Draft Scotland Clauses

Oral Answers to Questions — House of Commons Commission – in the House of Commons at 11:18 am on 22nd January 2015.

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Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland 11:18 am, 22nd January 2015

With permission, Mr Speaker, I wish to make a statement to the House about the further devolution process in Scotland and the publication of draft clauses to implement the Smith commission agreement.

The draft clauses published today deliver a substantial package of new powers to the Scottish Parliament. We are publishing ahead of the Burns night deadline, demonstrating the Government’s commitment to honouring the vow made to the people of Scotland during the referendum and meeting the timetable we set out during the referendum to deliver further powers to Scotland.

The referendum on independence on 18 September 2014 saw Scotland vote decisively to remain within our United Kingdom family of nations, retaining the strength, security and stability of being part of the UK. But the Scottish people did not vote for no change. During the referendum campaign, the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition, made a joint commitment to deliver more powers to the Scottish Parliament.

The Smith commission, chaired by Lord Smith of Kelvin, was the result of that commitment. All five main parties in Scotland came to the table and reached agreement on the proposals for further devolution to Scotland within the United Kingdom. The Government welcomed the fact that this was the first time that all of Scotland’s main parties had taken part in a process to decide the future of devolution. This landmark agreement was signed by all five parties. I am grateful to Lord Smith and the members of the commission for their work.

The commission’s heads of agreement were published on 27 November and the Government committed to bring forward draft clauses to implement the agreement by Burns night, 25 January. This was a challenging timetable, but, by publishing a Command Paper and draft clauses today, I am pleased to say that the Government have delivered on their commitment in advance of that deadline.

The clauses published today will make it possible quickly to translate the Smith commission agreement into law at the beginning of the next Parliament. The draft clauses provide for an already powerful Scottish Parliament to become further empowered and more accountable to those who elect it. As a result, the Scottish Parliament will become one of the most powerful devolved Parliaments in the world.

I will begin with the constitutional measures. The biggest transfer of powers to the Scottish Parliament and Scottish Minsters since the start of devolution comes with greater flexibility for the Scottish Parliament and the Scottish Government to manage their own arrangements, with statutory recognition of the enduring place of a Scottish

Parliament in the UK’s constitutional arrangements. Our commitment to the process has already been evidenced by the steps the Government have taken to enable the Scottish Parliament to extend the franchise to 16 and 17-year-olds in time for the 2016 Scottish Parliament elections, with an order now laid before both Parliaments.

On the fiscal framework, the package gives greater financial responsibility to the Scottish Parliament with an updated fiscal framework for Scotland, consistent with the overall UK fiscal framework. As the Smith commission agreement set out, the new fiscal framework will be agreed and implemented jointly by the UK Government and the Scottish Government through the Joint Exchequer Committee, with suitable engagement with both the UK and Scottish Parliaments. For the first time, more than 50% of the money spent by the Scottish Parliament will be funded by the Scottish Parliament. This is an important step that builds on the measures brought forward by this Government in the Scotland Act 2012 and further increases the financial accountability of the Scottish Parliament to the people of Scotland.

Under the tax clauses, Scotland will receive extensive new tax powers without losing the essential elements of our unified tax system that support the single market and make the UK such an attractive place to do business. The Scottish Parliament will be given the power to set the rates of income tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers. This is the most significant tax in Scotland and a powerful redistributive tool.

The first 10 percentage points of the standard rate and the first 2.5 percentage points of the reduced rate of value added tax will be assigned to the Scottish Government. This means that the Scottish Government will retain half the VAT revenue generated in Scotland. The clauses also give the Scottish Parliament the power to charge a tax on air passengers departing from Scottish airports and on commercial exploitation of aggregate in Scotland.

The welfare clauses provide for key welfare measures to be designed by and delivered in Scotland. The Scottish Government will be responsible for a number of benefits, including those for disabled people and carers. Issues relating to long-term unemployment will be tackled with specific consideration of local circumstances. As set out by the Smith commission, universal credit will remain reserved, but the Scottish Government will have certain flexibilities, including the power to vary the housing cost element. Scotland will continue to share the benefits and strengths of the UK-wide system for pensions, labour market benefits and Jobcentre Plus.

