Lords Sitting of 6 October 1998

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ely.

Lord Norton of Louth
Philip Norton, Esquire, having been created Baron Norton of Louth, of Louth in the County of Lincolnshire, for life—Was, in his robes, introduced between the Lord Weatherill and the Lord Newton of Braintree.
Baroness Miller of Chilthorne Domer
Mrs. Susan Elizabeth Miller, having been created Baroness Miller of Chilthorne Domer, of Chilthorne Domer in the County of Somerset, for life—Was, in her robes, introduced between the Lord Tope and the Baroness Maddock.

Disabled Employment Provisions: Exemptions
2.47 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
Why most employers are granted exemption from the employment provisions of the Disability Discrimination Act 1995.
Lord McIntosh of Haringey: My Lords, our review of the effects of the small employer exemption threshold led us to conclude that the threshold should be lowered from 20 to 15, thus bringing more employers into coverage. That means that over three-quarters both of all employees and all disabled employees will be covered by the employment provisions of the Act.
Lord Ashley of Stoke: My Lords, I am grateful for that reply. However, is my noble friend aware that there is no valid reason why any firm should be exempt from the Disability Discrimination Act? The Act specifically provides that only reasonable adjustments need to be made, so there is absolutely no question of any unreasonable demands being imposed on any firm. Does it not follow that any claim by a firm for exemption on the grounds that it fears unreasonable burdens is totally without justification according to the law and that such firms should therefore be included under the terms of the Act that forbids discrimination against disabled people at work?
Lord McIntosh of Haringey: My Lords, my noble friend is right in that when the tribunals, if necessary, come to consider the application of the Act and how to
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interpret the phrase, "reasonable adjustment", they will take into account the size of the firm. They will therefore undoubtably be more understanding of the problems of small firms. But the Act is concerned with responsibilities as well as rights. There are compliance costs. The Government took the view that to bring, as we have done, a substantially increased number of employees—750,000 employees and 60,000 disabled employees—within the purview of the Act was a worthwhile change.
Lord Swinfen: My Lords, why is it necessary to exempt some firms from that part of the legislation when they are not exempt from health and safety or tax legislation or, more significantly, the service provisions of the Act, which will probably prove far more onerous than the employment provisions?
Lord McIntosh of Haringey: My Lords, the noble Lord could have gone further: smaller firms are not exempt from provisions relating to sex and race discrimination. The analogies are not perfect in either case. I sought to emphasise that responsibilities and costs on employers are involved. That is why we took the view that the lower threshold was appropriate.
Lord Morris of Manchester: My Lords, my noble friend will be aware that I warmly welcomed the Government's decision to create the disability rights commission for which my Civil Rights (Disabled Persons) Bill provided. But is he aware of the recent research finding that a high proportion of employers now refuse even to interview disabled job applicants? Might not that mindless prejudice against disabled people be encouraged if those who are doing so much damage to their aspirations are unaffected by the new legislation?
Lord McIntosh of Haringey: My Lords, my noble friend is quite right that the legislation to create a disability rights commission, which he has championed so powerfully for so many years, is the Department for Education and Employment's highest priority for legislation. We must hope that it will find a very early slot in the Government's programme.
As to whether employers are excluding disabled persons from interview, that would be in contravention of the Disability Discrimination Act and any cases should be reported to the authorities.
Lord Rix: My Lords, does the Minister agree that the removal of the employer's contribution to Access to Work for disabled persons would go some way to encourage them to employ such persons, particularly those with a learning disability?
Lord McIntosh of Haringey: My Lords, the Government have gone a considerable way to removing the employee's contribution to Access to Work. We are prepared in most circumstances to shoulder 100 per cent. of the costs of Access to Work. I hope the noble Lord will agree that that is progress.
Lord Ashley of Stoke: My Lords, does my noble friend recall that the Labour Party was strongly opposed

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to any exemption when the Bill was going through both Houses of Parliament and was also opposed to it at the party conference? In and out of Parliament, strong opposition was expressed to any exemption. The sooner the Government go back to that realistic policy, the better it will be for disabled people.
Lord McIntosh of Haringey: My Lords, of course, I recall the history to which my noble friend refers. I have already referred to the department's hope that there will be early legislation. Once the Disability Discrimination Act of 1995 has been amended, as we hope it will be, there will be an opportunity to have a phased lowering of the threshold for inclusion under Section 7 of Part II of the Act, and that, I believe, will be in the direction in which my noble friend wishes to go, though not at the speed at which he wishes to go.

The North East: Unemployment
2.56 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What action they are taking in the north east of England as a result of the many redundancies declared in that region in recent weeks.
Lord Hunt of Kings Heath: My Lords, where substantial redundancies have occurred, access to the recently established Rapid Response Fund is available and task forces have been established to co-ordinate activity. Local authorities and Government Office-North East are pursuing the potential for attracting alternative buyers for the facilities, either as a going concern or for alternative purposes. The Employment Service is providing immediate on-site assistance to individual employees on re-employment, jobsearch techniques, re-training and benefit entitlement.
Lord Dormand of Easington: My Lords, is my noble friend aware that the northern region has had the highest unemployment rate outside of Northern Ireland since these statistics were first instituted and that it is now having to bear the brunt of the first and heaviest round of factory closures, not just by the big players, such as Siemens and Fujitsu, but by many smaller companies, a matter about which all parties are concerned? Is he further aware of reports that both employers and members of trade unions are expressing disappointment at what is considered to be inadequate discussion and consultation by the Government? While I welcome the last part of the Answer, I have to say to the Minister that much more is expected.
Lord Hunt of Kings Heath: My Lords, I understand my noble friend's concern. The Government are concerned about the impact of these decisions of companies to cease to operate on the individuals and communities involved, and that is why we acted so quickly to put in the support measures that I have mentioned. However, we have to put this in perspective.
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The fact is that the north east has undergone considerable industrial structural reform in the past few years which has helped it to become more resilient in the face of changing circumstances. The area has attracted considerable inward investment. Figures for August show that unemployment is continuing to fall. We are all concerned about the impact of redundancies, but there is some good news from the region as well.
Lord Clark of Kempston: My Lords, does the Minister agree that the high interest rates which we suffer in this country are hitting exports because of the strength of sterling? Is it not high time that the Chancellor of the Exchequer took responsibility for that rather than hiding behind the Bank of England, particularly in view of the fact that, following the recent G7 meetings, he has urged our partners throughout the world to reduce interest rates while doing nothing about them in this country?
Lord Hunt of Kings Heath: My Lords, monetary policy needs to be guided by the long-term needs of the economy and not by short-term political considerations. It is worth making the point that interest rates are low by historical standards. It is important to put exchange rate movements in an international context. The level of sterling has barely changed against the dollar since the end of 1996, while other European currencies have depreciated against both the dollar and sterling. Of course, the Government understand the problems which the rise in the pound has caused manufacturers and exporters, but it is essential that we take a long-term view. Short-term fixes are no answer at all.
Lord Taylor of Blackburn: My Lords, is the Minister aware that quite a number of people who are trying to invest in power stations, particularly in the north west, are awaiting the Government's announcement on their energy policy? If that policy were announced soon, those people would be able to invest and help to remedy the difficulties in the north east to which my noble friend referred.
Lord Hunt of Kings Heath: My Lords, there are very many examples of companies that are investing in the north east. Over the past six months 6,000 new jobs have been created in the region. For example, MTK Containers has taken on 220 staff, Black & Decker 350 and British Airways 450. It is very important to keep this matter in perspective and not engage in too much doom and gloom.
Lord Mackay of Ardbrecknish: My Lords, I begin by welcoming the noble Lord to the Front Bench and congratulate him on his appointment. I also commiserate with him that his Minister has decided to allow him to answer this Question today, especially in view of the general government line that interest rates have nothing to do with them and that unemployment and the destruction of manufacturing industry in many parts of the country—for example, West Central Scotland and the Borders—have nothing to do with them. I am not surprised that the Government do not like that. Will the

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Minister take responsibility for anything? For example, will he take responsibility for the vacillations over oil taxation in which the Chancellor has been engaged since the election? Although that matter has recently been resolved, that vacillation has persisted for so long that many orders in the oil industry have disappeared. Does the Minister appreciate the damage that has been done to the yards and the engineering industry of the north east and will he take responsibility for that, if nothing else?
Lord Hunt of Kings Heath: My Lords, I thank the noble Lord for his welcome this afternoon. I am sure that he is disappointed that my noble friend is not able to be here but I am sure that her answer would not be any different from mine. The Government are determined that the economy of this country should be run in the long term, in contrast to the past boom and bust situations and short-term political fixes which have had a damaging impact on both stability and productivity.
Lord Dixon: My Lords, is my noble friend aware that the biggest employer in the region is tourism and that this year government funding for the northern region via the English Tourist Board has been cut by 10 per cent. to £260,000? That represents 8p per head of population compared with £5 in Wales and £3.56 in Scotland. If the Government want to do anything about the problems in the north east does my noble friend agree that they should create a level playing field?
Lord Hunt of Kings Heath: My Lords, the support of the tourist industry to which my noble friend referred is a small part of investment in this country. The north east has much to offer tourists. It is a growth area and I am sure that it will continue to grow.
Lord Renton: My Lords, is the long term this year, next year, some time or never?
Lord Hunt of Kings Heath: My Lords, that is an extremely interesting question. The expression "the long term" means that over a period of years this country establishes stability in its economic policy and framework in a way that it has not achieved for many years. That is the aim of this Government's policy.
Lord Mackie of Benshie: My Lords, while it is very important to have inward investment, which has created a large number of jobs, can the Minister inform the House how many of the redundancies in the north east have been due to a cutback in production by inward investors?
Lord Hunt of Kings Heath: My Lords, I am happy to write to the noble Lord on that issue. Referring to inward investment as a whole, it is very important that we continue our efforts to attract it as much as possible. Our success in attracting such investment has brought wide benefits to the region in terms of initial investment, such as new technology, and its input into the economy as a whole. There is strong competition from other
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countries to attract inward investment. It is absolutely essential that we continue to compete effectively for that investment.

Disabled People: Welfare to Work
3.4 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What is their estimate of the number of disabled people who could move from welfare to work.
Lord Hunt of Kings Heath: My Lords, the Government have no such estimate. However, the Labour Force Survey indicates that just over 1 million disabled people of working age who are receiving state benefits excluding child benefit want to work. This figure includes some 656,000 people who for a variety of reasons would be unable to start work within a fortnight.
Lord Campbell of Croy: My Lords, I thank the noble Lord for his reply. Since the Green Paper confirms that at least two-thirds of the 6.5 million disabled are over retirement age and recent censuses show that about half of those of working age are already employed and many of the rest are very severely disabled, is not the scope for removing benefit from the disabled sector strictly limited although there is much willingness there to find suitable work?
Lord Hunt of Kings Heath: My Lords, I am aware of the noble Lord's keen interest in the number of disabled people of working age. I suspect that much of the difficulty in trying to work out the precise numbers arises from how disability is defined and how that information is gathered. This can lead to a wide range of estimates both in terms of the overall number of disabled people and the age distribution within it. But the substance of the issue is that a significant number of disabled people wish to work. The crucial importance of New Deal for Disabled People lies in finding better ways to support those people who are on sickness and disability benefit but who wish to work and could work given the right support.
Baroness Masham of Ilton: My Lords, is the Minister aware that very many severely disabled people would like to work part time but because they are fearful of losing their benefits they do not do so? Will the Minister look at part-time workers?
Lord Hunt of Kings Heath: My Lords, yes. One of the benefits of New Deal for Disabled People, which is being rolled out through a number of pilots and an evaluation at the end of next year, is that it allows the Government to examine many of the issues involved in trying to support disabled people in work, and we must take account of both the incentives and disincentives for people to do so.
Lord Higgins: My Lords, is the Minister aware that his first response is rather surprising? One would have

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thought that in the general review of welfare benefits, particularly those for the disabled, at least an approximate estimate would have been made. Does the Minister agree that there is widespread anxiety about disabled people as a result of the number of apparent leaks from his department which cause concern as to what measures the Government may introduce, which one might have anticipated would be covered in the public expenditure review? Can noble Lords be told now when the plans for the disabled are to come before the House?
Lord Hunt of Kings Heath: My Lords, it is not appropriate for me to comment upon press speculation on this issue. These matters will come before the Houses of Parliament in due course. As to the figures, I was referring to different approaches to surveys or the census. The figures that I quoted originally came from the labour force figures and show that the number of people of working age with long-term disabilities is just over 2.4 million. Of those, just over 1 million would like to work if they were able.
Lord Bruce of Donington: My Lords, does the noble Lord agree that part of the Government's difficulty in this matter arises from the practice adopted by the previous administration of artificially depressing the level of the official unemployed by transfers to disability? How long does the Minister believe the necessary statistical corrections to the system will take?
Lord Hunt of Kings Heath: My Lords, my noble friend raises an extremely interesting point in relation to the practice of the previous administration. I believe that this demonstrates the benefit of using the labour force figures which I have already mentioned.
Lord Rix: My Lords, does the Minister agree that the valuable financial support and benefits which accrue as a result of Access to Work to both employees and employers should be given far greater publicity, because a large number of disabled people and employers have no knowledge of this particular exercise?
Lord Hunt of Kings Heath: My Lords, yes.
Lord Campbell of Croy: My Lords, does the noble Lord accept that any proposal to tax the mobility element of disabled living allowance would lead to many disabled people returning from work to welfare, because they could no longer afford transport to get to their workplace?
Lord Hunt of Kings Heath: My Lords, again, it is difficult for me to comment upon speculation. Options are being considered in the welfare reform Green Paper. Decisions will have to reflect the clear principle of the government welfare reform programme, which is to help those in greatest need within the resources available.

DTI Campaign: "Languages for Export"
3.10 p.m.
Lord Quirk Lord Quirk asked Her Majesty's Government:
Whether they are satisfied with industry's response thus far to the Department of Trade and Industry campaign "Languages for Export".
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the campaign has been successful in increasing awareness and raising the languages and culture issue among exporters and their representative organisations. The department's benchmarking research has shown that the percentage of companies with no language proficiency has fallen from 34 per cent. in 1994 to 27 per cent. in 1997.
Lord Quirk: My Lords, I am grateful to the Minister for his reassurance, but may I refer him to the consultative report just published by the Nuffield Languages Inquiry chaired by Sir John Boyd and Trevor McDonald and enjoying the strong support of the Prime Minister? Has he noted the view expressed therein that,
"UK companies remain more deficient in linguistic competence than their major European competitors",
and does he accept the claim on page 22 of this interim document that, despite initiatives like "Languages for Export":
"a systematic and coherent government policy has not yet been achieved"?
Lord Sainsbury of Turville: My Lords, we would not want to claim that the situation has been corrected by this campaign, but it is clear that the campaign is a good and co-ordinated one. It involves a number of features: how-to-do-it guides on language training and business culture training; translation and interpreting; developing business language strategies; a scheme of awards; a language export advisory scheme; and a database of language training providers, translators and interpreters. It is a well-focused campaign, but I agree that there is more to be done. That is why we greatly welcome the Nuffield Language Inquiry.
Lord Janner of Braunstone: My Lords, I congratulate with great pleasure my noble friend on his elevation to the Dispatch Box. Will he turn his mind to the future and say upon which languages his department has its eye to improve future exports, recognising, as we do, that being able to speak the language of the other party is of huge and previously largely unrecognised importance?
Lord Sainsbury of Turville: My Lords, it is equally clear that due to the lag effects on teaching, the current disposition is not necessarily the ideal one. If we look at UK export companies we see that 63 per cent. are proficient in French, 56 per cent. in German, and 28 per cent. in Spanish, but areas such as Japanese and Chinese have low figures. Undoubtedly if we look ahead at population movements we shall see languages such as

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Arabic, Spanish, Hindi and Urdu becoming almost as important as English in future. Therefore, over time we need to adjust the languages that we teach.
The Earl of Carlisle: My Lords, does the Minister agree that the FCO might lead the way in this matter, and that commercial attachés going to central European nations often arrive woefully deficient in the language of the country to which they are posted?
Lord Sainsbury of Turville: My Lords, we would clearly look to any areas from which help may come in this matter, but the DTI as a department which has the major responsibility should take the lead in this area.
Baroness Hooper: My Lords, can the Minister reassure the House that adequate emphasis will be given in this admirable campaign to Spanish and Portuguese as the second and third most spoken languages in the world, given that in our education system those languages tend to be an add-on to French and German? Surely they should be instead of French and German.
Lord Sainsbury of Turville: My Lords, I agree that there is considerable scope to adjust languages which are taught in schools. It is significant that the language college initiative has been switching into some of those other languages and placing emphasis on them. That is greatly to be encouraged.
Lord Quirk: My Lords, will the Minister note that this is an issue which apparently affects also our financial services industry where, according to the Economist last week, job opportunities are being lost to British applicants because City firms like Goldman Sachs and J. P. Morgan are finding that only recruits from the Continent have the requisite language skills?
Lord Sainsbury of Turville: My Lords, the figures that the DTI has suggest that 14 per cent. of exporters claim to have lost measurable business due to the lack of foreign language. Financial services probably come within that category as well.
Lord Fraser of Carmyllie: My Lords, I join the congratulations extended to the noble Lord on his appearance on the Front Bench today. If he is absent from this House supporting the UK's export effort he will suffer no complaint from this side of the House. I join my noble friend Lady Hooper in indicating the importance that we wish to attach to the promotion of Spanish as a language. Does he recognise that the too-often neglected markets of Latin America must be a focus? Will he see that his department gives the proper priority to that language?
Lord Sainsbury of Turville: My Lords, it is interesting that the third commonest language in the export departments of UK companies is Spanish, and that has, as a result of the campaign, increased to 28 per cent. I agree with the noble and learned Lord that if
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we look long term, Spanish is undoubtedly one of the languages which should be at the forefront of export efforts.
Baroness Sharples: My Lords, is the Minister aware that there are a number of foreign language classes available within the Palace of Westminster?
Lord Sainsbury of Turville: My Lords, I am not aware of that. I thought at some point a question would be asked about which languages I speak, and I am glad that that has not been asked.
Lord Taylor of Gryfe: My Lords, perhaps I may assist my noble friend by providing him with the information. There is a German class every Thursday in one of the rooms adjacent to the Chamber. We should very much welcome new recruits to that service.
Lord Geddes: My Lords, does the Minister agree, with his responsibilities within the DTI, that it is just as important to promote the education of English for speakers of other languages to encourage inward investment as it is to teach other languages to speakers of English?
Lord Sainsbury of Turville: My Lords, I agree with that. It is important. We should encourage students to come to this country to learn the language and in that way to become friends so far as concerns trade.

Committee of Selection
3.18 p.m.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Baroness Jay of Paddington be appointed a member of the committee in the place of the Lord Richard.—(The Chairman of Committees.)
On Question, Motion agreed to.

House of Lords' Offices Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord Williams of Mostyn be appointed a member of the committee in the place of the Lord Richard.—(The Chairman of Committees.)
On Question, Motion agreed to.

Procedure Committee
The Chairman of Committees: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord Williams of Mostyn be appointed a member of the committee in the place of the Lord Richard.—(The Chairman of Committees.)
On Question, Motion agreed to.

Liaison Committee
The Chairman of Committees: My Lords, I beg to move the fourth Motion standing in my name on the Order Paper.
Your Lordships will be relieved to know that this is the last of my Motions—for the time being.
Moved, on behalf of the Committee of Selection, That the Baroness Jay of Paddington be appointed a member of the committee in the place of the Lord Richard.—(The Chairman of Committees.)
Lord Campbell of Alloway: My Lords, could not a tribute be paid to the noble Lord for the services that he has rendered to this House?
The Chairman of Committees: My Lords, I am always anxious to help noble Lords, not least the noble Lord, Lord Campbell of Alloway. I am among those of your Lordships who seek to protect the interests of the House, one of which is not to stray from the terms of the Motion. However, I am sure that the words that the noble Lord has uttered will be echoed throughout the Chamber.
On Question, Motion agreed to.

