Hansard

Yes, there is nae point.

Following negotiations between the Governments, a number of legislative and non-legislative measures have now been agreed to improve the bill and address our concerns. It is important that Parliament knows about those, so I will list the major ones. Consistent with the principle of consent in the UK Government’s statement of funding policy, both Governments should reach agreement on implementation issues, including adjustments to the block grant, to take account of the Scottish Parliament’s new fiscal powers. Each Government should also provide assurance to its Parliament before relevant provisions of the bill are brought into force and before implementation arrangements are brought into effect.

The Governments will develop an adjustment to the Scottish block grant based on the proposals of the Holtham commission on the funding of the Welsh Assembly Government. There will be transparency for both Parliaments on implementation and a statutory duty on both Governments to report regularly to their respective Parliaments on the implementation of the financial aspects of the bill.

There will also be discussions between the Governments on devolving additional taxes and on the arrangements for borrowing.

On the non-financial matters, the role of the UK Supreme Court in Scottish criminal cases will be properly defined with one procedure. The system and the need for certification will be reviewed in three years in a process chaired by the Lord President.

The reservations on health professions and corporate insolvency procedures, including those in relation to registered social landlords, will be removed from the bill.

The provision on the partial suspension of acts of the Scottish Parliament that are referred to the UK Supreme Court will also be removed, and the status quo on shared executive competence to implement international obligations will be maintained. There will also be a review of the regime for marine conservation.

I turn to the costs that will be associated with Her Majesty’s Revenue and Customs implementing the Scottish rate of income tax. The UK Government has estimated those costs to be up to £45 million. We have argued that the UK and Scottish Governments should share the costs of setting up the Scottish rate in recognition that it is a UK Government policy and to provide an incentive to maximise value for money.

UK ministers have refused that proposal, so the costs of implementation must be met in full from the Scottish budget. That presents the Scottish Government and Parliament with a significant issue in terms of lack of accountability: HMRC will manage the implementation but will not be formally accountable to us for how it is spending our money. It is therefore vital that we find ways of sharing oversight of the project and ensure as best we can that HMRC maximises value for money while providing the best possible service to Scottish taxpayers. The Governments have therefore set up joint assurance mechanisms at senior official level, and implementation will be overseen by ministers through the Joint Exchequer Committee. The bill also now requires statutory reports from both Governments to the Parliaments on progress with implementation.

The proposal to adopt the Holtham commission methodology for the mechanism for calculating the block grant adjustment is much better than the Calman proposals that the UK Government originally supported. Under Calman, the block grant adjustment would have been calculated once—in the first year—and the proportion would have remained the same every year thereafter. Scotland would have lost out if the block grant adjustment was bigger than receipts from the Scottish rate of income tax—in other words, if UK public spending grew faster than Scottish-rate tax receipts. Therefore, the effect on the Scottish budget would have depended on movements in UK public spending, over which Scotland has no control or even influence.

As members know, we argue that, in past years, Scotland would have lost substantial amounts of money from the Calman approach. However, under the Holtham approach, the adjustment to the block grant will be recalculated each year, based on changes to the UK tax base on which the Scottish rate is levied. That means that, if Scottish rate tax receipts grow faster than the corresponding UK tax base, our budget will benefit. That is, Scotland will benefit if earnings and employment in our economy perform better than those in the rest of the UK. That is a better, more principled, arrangement and I am genuinely glad that the UK Government has adopted a different approach.

There is also a clear undertaking that both Governments should reach agreement before the package is implemented. The Scottish Government recognises clearly that it needs to seek the agreement of this Parliament as part of that process.

The Scottish Government freely admits that it would like more. Scotland can, should and will be independent. However, the Scottish National Party has never stood in the way of any legislation that will help the people who live in Scotland.

There was a time when the bill did more harm than good. It promised a financial mechanism that could have cut spending in Scotland by billions of pounds had it operated from 1999. That mechanism has now gone, and the damaging reservation provisions in the bill have also been removed, as I outlined earlier. We are therefore satisfied that the bill no longer poses a threat to devolved interests. In the Scottish Government’s judgment, the package of changes makes it possible for the Parliament to support the bill.

However, the bill could have been so much better. It could have provided real economic levers, for example by devolving corporation tax. A more competitive corporation tax rate in Scotland would boost output, investment, exports and overall employment. The UK Government is, even now, examining a lower corporation tax rate for Northern Ireland to boost its economic performance, yet there has been no action here.

The bill could have provided us with better capital borrowing powers, as recommended by both Scotland Bill Committees and the Scottish Affairs Committee, yet there has been no action on that. The management of the Crown estate in Scotland has been identified by everyone from Ian Davidson to both Scotland Bill Committees and even Tavish Scott as unsatisfactory and ripe for reform, yet there has been no action on that. Calman recommended a formal role for the Scottish Parliament in welfare, and the Welfare Reform Bill has shown the need for that. More intergovernmental dialogue was promised by the UK Government last June, yet there has been no action on that.

The purpose of our proposals was to strengthen the Parliament and improve the lot of the people of Scotland.