Good afternoon. The first item of business this afternoon is a debate on motion S4M-13160, in the name of Bruce Crawford, on “New Powers for Scotland: An Interim Report on the Smith Commission and the UK Government’s Proposals”.
I call Bruce Crawford to speak to and move the motion on behalf of the Devolution (Further Powers) Committee.
The Devolution (Further Powers) Committee was established in October last year. Its task was to scrutinise the proposals for further devolution that arose from the recommendations of the Smith commission. We are here to debate our interim report, which was published last week, and which gives the committee’s initial view of the proposals thus far.
Across the committee, we believe our report to be constructive, balanced and objective. Members of the committee may differ on the powers that we consider that the Scottish Parliament should have, but it is clear that we speak with a common voice in saying that, as a minimum, the spirit and substance of the Smith commission recommendations must be delivered in full in legislative terms and in the actions of the Scottish and United Kingdom Governments. Our conclusion was that, unfortunately, the draft clauses that were published in January by the previous UK Government do not meet that objective in significant areas. The committee has called on the new UK Government to seriously consider the areas that we have highlighted in which we believe that the draft clauses fall short.
The UK Government must ensure that the bill, which is expected to be published next week, is strengthened to fully deliver on the Smith recommendations. As a committee, we set ourselves four very clear and specific tasks in scrutinising the proposals for further devolution: to assess whether the draft legislative clauses that the UK Government published would implement the Smith commission recommendations; to engage as widely as possible with stakeholders, communities and individuals; to obtain as wide a range of expert opinion as possible within the timeframe available; and to publish a report that would seek to influence the content and development of a new Scotland bill. I will let others judge whether we have met those objectives.
I wish to thank all those who provided evidence to the committee, whether in formal evidence sessions, at informal meetings in local communities or at the public meetings that we held in Hamilton, Aberdeen and Shetland. To assist us in our task, we appointed three advisers: Christine O’Neill, to provide advice on constitutional matters; Dr Heidi Poon, to deal with taxation; and Professor Nicola McEwen, to advise us on welfare. I put on record the committee’s thanks for the assistance that they provided us with in developing our report. I also put on record our thanks to the clerking team so ably led by Stephen Imrie, which did a fantastic job in preparing us to question the witnesses who were called to give evidence and in helping to pull together our report. Most of all, I thank my fellow committee members for the mature, professional manner in which they approached their work.
Our report has been agreed unanimously by all members of the committee and, in my view, it carries far greater weight as a consequence. Our recommendations are intended to be constructive and to assist the new UK Government in producing legislation that will implement the Smith recommendations.
It important to note that in certain areas, such as the devolution of air passenger duty and the aggregates levy, the draft clauses met the aims of the Smith commission as far as the committee was concerned, but because of the time available, I must focus on the broad areas in which the committee found that the draft clauses were not fit for purpose.
In a wide range of areas, the committee considered that clarification was required on the effect of a clause or that amendment was required to the clauses as currently drafted. Perhaps the most significant area in which we considered that to be the case was welfare. The committee considered that the draft welfare clauses would not provide a future Scottish Government with the power to, for instance, create new benefits in areas of devolved responsibility or make discretionary payments in any area of welfare, and that the definitions of “carer” and “disability” would significantly constrain the policy autonomy of a future Scottish Government in those areas. The committee also considered that the clauses would not devolve all the powers over support for unemployed people that Smith expected. For example, the access to work programme appears to remain reserved.
We seek assurances that winter fuel payments will be devolved and that, where a Scottish Government introduces a new benefit or top-up, that will not result in an offsetting reduction in a UK benefit.
The interaction of devolved and reserved powers is critical across many of the Smith commission proposals. Universal credit provides an example of where there is one such proposed shared power. In that light, the committee considered that draft clauses 20(4) and 21(3) could be considered or perceived to be a veto and that they need to be looked at again.
More generally, we recommended that the principles that would inform intergovernmental working on welfare require to be placed in statute.
That is a summary of our recommendations on welfare. Other members will no doubt want to go into more detail on those recommendations in due course.
The draft welfare clauses are the area in which perhaps most concerns rest, as they are potentially the most complex to implement. I know that the Welfare Reform Committee is carefully scrutinising that area. Those clauses will impact on some of the most vulnerable and disadvantaged individuals in Scottish society. I am reminded of a quotation that Sir Harry Burns is fond of recalling. A Los Angeles priest said to him:
“What we need is a compassion that stands in awe at the burdens the poor have to carry, rather than stands in judgment at the way they carry it.”
It is therefore essential that legislation in that area not only implements the spirit and substance of the Smith commission, but is capable of being implemented efficiently.
The taxation powers that the Smith commission proposed for devolution will also result in a significant degree of shared power between the Scottish Government and the UK Government. The most critical elements of the operation of powers in that area are not dealt with by the draft clauses; instead, the operation of those powers will be governed by a new fiscal framework, which is currently being developed. Although the operation of the no-detriment principle and the block grant adjustment may sound esoteric, those issues are absolutely critical to the effective operation of those powers. The committee is grateful for the work that has been undertaken by the Finance Committee in that area. It found clear differences between the Scottish Government and the UK Government on the no-detriment principle. Similarly, we recommend that greater clarity is required on how the no-detriment principle will operate in practice.
We made a number of detailed recommendations that relate to the implementation of the taxation proposals, such as how to determine what constitutes Scottish VAT. However, I will leave that for others to discuss.
The draft clauses were silent on how a new borrowing regime will operate. Accordingly, an early understanding of what borrowing powers are being devolved should be a high priority for both Governments at this point. In the committee’s view, a move towards a prudential regime would provide a sensible approach. We also recommend that future Scottish Governments should be able to retain any underspend in order to better manage volatility in income.
It is clear that the Scottish Government’s current borrowing powers are too restrictive to cope with the new era of fiscal devolution. It is therefore imperative that the borrowing regime that is entered into provides genuine flexibility for future Scottish Administrations.
The committee expressed significant concerns about the devolution of the Crown Estate. The Smith commission could not have been clearer in its recommendations on the Crown Estate. It said:
“Responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, will be transferred to the Scottish Parliament.”
However, the committee found that the draft clauses in that area would result in the creation of two Crown estates operating in Scotland. Let me assure members that that revelation was a considerable surprise to the committee, not least to those members of the committee who also served on the Smith commission.
Moreover, the committee took the view that the legislative approach to devolution taken in the draft clauses could be construed as being overly complex and complicated. Accordingly, the committee recommended that the UK Government should revise its approach to devolving the Crown Estate. I welcome the Rural Affairs, Climate Change and Environment Committee’s work in that area, which is now under way.
On the constitutional issues, the committee has made recommendations that seek to strengthen the draft clauses in relation to the permanency of the Scottish Parliament. In particular, we recommend that a referendum of the Scottish people should be held if there was ever a suggestion that this Parliament should be de-established.
We also made recommendations in relation to the Sewel convention. As we all know, that issue has become much more relevant given the new UK Government’s plans to repeal the Human Rights Act 1998.
The proposals for further devolution will, if implemented, result in a fundamental shift in the structure of devolution. Lord Smith recognised the importance of intergovernmental relations in the foreword to his commission’s report. Throughout the course of the committee’s work, the importance of intergovernmental relations was a constant theme raised as a critical issue underpinning the delivery of further devolution.
As a committee we agree with Lord Smith that the current largely non-statutory machinery of intergovernmental relations in the UK will not be sufficient to deal with the challenges arising from the proposals for further devolution. The committee recognises that for intergovernmental relations to operate effectively there must be space for discussions between Governments to take place in confidence. However, the general principles that will underpin intergovernmental relations and dispute resolution in future should, in the committee’s view, be placed in statute.
Central to any new structure or intergovernmental relations will be the role of this Parliament and, indeed, Westminster in scrutinising the actions of Governments within the new structure. That will pose a significant challenge to this Parliament. That is an area to which the committee intends to give further consideration and thought in the coming months.
The committee’s report is the culmination of seven months of intensive scrutiny, first of the Smith commission recommendations and secondly of the draft legislative clauses that were produced by the previous UK Government. I do not wish to sound conceited—it is not usually my style—on behalf of the committee, but the sense that I have is that the report has been well received across the spectrum of Scottish society. In this age of the digital Parliament, I cite two tweets in my defence. The first is from a former member of the Smith commission, Professor Adam Tomkins, whom many will know well—some in this chamber certainly know him well. He said:
“I’m quick to criticise the @ScotParl when it screws up but today’s report from the @SP_DevoCttee is legislative scrutiny at its best.”
At the other end of the constitutional spectrum, Dr Andrew Tickell of Glasgow Caledonian University, perhaps better known to some as the author of the blog, Lallands Peat Worrier, considered the committee’s report to be “forensic, clear and constructive” and one of the best reports he had seen coming out of Holyrood. I do not make those points lightly. That is a message as much for this Parliament as it is for the Secretary of State for Scotland in terms of the contents of the committee’s report.
It is now the ambition of all the committee to see
“both the letter and the spirit of the Smith Commission’s report fully translated into a legislative package” in the coming months. If the UK Government is getting ready to fire the starting pistol by introducing the Scotland bill next week, my committee is saying that we are not yet at the starting line, so let us not have a false start. Let us try to get the legislation right at the outset of this journey.
It was in that spirit that Lewis Macdonald, Linda Fabiani and I met David Mundell on Tuesday. We were pleased that he signalled an imminent introduction of a Scotland bill and that he was planning to make some—and I stress the word “some”—changes to the bill before introduction, most notably on the welfare clauses. All three of us welcomed the constructive dialogue that we had with the Secretary of State for Scotland, but we also said that we reserve judgment until we see the actual bill, as there is still a lot of work ahead for the UK Government to get it right. We would like to see as many changes as possible incorporated into the bill before its introduction, but if that is not possible, the Secretary of State for Scotland has a responsibility to clearly articulate what changes he intends to make via Government amendments during the passage of the bill. Let us leave nothing to nuance and interpretation. We owe it to the people of Scotland to be crystal clear on what new powers are coming.
That is not just me or other members of the Scottish National Party speaking, but, I believe, all five political parties that were represented on the committee.
That the Parliament notes the conclusions and recommendations contained in the Devolution (Further Powers) Committee’s 3rd Report, 2015 (Session 4), New Powers for Scotland: An Interim Report on the Smith Commission and the UK Government’s Proposals (SP Paper 720).
I would rather make progress, if Mr McDonald does not mind. Time is tight.
It is in the interests of the UK and Scottish Governments that the proposed legislation reflects the Smith agreement. To that end, I am sure that the committee’s views will be extremely useful—indeed, cogent—in informing the UK Government’s work as the bill progresses.
This is also a time to reflect further on broader issues. In that respect, it seems to me the Scottish Government reflects three positions on Scotland’s constitutional future. The first—that the Smith commission’s recommendations be implemented as a priority—is something upon which we can all agree. The second—independence for Scotland and leaving the United Kingdom—is an argument that many members will reject and which was roundly defeated in the referendum last year.
The third, which is more powers beyond the Smith commission’s recommendations, is more fluid. Some people will feel that that option is inadequate and others that it is too much, but many will at least want to explore what the Scottish Government has in mind. The Prime Minister and the new Secretary of State for Scotland have met the Scottish Government and said that they will listen to its views on that. That is a constructive approach.
My question is when and in what format the Scottish Government will set out proposals for such further powers. I am not asking simply for a restatement of the SNP’s proposals to the Smith commission because, in that process and the call for evidence, enormous opposition was raised to some of the party’s suggestions, such as the devolution of corporation tax. Concerns about that were raised not only by business groups but by bodies such as the Scottish Trades Union Congress, the Scotch Whisky Association, the Institute of Chartered Accountants of Scotland and the Chartered Institute of Taxation.
With little likelihood of building any consensus around such proposals, it is important that any areas for further attention and devolution that the Scottish Government intends to outline ought to be realistic and evidence based. It would be a constructive contribution to any continuing discussion for the Scottish Government to lay out what powers, short of independence, it seeks and to indicate a framework for the procurement of evidence and for engagement with civic Scotland.
There are some signs of positive change and it seems that at least some within the SNP have recognised the instability of the full fiscal autonomy that they once supported. I understand that its new MP for East Lothian has said:
“fiscal autonomy without inbuilt UK-wide fiscal balancing would be tantamount to economic suicide.”