Scotland Bill
3.20 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Sewel.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 69 [Power to fix basic rate for Scottish taxpayers]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 279B:
Page 30, line 42, leave out subsection (2) and insert—
("(2) Where this section applies to any year of assessment, the Income Tax Acts shall apply in relation to the total income of Scottish taxpayers liable to basic rate tax, subject to subsection (3),
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as if there were substituted for any rate determined by Parliament to be the basic rate for that year a rate increased or reduced in accordance with the resolution of the Parliament.").
The noble Lord said: I beg to move Amendment No. 279B and I shall speak also to Amendments Nos. 281A, 281C and 281D. It feels as though we have not been away, but perhaps in the intervening two months the Government have given some thought to the points raised in this important Bill and there will be some government amendments taking them on board.
The amendments in this group all deal with additional tax to be raised in Scotland if the Scottish parliament so desires. The first amendment looks at Clause 69, which starts the tax bearing powers in subsection 2, and replaces the words used by the Government with a variation which spells out exactly what is intended. I hope that the Minister can respond to one of the difficult issues this afternoon. If the Scottish parliament decide to add 3p in the pound to the basic rate for those who live in Scotland—and we will come to who does and who does not live in Scotland later—will that new rate be the basic rate? Will all tax law look to the Scottish rate as the basic rate, or will it be the basic UK rate plus an additional impost of 3p in the pound from Scotland so that where the Inland Revenue rules refer to the basic rate, it will be 23p and not 26p?
This is a very important issue that will affect a number of organisations; for example, charities and the pension industry which is greatly concerned that it may have to keep very complicated records of all the people who are paying into pension funds. Some people may be receiving tax allowances at 23p in the pound and others at 26p in the pound. Some may feel that it would be unfair to give the Scottish taxpayer the advantage of an extra 3p discount over their fellows in the rest of the United Kingdom. Can the Minister give the Government's interpretation of subsection 2 and state why it is necessary?
Amendments Nos. 281A and 281C are very much clearer. They include what must be magic words in legislation:
"For the avoidance of doubt, and notwithstanding any other provisions of this Act, the Parliament shall not vary any tax except the basic rate of income tax."
Those words are repeated in Amendment No. 281C, which states that the parliament shall have no power to retrospectively vary taxes, and that again is stated to be for the avoidance of doubt.
The amendments would make it absolutely clear that it is only the basic rate that can be varied and that there can be no retrospective tax increases in Scotland. I believe that that honours the second question which was posed to the Scottish people in the referendum. It ensures that any shortfall in the amount of money raised by the 3p can only be obtained by manipulation of the basic rate of income tax. At the time of the referendum the Government stated that 3p in the pound would raise £450 million. They now tell us that 3p in the pound would raise only £420 million, so £30 million has disappeared in the few months since the referendum.
If the £420 million cannot be raised by the 3p because something has been changed in UK income tax regulation, for example a narrowing of the band, the

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Government have said that somehow, magically, a way will be found to make up the difference. I use the word "magically" because we have never received an explanation of how that would be done.
We have been told on a number of occasions that promises made in the Scottish parliament, the White Paper and the referendum are not to be questioned and that we must not make any changes that will go back on those promises, even if we find that the detail will lead the Government into a daft position. The promise was quite clear, that it would only be the basic rate of income tax that would be changed. I am now giving the Minister the opportunity to clarify the position during this Committee day. I gave him the opportunity on the last day to solve part of this problem by getting rid of the 3p concept altogether and by saying that the £420 million was the base line. However, the Government would not listen and they have got themselves into a real problem. They could get themselves out of the hole by stopping digging, but they will not.
I want an assurance from the Minister today, the best assurance being to accept Amendments Nos. 281A and 281C, that the Bill cannot be used to increase or decrease any tax other than the basic rate of income tax. That was the promise in the White Paper, that was the promise in the referendum and that is the promise I want to see reflected in the Bill.
Lord Steel of Aikwood: Can the noble Lord clarify what he means by Amendment No. 281A? Does he exclude the possibility that the Scottish parliament could raise new taxes entirely of their own devising?
Lord Mackay of ArdbrecknishYes, I do, because that was the promise made to the Scottish people and that is what is in the White Paper: it is only the basic rate of income tax that can be varied. The noble Lord, Lord Steel of Aikwood, probably knows more about this than Ministers do, and he indicates that I am wrong about that and that the Scottish parliament may be asked to raise more new taxes. If that is so, please may I hear about them; please may we all hear about them, and then some of us can decide whether we want to stay in a country that would rapidly become the most overtaxed part of Europe? If the ticket is a free one, I may take it!
The intervention by the noble Lord, Lord Steel, is even more worrying. He is part and parcel of this constitutional convention which is the other part of the Holy Grail, in addition to the referendum and the White Paper, that I omitted to mention. He has increased my concerns. Is it true that the Bill would allow the Scottish parliament to raise other taxes? If that is right, then I want to know about it and we will return to it at Report stage with a vengeance.
However, if, as I believe, it is only the basic rate of income tax that will be varied by the Scottish parliament, as the Minister and his colleagues have said, then why is it not on the face of the Bill? The Minister, whom we trust, will then have his position clear on the face of the Bill; and the noble Lord, Lord Steel of Aikwood—whose position perhaps we do not trust, having heard it—or his colleagues will not be able in
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the future to impose taxes other than on the basic rate of income tax on the people of Scotland. I think that we should know.
As regards Amendment No. 281D, I wonder why we need subsection (6) of Clause 70. It states:
"A tax-varying resolution shall not be passed so as to have effect in relation to any year of assessment before the year 2000–01".
Clause 70(2) already states that any tax-varying resolution,
"must be expressed so as to relate to no more than a single year of assessment beginning after, hut no more than 12 months after, the passing of the resolution".
Under the powers of Clause 70 there does not seem any possibility for the parliament to do what it seems to be forbidden to do in subsection (6). However, that is a minor matter. The major matter into which we slightly stumbled is whether or not the parliament will be able to increase taxes other than the basic rate of income tax.
3.30 p.m.
Lord Renton: It seems to me that Clause 69 is one of the most important provisions in the Bill. Whenever we are legislating we should try to avoid uncertainty, especially when legislating on tax matters. I go further. When we are delegating the powers of the United Kingdom Parliament to a devolved parliament, again it is vital that we should avoid uncertainty; and vital that we should avoid uncertainty on tax matters.
The amendments moved and spoken to by my noble friend have the great advantage of removing uncertainty. If the Government do not agree to those amendments, or something like them, they will be inviting us to fail in our parliamentary duty.
Lord Steel of Aikwood: I hesitate to intervene again on this matter. However, it seems to me that the official Opposition, the Conservative Opposition—I remind them that they do not exist in Scotland but, unhappily, exist here, so we have to listen to this plea—seek to curtail the powers of the Scottish parliament. When the Government refer to the taxation matter being limited to the basic rate of income tax, they are referring to those taxation powers that are reserved. Income tax is a reserved matter. The only exception to that will be a variation of up to three pence. Value added tax is also a reserved matter. All that is clear in the legislation.
However, on those matters devolved to the Scottish parliament, the Scottish parliament itself must be left to decide what, for example, is the system of local government taxation, and other charges that they may from time to time decide in their wisdom. If they were a Conservative Government, they might introduce all sorts of new taxes. That is a matter for the Scottish parliament. I hope that in this House we shall resist any attempt to write into the Bill words that could be construed as curtailing the powers of the Scottish parliament when it comes into being.
Lord Molyneaux of Killead: I was originally opposed to the idea of tax-raising powers for any of the

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new devolved administrations. But I am inclined now to give some favourable consideration to the words of the noble Lord, Lord Steel.
The members of the assembly in Northern Ireland have already been elected. I have noted that in the few months since they were elected they have come under pressure and have sometimes yielded to the pressure and individually are making promises to keep all hospitals open, with no more rationalisation of the health service, and considering new roads where new roads have never been considered before. They will find it difficult, I think, to deliver on all those undertakings if they are dependent on and restricted solely to the block grant.
Although the Conservative Front Bench may think that I am somersaulting on this issue, it is again a question of experience. I fear that the representatives, the elected members of the Scottish parliament, will find themselves in the same trap: being expected to deliver that which cannot be delivered by Scottish members of parliament.
Lord Sewel: The Committee is indeed back, and in terms of the arguments we are addressing we have not been away. The point that the noble Lord, Lord Mackay of Ardbrecknish, sought to make today is one that he sought to make at the referendum debate, on Second Reading of the Bill, and on earlier amendments as the Committee considered the Bill before the Recess. I shall deal with his point yet again, but it may sound repetitious at least to some members of the Committee.
I return specifically in detail to the amendments. Amendment No. 279B would replace Clause 69(2) with a subsection with somewhat different wording but, as I think the noble Lord accepts, with substantially the same effect. Notwithstanding what the noble Lord said, I am not persuaded that the wording in the amendment offers any improvement over the clause as drafted. Indeed, there is a weakness in the way in which the amendment is worded because potentially it introduces a degree of ambiguity about whether Scottish taxpayers who pay tax at the higher rate would be liable for the Scottish variable rate. Therefore, rather than adding greater clarity, the amendment introduces a dangerous degree of ambiguity.
The purpose of Clause 69(2) is simple. It provides that where Clause 69 applies, the basic rate of income tax determined by the UK Parliament for any tax year, as it applies to the income of Scottish taxpayers, shall be varied by the amount specified in any tax resolution passed by the Scottish parliament. This is an important, yet essentially technical provision. The words currently in the Bill achieve precisely the intended effect and should not be replaced by a provision that is certainly no better and which is possibly flawed.
Amendments Nos. 281A and 281C are also unnecessary. The provisions of Clauses 69 and 70 are already drafted in such a way—I believe that these are the words the noble Lord, Lord Mackay of Ardbrecknish, is waiting to hear—as to ensure that the Scottish parliament can only vary the basic rate of income tax. I repeat: it can only vary the basic rate of
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income tax. I have made that point several times during debates on the referendum, the White Paper, Second Reading of the Bill, and earlier in Committee. Therefore I think that we can now draw a veil across this issue. I hope that it is clear.
Lord Fraser of Carmyllie: Before the noble Lord finally draws a veil over the matter, perhaps I may say that I disagree with my noble friend Lord Mackay and agree with the noble Lord, Lord Steel. I understood his position to be correct at the time of the campaign. It was then our understanding that a Scottish parliament would be able—I am not saying that it would do so—to impose, for example, a tourist tax. It could, for example, impose a bed and breakfast tax. It could, for example, completely unstitch the basis of local taxation and introduce a wide range of changes, including a local income tax which did not have a single rate but a range of bands, much the same as we experience in the United Kingdom for income tax.
I am sure that the noble Lord, Lord Sewel, intended to be as reassuring as possible, therefore I shall repeat for the last time that the Scottish parliament can vary only the basic rate of income tax. Of course, we take him at his word on that. The emphasis is on the restriction to the basic rate of income tax, but we want to understand the range of potential taxation for the Scottish parliament.
Clearly, I am not one who would favour an increase in taxation in Scotland, for the reasons put forward by my noble friend Lord Mackay. But if we are to have a grown-up debate on the issue, it would seem desirable to be able to understand the range of taxation that might be introduced by the Scottish parliament. As all political parties in Scotland are beginning to gear up for the election campaign, we want to understand what is at issue so that we can address our respective arguments. For example, we would never wish to see the introduction of a bed and breakfast tax, a tourist tax, and so forth.
It will not do for the noble Lord simply to say that he gives an absolute categoric assurance that the only income tax on a UK basis which can be varied by the Scottish parliament will be the basic rate. There is a far wider and potentially far more damaging issue. In spite of the referendum Bill and the fact that we are a long way into the Committee stage of this Bill, I am not sure that we have had a clear and comprehensive answer to what is the potential range of taxation.
Lord Sewel: I am happy to clarify the position and again I refer to points I made earlier in our consideration of the Bill. There is a fair distinction between the tax-raising powers of the parliament in terms of the taxes it can raise by its own hand. That refers specifically and is limited to the power to vary the basic rate of income tax upwards or downwards.
It is possible for the Scottish parliament to change the structure and nature of local government finance. We have been clear and explicit about that and I referred to it in earlier debates. It would be possible to change the system of local government finance, were it so ill advised, to what we called with great affection "the poll

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tax" or to introduce a totally different system of local government taxation. But that would not be in terms of the tax-raising powers of the parliament. Parliament would legislate to change the structure of local taxation for local authorities, giving local authorities a power to introduce, say, a tourist tax or something similar. But it is not the tax-raising power of the parliament at its own hand. That is limited.
Lord Fraser of Carmyllie: That really will not do as an argument. In respect of the block grant which the Scottish parliament will receive from Westminster, it would be open to the Scottish executive to save not only the £4.8 billion contributed towards the National Health Service in Scotland but to say that it shall be £6 billion or £8 billion. That could be achieved only by cutting back severely on local government expenditure. While it might be some luckless local authority which would impose the taxation, it would follow as a direct consequence of the actions of the Scottish parliament that such taxes were imposed.
Lord Sewel: No, and we dealt with the issue at an earlier stage. In those circumstances, if the UK Government, specifically the Treasury, took the view that public expenditure in Scotland was rising at a level which endangered the overall public expenditure figures or was having an impact on macro-economic policy, it would then be available to the Treasury to reduce the grant to the Scottish parliament accordingly. That check and balance is built into the system to deal with a potential abuse of the powers of the parliament. That situation is foreseen in the Bill and the Bill makes provision for it. I hope that the noble and learned Lord is reassured.
3.45 p.m.
Baroness Hogg: Without testing the Minister's patience even further, I wish to be clear about what he is saying. When saying that the Scottish parliament can alter only the basic rate of income tax he could be saying one of two things. He could be saying that in dealing with a system of income tax the only element that the parliament may vary is the basic rate. Alternatively, he could be saying that in dealing with our entire structure of taxation the only element that the Scottish parliament may vary is the basic rate of income tax.
I understand him now to say that in dealing with our entire system of taxation the only element that the Scottish parliament may vary is the basic rate of income tax, except that it may then give to Scottish local authorities the right to vary any element of our taxation system in order to raise finance for local government. Am I right in that belief?
Lord Sewel: I welcome the noble Baroness to our debates on the Bill and I thank her for her contribution. Perhaps I may build up the case. First, the whole Bill rests on the idea of reserved and devolved matters. As the noble Lord, Lord Steel of Aikwood, said as regards taxation, one can start making correspondence between elements of taxation and the reserved and devolved matters. As the noble Lord indicated, corporation tax
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and VAT clearly fall under the reserved category and the parliament is in no position to change them one way or the other. Income tax is broadly reserved, but there is a specific power to the parliament to make a variation upwards or downwards equivalent to 3p on the basic rate.
However, local government and local government finance are devolved issues. Clearly, it would then be appropriate for the Scottish parliament to legislate so as to change the system and structure of local government finance in Scotland. One would not need to change the system in order for local authorities to increase their expenditure levels. They could do so within the present structure and system of local government finance. However, if local authorities increase their expenditure levels fundamentally to distort the overall level of public expenditure in the United Kingdom and to upset that balance, or to act in a way which impacted upon macro-economic policy, or if basically they abuse their power, it is open to the UK Government to counter that by reducing the block grant which goes to the Scottish parliament. I hope that that offers some clarification to the noble Baroness.
Baroness Hogg: With respect, I thank the Minister for that explanation, but he has not answered my question. Is there a part of the system of taxation that may not be used by local government in Scotland to fulfill the devolved authority that may be given to it by the Scottish parliament? When you talk of reserved powers, such as VAT, is it the case that the Scottish parliament may not give local government the right to vary VAT in order to meet the local government finance arrears? Is it true of corporate taxes? Which taxes does it relate to?
There are two sets of local government finances. There is the expenditure which the noble Minister has described and there are also the taxes which are raised to finance it. Which ones are included and excluded for local government in Scotland under this Bill?
Lord Desai: Would it help the noble Baroness if I pointed out to her Schedule 5, page 66 where it says:
"Exception from reservation".
"Local taxes to fund local authority expenditure (for example, council tax and non-domestic rates)."
That is the one exception from reservation. That is it. There is nothing else.
Baroness Hogg: I am sorry if I am trying the patience of the Committee, but the description "local tax" does not define the taxation that is used. It does not say whether it is expenditure tax, income tax or corporate tax. They can all be used locally. That does not define the tax.
Lord Sewel: I hope it will be helpful to the noble Baroness if I say that it would be possible for the Scottish parliament to legislate in a way to change the basis of local government taxation. I accept that

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there is a theoretical possibility that it could legislate in a way to give local authorities the power to introduce something like a bed and breakfast tax.
Lord Mackie of Benshie: Can the Minister say whether the Scottish government could impose a tax on dogs and collect the money? Or has it no power to do that?
Lord Sewel: My off-the-cuff and highly risky observation is that the Scottish parliament could not introduce a tax on dogs; that is, to increase the tax revenue coming to the Scottish parliament.
Lord Campbell of Croy: The noble Lord, Lord Molyneaux, raised an interesting point. Members of the new parliament may feel bound to fulfil all kinds of promises they have given and I can visualise the situation where the new parliament has already expended its 3p. on the basic rate of tax and still calls for more money to be available in Scotland. Then the local government would be able to raise more and the parliament would allow it.
For example, non-trunk roads in Scotland have, for at least 50 years to my knowledge, been a local government financial responsibility and the Scottish Office was entirely devolved in those matters. That would continue. The noble Lord, Lord Sewel, has explained quite clearly that if the central government considers that too much money—not only the 3p. but a whole lot more for local government—would be charged by the new parliament, then the Treasury would put on a squeeze. That would be the worst situation one can foresee in Scotland. We know that there will be rows between Westminster and Edinburgh. To invite a situation where the Treasury has to put on a squeeze and stop money being available in that way is a situation we should try to avoid.
Baroness Strange: I do not want to confuse the situation further or to try the patience of the Minister. We have been talking about income tax. Will the Scottish parliament have any power to raise capital tax? If you have a bed and breakfast it is presumed that you have a spare room, which is capital, on which you will raise money by having people staying in it. Will there be a tax on people having spare rooms, such as there was on windows? Perhaps the Minister will explain that.
Lord Sewel: No capital tax, no spare bedroom tax, no window tax, no horse tax, no hot air tax. It may be to the advantage of the Committee if I can now return to the amendments before us.
Amendment No. 281C, to which the noble Lord referred, relates to retrospection. Retrospection is possible and desirable only in the very limited circumstances of Clause 70(4)—that is where the UK tax rate has been set so late that a Scottish resolution has to be made after the new tax year has started. That is the only circumstance, stated in Clause 70(4), which allows this very limited degree of retrospection. It is a necessary degree of retrospection where the UK tax rate
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has been set so late that the Scottish resolution can only be made after the new tax year has begun. That is the only possibility of retrospection.
As to Amendment No. 281D, I acknowledge that because of the way the tax provisions are structured and the dates on which the Scottish parliament will be elected it would not, in normal circumstances, be possible for the Scottish parliament to put in place a varied rate of tax before 2000–2001. There have been a great many theoretical and hypothetical exercises carried out to do with a new government, a general election and all sorts of weird and wonderful things before 2000, but there are extreme theoretical circumstances in which it could introduce the power before then were it not for Clause 70(6). I want to be absolutely clear that it will only be from 2000–2001.
We want to make that fact absolutely clear because many organisations have set great store by this provision in their planning and to remove it from the Bill now would undoubtedly cause confusion and would suggest to some, albeit erroneously—as the noble Lord, Lord Mackay of Ardbrecknish, recognises—that our intentions have somehow changed. It would be undesirable to introduce any such note of uncertainty at this stage when so much planning is already going on.
I have dealt with this particular group of amendments. The debate has gone into some interesting avenues and, indeed, some back-doubles which we have already travelled down at earlier stages. In view of the explanation I have given, I hope that the noble Lord will feel able to withdraw his amendments.
Lord Mackay of Ardbrecknish: I am grateful, at least in part, to the noble Lord the Minister. As to Amendment No. 281B, I am satisfied that the point about 2000–2001 is best on the face of the Bill. As to Amendment No. 281C, I accept the point that he has made quite firmly about retrospection. If ever there is any doubt, the words he has used to the Committee this afternoon will make clear the Government's intention.
As to Amendment No. 279B, I will leave that to one side and read what the Minister has said about it later. There is still a certain ambiguity about how the rest of income tax law will impinge on Scottish taxpayers if their basic rate is actually 3p. higher than the basic rate paid south of the Border. For the moment I am content to leave that.
Amendment No. 281A set a number of hares running. I suspect that the noble Lord the Minister has the noble Lord, Lord Steel of Aikwood, to thank for the hare beginning to run. That may be an unfair view of the "partnership" between the Labour Party and the Liberal Democrats. But it has been an interesting hare. I suspect that I have become more concerned as the hare has gone on running. We have the position where the Minister is doing his best to say, "There will be no other taxes. Don't worry", whereas his partner in devolution—I nearly said "in crime"—is busy saying, "We would like more taxes". As a Scottish taxpayer, one is left wondering where, exactly, one stands.
My noble friends raised some interesting points about exactly where we stand and, as usual, the noble Lord, Lord Desai, came to our aid on economic matters and

