Chamber
Meeting of the Parliament 10 March 2011
10 Mar 2011 · S3 · Meeting of the Parliament
Item of business
Scotland Bill
I have heard Tricia Marwick say that before, but the last time I heard her say it, she said that the figure was 15 per cent. I am reading from the committee’s report, although I am aware that she made a minority submission to it.
We owe the Scotland Bill Committee for a second service. It examined in huge detail the criticisms that were made of the bill and, as a result, brought about a rounded set of recommendations that will enhance the bill further if enacted. It would have been easy to have dismissed the criticisms as no more than whatever the bill’s opponents could dream up to discredit it, but the committee considered them on the basis of detailed evidence.
The commission on devolution presented a problem for the SNP, because it gained support and credibility. Members will remember the Scottish Government making the accusation in the chamber and on many platforms that Scotland would have lost £8 billion if the Calman proposals had been in place. Alex Salmond and Fiona Hyslop said that that is what the Scotland Bill would cost the Scottish budget. They called it the “deflationary effect”. I always wondered what remit officials were given to come up with that one. Now we know. The committee was more analytical than the Government, and it clearly set out that that conclusion was wrong, inaccurate and deliberately misleading. The report shows in detail that, if the plans were introduced from today, then, on the Scottish Government’s basis, they would increase rather than decrease the Scottish budget. Indeed, if the income tax base were to increase in the future, Scotland would also gain, which is another incentive to have a growth strategy. The SNP chose one year of the devolution project, projected forward and got the figures that it was after, but it has been found out.
There was a daft notion that income tax is somehow a declining tax. Tell that to anyone who pays it. The committee’s careful analytical work shows quite the opposite, of course. Many experts agreed that the package of taxation powers, income tax and a smaller number of taxes is sensible and the right place to start the process of fiscal devolution. Such an approach is found in many other federal and devolved nations.
Finally, the committee reported on the absurd claims about the economic growth that would follow if we moved to the full fiscal fairyland that the Scottish Government wants to inhabit. The committee dealt thoroughly and decisively with that matter. It got to the bottom of such claims, and that is perhaps not happy reading for the Government. The SNP has continued to claim that full fiscal autonomy leads to growth. That is an unfounded assertion; it is a fallacy. Indeed, the First Minister specifically stated that full fiscal autonomy would lead to 1 per cent growth per year. He founded that statement on the work of two professors who claimed that a 1 per cent increase in revenue devolution at the United Kingdom level might be expected to increase the country’s gross domestic product by 0.9 per cent. It is now clear that the Scottish Government misused the evidence of Professor Hughes Hallett and Professor Scott. More important, the committee was able to draw out that there is no such link. Even Reform Scotland, which has campaigned for fiscal responsibility, agreed with the committee that things entirely depend on what is made of the powers. Higher growth should be the objective of any future Government, but more fiscal powers in themselves will not achieve that.
The necessary adjustment in the block grant that the committee identified is the important thing to get right. It is obvious that there will be uncertainties in the first years, and stability in Scotland’s financing and accuracy in establishing the Scottish tax base are needed. The Scotland Bill Committee made the sensible suggestion that there should be a review in 10 years’ time. The radical suggestion by the committee that an overall limit on increased borrowing powers should be markedly higher is also sensible. The examination of tax bands and ensuring that Scotland gets parity in any future change to corporation tax is forward thinking.
I recommend that the Parliament passes a legislative consent motion that refers to the various suggested amendments in the report. This will not be the final word. After Westminster, we will consider the issue again in a future session of Parliament. It is correct to do so. If we do that, we will have served the people of Scotland well.
I move,
That the Parliament agrees that, further to motion S3M-7550 passed on 9 December 2010 supporting the general principles of the Scotland Bill as introduced in the House of Commons on 30 November 2010, the Bill be considered by the UK Parliament; invites the UK Government and the UK Parliament to consider the amendments and proposals made in the report of the Scotland Bill Committee, and looks forward to considering any amendments made to the Bill with a view to debating them in a further legislative consent motion before the Bill is passed for Royal Assent.
