Consideration of Lords amendments
Supplementary and transitional provision about elections
I beg to move, That this House agrees with Lords amendment 1.
Along with the redoubtable Wendy Alexander, Annabel Goldie, Lord Browne of Ladyton, Lord Stephen and my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), I took part in the very first meeting that led to the establishment of the Calman commission. I am pleased and proud today to be part of what I hope will be the successful conclusion of the commission’s work. The return of the Scotland Bill to this House comes after the other place has given the Bill a great deal of detailed scrutiny and consideration for many months. Indeed, in handling the Bill in the Lords, Lord Wallace of Tankerness was compared to Kate Adie. That comparison is not correct: he was more like General Montgomery, because he was at the forefront of the action rather than a mere commentator.
Since the Bill was last in this House, there have been two very significant developments. The Scottish Government have changed their position from one of opposition to one of support for the Bill, including many of the amendments we will consider today. On 21 March, the Secretary of State confirmed in a written ministerial statement the terms on which agreement had been reached with the Scottish Government on the Bill, and on 18 April the Scottish Parliament passed the legislative consent motion for the Bill unanimously.
When the Bill was last in this House, it appeared that the Scottish National party would never join the consensus that has been shared throughout both the Calman commission process and the parliamentary process on the Bill.
I know that the Minister wants to pretend that this Bill is incredibly important, but in fact it is a rather modest Bill. If I may correct him—I know that he sometimes struggles with detail—he will remember that on Second Reading, I made it clear that we would not stand in the way of the Bill. I welcome the changes that the UK Government have made, in particular to remove some of the re-reservations, and I hope that we can now get on and pass this modest little measure.
I also remember the occasion on which the Scottish National party voted against the Bill, as we will detail in respect of the specific amendments that come forward. Several changes have been made to the Bill, but all of them have been on the basis of assurances provided by the Scottish Government as to how the matters will be conducted.
Except sometimes the right hand of the Scottish National party does not know what the left hand is doing. While down here it was being conciliatory, it was initially prepared to stand in the way of this extensive devolution of powers.
The right hon. Lady may recall that during previous consideration of the Bill, I identified London SNP as a quite different body from the Scotland-based SNP. At the same time as the SNP in London opposed the Bill, more sensible forces in the Scottish Parliament were looking to bring forward what will be a significant package of measures that will strengthen devolution by increasing the financial accountability and responsibility of the Scottish Parliament.
Instead of misrepresenting me, why does not the junior Minister understand that the only reason the Scottish Parliament was able to agree the legislative consent motion was because the UK Government agreed to remove the idiotic re-reservations that they had planned; agreed to take out some of the significant and damaging things that they had intended with the Supreme Court; and, fundamentally and very sensibly, agreed proper commencement procedures, about which I will say more later?
I am sure that the SNP at Westminster group leader’s substitute will recognise that when this Bill was previously debated in this Parliament, the Scottish National party indicated that it had six demands that it required to be reflected on the face of the Bill before it would support it. None of those six demands is in the Bill as we debate it today or as it was debated in the Scottish Parliament, where it received unanimous support—including that of all members of the Scottish National party present.
I do not really like the Bill being called modest by the Scottish National party when the Office for Budget Responsibility says that the Scottish Parliament will be able to have over £500 million of income tax in 2015-16. That is hardly modest.
I could not agree more with my hon. Friend. This is a significant measure which will lead to the largest transfer of fiscal powers between Westminster and Scotland in 300 years, and it should be welcomed by all parties. My hon. Friend may be aware that yesterday that the First Minister apparently told the Institute of Directors that he planned to align taxes in Scotland with the rest of the UK, so the Scottish National party may now regard the actual requirement for tax-varying powers as insignificant.
Lords amendment 1 seeks to improve the drafting of clause 3. Section 113 of the Scotland Act 1998 makes provision about the scope of subordinate legislation powers in that Act. Clause 3(1) amends section 113 of the Scotland Act so that the supplementary powers contained in section 113 also apply to Scottish Ministers’ new power to make subordinate legislation about the administration of Scottish Parliament elections under section 12 of the 1998 Act.
Lords amendment 1 would replace clause 3(1) with new provision having the same effect. The amendment would have the effect of restructuring section 113 and this would make it easier for provisions in this Bill or future legislation to provide that the supplementary powers contained in section 113 apply in relation to other powers that may be conferred on the Scottish Ministers.
Clause 15 changes the name of the Scottish Executive to the Scottish Government. Lords amendments 7 and 8 are minor technical amendments that would ensure that all the references to “Scottish Executive” in section 44 of the Scotland Act are amended to “Scottish Government”.
Clause 22 makes provision for there to be a Crown Estate Commissioner who knows about conditions in Scotland. Lords amendments 10 and 11 would change the name of this Commissioner from the “Scottish Crown Estate Commissioner”, to the “Crown Estate Commissioner with special responsibility for Scotland”. I can confirm that the original title for the commissioner included in the Bill was taken from the Calman commission’s own proposals and discussed with the Crown Estate. However, it is accepted that the amendments to the commissioner’s title will properly reflect the role that the commissioner will play.
The amendment changes the title. If the hon. Gentleman is alluding to whether the Scottish Government, in their discussions on the Bill, put forward a requirement for further devolution of the Crown Estate, I can tell him that they did not. It was not a red line for the Scottish Government.
I am sure that that is a matter on which the hon. Gentleman and many others hold a view but on which the Government do not.
The Select Committee on Scottish Affairs has produced an interesting report on the future of the Crown Estate in Scotland. Obviously, the Government welcome the assiduous work carried out in preparing the report. I am surprised that its Chairman, the hon. Member for Glasgow South West (Mr Davidson), who usually plays a robust part in these deliberations, is not present. I had anticipated his having something to say about his report. However, the Government will consider it in due course. I understand that it has been debated in the Scottish Parliament, where the devolution of Crown Estate activities directly to local communities found support, at least among opposition parties there.
On that basis, I hope that the House will agree with the Lords amendments.
As we begin debating the Lords amendments, I hope the House will consider it appropriate for the Opposition to mark the significance of what is likely to be our final consideration of the Scotland Bill. If it receives Royal Assent in the coming days, the Bill will represent the largest devolution of financial powers to Scotland in 300 years; will make decisions on spending and taxation more transparently accountable to the Scottish Parliament than at any time since 1999; and create new borrowing powers with the potential to boost economic growth significantly.
This enhancement of devolution is the culmination of a four-year process of cross-party and cross-societal constitutional reform through the Calman commission, which was established by Wendy Alexander and other pro-devolution party leaders in Scotland. Its outcome was accepted in a White Paper by my right hon. Friend the Member for East Renfrewshire (Mr Murphy); was assisted by my hon. Friends the Members for Glasgow North (Ann McKechin) and for Rutherglen and Hamilton West (Tom Greatrex) in various capacities; and has been implemented with cross-party support by the coalition Government.
It is also welcome that the Scottish Government have finally indicated their assent, if not warm-hearted approval, for the Bill, after a significantly longer and more circuitous journey to reach that position than that undergone by Scotland’s other political parties.
I would like to pay tribute to the hon. Gentleman, his colleague the shadow Secretary of State, the hon. Members for Glasgow North (Ann McKechin) and for Rutherglen and Hamilton West (Tom Greatrex) and those from all parties in the House and elsewhere who have helped to make this Bill what it is today. I hope that the hon. Member for Glasgow North East (Mr Bain) will agree that this is a good model for how parties should work together to produce consensus and plan, and then devolve significant powers to Scotland.
It is intriguing. We have several descriptions: “indy-lite”, “devo-plus”, “devo-max”. Various formulations for additional powers have been put out for public discussion. I think this is “devo-positive”. It will give the Scottish Parliament additional democratic legitimacy by enabling it to raise about 35% of what it spends—far more than at present—but without the race to the bottom with other countries or parts of the United Kingdom on tax rates, including corporate tax rates, which would be very damaging for growth.
Lots of adjectives have been attached to the word “devo” with regards to the debate about the constitutional settlement in Scotland. Given that the Scottish National party supported it, then did not support it, then supported it again, then did not support it, then supported it again, could this be “devo-hokey cokey”?
That is a very interesting point put with typical style by my hon. Friend.
As a party that first supported devolution more than a century ago, we are pleased to see the Scottish Parliament strengthened by the Bill’s progress through the House and the other place.
The hon. Gentleman’s introductory remarks are interesting. Can we take it, given that he is speaking from the Opposition Front Bench, that the position of the British Labour party is no devolution of corporation tax to Scotland, under any circumstances, even if the evidence tells us that the power it might give would be incredibly beneficial for jobs and working people?
I am sure that if the hon. Gentleman wishes to make that intervention again when we discuss the implementation of tax powers, Mr Deputy Speaker, you might view it in order for me to address it then.
On the specific amendments, we support the provisions that make clearer the circumstances and criteria for Scottish Ministers to make orders in relation to the conduct of Scottish parliamentary elections. Those powers will be largely devolved to the Scottish Parliament under clause 3. We also agree with amendments 7 and 8, which resolve any remaining drafting ambiguities in relation to the change in the legal name of the Scottish Executive to “the Scottish Government” in clause 15. We also have no difficulty with amendments 10 and 11, which amend clause 22 to alter the Crown Estate commissioner’s name to
“Crown Estate Commissioner with special responsibility for Scotland”
to denote the special status that one of the Crown Estate commissioners will have, should the Bill become law.
In short, then, the Opposition support the amendments.
Forgive me, Mr Deputy Speaker. I was in total shock. I fell over.
I speak as someone who sounds like a Sassenach, but my Scottish father joined the Royal Air Force and was thereafter posted all over the world. Many members of my family still live in Scotland. My Aunt Eileen lives in Largs and my cousin teaches Gaelic in the Outer Hebrides. I say that to demonstrate that what happens in Scotland matters to a great number of us in the House. Many of my colleagues, such as my hon. and very good Friend the Member for Epping Forest (Mrs Laing), have Scottish ancestry going back—
Order. I know, Mr Stewart, that you will come to the amendments immediately, rather than touring Scotland. It is interesting to hear where your relatives live, and on another day I would welcome that information, but today I want to hear your views on the amendments.
I am sure, Mr Deputy Speaker, that you will agree that it is relevant to say that the amendment matters not only to people living in Scotland but to people in the whole of the United Kingdom, because our country operates as one. I am sure that the speech by my hon. Friend the Member for Beckenham (Bob Stewart), who was educated at the excellent Chigwell school in Epping Forest, will be warmly welcomed by the Epping Forest Scottish Society, which shares his views on this matter.
Thank you, Mr Deputy Speaker. The amendments will certainly be welcomed by the Stewart Society, which I shall be speaking to in two weeks’ time.
It is absolutely right that Members of the Scottish Parliament should have responsibility for raising more money, and the amendments will help them to do that. I am also pleased that MSPs will be more accountable to the Scottish people. I fully support, as do most people in this House, the fact that the Scottish Parliament will have responsibility for health, education, transport and the police. I am very pleased with the amendments.
It would be horrific if that were to happen. The Opposition and the Conservatives are all Unionists in this regard. It would be a disaster if there were any kind of separation of our great nation. Scotland is much more powerful through being connected with the English, the Welsh and the Northern Irish.
I am delighted to end my speech here. My jokes have been cut short by the unkindness of the Deputy Speaker, who will not allow me—
It is a great pleasure to follow the hon. Member for Beckenham (Bob Stewart), and it is a pity that we did not get to hear the rest of his speech. SNP Members were particularly looking forward to the tour de force that his tour around Scotland would have provided. Perhaps we will have the opportunity to hear it another day.
We in the Scottish National party welcome the Lords amendments. Anything that gives more power to the Scottish Parliament will be welcome to us. At this, the last moment of the last day of the last stage of the Scotland Bill, I just want to say: what a process we have had! There are many things we could say about the Bill, but we could never describe it as being particularly exciting. It has never had much press attention in the course of the past few months. We could describe it as unambitious, uneventful or lacking the powers to grow the economy, but the main thing about the Bill is that it is so “minority Government”. It is from another day, another era—it is from the last gasp of a Unionist majority in the Scottish Parliament. It is from a day that has passed.
I fail to understand how the hon. Gentleman can find it unexciting or irrelevant that Members of the Scottish Parliament are being made more accountable to the people of Scotland. That is what devolution and increasing democracy are all about. I would have thought that he would be excited by that.
I am very grateful to the hon. Lady for her intervention. As always in these debates, she makes a colourful presence and puts her case passionately and well. I must say, however, that the Bill has been overtaken by events. Things have happened over the past year, and the one big thing that happened was the election of a majority SNP Government. Everything has changed because of that.