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drew our attention to Schedule 5 to the Bill, which makes it clear, as he rightly pointed out, that taxes and excise duties are reserved matters. That suggests to me that the government of Scotland will not be able to change excise duties. The schedule refers to "taxes and excise duties", whatever that covers. I am not sure whether that covers corporation tax and other capital taxes, a point raised by my noble friend Lady Hogg. Perhaps the position will be made clearer later on in our discussions on the Bill.
If I am right, the Minister will agree and that will be fine. However, if the Scottish parliament decides that it wants to add 5 per cent. to excise duties in Scotland, my understanding, from what the Minister said and from what the Bill says, is that it cannot do that. But what would happen if it decided not to add 5 per cent. to excise duties but instead to have a sales tax on exactly the same goods and with exactly the same rules as with excise duties? I assume that "taxes and excise duties" means value added tax. As I understand it, the parliament cannot vary value added tax but it could introduce a sales tax, which would be the same as value added tax. It could add 5 per cent. It would come to an increase in value added tax but by a different name. Am I right about that? Is that what the parliament could do? If I am told that it could not do it, could local government do it? That is the point. Will the Minister help me? The Scottish parliament could not have a sales tax as that would be caught by the all-embracing reservation "taxes and excise duties". But local government could have a sales tax.
4 p.m.
Lord Sewel: The noble Lord is correct in that the parliament could not introduce a Scottish VAT variant. However, I think that he has chosen a dodgy example in terms of a local sales tax as I think we would run into trouble in Europe if we had a sales tax raised locally and at different levels in different local authority areas. But I will take the point in principle.
As I said to the noble Baroness, Lady Hogg, it would be possible for the Scottish parliament to legislate in a way that established a new system of financing local government in Scotland, just as we moved from the community charge to the council tax and previously had domestic rates. That kind of change is clearly open to the Scottish parliament to make because local government and local government finance are devolved. But if then, as a result, local authorities raised taxes at an excessive level, the Treasury, much to the chagrin of the noble Lord, Lord Campbell of Croy, could move in and claw back that excess expenditure.
I have just been handed a note which says that my memory, which needs a little refreshing on this point, was correct on the local VAT issue because it would be incompatible with the EC sixth VAT directive.
Lord Fraser of Carmyllie: Perhaps I may try out this point on the noble Lord to see whether I have understood the device. It is entirely within the power of the Scottish parliament to change local government. For example, it could revert to a two-tier system of local government. It would be possible for the Scottish
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parliament to introduce a local government Bill saying, "There shall be a single tier of local government for Scotland and the First Minister shall be the Mayor for Scotland". That is not altogether daft. The population of Scotland is 5.5 million—two-thirds of the population of London. By that device he could introduce a local income tax with all manner of bands and with all levels—perhaps up to 98 per cent. I believe that to be a ludicrous idea—of course, because I do not believe in high taxation. But, as a device, I would be interested to know where the flaw is in what I have put forward.
Lord Renton: Before the noble Lord answers that point, I wonder whether he would also bear in mind that it follows from what my noble and learned friend has said that the Scottish parliament could transfer to the Scottish local authorities responsibility for the upkeep of all roads and make local rate payers pay for that.
Lord Sewel: Some noble Lords have been concerned throughout the debates on the Bill to prevent the Scottish parliament acting in an absurd and ridiculous way. I have greater confidence in the Scottish parliament. I do not think there is any need for us to go over everything and try to block every potential absurdity and ridiculous act that the Scottish parliament might, if it had a brainstorm, seek to carry out. In a similar way, we are not troubled by the powers of this Parliament. This Parliament could do the most ludicrous things and there are precious few controls and limitations on it. There are many more controls, limitations and constraints falling on the Scottish parliament. However, within those constraints, let us have confidence that the parliamentarians will act reasonably and responsibly; and if they do not, the Scottish people will kick them out.
Lord Mackay of Ardbrecknish: That is not a satisfactory answer when it comes to drafting legislation. The legislation ought to be clear. It ought to be clear whether the parliament has the power to do it—and not whether the Scottish people will decide to allow the parliament to do it. What some of us are trying to do is to prevent situations in the future where there will be some difficult disagreements between Westminster and the Scottish parliament, or perhaps between the courts and the Scottish parliament, about what this legislation actually means. It is not a sovereign parliament. It is a devolved parliament. The powers it has are the powers given to it in this legislation. That is why it is right that we should probe the matter.
I think we have made some progress. At least I have discovered that we cannot have a local excise duty or a local sales tax and that we have the European Union directive to thank for that. Some of my noble friends will find that that is one of the first things they have had to thank European directives for. But there you are. They must be thankful for small mercies.
However, I am still suspicious about extra taxation in the form of new taxes and what new taxes the parliament may be able to bring to bear on the Scottish people. I understand perfectly clearly the point that my noble friend Lady Hogg and the noble Lord, Lord Desai,

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drew to our attention. The exemption from reservation could be local taxes to fund local government expenditure. Local government could use those powers that are not to be reserved to this House to make new taxes in order to pull in more money. While I am interested to hear that the Treasury may claw it all back, I suspect that the opinion polls in Scotland would begin to look very tartan indeed if the Treasury started to claw money back because local authorities had decided to use in one way or another the powers granted to them in this legislation, perhaps with the approval of their local electorates.
Therefore, that is all extremely dangerous. However, I shall not carry on with it any further at the moment other than to say that I take some comfort from the Minister's statement that the clause is drafted in such a way as to ensure that the Scottish Parliament can vary only the basic rate of income tax.
I noticed that the Minister said that my Amendment No. 281A could be defective because a higher rate taxpayer may well find that that portion of his tax bill which represents his basic rate would escape the extra 3p in the pound. He said that the amendment could do that. I have briefly taken some legal advice and that view is not shared universally by the people to whom I have spoken. It is very clear that the Bill says, "except the basic rate". It does not refer to the basic rate taxpayer. Therefore, I do not agree with the argument used by the Minister that somehow my amendment is ambiguous and open to the interpretation which he put on it. Before we reach that amendment, I shall have to reflect on what to do. However, I beg leave to withdraw Amendment No. 279B.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 279C:
Page 31, line 3, leave out subsection (3).
The noble Lord said: This amendment seeks to omit subsection (3) and is quite simply a probing amendment to ask the Minister what that subsection means. My amendment is grouped with Amendments Nos. 280 and 281. I am sure that my noble friends will explain the point behind their amendments. I believe that the main purpose of the amendments is to seek an assurance that all the allowances available to UK taxpayers will be available to Scottish taxpayers at the higher rate if the higher rate comes about.
I want to home in on the reference to the Income and Corporation Taxes Act 1988. Perhaps the Minister will explain to us what exactly is behind that. Does that mean that income from saving is to be exempt from Scottish tax? Perhaps I may explain my concerns about that.
Let us take three retired people. One has made provision for retirement through saving and investment. The second has put his money into a personal pension and has now bought an annuity to give him an annual income similar to the first person. The third person has been a member of a pension scheme which is exactly the situation which we have all wished to encourage. He
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is paid a pension which is the same size as the annuity paid to the second person and the income from saving and investments paid to the first. Currently, all three are taxed by the Revenue in much the same way. Am I right in thinking that the annuity pensioner will be asked to pay 3p in the pound extra; the pension fund pensioner will be asked to pay 3p in the pound extra; and yet the person whose pension income comes from saving and investment will not be asked to pay 3p in the pound extra?
I simply ask whether that is correct and if so, whether that is fair. Is the Scottish taxpayer whose pension comes from saving and investment to be exempt from the 3p while the person whose income comes from an annuity or a pension fund is not to be exempt? Is that fair? If I am correct, I suggest that it is not fair. The Government should do something about it. I beg to move.
Lord Lyell: Amendments Nos. 280 and 281 stand in my name and several of my noble friends. My noble friend on the Front Bench said that I may speak on this group of amendments, and the Minister and the Committee will be delighted to know that I shall be extremely brief. The noble Lord, Lord Mackay of Ardbrecknish, made the point about pensions and annuities beautifully. I am a trained accountant. I see that the noble and learned Lord, Lord Hope, is not here today. He was astounded that that was all I was. I am a fairly strong Angus lad.
The Committee will see that the Income and Corporation Taxes Act 1988 is a fair weight. I shall desist from starting at page one. However, I was looking at Section 875. According to the Institute of Chartered Accountants of Scotland, and others who were behind the tabling of this amendment, and Amendment No. 281, that section is amended and clarified by Section 257, which goes under the attractive name of "personal relief'. Those two sections clarify much of the argument raised by my noble friend Lord Mackay. If the Minister will accept Amendment No. 281, that may clarify exactly what is in his mind and will put everything beyond any doubt.
4.15 p.m.
Lord Campbell of Croy: Perhaps I may put an inquiry to the noble Lord, Lord Sewel. Savings and distributions are mentioned at various points in this part of the Bill. I should like to deal not only with retired people, to whom my noble friend referred, but also with those who are earning, who are in employment and of working age. It seems that dividends are distributions and are not to be subject to the 3p variation. I seek the Minister's confirmation, so that somebody whose income brings him into the basic rate but has an earned income from wages or salary will have to pay the extra 3p, if the tax goes up by that amount, whereas the unearned dividend part of the income of other people will not be taxed or subject to the 3p.
Financial experts commented on this matter when it arose before the referendum. They were told to shut up by the campaigners—not the noble Lord, Lord Sewel, but other people in Scotland—and were told that they

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should stick to their banking and finance and not meddle in politics, even though the second proposition was entirely financial and about this very subject.
However, this is my opportunity to ask the noble Lord whether it is still the case that dividends will not be taxed in this way—the variation of 3p—whereas ordinary earnings will be so taxed. Does the noble Lord believe that he will be able to explain that to many of his followers in Scotland? Will he confirm what I am saying?
Baroness Carnegy of Lour: When the Minister replies, perhaps he will tell us precisely what distributions are, where they begin and where they end.
Baroness Strange: I support my noble friend Lord Lyell on this amendment which stands also in my name. However, as I am not a chartered accountant, I do not believe that I can explain it any better or more explicitly than he has. I am only a second-hand chartered accountant, being the mother of one.
Lord Selkirk of Douglas: I shall speak to Amendment No. 280 to which my name is attached. I should mention an interest in that I am a trustee of a small charitable trust.
Amendment No. 280 is designed to state the purpose and nature of the extended basic rate of income tax. At present, the Bill provides that the Scottish variable rate is to be a varied basic rate of UK income tax. If that policy is followed through, Amendment No. 280 is required to clarify the purpose of the legislation. The amendment's effect is to make certain that any reference to the basic rate will be at, for example, 26 per cent. for a Scottish taxpayer and therefore the withholding of income tax from a deed of covenant will be at 26 per cent. The full amount held may then be reclaimed by a charity to which the taxpayer wishes to donate. At present, when a basic rate taxpayer signs a deed of covenant to a charity and agrees to give a net amount of, for example, £77, the taxpayer's liability is the same whether or not he makes the deed of covenant payment. The recipient charity receives an amount net of basic rate of tax of £77. Because the charity is not liable to income tax, it can reclaim the basic tax of £23 and increase the income to £100.
The effect of the Bill on charities will be different depending on whether the taxpayer is in England or in Scotland. An English taxpayer will pay, on £100, £77 to the charity and £23 tax. A Scots taxpayer will pay £103; £77 to the charity and £26 tax—£3 more. The charity in Scotland will receive only £100, not £103. The charity is prohibited from collecting the additional £3 which should, according to the underlying principle, be available to it.
The advantages of this amendment are that it is a logical application of a varied rate tax and makes certain that covenants and other such charges are outwith the income which will be subject to the Scottish variable rate. It will help to prevent charitable giving from
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further decline. In other words, it is an amendment which will help and benefit charities in Scotland. I commend it to the Committee.
Lord Sanderson of Bowden: I support this line of thought. A real problem exists in this regard unless the Government look again at the way in which this extra income tax is to be raised. I suggest that they might look and see whether it would be better to incur the extra 3p in the pound as a straight levy on Scottish residents rather than as an extra burden on income tax.
My noble friend raised an important point in relation to charities and I am certain that the Government will not be backed if the charities in Scotland are seen to do worse than those south of the Border.
Lord Eatwell: Perhaps I may speak on the issue of charities, being the head of a charitable foundation; namely, Cambridge College. I resist the amendment for the extraordinary complexity it would introduce into charitable giving.
At the moment there is a straightforward relief related to the standard rate of income tax—23p throughout the UK; there is not relief for any other rate of income tax. For example, the higher rate of income tax is not relieved; it is only the 23p. The complexity introduced would arise if persons in Scotland gave to English charities. Is the Treasury then to provide the extra 3p to an English charity? If someone in Scotland gives to a Scottish charity, from where will the extra 3p in the £1 come? Is it to come from the Treasury or from the financial offices in Edinburgh? That confusion and complexity would do great damage to charitable giving and anyone supporting charities should resist the amendment.
Lord Sewel: Amendment No. 279C would delete from the Bill the provision which makes it clear that income from savings, investments, dividends and the like does not fall within the ambit of the Scottish tax power.
As the UK tax system currently stands such income is taxed only at the lower rate or the higher rate of income tax. It is not taxed at the basic rate and will not therefore be affected by the Scottish power. But that does not mean that the provision is superfluous. Obviously, things may change.
In the first place, considerable concern was expressed to us, as we formulated this power, that to include income from savings and distributions—basically dividends—within the power would be a real threat to the continuing health and vitality of financial institutions in Scotland. We listened to those concerns. To make it clear that the exclusion of savings income from the power was a matter of deliberate policy and did not happen by default, we made specific provision in the Bill.
But equally, the power is important for the future, so that if anything which is currently categorised as income from savings and distributions were, in the UK context, to be included within the basic rate at some stage, there would not be an automatic translation of that into the

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Scottish power. The exclusions would remain. That is important. The current tax rules are beneficial to middle income savers. If the tax-varying power extended to savings income, that could have a disproportionately burdensome effect on middle income savers.
Clause 69(3) is a provision which was sought by the Scottish financial and business community and which has been welcomed by them as a sensible policy which also provides certainty for the future. I agree with that assessment and, in the light of that explanation, I hope that the noble Lord may feel able to withdraw this amendment.
Perhaps I may refer to the example given by the noble Lord, Lord Mackay of Ardbrecknish, of someone whose income was dependent on savings income, someone whose income was dependent on an annuity and someone whose income was dependent on a pension. The noble Lord has got it right; there is no doubt about that. The person whose income is coming from savings would not be affected by the 3p variation; the person whose income was coming from an annuity would be caught by the 3p variation, as would the person whose income was coming from a pension.
However, differences already exist. That is the point. Those three sources of income are treated differently now in any case. There are differences between the rates at which those types of income are taxed and that is government policy; indeed, that was the policy introduced by the previous government in 1996. So we are accepting the policy differentiation which the previous government advocated. It was a differentiation clearly designed to encourage savings, and that is what we wish to encourage also. I hope that deals with the specific point raised by the noble Lord, Lord Mackay of Ardbrecknish.
I turn now to Amendments Nos. 280 and 281. I listened carefully to what the noble Lord, Lord Lyell, had to say and admired his weightlifting achievements. I am not, however, persuaded that these amendments are necessary or desirable. The effect of a tax-varying resolution would be only to provide that a different basic rate should apply to a particular class of UK taxpayers ("Scottish taxpayers"). This does not disapply the existing tax rules defining total income for tax purposes. Nor does it affect the entitlement of Scottish taxpayers to the personal allowance or to any other deduction which reduces their liability to income tax—a point raised also by the noble Lord, Lord Mackay of Ardbrecknish.
Any suggestion that the effect of the Bill is to deny Scottish taxpayers their personal allowance or any other allowance is entirely unwarranted. There is no intention to deny Scottish taxpayers any deductions or allowances currently available to them.
I turn to the point raised by the noble Lord, Lord Selkirk of Douglas, supported by other Members of the Committee. The government policy is that the tax relief on gifts to charities will be uniform across the United Kingdom, so the charities will not do worse. I can give the noble Lord an assurance that the point he raised will not arise. In any case, the amendment in his
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name would not achieve his desired objective. We will achieve the desired result by exercising the power available in Clause 75(2).
There is therefore nothing between us in terms of the policy objectives identified by the noble Lord, Lord Selkirk. We simply arrive at the destination by a different route. I hope that on that basis the amendment will be withdrawn.
Lord Campbell of Croy: Perhaps I can say a word on dividends. The noble Lord, Lord Sewel, explained clearly and confirmed that dividends will be exempted from the extra 3p. But does the Minister accept that those who receive some of their income from dividends are, on average, likely to be better off than those whose income is entirely from their earnings? I raised all this over a year ago and I was told that the matter was much too complicated to try to include dividends. I am talking about them in general and not the savings of retired people only. I did see that it would be extremely complicated. Does the noble Lord foresee complaints in future about different treatment which means that on the whole the less well off will have to pay 3p on the part of their income that qualifies for the basic rate of tax whereas the better off will be excused that?
4.30 p.m.
Baroness Carnegie of Lour: I asked the Minister whether he could define "distributions". It is not a technical point in which I have a remote interest in asking, but something that everyone in Scotland needs to know. What will be exempt? We understand about dividends and my noble friend has just asked questions about that. The Minister said that distributions are basically dividends, but what else are they? I do not believe that people in general know what it means because it is a word with which we are not familiar.
Lord Sewel: I can try to help on that point. As I said, distributions broadly mean dividends paid by companies, but they also cover other things, such as distributions by unit trusts and other such vehicles. I hope that that is helpful to the noble Baroness. I return to the point made by the noble Lord, Lord Campbell of Croy. I confirm that dividends are not caught by the 3p variation. We set out quite specifically and from the start to introduce a very limited tax-raising power for the Scottish parliament, which is up to 3p variation on the basic rate.
One of the difficulties we are faced with as regards dividends is that they are not taxed at the basic rate, but only at the lower rate or the higher rate. That is one of the factors that we have to take into account. I hope the noble Lord understands that point.
Lord Lyell: Before my noble friend winds up, I can save a lot of time by thanking the noble Lord, Lord Sewel, for what he said about Amendments Nos. 280 and 281. I am rather flattered that he treats me in a manner akin to Corporal Jones in "Dad's Army" as the "threat" in thinking that my amendments might be concerned with doing down the Scottish taxpayers. All the briefing I have had shows that the two amendments

