The next item of business is a debate on motion S3M-8114, in the name of Iain Gray, on the Scotland Bill, which is United Kingdom legislation. I invite members who wish to speak in the debate to press their request-to-speak buttons. I repeat that time is extremely tight and therefore ask members to be punctilious in their timekeeping.
Today is important for the Scottish Parliament and all those who believe in devolution for Scotland. As the Scotland Bill Committee’s report makes clear, the Scotland Bill provides for the first time meaningful tax-raising powers and decentralisation from a UK Treasury that, until now, has collected 96 per cent of tax revenues. I put on record my gratitude to the politicians of the devolution parties who have made the Scotland Bill a reality. This work will result in radical changes to our young and developing Parliament. Whereas others talk about Scotland’s future and what might be, we, the parties that support strong devolution in the UK, have ensured a settlement that contains new and radical powers. I also pay tribute to my colleague Wendy Alexander, who brought about the Scottish commission on devolution, and to Kenneth Calman and all the commissioners for their excellent work.
In its analysis, its explanation, its rationale, its recommendations and its conclusions, the committee’s report is a great piece of work. However, it is a matter of genuine regret that the present Scottish Government has been unwilling to participate. It could have chosen to accept the will of the Parliament at any stage: when the Calman commission was set up; when the commission consulted and engaged and when the quality of its analysis, its arguments and indeed its report became clear; when this Parliament endorsed the report; when the successor UK Government accepted the commission’s recommendations; or even last December, when this Parliament agreed the Scotland Bill’s general principles. However, that it did not do so is only to be expected. Today is the last chance for the Scottish National Party Government to be constructive. A change of heart would be welcome.
The member does not recognise that, but I will come to that. Until now, Fiona Hyslop has argued for independence or full fiscal autonomy to the death. Nothing else will do; it is the only issue in town—despite the fact that the public have not supported the SNP’s view. Indeed, these days it is not clear whether its policy is full fiscal autonomy or independence, but perhaps that can be cleared up today.
Fiona Hyslop has participated, however, in misinformation and scaremongering. Until now, her party has stood outside the process for change for Scotland, the constitutional convention and so on. Need I say any more?
We should be grateful to the Scotland Bill Committee for its analysis of the issues, some of which I want to draw attention to in the short time available. The first issue is an understanding of the bill’s place in the development of Scottish devolution. [Interruption.] Bruce Crawford seems to think that that is amusing.
The Scotland Act 1998 was by any standard a landmark piece of legislation. It gave the Parliament very wide powers and, as the Calman commission showed, it got the bundle of legislative and executive powers about right. Moreover, it provided mechanisms to make changes and adjustments in the light of experience. Those mechanisms have been used many times, almost invariably to add to our functions.
However, with the benefit of hindsight, we can see that the 1998 act probably did not get the financial system right in the long run. Relying on the Barnett formula from Westminster might have served us well in many ways, but it is time to progress the settlement and be more accountable for what we spend. Given that we spend public money, we should also be responsible for raising some of it.
The second Scotland Bill will also be a landmark in that it will give Parliament powers over nearly a third of the revenue supporting devolved spending and will allow tax powers to be changed and devolved in the future. That is the big picture that the committee has set out very clearly and which is, in essence, why the Parliament should agree to the Scotland Bill proceeding.
I was struck by the member’s assertion that the Scottish Parliament would be responsible for levying almost a third of the money that it receives. That is simply not true. The figure is nothing like 30 per cent. Both the Calman commission and the Secretary of State for Scotland included the council tax in the figure, which the Scottish Parliament does not raise. The true figure is 25 per cent. It is important not to overegg the pudding.
I have heard Tricia Marwick say that before, but the last time I heard her say it, she said that the figure was 15 per cent. I am reading from the committee’s report, although I am aware that she made a minority submission to it.
We owe the Scotland Bill Committee for a second service. It examined in huge detail the criticisms that were made of the bill and, as a result, brought about a rounded set of recommendations that will enhance the bill further if enacted. It would have been easy to have dismissed the criticisms as no more than whatever the bill’s opponents could dream up to discredit it, but the committee considered them on the basis of detailed evidence.
The commission on devolution presented a problem for the SNP, because it gained support and credibility. Members will remember the Scottish Government making the accusation in the chamber and on many platforms that Scotland would have lost £8 billion if the Calman proposals had been in place. Alex Salmond and Fiona Hyslop said that that is what the Scotland Bill would cost the Scottish budget. They called it the “deflationary effect”. I always wondered what remit officials were given to come up with that one. Now we know. The committee was more analytical than the Government, and it clearly set out that that conclusion was wrong, inaccurate and deliberately misleading. The report shows in detail that, if the plans were introduced from today, then, on the Scottish Government’s basis, they would increase rather than decrease the Scottish budget. Indeed, if the income tax base were to increase in the future, Scotland would also gain, which is another incentive to have a growth strategy. The SNP chose one year of the devolution project, projected forward and got the figures that it was after, but it has been found out.
There was a daft notion that income tax is somehow a declining tax. Tell that to anyone who pays it. The committee’s careful analytical work shows quite the opposite, of course. Many experts agreed that the package of taxation powers, income tax and a smaller number of taxes is sensible and the right place to start the process of fiscal devolution. Such an approach is found in many other federal and devolved nations.
Finally, the committee reported on the absurd claims about the economic growth that would follow if we moved to the full fiscal fairyland that the Scottish Government wants to inhabit. The committee dealt thoroughly and decisively with that matter. It got to the bottom of such claims, and that is perhaps not happy reading for the Government. The SNP has continued to claim that full fiscal autonomy leads to growth. That is an unfounded assertion; it is a fallacy. Indeed, the First Minister specifically stated that full fiscal autonomy would lead to 1 per cent growth per year. He founded that statement on the work of two professors who claimed that a 1 per cent increase in revenue devolution at the United Kingdom level might be expected to increase the country’s gross domestic product by 0.9 per cent. It is now clear that the Scottish Government misused the evidence of Professor Hughes Hallett and Professor Scott. More important, the committee was able to draw out that there is no such link. Even Reform Scotland, which has campaigned for fiscal responsibility, agreed with the committee that things entirely depend on what is made of the powers. Higher growth should be the objective of any future Government, but more fiscal powers in themselves will not achieve that.
The necessary adjustment in the block grant that the committee identified is the important thing to get right. It is obvious that there will be uncertainties in the first years, and stability in Scotland’s financing and accuracy in establishing the Scottish tax base are needed. The Scotland Bill Committee made the sensible suggestion that there should be a review in 10 years’ time. The radical suggestion by the committee that an overall limit on increased borrowing powers should be markedly higher is also sensible. The examination of tax bands and ensuring that Scotland gets parity in any future change to corporation tax is forward thinking.
I recommend that the Parliament passes a legislative consent motion that refers to the various suggested amendments in the report. This will not be the final word. After Westminster, we will consider the issue again in a future session of Parliament. It is correct to do so. If we do that, we will have served the people of Scotland well.
That the Parliament agrees that, further to motion S3M-7550 passed on 9 December 2010 supporting the general principles of the Scotland Bill as introduced in the House of Commons on 30 November 2010, the Bill be considered by the UK Parliament; invites the UK Government and the UK Parliament to consider the amendments and proposals made in the report of the Scotland Bill Committee, and looks forward to considering any amendments made to the Bill with a view to debating them in a further legislative consent motion before the Bill is passed for Royal Assent.
This debate is a staging post in the Scotland Bill process, and the Scotland Bill is a staging post on the constitutional journey to achieve more powers and responsibilities for the Scottish people.
The SNP Government has been constructive in its approach. Our motion in December welcomed the general principles of the transfer of powers, and our motion last week and amendment today agree to further consideration of the bill, apart from four areas of reservations and transfer of power away from this Parliament.
Today is an opportunity for Parliament clearly and unequivocally to call for the bill to be improved, building on the work of the Scotland Bill Committee. We regret that the bill is a missed opportunity. It could do so much more to benefit our nation, with greater transfer of financial responsibility to achieve economic growth and jobs for Scotland.
We have continuing concerns about fundamental flaws in the financial provisions, which will need serious surgery to work. However, there are seven years before those provisions are expected to come fully into force, and in that time we expect the Scottish people to demand far more fundamental economic and constitutional powers to build a better nation.
Today is an opportunity for the Parliament to make clear, as the committee has, that we need to consider the bill again in our next session. Further consent will be needed once Westminster shows how far it will go to improve the bill.
We still think that there are fundamental flaws in the income tax proposals, not least because we have no idea how the Treasury will adjust the block grant. There is a danger that the Parliament could support a pig in a poke, unless there is an opportunity over the next seven years to improve that aspect. The bill can be improved. Consistent with our motions in December and last week, and our amendment today, the Government will back the motion if its amendment is unsuccessful.
In the meantime, the Scottish people have an opportunity in May to influence the bill. If they want the bill to be stronger, with more financial responsibility, they can vote for the SNP. If they just want a funding mechanism change, they can vote for someone else.
I am moving on.
The Scottish Government has provided the impetus for the current national debate on the way in which Scotland is governed. Our position is clear—only independence would allow Scotland to reach its full potential.
Jeremy Purvis rose.
However, we recognise that some, including Mr Purvis, have other sincerely held views. Hence our national conversation provided a detailed and ambitious vision of greater responsibility for Parliament and for Scotland and its people.
We have produced detailed proposals for a referendum, including a three-way referendum embracing devolution max as one of the options. A schism, a split, a chink of light in Conservative unionism, in the shape of Margaret Mitchell, shows that some people might be persuaded.
The Scottish Government is committed to giving the people of Scotland the right to have their say—a choice that Opposition parties wish to deny them. We are therefore happy to support Margaret Mitchell’s amendment if ours is defeated—unless she is about to say something that I disagree with.
The member might want to look closely at her amendment, because it talks about fiscal powers.
The Government has taken the Scotland Bill on its merits. We support those parts that would benefit Scotland and resist those that would not. I acknowledge the work of the Scotland Bill Committee. The Government agrees with a number of its recommendations. I am pleased that the committee has agreed—in full or in part—with 10 of the 19 improvements to the bill that the Scottish Government suggested in its LCM in December. However, as with the bill, the Government disagrees profoundly with parts of the committee’s report. We remain of the view that full financial responsibility is the best way, short of independence, for Scotland to improve its economy, increase jobs and fulfil our potential.
It is regrettable that Pauline McNeill, with satisfaction, tried to imply that there is a question about whether fiscal responsibility can improve the economy. The evidence that was provided showed that the opportunity to improve our economy has two elements. One is that the mix of tax and benefits would allow integration and provide a one-off improvement. The second aspect, as Reform Scotland clearly said, is what we do with the powers. In contrast, under the Scotland Bill, responsibility for key taxes would remain reserved. Corporation tax, green taxes, fuel duty, North Sea revenues and excise duties would all remain outwith Scotland’s control. However, I am encouraged by the committee’s recognition that the bill can be only the first steps. I am particularly encouraged by the committee’s comments on higher rates of income tax and corporation tax.
The Government is clear that the financial proposals in the bill in their current form have an inherent deflationary bias. I reassure Pauline McNeill that that is the view of the office of the chief economic adviser. I would be cautious about casting aspersions on such professional advice. The proposals would have cost the Parliament £8 billion since devolution. No self-serving assumptions about the future, selective analysis of historic trends or vague half-promises about there being no detriment can alter that fact.
The only assurance or comfort that Pauline McNeill offers is that, somehow, in a period of slashing and burning of public finances in the next four years, the income tax proposals in the bill become attractive. Perhaps the member would like to explain why that is any justification whatever.