I am genuinely sorry that the hon. Gentleman is not more positive in welcoming the Bill, but his support in the voting Lobby is obviously what matters. He mentions the things that have happened over the past year. In the past day, we have heard the amazing announcement by the First Minister that he is in favour of having the same income tax levels even if Scotland were to be given independence. Is it not amazing that a party that has been struggling for independence for 90 years is now telling us that, if Scotland were to become independent, nothing much would change?
What the Scottish people are hearing is a compelling case for Scottish independence, and the question will be put to them in a couple of years. The overwhelming majority of them will endorse and support it. We look forward to having that debate over the next couple of years, because we are absolutely confident that we will secure that overwhelming majority.
To be fair, this is a much better Bill now than it was a year ago. All the damaging economic powers that would have cost Scotland so much have gone. I am also glad that the UK Government have agreed with the Scottish Government on commencement powers, so that we will no longer be exposed to the damaging measure that would have had a massive and dramatic impact on Scotland.
We would not want the hon. Gentleman to mislead the House. The UK Government have not agreed with the Scottish Government on dual commencement. What we have said is that it is desirable and that we will work with the Scottish Government to achieve it, but it has not been agreed on at this stage. I say this just so that right hon. and hon. Members are not misled.
I am grateful to the Minister for clarifying that. It is good that he agrees with the Scottish Government that joint commencement is a good idea and I welcome the fact that there will be a veto for the Scottish Parliament in regard to the commencement of potentially damaging tax powers.
The Bill does not meet the aspirations of the Scottish people. It does not meet the aspirations of the anti-independence parties either. They have all moved on as well, and decided that these provisions are not enough. The Conservative-led Unionist alliance and what accounts for their think-tanks are all now considering the next stages of devolution as they move forward. They, as well as the Scottish Parliament and the Scottish people, have passed the Bill by. The Bill is finished, it is dead, it is something that belongs to another day and another era.
I think I heard the hon. Gentleman say a few moments ago that this version of the Bill would save the Scottish Government and the Scottish people many billions, compared with the version that we discussed a year ago. Will he tell the House which amendments that observation pertains to, and what it was that he was talking about?
I do not know whether the hon. Gentleman heard my exchange with the Minister, but this is to do with commencement powers. The agreement of the Scottish Parliament will now have to be sought before any tax-changing powers are brought in, which is right and appropriate. That will ensure that we do not go down any route that could damage the Scottish economy or the way in which the Scottish Parliament is funded.
I can see that you are keen for me to speak to the Lords amendments, Mr Deputy Speaker. We welcome the amendments. It is unfortunate that the hon. Member for Dundee West (Jim McGovern) is not here, but he will at last be able to refer to the Scottish Government as, well, a Government. The days of the Executive—and the unambitious Executives of the past—are finally at an end. The term “Executive” refers to boardrooms and golf clubs. It is Governments who run Scotland. As long as we are in charge, it is a Government, it will continue to be a Government and it will have the powers of a Government.
One of the first things we did when we came into government, back in 2007, was to ensure that we were a Scottish Government. If it looks like a Government, walks like a Government and quacks like a Government, it is a Government. We will continue to be that Government. The days of the unambitious Labour-Liberal Executive have now gone, and thank goodness for that.
We welcome the amendments, and I look forward to discussing the others and finding out why the Labour party has changed its mind on—
I have just about finished my speech, if the hon. Gentleman does not mind. I have had enough of Labour Members’ interventions, as they all tend to be on the same theme, but I thank him for his interest.
We will support the Lords amendments. It is in Scotland’s interests that the powers should be transferred, and we will continue to support the rest of the amendments.
I appreciate I am a blushing violet sitting here and you obviously did not quite see me, Mr Deputy Speaker. You are one of the few men who could say that they did not see me—even on this matter, but never mind!
I want to deal with the comments made by the hon. Member for Perth and North Perthshire (Pete Wishart) on this group of miscellaneous amendments. I think his comments are indicative of the fact that it does not matter how much devolution is given to Scotland or is agreed with the people of Scotland, it is never enough for a party that has only one ambition in this life, which is to separate Scotland from the rest of the United Kingdom. Such a party will continue to throw around the sort of parliamentary insults that the hon. Gentleman managed to put into his short contribution—such as “unambitious”. Frankly, it is not unambitious to provide the greatest transfer of powers to the Scottish people, and to give not just fiscal autonomy, which is a camouflage for independence, but fiscal responsibility to the Scottish Parliament.
I can see that you are getting agitated, Mr Deputy Speaker, because I may not be addressing the amendments, so let me deal with amendment 7, which is about health professionals. I have some concern about it. Although there is significant devolution of power, there is still cross-border traffic when it comes to health professionals. It was rational to say that this should have been a reserved power. However, it was yesterday’s statement by the First Minister that convinced me that this was probably the right way to go. We are now going to have not only the same Queen, the same currency and the same NATO, but, I hope, the same level of regulatory provision for health professionals, too.
I welcome the amendment, but I ask the Minister to convince me that there will be enough communication and consideration between the UK Government and the Scottish Government to ensure that we keep in sync health professional regulation between Scotland and the rest of the United Kingdom, so that people do not feel that they will get a different level of professionalism from the people they need to trust for their medical care according to whether they live north or south of the border.
My right hon. Friend is creating an important narrative for the link between the national health services in Scotland and in the rest of the United Kingdom. Does she agree that that probably explains how the Scottish National party ended up voting on the Health and Social Care Bill—because of the interlinked nature of the NHS between Scotland and the rest of the UK?
Order. The amendment refers only to leaving something out, which is all we are effectively debating. I have allowed some latitude, but I have to watch that we do not stray too far away from the amendment. I understand that the provisions affect Scotland and that hon. Members want to open up the debate, but we must try to stick to the amendments.
I think that Mr Deputy Speaker wants us to move the business on, and I do not wish to trespass further on his charity.
I want a reassurance that there will be full discussions between the UK Government and the Scottish Government to ensure that we have a framework that will regulate health professionals across the United Kingdom, albeit that the Scottish Government will have responsibility.
On a point of order, Mr Deputy Speaker.
Yesterday afternoon, my hon. Friend the Member for Bradford South (Mr Sutcliffe) asked the Secretary of State for Culture, Media and Sport:
“Why was the special adviser the nominated person in the Department? If this was so important, as the Secretary of State is saying, why was his special adviser the nominated person?”
The Secretary of State replied:
“His role was agreed by the permanent secretary”.—[Official Report, 25 April 2012; Vol. 543, c. 963.]
This morning, at the Public Accounts Committee, the permanent secretary was asked on 10 occasions whether he had actually approved that decision, as the Secretary of State suggested to the House yesterday, and he point blank refused to say. The reason this is a point of order is that if we were to apply for a Standing Order No. 24 debate on this very serious issue of whether the Secretary of State might have inadvertently or advertently misled the House, we would have to have the first debate on Monday and the second on Tuesday. Can you confirm, Mr Deputy Speaker, that the House would not be able to prorogue on Tuesday in that eventuality?
First, I cannot judge something that has not happened. We do not know whether what the hon. Member mentions will be received on Monday. The decision will obviously be taken when such a request has been received; only then could it be decided upon. It would be wrong for me to rule on something hypothetical.
I shall make a few points on the issues pertaining to this group of amendments. I can assure the right hon. Member for Stirling (Mrs McGuire) that we on the Government Benches always listen to her wise counsel. I will deal with the specific points she raised, which are important—regardless of when or where they are raised.
As the matter was raised by the hon. Member for Perth and North Perthshire (Pete Wishart), let me be clear about the position on joint commencement. The Scottish Government sought a specific provision for joint commencement in this Bill. The request was refused, as it was unworkable—like so many proposals advanced either by the SNP in London or the Scottish Government. Instead, we focused on delivering this Bill. At last, that objective is shared by the Scottish Government.
Of course we want to achieve circumstances in which joint commencement can take place. I shall quote from a letter sent by the Secretary of State on 20 March to Bruce Crawford and John Swinney:
“Consistent with the principle of consent, our two governments should reach agreement on implementation issues, including adjustments to the block grant, to take account of the Scottish Parliament’s new fiscal powers.”
That is the Government’s position.
Let me respond to a point made by hon. Member for Dundee East (Stewart Hosie). He seemed to suggest that evidence had been produced to support the Scottish Government’s and indeed the Scottish National party’s suggestion that corporation tax should be devolved. Again, I am sure that he would not wish to mislead the House into thinking that actual evidence had been produced to support that proposition. Indeed, it was not.
The Minister’s memory is appalling. I intervened on the Labour Front-Bench spokesman to ask the Labour party’s position on corporation tax. I said no such thing about evidence being provided to the UK Government. I am sure Hansard will bear that out. If, however, the Minister wants to carry on and embarrass himself further, I will be delighted to listen.
Thank you, Mr Deputy Speaker. I shall not use the same tone as the hon. Gentleman, although I think his remarks confirmed that no evidence had been produced at all or in any form to support the proposition of devolving corporation tax. That is why it is not being devolved in this Bill and is not the subject of these or any other amendments brought forward in the House of Lords. I support the amendment on that basis.
Lords amendment 1 agreed to.
Partial suspension of Acts subject to scrutiny by Supreme Court
As I have already explained, on 21 March the Government announced a package of measures in the Bill, and supporting non-legislative arrangements, to ensure that the Bill would operate in a fair and sustainable way to benefit Scotland and the rest of the United Kingdom. That announcement followed productive discussions with the Scottish Government.
I hope that it does not prove career-limiting for him if I pay tribute to Bruce Crawford MSP, the Cabinet Secretary for Parliamentary Business and Government Strategy in the Scottish Government, who has worked closely with me and with the Secretary of State on the dialogue that has been taking place about the Bill. Mr Crawford and his officials have always engaged constructively in discussions on the Bill, and, even on occasions when we have not agreed, we have always conducted those discussions in an orderly and proper fashion. I am most grateful to Mr Crawford for the way in which he dealt with the legislative consent motion in the Scottish Parliament, securing a unanimous outcome. There was no dissent from any member of the Scottish National party.
Following the agreement announced on 21 March, changes were made to both the finance and non-finance provisions in the Bill. Since its introduction in November 2010, it has been subjected to detailed scrutiny in the United Kingdom and Scottish Parliaments. In Westminster, it has passed successfully through its Commons and Lords stages, and has returned to the Commons today for further consideration. In Holyrood, not one but two Scotland Bill Committees have taken evidence and reported to the Scottish Parliament. I pay tribute to my colleague David McLetchie MSP, who experienced the pleasure of serving on both those Committees. I think that his expertise could rightly be said to be beyond that of Members of this House and the other place, in that he has a true understanding of the Bill and all its ramifications. I also pay tribute to the other MSPs who served on both Committees for their work in dealing with the reports, and subsequently passing the legislative consent motion tabled by the Scottish Government in favour of the Bill.
We have gone further than ever before in working with parties in Scotland and across the United Kingdom to deliver a Bill built on cross-party consensus. We have carefully considered and, when appropriate—that is, when a case based on evidence has been properly made—taken on board the views of the Scottish Government and the Scottish Parliament. We are pleased that we have reached agreement and can make progress with the Bill.
The package of measures announced on 21 March meets the tests that the Government set for changes in the Bill package. They are based on evidence, maintain the cross-party consensus that supports the Bill, and will benefit Scotland without detriment to the rest of the United Kingdom. The amendments in this group are part of those changes. Lords amendments 2, 5, 6, 17 and 26 would remove clause 7, clause 12, schedule 2, clause 13 and clause 26.
Lords amendment 2 would remove clause 7. As it stands, section 33 of the Scotland Act 1998 allows for only a Bill, rather than a single provision of a Bill, in the Scottish Parliament to be referred to the Supreme Court in its entirety on questions of legislative competence. That means that implementation of the whole Bill would be delayed if the matter were referred to the Supreme Court pending a decision of that court. The Government’s intention in pursuing the limited reference procedure contained in clause 7 was to prevent unnecessary delays on Bills the majority of whose provisions were considered to be within the legislative competence of the Scottish Parliament.
The Scottish Government expressed the fear that the clause could have the potential to introduce unintended consequences and delay to the enactment of legislation in the Scottish Parliament. As a result of our discussions with the Scottish Government, we agreed that the clause could be removed. The Scottish Government accept that that will mean that in future, as at present, only a full Act of the Scottish Parliament can be referred to the Supreme Court, even if only a single provision raises competence issues. I should make clear that the provision in the original Bill was intended to be helpful to the Scottish Government. However, they decided that they did not want that helpful measure to be included, and as a result we agreed to remove it.
