Scotland Bill

Anas Sarwar Excerpts

Thursday 27th January 2011 Commons Chamber

[Michael Moore]

The hon. Gentleman is tempting me to get slightly ahead of myself. He will see the proposals that we have set out in the Bill, taking account of the evidence that was supplied to the Calman commission.

[Anas Sarwar (Glasgow Central) (Lab)]

Does the Secretary of State agree that those Scottish National party Members who are getting animated on this issue could easily have made a submission to the Calman commission if they so wished? Instead, they stood for self-interest, rather than Scotland’s interest.

[Michael Moore]

If I may say so, the hon. Gentleman makes the point very neatly. Like him, I await the SNP’s detailed proposals on either fiscal autonomy or the Crown Estate, so that they might be debated. I believe that what we have in the Bill is the right balance, which will give Scotland the powers and accountability that it should have.

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[Pete Wishart]

It is a matter of principle. I know that the right hon. Gentleman knows very little about principle in the context of the Liberal Democrats, but we happen to believe in independence. It may have escaped his attention, but that is what our party is all about. The fact that a reference to independence was not included in—indeed, was intentionally excluded from—the wording of the Calman report meant that if we were to retain our principled position, we could not participate. That is what we call principle, and perhaps that is a little lesson for the right hon. Gentleman.

[Anas Sarwar]

The hon. Gentleman has criticised the Calman process, which involved three parties working together. We rarely agree on much, but we did agree on Scotland’s future. The SNP, however, had the “national conversation”, which cost almost £1 million, asked only seven questions, received a grand total of 222 responses, and has not resulted in a single new power for Scotland. It was nothing more than a vanity project for the SNP. It was not a national conversation, but a national waste of money.

[Pete Wishart]

I thank the hon. Gentleman for his intervention.

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[Pete Wishart]

I will oblige the hon. Gentleman. The Bill is a massive wasted opportunity for Scotland, because so much could have been included in it and we could have done so much to improve the position of Scotland. The Bill could have included measures to help our economic performance and increase growth. The Bill seems to contain a wee modest set of proposals that lack any real ambition to propel Scotland forward; it offers few solutions to provide Scotland with what it needs to take our nation forward; and, as I have said, it offers nothing in the way of a framework to increase economic growth in Scotland.

[Anas Sarwar]

Will the hon. Gentleman give a direct answer to something? Why did the SNP not make a submission to the Calman commission?

[Pete Wishart]

The Calman commission was proposed by the three Unionist parties, and discussions have gone on all the time with the Scottish Government about implementing the Calman proposals. Who put two of the main Calman proposals—on airguns and speed limits—before the Scottish Parliament? We could have legislated on those last year. The SNP said that it was prepared to take forward the Calman proposals where they were useful and helpful to the people of Scotland. Who refused to allow us to take those proposals forward? It was the Labour party, so I will take no lessons about trying to ensure that the Calman proposals are taken forward.

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[Pete Wishart]

We would not table a reasoned amendment if we did not intend to divide the House. Of course we are going to divide the House. The Bill is unacceptable, as we have said. If the right hon. and learned Gentleman wants to go home, he can do so, although I would suggest that he hang around.

[Anas Sarwar]

rose—

[Pete Wishart]

I am going to make a bit of progress because, to be fair, I have taken a number of interventions from the hon. Gentleman.

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[Pete Wishart]

I will give way to the right hon. Lady later, but I now wish to get through my speech.

Parts of the Bill are unacceptable to us, but, in other ways, it is merely perplexing. We shall, thank goodness, finally get devolution on the regulation of airguns. I have campaigned on that issue, as have colleagues in the Scottish Parliament. Airguns cause such a blight to so many communities.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I want to make some progress.

Airguns blight so many communities in Scotland, but it is perplexing that we shall get devolution on all airguns except the most dangerous ones. I am sure that the less dangerous ones also have an impact on communities, but surely, by definition, the most dangerous ones must cause most of the damage. Similarly, we are going to get devolution on speed limits.

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[Pete Wishart]

As my hon. Friend has just said, it came from Scottish taxpayers. I am grateful to the hon. Lady for asking that question, because that is exactly what would have happened: we would have been deprived of that budget if these proposals had been in place. That is why we are saying that they are so dangerous, and why they should be considered once again.

When the 1998 Scotland Bill went through, the then Labour Government were prepared to accept only one amendment. It related to the devolution of the regulation of stage hypnotists. I am sure that stage hypnotists were delighted that they were going to be regulated from Scotland. As we take this Bill through the House, let us try to do a bit better than that. The fact that we are having this debate at all shows that we are on a journey down the road of constitutional reform. We will be having the debate in the run-up to May this year, and I know where I want it to conclude. We have the opportunity to strengthen the Bill.