Additional clauses build on the already significant powers of the Scottish Parliament and Government in a range of other policy areas. To give a few examples, there are new powers for the licensing of onshore oil and gas extraction, powers to introduce gender quotas in respect of public bodies in Scotland, and powers to police the railways. Together, these clauses give greater responsibility for more decisions affecting Scotland to be made in the Scottish Parliament and paid for by revenue raised by the Scottish Parliament.

Later today, the Prime Minister and ministerial colleagues will host an event in Edinburgh to present the Command Paper and clauses to representatives of civic Scotland. This will signal the next phase of the work.

The clauses are presented today in draft. They will require further preparation to make them ready for their introduction in a Scotland Bill in the next Queen’s Speech. It has become clear that this legislation will be taken forward by whoever leads a Government after the general election. To get the clauses fully ready, the Government wish to engage with experts from civic

Scotland. We are also committed to engaging with the Scottish Government and Her Majesty’s Opposition ahead of finalising the clauses for introduction. Questions of commencement and implementation will need to be answered, and in order to do this we will need to understand what the Scottish Government intend to do with the new powers. It will be necessary for the fiscal framework to be agreed alongside the introduction of the Scotland Bill.

Lord Smith made further observations to which we need to pay heed. In some areas, he recommends further devolution from the Scottish Parliament to local authorities in Scotland. He also recommended better working between the two Governments and the two Parliaments.

The Command Paper and draft clauses provide for a responsible and accountable Scottish Parliament inside a strong United Kingdom. By publishing ahead of time, the Government are demonstrating that they are meeting their guarantee to the people of Scotland. The clauses ensure a set of proposals that do not cause detriment to the UK as a whole or to any of its constituent parts.

The Government remain committed to ensuring that Scotland and the whole of the United Kingdom continue to prosper from our single domestic market, our social union, and the strength that comes from the pooling and sharing of risks. People in Scotland made it clear that they want to keep the advantages of a UK pound, UK pensions, UK armed forces, and a strong UK voice in the world. These clauses allow that to happen.

This is the package that Scotland voted for, it is what all parties in the Smith commission process signed up to, and it is what this Government are delivering today. I commend this statement to the House.

Photo of Russell Brown Russell Brown Shadow Minister (Scotland) 11:27 am, 22nd January 2015

I thank the Minister for advance sight of his statement.

Today we mark another milestone in the delivery of the vow made to the people of Scotland before the independence referendum in September. The timetable set out by my right hon. Friend Mr Brown during the referendum campaign has now been exceeded at every stage, with a Command Paper on the process towards further powers just 25 days after the referendum; the conclusion of the Smith commission and agreement by all five of Scotland’s political parties before St Andrew’s day just 10 weeks after the referendum; and today, ahead of schedule, just 18 weeks after the referendum, the draft clauses that will form the basis of the next Scotland Bill.

Before I turn to our response to the draft clauses and the Command Paper laid before the House, I want to provide an absolute guarantee from the Labour Benches. As my right hon. Friend the Leader of the Opposition has made clear on a number of occasions, the powers agreed by Smith will be delivered, and the next Labour Government will include a new Scotland Bill in our first Queen’s Speech. Labour created the Scottish Parliament in 1999, we supported more powers for the Parliament in 2012, and we will create a powerhouse Parliament with these new powers when we are in government.

Labour made it clear at the outset of the Smith commission process that we wanted a settlement that, first, respected the outcome of the referendum, namely a strong Scotland inside a UK where we pooled and shared risk; secondly, moved the maximum possible power from Westminster to the Scottish Parliament; and, finally, did not make Scotland worse off.

We are satisfied that the Smith commission delivered that outcome and we can say with confidence that with these clauses we will be delivering home rule—the full powers that Scotland needs. As the Command Paper notes, the powers the clauses will confer on the Scottish Parliament will mean that it will control about 60% of spending in Scotland and retain about 40% of Scottish tax. That will make it the third most powerful devolved Assembly in the OECD.

