Scotland Bill

Andrea Leadsom Excerpts

Monday 6th July 2015 Commons Chamber

[The Temporary Chairman (Sir David Amess)]

With this it will be convenient to discuss the following:

Clauses 47 and 48 stand part.

Amendment 157, in clause 49, page 49, line 6, after “operator” insert—

“or not for profit operator”.

Amendment 158, in clause 49, page 49, line 8, leave out “does not” and insert “may”.

Clause 49 stand part.

Amendment 149, in clause 50, page 49, leave out from beginning of line 32 to line 50 on page 50 and insert—

‘(4) The Scottish Ministers may not make regulations under section 9 unless they have consulted the Secretary of State about the proposed regulations.

(5) Subsection (1) does not prevent the Secretary of State making a support scheme in relation to Scotland under section 9, or varying or revoking regulations made by the Scottish Ministers under that section with the agreement of the Scottish Ministers”

This amendment would remove the requirement in Clause 50 for the agreement of the Secretary of State as a pre-requisite to the exercise of certain powers by the Scottish Minister. It includes a requirement for the agreement of Scottish Ministers before the Secretary of State may vary or revoke instruments made by the Scottish Ministers.

Clause 50 stand part.

Amendment 150, in clause 51, page 52, leave out from beginning of line 10 to end of line 3 on page 53 and insert—

‘(5) The Scottish Ministers may not make an order under section 33BC unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 33BC is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

This amendment would remove the requirement in Clause 51 for the agreement of the Secretary of State as a pre-requisite to the exercise of certain powers by the Scottish Minister. It includes a requirement for the agreement of Scottish Ministers before the Secretary of State may vary or revoke instruments made by the Scottish Ministers.

Amendment 151, page 53, leave out from beginning of line 45 to end of line 37 on page 54 and insert—

‘(5) The Scottish Ministers may not make an order under section 33BD unless they have consulted the Secretary of State about the proposed order

(6) The power of the Secretary of State to make an order under section 33BD is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

This amendment would remove the requirement in Clause 51 for the agreement of the Secretary of State as a pre-requisite to the exercise of certain powers by the Scottish Minister. It includes a requirement for the agreement of Scottish Ministers before the Secretary of State may vary or revoke instruments made by the Scottish Ministers.

Amendment 152, in clause 51, page 55, leave out from beginning of line 28 to end of line 21 on page 56 and insert—

‘(5) The Scottish Ministers may not make an order under section 41A unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41A is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

This amendment would remove the requirement in Clause 51 for the agreement of the Secretary of State as a pre-requisite to the exercise of certain powers by the Scottish Minister. It includes a requirement for the agreement of Scottish Ministers before the Secretary of State may vary or revoke instruments made by the Scottish Ministers.

Amendment 153, in clause 51, page 57, leave out from beginning of line 15 to end of line 7 on page 58 and insert—

‘(5) The Scottish Ministers may not make an order under section 41B unless they have consulted the Secretary of State about the proposed order.

(6) The power of the Secretary of State to make an order under section 41B is exercisable so as to make any provision that may be made by the Scottish Ministers under that section, or vary or revoke an order made by the Scottish Ministers under that section, but only with the agreement of the Scottish Ministers.”

This amendment would remove the requirement in Clause 51 for the agreement of the Secretary of State as a pre-requisite to the exercise of certain powers by the Scottish Minister. It includes a requirement for the agreement of Scottish Ministers before the Secretary of State may vary or revoke instruments made by the Scottish Ministers.

Clauses 51 and 52 stand part.

Amendment 154, in clause 53, page 60, leave out lines 9 to 17.

This amendment removes restrictions on the consultation process with the Scottish Government and Scottish Parliament in relation to renewables incentive schemes.

Clauses 53 and 54 stand part.

Amendment 155, in clause 55, page 63, line 18, at end insert—

“() the Scottish Ministers,”

Clause 55 as currently drafted would allow Scottish Ministers to make a reference to the Competition and Markets Authority only in the most exceptional circumstances. This amendment would enable Scottish Ministers to make a reference without the involvement of the Secretary of State.

Clauses 55 to 64 stand part.

New clause 50—Commission on social and economic rights—

‘(1) The Secretary of State shall appoint a commission on social and economic rights.

(2) The Secretary of State shall invite the Presiding Officers or Speakers of the House of Commons, House of Lords, National Assembly of Wales, Northern Ireland Assembly and the Scottish Parliament each to nominate no more than three persons to the commission on social and economic rights.

