Hansard

I can well remember returning from school on 2 March 1979 to be greeted by my mother with some disappointing news: the yes campaign had not secured enough votes in the referendum to establish a Scottish assembly. As a 15-year-old, I had been captivated by the sense of possibility that would have come from the people of Scotland being able to shape our own future. A few weeks later, I joined the Scottish National Party, to play my part in securing Scottish self-government. So today is, for me, a very significant day. Today, the Scottish Government is inviting Parliament to give its legislative consent to the Scotland Bill, the next step in extending the responsibilities of this Parliament and in Scotland’s journey towards greater self-government.

The aspiration for self-government centres on ensuring that decisions about what happens in Scotland are made as close as possible to the people whom they directly affect—decisions that reflect the views, issues, priorities, hopes and aspirations of the people of Scotland.

The vibrant debate on Scotland’s future that was conducted during the independence referendum campaign is what has brought us here today. Although my aspiration for independence was not supported sufficiently by the electorate, it was crystal clear that the people of our country wanted to exercise more control over their lives here in Scotland and that the political parties and the Parliaments and Governments of Scotland and the United Kingdom had to make that happen. As we approach the end of this parliamentary session, it is appropriate to reflect on the journey that this Parliament has taken—in particular, the momentous events of the past five years.

Since 1999, this Parliament and the Government have continually evolved their powers, but the pace of devolution quickened after the former First Minister published the constitutional consultation document, “Choosing Scotland’s Future”, in August 2014, and we began the national conversation, discussing the powers that people in Scotland wanted the Parliament to have. In response, other parties and the United Kingdom Government established the Calman commission, publishing a Scotland Bill in 2010. This Scottish Parliament eventually gave its legislative consent to that Scotland Act in May 2012, so this is the second Scotland Bill that we have considered in this session. They come along with remarkable regularity.

We have used the powers in the Scotland Act 2012 to address the scourge of drink driving, take action on air guns and reform stamp duty with land and buildings transaction tax. However, it was clear at the time that the 2012 act lagged behind the aspirations that the people have for this Parliament. As we all considered whether we wished to be an independent country, an offer was made to the people of Scotland: they should vote against independence and they would be offered a secure, modern form of Scottish home rule. The UK parties made a vow promising extensive new powers for the Scottish Parliament.

The outcome of the referendum led to the establishment of the Smith commission to agree a basis for the implementation of the commitments made by the UK parties. Along with my friend and colleague Linda Fabiani, I represented the Scottish National Party on the Smith commission, and agreed the contents of its report. I pay tribute to my co-commissioners here in this Parliament—Annabel Goldie, Iain Gray, Tavish Scott and Patrick Harvie; and to those elsewhere—Michael Moore, Gregg McClymont, Maggie Chapman and Adam Tomkins. I pay particular tribute to Lord Smith, whose patient yet firm guiding direction enabled us to reach an agreement. Clearly, for me, it did not go far enough. As was painfully obvious during the process, for others it went far too far.

The Smith process delivered an agreement for additional powers that—if they are used in the right way—can benefit the people of Scotland. Those include extended powers over tax, new powers over welfare, and responsibilities for the Crown Estate, the British Transport Police, tribunals and licensing of onshore oil and gas activity.

However, the Smith commission produced only a report. A bill and a fiscal framework were necessary before anything could be implemented. The Devolution (Further Powers) Committee, under the distinguished leadership of Bruce Crawford, has been crucial in getting us to where we are today. Its scrutiny of both Governments, along with the diligent work of the Finance Committee, under the convenership of Kenneth Gibson, has significantly and materially improved the bill that is before us today. Both committees created the tests that would be central to agreeing a fiscal framework, and that work highlights the excellence that we have come to expect from the strong committee system of this Parliament.

While the bill is not perfect, it reflects the efforts of many people, in this chamber and beyond. There has been much joint working between the UK and Scottish Governments, and ministers are prepared to recommend that Parliament consents to the bill completing its parliamentary passage at Westminster.

The Government has already set out a number of proposals to use the powers that will be conferred on it to improve the lives of the people of Scotland. Those proposals include a social security bill to establish a social security agency, to move to abolish the bedroom tax as early as possible, to introduce support for carers, to create greater flexibility over universal payments and—importantly—to create a social security system that is based on dignity and respect for the individuals that that agency has to serve. Other proposals include effective employability services that support people while coping with severe cuts in funding, as highlighted in the report of the Devolution (Further Powers) Committee, and consultation on replacing and reducing air passenger duty to boost the economy.

