Scotland Bill

– in the Scottish Parliament at 9:15 am on 9 December 2010.

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Photo of Alex Fergusson Alex Fergusson None 9:15, 9 December 2010

The first item of business this morning is a debate on motion S3M-7550, in the name of Iain Gray, on the Scotland Bill. Time is fairly tight for this debate. I call Iain Gray to speak to and move the motion in 11 minutes.

Photo of Iain Gray Iain Gray Labour

This is a remarkable day in Scotland. The M8 is open; the trains are running, more or less; and our schools are open, for the most part. More to the point, however, the democratic structure of this Parliament is working in a fashion never seen before.

Members:

Where are the Labour members?

Photo of Iain Gray Iain Gray Labour

When, in 2007, my predecessor as leader of the Opposition, Wendy Alexander, proposed that the Parliament take the opportunity of our 10th birthday to review the devolution settlement, determine how it should be strengthened and undertake to create a stronger iteration of the settlement, many did not believe that it could be done. The party of government in Holyrood did not favour the project: it embarked on a constitutional path of its own, which involved a so-called national conversation, leading to an independence referendum. In any event, constitutional matters are reserved to the United Kingdom Parliament, and it was claimed that the Government there had little interest in strengthening devolution, especially as it approached what was likely to be a difficult general election. Yet here we are today.

Photo of Iain Gray Iain Gray Labour

This Parliament took matters into its own hands, as any self-respecting Parliament should. We debated and agreed the creation of a cross-party and cross-sectoral commission under the chairmanship of Sir Kenneth Calman, and the then UK Government, respecting that parliamentary wish, engaged with the commission and its conclusions and produced a white paper outlining how they could be legislated for at Westminster.

Even the intervention of a bitterly contested general election and the resulting change of Government has not derailed progress towards a stronger devolution settlement. The coalition in Westminster has tabled its Scotland Bill and has undertaken to steer it through the legislative process by next year.

Photo of Alex Fergusson Alex Fergusson None

No more sedentary interventions from fairly senior members of this Parliament, please.

Photo of Iain Gray Iain Gray Labour

The Scottish National Party has sat out of this process all along, so what should be different today?

The coalition in Westminster has indicated that the progress of the bill depends on the agreement of this Parliament not only to the principles of the bill but to the detail.

The power of Parliament over the Executive, the partnership of two Parliaments across the devolved-reserved divide and the persistence of a cross-party idea through a general election all make this debate a remarkable one indeed. We should acknowledge those who have steered us to this point, including the three Opposition party leaders at the time of Calman’s inception: Wendy Alexander, Nicol Stephen and Annabel Goldie.

This is also a moment when we should thank Sir Kenneth Calman and his commissioners once again for their work. They focused rigorously on what is right for Scotland. They took evidence widely, studied the forms of devolution that are to be found elsewhere in Europe and the wider world, and assessed the performance of our devolution settlement assiduously before reaching their conclusions. They recognised that Scotland has a high level of legislative power but a low level of fiscal devolution. To rebalance that, they pursued the extension of our fiscal powers in order to improve our accountability to the people whom we serve.

The expert group that the commission created developed the proposals for the devolution of some taxes and, crucially, the sharing of income tax between ourselves and the UK Parliament. It supported the idea of this Parliament having powers to borrow. Those are serious proposals, prepared by serious people, and they form the basis of the fiscal sections of the Scotland Bill.

The wider financial powers in the bill will give this Parliament real choices. Those will not necessarily be easy choices, but they will be ours to make about how to tax, spend and borrow. We will have the power to make different choices from those of Westminster if Scotland wants us to, for Scotland’s good.

The changes will make us directly and financially accountable to Scottish voters and taxpayers for our decisions. That means that if we take the wrong decisions, and fail to support and grow the Scottish economy, there will be a risk. However, if we get the decisions right, and get Scotland growing again, there will be a prize to be had. That is what responsibility means: it must be a two-way street.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Does Iain Gray accept that even under the proposals in the Scotland Bill, if there was economic growth, the UK Parliament would reap 85 per cent of the tax receipts from that growth while this Parliament would receive only 15 per cent? That is some rebalancing.

Photo of Iain Gray Iain Gray Labour

It is a principle of the bill that taxation is shared. There is a reason for that: it is to sustain the social union that is so important to the people of Scotland—something that the Scottish National Party does not want.

The bill means that we remain an integral part of the United Kingdom, not just a neighbour—good or bad—living next door. Most of our taxes will be pooled and redistributed to the Scottish budget via a grant, which is a practical expression of solidarity through sharing resources and risks across the United Kingdom. Recent history has shown how important that is.

Everyone except the SNP knows that it was the sharing of risk across the larger economy of the United Kingdom that allowed our two biggest banks to be saved from collapse. If the SNP does not understand that, surely the considerably greater difficulties that Ireland has encountered in dealing with its banking crisis are a reminder that small is not always beautiful when it comes to risk.

Sharing income tax will give us real accountability when we set a Scottish rate, as we will have to do under the bill’s proposals. There will still be a common UK tax framework, which makes practical sense for workers and employers. It also means that capacity will still exist for redistributive policies across the whole UK—the social union that the Calman commission made very clear was a central part of the structure and strength of the United Kingdom.

Parliament should support the principles of the bill for all those reasons, but there is a greater reason, too. The bill moves us to a stronger Scottish Parliament in a strong United Kingdom, which is the overwhelming desire of the Scottish people. It is demonstrated in opinion polls but, more important, it is demonstrated in election after election. Of course, there is much detailed scrutiny to be carried out. The previous Government’s white paper did not exactly follow the Calman proposals in every detail, and the new Government’s Scotland Bill is not the same as the white paper. That is why the work of the ad hoc committee that has been set up under Wendy Alexander’s convenership is so important.

The detail of the financial plans requires careful scrutiny, but we do not need to accept the SNP’s scaremongering to agree that the implementation plan must be designed with a very close eye on the consequences for the Scottish budget.

It is not too late for the SNP to be a constructive part of this constitutional challenge. The SNP has stood apart from it until now, but that is the pattern of the party’s engagement in devolution, just as it boycotted the Scottish Constitutional Convention but then joined the referendum campaign when it realised that that was in step with the desires of the Scottish people and the SNP was not.

The SNP has the space to do this, as its own constitutional cupboard is bare. The national conversation has fallen silent—not that it was ever anything more than an echo in an empty room—its referendum bill has fallen by the wayside and its core purpose has fallen yet further out of favour, with independence attracting the support of less than a quarter of Scots. The SNP can be a constructive partner in strengthening devolution, but to do that it must accept the principle that a strong Scottish Parliament that is anchored in the monetary, fiscal, social and political union of the United Kingdom is the settled will of the Scottish people. To be a constructive partner in the project, the SNP must end its endless search for coded formulations of independence—fiscal autonomy, full fiscal responsibility or whatever it is going to be today. It cannot be a constructive partner in the project with its amendment today, which tries to disguise opposition as grudging support and cannot be supported for that reason.

Detail is important, but today is the day when we take the decision of principle. Do we wish to rise to the challenge to put party politics aside and create a stronger devolution settlement—[Interruption.] Do we wish to rise to the challenge to put party politics aside, as we have done, the Conservatives have done, and the Liberal Democrats have done—[Interruption.]

Photo of Iain Gray Iain Gray Labour

Are we capable of rising to the challenge of putting party politics aside? The SNP is clearly not. Does the Parliament wish to rise to the challenge and create a stronger devolution settlement in a stronger United Kingdom, as the people of Scotland would have us do? Do we accept that challenge? Of course we do.

I move,

That the Parliament welcomes the introduction of the Scotland Bill in the House of Commons on 30 November 2010; notes that it is based on the recommendations of the Calman Commission on Scottish Devolution, which were warmly welcomed by the Parliament on 25 June 2009; supports the general principles of the Bill, which will give the Parliament substantial new taxation, spending and other powers, strengthen its relationship with the rest of the United Kingdom and enable it to serve the people of Scotland better, and calls on the Scottish Government to respond positively and timeously to any requests for assistance or analysis from Scottish Government officials from the committee considering the Bill.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party 9:27, 9 December 2010

The highlight of that opening speech from Iain Gray was undoubtedly his ringing declaration of “here we are today” at a time when extraordinarily few of his Labour members have managed to turn up to be here today. [ Interruption .]

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

Then, of course, there was his call for unity just after several paragraphs of attacking the Scottish National Party. Nonetheless, I must confess that, despite the paucity of his own numbers, the fact that he has summoned to existence more Conservatives and Liberal Democrats is indeed an impressive display of unity of the Opposition parties. It is certainly the most impressive display since 27 June 2007. On that fateful day, when we had the same degree of cross-party Opposition unity, they voted for the Edinburgh trams. As we remember, in the process, they cost the people of Scotland £500 million. One of our contentions today is that this impressive display of unity, with Iain Gray speaking for the Con-Dem coalition, may cost the people of Scotland not £500 million but £8,000 million.

I want to make one aspect absolutely clear. The motion calls on the Scottish Government “to respond positively and timeously to any requests for assistance or analysis from Scottish Government officials”.

I can tell the Parliament that so timeous is our response to such requests that I think that Scottish Government economists will be briefing the Scotland Bill Committee tomorrow. [Interruption.] Indeed, so timeous is our response to the motion from Iain Gray that Scottish Government economists will be briefing the committee today and explaining the deflationary bias—the threat in the proposal that would have cost the people of Scotland £8 billion over the past decade if it had been implemented then.

Photo of Wendy Alexander Wendy Alexander Labour

I am glad that we have moved on to the substance, because I think that sectarianism diminishes every member in the chamber.

In light of the First Minister’s willingness to accede to the timeous provision of information, will he provide modelling of how his plans for full fiscal autonomy, Barnett, and Calman would have compared over the past 20, 10 and two years? Hitherto, he has provided no modelling of full fiscal autonomy of any kind whatsoever in the past four years of his Government. Will he publish?

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

We will be delighted to model full fiscal autonomy and the growth that it would provoke for the Scottish economy. I know that Wendy Alexander is familiar with the work of Andrew Hughes Hallett and Drew Scott and the extraordinary assembly of economists, leading businesspeople and personalities who have rallied behind that cause.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

I am just answering the member. She asked whether we would provide the focus of and understanding behind fiscal autonomy, but I point out that she is the independent convener of a committee and therefore the question that should be asked not just of her but of all members of the Parliament is this: if the modelling that the Scottish Government economists provide to the committee demonstrates that the proposed form of financial devolution would indeed have cost Scotland £8 billion over the past 10 years, will they agree that it is not the basis on which to proceed?

Photo of Wendy Alexander Wendy Alexander Labour

Of course, the Government promised us alternative financial plans at the time of the budget, but they did not appear. I do not want to hear about third-party economists; I want to know whether the Government will publish modelling for its prepared financial solution for Scotland—in other words, full fiscal autonomy. Will the First Minister publish numbers for that preferred solution for the past 20, 10 and two years? It is a straight question.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

We will provide the proposals for fiscal autonomy and the benefits that it would provoke for the Scottish economy. However, I ask Wendy Alexander, as the independent convener of the committee, whether, if it is a matter of arithmetic rather than politics that over the past 10 years the proposed form of financial devolution would have cost the Scottish people £8,000 million, she would still wish in good conscience to recommend it to this Parliament and the Scottish people.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

It would be extraordinary for any member of Parliament—even a Liberal Democrat with a certain fascination for debates in another Parliament today—to wish to cost the Scottish people £8,000 million.

Photo of Robert Brown Robert Brown Liberal Democrat

Forget about 10 years—will the First Minister put into the modelling the £9 billion loss that the Scottish exchequer would have suffered in the past year as a result of the fall in Scottish revenues had Scotland been independent?

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

If the Liberal Democrat spokesman had analysed the Con-Dem budget, he would have seen that one of the very few sources of revenue that give Danny Alexander and his Tory counterpart in the Treasury some comfort at the moment is the rising platform of Scottish oil revenues, which has allowed the Liberal Democrats to cut only a third more from Scotland than the Labour Party had proposed over the next few years.

Surely if the analysis of the measure demonstrates an £8 billion loss, no one in good conscience will wish to support it. However, it can be changed and altered.

Iain Gray accused the Government of not engaging with the Calman proposals. Over the summer months, the Government had 16 meetings with Scotland Office and Treasury officials to try to improve the proposals. Some concessions and improvements were made. For example, it was possible to get from the Treasury another non-detriment provision, which means that another of Calman’s flaws—the fact that changing tax allowances would cause a loss in Scotland—will be compensated for. However, the details have still to be worked out. The Government has also been successful in getting a capital borrowing proposal that is an improvement on the totally unworkable set of proposals in the last white paper.