Fiscal balancing—the pooling and sharing of resources that we spoke of during the referendum—is a vital component not only of a common currency area but of the economic union that the Scottish people endorsed last year. Of course, fiscal balancing must be supported by some level of common taxation.
The Smith commission was careful not to pull apart the areas that support the UK’s single domestic market. I would like the Scottish Government to recognise the principle that the union for which people voted is more than the absolute minimum that is theoretically required to maintain the UK as a state.
The Parliament’s views matter a great deal in the process. By moving forward constructively, we have the opportunity to create an enduring settlement that is based on that broad consensus—a powerhouse Scottish Parliament within the United Kingdom that has responsibility for what it raises as well as for what it spends—and reflects the aspirations of the Scottish people. The interim report is a positive first step in that process.
It is my pleasure to speak today in support of the arguments in the committee’s interim report. In particular, I wish to comment on the work of the Crown Estate. It has taken us decades to get to a stage at which we may see Crown Estate issues devolved. The devolution of planning powers to local authorities took nearly a decade to achieve, and although there were demands in the Scotland Bill Committee in 2011-12 for devolution of the Crown Estate, it was not devolved at that time.
We are now in a position in which we have draft clauses before us. However, those clauses could, given the legislative approach that has been adopted in relation to the management and revenues of the Crown Estate, be construed as being overly complicated, unless there is full transparency and full consultation of the Scottish Parliament and Scottish Government during the legislative process.
A range of elements in the draft clauses have been discussed by members who have spoken previously in the debate. I will deal with one or two of those points in more detail.
For example, draft clause 23 states that the Treasury “may make a scheme” to devolve the Crown Estate functions. The committee would like to see the word “shall” in that clause and does not believe that parliamentary draftsmen would have any difficulty in understanding the import of such a change. It looks at present as though something is being held back, rather than being generously offered.
The Smith agreement made it very clear that the management and revenue of the Crown Estate economic assets that are held in Scotland should be devolved. As Bruce Crawford said earlier, many of us were amazed to find that it appeared that there would, somehow or other, be a continuation of the Crown Estate in another form—indeed, that there would be two Crown Estates working in Scotland at the same time. Crown assets would be devolved, but if the Crown Estate in London decided that it wished to invest in Scotland, it would continue to be able to do so under the proposed scheme. The committee stated clearly that if there were to continue to be a non-devolved Crown Estate—which we think is a ridiculous concept—any profits that would come from its investment in Scotland should accrue to this Parliament to enable Scots to decide how to spend them.
I thank Lewis Macdonald for that, but it still stands that we want our fair share of any profits that come from those investments, as was stated categorically in the committee’s report.
The Crown Estate deals with an entity called Fort Kinnaird—a shopping complex that is tied up in an English law that was passed in 1907—as part of a partnership with a private entity that seems to be offshore. We are very unhappy about that arrangement continuing, and we think that any profits from those assets in Scotland should be shared with the Scottish Parliament.
The coastline of Scotland is estimated to be about 10,250 miles long. Ordnance Survey has said that the coastline of Britain—Great Britain, not including Northern Ireland—is approximately 19,491 miles. Scotland has disproportionate importance, given that it has more than half the coastline of Britain, so we need to ensure that we are able to apply this Government’s policies to decentralise control of Crown Estate assets and so on. The Crown Estate is, therefore, disproportionately important to the Scots in comparison with its importance for the rest of Britain.
In that respect, we believe that we should, at the earliest opportunity, have the chance to look at the our islands, our future initiative and ensure that that devolution continues. That is not covered in the draft clauses at present, but it is a commitment—as I understand it—from the SNP Government.
The committee believes that there is scope in some communities for devolution of the management of certain economic assets including harbours, port authorities and local marine interests. We have to find ways to include those in further discussions, but that goes beyond what Smith was talking about, and certainly goes far beyond what is being discussed with regard to the draft clauses.
We recommend that the Scottish Government keep the Devolution (Further Powers) Committee and other Scottish Parliament committees up to date on discussions with local authorities and others about their interest in taking on devolved powers. My committee—the Rural Affairs, Climate Change and Environment Committee—has been bringing the Scottish Crown Estate Commissioner and his officers in Scotland into our Parliament each year to tell us about their activities, which will allow us to interrogate their activities in greater detail.
I suggest that the committee’s report is a model of clarity about the things that require to be cleared up, including there being a memorandum of understanding about issues related to UK interests in Scottish waters. However, the issue of the Crown Estate staff is of considerable concern to us because it is obvious that they need to be accommodated in the Scottish Government’s approach to using the Crown Estate’s powers, and that their expertise should be recognised and utilised, and some clarity given to them about their future.
I am glad to support the motion and I hope that my clarifications help the debate.
In the days since the general election it has become quite fashionable in some quarters to denounce the Smith commission. Of course, some people started doing that quite early. My fellow member of the Smith commission, Mr Swinney, started his denunciation about 15 minutes after the Smith commission’s report was released. However, some of my erstwhile colleagues took a little longer to jump on that bandwagon.
I start by paying tribute again to the work of the Smith commission and all its members, because the truth is that the commission was given what many people believed to be an absolutely impossible job. However, in my view, we made a remarkably good fist of what we were asked to do. We were asked to deal with some extremely complex issues in a timescale that was very truncated because of the deadline of St Andrew’s day, which meant that we had only about 10 weeks to do the work.
The complexity of the issues that we were dealing with is one reason—this comes through in the committee’s report—why we agreed that there were some things that the commission was not going to be able to resolve and so they would have to be left for what would usually be negotiation and discussion between the Scottish and UK Governments. Reference has been made to some of those things already—in particular, the fiscal framework and the detail of the borrowing regime. I do not think that we need to make any apology for the fact that those elements of the relationship between the two Administrations and Parliaments have to be worked out over time. There is not a devolved democratic structure in the world, be it federal or otherwise, that does not have some complexity in its fiscal framework and arrangements for fiscal transfer and borrowing.
The commission was a process in which compromise was made. I was cheeky just now about the Deputy First Minister’s reaction on the day that the Smith commission’s report was published, but in all fairness to him and to Ms Fabiani, they made it very clear from the start that although they were not going to change their view that the devolved settlement would not go far enough for them, they were prepared to take part in the process, and they did so. They compromised; I think that everyone on the Smith commission compromised. We should take the opportunity to pay tribute to that.
The next difficult task, of course, was the draft legislation. I know that drafting legislation is not easy but, to be frank, I simply have to agree with the Deputy First Minister that examination of the draft legislation does rather show that some of it does not, as he put it, reflect both the spirit and the substance of what was agreed at Smith.
I will quickly add to some of the points that the Devolution (Further Powers) Committee has made in its report. I think that the committee has been remarkably clear-sighted in doing the job that it was required to do, which was to look at where the draft legislation reflects the Smith agreement and where it does not.
I want to put in my tuppenceworth on a number of areas. On taxation, it was clear in the Smith commission that the agreement was that a great deal of responsibility would be devolved but that income tax would continue to be a shared tax. That is why, for example, tax allowances were not recommended for devolution. I say gently that the use of income tax devolution to try to justify what is called English votes for English laws has been one of the more reprehensible misuses of Smith.
There was also considerable debate about whether it would be possible to set a zero rate in order to make some taxpayers not liable for tax at all. I am clear that the Smith agreement was that a zero rate should be possible, so the legislation should reflect that.
When we look at the £2.5 billion of welfare benefits that are to be devolved, I am absolutely clear that what was intended was complete devolution of both the resources and the responsibility. If we look at carers allowance as an example, that would mean that a Scottish Government could simply take the money, get rid of carers allowance and use the money for something else. I do not think that it would be likely to do that, but any idea that the agreement means some continuing control over carers allowance is, from my point of view, simply incorrect.
It was also absolutely the intention that this Parliament ought to be able to create new benefits in devolved areas, and not for a temporary period.
As Jackie Baillie said, we on this side of the chamber are not closed to the idea of going beyond Smith. In particular, we continue to argue for devolution of housing benefit because we believe that the case for that has great merit. We did not win the argument in the Smith commission, but we will continue to make it, not least because—this is important—the arrangements in Smith were supposed to ensure that this Parliament would be able to abolish the bedroom tax, but they do so in a rather complicated and convoluted way. The simplest way to achieve that would be to devolve housing benefit. That is just one reason why we will continue to argue for that, as the process continues.
I, too, will start with general adulation for the convener of the committee and all others who served on it. I always take the Deputy First Minister seriously in his remarks, but I find it wonderful for the Government to say such nice things about a parliamentary committee report. I do not remember the Government saying such nice things about the minority report that some of us produced on police centralisation. I guess that that is how such things go in any Parliament.
I am very happy to associate myself with Mr Scott’s remark that, although elements of the draft clauses implement the spirit and substance of the Smith commission fully, entirely and to the Scottish Government’s satisfaction, they do not do so in other respects.
The publication of the report and today’s debate are further steps on Scotland’s journey through the history that is being made. I am delighted that members of the Inverclyde historical society are in the public gallery today to witness the debate.
I warmly welcome the debate. I am pleased that the committee can speak with one voice on the issues surrounding the draft clauses that were published on 22 January. I aim to focus my attention on two areas of the report: first, fixed-odds betting terminals—FOBTs—in paragraphs 412 to 415; and employment programmes, in paragraphs 302 to 313.
On FOBTs, members will not be surprised that I am raising the issue once again in the chamber. I have been consistent in voicing my concerns about how damaging the machines are. I have campaigned for powers to come to the Scottish Parliament relating to the machines and have welcomed the inclusion of the powers—though limited—in the Smith recommendations.
Paragraph 415 of the report highlights the limited evidence that the committee received on the issue and our concerns about the limitations in the draft clauses, which would have no effect whatever on existing premises in Scotland. The issue of FOBTs is now even more in need of further clarification, because one of the two new UK Government ministers who will deal with gambling, John Whittingdale MP—the new Secretary of State for Culture, Media and Sport—has previously pushed for rules on FOBTs to be relaxed and has supported having up to 20 FOBT machines per betting shop. In contrast, junior minister Tracey Crouch MP said in 2013 that she believed that
“we should look carefully at limiting them or limiting the stakes that people can place on them.”
Those mixed messages at UK Government level need to be clarified as soon as possible; I have written to the UK Government to ask for that clarity. However, the committee will scrutinise the relevant clauses in the bill when it is published next week.
On employment programmes, the Smith recommendations were crystal clear. Paragraph 57 of the Smith report says:
Unfortunately, the draft clauses do not go that far. In paragraph 335 of our report, we state:
“The Committee considers that the clauses as currently drafted do not fully implement the Smith Commission recommendations. The Committee considers that the Smith Commission intended that all employment programmes currently contracted by DWP should be devolved.”
We received evidence from organisations expressing their concern at the draft clauses on the issue. However, if we go back to 4 December 2014, when we took evidence from the then Secretary of State for Scotland, Alistair Carmichael MP, on the work programme, it becomes clear that there has been a lack of clarity about the issue from the outset. It was reported that day that the work programme had been extended to spring 2017. When questioned by Linda Fabiani MSP, Mr Carmichael stated that the decision had taken place in August 2014. However, when I questioned Mr Carmichael on whether Lord Smith was aware of that decision, he replied that he did not know. My colleague Linda Fabiani MSP, however, gave a determined
“No.”—[Official Report, Devolution (Further Powers) Committee, 4 December 2014; c 22.]
That is all on the public record. I raise that point not to be partisan—most contributions so far, including mine, have been constructive and consensual—but to highlight one area where there has been a lack of clarity.
Draft clause 22 from the UK Government, which was published in January, needs to be improved. If this Parliament were to be provided with the ability to help all, and with the flexibility over the length of time that an individual has been unemployed, that would aid greatly Governments of all political hues.
The committee received helpful evidence on transferring employment powers. The Employment Related Services Association stated:
“ERSA continues to believe that”— sufficient provision—
“would be best achieved through the devolution of responsibility for all in work and out of work welfare policies and benefits to the Scottish Government, including responsibility for Jobcentre Plus in Scotland.”
Last week, the STUC signed a memorandum of understanding with the Scottish Government on the further powers that should as a priority come to this Parliament. The powers include the minimum wage, trade union and employment law, health and safety law, equalities legislation and further powers over social security. If those powers could be transferred, they would provide this Parliament with greater flexibility and opportunity to help employment programmes such as the work programme and work choice, which is a specialist disability employment programme.
