The next item of business is a debate on motion S4M-14252, in the name of John Swinney, on Scotland’s future, democracy and devolution.
14:40
I welcome the opportunity to have this constitutional debate one year on from the referendum on Scotland’s independence, which took place on 18 September 2014. It is clear that the referendum has had a profound and positive effect on our nation and our democracy. We have seen a level of informed and engaged debate that has reinvigorated politics and has involved people—old and young alike—across our country.
It is worth recalling that more than 3,600,000 people turned out and cast their votes—a turnout of more than 85 per cent—which is higher than for any previous election. The result may not have been what I wanted, but we must celebrate the level of democratic engagement in the process.
There has been a real legacy from the referendum, into the bargain. The turnout in the recent general election was 71 per cent in Scotland, compared with 66 per cent across the United Kingdom as a whole. That was also an increased turnout on previous UK general elections. In addition, 80 per cent of people in Scotland have discussed politics since the referendum compared with 67 per cent in the United Kingdom.
The engagement and the reinvigorated politics continue, as does the close interest of the people in how we are governed, who makes the decisions, and who decides who makes the decisions in Scotland.
The first and critical test that we face in honouring the democratic renewal is in fulfilling the undertakings to strengthen the powers of this Parliament that were made during the referendum campaign by those who were opposed to independence and successful in the referendum.
Today is exactly one year since “The Vow” was made on the front page of the Daily Record. On 16 September, the Prime Minister, Ed Miliband and Nick Clegg jointly promised “extensive new powers” for the Scottish Parliament. The vow also said:
“People want to see change. A No vote will deliver faster, safer and better change than separation.”
That was not the first promise of further devolution that had been made during the campaign. Danny Alexander said:
“Scotland will have more powers over its finances, more responsibility for raising taxation and more control over parts of the welfare system—effective Home Rule”.
The Prime Minister said:
“The status quo is gone. This campaign has swept it away. There is no going back to the way things were. A vote for No means real change”.
He also said:
“If Scotland says it does want to stay inside the United Kingdom then all the options of devolution are there and are possible”.
Gordon Brown, the former Prime Minister talked of
“nothing less than a modern form of Scottish Home Rule”.
He also said:
“We’re going to be, within a year or two, as close to a federal state as you can be in a country where one nation is 85 per cent of the population.”
On the back of those undertakings—with the legitimate expectation of proposals that could be accurately described as a form of home rule or near-federalism—my party and every other party in the Scottish Parliament took part in the Smith commission that was set up by the UK Government.
The Scottish Government had some misgivings: in particular, we had misgivings about the process. Political parties trying to reach an agreement in a room seemed to be about as far away from the participative, open and engaged democracy of the referendum campaign as it was possible to get. However, we accepted and respected the outcome of the referendum, so both my party and the Scottish Government played a full and constructive role in the Smith process.
We made no secret of our view that the Smith commission’s final recommendations did not go far enough; neither do we believe that the Smith commission’s proposals met the undertakings of the UK parties that set it up in the first place.
The cabinet secretary has been speaking for nearly four minutes, and I interpret his argument as being that he signed up to the Smith commission reluctantly and that he would still like to hark back to the discussions that took place at the end of the referendum campaign. Is his ambition that the Smith commission’s proposals be fully implemented, or does he wish to centre his argument on a previous point on the timeline?
In the course of my comments, I will answer directly the point that Mr Johnstone has made, but I do not think that he could arrive at the conclusion that anything that I have said or done since publication of the Smith commission’s proposals in November last year could be interpreted as indicating that I do not want the proposals to be fully implemented. My problem, as I will come on to discuss, is that I think that we are a way away from full implementation of the Smith commission’s proposals that were set out last November.
A settlement that would leave under Westminster control more than 70 per cent of Scottish tax receipts and 86 per cent of Scotland’s welfare spending cannot remotely be described as home rule or near-federalism, but my judgment was that the proposals—had the UK Government implemented them in full, which I will come to shortly—offered enough enhancements of Parliament’s powers to allow us to support the final report.
Why does John Swinney only ever refer to a percentage of welfare spending instead of a percentage of spending, as most commentators would do?
The reference to welfare spending is part of a clearly expressed argument about welfare spending. As far as total spending is concerned, the Smith commission’s proposals do not give us more than 50 per cent control over total spending in terms of the revenue that is raised here. Those points are well charted by what the Scottish Government has said in the past.
I turn to the issue that Alex Johnstone raised about implementation of the Smith commission’s recommendations. If we reflect on the efforts of the UK Government since their publication, it is clear that the current approach will not implement the commission’s recommendations in full—either in spirit or in substance. Last week, the architect of the vow, Gordon Brown, described the UK Government as
“falling short on the delivery of the recommendations of the Smith Commission on Scottish Devolution”.
In May, the unanimous report of the cross-party Devolution (Further Powers) Committee, which was supported in this chamber, provided the authoritative analysis of the UK Government’s draft clauses. Its overall conclusion was that
“In some critical areas, the then UK Government’s draft legislative clauses fall short”
of the Smith recommendations. In considering the Scotland Bill that was introduced in May, the committee found that only one clause had been changed to reflect the committee’s findings, 12 were completely unchanged and a further eight had been changed but in a way that left it unclear whether the committee’s findings had been reflected. The clauses in question included clauses on key areas of social security, employment programmes, the Crown Estate, borrowing and the Sewel convention. That position is a considerable disappointment to the Scottish Government.
I say in response to Mr Johnstone—it is one of the material points in today’s debate—that it is clear that despite having the necessary information and the submissions from the Devolution (Further Powers) Committee and the Scottish Government, the UK Government is
“falling short on the delivery of the recommendations of the Smith Commission on Scottish Devolution”.
That is what former Prime Minister Gordon Brown is now telling parliamentary committees. I think that we would all describe him as one of the key players in terms of the outcome of the referendum; I readily accept that he was a fundamental player in the conclusion of the referendum campaign and in the success of the no campaign, by virtue of the promise that was made. It is a point that I think Parliament must take very seriously.
Mr Swinney correctly describes the conclusions of the Devolution (Further Powers) Committee, and I accept the points that he has made; I was a member of that committee. However, does he accept that what he describes should not be conflated with the commitment that was given by Ed Miliband and other party leaders on the provision of extensive new powers, which are in the Scotland Bill—albeit that they might not be all the powers that we might desire?
The person who is in danger of conflating is Lewis Macdonald. The point that I am making is that, at absolute face value, when judged by the Devolution (Further Powers) Committee, which is an all-party committee and so is pretty neutral, and by the Scottish Government, which has—although I accept that we are not neutral—approached the matter in an utterly dispassionate fashion—
Come on!
In this matter, we have most definitely done that. Even Gordon Brown, the former Prime Minister, is saying that the Scotland Bill does not deliver on the commitments that were made in the Smith commission. That, to me, is crystal-clear evidence that the United Kingdom Government has got to move, and to move significantly, during the remaining passage of the bill, to which we will turn shortly when that UK bill returns for its report stage in the House of Commons.
We know clearly the areas in which the bill needs to be improved. They include the restrictive definitions of “carer” and “disability”; the absence of new powers to create benefits in areas of devolved responsibility; the restrictions on the length of employment-support programmes that can be delivered; and restrictions on the type of people who can be offered help. The bill needs clarity on the Crown Estate provisions and future economic assets such as Fort Kinnaird; it needs a provision that protects this Parliament’s interests by including clearly the full scope of the Sewel convention, including its need for the Parliament’s consent to changes to its own competence and that of Scottish ministers; and it needs to respect the spirit of devolution by removing vetoes for UK ministers in the crucial areas of universal credit and energy schemes. Those are among the issues that require to be addressed when the bill’s report stage is reached in the House of Commons.
I therefore invite Parliament to join me in urging the Secretary of State for Scotland to engage closely with the Scottish Government to produce amendments that we have already suggested to the UK Government, that accurately reflect the Smith commission report and have the support of both Governments.
We know that the powers of the bill fall short of both the vow and the recommendations of the Smith commission; we will continue to demand that those promises be delivered. At the same time, the Scottish Government is acting with pace and with creativity to be ready to use the limited powers that are proposed, and we will do so in consultation with others.
In the programme for government, we set out some early policy priorities. They include: a social security bill in the first year of the new session, to give effect to our new social security powers; the abolition of the bedroom tax as soon as possible when we have the powers to do so; improved support for people to move into employment through reform of the work programme and of the work choice scheme; improved access to priority business and tourism markets by reducing air passenger duty by 50 per cent from 2018; early action on gender balance on public boards; the abolition of fees for employment tribunals; and management of the assets of the Crown Estate in Scotland, in order to maximise benefit to the Scottish economy and to local communities. Those are some of the early priorities that the Scottish Government will take forward through utilisation of the powers that will come to us as a consequence of the passage of the Scotland Bill.
I want to say a few words about the fiscal framework that will govern financial relationships between the Governments in the future. The fiscal framework must give the Scottish Government the flexibility that it needs to create a fair and prosperous Scotland and to use the powers that we have effectively. We know that that must be done in a responsible and sustainable manner, which is how we have always used our fiscal powers.
In my evidence to the Finance Committee’s inquiry, I have set out some of the key elements that we need to see in the fiscal framework. We need block-grant adjustments for devolved taxes that reflect receipts at the point of transfer, based on an agreed methodology and data. We need transfers for social security that reflect the full cost of the benefits that will be devolved, we need changes to the block grant that reflect the full cost of administering the new powers, and we need the ability to increase the amount of capital spending materially through capital borrowing powers.
Most fundamentally, we need a well-designed fiscal framework that ensures that further devolution provides the right incentives and increases accountability, and links the Scottish Government’s budget to Scottish economic performance. We should retain the rewards of our success, as we will bear the risks. When the Scottish economy outperforms that of the rest of the UK, our spending power should increase, so it is absolutely essential that the fiscal framework provide the Scottish Government with genuine flexibility and choice to pursue our own distinct policies.
The framework will be agreed jointly by both Governments and we are aiming to conclude negotiations by the autumn. I am currently involved in discussions with the Treasury, in that respect. However, I want to make it clear to Parliament, as I have told the Finance Committee before, that the Scottish Government will not recommend that this Parliament give consent to the bill without an agreed fiscal framework that is fair to Scotland. I would have no hesitation in refusing to recommend a proposal that did not provide us with the ability to use our powers properly and flexibly to support the people of Scotland, to address our own priorities and to improve our economy.
I want to bring my remarks to a close by reflecting on what the Scotland Bill tells us about the condition of democracy in Scotland today. The driving force for what became the Smith commission process was the clear momentum for change that was generated during the referendum campaign, but since then we have seen a return to business as usual. That graphically illustrates the mismatch between democracy and devolution in this country.
The Smith commission was, in the end, a party-driven exercise. The people were given little say in its process and none in its conclusions. We missed many opportunities in that process—perhaps because of the lack of public pressure in a closed process.
The Scottish Government therefore proposed, with the support of the Scottish Trades Union Congress, full devolution of employment law. That was not supported in the Smith commission. We have seen the consequences of that in the Trade Union Bill this week. The Scottish Government, with the support of many stakeholders across Scottish society, proposed that social protection be devolved in full. Again, that was not supported by other parties, and the consequences of that can be seen in the cuts to welfare that have been driven through Whitehall today.
That demonstrates that the Scottish Parliament must be equipped with the powers and responsibilities to enable us to take decisions that meet the expectations, needs, priorities and choices of the people of Scotland, and that is what the Scottish Government will argue for.
I move,
That the Parliament notes the establishment of the all-party Smith Commission following the 2014 referendum on independence and the commitment of the UK Government to legislate to implement the recommendations of the commission in full; further notes the findings of the Devolution (Further Powers) Committee that the Scotland Bill in its current form does not deliver the recommendations of the commission in full; further notes that no amendments to the Bill were accepted at its committee stage in the House of Commons; urges the UK Government to bring forward amendments at the Bill’s report stage to give effect to the Smith Commission recommendations and in particular to meet the standards set by the Devolution (Further Powers) Committee, and recognises the need for a satisfactory and fair fiscal framework to allow the Scottish Parliament and the Scottish Government to make effective use of the powers in the Bill.
I call Claire Baker to speak to and move amendment S4M-14252.2. You have 10 minutes, please. We are tight for time today.
14:56
In the week of the one-year anniversary of the referendum, it is understandable that a lot of the focus in today’s debate will be on reflecting on that historic day last year. Many column inches have already been filled on that this week, and I am sure that more words will be written about it before the week is out. It is also understandable that many people may wish to reflect today on their personal experiences. The day of the vote—18 September—was a truly remarkable one in Scotland’s history, and it will live long in everyone’s memory.