Iain Gray said, “We based the last white paper on the Calman proposals.” Twenty-three out of 63 Calman proposals were contained in the Labour Government’s white paper. There has been an improvement: the Scotland Bill contains 35 of the 63 proposals. Therefore, we are moving not so much to Calman-plus as to Calman-half. That is an improvement, but it is not a substantial move forward on many aspects that would benefit Scotland. I welcome aspects of this debate. I welcome the fact that we are having a constitutional debate in Scotland and that we are debating which powers to transfer to the Scottish Government, the Scottish Parliament and the Scottish people. That is important and should be welcomed. However, it is unfortunate that some measures, even in Calman, have not been devolved. That is totally mystifying to me. The only explanation can be the control freakery that pervades Westminster, whether in wanting to grab back Antarctica in the bill or in wanting to reserve responsibility for the most dangerous airguns despite the sensible proposal to devolve responsibility for airguns. I would have thought that MSPs would want to legislate on airguns precisely because of the most dangerous airguns. Innocuous airguns are no doubt important, but it is the most dangerous ones that we want to do something about.

There is also the misfortune of not following Calman on the devolution of the marine environment, which is of increasing importance to Scotland, given our enormous marine renewables potential. Under the Scotland Bill, the Scottish Government and the Scottish Parliament will have legislative competence for 12 miles out around Rockall and 12 miles out around St Kilda, but the stretches of water in between will remain the preserve of the imperial Parliament in Westminster, except, of course, for the fish that swim between Rockall and St Kilda. I would have thought that we could have unity in the Parliament on following that important Calman proposal, and on the proposals on the Crown Estate. Only a few days ago, I saw a press release from a Liberal Democrat that contained the ringing declaration that the Crown Estate should be devolved. However, we find in the Scotland Bill a retreat from Calman rather than an advance on Calman on the Crown Estate.

I will say exactly what the Scottish Government proposed in the 16 meetings. We thought that there was a strong case for the devolution of a full range of tax powers. We proposed the following:

“Scottish taxes: devolved with all revenues accruing directly to the Scottish Parliament:

  • income tax;
  • corporation tax;
  • fuel duty and vehicle excise duty;
  • tobacco and alcohol duties;
  • betting and gaming duties;
  • air passenger duty;
  • insurance premium tax;
  • climate change levy and landfill tax;
  • inheritance tax; and
  • stamp duties on property.”

That was the argument that we put forward. I have quoted, of course, from Tavish Scott’s submission to the Calman commission on 2 April 2009. The curious thing was that, because the United Kingdom Government said that it would not accept our arguments for Scottish independence or even the arguments for fiscal autonomy that Wendy Alexander is so frightened of, we thought that if we put forward the Liberal Democrat proposal, we would get a ringing endorsement from the meetings with the Treasury.

The key question for the Scottish Parliament is how we can grow the Scottish economy. We can do that only through independence or having fiscal responsibility. If we as members of a national Parliament are concerned about ensuring that we preserve the welfare of the Scottish people, we cannot in good conscience accept a provision that would have cost us £8 billion over the past 10 years and introduced a deflationary bias. The challenge for the Scotland Bill Committee and the Parliament is to find a mechanism to grow us into a better future in Scotland.

I move amendment S3M-7550.1, to leave out from “which were warmly welcomed” to end and insert:

“and supports the general principles of the Bill in conferring more powers and responsibilities on the Parliament but expresses concern about key aspects of the new system of financing proposed by the UK Government for devolved government, which will further reduce the resources available for public services in Scotland; rejects the UK Government’s reservations of legislative competence of the Scottish Parliament; regrets the omission from the UK Government’s proposals of important recommendations from the commission, notably on further tax powers, welfare and benefits and the marine environment, and urges the Scotland Bill Committee to scrutinise fully the Legislative Consent Memoranda, the Bill and accompanying documents so that the Parliament can come to a decision on these proposals after ensuring that they are in the interests of Scotland.”

Photo of Annabel Goldie Annabel Goldie Conservative 9:39, 9 December 2010

Having listened to the First Minister, there must be very few people who are thinking with any confidence that they would have welcomed an independent Scotland in the past two years. Scotland still has a sustainable and vibrant economy because it is part of the United Kingdom. That is why this debate is important. It marks a watershed in the life of the Scottish Parliament.

The Scotland Bill, which was unveiled on St Andrew’s day, reflects the deep thinking and thorough process that culminated in the Calman commission report. The bill will set the direction of the Parliament for the rest of the decade and beyond. It is not a tweak and tinker. It is not merely an MOT. It is a road map for our future. It is the direction of travel that is wanted by the great majority of people in Scotland, and wanted overwhelmingly by the Parliament. It is no coincidence that, as the three unionist parties have come together to make devolution work better, support for independence has hit an historic low. Let us be very clear: we have settled the constitutional question, and devolution has won. I am a proud Scot and a committed unionist. The proposed legislation and transfer of powers will not only benefit Scotland, but strengthen the union. The bill and the report that preceded it were conceived by Scots, for Scots and for the strength of Scotland within the United Kingdom. It is no mean feat to have brought together the three main UK parties. Even the original Scotland Act 1998 did not do that.

The SNP’s attitude towards the Calman commission is a matter of deep regret. Time after time, it was given the opportunity to participate, contribute and debate the proposals. At all stages, the invitation to get involved and to shape the future was extended in good faith but, at all stages, it was rebuffed. The SNP is outside the political main stream. It resented the fact that the Calman commission was the will of the Scottish Parliament. It cried foul when the bill was published, and although it could align itself today with the Parliament and Scotland, it has indicated clearly that it will not.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

Leaving to one side the fact that Mr Russell met the Calman commission and the 16 meetings that I have spoken about, does Annabel Goldie accept the proposition that, given the unity of which the Conservatives are now part with the Liberals and Labour, if people in Scotland think that the Scotland Bill is good enough, they can vote for one of those three parties, but if they think that we can do rather better, they should vote for the Scottish National Party or the Green party? Does she accept that as a proposition for the forthcoming election and will she accept the result if that is the division of opinion?

Photo of Annabel Goldie Annabel Goldie Conservative

I shall come to that in a moment.

Interestingly, given the First Minister’s intervention, the nationalist minority Government has run away from every opportunity to shape Scotland’s future. Alex Salmond took independence off the agenda. John Swinney secretly mothballed the Government’s tax-raising powers. Both are lost in the ideological and dogmatic fights of the past, when Scotland has actually moved on.

To address the First Minister’s intervention, I hope that Alex Salmond continues to fight on that ground during the Scottish parliamentary election, as it will be a fitting political epitaph that says, “Here lies one who didn’t like the answer to his national conversation. It was no—N, O.” The Scotland Bill heralds a new era. From now on, the debate will not be about the powers that Scotland has; instead, it will be about how those powers are used. Let us consider what those powers involve. There will be real fiscal accountability. The Parliament will have to think about how it raises money, not just how it spends it. That is a crucial discipline, the absence of which has weakened political responsibility and accountability. The Parliament will now have a real financial stake in the success of the Scottish economy.

Those powers offer a huge opportunity for the Scottish Conservatives. We are the party that froze council tax bills—cutting them in real terms—and reduced small business rates. Now we have the opportunity to argue for tax competition within the UK, to encourage and reward the Scottish entrepreneurial spirit that will return this country to prosperity. We have an opportunity to grow our private sector and rebalance our economy.

There has been a wide debate over many years with diverse ideas feeding into each party’s discussion and into the Calman submissions. There are those who worry about devolution and have no desire to move it out of the current limbo, but it is that very atrophy that is dangerous to the union. So, too, there are those who argue that full fiscal autonomy is the only way forward but, after years of scrutiny and evidence, the broad consensus across the parties, the Parliament and the country is that the bill is the way forward.

David Cameron and the coalition Government pledged to act on Calman and they have delivered. I support the proposed legislation. However, because of its importance, scope and impact, it must be scrutinised in detail in committee. That is entirely right. We must find the best way of implementing the financial provisions. We must properly examine the proposed new powers for the Parliament and for individual ministers both here and at Westminster. Those are the practical issues that must be looked at.

For today, the questions are simple. Do we, as a Parliament, want to move ahead following the road map that was set out by the Calman commission and which is now in the Scotland Bill? In doing so, do we want to strengthen devolution and safeguard the union? Do we want to embrace greater tax responsibilities so that fiscal responsibility goes along with spending power? My answer—but, much more important, Scotland’s answer—is a resounding yes. Over the past three years, the cross-party, cross-border initiative that created the Calman commission led to this bill. The three unionist parties north and south of the border worked hard to get to this point. Why? So that we could look beyond party politics, set aside our differences and work for the future benefit of Scotland. Even now, it is not too late for the SNP to put its partisan tub thumping behind it and join us in supporting the principles of the Scotland Bill. I am proud to support the bill. It will strengthen the union. It will make devolution work better. It responds to the wishes of the Scottish people. If used properly, it will allow us to make Scotland a more dynamic and prosperous place. That is why I support the motion in Mr Gray’s name and reject the amendment in Mr Salmond’s name.

Photo of Tavish Scott Tavish Scott Liberal Democrat 9:46, 9 December 2010

The First Minister was a little unfair on colleagues from across the parties who are not in the chamber today. Their not being here says rather more about the transport system of Scotland than about anything that we are debating this morning.

Scotland has had 10 years and more of devolution—10 years and more of its own Parliament. Even in a week when our current Government has struggled with snow, weather forecasts and the First Minister’s Christmas card, it is right to look ahead. The Scotland Bill is an important step forward. It will improve the next session of Parliament and the one after that. MSPs will be more accountable to the people of Scotland and to individuals, organisations and Scottish business. The bill will strengthen Scottish democracy for the future. Surely that is good.

I watched, as I am sure other members did, the First Minister attack the bill on its launch, and we have heard him do that again in the chamber today. There is a taxpayer-funded party political broadcast on the Scottish Government website that explains the SNP position. The nationalists say that they welcome the bill, but—as the First Minister showed again in the chamber today—they speak against it. The nationalists should support improving the accountability of our Parliament and MSPs’ accountability to the people of Scotland. I believe that members of our current Government never thought that they would see this day—the day when the majority parties in Scotland put Scotland first by working together, creating proposals for reform and change, producing a bill and now enacting legislation.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

As I said in the debate, we proposed in the 16 meetings with the UK Government not independence—it was not going to accept that—but the substantial proposals that Tavish Scott made to the Calman commission. If it turns out that the £8 billion figure that the Scottish Government economist produced is correct for the proposals in the Scotland Bill, will Tavish Scott revert to supporting the more ambitious proposals that he himself recommended to the Calman commission?

Photo of Tavish Scott Tavish Scott Liberal Democrat

I would always want to go further. The Steel commission that my party worked on was our contribution to the debate—a debate that was had among all the other parties. I wish that the Scottish National Party had played a role in it, as well. I hope that we all come up with a set of proposals that can be made to the Scottish Parliament and Westminster Parliament in the coming days. As for Mr Salmond’s £8 billion figure, I do not recognise the numbers. As others have commented, if he can substantiate the numbers for the independent committee of the Parliament that will consider the matter, then that will be fair and good. That will be the proper test of the figures—

Photo of Tavish Scott Tavish Scott Liberal Democrat

The First Minister can say “Ah!” as much as he likes, but that is how Parliament should properly do such things.

We now have a UK Government whose ministers appear regularly in front of this Parliament’s committees to be cross-examined. That is a big step forward. We have a legislature in Scotland where the Parliament establishes the scrutiny bill committee and the debate is initiated not by the Government but the majority parties working together in Scotland’s interests. I say in passing, Presiding Officer: that is what people expect us to do now and again. We do not do it often enough. I am as guilty of that as anyone, in that sense.

The final ignominy for the nationalists was that the Scotland Bill was launched on St Andrews day—a day that they have tried to say is just theirs. Thankfully, Scotland is bigger and better than that. My nation is no marketing product for one party—it is the country that all of us believe in, care for and passionately want to succeed. If Mr Salmond’s party would ever concede that, the Parliament would be a far better place.

The Scotland Bill is not a panacea for all the challenges that Scotland faces. Many of the key responsibilities are already here and have been since 1999, but some are not. I genuinely look forward to a finance minister introducing a budget in which he or she must set out the tax rates that Scotland will have and why, with no more blame game—a little less of it, anyway—but a real debate in our Parliament here in Scotland about the right spending levels, about the taxes that are necessary to raise the money for schools, hospitals and possibly snow-clearing equipment, about a competitive business environment, about corporate headquarters and about new and dynamic industries that will create jobs. A decade on from that extraordinary day in 1999, which many of us still hold dear, the time was right for us to review our proceedings and the powers that we exercise on behalf of the Scottish people. The world moves on around us. I will give the chamber three examples. Last year, 103 Bentleys worth £200,000-plus were sold in Russia; a decade ago, none was sold there. In 2000, there were 22 million internet users in China; today the figure is 420 million and rising. Over the past 10 years, Indonesia’s CO2 emissions have risen from 267 million metric tonnes to 434 million metric tonnes—and rising. The last example illustrates the enduring challenge of climate change that must be confronted.