[Anas Sarwar]

The hon. Gentleman has said repeatedly that he agrees with parts of the Bill, and he accepts that 35 new powers are being devolved to Scotland, but his amendment ends by proposing that the House

“considers the Bill as a whole to be unacceptable.”

Will the hon. Gentleman, who believes in independence, be voting against new powers for Scotland?

[Pete Wishart]

Of course we will not be voting against new powers for Scotland. We will be raising, throughout the Committee stage of the Bill, the dangerous proposed tax powers and the £8 billion that would have been lost to the Scottish people over the past 10 years had they been in place.

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[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I am about to conclude, if the hon. Gentleman will allow me.

This is clearly an insufficient Bill, a broken Bill, a Bill that does not serve the interests of the Scottish people. There are many things that we could do if we could work together, but we have to hear from Labour Members that they accept that the proposed tax powers are dangerous and that we have to do something about them. We cannot have this Tory-led Government bringing forward a budget cut in disguise. We need Labour’s support if we are to try to prevent that.

[Anas Sarwar]

On a point of order, Madam Deputy Speaker. Before the hon. Gentleman concludes, may I point out that I do not feel he has spoken about the amendment? I wonder whether he will do that before he concludes.

[Madam Deputy Speaker (Dawn Primarolo)]

Fortunately, it is not for the Chair to remind Members that they have not necessarily referred to every point in their amendments. Members of the House can draw their own conclusions.

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[John Stevenson (Carlisle) (Con)]

I am grateful for the opportunity to participate in this debate. My contribution will be modest, given that I am not versed in the intricacies of the politics of Scotland, although I am learning quite a lot this afternoon. As a Scot who has family in Scotland, I have a great interest in what happens there and I would like to see Scotland succeed. I am also interested in the continuing relationship between the devolved Government and the national Government. Most importantly, I represent a constituency on the border, so I want to be aware of the implications of the Bill for my constituents.

I appreciate that the Bill is primarily relevant to Scotland, but it does have a potential impact in England, and that impact will be most pronounced in the border area, affecting seats such as Berwick-upon-Tweed, Hexham, Penrith and the Border, Workington and, of course, Carlisle. Indeed, in my part of the country, we have an unusual relationship with Scotland in that we were not in the Domesday book because we were part of Scotland at the time. Subsequently, we had the “Debatable Lands”, the reivers, and the movement of the border to Hadrian’s wall and so on. Indeed, that continues to this very day with the invasion of Carlisle every Saturday by people coming over the border to shop and for entertainment. I therefore have a slightly different perspective on this debate from that of many hon. Members north of the border.

There will no doubt be some concern in my area about the Bill and the impact, in particular, of the tax-raising powers. In reality, many of the issues already exist: there are separate laws on housing, inheritance and planning. In some ways, the planning laws have been beneficial to parts of Scotland, with Gretna being an example. Traditionally, licensing laws were different. I remember when I moved to Chester from Scotland, I got a shock when the pub closed at 10.30 rather than 12, but England has since progressed. Scotland was also ahead of the curve on the smoking ban, to its credit. At times, Scotland can be more progressive and innovative. Indeed, those who live on the border are often more aware of the differences between the two countries and the various laws that affect them.

I welcome the Bill and its proposals. They are very much in line with the recommendations of the Calman report, which has broad support in this Chamber. It is also in line with my own philosophical viewpoint and that of the Conservative party—and of the Liberal Democrats—including a belief in localism, decentralisation and financial accountability. Devolution is now an accepted part of our political culture and is generally accepted by most people. Therefore, the issues that we now have to debate are the workings of devolution, how to make it better, how to achieve the right balance and the powers that we give to the devolved Assembly. Giving powers away is very much in line with the localism agenda, including the need for responsibility and the link between spending and taxation. Indeed, in many respects, that link has been missing in the English local government debate as well as in the Scottish one, but I am delighted that the Government are starting to address that issue for English councils just as they are for Scotland in this Bill.

The aim of the Calman commission was to recommend changes to the present constitutional arrangements in three ways—to serve the people of Scotland better, to improve the financial accountability of the Scottish Parliament and to continue to secure the position of Scotland in the UK. It is in terms of those three key points that we must consider the Bill.