Every member clearly wants more people in employment and training, and we should always strive to improve what is being done. Unfortunately, draft clause 22, which was published in January, will not deliver what is needed. However, next week, the new UK Government has an opportunity to deliver something meaningful on that matter in the new bill.
In various areas of our report, we have highlighted that the draft clauses do not meet the spirit and substance of the Smith commission recommendations. We also consider that our unanimous report should be taken into consideration by the new UK Government when it works on producing the new Scotland bill.
Clearly, the draft clauses do not go anywhere near far enough for SNP members—that is a given—and we will press for more powers to come to this Parliament. Nonetheless, I suggest that the comments that were made on 23 January by Ben Thomson, who is the chair of the campaign for Scottish home rule, on the draft clauses are apt:
“the real missed opportunity in this Command Paper is that it does not deliver a sustainable proposal based on a set of principles that gives Scottish Parliament control over domestic policy; in other words, it does not deliver Scottish Home Rule.”
It is up to the UK Government to strengthen the clauses and to live up to the spirit and substance of Smith and—who knows?—even to go further than Smith.
I am pleased to be able to speak in the debate, despite not being a member of the Devolution (Further Powers) Committee.
Committee members, clerks and witnesses are to be congratulated on a very detailed interim report, which flags up a number of important issues that must be addressed if the Smith commission recommendations are to be properly implemented. As others have said, it is particularly commendable that the committee, which comprises members from five political parties, managed to reach consensus on controversial matters, because that consensus makes the report all the more powerful. Therefore, I hope that the UK Government will consider the issues that are raised in it with the utmost seriousness.
The committee convener talked about intergovernmental relations, and Linda Fabiani at the end of her speech indicated that she would have liked to have said a bit more about the Sewel convention. It was the committee’s recommendations on the Sewel convention and legislative consent memorandums that stood out for me as I looked through the report. The committee report stated that draft clause 2
“does not incorporate in legislation the process for consultation and consent where Westminster plans to legislate in a devolved area.”
The Law Society of Scotland expressed concern to the committee that the draft clause does not place the Sewel convention, whereby the Westminster Government does not normally legislate on devolved matters without the consent of this Parliament, on a statutory footing. Professor Alan Page of the University of Dundee observed that
“It would be preferable therefore for that to be made clear on the face of the legislation.”
I am concerned that the current position should not be watered down. I want to see the requirement for consultation—with adequate time to do so—to be strengthened. Despite the Law Society stating that the Sewel convention had worked “relatively well”, our experience during my time on the Justice Committee is that it has not always been satisfactory. I ask members to cast their minds back to the legislative consent memorandum on the Anti-social Behaviour, Crime and Policing Act 2014, which we passed on 22 January 2014. Although we somewhat reluctantly agreed to that legislation, the Justice Committee was sufficiently concerned about the proposals to criminalise forced marriage that we could not make a recommendation on that part of the LCM, so we asked the Parliamentary Bureau for a short debate.
Members will recall that the Scottish Parliament had previously passed our own legislation—the Forced Marriage etc (Protection and Jurisdiction) (Scotland) Act 2011—which was thereafter deemed to be in contravention of the Istanbul convention on preventing and combating violence against women and domestic violence. Scottish organisations representing women’s ethnic minority groups had not had the opportunity that their sister organisations in England and Wales had to respond to the UK legislation. They were unable to submit their views on how the Scottish 2011 act was working or, in particular, to make their arguments about why the act was not in contravention of the convention, although legal advice that the committee received contradicted that view.
In addition, major changes were sought in the maximum sentence for the criminal offence, which were to be introduced in Scotland without consultation. I should make it clear that it was not the policy intention that was the concern; we were concerned about the lack of consultation of Scottish stakeholders and the possible conflict with our own legislation. We were faced with a choice between accepting an LCM that had not been the subject of consultation in Scotland and introducing emergency legislation here, which is—as we all know—a path that is strewn with pitfalls. Reluctantly, most of us accepted that approving the LCM was the better route. However, I am sure that other members will back me up when I say that the committee felt strongly that the LCM process is flawed.
The Justice Committee has received other LCMs—for example, on the Criminal Justice and Courts Bill and the Serious Crime Bill—that were prompted by amendments that were made in the House of Lords. Although most of those have not been as sensitive as the forced marriage issue, there has been very little opportunity to receive evidence in adhering to the short timescales that are required for the Scottish Parliament to give its consent to LCMs.
Therefore, the Justice Committee has not found the LCM process to be ideal as regards the opportunity that exists for Parliament to carry out consultation prior to giving consent or otherwise, and I am very concerned that the draft Scotland bill will weaken the process rather than strengthen it.
The UK Government’s intention to scrap the Human Rights Act 1998 further compounds my belief that the LCM process must be strengthened with regard to consultation and consent. The Scotland Act 1998 places obligations on the Parliament in relation to human rights, but if the Human Rights Act 1998 is repealed and a weaker British bill of rights is introduced at UK level, we might receive LCMs that could contravene the legislation that founded the Parliament. It is clear that the vast majority of MSPs are opposed to repeal of the Human Rights Act 1998. If it is repealed by the UK Government and replaced by something weaker, the Scottish Parliament might decide to pass its own human rights bill to protect human rights in devolved areas.
What will happen if we want to do that? UK legislation could be compliant with the provisions of the British bill of rights, but in contravention of the Scottish human rights act. The Parliament could be presented with LCMs that are incompatible with our legislation. Human rights is an important example, but as more responsibilities are devolved to this Parliament, there will be greater potential for divergent legislation and complications if the UK Government seeks to legislate in devolved areas. Therefore, it is essential that the relevant clause be redrafted to reflect the need for consultation and consensus.
I very much agree with the convener of the Devolution (Further Powers) Committee—the UK Government needs to get the bill right before it introduces it in the UK Parliament. There are serious issues on which there could be conflict between this Parliament and the UK Parliament if we do not get these things right, and it is necessary for intergovernmental relations that we do so.
I, too, would like to recognise the diligence of the committee’s clerks and our advisers in the process, and I thank all those who gave evidence to assist us in our deliberations. The committee was, of course, convened with flair, firmness and fairness by Bruce Crawford—I am only sorry that I have been unable to make him blush. [Interruption.]
The committee was tasked with scrutinising the previous UK Government’s translation of the Smith commission’s recommendations into proposed law. As my committee colleagues have said, that scrutiny was undertaken in an atmosphere of mutual respect and with an agreed determination to ensure that, as the report said,
“both the letter and the spirit of the Smith Commission’s report” would be
“fully translated into a legislative package”.
A key conclusion that the committee reached can be found in paragraph 493 of the report, which states:
“In some of the areas ... the Committee believes that the current draft legislative proposals meet the challenge of fully translating the political agreement reached in the Smith Commission. In other areas, improvements in drafting and further clarification are required. In some critical areas, the then UK Government’s draft legislative clauses fall short.”
In the time that I have, I intend to outline where the Scottish Green Party is content that the clauses meet the letter and the spirit of the Smith commission’s proposals and where we believe that they do not. I will also stress the need to broaden public engagement as widely as possible as the process moves forward, which Jackie Baillie touched on.
It is fair to say that we are having this debate because, during the referendum campaign, the people of Scotland, regardless of what side they were on, became so involved in the debate about what kind of Scotland they wanted to live in. Some 18,000-plus emails were received during the Smith commission process. Given the tight timescale, it is fairly likely that those emails did not all receive the consideration that they perhaps deserved. We will never have all the time that we wish to have, but there is a little more time now for engagement. That level of engagement illustrates that, as the Scottish Council for Voluntary Organisations noted,
“If it is to be meaningful and effective, devolution must be driven by the people of Scotland” and
“There must be opportunities for the public to influence the process and contribute their views.”
The committee report states as a key recommendation:
“The Committee believes that further public engagement, directly with the people of Scotland as well as representative bodies, charities, industry groups, voluntary bodies etc. is still a vital activity that needs to be carried out and is fully committed to the spirit of the recommendation made by the Smith Commission in this respect.”
“The Committee calls on the UK and Scottish Governments to consider how to commit to the spirit of the Smith Commission’s recommendation in this respect.”
The committee did what it could in that regard to go out and about. It had meetings and engaged where that was possible, but I would like the Scottish Parliament and the UK Parliament to consider properly how to broaden meaningful consultation. I urge the Government to look at things such as citizens juries and consensus conferences. As colleagues know, the charrettes method has been used with some success in the planning system in Scotland. Those techniques are used across the world to help to solve complex problems without top-down imposition by so-called experts.
“tangible level of fear among so many people in the face of” cuts
“to what remains of the welfare state.”—[Official Report, 14 May 2015; c 16.]
The Engender briefing for today’s debate sets out starkly how gendered the cuts have been. Since the coalition Government started cutting, 85 per cent of the money that has been saved from tax and benefit changes has come from women’s pockets. We want to fix those wrongs that are harming women, children and vulnerable people, but there are genuine concerns that we will not get the devolution of welfare right. Our job has not been made easy by the complex devolution agreement, which could potentially make things even more confusing for people.
The committee report has important recommendations to ensure that we are able to create a system that works. On top of that, women and those who are in receipt of benefits need to be much more involved in the design. Engender calls for the administration of universal credit to be devolved early with a section 30 order. Jim McCormick also pointed out that we need much-improved intergovernmental working if we are going to manage properly those really important areas of shared responsibility, such as welfare.
The Greens called for and welcomed agreement on the proposals for the devolution of unconventional gas licensing, fuel poverty and energy efficiency programmes, and formal consultation on energy policy. I agree with much of what the First Minister said yesterday on energy policy. Scotland needs a stronger voice.
The Scottish Government has a moratorium on fracking, but there should be no delay in the public consultation. It is time for a complete ban with no delay in devolving the licensing regime.
As we have heard, the Crown Estate is another area in which the draft clauses do not deliver the Smith agreement. For some reason, the proposed method of devolution is convoluted—the land reform expert Andy Wightman described it as “opaque, complex and unnecessary”. I strongly support the devolution of the Crown Estate away from Holyrood, but there is no need for overly complex preconditions in an already complex settlement. In effect, the draft clauses allow two Crown estates in Scotland, with one managed by commissioners in London and one managed by whatever sort of local devolution scheme is established. That is entirely at odds with the spirit of the Smith commission and must be rectified.
I welcome colleagues’ openness to the idea of building on the Smith commission. There is too much to cover, but I will make a final point. Devolution must not stop at Holyrood. I did not campaign for a mini-Westminster in Edinburgh. If the past couple of years have taught us anything at all, surely they have taught us that we need to trust our local authorities, our communities and our people with more power.
It is fair to say that, in some senses, we have been slightly overtaken by events. The general election changed things. We are at the start, not the end, of a process, and the watering down of some of the Smith proposals by the draft clauses means that they have to be revisited.
Gordon Brown famously guaranteed that, if Scotland voted no,
“We are going to be as close, within a year or two, to a federal state as you can be in a country where one ... nation has 85% of the population.”
“I hope and believe that we can bring the countries of our United Kingdom together, implementing the devolution agreed for Wales and Northern Ireland; creating in Scotland the strongest devolved Government anywhere in the world”.
Let me repeat that promise made by the Prime Minister this week. He said that we will create
“in Scotland the strongest devolved Government anywhere in the world.”—[Official Report, House of Commons, 18 May 2015, Vol 596; c 5.]
Not only do the draft clauses not come anywhere near meeting that promise; the Smith commission proposals fall short of it as well.
However, that is the test by which the Prime Minister wishes us to judge his Government’s proposals. The committee asked the Scottish Parliament information centre to provide an analysis of the amount of fiscal decentralisation in the UK compared to other Organisation for Economic Co-operation and Development countries. The UK was almost at the very bottom of that graph. Belgium, Norway, Australia, Italy, Germany, Finland, Spain, the USA, Sweden, Switzerland and Canada all scored much higher on both subnational Government tax revenue as a percentage of total tax revenue and subnational Government expenditure as a percentage of public expenditure.
The amount of fiscal decentralisation to Scotland has been overplayed. Few financial powers have thus far been decentralised. The Smith proposals take us a little further, while the recommendations on devolving benefits do not take us very far forward at all. If the Prime Minister really means to create in Scotland
“the strongest devolved Government anywhere in the world” as he has promised, his Government’s draft clauses are unrecognisable as the means to make that a reality.
The Smith commission did not recommend extensive powers for the Scottish Parliament on welfare, despite the pre-referendum promises, guarantees and vows. It listed some benefits to be devolved, but the vast bulk of welfare benefits were to remain reserved.