The same is true of our challenges. This week’s Organisation for Economic Co-operation and Development report on our education system must be a wake-up call that all of us should hear. Another challenge is the enormous impact of cancer on so many Scots: a family that is near and dear to me confronts that spectre every minute, every hour and every day. There is also a need to create jobs and to build a more entrepreneurial Scotland in which starting businesses and taking risks are supported and encouraged. We have responsibility for those issues.

The big challenge is how we deliver effective public services to meet the needs of the people whom we serve. It is less about the Christie commission and more about local control versus central diktat. For Liberal Democrat members and, I suspect, for members of many other parties that are represented in the chamber, the approach should be about local control and ownership—what was once fashionably described as subsidiarity. For others, the instinct is to centralise. In their view, big is best and central Government is always the answer. That is an entirely healthy debate to have here in Scotland. We should and shall have it. The debate is here now, before the Scotland Bill becomes an act.

The new ministers whom the Parliament will choose next May will have significant responsibilities. A responsible administration will be able to take on the challenges that I have described. A new Scottish Government must build with the UK Government a new relationship that benefits Scotland. Mr Salmond’s attacks on the previous and present UK Governments do not help Scotland or the Scottish people. All of us can play the “I’m standing up for Scotland better than you” game, but our politics will grow up when we aspire to, want and do rather better than that.

A new Scottish Government will be able to use the commitment that immigration policy should reflect Scottish skills and demographic needs. The oil and gas industry is making a strong case for greater flexibility, so that men and women who make the developments in the North Sea and west of Shetland happen can work out of Aberdeen, Shetland, the Highlands or other parts of Scotland. No nationalist rant helps that vital, massive Scottish industry, but solid Scottish and UK Government work can. That is what we need for Scottish jobs. A new Government for Scotland will be able to use the new capital borrowing powers to develop the transport infrastructure that Scotland needs, borrowing from the national loans fund or the private sector, if that is the best way of getting things moving. It will be able to consider how best to tackle environmental taxation in Scotland—through a landfill tax or by taking another approach that is more suitable to our country’s needs. A new Government will be able to use the powers that the bill will provide.

A cross-party committee will scrutinise the bill. Robert Brown, who has kept me right on matters constitutional for more years than he cares to remember, will serve on the committee for the Liberal Democrats. Scrutiny should be vigorous and fair. I commend all the parties, including the SNP, on nominating solid and able parliamentarians to do that work.

I acknowledge the role of Wendy Alexander, Annabel Goldie and my good friend Nicol Stephen in initiating the bill that we are debating today. Of course it was a response to political events, but what they started became the Calman commission, was taken forward by the previous UK Government and will be made law by the present UK Government. The bill is real and will change Scotland, our Parliament and our people’s involvement in the decisions that we make. That is good and it is worth having. That is why Parliament should back the motion today.

Photo of Linda Fabiani Linda Fabiani Scottish National Party 9:55, 9 December 2010

I welcome the publication of the Scotland Bill, not because I agree with it all but because, if it is passed in a suitably improved form, the bill could mark the beginning of a new phase in the devolution process.

In devolution’s first 12 years, our Parliament’s economic and fiscal powers have been constrained either by statute or by the refusal of the UK Government to co-operate on their use. Under the new proposal from the Conservative-Lib Dem Government at Westminster, Scotland has an opportunity to use its Parliament to advance its interests. That means having full discussions and debate, and refining proposals under which Scotland’s interests are not always sidelined for the sake of taking a standard UK approach.

As the motion in Iain Gray’s name says, the bill has its basis in the Calman commission. Calman was conceived in a very different world, however. At the end of 2007, the economic crisis was still in its infancy and the full effect of Gordon Brown’s failure as Chancellor of the Exchequer was yet to engulf his successors. The election of May 2010, which resulted in Westminster’s first coalition Government in 65 years, was more than two years away. As we look at the proposals in the bill, we should remember how quickly things can change.

We should recognise that, under its proposals, the most significant changes—the tax-raising and financial powers—are at least five years away. The impact of decisions that will be taken over the next few weeks will be felt not in this or even the next session of Parliament, but many years ahead. We need to use our time wisely to ensure that the changes that emerge from the debate live up to Scotland’s ambition.

At the Finance Committee a couple of weeks ago, Danny Alexander spoke, as we would expect, of his aim “to give the Scottish Parliament significantly increased financial responsibility”.—[Official Report, Finance Committee, 25 November 2010; c 2818.]

He also used neutral jargon, such as “policy spill-over” and “no detriment” to reassure the Scottish people about the risks that are associated with the proposals. However, his promise of “no detriment”, even if it is real, extends only to further actions by Westminster. If the powers of this Parliament are inadequate or badly designed, as they were under the Scotland Act 1998, the Scottish economy and our public services could face detriment indeed.

We have been there before. Given the incomplete powers at our disposal and the straitjacket of the funding agreement with the Treasury, the abolition of the council tax became unviable. Before that, on free personal care, Westminster took a windfall benefit when this Parliament acted within its powers, and continues to do so. Unless we are to operate on the premise that the last Labour Government was uniquely truculent regarding devolved matters, we should work together to ensure that the Scotland Bill mark 2 delivers a better relationship between the Governments and Parliaments in terms of responsibilities, risks and powers.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

No, thank you.

Never again should Westminster trumpet its granting of devolved powers when, in reality, it has built in roadblocks to their use.

I ask all members to keep in their sights what is best for Scotland. We might, and do, have different goals for the destination of this devolution journey, but we should be able to unite to protect Scotland’s interests in the short, medium and longer terms. Elected and civic voices have already united to defend Scotland’s right to regulate charities, which has led to the rejection of the Calman proposal in that area. We should take further opportunities to allow Scotland’s voices to prevail, to Scotland’s advantage. If Scotland is to get the best out of devolution, Parliament must allow the full range of Scottish opinion to be heard and not muffled by party politics. There are many issues on which people feel strongly, including income tax proposals, the scope of borrowing powers, the inability to vary corporation tax and the interaction between the tax and benefits systems. Surely the most important decisions over taxes and the welfare system should be controlled in Scotland; we hear that over and over again.

Photo of Robert Brown Robert Brown Liberal Democrat

I am interested in what Linda Fabiani said about the “no detriment” rule. Does she accept that, in an independent Scotland, there would be no such “no detriment” rule, and that the £9 billion that was lost to Scottish revenues last year due to the recession would have to be borne entirely by the Scottish Government?

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Robert Brown and others should consider countries such as Slovenia and Norway, which are suffering no detriment at all from being independent nations.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Scotland, as an independent nation, would make those most important decisions on taxes and the welfare system. We would control the destiny of Scotland to the benefit of the Scottish people.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

I heard Jeremy Purvis muttering about Ireland, as people do. People should really think about how they talk about one of our nearest neighbours. Even in the settlement that Ireland has agreed, it still has power over corporation tax. There is something that an independent nation can do as it considers what is best for its future.

I ask members to consider the anomaly whereby Governments in Westminster have considered corporation tax reductions for the north of Ireland that they will not countenance for Scotland. Members of other parties in Westminster, including Baroness Jay, are pushing for Northern Ireland to have that ability. Why cannot we get together and push for Scotland to have that ability? That would be worth talking about at the committee that has been set up. The Parliament must listen to all Scottish society. It must listen to all people who have an interest in improving Scotland. Scottish parliamentarians have an opportunity to make the bill better and to ensure that the Parliament has the power that it needs to advance the interests of Scotland’s people. That is why the legislative consent motion should be properly and independently scrutinised, and that is why the amendment in the name of Scotland’s First Minister should be supported.

Photo of Peter Peacock Peter Peacock Labour 10:01, 9 December 2010

There is no question but that this is a significant moment in the life and history of Scotland—one that offers an opportunity to develop devolution even further. The Calman proposals and the Scotland Bill, which flows from Calman, sit firmly within the broad family of stable federal and quasi-federal systems throughout the world. They also sit squarely with the mood and view of the Scottish people.

I have been a committed devolutionist all my political life. The day before the referendum in 1979 I had an operation, but to the extreme annoyance of my doctors I discharged myself from hospital the next day to go and vote yes. I literally dripped blood on the ballot paper. I went back to hospital, readmitted myself and watched the results, and I felt cheated by that moment in Scotland’s history and development. At a personal level, devolution was unfinished business, which is why I campaigned for devolution whenever I had the opportunity to do so, including for a yes-yes result in the 1997 referendum.

Since then, Scotland’s democracy has been maturing in the context of an ever-changing world. It is striking how the world is increasingly internationalised and how the international challenges are the biggest that we face in the modern world. I am thinking about challenges such as the globalisation of economies, the contagion that flows from economic ill winds, modern terrorism, climate change, organised crime and drugs and the new challenges that are brought by the application of the internet and much more worldwide travel.

In politics across the world we witness ever-increasing international alliances. Governments are working together and structures for co-operation are being developed that strengthen bonds between nations.

The UK is a highly successful political, social and economic union, and it is stable. Scotland has contributed significantly to the success of the union and has benefited significantly from being part of it. On a small island such as the one that we occupy, it makes eminent sense that the people stick together in a common political, social and economic cause. That is right and proper. Devolution represents a modernising of the long-established and successful union, in which the Scottish Parliament sits alongside the National Assembly for Wales, the Northern Ireland Assembly, the London Assembly and a modernised House of Lords. Devolution represents not a weakening, but a strengthening of the union. It represents greater national and regional self-determination within a strong political, social and economic union, in which we play a full part in meeting global challenges. It represents the best of all worlds that we can get.

If the importance of the strength of the union has ever been shown, it has been shown in the past three years. The rescuing by the whole UK of the Scottish banks, at eye-watering cost, could never be done under the scenario that the nationalists propose for Scotland’s future, whether that is fiscal autonomy—whatever that means—or independence. Ireland’s current pain, which I watch with no joy whatever, demonstrates just how exposed a small nation can be to modern international economic ill winds. Low corporation tax and full fiscal autonomy over other taxes did not save Ireland from those ill winds. By comparison—I stress “by comparison”—Scotland has a relatively easy, managed situation.

Donald Dewar made it clear that devolution was not an event but a process. It would be ridiculous to suggest that at that moment in history in 1997 and in the lead-up to the establishment of this Parliament, the perfect devolution settlement for all time was somehow arrived at. Much of the inspiration behind the settlement was to have everything devolved unless it was specifically reserved. We now realise from reading the published Scotland Bill that we had Antarctica within our grasp. If only we had realised: just think what we could have done.

It is right that we look at devolution after 10 years; that we re-examine what the practical experience has been and consider the reserved-devolved boundary in the light of that experience. It is on exactly that that the Calman commission and now the Scotland Bill have reflected. In the analysis of devolution’s first 10 years, as Annabel Goldie rightly indicated, not enough responsibility has been taken in this Parliament for raising the funds that we spend. Some have argued that the Parliament’s accountability and economic focus have left a significant democratic deficit. The Scotland Bill sets out clear areas for more devolved authority and addresses issues of concern from the first 10 years, such as air guns, speed limits and so on.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Peter Peacock talks about accountability, but he does not talk about economic growth. Can he point to something in the Scotland Bill that would enable economic growth for Scotland? As a Highlands MSP, does he regret that some of the Calman proposals about the Crown commissioners, which would have had a major impact on his constituents, have been left out of the bill?

Photo of Peter Peacock Peter Peacock Labour

I am quite sure that the Crown Estate will be looked at during the scrutiny process. The settlement that has been suggested by the UK Parliament gives us a wide range of ways in which we can help to grow the economy. First, we can achieve economic stability through the continuing support of the grants system and its no-detriment clause in relation to actions by the UK Government. The bill will give us tax powers that we can vary in whichever way we want in the future. As well as other factors, it contains huge borrowing powers that can be deployed to stimulate the economy in various ways.

I am conscious that time is moving on. The purpose of the committee that has been set up is to give those detailed proposals genuinely close scrutiny. I am sure that we can suggest ways in which the proposals can be further improved. That is our task. The task must fit within the view of the Scottish people that we should remain a firm part of the United Kingdom, constantly strengthening local choice and our democracy.

Photo of David McLetchie David McLetchie Conservative 10:07, 9 December 2010

I am grateful for the opportunities to speak in the debate and, subsequently, to consider the provisions of the Scotland Bill in detail as a member of the ad hoc committee that has been established by Parliament for that purpose. The committee will report back before our formal consideration of the legislative consent motion to approve the passage of the bill at Westminster.

I welcome the fact that the bill is being brought to Parliament as an integral part of the coalition agreement between the Conservatives and Liberal Democrats, but that is not to understate the importance of the support for the whole project that has been given by the Labour Party in government and in opposition, and the key role that it played in the establishment of the Calman commission. Therefore, it is entirely fitting that Wendy Alexander has been appointed as convener of the committee that will consider the bill in detail. I welcome the cross-party support for the establishment of the Calman commission, its recommendations and the general principles of the bill, as evidenced by resolutions that have been passed and that are to be passed by this Parliament. At every stage in the process, from start to finish, we have sought and won parliamentary approval for the measures both here and at Westminster. The importance of that should not be understated. I even welcome the half-hearted support of the Scottish Government for aspects of the bill, now that the national conversation gas has been reduced to a peep. I welcome the SNP’s reluctant, if belated, recognition that Calman and its proposals are the only game in town.