However, it is important that we use the opportunity to look forward. Last year, the voice of the majority of Scotland was clear, and we all need to accept the result, which was to stay as part of the United Kingdom. However, it was also clear that people wanted politics and democracy to change.
The Smith commission and, from that, the Scotland Bill are to be vehicles to deliver that change, although I caution that they are not the only vehicles. The change will be achieved if we—politicians from across all the parties—change the way we think about politics and how it is delivered. As our amendment states, devolution is not about concentrating powers in the Scottish Parliament; it must be about empowering our communities and local authorities.
I like the title of the debate, which promises more than the motion does—democracy and devolution. It is not just about securing new powers; it is also about how we use those new powers. Labour’s amendment highlights the work programme as an example of how we can use new responsibilities to gain more effective results. Labour believes that local communities and organisations are best placed to deliver that programme, and we encourage the Scottish Government to look at that way of delivering.
Similarly, we must push for the extension of the powers over the Crown Estate. Those powers should then be maximised to make local decision making meaningful.
In giving evidence to the Devolution (Further Powers) Committee, Dave Moxham of the STUC said:
“it is not enough for Parliament to have a relationship with existing civil society organisations and then think that it has done its job. That links in with the idea that we and others have raised about citizen juries and other ways of creating a representative democracy”.—[Official Report, Devolution (Further Powers) Committee, 15 January 2015; c 37.]
As the cabinet secretary said, the referendum was a great example of civic participation. We should not miss the opportunities to use the Scotland Bill to build on that.
However, let me be clear. As things stand, the Scotland Bill does not meet our expectations. It needs to be stronger and more reflective of the agreement from the Smith commission. That it is not is disappointing, and I hope that the Conservatives will address that in their speeches. Although I agree with much of their amendment, it glides over the reasonable concerns that exist about the Scotland Bill; we did have cross-party consensus on the Devolution (Further Powers) Committee.
We are left with two options as a result. One is to continually complain about the bill and undermine what has been achieved. More constructively, we could propose changes and not just enact the Smith commission proposals in full, but possibly go further.
I make it clear that Labour is committed to ensuring that the Parliament becomes one of the strongest devolved legislatures in the world. We want new powers to be delivered and we will do all that we can to make that happen. We have a record of bringing powers to the Parliament when we have believed that that is in the best interests of the Scottish people. Like other members, we have no interest in seeing the Scotland Bill fail. We want to take this opportunity to deliver the modern devolved Parliament that the cross-party Smith commission set out the blueprint for.
To make that progress we must return to the consensus that was built around the Smith commission. I welcome John Swinney’s statement that the Parliament should be united on that. It will take effort from all sides, particularly the two Governments. One of those Governments almost immediately began talking down the agreement as soon as it signed up to it and the other has seemingly closed shop and refused so far to accept amendments from other parties. It is time to put those agendas aside and work together. If the Governments truly want the Scotland Bill to succeed, they need to strengthen it. I hope that Conservative members will join us and lobby their counterparts in Westminster—in either house—to ensure that reasonable and proportionate amendments are accepted when the bill returns to the House of Commons following the conference recess.
Today the Labour Party has unveiled new amendments to the Scotland Bill, which would devolve a further £5 billion of revenue, along with extended powers over welfare to design a new social security system in Scotland. MSPs would be in greater control than ever of raising money that we are to spend.
I note the Labour Party’s call today for full rather than partial assignment of VAT. Does Claire Baker accept that that is not a revenue-raising power, as it would be an assignment rather than a power? Is the Labour Party’s view that the assignment should be based on production or consumption? That is an important distinction.
I anticipated that intervention, as I saw that Stewart Hosie had lined it up for MSPs this afternoon.
The SNP will know that the tax-raising powers on VAT are restricted by the European Union. However, we believe that our amendments would give more powers to this Parliament and more control of the money that we have to spend. They include measures that would devolve all revenues from VAT, whereas the level is currently set at 50 per cent. Our amendments would also give the Scottish Parliament powers to top up welfare benefits, create new benefits and remove a UK Government veto.
Those are substantial changes, with which we can build a build a better, stronger and more progressive Scotland. I hope that when the amendments come before Parliament, they will gain the support of the SNP, the Liberals and the Conservatives.
It is clear that we must move beyond any doubt on the idea of Westminster maintaining a veto over this Parliament on welfare powers. Such a veto is unacceptable and something that we have moved to stop. The UK Government must respond more fully than it has done so far to the work of the Devolution (Further Powers) Committee and to organisations’ concerns about the bill’s effectiveness.
We must ensure that there is full transparency as we move forward, and that is as true for the Scottish Government as it is for the UK Government. We are seeing—or rather not seeing—intergovernmental discussions at the joint exchequer committee, of which the Deputy First Minister is co-chair. On 4 September, the JEC met for its second meeting, yet no minutes for either that or its first meeting have been made public and there has been no clear statement from the Scottish Government of a preferred outcome. Considering that discussions centre on the substantive elements of the fiscal framework that will underpin the financial provisions of the Scotland Bill—the very fiscal framework that the Deputy First Minister references in the motion—it is unfortunate that fuller details have not been forthcoming.
I appreciate that there will be a need for sensitivity and space for frank exchanges during certain points of JEC meetings. However, given that all members in the chamber subscribe to the notions of transparency and accountability, will the Deputy First Minister commit to publishing the meeting minutes and keep Parliament—and, most important, people—informed throughout negotiations? I see from Bruce Crawford’s letter to David Mundell this week that the Devolution (Further Powers) Committee supports those principles.
The stakes that the Scottish Government is playing for are high. The First Minister has expressed the view that she will recommend consenting to the bill only if the accompanying fiscal framework is fair to Scotland, and the Deputy First Minister has reiterated that claim in today’s debate. If the Government is prepared to risk all that can be gained, there must be greater transparency and scrutiny of the decisions.
Will Claire Baker clarify the Labour Party’s position on the fiscal framework? Does she think that I should sign up to a fiscal framework that she does not believe to be fair to Scotland?
Of course not, but we have no involvement in the negotiations. What I am asking for is greater transparency and accountability. At present, we have to rely on the Deputy First Minister’s interpretation of whether the fiscal framework is fair for Scotland. We are caught between his interpretation and that of the Conservatives. I am arguing that everyone should be involved, that there should be transparency and that we should be able to make a proper judgment.
Will the member give way?
I am sorry, but I am short of time.
The Scottish Government claims that that important issue might lead to the rejection of powers. The public must be aware of the negotiations as they proceed and be able to make a judgment. Otherwise, we risk finding ourselves in the scenario that Professor Jim Gallagher warns against, where the fiscal framework becomes a private agreement between the two Governments.
As the Deputy First Minister will be aware, my colleague Ian Murray has written to ask that the papers that are published reflect, among other things, the adjustment of the Scottish Government’s block grant in relation to the new tax and spending powers, and set out the discussions around fiscal scrutiny and the current role of the Scottish Fiscal Commission. I hope that, in his closing remarks, the cabinet secretary will take the opportunity to confirm that he will seek to publish details of the meetings through the Finance Committee, as has been the procedure previously. Decisions of such importance to the people of Scotland should not be made behind closed doors.
I suspect that, if we were to ask a family at a food bank what their major concern was, it would not be the constitution. If we were to ask a patient who was waiting in an accident and emergency department for treatment or a bed what his major concern was, it would not be the constitution. If we were to ask a single parent who is struggling to find a place at college but cannot afford the childcare anyway what her major concern is, it would not be the constitution. Looking to the future, we have the opportunity to use the engagement that the referendum brought to the people of Scotland to deliver change in how we do politics not just in Scotland but throughout the United Kingdom.
The Labour Party has listened to voters and to our members and we have a bold, fresh and exciting new leadership that will be pursuing a radical new agenda for Scotland and the UK. Excitement in Scottish politics should not constitute itself just around the constitution. It should be about changing communities, embracing opportunities and changing futures. That is why the devolution settlement that we pursue and achieve will not stop at Holyrood.
I move amendment S4M-14252.2, to insert at end:
“, and believes that devolution should not stop at the Scottish Parliament but go on to create more effective delivery of public services, for example through the devolution of the work programme to local communities and empowering people in greater local decision-making”.
15:06
I am delighted to take part in this debate. I am stimulated and encouraged by the Scottish Government’s chosen title for the debate, “Scotland’s Future, Democracy and Devolution”, because, if the Scotland Bill is about anything, it is about our future—a future confirmed by the democratic decision of voters last September to reject independence, to stay within the United Kingdom and to give more powers to this Parliament.
As someone who believes that Scotland benefits from the partnership of the United Kingdom but who recognised the need for enhanced powers for this Parliament, I was delighted to serve on the Smith commission with Mr Swinney and others from across the parties and to achieve the united position reflected by the Smith agreement.
Over the years, it has been a genuine pleasure to work with Mr Swinney, whether on the Enterprise and Lifelong Learning Committee under his convenership or while engaging with him on his important ministerial roles in government. I acknowledge and respect his undoubted commitment to this Parliament and his wider service to Scotland. I was therefore wounded when, on the publication of the Smith agreement, Mr Swinney appeared to have been seized by an onslaught of simultaneous amnesia, fickleness and inconstancy. Never did I think him capable of such frailties. Suddenly, this much discussed, carefully crafted and painstakingly drafted document disassembled in Mr Swinney’s mitts. It was not enough. It was not good enough, big enough or brave enough. I think that the Smith agreement was a pivotal contribution to devolution and was historic in its own right.
I am glad that Miss Goldie set out those words carefully. I thought that she was in danger of accusing me of something else as she expressed them. However, I say to her that she should not have been so surprised by my reaction to the Smith commission report given that she had to put up with listening to what I was saying within the commission for a full 10 weeks. In that time, I was arguing for more and greater powers and wider responsibilities than were secured in the Smith commission report.
As ever, that was an adroit and gallant attempt by the cabinet secretary to exculpate himself.
In fairness to Mr Swinney, I say that I of course understand that, from the Scottish National Party’s perspective, the Smith agreement does not bring forward proposals for independence for Scotland, but that was never the job of the Smith commission. The referendum endorsed enhanced devolution and rejected independence. That is why I lodged the amendment in my name. I wanted to put into context the referendum result, the Smith agreement, the draft clauses and the Scotland Bill.
The Scotland Bill is an extremely important piece of legislation and it is entirely right that it be scrutinised at Westminster and by a committee of this Parliament. In response to the initial attack from Mr Swinney and his SNP colleagues that the bill reflects some faint-hearted, peelie-wally attempt to deliver a minimal extension of powers, let me remind members that the Scottish Parliament information centre has produced a fascinating analysis of the Smith agreement proposals. The Scottish Parliament will have more tax and spending powers than the majority of states in federal countries such as Australia, Germany and the United States, and in a league of sub-national legislatures across the world, Scotland will be near the top.
I appreciate that the SNP wanted to devolve responsibility for a range of issues, including employment law, national insurance contributions and the minimum wage, but a range of bodies from very different perspectives, such as the Confederation of British Industry, the STUC and the TUC had profound concerns, so those matters did not form part of the Smith agreement or the Scotland Bill.
Will the member give way?
I want to make progress, if the member will forgive me.
In the more detailed analysis of the Scotland Bill by the Devolution (Further Powers) Committee, the committee was principally concerned about four primary issues: the permanence of the Scottish Parliament; the Sewel convention; the welfare provisions; and the Crown Estate.
The statutory recognition in the bill of this Parliament as permanent, together with the obvious cross-party sentiment that the Scottish Parliament is permanent, means that the permanence of the Scottish Parliament is the political reality. To pretend otherwise is to dance on the head of a pin.
The Sewel convention has operated effectively and flexibly as a principle by practice and convention but, as is often the case with constitutional rules and protocols, it would be wrong to try to include in the Scotland Bill the process of legislative consent. That was not recommended in the Smith agreement, and in my opinion that was the right decision.
On welfare, which I accept is a sensitive issue, I argue that the provisions, which have been extensively altered since the draft clauses were published, reflect the Smith agreement. If there are constructive suggestions about how to clarify or improve on the welfare provisions, let us see the detail.
On the Crown Estate, the issue was always recognised as technically complex. I am sure that Mr Swinney and I agree that in the Smith commission the issue was regarded as particularly challenging, involving the Crown Estate—the body itself—the UK Government and the Scottish Government, all of which will require to co-operate and agree on the new arrangements. The bill is the enabling legislation for that to happen.
