My Lords, I am grateful to the House for giving me the opportunity to move the amendment. I am particularly grateful to my noble friend the Chief Whip for persuading the House to consider the Scotland Bill in an order that meant we looked at parts 2 and 3, concerned with taxation and welfare, last. I am not so grateful to my noble friend for suggesting, on the whip, that my Motion was a fatal amendment. It is not a fatal amendment. All it seeks to do is to implement the advice of both the Constitution Committee and the Economic Affairs Committee that we should not go on to discuss the Committee stage until we have the fiscal framework. It would be fatal only if my noble friend the Chief Whip thought that we would never ever agree the fiscal framework. As my noble friend the Minister is indicating that agreement is imminent, I do not see why he is so concerned about delaying the Committee stage by a few days. I have to say to him in the gentlest terms, since he used the fishing analogy, that it looks to me very much like a sturgeon is playing him like a salmon.
From the very day he was appointed, I have rather unkindly been asking the Minister if he could give an absolute guarantee that the Bill would not be broughtbefore this House for consideration until the fiscal framework was agreed. He said that he hoped that would be the case because he expected it to be agreed by the end of the Summer Recess. We were then told that it would be in November; then, it was going to be in January; and most recently it was going to be on St Valentine’s Day—but there he was, sat at a table for two on his own, with no sign of the First Minister turning up to deliver the fiscal framework.
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This is not a minor matter that is just concerned with Scotland; it affects every part of the United Kingdom, and the authority of this House and its ability to conduct its business. My noble friend says that he expects the fiscal framework to be agreed shortly. That is like Billy Bunter’s postal order, which is always coming tomorrow. What is the reason for the delay? It is because it has dawned on the nationalists that if you move from a system in which a grant through the Barnett formula is 20% higher per head than in England, to a system where you rely on an income tax base that is not 20% higher than in England, you end up with a very big gap in funding. They have suddenly realised that what they have been asking for is going to result in Scotland having less money and higher taxes. The Government, having committed themselves through the Smith commission—the noble Lord, Lord Smith, is not in his place—which did not even consider these details, now find that the Scottish Government are saying, “Hang on a second, we are going to lose out”, and as a result these negotiations have been going on to try to square the circle.
The fiscal framework sounds like a technical matter, but perhaps I may gently chide my noble friend. The chairmen of the Constitution Committee and the Economic Affairs Committee wrote to him on behalf of both their committees on 28 January, which is unprecedented. That letter was copied to all Front-Benchers and the Chief Whips. It was not circulated to other Members of the House, which is disappointing, but it was posted on the committees’ websites. That letter, signed by the noble Lords, Lord Hollick and Lord Lang, a former Secretary of State, stated:
“The Economic Affairs and Constitution Committees continue to believe that the House should not consider in Committee the financial aspects of the Bill until the fiscal framework is published”.
My noble friend has not even replied to that letter; as of Friday, the committees had not had a response. I really do think that the Government have to explain why they are choosing to ignore advice—advice which has been on the record since November.
Perhaps I may detain the House a little by taking some of the points that were made by the Economic Affairs Committee, of which I am a member. The report is called, significantly, A Fracturing Union? and it states:
“The implications of the Scotland Bill 2015 cannot be understood without reference to the fiscal framework and vice versa. Despite this the Scotland Bill has gone through the House of Commons
without MPs having any details of a revised fiscal framework …The Bill should not progress to Committee Stage until the fiscal framework is published”.
It goes on:
“The regime for funding devolved services is perceived by many as unfair: in 2014/15 identifiable expenditure per head was £8,638 in England, £10,374 per head in Scotland, £9,904 per head in Wales, and £11,106 per head in Northern Ireland. In the absence of any mechanism to promote fairness based on need, a sense of grievance will persist. The UK Government claims to be seeking an enduring settlement. This will not succeed if the new arrangements take as their starting point the existing inequity and contain no provision to adjust the system over time to make it fairer and to keep it fairer … The fiscal framework will set out how the Scottish block grant should be adjusted to account for Scotland retaining nearly all of its income tax receipts”.
The report goes on to explain the different methods which are available to do that, saying:
“Whichever method is chosen could have a large impact on the size of the Scottish block grant: a witness told us that the existing method for doing this under the Scotland Act 2012 would lead to an ‘intolerable’ reduction”.
The House is entitled to know what is being proposed and to debate that in the context of the United Kingdom as a whole.
On borrowing, the report says:
“The fiscal framework would grant Scotland additional borrowing powers. These should be subject to clear limits”.
What are the limits? We know not. The report says:
“The Smith Commission suggested there should be no detriment as a result of UK Government or Scottish Government policy decisions post-devolution. Such a principle is unworkable in practice and a recipe for continuing conflict”.
I have repeatedly asked Ministers and those who are advocating the no-detriment principle, including the noble Lord, Lord Smith, what the no-detriment principle means. From that Dispatch Box Ministers have said, “We don’t know”. The Minister has said, when I have spoken to him, “It is all part of the negotiation”. We are entitled to know the impact of these things.
The Constitution Committee said:
“Our report on the Draft Clauses noted that there were ‘key considerations around the fiscal framework that should be addressed by the Government before these proposals are implemented, and explained to Parliament when a bill is introduced’. These matters, on the face of the Bill, remain unaddressed. Parliament has been asked to vote on devolution of taxation powers and welfare spending powers without a full picture of the implications of these for future central funding of the devolved administrations, of how the block grant will be adjusted to take account of the newly devolved fiscal powers, or of the processes by which funding arrangements will be worked out”.
It concluded:
“In the absence of any information about the fiscal framework, it will be impossible for the House to assess whether or not the Bill will cause detriment to all or part of the United Kingdom”.
I have to say to my noble friend: it is just unacceptable that we should be asked to do this without having that information. Noble Lords can imagine how surprised I was, having seen that information and having seen the work of the committees, to read in the Scottish edition of the Times on 15 February:
“A senior Treasury insider said, ‘If the model that we are recommending had been in place in 1999, Scotland would have benefitted to the tune of £6.6 billion’”.
It is better than Barnett by £6.6 billion. In other words, what is being proposed in secret goes over and above Barnett by £6.6 billion. I do not know whether
that is the Government’s position. I certainly do not think that it will go down too well in Wales or in the north of England. Indeed, I can make an argument, on the other side, that Scotland might lose out and that someone living in Scotland might end up paying higher taxes to see a lower standard of public services. This is central to the Bill and it is a disgrace that the Bill is being rushed through in this way without proper consideration.
I understand the politics. My noble friend and the noble Lord on the opposition Bench are terrified that they will be blamed by the SNP for not delivering the Scotland Bill. If my noble friend feels that he cannot accept my Motion, perhaps he might accept an amendment saying that the Act should not commence until we have the fiscal framework and it has been approved by both Houses of Parliament. If, in his reply, he would give an undertaking to do that, that would be a compromise. It is not an ideal. He says he may well get the statement later this week and we may well consider it on Report, in which case, that is fantastic, but both Houses of Parliament should have an opportunity to do that.
I have a final point. I do not know why the Secretary of State for Scotland is not involved in these negotiations. I do not know why Ministers responsible for welfare have not been involved in these negotiations. The Chief Secretary to the Treasury, Mr Greg Hands, not confirming the amount but saying that Scotland would be better off than it was under Barnett under what he was proposing, went on to say, in a letter which my noble friend circulated, very helpfully, at 1 pm today, that he accepts that what is being proposed goes far further than the Smith commission proposals. So, if we are prepared to depart from the Smith commission proposals by making them better, it rather cuts a hole in the argument that we have to implement to the letter what was proposed by Smith. I beg to move.