Lords amendments 5 and 26 would remove the clause on insolvency and the related provision in schedule 2. Clause 12 would return exclusive legislative competence to the UK Parliament in relation to all aspects of the winding up of business associations. It is intended to ensure that the rules on corporate insolvency are consistent on both sides of the border. The UK Government continue to believe that it is important to take into account the view of stakeholders that, when appropriate, Scottish insolvency procedures should be in step with those in the rest of the UK. Our discussions with the Scottish Government have provided us with assurances that we can address those concerns without amending the devolution settlement in this respect.
Let me make clear to Scottish National party Members that the UK Government have removed the clause on the understanding that the Scottish Government will consider the modernisation measures for the devolved areas of winding up in Scotland that were introduced into the reserved insolvency procedures in 2009 and 2010, and have provided assurances that future changes made by the UK Parliament or Ministers in that area will be considered in a timely fashion by the Scottish Government in their area of competence.
Lords amendment 6 seeks to remove clause 13. The clause deals with the regulation of health professionals, to which the right hon. Member for Stirling (Mrs McGuire) has already alluded. Since Royal Assent to the Scotland Act 1998, the regulation of any health professionals not regulated by the legislation listed in schedule 5 has fallen within the legislative competence of the Scottish Parliament, but although the Scottish Parliament has had the power to introduce separate legislation in respect of the regulation of health professionals, it has chosen not to do so.
During our discussions with the Scottish Government, they raised some concerns about the clause. They pointed out that the delivery of health care is, on the whole, devolved to Scotland. However, they gave us clear assurances that they would work closely with us to ensure that consistent regulatory regimes apply to all health professionals. I assure the right hon. Member for Stirling that it is on the basis of those assurances that the UK Government are content to continue to develop policy in relation to the regulation of health professionals with the Scottish Government.
During consideration of the Bill in the House of Commons and by the Committees of the Scottish Parliament, I was not aware of a single piece of evidence suggesting that the regulation of health professionals would benefit from not being carried out on a UK-wide basis. In fact, it has been pointed out that health professionals are a relatively mobile group who may want to move to and from jobs in Scotland and England, and who would therefore not benefit from separate regulation.
As I said earlier, the Scottish Government have given assurances that although there will not be a relevant clause in the Bill, they will work with the UK Government to ensure that there is a uniform approach to the regulation of health professionals. I think that those remarks are consistent with the First Minister’s statement yesterday that he intended to align taxes in Scotland with those in the rest of the United Kingdom if Scotland became independent. In fact, if Scotland became independent, there would be no difference on virtually any matter.
Lords amendment 17 would remove clause 27. The Government included that clause to provide UK Ministers, concurrently with Scottish Ministers, with a power to implement international obligations in devolved areas. That would have allowed UK Ministers to implement international obligations on a UK basis, where it would be more convenient to do so. Both Governments acknowledge the importance of ensuring that all of the UK’s international obligations are fully implemented across the UK in a timely fashion. The UK Government are willing to remove this clause on the understanding that Scottish Ministers will ensure that any international obligations that fall within their responsibility are implemented on time. We have made clear to Scottish Ministers that the Government would be prepared to use their existing powers of direction under section 58(2) of the Scotland Act 1998 if we were to have concerns about the implementation of international obligations within the remit of Scottish Ministers.
Let me make it absolutely clear that the Government have not conceded on the principle of re-reservation, as the Scottish National party suggested during our earlier debates on this Bill. The Bill does not make devolution a one-way street. Clause 14 re-reserves the regulation of activities in Antarctica.
The hon. Gentleman forgets that he and his colleagues moved an amendment to remove the clause re-reserving activities in Antarctica. They were defeated in this House, and the Scottish Government have accepted that the regulation of activities in Antarctica should be re-reserved. I fail to understand the SNP negotiating position, because it appears that the regulation of dental hygienists—important though that is, as the right hon. Member for Stirling said—cannot be re-reserved, yet matters such as the administration of the Crown Estate, corporation tax, excise duties and further broadcasting powers were not red lines for the SNP in its discussions on this Bill.
This re-reservation—which some Members on the Opposition Benches sought to remove at an earlier stage—is a sensible measure.
We have removed provisions from the Bill where we have been given necessary assurances that their effect will be achieved by other means, or where we now take the view that we can sufficiently rely on existing powers.
Finally, let me turn to the proposed new clause under Lords amendment 18. Its purpose is to provide information to both Houses in the UK Parliament on the implementation and operation of the financial powers in this Bill. It requires the Secretary of State for Scotland to publish an annual report to both Houses of Parliament within one year of the Scotland Bill becoming an Act and until a year after the tax and borrowing powers are fully transferred to the Scottish Parliament. The last report is therefore expected to be published in 2020. The Secretary of State will send a copy of his report to Scottish Ministers, who will lay a copy of it before the Scottish Parliament. The proposed new clause also requires Scottish Ministers to lay a report of the same title to the Scottish Parliament on an annual basis and to provide a copy to lay before both Houses of the UK Parliament.
This amendment was proposed by the Government during discussions with the Scottish Government. The new provision will ensure that there is a transparent mechanism of reporting to both Parliaments on implementation. Passing the Bill is just one part of the process to ensure that these new powers are delivered and the accountability and responsibility of the Scottish Parliament are increased. The important implementation work that both Governments need to undertake to ensure that the financial measures operate successfully will now begin in earnest. This amendment will ensure that both Parliaments are kept properly informed of progress on implementation by both the Secretary of State for Scotland and the Scottish Government.
The Government intend for these reports to be comprehensive and accessible to all. They must cover all aspects of implementing the Scotland Bill financial package, legislative and non-legislative. The proposed new clause sets out the areas that each report must address. They are as follows: an update on all aspects of progress in implementing the powers in the Bill and its Command Paper since the previous report; details of the future steps towards implementation that all parties must take; an assessment of the operation of the powers; an assessment of the operation of powers to devolve taxes to the Scottish Parliament or changes to the powers of the Scottish Ministers to borrow, or any other changes to the finance provisions in the Bill; the effect of transferring tax powers on the Scottish block grant; and any other matters concerning sources of revenue to the Scottish Government.
I believe the amendments in this group will help ensure that the Bill delivers the most significant transfer of powers to the Scottish Parliament, and I beg to move that the House agrees to them.
This group of amendments is a result of agreement between the UK and Scottish Governments on the legislative consent motion passed last week by the Scottish Parliament, giving its assent to the transfer of powers prospectively made by the Bill.
Lords amendment 2 would remove clause 7, which creates new arrangements for the partial suspension of a Bill passed by the Scottish Parliament, subject to a reference made by the Advocate-General for Scotland, the Attorney-General or the Lord Advocate to the Supreme Court under section 33 of the Scotland Act 1998. The Scottish Government said that that could delay the overall implementation of affected Bills, and have thus invited this House to consider the merits of the existing arrangements. We consider that the existing judicial processes have worked sufficiently well in ensuring that the Scottish Parliament legislates within its powers, and that any incompatibilities found to arise by the Supreme Court in Bills pre-Assent or Acts post-Assent can be dealt with by amending legislation at Holyrood. We are therefore minded to accept the amendment.
Lords amendment 5 would remove clause 12, which re-reserves to the UK Parliament certain aspects of insolvency law in Scotland—on the winding-up of companies, the effect on diligence, prior transactions and the insolvency of social landlords. Personal insolvency and receiverships remain entirely devolved to Holyrood, and administrations and company voluntary agreements remain a responsibility of this Parliament as they affect Scotland. Lords amendment 26 would remove schedule 2, which makes the consequential changes to insolvency law required if clause 12 remains part of the Bill.
Lords amendment 6 would remove clause 13, which re-reserves the regulation of the medical professions in Scotland to the UK Parliament. On Lords amendments 5 and 6, we note that the Scottish Parliament indicates in its legislative consent motion that it will aim to make regulation in both matters in a way that is consistent with regulation across the United Kingdom. Given that commitment, we see no reason to oppose either amendment.
Lords amendment 17 would remove clause 27, which permits Ministers in the UK Government to make a single order in relation to the implementation of international obligations applicable across the United Kingdom, whether they extend into devolved competences or not. A similar approach already exists in relation to EU obligations. The Scottish Government have made commitments on the continued implementation of non-EU international obligations. Given that, and given also the power of direction available to the UK Government in such matters under section 58 of the 1998 Act, we would not oppose Lords amendment 17.
Lords amendment 18 would add, after clause 37, a significant new clause creating a new obligation on both the UK and Scottish Governments to make an annual report to their respective Parliaments on the progress made toward implementing the new tax and borrowing powers devolved to the Scottish Parliament by the Bill. We are aware that the Office for Budget Responsibility has already begun to make estimates of Scottish revenues from the tax responsibilities to be devolved, and has published, alongside its economic and fiscal outlook, estimates for this fiscal year and each successive year. In particular, it estimates revenues from the prospective Scottish rate of income tax at £4.4 billion this financial year, rising to £5.6 billion by 2016-17; revenues from stamp duty land tax at £328 million this financial year, rising to £536 million by 2016-17; and revenues from landfill tax at £123 million this financial year, rising to £157 million by 2016-17.
My hon. Friend raises a pertinent point, because although we hear demands for powers made by certain parties, no purpose is ever given for the devolution of those powers. It is a staggering omission that we know absolutely nothing about the future of stamp duty land tax, given that it is due to be devolved to Holyrood in just a few short years. We have heard about the lack of evidence provided for the devolution of other taxes, with the Institute for Fiscal Studies setting out convincing evidence in its “Green Budget” a few months ago that devolving corporation tax would involve a race to the bottom and be a very risky endeavour indeed.
My hon. Friend is being incredibly generous in giving way again. Is it not the case that the setting of corporation tax was devolved to Northern Ireland simply to allow it to equalise its rate with the rate on the other side of the land border to the south? Indeed, the First Minister of Scotland’s speech at the Institute of Directors yesterday, in which he said that he would use the taxation powers only to equalise the rates, highlights why corporation tax should not be devolved to Scotland.
The other implication of devolving corporation tax for it to be reduced to the levels that apply in the Republic of Ireland is that £2.6 billion would be lost from the Scottish block as a result. That would not be in the interests of economic growth, services, health or education in Scotland. As PricewaterhouseCoopers said in its report to Scottish Parliament’s Bill Committee on the Bill, the cut in corporation tax was only the 16th or 17th highest reason for companies investing in the Republic of Ireland, while most of the investment in the Republic of Ireland occurred when corporation taxes were not at the reduced level. The case for devolving corporation tax has therefore not been made. As we have seen in the past few days, with confusion over income tax policy and no rule on what debt levels a separate Scottish state would have, the First Minister’s plans for separation seem to be dissolving into yet another omnishambles.
As we are debating this matter, can we have confirmation that the British Labour party is now completely opposed to the devolution of corporation tax to Scotland, even if the evidence was that it would benefit Scotland through economic growth and jobs for ordinary working people? Is that correct?
Let me, as a member of the Scottish Labour party, tell a member of the London Scottish National party that our commission will look at the evidence on all fiscal matters. However, strong evidence has already been presented that goes against the devolution of corporation tax. No convincing evidence has been presented by either the Scottish Government or the Scottish National party to show how simply basing a policy on corporation tax would produce additional jobs and growth.
I am listening carefully to what the hon. Gentleman is saying about this complicated subject. He quoted the First Minister of Scotland as saying that he would only equalise taxation. I know the hon. Gentleman cannot answer for the SNP, but if the past is anything to go by, Labour always raises taxes. Can he therefore confirm that, should Scotland separate from the rest of the United Kingdom, he could give no undertaking that a future Labour Government in Scotland might not stick by the current First Minister’s—
Thank you, Mr Deputy Speaker. The hon. Lady tempts me to make future tax policy. However, the point she makes is that corporation tax is better levied and raised at UK level, and that is what we shall be defending in the debates on these amendments and the debates in the coming months.
