that but it would be hugely disruptive to try to break apart what has been a unified system up until now.
Iain Stewart
As I said, in quoting from the Hutton report, local variations can be provided for, and that is exactly what my right hon. Friend the Minister said. There is no inconsistency at all.
Most public sector pension schemes—with the exception, I think, of the local government one—are pay-as-you-go schemes. There is not a separate fund, a pot of money or assets that are invested and then pay out. The current pensions are paid for from current receipts and underwritten more widely by the Government, with the expectation that tomorrow’s pensions will be paid for largely by tomorrow’s contributions. With fiscal autonomy or full separation, however, how would all that be disaggregated? It would lead to an enormous muddle over who was liable to pay for what and over who would be liable for the shortfall in future pension payments accrued under the current system? Were we to move down that road, I would wish to train as an actuary, because a lot of them would make a lot of money from disentangling everything. [Interruption.] Indeed, they earn a good money as it is. But they would earn even more.
Stewart Hosie
The hon. Gentleman cannot argue that these are in-year contributions and then make the case that there is a pension pot requiring actuarial rules. There is either a pot of money that is paid for and needs to be disaggregated, or there is not, but he has just said that there is not one because it is paid for in-year. Which is it?
Mr Jones
I can do no better than refer the hon. Gentleman to the Office for Budget Responsibility, which indicated that 1% would opt out.
There is no doubt that this debate has raised passions, and that is understandable, but the Government’s aim is clear. We will do our best to ensure that public sector workers will continue to have access to pension schemes that are guaranteed, index-linked and inflation-proofed. In the current economic climate, there are many other workers who would be only too grateful to have a similar benefit. Most public sector workers will see no reduction in the pension that they receive, and some indeed will receive larger pension income on retirement than they would otherwise—
Stewart Hosie
claimed to move the closure (Standing Order No 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Oral Answers to Questions
Stewart Hosie Excerpts(12 years, 7 months ago)
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Michael Moore
I absolutely agree with my hon. Friend. The idea that the SNP can take it for granted that Scotland would enter the EU without negotiation and consideration of such issues is entirely fanciful. That is part of the uncertainty that needs to be resolved sooner rather than later.
Stewart Hosie (Dundee East) (SNP)
On 8 May the Scottish Secretary ruled out a 40% rule in a rigged referendum. He also said that the referendum was entirely a matter for the Scottish Government and that he would not be raising any constitutional questions. Does he stand by that?
Michael Moore
I do not think we should take any lessons on rigged referendums from the hon. Gentleman’s party, which is determined not to have a straightforward question on Scottish independence—the whole reason it exists—but to bring in other issues as well. Let us get a straightforward question now and end the damaging uncertainty.
Oral Answers to Questions
Stewart Hosie Excerpts(12 years, 9 months ago)
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David Mundell
I can assure the hon. Gentleman, who is a doughty fighter for Remploy, that no decisions have been made. I understand that he attended a meeting in the Scottish Parliament organised by Helen Eadie MSP that undertook to submit a response to the consultation on Remploy, and that response will be welcome.
Stewart Hosie (Dundee East) (SNP)
The Dundee Remploy factory is in the constituency of the hon. Member for Dundee West (Jim McGovern), but many of my constituents work in it. The factory makes first-class chemical and biological suits, which are required by the emergency services and the military. I urge the Minister to speak not just to the Department for Work and Pensions, however important that might be, but to the Ministry of Defence and the Home Secretary to ensure that the emergency services and the military look carefully at what Remploy produces and, in particular, the quality of the suits that the Dundee factory makes.
David Mundell
The hon. Gentleman will know that his constituency neighbour has already met the MOD, which has confirmed the high standard and quality of the work Remploy does in its Dundee factory. However, I urge the hon. Gentleman and everyone in Scotland with an interest to take part in the consultation.
Scotland Bill
Stewart Hosie Excerpts(13 years, 3 months ago)
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Stewart Hosie (Dundee East) (SNP)
I am sorry that I was not in my place for the start of the hon. Gentleman’s contribution, but I have been following most of it. I am unhappy about Members of the Scottish Parliament being named when they are not here to defend themselves. As for the three people mentioned by the hon. Member for East Lothian (Fiona O'Donnell), will the hon. Gentleman tell us whether one, two or all three of them as list members also intend to stand in the first-past-the-post election? If so, that would pose a very interesting question.
Mr Donohoe
The hon. Gentleman raises a pertinent point—one that my individual constituency voted on and came to a unanimous decision. I stress that this is on the basis of a vote only in my own constituency, but not a single person in the constituency party was in support of any added list members also standing for a particular constituency. I mentioned that earlier when I spoke about a person who came fourth in the first-past-the post election in my constituency finding herself in Parliament. That does not make sense, and I doubt whether the hon. Gentleman would say that it made sense.
Let me conclude. This is an important subject for the chattering classes, but it is not very important to the great bulk of people in Scotland—or, for that matter, anywhere in the United Kingdom. One thing is certain: electoral systems do not put food in bairns’ stomachs or jobs into the homes of people who most need them in order to put that food in bairns’ stomachs. I suggest that it is therefore more important for us to argue against and probe Ministers daily on the state of the economy. However, we are where we are; and we are debating what we are. That is why I thought it right to table these two new clauses for debate.
I want fairness: it is something I came into politics for. I have always believed in fairness and I believe there is no doubt, as conceded in this debate, that there is no accountability for these list members. My two new clauses thus have considerable merit, but I shall listen carefully to how the debate continues.
Michael Connarty
I am not giving way yet.
If this is about the electorate—I hope it is, rather than about the manipulation of party machinery—it is important that the electorate know who is representing them. The system at the moment is not clear—indeed, it is deliberately confusing for the electorate. It has nothing to do with the intelligence of the electorate; it is a matter of how all the political parties use the list system. We should genuinely consider moving to a system that can be recommended for its clarity. Having two constituency Members for the Scottish Parliament and one Member for this Parliament would be correct and clear, and people would like it.
What has happened is that people in this place do not care whether the electorate like it or not. This is the key point: they do not treat the electorate properly. I have to say that the SNP argument is completely flawed. It has nothing to do with whether SNP Members respect the electorate; it is about whether their party can get an advantage out of it. It is the same with all minority parties. If my party acts in the same way, it is equally wrong. I therefore believe that new clause 1 deserves serious consideration and support. If parties want to top up to a certain number because they cannot run the place without 129 Members, that is where the additional Members should come from. We should call these people what they are—party-nominated Members. That is what happens in Germany: people are nominated by their parties to appear on the list to stand for Parliament or for the European Parliament. People are clear about what they are getting, but what they are not getting is representation.
On new clause 2, the use of resources must be controlled in some way. In Scotland, people are running party machinery in constituencies using the list system resources. To have an office in Whitburn, someone should be representing all the Lothians. For that office to be used only for one Member who is trying to become the first-past-the-post Member for the Linlithgow constituency is the wrong use of resources—and we must find some way of controlling that.
Stewart Hosie
The hon. Gentleman makes that allegation, so can he confirm that this is a parliamentary office for list Members and not a party office?
Michael Connarty
My understanding is that it is an office used by the Member of the Scottish Parliament, who happens to be the person who keeps standing for election to the constituency under first past the post. That may be coincidental; it may be that it is so difficult for the other Lothian Members to get public transport from the centre of the city to the office that they use it solely as a telephone base.
It is important for us to bear in mind the aspiration of the House of Commons that list Members should represent a party that will use them in a way that bolsters the process in the Parliament, rather than shattering and scattering them throughout Scotland and sending them scurrying after votes in the hope that they might at some point secure a first-past-the-post seat, or perhaps secure some proportional extra seats for their party by being seen to be more active. That is not the vision that I was sold in the Scottish Constitutional Convention, it is not the vision that was presented here, and it is not the vision conveyed to me by Scottish National party members at that time. Why are SNP members now willing to accept a second-class option rather than delivering what we promised to the people of Scotland?
Stewart Hosie
I asked a simple question. I will repeat it. Is that office a list parliamentary office paid for with parliamentary resources to enable list Members to do their parliamentary work, and is it within the region to which they are elected?
Stewart Hosie
Is that not the argument that was being used earlier: that losers can become winners? Why would a Labour Member make that case, when the Minister is explaining that that is precisely what the Labour party is now doing?
Jacob Rees-Mogg
I thank the hon. Gentleman for an extremely helpful intervention. It missed a key point. Indeed, the hon. Gentleman may wish his hon. Friend the Member for Na h-Eileanan an Iar to withdraw his new clause.
The Crown Estate’s income was not given away in perpetuity in exchange for the civil list; it is given reign by reign. That started in the time of George III, who was a bit hard up at the time. He needed the money. Parliament had, and of course still has, tax-raising powers. In exchange for the Crown Estate’s income, George III accepted the civil list. That continued during the reigns of George IV, William IV, Queen Victoria, Edward VII and George V, the brief reign of Edward VIII and the reign of George VI, and it continues during the reign of our present most glorious sovereign. However, it is not a permanent settlement.