Already, for the elections in May, we have extended the right to vote to 16 and 17-year-olds. That is a right that they will exercise in a few short weeks, to the close interest of all of us in the parliamentary chamber. We will set out further proposals in due course and, if returned as the Government in May, will fully utilise the powers available.

Of equal importance to the Scotland Bill has been the fiscal framework that accompanies it. My overriding aim has been to secure a fiscal framework for Scotland that is fair, workable and faithful to the principles that Smith set out in his report. Throughout the negotiations, my approach was that I would not sign up to a deal that would impose systematic cuts to Scotland’s budget. That outcome has been achieved for the Scottish interest. The fiscal framework states that the Barnett formula will continue to determine the size of the block grant and is the benchmark against which we must assess the operation of the principle of no detriment, which was central to the conclusions of the Smith commission.

The Governments agreed that the block grant adjustment for tax and benefits should be effected by using the comparable model and the Barnett formula respectively, while achieving the outcome that is delivered by the index per capita method. Each year, it will be necessary to concurrently calculate the block grant adjustment, based on both the comparable and Barnett models, and the IPC model. The first step will be to calculate the adjustments on the basis of the comparable and Barnett models. The second, concurrent, step will be to calculate the adjustments on the basis of the IPC model. Finally, if there is a difference between the Barnett, comparable and IPC calculations, there will be a reconciling adjustment to the calculations to ensure that the mechanism delivers the IPC outcome before the start of each financial year. I accept that the agreement is complex, but it ensures that the Scottish ministers’ IPC model drives the outcome of the block grant adjustment process and, crucially, ensures that the Scottish budget does not carry any detriment.

After that, the UK Government cannot default to a funding model that would deliver detriment in the future—future arrangements must be agreed jointly. One of the key issues—and one of the great benefits—of the conclusions in the Smith commission’s report is the fact that Smith required the arrangements for the fiscal framework to be agreed jointly by the United Kingdom and Scottish Governments, making us equals in determining the issues. It is that factor that has enabled us to protect Scotland from the implications of the detriment that could have arisen. Therefore, the arrangement fully delivers the Smith principle of no detriment. To aid transparency, the results of the two models will be presented in the annual reports to each Parliament.

Besides setting out the block grant adjustment, the fiscal framework sets out the agreement that has been reached in other important areas such as capital and resource borrowing, funding for administration and implementation costs and, effectively, the policy spillovers that are associated with tax and welfare. It provides a governance framework for the future, making it clear that decisions in relation to the framework will be taken jointly by both Governments in the joint exchequer committee.

Yesterday, the two Governments published a technical annex to the fiscal framework, which sets out in further detail the agreement that was reached with the United Kingdom Government and then published. I would have preferred to have published it with greater time available to members to scrutinise it before the debate, but it amplifies and provides more detail on the agreement that the First Minister announced to Parliament a couple of weeks ago. It is there for members to scrutinise as background to the process that has been agreed.

We have an agreement on a fiscal framework that increases the Scottish Parliament’s financial responsibility, is consistent with the Smith principles of no detriment and is fair to the people of Scotland. I am therefore in a position to recommend that Parliament provides legislative consent to the Scotland Bill today.

This session has seen a remarkable journey for Scotland and her Parliament, from the legislative consent motion on the Scotland Act 2012 through the legislation for our own referendum, then the referendum itself and the enormous engagement of members of the public on the constitutional question, followed by promises to the people of Scotland of federalism and home rule. Then there were the 10 weeks of the Smith commission, a draft Scotland bill and a UK general election. There was then the consideration of the Scotland Bill at Westminster, with hours of scrutiny by the Devolution (Further Powers) Committee and the Finance Committee, and seven months of negotiations over the fiscal framework.

The result is a set of powers that do not enable us to do all that the Government would want to be able to do but are a range of powers that we will use to the full in the interests of building a stronger Scottish economy, tackling inequality and ensuring that all our people have the opportunity to flourish in Scotland.

I believe that the more we exercise self-government here in Scotland, the more the benefits become clear to members of the public and the stronger the argument becomes for extending our powers even further. That is Scotland’s journey, and I encourage Parliament to take a further decisive step on that journey by supporting the Government motion.

I move,

That the Parliament notes the agreement on a fiscal framework for the Scotland Bill published by the Scottish and UK governments on 25 February 2016, and agrees that the Scotland Bill, introduced in the House of Commons on 28 May 2015, as amended, should be considered by the UK Parliament.