Let us be clear. The Scotland Bill does what it says on the tin. It is a major extension of powers to this Parliament, enacting what all parties signed up to in the Smith agreement. Should we close our minds to improving the bill? No, but we must first identify what changes are proposed and then be satisfied that they are improvements. The Secretary of State for Scotland has indicated that changes will be made at the report stage of the bill and has expressly said that he will reflect on Opposition amendments.
The real debate in Scotland has moved beyond the constitution. We cannot be hogtied and pulled back by the separatists to a question that was answered a year ago. We cannot get bogged down in the separatists’ neverendum, because their efforts to stay stuck in the past are pulling Scotland down and holding Scotland back. Instead of remaining divided over the constitution, we should be united about forging a new Scotland.
This is the big question for the Scottish Government. How do we use the powers that we have got and the ones that we will get to give Scotland an exciting, stable future in an increasingly uncertain and competitive world? We can rise to that challenge, but only by looking forward, not by looking back.
I move amendment S4M-14252.1, to leave out from first “further” to end and insert:
“regrets that the Scottish Government’s immediate reaction to the Smith Agreement was to criticise and disparage its recommendations; notes that the Smith Agreement proposes a very significant transfer of powers to the Scottish Parliament that will make it one of the most powerful sub-national legislatures in the world; considers that, in the context of rejection of independence by voters in Scotland in the 2014 referendum, the Smith Agreement and the Scotland Bill, reflecting changes to the original draft clauses, deliver on pledges to provide more powers for the Scottish Parliament; recognises that extensive constitutional change is best brought about by building a broad consensus between political parties and governments; calls on the Scottish Government to respect the result of the referendum by repeating its assurances that such a poll would be a once-in-a-generation event, and urges continuing objective and constructive scrutiny of the Scotland Bill so that where any improvements to the legislation can be identified appropriate changes can be made.”
Thank you, Miss Goldie. I look forward to checking the spelling of “peelie-wally” in the Official Report.
We are just about where we should be with the debate timing, so in the open debate I would be grateful if members could stick to their six minutes, please.
15:14
Like many members, I have been reflecting on the events of the independence referendum. In the immediate aftermath, the decision left me utterly crushed, yet, strangely, a year later I find myself almost celebrating that historic occasion.
Perhaps that is something to do with my being a card-carrying member of the tartan army, which has enabled me to find some joy in glorious defeat. However, the referendum was also a remarkable democratic process, as John Swinney said, which led to Scotland becoming a different and better place, with the most extraordinarily engaged people and with the bar of expectations on what Scotland is capable of achieving raised to hitherto unforeseen heights.
It is in that context that we consider the now-infamous vow, which suggested home rule and near-federalism, and the Smith commission recommendations that we debate today.
I do not want to re-rehearse what many individuals and organisations have said about the Smith process being too rushed or about the bill not containing significant additional powers, although I sincerely hope that the UK Government responds to those calls. The Scotland Bill that is before the UK Parliament will soon enter its report stage, so we must do all that we can to persuade a Tory Government to implement Smith in full and to deal with the positive criticisms that are laid out in the constructive letter that was sent from the Devolution (Further Powers) Committee to David Mundell on Monday.
I strongly believe that, when we come to decision time, we should all support the Scottish Government’s motion because our speaking with one voice will provide the Parliament with its best opportunity of seeing the bill get as close as possible to delivering Smith in full, ensuring that there is clarity of intent and ironing out any potential dangers.
There are those—including the Prime Minister today at Prime Minister’s questions—who argue that the bill, in its current state, delivers Smith in full, but they know perfectly well that it does not. To pretend otherwise is to do this Parliament and, more important, the people of Scotland a disservice. The very reasonable letter that was sent to the Secretary of State for Scotland earlier this week outlined in considerable detail the scale of the job that remains to be done by the UK Government, which John Swinney has alluded to. I will concentrate on three key aspects.
First, I believe that there is, at the very least, potential for dispute over whether the Scottish Parliament will have the competence to create new benefits in devolved areas. There is a significant body of evidence that Parliament will be able to create new benefits only in a much narrower area because the legislative mechanism that the bill uses devolves responsibility for certain specific benefits through a series of new exceptions to the existing reservations in the Scotland Act 1998. It is argued that, if a new benefit is not provided for in the bill, it will remain explicitly reserved, with no exception.
That could have the perhaps unintended effect of limiting the policy flexibility of a future Scottish Parliament despite the fact that the Smith report makes it abundantly clear that it intends no such limitations, stating simply:
“The Scottish Parliament will have new powers to create new benefits in areas of devolved responsibility”.
As Professor Aileen McHarg said in her compelling evidence to the Devolution (Further Powers) Committee, it would be prudent to put the matter beyond doubt through the inclusion of an express provision in the bill. We should ask the UK Government to do just that.
Secondly, on the issue of risk and reward balance, many people, including Professor David Bell, have argued that the limited basket of tax-raising powers in the bill may not produce sufficient receipts to increase tax in proportion with future liabilities such as an ageing population. It is therefore imperative that the fiscal framework that is agreed between the two Governments deals with the specific detail of how such matters will be balanced out in future funding settlements. I say that because I cannot see any circumstances in which the Scottish Parliament can safely agree to any bill unless those matters are appropriately and transparently addressed in the fiscal framework.
Thirdly, and in conclusion, I will dance on the head of a pin on the matter of the permanency of this Parliament. We all know the difficulty in that area. In theory, no Parliament can bind in law its successors, and no rule suggesting that a particular institution be a permanent constitutional fixture can guarantee that. Therefore, whatever provisions are finally agreed in the bill, they are likely to be largely symbolic—I accept that. However, I believe strongly that symbolism and a statement of intent are hugely important as far as this institution is concerned.
The Scottish Parliament was brought into being through the consent of the people in a referendum; surely it goes without saying that it can be disestablished only with the consent of the Scottish people voting in a referendum. Such a provision must find its way into the bill. Yes, it would be highly symbolic; nevertheless, it would be a statement of intent recognising the sovereignty of the Scottish people.
I believe that all members of this Parliament are signed up to that concept. Therefore, it is up to us to put as much pressure as we can on the UK Government in the coming weeks to lodge appropriate amendments to ensure that the Smith commission’s proposals are delivered in full in the areas that I have outlined and in the areas that the Devolution (Further Powers) Committee has outlined in a wider context. I recommend that all members support the Government’s motion. We should unite behind it to make sure that we get the job done.
15:20
I agree with what Claire Baker said on decentralised powers, but I will focus on the immediate issue of the Scotland Bill.
I hope that the Parliament will unite in supporting the Government motion. I think that all members support the Smith agreement. Clearly, the SNP members want to go a lot further; I would like to see Smith plus, but surely nobody in the Parliament wants to see Smith minus.
On social security, there are several concerns on unnecessary detail and definition, to which I will come the moment, but there are three fundamental problems apart from that.
First, the bill is silent about the power to create new benefits in devolved areas. That issue must be addressed.
Secondly, the bill should be amended to place it beyond doubt that top-up payments create new Scottish entitlements and are not discretionary in the sense that the social fund is. That is not clear in the bill at present.
Thirdly, we have to get rid of the veto—perhaps some would call it a perceived veto—in relation to social security. The Scottish Parliament should inform the UK Government about its decisions on social security, not seek approval from it. That embodies what is in reality now the shared competence between this Parliament and the UK Parliament on social security.
The unnecessary detail and definition could be described as micromanagement by the UK Government of devolved social security powers. There are concerns about the definition of disability in the bill and what is said about carers, employability programmes and discretionary housing payments. Andrew Tickell, who gave evidence to the Devolution (Further Powers) Committee last week, said that some of those issues were likely to lead to litigation. For example, the bill mentions “significant” disability. What does “significant” mean in a court of law? He also posed the question:
“What interest does the Westminster Government have in defining carers benefits as being payable only to people over the age of 16 who are not in work and not in education?”—[Official Report, Devolution (Further Powers) Committee, 10 September 2015; c 6.]
Why does the UK Government have to narrow down the definition of carers in that way?
There are also concerns about the fact that the employment programmes are restricted to a particular type of person who has been employed for a particular length of time. There ought to be far more freedom in that as well. Again, I agree with Claire Baker about the implementation of those programmes at a local level.
A final example of that micromanagement concerns discretionary housing payments, on which the bill says that the recipient must be in receipt of housing benefit and not being sanctioned. That, too, constrains the freedom of the Scottish Parliament on an area that we were said to be getting autonomy in relation to—I am sorry: that is rather a clumsy sentence.
There are two Sewel issues—named after my former ministerial colleague, Lord Sewel. The first issue is the wording of the bill, which says:
“the Parliament of the United Kingdom will not normally legislate with regard to devolved matters”.
We do not like the word “normally”. I would not die in a ditch over it, because there could be emergency situations, but it still sends out the wrong message. The phrase “devolved matters” is slightly odd because that wording is not used in the Scotland Act 1998, but that is a bit of a techie detail, which I shall move on from.
More substantively, our current arrangements on legislative consent—or Sewel—motions are governed by devolution guidance note 10, which talks not only about legislation in devolved matters but the Scottish Parliament giving consent to anything that alters
“the legislative competence … or the executive competence of the Scottish Ministers.”
There is nothing in relation to that in the bill. That is serious, because it means that the Parliament would have no locus to discuss the Scotland Bill, which alters our legislative competence. The same would be true if the executive competence of ministers was being changed positively or negatively.
There is also no clarity on equality issues. The words in the bill—again, I think that I quote accurately—“except to the extent that provision is made in the Equality Act 2006 or the Equality Act 2010” mean that the proposals on quotas will all be governed by those acts, in which there is no clarity at all about quotas.
What needs to happen is that David Mundell—given his commitment to quotas in a letter—ought to make sure that it is explicitly stated in the bill that Scotland should have the ability to legislate for quotas, including those for 50 per cent of candidates being women in elections to the Scottish Parliament, public bodies and local authorities.
Finally, Labour has put forward a proposal on VAT. I totally agree with the cabinet secretary that the budget should be related to economic performance. Albeit it is an assigned tax, having VAT, as proposed, would enable this Parliament to reap the benefits of improved economic performance. Again, that ought to be explicitly stated. I do not know whether the VAT issue is going to be in the bill or just in the fiscal framework.
I agree that the fiscal framework is absolutely fundamental and I agree that we should not consent to the bill if we do not have a fair fiscal framework because the whole future of devolution hangs on a fair fiscal framework. Crucially, if we cannot get the block grant adjustment right, devolution will fail because we will end up worse off than we are at present, so that is absolutely central. Obviously I agree about increased capital spend as well.
I agree on all those issues, but I also agree with Claire Baker that everything has to be transparent and there has to be a full discussion.
The fiscal framework is central, but I hope that we can unite around the Government’s motion. We come from different positions, but I think that we can all unite around the words of the motion.
15:26
I must say that, when Malcolm Chisholm said that there were two issues with Lord Sewel, I thought that he handled the issue very delicately indeed.
I had forgotten that, as the Deputy First Minister reminded us, we were 10 weeks in that hot room, sweating over something that just does not seem to be loved, so I do not quite know where I will ever get that time back again.
The Government’s motion appears to be a straightforward endorsement of the Devolution (Further Powers) Committee’s work on the current Scotland Bill, so I have been a little surprised that the SNP appears to have wanted to use such an endorsement as a trigger to veto the bill in radio interviews that have been taking place this week, and indeed as a condition for a second independence referendum.
I am puzzled by that because Mr Swinney’s Government threatened the Scotland Act 2012 with a veto but ultimately the Government accepted more powers, which the act devolved. I cannot see the circumstances in which the nationalist Government here in Edinburgh would veto more powers for this Parliament. I totally accept the Deputy First Minister’s point on the fiscal framework—that is a separate matter—but I struggle to imagine circumstances in which this Parliament would not gain by having more powers.
Perhaps I can help Mr Scott in his analysis by pointing out that what convinced the Scottish Government to support a legislative consent motion on the Scotland Bill in 2012 was the fact that the UK Government changed the mechanism for block grant adjustment to the Holtham mechanism, which was then acceptable to the Scottish Government. The mechanism proposed by Calman would have been damaging to the fiscal interests of Scotland.
I accept that point and that is why I made the point about the fiscal framework. However, my wider point is about the powers that this Parliament can gain, which other members have talked to in the context of the debate.