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in my name, that of my noble friend Lady Strange, and one in the name of the noble Lord, Lord Selkirk of Douglas, would clarify the entire position for United Kingdom taxpayers. The noble Lord has given a very full explanation, for which I am grateful. I shall digest what he said and I look forward to hearing what my noble friend on the Front Bench has to say.
Lord Selkirk of Douglas: I am also very grateful to the Minister. Can he state in a couple of sentences how the Government intend to use Clause 75(2) in relation to charities in future?
Lord Sewel: I shall take refuge in the time-honoured phrase; namely, that I shall take the opportunity to write to the noble Lord on that point.
Lord Mackay of Ardbrecknish: We have had an interesting debate. I am pleased to hear that Amendment No. 279C is in because, following consultations, the Scottish financial community is very keen on it. We shall come to amendments further on in the Bill about which the Scottish financial community is also keen. I look forward to the Minister being persuaded by its arguments to accept the amendments in the Marshalled List.
I am disturbed that the Minister confirms my example about the three sets of retired people. It will be seen to be unfair and unjust. I understand the arguments. I am puzzled as regards the position of a basic rate taxpayer who has some pension income and some dividend income. The pension income alone does not take someone into the basic rate and the dividend income alone does not do that either; but together they take a person into the basic rate. Will the portion of the basic rate on which a person has to pay the extra 3p come from the pension income or from the dividend income? I am sure that the Inland Revenue will have written pages to resolve that problem. Perhaps the Minister has read the pages and can help me, or will he write to me?
Lord Sewel: I made the earlier point that dividends are taxed in a completely different way from income. They are not taxed at the basic rate, but at either the lower or higher rate. Therefore the situation that the noble Lord envisages cannot come about.
Lord Mackay of Ardbrecknish: I shall read my self-assessment form again and the notes that go with it. I was not aware, when I read the calculations that go with it, that somehow or other they were separate. I will leave that and have a look at it. These matters are complex. The noble Lord, Lord Eatwell, made a brief intervention and left the Chamber before he heard the replies—but if one runs a great Cambridge college then I suppose one cannot spend too much time here. He complained about the complexity as regards charities. What has been made clear in the past 25 minutes, and in the previous debate, is that the whole issue is hugely complex. It is not just a question of the charities.
I believe that my noble friend Lord Sanderson made a good point. Instead of trying to suggest that it is an extra 3p on the basic rate of income tax, which could take the basic rate of Scottish tax to 26p; it could be simply said
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that the basic rate would be 23p wherever one lives in the UK, and the Scottish taxpayers who pay at the basic rate will pay an additional 3p levy. One can call it what one likes. But it is not an addition to the basic rate. I wonder to what extent that would solve a great many of the problems. Perhaps the Minister will consider what my noble friend Lord Sanderson said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 280 and 281 not moved.]
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 281A
Page 31, line 19, at end insert—
("() For the avoidance of doubt, and notwithstanding any other provision of this Act, the Parliament shall not vary any tax except the basic rate of income tax.").
The noble Lord said: I wish to test the opinion of the Committee on this amendment.
4.38 p.m.
On Question, Whether the said amendment (No. 281A) shall be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 115.

Division No. 1

CONTENTS

Addison, V.

Kenyon, L.

Ailsa, M.

Kingsland, L.

Annaly, L.

Kinnoull, E.

Balfour, E.

Kintore, E.

Belhaven and Stenton, L.

Lang of Monkton, L.

Beloff, L.

Lauderdale, E.

Belstead, L.

Lindsey and Abingdon, E.

Berners, B.

Long, V.

Boardman, L.

Lucas of Chilworth, L

Brabazon of Tara, L

Lyell, L.

Brougham and Vaux, L.

McConnell, L.

Burnham, L. [Teller.]

Mackay of Ardbrecknish, L.

Cadman, L.

Mackay of Drumadoon, L.

Campbell of Croy, L.

Mancroft, L.

Carnegy of Lour, B.

Mersey, V.

Charteris of Amisfield, L.

Milverton, L.

Chesham, L.

Monro of Langholm, L.

Clark of Kempston, L.

Montrose, D.

Cork and Orrery, E

Mowbray and Stourton, L.

Courtown, E.

Munster, E.

Cox, B.

Naseby, L.

Dean of Beswick, L.

Nelson, E

Denham, L.

Nickson, L.

Denton of Wakefield, B.

Noel-Buxton, L,

Dixon-Smith, L.

Norfolk, D.

Donegall, M.

Norton of Louth, L.

Drogheda, E.

O'Cathain, B.

Ellenborough, L.

Oxfuird, V.

Elliott of Morpeth, L.

Pender, L

Elton, L.

Platt of Writtle, B.

Fraser of Carmyllie, L.

Rathcavan, L.

Gray of Contin, L.

Renton, L.

Haddington, E.

Roberts of Conwy, L.

Halsbury, E

Rowallan, L. [Teller.]

Harlech, L.

Saltoun of Abernethy, Ly.

Harmar-Nicholls, L.

Sanderson of Bowden, L.

Harrowby, E.

Sandford, L.

Hayhoe, L.

Selkirk of Douglas, L.

Hogg, B.

Sempill, L.

Holderness, L.

Sharples, B.

Inchyra, L.

Shaw of Northstead, L.

Jopling, L.

Stodart of Leaston, L.

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Strange, B.

Swinfen, L.

Strathcarron, L.

Thomas of Gwydir, L.

Sudeley, L.

Wade of Chorlton, L.

Swansea, L.

Westbury, L.

NOT-CONTENTS

Addington, L.

Linklater of Butterstone, B.

Allenby of Megiddo, V.

Listowel, E.

Amos, B.

Lockwood, B.

Annan, L.

Lofthouse of Pontefract, L.

Archer of Sandwell, L.

Lovell-Davis, L.

Ashley of Stoke, L.

Ludford, B.

Bach, L.

McCarthy, L.

Barnett, L.

McIntosh of Haringey, L. [Teller.]

Berkeley, L.

Mackenzie of Framwellgate, L.

Blease, L.

Mackie of Benshie, L.

Bledisloe, V.

McNair, L.

Borrie, L.

Maddock, B.

Bruce of Donington, L.

Mallalieu, B.

Burlison, L.

Mar and Kellie, E.

Calverley, L.

Mason of Barnsley, L.

Carlisle, E.

Milner of Leeds, L.

Carmichael of Kelvingrove, L.

Mishcon, L.

Carter, L.

Molloy, L.

Castle of Blackburn, B.

Monkswell, L.

Cledwyn of Penrhos, L.

Montague of Oxford, L.

Clinton-Davis, L.

Morris of Castle Morris, L.

Crawley, B.

Morris of Manchester, L.

David, B.

Nicol, B.

Davies of Oldham, L.

Orme, L.

Dean of Beswick, L.

Pitkeathley, B.

Desai, L.

Prys-Davies, L.

Dholakia, L.

Ramsay of Cartvale, B.

Dixon, L.

Redesdale, L.

Donoughue, L.

Rendell of Babergh, B.

Dormand of Easington, L.

Rodgers of Quarry Bank, L.

Dubs, L.

Rogers of Riverside, L.

Dunleath, L.

Russell-Johnston, L.

Eatwell, L.

Sainsbury of Turville, L.

Evans of Parkside, L.

Sefton of Garston, L.

Falconer of Thoroton, L.

Sewel, L.

Farrington of Ribbleton, B. [Teller.]

Shepherd, L.

Gallacher, L.

Shore of Stepney, L.

Gladwin of Clee, L.

Simon, V.

Goudie, B.

Simon of Highbury, L.

Graham of Edmonton, L.

Smith of Gilmorehill, B.

Gregson, L.

Steel of Aikwood, L.

Grenfell, L.

Strabolgi, L.

Grey, E.

Taverne, L.

Hardie, L.

Taylor of Blackburn, L.

Haskel, L.

Taylor of Gryfe, L.

Hayman, B.

Thomas of Macclesfield, L.

Hilton of Eggardon, B.

Thornton, B.

Hogg of Cumbernauld, L.

Thurso, V.

Hollis of Heigham, B.

Tomlinson, L.

Hoyle, L.

Tope, L.

Hughes, L.

Tordoff, L.

Hunt of Kings Heath, L.

Turner of Camden, B.

Hylton, L.

Walker of Doncaster, L.

Islwyn, L.

Watson of Invergowrie, L.

Jacobs, L.

Whitty, L.

Jay of Paddington, B. [Lard Privy Seal.]

Williams of Elvel, L.

Williams of Mostyn, L.

Judd, L.

Wilson of Tillyorn, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.47 p.m.
[Amendment No. 281B had been withdrawn from the Marshalled List.]
On Question, Whether Clause 69 shall stand part of the Bill?
Lord Mackay of Ardbrecknish: Normally, I do not speak to the Question whether a clause shall stand part
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of a Bill. However, we have had a divided Committee stage on this Bill in that part of the clause was discussed before the Recess and we are discussing the rest today. I should like to take a few minutes to ask the Government whether they have given any reconsideration to the proposal which I made to resolve some of the difficulties in Clause 69. If they had done so, they would not only have resolved the difficulties of Clause 69 but would also have made Clause 72 totally unnecessary. As Clause 72 is impossible to read and understand, I should have thought that that would be a good thing.
It all started when the Government decided that the Scottish parliament should have the power to raise an extra 3p on the basic rate of income tax. That was quickly translated to £450 million. As I said earlier, the question that then arose was: what happens if, because of changes, the 3p does not raise £450 million? The Government said, "Ah well"—without any thought at all, I suspect; I was going to say, "without a great deal of thought", but I have concluded that it was without any thought at all!—"if that happens, the House of Commons will amend the tax-raising powers to ensure the £450 million"—in some magical way.
The next question was obvious, except to the Government: how will you do that? Where will the new tax come from? We have been around that course this afternoon. We have had a bit of an answer. It is said that it will come from income tax, but we have no details. Nobody knows. It is a simple question so I should have thought that the Government ought to have an answer before walking down that road.
There has been a new twist. The sum is no longer £450 million, but £420 million, so the poor old Scottish parliament has lost £30 million before it is even up and running. We are talking about 3p or £420 million, but £420 million is the top line.
My amendment on the last Committee day before the Recess would simply have removed the "either/or", and would have stated that, up to £420 million, the Scottish parliament can raise or lower the amount that it takes and can do so by amending the basic rate. That would have made this part of the Bill much simpler and easier to understand. Clauses 69 and 72 would not be needed in the Bill at all. It seems to me that that would be a sensible idea. I wonder whether the Minister has had any thoughts on the matter over the Recess and whether he has come to a conclusion that that might be a better way to approach the issue than the way he has chosen in the Bill.
Lord Lang of Monkton: Like my noble friend Lord Mackay, I should like to address a few remarks to the debate on whether this clause should stand part of the Bill. It is a very important clause, giving as it does power to the Scottish parliament to fix the basic rate of tax for Scottish taxpayers. During the Second Reading debate I described the tax-raising powers as "pitiful and peripheral". I still hold to that view; indeed, at that stage I thought that they would raise £450 million, but we are now told that they will only raise £420 million. Once one deducts from that the cost of running the Scottish parliament, the cost of collection of the tax and other

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overheads, it is easily seen that the revenue will be very small in proportion to the Scottish Office budget—something like 3 per cent. of the Scottish Office budget—or less than 2 per cent. of the total resources spent by the Government in Scotland. You cannot do very much with that.
There is a danger that this clause—the provision of tax-raising powers in the Bill—will lead to the dangerous misconception that a Scottish parliament can achieve something worth while with such resources. So, in a sense, we get the worst of all worlds because the Bill concedes the principle of tax-raising powers to this parliament but does not grant it sufficient power to raise a worthwhile amount of tax if it decides that that is necessary. Power without responsibility has been described for many years as the prerogative of the oldest profession, but responsibility without power, or the perception of responsibility without the reality of power, is perhaps an even worse situation.
Having conceded the principle of tax-raising powers, why do the Government not go the whole hog? Why do they seek to limit the level of taxation that can be raised under the Bill? Of course, that is a dangerous game but this is part of a very dangerous project; indeed, the whole establishment of this parliament carries with it great dangers. I shall quote the words of the noble Lord, Lord Sewel, on tax-raising powers in the debate in this Chamber on 23rd July. At that time my noble friend Lord Mackay of Ardbrecknish was seeking to protect the interests of Scottish businesses from the possible depredations of a Scottish parliament or of a local government given powers to vary business rates. In reply, the noble Lord, Lord Sewel, said:
"His approach seems to be based upon the perverse idea that almost as soon as a Scottish parliament is elected it will deliberately implement policies which would have as their primary objective the inflicting of damage on the Scottish economy … I am prepared to trust them and if they get it wrong they will simply suffer the judgment of the electorate. It is as simple and straightforward as that".—[Official Report, 23/7/98; col. 1051.]
If it is as simple and as straightforward as that, why are the Government not prepared to trust the people when it comes to income tax? After all, businesses have no vote but the people do. The answer is that essentially the power that has been granted is not a power of any real substance; it is essentially cosmetic, a piece of pretence, and, as such, is no basis for constitutional change.
The provision of very limited tax-raising powers is dangerous for two further reasons. First, the distribution of resources from the Treasury through the Scottish block will come under attack; indeed, it is already happening. The fact that spending under almost all headings in Scotland is some 20 per cent. higher per head than it is in England is becoming increasingly well known and resented in other parts of the United Kingdom, the more so given the closer alignment of the Scottish economy with that of England which has been achieved in recent years. Why, the English ask, should Scotland with its own parliament continue to get more? They have tax-raising powers, let them use them. Scotland would no longer have power in the Cabinet, in the Government, in Whitehall and at Westminster to resist that.
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The second danger that I see is that revenues per head in Scotland are lower than in the United Kingdom. Therefore, to raise the same revenue from within Scotland requires more per capita in tax than would be required from the UK as a whole. When this debate was taking place in another place in 1988, I calculated that a 10 per cent. increase in spending by the Scottish Office would require a 19 per cent. increase in income tax if levied only in Scotland.
Tax revenues in almost all cases are lower per capita in Scotland than in the rest of the UK. I published a Government paper in 1992 entitled, Government Expenditure and Revenues in Scotland which indicated that revenue from income tax, from national insurance and other contributions—for example, from VAT, from local authority revenues—were all lower per head in Scotland than in England. That was only marginally offset by the counter balancing lower benefits to be derived from tax reliefs and allowances. Only taxation revenue from tobacco and from drink was higher in Scotland. The Scottish Health Education Board has been working hard to put that right.
The debate is often clouded by references to North Sea oil, especially by the Scottish National Party. It points to the vast revenues which it believes belong in Scotland. That is a debate in itself which could take a long time to resolve and one which might have been valid when such revenues were over £12 billion as they were in the mid-1980s, but rather less so in the early 1990s when they fell to £1 billion and now when they are not a great deal higher than that. The fact remains that there is still a substantial structural budget deficit in a separate Scottish economy. Therefore, to start giving tax-raising powers to a Scottish parliament, and running the risk of a gradual transfer of resources from the UK Treasury to a Scottish tax base, is a dangerous trend to set loose. The Scottish parliament has a higher per capita spend to maintain—or, indeed, to increase, if that is what it wishes—and it will have to do so increasingly from a lower tax base.
Another point about these tax-raising powers which concerns me is the regressive nature of the proposals. Over the years the previous government sought to reduce the basic rate of income tax and to raise allowances. They brought in a lower 20 pence rate. Of course, we are talking about tax increases and not tax reductions. Although the Government have adhered to the claim that the powers are essentially tax-varying powers, Clause 74 makes it quite clear that the Scottish people will not have their tax bills reduced under the provisions of the Bill.
How would those tax increases be applied in relation to allowances and social security benefits? Clause 99 covers to some extent the answer on social security benefits, and no doubt we shall have the opportunity to debate that issue. However, will Scottish income tax—and I ask the Minister this question out of ignorance—simply be bolted on to existing tax rates, or will the allowance system and the grading of tax rates be rephased to take account of the quite substantially changed circumstances which would arise, particularly in the case of lower income earners? I understand that it is not to be applied to the 20p rate but only to the

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basic rate. That offers some relief. But even at the basic rate of only 23p in the pound, the application of a 3p in the pound tax increase would raise the tax bill for a basic rate taxpayer by 12.5 per cent., whereas to a 40p in the pound taxpayer, the increase would only be 7.5 per cent. But, for a 20p taxpayer, whose income rises to bring him into the basic tax rate net, his tax bill would rise by 30 per cent. as it went up from 20p to 26p in the pound. That must have very clear and unsatisfactory implications for work incentives.
There are many other issues relating to the imposition of tax-raising powers through this Bill and under this clause—for example, the economic burden, the disincentive to industry to locate in Scotland, the disincentive to invest, the burdens on business, the cross-border anomalies and the other points that my noble friends raised in earlier debates. But, in essence, I submit that the power to raise taxes as worded in this clause, is essentially destabilising, It is dangerous because it pretends to do more than it actually allows and because it carries the hidden threat of other taxes, as my noble friends have said this afternoon. It also puts a disproportionately higher burden upon Scottish taxpayers, especially the less well off, in order to buy less than a comparable UK tax rate would do. It would, and will, undoubtedly be a focus for future conflict and tension and will be exploited by those who see a Scottish parliament as only half the story. I believe the measure will do no good, but if we have to have it I believe that we should release the Scottish parliament from the shackles imposed within the terms of this clause and let those who would raise the tax face the consequences more clearly, more honestly and more directly.
5 p.m.
Lord Monro of Langholm: I follow my noble friend Lord Lang and refer to one or two issues that I mentioned on Second Reading relative to the principle of the tax we are discussing. The nearer one is situated to the Border, the greater the repercussions that appear to result from this measure. That is why Dumfries and Galloway voted against the tax raising powers. The figures were 51.2 per cent. against and 48.8 per cent. in favour. The neighbouring inhabitants of the Scottish Borders voted similarly, with 50.7 per cent. in favour of tax raising powers and 49.3 per cent. against. The majority was only 787. The people who live in these areas are aware of the taxation problem as regards cross-Border issues. Later we shall discuss the complications that arise as regards where one lives, where one works and where one pays tax. I should have thought that any company accountant drawing up weekly or monthly payslips would go round the bend trying to find out where his employees have been living and working. This is an important matter because employers may have to pay higher wages to employees in Scotland than to employees of the same rank just the other side of the Border in England in order to make their net pay the same. That is the least one can expect to happen.
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One is aware that industry is considering this matter. I know of a company in my former constituency which is considering whether to locate a new factory in England or in Scotland. This dilemma has arisen because of the possibility of increased taxation in Scotland. We need to think hard about whether we are going down the right route. There is no doubt that anywhere with lower taxation becomes a honey-pot in terms of people moving to that area. I know from my occasional visits to the eastern seaboard of the United States that many people from New Jersey, Philadelphia and Maryland shop in Delaware where there is no sales tax. They perceive they are getting a bargain.
We do not want people to perceive Scotland as a country of high taxation with the tartan tax that we have discussed, because that will have an adverse effect not only in terms of attracting industry but also on those who live in Scotland who will have to pay higher tax for the somewhat doubtful privilege of receiving better services. However, that remains to be seen. We view with horror the Minister's words when he said earlier that it looks more than likely that local taxation will be increased to meet the aspirations of the Scottish parliament. I am sure that will happen. I can envisage that the council tax will be increased substantially with the alleged intention of improving services because people realise that they will not receive the money from the block grant.
I agree with my noble friend Lord Campbell of Croy that if the Treasury were to put a ceiling on local government expenditure all hell would break loose in Scotland as people would consider they were being governed by England yet again. That would negate the whole objective of the Government's wish to devolve a parliament to Scotland. I urge the Minister to look carefully at what the Government propose. The proposed measure could have many adverse repercussions. When one considers Clause 71 and the ins and outs of where one lives and where one will pay tax it is clear that many people will experience immense heartbreak because they will not have understood what hit them.
Lord Steel of Aikwood: Listening to the arguments that have been expressed so far, it appears to me that the noble Lords, Lord Lang and Lord Mackay of Ardbrecknish, are not singing from the same hymn sheet at all. The noble Lord, Lord Lang, made a convincing case for doing away with this miserly 3p varying power and opening the lid and allowing the Scottish parliament to do whatever it wants with regard to financial matters. He said this measure is a compromise. I agree with him that it is a compromise. However, if he casts his mind back to the 1970 proposals he will remember that one of the criticisms of the scheme that was put before the Scottish people was that there was no tax responsibility at all. As we all know, the whole of local government has operated on the basis of a minority element of tax responsibility while the majority of local government expenditure is provided by central government. As I said, the noble Lord is right to say this measure will be a compromise, but it is the compromise that was agreed in the constitutional convention. The