The agreement between the UK Government and the Scottish Government provides that borrowing limits will be reviewed regularly, ahead of UK spending reviews by the Joint Exchequer Committee, and a consultation will be initiated on the Scottish Government being able to issue bonds. The annual reports will allow Members of this House and the Scottish Parliament both to scrutinise the detailed arrangements made by Her Majesty’s Revenue and Customs and the Scottish Government in the run-up to implementation and the first five years following the commencement of operation of the new fiscal powers, and to permit any remaining issues—such as the precise interpretation of the definition of a Scottish taxpayer, as raised by my hon. Friend the Member for Glasgow North (Ann McKechin) in Committee—to be resolved before the tax powers become active in April 2015. It is also our view that the reports will provide an opportunity to scrutinise arrangements made at Holyrood on the workings or replacement of stamp duty land tax. We welcome the new commitments on giving consideration to bond issuance by the Scottish Government, and the additional capacity that such borrowing powers will provide to the Scottish Government to make capital and infrastructure investments, which are vital for Scotland’s economic competitiveness.
The requirement to make annual reports will also show the strength of the financial powers being devolved by the Bill. The Scottish Consolidated Fund will have sufficient balance to ensure cash flow on the devolution of these new tax powers and to manage any excessive in-year volatility of tax receipts. It will also meet differences between forecast and out-turn receipts on income tax allocated to the Scottish Government at the beginning of the relevant fiscal year.
Indeed, one of the benefits of being part of the United Kingdom is that we enjoy a fiscal union in which there are significant fiscal transfers from the UK level to Scotland. The evidence published in January 2010 by my right hon. Friend the Member for East Renfrewshire (Mr Murphy), when he was Secretary of State for Scotland, indicated that in the 20 years running up to 2008, fiscal transfers of about £75 billion had taken place. That is the Union dividend; that is the benefit that Scotland has obtained from remaining part of the United Kingdom, and we will defend that in the debates in the coming months.
These powers to meet any differences between forecasts and actual receipts of income tax rise to a cumulative limit of £500 million and permit an annual increase in capital investment of up to £230 million per year, subject to a cumulative limit of £2.2 billion from the national loans fund, the Public Works Loans Board or commercial banks.
We welcome the fact that the Scottish Government have not persisted with their demands on the devolution in the Bill of corporation tax or excise duty, which would not be in the interests of the people of Scotland at this time. Finally, may I say that we offer our support for this amendment and the others in this group?
I am grateful for the opportunity to speak on this group. I will speak specifically to Lords amendment 18, but before I do so, Mr Deputy Speaker, I hope it is in order for me, having taken part in all the Bill’s proceedings in the House, to place on the record how much I welcome the progress that has been made, both here and in the Scottish Parliament; I particularly welcome the unanimous approval given by the Scottish Parliament on 18 April. I believe that the Bill as a whole embodies sensible evolutionary progress on devolution. It represents a measured and calm approach, which takes forward at a sensible pace the whole devolutionary process, and it avoids some of the risk and uncertainty that would be involved in more extreme constitutional change that some Opposition parties want.
On Lords amendment 18, the publication of an annual statement of progress on the transfer of fiscal powers is a welcome and sensible move. I do not think we should underestimate the scale of change that will occur when capital borrowing powers are devolved, when income tax powers are devolved, and when stamp duty and the other measures are passed down. A huge sum of money is involved and, as other right hon. and hon. Members have mentioned, it will mean that the Scottish Parliament is responsible for raising more than one third of its spending. When coupled with the actual amount of money involved, the process of disentangling what has been a unitary tax system should not be underestimated.
Does my hon. Friend agree that producing such a report will bring greater openness and transparency to the financial affairs of the Scottish Parliament, and that it will also allow greater scrutiny of issues relating to the Barnett formula?
My hon. Friend makes a very important point, as the essence of the Bill is that it creates additional transparency and provides for democratic scrutiny of the decisions made by the Scottish Parliament. That is important not only in Scotland, but in England. I am sure that constituents write to him to complain about some of what they see as the largesse given to Scotland. Some of what is reported to us is not accurate—the media tend to whip up a storm about the bounty that is provided to Scotland. Some of what is said may be true, but greater transparency will be healthy for democracy and it will remove some of the myths from the debate. I think that this measure will be good for the Scottish Parliament, for devolution and for the Union.
I am listening to the hon. Gentleman with keen interest and I very much approve of the tone of his remarks. Will he ensure that when nonsensical claims are made about Scotland having this “largesse”, as he describes it, he will deal with them all in the same way as he just has?
I am grateful to the hon. Gentleman for that intervention. I always try to be reasonable and measured in my comments. These issues are important and I have long argued—I will not repeat the arguments that I have made in other debates, as I think you would quickly rule me out of order, Madam Deputy Speaker—that there is a great deal of confusion about the fiscal relationship between Scotland and the rest of the United Kingdom. I think that this measure will give extra clarity. Some of the claims are justified; others are not. I shall not be tempted down the path of identifying which are and which are not, but, as my hon. Friend the Member for Carlisle (John Stevenson) says, it is important to have that scrutiny so that we can keep tabs on this very complex change. The last thing our economy needs in these difficult economic times is additional uncertainty about changes that are being rushed through that might provide uncertain trading conditions for companies. The proposed process is measured, calm and sensible.
I am glad that some of the other demands for fiscal transfers have been resisted at this stage. We have talked about corporation tax and I will not re-enter that debate. The demands made by the Scottish National party initially included the transfer of excise duties, but even they now realise the complexity that that would involve, thanks to the fact that such an august body as the Scotch Whisky Association—a very fine body—pointed out that different alcohol duties north and south of the border would require the introduction of some sort of tax border policing to ensure that there was no abuse of the system. I am glad that that demand has been dropped.
As my hon. Friend says, the additional transparency will be good for our constituents. The publication of the annual reports will also be helpful in relation to another sensible change that has been made during the progress of this Bill, which is the proposed adjustment to the annual block grant. Initially, I think there was to be a one-off assessment of what change should be made to the block grant as a result of the fiscal changes. That has now been amended to be an annual assessment of what I think is known as the Holtham approach, which has been considered for funding for the Welsh Assembly. Having that annual check on a very complex and dynamic fiscal situation will be sensible. I recall that similar changes were made to the calculation of the Barnett formula in the 1990s when the initial formula, which had been set in stone since it was first introduced in the late 1970s, had resulted in some disparities and anomalies as a result of changing population levels. That has since been adjusted to an annual change.
As my hon. Friend says, a change has been made at the last moment to what is called the no-detriment principle, which was indeed set out in the Holtham report, produced in July 2010. Does he concede that the majority of the Holtham report focused on a needs-based funding formula, and that we are not implementing that at this time?
I am grateful to my hon. Friend for that intervention but I do not think that you would be terribly enamoured of me, Madam Deputy Speaker, if I widened the debate into a discussion of the Barnett formula and fiscal matters more generally. My hon. Friend is right, however, that that is not part of the Bill. It is a subject to which I think we will return on another day.
In conclusion, I welcome Lords amendment 18, which would make a sensible change to the Bill. I welcome the Bill as a whole, as it is a sensible change and a sensible evolution of the devolutionary process, and I think that it will be welcomed both north and south of the border.
I want to say only a few words about this group of amendments. They are very welcome, particularly the scratching out of some of the re-reservations. We tabled amendments, of course, to remove the re-reservation of insolvency and health professional regulation matters in a previous stage, but the Government rejected them at that point, as did the British Labour party. I am delighted that there is now unanimity that those re-reservations should be removed.
Indeed it does. We can safely say that we have no territorial claims on Antarctica. This is a Scotland Bill, and the re-reservation removal is sensible.
Lords amendment 18 deals with reports on the implementation and operation of financial measures in the Bill. That is a sensible provision, and it is linked closely to the commencement of those financial provisions. We made that point repeatedly throughout debates on the Bill. In the Committee of the whole House, on the second day of debate, we discussed commencement powers to ensure that things were done at the correct time. We had a good debate on six separate commencement provisions for various financial measures. We said:
“If the commencement arrangements are left unchanged, many of the most important questions about the Bill will be left unanswered.”—[Official Report, 14 March 2011; Vol. 525, c. 89.]
On Third Reading, we said that the amendments that we had tabled on commencement would ensure that the tax provisions could not
“be brought into effect unless the Scottish Parliament...specifically consented.”—[Official Report, 21 June 2011; Vol. 530, c. 248.]
That was not just a point of principle—matters that affect the Scottish Parliament should be decided by the Scottish Parliament—but concerned some practical, technical issues. If a number of fiscal measures were introduced at the wrong time in the economic cycle that could be detrimental economically. Several Labour Members understood that point, and did so very clearly indeed, and it was interesting that Labour abstained from decisions on commencement—the party did not object to it, and I am glad that it welcomes what we have at the moment.
I want to take the opportunity, unusually, to be generous to the Secretary of State. The discussions and negotiations between his team and Bruce Crawford, the Cabinet Secretary for Parliamentary Business and Cabinet Strategy, and the letter that the Secretary of State sent to Bruce and to the Cabinet Secretary for Finance, Employment and Sustainable Growth, John Swinney, were extremely helpful, particularly the part of the letter that said:
“Consistent with the principle of consent”—
which was what we were determined to deliver—
“our two governments should reach agreement on implementation issues, including adjustments to the block grant…Each government should also provide assurance to its Parliament before the relevant provisions of the Bill are brought into force and before implementation arrangements are brought into effect.”
That agreement on the requirement properly to engage the Parliaments, and the principle of consent, were what we were trying to achieve. For the avoidance of doubt—and I have said this to the Secretary of State for Scotland, so it is not a surprise to him—of course there will be a bun fight about the contents of the Bill. Of course the matters that are being devolved do not go far enough for the Scottish National party—that is not a huge surprise—but making sure that we avoid the dangers of the financial provisions commencing at the wrong time was always the key thing that we needed to change. The Secretary of State knows that, so I very much welcome that exchange of letters to ensure that commencement is done properly on the basis of consent.
Allow me to be equally generous to the hon. Gentleman in accepting the points that he has made. From the outset, we have made it clear that we want to reach agreement on all those provisions before they are implemented. What he and his colleagues originally wished for was joint commencement powers, which are not in the Bill. However, we are committed, as we properly have to be, to working with the Scottish Government, of whatever colour, to ensure that those proposals are implemented properly.
I thank the Secretary of State. Irrespective of the final mechanism, which was a subject of some negotiation, the provisions, which allow us to proceed on the basis of consent and agreement, effectively deliver the protections against the commencement of fiscal provisions at the wrong time, which was a key objective in getting to where we are.
It seems a little dry to focus on Lords amendment 18 with reference to clause 37, but it is a central issue. It is not a dry issue at all. As my hon. Friends the Members for Carlisle (John Stevenson) and for Milton Keynes South (Iain Stewart) pointed out, this is central to two issues that define the Union. The first is the issue of borrowing and finance, and the second is that of what my hon. Friend the Member for Carlisle called the issue of transparency. These two principles of borrowing and transparency—borrowing defined in clause 37 and transparency in Lords amendment 18—show why the Union matters. Transparency matters because an enormous amount of the pressure for separation from Scots, and from some English people, comes from suspicion—suspicion about money. Borrowing matters because borrowing shows why the Union can operate well.
The shadow Minister, the hon. Member for Glasgow North East (Mr Bain), pointed out three things which the clause delivers. It delivers, first, decentralisation. An important part of decentralisation is fiscal responsibility. It delivers, secondly, a lever for growth, but the third and most important thing that it delivers is macroeconomic stability within the context of the United Kingdom. This is central because the biggest argument for the Union, the thing that underlies the dry language of the Bill, is why being part of a bigger country matters—why, to put it in the most brutal terms, we do not want to be Denmark.
Why is it that our ancestors got on their Viking boats, left Denmark and came here? The answer is, of course, that there are benefits in size. There are benefits to having an economy 12 times the size of Denmark’s. There are benefits to having a population 12 times the size of Denmark’s, with the corresponding borrowing and fiscal responsibility. That perfect balance enshrined in clause 37 and revealed in amendment 18 is the balance that comes from the benefits of autonomy combined with the benefits of size.
Thank you, Madam Deputy Speaker. I am happy for us to discuss Scottish history later.
We are discussing transparency, which is exactly what Lords amendment 18 relates to—explaining to this Parliament, to the Scottish Parliament, to the British people and to the Scottish people what we are doing with their money. Transparency is crucial because money is at the heart of this. On the one hand, the Scottish National party uses money to fight for separation through fantasies about oil. On the other hand, English nationalists, who are equally to blame for what is happening to the United Kingdom, focus on money to attack Scotland. This is the wrong thing to do.
Lords amendment 18 matters because it should, we hope, put those arguments aside. There are those who imagine that we are going to wreck the United Kingdom because we are worried about free eye tests, prescription charges or tuition fees. For goodness’ sake, let us, in line with Lords amendment 18, see the money. What we will see is that we are spending every year in transfer payments to Scotland half of what we are spending on the war in Afghanistan, if we include the debt and veterans costs. The reason why we need to move beyond this is that the kind of borrowing enshrined in the clause and amended in Lords amendment 18 is the borrowing that made us great together.
