Hansard

In this matter, we have most definitely done that. Even Gordon Brown, the former Prime Minister, is saying that the Scotland Bill does not deliver on the commitments that were made in the Smith commission. That, to me, is crystal-clear evidence that the United Kingdom Government has got to move, and to move significantly, during the remaining passage of the bill, to which we will turn shortly when that UK bill returns for its report stage in the House of Commons.

We know clearly the areas in which the bill needs to be improved. They include the restrictive definitions of “carer” and “disability”; the absence of new powers to create benefits in areas of devolved responsibility; the restrictions on the length of employment-support programmes that can be delivered; and restrictions on the type of people who can be offered help. The bill needs clarity on the Crown Estate provisions and future economic assets such as Fort Kinnaird; it needs a provision that protects this Parliament’s interests by including clearly the full scope of the Sewel convention, including its need for the Parliament’s consent to changes to its own competence and that of Scottish ministers; and it needs to respect the spirit of devolution by removing vetoes for UK ministers in the crucial areas of universal credit and energy schemes. Those are among the issues that require to be addressed when the bill’s report stage is reached in the House of Commons.

I therefore invite Parliament to join me in urging the Secretary of State for Scotland to engage closely with the Scottish Government to produce amendments that we have already suggested to the UK Government, that accurately reflect the Smith commission report and have the support of both Governments.

We know that the powers of the bill fall short of both the vow and the recommendations of the Smith commission; we will continue to demand that those promises be delivered. At the same time, the Scottish Government is acting with pace and with creativity to be ready to use the limited powers that are proposed, and we will do so in consultation with others.

In the programme for government, we set out some early policy priorities. They include: a social security bill in the first year of the new session, to give effect to our new social security powers; the abolition of the bedroom tax as soon as possible when we have the powers to do so; improved support for people to move into employment through reform of the work programme and of the work choice scheme; improved access to priority business and tourism markets by reducing air passenger duty by 50 per cent from 2018; early action on gender balance on public boards; the abolition of fees for employment tribunals; and management of the assets of the Crown Estate in Scotland, in order to maximise benefit to the Scottish economy and to local communities. Those are some of the early priorities that the Scottish Government will take forward through utilisation of the powers that will come to us as a consequence of the passage of the Scotland Bill.

I want to say a few words about the fiscal framework that will govern financial relationships between the Governments in the future. The fiscal framework must give the Scottish Government the flexibility that it needs to create a fair and prosperous Scotland and to use the powers that we have effectively. We know that that must be done in a responsible and sustainable manner, which is how we have always used our fiscal powers.

In my evidence to the Finance Committee’s inquiry, I have set out some of the key elements that we need to see in the fiscal framework. We need block-grant adjustments for devolved taxes that reflect receipts at the point of transfer, based on an agreed methodology and data. We need transfers for social security that reflect the full cost of the benefits that will be devolved, we need changes to the block grant that reflect the full cost of administering the new powers, and we need the ability to increase the amount of capital spending materially through capital borrowing powers.

Most fundamentally, we need a well-designed fiscal framework that ensures that further devolution provides the right incentives and increases accountability, and links the Scottish Government’s budget to Scottish economic performance. We should retain the rewards of our success, as we will bear the risks. When the Scottish economy outperforms that of the rest of the UK, our spending power should increase, so it is absolutely essential that the fiscal framework provide the Scottish Government with genuine flexibility and choice to pursue our own distinct policies.

The framework will be agreed jointly by both Governments and we are aiming to conclude negotiations by the autumn. I am currently involved in discussions with the Treasury, in that respect. However, I want to make it clear to Parliament, as I have told the Finance Committee before, that the Scottish Government will not recommend that this Parliament give consent to the bill without an agreed fiscal framework that is fair to Scotland. I would have no hesitation in refusing to recommend a proposal that did not provide us with the ability to use our powers properly and flexibly to support the people of Scotland, to address our own priorities and to improve our economy.

I want to bring my remarks to a close by reflecting on what the Scotland Bill tells us about the condition of democracy in Scotland today. The driving force for what became the Smith commission process was the clear momentum for change that was generated during the referendum campaign, but since then we have seen a return to business as usual. That graphically illustrates the mismatch between democracy and devolution in this country.

The Smith commission was, in the end, a party-driven exercise. The people were given little say in its process and none in its conclusions. We missed many opportunities in that process—perhaps because of the lack of public pressure in a closed process.

The Scottish Government therefore proposed, with the support of the Scottish Trades Union Congress, full devolution of employment law. That was not supported in the Smith commission. We have seen the consequences of that in the Trade Union Bill this week. The Scottish Government, with the support of many stakeholders across Scottish society, proposed that social protection be devolved in full. Again, that was not supported by other parties, and the consequences of that can be seen in the cuts to welfare that have been driven through Whitehall today.

That demonstrates that the Scottish Parliament must be equipped with the powers and responsibilities to enable us to take decisions that meet the expectations, needs, priorities and choices of the people of Scotland, and that is what the Scottish Government will argue for.

I move,

That the Parliament notes the establishment of the all-party Smith Commission following the 2014 referendum on independence and the commitment of the UK Government to legislate to implement the recommendations of the commission in full; further notes the findings of the Devolution (Further Powers) Committee that the Scotland Bill in its current form does not deliver the recommendations of the commission in full; further notes that no amendments to the Bill were accepted at its committee stage in the House of Commons; urges the UK Government to bring forward amendments at the Bill’s report stage to give effect to the Smith Commission recommendations and in particular to meet the standards set by the Devolution (Further Powers) Committee, and recognises the need for a satisfactory and fair fiscal framework to allow the Scottish Parliament and the Scottish Government to make effective use of the powers in the Bill.