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Government have faithfully introduced legislation to implement it. One can argue for or against a 3p limit or a 4p limit or a 2p limit, but the 3p figure seems to allow a reasonable amount of flexibility to enable the Scottish parliament to do some of the things it may wish to do.
I say to the noble Lord, Lord Monro—I almost addressed him as my noble friend as he is a friend in a personal sense—that I do not share his view about the problems of cross-border transfer. I agree with him that if there were different rates of sales tax as in the United States people would cross borders. I agree with him on that. However, in the United States, neighbouring states have variations in income tax of up to 5p but people do not move their residences across federal state boundaries to take advantage of fluctuating income tax rates. I believe this issue can be greatly exaggerated. I do not believe that that situation will occur here. In any case, the constant assumption from the Conservative Benches on this subject is that the Scottish parliament will be full of financial idiots who will be utterly irresponsible and who will do daft deeds. That may happen. Who knows, we may have a Conservative parliament? However, I think that is unlikely. We must proceed on the assumption that rational men and women will use these powers sensibly. One of the reasons I so opposed the amendment which we fortunately defeated a moment ago is that the phrase,
"for the avoidance of doubt".
was mischievous, because the amendment proposed by the noble Lord, Lord Mackay, raised the question, when is a tax not a tax? The answer is, when it is a charge or a fee. I remember that the poll tax was called the community charge. I repeat my view that as regards devolved matters the Scottish parliament has total freedom to raise what charges, taxes, levies, tolls—call them what you will—it pleases. However, it will do so only with a sense of financial responsibility. At the end of the day, the Treasury will keep an eye on the public expenditure controls, as everyone has mentioned. The electorate will also wreak retribution on those who misuse financial powers.
I have a specific example in mind. My noble friend Lord Mackie of Benshie asked about dogs. There is a perfectly rational case, strongly supported by the farming community and by many in urban areas, for a dog registration scheme. Westminster has ducked that issue. However, there is no reason why the Scottish parliament cannot introduce such a scheme. If it introduces it, it will levy a charge and may decide to make a profit on it. I believe that would be a good idea. I believe the amendment of the noble Lord, Lord Mackay, would have cast doubt as to whether it would be able to do that. I believe that we should get on with the legislation, accept the 3p variation on the basic rate of income tax and allow the Scottish parliament to administer in a sensible way all the matters that we are devolving under this Bill. It will not act within the realms of fantasy, as the Conservative Party seems to imagine.
Baroness Hogg: I support a number of points made by my noble friends. In a spirit of pure helpfulness to the Minister I warn him against redeploying a fallacy in
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his responses, which is to rely on the Treasury to resolve this issue in practice. If, as I am sure will be the case, expenditure rises in Scotland and taxation rises to match it, and the Treasury seeks to control the situation by withdrawing grant, as I am sure it would be only too delighted to do, taxation would have to be increased further in Scotland. It would not come down. If the Minister wants evidence of that fact, he has only to look at the dynamics of local government finance over the past 20 or 30 years.
Lord Sewel: I am intimately acquainted with the dynamics of local government finance over the past 20 or 30 years. We should bear in mind that this very specific proposal was put to the Scottish people in the referendum on 11th September last year. We were absolutely open and straight with the electorate of Scotland at that time. We sought their specific endorsement, and they endorsed the proposal by over 60 per cent. We are committed to legislate to give effect to the proposals placed before the Scottish people in the referendum.
Perhaps I may attempt to explain how we arrive at the figure of 3p. On the one hand it seems to be ridiculed as being of no consequence, and on the other as bringing about the flight of everybody of any value and merit from Scotland. It is not my job to attempt to reconcile those two positions.
There was general dissatisfaction regarding the 1979 proposals—the point was referred to by the noble Lord, Lord Steel, and was made strongly by some distinguished members of the party opposite—that they would establish a destabilising talking-shop with no fiscal responsibility. It was said that that would lead to an assembly pressing for improvements in services but being unable to secure those improvements because the level of income allocated to it through the block grant would not enable them to be sustained; that the argument would arise: "We want to do it, we have the political will to do it, but Westminster won't give us the money. If we had the right to tax, we would do so; we should look the Scottish people in the eye, go to them, receive their endorsement and get on with the job".
I have some sympathy with that type of criticism. That is why we introduced a tax-raising power. However, the power we have introduced is specific and limited in order to balance that sense of fiscal responsibility with a recognition that we live in an integrated economy and macro-economic policy is a reserved matter. It would therefore be totally inappropriate for the whole tax-raising power indicated by the noble Lord, Lord Lang, to be devolved. Clearly, control over income tax rates is a major tool in the management of the economy. Therefore a balance had to be achieved, and that is what we sought to do. The 3p rate represents £450 million a year. I do not deride that amount, and I do not believe that the farmers of Scotland would deride it. It is slightly short of the total amount paid to Scottish agriculture every year by way of public support. It is about the same amount as the combined budgets of Scottish Enterprise and HIE. That amount of money can make a significant difference—

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slightly more than at the margin; it can make a significant difference across a range of activities in Scotland. If the Scottish parliament wished to use the power, it would have at its disposal an amount of money which cannot properly be called trivial. It would not, through its tax impact, disturb the macro-economic management of the economy. That is the way we arrive at the 3p figure. As the noble Lord, Lord Steel, indicated, it could have been 2p or 4p, but 3p seemed to create and sustain that balance.
Let us now turn to the £420 million/£450 million yield. The yield from the 3p rate will vary depending on the level of economic activity and on inflation. The best estimate we received when we produced the White Paper was £450 million. Subsequently the Inland Revenue was able to produce a more precise estimate, providing us with the figure of £420 million. That is merely a function of the increased sophistication of the ability of the Inland Revenue to provide a more accurate estimate of the yield.
Let us then turn to the slightly different argument, alluded to somewhat elliptically by the noble Lord, Lord Mackay of Ardbrecknish, relating to changes in the tax structure. As I have been at pains to point out, the present power is expressed purely in terms of 3p on the basic rate. We know that tax structures may change over time; there has to be a base reference point in order to know what amount of money should be raised after the tax structure has been changed. That is the reference back to the £420 million. It would then be a matter for the Treasury, in consultation with the Scottish parliament, to agree on a means by which, under a changed tax structure, as near an arrangement could be achieved representing the present 3p on the basic rate. So there is nothing strange, cynical or mischievous in the movement from 3p to £450 million, to £420 million. They all refer to the same thing.
5.15 p.m.
Lord Mackay of Ardbrecknish: I thank the Minister for giving way. I follow his argument—at least, I thought I did for a moment or two, but then I began to have doubts. If he is saying that the decision is made by the UK Treasury (by the Chancellor) to change the structure of income tax so that the basic rate takes in less than £420 million to £450 million, then some other way would be found. If the shortfall comes from other economic factors—perhaps a downturn in the economy, or fewer basic rate tax payers—does that imply that the procedures in the Bill to allow the Treasury to make changes will not run?
Lord Sewel: The Scottish parliament would pass a resolution increasing the tax rate by, let us say, 3p. The Inland Revenue would estimate what the yield from that would be and make that money available. During the course of the tax year it could become clear that there was a difference between the estimate and the yield. Either an adjustment would have to be made during the course of the tax year, or an end-year adjustment would be made to take account of the difference between the estimate and the actual yield. I hope that explains the point satisfactorily.
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I come back to the basic point in this debate as to whether Clause 69 should stand part of the Bill. The provisions which are captured in the clause were put explicitly and openly to the people of Scotland at the time of the referendum on 11th September last year. Over 60 per cent. of the people of Scotland endorsed those proposals and we are pledged to give legislative effect to them.
Clause 69 agreed to.
[Amendment No. 281BA not moved.]
Clause 70 [Supplemental provision with respect to resolutions]:
[Amendments Nos. 281C and 281D not moved.]
Clause 70 agreed to.
Clause 71 [Scottish taxpayers]:
The Deputy Chairman of Committees (Viscount St. Davids): I should point out before calling Amendment No. 281E that if that amendment is agreed to I cannot call Amendment No. 282.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 281E:
Page 33, line 8, leave out subsection (6).
The noble Lord said: We now come to the part of the Bill which attempts to define who is a Scottish taxpayer and who is not. We shall come later to what I believe is a more elegant solution to this problem, but I have learned that the Government do not like elegant solutions and so I do not suppose that I shall make much progress on that. I therefore wish to look at some of the detail of the solution that the Government have brought forward as to who is a Scottish taxpayer and who is not.
In Clause 71 we look at place of residence. In subsection (6) we have the interesting issue of,
"a vessel or other means of transport",
with which comes the question of where one is just before and just after midnight. Take someone who commutes on Sunday night on the Glasgow to London sleeper, which currently leaves just before midnight. I should say that I seldom use the sleeper so this is not a case of my seeking anything for myself. I assume that the sleeper is still in Scotland just after midnight and therefore the commuter is judged to live in Scotland for that day. If, however, the sleeper were to leave a little earlier and cross the border by midnight, the commuter would be judged to live in England for that day. If someone leaves London on the sleeper, goes to sleep before midnight in England and wakes up in Scotland, it will be decided that he does not spend that day in Scotland because just around the witching hour he was still in England, sleeping his way north. I wonder whether the Minister can help me with the sleeper quandary.
There is a similar problem with regard to transport which concerns lorry drivers, but perhaps one of my noble friends will take up that matter. Many lorry drivers do a lot of commuting and moving around. Sometimes they are in Scotland overnight, sometimes in England and sometimes on the Continent. They may, in fact, be on the Continent to such an extent that the

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number of days on which they are in the UK calls their tax position into doubt and the matter may become very complicated for them. There are, for example, major transport firms in what was the constituency of my noble friend Lord Monro which operate cross-border and across Europe. Those firms will have drivers whose homes are clearly in Scotland but who will spend a lot of midnights outside Scotland, and I believe that that will be a problem.
I think the question of ships is the best of all in this particularly daft clause. A coaster may trundle around the coasts of Europe and spend some time in Scottish ports, some time in English ports and some time in European ports. I am happy to say that, thanks to the abolition of the dock labour scheme by the previous government, the ports in Scotland have seen a considerable revival of their trade, so it does happen that many sailors and merchant seamen spend many nights on their coaster in Scottish ports. They may live in England, they may indeed live in an overseas country, but they escape the tartan tax, at least so far. It seems to me odd that a merchant seaman who resides in England, and whose wife and family reside in England, but who spends a lot of nights in a Scottish port, may suddenly find himself having to argue with the tax authorities that he is not a Scottish taxpayer. I wonder what the position is if a ship leaves the Clyde on the tide and is still in Scottish waters at midnight. How would we resolve that?
The Inland Revenue has already sent out pages and pages of material to try to clarify the Scottish tax position. It has not succeeded as far as I am concerned, but I suppose it will all be to the benefit of accountants and such people who will be able to advise their clients as to the position.
I accept that there may not be many such people, but legislation is written to cover all eventualities and we must look at this matter very seriously. What will happen if someone spends a lot of time in coastal waters? It might be very relevant to the Scottish Fisheries Protection Agency, of which the Minister is the commanding officer, the commander in chief, the vice admiral, or whatever we want to call him. Many of the men of that agency will spend a lot of nights in Scottish coastal waters. Will they be able to say: "We are not Scottish taxpayers because we are not tied up at a Scottish port; we are out in the Minch somewhere watching the fishermen and making sure that they are all obeying the law".
The position will have to be clarified. If it is not clarified in the legislation or in the guidance, it will eventually have to be clarified by expensive court action, which we all want to avoid. I believe that this daft little subsection deserves some attention from the Committee to try to make sure that the Government know what they are doing. If it becomes clear to the Committee, as I am sure it will, that this is a pretty confused issue, I hope that Members and the Government will be persuaded that the simpler solutions
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with regard to defining who is and who is not a Scottish taxpayer, to which we shall come later, should be accepted by the Government. I beg to move.
The Earl of Balfour: Grouped with Amendment No. 281E in the names of my noble friends Lord Mackay of Drumadoon and Lord Mackay of Ardbrecknish is my Amendment No. 282, which I realise will fall if their amendment is accepted. Mine is a purely probing amendment, but I should like to give the Committee a few examples of where I think a problem exists in respect to
"a vessel or other means of transport"—
that is, ships, aircraft or road vehicles, which all have to be registered at some place.
When I was in Finland in June 1977 I was asked if it was still possible to obtain flax sail canvas and sail twine to equip a square-rigged sailing vessel. Upon my return, I contacted Webster & Sons, now called Millerain of Arbroath, who informed me that they could still make flax sail canvas to full Admiralty standards and sent me samples and prices f.o.b. a British port. Flax canvas is much nicer to handle in wet stormy weather than is cotton, which is horrible, or man-made polyester, which deteriorates in bright sunlight.
I also contacted Barbour Campbell Threads Limited of Lisburn, Northern Ireland, who make the best flax and polyester twine and thread I have ever seen and whose products are ideal for sewing anything from leather to the finest silk.
The order from Finland was placed with those two firms, who arranged delivery to Aberdeen where the bolts of canvas and boxes of twine went aboard a Finnish cargo ship. That ship regularly called at Aberdeen. That is my first example: I would not wish the Finnish crew to be subject to the tartan tax.
My second example is of the then well known shipping company Richard W. Jones of Newport, South Wales, which for many years had ships with cargoes of coal making regular voyages from a Forth port to the Mediterranean returning with full cargoes, including deck cargoes, of esparto grass (used in making the best quality paper) from North Africa. These ships sailed with mostly a Welsh crew and were always registered at Newport but seldom, if ever, sailed to their home port. In October 1950 I was fortunate enough to sail for the first time as second mate for one voyage on the "Uskport" when the regular second mate was home on leave.
My last example refers to the best shipping company with which I ever sailed: the Ben Line of Leith. All of its ships were registered at Leith but they were too large to get into Leith and their main port was London. Their regular voyages were to the Far East—Malaya, Hong Kong and Japan—which meant a round voyage of about five months. Although my parents' home was in Scotland, as was the case with most of the officers and crew, I was never at home in Scotland for more than two months in any one year. When I was at sea a person had to be out of the country for a full financial year and unmarried in order to claim any tax rebate. He could then reclaim the lot.

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Under subsection (3) of this clause it appears that a single person is able to avoid tartan tax if he or she spends most of the time out of Scotland. I fear that a married person with a home in Scotland will miss out, as has been the case with income tax in past years. I should not like to see a situation in which a married person who is a householder in Scotland must pay Scottish tax but a single person is able to avoid it because that person has no home of his own in Scotland.
In conclusion, I draw the attention of the Committee to the concluding words "or other means of transport" of Clause 71. Some years ago when I attended the Peterhead Harbour inquiry chaired by the noble Lord, Lord Hughes, I was interested to learn that regularly two refrigerated lorries per week left Peterhead whose first stop was Rome. I believe that in this case the Government should take into consideration that our transport costs, including fuel costs, are very much higher at the moment than in most of Europe. I should not like Scotland to lose this important trade, which contributes to the balance of payments, due to any kind of Scottish tax.
I ask the Government to consider the question of a person's domicile. I hope that married people will not be penalised because they have homes in Scotland and that single people can get away with it.
5.30 p.m.
Lord Mackie of Benshie: The fact is that the Inland Revenue already deals with a number of cases involving taxpayers who work both in and out of the country. They deal with people who work on rigs or drive lorries, and in respect of the whole of their tax, not just thruppence. I believe that we are making a little too much of it.
Lord Mackay of Ardbrecknish: If that is the case why should we not hitch a lift with the same rules and regulations that are already applied by the Revenue?
Lord Mackie of Benshie: I do not know. But I do know that what happens now does not appear to cause too much trouble. We have heard gloriously exaggerated examples about people travelling on sleepers and so on. I have a much better story about sleepers that I shall tell the Committee a little later. I believe that we are making a little too much of this, especially when the Inland Revenue is today dealing with this matter. Of course the Revenue will deal with the matter in the same way. I believe that we should get on.
Lord Dunleath: I apologise if I am labouring a point. I am very grateful to the noble Lord, Lord Mackay of Ardbrecknish, and the noble Earl, Lord Balfour, for their maritime expertise. In particular, I thank the noble Earl for his kind words about the Northern Ireland linen industry. I am vexed about the position relating to vessels. Currently, there is an extremely good and fast ferry service operated by two companies between Northern Ireland and Cairnryan or Stranraer in Dumfries and Galloway.
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To return to the "midnight clause", the Northern Ireland Assembly that will shortly be up and running does not at the moment have tax-raising powers. However, as sure as night follows day it will have such powers at some stage. The wretched crews of high-speed vessels will have to wrestle with the question of whether they are in Stranraer, Cairnryan or Belfast. I suspect that they will have to spend so much of their time filling in their tax returns that the vessels will not sail at all.
Baroness Strange: I believe that subsection (6) has some vagueness about it in that it refers to "or other means of transport". Does it mean a raft, yacht, houseboat, barge or ark? Exactly what is it? Would it not be much easier not to have it at all?
Baroness Ramsay of Cartvale: It may be helpful if I deal first with the specific point raised by the amendment tabled by the noble Earl, Lord Balfour, before dealing with the wider point raised in Amendment No. 281E.
Clause 71(6) makes provision, for the avoidance of doubt, that a vessel or other means of transport can be regarded as a place of residence and can therefore in particular circumstances, be a person's principal residence in Scotland. For example, somebody living on a vessel permanently moored in Scotland could be liable for the Scottish variable rate of tax. To put it another way, if someone lives in a mobile home, either on land or water, in Scotland, if other conditions are met, he or she will be liable for the Scottish variable rate. That is only right if that person is benefiting from public services in the same way as a person who lives on shore.
It may also be possible for this clause to apply to a person working aboard a merchant ship. Various members of the Committee have given examples of such a situation. But it is important to recognise that for that to happen—it applies to everyone—all the other relevant conditions in the clause must be met. Since the Committee seems to be losing sight of that fact in some of the contributions it is worth dealing with the matter in detail. The other main relevant conditions are that he or she must be a UK resident for tax purposes. Then he or she would have to have a principal residence in Scotland or meet the "days spent in Scotland" criterion; or perhaps, more bizarrely, there are the cases we have had of an MSP, an MP or an MEP for a Scottish constituency.
The amendment would mean that a person whose principal residence was on a vessel could be a Scottish taxpayer if the vessel upon which he or she lived happened to be registered in Scotland, but could find himself or herself not liable if the vessel was, for example, English or Panamanian-registered. That would surely be illogical. In the light of that explanation, I hope that the noble Earl will not move his amendment.
I turn to Amendment No. 281E which would remove from the definition of a place of residence the clarification that that includes a boat, a ship or other means of transport. The amendment would not necessarily remove ships and so forth from the definition. It would just serve to make the position less