As far as I remember, 1999 was the year in which the Scottish Parliament was established and devolution began. The projections that were provided to the committee showed that there would have been a £10 billion deficit under the proposal and that, rolling forward, there would be an additional problem to 2014-15. The member might have benefited from reading some of the evidence that was provided.
I am moving on.
It is important to point out that, although the bill seeks more powers for the Scottish ministers, it provides a net loss of powers to the Scottish Parliament. The Parliament stands to lose three powers and gain only one. The Government has argued against the proposed reservations in principle, for which we make no apology, and in the specific cases.
On insolvency, it is clear that the rules for which the Parliament has competence are an integral part of Scots law. It makes no sense for those to be decided at Westminster, and the Calman commission did not make such a recommendation. I am pleased that the committee agrees with the Scottish Government that social landlords should be removed from the provisions. That is why it is unfortunate that, on Monday night, before this Parliament has had a chance to support the bill committee’s report, the Westminster Parliament took a decision and voted against the committee’s recommendation.
On health professionals, the committee proceeded under a misapprehension that the current situation is an “unintended consequence” of the drafting of the Scotland Act 1998. The current arrangements, including the role of the Parliament, were codified in the UK Health Act 1999, which was introduced as a bill in January 1999—shortly after the Scotland Act 1998 was passed—and which received royal assent before we assumed our full powers. That shows that the current system was understood and intended at the time. The current system ensures consistent regulation throughout the UK and, crucially, it ensures that the content of regulations reflects Scottish qualifications and systems. The issue is not minor. The careers, qualifications and futures of individual health workers in Scotland will be affected, as will their employers’ plans. It is therefore no wonder that, in evidence, the health professions whose regulation is currently devolved unanimously supported the Parliament’s current role.
There are other parts of the report that the Scottish Government welcomes and which reflect the Government’s evidence to the committee. For example, we welcome the recommendations on the need for clear proposals on reducing the block grant; the early establishment of the joint finance committee; more flexible borrowing powers; joint governance of Her Majesty’s Revenue and Customs; and greater powers for the Parliament on drink driving, speed limits, the Crown Estate, MG Alba and marine conservation.
I am grateful for the committee’s attention to our arguments on those points. The Government also welcomes the conclusion that clauses should be removed from the bill, especially proposals on international obligations and, as I have said, social landlords. However, I must alert the Parliament to the fact that, again, on Monday night, Westminster voted against the committee’s recommendations in that regard.
I have other concerns but, primarily, we have to reflect the fact that the bill represents a missed opportunity. There is consensus on the need to develop our constitutional settlement and there is consensus about the need for greater financial responsibility for this Parliament. Further, there is a UK Government that is committed to decentralisation and localism and which contains a party that is committed to home rule. Therefore, we face an opportunity to rebalance the political and financial relationship within the United Kingdom to ensure that Scotland pays its way not for 15, 25 or 33 per cent of its expenditure but for 100 per cent. That is what responsibility is all about.
The bill could give the Scottish Parliament the power to make its own judgments about its own competence through a process that would be similar to the democratic process that we have just seen in Wales, where our colleagues, with the support of the Welsh people in a referendum, have decided to extend their legislative competence.
For the Government, the Scotland Bill Committee, this Parliament and the people of Scotland, the bill represents a staging post and unfinished business. First, the Scotland Bill Committee has identified changes that should be made to the bill and has suggested immediate action on important issues—the establishment of a joint Exchequer committee and more detail on the block-grant reduction mechanism, as it is essential for the Parliament not to sign up to a pig in a poke. Secondly, the committee has identified areas for greater devolution outwith the bill, in relation to the Crown Estate, marine conservation and benefits policy. Thirdly, the committee has identified areas where the financial powers can evolve, in relation to higher rate income tax, corporation tax and other new taxes. Fourthly, this Parliament should become responsible for the big issues that affect Scotland’s future, such as the economy, jobs, poverty and welfare, energy and the environment.
The Scottish social attitudes survey that was published in December 2010 found that 62 per cent of people favour significantly more powers for the Scottish Parliament and that, on tax and on welfare benefits, 57 per cent and 62 per cent of people, respectively, want the Scottish Parliament to make the decisions for Scotland. The people of Scotland are far ahead of the Calman commission, the Scotland Bill, the UK Government, and the Opposition parties. They are ambitious for their Parliament and their nation. This Government is, too, and will continue to press for the Scottish people to be allowed to govern their own affairs as a nation equal among nations.
I am closing now.
Throughout the process of constitutional debate that was initiated by the Government in the national conversation, we have been open to ideas that would benefit Scotland, wherever they have come from. We continue that approach with regard to the Scotland Bill and the report of the committee. As detailed in our amendment, we believe that the Parliament should not support parts of the bill. Most important, we believe that it is vital that the UK Government and the UK Parliament respect the will of this Parliament.
The ball is now firmly at the feet of the unionist parties in Westminster and, in their votes over the next 12 days, we will see whether they are prepared to pay any attention to this Parliament and its committee or whether they need a firm reminder at the election of their need to do so.
However we vote on the Government amendment, we must all unite to support the committee’s conclusion that the bill must come back to this Parliament once it has been considered by the UK Parliament so that we can consider it as a whole before deciding on final consent.
I move amendment S3M-8114.1, to leave out from first “the Bill” to end and insert:
“Scotland is best served by a Scottish Parliament that has the full range of powers and responsibilities necessary to improve Scotland’s economic performance and promote sustainable economic growth; agrees that the current provisions of the Scotland Bill do not provide those powers and responsibilities; recognises the improvements to the Bill suggested by the Scotland Bill Committee but is of the view that further improvements are needed to provide the financial responsibility that Scotland needs and to address other flaws in the Bill; nevertheless agrees that the UK Parliament should consider the Bill, apart from the provisions that reserve insolvency and the regulation of health professions (clauses 12 and 13) and allow UK ministers to implement international obligations in devolved areas (clause 23) and partial suspension of Acts subject to scrutiny by the Supreme Court (clause 7), and further agrees that, given the amendments requested by the Scottish Parliament, the incoming Scottish Parliament should consider the Bill as amended by the UK Parliament in a further legislative consent motion before the Bill is passed for Royal Assent.”
Today’s debate is hugely important, and I fully recognise that, on the issue of the fiscal powers that should be available to Parliament, members will argue from the basis of different but equally deeply held convictions. Whichever perspective we come from, there can be no doubt that the tax-raising proposals that are under consideration in today’s legislative consent motion represent a significant change to the existing fiscal powers that are available to the Scottish Parliament and will have potentially far-reaching consequences for Scotland as a nation and within the United Kingdom.
My referendum amendment brings to the debate an aspect that, hitherto, has not been discussed and raises the important democratic principle that is at stake. On that basis, I seek the support of every member across the chamber in putting it to the UK Parliament that a referendum be held on the fiscal powers that the LCM proposes. It would be a dark day in the evolution of the Scottish Parliament if that fundamentally important issue fell on the sword of partisan politics, and I am therefore calling on all parties to give their members a free vote on the issue.
This is an amendment speech. With his political experience, Mr Rumbles should know that.
The Parliament has justifiably been proud that, since its inception, it has been much more user friendly than Westminster and that MSPs have been far more accessible to the public than their counterparts south of the border have been. However, in setting up the Calman commission, in the commission’s remit and in the subsequent consideration of the commission’s recommendations and of the Scotland Bill Committee’s report, MSPs have been guilty of talking largely to themselves or academics.
Politicians know that constitutional change is not a major issue for constituents. The Calman commission was convened not to respond to public clamour for change, to make Holyrood more accountable or even to mark the watershed of 10 years of devolved government; rather, as the December 2007 approval date indicates, the commission was the unionist parties’ reaction to the advent of a minority SNP Government in May 2007.
In the first instance, the commission’s remit was to recommend changes to the constitutional arrangements to enable the Scottish Parliament to serve the people better. In other words, Holyrood politicians decided on constitutional navel-gazing when, in the real world, it was widely recognised that the elephant in the room was the desperate need to reform how business in the Parliament is carried out. Insufficient debating time is allowed for important issues and inquiry reports, and committees are hard-pressed to undertake post-legislative scrutiny. Addressing that fundamental issue would without doubt serve the people of Scotland better.
The commission’s remit also focused on improving the Scottish Parliament’s financial accountability and continuing to secure Scotland’s position in the United Kingdom. That is where the main debate has remained.
Those who favour the commission’s proposals and what has been described as Calman plus—in the form of the recommendations in the Scotland Bill Committee’s report—cite the Calman consultation as the mandate for progressing the tax-raising provisions and other provisions that we are considering today.
I acknowledge whole-heartedly the commission’s aim to give
“prime importance to engaging with the public”, but it is worth examining in detail how successful it was in achieving that objective. A questionnaire was available online and on paper and 921 responses to it were completed. The commission said that that was an important strand of its engagement strategy, but it also said:
“As respondents were entirely self-selecting the results, although interesting and valid for that group, constitute a non-random sample not necessarily representative of public opinion.”
The commission held 12 events in 2008 in 11 locations. The events were widely publicised, but only about 300 people attended them. The commission had 150,000 information leaflets distributed to about 7,000 premises. To put that in context, Scotland’s population is about 5.1 million, and more than 140,000 people live in Dundee alone. It is clearly impossible to claim that the consultation represented the views of the people of Scotland.
I am sorry—I am in my last minute.
The only way to ensure that the Scottish Parliament genuinely seeks the views of and listens to the people whom it represents on this most important of all issues is to hold a nationwide Scottish referendum. I ask members—regardless of the side of the fiscal powers debate on which they fall—to put party politics to one side and to support the referendum amendment, on the basis that the public have a democratic right to decide whether to transfer the powers that are described in the LCM, such as those on income tax, from MPs to MSPs.
I have much pleasure in moving amendment S3M-8114.2, to insert after “Committee”:
“together with the proposal that a nationwide referendum be held in Scotland on the fiscal powers of the Scottish Parliament on the grounds that the public has a democratic right to decide whether to transfer powers such as income tax from MPs to MSPs”.
I am pleased to speak in support of the legislative consent motion in the name of Iain Gray, which is supported by Annabel Goldie and Tavish Scott. In so doing, I commend the coalition Government at Westminster for taking forward the work of the Calman commission to enhance the powers of the Scottish Parliament. I was a supporter of greater fiscal powers for this Parliament long before it was fashionable in my party to be so. I am particularly pleased that we will have a more financially accountable Parliament in the future—one in which politicians will be held to account not only for the money that they spend but for how it is raised.
At the outset, I record my thanks to the members of the Scotland Bill Committee who did a huge amount of work in scrutinising the legislation and producing their report—or should I say reports. We have not only the excellent committee report, but the remarkably churlish and petulant minority report, the latter of which goes on about “political motivation”, “bias and distortion” and damage to the reputation of this Parliament.
I pay particular tribute to the committee convener, Wendy Alexander. Wendy will shortly leave the Parliament after serving with distinction for 12 years. Wendy and I have often crossed swords in the past, but I have also worked closely with her. Some years ago, with Alex Neil and George Lyon, we set up the cross-party group on the Scottish economy. Although I have often disagreed with Wendy, I have nonetheless always respected her intellect. The detailed and comprehensive report that is before us is a fitting legacy of her period in the Parliament.
I never imagined that Wendy Alexander’s last weeks in the Parliament would see her cast in the role of a vicious and remorseless mugger—someone who abuses committee witnesses. According to some, Wicked Wendy, ably assisted by her henchman, Dastardly David McLetchie, ganged up to terrorise poor, innocent and unsuspecting professors of economics who came before the committee to have their say on the Scotland Bill provisions, apparently not for one moment suspecting that they might be asked to justify their opinions. Indeed, in the eyes of some members on the SNP benches, it was extraordinarily impertinent of Wendy Alexander, David McLetchie and other committee members to dare to ask the so-called experts about their published views on the pros and cons of fiscal devolution or full fiscal autonomy. Far from diminishing the role of the committees in the Parliament, the Scotland Bill Committee did exactly what a committee is supposed to do: it rigorously challenged and tested the evidence that it received. To do anything less would be a disservice to the work of the Parliament. For that reason, I commend Wendy Alexander and her colleagues for the work that they did.