Any step that undermines or changes the Crown Estate should be taken with the greatest caution. I hope that the day never comes, but if we were to have another sovereign, that sovereign would be entitled to claim the Crown Estate for himself. If we had introduced measures that took it away, we would have broken the bargain that was made in the reign of George III and has been renewed in subsequent reigns. We should be extremely wary of interfering with a system that has worked so well.
I also want to deal with the attack on property rights, which are the fundamental basis of a free society and the rule of law. I know that some hon. Members like me to dwell on history occasionally. We know that rights of property have been established in this country since 1189—
Jacob Rees-Mogg
This country, England, which is where we are now. Those rights of property, established in this country, England, were passed to Scotland by virtue of the Act of Union. It is well established that the combination of Parliaments that resulted in the inheritor Parliament—this Parliament—merged the benefits of the two earlier Parliaments. The rights of property that we enjoy are the foundation of our free society.
Stewart Hosie
The hon. Gentleman is making an extraordinary speech. I have received an e-mail from a colleague who has been watching it and who describes it as “epic”. It certainly is, in an 1842 kind of way.
However, I have a question for the hon. Gentleman. He talks of “rapacious socialism” and of the seizing of land. The Land Reform (Scotland) Act 2003, which came into being after the establishment of the Scottish Parliament, allows those on estates to buy the land on which they live. Would he wish it to be repealed to protect what he views as the property rights that he is defending?
Jacob Rees-Mogg
Had I been a Member of Parliament at the time, I would have opposed leasehold reform. I thought that it was an outrageous attack on property rights, and I would have taken the same view had I been a Member of the Scottish Parliament. I think that property rights are of overwhelming importance, and that the new clause is genuinely dangerous in seeking to undermine them.
As I was saying, my three reasons for opposing the new clause are the attack on property rights, the attack on the Crown—that mystical union of Crowns that we have had since 1603—and the loss of revenue for the English. I feel that I must stand up for the people of North East Somerset. They do not benefit from as much spending per capita on the health service, the police or education as those north of the border. I accept that, because I believe in the Union and I think it a price worth paying, but the price must be fair. The revenues that are ultimately the revenues of the state must come centrally, and must be shared out proportionately. When the Scots start asking “Why do we not have Crown Estate revenue for the territory and the sea around Scotland?”, I may respond by asking why people living in London do not say “We will have the revenues from the Crown Estate in London, and we will not allow any subsidy to be given to Scotland.” That, I think, would make the Scots rather upset. A good deal more money comes from places such as Pall Mall, which is owned by the Crown, than from the seashore.
Scotland Bill
Stewart Hosie Excerpts(13 years, 3 months ago)
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Pete Wishart
That answers one of the questions that I was going to put to the Minister, which is when are we going to see those amendments? How are they going to be introduced? If they are all to be tabled on Report, we will need a little more time to discuss them than is currently available. It would be unacceptable for them to be tabled in the unelected House of Lords. It is the responsibility of directly elected Members of Parliament to discuss those issues, and we should have the opportunity to do so. Those amendments should not be tabled in the House of Lords; they should be discussed on the Floor of this House. We should also have more time on Report, if that is when we will see those important amendments arising from the Scottish Parliament’s Bill Committee.
Stewart Hosie (Dundee East) (SNP)
My hon. Friend will have noticed the Minister saying that there would be time later—perhaps on Report—for the consideration of any amendments that follow the LCM Committee’s recommendations. However, during earlier exchanges the Secretary of State was nodding when my hon. Friend was confirming that the Government would not be bound by the LCM Committee’s recommendations. Will he now press the Government to confirm that if the LCM Committee proposes serious amendments or makes recommendations that would improve the Bill, they will accept them?
Pete Wishart
My hon. Friend poses an important question for the Minister. That is what we need to hear: are the Government of a mind to accept those recommendations? [Interruption.] The Secretary of State is saying no. That is very clear. This is not an issue just for me; it is an issue for all my colleagues in the Chamber. This was supposed to be a process that started in the Scottish Parliament, but now that recommendations have been made, the Secretary of State is saying that he is not of a mind to accept them all. Perhaps he could give his view on what he is prepared to bring forward and what he is not prepared to bring forward.
David Mundell
I note the hon. Gentleman’s comments, but I believe that we can all play a role in ensuring that it happens through the force of our argument. Again, I invite colleagues to join me and others at the meeting with the chairman of the Interim Electoral Management Board.
Stewart Hosie
The Minister is doing a stoical job in trying to defend the indefensible, but the right hon. Member for Stirling (Mrs McGuire) is right. Notwithstanding the fact that we want everything devolved, not just the administration, the clearest signal that we are backing public opinion in wanting an overnight count would be voting for amendment 10 and allowing the Scottish Government to make the decisions thereafter.
David Mundell
I do not know why I should be surprised at the SNP’s voting against more powers for the Scottish Parliament in an attempt at gesture politics, in which its specialises.
The SNP referred to new clause 5, on which we will vote on the third day of Committee proceedings. That would give the Scottish Parliament full legislative competence for the Scottish Parliament elections. That goes far wider than the Calman commission’s recommendation to devolve only the administration of elections. The Government gave careful consideration to the extent of the powers to be devolved on the evidence provided to the commission, and we believe that the proposals in the Bill strike the right balance. Devolving elements of responsibility for the administration earlier, as was outlined earlier, is consistent with the Calman commission’s principle—
David Mundell
This will not be the first time during the Committee’s discussions that I refer to the fact that the SNP declined to take part in the deliberations of the Calman commission, and indeed set up its own national conversation. Many issues on which SNP Members now claim outrage could have been fully debated if they had raised them at that time. The Bill is based on the recommendations of the commission.
Stewart Hosie
The Minister says that the SNP declined to take part in Calman. He will, I am sure, want to confirm for the record that the Government refused to accept all the Calman recommendations, and that the Bill does not go even as far as Calman suggested it should.
David Mundell
Given the hon. Gentleman’s thorough research into all matters on which he speaks, I am sure he has read in detail the Command Paper that accompanied the publication of the Bill, in which the Government set out their response to each and every Calman recommendation, and how, whether in legislation or otherwise, those are being taken forward.
Government amendment 29 to clause 3 is technical and ensures that when Scottish Ministers make orders about the administration of Scottish Parliament elections, they can include the type of technical supplementary provision set out in section 113 of the Scotland Act 1998. For example, Ministers could make different provisions for different purposes or make consequential or savings provisions. The amendment also ensures that any criminal penalties imposed in such an order are subject to the appropriate limits. It gives Scottish Ministers the same supplementary powers and constraints as currently apply to the Secretary of State when he makes provision on the administration of Scottish Parliament elections.
I commend clause 1 to the House and urge the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) to withdraw his amendment.
David Mundell
As I have suggested—as have the “secret” ministerial statement the Secretary of State made last week, the “secret” LCM Committee report, and the “secret” clauses that are on the website—the coalition Government are engaged in consultation and dialogue on these clauses. Indeed, so generous are we in that regard, that we will even take on board in our considerations the points the hon. Gentleman makes on these matters, but these amendments are not being moved at this stage. There is a further very significant point, which I would have thought would have satisfied the hon. Gentleman given the respect he has for the Scottish Parliament and its views: a further LCM would be required from the Scottish Parliament if significant amendments were being made in relation to section 57(2).
Stewart Hosie
Given the time scales, will it in fact be the next Scottish Parliament after the election in May that will have to consider a further LCM, were one to be requested if such amendments were going to be considered?
David Mundell
The hon. Gentleman is very astute: yes, there will be a Scottish Parliament election on 5 May, and, yes, the current Parliament will be dissolved on 22 March. It is therefore very likely that there will be another Scottish Parliament in place, but this coalition Government respect that Parliament and whatever Government emerge of whatever political colour, and we will engage in a constructive dialogue with whoever is in power in Holyrood.
On the Opposition amendments, currently entire Bills of the Scottish Parliament can be delayed, possibly for months, should just a single provision be referred to the Supreme Court to determine whether it is within legislative competence. Clause 7 of this Bill will amend the 1998 Act, not in the nefarious way the hon. Member for Perth and North Perthshire (Pete Wishart) suggests, but in a positive way, to prevent unnecessary delays to Bills where the majority of provisions are considered to be within the competence of the Scottish Parliament. The affected Bill would be submitted for Royal Assent by the Presiding Officer, while the disputed provisions would not come into force until the Supreme Court had reached a decision and Scottish Ministers had made the appropriate commencement order. The UK Government believe this is the most appropriate and sensible method of helping to ensure that the work of the Scottish Parliament runs as smoothly as possible. Members will wish to note that the Scotland Bill Committee in the Scottish Parliament accepted this provision, but asks for consideration to be made of the legislative procedure used. We will review that recommendation carefully.
The amendments would require the Law Officer making the limited reference, in addition to the Presiding Officer, to publish notice of the reference in the Edinburgh Gazette and also in the London Gazette and Belfast Gazette. Clause 7 already requires the Presiding Officer to publish notice of a reference in the Edinburgh Gazette and in such other ways as he considers appropriate. It does not prevent the Presiding Officer from publishing notices in the London Gazette or Belfast Gazette, or in any other paper or on any website, or in any other way he should wish—even secret ones.