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clear. There is no reason why houseboats and yachts sailed or moored in Scottish inland waters or territorial sea adjacent to Scotland should not be regarded as someone's principal home for tax purposes if such is the case in reality. I should make the point that someone living on, for example, a boat or ship would be liable only if the various criteria set out elsewhere in Clause 71, which I have already enumerated and will not repeat, are met.
Any time that the person was outside Scotland (as defined in Clause 112) would not count towards the various tests in the clause. Various Members of the Committee have raised various imaginative cases. My old acquaintance rather than friend, I have to say, in this place, the noble Lord, Lord Mackay of Ardbrecknish, mentioned the Scottish fisheries protection crew. In practice, such people are likely to have their principal home in Scotland, and will qualify as a Scottish taxpayer on that basis, regardless of the number of days spent in Scotland's inland waters. If any member of the crew lives outside Scotland, days spent in Scotland, including on inland waters, would be a factor in determining liability.
Lord Mackay of Ardbrecknish: Before the noble Baroness leaves ships, I am entirely with her about houseboats and the like, but on her answer to the last point about the fishery protection vessel I understand that if someone lives in Scotland, that is fine, but if someone lives in England and spends enough time in coastal waters—my understanding was that the fisheries protection service did not spend any time in inland waters, but in the sea in coastal waters—to break through one of the definitions, despite the residence in England, such a person would be considered to be a Scottish taxpayer.
Baroness Ramsay of Cartvale: I think that the answer is yes. If such a person qualified under the clause providing for days spent in Scotland, then he or she does, because in Scottish inland waters that is what applies.
Lord Mackay of Ardbrecknish: I know that I may be splitting hairs and that the noble Baroness may just be making a mistake in her reading, but I cannot allow her to keep on the record "inland waters". That is utterly wrong. It is not inland waters that bother me. It is not the fisheries protection vessel sailing up Loch Ness or Loch Lomond, it is the fisheries protection vessel sailing in Scottish waters; that is, the Minch, outside the Minch, and so on. I think that the noble Baroness has made a slip of the tongue, because she does not have much of a nautical background, despite the fact that she lives overlooking the sea.
Baroness Ramsay of Cartvale: Yes, but it is the Firth of Clyde. It is coastal waters. I agree with that. I thought that I said "coastal waters" the second time that I spoke about the point. I do not want to get into the question of sleepers crossing the Border. The noble Lord is technically right. Where one is at midnight determines where one spends the day—in Scotland or
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elsewhere. Limits and divisions have to be drawn somewhere. I should like to set out the general principle rather than go into every example that has been given, although I cannot resist dealing with the Stranraer ferry mentioned by the noble Lord, Lord Dunleath. Workers on that ferry could, through months spent on the boat in Stranraer, qualify as Scottish taxpayers. To do that they would need, first, to qualify as UK residents for tax purposes and then have a principal residence in Scotland or qualify through the days-spent-in-Scotland rule.
If all those other criteria were met, there is every chance that such people would benefit from the Scottish tax power, and it is wholly appropriate that they should count as Scottish taxpayers. As a general principle, behind the liability rules, UK residents who are likely to derive benefit from the operation of the Scottish tax power, whether it is varied up or down—no one seems to mention that it might be down—through having a close connection with Scotland should be liable.
Clearly some people have closer connections with Scotland than others, but as I have said, limits have to be drawn somewhere. The lines drawn in Clause 71 are built around the general principle which I have just described. While there is scope for some dispute around the margins, there will always be a reasonable argument for the inclusion of those marginal cases within liability as well as for their exclusion.
It should be stressed that the difficult cases are almost by definition going to be at the margins, with the greater majority of taxpayers unaffected. About how many people are we talking here? I suspect that with most of these extreme examples it is very few indeed.
I am sure that everyone remembers the adage:
"Hard cases make bad law".
Some people have a stronger case than others for counting as Scottish taxpayers. As I have said, divisions have to be drawn somewhere. Nothing that I have heard from anywhere around the Chamber tonight persuades me that we have drawn the lines in the wrong place, or that there are other options which are preferential in terms of equity or practicality. So I ask the noble Lord to withdraw the amendment.
Baroness Carnegy of Lour: Before the noble Baroness sits down, the noble Lord, Lord Mackie of Benshie, said—it is probably correct—that the Inland Revenue deals with these matters every day and so there is nothing to worry about. Will the noble Baroness reply to him now, or will she leave the reply for a later amendment, because it seems to me to be an important point? The Inland Revenue has ways of dealing with lorry drivers and so forth. Will she reply to that?
Baroness Ramsay of Cartvale: I was not conscious that the noble Lord, Lord Mackie of Benshie, had asked me a question.
Lord Mackie of Benshie: I did not, I was just telling the noble Baroness.
Lord Desai: Perhaps I may make a point which I believe is important to make, because these things go

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down in Hansard and have legal force. When arguing about the virtue of paying the higher rate of tax in Scotland, my noble friend said that such people have to do so because they derive benefit from public services in Scotland. That is all right as a general principle, but it is not true for individuals. I do not escape taxation if I demonstrate that I derive no benefit from public services in Scotland. One pays tax because one is a resident and one is subject to tax whether one benefits or not. That point has to be made clear. Taxation is not a give-and-take thing. One is presumed to derive benefit whether or not one derives benefit.
Lord Sanderson of Bowden: Before the Minister gives up on this subject, I am concerned about one thing. The Inland Revenue has good rules at the moment for residents as regards the UK. I do not know why we are going into so much detail about Scotland per se, as opposed to the Inland Revenue just adopting what are its existing rules about residents.
Baroness Ramsay of Cartvale: We are laying down what we think is right for the new situation in Scotland in regard to the tax powers. I make no apology for that. I do not understand why people are puzzled. We have laid down some practices that are already in use by the Inland Revenue, and also proposing new matters. We are debating the Scotland Bill and how tax variable powers will be implemented.
5.45 p.m.
Lord Sanderson of Bowden: I agree that we are looking for something that is simple, which will not cause enormous problems in implementation. However, there are perfectly good rules already laid down by the Inland Revenue in check in regard to residence and raising taxes. I wonder whether we are making this a very complicated issue in what is already a very complicated Bill.
Baroness Carnegy of Lour: The noble Baroness should take the matter seriously and answer this very important point. There are in existence rules for residence which work: why are they not being used in this case?
Baroness Ramsay of Cartvale: The noble Lord, Lord Mackie of Benshie, said that all the problems that were being raised as though they were unique between Scotland and England are being resolved all the time in Britain and in Europe, and there is no reason why we cannot resolve the issue of tax variable powers to our satisfaction. That is what we are doing in the Bill. Neither of the amendments that we are debating now do anything to help the situation; they merely confuse the matter. We are only debating the two amendments before us.
Lord Mackay of Ardbrecknish: The amendments expose the House to the folly of the Committee and the folly of the Government's decision to redefine Scottish taxpayers in a way that is different from UK taxpayers
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in laws that are already defined and operating. There is plenty of case law and many of these issues have already been resolved. The Government have decided to play a new game.
In the last half hour we have succeeded in showing that the Government have no justification for playing a new game. In trying to be helpful, the noble Lord, Lord Mackie of Benshie, set out how the matter had been dealt with already. But the point is that the Government are not using current procedures. They are trying to change the rules in certain circumstances. That is the folly of their position. We have shown, as in the previous debate, why the Government should back off from these complicated clauses and just use the current procedures.
We have established that a certain amount of confusion exists. A person who is resident in Northern Ireland, working on ferries which stay overnight in Scotland, will become a Scottish taxpayer. If that is the case, that is plain daft. I suggest that a little more thought ought to be given to the matter. We will return to the wider point, but in the last 32 minutes we have exposed the Government's clauses to be as confused as many of us have thought for some considerable time. I beg leave to withdraw the amendment.
Amendment by leave withdrawn.
[Amendment No. 282 not moved.]
Lord Lyell Lord Lyell moved Amendment No. 283:
Leave out Clause 71 and insert the following new clause—

SCOTTISH TAXPAYER: DEFINITION
(" .—(1) For the purposes of this Part, a person is a Scottish taxpayer in relation to any year of assessment if he is treated for income tax purposes as resident in the United Kingdom for that year and is ordinarily resident in Scotland.
(2) In this section, "resident" and "ordinarily resident" have the same meanings as in the Income Tax Acts.").
The noble Lord said: It is 20 years since I moved a major amendment in my name, so I hope noble Lords will assist me to keep on the straight and narrow.
We have already heard many of the arguments that I will raise in my amendment, which is grouped with Amendments Nos. 284 and 285, covering the same subject in Clause 71 "Scottish Taxpayers".
I was grateful to hear the erudite and excellent remarks made by the noble Baroness, Lady Ramsay, at Second Reading, and I look forward to hearing her again. I am delighted to see the noble and learned Lord the Lord Advocate in his place this evening because I should like to refer to his kind remarks as he wound up at Second Reading on 18th June. At column 1786 the noble and learned Lord referred to persons who are liable to pay the Scottish variable tax. The noble and learned Lord said:
"in practice, nearly two-thirds of tax payers will pay only £145 on average, assuming a full 3p increase. The average liability will be £230. The impact of tax on individuals will therefore not be excessive in any circumstances".—[Official Report, 18/6/98; col. 1786.]
The noble and learned Lord was right, and I appreciate the tone of his remarks. The noble Lords, Lord Mackie and Lord Steel, and others in the county of Angus, will

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know that in rural areas £4 a week might make a small difference to many people like shepherds. All these matters were discussed at length and they were also discussed in the Scottish press and media before the referendum was held.
Being only an accountant, I feel a little like a tightrope walker when attempting to interpret Clause No. 71. That clause deals with Scottish taxpayers. It is logical to start with subsection (1) paragraphs (a) and (b) which define a Scottish taxpayer. Subsection (2) deals with a person who is treated for income tax purposes as resident in the United Kingdom. I shall not go into the Income Tax Act. Paragraph (a) states that he is an individual to whom subsection (3) applies. This is like filling in a passport form, but it is fairly simple. Subsection (3) states that it applies to an individual for a year of assessment if he spends at least a part of that year in Scotland, or for at least a part of the time that he spends in Scotland in that year his principal UK home is located in Scotland. Paragraph (c) concerns the aggregate with this complicated formula. Subsection (4) defines when one is and is not a Scottish taxpayer. It asks the dreaded question of every single United Kingdom taxpayer, not just Scottish taxpayers: "Where were you at midnight?" I shall be corrected if I am wrong, but it is the responsibility of every United Kingdom taxpayer to know, if he has any connection at all with Scotland, where he is at midnight on any one day. I shall not go into whether that includes being on a houseboat. I was intending to tease the noble Baroness, when talking about Scottish protection, by mentioning nuclear submarines, but I shall not do that tonight.
Subsection (4) is very clear and relates to an individual who is in the geographical area of Scotland at midnight and spends the day up to midnight and the day following there.
Subsection (5) deals with residence. I have referred to Clause 71(2) which states that,
"an individual … has his closest connection with Scotland during that year if, but only if, one or more of the following paragraphs applies in his case".
Clause 71(2)(b) provides the test as regards the number of days an individual spends in Scotland. That is the crux of my amendment, which is grouped with Amendments Nos. 284 and 285. This amendment is proposed by the chartered accountants of Scotland. I believe that Amendment No. 284 is proposed by the CBI and Amendment No. 285 by the legal profession.
Clause 71(2)(b) is the linchpin of my amendment. There is an anomaly. The noble Lord, Lord Steel, referred to cross-border workers in the United States. That is one scene with a possible difference. In the United States it would be classified as a federal tax. There would be many state taxes. If the noble Lord wishes, we can debate the issue another day as regards the German system. He can come to our German lessons and discuss it. Clause 71(2)(b), as to whether or not a person is a Scottish taxpayer, provides that he does not have to be resident, or to have a home, but only to be in Scotland at midnight. Those provisions apply to any United Kingdom taxpayer.
This might give some comfort to my noble friend Lord Mackay. I have to assure him that chartered accountants who are considering the proposals in this part of the Bill, and are having to give advice to firms in the United Kingdom, are not entirely of the opinion of my noble neighbour. As other Members of the Committee will explain when they deal with their amendments, the concept in Clause 71 is totally at variance. It introduces new concepts as regards the rules of residence, a point referred to by my noble friend Lord Sanderson.
Perhaps I may refer the Committee to one example. The noble Baroness said that the measure would not affect many people. Some noble Lords may drive either in Scotland or on major trunk routes to Scotland from time to time. The A.1, the A.74 or—one perhaps familiar to the noble Lord, Lord Steel—the A.68 are trunk roads which cross the Border, and are used by large lorries. I have often seen car transporters. The headquarters of a firm which the noble Lord, Lord Mackie, will know well was 200 yards from my gates at Kinnordy in Kirriemuir. The firm moved its headquarters to Dundee. It carries the saltire on many of its trucks. The firm employs 1,000 people around the United Kingdom. Of those 1,000, 360–36 per cent. of the employees—drive those trucks. They travel the length and breadth of Great Britain. They do not go abroad and I shall therefore not go into the European aspect to which my noble friend referred.
Ten days ago the company told me that of those 360 drivers it could identify 26 drivers who would be classified straight away as Scottish taxpayers. In other words, the revenue sends communications to them in Scotland. Approximately 330 of those drivers are non-Scots and residents of the United Kingdom. They will drive those trucks around the United Kingdom and might well be in Scotland. The noble Baroness referred to the measure affecting a handful of individuals. I was advised that 70 of those drivers could be caught by the provisions. The company had no clue about Clause 71, let alone subsection (2) or (2)(b).
I hope that I am right that Clause 71(2)(b) will catch an individual whether he has a home in or is a resident of the UK, or whatever. I was advised that up to 70 of those drivers would have a substantial presence in Scotland and would be likely to be caught by Clause 71(2)(b) as Scottish taxpayers, despite the fact that the only connection they have with Scotland is that they happened to be in Scotland for perhaps two or three nights in a fortnight. If they were to spend two nights in Scotland, let us say Monday and Thursday, that is four days in Scotland as laid down in subsection (4). If they spend 60 to 80 nights in Scotland during a year, and one multiplies the figure by two, that is 160 days in the year.
As I understand the rules laid down by the Inland Revenue, one deducts from one's "residence" in the United Kingdom the time one spends outside the United Kingdom. So if those drivers take a holiday abroad, or in Scotland, they will be spending more than 50 per cent. of the year in Scotland under the provisions of Clause 71(2)(b) and subsection (4).
I wonder whether the noble Baroness who spoke with great eloquence has taken that factor on board. I refer to only one firm which employs 1,000 people. It has given me full details. It has tachographs; and the drivers' hours have to be noted. I confirmed today with the director of human resources that the English or Welsh drivers do not sleep in a bed, but in their cab. The noble Baroness may have fun stating that that is "residence" for the purpose of the Bill.
The provisions of Clause 71(2)(b) have been eloquently laid before us and justified by the noble Baroness. The only connection those individuals have with Scotland is that they spend up to 80 nights in Scotland. I may be known as "squirrel Lyell"; I never throw anything away. When coming to the debate today, I found this document which states:
"The decision whether or not to use the power to raise additional revenue"
by the method that we are discussing—
"should be the [people of Scotland's] decision.
"This prospect of democratic control contrasts markedly with our experience the last seventeen years during which taxes rejected by Scotland have been imposed on us against our will. The classic example is of course the detested Poll Tax, devised by Michael Forsyth, and others, and introduced in Scotland a full year ahead of England and Wales. If there ever was a 'tartan tax' it was the Poll Tax—the Forsyth Tax".
Blue is the colour of my football team, but this document is The Blueprint for Scotland. I believe that those words apply to Clause 71(2)(b) which will affect lorry drivers from the United Kingdom.
At Second Reading, the noble Lord gave a helpful reply. The figures he gave are curiously adjacent to the figures foreseen by tax advisers, chartered accountants and the Law Society as the total sum of Scottish taxpayers. They have given me the authority to say that Clause 71(2)(b) will open up a can of worms. I have referred only to 360 drivers in one firm driving car transporters. What about those vehicles we see being driven up and down the trunk roads delivering food to us?
I have said that it is 20 years since I moved a major amendment. However, have the noble Baroness, the noble and learned Lord the Lord Advocate, and the noble Lord, Lord Sewel, taken Clause 71(2)(b) into account when justifying the provisions with such eloquence? I beg to move.
Baroness Strange: I support my noble friend in the amendment, which is tabled also in my name. I assure the noble Baroness that I shall not speak about rafts, or anything like that, so she should be happy. I say only that the amendment puts forward an easier, more simple clause, as suggested earlier by the noble Lord, Lord Mackie of Benshie.
All Members of the Committee want the new parliament in Scotland to work. That is why we are spending so much time on the Bill. We are fussing with all these amendments because we want to introduce something which will work. We do not want to build in legal complications and have unhappy lorry drivers travelling backwards and forwards in the night.
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Clause 71 is enormously complicated and full of traps and pitfalls. I hope that the noble Baroness will consider what has been stated by the chartered accountants, the Law Society and the CBI. We are only their mouthpieces—inadequately, in my case—but we are trying to make the Bill work. I support the amendment.
Lord Selkirk of Douglas: I speak briefly to Amendment No. 285. It has the support not only of the Law Society of Scotland but of the Institute of Chartered Accountants of Scotland and the Scottish CBI. Therefore, there is a strong basis of support for the amendment from a wide range of bodies which have an undoubted expertise in dealing with such matters.
The Committee has already heard the case for subsections (1) and (2). I support the arguments put forward by my noble friends, in particular my noble friend Lord Lyell who so ably argued the case of the lorry driver who will be caught by the midnight provisions if he travels to Scotland every week. As the Bill focuses on midnight, someone living in Carlisle who crosses the Border at 8 a.m. and returns at 6 p.m. does not fall within its ambit, although he or she may have a more substantial connection with Scotland than a lorry driver.
I contend that the provisions put forward in Amendment No. 285 are a more certain test than that in the Bill. It relies on residency in the UK and closest connection with Scotland. It is also a more satisfactory test in the sense that it could be more readily established. The present provisions try to cope with the position of the Scot who maintains a home and family in Scotland but commutes to England on a Monday morning and returns to Scotland on Friday evening. Unless one counts the weekend as four days in Scotland, that person would escape the taxation provisions. The question is: which approach might do more economic harm; a narrow tax base which allows some to escape undeservedly or a wider area which will catch others undeservedly?
The better and more professional approach would be to exempt those who travel to Scotland in the course of work, whether employed or self-employed, unless they are in Scotland for 183 days. For this purpose, a day would count only if one were in Scotland at the start and the end of it. I commend the amendment on the basis of certainty and clarity. The practitioners most directly involved with the subject give it strong support.
Lord Rowallan: I am deeply concerned about Clause 71. It is illogical to introduce a new definition of what is resident in Scotland. The noble Lord, Lord Mackie of Benshie, put the matter succinctly in saying that perfectly good laws already exist which define people as being abroad or at home. Why are we seeking unnecessarily to have a set of totally new rules?
It is interesting that the chartered accountants, the CBI and the Law Society believe that the clause is rather stupid. I can see no reason for changing the 183-day rule. I should like to hear from the Minister one single solitary reason why he believes it is a good idea.
Lord Saltoun of Abernethy: Everything I have read about Part IV, and Clause 71 in particular, and