Not at the moment.
The proposals in the Scotland Bill will give the Scottish Parliament control of around one third of its revenues. In so doing, we will create for the first time a Scottish Parliament in which politicians are held to account for how a sizeable proportion of the money that they spend is raised. For the first time, politicians in this place will require to set an income tax rate to fund their spending plans—a rate that may or may not be in line with that which is payable south of the border. That is an important step change. To my mind, it will ensure that Scotland will be better governed in the future. I agree with the committee's conclusion that the Scotland Bill proposals will give the Scottish Parliament very wide fiscal powers.
Does the member acknowledge that to rely on only one tax—income tax—is a heavy risk? This year alone, we raised £2 billion from the bank levy and £12 billion from the VAT increase. There is also the £3 billion from the increase in national insurance payments and £500 million from the increase in fuel duty. In this year alone, such tax variations would diminish the tax take for Scotland under the Scotland Bill provisions. Does the member acknowledge that there is a risk in relying on income tax alone?
Of course, it is not a single tax that is being devolved, but a range of taxes. We already have a basket of taxes: non-domestic rates, council tax, stamp duty and landfill tax are all devolved. I do not accept the minister’s characterisation of the situation.
The Scotland Bill Committee robustly scrutinised the evidence that it received for and against the proposals. Of course, the SNP proposes that all taxes in Scotland should be levied by the Scottish Parliament. As the committee made clear in its report, the SNP produced no detailed plan for the proposal. Paragraph 42 of the report makes it clear that the Scottish Government's plans consisted of a single side of paper—not quite the back of an envelope, but not far away from it.
There has been no attempt by Scottish Ministers to engage constructively in debate on the detail of how the financial provisions in the Scotland Bill might be improved. No amendments or written suggestions for improvement were received during evidence taking. Ministers’ ideas were finally submitted to the committee as late as 20 February—more than 10 weeks after the bill’s publication. That is hardly a serious attempt to engage with a serious process.
No. The minister will forgive me, but I have already given way once.
In paragraph 43 of its report, the committee states that it did not examine in detail the option of full fiscal responsibility
“as there was no detail to examine.”
“no costings for these plans” and
“no material explaining the practical implications for taxpayers, employers, Scotland’s financial sector or collection plans.”
If SNP members feel that the committee did not give sufficient attention to the option of full financial responsibility, that is the fault of no one but the Scottish Government and the SNP. If they had wanted to engage with the process, they had the opportunity to bring forward serious proposals, but they failed to do so.
We are now in the extraordinary position that the three unionist parties in the Parliament are supporting legislation to devolve greater powers—and, importantly, financial powers—to the Parliament. However, the SNP—the party that is supposed to believe in independence for Scotland—is dragging its feet. It has completely failed to engage with the debate and has failed to give meaningful evidence to the committee. SNP members of the committee have resorted simply to playing party politics and to crying foul when the argument has gone against them.
The proposals in the Scotland Bill will strengthen the Parliament and our Government in Scotland and will make for better politics in the future. I commend the Scotland Bill Committee and, in particular, its convener on their sterling work. I have pleasure in supporting the motion.
This is probably the last major debate of the session. It is highly appropriate that it should be on the Scotland Bill and the committee report on it. Ultimately, it is about the place of the Parliament and of Scotland within the evolving constitutional framework of the United Kingdom.
The report confirms the Calman commission’s view that the Scottish Parliament has been a great success, that it has embedded itself in the constitution and that its basis is sound. It is, perhaps, no particular surprise that the report broadly backs the proposals in the new Scotland Bill. However, many people—they obviously include Fiona Hyslop—have been and will be impressed by the robustness both of its analysis and of its recommendations for improving the bill and the operation of the new powers for which it provides.
It is highly appropriate for me to begin by thanking the clerks, advisers and researchers for the huge effort that they put into the process, as well as fellow members of the Scotland Bill Committee, all of whom—minority view or not—can take credit for the strength of the report.
The Scotland Bill is being delivered by a Liberal Democrat Secretary of State for Scotland, with Conservative partners in the coalition Government and with the support of the Labour Party. It is a step change for Scotland that will put in place a solid and federal framework for the future, thereby strengthening Scotland and the United Kingdom immeasurably. I pay tribute to the Secretary of State for Scotland, Michael Moore, who appeared before the committee twice and has led from the front on the issue. He has launched a Scotland Bill that more than meets the aims of the Calman commission and that is as historic in its time as the original Scotland Bill was in 1998.
I want to concentrate on the constitutional framework, which will, in retrospect, prove to be the most significant aspect of the bill. The reforms provide the framework for the future: not just any future, and not for a slippery slope to independence or to fictional Valhallas such as full fiscal responsibility, but a future that is built on what I can justly describe as quasi-federal lines, consisting of a stronger Scotland in full partnership in a strengthened United Kingdom. In short, the bill will create the sort of structure that is to be found in many “normal” European democracies such as Switzerland, Spain and Germany.
I greatly appreciate the analysis, but I wonder why the member would go to such lengths to ensure that we do not have sovereignty. We can enjoy equal sovereignty in a better way than we can enjoy federation in an unequal partnership.
I respect Margo MacDonald’s views on these matters, which are shared by others, but she must accept that other legitimate and, perhaps, more “normal” arrangements are to be found in other constitutional jurisdictions.
There is a developing framework around the potential for the Parliament to acquire new tax powers in the light of experience. There are golden rules around the use of the borrowing powers, mechanisms for change in the grant, a more mature relationship with the Treasury and HM Revenue and Customs, and a wider role for the Office for Budget Responsibility.
If the member does not mind, I will make some progress first.
The committee report is bold in arguing that the significant borrowing powers that are being provided for should be based on transparent principles and that, after the current financial pressures ease, they might imply in practice higher borrowing limits and less Treasury interference in detail—although even the Scottish Government recognises the macroeconomic responsibilities of the United Kingdom Government.
The committee makes the important proposal, which echoes through Liberal Democrat contributions over the years, that there should be a joint exchequer committee with statutory underpinning that acts as a powerful forum for intergovernmental discussions on the wide range of fiscal issues that are now in play, and which is able to sort out the differences over the scope for new taxes, the cost of tax collection and issues about the grant. That is part of the respect agenda, but the institutional framework displays the growing maturity of the arrangements. As the report states, they are parallel to the set-up in other federal and quasi-federal countries.
As I did at the launch of the report, I remark today that the most notable feature of the report is its confidence—confidence in the future; confidence in our ability to say to Westminster, “Yes this is great, but we need improvements too”; confidence that comes from developing a vision of the future that is signed up to on a consensual basis by the bulk of political and public opinion in Scotland; and confidence in the strength and potential of Scotland in a United Kingdom that will, itself, be strengthened by the proposals.
It is the SNP that has been all over the place on the matter. If anything was clear, it was that it was against key aspects of the bill, notably the income tax proposals, and against anything at all, however sensible, that involved re-reservation. SNP members were even against the re-reservation of Antarctica. Whether they have in mind some latter-day Darien scheme, I am not quite sure. Today, it seems that the SNP is no longer against the income tax proposal, which is not mentioned in its amendment, and nor does it seem to be against all re-reservations on principle. I wonder whether I detect some delicate shift in the balance between the fundamentalists and the gradualists that has hitherto remained out of sight.
As I said, the amendment today is completely consistent with what we put forward last week. If the member looks at what we said last week and in December, he will see that we want to improve the financial provisions. Will he point me to where the Scotland Office has explained the block adjustment? How can he be confident, with any certainty, that the five pages of explanation are good enough? Does he agree with the committee that we need more detail?
I will come to that, but it is the movement in the SNP position that I am talking about at the moment.
Members may recall, as I certainly do, that the First Minister mocked the Calman process, as he did the constitutional convention, and yet it is the Calman process that has the vision and the philosophical and economic underpinning and framework. Indeed, we hear today the heavy sound of bandwagons being jumped on by the SNP. It is the First Minister and his Government who are diminished by their schoolboy puffs and exaggerations, by their sniping from the sidelines, and by the economic myths that seem to be inseparable from the independence argument, even if the efforts of the public relations people in the SNP are temporarily clothed in the garments and pretentiousness of government.
The report does one other thing: it cruelly exposes the inadequacies of the SNP position, its slogans and its far-fetched claims for the land of milk and honey that would come with independence. Independence is a damaging irrelevance for Scotland.
Those claims have been destroyed as the nonsense that they always were. Starkly, on pages 75 and 76, the report lays out for all to see the essence of the SNP’s misrepresentation—its very own dodgy dossier. The official SNP Government document of January 2011 and the misleading changes in it that exaggerate further the already polemic and debatable claims of Professors Hughes Hallett and Scott.
I believe that the report will prove to be a seminal document that sets the stage for the future of our country. As Murdo Fraser has already said, it is a fitting finale to the political career of Wendy Alexander, who has been there throughout the Parliament’s preparation and its journey to this point. Wendy provided much of the intellectual firepower that led the committee, but I hope that she and the Parliament will forgive me when I observe in conclusion that the Scotland Bill walks in the shadow of Jo Grimond and Russell Johnston, of David Steel and the Steel commission, to which I was proud to contribute, and of the many Liberals and Liberal Democrats who trod the path and argued for the cause, when others fell by the wayside, of a Scottish Parliament with substantial tax powers, and of home rule for Scotland within a federal United Kingdom—a cause that we have long believed in, which gives us strength and diversity, and which reaches back to the unfulfilled demands of the Scottish commissioners of union in 1706.
In conclusion, the Scotland Bill is not the end of that road, but we can increasingly see the solid framework of the future of our Scotland and our United Kingdom in this bill, behind which I urge our Scottish Parliament to unite in the vote tonight. I support the motion.
I pay tribute to my committee colleagues, who are all highly experienced parliamentarians in their own right, and to the clerks, to the Scottish Parliament information centre and to our advisers. Ours was the first-ever committee dedicated to considering a bill. According to the spin, we would simply rubber-stamp it, we would not study the Government’s alternative and we would make few improvements. In short, we would fail.
However, the committee’s collective commitment was to a report that was strong on analysis, rigorous about the evidence and short on rhetoric. Let me give just one highly topical example of the improvements that the committee is recommending. This morning, the Treasury announced that it intends to claw back end-year flexibility moneys; yet, if the recommendations of our report were implemented, such a step would be impossible—in the future, Scotland would have its own bank account including EYF moneys.
It is a commonplace among commentators these days to note the partisan nature of contemporary Scottish politics. However, this initiative has from beginning to end been cross-party, consensual and co-operative among the participating parties. I agree with Robert Brown’s recollection of the long home-rule tradition that many of us are proud to stand in. It is in that spirit that I recall more than two decades ago, as the claim of right was bringing forth the Scottish constitutional convention, learning from Donald Dewar that Scots prefer cross-party consensus when it comes to constitutional change. Donald’s inclusiveness shaped the first Scotland Bill, and this second Scotland Bill has been inspired by the same principle of cross-party working together to do the right thing by the nation.
Fourteen years ago, the first Scotland Bill got the powers of this place right for the times; this second Scotland Bill can get our finances right for the future. Both bills have set a framework and both bills have begun a journey. If enacted, the bill will deliver the most far-reaching transfer of financial powers from London since the creation of the union. Let me highlight why I believe that it deserves support.