David Mundell
I acknowledge for the record that the vote took place, but I also point out to the hon. Lady annex A, where the minority views on the issues on which her colleagues felt particularly strongly are set out, clearly stating their disagreement.
Stewart Hosie
This is not good enough. The Minister said that the Bill Committee was unanimous, but the footnote makes it clear that it was not—there was a division and a split vote. Will he now take the opportunity to correct what he said so that the Committee is not inadvertently misled by his earlier remarks?
Stewart Hosie
That answer was interesting. Presumably it means that BB weapons, such as those that have been described, are not covered by the legislation, in terms of being devolved to the Scottish Parliament. Will the Minister confirm that that is the case?
David Mundell
My understanding is that the Scottish Parliament would at this stage be able to take forward its own proposals in relation to a gun or implement of that type. As I understand it, we are not at the stage of having a definition for the weapon in relation to the incident, but there are implements of that nature for which the Scottish Parliament already has the power to make provision, as the hon. Gentleman knows.
Stewart Hosie
Further to that point of order, Mr Benton. The Minister has generously offered to e-mail those secret amendments to the Front-Bench spokesman of the Labour party. I take it that he will want to communicate with the whole Committee, so placing the amendments in the Library would be more helpful.
David Mundell
I am happy to accede to that request, Mr Benton.
Clause 12
Insolvency
Question proposed, That the clause stand part of the Bill.
Scotland Bill
Stewart Hosie Excerpts(13 years, 5 months ago)
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Michael Moore
I would not characterise those discussions as negotiations per se, but people have certainly been raising possibilities in connection with what taxes might be suitable for other parts of the United Kingdom. As I have said, our proposals in the Bill are founded on careful consideration, and on impressive and important academic research that made it clear that if we wish to preserve the United Kingdom—I understand that the hon. Gentleman does not—we should ensure that, in increasing accountability in Scotland, we focus on income tax rather than corporation tax, and I am satisfied with that.
Stewart Hosie (Dundee East) (SNP)
The Secretary of State says that all this is part of defending the Union. Obviously his colleague Tavish Scott would share his view, but in his submissions to the Steel commission and then the Calman commission he suggested devolving
“income tax; corporation tax; fuel duty…tobacco and alcohol duties; betting and gaming duties; air passenger duty; insurance premium tax; climate change levy and landfill tax; inheritance tax; and stamp duties”.
Surely the Secretary of State does not disagree with his own colleague in the Scottish Parliament, does he?
Michael Moore
What I absolutely agree with is the process that we went through as three different parties that came together in the Calman commission, examining the options, scrutinising them and coming forward with a balanced set of proposals. We look forward to seeing fully costed proposals from the hon. Gentleman and his colleagues. They have had months to produce them— indeed, years—but as yet we have seen nothing. That is something that the House will note and that will perhaps reduce the bluster on the part of some.
Michael Moore
I respect the hon. Gentleman’s interest in these matters and I commend the way he has followed devolution developments over the years. The primary responsibility for accountability is to the Scottish Parliament. Governments of different hues have gone before the committee system and made statements in the Scottish Parliament; there are 129 Members of the Scottish Parliament and that is their primary function. Ultimately, as in this House, all are accountable to the electorate. What we are trying to do with accountability in this Bill is enhance the financial powers so that parliamentarians in Scotland can be made accountable not just for the spending decisions, but for the tax-raising decisions that precede them.
Let me finish my point about the Barnett formula. We do not intend to alter it or review its arrangements at this time. Nothing in the Bill, however, prejudges future changes to the funding formula. Rather, the Bill’s effect will be to make the Scottish Parliament more reliant on its own revenues and less reliant on the block grant to fund public spending in Scotland.
Stewart Hosie
In the Secretary of State’s comments on the Barnett formula—before the interventions—he said that he would not seek to change it until the economy has returned to rude health. I presume by that he means that this Government’s priority is to tackle the deficit. I see him nodding to that. It worries me slightly, then, that the additional capital borrowing powers require a consent per project, so will the right hon. Gentleman confirm that when a good, sensible, costed project comes up looking for additional capital consent, this Government will not use the excuse of the deficit in order simply to say no?
Michael Moore
I respect the thoroughness with which the hon. Gentleman usually approaches such matters, and he has clearly spotted the bit in the Command Paper that says that, as of 2013, we will introduce the new capital borrowing powers. In the first couple of years, there will be additional Treasury constraints in relation to the feasibility and appropriateness of projects, as a precursor to those capital powers being fully available, in 2015, to the Scottish Parliament and the Government formed from it.
Stewart Hosie
The Secretary of State has not quite given me the assurance I seek. The Command Paper also says that the powers will be subject to Her Majesty’s Government limits and controls. Will he confirm that the Government will not use their deficit consolidation plan as an excuse to say no to important new capital investment?
Michael Moore
I hoped that I had been clear, but I am happy to refer the hon. Gentleman back to the Command Paper, which is crystal clear on the availability of those powers from 2013, on the annualised basis set out. When the right projects are brought forward—as he and I seem to agree on this occasion, such projects will be those that help growth—such consent will not unreasonably be withheld. I hope that that reassures him.
Aside from the Government’s proposals, another set of financial arguments has been put forward as an alternative to the measures in the Bill. In recent months, there has been some discussion in the Scottish Parliament and the Scottish press about other approaches to fiscal devolution, and specifically about the idea of fiscal autonomy. However, its proponents have failed to come up with any credible proposals, or indeed any detailed proposals at all, while the economic arguments advanced in support of fiscal autonomy lack any firm evidence to support them.
Stewart Hosie
This is ludicrous. The Scottish Government have published the document, “Fiscal Autonomy in Scotland: The case for change and options for reform”. Saying that no work has been done is neither helpful nor accurate.
Michael Moore
The essence of debates in the House is that we are allowed to have opinions. I carefully used the word “credible”, and credibility is lacking in the Scottish Government’s proposals. The desperate efforts to undermine the proposals in the Bill have now been exposed for what they are.
Pete Wishart
And the Secretary of State accuses me of being selective! It is not possible to be more selective than he has just been.
We will never agree on these issues. What we have seen as a result of the work of the Scottish Government is an £8 billion loss to the Scottish budget since devolution in 1999. The Secretary of State, making the same assumption, said that £700 million would be lost to the Scottish people over the past 10 years. That is unacceptable to us, and we will have nothing to do with it.
Stewart Hosie
I think that the Secretary of State is confused. He has talked of basing the figure on a single year, which was the worst year, and has said that there would not be an £8 billion shortfall. Of course he is right, but no one has ever said that. We are talking about the cumulative impact had the Bill been in operation between 1999 and 2011-12, not 2014-15. I am disappointed, because the Secretary of State is normally fair, but on this occasion he has failed even to understand the argument that has been advanced against him.
Pete Wishart
I am grateful to my hon. Friend, who knows about these issues and understands the difficulties that the Bill would create.
Why are we giving the Scottish Parliament new fiscal responsibilities that would damage it? That is one of the proposals that we will seek to correct during the Bill’s passage. We will be making suggestions about how it could be dealt with. We are prepared to work with the Government, because we want to improve and strengthen the Bill. We want to make it a powerhouse Bill that will serve our nation and be a credit to the communities that we serve.
As we have heard, the Bill has already been debated in the Scottish Parliament, and has been subject to what has been described as an independent Bill scrutiny Committee. I certainly hope that the proceedings in the House of Commons will be a bit more useful and relevant than what we have seen in the Scottish Bill Committee thus far. We have seen a Labour convener haranguing and harassing independent witnesses, as a result of which several have decided not to take part in the proceedings because of what they feel is an in-built bias. The Scottish Bill Committee seems to be more interested in considering options that are not even in the Bill than in examining the dangerous tax plans that it contains. I hope that we can do a bit better than that down here, Madam Deputy Speaker. As you know, and as we are already observing, Scottish debates in the House of Commons are always characterised by their good nature and conviviality.
Mrs Laing
I entirely agree with my hon. Friend and I am grateful to him for making that point at this stage in the debate. I am glad to say that he is something of an expert on this subject, having been steeped in it for many years. He is absolutely right; it is also very important, for the reasons he has just stated, that we keep the Barnett formula. That is the way to protect the people of Scotland not from the effects of the Conservative-led coalition but from the effects of 13 years of Labour mismanagement of the economy.
Stewart Hosie
I am grateful to the hon. Lady, who is sadly wrong, as is her hon. Friend the Member for Milton Keynes South (Iain Stewart). Barnett is of course a convergence formula and, far from protecting in the way that the hon. Gentleman suggests, it squeezes. More importantly, the hon. Lady was making the case that we should not do things differently, but of course that is the nature of devolution. If the Scottish Government had proper fiscal and economic control, they could well take steps different from those taken throughout the UK to protect and grow the economy. What would be so wrong with that?
Mrs Laing
That is exactly why the provisions of this Bill, which give more accountability and power to the Scottish Parliament, are absolutely right. The hon. Gentleman makes a good argument in favour of the Bill.