Before I turn to the detail of the clauses, I wish to press the Minister on two areas that I hope he will address in his reply. The Command Paper makes explicit reference to the Barnett formula and the agreement of all five parties during the Smith commission to its continuation. Can the Minister provide any more clarity about how the adjustment to the block grant will take place and how discussions with the Scottish Government to agree that are progressing?

I also wish to press the Minister on an item on page 40 of the Command Paper, which reproduces the following commitment from Smith:

“MPs representing constituencies across the whole of the UK will continue to decide the UK’s Budget, including Income Tax.”

Given the Chancellor’s comments at the Treasury Committee on Tuesday, can the Minister provide an absolute reassurance that that part of the Smith agreement will be respected, as it is not addressed in the paper?

I now wish to turn to the detail and the precise powers that the clauses will confer specifically over job creation, tax and social security. The clauses confer full power over income tax and a number of other taxes. We welcome the clarity provided by the Command Paper on the areas to be devolved. We welcome the extension of powers over VAT, which go further than the proposals of the Smith commission, but will the Minister explain why that change was made?

On welfare, the clauses will transfer extensive new powers on the Scottish Parliament, including powers worth £2.5 billion for welfare spending and the powers to create new benefits. Will the Minister confirm that the clauses as drafted respect the spirit and the letter of the Smith agreement and allow the Scottish Government to create new benefits? Will he also explain the process that will now be undertaken to examine in more detail the consequential arrangements to adjust the Scottish block grant to reflect what will now be devolved to the Scottish Parliament?

On job-creating powers, my hon. Friend Margaret Curran has already raised with the Secretary of State, and at Scottish questions, our desire to see the job-creating powers of the Work programme passed to Scotland at the earliest opportunity. It continues to be our view that that could be achieved by using a section 106 order to transfer responsibility to the Scottish Government immediately. That would reduce any uncertainty about the effect of continuing contracts in Scotland and it would allow others to start to remedy the failure of this Tory Government’s Work programme in Scotland, which sees only one in five people into a job. Will the Minister consider again the introduction of those powers now?

Finally, I would welcome more clarity from the Minister on the devolution of the Crown Estate. Will he clarify the process that will be followed to determine the transfer scheme and how long it might take? Will he also explain how the Government will ensure that the Smith commission’s recommendation that the powers be further devolved to our island communities will be seen through? Many in our rural and island communities will want guarantees about the devolution of the Crown Estate and that the powers will be passed to the islands as both the UK and Scottish Governments promised during the referendum.

This is another milestone in Scotland’s home rule journey. The Smith agreement was the response to the call for change that we heard, and today one thing is clear: Scotland will have a powerhouse Parliament.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I very much welcome the hon. Gentleman’s commitment, and indeed that of his party both in Scotland and across the United Kingdom, to the implementation of the Smith commission proposals. The position could not be clearer: whichever party is in government after the next general election, the proposals will be taken forward in the Queen’s Speech.

The hon. Gentleman raised a number of issues. The Prime Minister, the Leader of the Opposition and the leader of the Liberal Democrats have made it very clear that the Barnett formula is here to stay. The discussions on the creation of the fiscal framework will have to take into account the additional revenue raised by the Scottish Parliament. It is very important for MPs from Scotland to make it clear to our colleagues that the Scottish Parliament’s additional ability to raise funds will not be in addition to the block grant that it receives, because an amount still to be calculated will be deducted from the block grant under the Barnett formula.

The hon. Gentleman raised the issue of VAT. The Smith commission clearly made a recommendation on the standard rate of VAT, and the Government feel that it is entirely consistent to apply the same recommendation to the lower rate—the 5% rate—of VAT. That will ensure that Scotland receives 50% of the revenue raised.

The hon. Gentleman raised several issues about the welfare proposals. We and the Scottish Government have established a joint welfare working group at ministerial level—I will co-chair it with Alex Neil, the Scottish Cabinet Secretary with responsibility for such matters—which will take forward some of the issues. I assure the hon. Gentleman that the Scottish Parliament will have full legislative responsibility for the Work programme. As I understand it—I will provide confirmation—my right hon. Friend the Secretary of State has already written to Margaret Curran to set out why he and the Government do not believe that the section 106 route is the right way to transfer the programme. If the letter has not already been delivered, I will ensure that the hon. Gentleman receives a copy.