(3) The commission on social and economic rights must report on—

(a) the practicality of making the Scottish Parliament and Scottish Government subject to the rights contained in the International Covenant on Economic, Social and Cultural Rights; and

(b) the consequences of Scottish devolution for the attainment of economic and social rights throughout the United Kingdom.

(4) The Secretary of State may by regulations determine the role, composition, organisation and powers of the commission on social and economic rights.’

The purpose of this New Clause is to create a commission to consider whether economic and social rights could be made justiciable in Scotland, and the prospects for achieving fuller attainment of economic and social rights throughout the United Kingdom.

New clause 52—Office of Wellbeing—

‘(1) Scottish Ministers shall appoint an independent Office of Wellbeing to monitor and report on the wellbeing impacts of fiscal and macro-economic policy in Scotland, with a particular focus on inequalities of wellbeing.

(2) The First Minster must publish at least once a year a wellbeing statement setting out the relevant social, economic and environmental policies of Scottish Ministers and their intended effects on the wellbeing of the people of Scotland.

(3) The Office of Wellbeing may commission independent research.

(4) The Office of Wellbeing must report at least once a year on progress being made against the wellbeing statement made by the First Minister and may report from time to time on any other relevant matter.

(5) The costs of the Office of Wellbeing shall be borne by the Scottish Parliament.’

This Clause establishes an independent Office of Wellbeing, akin to the Office for Budget Responsibility, to ensure that expert consideration is given to the interplay between the economic, fiscal and macro-economic policies of the Scottish and United Kingdom Governments and their environmental, economic and social effects.

New clause 65—Rail Services—

‘In Part 2 of Schedule 5 to the Act, in section E2, after “Exceptions” there is inserted—

“The provision of rail passenger services that are Scotland-only services (and so far as they include other services, include only cross-border services designated by the Scottish Ministers), including the power to decide who will run such services, the provisions of the Railways Act 1993 notwithstanding.”’

This amendment would devolve rail services in Scotland giving Scottish Ministers full powers and flexibility to decide who would run such services.

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

Thank you, Sir David. It is a great pleasure to be introducing these clauses. Clauses 46 and 47 deliver the Smith commission agreement and provide Scottish Ministers with greater influence over the strategic direction—[Interruption.]

[The Temporary Chairman]

Order. Members owe the Minister the courtesy of leaving the Chamber quietly.

[Andrea Leadsom]

Thank you, Sir David.

Clauses 46 and 47 deliver the Smith commission agreement and provide Scottish Ministers with greater influence over the strategic direction of the Commissioners of Northern Lighthouses and of MG Alba. They achieve that by enabling Scottish Ministers to appoint a member of the Northern Lighthouse Board and by giving Scottish Ministers the power to approve Ofcom appointments to MG Alba.

Clause 48 provides that the Secretary of State will be required to consult Scottish Ministers when setting the strategic priorities in relation to the exercise of functions in Scotland regarding the activities of Her Majesty’s Coastguard and the safety standards of ships. These functions are exercisable by the Secretary of State for Transport, but are in practice carried out in the UK by the Maritime and Coastguard Agency, an Executive agency of the Department for Transport.

The Smith commission agreement was explicit in the devolution of the power to allow public sector operators to bid for rail franchises funded and specified by Scottish Ministers, and clause 49 achieves that.

Clauses 50, 51 and 52 implement the Smith commission agreement and devolve design and implementation powers relating to energy efficiency and fuel poverty to Scottish Ministers, while reserving responsibility for the overarching aspects that affect all consumers in Great Britain, such as scale, costs and apportionment of obligations, as well as the obligated parties. The clauses contain safeguards to give effect to the Smith commission agreement that the devolution of these powers

“be implemented in a way that is not to the detriment of the rest of the UK or to the UK’s international obligations and commitments on energy efficiency and climate change.”

It is the Government’s position that such provisions are necessary. Specifically, we believe that it would be in the interests of UK and Scottish Ministers that the benefits provided to consumers in one part of Great Britain should be proportionate to the costs on consumers in that part of Great Britain.

Scottish Ministers should be able to design supplier obligations for Scotland, but costs should be proportionate across regions, removing the possibility of competitive distortions and cross-subsidy by consumers across Great Britain. We will look at ways of making the costs of obligations clear and equitable between Scotland and the rest of Great Britain.