I want to enter into the constitutional spirit of the debate, in this week of all weeks. After all, Labour has a new leader—a genuine socialist. Politics is black and white again, and it is certainly not Blair. Neil Findlay is now the most influential Labour politician in Scotland, with the ear of the leader.
I want to make a constitutional suggestion to team Corbyn, although team Corbyn may be a concept that takes Labour unity a little far, judging by what we have been watching. However, Labour should go back to the future, as it did in the past, and embrace devolution within England. I believe that that is important for Scotland as well.
I fear that that will not happen because command and control socialism does not sit easily with decentralisation, so I doubt that there will be a Labour policy shift towards the obvious and only alternative to the constitutional morass of the UK—a federal country where the nations of England, Wales, Northern Ireland and Scotland figure out a coherent way of working together. That is why I believe that the work of the Devolution (Further Powers) Committee on intergovernmental relations is arguably the most important part of the work that is taking place at the moment.
A federal system creates a positive, unifying future for Scotland and the rest of the UK. Such a system is completely normal around the world for modern, complex democracies such as ours. It would be good for Scotland, and it is a pity that we cannot ask Parliament to support such a move with a vote this afternoon on the amendment that I lodged.
I doubt that nationalist friends in the chamber will embrace the progressive approach of a federal UK—not in Scotland, anyway. In Wales and Northern Ireland, nationalist parties recognise—and openly articulate—that future because they see the interdependence of their nations and the benefits that would flow.
The cabinet secretary mentioned last year’s referendum; it would have been a surprise were that not to have been raised this afternoon. I now read that Angela Constance and Richard Lochhead are leading lights of the campaign for a second referendum: “Yes 2”. I gently say to my friends on the SNP benches that most of us genuinely thought that when people said, “Once in a lifetime” they absolutely meant it. For many Scots, suggesting that we should go down the same route that we went down last year will be a considerable ask indeed.
The politics of today will be about the SNP’s short-term political positioning in making a judgment on how left wing to be. Jeremy Corbyn’s success in becoming Labour leader, and his socialism, can bring lost voters back to Labour. I suspect that Ms Sturgeon will not want to lose west central Scotland to the auld enemy, so Scotland can expect a battle on who is more left wing.
That matters in terms of what we are to look at in terms of the constitution and the future. It also leaves empty the centre and the right of British and Scottish politics. The Tories move ever more to the right, bringing to the UK Parliament a vindictive Trade Union Bill that not even Mrs Thatcher would have introduced. The bill is also bad politics: far from dividing Labour, it seems to have completely united the party, so it has not worked.
The issue that is every bit as important for our constitution in Scotland as for our future in Europe. We are about to witness, as we have all seen in the past, a Tory civil war. I heard Bill Cash on the radio the other morning, and I thought that we are indeed going back to the future.
That matters because the European question is an SNP condition for a second referendum on Scottish independence. The SNP has said that it would not work with other pro-European parties to face down the arguments for leaving Europe. That is disappointing, but hardly surprising. After all, just as the First Minister wanted David Cameron to win in May, so she wants England to vote to leave the EU because that helps the SNP and the case for Scottish independence.
All that makes the liberal, radical, progressive centre of politics essential. It is the gaping political hole, and there is a great opportunity not just in the UK but in Scotland. As I say openly to my party, that is why the Liberal Democrats will recover from the trauma of the past five years.
It is increasingly clear that there are only two future courses for Scotland—independence or federalism—and that federalism is the only viable future for the UK. Scotland is well placed to provide the drive and the route map towards a new future: a federal UK with a stable and lasting written constitution that honours the democratic decision of the people of Scotland last year.
Now is the time for that new start. It is time for a federal UK, and it is time to find people who want a lasting, progressive settlement for our nation amidst other nations.
I have been generous with the first three speakers, but I must now ask everyone to keep to their six minutes, please.
15:33
With regard to Tavish Scott’s remarks, I will say only that I certainly never used the phrase, “Once in a lifetime,” mainly because I hope that I will have quite a long lifetime yet. Beyond that, it is important that we look at the genesis of today’s debate and where we have got to.
It was interesting that Lewis Macdonald said that we should not judge the vow on the basis of what is in the Scotland Bill. If we took the progression from the vow giving birth to the Smith commission to the Smith commission giving birth to the Scotland Bill, we could argue that a longer gestation period would perhaps have been beneficial. We cannot rub out the very clear lines between those processes.
As my colleague Bruce Crawford said, the UK Government is today asserting again that it is delivering on its promises to Scotland. Most objective analyses of the legislation that is before the Westminster Parliament would tend to disagree with that.
I note the comments from the Tories and Labour about Scotland having one of the most powerful sub-national legislatures. I point them to the graph on page 26 of the unanimously agreed Devolution (Further Powers) Committee report on the UK Government’s proposals, which demonstrates that around 38 per cent of the taxes that are raised in Scotland will be devolved or assigned to Scotland. The figure for the Basque Country and Navarre is over 50 per cent, for Quebec it is over 70 per cent and for the other Canadian provinces it is over 60 per cent. We should bear in mind that comparison when members make such statements.
Will the member take an intervention?
I want to make progress on the issues that I want to highlight, which have been highlighted in the discussions and deliberations on the two committees that I sit on—the Finance Committee and the Devolution (Further Powers) Committee.
There is a question about the completeness of the taxation elements and the suite or basket of taxes that are being devolved. The Parliament is to receive powers over income tax, but there will not be powers over national insurance contributions, which strike me as something that would provide completeness.
We are not being given powers over the personal allowance, but we will—apparently—be able to set a zero rate of income tax, which seems to be a bit of a faff when, in essence, that is an instrument through which personal allowance alterations can take place. A zero rate will apply if Scotland wishes to increase the personal allowance beyond that which Westminster sets. However, if Westminster decides to increase the personal allowance, that will have an impact on tax income for the Scottish Parliament. It will be interesting to see how that issue will be resolved should such a decision be taken. It would have a material impact on the Scottish Government’s projections of the income that will be available to it.
Another issue is dividend income. The Institute of Chartered Accountants of Scotland said that, if a decision was taken in the Scottish Parliament that resulted in individuals moving income into dividends, that would reduce the tax income for the Scottish Parliament but boost the tax income for the UK Exchequer, which would receive the benefit of the dividend income. That is another issue that needs to be examined, particularly in terms of how it relates to the no-detriment principle.
On the breadth of options that are available, the Royal Society of Edinburgh said that the taxes that are being devolved are
“a narrower basket of taxes than is usually the case”.
The Chartered Institute of Housing in Scotland said that, although
“the Scottish Government may appear to have the power to make changes to the social security system”,
it would
“lack sufficient fiscal levers to put changes into practice.”
Those comments are worth noting.
Labour has called for full assignment of VAT. I caution it against saying that that would result in additional revenue, because it would result in a block grant adjustment. There would simply be an offset, and there would not be revenue over and above what Scotland would otherwise receive.
That is why the point that I have made about production versus consumption is important. Attaching VAT to production would create an incentive to boost economic activity in Scotland, because we would see the benefits of that. Attachment to consumption would not necessarily carry the same incentive. If, as the Labour Party suggests, we want benefits from increased economic activity, that should perhaps be pursued by attaching VAT to production.
Borrowing and the fiscal framework are critical elements. We need detail on exactly what the borrowing powers will entail. There has been talk that the borrowing powers will replace the powers that are in place in the Parliament, which raises the question of how effective the new powers can be if they are replacing rather than supplementing what the Parliament has available to it.
There is also a wider consideration. When the Secretary of State for Scotland came before the Devolution (Further Powers) Committee on 25 June and was asked about the flexibility for the Parliament within the fiscal framework, he said:
“it is not the intention that the fiscal framework should constrain the powers that are being devolved in the bill.”—[Official Report, Devolution (Further Powers) Committee, 25 June 2015; c 33.]
However, paragraph 2.2.5 of the command paper from the UK Government states:
“In the context of Scottish devolution, the fiscal framework must ensure that Scotland contributes proportionally to the overall fiscal consolidation pursued by the UK Government.”
Those two statements do not tally. Either the Parliament will have flexibility—that has a knock-on effect on the definition points around welfare, which some of my colleagues will speak about—which is what devolution should entail, or it will be constrained. That will be the acid test of whether the fiscal framework matches the aspirations that were outlined in the vow and the Smith commission report and which the Scottish people expect to be met.
15:40
Like John Swinney, I think that the country is in a reflective mood, even as we hear of concerns about the detail of the legislative provisions that will deliver the conclusions of the Smith agreement. He was right to say that last year’s referendum was an exciting time for all of us. The jury is out on whether that unprecedented engagement with politics will be sustained into other issues and ideas, but we can certainly hope and act to ensure that it is.
On one level, Annabel Goldie was right to highlight that the referendum result was a vote of confidence in devolution as a process and as a way of doing things that, at its very best, represents a partnership with our closest neighbours and respects the principles of good government. Such an approach is closer to people and based on sound rationales for where power should lie and, crucially, for the routes that we all have to achieve the changes that we each believe in.
However, the referendum was never going to be an endorsement of the status quo for the powers of the Scottish Parliament versus those of local government—which Claire Baker highlighted—or versus powers at the UK level. Neither, thankfully, could it ever be an endorsement of the current order of who holds power, wealth and the most opportunity in our society. Those are the big questions of modern Scottish politics, just as they were throughout the past century. They are constitutional questions, but they are also fundamental. For Labour, the questions remain who has power, in whose interest do they wield it and how is power obtained by those who are excluded.
The tests that should be applied to the Scotland Bill are how it matches up to the commitments that were made last year and whether it is consistent with how Scotland voted in the referendum. For Labour, the Smith agreement went beyond the proposals that we made as a party; for the SNP, it fell short of the party’s demands. That is as it should be, because the majority of Scots chose union over independence.
The Scotland Bill’s purpose is to give effect to the agreement that was reached, so for Labour—as for the SNP—the bill as drafted is not quite there. I pay tribute to Ian Murray in his role as the shadow Secretary of State for Scotland for the work that he has done in pushing amendments to the bill that go beyond the position from which my party started and beyond the position that the UK Government has taken. Equally, I commend the cross-party work of the Devolution (Further Powers) Committee in this Parliament, of which I was previously a member, and of the Scottish Government. I respect the fact that the SNP’s victory in the general election gives it the duty to ensure delivery of the agreement and, more generally, to articulate the desire of its supporters to go further.
I welcome some of the things that Ian Murray has done and I welcome the idea of full assignment of VAT. However, does Drew Smith accept what was described last week by Professor Iain McLean, one of the architects of the Calman commission? He said that
“where we could assign—not devolve—the whole of VAT receipts in Scotland to the Scottish Government ... it would make not a blind bit of difference to the policy levers that the Parliament can pull”.—[Official Report, Devolution (Further Powers) Committee, 10 September 2015; c 18-19.]
All that it would mean at the end of the day is a reduction in the block grant.
That takes us back to why the fiscal framework is important. We accept the Deputy First Minister’s argument about the importance of that framework, provided that there is transparency and that it is not just the case that, because the Scottish Government does not like it, we should all reject it.
In the current environment, consensus is a worthy aim in what we are trying to achieve, particularly in constitutional politics, but it should not be the be-all and end-all, because we all reserve the right to argue our own positions, even when we are in the minority—as people who supported independence were after the referendum and as my party found itself after the general election.
We have to face up to the fact that in the Scottish political debate the constitution is a contested issue. That presents a significant challenge, not just to those of us who supported the result last year but to all of us who are involved in Scottish politics. The SNP might not particularly feel that challenge just now, but it is a challenge for all of us, because constitutional arrangements are simply rules that govern power, and since power is always capable of being challenged, true consensus will never be possible, although it should always be sought.
As other members did, I enjoyed last year’s referendum experience and some of the debates that we had here. For the most part, they were good natured and respectful. We all have friends, family members or people we respect who reached a different conclusion from us on independence.
The same issue applies to the Scotland Bill. We need to get beyond the cynicism that has damaged the process to some extent. On one side, we have cynicism about what can be achieved, and there is some lack of interest from others in achieving as much consensus as possible. That troubles me. Scotland did not just provide an opinion about powers for the Parliament or constitutional status; it provided an instruction. The challenge that faces us is to deliver on what was promised and instructed. That is about the greatest possible devolution that is not to our detriment. We also need to respect the views and aspirations of the minority.