First, the bill will lead to a real budget because, in the future, all Scottish political parties will have to make decisions about raising money as well as about spending it. No longer will Holyrood politicians of any persuasion be able to indulge in a lazy London blame game.
Secondly, the bill will expand the powers of the Parliament to invest in the nation’s future. Such powers could help to pay for the Forth road bridge, fund a major housing programme or support far-reaching decarbonisation. They will ensure that, in tough financial times, we continue to invest for our future.
Thirdly, the bill will allow our successors to make important choices. For example, on the future of Scottish universities, should not our successors have the right to consider a graduate tax? On the scourge of alcohol, should not our successors have the power to shape a proper pricing solution? When it comes to the climate change targets that we have set, should not our successors have the ability to create new financial incentives? Those who support the bill today will put that power into this Parliament’s hands. The bill is right for the times, right for the Parliament and right for the people of Scotland.
The committee’s recommendations fundamentally strengthen the bill’s commitment to consultation, co-decision making and future co-operation. That is good for Scotland and good for the United Kingdom. The report is not a “Take it or leave it” ultimatum, but a menu for dialogue.
I also pay tribute to the previous UK Government for embarking on the process in partnership with this Parliament, and to the current UK Government for living up to its respect agenda. It is long overdue that the Scottish Government has come on board. The SNP was big enough to think again in 1997, and it is time for it to do so once more.
The Parliament is, as Donald Dewar said, about shaping our future. Divided though we be on the destination, the bill serves Scotland better and deserves support from all parties. It is, quite simply, in the national interest.
It is time to back the bill.
I am a nationalist; I believe in independence. However, others have said that devolution is a process and not an event, and the same is true of independence. It has become clear that the Scotland Bill is one step in the right direction, but it does not go far enough, as far as I am concerned.
The committee recognised some of the bill’s shortcomings but not, unfortunately, all of them. I will start with the areas of the bill that the committee has got right. There are bits of the report that clearly say that the whole committee agrees with a provision.
There is no doubt that the SNP has engaged with the process. We have done so fair-mindedly and openly, given the fact that we do not agree with the end point that the unionist parties have.
It will not be a surprise that I—and the SNP as a whole—support the devolution of responsibility for control of airguns. We campaigned for many years for the Parliament to control airguns. I well remember being told by members in other parties that it was unworkable and unnecessary, so I welcome their conversion to the cause.
Likewise, I am delighted that the Parliament will gain the powers that are needed to make our roads safer. The committee was correct to recommend that the bill’s provisions on speed limits and drink driving limits be extended.
Although I welcome those parts of the bill, there are other policy areas on which the bill could, and should, have been more ambitious. An obvious example is the Crown Estate commissioners. The bill’s proposals are extremely limited and do not reflect the importance of the Crown Estate commissioners’ activities to Scotland’s future—especially with regard to renewables. On the weight of the evidence that the committee received, the UK Government’s proposals fall far short of what is required. I am glad that the committee recommended a review of the current situation with all options on the table. Based on the evidence that the committee heard from a wide range of sources, my preferred option would be for the Crown Estate to be fully devolved to the Scottish Parliament.
The most heated debate during the committee’s deliberations was over the financial aspects of the bill. That said, there was agreement on some important aspects. Most notably, the committee was united in its view that the revenue and capital borrowing powers are welcome in principle but too restrictive. The limits that have been placed on both forms of borrowing are arbitrary and too low. No expert to whom the committee spoke could explain why the limits had been set at the level in the bill—nor, indeed, could UK ministers.
I fully endorse the committee’s recommendation that the borrowing powers be extended and I particularly welcome the finding that the Scottish Government should be able to issue bonds. Having proper borrowing powers would be a huge boost to the Government’s and Parliament’s ability to invest to improve our economic performance and manage our finances.
However, it is not only about financial accountability. It is about having the economic levers to stimulate growth. That is the great weakness in the bill. That brings me on to the most problematic and, indeed, dangerous aspect of the bill: the income tax proposals. Unfortunately, on that matter, there is little room for agreement. The proposals are flawed and require major surgery. I will not rehearse the arguments on deflationary bias and counter-cyclical measures, as I am sure that at least the members of the committee, if not the public, have heard enough of that. Suffice it to say that the Parliament should think long and hard about tying itself so closely to a single tax that evidence shows is declining over the long term. There is a real danger that, if we do that, we will be caught in a vicious circle in which our budget will fall but we will be unable to take the necessary steps to reverse the fall.
The Government sincerely hopes that the result of the election will drive the UK Government to reconsider the proposals and that the concerns about that particular proposal will be addressed at that stage.
Instead of putting all our fiscal eggs in one basket, we should be seeking control of as wide a variety of economic levers as possible, so that we can address the economic needs of the Scottish people. I firmly believe that the proposals that the Scottish Government put forward were sensible. They would give us a broader range of powers and, indeed, were very much in line with the proposals of the much-loved-by-Liberal-Democrats Steel commission. I find it disappointing that the Liberal Democrats, in order to seek agreement with those who do not want to make the same degree of progress, chose to tie themselves to the much less ambitious plans when the Steel commission proposals on financial matters had been adopted as a compromise position or as a staging post to independence by the Government. It is disappointing that Mr Brown and his colleagues were unable to support those proposals as part of the way forward.
It is still possible for the Parliament to work together and to play its part in making the bill better. We have already made some improvements to it through the committee’s recommendations on issues such as speed limits and borrowing, but we must go further. Perhaps the most important recommendation of the committee was that the bill should return to the Parliament after the election so that a decision can be made on the legislation in its final form. Politics has undoubtedly played a significant part in the decisions that have been made, but that will be an opportunity to reconsider the legislation and demand the full and proper economic powers that the Parliament needs if it is to deliver for the people of Scotland.
I regard it as a privilege to have served on the Scotland Bill Committee in the past three or four months. The committee did a very thorough piece of work and its report stands as a clear statement and analysis of the arguments of the day. That will be seen in the years to come.
I have said before in the chamber that it would be strange if the Scotland Act 1998 was perfect in every respect and would last for all time. It was, as we now know, mostly right in the way it divided the devolved and reserved functions between the Parliaments, but the Calman report and the bill that followed from it formed the first major review of the workings of devolution in more than a decade.
The bill addresses the big weakness of the 1998 act, which others, in particular Murdo Fraser, have mentioned—the weakness that not enough financial responsibility or accountability for what we spend was invested in the Parliament. That will be rectified by the bill, in a major adjustment to devolution. Significant new powers will come to the Parliament, and what is more, the bill sets a framework for the further devolution of powers, which undoubtedly will happen in the years to come.
The bill places Scotland firmly within the broad family of devolved Administrations of quasi-federal or federal nations, and in the mainstream of the constitutional arrangements worldwide. I make that point because we have been fed a diet for a long time, both in the chamber and more widely in Scotland, that somehow we are not a normal country. Well, we are. What is more, we have also been fed a diet—I am afraid that Brian Adam added to it just a few moments ago—that we have no significant economic levers at our disposal. The evidence to the committee—I stress that it was evidence—gave the lie to that. The evidence shows that we have highly devolved spending autonomy in Scotland. We have near total autonomy, and more than almost all other federal or quasi-federal nations. The evidence is also that making good use of that autonomy over spending is almost always more significant in creating economic growth than is having devolved tax powers per se.
The member makes an important point about the degree of spending autonomy that we have in Scotland. Does he agree with the bill’s proposals on the proportion of revenues? Currently, Scotland has 7 per cent. The bill will take it to only 15 per cent of the revenues of Scotland being under the control of this Parliament. Does he believe that that is sufficient or, like Wendy Alexander, does he believe that the proportion should grow to include, for example, excise duty and other arrangements?
The bill’s provisions will add to our existing powers over spending—which are important for economic growth—a wider basket of tax powers. We already have powers over council tax and non-domestic rates. Contrary to what has been said, with income tax coming to us, we will have a stable and buoyant tax that grows in line with growth in the economy as a whole. In addition, stamp duty and the landfill tax will be devolved to us. We have asked for the aggregates levy to come to us now, and the air passenger duty is to come to us in the future. We will have increased borrowing powers, and the committee has argued for the UK Parliament to include the issuing of bonds in that framework. The bill also contains a framework for the further devolution of new taxes in the way that Wendy Alexander described, which we could use in relation to climate change and so on.
In addition, the committee has not ruled out our having access to the higher tax bands in the future. That would not come without challenges—increased risk and volatility come with that—but we have not ruled it out for the future. Neither has the committee ruled out, in specific circumstances and under clear rules, our having limited access to corporation tax. Corporation tax is no magic bullet for promoting economic growth, as it is sometimes portrayed. It is complex in its administration, and the proposal raises fundamental competition issues between the rest of the UK and Scotland, in that it could create a race to the bottom in taxation rates. Cannibalising our tax income would be to no one’s benefit.
I am afraid that I cannot, because I am short of time.
If the UK wants to look at that as part of wider UK regional policy, Scotland should be at the table in the discussions and we should keep that option open. Overall, the bill will result in our having a growing basket of tax powers and will improve the governance of this country and our accountability over time.
As others have said, the committee has sought to scrutinise and improve the bill. That has come as a surprise to some people, who thought that we would simply rubber-stamp its proposals. There are still some extremely tricky issues to resolve, not least of which is the grant reduction mechanism that Fiona Hyslop mentioned, which will apply when Scottish income tax kicks in. How much better it would have been if the Scottish Government had engaged in the dialogue on that and had used the resources of the civil service to help us work through the complex issues to which the mechanism gives rise, but we are still awaiting a single bit of evidence from the Scottish Government on how to improve that set of highly technical and complex measures.
The committee was not put off by that and has drawn up key principles, which the next Scottish Government will have to address in great detail to ensure that the arrangements that are introduced are fit for purpose. While the Scottish Government sat on the sidelines, the committee engaged with the real issues.
I could go on at great length about the deflationary bias, which does not exist, and the exaggerated claims that have been made about economic growth, but I do not have time to do so. I want to conclude by paying tribute, as others have done, to Wendy Alexander for the huge effort that she has put into the process. She has led by example in the rigorous scrutiny that has been undertaken. It is fitting that her final speech to the Parliament should be on the Scotland Bill. She has played a hugely significant part in shaping the current governance of Scotland. I hope that the arrangements that will be put in place from today will help to shape the future governance of Scotland. She is to be congratulated. I hope that the Parliament will support the motion.
As many of my longer-serving colleagues in the Parliament will be aware, I am another of those Conservatives who has long believed that the Parliament should have greater fiscal responsibility. The problem that I have when elections come around, to which Wendy Alexander referred, is that I find myself competing against politicians whose only raison d’être is to tell everyone how much more money they will spend and on whom they will spend it. In that environment, it has always been difficult for the more responsible fiscal attitudes of people like me, who believe that we should take a significant degree of responsibility for how that money is raised, to be expressed.
That is why I am delighted that the bill makes that proposal, which will give us the opportunity to move on. It is essential that whoever governs Scotland concerns themselves in the longer term with how we will create wealth and how we will exploit it effectively to ensure that we have properly funded public services and appropriate levels of investment from within the country and from outwith it.
I am very grateful to the member for giving way so graciously.
I have been impressed by the arguments made by the Conservatives in this debate about their conversion to a referendum to ask the people of Scotland whether they approve of certain constitutional changes. Why does the member not believe that there should also be a referendum in England for the same changes, as powers are being moved from MPs to MSPs?
I do not believe that there should be a referendum here. The unionist parties in the Parliament will subject themselves and their views to the scrutiny of the Scottish people on 5 May, and the people will decide how to vote on the basis of this and other issues.