Clause 53 creates a formal consultative role for Scottish Ministers in the design of renewable electricity incentive schemes that will apply in Scotland. Clause 54 will enable Scottish Ministers to take decisions on safety zones for renewable energy installations in Scottish waters by making Scottish Ministers the appropriate Ministers, and it will enable them to take responsibility for ensuring that offshore renewable energy installations are removed or decommissioned at the end of their useful life. It ensures that consent to and decommissioning of offshore renewable energy installations and the management of Crown Estate assets in relation to such installations are the responsibility of Scottish Ministers, rather than being divided between Scottish Ministers and the Secretary of State.

Clause 55 delivers the Smith commission agreement by devolving to Scottish Ministers, when acting jointly with the Secretary of State, the power to require the Competition and Markets Authority to carry out a market investigation reference when they suspect that features of a market are preventing, restricting or distorting competition. Clause 56 requires Scottish Ministers to lay Ofgem’s annual report and accounts before the Scottish Parliament. To enable that, it ensures that copies will be provided to Scottish Ministers.

Clause 57 gives effect to two key elements of paragraph 38 of the Smith commission agreement relating to Ofcom. It gives Scottish Ministers the power to appoint one member to the Ofcom board to represent the interests of Scotland, and it requires Ofcom’s annual report and accounts to be laid before the Scottish Parliament. Clause 58 gives effect to paragraphs 39, 40 and 41 of the Smith commission agreement relating to the appearance of the Northern Lighthouse Board, Ofcom and Ofgem before the Scottish Parliament on matters relating to Scotland.

Finally, part 7 contains standard technical clauses, including general provisions associated with the Bill, such as transitional provisions, commencement arrangements and the short title.

[Wayne David (Caerphilly) (Lab)]

Before speaking to amendments 157 and 158 to clause 49, I would like to comment on clauses 50 and 51, which relate to fuel poverty support schemes and energy company obligations. I would like the Minister to explain—indeed, to justify—why those clauses are constructed as they are. They amend existing primary legislation, but they are far from clear.

Our starting point must be paragraph 68 of the Smith commission’s report, which states:

“Powers to determine how supplier obligations in relation to energy efficiency and fuel poverty… will be devolved. Responsibility for setting the way the money is raised… will remain reserved.”

Importantly, it then states:

“This provision will be implemented in a way that is not to the detriment of the rest of the UK or to the UK’s international obligations and commitments on energy efficiency and climate change.”

Indeed, paragraph 68 is one of the more prescriptive in the report.

Clauses 50 and 51 also state clearly that any action proposed by Scottish Ministers should not be to the detriment of the United Kingdom as a whole. I want to press the Minister on the criteria to be used by the Secretary of State to determine whether a course of action proposed by Scottish Ministers would be to the detriment of the UK. That is clearly stated in clause 50, and at several points in clause 51. Specifically, proposed new section 14A(8)(b) in clause 50 refers to schemes likely to

“cause detriment to the United Kingdom”.

However, it does not state how detriment in all cases may be judged to have occurred. Proposed new section 14A(9) states that

“considerations that the Secretary of State may take into account include the costs imposed on suppliers by virtue of schemes made, or to be made, by the Secretary of State and the Scottish Ministers under section 9.”

That is section 9 of the Energy Act 2010.

In clause 51, proposed new section 33BCA(7) and others make similar references to “detriment” and to “costs”. Here, too, the phrase “may take into account” is used, which strongly implies that the Secretary of State will not be obliged to take costs into account. It seems that he will also be able to take other, non-specified factors into account. The same can be said of other amendments to existing legislation proposed in clause 51.

What I find worrying about the proposed new sections in clauses 50 and 51 is the lack of specificity and the significant discretion placed in the hands of the Secretary of State. Apart from the politics of this, there is a question of the lack of clarity and, with it, the possibility of any course of action being justiciable. I am not a lawyer—I am an ordinary person—but my experiences over the past decade or so tell me that if there is a lack of clarity in legislation, all too often it is the judges who end up providing that clarity.

I am thinking of the action taken two years ago by the UK Government against the Welsh Government. The Welsh Government wanted to protect Welsh agricultural workers after the UK Government abolished the Agricultural Wages Board, and the UK Government lost the case in the Supreme Court. That is simply an example that springs to mind of what can happen when legislative imprecision leads to legal problems. I would welcome the Minister’s response to the points I have made.