The very economics that underlie that notion of borrowing came south from Edinburgh with Adam Smith and the enlightenment. The very same borrowing on the basis of the United Kingdom meant that Scots and English were able to fight together at Waterloo and win. The very borrowing enshrined in clause 37 is what allowed us to create the national health service together. The very borrowing enshrined in clause 37 and amended and made transparent in Lords amendment 18 is what allows us to flourish today. I urge the House to vote for Lords amendment 18 because it enshrines the principle of togetherness.
The hon. Gentleman spoke of a possible history debate with the hon. Member for Dundee East (Stewart Hosie). We invite the hon. Member for Penrith and The Border (Rory Stewart) to come to the Floor of the House, because I am sure that the debate is one that the whole House would like to hear, and no doubt we know who the winner would be.
I thank the hon. Gentleman very much indeed.
Having been a little rhetorical, I will return to the measures set out in the new clause proposed in Lords amendment 18. I congratulate the example set by my hon. Friend the hon. Member for Milton Keynes South in the moderation of his tone. The conduct of the Ministers in this regard, which has been praised by the hon. Member for Dundee East (Stewart Hosie)—he is now leaving the Chamber to research in his history books—shows exemplary co-operation and is an example of why the United Kingdom Parliament works so well. The moderate voices of the hon. Member for Milton Keynes South and the shadow Minister show that separation is unnecessary. The correct praise for the Scottish National party for its successes shows the successes of autonomy, not of separation and independence. If we can get the principles of transparency correct and the exact details of Lords amendment 18, the sinews of the Union, the point-by-point, sometimes dry legislative amendments that allow us to work together and avoid what the Scottish National party wishes to push us into—a black-and-white solution of either fatal inertness or still more terrible activity—we will instead, through a voice of passionate moderation and amendments of this sort, keep together the Union that made us great and will make us greater still.
It is a great pleasure to follow the hon. Member for Penrith and The Border (Rory Stewart), who has a great knowledge of everything historical and has driven the hon. Member for Dundee East (Stewart Hosie) out of the Chamber to hunt out not only his history books, but no doubt his horned helmet. If he can drive SNP Members out of the Chamber with such ease, he should speak here more often to ensure they disappear.
I, too, wish to concentrate on Lords amendment 18 and its proposed new clause, and that is for one simple reason: transparency. Transparency is the word that hits the new clause on the head, as the hon. Gentleman suggested. We need transparency because over the past few months, and indeed since the Scottish parliamentary elections in 2011, we have had anything but from the Scottish Government. We have had smoke and mirrors on tax, the constitutional settlement, the currency, visa arrangements and NATO—the list is endless. One of the most prevalent calls in Scotland in the debate on separation is for transparency on taxation, because that feeds into public services and the ordinary lives of everyone who lives in Scotland and, indeed, the other component parts of the United Kingdom.
My hon. Friend is making an excellent speech. Does he agree that there is a strong case for transparency from the Scottish Parliament on how money is spent, because we have not always had that?
I am grateful to my right hon. Friend for raising one of the key points on why we need transparency. The hon. Member for Penrith and The Border said clearly that transparency helps not only the Scottish people to determine how their money is spent and allocated, but the other component parts of the United Kingdom to see how money is spent in Scotland, which would be welcomed by everyone in this House. Indeed, we have not even had transparency on the Bill itself. The Bill has been called “a poison pill”, “a dog’s breakfast” and “dangerous” by the same party that voted for it, campaigned against it and will, no doubt, vote for the amendments if the House divides this afternoon.
We need transparency from the Scottish Government at every level on what they wish to achieve. In the past few months, we have heard the Scottish National party say in public—the records are available—that it would reduce fuel duty, reduce corporation tax to the level it is in Ireland, and will be in Northern Ireland, which is 12.5 %, and that it would reduce duties and business rates. I am not an expert on taxation systems or, indeed, on algorithms or mathematics, but it seems that that would lower every single tax in Scotland, so I pose the question, where would the money come from? There is only one place that it can come from, and that is public services, so, on the report that would come from the Secretary of State concerning those powers, I challenge the Scottish Government and the Scottish National party to tell us, with regard to every single tax that they wish to lower or decrease, where the money will come from and where the money will go.
Let us take corporation tax, which my hon. Friend the Member for Glasgow North East (Mr Bain) mentioned, and which is a complicated issue. I mentioned smoke and mirrors at the start of my contribution, and there has been a lot of smoke and mirrors from the Scottish Government on corporation tax. They have used the example of Northern Ireland, but there are two clear lessons from Northern Ireland.
As I said in an intervention, Northern Ireland wants corporation tax devolved to equalise its rate with the country on its land border to the south and ensure that it is not disadvantaged. That highlights two things: first, that the land border is important; and secondly that corporation tax levels, when they are lowered to such a drastic state as we have seen in Ireland, create an uncompetitive situation and a race to the bottom.
We cannot afford that race to the bottom in the United Kingdom, with its land border between England and Scotland, because it would create an environment in which the money that came out of the block grant—some £2.6 billion if the rate were equalised with Ireland’s at 12.5%—would have to come from public services.
The Scottish Government have yet to tell us which public services they would cut. The national health service already has far fewer nurses in Scotland than it did in 2007, and the Scottish Government have yet to tell us where the money would come from in terms of public services, so I should welcome the debate and the evidence that the hon. Member for Perth and North Perthshire (Pete Wishart) tells us we should have about corporation tax, because perhaps the Scottish Government could lay out that information, and the report under discussion, which would come back annually to the House until those taxation powers had been fully devolved, would be very welcome and could examine some of those issues.
The smoke and mirrors continues, because the First Minister of Scotland, Alex Salmond, when he was in London yesterday, no doubt met his London SNP colleagues to discuss these issues. In his speech to the Institute of Directors he suggested that, with the powers in the Bill transferred to Scotland, income tax levels in Scotland would not be changed. One of the key points here is that the Scottish Parliament has powers to reduce or to increase income tax in Scotland by 3p, but the Scottish Government chose not to maintain HMRC’s systems to enable that, so we are left with the Scottish Government and, indeed, the First Minister jumping up and down like little children, demanding powers—
I will be coming back to the report this very second, because it is about transparency, and what we have had quite clearly from the Scottish Government is a complete lack of transparency. I hope that the report allows us some, because when the Bill receives Royal Assent, we will have a Scottish rate of income tax, the devolution of stamp duties, the devolution of landfill tax, the power to create new taxes and the power to borrow of many billions of pounds—borrowing powers, incidentally, which the Scottish Government did not want but have planned to use. So it is quite important that the report comes back.
With this amendment, the Lords have done a good job of enabling us to see where the new taxes will go. I certainly welcome it and will support it later this afternoon.
Having listened to the positive speeches that have been made about Lords amendment 18, I wonder whether it needs more support from either side of the House, but I rise to support it none the less.
As a member of the Scottish Affairs Committee, I welcome the Bill, as amended, and recognise how positive it is that the Government have delivered the additional powers for Holyrood that were promised in the coalition agreement, thereby fulfilling a manifesto commitment of more than one party in the House. As has been said many times—but it bears repeating—the Bill will deliver the largest transfer of fiscal powers to Scotland since the creation of the UK. It has involved a huge amount of work by many people, not least by Ministers at the Scotland Office. I congratulate them on reaching this stage with the Bill and on its being supported by Holyrood and the UK Government without reservation.
I welcome Lords amendment 18, which will facilitate better scrutiny of the implementation of the financial aspects of the Bill. As we all recognise, economic growth driven by enterprise and predominantly by businesses in our local communities will be a key element in the resurgence of this nation. Creating a new Scottish rate of income tax from April 2016 will give the Scottish Government more responsibility not only over how they spend revenue, but over how they raise it. That is a crucial discipline, which we hope will increase the likelihood that fiscal decisions will reflect the needs and priorities of Scotland, the Scottish economy and, most importantly, the businesses of Scotland. This is an opportunity to deliver genuine and innovative fiscal accountability for the people of Scotland. The amendment will further facilitate and enhance that.
I welcome the fairness, transparency and accountability that the amendment will promote, which have been mentioned by a number of Members. It will insert a new clause requiring the Secretary of State to publish a report on the implementation and operation of the financial aspects of the Bill within one year of the Bill becoming an Act, and thereafter to publish an annual report until a year after the tax and borrowing powers are fully transferred to the Scottish Parliament. I welcome the fact that such reports must be laid before both Houses of Parliament and sent to Scottish Ministers, who will have to lay them before the Scottish Parliament, and the joint working and greater co-operation that that process will undoubtedly promote. As has been said, the new clause will require Scottish Ministers to make and lay reports of the same kind before the Scottish Parliament on an annual basis and to provide a copy of each report to the Secretary of State to lay before both Houses of Parliament.
The new clause also sets out the areas that each report must include. That detail is welcome, and I will mention some of the details because, although they have been referred to, they have not been covered as comprehensively as I would like. The reports must include an update on all aspects of progress towards the commencement of provisions on the financial aspects of the Bill since the previous report; detail of any steps towards the commencement that the maker of the report proposes should be taken; an assessment of the operation of the provisions that have been commenced; an assessment of the operation of powers to devolve taxes to the Scottish Parliament or to change the powers of Scottish Ministers to borrow—those borrowing powers are substantial and I will return to them in a moment—or of any other changes to the financial provisions in the Bill; the effect of transferring tax powers on the Scottish block grant; and any other matters concerning sources of revenue for the Scottish Administration that the maker of the report considers should be brought to the attention of the UK or Scottish Parliaments. The sheer width of the areas that will be scrutinised in the report is to be welcomed.
There will be a new £2.2 billion capital borrowing power for the Scottish Parliament from April 2015. A limited version of the power will be in place from April 2013 to enable the Scottish Government to fund £100 million of prepayments for the Forth road crossing, which will allow early work on the bridge to get under way. That will provide an effective boost for the economy across Scotland and the UK.
The other powers that will be introduced and that will be scrutinised include not only the new Scottish rate of income tax, which will be in place from April 2016, but the power to introduce new taxes, subject to the agreement of the UK Government, from the enactment of the Bill, and the full devolution of stamp duty, land tax and landfill tax from April 2015. Those are not token gestures, but substantial changes, as the figures show. Last month, the Office for Budget Responsibility produced a forecast of the sums that will be raised under the Scotland Bill powers in 2015-16. The figures demonstrate the importance of good scrutiny. The sums are great: £5,265 million from income tax, £480 million from stamp duty, £151 million from landfill tax and £49 million from the aggregates levy. They are huge figures by any standards, and it is right that there is year-on-year reporting on them, with scrutiny and accountability. That is why the amendment is so welcome.
The amendment will strengthen democratic accountability, better inform all those involved and the people whom they serve and bolster political engagement in Scottish communities, which is welcome. The amended income tax provision in the Bill will mean that the procedure for setting the Scottish Government’s budget will be more responsive to the wishes of the Scottish electorate, and the additional provisions of Lords amendment 18 will effectively augment the implementation of the change.
The Bill as amended is about improving the devolution settlement and promoting economic growth effectively. The income tax proposals in it retain the reservation of overall fiscal management to the UK Government, but ensure that Scotland’s needs are supported alongside a UK-wide strategy of promoting growth and economic stability for all those in the Union. In welcoming the Bill, the report of the Scottish Parliament’s own Committee stated:
“The Scotland Bill is about good government. It is intended to improve how Scotland is governed and align decisions on spending and taxation more closely so that the Scottish Parliament will be more accountable and, in the long run, take better decisions. Better decisions will, in the longer term, mean improvements to many aspects of Scottish public life.”
I am sure the scrutiny that the amendment will provide—it is good to hear that it is a Government amendment—will indeed furnish those improvements.
Devolution on the basis of the Bill as amended will give Scotland the best of both worlds. It is better off as part of a strong UK when dealing with economic and global security shocks, and the devolution settlement as set down in the Bill will facilitate Scotland in making its own decisions on matters such as health, education, transport and policing. I am therefore pleased that, after careful consideration, the Bill has been supported by both Houses in the UK Parliament, and that it was passed unanimously by the Scottish Parliament just a few days ago following agreement in March between the UK and Scottish Governments on its details. That is an example of the effective joint working that Lords amendment 18 is intended further to promote.