14:50
We owe the Scotland Bill Committee for a second service. It examined in huge detail the criticisms that were made of the bill and, as a result, brought about a rounded set of recommendations that will enhance the bill further if enacted. It would have been easy to have dismissed the criticisms as no more than whatever the bill’s opponents could dream up to discredit it, but the committee considered them on the basis of detailed evidence.
The commission on devolution presented a problem for the SNP, because it gained support and credibility. Members will remember the Scottish Government making the accusation in the chamber and on many platforms that Scotland would have lost £8 billion if the Calman proposals had been in place. Alex Salmond and Fiona Hyslop said that that is what the Scotland Bill would cost the Scottish budget. They called it the “deflationary effect”. I always wondered what remit officials were given to come up with that one. Now we know. The committee was more analytical than the Government, and it clearly set out that that conclusion was wrong, inaccurate and deliberately misleading. The report shows in detail that, if the plans were introduced from today, then, on the Scottish Government’s basis, they would increase rather than decrease the Scottish budget. Indeed, if the income tax base were to increase in the future, Scotland would also gain, which is another incentive to have a growth strategy. The SNP chose one year of the devolution project, projected forward and got the figures that it was after, but it has been found out.
There was a daft notion that income tax is somehow a declining tax. Tell that to anyone who pays it. The committee’s careful analytical work shows quite the opposite, of course. Many experts agreed that the package of taxation powers, income tax and a smaller number of taxes is sensible and the right place to start the process of fiscal devolution. Such an approach is found in many other federal and devolved nations.
Finally, the committee reported on the absurd claims about the economic growth that would follow if we moved to the full fiscal fairyland that the Scottish Government wants to inhabit. The committee dealt thoroughly and decisively with that matter. It got to the bottom of such claims, and that is perhaps not happy reading for the Government. The SNP has continued to claim that full fiscal autonomy leads to growth. That is an unfounded assertion; it is a fallacy. Indeed, the First Minister specifically stated that full fiscal autonomy would lead to 1 per cent growth per year. He founded that statement on the work of two professors who claimed that a 1 per cent increase in revenue devolution at the United Kingdom level might be expected to increase the country’s gross domestic product by 0.9 per cent. It is now clear that the Scottish Government misused the evidence of Professor Hughes Hallett and Professor Scott. More important, the committee was able to draw out that there is no such link. Even Reform Scotland, which has campaigned for fiscal responsibility, agreed with the committee that things entirely depend on what is made of the powers. Higher growth should be the objective of any future Government, but more fiscal powers in themselves will not achieve that.
The necessary adjustment in the block grant that the committee identified is the important thing to get right. It is obvious that there will be uncertainties in the first years, and stability in Scotland’s financing and accuracy in establishing the Scottish tax base are needed. The Scotland Bill Committee made the sensible suggestion that there should be a review in 10 years’ time. The radical suggestion by the committee that an overall limit on increased borrowing powers should be markedly higher is also sensible. The examination of tax bands and ensuring that Scotland gets parity in any future change to corporation tax is forward thinking.
I recommend that the Parliament passes a legislative consent motion that refers to the various suggested amendments in the report. This will not be the final word. After Westminster, we will consider the issue again in a future session of Parliament. It is correct to do so. If we do that, we will have served the people of Scotland well.
I move,
That the Parliament agrees that, further to motion S3M-7550 passed on 9 December 2010 supporting the general principles of the Scotland Bill as introduced in the House of Commons on 30 November 2010, the Bill be considered by the UK Parliament; invites the UK Government and the UK Parliament to consider the amendments and proposals made in the report of the Scotland Bill Committee, and looks forward to considering any amendments made to the Bill with a view to debating them in a further legislative consent motion before the Bill is passed for Royal Assent.
14:50
In the same item of business
The Presiding Officer (Alex Fergusson)
NPA
The next item of business is a debate on motion S3M-8114, in the name of Iain Gray, on the Scotland Bill, which is United Kingdom legislation. I invite membe...
Pauline McNeill (Glasgow Kelvin) (Lab)
Lab
Today is important for the Scottish Parliament and all those who believe in devolution for Scotland. As the Scotland Bill Committee’s report makes clear, the...