Let me turn to clause 49—Rail: franchising of passenger services. It amends section 25 of the Railways Act 1993 to remove the prohibition on public sector operators bidding for a franchise in relation to a Scottish franchise agreement. The Smith commission’s report stated clearly, in paragraph 65:

“The power will be devolved to the Scottish Government to allow public sector operators to bid for rail franchises funded and specified by Scottish Ministers.”

Labour’s amendment 157 would take a small but significant step further, but in a way that is in keeping with the spirit of the Smith commission’s report. In proposing to allow not-for-profit operators, it echoes the proposal by Gordon Brown prior to the referendum.

--- Later in debate ---

[Andrea Leadsom]

I am delighted to respond this evening. We have heard a wide range of views—albeit some ranging away from the proposed amendments—and I thank hon. Members for all their contributions.

The hon. Member for Caerphilly (Wayne David) spoke to clause 49, on which the Smith commission agreement was explicit that the power to allow public sector operators to bid for rail franchises funded and specified by Scottish Ministers would be devolved. Amendments 157 and 158 are unnecessary. Amendment 157 is not necessary as not-for-profit entities, public or private, are not precluded from being franchisees already. Amendment 158 would create unnecessary uncertainty by allowing discretion on whether a public sector bidder could join a live procurement process and therefore does not enhance the drafting in any way. New clause 65 would give the Scottish Parliament full competence over railways. That clearly goes beyond the Smith commission agreement, and would create the potential for unwanted disruption of networks and relationships between franchise authorities, passenger services and cross-border operations. I therefore urge right hon. and hon. Members to withdraw amendments 157 and 158 and new clause 65.

Turning to energy company obligations and fuel poverty, amendments 149 to 153 would depart from the Smith commission agreement. The agreement recognised that decisions that could impact on all Great Britain consumers have an impact on the Great Britain energy market as a whole and on UK international obligations that should be made at a Great Britain-wide level and remain reserved. Costs incurred by energy companies owing to supplier obligations affect all Great Britain’s consumers. Different costs incurred by a supplier in one area of Great Britain may cause competitive disadvantages and higher costs for customers in other areas. We think it would be in the interests of both UK and Scottish Ministers that costs on consumers in one part of Great Britain should not be disproportionate to their benefits. We believe that proportionate costs across regions removes the possibility of those competitive distortions and cross-subsidy by consumers across Great Britain. We will look at ways of making the cost of obligations clear and equitable between Scotland and the rest of Great Britain, and will work with the Scottish Government to identify the best way of achieving that.

The hon. Member for Caerphilly raised the question of who will decide what causes detriment to the UK. I can assure him that we will work with the Scottish Government to set up a process and methodology for evaluating the impact of schemes implemented in Scotland on their own, and in conjunction with schemes implemented in England and Wales, on the Great Britain energy market and on any relevant UK commitments and obligations. I can tell him that UK and Scottish Government officials have already begun working together to scope out how such a process could work.

[Jim Shannon (Strangford) (DUP)]

The Minister refers to how to address the price of energy in different regions of the United Kingdom. One of the things we would like in Northern Ireland, if at all possible, is a connector between Scotland and Northern Ireland, which would reduce our prices. Is that part of the Government’s strategy? She has not mentioned Northern Ireland and I am conscious that I would like it included.

[Andrea Leadsom]

I think the hon. Gentleman means an interconnector. I am absolutely a huge fan of interconnectors. That is not a part of the Bill, but I can assure him that I am happy to discuss that at any time and to facilitate conversations with the Scottish Parliament. I am, however, quite sure he will not need me to do that and is able to discuss that with them directly.

Our proposals on energy company obligations and fuel poverty are fair to all consumers and align with the Smith commission agreement. I urge hon. Members not to press amendments 149 to 153.

Let me turn to renewables incentives. Amendment 154 would remove subsections (2) and (3) of new section 90C of the Scotland Act 1998, in clause 53, such that changes of a minor, technical or administrative nature would no longer be excluded from the requirement to consult Scottish Ministers, nor those made by the Secretary of State that are not subject to parliamentary procedure. The hon. Member for Aberdeen South (Callum McCaig) has raised his concerns about this area of consultation. Removing subsection (3) would remove the exclusion to consult the Scottish Ministers on any levy in connection with a renewable electricity incentive scheme. Amendment 154 would require consultation not just on the design of renewable incentive schemes, but on their operation. This would not be in keeping with the Smith commission agreement and would lead to over-complex and time-consuming consultations that would affect the smooth operation of the schemes.