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everything I have heard about it so far makes me realise that it is a total pig's breakfast which will lead to nothing but litigation and confusion. I can only implore the Government to take this part away and to think about it and try to redraft it between now and Report.
6.15 p.m.
Lord Stewartby: I hope that the Minister will take on board the comments that have been made in Committee tonight and those which have come from quarters outside. The heart of the problem lies in subsection (4) and the asymmetrical nature of what residence in England and Scotland means. As my noble friend Lord Lyell said in opening, the provision could affect a number of those who are temporarily in Scotland. As my noble kinsman Lord Selkirk point out, the weekend definition must have double counting, otherwise it does not offset the part of the week which a person might spend in England.
The simple mathematics are that if one spends 92 nights in Scotland in a year one is deemed to be resident for this purpose in Scotland and not elsewhere in the United Kingdom. That is asymmetrical. It will catch many people who may spend nine months in England and Wales and only three months in Scotland. I do not believe that such an artificial distinction which tilts the ordinary equitable definition of residence will be enforceable. What is more, I doubt whether it will be sustainable in law. I suggest that the Government think seriously about it.
Lord Steel of Aikwood: As my noble friend Lord Mackie hinted earlier, we on these Benches are sympathetic to attempts to redraft the clause before us. In my view, each of the three amendments is more succinct and clearer than the provision in the Bill. I do not know whether it is a pig's breakfast or a dog's dinner, but it is unnecessarily complex. We in this House, as a revising Chamber, ought to be aiming for simplicity in legislation, provided that simplicity brings clarity. We will listen to what the Minister has to say, but we are sympathetic to the amendments.
Lord Milverton: As an Englishman, I have been interested to hear what has been said. I agree that it is a strange way to deal with the residency issue. It would be good if the Government and the Minister could take on board what has been said by Scottish Peers and try to respond in a helpful way.
Lord Simon of Glaisdale: It requires an apology on my part for intervening in this debate. I do so because I have been concerned in more than one capacity with the revenue law. Our revenue law is extremely complicated, far more so than the codes of the United States and the Commonwealth. A high-powered committee, with the blessing of the Government, is considering a way of restating the law in more simple terms. It is purely to restate the present law in a more intelligible way. But there is a vice in our revenue law in that we try to cover particular cases too precisely. We do so much more than most other comparable codes.
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Clause 71 does not add anything to the simplicity of the preceding existing law. The proposed restatement in these three amendments are an improvement and should be acceptable. If I had to choose between them I would choose Amendment No. 283 because it is the most simple and covers everything that the Government needs.
I hope that whoever replies to this debate will desirably accept that amendment. At the very least they should undertake to consider this matter further in view of the arguments which have been put forward.
Lord Mackay of Ardbrecknish: Amendment No. 284 is in my name and that of my noble friend Lord Rowallen. I am delighted and relieved to find myself in total agreement with the noble and learned Lord, Lord Simon of Glaisdale. I am delighted because occasionally in a previous existence I found myself having to argue with him. I can tell the Ministers that it was not an easy experience and that usually the noble and learned Lord, Lord Simon, had more than a point in the arguments he brought forward. Government Ministers should listen to him.
I will not rehearse the argument to any great extent. We have had the argument in this debate and in the debates leading up to it. I know that the Government were beginning to lose patience with these arguments, but I put them forward deliberately in order to illustrate to the Committee the complexities of this clause.
The noble Lord, Lord Mackie, came to my support when he said that there is a perfectly good system already. Why do we not just use it? "What are you bothered about?" he said to me. I paraphrase the noble Lord, but what I am bothered about is that we will not be using the system.
Lord Mackie of Benshie: I did say that it was a perfectly good system. What I inferred was that the present clause could not damage it much.
Lord Mackay of Ardbrecknish: The noble Lord, having heard much of the debate since, might agree that perhaps it is not a good system in Clause 71 and 72. Certainly that is what his noble friend Lord Steel of Aikwood suggested. I am happy to say that I find myself in agreement with the noble Lord, Lord Steel of Aikwood, on this one.
These three amendments are all similar. The noble and learned Lord, Lord Simon of Glaisdale, picks the one that is shortest. I am not surprised at him at doing that because he is a great advocate of not only clear but short legislation.
The history of the amendments is that Amendment No. 283 emerged from the accountants in Scotland, Amendment No. 284 came from the CBI and Amendment No. 285 came from the CBI, and then from a combination of all three organisations. All three organisations now think that the clause in the name of my noble friend Lord Selkirk of Douglas is the one that encompasses all their concerns.
When we debated Amendment No. 279C, the Minister made a great virtue of the fact that the particular part that we were debating had been

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inserted in the Bill after discussion with the Scottish financial community who wanted this kind of provision. Here we have a provision in the Bill which is wanted by the CBI, by the accountants and by the Law Society. The Government should take their own words to heart and think carefully about this.
This simply takes on board the definitions already well entrenched in UK tax legislation, well entrenched in case law and well understood by the people who have to work the system about who are residents and where they are resident. If the Government could take this on board, take these amendments or one of them—perhaps Amendment No. 285, or even Amendment No. 283, as the noble and learned Lord, Lord Simon of Glaisdale, suggested—we would be delighted.
The definitions in this Bill are a real nightmare. Without doubt this is the most complicated part of the Bill. The Government would be well advised to think again about proceeding in the way that they intend. I cannot speak for my noble friends but what would allow me to withdraw my amendment is if the Government promise to have discussions with these three leading organisations in the field in Scotland. They could then come back to us on Report with their proposals on the way forward and remove these complex clauses which do nothing to help the legislation. If they could do that and go for the simpler and well-honed definitions of residence which are contained in current legislation we would all be mightily relieved. The system would then work far better for the Scottish parliament. A lot of unnecessary argument would be prevented and the position would be much better. The Government would have been shown to have listened.
I regret that one of the features of this Committee stage—and this is the ninth day—is that the Government do not listen. I have long since decided that they are not going to listen to me, but can they not listen to the CBI, the Law Society of Scotland and the Institute of Chartered Accountants? If they cannot listen to me, will they listen to them? I commend these amendments to the Government. Perhaps they can give some indication that they will accept one of the amendments, or at least discuss with these outside bodies and come back on Report. I cannot speak for my noble friends but I give the Government notice that if they do not the House will be asked to test one of these amendments in a very serious way in the Division Lobbies on Report.
Lord Sewel: Let us look at Amendments Nos. 283, 284 and 285. They all have in common the fact that they seek to replace the definition in Clause 71 of a Scottish tax payer. In a way they all build one upon the other, starting with the amendment in the name of the noble Lord, Lord Lyell. It is the common building block of all the amendments because it seeks to restrict liability to the Scottish variable tax to people who are ordinarily resident in Scotland.
Amendment No. 284 widens the definition slightly by building back in the existing provision in Clause 71 Scottish MPs, MEPs and MSPs, who would be Scottish tax payers. Amendment No. 285 widens the definition
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further by including people in Scotland for a temporary purpose who spend more than six months there in any year.
One of the difficulties is that the amendments are not correct in ascribing existing statutory definitions to the terms "resident" and "ordinarily resident". These terms are not defined in the Income Tax Acts.
Lord Simon of Glaisdale: Is the noble Lord sure about that? My recollection—admittedly somewhat rusty—is that those phrases have been clearly interpreted by the courts that "resident" and "ordinarily resident" mean the same thing. They are both used in the Income Tax Acts and can be well accepted.
Lord Sewel: I thought I was on the thinnest of all possible ice for some time. The noble and learned Lord said in his intervention what I was going to say in my subsequent sentence. They are not defined in the Acts but have been defined through the courts. There is no point of disagreement between us
It is worth going back to say that we have tried to define a Scottish tax payer, in the following ways, in Clause 71. An individual is deemed to be a Scottish tax payer for a given year under the following conditions. First, an individual must be a UK resident for tax purposes in the year in question. So we are talking only about UK residence. That is an absolute requirement. If that test is met, there are three ways to qualify. One way of qualifying is that the principal home is in Scotland. Another way of qualifying is that more than half the number of days spent in the UK are spent in Scotland. The third is that one is a Member of Parliament—Scottish, UK or European—for a Scottish constituency. A person who meets one or more of those tests will be regarded as a Scottish taxpayer.
Noble Lords have argued forcefully that the proposed alternative test for defining Scottish taxpayers is more straightforward and should be easy to apply in practice because it relies on familiar concepts. We have considered that approach. It was the obvious one to consider—we have not gone down this road with any sense of perversity. We looked at that as the possible solution to the difficulty of defining a Scottish taxpayer, and of course we had discussions with the Inland Revenue. I take the point made by the noble Lord, Lord Mackie of Benshie, that the Inland Revenue has expertise in dealing with these matters. It is because of those discussions that we have come up with the clauses in the Bill.
The difficulty that we faced was that the case law that had been developed in terms of resident and ordinarily resident could not be simply translated to a rather different situation of movement within the United Kingdom where that case law had been developed very much in the context of international movement, not least because the level of cross-border traffic between Scotland and the rest of the United Kingdom is much greater than it is in an international context. Furthermore, it is far more common to move home within the United Kingdom. We were drawn to the conclusion that we must have rules which work for persons who spend a lot of time in both Scotland and

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the rest of the United Kingdom and persons who move home from, say, Scotland to England. That is what we have attempted to do in laying down these tests.
Although residence is an appropriate qualification for tax liability, it is not in itself a sufficient one because it is proper, particularly in this context, to have something which captures those who spend a great deal of time in Scotland without technically residing there. Indeed, Amendment No. 285 attempts to deal with that by introducing the concept of temporary purpose. However, I think that the introduction of that concept would be enormously difficult to define.
I think that we are broadly correct in the approach we are taking. However, I have listened to what noble Lords have said and I take on board the concern that has been expressed about the 92 nights situation whereby someone can become a Scottish tax payer on the basis of spending 92 nights in Scotland. That would arise only if none of those 92 nights was consecutive. If I may almost argue against myself, if we arrived at a system of regional government in England and those regional authorities had variable tax rates, it would be at least theoretically possible to pay three different variable tax rates. That would take some degree of argument and justification.
I have listened to what has been said. I think that our broad approach remains correct. I do not think it is possible just to apply the working concepts of resident and ordinarily resident. I wish to go away and look at the definition that produces the 92 day cut-off. Perhaps we could consider wording that part of Clause 71(4)(a) differently so that we remove what I think are the words that cause the problem—"the beginning or end of the day"—and come up with a different formulation. I will then come back to your Lordships' House at Report stage.
6.30 p.m.
Lord Mackay of Ardbrecknish: Before I decide what to do with my amendment—perhaps my noble friends will be of the same mind—I wonder whether I could invite the Minister to indicate that, if they wished to do so, he would be happy to have a meeting with the CBI, the Institute of Chartered Accountants and the Law Society of Scotland in order to discuss these matters. They have attempted to discuss these matters with the Chancellor of the Exchequer. I have before me a letter which the CBI received back from the Chancellor. It is dated 1st October. The CBI had written on 28th July. It took the Treasury two months to reply. Frankly, it could have replied the next day because it did not argue. The Chancellor simply said that he was not persuaded that the suggestions from the CBI would achieve a better result.
The CBI was not in the least persuaded by the Chancellor because he did not argue his case. He just made the bland assessment that the Government had thought about it, the Government are right, and that is it. I recognise such a letter. I probably signed a few of them in my time. It is not a very adequate answer. I did not think so even when I was signing such responses. I wonder whether the Minister could give an assurance
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that if these organisations, either together or individually, would like to discuss these matters with the Government before Report stage, the Government would be willing to do so.
Lord Sewel: There have been discussions with the three organisations on this very point. But I am more than happy, and I am sure my colleagues will be more than happy, to meet them again and try to resolve this issue.
Lord Lyell: I was a little mystified, because I thought we were getting close together, by the Minister saying, "We want to catch people". That is at variance with what was said by the noble and learned Lord the Lord Advocate at Second Reading. The United Kingdom Inland Revenue has a good idea of the number of people to whom Clause 71 should apply. Indeed, the figures quoted by the noble and learned Lord were very close to the figures quoted to me by the chartered accountants. It was in that spirit that I was very encouraged. But I am very encouraged by what the Minister has said. I have copies of correspondence from the president of the Institute of Chartered Accountants of Scotland expressing gratitude to Mr. McLeish, the Minister of State, for his helpful attitude in trying to resolve this difficulty.
I return to Clause 71(2)(b). The Minister made an eloquent comment about residence and was backed by the noble and learned Lord, Lord Simon of Glaisdale. The existing concept of residence seems to tally with what the noble and learned Lord said at Second Reading. Clause 71(2)(b) might extend a little wider and might cause unnecessary concern among non-Scottish taxpayers. At no time during the referendum campaign or in your Lordships' House did the Government intend, to quote the Minister's words, to catch them. I do not think they intended to do that. It is with that in mind that I ask leave to withdraw Amendment No. 283.
Amendment, by leave, withdrawn.
[Amendments Nos. 284 and 285 not moved.]
Clause 71 agreed to.
Clause 72 [Changes to income tax structure]:
The Earl of Balfour The Earl of Balfour moved Amendment No. 286:
Page 33, line 13, leave out ("or the Board").
The noble Earl said: At this stage of the proceedings on this Bill, we find reference to "the Board". This amendment is a purely probing amendment, to give me an opportunity to see whether it is possible to find out who or what is "the Board". Although I have searched for it all the way through this Bill, I have found no definition whatever.
But I notice that Amendment No. 286 is grouped also with Amendment No. 293. I sought the best possible advice from our wonderful staff in the Public Bill Office and they suggested that "the Board" could mean the Commissioners of Inland Revenue. I may be right; I may be wrong. However, as the Bill stands, I have not a clue as to who or what "the Board" is. I beg to move.
Baroness Ramsay of Cartvale: Clause 72 sets out the action the Treasury would have to take if it appeared that the tax-varying power was going to be significantly affected by published or forthcoming changes to the UK income tax system. Such changes could be made or published in a variety of ways, and it is necessary for the Bill to recognise this.
Changes to the income tax code may be first published by Treasury or Inland Revenue. They are often, of course, announced by the Chancellor in his Budget. Clause 72 as currently drafted explicitly covers all of these possibilities.
If Amendment No. 286 were accepted, doubts could arise as to the point at which Clause 72 is triggered by satisfying the condition on subsection (1)(b), or there may be doubt as to whether the clause is triggered at all. At the very least it could introduce delay into the process of considering revised tax arrangements for Scotland. There would be no purpose to that delay. There is no question of lack of proper parliamentary scrutiny since any change to the arrangements already provided in Clause 69 of this Bill would need to be the subject of primary legislation by the UK Parliament.
I turn to Amendment No. 293. Section 832(1) of the Income and Corporation Taxes Act 1988 defines "the Board" for the purposes of all enactments relating to income tax as "the Commissioners of Inland Revenue". As Part IV of the Scotland Bill, if enacted, will form part of the Income Tax Acts, there is no need to define the term specifically in the Scotland Bill, in much the same sense that if the term appeared in an income tax provision in a Finance Bill, there would be no need to define the term in that Bill.
In the light of those explanations which I hope satisfy the very understandable points of query raised by the noble Earl, I hope that he will feel able to withdraw the amendment.
The Earl of Balfour: I am most grateful to the noble Baroness for her reply. I believe that each Bill, which of course becomes an Act of Parliament, should stand on its own and not leave the ordinary person reading legislation wondering, just as I had to wonder, what is "the Board". In that respect, I rather wish that the noble Baroness, Lady Ramsay, would think again between now and Report, because I believe that we must never leave the ordinary citizen in doubt. Otherwise, I am grateful to the noble Baroness for what she has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 286ZA:
Page 33, line 14, leave out from ("or") to ("a") in line 15 and insert ("is").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 286ZB and 286ZC. Clause 72 relates to changes in the income tax structure. I now understand more clearly what is behind this part of the Bill than I did at the beginning of today. If I understand an exchange we had earlier—and I am
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repeating it because I was not entirely sure if my question was clear to the Minister when he answered it and at least one other of my noble friends thought the same—when we deal with this 3p or £420 million, the question of finding some other way to raise the money will be triggered only if the changes which mean that 3p does not raise £420 million are because of changes in the tax structure of the United Kingdom. If, because of economic changes—when perhaps the number of basic rate taxpayers has declined because of an economic downturn—the 3p raises only £350 million or £400 million, so be it, the Scottish Parliament is stuck with that. The nods from the Government Front Bench tell me that I have that right. It is only if there are structural changes which result in the 3p not raising £420 million that Clause 72 will be triggered.
I have tabled three amendments which are probing. They are of the "What does it mean?" variety. I understand Clause 72(1)(b) which states
"that proposal is one made and published by the Treasury or the Board, or … appears to the Treasury to be a proposal to which effect is likely to be given by Act of Parliament".
However, I do not understand the expression,
"without having been so made and published",
which is in brackets. If the proposal has not been made or published, how the devil can the Treasury make any decision about what it is? Therefore, why does the subsection include the words,
"without having been so made and published"?
If the proposal has not been made or published, it does not seem to me that there is a problem. Why are those words there?
Amendment No. 286ZB removes the words "it appears to the Treasury". Why are those words there and why is it only the Treasury? What will happen if the Treasury considers that the changes will not affect the Scottish rate or it will not be by a significant amount but only £10 million or £20 million so that it will not do anything about it? Will the Scottish parliament have absolutely no say and no one to appeal to? Will there be no one to adjudicate on any dispute between the Scottish parliament and the Treasury? Perhaps the judiciary will be called into play to resolve any dispute in relation to such matters. Is it just the Treasury which is to make those decisions?
It is dangerous to leave the Bill in that way because I can see that in the future the Treasury may decide, "Given the bother that we shall have to go to to raise another £30 million or £40 million, we do not think that is significant so we shall not try". Anybody who has had dealings with the Treasury knows that when the Treasury digs in its heels, its heels get dug in fairly deeply. It is not right that we should leave the matter just to the Treasury.
Amendment No. 286ZC takes out what seem to me to be unnecessary words. If they are not unnecessary, they certainly put the Treasury in the driving seat to a far greater extent than I believe should be done. We are entering a phase where we will have another parliament and government in the United Kingdom quite separate and distinct from the United Kingdom one. Indeed, during the Recess I heard the Secretary of State for

