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Scotland: Fiscal Framework

Volume 767: debated on Wednesday 16 December 2015


Asked by

To ask Her Majesty’s Government, in the light of talks on 14 December between the First Minister and the Prime Minister, when the fiscal framework agreement between the Scottish and United Kingdom governments will be finalised and published, and how it will be ratified.

My Lords, the Prime Minister and the First Minister met on Monday 14 December to discuss a framework which is fair both to the taxpayers of Scotland and the rest of the UK. The Joint Exchequer Committee will meet again shortly to continue discussions, with the aim of reaching final agreement in the new year. Once agreed, a framework would be signed by both Governments.

My Lords, the Government said in the summer that agreement would be reached in the autumn, and in the autumn they said it would be reached in the winter. In the communiqué from the Joint Exchequer Committee last week, reference was made to the new year, but the First Minister of Scotland said after the meeting with the Prime Minister that the target for reaching agreement would now be mid-February—long after the proposed scheduling of the Committee stage of the Scotland Bill. When will agreement be reached? Given that this is of such significance for taxpayers across the whole United Kingdom—not just for those of us who are resident taxpayers in Scotland—is it not appropriate that, before Christmas, the underlying data for these discussions be published to enable much wider debate across civic Scotland and the UK, and indeed in Parliament?

The Government want an agreement as soon as we can achieve it. I cannot offer any guarantees as to the end date, because there are two parties to these negotiations. However, I was very encouraged by what the First Minister said on Monday after the meeting with the Prime Minister. She and the Scottish Government want to reach an agreement, and she is optimistic that a deal can be done and is very keen that we should get on with it. That is absolutely what the UK Government want as well. Clearly, the fiscal framework will be a very detailed public document when it is agreed, and obviously, it will be made available to this House. We welcome full scrutiny of that agreement.

I know that my noble friend is suspicious of the Scottish Government’s motives. We are entering and taking part in these negotiations in good faith. The discussions we have had so far have been constructive, and we are confident that a deal can be reached.

Does the Minister agree that it is nothing short of ludicrous that the Bill should have passed all its stages in the House of Commons before the full fiscal framework has been spelled out in detail? Will he give an assurance that it will not pass all its stages in the House of Lords before we know all the details of the full fiscal framework?

As I have said, we want to reach an agreement as soon as we can. I cannot give guarantees as to the end point—we have debated these matters fully at Second Reading—but I can assure the House that once an agreement has been reached, there will be an opportunity for it and the other place to give full scrutiny to that agreement.

This is a very important agreement and all sides are agreed that this is a critical part of the overall settlement. It is important to get this agreement right. We want an agreement that is fair to Scotland and to the UK as a whole, and which is built to last. The important thing is to get the agreement right.

As my noble friend Lord Gordon pointed out, the fiscal framework underpins every important implication of the decisions that this House and the other House have been asked to take. If it is wrong, it will have the most serious consequences not just over a period of time but over decades. I am afraid that the Government are approaching this with all the alacrity of their deciding on additional airport capacity. However, the difference is that this House has been asked to consider this before we know the fiscal framework on which it will all be based. Can he not at least assure us that there will be no concluding stages of this legislation until the fiscal framework is available to Members of both Houses of Parliament?

We have reordered the Bill so that the parts most relevant to the fiscal framework will be dealt with at the end of Committee. As I said at Second Reading, that gives us the time and space to reach agreement, so that this House can give the agreement full scrutiny.

Can my noble friend explain what the effect will be on the fiscal framework of the continuing slide in the price of crude oil and the likelihood that it will go down considerably further?

Clearly, the reduction in the price of oil shows how wise the Scottish people were in their vote last September, and it underlines the key importance of pooling and sharing risks and resources across the United Kingdom. We really are stronger together.

In such circumstances, we have to go with what the House is indicating, which is that it wants to hear from the Lib Dem Front Bench.