Of course we will proceed on the basis of good faith in relation to the Scottish Government and further devolution within Scotland. The hon. Gentleman will be aware that the Scottish Cabinet is coming to Dumfries on Monday, which will be a good opportunity for the Scottish Government to demonstrate that they are listening to people outwith the central belt of Scotland. I am sure that they will discuss the Crown estate, which is certainly an important issue in my constituency.

If I have not covered all the points made by the hon. Gentleman, I will write to him about those matters.

Photo of George Young George Young Conservative, North West Hampshire

The coalition Government have moved with commendable speed to meet the aspirations of the Scottish people, and I welcome the statement. Does my right hon. Friend agree that the Government should now move with equal speed to meet the aspirations of the English?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

As has already been made clear from the Dispatch Box, the proposals for Scotland are stand-alone proposals that will proceed whatever arrangement is reached for other parts of the United Kingdom. My right hon. Friend the Leader of the House has published a Command Paper setting out various options in relation to England, which I am sure will continue to be the subject of vigorous debate in the House.

Photo of Alistair Darling Alistair Darling Labour, Edinburgh South West

I, too, welcome the statement, and the production of draft clauses exactly to the timetable promised during the referendum. May I press the Minister on one matter on which he conspicuously did not respond to my hon. Friend Mr Brown? The Smith commission recommended that all Members of the House would decide on the Budget, which is all very well and good. That appears to have been accepted in the Command Paper, but it is entirely inconsistent with what the Chancellor and the Prime Minister have said during the past few weeks. Does the Minister accept that any future reforms will have to be fair, but must not undermine the fiscal integrity of the United Kingdom? If they did so, we would end up with all the restrictions we see in the eurozone, which no one in this country—north or south of the border—wants.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

Nobody in the House, with the exception of one party, wants to see the fiscal nature of the United Kingdom undermined in any way, and my right hon. Friend the Chancellor most certainly does not. He has made it clear that as we move forward with the different settlement in Scotland, there will be elements of the Budget that do not apply to Scotland. Clearly it is appropriate, as there is a debate about the governance of England, to debate that matter too.

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Deputy Leader, Liberal Democrats

My constituents in Gordon overwhelmingly rejected independence and declared their support for the United Kingdom. They will certainly welcome the statement. However, they are concerned that it is the responsibility of the Scottish Government to provide devolution within Scotland. The people of Gordon feel extremely let down by the Scottish Government, who have diverted resources and powers away from them, leading to a crisis right across our public services.

There is also an abuse of the term “home rule”. Apparently, to the SNP it means everything except foreign affairs and defence, which means that it does not address the single currency, the single market or the single welfare system. In other words, it means independence. Nobody should be in any doubt that voting for the SNP is voting to break up the United Kingdom.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I certainly agree with the right hon. Gentleman’s final statement. We have to move the debate on, so that it is a debate about what the powers of the Scottish Parliament are used for, rather than a debate about powers, which always seems to be predicated on blaming someone else for the lack of action by the Scottish Government. I hope that today will be a watershed and that the debate in Scotland will be about what the Scottish Government are doing with the extensive powers the Scottish Parliament has and those that it is going to receive.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

How come the UK austerity parties are so far behind the curve when it comes to more powers for the Scottish people? The Scottish people thought that they were getting real home rule, as Sir Malcolm Bruce described it, or “almost federalism”, which is the phrase that was used. Instead, we have this veto-ridden document. Is not the only way the Scottish people will get the further powers they want by having more SNP MPs? That is why we are at 52% in the polls.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I could not disagree more with the hon. Gentleman, but he would not expect it to be otherwise. Some of the questions that he has raised today and on other occasions need to be addressed to John Swinney and Linda Fabiani, who were the SNP members of the Smith commission. If these powers were so important to them, why were they not deal-breakers in reaching the Smith agreement? Instead, they signed an agreement at 8 o’clock one night and at 8 o’clock the next morning, they set about deriding it. This agreement is what the people of Scotland voted for by a significant majority. More than 2 million people in Scotland voted for a Scottish Parliament with more powers, and that is what the draft clauses deliver.