However, the Smith report states:
“The Scottish Parliament will have new powers to create new benefits in areas of devolved responsibility”.
Unfortunately, the draft clauses propose that the powers of the Scottish Parliament will apply
“as long as they specifically relate to areas of welfare responsibility that are devolved.”
That does not necessarily sound like a big difference, but it is a substantial difference and it in no way meets either the spirit or the substance of the Smith recommendations.
As Professor Paul Spicker of Robert Gordon University mentioned in his submission to our committee, schedule 5F to the Scotland Act 1998 implied a presumption that all benefits would be reserved unless explicit provision is made to the contrary. Professor Spicker said that the draft clauses on further powers
“operate almost wholly by adding further exceptions.”
He also said:
“The clauses in the White Paper are not faithful to the recommendations of the Smith Commission. The key differences are the absence of the power to create new benefits, and the restrictions placed on the categories of people to whom benefits refer.”
That restriction will have real consequences for the people of Scotland—it is not an abstract concept—particularly for our most vulnerable citizens. Unless the UK Government makes substantial changes in this area it will have failed in its promise to meet the Smith recommendations in full.
One final point on the power to create new or top-up benefits is the crucial one that any additional income created by such new benefits introduced by the Scottish Parliament must provide additional income for recipients and not be offset by reductions in entitlements to benefits, tax credits or tax relief provided by the UK Government. That is the unanimous view of the committee and the UK Government must rise to that challenge.
Even the specific benefits that Smith proposed be devolved have been restricted in the draft clauses. I will give just two examples. It was recommended that benefits for carers be devolved, but the white paper proposes devolving benefits only for unemployed carers. While Smith recommended devolving industrial injuries disablement benefit, the white paper proposes devolving industrial injuries disablement benefit excluding prescribed industrial diseases.
That is important. I will quote a research paper published by the Alliance for Cancer Prevention, entitled “Asbestos in Scotland”, to show why I think it is important. The paper states:
“In the last quarter of the twentieth century the government’s official statistics ... recorded rates of mesothelioma in Scotland running at 31% higher than the UK average, while in the Clydeside region rates were almost double, and in Glasgow the rates were two and a half times higher than the UK average. A particular hotspot was the town of Clydebank, several miles west of Glasgow, which officially recorded the highest rate of mesothelioma mortality in the whole of the United Kingdom.”
Yet apparently the Scottish Parliament cannot be trusted to deal with providing industrial injuries disablement benefit to the victims of asbestos.
Given the failings of the draft clauses on welfare, the question that I have to ask Labour members is: if SNP MPs lodge amendments to the bill on devolving welfare powers, will Labour MPs support those amendments or will they vote to keep welfare in the hands of a majority Tory Government? That is not an attempt to directly attack our colleagues on the Labour benches; it is an extremely important question that members of the public in this country need to know the answer to.
The general election reset the bar: the Scottish National Party received an overwhelming mandate from the people of Scotland. The Prime Minister has promised to create in Scotland the strongest devolved Parliament in the world. Therefore, the question for all of us here today is simple: will we stand together and demand that that promise is honoured, or will some parties accept an offer that fails both in spirit and substance to even meet the recommendations of the Smith commission?
I am looking to you, Presiding Officer, to see whether I can take Jackie Baillie’s intervention. I can. Given the likely impact of a majority Tory Government at Westminster on trade unions, employment law and the minimum wage, will Jackie Baillie now join the STUC and the Scottish Government in supporting the devolution of those powers?
I will give Jackie Baillie a suggestion. The suggestion is that, when I say to her, “Will you join the STUC and the Scottish Government in demanding that those powers are devolved?” she should answer, “Yes.” That is my constructive suggestion to Jackie Baillie on how we might proceed.
Looking at what is coming forward, I note that the bill will be published next week, and it will be interesting to see whether the constructive points that the committee has raised are factored into it. I would like to hear in the closing speeches—particularly from the Conservative side of the chamber but also from Labour—a commitment that, if those points are not factored in, those parties will lobby with us for Westminster to agree to amendments that will deliver the spirit and the substance of Smith. It is the very least that the Scottish people expect and deserve.
When we are talking about deciding how those things should be done, it is not a question of whether the people at the most local level should control them. Does Lewis Macdonald agree that we have to create a structure in which they can do so, and that the obvious place to do that is this Parliament?
I wonder whether the Deputy First Minister does not regret that last remark, given the discussions that are being had with the Office for National Statistics and Eurostat about the validity of certain capital projects and whether they are on or off budget. Indeed, in my area, Our Lady and St Patrick’s high school has been delayed as a result.
Christine Grahame talked about the stability of the United Kingdom. The greatest threat to that stability is the fact that we have a British Prime Minister in Downing Street who used the threat of Scottish nationalism and played the English nationalism card in middle England to the disgrace of British politics. That is the greatest threat right now; it is certainly not the SNP or the Smith commission.
I thank the committee, under Bruce Crawford’s chairmanship, for the work that it has done in producing a very detailed report. I have been able to skim through it and it is clearly valuable. I will study it in greater detail as we move forward.
In his opening remarks, the Deputy First Minister talked about the importance of the Smith commission being implemented in “spirit and substance”, and most members have used that term. I agree with that and I hope that we have expressed a fairly united view today. The Parliament is united in saying that the “spirit and substance” of the Smith commission have to be implemented. I for one hope that my party will stand alongside the Deputy First Minister to make that point clear to the UK Government.
In its briefing, the SCVO says:
“If it is to be meaningful and effective, devolution must be driven by the people of Scotland.”
I agree with that absolutely. The committee’s report makes that point and it is important: not that we take the people of Scotland with us but that they lead the debate as we move forward.
Iain Gray said that he was open to further devolution. I would certainly go further: devolution is a journey, we are on that journey, and that journey will take us further, beyond what the Smith commission has come up with. I accept Iain Gray’s point that a timetable was laid out, and that timetable had to be met for what were obvious reasons, in my opinion. However, I do not see that as the end of the process—I think that we will go much further than the Smith commission recommendations.
That point was made by Jackie Baillie, who highlighted the issue of housing benefit. That is an area that my party thinks should be included. The spirit of the Smith commission must be followed, and the substance must be implemented in full, but there then has to be a discussion that also involves the Scottish people about how we use the powers that we have.
Housing benefit, which Jackie Baillie discussed, is one specific area where I will be making an argument for further devolution. The absolute waste when it comes to the amount of public money that is spent on housing benefit is a national scandal, yet we have a housing crisis in Scotland. If housing benefit was being put to use properly, we would be building more council houses and more public sector houses for rent across Scotland. That is where we need to move on to.
I say to Stewart Maxwell that we must move beyond the politics of grievance. Equally, I accept that we need to move beyond the politics of fear. We have to embrace the journey that we are on in terms of devolution.
Unison Scotland said this week:
“UNISON Scotland has always been a strong supporter of a strong Scottish Parliament.”
In the run-up to the independence referendum, Unison
“produced Fairer Scotland and Devolution. Since then we’ve had the Smith commission report which although it doesn’t go as far as we argued for in our submission is an important step forward.”
It is an important step in the right direction, and it is important that we recognise that and start to consider how we will use those powers.
Unison goes on to say:
“That doesn’t mean of course that we have a simplistic approach”, where more devolution
“is automatically assumed to be better, the arguments for full fiscal autonomy for example are very weak.”
The Scottish Government has put a stronger case, and has a case, for full fiscal autonomy. I am keen to move away from the politics of fear and have that discussion. Let us have that debate and get things on to the table so that the people of Scotland can have that debate, with an open dialogue, not on the politics of fear but setting out what full fiscal autonomy would mean for Scotland.
I argued for a no vote in the referendum. I did so because I believed that it was in Scotland’s best interests to remain part of the United Kingdom, pooling and sharing resources where practical and necessary but, at the same time, bringing far greater powers to this place where necessary and where that is in the interests of Scotland.
Today, in welcoming the committee’s report and in having this debate, my view is very much that we need to ensure that the spirit of Smith is followed and the substance of Smith is implemented. Nothing else would be acceptable to the Parliament. We should unite on that.
Let us now have the debate about what more powers we need and, more importantly, about how we are going to use those powers to make Scotland a more prosperous place where everyone can enjoy the rewards that are available from a successful economy.
I found Alex Rowley’s speech—as I often find Alex Rowley’s speeches—to be measured and very interesting. There were a lot of ideas there, and it is not for me to involve myself in the internal affairs of other political parties, but I simply say to Mr Rowley that I understand that there may be a vacuum where such positive ideas may well find a home.
I thank the committee clerks and my fellow committee members, including our over-thanked convener. They have steered us very much towards what has been recognised, both inside and outside the chamber, as a substantial piece of work. I also thank the range of witnesses who came before the committee because, if it had not been for the high quality of evidence that we received, we would not have been able to come to the substantial conclusions that we drew as a result.
Other members highlighted the public meetings that took place. I was able to attend only the public meeting in Aberdeen. One of the things that surprised me at it was the lack of awareness among individuals—many of whom were politically active in the referendum and politics in general—about not only what was in the draft clauses that the UK Government had published but what the Smith commission had recommended in the first place. That ties into what my colleague Christine Grahame said about the fact that the public were not and did not see themselves as part of the process of drawing up the commission’s conclusions. I know that the timetable was a victim of campaign rhetoric and that the timetable that was laid out during the referendum campaign had to be adhered to for political reasons, but it should give us pause for thought that even those whom we would consider to be politically aware struggled to comprehend exactly what was on the table.
A number of points in the debate merit a little more examination. One is the fiscal framework, which is vital. It is a dry and technical area of the debate, but it is also extremely important. As well as being a member of the Devolution (Further Powers) Committee, I also have the pleasure of being a member of the Finance Committee. That is not a sentence that normally flows from the mouth of a member of the Finance Committee, but one of the things that that committee has been doing is examining the fiscal framework. A number of issues that have been highlighted during our evidence taking at the Finance Committee came up during the evidence taking at the Devolution (Further Powers) Committee and need to be examined further. They concern tax competition and tax gaming, as well as the no-detriment principle.
I cannot emphasise enough the importance of getting a firm definition and understanding of no detriment because there are different interpretations not only at governmental level but academic level. Some work will be done to explore the definition and practical effects of the no-detriment principle.
On gaming, one of the interesting pieces of evidence that we took was from Professor David Heald of the University of Aberdeen. Professor Heald highlighted the autumn statement and what he considers to be
“the disruptive potential of what the UK Government does” when it sets its tax policies. He said:
“This Parliament spent a long time trying to reform stamp duty land tax and to produce a property tax that would be implementable by the beginning of April, but the UK Government has basically disrupted that implementation by suddenly changing the tax in the rest of the UK.”—[Official Report, Devolution (Further Powers) Committee, 11 December 2014; c 4.]
I have referred to that in the Finance Committee as the rabbit-out-of-the-hat approach, which is often taken in UK budget setting. We need to consider how it fits with the powers that are being devolved to the Scottish Parliament.
On where we go from here and where we need to go further, one of the issues on which we took evidence concerned savings and dividends, which covers taxation. One interesting piece of written evidence came from the National Union of Students Scotland. One of the concerns that it highlighted was:
“by only devolving non-savings taxes, the Scottish Parliament is put in a precarious position for any future tax rises, and particularly the introduction of a higher rate of tax. As was seen in the year before the introduction of the 50p rate in 2010, and then in the year following the reduction to 45p, those who it affected were able to shift extremely large sums of money between years and between income and dividends”.
There is a concern that, were the Parliament not to be in possession of powers over that, such a situation could cause difficulty. That will merit a watchful eye and further examination as we go forward.
We have heard mention of the STUC’s proposals. In yesterday’s economy debate, I intervened on Jackie Baillie to ask whether the Labour Party would now come with us and the STUC on the powers over employment law and the minimum wage. In response to me, she said:
“I thank the member for his intervention. We will have an opportunity tomorrow to debate the full devolution package. I will also be speaking then, and I look forward to engaging with him on the substance of that issue.”—[Official Report, 20 May 2015; c 20.]
I waited and waited, but I did not hear whether Jackie Baillie and the Labour Party were going to go where the STUC is clearly pushing for us to go.