Until a few moments ago, I was going to say that it is good to see such cross-party consensus on the Bill. Of course, we have cross-most-party consensus, but not consensus with those in the Scottish National party. We understand that however much they seem to be stepping back from their long-held belief that we ought to move towards an independent Scotland—I do not understand why they do not have the courage of their convictions and go ahead and ask the people of Scotland—they want to go on a different path from the rest of us on protecting and helping Scotland, and giving it the best chance for the future.
I want to pay tribute to Donald Dewar, who did a wonderful job in setting up the Scottish Parliament. That was not what I said in 1997 and 1998 as we debated the original Scotland Bill for hour after hour, day after day and week after week. It was strange that the hon. Member for Perth and North Perthshire said at the beginning of his speech that this Bill would not be properly scrutinised. I can assure him that those of us who spent weeks and months scrutinising the Bill that became the Scotland Act 1998 will find this nice little Bill a piece of cake in comparison. Of course it will receive proper scrutiny.
Back in 1997 and 1998, we properly scrutinised the Scotland Bill. Many of us said over and over again that the devolution settlement that was being created would not work in the long term and would have to be amended and improved. I am very pleased to see this Bill make the improvements that some of us have thought necessary for a long time.
Malcolm Bruce (Gordon) (LD)
I am very happy to follow the hon. Member for Glasgow North (Ann McKechin), who made a fair analysis of the co-operation and consensus that have characterised the process over many years. She presented a constructive role for the Opposition, as is right and proper, in scrutinising and trying to improve the legislation, and in addressing some of the issues. I certainly hope that matters are proceeded with in that spirit.
I am very happy also to welcome the Bill, as someone who has been involved in the process since its very early days—indeed, for 25 or more years. Frankly, however, I see it as a further step along the way to home rule within the United Kingdom. I never thought, any more than others did, that the Scotland Act 1998 was the end of the process; most of us recognise that the constitution is evolving. The first Act, which established the Scottish Parliament, was seminal legislation, but it was always work in progress, and this Bill falls into the same category.
I hope that my right hon. Friend the Secretary of State for Scotland does not find any discomfort in that, but I completely understand that his role in government, operating on an agreed cross-party consensus, is to put forward a Bill that commands the support of the House and the Government and does not prevent any of us from arguing the case for further reform and development. That puts the SNP in a difficult position, but that is precisely where it wants to be.
For many of us who have been through this debate a few times, my previous point might sound ponderous, but we are making history because we are shaping the evolution of the United Kingdom’s constitution, and this stage will be monitored for many years to come as one of the stages along the route. It will represent the foundation of a much more radical and decentralised United Kingdom over time.
Stewart Hosie
I respect the right hon. Gentleman’s view that this is a process, and that he wants to reach what he calls home rule within the UK. I suspect that that probably means, in his mind and those of his honourable colleagues, effectively a federal position with full fiscal autonomy. I respect that position, but we do not have that before us, so why is he prepared to settle for a Bill that, while devolving speed limits for cars, will not allow the devolution of speed limits for cars drawing caravans? Why is he prepared to accept something so weak?
Malcolm Bruce
If the hon. Gentleman will let me proceed with my speech, he will receive the answer, precisely because I took part in the constitutional convention when it was set up in the 1980s. At that time, we and the Labour party were in opposition, but the Conservative party largely ignored the convention and the SNP boycotted it. Yet that constitutional convention carried out detailed and thoughtful work that laid the foundations for the first Scotland Bill and, in my view, for this Bill and probably the next one. The difference between my party’s approach and that of the SNP is that we, as a single party with an ambition, recognise that we cannot achieve on our own everything that we want; we have to work with others who do not necessarily share all our views. By working with them, however, we can progress towards what we want to achieve; if we refuse to co-operate, we cannot.
Malcolm Bruce
I shall make a little progress, if the hon. Gentleman will allow me.
At the time when the constitutional convention was established, there was a minimalist position. Many people in the Labour party were prepared to consider an assembly. I accept that many were passionately in favour, but others had reservations, and the minimalist position involved an assembly, elected by first past the post, funded by a block grant and operating with even fewer powers than the then Scotland Office.
The process—this is the real point that the SNP should take on board—of the constitutional convention meant that we finished up with a Parliament, with all the powers of the Scotland Office at that time, with a proportional voting system to make it much more nationally acceptable and, in fact, with non-defined reserved powers attached to the Parliament. That was a much more radical outcome than the original agenda, and one that would not have been achieved if my party and others had not engaged. At the time, I challenged the SNP to take part, because I wanted it to be there, knowing that it wanted independence but accepting that the party probably would not get it. The SNP’s involvement, however, might have helped us to gain more powers than we did. That is why I continually regard its all-or-nothing approach as damaging to Scotland and, ultimately, to the party’s own interests.
We got quite a lot of agreement, and that is relevant to this debate. Indeed, I think we got agreement in the convention on tax-raising powers, but they did not follow through into the original Scotland Bill. I remember that Donald Dewar even renewed his passport to travel to Germany, and Jim Wallace, Ray Michie and I went to Spain to look at that country’s arrangements. On our return, we more or less agreed on the proposal to assign half of all income tax revenues, and VAT and excise duties, to the Scottish Parliament. The fact that those proposals did not carry through into the first Scotland Bill—I think; I suspect—owes a lot to the resistance of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). The convention largely agreed to them, however, so I am particularly pleased that the Bill before us moves in that direction and will allow them to be introduced.
I also firmly believe—the Scottish National party ought to give thought to this—that those of us who have brought forward and will take forward this legislation are working with the grain of majority opinion in Scotland, in terms of wanting both more power and a step-by-step approach. Those of my constituents who are sympathetic to the SNP cause are puzzled as to why it cannot work with other people and take a step-by-step approach. We could all decide at what point we wish to get off, but that does not happen because the SNP knows that the majority of people in Scotland would get off long before it did.
Stewart Hosie
The right hon. Gentleman makes the interesting assertion—it is only an assertion—that he believes he is working with the grain of Scottish public opinion. I doubt that a single person has said to him, “That’s right Malcolm, we want 50% of the basic rate of income tax, 25% of the 40p rate and 20% of the 50p rate—that’s the grain in my street.” I do not think he is right when he says that.
Malcolm Bruce
No, but people have said to me, “I want independence, as long as I can still be a British citizen.” There is confusion in the minds of many people about what independence is. Two facts are clear: the majority of people vote for Unionist parties, and the majority of people say repeatedly that they want more power, but that they want to take it in an orderly and measured fashion. It is up to the politicians, to some extent, to work through what the priorities are and how they should be worked up. That is precisely what this legislation does.
In the end, the SNP’s position is anti-democratic, because it does not represent the majority. More to the point, it is unproductive. Frankly, it is downright lazy, because many of us have done an awful lot of work to bring these proposals forward. Having done nothing to create the Scottish Parliament, the SNP is happy to use it and abuse it. It takes a similarly curmudgeonly approach to this legislation. Of course it will not provide fiscal autonomy, which is, of course, a technical term for separation from the UK, as was pointed out by the Steel commission, of which I was a member. There is no mandate for that. The proposals do not go as far as I want them to go, but I have no hesitation in welcoming them as a constructive step forward that will allow us to test how greater responsibility and accountability will work. In my view, as and when that does work, it will justify future extension.
The Bill will give Scotland control over about 35% of its budget, which I hope will increase over time. It will ensure that Scotland has the capacity to demonstrate responsibility and accountability to justify more devolution. In an ideal world, I would like each tier of government to have access to part of the taxes that broadly finance its operations. In other words, each tier should be able to get more or less all its revenue from its own tax base, subject to the recognition that the UK Government have fiscal transfer responsibilities. Perhaps on a smaller scale, the Scottish Government should have some internal fiscal transfer responsibilities. That would be my ideal in the long run, but one has to take these things a step at a time and by negotiation.
I want to pick up on the point on which the Secretary of State has intervened two or three times. On a few occasions, I have heard the assertion—stated as a matter of absolute fact—that had this arrangement already been in place, Scotland would have lost £8 billion. As has been pointed out, if that were true—which it is not—it would be a clear demonstration of the benefit of being part of the United Kingdom, because that £8 billion would have been a transfer from the UK taxpayer to Scotland. Of course, the assertion is perverse nonsense. It is also retrospective, at a time when the balance is changing. It showed that, at a time of rising public spending, the Barnett formula delivered for Scotland at a faster rate than the rate at which incomes rose. Of course, at a time of public spending constraint, the reverse will be the case—the income tax take will rise faster than the Barnett formula consequentials. Over time, that can be averaged out—that is what the cash borrowing is for. That is the way that we should look at it.
The proposals give the Scottish Government the capacity to benefit from economic success, which grows the tax base and can potentially grow the revenue base. If they use their powers well, they will benefit from the buoyancy of the revenues. Of course, if they mismanage the economy, the reverse will be the case. The advantage of the Bill is that the transitional arrangements and the cash borrowing adjustments will provide a cushion to minimise the extremes of that effect. However, they will not deny a bit of pain if it goes wrong and a bit of benefit if it goes right. Over time, one hopes that that will become a more substantial amount.