I will move on. The reason why I am, as I have said, a supporter of greater fiscal responsibility is that, particularly in my party but also beyond it, people are genuinely concerned about how a past Scottish Government might have used such powers. There are those who are concerned that, if a Scottish Government had tax-raising powers, it would simply use them to raise tax. Of course, those of us who have a broader understanding of economics realise that increasing the rate of tax does not necessarily increase the amount of revenue that is raised. That would be a huge danger for Scotland. I have discussed that issue with people who are seriously concerned about giving the Parliament borrowing powers. Who would not be concerned when we see how irresponsibly borrowing powers were used by the previous Westminster Government during the past 13 years?
I have to make some progress.
The problem that we have in Scotland is that we do not have our hands on the lever. Until this point, we have not been trusted to take responsibility in case we make the wrong decisions. The Parliament is now mature. Our Government should be mature. We are now at the point at which we should, rightly, be considering extending our position. That is why it is necessary for those of us in Parliament to find common ground and move forward. From what I have heard of the SNP’s position today, I am delighted that SNP members might actually find common ground with the rest of us at 5 o’clock.
If we are to move forward, we must ensure that decisions that are made here impact on the growth of the economy of Scotland. Of course, as I am standing on this side of the chamber, I am not just talking about growth of the public sector. We want to see private sector growth and wealth creation, and we want the Government to be motivated to work to achieve those.
There are already opportunities that the Government could take and which are critical to achieve growth in the wealth-creating part of the economy.
The major change that the bill will make is that the people of Scotland will, in future, cast their vote based on what is best for them in terms of the revenue that will be taken from them and how it will be spent. Too often in the past, votes in Scotland have been cast on the basis of what will be spent and what will be spent on the voter individually. In future, Governments will be accountable to this Parliament for how revenue is raised.
A moment ago, I spoke about the people who are genuinely afraid of those powers. It is important that we take everyone in Scotland forward with us, including the SNP with its ambitions, and those others who are inclined to drag their feet. Common ground must be found.
I warn the Government about one other aspect of the bill. I am delighted that the report supports the proposals to move only the powers to regulate airguns. In the past, I have heard the SNP Government demand the movement of firearms regulation to this Parliament. Firearms legislation in the United Kingdom is second to none. Its achievements in ensuring the proper regulation of firearms are worthy of praise and should be continued. Common regulation north and south of the border is important to many of our rural industries, and we should defend it at all costs. I welcome the fact that the committee’s report does not vary from the proposals to limit the measure to airguns.
I express my thanks to Stephen Imrie and the clerking team to the Scotland Bill Committee: they were outstanding in the support that they gave to every committee member, and they are a credit to the Parliament. My thanks and appreciation also go to Euan Lloyd of the SNP central unit for the support that he gave to Brian Adam and me throughout the period in which the committee met.
It is fair to say that the Scotland Bill process was difficult, but despite our differences—on income tax, for example—the committee was united on a number of key areas. I do not have enough time to go through all the recommendations, but I emphasise that the whole committee agreed that in the next session of the Scottish Parliament we should consider a further legislative consent motion following the final deliberations on and amendments to the bill at Westminster.
The final say on whether we approve the bill will, therefore, come in the next session of Parliament. It is right and proper that this Parliament has an opportunity to consider and examine whether the recommendations that the Scotland Bill Committee worked so hard to produce have been heeded. That will be the real test of the Westminster Government and of whether it has listened to what the committee has said.
I welcome the proposals for further powers for the Scottish Parliament. In particular, I support the devolution of airgun legislation, on which, as Brian Adam said, we in the SNP have campaigned for many years. Although I believe that all firearms legislation should be a matter for this Parliament, devolving airgun legislation is a step forward.
It is important to say that Brian Adam and I were very clear—and made it clear from the beginning—that we would work with the committee to do what we could to improve the bill and to ensure that the committee’s report was as robust as it could be. Despite some comments to the contrary, I think that few would dispute that Brian Adam and I made such a contribution.
In particular, the committee recommended that the capital and revenue borrowing limits should be increased. It is fair to say that the original figures were plucked out of thin air by the Treasury and the Scotland Office. They could give no reason for choosing their figures for capital funding in the bill; there were assertions that it was perhaps to do with the cost of the Forth bridge. However, I think that the committee’s recommendations on increased limits for capital and revenue borrowing will assist the Scottish Government in the future. The committee was unanimous in the view that those limits should be increased.
The committee also recommended that powers to set corporation tax should be extended to Scotland, or that that should at least be considered if such powers were given to any other part of the United Kingdom, particularly Northern Ireland, where the situation is currently being examined. Although I have argued and will always argue that Scotland needs the right to set corporation tax, it is very welcome that the other members of the committee have come some way towards the idea that if other parts of the United Kingdom are allowed to set corporation tax, Scotland should be too.
Does Tricia Marwick accept that that is not quite what the committee recommended? It said that there should be a framework for the devolution of corporation tax, if it was to be considered for other parts of the UK, with rules around it that recognised the race-to-the-bottom issues that the committee identified.
I do not think that we disagree with each other. We are saying exactly the same thing—only, you have used about 30 seconds of my time to say it.
It has been constantly and consistently asserted that the bill will bring much greater financial accountability to the Scottish Parliament. From the time of Calman, right through the time of the Scotland Bill Committee, it has been asserted that this Parliament will be responsible for raising 35 per cent of what it spends, but that is simply not true. The figure of 35 per cent from Calman has been considered, and SPICe—at my instigation, I have to say, not the committee’s instigation—asserted that the figure was nearer 30 per cent. However, that figure of 30 per cent included council tax, which is not the responsibility of this Parliament. If we strip out the council tax, the true figure is nearer 25 per cent. If the powers in the bill are all that they should be, I can see no reason why people should have to hype them up.
I have a really important point that I wish to finish on. HM Treasury and the Secretary of State for Scotland claimed that the estimate for setting up a Scottish taxpayer base would be £45 million—a cost that the Scottish Parliament will have to bear. The Institute of Chartered Accountants of Scotland said that the cost could actually go up to £150 million. The Liberal Democrat secretary of state defended the figure of £45 million, but refused my invitation to agree to cap the figure if he was so confident about it. This Parliament must be very careful to tie down the Treasury and the Scotland Office, or we might find that the cost of implementing the tax powers will be much higher than anybody ever expected. ICAS was very clear that it was not the first time that the Treasury has plucked figures out of thin air.
This is one of those occasions. I urge colleagues all across the Parliament to ensure—even if they care about nothing else—that we do not get ripped off for costs once again.
I have here a newspaper clipping from the New York Times. Perhaps unusually, members might think, it covers a political meeting in Stow in my constituency in the Borders. The public meeting was described as “Radical and dangerous”. Four thousand people were present, and Afghanistan and the powers of the Scottish Parliament were discussed. I can give members a clue as to the time of the meeting: most of the people arrived at Stow by train. The story was about Gladstone in the Midlothian campaign of 1879. As Robert Brown said, the Liberal Party and its successors have had a consistent thread: in our movement there has been a settled will that there should be a Scottish Parliament within the United Kingdom, and that it should be a legislature with the requisite financial powers to allow it to carry out its functions. This Scotland Bill, like its predecessor and like the other constitutional discussions that Wendy Alexander mentioned, is consistent with the approach of our movement.
As well as that settled will, throughout the period—and more acutely now—we have seen that great political seducer, nationalism, appealing to the weak spot in any political view. It says either, “You are better than others,” or, “Others are better than you because you are being held back by someone else—London.” Those are the sentiments that I have heard expressed most regularly here in all the time that I have been a member of this Parliament. From the minister’s opening remarks, that seems to be the issue.
I think that I heard somebody say “rubbish” from a sedentary position behind me. However, I will give an illustration from an answer to a parliamentary question. The question was on the European social fund and the European regional development fund, and I received an answer yesterday from Jim Mather. The European Commission has suspended €41 million-worth of European structural fund programmes in Scotland. It did so on 22 December because of the Scottish Government’s lack of management of the programmes.
The issue has to do with the powers of the Parliament, the resources that come through the Parliament and the budget process, but we found out about it only because I asked parliamentary questions. If the Treasury had suspended payments, I think that we would have heard about it on 23 December—the day after. It is not about the issues that are at stake; it is about where the political areas lie. That is the SNP’s approach to London.
During the past three or four years the Scottish Government has taken a footloose approach to the constitution and the economic model that we should adopt. Three years ago, the national conversation started, with five mentions—in ministerial blogs and speeches—of Iceland as the country whose economic and political models we should follow. The Government has gone very quiet on that now.
I have never had an issue with the Government suggesting that we follow the Icelandic model, but I have an issue with the Government going quiet on the matter. If the Government thinks that Iceland is the economic model, and if it wants to be honest with the people of Scotland, it should continue to say that Iceland is the country that we should follow. If the Government is saying that we should have all the powers that Iceland has, it must also say that we should have all the risks.
I welcome the fact that in the SNP election campaign we are going to hear that Iceland is the country that we need to follow.
There was a similar situation in relation to Ireland, up to the point at which the Minister for Enterprise, Energy and Tourism described the Irish Government as “incompetent”. Since then, the Government has been silent on Ireland. All we are asking is that if the Government thinks that we should follow other models, it should be consistent.
I am grateful, Presiding Officer.
The Scottish Government’s use of the powers that it has illustrates the SNP’s approach. The Government treated the Parliament shabbily in relation to its tax-varying powers. A full Finance Committee inquiry found that the Government’s treatment of the Parliament in that regard had been unacceptable. There is also the example of the Government’s actions on European structural fund and ERDF money, which I mentioned.
Probably most disappointing is the choice way in which the Government has used the office of the chief economic adviser, which is illustrated by how the Government presented data to the Scotland Bill Committee. SPICe said that the Government presented “skewed” information. Of course, the committee found that the Government’s arguments on the deflationary impact of the bill were not accurate, and it said so categorically in paragraph 66 of its report.
The bill is a good one. Its approach is consistent with the approach that Liberal Democrats have taken all along. As far as the electorate is concerned, a touch more honesty from the SNP on the models that we should follow would be welcome in the forthcoming campaign.
It is a pleasure to speak in the debate. This might be my final opportunity to speak in a Scottish Parliament debate, although I hope to speak in the members’ business debate on co-operatives later.
It is arguable that the bill has had the longest period of pre-legislative scrutiny in history. I was going to say that we have been talking about it since 1999, but I defer to Jeremy Purvis’s greater interest in history and what has gone before.
The bill is unique and the bill process has been unique. I thank Wendy Alexander for convening the Scotland Bill Committee and I thank the members of the committee and the officials who supported its work. The committee produced a good and thorough report. In another role, I must consider and absorb it and take forward a number of the points in it.
It is important that there has been a more consensual tone in the debate than I expected, particularly from the Scottish Government benches, given some of the comments that I heard in another place only a few days ago. Then, the London wing of the SNP seemed to be arguing that because the bill was not fit for purpose and would not do any of the things that the SNP wanted, it would give the bill a hard time and was not entirely sure whether it would support it. I am sure that the minister will have been on the phone or will have communicated in whatever way the SNP communicates between Edinburgh and London to ensure that, when the bill is next discussed, the more consensual tone that has been taken here will be noted.
I will highlight a couple of areas that will need further scrutiny and in respect of which it is important to have a further LCM. That applies to some clauses that are not related to the Calman commission, particularly on the work of the Advocate General for Scotland’s expert group. Not all members, here or in another place, think that we have had the opportunity to scrutinise those things properly. It is right and proper that the committee recommended that we should look at a further LCM.
I watched the debate in the United Kingdom Parliament on Monday. I think that the Advocate General finally agreed to share his initial draft clauses as a result of interventions by the SNP and the Labour Party. I hope that those draft clauses can be improved, but that provides a good reason why, as Cathy Jamieson says, a further LCM will need to be considered in the next parliamentary session.