During the past year, we could have taken the opportunity to build a new framework for devolution that would have respected the outcome of the vote, delivered on the promises that were made and commanded as much support as possible. I regret that we do not appear to have reached that outcome. There might be lessons in glorious defeat that have their attractions, not least to Labour members, but I hope that we arrive at a better resting place than glorious defeat.
I also hope that the UK Government moves from its current position and supports some of the amendments that we have talked about. I will be happy to support the Labour amendment and the Government motion at decision time.
15:46
I start with a direct reference to paragraph 17 of the Smith commission report, which comes under the heading “Heads of Agreement: Introduction”. It says clearly:
“The parties believe that Scotland’s devolution settlement should be durable but responsive to the changing needs and aspirations of the people of Scotland within the United Kingdom. As a result, it may be appropriate to devolve further powers beyond those set out in the heads of agreement where doing so would aid the implementation of the consensus reached by the parties in this report.”
That is so important. It reflects the speed at which the Smith commission was obliged to work following the Prime Minister’s announcement on 19 September last year and given the timescale. It reflects the spirit of the Smith agreement, which goes beyond the substance, and it sets out a starting point for additional powers—a floor rather than a ceiling—in the interests of cohesion.
From the commission’s discussions, I have no reason to doubt that, although there were many disagreements on the powers that are to be devolved, there was consensus that those powers should make sense and be cohesive. The order of reporting in the resultant Smith document reflects that desire for cohesion.
Pillar 2 of the heads of agreement is
“Delivering prosperity, a healthy economy, jobs, and social justice”.
That chapter combines welfare, employment, equalities and social affairs. It takes a cohesive approach with points of agreement for further discussion. It is a floor, not a ceiling.
However, here we are with a Scotland Bill that does not even reflect the starting point. That has been confirmed by the cross-party Devolution (Further Powers) Committee’s report and by witnesses who have given evidence, such as academics, practitioners and neutral commentators.
The clauses in the bill do not even open the starting gate, let alone move along the track to cohesion. Pillar 2 calls for the devolution of all employment support services that are provided by the Department for Work and Pensions, but the bill includes a restriction that the support must last for at least a year, which is a significant limitation. Pillar 2 calls for the creation of new benefits in devolved areas and flexibility in universal credit, but the bill gives no explicit power, the definitions in relation to carers are restrictive and there is still a veto clause on universal credit. On the equalities issues, the Devolution (Further Powers) Committee has received strong advice that the Smith recommendations are not being met and that the clause in the bill is confused, to say the least. There is no fulfilment of pillar 2 of the Smith agreement, let alone a more cohesive approach or a settlement that is
“responsive to the changing needs and aspirations of the people of Scotland”,
as outlined in paragraph 17 of the introduction to the heads of agreement in the Smith agreement.
Cohesion would mean listening to practitioners and others about sensible welfare devolution. It would mean giving serious consideration to employment issues, meeting the commitment of devolving all employment support services and considering whether further devolution, such as the devolution of Jobcentre Plus, would give a more cohesive system. It would mean the ability to use equality legislation to make our system fairer. Cohesion plus, which would be responsive to aspiration, would mean capitalising on all that and having, for example, the full devolution of powers over the minimum wage, employment law, health and safety and trade union law.
Trade union law is particularly worthy of discussion now, and I hope that the Labour Party will join the SNP and the Scottish Trades Union Congress in asking for full power over trade union law to be devolved. Given what is being proposed in Westminster, surely we can reach agreement on that in order to protect and promote the rights and responsibilities of workers in Scotland.
Cohesion means pulling all the strands together, but we have to have control over the strands before we can knit them together to create something sensible. We should all aim for that.
I am aware that the Scotland Office is punting messages on social media and other places that say, “We are meeting the terms of the Smith agreement,” but that is clearly not the case and it is disingenuous to pretend that it is. On 15 July, the Secretary of State for Scotland stated in the House of Commons that he intends to make substantive amendments to the Scotland Bill at report stage. It is clear that the bill does not meet the Smith agreement at the moment. From the evidence that we have heard in committee, it does not seem that there is an intention to get there, let alone go beyond that.
I will finish by going back to the Smith report. In his foreword, Lord Smith of Kelvin said:
“I took on the job in the knowledge that the three leaders of the main UK parties had committed to take the recommendations set out in the agreement and turn them into law—fulfilling their commitment to strengthen the powers of the Scottish Parliament within the UK.”
It is clear to me that that commitment is not being met, and I call on the three main parties in the UK to meet their own commitment and work together with us to achieve the best for Scotland.
15:52
I am pleased to have the opportunity to speak in today’s debate on democracy and devolution. On Friday it will be a year to the day since Scotland voted decisively to stay part of the United Kingdom, with a strong Scottish Parliament armed with more powers to strengthen the present constitutional arrangements and serve Scotland better, in a way that would meet the aspirations of the Scottish people for a strong Scottish Parliament and strengthen the United Kingdom.
Scottish Labour is a party of devolution and the union. For more than 100 years, we have led the argument for Scottish devolution within the union, and it is a cause that we have advanced out of deep-seated conviction. Devolution can and should be strengthened, where that is in the interests of the people of Scotland. That is why I believe that Scotland needs the full powers that were promised by the Smith commission, so that it is able to create its own welfare powers, and that the Scotland Bill must go further and give the Scottish Parliament more control over the welfare state.
At Westminster, we have tabled more than 80 amendments to the Scotland Bill, including amendments that would devolve housing benefit and also remove the veto of UK ministers over welfare powers. Indeed, last week’s report by Professor Jim Gallagher, which stated that the Scotland Bill must go further to give the Scottish Parliament more control over the welfare state, is yet more evidence that the UK Government should accept Labour’s amendments.
As my colleague Claire Baker said, we have today announced new amendments to the Scotland Bill that would see the Scottish Parliament take control of a further £5 billion of revenue and the powers to design a new social security system for Scotland. The amendments include measures to assign all revenue from VAT, to ensure that the Scottish Parliament can top up welfare benefits, even where individuals have been sanctioned, and to give the Scottish Government the power to create any new benefit. Amendments have also been tabled to investigate the concerns that have been raised by many charities across Scotland on the impact of new income tax powers on the gift aid system.
Our amendments would increase significantly the powers in the Scotland Bill and ensure that our Parliament is one of the most powerful devolved legislatures in the world. The bill is an opportunity for people across Scotland, and we want to make sure that they get the powerhouse Parliament at Holyrood that they were promised. However, as Claire Baker’s amendment states, we must recognise
“that devolution should not stop at the Scottish Parliament but go on to create more effective delivery of public services”.
We know that Scotland is one of the most centralised nations in Europe, with our local authorities’ powers decreasing in recent years. I believe that responsibility over key policy areas needs to be handed back to regional government, and the new powers that are coming to our Parliament will be a perfect opportunity to do that.
In our devolution commission report “Powers for a purpose—Strengthening Accountability and Empowering People”, we recommended the full devolution of responsibility for delivery of the work programme to local authorities on the basis that they are better placed to meet the requirements of local labour markets. That would enhance democratic accountability and empower people in greater local decision making. However, it is essential and right that the Scottish Parliament play a key role in providing strategic oversight of local authority delivery of that service.
The Scottish Labour Party is focused not just on making sure that the Scottish Parliament gets the powers that it needs, but on how we will use those powers to improve the lives of people across the country. It was never the intention of devolution to devolve power to the Scottish Parliament only for it to accumulate powers upwards. We must use the new powers that are coming to strengthen devolution, increase accountability and better meet people’s needs.
I am afraid that the extra time that we had has gone, so I must ask members to be strict with themselves and keep to their allocated six-minute speaking time.
15:58
I warmly welcome the debate. On 21 May, we had a debate on the Devolution (Further Powers) Committee report “New Powers for Scotland: An Interim Report on the Smith Commission and the UK Government’s Proposals”, which considered the draft clauses that were published in January by the former UK Government. As we all know, the report was signed off unanimously by all parties on the committee, which was no mean feat. All the credit must certainly go to my colleague, Bruce Crawford, for achieving that.
On that day, I spoke about two issues: fixed-odds betting terminals and employment programmes. I intend to discuss fixed-odds betting terminals for a few moments as that issue, like many other parts of the Scotland Bill, is unfinished business. I have consistently raised the issue of FOBTs because of my concerns about how damaging they are; I have campaigned for powers to come to this Parliament so that we can do something about those machines. At the time, I warmly welcomed the Smith recommendations that powers be given to the Parliament, even though those powers were to be limited. However, what we have in the Scotland Bill is an outcome that will create confusion for all.
As the bill stands, the new powers will deliver a system whereby a premises with FOBT machines—or class sub-category B2 machines, to give them their proper legal title—will be governed by legislation from the UK Parliament and legislation that is made here. The relevant clause in the bill will give us powers over new machines but will leave existing machines to the UK Parliament. I think that that is an incredibly silly and convoluted way to deal with an issue that is blighting communities across Scotland.
The Law Society of Scotland proposed amendments to improve that part of the bill, and I encourage the Secretary of State for Scotland to think again on the issue. If he is serious and is in listening mode, as he indicated that he was when he appeared before the Devolution (Further Powers) Committee in June, he needs to clear up this FOBT mess. I also encourage him to explain where the £10 limit in clause 45 came from. That figure seems arbitrary, and I can decipher no clear rationale for it.
The second issue that I want to raise is that of the definitions of carers, disability and new benefits. Paragraph 54 of the Smith commission’s report was clear on the creation of new benefits and the ability to top up reserved benefits, but the Scotland Bill falls short on the provision of powers to create new benefits in devolved areas, not to mention its restrictive definition of carers. Clause 23 of the bill lacks clarity on the matter.
The secretary of state’s letter to the committee of 26 August explains the position of the UK Government. It says that
“The Welfare provisions in the Bill fully deliver the Smith Commission Agreement”
but goes on to say in the next paragraph that
“There is no power in the Bill to create new benefits in areas of devolved responsibility because the UK Government believes the Scottish Parliament already has this power.”
If that were the case—I will give the UK Government the benefit of the doubt just for this point—why did the Conservative and Liberal Democrat members who were on the Smith commission sign off on paragraph 54 of the commission’s report? That paragraph says:
“The Scottish Parliament will have new powers to create new benefits in areas of devolved responsibility, in line with the funding principles set out in paragraph 95.”
Surely the Conservative and Liberal Democrat members would have been aware of the position that is now proposed by the secretary of state, who said in his letter:
“By definition, if the area is one of devolved responsibility then the Scottish Parliament has full legislative competence to enact legislation in that area (as long as this does not also relate to a reserved matter) including the provision of new benefits should it wish to do so.”
Therefore, either the members on the Smith commission displayed an ignorance of the so-called facts—I do not believe for one minute that they did—or there is now a sense that Dover house is backtracking on the issue.
A further thing that I genuinely find bizarre is the inclusion of a restrictive definition of carers. If this Parliament is to have the limited additional powers that are to come through the bill, why has a restrictive definition of carers been included in the bill? That will surely limit the ability of future Scottish Governments to introduce measures to assist with carers.
The secretary of state explained his position in the letter of 26 August by highlighting the fact that under-16s are not normally supported by the benefits system and that those in education are normally supported through grants, bursaries or education maintenance allowance. However, the life of a carer is hard. There are many carers in Scotland and, I expect, across the UK who are under 16. For many of them, any additional assistance would be hugely beneficial and might allow them to continue their education with a little bit of the stress alleviated. Who knows? If we can remove the proposed narrow definition of carers from the bill, that might provide a further tool for the present Scottish Government and future Governments to deal with educational attainment, which is an issue that has been widely discussed in recent months. Tying the hands of future Scottish Governments by enforcing such a restrictive definition does the UK Government no credit, and it will mean that young carers will continue to face the same difficulties.
You need to bring your remarks to a close.
As we have heard, some members believe that the Scotland Bill goes far enough and some believe that it does not go far enough. In my view, it falls far short of the Smith recommendations.
I think that all members of the Devolution (Further Powers) Committee have done a tremendous job in showing that we can work together to get the best outcomes for our constituents. As the bill stands, it does not do that by any manner of means, and the secretary of state needs to listen and act at the report stage.
16:04
I would like to comment first of all on a couple of items that have cropped up in the debate, arising from the Labour and Conservative amendments. There was a hint that there would be agreement that local communities and empowering people in greater local decision making were something that Labour believed in and that, somehow or other, the SNP was opposed to having more decentralisation. Nothing could be further from the truth. Indeed, when it comes to the Crown Estate, we talk about having decentralisation not only to local authorities and harbour trusts but to other local bodies, and that is an example that shows the decentralisation tendency. However, I would like to know whether references to local communities actually mean local authorities in Labour’s mind, or whether they mean local communities. Labour members had better explain that in their closing speeches.