As Calman said, the devolution settlement is a “real success” and “works well in practice”. In many respects, that outcome is supported by the Bill, which does not dramatically rewrite the devolution settlement, but fine-tunes and adds to it. As hon. Members have said, the key aspect of the Bill is the changes on tax, but it also includes drink-driving limits, speed limits and other measures. I suspect the drink-driving limits and speed limits will be of more interest to those of my constituents who travel over the border.

One omission from the Bill is welfare and social security. It will be interesting to see how the Government approach that in due course, but I appreciate that a national debate on that subject is going on. The reforms that the Government are proposing nationally must have priority.

Income tax is the obvious area that could have an impact on cross-border relationships. There are people who live in Scotland and work in England and vice versa. However, I believe that there is nothing wrong in having different tax rates between different places—we see it at local government level with domestic rates—and allowing the Scottish Parliament to be able to set its own income tax rate creates accountability, responsibility and transparency.

The tax that I am probably most interested in, and the one that gives Scotland a real opportunity to be innovative, relates to old-fashioned stamp duty land tax and how it could be applied to commercial and residential property. If the Scottish Parliament is innovative, that will give it the opportunity to gain a commercial advantage, which could be beneficial to the local economy. However, the Bill is not just about transferring powers; it is also about providing the tools for Scotland to improve itself. The really exciting part of the Bill is that the Scottish Government and Parliament will receive incentives and control over their own economic destiny.

In my view, the Scottish economy needs to have a smaller public sector and a much larger private sector. Scotland needs to grow its private sector, and by doing that it needs to increase its population, build more houses and create more businesses. It will now have some of the tools to achieve that, via business rates, SDLT and income tax. This is a real opportunity for Scotland. If it can grow its tax base, it can reap the benefits. So I welcome the Bill. It achieves the key objectives of the Calman commission. It gives Scotland a greater opportunity to do things differently and, perhaps, better, and interestingly enough, the 2015 election will give the political parties an opportunity to offer different visions of a future Scotland. That is healthy for Scottish democracy and the Scottish Parliament, and will help to strengthen the Union.

[Anas Sarwar]

I welcome the hon. Gentleman’s comments and am pleased that he supports the Bill. I just want to highlight the irony of a Tory Back Bencher supporting more powers for Scotland, but the Scottish National party voting against it.

[John Stevenson]

There is certainly a degree of irony in that. I welcome the Bill.

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[Mrs Anne McGuire (Stirling) (Lab)]

It is a great pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart). I listened carefully to his analysis and, 13 years on, I now realise why the hon. Member for Epping Forest (Mrs Laing) was so well briefed in some of the intricacies of the Barnett formula. The hon. Gentleman has posed some fascinating and interesting questions this afternoon.

I made my maiden speech in 1997 on the Referendums (Scotland and Wales) Bill, which paved the way for the Scottish Parliament. It is fair to say that both the hon. Gentleman and the hon. Lady recognised that, collectively, we have travelled a long way in this House—at least, most of us have. I shall come on to those who are still stuck at the station a wee bit later.

We have travelled a long way and in many ways the Members who are participating in today’s debate reflect that. We have a former Member of the Scottish Parliament, who, as the Under-Secretary, will be helping to drive this Bill through along with most of us. Of course, we have two current Members of the Scottish Parliament, my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Glasgow East (Margaret Curran), both of whom have extensive experience not only of the workings of the Scottish Parliament but of the workings of government in Scotland, as they are both former Ministers.

Collectively, in the Chamber today we have a unique opportunity to discuss the importance of the Scotland Bill. I recognise its importance and identify with the statement made by Donald Dewar—devolution was

“a process and not an event”.

We are all part of that process. In my opinion, there is no doubt that the relationship between the UK and Scotland and their governmental institutions has matured to a point where there is widespread recognition that the devolved approach has strengthened the United Kingdom and its four nations, working together. There are still some cynics among us—the ultra-Unionists, who perhaps do not see this as a way forward for the United Kingdom, and their uneasy bedfellows, the nationalists, who have a fundamental view. I fully accept their right to hold that view. I do not have any problem with their ultimate aim of independence; I just thank God every day for the sanity of the Scottish people, who have never accepted that analysis, but that analysis is obviously still there. The majority of people in Scotland want good government that brings decisions closer to them, so I welcome the principle of the Bill. I particularly welcome the strengthening of the Scottish Parliament’s fiscal powers.

[Anas Sarwar]

Is it not alarming, given the Scottish National party’s amendment, that those Members will be voting against the new powers for Scotland? Does that not show that they are now the conservatives in Scotland, supporting the status quo over new powers for the Scottish Parliament?