I understand the Labour Party’s reluctance to make those commitments in advance of the referendum; the party was obviously hedging its bets on whether a Labour Government would come to power. However, now we have a majority Tory Government at Westminster—
In time-honoured fashion, I rise—as others have done—to say that this has been an interesting debate. I express gratitude on behalf of the committee for the tone of the debate, in which complex issues discussed by the committee have been raised. Considered statements have been made and there have been valuable contributions from across the chamber. The consensus that began with the sainted Bruce Crawford, our convener, has almost become a contagion. It is great to hear that, because sometimes consensus does not lead to interesting debates in the chamber. Today, however, it has, and it highlights a great number of common objectives. Maybe we should focus on those and make progress on them in future.
The Devolution (Further Powers) Committee has considered in detail the Smith commission’s recommendations, which have not yet been fully implemented into draft legislation. As members have heard once or twice this afternoon, the committee’s report was agreed to unanimously by all members of the committee. It is a stronger report because of that. It shows that the committee system is stronger than some people believe. It is a good example of what can be achieved. Indeed, it is the first parliamentary report on this issue that I am aware of that all the parties on the Smith commission have signed up to. I echo the convener’s views and pay tribute to all members of the committee for their efforts in achieving that outcome.
We have heard today that there were some difficult areas. The committee took a particular interest in many of those areas and reflected that in its discussion. As a consequence of the committee’s considered approach, in which it has focused on the facts, let the facts speak for themselves and focused on the job in hand, we have received wide acclaim throughout Scotland for the report. Bruce Crawford mentioned that earlier. For that reason, the Scottish and UK Governments need to pay careful attention to the report and ensure that any future Scotland bill addresses the issues that we have raised.
Our report is a considered and constructive contribution to the process of further devolution. Where that process will or should end was not the aim of the committee’s scrutiny; maybe we were able to get consensus because the issue is on-going.
Annabel Goldie and the Deputy First Minister mentioned the committee’s discussion about further further powers. We have plans to get the new Secretary of State for Scotland and, indeed, the Deputy First Minister, to come before the committee. There will be opportunities to talk about the further further devolution that may or may not be available.
Our focus was on whether the previous UK Government’s draft clauses had fully implemented the Smith commission recommendations. Our conclusion was clear: in substantial areas the draft clauses do not yet achieve that objective. Members have considered in detail the areas that we have identified where redrafting, clarification or proposals must be developed if the further powers that have been agreed to by all parties are to be delivered.
I make it clear that I do not approach the debate in the spirit that the pursuit of new powers for this Parliament is, as Jackie Baillie and Alison Johnstone alluded to, an end in itself. However, I recognise that the Smith recommendations have been agreed by all the parties represented in the chamber, and that the new UK Government must deliver on both the spirit and the substance of the recommendations. The draft clauses do not do that.
I am looking at Iain Gray, because I am about to cite John P Mackintosh, who is someone he has cited previously, too. The citation is relevant because, although we are not now in the position that we want, that does not mean that we cannot achieve that position as a Parliament. In a speech on the Scotland and Wales Bill before the House of Commons in 1976, John P Mackintosh said:
“Institutions have to be the servants of political demands.
We have people in Scotland who want a degree of government for themselves at the Scottish level. It is not beyond the wit of man to devise the institutions to meet those demands and thus strengthen the unity of the United Kingdom.”—[Official Report, House of Commons, 16 December 1976; Vol 922, c 1130.]
I want to highlight briefly, in closing this debate on behalf of the Devolution (Further Powers) Committee, the headline areas where the draft clauses fall short.
On welfare, as we have heard, the clauses do not deliver Smith. Furthermore, there will be significant challenges in implementing the proposed powers.
On income tax, significant implementation issues remain to be resolved, such as how a Scottish taxpayer will be defined, how to avoid double taxation, and the timing and phasing of the new powers arriving under the Scotland Act 2012.
On the fiscal framework, the detail of the framework should be available for scrutiny by this Parliament before the issue of legislative consent for any new bill is considered.
On the Crown Estate, the committee has serious concerns about the potential for competition and confusion that may arise from the creation of two Crown Estates. No one wants to rule out the chance for inward investment to Scotland, as Lewis Macdonald alluded to, but the committee was clear that there must be scope for shared investments between the two Crown Estates, with a fair share of revenues accruing to Scotland.
On the permanence of the Scottish Parliament, the Scottish electorate should be asked to vote in a referendum if permanence comes into question, with majorities also being required in the Scottish and UK Parliaments.
As Bruce Crawford highlighted in opening the debate, the issue of intergovernmental relations has permeated every aspect of the committee’s scrutiny of the proposals for further devolution. There is no question but that the shift from a devolved settlement based on a system of largely separate powers to one of shared powers cannot be borne by the non-statutory, ad hoc nature of intergovernmental relations at work in the UK. Tavish Scott and Linda Fabiani took an interest in those issues, and Elaine Murray pointed out some of the complexities.
In particular, the committee is clear in saying that the need for revised intergovernmental structures will be critical in the areas of taxation, welfare, employment support and European Union representation. The structures that emerge will be required to deal with the uneven distribution of powers across the constituent parts of the UK. The committee is also clear in stating that the general principles underpinning the operation of intergovernmental relations should be put in statute. The role of the Parliament in scrutinising the operation of intergovernmental relations in the new landscape of devolution will be a key challenge to which this institution must respond.
The Devolution (Further Powers) Committee intends to consider that issue in the coming months, and I know that it is an area that the Presiding Officer is looking into, along with the Speaker of the House of Commons. We will play a full part in helping the Presiding Officer to ensure that committees in both Parliaments hold their Governments to account. That will involve learning from the practice of parliamentary scrutiny in other jurisdictions and developing a set of principles that could structure parliamentary scrutiny in this area.
We have set a high bar in the common approach that the committee has adopted, and I think that I speak on behalf of the committee when I say that we will continue to meet that high standard in the future. We will seek to get reports that achieve the level of agreement that we have achieved with the report that has been debated this afternoon. That will be our challenge in the coming months, and it will not be an easy one to meet.
Thank you, Mr McNeil. I have already privately congratulated the convener of the Devolution (Further Powers) Committee on his committee’s report, but I take the opportunity to thank all its members—you have done the Parliament a great service.
I am grateful for the opportunity to set out for the Parliament the Scottish Government’s response to the Devolution (Further Powers) Committee’s interim report on further powers for the Scottish Parliament, which was published last Thursday. Like all members, I am extremely grateful to the committee for the work that it did on the report, which is dispassionate, evidence based and considered. It is particularly significant that it is a unanimous report that represents the views of all parties in the Parliament.
As we would expect, Mr Crawford presented the report in an entirely measured way. He made it clear that his citing of the commendations that the report and its style have been given was intended to be for the Parliament’s benefit and was not intended to reflect his personal contribution. However, dispassionate, evidence-based and considered reports such as the one that we are discussing do not come about by accident; rather, they are the result of careful stewardship by conveners such as Mr Crawford, who presided over the evidence-gathering process that enabled such a dispassionate report to be produced.
The report is part of a growing consensus about the forthcoming Scotland bill. Since the draft clauses were published in January, the Scottish Government has maintained that they do not address a number of issues and that that has to be remedied. That view has been reflected in the contributions of a number of stakeholders in the past few months, and now a cross-party committee of Parliament has made the serious, substantive and well-evidenced point that the draft clauses that the UK Government published in January will not implement, in spirit or in substance, the Smith commission’s conclusions.
That is the essential test and starting point for the debate, because the people of Scotland have the right to expect, at the very least, the full and faithful implementation and translation into legislative reality of the Smith recommendations, without any doubts, uncertainties or need for interpretation. We now have a number of voices, including the Scottish Government—of course, some might say, “They would say that, wouldn’t they?”—as well as stakeholders and an all-party parliamentary committee saying that the draft clauses need to translate the spirit and substance of the Smith recommendations into reality. That is a fundamental part of the conclusions of the committee and of today’s debate, and it will be a fundamental part of our consideration of the Scotland bill when it emerges in the next seven days.
Before I set out a more detailed response to the report, I will briefly recap our route to this point. The Scottish Government has been clear that the result of the referendum last September was clear and decisive. Although the Government still believes that independence is the best way forward for Scotland, we respect the result of the referendum and the view that the people of Scotland expressed democratically in it. We therefore played a full and constructive part in the Smith process that followed the referendum to develop and deliver more powers for this Parliament.
The Government published detailed proposals for more powers for this Parliament in October as a contribution to Lord Smith’s work, founded on acceptance of the fact that the powers that we set out could be secured within the constitutional framework of the UK. Linda Fabiani and I represented the SNP on the commission.
Although we signed up to the commission’s conclusions in full and in good faith, it is no secret that we have never viewed the proposals as going nearly far enough. However, we recognised the progress that had been made and sought to work constructively with the UK Government to enable it to deliver a Scotland bill that commands broad support.
The publication of the UK Government’s command paper in January was an important step in taking forward the Smith commission’s proposals. However, the Scottish Government made it clear that the draft clauses did not deliver Smith in full. Since the command paper was published, the Scottish Government’s priority has been to work with the United Kingdom Government to improve the clauses and to ensure that the bill that is introduced delivers the spirit and intent of the Smith commission in full, in a coherent and practicable way. The Scottish Government has therefore made a number of detailed comments and observations to the UK Government about how the issues and deficiencies that we highlighted in January can be properly and fully taken into account by the UK Government in formulating the Scotland bill.
I turn to the details of the committee’s exemplary report. It is an interim report and it is clear that it covers the areas of the bill that are of the highest importance. The committee is—rightly—waiting to see the bill as introduced, and any changes during its progress through the UK parliamentary process, before offering any recommendation on whether the Scottish Parliament should give its legislative consent to the proposals. However, even at this interim stage, it is highly significant that the conclusions have been reached unanimously by the committee. That provides cross-party endorsement of the view that the draft clauses do not meet the spirit or substance of the Smith commission report.
A focus of the committee’s report is on the clauses on welfare and employment support. The committee found that how the clauses on new and top-up benefits were drafted would limit the policy discretion available to future Scottish Governments, that the definitions of carers and disability were overly restrictive and that there were unnecessary restrictions on the employment support programmes that could be delivered.
Members will be aware that those are among the most high-profile areas in which the Smith commission reached agreement to transfer further powers to the Scottish Parliament. The significant shortfalls that the committee has identified will have an impact on the Scottish Government’s ability to deliver in those critical areas reform and improvement that match the specific needs of the people of Scotland. The shortfalls in the relevant draft clauses therefore need to be addressed as a priority if the Scotland bill is to be viewed as a credible reflection of the Smith proposals.
The report touches on the veto clauses in the draft bill—most notably the one related to changes to universal credit. The committee recommends that the issue should be resolved through joint working between the Governments. The Scottish Government has made proposals to the United Kingdom Government to resolve the issue through administrative tools such as concordats, effective joint working between officials and joint ministerial working groups, which are proven and well-established means of ensuring the sort of co-operation that will be required, and I continue to see no need for a statutory backstop.
The committee highlighted shortfalls in other areas that it has examined, from the Crown Estate to the Sewel convention and equalities.
Yes—the Government intends to take that forward. That has been the Government’s consistent position throughout the process. As a signatory to the report, Mr Scott will appreciate that many issues and obstacles have to be resolved in relation to the provisions of the Scotland bill on the Crown Estate, which are far from straightforward.
The Scottish Government strongly supports the committee’s call for improvements in the areas that I mentioned, and we have made proposals to the United Kingdom Government to deliver those improvements.
Before leaving the detail of the committee’s report, I will touch on tax and the fiscal framework. Successful negotiation of the fiscal framework is one of my highest priorities in the months ahead. I have made it clear to the United Kingdom Government that an acceptable fiscal framework is essential to allow the Scottish Government to recommend that this Parliament consents to the bill, and I suspect that Parliament would expect nothing less of the Scottish Government. I have asked for an early meeting with Treasury ministers to review work so far, and the chancellor and I made a personal agreement before the election to oversee work on the framework to ensure that rapid progress is made.
In relation to specific comments by the committee, I agree that further information will be required from the UK and Scottish Governments to enable the Scottish Parliament to give its legislative consent. My objective is that the Scottish Government and the Scottish Parliament are clear about the financial implications, opportunities and risks that come with the powers that will transfer through the bill.
I will conclude by reflecting on the events that have taken place since the general election two weeks ago today. The Prime Minister came to Scotland on Friday and met the First Minister and me along with the Secretary of State for Scotland and the parliamentary under-secretary of state. The discussions were constructive and helpful.