I do not want to throw cold water on what has been a reasonably comradely debate so far, but it has been suggested that the UK Government will bring the next stage of the Scotland Bill to the chamber at Westminster earlier than might have been expected, which would make it difficult for the second LCM debate to take place. I hope that, on leaving the Parliament today, all parties—the Scottish Government and those who have connections with the upper echelons of the UK Government and the Secretary of State for Scotland—will use their good offices to get on the phone and tell the UK Government that that would not be a particularly clever idea and that it would certainly not be in the spirit of this debate.
I will say something about air weapons. I heard what Alex Johnstone said, and welcome the fact that the Conservatives here, at least, seem to accept that it is the will of the Scottish Parliament and the Scottish people to have powers over air weapons devolved. Some of Alex Johnstone’s colleagues in the UK Parliament do not seem to agree with that. However, I sound a note of caution. I have consistently raised the point that those powers must be meaningful. There is no point in transferring a power if nothing can be done with it. That is why it is important that whoever forms the next Scottish Government continues to work with the Home Office, in particular, on its review of firearms legislation so that there is not simply posturing on an important issue for the sake of it.
As I said, this may be my last opportunity to speak in this chamber and I particularly want to make this point. We have talked a lot about greater powers. Of course, greater responsibilities go with greater powers. That will mean members taking a different approach in the next session to scrutinising the financial settlement and what is being done with it. It will also mean that members must be prepared to scrutinise in a different way. Members will have to be bold enough to say that there are things that are done well in Holyrood, but the structures, procedures, committee processes and how the budget negotiations are done may have to change to reflect a different setting and different responsibilities.
We have had the opportunity to have a good debate. I am conscious of the time and I will end by making the point that I have had less time to talk about a whole bill than I had to talk about one clause in another place. However, I thank people for giving me the opportunity to work on the bill.
Wendy Alexander is now back in her seat. I put on record my thanks for everything that she has done to drive these matters forward, not just over the past few years, but in all the time that she has been involved with them as a Labour politician.
It has been interesting listening to all the different points of view. As Brian Adam said, there are some good aspects of the Scotland Bill Committee’s consideration of the bill. There are also some worrying and some contentious aspects.
We have heard talk today, and we heard a lot of talk previously, about what went on when the academics appeared at the committee. I will talk about an issue that has not been given much consideration. I have concerns about the way in which the committee was put together and the way in which it worked. While I do not wish to personalise the issue, the Parliament should ponder it.
The first thing that gave me concern was the fact that the committee appointed as its independent advisers those who were directly concerned in creating the bill. Asking those whose work underpins the bill to serve as independent advisers was not just bad practice—it inhibited the committee from carrying out its function. Those people should have been giving evidence, so that the MSPs on the committee could openly probe the thinking behind the bill, test its limits, feel its scope and use that evidence and the evidence presented by other witnesses to frame their thoughts on the legislation.
I have heard others say today that Wendy Alexander did very well as convener of the committee. I am sure that she did, but I feel quite strongly that instead of being convener, Wendy Alexander should have been able to make herself available to give evidence to the committee. We hear over and over that Wendy was one of the architects of the Calman commission. In fact, Pauline McNeill said today that it was Wendy who brought it about. It would have been useful for the committee to have heard evidence from Wendy Alexander.
Then, of course, there were Jim Gallagher, the former civil servant who was secretary to the Calman commission and probably the principal author of the report, and Professor Ulph, who was a member of the Calman commission panel of economists. They were both employed by the committee to provide advice and criticism of their own work. That is problematic. Knowing the genesis of proposed legislation is as important as testing its parameters. The committee lost that opportunity when it decided to appoint people whom it should have called as witnesses.
No minister, in the Scottish Parliament or the UK Parliament, sits on a committee scrutinising a bill that that minister has originated. The Scottish Parliament’s standing orders explicitly prohibit a minister in charge of a bill from sitting on the committee that scrutinises it. They also prohibit the sponsor of a member’s bill from being a member of a committee while it scrutinises the bill.
The principle underpinning those restrictions is to ensure that the scrutiny of legislation is impartial, that committee members are as free of bias as possible and that the committee feels free to call as witnesses everyone and anyone who seems to it to be appropriate, to give informed evidence on a bill’s provisions.
Committees have to serve the Parliament and help it to be better informed. We should never be in a position in which we can be subject to the criticism that a committee is being used as a vehicle for one faction to run legislation through it unchallenged. In a single-chamber Parliament, that is a particularly vital responsibility. It is one that the Scotland Bill Committee failed to discharge.
In common with many others, in my party and beyond, I have great concerns about what I believe to be the damaging effects that the Scotland Bill could have on Scotland if it is passed in its present form. There would be a deflationary impact on Scotland’s public spending—that is a major issue.
Another major issue, and one that is just as important for the long-term health of Scotland, is that legislation that is passed in such circumstances cannot serve anyone any good, no matter which side of the debate they are on. I ask the Parliament to reflect on those points so that they can be further considered in the next parliamentary session, after 5 May.
When we discussed the Scotland Bill previously, some feared that our parliamentary committee would do nothing more than rubber stamp the bill that is currently going through Westminster. That was an underestimation of the committee convener’s tenacity and her track record on the issue. As other members have said, the committee’s report is a fitting legacy of the 12 years for which Wendy Alexander has served in the Parliament in a variety of roles.
Whatever else people think of the report, it would be incredible if anyone believed that it reflected a committee that was inhibited. The last people who will think that the committee was inhibited are those in the Westminster Government who now have to face the challenges of an intensive dialogue as a result of the committee’s work. I am glad to say that the report is far from a rubber-stamp job. The committee has decided to test the Westminster Government’s sincerity by challenging the provisions in the bill and recommending expansion of them. Further, the committee has done sterling work in exposing the shallowness of the exaggerated claims on fiscal autonomy. Although it might suit some to attempt to make a link between tax evolution and growth, the committee has shown that there is little to justify that as an automatic assumption.
Back in the early days of the Parliament, I remember some SNP members, some of whom are now in high office, becoming rather animated when I described devolution as a process rather than a full stop. The language seems to have changed considerably, which I welcome. Twelve years into the devolution journey, in the light of experience, the Scotland Bill is refining that process and the Parliament is demonstrating that it wants a say in how that refinement takes place.
The committee has demonstrated that through important recommendations, not least of which is that on the power to vary higher rates of income tax. If we believe that we can grow our economy and we have genuine aspirations for individuals to advance their economic activity, that recommendation is vital. The committee’s recommendations on the aggregates levy and air passenger duty would give breadth and flexibility to our tax-raising powers and our ability to influence critical sectors of our economy. Importantly, the committee has kept the door open with regard to corporation tax and has wisely recognised the need for action on the matter that involves all the devolved nations.
In an uncertain world, the committee is absolutely correct that the Scottish budget should not take an immediate hit if tax receipts fall below what is forecast. Economic shocks come in many forms and often without notice—the turmoil in the middle east and the current price of oil are just two examples. It is clearly right that there should be a more substantial short-term annual borrowing capacity, and the figure of £1 billion seems perfectly reasonable to me.
The committee’s report should form the basis for intensive dialogue between the next Scottish Administration and the Westminster Government. As I said, that dialogue will go a long way to confirming the shape and substance of the working relationship between London and the devolved Scottish Parliament. We are moving forward the process of devolution and our constitutional arrangements. The report helps us to do that in a thoughtful and constructive manner. Every political party that has an interest in Scotland’s economic enhancement and in allowing Scotland to find solutions for its priorities should now give whole-hearted support to the report. All parties should start to look not only to the future interests of the Parliament, but to the shape of our devolved settlement and to think more about what is in the interests of the people of Scotland and less about what might be in each party’s short-term electoral interests.
Bad news: we have had Wendy Alexander’s last speech in the Parliament, although I do not expect that this will be mine, which is the second part of the bad news. I, too, congratulate Wendy Alexander on what has been a distinguished and often interesting—sometimes for the wrong reasons—career. I also extend my congratulations to Cathy Jamieson on leaving this place. They are two of the six female members who will voluntarily stand down at the end of the session.
It is worth saying that the committee has turned out better than I feared but has achieved less than I had hoped. Murdo Fraser and Linda Fabiani have discussed the committee’s approach. In that regard, the 2,000-year-old Latin phrase, “Quis custodiet ipsos custodes?”—who will guard the guards?—shows that that is not a new issue for politicians.
Robert Brown suggested that this is the last major debate of the session—I note that we are not packed to the rafters—and said that we strengthen a federal structure for the UK. On Tuesday night, I was at a dinner in Newcastle, sitting with many of the Liberal Democrat politicians who run that city. I will not name names, as what they told me was unattributable, but it was clear from that discussion that the asymmetric federal structure that we have, if we have one at all, leaves those Liberal Democrats much less excited than their colleagues in this chamber.
Wendy Alexander said that the committee was the first specialist committee to study a bill—I think that she meant that it was the first specialist committee to study a UK bill—and reminded us that the UK Government has announced that EYF will be clawed back. Does that not precisely illustrate the difficulties that arise from being in continual thrall to the Treasury?
Peter Peacock talked about states. States across the world have many ranges of power. In the United States of America, they have power over sales tax, corporation tax and so on. There have been talks about income tax, but I do not think that we have seen much in the way of proposals about how the UK Government might implement what is in the bill.
I am always wary of geeks bearing gifts, when they are Labour Party geeks. However, Guido Fawkes, one of the most prominent bloggers, has today reported that the Labour Party itself is £36 million in debt.
The committee’s substantial report contains 225 paragraphs of conclusions and recommendations. Three of them are on Antarctica—I will say little more about that. However, insolvency and health regulation receive only four paragraphs each. I think that they are more important than those eight paragraphs suggest. Scotland has a different approach to bankruptcy and a different set of terminology for the various stages of financial difficulties that individuals and companies can experience. We have absolutely no guarantee that the UK insolvency service will be able to adapt its processes and resource itself to take over what is done by the Accountant in Bankruptcy in Scotland. There is little doubt that the case for that has not been made.
There are many technical difficulties that cross boundaries. The question is, is it possible to work within them and are there distinct advantages to having our own system, which is capable of being adapted more rapidly than it would be if the powers were returned to Westminster? We can work rapidly when we require to do so; it is more difficult otherwise.
With regard to the regulation of health professions, the General Pharmaceutical Council believes that having displaced powers in that regard creates no problem. It does not believe that there is any need to centralise the powers in London.
Jeremy Purvis talked of Gladstone’s Midlothian campaign. When I heard Gladstone speak in Midlothian—well, not quite. However, my Liberal family discussed the Midlothian campaign at lunch once. I recall that the issue of Irish home rule split the Liberal party and that most of its members joined the Tories. Plus ça change? Perhaps.
In relation to the parliamentary question that Jeremy Purvis referred to, he should of course have informed the chamber that there will be no effect on projects that are being funded by the Scottish Government and that the issue is simply one of getting the money out of Europe and into Scottish hands.
This has been a debate about principle, on which there is, fundamentally, broad agreement. On the issue of tactics, however, there is much less agreement.
Today’s debate is not the end of the matter; we all wish to debate the issues further at a later date. We certainly hope that that debate will lead to something that suits Scotland’s needs even better.
I associate myself with those who have thanked Wendy Alexander for what she has done. I am sure that she will do more in the future; she is not off the hook.
I will turn the debate on its head. What is the reason for staying in the United Kingdom? As far as I am concerned, there is only one reason—that doing so provides better governance and delivers better public services than a Scots sovereign Parliament would for the Scottish people. That is the reason why we are here. Unless the people who promote the union at all costs can guarantee that position, they stand on no firmer ground than the idealists who say that the Scots could do as other nations have done.