Even although this debate was graced by the blustering presence of the great helmsman himself, let us not allow the willingness of the SNP Government to engage in the process of the bill disguise the fact that there are clear and fundamental differences between the SNP’s approach to the bill and that of the unionist parties in this Parliament.

I respect the fact that the Scottish National Party wants to establish Scotland as a sovereign independent nation with full fiscal freedom and full monetary subservience to the euro, just like the Republic of Ireland. That is an honourable and legitimate position. However, an equally honourable and legitimate position is that Scotland should remain part of the United Kingdom, as we have for more than 300 years.

The proposals that came from the Calman commission and which appear in the Scotland Bill are unequivocally and explicitly rooted in a desire to strengthen and sustain a devolved system of government that is firmly anchored in the United Kingdom. Accordingly, the measures in the bill have that aim in mind. What the SNP calls weaknesses are strengths, because we—along with the overwhelming majority of people in Scotland—want Scotland to remain part of the political, economic, monetary and social union that is the United Kingdom of Great Britain and Northern Ireland. That is demonstrated—if further demonstration is needed—by the results of the recent general election.

The Calman review of devolution was thorough and pronounced devolution to have been a success. It concluded that the broad division of responsibilities between Westminster and this Parliament was correctly judged—that is hardly a surprise, since it mirrored the division that is found in most other federal systems of government in the world—but it identified the weakness that, although we as a Parliament enjoy virtually unfettered spending autonomy and responsibility, the lack of fiscal accountability must be addressed. The commission recognised that addressing that deficiency required not an all-or-nothing approach but—again in common with every other federal or semi-federal system of government in the world—simply an adjustment in division of the funding and tax mechanisms between the national Government, which is the UK Government in our case, and the subnational government. The Calman analysis exposed the truth that so-called full fiscal freedom is a full fiscal fraud and is basically a front for independence. Equally absurd is the proposition that one can achieve a perfect division of discrete taxing and spending responsibilities between the devolved Parliament in Scotland and the UK Parliament, and that to achieve such a division would be desirable in our economic and social union.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

David McLetchie’s analysis is that a perfect proposal for the tax relationship between the UK Government and the Scottish Government might not be achievable. Does he concede that we might be able to produce a better proposal than is in the Scotland Bill? Is he open to the Scottish Parliament proposing that?

Photo of David McLetchie David McLetchie Conservative

The Scotland Bill Committee will fully consider alternatives and I look forward to examining such propositions, just as the Calman commission examined the extensive and detailed analysis by the independent expert group, which demonstrated conclusively that nowhere in the world does any subnational Government or Parliament have full fiscal autonomy in the sense that some people here advocate glibly or deceitfully—and here is another one.

Photo of Rob Gibson Rob Gibson Scottish National Party

Will David McLetchie consider the position of the Basque Country, which has such an arrangement?

Photo of David McLetchie David McLetchie Conservative

I hate to disillusion Mr Gibson, but the Basque Country does not have that system. He will find that Spain has an overriding constitutional provision that inhibits the Basque Country and other regions from engaging in what is called tax competition. The Basque Country does not have full fiscal autonomy. I suggest that he read some of the reports and the analysis by the experts on that, which demonstrate the point conclusively.

Photo of David McLetchie David McLetchie Conservative

We can continue that argument on another day.

I look forward with relish to exposing the full fiscal frauds in the committee’s detailed examination of the bill. I would be happy to do for others’ benefit what I have done for Mr Gibson’s benefit.

Photo of Christine Grahame Christine Grahame Scottish National Party 10:14, 9 December 2010

My late mother was prone to saying that half a loaf is better than no loaf. She had been brought up with low expectations in life, unlike her daughter. I do not believe that half a loaf is a good deal when I am entitled to the whole loaf. It therefore follows that 15 per cent of a loaf is, in principle, a worse deal. There are no surprises there. As for Calman, no one out there beyond this bubble or, indeed, the unionist bubble has the word “Calman” on their lips. The Labour benches, the press gallery and the public gallery are all empty. In my very popular Saturday supermarket surgeries in Tesco, constituents are talking to me about job losses and the banking crisis, which was all a result of the mismanagement of the UK’s and, therefore, Scotland’s finances.

Of course, we Scots have been told that without the strength of the union, the economic repercussions would have been dire. Well, here is breaking news: the union took us into the crisis that exposed the incompetence of the UK Government’s fiscal management, courtesy of Gordon Brown, first as the iron chancellor and then as Prime Minister. As for the protection of the union in the economic tsunami, mention has been made of the example of Ireland, but let us consider the example of Norway, which has an oil fund that is worth billions, and with which it supported its banks. It is plain as a pikestaff: independent Norway set up an oil fund, whereas Scotland’s oil revenues have been spent, spent, spent by the union.

Photo of Christine Grahame Christine Grahame Scottish National Party

Please sit down.

Even the 15 per cent of the loaf is crumbly. Frankly, to tamper with income tax alone would be disastrous and regressive. For example, bands, allowances and thresholds are set by Westminster. A range of taxes are levied on the Scottish public, most of which are stealth taxes—national insurance, VAT, excise duty, fuel duty and corporation tax, to name but a few. They all count, they all interact and the revenues from them are all retained by Westminster. The offer is not only not tempting, but to accept it would be counterproductive for economic growth and, more important, would be unjust as regards the redistribution of wealth. Any increased tax take from Scotland following economic growth would be siphoned off to Westminster, just as the oil revenues were.

When we add to the mix the Scotland Bill’s failure to devolve control over benefits to the Scottish Parliament, which Linda Fabiani touched on, the offer becomes even messier. Members will recall that the money that is saved through not requiring attendance allowance as a result of the implementation of free personal care, which is currently running at £40 million per annum, is retained by the Treasury. Money that is saved by Westminster as a result of devolutionary activities simply goes south. Even the proposed changes to UK benefits and the bringing in of the universal credit may not be an improvement. In the meantime, housing benefit is excluded. Although housing—social housing—is our responsibility, in practical terms Scotland, unlike Northern Ireland, which at least administers benefits, cannot integrate any tax powers such as those over housing benefit with its requirement to deliver socially rented housing, in which there is a major crisis throughout Scotland.

The current proposals represent a pig’s breakfast of an offer; they do not even make up 15 per cent of a loaf. I offer this postscript by way of example: can someone explain why the power to change speed limits for cars is to be devolved, but not the power to do the same for cars that are towing caravans? Answers on a Calman postcard, please. Devolution, like this debate, is dull; independence is exciting.

Photo of Nicol Stephen Nicol Stephen Liberal Democrat 10:18, 9 December 2010

When the Scottish Parliament was established in 1999, the Liberal Democrats were proud to have played a central role in shaping and delivering it. We knew that it was the start of a journey and we agreed with Donald Dewar’s wise words that creating the Parliament was the beginning of a process, not an event in itself.

Liberal Democrats did not agree with every aspect of the Scotland Act 1998. For example, many of us wanted a different, better voting system and stronger tax-raising powers for the new Parliament. That is why we were and have remained at the forefront of the argument for more powers for the Scottish Parliament as part of a more federal UK.

New powers have been transferred to the Parliament over the past decade. As then Minister for Transport, I was involved in the most significant of those transfers to date, when Alistair Darling agreed to transfer substantial powers over the rail network to Scotland. As a minister, I was also involved in trying to explain our Parliament’s tax and funding system. One Chinese finance minister told me, “Ah! Now I understand. We have a similar system for funding Tibet.” Change is needed because the system is not sustainable. Simply receiving a cheque for around £30 billion a year from the UK Treasury was not the best way for the new Scottish Parliament to move forward. The Liberal Democrats recognised that. We established the Steel commission—a former Presiding Officer of this Parliament at the head of a group that included senior figures such as Chris Huhne, Iain Vallance, Neal Ascherson and Jeremy Purvis MSP. The Steel commission blazed a trail for new powers for the Scottish Parliament and rightly received substantial credit from the Calman commission, which was influenced by its recommendations. If we cast our minds back, early in 2007 the prospect of delivering substantial new powers to the Scottish Parliament did not look like a solid bet. The Liberal Democrats continued to campaign strongly for more powers but there was little visible support from elsewhere. Members may recall that in early 2007, Gordon Brown, then Prime Minister, specifically rejected more powers for the Scottish Parliament. It is to the great credit of Wendy Alexander for the Labour Party and Annabel Goldie for the Conservatives that they joined with the Liberal Democrats to create the Calman commission. It is also remarkable that we have moved so quickly from the Calman recommendations to a Scotland Bill, proposed by the new coalition Government, that will be passed by overwhelming majorities in all the UK’s Parliaments over the coming months.

The new powers for the Parliament are important. The new tax-raising powers are especially important. They will create a stronger, more effective, more powerful Parliament. Fiscal responsibility, with sensible tax-raising powers for a strong Scottish Parliament, will achieve a stronger UK in a more federal system. The SNP snipes on the sidelines and does not participate. It did not participate in the original Scottish Constitutional Convention. It did not participate in the Calman commission and it does not participate constructively in relation to the proposals in the Scotland Bill.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Does Nicol Stephen understand that the SNP believes in independence from its head and from its heart? It will not compromise on that belief. Considering that the Calman commission refused to consider independence as part of its discussions, should not the SNP be commended for standing by its principles?

Photo of Nicol Stephen Nicol Stephen Liberal Democrat

I repeat: there was no SNP participation in creating the Scottish Parliament and there is no SNP participation in strengthening the Scottish Parliament. All that we get from the SNP is grumbling, rumbling thunder. In recent months and years, the SNP’s cause of independence has gone backwards. The proposals in the bill drive Scotland forwards. They deserve the support of every member of the Scottish Parliament.

Photo of Tom McCabe Tom McCabe Labour 10:22, 9 December 2010

Devolution from Westminster to Scotland, Wales and Northern Ireland was undoubtedly a seismic shift for the United Kingdom. Here in Scotland, with the creation of the Parliament, we enjoyed the most extensive of transfer of powers. Some people expected that everything would fall into place and work perfectly on day one. That was not going to happen; devolution was always going to be refined in the light of experience. That is what responsible legislators do—they allow themselves to be guided by experience.

I have been fortunate to be a member of the Scottish Parliament since its inception, and to have served in the Parliament as a committee convener, a member of the Parliamentary Bureau and on the Scottish Parliamentary Corporate Body. I have also observed the operation of devolution as a Government minister, having had the privilege of holding three ministerial posts. Like any new legislative body, this institution will mature over the long term. It will gain and hold respect by seeking to enhance its scope, where appropriate, and by acknowledging its shortfalls.

During the lifetime of the Parliament, we have operated under the financial equivalent of a tropical sun. Our budgets have more than doubled and we have been able to implement a range of distinctively Scottish policies that are popular and have undoubtedly benefited our people. What we have not had the opportunity to do is rigorously to prioritise in the way that would be necessary had it been our responsibility to raise a greater proportion of our income. That failing has been recognised by the majority of politicians across the spectrum in the Parliament, although, to paraphrase the First Minister, not by the SNP. It has also been recognised by business, civic society and, most important, by our electors. Our institution will gain greater standing and earn more respect when that shortcoming is rectified.

The power over land and landfill tax is a welcome development—the start of a process that should be taken forward with care and in the light of experience. The bill is explicit about the powers to create or devolve other taxes, and I have no doubt that the process of refining devolution will continue. Of course, not all the taxes that the Calman commission recommended have been devolved, but there are rational explanations in the bill and, importantly, no closed doors on them.

The borrowing powers are substantial—greater than those recommended by Calman—with a welcome ability to borrow in the shorter term to allow for fluctuations in anticipated receipts.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The First Minister has already said that we welcome the improvements in borrowing, but the borrowing powers will still be less than those of Northern Ireland, which has £3 billion available to borrow, and the flexibility for bonds will be less than for Birmingham City Council. Does the member think that the bill’s borrowing provisions could be improved?

Photo of Tom McCabe Tom McCabe Labour

Of course the bill can be improved, which is why there must be rigorous scrutiny of it in the appropriate committee. I do not want to be Northern Ireland, however, and if that is Ms Hyslop’s aspiration she is welcome to it. Financial matters are important for the Parliament, but so are relationships. From experience I know that, at ministerial, intergovernmental and official levels, relationships and contact mechanisms should and could have been better. The changes proposed in the bill recognise that and, in my view, address some of the critical areas.

My reading of the bill tells me that there is a genuine desire for a more respectful and productive relationship at all levels. That is not to say that there will not be a test of sincerity for the coalition Government and the civil service. After all, it is people, and not pieces of paper, who shape relationships. I am bound to say that if the coalition Government wishes to be judged by its actions it should quickly rethink its approach to the timing of the referendum on voting next year—but I digress.