I congratulate the Government on their determination to continue to bring operational effectiveness to the new tax powers in the Bill through joint working over the coming months and years. The Bill is a fair and substantial way of promoting devolution, with the intention of reaching effective implementation. I am sure that Members of all parties will welcome the good intent that the Government are showing towards that effective implementation and joint working on the Bill. I welcome the Bill as amended.
It is a pleasure to follow the hon. Member for Congleton (Fiona Bruce). The Scottish people are always pleased at the interest and indulgence of English Members of Parliament in our affairs and business. We are all grateful for that.
It is a pity that the hon. Member for Penrith and The Border (Rory Stewart) has left the Chamber. I did not know whether to reach first for my horned helmet or my longboat during his comments about Vikings. I do not know how many people in Denmark are rushing to join a greater union with Germany—certainly I have never come across a Dane who has been keen to be part of that particular union.
The most notable thing about these Lords amendments is how little they were discussed in the Lords. I do not know whether other Members spent any time looking at the debates in the House of Lords, but I did, and “interminable” would not be the word to describe some of them. At times it seemed like the Michael Forsyth show—he was on his feet all the time. Such is his pre-eminent place in the Tory-led cross-Unionist alliance that people like him are leading the debate just now.
Does the hon. Gentleman recognise that, unlike the Scottish National party, Lord Forsyth achieved extra devolution to Scotland in the Bill? Lord Forsyth introduced amendments that extended the Scottish Parliament’s powers, which were accepted in the House of Lords and will be proposed in this Chamber. The Scottish National party has failed—
Order. I would like both the Minister and the hon. Member for Perth and North Perthshire (Pete Wishart) to return to the subject of the amendments. We should talk about the subject, not what debates went on elsewhere. I am sure, Mr Wishart, you will do so immediately.
Thank you, Madam Deputy Speaker, because I want to speak to the Lords amendments and discuss where they came from. We did not get much of a debate in the House of Lords. I do not know whether the Minister is helping the cross-Unionist campaign by promoting Michael Forsyth as a champion of the Unionist cause. I can see Labour Members practically squirming—
Order. Perhaps I did not make myself abundantly clear, Mr Wishart, so I shall do it now. If you wish to address the House, I wish you to address it on the basis of the business before us, which is Lords amendment 18 and associated matters, and to do so now, please.
Thank you, Madam Deputy Speaker. I was just making the point that there was very little in the way of debate, but the Government amendments are welcome. I particularly welcome the fact that the re-reservations have disappeared. I heard what the Minister said. I remember debates in the House going back to last March on the re-reservations of health professionals. I remember the passionate case that was put for—
I am grateful, Madam Deputy Speaker.
We have effectively ensured that there will no longer be re-reservations of health professionals because the clause was dropped, but the point I was trying to make was on how we managed to get to that point. I remember the debate and the passionate case that was put for the re-reservation of health professionals. The right hon. Member for Stirling (Mrs McGuire) does not agree with that, but I do not know whether Labour Front Benchers take that position or whether they believe that re-reservation is no longer required. I would be interested to find out how we got to this position.
Perhaps the hon. Gentleman did not hear what I said earlier. The Government reached this position because the Scottish Government gave assurances that they would work with the UK Government to ensure that the regulation of health professionals was the same across the UK. On the basis of those assurances, which I understand still hold good, the UK Government agreed that we would not put that clause in the Bill, hence the amendment. We have acted on the basis of assurances given by the SNP Government. I do not expect that they will renege on those assurances, and I hope the hon. Gentleman is not suggesting they will.
That sort of clarifies things, but I do not understand why the Minister did not accept the amendments when they were debated in the House in March last year. We know the right hon. Member for Stirling does not like the amendments and that the Minister has grudgingly given the re-reservation away, but we do not know the position of Labour Front Benchers.
I appreciate that I pre-empted this debate by speaking to the earlier group of amendments, but for the sake of clarity, I said that I supported the amendment because of the assurances given by the Scottish Government that there would still be a system of strategic regulation of health professionals. I would not like the hon. Gentleman to misinterpret me even if I pre-empted this discussion.
I am grateful to the right hon. Lady. I listened very carefully to what she said earlier, and picked up that her acceptance of that re-reservation measure was very grudging, as was her acceptance of the rest of the re-reservation measures addressed in this group of amendments.
There is one issue that has escaped attention, and that is the partially suspended acts of the Scottish Parliament, so that they can be challenged in the Supreme Court. One act of the Scottish Parliament that was challenged in the Supreme Court was our legislation on compensation for the victims of asbestos—a very important Bill that was supported by the whole of the Scottish Parliament. I am glad that the Supreme Court upheld the Scottish Parliament’s position on that issue. If that partial suspension had been allowed to continue, such challenges would have become much more common.
Professor Tierney of the University of Edinburgh said, when he was advising the Committee in the Scottish Parliament, that the idea of partial suspension was deeply disrespectful. I am pleased that it has now been abandoned as a result of the insistence of the Scottish Government and the good negotiations that have gone on between this Government and the Scottish Government.
We welcome the fact that so many of the things on which the Scottish Government and the Scottish Parliament, through the Bill Committee, have insisted have now been accepted by this Government. That has made this Bill better. Thank goodness we no longer have the two-way traffic that was supported and promoted by the Labour party on re-reservations. That was anti-devolutionist and I am glad it has abandoned that position. We support further powers for the Scottish Parliament. We now have the support of the Labour party in trying to achieve that, and it is once again a devolutionist party. I only look forward to the day when we get all the powers—the whole shooting match—returning to the Scottish Parliament.
I welcome the amendments to the Scotland Bill, which—I am proud to say—was brought forward at the earliest possible opportunity in the coalition’s programme by a Liberal Democrat Minister, reflecting our 100-year commitment to home rule. The Bill is the outcome of an inclusive and iterative process, and reflects the devolution journey embarked on in 1999. I am sure that it will not be the final iteration.
The Bill devolves huge further powers to the Scottish Government, which will make that Government much more responsible to the Scottish people for the taxes they raise and the money they spend, and that is hugely welcome. Powers should reside at the best level for them to be exercised, and in accordance with that sentiment, the original proposed reservation of powers relating to insolvency and the regulation of health professionals—as well as the powers relating to Antarctica, as we would not want to forget those—was a sensible part of that iterative process. I happily supported them as they reflected the key Liberal Democrat principle that powers should reside at that level of government where they most sensibly lie.
I understand the reason for removing those parts of the original Bill, given the assurances that the Minister has now received from the Scottish Government, but I am left confused by the situation that remains for the SNP and the Scottish Government. We now have assurances that insolvency will be treated similarly cross-border, and that regulation of health professionals will also be maintained in the same way. Those issues are added to the currency, monetary policy, the monarchy and, yesterday, income tax levels as areas in which there would be no change if Scottish independence were achieved. In the same vein, NATO membership may even be up for grabs.
The Bill and the amendments are the result of a sensible consultation and compromise, and that is surely the correct and proven way to move the devolution settlement forward. I know we will see further iteration of that once the distraction of independence has been put to bed as quickly as possible.
May I make the same apology to the House as I made to you earlier, Madam Deputy Speaker, for having been late for the debate? There was a break-in in Glasgow and I was involved in clearing things up.
As Chairman of the Scottish Affairs Committee, I very much welcome clause 18. Aside from the political discussions and disagreements in the Committee and elsewhere about the Bill, the main issue on which we wanted the Government to move was the question of transparency and whether the transfer of financial powers, both borrowing and revenue-raising, would have unintended consequences. We were concerned that the transfer might lead to errors and a diminution in the amount of money going to the Scottish Parliament owing to other changes not intended by the legislative movements being proposed.
We wanted to ensure that everything was above board and clear because we recognised that gainsayers of devolution wished to identify causes of dissent and disagreement. We thought that illumination of the facts might remove difficulty. The proposals to make everything transparent address our major issues with the Bill. Others might have said this already, but this seems to be a major step forward from the Government, indicating that they are prepared to consider the work of a Select Committee and take onboard its non-partisan points. My Committee colleague, the hon. Member for Congleton (Fiona Bruce), is present. I understand that the Committee is the high point of her week—she has said that to me and my colleagues several times—and I hope that she has made these points as well.
I hope that the difficulties to which the hon. Gentleman referred are sorted out quickly. I thank him and his Committee for their work and for his observation that the amendment resolves one of the central issues that he was anxious about. We assured him at the time that we wanted to ensure transparency and a proper ability for scrutiny. The report will be the basis of that, and I look forward to discussing the matter with him further at the appropriate moment.
I thank the Secretary of State for his good wishes. Witnesses have told me that someone was seen running away from the scene: they were wearing a pair of tartan trews, a kilt, a Scotland football top, a See You Jimmy hat and an Alex Salmond mask, and were holding a set of SNP manifestos, but this might have been a disguise.
I hope that how the dialogue has taken place so far will continue. The Secretary of State makes a useful point. It is essential that we do not simply have a big-bang transfer. As the hon. Member for Edinburgh West (Mike Crockart) said, this has to be an iterative process. We hope there will be a dialogue with the Select Committee, before the transfer and even before the papers are tabled with the Scottish Parliament and at Westminster, so that all reasonable complaints can be raised in a multi-party atmosphere. It is important not to give those who wish to pick a fight unnecessarily the opportunity do so. It is therefore essential that the maximum amount of information is made available at all times.
I thank the Secretary of State for introducing the clause and the Government for following it through—and I hope, in future contributions, to update the House on the reports of the criminal activity that has been taking place in Glasgow.
I rise to speak to Lords amendment 18, which I thoroughly support, like everyone else who has spoken. I pay tribute to my hon. Friend the Member for Milton Keynes South (Iain Stewart), who is something of an expert in these matters, for his measured and helpful approach, to my hon. Friend the Member for Congleton (Fiona Bruce) for all her work on these matters in the Select Committee, and to my hon. Friend the Member for Penrith and The Border (Rory Stewart), whose impassioned speech has, I am sure, left its mark on the House, as it should have done. Unsurprisingly, however, I take issue with the hon. Member for Perth and North Perthshire (Pete Wishart) over his patronising remarks about the indulgence of Members speaking in the debate whose seats are not in Scotland—[Interruption.] The hon. Gentleman has just indicated that he was being pleasant in his remarks. If that was the case, I thank him for them.
It is a matter of fact that, since the sad passing of my mother, nobody in Scotland listens to me at all any more, but I thank the hon. Gentleman for his intervention and I hope that he will forgive me for misinterpreting what he said.
The fact is that this is the Parliament of the United Kingdom, and the matters that are discussed and examined here affect the whole of the United Kingdom. That is why Lords amendment 18 is so important. Just as the people of Epping Forest have no particular interest in what happens in Liverpool, Birmingham, Leeds, Hull, Cornwall or Belfast, those events affect all of us none the less. We live together on this small island, and any artificially created divisions cannot hide the fact that we are interdependent and that our economy is the economy of the whole of the British isles. Those things that affect one of us affect all of us, and that is why Lords amendment 18 is so important.
The amendment clearly highlights the equal partnership, particularly in regard to taxation and economic welfare, between this Parliament and the Scottish Parliament. I wonder why anyone would wish to go further and create an unnecessary and damaging artificial separation. Amendment 18 and the others pertaining to this part of the Bill relate to an enormous transfer of power and accountability from this Parliament to the Scottish Parliament. So it should be. As a result of the transparency introduced by the Bill, as a result of Lords amendment 18, both Parliaments will be required to examine the economic fiscal affairs of each part of the United Kingdom. I hope that those matters will therefore be clearly seen as the years go on. If separation were to take place, we would lose all the strength that has been built up over a long time. I hope, however, that it will become apparent, with more transparency and a greater ability on the part of each of our legislative Houses to examine these matters, that the interdependence of the United Kingdom brings benefits to all of the United Kingdom.
To paraphrase my hon. Friend the Member for Penrith and The Border (Rory Stewart), I rise with passionate moderation to speak in favour of Lords amendment 18, although I will ask for some clarification of those provisions and of the legislative consent motion from the Scottish Parliament.
For the avoidance of doubt, the proposed new clause in Lords amendment 18, for which many claims have been made in the debate, is concerned with the implementation of the financial aspects of the Bill. It is extremely welcome that we are going to have a yearly review of those aspects. My points relate to some of the wording in the Secretary of State’s statement in March and to the prior negotiation between him and the Scottish Parliament.