Photo of Andrew Tyrie Andrew Tyrie Chair, Treasury Sub-Committee, Chair, Treasury Committee

It is right to honour the vow and I warmly welcome the Minister’s announcement. Does not the big increase in devolved powers from this place to Scotland that is embodied in the announcement highlight the need finally to address the West Lothian question? It cannot be right that Scottish MPs should continue to vote on English-only issues and laws in such circumstances. The English and the Welsh need more than a say. Is it not necessary, in order to buttress the Union as a whole, that they have the power to decide whether such a measure is acceptable to them?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I absolutely agree with my hon. Friend, and I think that most people in Scotland would agree with his sentiments. However, it is always important to make it clear in such discussions in this Parliament, in case they are misrepresented, that this is a stand-alone package of measures that will be implemented regardless of where the debate in England, Wales and Northern Ireland goes.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee

May I ask the Minister about pensions and benefits? Will he confirm that, under the Smith commission’s proposals, although the pensions system is being reserved, which will provide a floor level for pensioner income in Scotland, things like the winter fuel payment are being devolved, which will effectively allow the Scottish Parliament to double pensioner incomes in Scotland, if it is willing to pay for it? Similarly, will he confirm that the Scottish Parliament will be able to increase every welfare benefit in Scotland through the use of discretion, should it wish to do so, because some benefits are being devolved entirely and those that are not being devolved will have a floor level set by the United Kingdom, meaning that it will be entirely up to the Scottish Government whether they wish to make the money available to double, treble or quadruple any of those benefit levels?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I agree with the hon. Gentleman. If he refers to pages 50 and 49 of the Command Paper, he will find a good summary of the benefits for which full responsibility will be devolved to the Scottish Parliament, and of the measures related to universal credit. Although universal credit will remain reserved, as was agreed by all five parties to the Smith commission, the housing element will be subject to Scottish Government engagement.

The hon. Gentleman is right that with their new powers, the Scottish Government will now have a responsibility and will need to explain whatever decisions they take to the people of Scotland.

Photo of John Thurso John Thurso Chair, Finance and Services Committee

May I, too, commend the Government for publishing the clauses and making this statement? The Smith commission recommendations, if properly enacted, are a blueprint for home rule delivered, and the clauses will ensure that. However, the devil is always in the detail, and it will require good will to work through the process in the coming months and ensure that the recommendations are properly enacted. What will the Government do to ensure that there is good will from all parties in the process, so that we do not have a jam further down the line, which the Scottish people would never forgive?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I assure my right hon. Friend that I am personally committed to that good will, and the recent meetings that I have held with Alex Neil to discuss welfare matters, for example, have been extremely constructive. The Prime Minister is meeting the First Minister today, which I am sure will also be a constructive dialogue, and the Secretary of State is in almost constant dialogue with the Deputy First Minister, who has responsibility for constitutional matters. Scottish Government and UK Government officials also work extremely well together. I give my right hon. Friend the undertaking that we are committed to delivering not just the letter of the Smith commission proposals but the spirit of them.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions)

The extensive income tax powers that are to be devolved to the Scottish Parliament will give Scotland the opportunity to make different decisions on taxation. The Scottish Labour party is committed to restoring the 50p rate of income tax for those earning more than £150,000 a year. Will the Minister join the Scottish Labour party in supporting that policy, putting some clear blue water between the Conservative party and the SNP, which refuses to support the restoration of the 50p rate?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I thought the hon. Gentleman was asking me to join the Scottish Labour party, which I understand I can do for just £1 at the moment. Although I do not seek to endorse any particular policy of the Scottish Labour party, I welcome a debate on these issues in Scotland. We need a debate on the use of the powers and the difference they can make in Scotland, not simply a debate on the powers themselves.

Photo of Alan Reid Alan Reid Liberal Democrat, Argyll and Bute

I congratulate the Government on delivering this significant package of powers ahead of schedule, which will bring about a powerful Scottish Parliament. Will the Minister confirm that the Government have completely rejected the submission that the SNP made to the Smith commission to replace the Barnett formula with disappearing oil revenues? It was revealed at a Scottish Affairs Committee hearing that if the black hole were made up purely out of income tax, it would mean a staggering 14p in the pound increase in Scottish income tax rates.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

The Scottish Affairs Committee is to be commended for its work on the impact that the falling oil price would have on the figures given in the Scottish Government’s White Paper. My hon. Friend is quite right to highlight that black hole.