Stewart Hosie
The right hon. Gentleman is simply wrong about this matter. Although the Scottish Government will control 15% of the taxes raised in Scotland, if GDP rises and the tax take rises, the rise in the income tax take will be lower than the average. That will have a deflationary effect on the Scottish budget and will not allow the Scottish Government to benefit in the way that he describes.
Malcolm Bruce
On the models that I have seen, the reverse is the case, particularly at a time of public spending constraint. The point is that it will depend on changes over time—some years it will be up and some years it will be down. However, the proposals provide the potential for successful economic management to provide genuine benefit.
I would give more credibility to the SNP claims that the measures are inadequate to grow the Scottish economy if its record in government showed that it was using the powers it currently has in ways that will grow the Scottish economy, but it has not done that. We have seen a succession of populist consumer gimmicks; almost a complete collapse in public investment; and the slow strangulation of local autonomy. Local councils have less and less control and more and more centralised management through the freezing of council tax. There is effectively less flexibility across Scotland to gear responses to meet local needs.
Mr Weir
The right hon. Gentleman has just made an outrageous attack on the subject of rail. He should ask the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) about the reopening of Laurencekirk station, for example. What about the Bathgate rail line? What about the Alloa-Stirling line stations? All those things happened under the SNP Government. What he said is simply incorrect.
Madam Deputy Speaker (Dawn Primarolo)
Order. Mr Hosie, I think that is my business, not yours, and I would be very grateful if you did not shout across the Chamber.
Stewart Hosie
The hon. Gentleman is wrong. Any country will see its tax revenues fall or rise with the economic cycle—the one that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) said he had ended. The difficulty with the proposals in the Bill is not that tax revenues may go up or down, but that they embed a deflationary bias in the Scottish budget.
Graeme Morrice
I am obviously aware of the objection to the Bill from the SNP—it is an objection that we often hear—which is that it would mean less money for the Scottish Parliament. Indeed, the First Minister claims that the Scottish budget would have been considerably worse under Calman, compared with the current regime, yet Alex Salmond refuses to publish the numbers setting out what his plans for fiscal autonomy would have meant for the Scottish budget in the last 10 years.
Iain Stewart
As I said to the hon. Member for Angus (Mr Weir), if the hon. Gentleman allows me to make a little progress, I will come to the issue of full fiscal autonomy in a moment.
Clearly, the existing Scotland Act contains some fiscal powers for the Scottish Parliament: principally, the ability to vary the basic rate of income tax by 3p higher or lower than the UK rate. That has never been used, partly because the SNP Administration in Edinburgh has allowed the levy required each year for the mechanism to stay in place not to be paid. There is a more fundamental point, however: the administrative and set-up costs for making that small change in the income tax rate are disproportionate to the revenue that would be raised.
When the House was considering the Bill that became the Scotland Act 1998, it was calculated that it would raise, at the most, an additional £450 million. Given a total Scottish Office budget of over £22 billion, it was a tiny measure and would involve considerable start-up and administrative costs and not generate enough revenue. I can understand why it has not been introduced so far.
Stewart Hosie
The hon. Gentleman talks of the amount that might be raised if the tax rate were put up. There is, however, a built-in perverse disincentive to lower the tax rate. If the income tax rate, for example, were lowered and that stimulated economic growth, and if the benefit were paid from higher corporation tax receipts, the Scottish Parliament would take the hit of reduced income tax, while the United Kingdom Government would gain the advantage of enhanced corporation tax.
Iain Stewart
I am explaining why I do not think the provisions in the current Scotland Act are sufficient, and why I welcome the measures to increase substantially the power of the Scottish Parliament to raise a significant chunk of its own revenue. There are still concerns about how they will be implemented, and I raised that point during Scottish questions yesterday. I have been reassured that proper consultation is taking place with members of the business community in Scotland, who will have to administer many of the new arrangements, but I urge my colleagues on the Front Bench to keep a close watch on the increased regulatory burden on businesses at a time when they can ill afford much additional bureaucracy.
I think the HMRC bodies should consider the possibility of certain unintended consequences. There is, for instance, the question of how payments into personal pension plans which attract the adding back on of basic or higher-rate tax contributions should be treated. If in the past contributions have been made at the United Kingdom rate and added back on, a different Scottish rate will create potential anomalies when it comes to how that income is treated. I suspect that a fairly small amount is involved overall, but it is an important detail that ought to be clarified before the Bill is implemented.
I welcome the move to devolve some taxes, and I hope that more can be devolved in time. I hope that, for instance, the issues surrounding the aggregates levy and air passenger duty issues will be resolved. I do not believe that this is the end of the story; I trust that those two taxes will eventually be devolved, and that the Scottish Parliament will be given greater fiscal autonomy.
I referred earlier to the book that I co-authored. Part of our research involved international comparisons.
Iain Stewart
Thank you, Madam Deputy Speaker. I sense a rising demand for my book. Next Christmas is a little way off, but I have a couple of boxes of back copies which I will happily distribute.
As I was saying, part of our research involved examining the way in which other countries—Australia, Germany and Canada—operated financial relationships between state Governments and federal Governments, or provincial Governments, or whatever the term was in those countries. What struck us was that each of those countries has a system that comes close to what the Scotland Bill is proposing to introduce. Certain taxes are levied at the federal level. The example in each country varies, but some taxes are levied at the provincial level—the state level—and sometimes the state level has the power to introduce specific taxes of its own. That is balanced by a form of fiscal transfers between the federal level and the state level. There are perpetual arguments in all those countries about what the right level of spending, taxes, transfers and so on is—we will never get away from those—but on the whole the arrangements are stable. We can draw some comfort from the fact that the lessons from abroad point to the sort of system that the Bill is trying to introduce.
Conversely, there are few examples of a federal or devolved system of government where the lower level has full fiscal autonomy. Our research encountered only one example that came quite close to such an arrangement, which was in the Basque part of Spain. Since we did our work Catalonia has also adopted such an arrangement, but it is still fraught with difficulties. I do not believe that there is sufficient evidence from abroad to warrant the type of policy that the Scottish nationalists wish to introduce.
Stewart Hosie
The hon. Gentleman says that the approach of the Basque country and others may be fraught with difficulties, but that country’s gross domestic product growth is now 30% higher than that of Spain as a whole and its credit rating is stronger than that of Spain as a whole. Although that sort of model may need to overcome obstacles, it clearly has had some success.
Iain Stewart
The hon. Gentleman has a more detailed knowledge of the current state of the Basque economy than I do, but our research showed that there were specific problems there. I shall discuss them in a moment, as they are directly relevant to the example in Scotland.
Iain Stewart
I am grateful for that intervention. I think it is unhelpful to make an exact analogy with a particular model. Spain has a very curious multi-speed system of devolution between its different constituent parts.
I promised to discuss why I do not believe, certainly at this point, that fiscal autonomy is feasible or desirable for the Scottish Parliament. There are huge unknowns in the fiscal relationship between Scotland and England, for the simple reason that we have never assigned tax revenues or allocated public spending on a straight territorial basis—that just has not happened. As part of our research for the book, I spent many hours enjoying and analysing the various forecasts and documents that the Scottish National party had published over the years giving its view on what Scotland’s net contribution to or net borrowing from the United Kingdom had been.
Part of the SNP’s criticism was that the official Government figures, as published in the annual Government Expenditure and Revenue Scotland survey, were based on assumptions about what Scotland’s share of corporation tax or income tax should be. However, the SNP’s own figures are based on assumptions and projections. They disagree with the assumptions made, but they could not analyse particularly and exactly what the Scottish revenues were.
Iain Stewart
Before the hon. Gentleman intervenes, I wish to illustrate that point by discussing two SNP publications that examined the period between 1979 and 1997. In one document, published in October 1996, the SNP estimated that Scotland had contributed £91 billion to the UK over that period. Three months later, however, it published a separate report covering the same period which calculated that the figure had been £27 billion. Well, what is £60 billion between friends? The point is that anyone wanting to analyse this has to do it on the basis of assumptions, not hard facts.
Stewart Hosie
I certainly agree that the Government Expenditure and Revenue Scotland—GERS—survey is based on certain assumptions and calculations. Most of the documents, certainly over the past decade, have effectively taken the GERS assumptions and, if they have differed from them, have always explained why. Those differences tended to be marginal. The key question here is not SNP figures versus those of another party; it is the work done by organisations such as Oxford Economics or, about a year ago, Reform Scotland, which calculated a broadly balanced budget of about £50 billion out and £50 billion in. Those seem to be generally accepted pre-recession figures.
Iain Stewart
But surely the point is that, if we want to set up new fiscal arrangements between the constituent parts of the United Kingdom, we should not do it on the basis of assumptions. We should do it on the basis of hard facts, and one of the conclusions of the book is that we need to do more hard research and assign revenues and spending on a territorial basis. Such proposals are not in the Bill, but I hope that the Government will take those matters forward.