Members have mentioned the Barnett formula, but it is not my intention to talk about it, other than to say that I do not apologise for being a proponent of a needs-based formula. I agree that moderate language should be used, but I would like to put on the record the fact that I feel that the current settlement is wrong. It is not a question of subsidy or largesse. The Scottish economy pays for the money it receives through oil revenues. I accept that. My point is, however, that for a nation or country such as the United Kingdom, revenues should be allocated on the basis of needs, not of where the oil is to be found. I put on the record again that the current arrangements have no element of subsidy. The working of the Barnett formula merely ensures that Scotland is whole, as it were, in respect of the Scottish oil revenues.
Let me deal now with the statement of 21 March, which I think provided the basis of the proposed new clause. The Secretary of State said that he would like to reflect in the new tax-raising powers the proposal recommended by Holtham, which would shield Scotland from macro-economic shocks. There would also be a no-detriment principle. The hon. Member for Perth and North Perthshire (Pete Wishart) said that he felt the House of Lords debate on this subject was poor. I have read their lordships’ comments and I have also read those of the Scottish Parliament—and I would say that it is pretty much 50:50 in length and quality. I thought both debates were good, but I want to speak further on the issue of no detriment.
This no-detriment provision represents a change to the working of the Bill between now and the last time it was discussed in this House about a year ago. I hope that Ministers will put my mind at rest as to how it will work. To recap, the last time we discussed this matter, we were going to adjust the block grant for the amount of income tax raised in Scotland. That was to be a once-and-for-all adjustment, and then we would be able to move forward. If Scotland were to raise more income tax, it would have more revenue, enabling it to spend more on public services and so forth.
That position has now changed. The House of Lords called it a fudge. Essentially, the change relates to the principle of no detriment. My question is this: no detriment to whom? My understanding is that the allocation will be reviewed each year, as advocated in the proposed new clause. If, as a consequence of how the system works, Scotland loses out due to its income tax revenues not having risen as expected, an adjustment will be made to ensure that Scottish taxpayers are not out of pocket. That, as I understand it, is the no-detriment principle. There could be detriment, however, as this is a zero-sum game. I welcome the transparency of an allocation of that type, but its consequence will be a movement of resources from the UK to Scotland. That does not seem to me to be equitable, but perhaps Ministers will be able to put my mind at rest on that point.
Let me raise three questions about the proposed new clause in Lords amendment 18. First, is there a fear that the no-detriment principle reduces the accountability of the Scottish Parliament? I think it was Mr Crawford who, during the debate in Scotland, suggested that, had the principle been introduced over the past four or five years, there would have been an increased transfer to Scotland of many billions of pounds. That may or may not be true, but we should certainly not simply nod the measure through without its being understood.
I hope that the Minister will give me some reassurance. I think that we have all been present when Members of the Scottish National party have described the Bill as a dog’s breakfast and a pig’s ear. I apologise if I have got that the wrong way round and it was a pig’s breakfast and a dog’s ear. However, the transcript of the Scottish debate suggests that there was a lot more enthusiasm about the Bill there, much of it in respect of the no-detriment principle. So was Mr Crawford right? Is it true that, had the principle been introduced three or four years ago, there would have been a transfer differing by billions from what was discussed a year ago on the Floor of the House? If that is the case, there should be a transparent discussion about it.
Finally, I should like to know whether the no-detriment principle implies a two-way flow. Does it work in both directions? According to my understanding of its operation, if income tax in Scotland as a proportion of the total UK income tax becomes less important, there will be an adjustment. Will that adjustment also take place in the opposite direction?
I repeat that, notwithstanding the fairly technical points that I have raised, I support the Bill and the Lords amendments, particularly Lords amendment 18. Whatever else it may do, it will increase transparency.
With the leave of the House, I shall respond specifically to the points raised by my hon. Friend the Member for Warrington South (David Mowat), because I understood all the other Members who have spoken to be expressing support for the amendments, some more grudgingly than others.
I do not wish to question the accuracy of my hon. Friend’s analysis of the debates that have taken place in the House of Lords and the Scottish Parliament, but according to my reading of Bruce Crawford’s contribution to the Scottish debate, he made no reference to the no-detriment principle. He did, however, refer to the Holtham approach. There are two separate issues in play. The Holtham approach is about the adjustment of the block grant.
I accept the hon. Gentleman’s recollection of what Mr Crawford may have said about the Bill on previous occasions, but as I said earlier, I welcomed his constructive approach in his dealings with me, with the Secretary of State and with the UK Government in taking the Bill through the Scottish Parliament by way of a unanimously expressed legislative consent motion.
During the debate in that Parliament, Mr Crawford referred to the Holtham approach, which, as I said a moment ago, relates to the adjustment of the block grant and is separate from the no-detriment principle. The Government have accepted that, as in relation to Wales, the Holtham methodology should apply for calculating block grant adjustments. That is the basis on which we will move forward. I do not accept that over the past 12 years or so the Scottish Parliament and Government have been deprived of funds. As others have said, no matter how much money is allocated to the current Scottish Government under whatever mechanism, it would never be enough.
The no-detriment principle refers to how the financial system will operate after the Scottish rate of income tax comes into force. Under that principle, the UK Government would either compensate the Scottish budget for the costs of their policy change on the devolved tax base through the block grant, or receive funds back if the Scottish budget benefits from the policy change in raised receipts. The cost or benefit to the UK from decisions taken on the income tax structure is therefore exactly the same as it would have been before this Bill devolved 10p on income tax to Scotland, and the Scottish budget would be no better or worse off.
The Office for Budget Responsibility will forecast the impact of UK decisions on the Scottish rate of income tax, and we will take steps to ensure that the Scottish budget is compensated. There is therefore a principle of reciprocity. Where one Administration either gains or loses as a result of decisions taken by the other Administration, across the shared income tax there are measures in place to compensate for that loss or gain. This is simply a matter of common sense. It is based on the principle of accountability, which lies at the heart of the statement of funding policy.
I assure my hon. Friend the Member for Warrington South that where decisions taken by any of the devolved Administrations have financial implications for UK Departments, or where UK decisions lead to additional costs for any of the devolved Administrations, the body whose decision leads to the additional cost will meet that cost.
Lords amendment 2 agreed to.
Continued effect of provisions where legislative competence conferred for limited period
Lords amendment 3 would remove clause 10, and Lords amendment 4 would replace it with a new clause making similar, but expanded, provision.
Clause 10 makes provision regarding the status of the Acts of the Scottish Parliament after temporary changes to legislative competence following an order under section 30 of the Scotland Act 1998. There is widespread recognition that clarity is required on the status of Acts of the Scottish Parliament in the event that its legislative competence is reduced. The Government introduced these amendments in the other place to provide clarity following comments from the previous Scottish Parliament Scotland Bill Committee and the Law Society of Scotland.
Lords amendment 4 would ensure that Acts of the Scottish Parliament that have been validly made within the legislative competence that existed at the time do not cease to have effect purely because of changes to the boundaries of competence. Therefore, provisions contained in Acts of the Scottish Parliament will not automatically fall following an alteration of legislative competence, and no gaps in the law will inadvertently be created as a result. Such provisions would cease to have effect only if explicitly provided for in an enactment.
I hope the House will agree that Lords amendment 4 is sensible and will strengthen the provision originally contained in clause 10, and that Lords amendments 3 and 4 will be agreed to.
Lords amendment 3 removes clause 10, and Lords amendment 4 inserts a new clause before clause 11 on the matter of provisions ceasing to be within the legislative competence of the Scottish Parliament.
Clause 10 would have permitted laws passed by the Scottish Parliament under a temporary transfer of powers—such as under a section 30 order—to remain in force after that transfer had come to an end. We note that the new clause widens the scope of the transfer, with the effect that any such laws, whether in the form of an Act of the Scottish Parliament or subordinate legislation, would have effect even where the competence of the Scottish Parliament to legislate had been removed, irrespective of whether this had been granted on a short or longer-term basis. We consider the new clause to remove any potential future ambiguities, and on that basis we are content to support Lords amendment 3.
Lords amendment 3 agreed to.
Lords amendments 4 to 8 agreed to.
The Lord Advocate: Convention rights and Community law
There has been much debate about the role of the Lord Advocate and the Supreme Court in Scottish criminal proceedings. That debate has come a long way, and there is now agreement that the Supreme Court should have a role in relation to the European convention on human rights and EU law issues arising in Scottish criminal appeals.
The amendments tabled by the Government in the Lords took account of the many views expressed on these issues, including those of the expert group set up by the Advocate-General for Scotland. It would be appropriate at this point to remark on the passing of Paul McBride QC, who served on the expert group. Paul McBride was a well respected lawyer in Scotland and a highly regarded member of civic Scotland, and he is greatly missed by all who knew him and by the wider legal community. The amendments also took account of the views of the review group led by the noble and learned Lord McCluskey. On Report in the other place, he commented on the Government’s amendments. The end result of that process is something that even I could agree to about 98% of—which for anyone, never mind a lawyer, is a pretty good outcome, given where the debate started. In addition, the amendments tabled by the Government reflected the agreement that was reached with the Scottish Government to ensure that the legislative consent motion in support of the Bill was passed in the Scottish Parliament.
Lords amendments 9 and 19 to 22 replace clause 17 and make further provision about Scottish criminal proceedings. Subsection (2) of the new clause inserted by Lords amendment 21 would make the same provision as provided for by clause 17(2). That would mean that acts or failures to act by the Lord Advocate in prosecuting any offence, or as head of the system of criminal prosecutions and investigations into death in Scotland, would not be ultra vires should those acts be incompatible with the European convention on human rights or EU law. However, it will still be possible for acts of the Lord Advocate to be unlawful under section 6(1) of the Human Rights Act 1998 if the Lord Advocate acts in a way that is incompatible with the convention.
Lords amendments 19 to 21 provide for a new route of appeal to the Supreme Court for compatibility issues—questions raised in criminal proceedings about convention and EU law issues. Those issues would no longer be able to be raised as devolution issues. Lords amendment 21 would provide a right to appeal a compatibility issue from the High Court, acting as an appeal court, to the Supreme Court. The permission of the High Court or the Supreme Court would be needed for most appeals. An application for permission to appeal would have to be made within specified time limits, which could be extended if the Court considered that equitable.
Lords amendment 21 provides that the Supreme Court would only be able to determine a compatibility issue and would then have to remit the case back to the High Court. The High Court would then decide what steps needed to be taken in the light of the Supreme Court’s decision. For example, the Supreme Court would not be able to decide to overturn an accused’s conviction; that would be for the High Court to decide.
I welcome that part of the group, but will the Minister make it absolutely clear—I believe he is just about to do so—that what we are seeing with these changes is an ending of the Supreme Court’s ability to substitute its decision for that of the High Court?
Many of us in the House would wish to associate ourselves with the very generous and entirely appropriate remarks that the Minister made about Paul McBride. May I put it to the Minister that these amendments are an entirely effective antidote to the ill judged and ill informed comments made about the Supreme Court and its members by Scottish Ministers last summer?
I am happy to make it clear to the hon. Gentleman that views expressed by the First Minister about the Supreme Court played no part in these amendments or the completion of the Scotland Bill. Indeed, in dialogue involving the Scottish Government and Lord Advocate a much more moderate and sensible tone was adopted in relation to these matters, hence the ability to agree on what I would regard as a sensible and fair set of provisions that deal with the matters at hand.
The Minister will recall that the attitude taken, to which both of us have referred, was to suggest that there should be no role of any kind for the Supreme Court in relation to any criminal issue arising out of Scotland. The proposals that he is now arguing for so eloquently represent an effective and entirely acceptable compromise.
I thank my right hon. and learned Friend for his comments. The proposals that form part of these amendments were part of the legislative consent motion that went before the Scottish Parliament and received unanimous support of that Parliament. Indeed, they were not opposed or spoken against by any Member of the Scottish National party, including the First Minister.
Lords amendment 20 would provide powers for compatibility issues to be referred to the High Court and the Supreme Court. That will enable such issues to be dealt with more quickly, where appropriate, which will be useful when a compatibility issue has implications for other cases. There are currently no time limits for appealing devolution issues in criminal proceedings to the Supreme Court. It is important that there is finality and certainty, especially for victims, in relation to criminal proceedings. Lords amendment 22 would impose time limits for seeking permission to appeal devolution issues from the High Court to the Supreme Court for devolution issues raised in Scottish criminal proceedings. The time limits are the same as those that will apply to compatibility issues.
Lords amendment 23 makes provision for a review to be arranged by the Secretary of State of the new compatibility issue procedure and of the introduction of time limits for certain devolution issue appeals. The review is to be carried out as soon as practicable after the provisions have been in force for three years. The review may be carried out earlier if that is considered appropriate. It will be wide ranging and will look at all aspects of the provisions and consider whether changes should be made. The UK Government and the Scottish Government have agreed that the review will be chaired by the Lord Justice General.
