The report of the Scottish Parliament’s Scotland Bill Committee is interesting in ways I’d not expected. Oddly, it probably sets more of a puzzle to the UK Government than a more straightforwardly hostile, or more supportive, report, might have.
Much of the report is devoted to justifying the economic provisions of the bill – criticising the arguments made for full fiscal autonomy, as well as devolution of corporation tax and oil and gas duties. It includes a fairly thorough attempt to rubbish the arguments made by Drew Scott and Andrew Hughes-Hallett for much more extensive forms of fiscal autonomy. On that level, the report constitutes a pretty detailed consideration of the issues – or reconsideration, given that the Calman Commission had already been over much of this ground. For the first time, it provides a way of putting the various positions against each, and so it provides the first real opportunity to bring together the various strands in the debates about financing Scottish devolution that have been underway for the last four years. That’s to be welcomed, but it also shows the flaws of the process. It’s clear that, for all the committee’s work since December, a committee inquiry on a piece of pending legislation is wrong for this sort of role. It’s too politically polarised, it’s too rushed, and the inquisitorial approach that is appropriate for forensic committee inquiries isn’t appropriate when it comes to issues on which there is a lively academic debate but little definitive evidence. The row about the treatment of Scott and Hughes-Hallett when they gave evidence to the committee is a symptom of that wider underlying problem, and it’s one that undermines the legitimacy of the whole scheme under consideration.
While the report may accept the broad contours laid out by the Calman commission (a limited measure of fiscal responsibility relying mostly on personal income tax), it is more critical of the institutional arrangements for managing the devolved tax power. It calls for a statutory foundation for the role of HM Revenue & Customs in collecting the Scottish rate, with accountability for HMRC to the Scottish Parliament as well as Westminster. It argues for the costs of the new system to be borne by both governments and not simply (as Strengthening Scotland’s Future provides) from the Scottish block grant. It recommends that the proposed bilateral tax committee should be called a ‘Joint Exchequer Committee’, should start work immediately, for its relationship with other intergovernmental bodies to be clarified, and for it to function ‘as a mechanism to forestall or resolve disputes, avoiding the need for top level political exchanges’. It seeks a clearer way of verifying the various estimates and calculations of revenue prepared by or for the UK Government, perhaps with a role for the Auditor-General for Scotland. It also calls for substantially higher borrowing limits, for both the proposed short-term and long-term borrowing powers. Perhaps most important, it suggest that the discount from the block grant should be calculated using the ‘own base deduction’ method discussed by the Holtham Commission. All this is quite right – it’s what’s needed if the Calman system is to work at all (and most of it was recommended in my own evidence to the Committee). It’s an attempt to remedy flaws in the design of the bill that should not have been there in the first place, if the UK Government had thought harder about what’s constitutionally necessary to run a system of devolution like the one Scotland has.
As far as the bill’s constitutional provisions are concerned, the report largely endorses the ‘re-reservations’ proposed in the bill – whether it concerns insolvency, Antarctica, the misuse of drugs or the health professions. It’s more equivocal where the bill proposes simple solutions to awkward institutional situations such as the Crown Estate or the BBC and Gaelic broadcasting – a reflection of how intractable these problems are, and how they’ve benefitted from the more open process of debate and scrutiny that the Committee has afforded compared to the way they’ve been considered up to now. The Committee has also accepted the proposed changes to the referring of legislation to the UK Supreme Court (so that particular clauses, not whole bills, can be referred), and to temporary conferrals of legislative power. Both of those are unlikely to suit any future Scottish Government, whatever its political make-up. Although it has agreed to those dubious propositions, I’m pleased that it has taken my point about the excessive breadth of clause 23 of the bill, and how much further that goes than any mischief to which the UK Government can point. I’m also pleased that the report is clear that the present proposals are one step in revising devolution, but not the last word on the matter. The report is clear that there will be further developments in due course. While that may be pretty self-evident in Scotland, that’s not how it appears in London, where such a message will be rather more controversial.
The report accepts that many of the issues where it identifies the need for change are not ones that can be resolved straightaway. While it recommends that the Parliament gives its legislative consent to bill, the Committee emphasises the need for these issues to be settled before the bill is passed into law. While it doesn’t explicitly call for the legislative consent motion to be conditional, and doesn’t set out its recommendations for such a motion, it makes it clear that there should be a number of changes to the bill and that the process of giving legislative consent cannot involve a single vote. It calls expressly for there to be another vote before the bill receives Royal assent – which will take place after the May elections. So on the levels of both principle and of procedure, the Parliament has asserted its key role in approving legislation that affects the functions of the Scottish Parliament or Government. (For previous discussions of that, see HERE and HERE.)
Moreover, the requirements of Holyrood are limited and modest by any standard. In no sense are they ‘fundamental’; they all simply seek to make the bill achieve its aims. For the UK Government to reject them would suggest an utter contempt for the Scottish Parliament. Similarly, a refusal by the UK Parliament to act on them would be an assertion of the principle of parliamentary sovereignty in a way that would undermine devolution as a whole, as well as the principles set out in the bill. Managing such a constitutional change is a complex gavotte; the next steps are ones for Michael Moore to take as the bill goes into its Commons Committee stage (which starts next Monday, 7 March). Having been gracefully invited to dance, he’d be well advised to accept.
The Scotland Bill Committee hasn’t come up with a radical reinvention of the Calman recommendations, conservative as those were. It was never likely to. But it has come up with a report that emphasises the dynamic nature of the processes as well as flaws in the execution if not design of the Calman recommendations. How these issues play during the election campaigns and afterward will be fascinating to watch. Let’s hope that the next round of these debates is better handled than the last one has been. The case for a more courteous and inclusive process has been abundantly made by the problems of this disjointed one.