I shall give the House an example to illustrate why there would be a huge debate about the revenue. Let us take Standard Life, which is headquartered in Edinburgh. If corporation tax were devolved, the company would be domiciled as Scottish, yet it trades throughout the United Kingdom and has many policyholders in England who contribute to its profits. How would we determine which profits were Scottish and which were English? These are huge issues and they would have to be resolved before a full system of fiscal autonomy could be introduced.
Iain Stewart
That is exactly the point. The relationship between Scotland and England is so interwoven that to start to unpick it now would be hugely complicated and difficult. On the point about pensions, I have mentioned the potential difficulties under the current proposals that would need to be clarified. If there were full fiscal autonomy, those problems would be magnified many times over. People might have made national insurance contributions all through their lives. How would all that be untangled to sort out the different rights and contributions? The process would be enormously complicated. I am not saying that it would be impossible, but I do not believe that it is practical at this point in time. I hope that my right hon. Friends on the Front Bench will take up my point that we should move towards assigning revenues and spending on a straight territorial basis, so that in time we might be able to move to a system involving much greater devolution of fiscal power down to the Scottish Parliament.
Stewart Hosie
The hon. Gentleman’s speech is throwing up practical issues that would have to be resolved in any circumstances. On his first concern, would the broad principle not be accepted that the tax liability would follow the economic activity? On his second concern about corporation tax rising, I would prefer to see corporation tax falling. Is it not odd that we have a party that is very keen on tax competition until it comes to Scotland’s competing? Is that not slightly contradictory?
Iain Stewart
It is not a contradictory at all and I am not saying that I rule out that possibility. My book does not rule it out. All I am saying is that at this point in time it would be an enormous leap in the dark that would throw up so many unintended consequences that it would be a foolhardy move. I welcome the sensible incremental step that the Bill is taking.
I have probably been indulged by the House rather longer than I intended. I want to move briefly to one other point before I resume my seat. It concerns another part of the Bill about which I have a specific concern, and that is the proposal to devolve down to the Scottish Parliament the power to set the drink-driving limit. I am a member of the Select Committee on Transport and we have just concluded an investigation into the drink-driving limit. Part of the evidence we received was a strong representation from the police that we should not have a different drink-driving limit in different parts of the United Kingdom. I am not against the power’s being devolved, but want to put it on the record that I would not wish the consequence of that devolution of power to be a marked difference in the Scottish and English drink-driving limits. That might cause some practical problems in border constituencies such as that represented by my hon. Friend the Member for Carlisle (John Stevenson), who is no longer in his place.
In conclusion, I welcome the Bill. It is a huge step forward, even for people like me who were devolution sceptics to begin with. It will do an enormous amount to strengthen the Scottish Parliament and the Union. I look forward to supporting it in the Lobby tonight.
John Robertson
Thank you for your guidance, Mr Deputy Speaker; I am hoping to speak to amendments in Committee that might deal with those matters, and to develop that argument and discussion in greater detail. To answer the hon. Member for Perth and North Perthshire (Pete Wishart), I have never been spoken to so nicely. He called me reasonable. I have always thought I am reasonable, but sometimes people say that I rant.
It is important for people to have representation. I do not believe that voting for a loser to represent me is right. I want to vote for a winner, and I believe the person who wins the vote should look after me. That is how I was elected. I like to think that I have done a good job. Admittedly, when someone gets over 50% of the vote, they would say that, but they might not if things were a bit closer. I still believe that people would like to vote for a winner and not a loser to be their elected representative; sometimes even somebody who comes in third place will be elected. I hope to set out that position in Committee.
Consensus is important. The SNP has tabled a reasoned amendment, but at the end of the day, SNP Members want the same thing that I want: the best for the people whom they represent. However, you have to listen to the other side. The right hon. Member for Gordon (Malcolm Bruce) made a very good point when he said that the fact of the matter is that the Scottish people do not agree with the SNP. If 70% or 80% of the Scottish people do not agree with you, you might be wrong. You should actually listen to that 80% and find out why they disagree with you. You might want to persuade them in the years to come, but we are not at that stage. To go back to my initial point, we are developing and broadening out what the Scottish Parliament does and trying to make it better. That will not be achieved in one go.
Stewart Hosie
The hon. Gentleman is being unreasonably reasonable. The amendment is not only reasoned, but reasonable, and it specifically fails to seek to decline to give the Bill a Second Reading. If he reads the amendment carefully, he will quickly appreciate that we seek to improve those areas in the Bill that we believe are weak, and that we are criticising the exclusion of recommendations by the Calman commission, which was the genesis of the Bill.
John Robertson
The hon. Gentleman sounds very reasonable, but I do not believe he is being reasonable, and I shall explain why—[Interruption.] Let me explain why you are not being reasonable. You have put forward an amendment that—
Stewart Hosie (Dundee East) (SNP)
It is a genuine pleasure to follow the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who said a number of things with which I agree entirely. Twice she said that this should not be a dry, academic exercise, the first time stating that it was not about the powers, but the policies that they are used for.
On the Bill’s proposals for enhanced financial powers, with which we agree, I wish to set out in a little detail precisely what we would do with them and why we back them. I would also like to clear up a slight misunderstanding: we will absolutely not stand in the way of the Bill. The SNP will never stand in the way of additional powers coming to Scotland. The reason for the reasoned amendment, and for the amendments that we will table in Committee and beyond, is our desire to strengthen the Bill by ironing out some of the flaws and making it better. That is what we should all be doing. Notwithstanding the fact that we are only 100 days away from the Scottish election, at heart we all want the Bill to be as good as it can be.
David Mundell
I am afraid that I do not understand the logic of the hon. Gentleman’s argument, because his so-called reasoned amendment suggests that the Bill is “unacceptable”. The logic of his argument is that if he does not succeed in making the amendment—and he must accept that he is unlikely to do so—he will be unable to support the Bill in an unamended form.
Stewart Hosie
It is rather obvious that we are seeking to make the Bill better. In its current form it will not work, and I will explain why in a moment. I do not believe that it will meet even the honourable objectives that the Government have set out.
David Mundell
I think that the House deserves some clarification from the hon. Gentleman. If the amendment that he is promoting does not prevail and the Bill progresses in essentially the same form, perhaps with only some minor amendments, is he saying that his party will not accept it?
Stewart Hosie
I now see what the Minister is asking. I have every confidence that, when we coalesce in Committee, the common sense of Members from all parties will lead to a number of successful amendments that will improve the Bill, perhaps by addressing the weaknesses in the financial powers, for example, to which the hon. Member for Kilmarnock and Loudoun alluded. We will wait until the subsequent stages before deciding on the Bill, which might have been changed substantially by then.
Cathy Jamieson
My understanding was that the hon. Gentleman indicated earlier that he would divide the House on the amendment, the last line of which states that the House
“considers the Bill as a whole to be unacceptable.”
Given the spirit of consensus that appears to be breaking out, will he now consider withdrawing the amendment so that we can move forward on the basis of consensus?
Stewart Hosie
The arguments in favour of the reasoned amendment will be made and they will explain, I hope with some support, why there are flaws in the Bill.
The Bill contains two fundamental fiscal measures: first, the reduction in the basic higher and additional rates of income tax by 10p, and the setting of a Scottish rate to compensate for that; and secondly, the availability of limited revenue and capital borrowing powers. Revenue borrowing will fill a part of the gap left when revenue decreases and a limited increase in capital borrowing will enhance direct capital investment.
However, the income tax powers are inadequate and include an in-built, long-term deflationary bias in the Scottish budget. The borrowing powers, particularly the revenue powers, are so tightly controlled that they are unlikely to be effective in delivering the sensible outcomes that many of us want. It is also worth noting that even the devolution of the income tax, the small stamp duty land tax and the landfill tax means that the Scottish Parliament will still have direct control of only 15% of the taxes raised in Scotland, with the remaining 85% accruing directly to London. I do not intend to talk about full fiscal autonomy, which there has been some talk of, but as a comparator we can look to the Basque country, which has been mentioned. It controls around 86% of its revenue.
I want to concentrate on the specific problems with income tax provisions. Receipts are sensitive to changes in economic circumstances and might fall dramatically in a downturn, as I will explain later. That presents an instability to the budget in Scotland, because we are talking mainly about income tax and the shortfall that would not be matched by the Bill’s provision of very limited borrowing powers. Growth in income tax revenue is low when compared with that of total tax revenue, and that is obviously deflationary, because only the modest growth in income tax will accrue to the Scottish Parliament, with the higher growth in total tax accruing still to London.
The figures between 2004-05 and 2008-09, for example, show that total tax revenue increased by £13.7 billion, but under the proposed plan the Scottish Government, although they control 15% of the tax, will receive only 9% of the increase. That automatically begins to squeeze the Scottish budget. Even within income tax, the most significant growth comes from the higher rates, and most of that growth will not be available to Scotland.
Historically, higher rate taxpayers account for a larger share of the growth in tax receipts, and therefore most of the growth in income tax receipts will accrue directly to Westminster, not to Scotland. We might, in fact, receive a declining share of Scotland’s income tax yields, because we are assigned half the basic rate, one quarter of the 40% rate and only 20% of the 50% rate. The impact of that deflationary bias can best be demonstrated by assuming that the powers had been in place since 1999-2000. Since then, the impact of the shortfall against forecast departmental expenditure limits would have represented an accumulative cut of about £8 billion.