The second point that I suggest needs to be looked at is one in which the Conservatives talk about making the Scottish Parliament
“one of the most powerful sub-national legislatures in the world”.
Do the Tories actually think that it is acceptable for the Scotland Bill to include vetoes over universal credit and energy schemes, despite there being no mention in Smith of the UK having the ability to veto the Scottish Government’s decisions? That clearly falls far short of the Smith conditions, and represents a lack of good faith, in my view.
The Crown Estate is an area in which I and the committee take a great interest. The drafting of the clause relating to the Crown Estate is complex and much of the detail is to be set out in the statutory scheme, a draft of which has been laid in the House of Commons. The assets to be transferred under the bill exclude the Crown Estate’s stake in Fort Kinnaird business park, which could be worth more than £100 million. The bill also includes major caveats relating to defence, national security and electricity distribution, as I hinted in my previous discussion about the Tory position.
The Crown Estate as such is perhaps one of the areas that this Parliament has spent longest trying to get devolved. Indeed, some of us have been involved for the past 20 or 30 year in efforts to get aspects of it devolved. That devolution has been slower than glaciers melting, although the glaciers are speeding up now, and perhaps the bill will speed up the process a little bit, too. My point is that, if the Crown Estate Act 1961 is to apply properly to the new managers, the Scottish Government and the Scottish Parliament have to be able to put our own legislative arrangements in place. However, we are faced with a Treasury that is intent on giving with one hand and caveating with another. Clauses 31(2) and 31(6) allow us to transfer assets and contain detail about that, but clause 31(10) potentially stops the Scottish Parliament from taking those actions. The provision appears to undercut the freedom granted by clauses 31(2) and 31(6) to modify the way in which the Crown Estate in Scotland is currently managed.
What kind of devolution of powers is that? We have to ask ourselves exactly what we should expect. Professor Aileen McHarg, when giving evidence to the committee, was asked about clause 31(10) and agreed that it should be struck off and removed from the Scotland Bill. We look to the Conservatives to tell us their position on that.
A further problem with the way in which we might apply ourselves to the use of the Crown Estate facilities and assets was raised by Professor Iain McLean, who gave the example of us perhaps passing some of the assets to social enterprises and thereby reducing, to some extent, the potential actual value of the Crown Estate. He said that
“under the Smith no-detriment principles,”—
another vague area—
“the rest of the UK could play hardball and say, ‘You have reduced the revenue that comes to you from the Crown Estate, so you must bear the risk of that.’ I am simply pointing out that that is a risk to the Parliament of using the powers in that way. That is not to say that it is the wrong thing to do; it is just a risk.”—[Official Report, Devolution (Further Powers) Committee, 10 September 2015; c 23.]
Why would we have to face a risk in attempting to devolve the powers of the Crown Estate?
Those are the kinds of issues that bedevil the whole process and show that the bill has made the process of devolution much more tortuous than the draft clauses did. The Treasury’s reluctance shows very bad faith in its relationship with Scotland. I hope that we can get that sorted out in the next while, and I hope that the other parties, of which I have asked questions, will answer those questions in the debate.
16:10
In the run-up to the referendum last year, I was a member of the Welfare Reform Committee and the Finance Committee, so I heard a number of eminent academics discuss a wide array of fiscal issues in the contexts of both independence and devolution. As members might imagine, when it came to discussions about devolution of powers, there was a fair spread of opinion on what the complexities of that process might entail, especially when it came specifically to welfare issues.
One of the SNP’s favourite go-to academics, Professor John Kay, boiled down the argument quite simply by saying that it is difficult to unpick welfare issues from everything else. He suggested that we are faced with a choice of all or nothing as regards what to devolve. Other academics had some sympathy with his position, but the overwhelming majority were of the opinion that the difficulty is not simply that the benefits system is complicated, but that all changes—whatever they are—run considerable risks that some of the most vulnerable and disadvantaged people in our society will be further disadvantaged, so we have to approach whatever is done with great care.
The benefits system is complex, and there are many interactions. Benefits interact with each other, with the tax system and with other social services—most notably healthcare and social care services. We must always be aware that there will be implications for whatever other parts of the system benefits are tied to. Therefore, before we start to unpick bits of the settlement and ask which benefits should be devolved, we need to think about the tests that we might apply to ensure that further devolution is feasible and affordable and will help with addressing issues including poverty reduction, which should be our primary purpose. Will further devolution help to achieve those ends?
There was, overall, some consensus that, at the very least, devolution of housing benefit would be beneficial, but in any debate on the implications of some powers but not others, the sorts of problems that could arise in relation to financial co-ordination must also be considered. Most important, before we start to ask which benefit may be devolved, we need to think about the tests that we might apply to ensure that further devolution is feasible. As a principle, if there is to be devolution of benefits, we need to accept that the terms of benefits will have to vary. There is not much point in devolving benefits if the terms do not vary and they remain completely uniform.
That leads us to almost the opposite of the parity principle that is used in Northern Ireland. Northern Ireland works on the principle that what happens in its system must be close—if not identical—to what happens in the rest of Britain. That is not really a principle of devolution. If we are to look at any form of devolution, we need to talk about the opposite approach, which is the presumption that it is legitimate and even desirable for benefit conditions to be different.
Different levels of social security in Scotland and the rest of the United Kingdom are not new. Before the creation of the welfare state, Scotland’s poor law was certainly different from that of the rest of the United Kingdom. It has to be recognised in going back to such a situation that, irrespective of any difficulties between benefits and the tax system, any new system will have a cost. There is no question about that.
Ultimately, further devolution needs to be financed in a way that means that the savings that would flow from better programme performance in Scotland would stay in Scotland. Any additional costs, through higher expenditure or poorer performance, should also be within that core part of the Scottish budget. That is a grown-up approach to further devolution.
In arguing against Professor Kay’s all-or-nothing position, it should be noted that the Scottish Parliament has already varied the social security system in three important respects: in respect of the bedroom tax, the council tax rebate scheme, and the abolition of the social fund.
Labour amendments to the Scotland Bill that have been tabled to date would mean the Scottish Parliament taking control of a further £5 billion of revenue and having the powers to design a new social security system for Scotland. It is absolutely right that we pursue that continuation of the devolution process.
The referendum outcome said to me that the people of Scotland want to remain in some kind of social and economic union with the UK, but also that they want that union to change and they want further devolution in social security to be a reasonable and feasible part of the change process. It is clear that differences in attitudes to social security have caused enormous friction and tension in Britain, but there should be a general presumption that in a political union we share a common social security system for, among other things, mobility of labour and social solidarity. That is what the people of Scotland voted for and what this Parliament should focus on delivering.
We must keep our eye on the ball and accept that what is on the table is not exactly what we set out to achieve. The amendments that Labour is tabling will take us closer to that. The Scottish Government has a responsibility in whatever actions it takes to address the complexities with which I know the cabinet secretary is grappling—we have seen them in the problems around land and buildings transaction tax and the landfill tax. Even with small taxes such as those, complexities make change difficult. I ask the cabinet secretary to focus on that whenever he makes the fiscal responsibility argument, and to take us all with him.
16:16
I will address clause 1 and 2 of the Scotland Bill. I make it clear that I am not attempting to rehearse constitutional arguments. At this point I am entirely concerned with the practicalities of the drafting of what we have before us and the evidence that has been heard, particularly by the Devolution (Further Powers) Committee, about what the bill’s proposed amendments might mean in law.
Clause 1(2)(1A) says:
“A Scottish Government is recognised as a permanent part of the United Kingdom’s constitutional arrangements.”
The evidence is that that phraseology does not help. The phrase “is recognised” does not do anything in law and it does not add anything. Our law and legal systems work on the basis that the law is the law for the time being. Only last week, I think, we changed the law on disclosure. We know that we will have to reconsider that as time goes by. If necessary, we will change it and what we change it to will become the law again for the time being. We know very well that no Parliament can bind its successors, so it may be that the issue in clause 1(1)(1A)—and every other issue—is revisited by the next Parliament. There is nothing to be gained by saying that something is “recognised”. The bill might as well say, “the Scottish Government is a permanent member of the United Kingdom’s constitutional arrangements,” or say nothing at all.
There is another permanence issue. Despite constitutional theories that say the opposite, article 19 of the treaty of union says, in effect, that it is understood that the Scottish legal system will remain for all time. That has yet to be proved to be the case, but several centuries have passed. There is no reason why we should not say that something is permanent.
In clause 2 we have the same problem with the phrase “it is recognised”, in the context of Sewel. I will deal with that in a different way. Baron Sewel set out the Sewel motion policy in a policy statement on 21 July 1998. In a speech in a debate in the House of Lords he included the text of the amendments to which he was speaking. I find it astonishing that the UK Government’s response to Smith’s recommendation that the Sewel convention be in statute is literally to put it into statute in Lord Sewel’s words. That is naive and facile, and, to be quite frank, a first-year student would know better than to draft such legislation. If we were to draft legislation like that the rest of the time we would simply put policy memoranda annotated with section numbers before committees.
The reality is that the Sewel convention is laid out in a Government document: “Devolution Guidance Note 10”, which was published in 1998. The latest version has been around since 2005 and, as I understand it, the convention has never been breached. The terms in that document say what the convention really is, so if we are going to put something in statute, it should be them. The guidance tells UK Government departments not what they “may” do, but what they “will” do. It is entirely clear that they have to consult, and paragraph 9(II), in effect, says that agreement must have been reached before the final decision-making process at Westminster. It does not say that it “may” be done; it says that it “will” be done.
The guidance note also covers emergency and exceptional circumstances. The Scotland Bill does not cover that, nor does it cover the full range of the Sewel convention, which is the fundamental point to which I would now like to return. Sewel covers three issues—legislation on the issues on which we may legislate, the powers of this Parliament and the powers of ministers. What we have before us in clause 2 of the bill potentially does not cover all those, and it might cover only the first issue. The Scottish Government has brought forward proposals. They are in the public domain, and they clearly address precisely that issue.
The bill is, at least, badly drafted. What we have in it about the Sewel convention is nothing more than a naive statement on a piece of policy that was set out by Lord Sewel. The convention itself is clearly on paper in the Government guidance, so if it is going to be legislated for, that is what should be in the legislation—complete with exceptions, which are not disputed. If that is done, the bill will clearly cover the powers of this Parliament and the powers of Scottish ministers, as well as the ability of the UK Government to legislate on issues on which we could legislate.
16:22
In preparing for today’s debate, I reread the vow—the historic signed joint promise that was made by David Cameron, Ed Miliband and Nick Clegg and which was carried by the Daily Record exactly a year ago today. I am firmly of the view that those three Westminster party leaders felt compelled to sign that promise to the people of Scotland following polling on the referendum question, because—let us face it—signing a joint pledge promising “extensive new powers” would not have been on their week-by-week referendum planners.
Whatever our view, however, what we witnessed was people and politics meeting on the front page of a popular national newspaper, and the vow can be considered to be symbolic of an incredible shared experience in which people and politics came together. Within that changed dynamic, which is needed and welcome, people are involved and are taking part and sharing views rather than simply having politics done on their behalf by a few representatives.
In its briefing for today’s debate, the Electoral Reform Society Scotland asks:
“One year on, have we honoured the legacy of this ‘energised and enthused’ nation?”
The ERS, I suggest, thinks not, and I am inclined to agree with it. The ERS and witness after witness at the Devolution (Further Powers) Committee commented on the haste with which this part of the devolution process has progressed. Aileen McHarg, who is a professor of public law at the University of Strathclyde, said that
“It is hardly an original observation to say that the process that has been followed so far has been unsatisfactory.”
It is important to remember what it was like in Scotland in the lead-up to the referendum—how people packed out public meeting halls, how passionate were the pub and kitchen table conversations that were had around the country, and how it felt like we were all part of an important decision. We were learning to discuss and debate issues that matter. That is not divisive; it is empowering.
Today, we will support the Government’s motion and Labour’s amendment. We cannot support Annabel Goldie’s amendment. It asks that we continue to scrutinise the Scotland Bill in an “objective and constructive” way in order to allow the identification of “appropriate” improvements, yet it would delete the reference to the unanimously agreed, objective and constructive finding of the Devolution (Further Powers) Committee that the bill does not fully deliver the Smith commission’s recommendations.
The Conservative amendment also says:
“extensive constitutional change is best brought about by building a broad consensus between political parties and governments”.