The Minister for Culture and External Affairs (Fiona Hyslop)
SNP
The Scottish Government has been extremely constructive not only with the bill committee but with the UK Government. We have made 30 different suggestions fo...
Pauline McNeill
Lab
The member does not recognise that, but I will come to that. Until now, Fiona Hyslop has argued for independence or full fiscal autonomy to the death. Nothin...
The Minister for Parliamentary Business (Bruce Crawford)
SNP
I do not think that you are very amusing at all, actually.
The Presiding Officer
NPA
Order.
Pauline McNeill
Lab
The Scotland Act 1998 was by any standard a landmark piece of legislation. It gave the Parliament very wide powers and, as the Calman commission showed, it g...
Tricia Marwick (Central Fife) (SNP)
SNP
Will the member give way?
Pauline McNeill
Lab
I will take a brief intervention.
Tricia Marwick
SNP
I was struck by the member’s assertion that the Scottish Parliament would be responsible for levying almost a third of the money that it receives. That is si...
Pauline McNeill
Lab
I have heard Tricia Marwick say that before, but the last time I heard her say it, she said that the figure was 15 per cent. I am reading from the committee’...
The Minister for Culture and External Affairs (Fiona Hyslop)
SNP
This debate is a staging post in the Scotland Bill process, and the Scotland Bill is a staging post on the constitutional journey to achieve more powers and ...
Robert Brown (Glasgow) (LD)
LD
I was intrigued by what the minister said about supporting the bill, with reservations. That is not quite what she said at the beginning, when she damned the...
Fiona Hyslop
SNP
We still think that there are fundamental flaws in the income tax proposals, not least because we have no idea how the Treasury will adjust the block grant. ...
Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD)
LD
Will the minister give way?
Fiona Hyslop
SNP
I am moving on. The Scottish Government has provided the impetus for the current national debate on the way in which Scotland is governed. Our position is cl...
Fiona Hyslop
SNP
However, we recognise that some, including Mr Purvis, have other sincerely held views. Hence our national conversation provided a detailed and ambitious visi...
Margaret Mitchell (Central Scotland) (Con)
Con
Just to make it absolutely clear, I say that the referendum that is proposed in the amendment is on the LCM powers as proposed in the motion. It is clear tha...
Fiona Hyslop
SNP
The member might want to look closely at her amendment, because it talks about fiscal powers.The Government has taken the Scotland Bill on its merits. We sup...
Pauline McNeill
Lab
Why did the Government choose 1999 as the basis of its calculations? Does the minister accept that, if the Calman proposals were in place now, Scotland would...
Fiona Hyslop
SNP
As far as I remember, 1999 was the year in which the Scottish Parliament was established and devolution began. The projections that were provided to the comm...
Pauline McNeill
Lab
Will the minister give way?
Fiona Hyslop
SNP
I am moving on.It is important to point out that, although the bill seeks more powers for the Scottish ministers, it provides a net loss of powers to the Sco...
Jim Hume (South of Scotland) (LD)
LD
Will the member give way?
Fiona Hyslop
SNP
I am closing now.Throughout the process of constitutional debate that was initiated by the Government in the national conversation, we have been open to idea...
Margaret Mitchell (Central Scotland) (Con)
Con
Today’s debate is hugely important, and I fully recognise that, on the issue of the fiscal powers that should be available to Parliament, members will argue ...
Mike Rumbles (West Aberdeenshire and Kincardine) (LD)
LD
I am trying to find out whether this is an opening speech for the Conservative party or an opening speech for Margaret Mitchell—I am not quite sure.
Margaret Mitchell
Con
This is an amendment speech. With his political experience, Mr Rumbles should know that.The Parliament has justifiably been proud that, since its inception, ...
Ian McKee (Lothians) (SNP)
SNP
Will Margaret Mitchell take an intervention?
Margaret Mitchell
Con
I am sorry—I am in my last minute.The only way to ensure that the Scottish Parliament genuinely seeks the views of and listens to the people whom it represen...