Does any MSP present really believe that they are somehow inferior to deliver the most suitable and customised set of policies for the people who they are and the people whom they represent? I doubt it very much.
I do not want to believe that sovereignty does it all and that we will automatically do it all because we are sovereign—that is not the reason. The reason comes from what sovereignty would do for us once we exercised it on our own behalf. Sovereignty releases creativity and ambition. To be frank, the ambition that we heard from the Government was too limited for my taste. We heard more ambition from some people who are supposed to oppose the onward march of self-government.
I will take no more time for my speech. I simply ask MSPs to think on whether we are bound to do less for Scots if we govern ourselves, according to our own criteria and in fellowship with the people with whom we have shared the United Kingdom. We can maintain the social union, but we must change the political union in favour of the people. I identify myself with the open-mindedness of Tom McCabe.
The debate has been wide ranging. Some colleagues have argued strongly that, to serve the Scottish people better, the Parliament must be given more fiscal powers. I disagree and share the view of Tom Miers, which is that Scotland already has autonomy on the most important policies—for example, it has unlimited leeway to reform the main public services. However, the political will to pursue the radical reforming agenda that would serve the people of Scotland better is lacking.
I respect the fact that others hold a different view. I acknowledge the work that Wendy Alexander has done in her time as an MSP and I wish her well for the future.
The unionist members who favour the fiscal powers that the Scotland Bill Committee recommended argue that they will strengthen the union. However, political commentator Iain Macwhirter firmly believes the opposite. His comments on Radio Scotland’s “Newsweek Scotland” last Saturday morning must surely ring alarm bells among all who care about and want to maintain the union with the rest of the UK. He said:
“Since the Calman report was first published two years ago, I mean, I’ve had to pinch myself, because I still can’t quite believe that even as the SNP appears to be losing political momentum the pace of home rule has been stepped up.”
The Institute of Chartered Accountants of Scotland has raised legitimate points about the unintended consequences that could result from confusion about who precisely is a Scottish taxpayer. The cost of creating a register of Scottish taxpayers has been estimated at between £45 million and £150 million—that depends on how the term is defined. At a time of austerity and threats to front-line services, the public deserve the right to decide whether such money would be well spent. It has also been argued that another unintended consequence would be the adverse effect on the Scottish economy as businesses desert Scotland in fear of higher taxes.
So, let us put all this in perspective. Regardless of how convinced any one of us may be that our view is correct, no one—not me nor any other elected parliamentarian—has all the answers. In the words of Dr Nicola McEwen, the co-director of the institute of governance and a senior lecturer in politics at the University of Edinburgh:
“this has been an elite-based debate almost academic in some ways ... When one of the strengths of the original devolution settlement was that it had the legitimacy of a popular majority, a referendum”.
There is a precedent for my amendment: the referendum on whether the Scottish Parliament should have the 3p Scottish variable tax power. The fiscal powers that are now being considered and supported in the LCM are even more significant than that. They are wide ranging and—as the Scotland Bill Committee found—have potentially unintended consequences.
A fundamental democratic principle is at stake here. I hope that this evening’s vote at decision time is one of which the Scottish Parliament is proud, where conviction triumphs over partisan politics. In the words of Edmund Burke:
“All that is necessary for the triumph of evil is that good men”
I call on members to give the LCM legitimacy by voting for my amendment. Not to do so may not be evil, but it certainly represents bad decision making.
I, too, pay tribute to the work of the Scotland Bill Committee and those who worked so hard on it. Clearly, the convener, Wendy Alexander, deserves special praise. I associate myself with the remarks of previous speakers about Wendy’s contribution not only to the committee but to the wider work of the Parliament. I pay tribute also to my colleague Robert Brown, who was not only a member of the committee but a key member of the Steel commission. He chaired many of its meetings. In many ways, he is the constitutional guru of the Liberal Democrats in Scotland. I acknowledge the role of David McLetchie on the committee for the Conservatives and of Murdo Fraser, whose long and consistent support of the policy has helped to bring all of this to where we are today. We are now in a strong position and about to take a major step forward.
We have to remember that up to and including the 2007 election, the only party that supported stronger powers for the Scottish Parliament—not independence but stronger powers—was the Liberal Democrats. The co-operation between the Labour Party, the Conservatives and the Liberal Democrats is a remarkable and rare co-operation, and led to the creation of the Calman commission. The commission made clear, strong and unanimous recommendations to give more powers to the Scottish Parliament. The work of the commission led to the Scotland Bill, which will carry those new powers swiftly into legislation.
The proposals carry an overwhelming majority in the UK Parliament and a large majority in the Scottish Parliament. They are groundbreaking because they reflect the first substantial legislative push to deliver new powers to the Scottish Parliament, including tax-raising powers. In some areas and in time, I would like to see more powers given to the Parliament, including more tax-raising powers. As Robert Brown has said, home rule is a noble Liberal cause. Home rule in a strong federal UK within a stable and peaceful Europe is the long-established policy of the Liberals and Liberal Democrats. That tradition is consistent and long held—from Gladstone right through to David Steel and Jim Wallace.
In this modern world, it is crucial to devolve as much responsibility as possible to local communities. Co-operation—working together—is also central. Like other Liberal Democrats, I strongly support the need to work together in Europe.
I contrast the consistent and long-held position of the Liberal Democrats with the position of the SNP. What is its consistent policy in this regard? It is one of flip-flop. Members should remember that the SNP refused to be part of the constitutional convention to create the Scottish Parliament. It then changed its mind, saying that it was for it.
SNP members refused to be part of the Calman commission, to strengthen the powers of the Parliament. Worse than that, they undermined the commission’s work at every opportunity with selective and misleading statistics. However, today they have changed their minds and say that they are for it. I am genuinely bemused by that. I do not support nationalism—in fact, I strongly oppose it—but why in other parts of Europe are the nationalist parties at the forefront of campaigning for more powers for their communities when here they turn their back on all of that? They say that it is independence or nothing, but even then they flip-flop and, in this Parliament, drop their flagship policy of holding a referendum on independence, without even bringing it to the chamber, which is the democratically elected voice of the people of Scotland.
I do not have time.
For me, the most important by far of the new powers are the tax-raising powers. It is no secret that they were strongly opposed not only by the SNP but also by the mandarins in the UK Treasury—curious but clear bedfellows. That is why it was so vital that the UK Government strongly backed this Parliament’s overwhelming support for the work of the Calman commission. That support has remained solid and united, from a UK Labour Government to the current Conservative-Liberal Democrat coalition. I am pleased that the Prime Minister and Deputy Prime Minister, along with the Secretary of State for Scotland, Michael Moore, have been able not only to support these proposals but to deliver them in legislation.
To me, the notion that the Parliament should have responsibility for raising a substantial proportion of the £30 billion that it spends each year is self-evident. The bill will deliver that. I am certain that, in time, we will go further in strengthening the powers of the Scottish Parliament, but what is being delivered today is a significant and substantial step forward.
As these may be my final words in the chamber, I end by saying how proud I am that my last speech is on the issue of more powers for this great Parliament. It was not easy for the Scottish leaders of the Conservative party, the Labour Party and the Liberal Democrats—of whom I was then the Scottish leader—to work together to ensure that the Parliament developed and grew stronger. However, that was very important and a big achievement. It is not always easy to be a member of the Parliament, nor should it be. However, it has been a great privilege and honour for me to speak and to work in the chamber. I will miss it very much.
On a point of order, Presiding Officer. Today we are discussing a motion with two interesting amendments. Can you provide the procedural reasons why the mover of one amendment was given only four minutes in which to sum up, whereas members who lodged no amendment have been given six minutes? It seems quite unfair that someone who lodged an amendment should have less time to speak than members who did not.
This is a tale of two conversations. The first is the so-called national conversation, which the First Minister launched with great fanfare in August 2007 and described as
“the start of the next, and most dynamic phase, of Scottish constitutional reform.”
However, the national conversation is no more. It is reduced to a mere whimper of irrelevance.
Thankfully, there was a second conversation, between the parties in the Parliament that represent the overwhelming majority of our fellow Scots, are committed to sustaining Scotland’s place in the United Kingdom and are equally keen to ensure that our constitutional settlement is right for Scotland, is fit for purpose and promotes accountable and good government on the matters for which we are responsible. Our conversation led to the establishment of the Calman commission and its thorough review of devolution to date, which was taken on by the outgoing Labour Government—to its credit—and has now manifested itself in the Scotland Bill that the Conservative and Liberal Democrat Government have brought to Parliament.
Moreover, unlike the futile and wasteful national conversation that is no more, the process has had the endorsement of this Parliament at every stage.
Some say that there is no democratic mandate from the people for the Scotland Bill, but I can assure members that there is. Careful research discloses that we have passed the Salmond test, which was articulated by the great man himself on 9 December 2009 in this Parliament. He asked my colleague Annabel Goldie:
“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?”—[Official Report, 9 December 2010; c 31364.]
Of course, Annabel Goldie said yes. What was the forthcoming election? It was the one that we had last year. What happened in the election? The Scottish National Party got 20 per cent of the vote, and the parties who supported the Scotland Bill got nearly 80 per cent of the vote. Therefore, we have passed the Salmond test with flying colours, and let us hear no more of that kind of nonsense.
I want to highlight three criticisms of the financial provisions of the bill and the refutation of them in the report, which is based on the evidence that we gathered. First, let us consider the alleged £8 billion deficit that was held up as demonstrating a so-called inherent deflationary bias in the income tax proposals. It was rightly described by the Secretary of State for Scotland as a nonsense figure based on a set of assumptions that were explicitly ruled out in the white paper.
Interestingly, when we look forward—it is the future with which we are concerned—an analysis prepared independently by the Scottish Parliament information centre’s own researchers for the committee demonstrated that if the Scottish Government model was started in 2011-12 and extended over the four-year period of the spending review, under the bill’s proposals we would be nearly £2 billion better off. That is an independent assessment using the Scottish Government’s own methodology. The claim that there is an inherent bias or flaw is complete nonsense.
Neither is there an inherent inflationary bias. The overall objective is to equate the level of grant reduction with an accurate estimate of income tax receipts in year 1, so that we have a position of neutrality and a level playing field on which to move forward. That is why we have to get the grant reduction sums right at the outset and why we set out in the report the principles on which they should be calculated.
We also had the claim that there is a direct connection between the devolution of tax powers and economic growth. At its most absurd, it was claimed by the First Minister in a speech to the SNP conference—where else?—that
“with economic powers we could grow the Scottish economy by an extra 1 per cent a year”.
One would have to make such a statement at an SNP conference, because they are the only people stupid enough to believe it.
Be that as it may, the poor professors who were cited for that absurd proposition came in for further misrepresentation in official Government publications about the linkage. Interestingly, if we carefully read the evidence submitted to the committee, we see that there has been a significant shift in the position of the SNP Government and its pin-up-boy economists. Economic growth is now referred to as economic performance, and sustained annual increases in GDP have now become one-offs. Finally, we had an acknowledgement from the Cabinet Secretary for Finance and Sustainable Growth that
“a large measure of it depends on what you do and what policies you take forward”.—[Official Report, Scotland Bill Committee, 8 February 2011; c 440.]
How true—that was self-evident from the start, but it is a long way from the blustering assertions of Mr Salmond.
No, thank you.
For example, if we want to impose a special tax on our largest retailers—as the SNP wanted to do—within the existing powers of this Parliament, the chances are that we will put jobs and new investment by those companies at risk. However, if we want to reduce corporation tax for all businesses in Scotland and elsewhere in the UK, as the Conservative and Liberal Government at Westminster wants to do, we create an environment that encourages investment and job creation, albeit at some revenue cost. What matters is what is done and by whom, not necessarily the level of government that carries it out.