The position on the Barnett formula is quite clear: the Prime Minister, the Leader of the Opposition and the leader of the Liberal Democrats have made it absolutely clear that the Barnett formula will continue.

Photo of John Denham John Denham Labour, Southampton, Itchen

As a result of this statement it is much clearer what the governance of Scotland will be; it is much less clear what the governance of England will be, and which decisions will be retained at UK level. The paper produced by the Leader of the House before Christmas was inadequate and inconclusive. Is it time for a clear statement that considers all aspects of the governance of England, where power should lie, and how decisions should be taken?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

It is to be welcomed that the referendum in Scotland and the Smith commission have brought about debate in England about governance within England, and that discussion is clearly ongoing. I do not accept the right hon. Gentleman’s comments about the Command Paper produced by my right hon. Friend the Leader of the House, as that is a significant part of the debate.

Photo of Anne Begg Anne Begg Chair, Work and Pensions Committee

If 50% of the money spent by the Scottish Parliament will be funded by the Scottish Parliament, is it about time that an independent body, like the Office for Budget Responsibility, is set up in Scotland to ensure that spending is scrutinised properly? Is the Minister aware of whether the Scottish Government plan to publish a timetable of when the powers that they currently hold, or will receive, will be further devolved to local level?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

The hon. Lady makes a good point, and I am sure that our counterparts will want to raise that issue in the Scottish Parliament to ensure that the Scottish Government set out a timetable for devolution. Of course a strong body—an equivalent to the Office for Budget Responsibility—is required, and I am sure that that will be discussed as we go forward with the fiscal framework.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge, Chryston and Bellshill

Does the Minister accept that nothing in this decent and honourable document diminishes the standing of local government, given that local authorities deliver more, day by day, to ordinary people than the Scottish Parliament or even this House?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I absolutely agree, and I was appalled by the comments of Joan McAlpine MSP in relation to denigrating local government in Scotland. Local government in Scotland currently does an excellent job under very difficult circumstances. We need devolution within Scotland, not the ever-centralising nature of the current Government.

Photo of Michael Weir Michael Weir Shadow SNP Spokesperson (Business), Shadow SNP Spokesperson (Energy and Climate Change)

The Minister claims a substantial transfer of powers, but is it the case that many new powers, for example those regarding benefits or fuel poverty, remain subject to a veto by UK Ministers?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

That is the hon. Gentleman’s almost inevitable interpretation. The position on consultation and working together is that the Department for Work and Pensions will continue to administer benefits and therefore clearly needs to work with the Scottish Government on that. The Scottish Government will have the capacity to take forward arrangements as they choose. [Interruption.] Perhaps we are already getting a flavour of what we will see continuing in Scottish politics—when the SNP does not deliver the promises on welfare that it makes to the people of Scotland, it will be somebody else’s fault.

Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts

I remain concerned about some of the responses that the Minister has given to my hon. Friends, regarding MPs who represent Scottish constituencies voting with their colleagues across the UK on the Budget, including income tax. He said that there was a commitment to honour the wording and spirit of the Smith commission. The Smith agreement is explicit that that power will be retained, and many believe that that is necessary in order for Scottish people to be represented equally in this place with people across the UK. Will the Minister confirm whether the Conservative party will stick to the commitment in the Smith agreement and support Scottish MPs voting on the Budget, including income tax?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

The hon. Lady obviously did not hear my response to the former Chancellor, Mr Darling. As my right hon. Friend the Chancellor indicated earlier this week, the Budget will be framed in a different way after powers have been transferred to Scotland. It is wholly appropriate to hold a discussion and debate on matters that apply solely to England, or to England and Wales, about who makes decisions in that regard.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

I would like to press the Minister slightly further on the response he gave to my hon. Friend Pamela Nash. At some stage the Budget has to be taken as a whole entity, because it has implications right across the UK. It was clearly the intent of the Smith Commission that all Scottish MPs would have a vote on that Budget. Will the Minister give a simple yes or no answer: will that now happen?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I made that very clear in my previous answers. What I welcome from both hon. Ladies is a willingness to engage in the debate on which MPs should vote on which matters. It is disappointing that the Opposition more widely have not been prepared to engage with the Command Paper and the debate instigated by my right hon. Friend the Leader of the House. Let us have that debate on the governance of England and let us all make our contributions to it.