[Callum McCaig]

The Smith commission refers to

“a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives”.

I simply cannot understand or fathom how excluding levies gives the Scottish Parliament a consultative role in designing those incentives.

--- Later in debate ---

[Andrea Leadsom]

Let me reassure the hon. Gentleman that we are talking about consultation with the Scottish Parliament on the design of renewable incentive schemes. The point I am making is that where there are minor, technical changes, the need to consult would be too time-consuming and burdensome on both sets of Ministers. That is why we urge him not to press amendment 154.

Amendment 155 concerns the Competition and Markets Authority. A market investigation is a significant undertaking by the CMA, and the impact of business uncertainty and potential remedies may spread across the whole UK. Let us not forget that the CMA is funded by the UK Government, so it is only fair that, just like UK Ministers, Scottish Ministers should be required to involve the Secretary of State in any decision to require the CMA to undertake an investigation. I therefore urge hon. Members not to press amendment 155.

Turning to the amendments from the hon. Member for Nottingham North (Mr Allen), I fully recognise the position that he is trying to convey. He and I have had many conversations on wellbeing, and he will know that I am a big fan of devolution—I am a fan of devolution to local government and a fan of this devolution Bill. The Bill proposes fundamental changes that will give unique new powers to the Scottish Parliament that it has not had before. It will mean that, overall, this devolution settlement is one of the strongest anywhere in the world. The Bill will give significant new powers to Scotland, and it is important that all Members get the opportunity to do justice to those.

Equally, the hon. Gentleman will recognise that we do not want to be telling the Scottish Parliament whether it should be setting up its own commission on wellbeing or, indeed, what sort of commission it should establish. It will be for Scottish Ministers, with the support of their Scottish MPs, to decide when and if they want to establish their own commission for wellbeing and, of course, what sort of powers they want to devolve to their local government, local enterprise partnerships and so on.

[Mr Graham Allen]

I agree with what the hon. Lady is saying, but will she also touch on the rights of local government, so that it, too, can have responsibilities and clarity about its role? At the moment, that is unfortunately not the case in Scotland—or, indeed, any other part of the Union—but we now have an opportunity to give local government in Scotland that freedom.

[Andrea Leadsom]

The hon. Gentleman makes an interesting point. As my right hon. Friend the Secretary of State has said, he will be looking carefully at the debate and at all the feedback right across the House, giving consideration to all those proposals to see whether there is anything more we need to do to improve the settlement for Scotland. A lot of valuable contributions have been made and there is a long way to go with this devolution Bill. I am sure my right hon. Friend will listen to what the hon. Gentleman has to say, but at this point there is nothing further I can add to his comments, other than to say that I would of course entirely support any work done on wellbeing for any of the countries that make up the United Kingdom.

I think it is an incredibly important subject, and I certainly pay tribute to the hon. Gentleman for the work he has done. We have worked in close co-ordination on giving every child the best start in life and on the importance of wellbeing. I pay tribute to the Scottish Parliament, too, because I am aware of the enormous strides made in Scotland on supporting wellbeing and the best possible start in life for every child. I commend that Parliament for its foresightedness. I sincerely believe that other parts of the United Kingdom have something to learn from its actions.

To conclude, the discussion of all the amendments has been important. Today has been a bit of a wash-up, in that we have discussed everything ranging from the new powers for Scottish Members and appointing new members to the Northern Lighthouse Board to Scottish television stations and taking parliamentary submissions from Ofcom and Ofgem. We have also talked about new powers for the Scottish Parliament to be able to decide on the measures it wants to make to deal with fuel poverty and about incentives for new supplier obligations in Scotland to deal with those struggling to pay their bills.

I think that this set of measures represents an enormous transfer of powers from the UK to Scotland. All right hon. and hon. Members should be very pleased about that. We have heard a number of views on all the issues raised today, but for the reasons I outlined, I believe that the Bill’s clauses are in keeping with the Smith commission agreement, so I urge hon. Members not to press their amendments.

Clause 46 ordered to stand part of the Bill.

Clauses 47 to 52 ordered to stand part of the Bill.

Clause 53

Renewable electricity incentive schemes

Amendment proposed: 154, page 60, leave out lines 9 to 17.—(Calum McCaig.)

Question put, That the amendment be made.