The Prime Minister and the secretary of state made clear commitments that the Scotland bill will implement the Smith commission in full and we will test that commitment when we see the Scotland bill on 28 May. Similarly, the Prime Minister undertook to consider Scottish Government proposals for devolution beyond the Smith commission. We will put those proposals to the UK Government and I will meet the secretary of state to discuss the next steps.
The Scottish Government is clear that the process that follows any timetable for action should allow for full engagement with the people of Scotland. The general election result in Scotland showed the people’s desire for change. The Government will build on the Smith commission proposals and we will hold the UK Government to account to deliver them in full, consistent with the arguments and explanations that the Devolution (Further Powers) Committee has set out. We will also propose a coherent set of powers that will allow Parliament to encourage growth, create jobs, address poverty and tackle inequality in our country.
Those are the Government’s objectives as we take forward the constitutional agenda. Our priority is to ensure that the Scotland bill reflects in full and in substance and spirit the Smith commission’s report and to put to the UK Government our proposals to extend this Parliament’s powers so that we can tackle the issues that matter to the people of our country.
I thank the members of and clerks to the Devolution (Further Powers) Committee for their work in bringing the report to the chamber today. I am pleased that the Scottish Government has used the unanimous report as the framework for discussion with the UK Government about the draft clauses that give effect to the Smith agreement. As the committee said, all that we want to see is the letter and spirit of the Smith agreement fully translated into a legislative package that will be contained in the first Queen’s speech of the new United Kingdom Parliament.
In the short time that is available to me, I want to touch on the three areas of public engagement, the fiscal framework and welfare. That said, the committee report fully explores a number of other technical and drafting issues, and I commend the detail to the chamber. One example of that is the need to tighten the wording of the clauses on equality provisions to ensure that the legislation allows for quotas to be set for the boards of public bodies; the majority of members support that. The lack of time to cover all of these areas in today’s debate does not mean that they are any less important, and I am grateful to the committee for taking the time to scrutinise all that for Parliament.
I turn to the first issue, which is public engagement. The Smith commission was undoubtedly a swift process and the commission members worked at a truly electrifying pace. However, there is a need for a more widespread understanding of what powers are intended to be transferred. We could ask any number of people, but a substantial number are not aware of what powers were transferred to the Parliament in 2012, never mind what is proposed by Smith.
We should use the opportunity to have that dialogue and to talk about implementation. Having the power is one thing, but the question of how we actually use it is a much more interesting discussion. We should take this opportunity to inform, discuss and listen.
My second issue is the fiscal framework. Substantial powers over taxation are coming to Parliament. Some will come for April 2016 and others that flow from the Smith agreement could come by 2020 or earlier. The committee report made it clear that there was agreement with the draft legislative clauses but that the key issue was one of implementation. Making sure that the Scottish Government and HM Revenue and Customs talk to each other about practicalities such as defining residency, arrangements for collection and so on seems to be eminently sensible. I concur with much of what the cabinet secretary said about making sure that the fiscal framework is robust.
Similarly, there needs to be a much clearer understanding of what VAT assignment and the much-quoted phrase of “no detriment” mean in practice. One Scottish National Party member of the Scottish Parliament—who shall remain nameless because I think that they said this to me in jest—defined no detriment as getting full fiscal autonomy for Scotland but not worrying if the sums do not add up because we could always just shout “No detriment” and the UK Government would just bail us out. It is a bit like having one’s cake and eating it, and I am sure that that is not the SNP’s position.
In this and in other areas, intergovernmental relationships are critical. We need a shared understanding and a shared evidence base to ensure that our legislation and our approach are sound. Far be it from me to point out to the SNP and indeed the Tories that megaphone diplomacy of the kind that we have seen recently is unlikely to be conducive to having a mature and sensible relationship in the interests of our country. However, I recognise that much of that is political theatre.
With all this new financial responsibility comes the need for much more robust and independent financial scrutiny. The Scottish Government is consulting on giving the Scottish Fiscal Commission a legislative underpinning; I very much welcome that, but the Government must do more than that. The commission should be truly independent from Government. None of its members should occupy a dual role as a Government adviser and someone with an independent scrutiny function. They should have teeth to properly hold the Scottish Government to account for the nation’s finances. There should be nothing for any of us to fear from that degree of transparency.
Thirdly, I turn to the area of welfare. This is perhaps where the UK Government has been most disappointing in its draft clauses. The Smith agreement was clear that the Scottish Parliament should have the ability to create benefits in devolved areas and that it should also be able to top up reserved benefits if it so wished. I believe that those particular draft clauses illustrate the behind-the-scenes efforts of the Department for Work and Pensions to thwart the agreement, which is simply not good enough.
I believe in a UK-wide system of social security, guaranteeing a minimum safety net for every person across the United Kingdom, but I strongly believe that this Parliament should be able to enhance those benefits to reflect different but specific needs in devolved nations. Therefore, the UK Government needs to redraft the welfare clauses so that the spirit and substance of the Smith agreement are delivered.
Already, though, the Government is illustrating that the debate goes further. The Labour Party wanted the full devolution of housing benefit, which was not supported by the majority within the Smith commission. We wanted that because we want to abolish the bedroom tax and also because we want to look at how we could better use the money to begin an ambitious programme of house building. However, we need to spend as much time—if not more—on bedding down the powers that we have and the powers that are coming as we do on debating what powers we would like to see.
Devolution cannot simply be about transferring power from one Parliament to another, from Westminster to Holyrood—from one set of politicians to another. That is not enough. We want power to be devolved further, to local authorities and to communities themselves, empowering them to do more. I have to confess that the SNP has, to me, been one of the most centralising Governments. We need to reverse that trend. If we believe in devolving power—and I believe that that principle is shared across the chamber—we need to move that power out of Edinburgh, too.
I, too, take this opportunity to welcome the committee report and to extend my thanks to the convener, Bruce Crawford, the committee members, the clerks and the committee advisers for what I think we all agree is a very thorough piece of work.
This has been a significant exercise and it is important that the Parliament is an effective forum to oversee how changes to the devolution settlement are implemented. The committee has manifestly fulfilled its scrutiny obligation. I have to say to Mr Crawford that, looking at the report, I felt quite nostalgic and missed my presence on his committee.
Above all, it is important that our constitutional direction is a matter of building consensus rather than being politically divisive. In that vein, I pay tribute to the work of my fellow commissioners in the Smith commission and, of course, to Lord Smith of Kelvin himself. Presented with a demanding schedule, as Jackie Baillie said, they worked together to create a scheme of more powers that all parties represented in the chamber could agree upon.
Now we are faced with the work of translating those statements of principle into legislation. It is now for us in the Scottish Parliament and for those in the UK Parliament to provide, in the words of the committee, a “constructive commentary” on the process. We must ensure that the Smith commission agreement is brought forward effectively, recognising both the spirit and the letter of the agreement itself, as both Bruce Crawford and the cabinet secretary have said.
In that, the committee has functioned effectively but, of course, the matter has two sides to it. I am—if members will indulge me—not surprisingly pleased that a Conservative majority was achieved a fortnight ago. We have a UK Government that has implementing the commission’s proposals as an absolute priority, and those commitments will form an important part of the Queen’s speech next week.
However, that is just the beginning of the process of introducing a new, effective Scotland bill that will make the Parliament one of the most powerful devolved legislatures in the world.
Although things have very much moved on since last September, I think that it is worth while to put where we are today in context. We started before the independence referendum with the vow that was made, and then we had a post-referendum commitment on what Scotland could expect to happen next. That resulted in the cross-party Devolution (Further Powers) Committee being set up, and it was then given a firm remit to study the draft clauses that came from the Westminster Government in relation to the agreement of the Smith commission, which some members of this Parliament served on.
It is clear, and it certainly comes out in the report of the cross-party Devolution (Further Powers) Committee, that the draft clauses that came from the Westminster Government do not match either the spirit or the substance of the Smith report. It is telling—and excellent—that there is cross-party agreement about that.
Given the nature of the events and the timescale that I have outlined, further discussion of the issues is needed to ensure that both the spirit and the substance of the Smith agreement are delivered on and that the legislation that results from it is coherent. I am pleased to say that the Secretary of State for Scotland agreed with that point when we met him the other day.
I also want to be clear that we are talking about intent. The spirit and substance of the Smith agreement came from the intent of the Smith commission, following on from commitments that were made. It is about intent, rather than interpretation. You cannot say that the Smith agreement is there to be interpreted and that the draft clauses may interpret it in one way and I might interpret it in another, because it is not that simple. To talk of interpretation is to belittle the commitments that were made, the cross-party work of my colleagues on the Smith commission and the cross-party work of my colleagues on the Devolution (Further Powers) Committee, not to mention the excellent contribution of advisers and witnesses. I cannot emphasise enough that the cross-party committee noted the need to match the spirit and substance of the commission—and, I would add, its intent, rather than an interpretation of it.
I would like to focus on a couple of things, allowing my colleagues to focus on others. The permanence of the Scottish Parliament was a big thing in both the vow and post-referendum commitments. There was a lot of talk about it at the Smith commission and at the committee. The draft clause provides that the Parliament and Government will be “recognised” as permanent. I do not see that there is any purpose in adding those words and it is unclear what the expected effect is of that. Removing those words would move the provision much closer to the Smith recommendation. That was the view of the committee.
If we were to weaken the effect of that clause, it would be unfortunate, given that all-party agreement to the recommendation, and the views expressed to us by the then Secretary of State for Scotland that the permanence of the Scottish Parliament and the Scottish Government is guaranteed.
We consider that the effect of the clause on permanence is declaratory and political, rather than legal. The committee recommends that, should there ever be any thought of a future UK Government deciding that the Scottish Parliament was no longer required, it would have to be tested in a referendum of the people of Scotland, with majorities being required in the Scottish and UK Parliaments. The Smith agreement specifically said that nothing within any settlement precludes the sovereignty of the Scottish people. As has been noted many times, devolution is a process, not an event.
When Lord Smith came up to appear before the committee, he said:
“If you know a way of making the institution permanent, tell me, because that is the Scottish people’s will.”—[Official Report, Devolution (Further Powers) Committee, 2 December 2014; c 31.]
We should bear that in mind at all times when we are talking about any legislation on powers for Scotland.
There is always a worry that you do not have enough to say and then you start and you feel that you could say so much more. I would like to have talked at greater length about the Sewel convention. Again, the committee was concerned that not enough emphasis was being given to ensuring that the UK Parliament could not legislate against the will of the Scottish Parliament. I hope that the secretary of state and his colleagues will look at that much more closely and redraft the clause before it is presented to the UK Parliament again.
What underpins so much of all of this is intergovernmental relations and interparliamentary relations as a subset of that. I hope that, in trying to smooth the way for the additional powers for Scotland and coherence in that settlement, everyone concerned will bear in mind that it must be underpinned by respect on all sides.
There we are.
I am pleased to join others in saying that Mr Crawford has handled things extremely well, but I have to say that I chuckled when I heard the Deputy First Minister on Friday’s “Today” programme extolling the virtues of the committee report and then talking about the impending meeting between the Prime Minister and the First Minister. Only then did it dawn on me why it had been necessary to get the committee report out—which, of course, was the right thing to do—and how it coincided beautifully with the meeting between the First Minister, the Deputy First Minister, the Prime Minister and, no doubt, a great range of other very important people. I am sure that our committee report helped enormously in those discussions.
The Deputy First Minister has rightly pointed out that next Friday, once the Queen’s speech is made, a draft Scotland bill will be produced. I suspect that, when the Queen’s speech is read out next Thursday, there will be more interest on the Tory benches in the in/out referendum on Europe than in the Scotland bill, but we can always hope that the Scotland bill will be top of the list. It certainly should be, because of its implications for not just our nation but the rest of the United Kingdom.
Mr Crawford, who is to be applauded for being very careful with his language, pointed out that the draft clauses implement Smith in some areas but not in others. I agree entirely with that synopsis. The Deputy First Minister, who is also extremely careful with his language, did not quite put the matter in those terms, and I think that it is important to recognise that the committee has said that the clauses get things right in some areas but demonstrably do not in others. Indeed, as Linda Fabiani has rightly said, they do not implement the whole spirit of the Smith agreement with regard to certain other areas that Mr Swinney is no doubt going to tell me about.
I am most grateful for that clarification and I am sure that that is exactly as it should be.