Photo of William Bain William Bain Labour, Glasgow North East

Can the Minister confirm that, with the proposals before the House today, if the Scottish Parliament chooses to introduce discretionary payments, which would effectively top up even reserve benefits such as unemployment benefit or employment and support allowance, that will be a decision purely for the Scottish Parliament and that this Parliament does not have a veto? Does he agree that these powers would make the Scottish Parliament one of the most extensive welfare Parliaments anywhere in the world?

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

I thought my ears were deceiving me when I heard the Minister say that there would be powers for gender quotas in public bodies in Scotland. That is excellent news, and something from which the rest of the UK would benefit. A popular measure is the devolution of air passenger duty, which is very important for Prestwick airport and has the potential to help it tremendously with the problems it has been having. Will the Government consider bringing that forward before the general election and giving those powers to Scotland now?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I certainly respect the hon. Lady’s championing of both gender issues and Prestwick airport. It is not practical, within the time scale of Parliament ahead of the general election, to introduce the necessary procedures to transfer air passenger duty. We are pressing ahead on a very, very tight time scale with the 16 and 17-year-old vote. I hope that as soon as we have a new Parliament, post general election, we will expedite all the measures in the clauses and have them in legislation as soon as possible.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

Will the Minister confirm whether the clauses relating to rail mean that the Scottish Government will no longer be required to put rail services out to tender? Will he agree to meet me, and any other interested MP who wishes to see the railways in Scotland brought back into public ownership, to discuss whether that will be possible under the forthcoming legislation?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

It will certainly be possible for the franchise in Scotland to be let to a public sector organisation.

That was the basis of the agreement on the Smith Commission to which the hon. Lady’s Labour colleagues signed up.

Photo of Fiona O'Donnell Fiona O'Donnell Labour, East Lothian

May I say to the House that we will not hear MPs from the Scottish Labour party bleating about the fact that the Smith agreement went beyond our original submission, because we know how to put country before party?

The proposals give powers to the Scottish Parliament to build a fairer Scotland, an issue that was at the heart of the referendum debate. I want to ask the Minister about a particular aspect of that agenda—access to work support grants. I wrote to the Secretary of State about that at the beginning of December. There is no certainty in Scotland on how the assessment takes places—there are inconsistencies. Is the Minister proposing that support grants should be part of the settlement?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I will certainly speak to my right hon. Friend the Secretary of State to look at the position of the correspondence he entered into with the hon. Lady.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

The Government are currently rolling out the personal independence payment benefit throughout the UK, but PIP benefits will, of course, be devolved to the Scottish Parliament under these proposals. Given that we all know that the PIP system is already causing chaos and misery to many of our constituents, do the Government propose that the PIP benefits should continue to be rolled out in Scotland when, in a year or so, the matter will be devolved to the Scottish Parliament, which might want to do something different?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I have two points in response. First, that issue will be discussed at the first meeting of the joint ministerial group. Secondly, whatever happens to the current PIP regime, as we move forward on benefits, we need to have a clear idea of what the Scottish Government are proposing. The transition will be affected by what we are transitioning to, so on the devolution of benefits, it is very important for the Scottish Government to come forward with their proposals. None of us wants to see a UK system being switched off without a Scottish system in place.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

Following on from that, one important thing that could be done over the next few months would be to get the involvement of many organisations—voluntary organisations, charities and so forth in the disability and carers sector, for example—in framing some of these ideas. Can the Minister tell me how these organisations are going to be involved right from the start, because I believe that they will have important insights into this work? They need to be convinced that this will give them—I believe it will—an ability to shape a much fairer welfare system.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

The hon. Lady makes an excellent point. I have already discussed that with the Scottish Government, and it will form part of the agenda for the first meeting of the joint ministerial welfare group.