David Mowat
I understand the hon. Gentleman’s point about a deflationary bias vis-à-vis the total tax take, but, in comparing the proposal before us with the status quo, what is relevant is the increase in income tax versus the increase in public spending. That is the basis on which the current Barnett allocation works, and on that basis Scotland is likely to do better in the short term.
Stewart Hosie
That is not necessarily true, and we need to look at both these measures: the growth in income tax versus the growth in total tax, and the percentage of the share of growth that we receive from income tax alone, owing to how it will be assigned to Scotland, with most of the higher parts being accrued still by the UK, where growth is likely to be higher.
Anas Sarwar
Does the hon. Gentleman accept that, under the arrangement imposed by the Bill, we would share not only the potential benefits, but the potential risks?
Stewart Hosie
Notwithstanding the deflationary bias, there might be growth in some elements of income tax revenue, but in terms of sharing risks the downsides for Scotland are much greater. In an intervention, I said that, if a future Scottish Government chose, for example, to reduce income tax to stimulate economic growth and it worked, they would take the hit in reduced income tax revenue, but the UK Government would benefit from the additional corporation tax yield. There are probably more downsides than upsides, because the range of devolved taxes is limited and, in cash terms, involve almost exclusively income tax.
The other problem is that the provisions fall foul of not being fully devolved. Income tax rates do not stand on their own; they must be looked at alongside allowances and thresholds, neither of which is being devolved. So the consequence of a significant change, in particular the UK Government’s plan to increase personal allowances to £10,000, which in principle is a very good policy, could mean a reduction in funding to Scotland of between £800 million and £1 billion a year.
Stewart Hosie
One second.
I am sure that such a change will not be allowed to happen, but UK Governments have announced 17 changes to income tax since 2007, and they would have affected the proportion of income tax revenue or receipts assigned to the Scottish Government. Those changes included not only the big headline splash on the £10,000 threshold, but 16 others, each of which would have affected the assignation of receipts to Scotland.
Even if the provisions did not result in a real-terms cut to the Scottish budget, which I believe they do, and even if they did not create an in-built deflationary bias, which I believe they do, they would still provide an unstable platform for the Scottish Government, precisely because of the volatility of income tax receipts in difficult times. At no time was that clearer than between 2007-08 and 2009-10, when income tax receipts fell by 7.3%. Over those two years, that would have led to a drop in Scottish revenue in excess of £1 billion, and that is presumably the point at which the revenue-borrowing powers are meant to kick in and help. I shall take the hon. Gentleman’s intervention now, because the next part of my speech is complicated.
Iain Stewart
I want to return to the hon. Gentleman’s point about changes to income tax allowances and other changes to the UK rates of income tax that would have a consequential effect. If I have read the Command Paper correctly, there will be a no-detriment rule. Therefore, if a change in the allowance structure has a consequential effect, the block grant will be adjusted appropriately.
Stewart Hosie
That is what the Command Paper says, but because the Barnett rules have the effect of squeezing income, we will have to see precisely how the no-detriment clause works. Will it be an up-front no-detriment clause that pays against forecasts, or will it be retrospective and pay only if the estimate be lower than the forecast? None of that is at all clear yet. That is precisely the kind of issue that we want to probe with more detailed amendments in Committee.
The limited borrowing powers are slightly poorly designed and would constrain the Scottish Government, rather than assist them. Fundamentally, the borrowings can be made not against forecast reductions in revenue, but against reconciled outturn receipts 12 months after the end of the financial year. That means that revenue borrowing cannot even act as an automatic stabiliser to fill the tax gap during a downturn—something that every party accepts is necessary and supports. In short, the powers will expose the Scottish Government to the full negative impact of the economic cycle, rather than present them with the ability to mitigate those problems.
Secondly, revenue borrowing will be capped at £200 million in a single year and at £500 million in total. Therefore, even if the timing of the borrowings could have been sorted out, the limits would have been inadequate to close the revenue gaps in 2008-09 and 2009-10, when the calculated budget shortfalls were £400 million and £800 million respectively. That might be what the hon. Member for Kilmarnock and Loudoun meant when she referred to the economic parts of the Bill.
Thirdly, the repayment of borrowings within four years almost certainly means that repayments will have to be made at precisely the wrong point in the economic cycle. To make that point more solid, I should explain that the proposals would have required the revenue borrowing needed to cover the shortfalls between 2008-09 and 2009-10 to be repaid in the current comprehensive spending review period, when the Scottish block grant is already under pressure from proposed cuts of more than £3 billion. Borrowing and repayment should be possible over the entire economic cycle and should not have arbitrary timelines attached to them. Cyclical borrowing can mitigate volatility, but the proposals will generate additional volatility in future budgets.
The highly limited revenue borrowing powers that are proposed will be further constrained because the first 0.5% of any shortfall—about £127 million in 2014-15—will have to be found from cuts in the cash reserve before retrospective revenue borrowings can even be found.
The second borrowing power in the Bill is for capital expenditure. It is welcome, but could be improved. The cumulative borrowing total that is set out is £2.2 billion. That is quite low compared with recent Scottish Government investment of more than £3 billion a year. Borrowing in any year will be limited to 10% of the capital DEL—approximately £230 million by 2014-15—not the total budget. For example, a replacement Forth crossing costing between £1.7 billion and £2.2 billion would use up the entire additional capital borrowing, if we were able to secure it under the constrained limits set out by the Treasury. The only way to increase the limit to allow additional borrowing would be for the UK Parliament to agree to a legislative amendment. I am not sure that that is the best approach for securing long-term sustainable capital investment.
The borrowing powers in the Bill will limit the Scottish Government to certain types of borrowing. They will be able to use loans, rather than bonds or other instruments that would provide greater flexibility. Transport for London, which is a local authority in respect of its borrowing powers, is currently issuing commercial paper worth £7 billion for Crossrail and other projects. Birmingham city council issued paper to the tune of £250 million in 2006, and it seems passing strange that what should be seriously enhanced powers for the Scottish Parliament would not even put it on a par with TFL or Birmingham city council in its ability to raise cash through commercial paper for important national infrastructure works.
We are also concerned, like the hon. Member for Kilmarnock and Loudoun, that the Bill might not provide access to capital quickly enough to meet Scotland’s needs. The proposal is that access will commence from 2013, subject, as we heard earlier, to Treasury approval on a per-project basis. In the face of the budget cuts and the urgent need to invest in infrastructure, that is not soon enough.
The remaining tax proposals in the Bill are limited, although welcome. I have to say, however, that the Conservatives appear to have U-turned on some of the taxes that Calman said should be devolved. As I said, this is not a dry, academic exercise, and we would like stamp duty to be incremental, so that people do not pay the full whack for hitting the threshold. I am glad that responsibility for that is being devolved. It was worth £593 million in Scotland in 2008-09, but that was only 1.4% of all the non-North sea revenue raised in Scotland.
Fiona O'Donnell
The hon. Gentleman has been very reasonable in acknowledging the parts of the Bill of which he approves. Would his amendment not therefore have been more reasonable if it had said “on the whole” rather than “as a whole”?
Stewart Hosie
There are forms of words that can be accepted, tabled and selected and forms of words that cannot. I stand by the amendment, because it is important to challenge the Bill in areas in which we do not believe it comes up to scratch, and it would appear that many of our concerns are shared among the parties. To have a dry, sterile debate about the words in the amendment rather than its substantive nature does the Labour party no good. That is the only time I have been partisan in my entire speech, and I will stick to that.
Stewart Hosie
I am going to go on with my speech.
We would like the landfill tax to be used to support waste separation at source, recycling, waste minimisation and packaging reduction, so we welcome its being devolved. However, at £85 million, it represents only 0.2% of Scotland’s non-North sea revenues. We welcome parts of the Bill, but there are significant weaknesses and flaws in it, and I believe that I have explained the potential deflationary bias in its main economic powers.
I have said that there are bits of the Bill that we like and bits that we need to change, and it is hugely disappointing that some of the Calman tax proposals have been excluded. The Government have decided not to devolve air passenger duty or aggregates duty. They argue that since aggregates duty is subject to challenges at EU level it cannot be devolved, but had it been devolved, the Scottish Government would have been required to take exactly the same cognisance of an EU decision as the UK Government. The same applies to other taxes. The Government argue that air passenger duty is under review and cannot be devolved, but the whole purpose of devolving responsibility is to allow the system to be different if it is sensible or necessary. They should devolve the matter first and then have the review in England. If the Scottish Government decided that they needed to have a review, they could do so in their own good time.
I am further disappointed that, as the right hon. Member for Stirling (Mrs McGuire) said, the Calman proposal on revenue from savings and dividend income was not included in the Bill. That would have been extremely important because of the link with income tax, and because of the complexity of the rates about which she spoke.
We will not stand in the way of the Bill, although we have set out a series of issues in our reasoned amendment.