I have always believed that devolution is a process. The Scotland Bill advances the process in sensible steps that I am convinced will be seen as such by the public whom we serve. It is, however, a genuine shame that yet again the nationalists seek to carp and complain. In their defence, I feel obliged to point out that they are being entirely consistent: they refused to contribute to the Constitutional Convention, they have refused to acknowledge the benefits of devolution, and they refused to play any part in the work of the Calman commission, to which, incidentally, we all owe a debt of gratitude. The nationalists were happy enough to accept four years in government, but that illustrates the all-take-and-no-give approach that they have shamefully adopted from the start of the process.

I will close uncharacteristically by praising the coalition Government for this piece of work. Unlike some, I do not want to make the mistake of misleading the Parliament. For the vast majority of my waking hours, I hope that the Conservatives and their twisting and turning, flipping and flopping partners fall over a high cliff sooner rather than later, but for this piece of work they are due recognition. It does Scotland and devolution a service, and I thank them for it.

Photo of Derek Brownlee Derek Brownlee Conservative 10:28, 9 December 2010

On behalf of the coalition parties, I can say that the sentiment from these benches towards the Labour Party is entirely the same.

Today we have largely addressed the financial provisions in the Scotland Bill, for understandable reasons, but we have had some other interesting insights. The First Minister referred to his concerns about the reservation of policy in relation to the Antarctic, which suggests to me that the arc of prosperity has changed not just continents but hemispheres.

More concerning—I make this as an entirely serious point—is the attitude of the SNP Government to the general drift of the Scotland Bill. For many years we have discussed whether the SNP is in the hands of fundamentalists or gradualists, but today it seems to be in the hands of backwardists who do not want to consider fiscal devolution. That is a significant problem because, if we are serious about making the provision better and giving the Scottish Government—of whatever political hue—the powers that it could usefully use to make a difference, it is much better to have the Scottish Government seriously engaged.

I will deal with some of the concerns that have been raised about the bill’s provisions.

The fundamental objection that we have heard to the income tax power is that the yields of some taxes are more variable than others. That is true. The document on the Calman commission proposals from the office of the chief economic adviser to the Scottish Government states:

“Between 2007/08 and 2009/10 Scottish income tax receipts are estimated to have fallen by approximately 7.3%.” That is where the First Minister gets his figure of £900 million a year, which he then multiplies by 10.

On the face of it, that might be a plausible claim. However, another document from the office of the chief economic adviser, which was published in 2008 and entitled “Abolition of Council Tax and Introduction of Local Income Tax: Revenue Projections”, projects income tax rises of 5 per cent a year over a cumulative period of five years. When I raised the issue with the Cabinet Secretary for Finance and Sustainable Growth, who has better things to do today than to try to justify the SNP’s position, he said:

“Mr Brownlee has got his numbers completely wrong. ... There will clearly be an increase in the level of tax take as the economy improves.”—[Official Report, 4 December 2008; c 13092.]

That is precisely the point that the Scottish Government misses in its analysis. We are in a significant recession and income tax receipts have gone down, but they will recover.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The member touches on an important point about the increase in rates of income tax—especially the basic rate, which is in the Scotland Bill—relative to the rate of increase of the Scottish block overall. As Tom McCabe said, over the past 10 years, there has been an increase in the Scottish block; however, even in that period, there would have been a reduction of £8 billion if the provisions of the Scotland Bill had been applied. Surely, the member recognises that that is the bit that needs to be scrutinised.

Photo of Derek Brownlee Derek Brownlee Conservative

We are moving from a situation in which 90 per cent of the spending that is determined by the Parliament is set by spending decisions that are taken by the UK Government in relation to England, to one in which two thirds of it will be set in that way. The nationalists might want to go further, but I cannot for the life of me understand why a party that is pledged to defend the Barnett formula should be critical of getting additional powers to set the spending parameters for Scotland. That seems a sensible position to take.

Earlier, the First Minister expressed concerns about income tax revenues. However, he entirely omitted to mention the fact that, according to the command paper, during the transitional period for income tax, which will begin in 2016, “the UK Government will bear the risk of any deviation of outturn from forecast” and that that transitional period will last for a number of years. That makes me wonder whether any of the SNP Government members has read the command paper. If the SNP were saying that it was going to take too long for the powers to come into effect, there would at least be some logic to its argument. Instead, it is misrepresenting the clear position of the UK Government in these matters. If fiscal devolution is to mean anything, fiscal risk must eventually be transferred to the appropriate level of government, not just to make financial accountability effective, but to comply with European Union law.

The key question in relation to the Scotland Bill is whether the financial provisions represent an improvement or a step backwards. To my mind, they represent a significant improvement on the Scottish variable rate. The powers are broader and, critically, will force the Parliament to make a decision on the appropriate levels of spending and tax in Scotland. As we have heard, spending in Scotland has doubled since devolution. If those powers had been in place in 1999, perhaps we would have had a broader debate about the balance of tax and spend in Scotland and we could have decided either to spend double or to restrain taxes in order to enhance economic growth. Taxes do not have to go up under fiscal devolution. I do not want the powers to be used to increase taxes in Scotland; I want them to be used to make Scotland more competitive. I believe—as some of the SNP ministers used to believe—in the effects of the Laffer curve and in the benefits of tax competition, which Annabel Goldie mentioned. Even if some members believe that the proposed powers do not go far enough, the question that we should all be considering is whether they are an improvement on the status quo. For me, they are a significant improvement, which is why the general principles of the Scotland Bill are right. I hope that its provisions come into force as soon as possible.

Photo of Alasdair Allan Alasdair Allan Scottish National Party 10:34, 9 December 2010

I welcome the debate, much as the tone of the motion rather assumes that I will not. I regret it if my open-mindedness leaves those who lodged the motion feeling cheated in any way.

Judging by his tone, I am not sure that Mr Gray welcomes the debate, but I do. I welcome it first, and most important, because I want to see Scotland take more control of our own affairs. I genuinely—as opposed to just tactically—want to see our national Parliament take more legislative and fiscal responsibility away from another place. So the fact that we are discussing a bill that, however limited in its scope, talks about those ideas is something that I hope all parties can now regard positively.

Margaret Mitchell might fear that the bill is a Trojan horse for Scottish independence. I can reassure her that, wary as I might be, I do not intend to spurn unionists bearing constitutional gifts, however modest those gifts might be.

The fact is that this bill represents a long overdue, if grudging, recognition from certain quarters that Scotland's constitutional future matters. It matters because, without power, we cannot act to address our country’s social and economic problems. The only question is, of course, how much power do we want our country to have? Everyone knows my preferred answer to that question, and it involves, among other things, repealing schedule 5 to the Scotland Act 1998.

However, rather than each of us reiterating our preferred party positions, our real challenge, if we choose to accept it, is to find agreement as a Parliament. That means that we have to start from the reasonable position that, just like any other, the bill is capable of constructive improvement.

There is much in the bill that we can all seek to build on. There are, however, undoubted anomalies that I believe that we must correct. Some of the anomalies have been well rehearsed, but that is no reason not to repeat them. I am pleased, for instance, at the bill’s devolution of powers on speed limits. However, as Christine Grahame asked, can anyone tell me why, if I speed in my car, my crime is a devolved matter but, if I am towing a caravan at the time, my crime is a reserved one? At the level of principle, however, what is more important is the question of the various powers that the bill envisages this Parliament giving up. I know that the SNP is not the only party that, at the time of the establishment of the Scottish Parliament 11 years ago, would have struggled to imagine us now debating the merits of handing back powers to Westminster. I therefore urge members of all parties to consider how far it might be consistent with self-respect to envisage measures that take us down that route.

The bill envisages all sorts of currently devolved activities being un-devolved, such as the regulation of various medical professions, aspects of charity law and insolvency law. As many people have mentioned, it seems that the bill even envisages reserving penguins, through its references to Antarctica, which suggests a certain degree of obsession on the part of its framers.

More contentious than anything else, however, is the shape of the bill’s proposed tax powers for Holyrood.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I am grateful for the member’s grudgingness.

Does the member not pause slightly with regard to this Government’s record on tax powers, given that it did not even inform the Parliament that it had not allowed that tax power to be activated? Is that not relevant to the issue that the member is discussing?

Photo of Alasdair Allan Alasdair Allan Scottish National Party

I can well understand why the member and his party sought to manufacture a grievance about tax powers at a time when it was becoming clear just how poor the tax powers that are proposed by the Scotland Bill are.

I suspect that it is not only SNP members who identify weaknesses in the tax proposals. If Scotland is to enjoy real freedom of economic manoeuvre, it cannot be reliant on such a narrow range of taxes as the bill envisages—essentially, income tax, landfill tax and stamp duty. No Westminster Government would contemplate trying to operate without some discretion over corporation tax, for example, not to mention some of the smaller taxes that even Calman’s tame report recommended be devolved, including air passenger duty and the aggregates levy. The bill includes none of those.

There are many areas in which this welcome bill needs serious attention. Peter Peacock admitted, quite rightly, that the Scotland Act 1998 was not an everlasting work of perfection. I remind members that even that bill was subject to amendment during its passage through the House of Commons, even if the only substantive power that was transferred from reserved to devolved was the regulation of stage hypnotists. Perhaps when we or others amend the bill that is now before us, we can aim a little higher.

The fact that we are having this debate at all disproves the refrain heard in this chamber until a few years ago: “This far shalt thou go and no further.” I have a preferred constitutional position, but I can say this much in defence of those who prefer the status quo: at least in Scotland the status quo keeps shifting.

I urge all parties to propose constructive improvements to the bill, and to do so in the spirit of seeking to get the maximum that they can for their country, rather than the barest minimum that they feel they can get away with.

The bill will not set the heather on fire—even in Antarctica—but, if we strengthen it, address its anomalies and address the weaknesses in the way in which its tax proposals are framed, we could end up with a bill that benefits Scotland.

Photo of Patrick Harvie Patrick Harvie Green 10:40, 9 December 2010

I apologise for arriving two or three minutes late for the start of the debate. I was here, however, to hear Iain Gray describe the bill as containing serious proposals from serious people. I will begin by criticising the process by which those proposals have been produced.

The people who were to lead and participate in the Calman process, the remit and the limitations that were imposed on it and the scope of its work were chosen and set not in a participative and inclusive manner, but by three political parties. The rest of the people in Scotland were not involved. If we are considering proposals from serious people, we should be looking at proposals that have arisen through the participative involvement of all the people in Scotland, but that has not been the case.

The Calman process was started by not just any three political parties, but specifically by the three parties that dominate Westminster rather than Scottish politics. Far from putting party politics aside, as Iain Gray claimed, the process has been entirely party political. It is no surprise that the conclusions seem to be designed to serve the interests of those parties. I level the same criticism at the SNP’s national conversation, which was pitched at and largely involved those who had already made up their minds about independence. The Constitutional Convention, which many members have mentioned, should have been the template for an involving, inclusive and welcoming process in which the whole of Scotland could have participated. I know that the SNP chose not to take part in the Constitutional Convention, but the Greens did and demonstrated that it was possible for a pro-independence party to engage in that process without compromising its principles. It should have been possible to set up that type of process, which would have allowed the public to identify its own priorities.

If we had done that, rather than going with a quick process that was cooked up by three political parties, and if we had had such public participation and involvement, we might now be joined by a gallery full of excited and engaged citizens who had been given the chance to shape the process. Instead, as so often, we have politicians talking to politicians.

If there had been a more participative process, Iain Gray might well be right, and people might have expressed again the fabled settled will for a strong Scottish Parliament within the UK. On the other hand, Alex Salmond might be right, and the people might have cried out for full economic powers, with many viewing that as a stepping stone to independence as the next logical step. The point is, however, that people were not asked, were not part of the process and were not inside.

We might at least have moved the debate on from the purely economic matters that too often cloud out the other priorities that we should set when we ask ourselves about Scotland’s constitutional future.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Patrick Harvie makes an important point, but we are where we are. On the basis that the Parliament can help to shape where we go next, does he agree that it is important that civic Scotland has a voice as of now on where the bill and its scrutiny goes, and that all of us in the Parliament—and the bill committee in particular—should help to enable that to happen?

Photo of Patrick Harvie Patrick Harvie Green

I agree with Fiona Hyslop’s point in general, but I regret that it is probably too late to have wider civic Scotland genuinely shape the bill, which is unlikely to change in substantive terms at Westminster.

We should examine a wider range of questions when we consider the constitutional future of Scotland. It is not just about the economy, or which particular powers can create a richer Scotland. It is not about how rich we are, or could be, or might have been if history had gone differently.

It is certainly not just a narrow question about a narrow metric such as gross domestic product growth and which powers would increase it. It is more relevant to ask what constitutional choices we could make that would better enable us to share Scotland’s wealth and opportunities more equitably. Which constitutional choices would support, for example, the transformation of our energy system, or the rebuilding of strong local economies that can meet local needs without growing transport demands?