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[David Mowat]

I thank my hon. Friend for that intervention. She made two points, the first of which was about sparsity. Scotland is more spread out than the rest of the UK. Page 18 of the Holtham report takes that sparsity into account. The Scottish national health service has to take sparsity into account in the allocation of money. Parts of Scotland are very spread out, such as the highlands and islands, Orkney and the Hebrides. The Scottish NHS adjustment in respect of that, which was validated by the Holtham formula, was 1.5%. We are dealing with a figure of 20%.

The second point that my hon. Friend made was about deprivation. There are areas of deprivation all over the country. That is why it is so important that the formula is based on need. There can be no argument about that.

[Anas Sarwar]

When discussing the rights and wrongs of the Barnett formula, would it not be sensible to compare the averages for Scotland and Wales to different regions of England, because the north of England receives almost the same amount per head as Scotland?

[David Mowat]

Paradoxically, the part of England that receives the most per head is London.

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[Stewart Hosie]

That is not necessarily true, and we need to look at both these measures: the growth in income tax versus the growth in total tax, and the percentage of the share of growth that we receive from income tax alone, owing to how it will be assigned to Scotland, with most of the higher parts being accrued still by the UK, where growth is likely to be higher.

[Anas Sarwar]

Does the hon. Gentleman accept that, under the arrangement imposed by the Bill, we would share not only the potential benefits, but the potential risks?

[Stewart Hosie]

Notwithstanding the deflationary bias, there might be growth in some elements of income tax revenue, but in terms of sharing risks the downsides for Scotland are much greater. In an intervention, I said that, if a future Scottish Government chose, for example, to reduce income tax to stimulate economic growth and it worked, they would take the hit in reduced income tax revenue, but the UK Government would benefit from the additional corporation tax yield. There are probably more downsides than upsides, because the range of devolved taxes is limited and, in cash terms, involve almost exclusively income tax.

The other problem is that the provisions fall foul of not being fully devolved. Income tax rates do not stand on their own; they must be looked at alongside allowances and thresholds, neither of which is being devolved. So the consequence of a significant change, in particular the UK Government’s plan to increase personal allowances to £10,000, which in principle is a very good policy, could mean a reduction in funding to Scotland of between £800 million and £1 billion a year.

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[Ian Murray]

rose—

[Anas Sarwar]

rose—

[Stewart Hosie]

I am going to go on with my speech.

We would like the landfill tax to be used to support waste separation at source, recycling, waste minimisation and packaging reduction, so we welcome its being devolved. However, at £85 million, it represents only 0.2% of Scotland’s non-North sea revenues. We welcome parts of the Bill, but there are significant weaknesses and flaws in it, and I believe that I have explained the potential deflationary bias in its main economic powers.

I have said that there are bits of the Bill that we like and bits that we need to change, and it is hugely disappointing that some of the Calman tax proposals have been excluded. The Government have decided not to devolve air passenger duty or aggregates duty. They argue that since aggregates duty is subject to challenges at EU level it cannot be devolved, but had it been devolved, the Scottish Government would have been required to take exactly the same cognisance of an EU decision as the UK Government. The same applies to other taxes. The Government argue that air passenger duty is under review and cannot be devolved, but the whole purpose of devolving responsibility is to allow the system to be different if it is sensible or necessary. They should devolve the matter first and then have the review in England. If the Scottish Government decided that they needed to have a review, they could do so in their own good time.

I am further disappointed that, as the right hon. Member for Stirling (Mrs McGuire) said, the Calman proposal on revenue from savings and dividend income was not included in the Bill. That would have been extremely important because of the link with income tax, and because of the complexity of the rates about which she spoke.

We will not stand in the way of the Bill, although we have set out a series of issues in our reasoned amendment.

[Anas Sarwar]

The hon. Gentleman has been very generous in giving way. He says that he will not stand in the way of the Bill, but the amendment clearly states that the SNP

“therefore considers the Bill as a whole to be unacceptable.”

That means that if the amendment is not accepted, he will vote against the Bill and against new powers for the Scottish Parliament. Is that the wording in the amendment wrong, or is it just the wrong politics from the SNP?

[Stewart Hosie]

We are 10 years into devolution. We have a Scottish Parliament, of which everyone speaks highly. The Bill purports to devolve some significant powers and give additional responsibility, which is good. However, those powers are not good enough. If all Labour can do is snipe, “They didnae do that, they didnae do this,” rather than consider the substantive issues—[Interruption.] I shall tell hon. Members what we will do: we will press our reasoned and reasonable amendment to a vote, but we will not oppose the measure. I hope that, when we deal with the matter seriously, through amendments on issues that we have identified in common, we will have less Second Reading, pre-election banter and make the Bill much better.