Mr Swinney said that he would argue for independence; I would argue for something different. I believe that if there was ever a case for a federal solution to the constitutional upheaval in the UK that we seem to be perpetually going through—and, more to the point, putting our people through—this is it. However, in her opening speech, Annabel Goldie made a good observation about parliamentary scrutiny of the suggestions that the Deputy First Minister’s Government has rightly made to strengthen the clauses that the committee and many others consider to be deficient. In fact, in what is a very small but, I think, important part of the report, the committee looks at the issue of parliamentary scrutiny of what Government does.
I believe that Mr Crawford said that there needs to be space for confidential discussions—and he is, of course, right. Indeed, Jackie Baillie, Lewis Macdonald and I will recognise that there must be such a requirement to allow Governments to talk. However, there is also a need to ensure parliamentary scrutiny of what the Government is doing, and there are examples that we can consider from other parts of Europe, particularly Scandinavia, where Parliaments are very effective at looking at such aspects. Such matters are dull and dry and are about politicians looking at what other politicians are doing, but it is also all about looking at the policies that we implement.
Similarly, one person’s veto is another person’s proper discussion. Today’s Herald reports on what it describes as
“a new front in” the First Minister’s
“rapidly escalating fight with the UK Government after she demanded a veto over Britain's energy policy”.
Mr Crawford rightly raised the veto on social security provisions that some have seen in the draft clauses, but here is an example of a veto on another area of policy—only this time it is the other way round.
I commend to our Government here in Scotland and the Government down at Westminster an approach based on the committee’s recommendations on intergovernmental work and activity. Interestingly, the Deputy First Minister—if I heard him right—said that he did not believe that there needed to be statutory backing for that, and I am sure that the committee will wish to come back to that matter. I am also sure that, to his credit, the Deputy First Minister will come along to the committee and explain his thinking on that, because I think that some of us might have sympathy for his arguments but will want to probe the issue completely to ensure that we strike the right balance and allow Parliament to do its job appropriately.
I want to make two final points. First, I broadly associate myself with Rob Gibson’s remarks about the Crown Estate. I think that we can get a bit hung up on the two Crown Estates issue; we are going to get rid of one, and I very strongly agree with Mr Gibson’s remarks in that respect. I am also grateful to the Deputy First Minister for his response to my question about devolution within Scotland, which is something that I have believed in all my life and which I want to happen.
My final point is on the fiscal framework. I do not have time to go into the no-detriment principle. However, my contention in this area is that the Government has got it right when it seeks to make the Scottish Fiscal Commission independent. That is fundamentally important for our deliberations on Government activity. The working relationship between the UK-wide Office for Budget Responsibility and the Fiscal Commission, once it is independent, is fundamentally important, too, to how we resolve some of these outstanding issues.
I welcome the opportunity to speak this afternoon. In doing so, I welcome the report by the Devolution (Further Powers) Committee and thank Bruce Crawford and his committee for the work that they have done to produce such a comprehensive report.
We need cross-party co-operation to make our additional powers work for all and to ensure that the powers are used for a better Scotland. The Smith agreement has set out a clear path for Scotland to enhance and enshrine our Scottish Parliament. Among the wide-ranging proposals that were set out by Lord Smith, I welcome, in particular, votes at 16 and 17 and the devolution of air passenger duty, tribunals and, most crucially, welfare. With another five years of a Tory Government—a majority one, at that—and its focus on reducing the welfare bill, our poorest and most vulnerable need the protection that is afforded to them through Smith. I hope that we can act on those welfare issues as soon as practically possible and, indeed, work together to ensure that more powers over welfare come to this Parliament.
As we enter the final year of this session of the Scottish Parliament, I anticipate engaging positively with young people to ensure that their voices are heard and not ignored. As a long-standing supporter of lowering the voting age, I found that it was a joy to speak with 16 and 17-year-olds during the referendum campaign and hear their passion and interest, regardless of the position that they took. The work of the Devolution (Further Powers) Committee to engage with young people during informal events and online to seek their views is to be commended.
As the Scottish Labour lead on infrastructure, capital investment and cities, I welcome and support the devolution of air passenger duty. The committee report shows overwhelming support for its devolution, particularly on the part of Glasgow, Edinburgh and Aberdeen airports, which also try to ease concerns about cross-border effects arising from a reduction of APD or its abolition.
In a past life I sat on employment tribunals and, with that experience in mind, I whole-heartedly support the devolution of tribunals in order to improve access to justice. As is stated in our devolution commission report, Labour believes that
“the operation of employment tribunals should be devolved … even where there is continuing reservation of responsibility for common rights across the UK.”
The administrative cost that is forced on workers who wish to seek justice from their employer goes against everything that I believe in as a trade unionist. With the further transfer of powers for tribunals, I hope that this Parliament will unite in removing those punitive costs.
The Smith commission rightly discussed the issues surrounding victims of human trafficking. I back the call for further exploration to extend the temporary right to remain in Scotland to victims of human trafficking, and I plead for both Governments to work on the basis that victims must be protected from further abuse, in particular in their home country if the temporary right to remain is withdrawn.
On equality, there is a desire for the introduction of gender quotas for the boards of Scotland’s public bodies. I encourage the Scottish Government to work with the UK Government to clear up what the committee regarded as
“doubt about the power of the Scottish Parliament to legislate for gender quotas.”
With further clarification needed, I eagerly look forward to the committee’s next steps and want to hear more about the relationship between gender quotas and the Equality Act 2010.
On taxation, I join others inside and outside the chamber in warning against a race to the bottom between the countries of this island. However, with the recommendation that the Scottish Parliament has the power to set the rates of income tax and the thresholds, we must use those powers to tackle inequality and injustice by redistributing wealth from top to bottom.
On borrowing, the committee reports that all the parties of the Smith commission agree that current borrowing powers are restrictive and limited. Utilising the proposed borrowing powers will enable our infrastructure to have the investment required. There is clearly further work required on borrowing powers, and I wish the committee every success in getting both Governments to meet the challenges head on.
The report notes:
“The Smith Commission report states that the Scottish Parliament will have the power to prevent the proliferation of Payday Loan shops.”
That is another area on which I fully support action. The Scottish Government can already tackle the problems of such payday loan shops through the planning process, but so far it has not done so. However, as Citizens Advice Scotland has highlighted, the Scottish Parliament planning laws cannot tackle online access to payday companies. Renfrewshire Council has banned access to online payday loan companies from any of its public library computers. That is a measure to be welcomed and supported by those wishing to tackle the debt problems that are caused by quick access to loans at a heavy burden to the consumer.
With the UK Government expected to launch a bill for further powers next month, I look forward with great interest to seeing what comes from the bill and the subsequent inquiry by the Devolution (Further Powers) Committee. I hope that, across the chamber, we can work together to strengthen our Parliament.
I commend the committee for its interim report. I was going to commend the convener, but I think that he has had enough commendations.
Paragraph 5 of the report states:
From what I hear and from what I have read in the report, even that is not happening.
I want to go beyond that. I want to focus on what the report says from page 125 onwards, in the section entitled “Coherence and cohesiveness of the proposals for further devolution”. It is a matter that I raised in a previous debate, on 10 December, when I was a wee bit more fiery. That was in the early days after the Smith commission, when Smith’s criteria were that the proposals should be substantive and cohesive. I argued that, although all of us across the chamber could state our differing views about what is substantive, which is appropriate, we should be able to agree on what is cohesive.
There is a caveat to this argument, because I noted that the report states, under that heading:
“the Committee does not, at this stage, intend to take a collective position on this strand of the evidence it has gathered.”
That is in reference to the coherence and cohesiveness of the proposals, but the evidence is not the evidence of politicians. It is the evidence of the very civic society to which Alison Johnstone referred. The report cites Professor Michael Keating, who suggested that
“the devolution of a broader range of taxes would have provided greater flexibility to the Scottish Government.”
He did not see what was being proposed as cohesive. The report also noted that
“Dave Moxham, of the STUC, also sought a greater range of taxation powers to be devolved”, including employment law and tribunals, to which Mary Fee referred, because what is being proposed is not cohesive.
Peter Kelly of the Poverty Alliance called for control of the national minimum wage, and much more, to deal with poverty, because his view was that the proposals were not cohesive. A range of organisations involved in welfare issues highlighted the linkages between employability and equalities and suggested that the devolution of equalities legislation and employment law would have resulted in a more coherent package of proposals for devolution. We have many such strands of evidence. One Parent Families Scotland took the same view.
Of course we want certain benefits devolved, but will that work? Even though my direction of travel—and it had better be soon—is to independence, and even if other people’s goal is not the same and they simply want a form of devolution, whether that is Smith, Smith plus or Smith maximum plus, we must all apply the same test: will it work?
Will the Smith proposals stabilise the UK? Will they work? We have to deal with that question even before we deal with intergovernmental dealings, but we cannot even look at it if the powers that are proposed in the Smith report are not cohesive. I have concerns about the Smith proposals, but I will have huge concerns if we are not even getting them, and we have not resolved those issues.
As other members have said, in the last election the Scottish people moved on, not to vote for independence but to vote for more than Smith. There is no doubt about that. The Smith proposals will not deal with what the Scottish people voted for and it will not give cohesive and substantial results.
I also raised public engagement in my speech in December. The Smith commission was done at breakneck speed and 18,000 people submitted various proposals. Smith had written his report within a month so, of course, he did not read all those submissions. People took the trouble to make their proposals but, at the end of the day, politicians sorted something out and did not involve the Scottish people, whatever their views were.
I am rather pleased, therefore, with what the committee has said in its report’s “Key conclusions and recommendations” and it echoes Alison Johnstone’s point:
“The Committee believes that further public engagement, directly with the people of Scotland as well as representative bodies, charities, industry groups, voluntary bodies etc. is still a vital activity that needs to be carried out”.
What we must not do is rush. We must do something that is appropriate for the people of Scotland. Of course we will continue with Smith, but that is no longer good enough. It is not good enough in what it seeks to deliver and because it turns its back on what the people of Scotland might want. They have not had a voice in where we are going and it is time they had one.
The debate has been interesting and has focused on key issues, although it has at times wandered to an extent. I will deal with the issues in much the same way as other members have done.
I note the actions of the convener in producing a unanimous report. Although Bruce Crawford should not be praised too much, there are one or two people in the Parliament who are pretty damned good at what they do; he is one of them, and he has delivered once again.
Much has been made of the fact that there was unanimous support for the committee’s report, but it should not surprise anyone that a Conservative member of this Parliament demonstrated commitment to the Smith process.
The Smith commission sat on a relatively short timescale and brought together key ideas at a critical time in Scottish history in the days immediately after the referendum. It did so in an atmosphere that may well turn out to have been unique, so it is only appropriate that we should maintain our commitment.
There are those who are concerned about the timescale that has been applied—in fact, Christine Grahame described the process as going forward “at breakneck speed”. However, we should remember that the commitment that was given immediately after the referendum that there would be a timetable on day 1 appeared to have been broken, when it took us until lunch time on day 2 to put the timetable together, and many on the losing side in the referendum cried betrayal at that very moment. Members should therefore not be surprised that the timescale remains important to the newly elected UK Government.
On the ability of individual clauses that have been published to translate the desires of the Smith commission into law and into practice, there appear to be varying degrees of success.
On taxation, I am particularly happy with what has been put forward, but the weakness is the lack of detail. As time goes on, we will have to address issues such as the fiscal framework, the concept of no detriment, the practices that will be involved in borrowing, and how we deal with assessing what the Scottish component of VAT will actually be. That will have to be done through a much stronger governmental framework, and intergovernmental relations will be key to the process. That is why it is a consolation to me that progress is being made on the development of a strong working relationship between our First Minister here in Scotland and our newly reappointed Prime Minister in Westminster.
The process that we are involved in is driven by the Smith commission and it is important that we find ways to ensure that the promises that were made through Smith are brought into being. Those processes will be easier in some areas than in others. My concerns about welfare in particular drove me to support the committee’s broad view. However, having discussed the matter with someone who was involved in drafting the clauses, I am content that the intention was to give effect to Smith. In my view, however, it remains questionable whether the clauses as they currently exist will achieve the objectives of Smith. For that reason, I think that redrafting of the welfare clauses in particular is necessary.
The issue of the veto was brought up on day 1 after publication of the clauses—although in my view it is something of a red herring. However, the wording of the clauses gives rise to concern. Consequently, we need to be sure that we know what they mean before we move forward.
Another issue of concern is the Crown Estate: since publication of the draft clauses questions have been thrown up about it that we did not anticipate. I believe that the Crown Estate issue will only get more complicated before we reach a solution on it.