What would a bill look like that addressed some of those priorities? It is probably too late to say. The tax powers would certainly be addressed, but the bill would allow not just higher or lower taxes but a fundamentally more progressive tax system. The powers that are on offer do not allow that. We would certainly also be looking at the other half of the welfare state, which is benefits. If Scotland wants the power—I believe that it does—to defend the welfare state from the all-out assault that is being launched, we should not limit ourselves simply to raising tax. We should also think about the welfare and benefits system.

We should also have a hand in the regulation of the energy system. We are still waiting to find out what wonderful green deal the UK Government will launch. We do not know the detail of that. Our efforts to address energy waste and fuel poverty in Scotland always have to be fitted around UK definitions of what the energy companies have to contribute, and that always leaves us unable to do as much as we would like to do. We should also be talking about greater representation and influence at the European level, where many of our priorities are barely heard.

There are countless other options that could, should and would have been in the bill if the people of Scotland had helped to shape it, rather than just three political parties. The bill does not offer the options that Scotland needs. I cannot welcome it and I will vote against both the motion and the amendment tonight.

Photo of Wendy Alexander Wendy Alexander Labour 10:46, 9 December 2010

Like others, I welcome the debate. I begin by saying that I am honoured to be on the new Scotland Bill Committee along with many other esteemed colleagues in the Parliament. I assure people that we will bury into all the detail, but today is about the bigger themes that lie behind the bill.

As others have said, today opens a new chapter in the devolution story. I believe that it is on the template of the Constitutional Convention that we have come to the point that we are at today. The key insight of the Constitutional Convention was, first, to build a wider consensus, then to develop detailed proposals, and finally to deliver those proposals to Parliament. That is exactly the process that the Calman commission has embarked on and which many in the Parliament have supported. As Nicol Stephen said, four years ago, there was no expectation of a consensus on the future of devolution. Four years ago, what people expected was an internal Labour Party review, a Liberal Steel commission mark 2, and a series of Tory speeches with some nudges and winks about what would happen if the Tory party won power. There were competing prospectuses with no consensus. Calman was uniquely cross-party and beyond party, and that is what gives it authority on how we move forward.

Photo of Patrick Harvie Patrick Harvie Green

Will Wendy Alexander explain why the process was not widened out beyond those three political parties? Why were others not invited?

Photo of Wendy Alexander Wendy Alexander Labour

There was an invitation to the whole of civic Scotland and any political party to participate in any way they wished in a commission where a majority of the representatives were firmly not of any party.

The other lesson from history that resonates today is that, in the 1990s, there was a Government that opposed the emerging consensus, as the Scottish Government does today. Twice already, in December 2007 and June 2009, it has voted down Calman. However, I predict that these reluctant refuseniks will change their minds. I was encouraged by the speech that we heard from Alasdair Allan today.

The task for all of us is to look at the blueprint that commanded majority support in this place and beyond. It is no more the committee’s task to tear up Calman than it was Donald Dewar’s task to tear up the convention scheme. He improved the convention scheme and the committee will seek to do the same for the proposals.

I turn now to the new chapter on financial powers, which is the substance of the proposals. Donald Dewar did not think that the financial arrangements were perfect—he was very much focused on the Parliament’s powers—but, nevertheless, he did two extraordinary things. First, he gave the Parliament total expenditure discretion within its responsibilities, with no fetters, no shackles and no second-guessing on how it spent its money. Such no-strings-attached spending powers remain nearly unique in the devolved world. Secondly, Donald Dewar was determined to give the Parliament tax powers and asked the people for that right. They backed him in that decision. As we look to the future, financial questions will inevitably dominate our considerations. Finance is fluid. There is no one right answer—indeed, there is certainly no one right answer to the question of how we magically deliver economic growth. Federal countries routinely review powers that have been devolved, taxes that are shared and grants that have been distributed and, post-Calman, such work will become commonplace. The new chapter provides a process for the future. On offer are new shared taxes, devolved taxes, new borrowing, new tax powers, new saving for a rainy day, new transparency, new co-ordination mechanisms and a new process for dialogue. All that has to be the way forward.

The committee’s considerations will be assisted if there is full transparency from the Scottish Government. Of course it has the right to disagree but, as we have learned today, it put before the UK Government a preferred option that specified the taxes that it would or would not like to retain in Scotland. I presume that it modelled the preferred option that was put to the UK Government over the 16 meetings that were mentioned, but so far it has refused to publish any of that modelling. If it has been carried out, the committee would very much like to see it to assist our deliberations.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Will the committee of which the member is the convener give full scrutiny to alternative proposals to the Scotland Bill and the provisions that have been sought in all our discussions with the UK Government to secure a better deal? Is she prepared to help the Parliament and give it an opportunity to consider the other option?

Photo of Wendy Alexander Wendy Alexander Labour

The committee’s task is to scrutinise the bill. The Scottish Government has asked us to consider its critique and we have indicated our willingness to do so. However, the Government has presented an alternative to the UK Government but has not shared with the Parliament the financial modelling that it has used. If we saw that, it would assist our deliberations.

We will seek to do justice to the tradition that I have outlined today and the new chapter that puts in place a process for the future to ensure proper responsibility, accountability and stability for Scotland’s financing.

Photo of Rob Gibson Rob Gibson Scottish National Party 10:53, 9 December 2010

The debate is very important to Scotland’s future. First, though, I should point out that, if the SNP Government had not been elected in 2007, there would have been no Calman commission or Scotland Bill. The debate is driven by the strength of support for the SNP’s determination to force the unionists to make more concessions. The committee needs to measure the strength of devolution in delivering some of our long-held beliefs and, in that respect, I want to dwell on two of the most important areas for the Highlands and Islands. Unfortunately, our experience of devolution is that it moves more slowly than glaciers melt. For example, we have never had proper control of fishing and other environmental aspects of the marine environment in which we in the north must try to earn our living. In the previous session of Parliament, we managed to get maps drawn that showed the various boundaries. The Calman commission suggested that the situation be sorted out but, as the First Minister pointed out, the bill makes it clear that there will be no such sorting out and, indeed, that the Scottish Government’s overall responsibility in this respect will be reduced.

The Liberal Democrats have certainly to answer for the length of the debate on this. I am glad that Jeremy Purvis is speaking after me, so he will not need to intervene. Back in 1991, David Ross said in an article in The Herald on the Liberal councillor Dr Michael Foxley, who is now leader of Highland Council:

“The fish-farming industry and its domination by multi-national companies and its administration by the non-elected Crown Estate Commissioners is another of the doctor’s pet subjects.” Dr Foxley has had views on these things over many decades, and he has been joined by other elected representatives of the Liberal party. For example, after the Crown Estate review working group was set up, the northern isles MP, Alistair Carmichael, backed calls by the Orkney MSP, Jim Wallace, to change the role of the Crown Estate in Scotland. What happened to change that role from 1999 to 2006 under devolution and under Labour and the Liberals? Nothing.

In the SNP Government’s time, Tavish Scott has lodged a motion on the same subject, which was debated in the Parliament. On 27 April 2007, he said:

“The time has come for control of the seabed to be passed from London to the communities who depend on the coastal waters. I will be working with Isles MP, Alistair Carmichael, so that the UK Marine Bill can include measures to give Shetland back control of its seabed.” Did the UK bill that Labour introduced bring back that control? It ignored the possibility. Once again, there was delay, delay, delay.

And so it has gone on through to this year. The First Minister has pointed out what has happened. On 30 November, the Liberal Democrat MSP for Orkney, Liam McArthur, who is, unfortunately, not here, said:

“The Scotland Bill provides an opportunity to help coast communities and our aquaculture and marine renewable industries. The UK Government should review the Crown Estate’s role in Scotland and look at using the Bill to devolve powers and controls over the seabed.” The progress is even slower than glaciers melting. We are talking about a period from 1991 to nearly 2011. Those are the kinds of processes and burdens under which the Scottish people have to work. Thanks to the Liberal party and its continued ineffectiveness, even when it is in government in London and can convince its Tory allies to do something, we are faced with having to discuss this in the Parliament. Will we get the Liberals’ support in the committee that Wendy Alexander is convening? Will there be a new chapter? Will we get such powers, or will the Highland people once again be failed by the Liberal Democrats, who have failed them for decades? The bill will create a Scottish commissioner for the Crown Estate, who will be appointed by UK ministers; the Scottish ministers will merely be consulted. Wow. What progress.

If the committee is serious, it must make the changes in administration that the marine environment requires and changes in the responsibilities of the Government and the Parliament, which passed the leading climate change legislation in the world. If Wendy Alexander’s committee is not up to making such changes, it is not up to delivering anything at all to change things.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 10:58, 9 December 2010

René Lévesque was a hugely charismatic politician. He was popular and very different from the political norm. To some extent, he changed politics in Quebec. He left the Liberal Party and set up what became the Bloc Québécois. He is, of course, a hero for many SNP members who have heard of him. When he broke the Quebec political mould, he had a strategy of leading a competent Government that would provide the platform for a referendum on separation and independence. Part of his argument involved the particular needs of the Quebec economy, which was suffering because of the huge federation of the rest of Canada. Ultimately, he failed, for two reasons, one of which we are already seeing in Scotland—the Government was not competent. Secondly, he failed because he did not countenance the fact that the rest of Canada believed that there was scope to have a passionate and friendly relationship between all parts of Canada and that federation and federalism were positive, both socially and economically. It is no surprise therefore that the referendum in Quebec in 1980 was a failure.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

That sedentary comment relates to my point about the competence of the Scottish Government. Lévesque famously said about the defeat in the referendum, “À la prochaine fois,”—until next time. With regard to the SNP’s strategy, there is challenge between those who wish independence now and those who take a gradualist approach. Under the surface of the speeches that we have heard from SNP members, we can identify those who are on the gradualist side and those who are on the more fundamentalist side.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I do not need to name them, because I think that the selection process for the SNP lists highlighted that.

Underlying everything that we have heard is the slight charade that the SNP believes that the bill is not good enough. When John Swinney opened his speech on the budget, he said that it was the worst budget since devolution. That was the budget of 2007. The SNP has not believed that any budget since devolution has been a good deal, even when budgets were growing by 3, 4 or 5 per cent, so it should be no surprise that the SNP says that the bill is bad.

I tried to intervene on Linda Fabiani, but she did not let me in, although I appreciate that she was pressed for time. The question that I was going to pose was whether there is any solution short of independence that the SNP would publicly say was a good deal for Scotland and would help Scotland’s economy. I genuinely suspect not, because that is not the narrative.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I am sure that Linda Fabiani will answer my question.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Does Mr Purvis accept that the independent and cross-party committee that has been set up should independently consider the legislative consent motion that is to be lodged and the options for Scotland, come up with what it decides independently would be a good deal for Scotland, and then let the Parliament consider that?

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I hoped that there would be an answer to the question that I posed, but there was not.

Nationalism is the great political seducer, because it appeals to one element of a politician—the grass is always greener when we look at other countries. We have heard that this morning with regard to Ireland, the Basque Country and Slovenia. In the past, we heard in five ministerial blogs, the national conversation and, without a hint of irony, the business case for the Scottish Futures Trust that we should follow the model of Iceland. However, when that economy came into difficulties, which was problematic for the Icelandic people, there was silence on Iceland, so we moved on to Ireland.

Even in October this year, Joe FitzPatrick, who is a fellow member of the Finance Committee, issued a press release saying that Labour’s attack on the Irish economic model was turning “to dust”. That was a few days before the €80 billion bailout of the Irish economy. Right up until last week, Jim Mather, our enterprise minister, said that we should follow the Irish economic model, but that stopped last week, when he said that the Irish Government was “incompetent”.

This is not just about looking to other countries or even about holding the grotesquely irrational view of wanting the Irish tax framework with the Norwegian social model. This is about looking into how we can get the best model for Scotland within the UK, and the Scotland Bill is a serious proposition in that regard. It is no surprise that the SNP believes that the bill is not in Scotland’s best interests.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party 11:05, 9 December 2010

Although I have some sympathy with Patrick Harvie’s position on the lack of input into the process for civic Scotland, I welcome the debate. I also welcome the bill, albeit with some reservations. That is why the reaction from other quarters to the SNP position seems more than a little disingenuous. Today and on previous occasions, we have broadly welcomed much of the bill, yet still the argument is rehearsed that we are obstructionist. It seems a little like a pre-rehearsed line that members are desperate to cling to and convince people of, despite the facts.

We have just heard from Jeremy Purvis the tired old propaganda about the non-existent lines of division in the SNP. Let me state clearly that all of us in the SNP believe in independence yesterday, today and tomorrow—we all want independence as soon as possible. More than any Scotland Bill, independence will empower us to make the difference that is needed in Scotland. That said, I welcome the Scotland Bill that is before us today, albeit with some reservations.

The history of devolution is marked by a series of milestones and there is no doubt that the Scotland Bill is another milestone on the way. As Tom McCabe said, it confirms that devolution is a process, not an event, and that the story of the growth of this Parliament’s powers is not at an end. Just as constitutional perfection was not achieved in the Scotland Act 1998, let none of us pretend that the Scotland Bill represents the last word on the devolution settlement. I do not believe that it represents the settled will, as some have argued—although not, I was interested to hear, Tavish Scott, who believes, as I do, that we should go further than the provisions of the Scotland Bill.