That is important, but the amendment excludes—or at least forgets to mention—the people of Scotland. Participation takes time and effort, but it leads to a better outcome. I do not think that any considered body of experts charged with securing optimal outcomes for people would have designed the devolution of welfare powers that is currently on offer. I do not dismiss the powers that will be devolved, but there is concern that they are not sufficient or broad enough to help us to make the system work.
The Crown Estate is another area in which the devolution proposals seem to have been designed by someone who really did not want such devolution to happen. When the Smith commission report said that
“Responsibility for the management of the Crown Estate’s economic assets in Scotland ... will be transferred to the Scottish Parliament”,
people understood that to mean pretty simple devolution of everything. However, that is not what we are offered. We will have a double-stream Crown Estate and complex transfer scheme, and Scotland will see no financial benefits from assets such as Fort Kinnaird.
In the vow, David Cameron, Ed Miliband and Nick Clegg agreed that
“The Scottish Parliament is permanent”.
As we members of the Devolution (Further Powers) Committee know, the drafting on that important provision has provided academics with many challenges, and continues to do so.
The Smith commission was hurriedly convened. It delivered its report, and now we debate whether the Scotland Bill delivers the report’s intent and the change that was agreed by the people who represented Scotland’s people on the commission.
We need to insist on and be part of a new type of politics. The people I speak to are not concerned about whether a party leader is wearing a tie; they want to debate the need for the ermine-clad members of the House of Lords. They think that we need devolution of gender politics to this Parliament. Surely that is essential to a new politics.
The further devolution of powers that we are discussing, and the way in which powers are being devolved, mean that positive intergovernmental relations are essential. In evidence to the committee, Jim McCormick said:
“Smith observed that we have weak intergovernmental working”—[Official Report, Devolution (Further Powers) Committee, 19 February 2015; c 4.]
He focused in particular on the impact that that might have on welfare devolution. The sharing of power in relation to universal credit demands a mature relationship and a commitment to work for the greater good. The Scottish Federation of Housing Associations agreed that the interconnections would be complex, and pointed out that the people who rely on benefits are often vulnerable.
We look forward to progress at the Scotland Bill’s report stage in the UK Parliament, and we hope that the bill will match the spirit and substance of the Smith commission recommendations. If that is to happen, we need clarity on the Sewel convention, the Crown Estate, welfare benefits, definitions of carers and disability, employment programmes and much, much more. The Westminster Government has much to do to deliver a Scotland Bill that matches the intent of the Smith commission.
16:27
I am grateful for the opportunity to speak in what has been an interesting debate on Scotland’s democracy.
The institution of the Scottish Parliament is a direct reflection of the democratic will of the people of Scotland, and Bruce Crawford, as a veteran of the first parliamentary session who was elected in 1999, was quite right to raise the issue of the Parliament’s permanence as an institution. The question is surely this: are we a subordinate legislature and an underling of Westminster, or are we a sovereign Parliament that is accountable to the people of Scotland?
Part of the answer to the question was provided in the motion that this Parliament passed by 102 votes to 14 when we debated the claim of right on 26 January 2012:
“That the Parliament acknowledges the sovereign right of the Scottish people to determine the form of government best suited to their needs and declares and pledges that in all its actions and deliberations their interests shall be paramount.”
I believe that the people of Scotland know where they stand. They want the Scottish Parliament to be a powerful Parliament, a sovereign Parliament and a permanent Parliament. It is therefore incumbent on the UK Government to heed the calls from the Devolution (Further Powers) Committee and to set out the steps that it intends to take to give practical and legislative expression to the clear aspiration that the committee set out.
Is there not at least an equal and opposite requirement for the Scottish Government to acknowledge the outcome of last year’s referendum and understand that the process is not a means by which to continue to campaign endlessly for the independence that the Scottish people rejected?
The member is entitled to put forward that point of view. All of us in the chamber respect the democratic will of the people of Scotland. However, it is not democratic to deny the people of Scotland the right to determine their own future.
It was Mrs Thatcher—a heroine of Alex Johnstone—who famously was able to abolish the Greater London Council, not quite by the stroke of a pen but by parliamentary diktat, precisely because it was a creature of statute. As Nigel Don set out compellingly, there is nothing in the Scotland Bill that would prevent a future UK Government that was hostile to the Scottish Parliament from abolishing it as an institution. That potential threat to the Parliament exists because, as A V Dicey stated in 1885,
“There is no power which, under the English constitution, can come into rivalry with the legislative sovereignty of Parliament.”
Therefore, the suggestion that an amendment should be lodged that would require a referendum of the Scottish electorate to be held if the issue of the Parliament’s permanence were ever in question, as well as a vote of the Scottish Parliament and the UK Parliament, seems sensible and constructive. I hope that the UK Government will respond to that suggestion positively.
In taking that step, the UK Government would be respecting the will of the people of Scotland and the wishes of this Parliament. It would also be showing due respect to the Scottish concept of popular sovereignty resting with the people—a concept that we can trace back to the declaration of Arbroath. That concept is in stark contrast to the unlimited sovereignty of Westminster, which Lord President Cooper famously referred to as being
“a distinctively English principle which has no counterpart in Scottish constitutional law.”
The cabinet secretary set out in some detail the fact that the vow has not been fulfilled, and a number of members underlined the view of the Devolution (Further Powers) Committee that the Scotland Bill does not fulfil either the spirit or the content of the Smith commission’s recommendations.
Lewis Macdonald rose—
Lewis Macdonald warned us not to conflate the two—we all heard his contribution.
The cabinet secretary and Malcolm Chisholm both highlighted the importance of having a fair fiscal framework, which is an issue that has been the subject of expert analysis by two of my constituents, the highly respected economists Margaret and Jim Cuthbert. They warn that
“income tax is an unsuitable choice as the primary vehicle for giving the Scottish Parliament greater fiscal responsibility”.
They state:
“The Scottish Government is being given responsibility for living within its tax resources, without being given adequate powers to grow the economy, and hence its tax base.”
We would do well to heed their warnings in relation to the proposed fiscal arrangements.
Linda Fabiani lamented the lack of a cohesive approach to welfare, employment and job creation, highlighting the need to secure further powers over those matters in order to meet the aspirations of the people of Scotland.
Malcolm Chisholm highlighted the lack of clarity on new benefits and top-up payments, as did other members including Stuart McMillan.
Mark McDonald dealt with the issue of dividend income accruing to the UK Exchequer possibly undermining the principles of no detriment.
Tavish Scott, in an excellent speech—notwithstanding the cynical blip mid-speech—made the perfectly reasonable case that we are seeking a progressive and durable settlement within a family of nations. He is absolutely entitled to argue that federalism is one way of achieving that. I agree with his conclusion that, in the medium to longer term, we are looking at a federal solution or independence. That will be the democratic will of the Scottish people, regardless of the final outcome.
The publication of the Scotland Bill should have been a democratic milestone—a chance for the Scottish Parliament to gain further powers to take Scotland forward. We must ensure that it does not become a fiscal and political millstone and a barrier to further progress in the years ahead.
16:34
We have had a lot of positive contributions to the debate, and I will reflect on a number of them. We heard excellent speeches from Malcolm Chisholm, who talked about welfare, and from Nigel Don on the slightly technical issue of the Sewel convention, which was nonetheless well covered. Although I might not agree with all the conclusions that they and other members reached, their speeches contained food for thought and things that I will reflect on.
The Scotland Bill is not perfect as it is. Of course parts of it could be improved and parts of it are badly drafted. However, the UK Government is certainly adhering to the spirit and substance of the Smith agreement and will continue to adhere to it so that we have the best possible bill for an enduring settlement in Scotland and the rest of the United Kingdom.
The approach that was taken by members who made positive suggestions and did not overegg the pudding will be far more effective and do the Parliament a far greater service than that taken by members who try to traduce everything that the UK Government does and challenge its intentions along the way.
Mr Swinney gave a more measured speech, but I was disappointed in his press release today, which said:
“The Bill takes every opportunity to constrain and limit new powers and utterly fails to deliver the spirit of the Smith Commission.”
I do not know whether he actually believes that statement, but nobody who is being fair minded, reasonable and genuine about the process can believe that it is true. Why does Mr Swinney not put his undoubted energy and ability into getting the best possible Scotland Bill instead of taking swipes like that? I genuinely do not think that he believes it to be true, but he may disagree and respond in his closing speech.
I hear what Gavin Brown says, but he will be aware that the Scottish Government is writing repeatedly to the UK Government and is engaged in discussions with it to precisely that end. Does he agree with the Prime Minister, who has said on more than one occasion at the dispatch box that the Scotland Bill delivers the Smith commission recommendations in full?
Yes, and it will continue to do so, but to say that does not mean that it cannot be improved. As I acknowledged at the start of my speech, it can be improved: wording can be tightened up and there are areas in which it is not perfect. By the time the process is complete, we will be in a better position.
However, it is unfair to say that the bill “utterly fails to deliver” because many of the headline issues that were front and centre when the Smith agreement was published have barely merited a mention in the debate. There has been almost nothing about income tax, which is the biggest tax in the country; there was something, but almost nothing, on VAT, which is the second-largest tax; there was almost nothing on air passenger duty; and there was absolutely nothing on 16 and 17-year-olds being given the vote. Those are some, not all, of the headline issues of the Smith agreement that have not been mentioned. Why is that? It is because the Scottish Government and the UK Government have got on with the job and done what they are supposed to do. There is no doubt that, if we give our attention in a similar way to the remaining issues, we can get similar results.
Will Gavin Brown give way?
Not at this stage.
I come back to a point that Annabel Goldie made. It is easy to say, as many nationalist members have, that the Smith agreement does nothing—that it transfers powers that do not add up to much and are worth little. I refute that. It has become something of a cliché to use the expression “powerhouse Parliament” but I genuinely think that the Scottish Parliament is that. It is quite hard to measure in cash terms but, if we look at the laws for which we have responsibility, we find that there are few devolved Parliaments that have greater legislative reach than we have and will have once the Scotland Bill is enacted.
There are few devolved Parliaments on the planet that have greater spending power than we do. That is one reason why the Scottish Government talks only about our spending responsibilities in welfare. The SNP is the only political party in the world that, in looking at spending and tax, talks only about the percentage of spend on welfare. Why is that? It is because the percentage of spend that we have as a whole is a big figure and does not suit the SNP’s narrative and argument. According to Scottish Government figures in “Government Expenditure & Revenue Scotland” this year, we are responsible for 65 per cent of all Scottish spending—65 per cent of it is devolved—which puts us right at the top of devolved nations.
In relation to tax, there was a big weakness. Most analysts said that there was a vertical fiscal imbalance and they were right. However, post-Smith, we will be responsible for approximately 40 per cent of taxes in Scotland, according to GERS.
We are spending more than 65 per cent, we are responsible for the collection of 40 per cent of taxes and, as David Bell, who has been quoted by others, said at the time,
“Implementing Smith will mean that, in terms of fiscal federalism, Scotland will be closer to Canadian provinces and Swiss cantons, which are at the extreme end of the spectrum of devolved fiscal powers among OECD countries.”
Yes, there will be one or two places that are slightly higher, but we will be ahead of almost all of them. For that reason, I support Annabel Goldie’s amendment and urge the Scottish Government to do all that it can from its side.
16:40
The debate has been about the process of devolution and about its purpose. Among other things, devolution decentralises the governance of Britain and modernises the British state. Promoting Scottish devolution does not weaken the United Kingdom; it does not disadvantage other parts of the union. David Cameron’s big idea of English votes for English laws is divisive and ultimately self-defeating because he misunderstands the nature of Scottish devolution.
Devolution is firmly compatible with the ideals of the European Union. It derives from the principle of subsidiarity—devolving powers and responsibilities to the most local level that is practically possible. That principle is essential if a union of states on the scale of the European Union is to remain democratic and locally accountable, but it is just as relevant at the level of the United Kingdom and within Scotland. That is why our amendment calls for double devolution: the transfer of powers to this place from Westminster and the transfer of powers from here to a local community level. Our amendment also calls for people to be empowered by greater local decision making, reversing the centralisation of Scotland’s public services that has been a feature of the past eight years.
Devolution is about democracy and accountability, but that is not the whole story. Devolution in the present day is also about enabling social and economic change. Those things have not always gone together. Some of the most far-reaching social and economic reforms in Scottish history were delivered in the context of a unitary British state, from the nationalisation of the railways to the creation of the national health service.