No, I am in my last minute.
The Scottish Conservative party supports the motion and looks forward to further positive dialogue with the Government. Like others, I pay tribute to Wendy Alexander for her outstanding contribution. The Scotland Bill owes much to many people but, as others have said, she deserves particular praise. As she is about to stand down from this Parliament, I wish her, Brian and her children health and happiness in the next phase of their lives.
I, too, pay tribute to Wendy Alexander, whom I shadowed in 1999 when she was the Minister for Communities, and to Peter Peacock, whom I shadowed when he was the Minister for Education and Young People. I share the desire for equality to allow women to choose their own future, and I wish Wendy Alexander well in that regard. I would like to extend that choice to the rest of the nation and allow everyone to choose their own future, but we might disagree on that point.
As I said in my opening comments, the Government’s position is clear: we believe that only independence will allow Scotland to reach its full potential. However, we recognise that others in the Parliament and in Scotland hold other views. Since we took office, we have initiated and encouraged a national debate on Scotland’s constitutional future in the national conversation, through the Government’s white papers, with the UK Government on the bill and now in the committee and its inquiry. I point out to Pauline McNeill that the committee states:
“Both governments—UK and Scottish—have provided substantial amounts of information and evidence to the Committee at various stages of its work.”
I refer those who want to find out more about the arguments, proposals and framework for full financial responsibility to the following Scottish Government publications: “Fiscal Autonomy in Scotland: The case for change and options for reform”; “An Oil Fund for Scotland: Taking forward our National Conversation”; and “Your Scotland, Your Voice: A National Conversation”.
I am happy to acknowledge—as I did in my opening remarks—that the committee made valuable recommendations to improve the bill. I was especially happy that many of its suggestions reflect the positions that the Scottish Government has advanced throughout the development of the bill and the committee’s consideration of it. However, I have reiterated the Government’s view that the bill needs to be improved, especially to provide incentives for economic growth. We believe that further improvements and amendments are needed to provide the financial responsibility that Scotland needs.
Wendy Alexander said that the Parliament needs opportunities to propose a graduate tax, environment taxes and alcohol duties. However, those are not in the bill, although they could be. Indeed, as it stands, all of those would require the agreement of the UK Treasury—despite people’s best wishes, that agreement does not exist in black and white from the Treasury.
Liberal Democrat members have talked about the arguments for home rule and the Steel commission. Tavish Scott’s evidence to the Calman commission talked about a range of taxes. We have a Conservative-Liberal Democrat coalition UK Government, and the Conservatives, as Alex Johnstone said, believe that Scotland should pay its own way. They understand the importance of those provisions. Why are the Liberal Democrats so limited in their proposals, given the opportunity that we now have?
As Robert Brown clearly indicated, the bill is a very strong taking forward of the proposals of the Steel commission, of which I was a member.
Paragraph 3.34 of “Your Scotland, Your Voice” states:
“Scotland would continue to operate within the sterling system until a decision to join the Euro by the people of Scotland in a referendum when the economic conditions were right.”
Under the Government’s proposals, would interest rates, which affect every business, every house and every mortgage, ever be—
It is, indeed. The member will have plenty of opportunity to find out more about the proposals in the publications that I cited.
Today’s debate is not the end of the story for the Scotland Bill, never mind the Scottish Parliament; it is, however, a milestone in our efforts to secure a Scotland Bill. David McLetchie was correct to quote the First Minister, but he should perhaps have checked the Official Report more carefully, as the quotation comes from a debate in December 2010. Indeed, it is very important that the public have the opportunity to influence the strength of the bill, as the choice is clear: is it about more financial responsibility or is it about implementing a new funding mechanism to provide accountability? I think that we should be seeking accountability, but it is not enough to grow the economy. I will come back to that in a second.
We believe that the Scottish Parliament having responsibility for poverty and welfare, energy and the environment, taxation, jobs and the economy is the best way forward if those decisions are to be taken in the interests of the people of Scotland.
In my opening remarks, I talked about some of the committee’s positive recommendations. On the financial side, we agree that improvements are needed. We agree with the committee’s proposals for doubling the revenue borrowing limit, for improving the flexibility of the capital borrowing regime and for seeking earlier capital borrowing powers and the power to issue bonds. We also agree that some of the non-financial aspects—particularly the European convention on human rights arguments—need to come back to the Scottish Parliament in a legislative consent memorandum, as Cathy Jamieson said.
On the other hand, we are disappointed that there is no proposal in the committee’s report to give the Scottish Parliament a formal role in commencing the financial provisions, in particular. That is important, because the lack of detail on crucial issues at the heart of the bill—such as the exact mechanism for adjusting the block grant and the operation of the no-detriment policy—is serious indeed. As I said to Robert Brown, the Scotland Office’s proposals were only a five-page document and came with the caveat that the mechanisms were just illustrative. That is a very important reason why we need to reconsider them.
Robert Brown rose—
I am tight for time.
If the Parliament is to bear a cost of £145 million, we must ensure that we question that. It is a dangerous precedent.
We are examining the bill’s financial proposals and, in particular, the committee’s acceptance of its income tax proposals. They are one of the flaws that must be addressed in improvements.
Peter Peacock talked about income tax being stable. The problem with the committee’s report is that it has completely removed VAT from its analysis of the relationship between income tax and other taxes.
Since 1965, tax in the UK as a share of GDP has grown by 6.2 per cent but income tax has grown by only 0.9 per cent. Between 1978-79 and 2009-10, income tax grew by 2 per cent, public spending by 2.3 per cent, fuel duty by 3 per cent, corporation tax by 2.6 per cent and North Sea revenues by 3.1 per cent. That is why there is an automatic deflationary bias in the income tax proposals and they must be improved to ensure that the Parliament can continue the spending that it needs to improve society.
The committee’s key conclusion is that the bill is unfinished business and that the Scottish Parliament should consider it again in the next session. The Government is of the same view.
We pay tribute to all those in the Parliament and wider civic Scotland who have joined the Scottish Government’s pressure for improvements in the bill. We welcome the support of all parties and the support for a further LCM—Cathy Jamieson in particular made that point—to consider changes to the bill before it can be passed for royal assent.
The most important thing to happen now is that the UK Government does not merely note, consider or even seriously consider the Parliament’s views: it must act to change the bill. In agreeing to the motion or the Government’s amendment, members will make sure that their successors in the Parliament can ensure that the UK Government has fulfilled that obligation.
I acknowledge a number of excellent speeches in the debate.
As the sun sets on this session, the report will be one of the most important of that period, as it represents further progress on the Scottish Parliament’s powers, which is in Scotland’s interest. As Nicol Stephen said in his closing speech for the Liberal Democrats, it feels like a big step forward. It certainly feels that way to me, particularly if the committee’s recommendations are adopted. Like Margo MacDonald, I acknowledge the contribution that Nicol Stephen has made to the debate and the Parliament.
I have always had faith, as I said in the previous debate on the bill, in the individuals who were appointed to the committee: Wendy Alexander, David McLetchie, Robert Brown and Peter Peacock. I also acknowledge Brian Adam and Tricia Marwick, even though I have a difference of opinion with them. Today, they have made a constructive contribution to the debate and, in fairness, having read through all the Official Reports, I can see that there were some long and difficult meetings. I believed that those individuals would be robust in their analysis of the taxation and non-financial powers, and they were.
Wendy Alexander is right that some people thought that the process would fail. Perhaps that is one of the reasons why the SNP is belatedly trying to appear a little bit more constructive. When I asked her, the minister did not acknowledge David McLetchie’s important point that, if the bill had been in place in 2010-11, Scotland would have been better off. If she had acknowledged that point, I might have been persuaded about her ability to be—
I have heard enough. The minister had her last chance to be constructive. The Calman commission reported that the Scotland Act 1998 was just about right. The Parliament has spoken on this important constitutional matter to Scotland on three occasions, and on all three occasions the minority Government has chosen to ignore the will of the Parliament. I am therefore not persuaded, but if the minister wants to be more helpful, she could welcome the progress towards the principle of the Parliament being more accountable for what it spends.
Murdo Fraser, in an excellent contribution, illustrated the absurdity of the complaints against the committee for pressing witnesses on their opinions and their written work. We must base our conclusions on facts and evidence. It is not good enough for the Scottish Government to make it up to suit its arguments. I agree with Murdo Fraser that the coalition should be congratulated on taking the work forward. However, we will not support the amendment in the name of Margaret Mitchell, because we believe that there has already been a great deal of consultation and scrutiny.
Robert Brown, as ever, made an excellent contribution to the debate. I am happy to endorse the Liberal Democrats’ commitment to the claim of right and their record on home rule. I also congratulate Robert Brown on his contribution to the committee’s work. He says that the establishment of a joint Exchequer committee highlights how mature our relationship has become, and the direct relationship with HMRC will be necessary in order to achieve the desired ends.
Wendy Alexander pointed out, rightly, that party-political consensus is what the public expect, and the 240-page report is probably an indication that she had a hand in putting it together.
Brian Adam said that the bill is a step in the right direction. He talked about the necessity to legislate on airguns. I have supported the devolution of that to Scotland and I wrote to the Home Office minister on that subject in 2007.
Peter Peacock, another outstanding politician, highlighted that we have a normal country in that we have high devolution in relation to spending. As he said, there is no silver bullet for economic growth. Also, the committee did indeed push the boundaries by looking at corporation tax and considering that Scotland should have parity if the UK decides to go down the road of devolving corporation tax.
Alex Johnstone said that people might be afraid of the powers. They should be no more afraid of a Scottish Government exercising them—perhaps depending on the complexion of the Government, of course—than of the UK Government doing so.
Tricia Marwick rightly emphasised the points of unity for the committee.
Jeremy Purvis, in what I thought was an enjoyable and usually entertaining speech, emphasised that we do not hear much nowadays about Iceland and Ireland and that there are no modern examples of how fiscal autonomy has helped those countries.
Cathy Jamieson said—she is right—that the Parliament has to be bold enough because we will be setting a different agenda. When the budget process comes around, we will be responsible for setting the rate of tax, and she was right to say that we have to live up to that challenge. [Interruption.]
I was disappointed by Linda Fabiani’s series of buts; she is so worried about this and so worried about that. She said that she thought that the committee would be inhibited. I am staggered by that. The committee recommended a doubling of the borrowing powers, extending the powers on speed limits, revisiting the tax bands, and pushing the parameters of corporation tax. There is not much on which the committee did not push the boundaries.
As Tom McCabe said, the report is not a rubber stamping of the Scotland Bill, and I believe that the committee has made the bill remarkably better and much improved.
I find that it is always Margo MacDonald who turns these debates on their head towards the end. She talked about those who support the union at all costs. Well, I am not one of those. She was right to say that we all come to our conclusions for our own reasons and that we must all respect one another’s point of view. I support strong devolution because I happen to think that it is the best solution for the Scottish people, but I agree with Margo MacDonald that, regardless of the constitutional settlement that we wish for the country, providing greater social justice and improving the quality of life is what we should all be about. That is why I am here today, moving and summarising on the motion.
It has been an excellent debate, and I am sad that many of the members who have spoken in it are standing down. We have all paid tribute to them. The work of the Scotland Bill Committee has made a tremendous contribution, and I hope that it will be taken on board when the bill goes through the Westminster process. As members would expect, this Parliament—whatever its future composition—will have the last word, and the Government of the day will have to rise to the challenge of bringing about stronger devolution for the better of the country.
Before we come to the next item of business, a commitment was made to come back to the chamber on the point that Mike Rumbles raised about the order of speakers in the Scotland Bill debate and the time allotted to them. I can only say that, as is set out in standing orders, the selection of speakers and the allocation of speaking times in any debate is a matter for the Presiding Officer alone.