What emerges from the Scotland Bill process, and from the ways in which the powers of the Parliament are enhanced or changed as a result, will cast the history of devolution in a new light. At the end of the process, we may well ask what could have been different if we had had some of these powers sooner—what might we have done if we had had the powers over drink-drive limits and airguns or control over our own elections? How might we have utilised borrowing powers in response to the current situation if those powers had been part of the original Scotland Act 1998?

My party will always support measures that maximise the powers of the Parliament. There is much in the Scotland Bill that is to be welcomed. Bringing stamp duty and landfill tax to Scotland—or, more accurately, abolishing those taxes in Scotland and giving the Parliament the power to reintroduce them—is a small step on the way to the full fiscal powers of independence that the Parliament and the country need, but it is a step on the way nonetheless.

I turn to SNP reservations about the Scotland Bill. One big question that has to be asked is why it seeks to return to Westminster powers over a number of areas and to make exclusions in areas that are to be devolved. There are both principled and practical reasons for asking such questions, which must be addressed by the committee in its consideration of the bill. One example that has been cited is that the Scottish Parliament will be able to change the speed limit for cars but not for cars towing trailers or caravans. Another example is that the devolution of control of airguns makes an exception for “dangerous” airguns—it is good to know that Westminster trusts us in Scotland to deal with safe airguns. I struggle to think of any good evidence-based policy reasons for those decisions. I suggest that some technical aspects of the bill have not been fully worked through.

One of the more noted reservations in the Scotland Act 1998 was in schedule 5, section L6, on “regulation of activities in outer space”.

Why the UK Government at the time felt it necessary to reserve that area remains unclear. It now seems that one of the final frontiers on earth is also to be reserved. Proposed new section L7 in schedule 5 to the 1998 act will reserve “Regulation of activities in Antarctica”. In that, we begin to see clearly convergence in the principled and practical concerns about the rereservation of powers. The UK Government and Scottish Government already co-operate in developing administrative arrangements for scientific expeditions overseas. The reservation is therefore unnecessary from a practical point of view. Also, each time that we look at such a reservation, we must ask whether it is in the spirit of devolution and the wishes of people in Scotland.

At each milestone and staging post of the devolutionary process, even going back to the Kilbrandon commission on the constitution in the 1970s—way before my time, of course—the starting point was the principle of giving power away from Westminster to Scotland and other parts of the UK. There was an acceptance that constitutional reform would continue and that further devolution could be expected. There was never the assumption that the UK Government might, at some point, take powers back.

If Opposition members genuinely support the reservations, they must be the only political leaders in history who want to give potential power away. Shadow ministers appear to be saying that, if they were in power, they would not or would not be able to make decisions in those areas. It appears that Labour members would rather have the Con-Dem coalition Government in London regulate the health care professions in Scotland or implement European legislation on devolved matters in Scotland than allow any Government in Scotland, even one of which they may be part in the distant future, to have control over those areas.

If my understanding of the principle and its implications is not correct, I look forward to hearing other members explain why. That is, as it should be, part of the debate that Scotland must have on the Scotland Bill.

We have before us draft legislation and a timetable for changing the powers of the Parliament, which was founded on the principles of openness, accountability and the sharing of power. The first Scotland Bill was scrutinised by 72 MPs from Scotland and steered through Westminster by three Scottish Office ministers. Rightly, this bill is subject to scrutiny by a full Parliament of 129 elected members—a Parliament that has some of the most open and transparent processes in Europe. We owe it to the people of Scotland to do that job effectively and to have as much opportunity as possible to ensure that the bill enables the Parliament, as the motion would have it, “to serve the people of Scotland better”.

Photo of Robert Brown Robert Brown Liberal Democrat 11:11, 9 December 2010

It is my great pleasure to sum up on behalf of the Liberal Democrats in this debate on the Scotland Bill. I have supported home rule for Scotland, as part of a strong and federal United Kingdom, for all my political life. It was one of the causes that drew me to the Liberal Party as a student, and I have been privileged to play my small part in the creation and moulding of the Scottish Parliament and, subsequently, in the work of the Steel commission on “Moving to Federalism—A New Settlement for Scotland”.

Today I pay tribute to all those people, in all parties and none, who have argued genuinely with passion and commitment about the constitutional issue, but especially to those who have been prepared to put aside party and tribal differences, to contribute their ideas and commitment and to strive for agreement on the way forward. Such was the story of the Scottish Constitutional Convention, which led to the creation of the Scottish Parliament; such, too, has been the story of the Calman commission process, which was first suggested by Nicol Stephen, was taken up—as we have heard—by Wendy Alexander and was supported firmly, despite denigration, criticism and sarcasm from the SNP, by Liberal Democrats, Labour and the Conservatives here and in Westminster up to the launch of the Scotland Bill. As David McLetchie rightly said, the process was backed every step of the way by parliamentary vote.

Scotland, its national symbols and its history are not the exclusive property of any one party. Scotland’s constitutional future and our long-standing status as a partner in our United Kingdom are not things to be tampered with except on a well-prepared basis of consensus that weighs and tests the proposals and finds them to be in the interests of Scotland and in the broader interests of the UK. The Scotland Bill provides the Parliament with substantial fiscal and borrowing powers that, in accordance with Sir Kenneth Calman’s remit, makes it more accountable and more responsible for its revenues. Importantly, it also puts in place a framework on which there can be devolution or allocation of additional tax powers, if that seems right in the future.

I pause to examine where we are and how our structures fit into the family of nations across the world with which we like to be associated in various ways. No one can see into the future, but I believe that we are approaching a point where the process that was devolution becomes an end point that is home rule within a reformed United Kingdom, developed on federal lines. It is notable how many speakers in today’s debate have talked about federal principles. To a degree, the settlement is messy and asymmetrical and has loose ends, but it looks pretty much like the relationships that exist between the German Länder, the Canadian provinces, the Australian states, the Swiss cantons and the Spanish autonomous communities, and their respective federal Governments. In short, increasingly Scotland and the United Kingdom have the sort of constitutional pluralism that is typical of many, if not most, normal countries across the world—mature, pluralist, encompassing liberal democracies that can provide the democratic platforms on which we debate the manifold political, social and economic issues that define and shape our societies and offer opportunity to our young people, because it is what we do with our Parliament and parliamentary structures that is important.

I will develop that point. Although I have been dwelling on the importance of consensus for constitutional change, something else should be stressed: the changes to the powers of our Parliament are for a purpose, which is to make us more accountable to our people, to make our democracy work better and to equip government at the right level, giving it the right levers to tackle the challenges of the day.

In what I thought was a thoughtful speech, Alasdair Allan said that the Scotland Bill Committee should seek to take the maximum powers that it can for the country. That is the nub of the matter—but it raises the wrong issue. The issue is not about getting the maximum powers for the Parliament, but about getting what is best for the Parliament and for Scotland.

That is an appropriate thought on which to turn to the SNP, the minority Government in this chamber.

Photo of Margaret Mitchell Margaret Mitchell Conservative

Does the member accept that the Parliament already has sufficient powers but that, since its inception, it has lacked the political will to follow a radical, reforming agenda to make things better for the people of Scotland?

Photo of Robert Brown Robert Brown Liberal Democrat

I do not accept that. This Parliament has achieved some considerable things, although it could do much better. Over the past four years, however, we have had a bit of a stall in trying to move forward.

The First Minister’s minority Government holds a minority, and diminishing, view in the country. Its whole raison d’être is based on an ideology that is old fashioned and unsuited to Scotland’s needs, and is irrelevant to the challenges of the modern world.

Jeremy Purvis was right to ask whether there was any solution short of independence that the SNP would support. I entirely accept the genuineness of the SNP’s views, but its approach to the Scotland Bill raises some different questions.

Photo of Robert Brown Robert Brown Liberal Democrat

I do not have time to take a further intervention, unfortunately.

SNP members once told us that we should be like Iceland or Ireland, but it seems from Linda Fabiani’s speech that Slovenia is now the model that we should follow. SNP members are girning about the Scotland Bill, much as their transport minister has been girning about the weather forecasters, but a girn is not a serious analysis. The current block grant system protects the Scottish Government’s budget against fluctuations in tax take in varying economic circumstances. In some ways, that is a great advantage. Greater tax powers carry with them the opportunity of greater benefit if tax revenues rise, as they will do during the recovery from the recession, but they also contain the risk that revenues will fall on other occasions.

Photo of Robert Brown Robert Brown Liberal Democrat

In conclusion, this is no time for dithering or prevarication. The SNP has clearly not come to terms with the emerging consensus in support of greater powers, and—

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

Your time is up, I am afraid. You must sit down.

Photo of Robert Brown Robert Brown Liberal Democrat

Members should support the bill.

Photo of Murdo Fraser Murdo Fraser Conservative 11:17, 9 December 2010

The Scotland Bill marks the latest step in the development of the coalition Government’s respect agenda for Scotland. Within three days of becoming Prime Minister, David Cameron came to this Parliament and met the First Minister; UK Government ministers now regularly come to appear before Scottish parliamentary committees; the coalition Government agreed to make funds available to the Scottish Government from the fossil fuel levy; Richard Lochhead, the Scottish fisheries minister, has been allowed by the coalition Government to lead UK-level fisheries talks in Brussels; and the Scotland Bill has now been introduced to implement the proposals of the Calman commission.

None of us should underestimate how far the process has come. When the Conservatives, Labour and the Liberal Democrats came together to set up the Calman commission, few believed that the process would even have an outcome, never mind find its way into legislation. It is indicative of the strength of the work that was done by the commission that the three parties are united, representing between them the great majority of people in Scotland as we propose a major set of constitutional changes—changes that have, of course, already been endorsed by a vote of this Parliament.

As we have heard already, the biggest changes affect taxation, spending and borrowing. Writing in The Scotsman last week, Prime Minister David Cameron said:

“For eleven years now, Holyrood has had the power to spend money on schools, hospitals, transport and justice as it decides.

But it has raised little of this money itself, depending instead largely on the block grant from Westminster. This doesn’t make sense. If you believe in people power and accountable government, the two should be joined up.

Scottish politicians, who better know the needs of the economy and the will of the people, should be able to both spend money and raise taxes—and then be prepared to be judged at the ballot box for those decisions.” I find it hard to disagree with any of those words.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

In the past, Murdo Fraser has advocated more powers for the Parliament and full fiscal autonomy. Derek Brownlee talked about people going backwards. Has Murdo Fraser got the confidence to go back to his previous position and support full fiscal autonomy for the Parliament?

Photo of Murdo Fraser Murdo Fraser Conservative

I have consistently supported greater financial powers for the Parliament. I am delighted that we have a Conservative Prime Minister who agrees with me and is taking the agenda forward. In future, we will have a properly financially accountable Scottish Parliament and politicians who will have to concern themselves with not just spending but raising money.

There are critics of the Calman process who think that it is another step on the slippery slope to independence, but I do not think that improving devolution undermines the United Kingdom or that giving Scotland better government makes independence more likely. During the devolution debates in the 1990s, members of my party—including me—often argued that setting up a Scottish Parliament would boost support for independence. In the event, that did not happen and I am happy to admit that we got it wrong. Last week, the most recent opinion poll figures showed support for independence to be at an all-time low of 23 per cent. So much for the argument that a Conservative Government in Westminster would stoke the fires of nationalism.

Just as the argument that more devolution will increase support for independence is wrong, the argument that devolution will kill off nationalism, as George Robertson famously said, is wrong. There is no such thing as inevitability in politics or history. In Scotland we will get the constitutional future that we choose. That will ultimately be for the Scottish people to decide, and I have every confidence in their good sense. Their majority view is clear; we should back the proposals in the Scotland Bill, which will bring better government for Scotland.

The SNP has simply stood on the sidelines and criticised the process. Once again, the party has brought little constructive comment to the debate. I exempt from that general attack Alasdair Allan, who made a constructive speech. Indeed, his speech was much more constructive than the speech that we heard from the First Minister—I am deeply sorry if that in any way damages Alasdair Allan’s career prospects.

The SNP’s attack on the proposals in the Scotland Bill for financial devolution is based on the assumption that they will mean lower income for the Scottish Government. Let us leave aside the basis of the SNP’s fiddled figures on which the assumption is founded, which was thoroughly demolished by Derek Brownlee—I am sorry that the First Minister was not here to listen to Derek Brownlee’s demolition of his financial case. It staggers me that SNP members cannot see the irony of the argument that they are putting forward. If it is the case that we are seeing a fall in income tax revenues as a result of the economic recession, that would apply to Scotland whatever level of financial powers it obtained. If Scotland were independent, the position, far from being alleviated, would be made much worse. We have only to consider what has happened over the Irish Sea during the past few weeks for an example of the problem.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sorry. The Presiding Officer is indicating that I do not have time to do so.