However, the Labour Party has embraced devolution as a means to further progressive social and economic change, not as an end in itself. That is how we see the Smith agreement and the Scotland Bill and that is how we have approached today’s debate.
The Smith agreement covers a wide range of policy areas. Its most important provisions are to transfer tax powers to the Scottish Parliament and to provide for powers in the field of social security to be shared between Holyrood and Westminster.
The tax changes increase our accountability as members of the Scottish Parliament by making us responsible for raising revenue as well as spending it. The combination of tax and welfare powers gives us an opportunity to create a distinctive and progressive system of social security in Scotland in the context of the wider British welfare state—an opportunity to improve the lives of those who have the least.
It is simply wrong to say that the Scotland Bill has failed on all fronts or that it does not fulfil the vow to devolve extensive new powers to the Scottish Parliament in any way. Indeed, the Devolution (Further Powers) Committee’s interim report concluded that the bill fully reflected Smith in a number of areas but required amendment or clarification in a number of others. Those were conclusions to which all parties agreed, although many of us wish to go further.
It is, of course, true that the bill falls short in the area of welfare, as Michael McMahon and others have said. It is also true that the Tory Government at Westminster has yet to accept any of the many amendments to the Scotland Bill moved by Labour, the SNP or the Liberal Democrats and indeed it has made few concessions to the issues raised on a cross-party basis by the Devolution (Further Powers) Committee here.
Does the member agree that there is a certain irony in the use of the issue of welfare, particularly by the Government and the Government’s back benchers, who demand additional expenditure while apparently ignoring the taxation responsibilities that that would bring with it?
I think that the point was well made by Gavin Brown that income tax is an important part of the devolution package and should be highlighted. Of course, that does not mean that the approach of the Conservative Government on social security is supported by other parties. It is disappointing that the Westminster Government has not seen fit to accept any of such a wide range of positive and helpful amendments to improve the package.
Those of us who do not agree with the Tory approach to social security should not be deterred just because a Conservative Government digs in its heels and resists amendments that are aimed at achieving social and economic reform. After all, Mr Cameron’s ministers are undermining the welfare state and the rights and freedoms of working people daily, so it is hardly surprising that they are resisting changes to the Scotland Bill that have been proposed by those who want to use it to create a fairer and more equal society.
If the Conservatives at Westminster persist, so should the Opposition parties, and so should we. Devolution is a process, not an event, and what one Scotland act fails to deliver, another Scotland bill can propose to make happen. That has been the history over the past 18 years, and if all parties cannot agree in the next few months, it may well be the case again.
Devolution is not a transitional demand. The failure of the Conservatives to accept Opposition amendments should not be seen as an alibi that allows any other party to walk away. It would simply not be credible to sign the Smith agreement and commit to a scheme of further devolution and then to use the imperfections of the bill as an excuse to abandon the process of devolution in order to do something radically different instead.
I am interested in the point that Lewis Macdonald is articulating. Is he saying that, if the fiscal framework results in something that would be detrimental to this Parliament, we should still agree to it because we would otherwise not meet the aspirations that we signed up to as part of the Smith agreement, or does he believe that such a fiscal framework should be rejected?
What I said was that the imperfections in the Scotland Bill as it is currently drafted and as it proceeds through Parliament should not be used as an excuse to walk away from the process.
Mark McDonald is right to mention the fiscal framework, because there are parallel processes under way with a view to implementing Smith. One is open and public: the process of seeking to amend the Scotland Bill in the democratic forum of the House of Commons. The other is hidden and is taking place behind closed doors: the process of negotiating the fiscal framework to underpin the future sharing of power between the Scottish and United Kingdom Governments. That process of negotiation requires good will on both sides, as it will succeed only if both Governments want it to. There is little point in MPs seeking to improve the bill in Parliament if ministers are unwilling to negotiate in good faith with a view to making the Smith agreement work.
John Swinney has always rightly emphasised the importance of getting the fiscal framework right. He has described the process as a negotiation, which implies that both sides must be willing to compromise and that the end result is unlikely to be perfect from either point of view. We are calling today for that process to be made open and transparent so that the people of Scotland and the wider United Kingdom can see what is being said and done in that negotiation on their behalf. It is important that both Governments can demonstrate their good will in the negotiations, so that we can see that United Kingdom and Scottish Government ministers are seeking the best way to implement the Smith agreement rather than pursuing other priorities at the expense of Scottish devolution.
Next year’s election should not be about the Scotland Bill or a second referendum on independence, or about constitutional issues alone. It should be about the funding and provision of public services in Scotland and what this Parliament should do with the powers that we have and those that we will acquire to close the attainment gap, address the crisis in the Scottish NHS and restore local accountability for public services.
Those are the issues that matter to the people of Scotland. Devolution is a means to address those issues, not an end in itself. All parties have signed up to the process, and now all parties need to get on and make it happen.
16:48
The debate in Parliament this afternoon has been outstanding. It has been graced by a number of thoughtful and substantive contributions from a range of shades of opinion in Parliament, and it has helped enormously in expressing Parliament’s view on the current status of the Scotland Bill, in a momentous week for our country as we approach the first anniversary of the referendum last September.
I think that all of us, regardless of our perspective, accept that the referendum was a triumph of participatory democracy in our country, despite the fact—as Drew Smith fairly pointed out—that it led to people close to us and in our communities, and those whom we represent, holding differing opinions. Nonetheless, it was an invigorating democratic process of which we should be proud.
Annabel Goldie started her speech by saying that she was somewhat surprised by my reaction to the publication of the Smith commission report in November last year. I do not think that she should have been at all surprised by my reaction, because the poor soul had to put up with me going on and on about it for what I have often described as 10 of the happiest weeks of my life—and those who were in the Smith commission room will realise how much of a joke that is.
Annabel Goldie went on to say that some of the Government’s reaction in handling the issues and some of the things that my colleagues say are in the sphere of being equated with angels dancing on the head of a pin. It is wrong to characterise the issues that have been raised by members from across the political spectrum in Parliament today as being somehow trivial in that way because, as we have heard during the debate, they are very substantial questions about the implementation of the Scotland Bill and its contribution to the process of devolved government in Scotland.
I completely disagree with one of the interventions that Mr Johnstone made, in that we participated in the Smith commission. Linda Fabiani and I, who represented the Scottish National Party, did not go in and argue for Scottish independence; we accepted unreservedly the result of the referendum. We argued for strengthened powers for the Scottish Parliament within the United Kingdom. The Scottish National Party submission to the process made that point explicitly: we accepted the fact that we could not argue for independence through Smith and that we had to argue for strengthened devolution, which is precisely what we did.
Therefore, we have what I think is a reasonable expectation that what comes out of that process should be a strengthened form of devolution that will be implemented. I accepted, in the national museum of Scotland, that Smith represents a strengthened and greater degree of powers for the Scottish Parliament although, as Drew Smith fairly pointed out, it clearly did not reach my expectations.
One of the key issues in the debate has been whether the Scotland Bill has delivered on Smith. This might come down to the kind of stuff that Annabel Goldie thinks is about angels dancing on the head of a pin, but I think that it is important. Just about four and a half hours ago, the Prime Minister said to my colleague Angus Robertson, who is the Member of Parliament for Moray and the leader of the SNP group in the House of Commons:
“You give me a list ... of the things that were promised and ... not delivered, and then we can have a very reasonable conversation. Until then, it is all bluster from the SNP.”
Well, we have heard today in Parliament a whole host of things that have not been delivered. The Devolution (Further Powers) Committee of this Parliament has unanimously sent several letters to the Secretary of State for Scotland, not least of which was sent on 14 September, setting out a range of things that were promised and not delivered, to fulfil the Prime Minister’s request.
Members could fairly ask what the Scottish Government has been doing about that. After the publication of the Smith report in November, we offered jointly to author the clauses that were to be published by the UK Government in January. The First Minister wrote to the Prime Minister on 26 November to do that, but the offer was not accepted. After the publication of the Smith clauses in January 2015, we published the alterations to those clauses that would turn Smith into reality, but the UK Government did not accept them.
When the Scotland Bill was published after the United Kingdom election, we set out and published on 8 June draft amendments that would make the bill into Smith. We were not trying to build beyond Smith; we were simply saying that, if those changes were made, the bill would be what we think to be Smith.
On 8 June on the “Good Morning Scotland” programme, the Secretary of State for Scotland said:
“I am absolutely clear that the Scotland Bill does fulfil in full the recommendations of the Smith Commission, and I am ... happy to have, as it has been described, my feet held to the fire”.
On 8 June, therefore, the secretary of state said that the published bill does the business—it does it in full—but on 15 July, in response to my colleague the Member of Parliament for Linlithgow and Falkirk East Martyn Day, he said:
“It is my intention to make substantive amendments in the House of Commons when the Bill comes back on Report.” —[Official Report, House of Commons, 15 July 2015; Vol 598, c 877.]
The secretary of state, in his answer to Mr Martyn Day on 15 July, is clearly accepting that what he said on “Good Morning Scotland” on 8 June was rubbish.
Why then did the Prime Minister say what he said to Angus Robertson at 12:15 this afternoon? The Prime Minister’s statement, if anything, is what can be described as “bluster” in the House of Commons.
Will the member take an intervention?
I would love to.
I have listened to what the Deputy First Minister has had to say over the last few minutes. Could he tell me clearly whether what he is trying to do today is set out a negotiating position or close that position down?
I think that my negotiating positions have been pretty well publicised. As I have just said to the Parliament, what we published on 8 June were essentially the amendments that we thought would turn Smith into legislation to our satisfaction. That was a complete and utter revelation of my negotiating position. There is nothing left in the cupboard to disclose—that was it.
I would have thought that the UK Government would be interested in such intergovernmental work being done properly and fully—Tavish Scott, quite understandably, always lectures me about the importance of that. Our amendments said it all; we could have just settled on them.
I will address some of the other issues that have been raised in the debate. To come back to Mr Scott, he said that he could not conceive of the Scottish Government voting down additional powers because of the context of the fiscal framework. I would say to Mr Scott that Parliament has to understand the Government’s position that we see the fiscal framework and the bill as one and the same thing. There is no point in having the powers if we do not have the fiscal framework that allows us to exercise the powers without prejudice to the interests of Scotland
Claire Baker made a number of very fair and reasonable points about the transparency of the process. I have gone to the Finance Committee on, I think, two occasions to talk about the fiscal framework. I have set out a lot of the Government’s thinking on the issues that we have to deal with. I have also said to the Finance Committee that I cannot see how I can provide a running commentary on the issues that have been discussed within the joint exchequer committee, of which, she quite correctly points out, I am the joint chair.
I can assure Claire Baker that a report will be published after each meeting of the joint exchequer committee, and that has happened on the occasions that it has met. I can also assure her that Parliament will have the ability to have full consideration and analysis of the fiscal framework that emerges from those discussions before we move to any acceptance of the Scotland Bill. I will come to Parliament and recommend the acceptance of a fiscal framework only if I believe it to be fair, in the interests of the people of Scotland, and consistent with what was envisaged by the Smith commission in its report.
Malcolm Chisholm made a couple of very substantial points about some of the elements of the Scotland Bill that are more about micromanagement than they are about devolution. Rob Gibson made the same points in relation to the Crown Estate. We should ignore that issue at our peril. Devolution is about giving power to the Parliament that it can exercise, not stipulating how powers should be used.
I am always wary about praising Labour members, because I feel that it does not do them any good internally, but if Drew Smith will forgive me for saying so, I think that he made a substantial contribution to the debate today in relation to how there is an opportunity to create broader agreement about the further steps that can be taken in empowering this Parliament by dialogue, discussion and debate. That approach has been helped by the debate today, and the Smith commission would have been helped by having such a process to a greater extent. The Scotland Bill would undoubtedly be strengthened if the UK Government responded positively to the substantive and dispassionate contribution that has been made not least by the Devolution (Further Powers) Committee but also by the Scottish Parliament.
Finally, Linda Fabiani made a key point for the whole debate about the need for the entire package to be cohesive. It must hang together. It must enable us to exercise the type of welfare responsibilities and imagination that Michael McMahon talked about, but also give us the ability to create the stronger economy to fund those provisions as a consequence. That is the bit that we think is substantially lacking in the contents of the Smith commission agreement, and if it is absent from that agreement, it will be absent from the Scotland Bill. That is what we must remedy.
Mr Macdonald might have given us the clue. There was a Scotland Act 1998, a Scotland Act 2012, and there will be a Scotland Act 2015. Who knows? There might need to be another Scotland act into the bargain.
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