Lords amendments 24 and 25 make consequential amendments to clause 41.
First, let me associate the official Opposition with the Minister’s remarks about Paul McBride. I also thank the right hon. and learned Member for North East Fife (Sir Menzies Campbell) for reminding the House of the importance of the Supreme Court in ensuring that institutions of government are exercised in accordance with the rule of law. That is a vital element of our constitution and one that must not go unheard in the House today.
Lords amendments 9 and 19 to 25 collectively omit clause 17 from the Bill and add new clauses before clauses 38 and 41 in respect of the relationship between the Supreme Court and the functions of the Lord Advocate in criminal prosecutions in Scotland, Acts of the Scottish Parliament thereby affected, and the role of the Advocate-General for Scotland.
Lords amendment 19 amends the Criminal Procedure (Scotland) Act 1995 to provide that the Advocate-General may take part as a party in criminal proceedings in Scotland in so far as they relate to a compatibility issue over the actions or omissions of a public authority relating to convention rights or EU law or over whether an Act of the Scottish Parliament or any provision thereof raises issues of compatibility with EU law or convention rights in Scottish criminal proceedings.
Lords amendment 20 makes further amendment to the 1995 Act to provide that when a compatibility issue arises in criminal proceedings in a court, other than any High Court of Justiciary proceeding heard before two or more judges, compatibility issues may be referred to the High Court of Justiciary. That may be required by the Lord Advocate or by the Advocate-General, if he is a party to the proceedings. In turn, the High Court of Justiciary may refer a compatibility issue to the Supreme Court, and may be required to do so by the Lord Advocate or by the Advocate-General, if he or she is a party to the proceedings.
Lords amendment 20 makes it clear that the role of the Supreme Court is restricted to determining the compatibility issue, whereby the case is then remitted back to the High Court of Justiciary for determination in the light of the Supreme Court ruling on the compatibility issues. That amends the relationship between the two courts, and while it preserves the ability of the Supreme Court to make entirely authoritative and decisive rulings on questions of the compatibility of the decisions of the Lord Advocate in relation to Scottish criminal proceedings and the prosecution system, it also ensures that the High Court of Justiciary is the judicial forum in which any convictions required to be reduced in the light of such a compatibility ruling are reduced.
Lords amendment 22 introduces a new clause that creates a time limit for application to the High Court of Justiciary in some cases, and to the Supreme Court in more serious criminal cases, of 28 days following the initial decision or, in the latter case, against the refusal to give permission for a compatibility reference. However, as the Minister suggested, that time limit can be extended by either court on the ground of equity.
Lords amendment 23 introduces a further new clause that obliges the Secretary of State to hold a review of those new processes three years after the entry into force of the new clauses that might include the requirement for prior certification. The amendments deal with the constitutional implications of the Supreme Court decisions in Cadder v. Her Majesty’s Advocate and in Fraser v. Her Majesty’s Advocate. In November 2010, an expert group appointed by the Advocate-General for Scotland produced recommendations on the revision of the devolution settlement and its handling of the Lord Advocate’s role in criminal proceedings. The group recommended preserving the jurisdiction of the Supreme Court over that area against the prevailing wisdom, if we can term it that way, of the First Minister and the Scottish Justice Secretary, but refining the process of reference to that court.
The Scottish Government established their own review group chaired by Lord McCluskey which endorsed the continuing reference of some criminal cases to the Supreme Court on matters of compatibility with EU law and convention rights. The McCluskey review, however, suggested introducing a requirement of prior certification by the High Court of Justiciary before a case could be referred on appeal to the Supreme Court. That proposal was not endorsed in the other place because of arguments that the processes in Scotland and in England and Wales were not comparable, as there was no general right of appeal to the Supreme Court in Scottish criminal cases, unlike their equivalents in England and Wales. In particular, my noble friend Lord Boyd made a compelling argument that a requirement of prior certification could result in people losing the right to protection under EU law and the convention rights enshrined in the Scotland Act 1998 that they enjoyed. The requirement for prior certification by the High Court of Justiciary before seeking direct leave was further questioned by the Law Society of Scotland and by the Faculty of Advocates.
The amendments remove the Lord Advocate from the scope of section 57 of the Scotland Act in relation to the determination of devolution issues by the Supreme Court, and create a new category of compatibility issues that determine the Lord Advocate’s compliance with EU law obligations or those arising from convention rights in Scottish criminal proceedings. The new process is therefore more efficient and less cumbersome than the existing one. The amendments strike the right balance between protecting the existing rights of individuals in criminal cases while affording the High Court of Justiciary the ability to make final determinations on convictions in the light of Supreme Court rulings on compatibility.
I am grateful to the hon. Gentleman for giving way, as I deduced that he was about to conclude. Is it not important to remember that the case of Cadder raised the issue of the right to legal representation and advice for someone in police custody, and that the case of Fraser raised the issue of the responsibility of the prosecuting authorities to make available to the defence all relevant evidence, perhaps to assist the defence in making a stronger case? Given that those are fundamental human rights issues is it not the case that the Supreme Court is exactly the place to determine compatibility?
I entirely agree with the right hon. and learned Gentleman. One of the strengths of the devolution settlement is that it allows a court of the seniority of the Supreme Court to make these determinations. It would have been wholly irresponsible to remove these basic protections from people in criminal cases in the way that other politicians in the Scottish Parliament sought to achieve.
We are content with the amendments that have been made by the Lords and we will support them in the Chamber today.
Lords amendment 9 agreed to.
Lords amendments 10 and 11 agreed to.
Clause 25 allowed the Scottish Ministers to determine the national speed limit on roads in Scotland and to make regulations to specify traffic signs to indicate that limit. Clause 25 limited these powers to cars, motorcycles and vans under 3.5 tonnes.
We listened carefully to the arguments presented by noble Lords, together with the case made by the Scottish Parliament and Scottish Government for the Bill to provide for the devolution of powers to set different speed limits for different classes of vehicles—for example, cars towing caravans or goods vehicles. Lords amendments 12 to 16 would give the Scottish Ministers the power to make regulations regulating the speed of all classes of vehicle on roads in Scotland.
As the hon. Gentleman knows, in the devolution of powers such as speed limits, which are devolved in the clauses to which the amendments relate, it is entirely a matter for the Scottish Parliament and Scottish Government to determine how they use those powers and whether they apply them to themselves as they would to others.
Although I fully support the Bill and what we are trying to achieve by devolving power to the Scottish Parliament, with regard to the road traffic regulations I have one concern, being the Member of Parliament for Carlisle, which is on the border—that is, that we ensure that there are sufficiently sensible signs on the border to indicate whether we should be speeding up or reducing our speed as we cross the border. I hope my right hon. Friend will ensure that the Scottish Parliament makes sure that that happens.
I am responsible for many things, but I am not responsible for the Scottish Government acting in a sensible manner. We are seeking to devolve these powers, which apply not just to the setting of limits, but to the signage. I am a Member of Parliament for a border constituency, as is the Secretary of State. We want to ensure that appropriate measures are in place so that people know what the law is on both sides of the border. As my hon. Friend pointed out on Second Reading, there are numerous legal differences between Scotland and England, which our respective constituents have managed to cope with over many years, not least the licensing laws.
I do not disagree with the hon. Gentleman. I took part in a radio programme with a member of the Scottish National party to debate the currency, and her principal argument was not over which currency Scotland should have, but about the fact that she should have the right to choose which currency; she suggested the Chinese renminbi, but I did not think that that would go down too well with the Politburo.
Lords amendments 12 to 16 would give Scottish Ministers the power to make regulations regulating the speed of all classes of vehicle on roads in Scotland and some consequential amendments. Together with the existing provisions in clause 25, that would enable them to set a national speed limit that is different for different classes of vehicle and the power to make regulations to specify traffic signs that indicate that limit. We think that that is a sensible addition to the Bill and, as right hon. and hon. Members might know, it was promoted in the House of Lords by my noble Friend Lord Forsyth, no less.
These are sensible measures and I am sure that Scottish Governments of whatever political colour will use the powers sensibly. If a significant divergence was to develop between practice in England and practice in Scotland in relation to road signage and speed limits, what steps could be taken to make the necessary changes to the Highway Code, the driving test and more generally to inform drivers on both sides of the border?
It will obviously be for the Scottish Government to advise on changes to signage, among other things, that they make. Changes that are specific to Scotland can be included in the Highway Code, and we currently have differential traffic regulations in different parts of the United Kingdom. I am sure that the hon. Gentleman, like me, will have constituents who have fallen foul of the congestion charge that applies in London but nowhere else in the United Kingdom. There are differential traffic regulations in place at the moment, and these are well advertised.
What discussions were held when it was decided that it would be the right thing to devolve the power that would allow the Scottish Government to determine what traffic should be flowing and at what speed? Was there any sense behind the decision that, for example, heavy goods vehicles should be allowed to travel at 60 mph on single track roads?
I share the hon. Gentlemen’s concerns about traffic speeds in our part of Scotland, Dumfries and Galloway, particularly on the A75. I hope that these powers will allow the Scottish Government for once to focus on Dumfries and Galloway and address such issues. They will have the powers and it will be for them to make the decisions. I commend my noble Friend Lord Forsyth for achieving this significant amendment to the Bill. It is the only amendment made during the passage of the Bill that will ensure that the powers of the Scottish Parliament are increased, and I do not think that the irony of that was lost on him.
Before the debate becomes any more raucous, I should recognise that this is possibly my final opportunity to speak to the Bill, so I should like to use it principally to thank the officials in the Scotland Office who have worked so hard to deliver it. We are often the subject of scrutiny, but we are a very small Department and we, along with the Treasury and, indeed, Scottish officials, have worked to deliver this major piece of constitutional legislation. I thank all those who have participated in that process. As I said at the very start of our proceedings, I participated at the beginning of the process that led to the Bill, and I am very proud to be here at the end.
Lords amendments 12 to 16 would amend clauses 25 and 26 to devolve completely to the Scottish Parliament all aspects in relation to speed limits on all roads in Scotland. They follow the recommendation of the Calman commission and resolve the ambiguities and uncertainties that might have ensued from a partial devolution of the national speed limit for Scotland in respect of certain vehicles or roads.
We are pleased to support the amendments, and I echo the right hon. Gentleman’s thanks to the officials and team in the Scotland Office for piloting this hugely significant Bill on such a relatively smooth course through not just this House, but the other place. It now has the approval of the Scottish Parliament, too—no mean feat. On that basis, we on the Opposition Benches wish the Bill a speedy journey on its passage into law in the coming days.
I am very happy to support this group of Lords amendments and, indeed, the provisions in the Bill.
I must confess that this is an issue on which I have changed my mind. On Second Reading, I had concerns about creating different speed limits north and south of the border. I did not say so from any great constitutional position; I was very much wearing a “road safety” hat. I serve on the Transport Committee, and road safety is an issue that we take with great seriousness. Indeed, we are conducting an inquiry into it.
Drivers can get lulled into a sense of security on a long journey, and for long-distance drivers in particular, going up the M6 and then the M74, I was concerned that if the speed limit changed suddenly at Longtown or Gretna, depending on which way they were going, it could result in some road safety issues. But as part of the Committee’s inquiry we have been looking at different speed limits in different parts of the country, through managed motorway limits and other road safety measures, and by considering the evidence I have been persuaded that it is not the issue I thought it might be, so I am happy to welcome the changes before us. Rather than having the United Kingdom Government responsible for some speed limits and the Scottish Government responsible for others, it makes sense to group them under the auspices of one Government.
My only additional point, which echoes that of the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), is that if we reach a situation in which there are differing speed limits on either side of the border, we will need proper signage and, through the Highway Code and the driving test, to explain those differences properly so that there is proper education and awareness.
With that small caveat, I am happy to support the Lords amendments, and in the last few seconds before I am cut off in my prime, I too congratulate and thank the officials who put together the Bill.
I add my support for the Lords amendment. It makes sense. We have to realise that drivers of all kinds cope with different speed limits, even within one county. This Bill has had a long journey, but there has also been a long journey for those of us who, like you, Madam Deputy Speaker, were here in 1997—
Three hours having elapsed since the commencement of proceedings on consideration of Lords amendments, the debate was interrupted (Programme Order, this day).
The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House agrees with Lords amendment 12.
Question agreed to.
Lords amendment 12 accordingly agreed to.
The Deputy Speaker then put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).
Lords amendments 13 to 26 agreed to.