The Calman commission’s proposals as set out in the Scotland Bill will improve devolution, increase the accountability of Scottish politicians and strengthen the United Kingdom. For all three reasons they deserve our whole-hearted support.

Photo of Pauline McNeill Pauline McNeill Labour 11:23, 9 December 2010

When I campaigned for Scottish home rule within the UK in 1997, I never imagined that I would, in opposition, be promoting a new phase of devolution and that a Tory-Liberal UK Government and a nationalist Government at Holyrood would preside over a new Scotland Bill. That was not a scenario that I would have gambled on. Nevertheless, I am proud to be part of the current political cross-party consensus. We are preparing for the Scotland Bill Committee to scrutinise the bill and the legislative consent memorandums. The committee will squeeze in a timetable of evidence taking before the Parliament is dissolved before the 2011 fixed-term election. I think that today’s debate largely reflects what the majority of Scots want, which is a stronger devolution settlement and a Scottish Parliament that is more accountable and has additional powers.

As Murdo Fraser said, polls repeatedly show that devolution is the political settlement that most Scots want, with support for independence at an all-time low of 22 per cent. Alex Salmond caught up with that sentiment recently when he finally admitted that independence is no longer the centre of gravity. However, when he was gone from the chamber, others in his party still seemed to hold true to the principle of independence, so there is a little divergence between his view and that of some of his back benchers.

It is up to the parties in the Scottish Parliament to take forward the bill and test to the Parliament’s satisfaction whether its proposals are practical, workable and in Scotland’s best interests. I do not expect that there will be large areas of disagreement or concern at this stage. I know that the individuals who are on the bill committee—David McLetchie, Wendy Alexander, Robert Brown and Peter Peacock—will not leave a stone unturned in pursuing Scotland’s best interests in scrutinising the content of the bill. [Interruption.]

Photo of Pauline McNeill Pauline McNeill Labour

The jury is out on the SNP’s real approach to the bill. When that is clear, perhaps I will welcome the contribution of the SNP members on the committee.

Acquiring new powers over matters such as airguns, speed limits and drink-driving laws is a significant development. Airguns have been a topical issue and, in time to come, there may be a consensus to use that power, which is a direct result of the Calman commission. Acquiring powers over speed limits and drink-driving laws could mean that we have different laws on those matters from England, Wales and Northern Ireland.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

No one so far has defined the difference between a dangerous airgun and a safe one. I am confused and wonder whether Pauline McNeill can help.

Photo of Pauline McNeill Pauline McNeill Labour

Let me clear up that confusion. Has it escaped Mr Hepburn’s notice that the bill will be scrutinised by a committee? I am sure that the committee members whom I mentioned will address his point and satisfy themselves about it. If that is his only criticism of the bill, I am not at all worried. The bill heralds a new relationship with the UK Parliament, which will have to deal with our decisions. It could mean that we will have legal differences that the Driver and Vehicle Licensing Agency will have to administer if we choose to diverge from England, Wales and Northern Ireland. That is a radical aspect of the Scotland Bill but, of course, a more radical aspect is the fiscal powers that others have talked about. I am sure that the committee will consider the questions that Christine Grahame and others raised.

The Scotland Bill is a constitutional bill, not an economic development measure. As Margaret Mitchell alluded, the Scottish Parliament already has many economic development powers to grow our economy. It is up to the Government of the day to use those powers for growth to achieve its ambitions for education, research, jobs and industry.

Like Nicol Stephen, I believe that it is time that we move away from being a Parliament that simply spends a block grant from Westminster. He is right to point out that the SNP has grumbled constantly from the beginning of devolution, but that is where the SNP seems to be. Linda Fabiani says that the SNP still has a principled position on independence. However, it does not refuse to take seats in the Scottish Parliament under devolution.

As Tom McCabe said, the significantly devolved taxes, the borrowing powers and the power to devolve other specified taxes are the central aspects of the Scotland Bill. For me, moving towards taking responsibility for what we spend is the next phase in devolution.

As Derek Brownlee said, there will be a transitional period from 2015-16. The command paper outlines careful steps for the full implementation of the proposals, under which the UK will bear the cost of shortfalls in the budget. The negotiation between the Scottish Government of the day and the UK Government will be the critical factor, but the Labour Party has faith that that will act in our interests.

Derek Brownlee posed a question that those who are critical of the bill should answer: will they support the status quo? We will not.

Alex Salmond demonstrates well the SNP’s attitude to the bill. Most of the Government’s time has been spent undermining the Calman proposals with imaginary figures and scaremongering that Scotland would have been up to £8 billion worse off. However, when Wendy Alexander challenged Alex Salmond to publish the figures, he did not say that he would do so.

The SNP makes claims for fiscal autonomy, under which it would be prepared to take all the associated risks, but it has produced no figures whatever on that. I urge the First Minister to provide to the Scotland Bill Committee all the figures that are associated with his assumptions, so that we have full transparency and the committee can have a proper look at the information.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

I will refresh Pauline McNeill’s memory. Wendy Alexander would not acknowledge that the information on the £8 billion deficit that such a financial settlement would have produced in the past 10 years will be presented first to the committee tomorrow.

Photo of Alex Salmond Alex Salmond First Minister of Scotland, Leader, Scottish National Party

I tell Wendy Alexander that members cannot intervene on an intervention.

If that information stands up, will Pauline McNeill withdraw her support for something that would leave people in Scotland £8,000 million worse off than the current system?

Photo of Pauline McNeill Pauline McNeill Labour

As I said, that figure is designed to scaremonger. We are interested in the next 10 years. I call again on Mr Salmond to provide all the figures to the committee, which I am sure will take an honest view on them.

The analogies that Mr Salmond’s back benchers constantly draw with Ireland do not help the SNP’s case. SNP members consistently refuse to acknowledge that, when Ireland separated from the UK, it took with it substantial debt. If Scotland separated from the UK, the figures would show a substantial debt.

The Scotland Bill is the next phase of devolution. I urge all members to back the committee to do its work, so that we can make the devolution settlement stronger.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 11:32, 9 December 2010

The Scottish Government has always supported the extension of the Parliament’s powers and responsibilities. We welcome the bill and we support the general principle of the transfer of powers. However, we recognise that the bill is a starting point on which we need to build. Much work must be done to improve the bill if it is genuinely to benefit Scotland.

The Scottish Government has engaged promptly and positively with the bill, on which I made a ministerial statement. Within 24 hours of the bill’s publication, I had lodged a legislative consent memorandum. The following day, I wrote to Robert Brown and other Scotland Bill Committee members to respond constructively to the committee’s request for assistance. On Monday, I lodged a Government motion for debate that supports the bill’s general principles. However, Iain Gray and the Labour Party are leading the debate with a motion that uncritically supports a Tory bill. The danger is that the bill is a Tory tax trap that will reduce Scotland’s budget, stifle growth in our economy and limit investment in our public services. The Opposition parties want powers so that they can be accountable, to justify devolution. The SNP Government wants powers so that we can grow the economy and deliver social justice to the Scottish people. Pauline McNeill perhaps summed up the situation when she said that the bill was not about economic development.

Photo of Pauline McNeill Pauline McNeill Labour

As Fiona Hyslop was the Cabinet Secretary for Education and Lifelong Learning, will she tell the Parliament how she used her powers on education and skills to grow the economy? Does she not believe that they are important powers to improve our industries?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I used those powers constructively. As a result of measures that we have taken, 600 apprentices who would have been on the dole have been re-employed. I will not take lectures on that matter.

Regardless of the starting point in relation to the bill, it is important that we seek thoughtful and critical engagement on the details of the proposals. That is why the Parliament must not bounce the committee into a position by agreeing to a motion that fails to await the committee’s view. The motion cannot be supported unamended.

We have supported many of the Calman commission’s recommendations—indeed, we pressed for early implementation of several of them. However, we have consistently expressed concerns about some matters—particularly the financial provisions and the proposed reservations. As the United Kingdom Government says, the financial provisions represent the most significant change to the devolution settlement.

All the parties in the Parliament agree on greater fiscal responsibility, so we share a common starting point. Our responsibility now is to look at the financial package that is on offer and to consider whether we are satisfied that the provisions, as they stand, are in Scotland’s best interests. If they are not, it is for the Parliament to propose improvements to that package.

We have already provided a detailed, evidence-based analysis of the proposals in our memorandum, which we expect the committee to consider in much detail. As our comprehensive analysis shows, in their current form, the bill’s financial provisions are potentially damaging to Scotland’s economy because the only significant tax power that is to be devolved relates to a proportion of income tax, and income tax receipts tend to grow more slowly than other tax receipts. There is a deflationary bias built into the bill’s fiscal proposals. Given the rate of growth of the Scottish budget to date, we have estimated that they would have cost Scotland £8 billion since 1999.

Photo of Robert Brown Robert Brown Liberal Democrat

Will the minister clarify what she meant when she said that she thinks that the motion binds the hands of the committee? It does not do that at all. It supports the general principles of the bill, as she said she did.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I think that we are agreed that we support the bill’s general principles. The concern is that the motion overcommits the Parliament and makes a judgment on the bill’s benefits before scrutiny and analysis have been carried out. That is extremely serious indeed.

I welcome Tavish Scott’s commitment that he will look at the concerns about the £8 billion that we have raised. Wendy Alexander invited us to provide information on those concerns and on fiscal autonomy. We are happy to do so. David McLetchie said that alternatives will be considered. That is welcome. The deflationary bias in the bill must be addressed. Scotland would receive only a quarter of the income tax revenue that was raised at the higher rate and only a fifth of the revenue that was raised at the top rate. Historically, higher-rate taxpayers have accounted for a larger share of the growth in income tax receipts, but the majority of that growth would accrue to the UK Government.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I want to move on.

Control over other taxes, such as stamp duty and the landfill tax, is to be devolved, but they account for less than 1 per cent of total tax revenues. Overall, 85 per cent of the tax revenues that are raised in Scotland would still flow to the UK Government. If the Scottish economy were to grow, the UK, not Scotland, would be the chief beneficiary. Iain Gray may say that he wants to see a rebalancing of devolution, but I do not think that an 85:15 split of tax revenues is a fair balance for Scotland. The key test of whether the bill will be of any benefit must be on economic growth.

A point was made about borrowing powers. Peter Peacock said that the bill would bring “huge borrowing powers”, but the proposed £2.2 billion cap is significantly lower than the Northern Irish cap of £3 billion. The bill would restrict how borrowing could be allocated in a particular year and would not allow us to issue bonds. It would leave us in a weaker position than local authorities are in. In that regard, I welcome Tom McCabe’s acknowledgment that improvements can be made.

As they stand, the bill’s financial provisions fall short of the ambitions that not just the SNP but other parties such as the Liberal Democrats have long expressed for Scotland. If we are to grow the country’s economy and to secure the future income of our public services, it is important that we scrutinise the bill properly.

Moving on from the fiscal package, many of the non-financial elements of the bill represent welcome extensions of the devolution settlement that will enable us to move on, but on matters such as Scottish elections, the Crown Estate and the appointment of a Scottish member of the BBC Trust, it falls far short. Tavish Scott wants us to have more powers over immigration, but that is not in the bill. Liam McArthur wants control of the Crown Estate to be devolved, but that is not in the bill.

The Calman commission made other significant recommendations that are not taken up in the bill, including the proposals on the aggregates levy and air passenger duty, and there is cross-party support in the Parliament for many of those recommendations. Powers over benefits are crucial, too. Christine Grahame was absolutely right when she said that we cannot tackle social housing unless we have influence over such matters.

There is much to be done on the bill. We can welcome the general principles, but if we welcome the bill without subjecting it to criticism or scrutiny we will not be doing our jobs properly.

The Scottish Government has always supported proposals to strengthen and enhance this Parliament but we cannot support measures that diminish it or could damage Scotland’s economy.

In its current form, the bill is a mixture of elements that strengthen Scotland and elements that weaken it. We need to eliminate the weaknesses and build on the strengths. In an excellent speech, Alasdair Allan talked about how, together, we can make the bill better. Jeremy Purvis should read the Government’s legislative consent memorandum to understand how we can do that.

Parliament faces three challenges. The first is a challenge to the SNP Government to work constructively to enable the bill to progress; that is what we are doing. The second is a challenge to the Parliament on whether it is big enough to improve the bill. The third is a challenge to the Labour Party on whether its dislike of the SNP is enough to let it lead Scotland into a Tory tax trap and let Iain Gray be a cheerleader in chief in Scotland for the Tories. Will the Parliament and all the parties in it rise to those challenges?

Photo of Alex Fergusson Alex Fergusson None

That concludes the debate on the Scotland Bill.

Photo of Ross Finnie Ross Finnie Liberal Democrat

On a point of order, Presiding Officer. Will you advise Parliament under which standing order the party that lodged an amendment can end up winding up the debate?

Photo of Alex Fergusson Alex Fergusson None

It is for the Presiding Officer to adjudicate on the speaking order in a debate, and that is how the matter was adjudicated today.