Among other aspects of the debate that I want to mention is that there are those who have gone off in different directions: there are those who have been more concerned about process than the Smith commission itself, and there are those who are more concerned about how we might use the policy driver for the new powers, which I believe is going a step too far in this debate because we need to know what powers we will have before we talk about policy. Perhaps that is something for next year’s election campaign. There are also those who are too concerned about what we might add to the process; I believe that it would be a mistake to drop the current Smith process and simply go off and try to argue now for additional powers in other areas.
It is perfectly appropriate for our two Governments to discuss where we wish to go next, but it would be a foolish error to drop the current process in the hope of getting something better. We have a tremendous opportunity to put together a package of powers that will be coherent and which will deliver for Scotland. We must also remember that we have a process to go through both in this Parliament and—which is much more relevant—in the Westminster Parliament to deliver the new powers. By virtue of the election that we have just been through, the Scottish National Party has very strong representation in the House of Commons and will have the opportunity to amend the bill as it goes through Parliament.
We must also remember, however, that this Parliament has a role. As we go forward, the two Governments will, of necessity, have to become closer and have a better working relationship, but we must never forget that Parliament must have a role. Do not lock Parliament out; make sure that Parliament has that role and we can make this work for the benefit of Scotland in the longer term.
It has been said that
“Devolution is a process and not an event.”
Delivering Scotland’s devolved Parliament was one of the highest priorities of the incoming Labour Government in 1997. That priority was delivered in record quick time and it is now 16 years since this Parliament first met on the Mound and elected Donald Dewar as First Minister. The Scotland Act 1998 that Donald Dewar delivered was rightly praised for its clarity and directness. Crucially, it provided that what was not reserved was devolved: that provision removed a range of potential difficulties before they could arise—a point to which I will return in a moment. It also ensured that further devolution was bound to follow. Anything that Government did not do before 1998 but came to do afterwards would be devolved unless a specific decision was made to reserve responsibility for it to the United Kingdom Parliament.
The process of devolution followed and, as the 1998 act implied, it was soon enhanced by both legislative and executive devolution of further powers. On top of that, we have had step changes in the scale and scope of devolution, with the Calman commission, the Scotland Act 2012 and now the Smith commission and the Scotland bill that we expect to see next week. Indeed, with the Smith agreement on the Crown Estate, we have a high-level commitment to devolution from this Parliament to island and other communities—a commitment that I was glad to hear the Deputy First Minister repeat today.
On that subject, I remind Rob Gibson that the Smith agreement was to devolve to local level management of all the relevant economic assets including the sea bed, the foreshore, where appropriate, and mineral and fishing rights. We cannot now pick and choose which aspects of the Smith agreement we want Government to implement.
What is important is that the committee has come together across the parties to call for implementation of the Smith agreement. That is not a call that any of us should back down from, no matter what practical challenges are in the way of making that happen.
As has been said, the scheme to extend devolution within the United Kingdom has been endorsed by every party in this Parliament, including those that campaigned to leave the UK. That is the significance of the Smith agreement: no party that is represented here today can reject that agreement, because every party has signed it and undertaken to deliver it.
Parties can argue for powers beyond Smith. We have done that today, and others have done so, too. Likewise, we signed off the committee report on a cross-party basis, but we have different views on the relative importance of different parts of the Smith agreement and on the areas where the draft clauses fall short or are unclear. There may be issues of interpretation, there will be questions of priorities, and there are differences of philosophy, too.
As Bruce Crawford said, a number of us met the Secretary of State for Scotland in Whitehall this week, and he emphasised the issue of interpretation. However, there should be no dubiety about how to interpret the intention of a new devolved power to create top-up welfare benefits. Since the Smith agreement does not envisage claimants facing a clawback from other income, neither should the next Scotland bill, and nor should the commitment to devolution of employment programmes that are currently contracted by the DWP be artificially limited in the way that the draft clauses propose. In addition, devolution of the power to abolish the bedroom tax—without disadvantaging those who receive discretionary housing payments—is the clear intention of the Smith agreement.
Labour would go beyond Smith in those areas; we would wholly devolve housing benefit rather than see it be absorbed into universal credit, and we would seek to ensure that housing support is used in a range of ways to benefit those who are in greatest need—not least in providing more and better social housing.
Scottish Labour’s priorities will be to use the new fiscal resources and the new spending powers to protect people on the lowest incomes as well as to support the creation of jobs and opportunities through devolved employment programmes. The Smith agreement will allow us to do much of that if it is delivered in full, and that is our priority at this stage.
However, if we go back to first principles, the legislation that we will see next week will inevitably lack some of the clarity and simplicity that were achieved by Donald Dewar’s original Scotland Act 1998. That legislation grew out of a constitutional convention that was not an all-party process, although it had the support of a number of parties that are represented in the chamber. Nonetheless, it grew, developed and came out as a statute from the Labour Government, and provided a clear basis for the devolution settlement. Under that act powers and areas of responsibility were, broadly speaking, either reserved or devolved. Now, as has been said, responsibilities that were previously reserved are to be shared, whether in taxation or public spending. That must inevitably mean a less clear division of powers in the future devolution settlement. That simply reflects the complexity of the Smith agreement and the choices that have been made in that context.
On welfare, for example, the simple model of reserving the whole of legislative responsibility for social security is to be replaced by a new web of exceptions to reservations and exceptions to exceptions. Likewise, devolution of the Crown Estate is to be done by way of a scheme to devolve its economic assets, rather than simply by removing the Crown Estate as a whole from the schedule of reserved powers.
Some of the flaws that are identified in the report can be sorted by intergovernmental agreements or by relatively straightforward changes to the draft clauses. Others may require more far-reaching amendments. Whatever we do, we cannot credibly insist on implementation of the Smith agreement and then claim that the lack of coherence of the settlement means that it cannot stand. Given that all parties compromised in order to reach the Smith agreement and all parties have taken a mature approach, as Bruce Crawford described it, to agree today’s report, then all parties must get behind the new more complex devolution scheme, once it has been delivered, and make it work.
Whatever the outcome of the parliamentary process over the next few months, it will mean both Parliaments working within a more complex devolution settlement in the future than we have done for the past 16 years. How the Governments work together will become all the more important, as will the mechanisms for holding ministers to account by elected members of both Parliaments.
Bruce Crawford highlighted the committee’s call for the general principles of intergovernmental working to be placed in statute. I was somewhat surprised to hear John Swinney appear to reject that view, but that is no doubt an issue that we will return to before too long. Indeed, the Deputy First Minister may have something more to say on it shortly.
For now, we support the committee report as a yardstick by which to measure the bill that is to be produced next week, which will be the basis for the next stage in the process of devolution.
This afternoon’s debate has been constructive and wide-ranging. Dr Murray raised a very specific issue—in the usual detailed and thoughtful way in which she raises such points—about the operation of the Sewel convention and its application to the Human Rights Act 1998. I want to take a couple of moments to address some of the issues that Dr Murray raised. I suspect that a great deal more of the issues that she raised about the implications around the stance of the current United Kingdom Government on human rights provision will require some detailed legal analysis, which Parliament will have to consider.
Dr Murray’s points about how confident we can be in the robustness of the Sewel convention are directly applicable to what we might face on the Human Rights Act 1998. Undoubtedly, for the current UK Government to repeal the act and replace it with a British bill of rights will require the agreement of the Scottish Parliament in a legislative consent motion consistent with the Sewel convention. Dr Murray went on to raise the possibility of the Scottish Parliament legislating in the sphere of human rights, but that will be very complicated for us to consider, given the fact that the Human Rights Act 1998 is named in schedule 4 to the Scotland Act 1998 and is therefore an act that the Scottish Parliament is prohibited from amending.
The issues that Dr Murray raised in great detail illustrate the significance that can be attached to some of the provisions within the Smith clauses. We must ensure that nothing happens that in any way diminishes the effective control that the Scottish Parliament has to protect the legitimate interests of the devolved settlement in relation to some of those questions.
The debate has benefited enormously from taking place in what I might call the cool aftermath of the general election. I notice a significant reduction in the tone and tension in the chamber, so much so that Iain Gray found himself able to say that he agreed with the Deputy First Minister, which was joyous. We former commissioners must stick together.
I do not say this to cast aspersions, but when the UK Government set out its clauses in January, some of the reaction in the Parliament to the points that were made by the Scottish Government almost suggested that we were trying to pick a fight where no fight was to be picked—yet here we find ourselves in Parliament today, with Mr Gray accepting that the spirit and substance of the Smith commission have not been implemented in the clauses. I welcome that. In fact, I welcome that wherever it has come from across the political spectrum, because it puts to the United Kingdom Government the utterly compelling proposition that, if it is to live up to its rhetoric, it has to accept that what was published in January was just not sufficient to satisfy the commitment to translate the spirit and substance of Smith into legislation.
Some of that has been evidenced in a number of members’ speeches. As Rob Gibson pointed out, some of the provisions on the Crown Estate in the draft legislation say, “There may be” rather than “There shall be”. We all know what “may” means—it means might or perhaps—and we all know that “shall” means that something will and must happen. Linda Fabiani asked why it was necessary for the draft clauses to refer to the Parliament’s “permanence” and for them to say that the Parliament would be “recognised” as “permanent”. Why do the clauses not just say, “The Parliament’s permanent”? That would entrench its position as well as it can be within the UK’s unwritten constitution.
I therefore think that the Scottish Parliament has, with some force, expressed its view about what was published—on time—on 22 January. I cannot quibble about its being published on time; it was even early—a bit like most of the Scottish Government’s capital projects, I might add.
Jackie Baillie is always one to break a consensus when she can find one to break.
The point that we have reached in this debate is to recognise that the provisions in the draft clauses must be substantially improved to fulfil the Smith commitments. In that respect, I want to make the Scottish Government’s position crystal clear: the delivery of the Smith commission proposals should not be seen as a response to the outcome of the general election. Instead, it should be seen as the fulfilment of the post-referendum commitment that was made and is the absolute minimum that must be delivered by the United Kingdom Government. Anything else would be a breach of faith to the people of this country, given the fact that despite our different points of view we all came together in the Smith commission and argued for the propositions that we put forward. The Scottish Government believes that the delivery of the spirit and substance of the Smith commission report is entirely related to the post-referendum outcome and is nothing to do with the post-election outcome.
The other interesting element of the debate has been the recognition that there is still space for further constitutional development. Obviously I have set out the Government’s aspirations for further powers to be devolved to the Parliament within the structure of the United Kingdom; Iain Gray has repeated the argument for the devolution of housing benefit that he made in the Smith commission; and Mr Rowley made it very clear that further responsibilities should be transferred to the Parliament within the devolved settlement.
There is clearly a debate to be had about how we expand and extend the Scottish Parliament’s powers, and Alison Johnstone was absolutely correct to say—Annabel Goldie made the same point to me during this week’s question time—that it is essential that we have dialogue with members of the public in Scotland about how we can do that most effectively. Indeed, as Christine Grahame pointed out, 18,000 members of the public made submissions to the Smith commission, but I do not think that any of us who participated in the Smith commission can feel that we did justice to that input and those voices, simply because of the timescale that was involved. Anyone looking at the general election outcome can only conclude that the people of Scotland indicated that they had a desire for greater responsibility to be vested in the Parliament. That is an issue to which we must turn our minds—and we will discuss it with the secretary of state—but I give my commitment to wider public participation in that respect.
My final point is about intergovernmental arrangements. There has been a lot of talk about how Governments need to work together to arrive at conclusions, and I reaffirm the Scottish Government’s desire to work constructively with the United Kingdom Government in any way we can on our joint agendas. There will be issues on which we disagree. The Human Rights Act 1998 is one issue where we fundamentally disagree with the United Kingdom and will say so. There are other such issues.
I return to my point about the post-election tone of the debate. I hope that members understand that the Scottish Government sometimes has to dig in its heels to protect the interests of this Parliament and this country. If I had not dug in my heels about the block grant adjustment and the land and buildings transaction tax, this Parliament would have ended up with a worse deal because of what was proposed by Her Majesty’s Treasury. That will be crucial in the fiscal framework and the working arrangements. We cannot proceed on the basis that the United Kingdom Government has the ability to impose on the Scottish Government and the Scottish Parliament arrangements that suit it but which do not suit Scotland and the devolved interests of the Scottish Parliament. That is the position that the Scottish Government will take forward in the necessary intergovernmental co-operation to implement these provisions.