Anas Sarwar
The hon. Gentleman has been very generous in giving way. He says that he will not stand in the way of the Bill, but the amendment clearly states that the SNP
“therefore considers the Bill as a whole to be unacceptable.”
That means that if the amendment is not accepted, he will vote against the Bill and against new powers for the Scottish Parliament. Is that the wording in the amendment wrong, or is it just the wrong politics from the SNP?
Stewart Hosie
We are 10 years into devolution. We have a Scottish Parliament, of which everyone speaks highly. The Bill purports to devolve some significant powers and give additional responsibility, which is good. However, those powers are not good enough. If all Labour can do is snipe, “They didnae do that, they didnae do this,” rather than consider the substantive issues—[Interruption.] I shall tell hon. Members what we will do: we will press our reasoned and reasonable amendment to a vote, but we will not oppose the measure. I hope that, when we deal with the matter seriously, through amendments on issues that we have identified in common, we will have less Second Reading, pre-election banter and make the Bill much better.
David Mundell
Of course, Antarctica is another issue—it became of interest to the Scottish National party only when it discovered that it might no longer be devolved. As became clear in the debate, SNP policy on it is not exactly clear.
The Calman process provides a great example of different political parties working together in the national interest, and I am sure that Opposition Members will in due course come to see the coalition Government in a similar light. If the Bill benefits from being cross-party, it also benefits from being cross-Parliament. I have no doubt that the Bill, and support for it, will be enhanced through being tested by the unique tricameral scrutiny to which it is subject—in this House, in the other place and in the Scottish Parliament.
I was extremely disappointed by the way in which Scottish National party Members derided the Scottish Parliament process of scrutiny, about which the hon. Member for Glasgow East spoke eloquently, and which is accepted as one of the great assets of the Scottish Parliament. As ever with the Scottish National party, however, the issue is not the level of scrutiny but whether the scrutineers agree with it.
Stewart Hosie
The Minister is wrong: there was no criticism of the process of Scottish Parliament committee scrutiny, which is a model, an exemplar, a fantastic system. The difficulty was the shameful way in which certain witnesses and potential witnesses were treated. I am happy to defend them against the committee involved, which treated some of them appallingly.
David Mundell
Anybody who reads the transcripts will realise that it was the way in which the evidence was given, and its quality, that was the issue in the sessions concerned. I look forward to the evidence of Scotland’s Finance Secretary when he is recalled to that committee. Given some of the comments of the hon. Member for Perth and North Perthshire (Pete Wishart), we will not take too many lessons from his party on respect within the context of a debate.
The commission’s initial task was to review
“the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom.”
As we have heard today, there is an overwhelming consensus in the House and in Scotland that the Bill lives up to that vision. It builds on the success of the first 11 years of the Scottish Parliament, and addresses Holyrood’s one critical flaw: the lack of revenue-raising power to match its spending power.
On the amendment, I defer to the House and the Speaker, who selected it, but I am not sure how to respond. It clearly states that the Bill, in its present form, is unacceptable, yet when Scottish National party Members are asked whether they support the Bill, and whether they will support it if it emerges from the parliamentary process in broadly the same terms, they are unable to give an answer. I am afraid that the amendment strikes me as no more than a stunt—an opportunity to say, “We opposed it,” while agreeing with it. It is absolutely ludicrous that a party, which has some worthy people in it—the worthiness of the views of many members of the SNP has been acknowledged—should come to the House and say, when additional powers for the Scottish Parliament are proposed, “No, we don’t want them. Because we can’t have our own way, we’re not going to support the Bill.”
Stewart Hosie
The Minister has not listened to the debate. We made it extremely clear that we will not stand in the way of any powers being devolved to Scotland. As the Bill stands, however, it has huge flaws and needs to be improved. That is a rather sensible thing to say, one would have thought, on Second Reading.
David Mundell
In that regard, the hon. Gentleman’s comments are as incoherent as his comments in relation to the financial provisions. The SNP stands against the Bill, and will divide the House on the basis that the Bill is unacceptable. If the motion is carried, that, as Mr Deputy Speaker has indicated, would be the basis on which the Bill went forward. The position set out by the SNP is incoherent not just financially but constitutionally.
Let me now deal with some other, more sensible contributions. We heard from a number of old hands—old in terms of the devolution process, although not, of course, in terms of years. We heard from my hon. Friend the Member for Epping Forest (Mrs Laing), who described her experience of the scrutiny of the original Scotland Act. We also heard from the hon. Member for Central Ayrshire (Mr Donohoe), who is no longer in the Chamber, but who is a great supporter of devolution whenever the opportunity arises.
The right hon. Member for Gordon (Malcolm Bruce), who has campaigned on these issues for a long time and with some success, made a thoughtful speech. I can inform him that the United Kingdom Government as a whole will review charity law, and that, as we have made clear in the Command Paper, we felt that it would be better to enact the spirit of the Calman recommendations once that review had been completed in the rest of the UK.
A number of Members raised the question of changes in the income tax threshold. The Command Paper makes it clear that the Government would proceed on the basis of no detriment, and that any such changes would be accommodated in the block grant settlement.
I congratulate the hon. Member for East Lothian (Fiona O'Donnell) on the fact that she is celebrating her birthday, although I am slightly concerned that she should enjoy doing so in combat with some members of the SNP. During the course of the debate, I realised that there was an obvious gift for her: the book by my hon. Friend the Member for Milton Keynes South (Iain Stewart). As he revealed that he had a large number of copies, not only the hon. Lady but most of her constituents would be able to receive one.
My hon. Friend the Member for Carlisle (John Stevenson) made some important points about cross-border relations. As both the Secretary of State and I are well aware, people living in the border regions have long been able to cope with the differences on either side of the border. For instance, the well-established difference in the licensing laws that used to prevail did not cause any particular difficulties. The existing devolution settlement does not cause any difficulties, and the revised settlement will not cause any either.
The hon. Member for Livingston (Graeme Morrice) made the important point that strengthening devolution does not undermine the United Kingdom, but strengthens it. As well as giving us a précis of his book, my hon. Friend the Member for Milton Keynes South raised significant points about, for instance, pension plan payments. I can reassure him that the high-level implementation group involving HMRC is examining those issues at this moment.
My hon. Friend the Member for Warrington South (David Mowat) intervened on my hon. Friend the Member for Milton Keynes South on the subject of the Barnett formula, and was subsequently involved in a discussion of the subject. I accept that concern has been expressed about the system of devolution funding, but tackling the deficit is the Government’s top priority, and any changes would await stabilisation of the public finances. The current funding arrangements—in essence, the Barnett formula—are set out in an administrative agreement rather than in statute, but the financing mechanism in the Bill would apply equally well to another way of calculating the block grant. The Bill does not fix the Barnett formula in stone for the future. It neither rules in nor rules out reform of the Barnett formula in the future; indeed, it is designed to be flexible in relation to alternative approaches to funding.
The right hon. Member for Stirling (Mrs McGuire), a seasoned campaigner on these issues, made a number of important points. I can reassure her that the Government are not devolving taxation in relation to savings and unearned income, so most of the things about which she expressed concern will not come to pass. The hon. Member for Glasgow North West (John Robertson), who is no longer in his place, has always been a staunch supporter of the nuclear industry, and he is to be commended for that. However, he will be aware that, after due consideration, the Calman commission concluded that there should be no change to the arrangements for new nuclear power stations in Scotland.
The hon. Member for Glasgow North East made an interesting point about a Scottish office for budget responsibility, and I look forward to hearing more about that in the next stage of the debate. As I have said on previous occasions, I very much welcome the hon. Members for Glasgow East and for Kilmarnock and Loudoun to this House, because they bring a great depth of experience of the Scottish Parliament and of being in government in Scotland—in coalition with the Liberal Democrats, of course. I reassure the hon. Member for Glasgow East, in her absence, that the Government are committed to the Bill’s proposals on airguns and that I listened to the powerful case she made in that regard. Finally, I did welcome the contribution of the hon. Member for West Dunbartonshire (Gemma Doyle). However, although she is one of the younger Members of this House, it appeared that she was somewhat stuck in the 1980s.
My final remarks are for those people who have opposed this process, who have sat on the sidelines every time they have had an opportunity to contribute to this process and who are only able to come forward at the last minute with carping complaints. What I say to them is—
Oral Answers to Questions
Stewart Hosie Excerpts(13 years, 5 months ago)
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Stewart Hosie (Dundee East) (SNP)
The problem is that the recommendations of the Calman commission are not being implemented—they are not in the Scotland Bill. The proposal on the aggregates levy, the proposals for the devolution of the marine environment and the proposal on air passenger duty have all been abandoned. Is that a lack of imagination on the part of this Government, or merely a lack of ambition for Scotland?
Michael Moore
We certainly do not lack ambition for Scotland. We have a set of proposals that are being thoroughly scrutinised in the Scottish Parliament, and from tomorrow, they will be scrutinised in the House as well. As far as the specifics are concerned, the hon. Gentleman will be aware that, in respect of the aggregates levy, we have said that given the current court case, it is inappropriate to devolve that just now, but we will do so in future. I recommend that he goes back to the Command Paper and studies it carefully.