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Scotland actually using the word "independent". I felt it was a dangerous word to use because it has other meanings; but on certain issues, to all intents and purposes it will be an independent parliament.
It is an important matter of finance. If the parliament decides to use these tax raising powers, we should not be put in a position where the Treasury remains entirely in the driving seat when it comes to disputes surrounding the implementation of any part of Clause 72.
I hope that the noble Baroness who is to reply will be able to reassure me and explain what the words mean that I desire to be removed from the Bill. I hope that she can persuade me that they should remain in the Bill; that they have meaning and substance. If not, I suggest that she agrees with my amendment and we remove the unnecessary words. I beg to move.
Baroness Ramsay of Cartvale: I understand and appreciate the motivation behind these amendments now that they have been explained to me by the noble Lord, Lord Mackay of Ardbrecknish. I understand also some of his doubts and the reason he moved this probing amendment. I hope to be able to explain exactly what is behind the point of his concern.
When any change is proposed in income tax provision, Clause 72 requires that the Treasury judge its likely effect on the Scottish parliament's tax-varying power. Where it believes the effect will be significant under Clause 72 the Treasury must make proposals—I emphasise that word—for a replacement tax power.
I have no difficulty with the proposed Treasury role in such circumstances. It is the Treasury (and no one else) who will know in advance the big picture on any major UK tax changes that could affect the Scottish tax power and as guardian of the UK tax system (of which the Scottish power will be a part) it is appropriate that it should be charged with making proposals for any changes. But its role will be limited to one of proposal. It will ultimately be for the UK Parliament to decide upon those proposals. There is of course nothing to prevent the Scottish parliament arguing the case for change with the Treasury at any time.
But the key purpose of these provisions is to ensure that the Scottish dimension is taken fully into account when major UK tax changes are in prospect and that things are put in motion quickly to ensure that appropriate changes are made.
The noble Lord, Lord Mackay of Ardbrecknish, asked specifically what is meant by the words,
"without having been so made or published".
I am advised that the reason those words were inserted was to deal with a situation, for example, when an Opposition amendment may be proposed to the Finance Bill when it would not have been "so made or published". I understand that has happened in the past.
The other point I make is that, in some circumstances, time could be of the essence; for example, when a revised tax power is to be available for the Scottish parliament in time for a new tax year following UK tax
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changes. In that regard the Treasury role could be vital in arranging things quickly.
I hope those explanations go some way to explain why the provisions are phrased as they are and that I have gone some way to answer the noble Lord's points and queries. If so, I trust that he will withdraw his amendment.
Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness. I am intrigued that the Opposition may make changes to the Finance Bill which may change the basic structure of income tax and might even manage to win. That envisages a slightly different House of Commons to the one that we have. However, I see the point.
I do not believe the noble Baroness fully addressed my concerns. What if the Scottish parliament decides that it is not happy with the Revenue's proposals or lack of proposals and feels, for example, that the Revenue is describing as "not significant" a sum of money which, in its view, is significant? Will it simply be a matter of horse trading between the Government in London and the government in Edinburgh to try to resolve it, or is there some way in which an arbitrator—the courts or whoever—can be brought into play in order to decide the issue?
That is the only remaining point which the noble Baroness did not answer to my satisfaction. If she can do that, I shall withdraw my amendment.
Baroness Ramsay of Cartvale: The only point I can make is that, at the end of the day it will be the UK Parliament's prerogative. I hope that that answer is adequate.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish: As a Unionist, that is a perfectly adequate answer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 286ZB and 286ZC not moved.]
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 286ZD:
Page 33, line 31, after ("to") insert ("the basic rate of").
The noble Lord said: This is a simple amendment with a simple intention. We are still talking about changes that the Treasury may decide to make because of structural changes to the tax system.
The Bill as it stands must be confined to income tax. I appreciate that. I should like it to be confined to the "basic rate" of income tax. After all, those Members of the Committee who have been here all afternoon will have gathered that it is the basic rate about which we are talking when we discuss the plus or minus 3p. My mind may perhaps be oversuspicious, but I wonder why all of a sudden the basic rate has been dropped when it comes to this specific part of the clause. The amendment suggests the insertion of the words "the basic rate of", which would make it consistent with what we have discussed from Clause 69 onwards; that is, the basic rate.
If the Government decline to accept my amendment, it will be clear that in the circumstances we are discussing, of the Treasury having to make proposals, they will be able to make proposals affecting other rates of income tax—either the 20p or higher rates. That is clearly the only conclusion that can be drawn from subsection (3)(a) as it stands. Unless we insert the words "the basic rate of", it is not clear that we will be dealing with the basic rate. The Treasury may decide to make the amount 4p, for example, if there was a shortfall. That would be one way out. Equally, it may decide that the only way to get round it is to impose a Scottish variable rate on one of the other bands of tax. We can argue about that, but we ought to be clear about it.
Subsection (3)(a) clearly indicates to me that, in the circumstances we are discussing when Clause 72 is brought into play, the Treasury might propose to add a Scottish tax to either the 20p rate or the 40p rate. If that is not the Government's intention, I suggest that they accept my amendment. I beg to move.
Baroness Ramsay of Cartvale: I understand that, by this amendment, the noble Lord intends to ensure that any replacement tax power affects broadly the same group of Scottish taxpayers as the existing proposed power. We agree entirely with that principle and have already provided for that by Clause 72(5).
The real point is that we cannot know what changes may be made to the income tax structure in the future. It may be radically rewritten and there may no longer be a basic rate band. In that situation this amendment would create chaos. I understand that that is not what the noble Lord intends; I understand his intentions as he explained them. The reason behind leaving out the reference to the basic tax band in this part of the Bill is because there might well be no basic rate tax band at some point. That is why we have let it go on this part of the Bill. With that explanation I hope that the noble Lord will agree to withdraw his amendment.
7 p.m.
Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness. While the circumstances that we are discussing are pretty hypothetical, I can see her point that at some stage in the future the tax system may be changed in a way that there is no longer something which can be called the basic rate of income tax. Consequently, the way in which Clause 72 is drafted would be appropriate. Therefore, I presume that as long as there is a basic rate of income tax the restriction will apply. It is only if there is no basic rate of income tax that it can be widened to other taxes. I shall require more than a nod of assent from the Government Front Bench. I would like the Minister to intervene.
Baroness Ramsay of Cartvale: I can confirm that. I am even prepared to write to the noble Lord if he so wishes.
Lord Mackay of Ardbrecknish: While I would love a letter from the noble Baroness, it is not necessary.
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I have had her assurance from the Dispatch Box, which carries a good deal more weight as regards the future than a letter. I am content to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 286A:
Page 33, line 36, at end insert (", and
(d) shall be contained in a statutory instrument which shall be subject to approval by resolution of the House of Commons").
The noble Lord said: This amendment refers to any proposal to make tax-varying amendments or tax-varying powers by secondary legislation. It follows on from what we were discussing about certain circumstances which may arise under Clause 72. The Treasury has made suggestions for changes and how they are to be dealt with by Parliament. I am disturbed by a power to amend the tax-varying powers by secondary legislation especially as so much time was spent here and in the other place discussing them. Those tax-varying powers were endorsed last September in a referendum, as I am constantly reminded, by the Scottish people.
I considered striking all this out of the Bill to ensure that any changes to the referendum pledges could be made only by primary legislation, but I decided not to go that far, especially as I believe that I have offered the Government an easy way out of this problem. However, I believe that any proposals to amend the parliament's tax-varying powers should be subjected to the strongest possible parliamentary scrutiny short of primary legislation.
My amendment makes clear that any such proposal will need the affirmative order procedure. I accept that this matter ought to be placed in Clause 102, but by putting it where it is now I believe that we shall have the debate in the correct place. If the Minister tells me that she accepts in principle the point that I am making and will make the amendment later on, I shall be content. The whole of Clause 102 has now been re-written by the Government. I have not yet had time to study it. I shall be even more delighted if the Minister tells me that in the re-write I shall find that my wishes have been agreed by the Government.
I am not very happy with the way in which the Government have brought forward at this Committee stage these amendments to the procedures for secondary legislation. From my understanding of the copy letter that I had from the noble Lord, Lord Alexander of Weedon, these matters were to be dealt with at Report stage, which would give us some time to consider them. This very considerable re-write now has to be considered by us—and amended if we want to—today while we are still in Committee on an earlier part of the Bill. In my view it was clear in the letter to my noble friend Lord Alexander of Weedon that these matters were for Report stage. I am puzzled as to why they suddenly appear on the Marshalled List for Committee stage.
Amendment No. 286BA is very simple. The sum of £420 million which we have discussed a few times is to be inflated by the retail price index. We are talking about Government expenditure. It would be more accurate if the figure was changed by the applied deflator for general government final consumption. I recommend that to the Government as a more accurate way of dealing with the £420 million over the course of the years to come.
Amendment No. 287C removes the possibility that the Treasury may make an order retrospectively if it considers it appropriate. Why do the Government believe that the Treasury may need this discretion and retrospective power? Could it be used by the Treasury to negate a resolution of the Scottish parliament. If the parliament does something, can the Treasury use that power to negate it if it does not like it? If my fears are correct, that could cause a clash between Westminster and Edinburgh, which none of us want to see.
Referring to Amendment No. 287D, I am really puzzled. Surely the Government mean to refer to changing any enactments already on the statute book drafted and passed before by the Scottish parliament was conceived. Any enactment from now on will surely take into consideration the existence of the Scottish parliament and should not need any subsequent changes to take account of the Scottish parliament. I wonder why these words are in the Bill in this rather convoluted way. If the noble Baroness can explain, I shall be very interested to hear it. I beg to move.
Lord Mackie of Benshie: Perhaps the noble Lord, Lord Mackay of Ardbrecknish, can explain why he needs Amendment No. 286A. Clause 72(3) begins,
"Any proposals for amending the Parliament's tax-varying powers that arc laid before the House of Commons by the Treasury".
Surely those provisions have to be in a statutory instrument laid before the House.
Lord Mackay of Ardbrecknish: I believe I am right in saying that many things are laid before the House of Commons which are not statutory instruments. There is a difference. I invite the noble Lord, Lord Mackie of Benshie, to look at the Order Paper. He will see that there are things laid before this House which are not statutory instruments. There are usually lines and lines of them on the Order Paper. That is why I have put the matter in the way that I have.
Baroness Carnegy of Lour: I hope that the noble Baroness is going to look seriously at Amendment No. 286A, if my noble friend is right and the noble Lord, Lord Mackie of Benshie is not correct. When people voted in the referendum for the tax-raising powers they certainly had no idea that the arrangements for those powers, and the level of the amount of tax to be raised, might be decided in the House of Commons. I do not think that people realised that. It could be a source of enormous friction. It may look alright to the Government now. They visualise dominating the Scottish parliament and also Westminster. No doubt that cannot go forever: they may not even last very long. It
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is therefore important that this matter should be formalised and that there should be proper discussions and a vote. That is the way it should be done.
Lord Mackay of Ardbrecknish: The noble Baroness may be very worried. I believe that inadvertently I have confused Amendments Nos. 286D and 287D. I apologise for that. Given the state of the Marshalled List I think I can plead for forgiveness. We shall come to Amendment No. 287D later. I wonder why I put it in this group. I should have spoken to Amendment No. 286D and I shall leave Amendment No. 287D for a later time.
Amendment No. 286D is about Clause 72(5), which is an astonishing subsection. It states,
"The second condition so mentioned is that the proposals would not enable the Parliament's tax-varying powers to be exercised for any year of assessment so as to have an effect on the levels of the after-tax income of Scottish taxpayers generally that would be significantly different from the effect their exercise could have had in any previous year of assessment".
When I read it, my reaction was, "Sorry, say that again." If that means that the after-tax income will be changed very much, you cannot do that, so I ask myself why they have been given the power to do it at all. If taxes can be increased by up to 3p in the pound, that will affect the after-tax income. That is inevitable.
What does that amazing subsection in Clause 72 mean? If it means that the other taxes (which the Treasury has suggested might take the place of that 3p in the pound) may impinge heavily on Scottish taxpayers, that cannot be allowed. I do not understand how they can impinge more heavily on Scottish taxpayers than would a tax of 3p in the pound if both are to raise £420 million. Perhaps the noble Baroness could explain what that means. I apologise to her for probably giving her a slight flutter of the heart because she might have wondered which amendments I was talking about.
7.15 p.m.
Baroness Ramsay of Cartvale: I shall endeavour to explain. Yes, that did cause me some consternation and my noble and learned friend the Lord Advocate will deal later with some of the points that were raised, to my horror, a few minutes ago.
This whole subject is, of course, a very complex business. I shall try to put our points as clearly as I can and allay some of the fears or apprehensions that might have been aroused by a lack of understanding about what lies behind some of the provisions.
Amendments Nos. 286A, 286C, 286D and 286BA concern the proposals for an alternative tax-varying power which the Treasury, as we have already discussed, is required to make in the event that changes to the UK income tax system would have a significant effect on the tax-varying power. That sets the scene.
Amendment No. 286A would require that the proposals be presented in the form of a statutory instrument, which would be subject to an affirmative resolution. I assume that this amendment is prompted by a very proper desire to ensure proper parliamentary

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scrutiny of any changes. Indeed, the noble Lord, Lord Mackay, confirmed that. But Clause 72 sets out only the parameters which the Treasury might follow in drawing up proposals. Any change in the tax-varying power would require a change in primary legislation, most likely through provisions made in the annual Finance Bill. The use of a statutory instrument would leave changes to the tax-varying power subject to less, not more, parliamentary scrutiny than we intend and believe is embodied in the Bill as it stands. In any case, the proposal provided for in this clause would not be a suitable instrument for making such a statutory change.
Amendments Nos. 286B, 286BA, 286C and 286D are concerned with the parameters for the replacement power. The key point is that, as it stands, Clause 72, just like Clause 69, is based around the tax rate—the maximum 3p variation—rather than the tax product. As I hope that I explained in our debate on Amendment No. 279A, this must be the correct approach if we are to avoid the situation of fewer people having to pay more tax.
The figure of £450 million, which appeared in the White Paper, was a preliminary estimate of the maximum amount which could have been raised or forgone under the proposed tax power, had this provision been in operation in 1997–98. It was right that we included it in the White Paper because it allowed people to see the order of magnitude of the revenue generated or forgone by a 3p rate variation. The White Paper made it very clear that that was just an estimate, albeit that it looks likely to be quite an accurate one.
The key point is that it would be inappropriate to tie the product of any future power to any fixed figure, whether it was a preliminary estimate or any other figure. The correct approach is to concentrate upon the tax rate—the amount which people will have to pay. This approach will ensure continuity for taxpayers (ensuring that their individual tax liability does not change dramatically as a result of any new power); and it will actually deliver year on year continuity of the tax product more effectively in this context than the setting of a fixed product. A fixed product—whether £450 million or whatever—may differ significantly from the actual product of the previous tax year if the tax base had shifted over the years, upwards or downwards, and this could mean a significant discontinuity between years. Incidentally, the £450 million suggested in Amendment No. 286C could also be very different from the "guaranteed additional revenue" figure, which was proposed in Amendment No. 281BA. We think that Amendment No. 286C is fundamentally misguided.
I appreciate, of course, that Amendment No. 286BA falls naturally out of the approach being proposed by the noble Lords opposite. If one concentrates on tax product, the GDP deflator would be the correct indexation approach. However if, as we propose, we concentrate on the tax rate and the effect upon individual taxpayers, the RPI, which is the main measure of inflation as it affects taxpayers, is the appropriate mechanism for indexation.
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Turning to Amendment No. 286D, Clause 72(5), which the noble Lord, Lord Mackay of Ardbrecknish, said was pretty difficult to get one's mind around—he did not put it quite like that, but that is certainly what I feel about it, and about certain other clauses—requires that any proposed replacement power has a similar impact on individual taxpayers to the existing power. This is to ensure continuity with any future replacement power. It would prevent, for example, the extension of the replacement power to those who pay income tax only at the lower rate; or any major concentration of the tax burden in future on a particular income group. I am sure that it is not the noble Lord's intention to encourage proposals for any replacement power which would have an undue impact on any group of Scottish taxpayers, but we think that that would be the unfortunate consequence of the amendment.
The noble Lord referred to the point about subordinate legislation being made in Committee rather than on Report. I am advised that it was always intended to table these amendments in Committee and not on Report. I am also advised that there was an error in the layout of the annexe to the letter to which the noble Lord referred, which may have caused some confusion. As I was not aware of that, I can only apologise to the noble Lord for that and for any confusion that was caused. I hope that in the light of all these explanations the noble Lord may feel able to withdraw the amendment.
Lord Mackay of Ardbrecknish: I do not blame the noble Baroness for the confusion, but perhaps she can help me in this regard. If the letter has gone to my noble friend Lord Alexander of Weedon and the Select Committee on Delegated Powers and Deregulation and if it has told them that these amendments will be tabled on Report, I presume that they will be working to report to the Committee before Report. We shall now have to discuss the amendments on Thursday. Is there any possibility that the Select Committee will be able to consider those matters before our next Committee, on Thursday? If not, it seems to me that the error in the letter to my noble friend is a serious mistake by the Government. Although I do not expect the noble Baroness to answer this now—I am merely pointing it out—if the delegated powers committee cannot consider the letter and report to this Committee before Thursday, then the Government should withdraw the amendments and bring them back on Report. That was the clear intention not just in the annexe to the noble Lord's letter: the actual body of the letter referred to the Report stage.
I am pretty clear in my own mind that the body of the letter itself mentioned the Report stage. I should just like to lay that point on the table. I do not necessarily expect an answer but, if there is one, I should be delighted to hear it. It appears that there is no answer from the noble Baroness. That is not very satisfactory.
Baroness Ramsay of Cartvale: I shall happily undertake to reflect on the matter and return to it. I am advised that the delegated powers committee knows that the amendments are to be tabled in Committee.

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Therefore, there does not seem to be any reason to delay proceedings. The noble Lord said that he has laid the matter on the table and asked whether we can perhaps discuss it further outside the Chamber in order to resolve the problem. As I said, I am advised that the delegated powers committee knows about the amendments. Obviously there is some confusion; indeed, I understand there was some confusion in at least the annexe of the letter and the noble Lord has pointed out that there was also some confusion in the letter. In that case, if the noble Lord agrees, perhaps we can look into the matter.
Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness. I have now found the letter which is dated 2nd October and addressed to my noble friend Lord Alexander of Weedon. One could argue that there is a bit of dubiety in the text because it talks about attaching the text of the amendments,
"along with further related amendments for Report".
I believe that one could read that in two ways. However, when one comes to the annexe, the important thing is that it quite clearly refers to the Scotland Bill on Report. Thereafter, all the amendments are set out and they are the ones which are now before us for consideration.
The real point is not whether they will be considered on Thursday, but when they will be considered by the delegated powers committee. Will that committee meet tomorrow? My understanding is that its next scheduled meeting is set for a week on Wednesday. That is what I find so unsatisfactory. Indeed, both aspects are unsatisfactory. However, if I knew that by Thursday morning I would have a report from that committee on the matter, I would be content. But I shall not be content if I discover that I will not in fact receive a report by that time. Given the fact that we have had two months in which to consider all of this, I believe that the letter to my noble friend indicating such changes could have been sent a little before 2nd October. Perhaps the noble Baroness could further assist me in that respect.
Baroness Ramsay of Cartvale: I shall ignore the noble Lord's last point. However, we can discuss the matter further on Thursday. At that stage we shall know a little more clearly where we stand. It would be best for us to wait until we come to consider these amendments on Thursday. We can then continue the discussion in an effort to resolve the matter.
Lord Mackay of Ardbrecknish: I do not quite know where that takes us. However, if we are to discuss such matters on Thursday, I shall want to have—and I am sure that this applies to all sides of the Committee—the opinion of the Delegated Powers and Deregulation Committee. However, if that cannot be achieved, I do not foresee any problem in the Government simply withdrawing the amendments and bringing them back on Report. I shall certainly not complain if they do so. Indeed, I think that that is the right and proper way to proceed and I am prepared to leave the matter there.
I turn now to the points of the debate which have brought the latter problem to a head. I shall read the Hansard report of what the noble Baroness said about the interplay as regards secondary legislation, primary
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legislation and tax legislation as far as concerns Amendment No. 286A. If I heard the noble Baroness correctly, I believe that I am probably satisfied with the response. However, I should like to be absolutely sure in that respect.
I was interested to hear the Minister's arguments against the implied deflator for general consumption. I shall discuss these matters with the erudite economist who proposed the amendment.
As regards the other points that I raised, I am satisfied, although somewhat intrigued, by the answers. Part of the reason for my tabling such amendments was to probe what is a pretty impenetrable clause. I was going to have a stand part debate, but I shall not do so. However, I shall register now my disapproval of such incomprehensible gobbledegook. It is not only this clause in the Bill; indeed, it is all the clauses in the financial section of the legislation. The rest of the Bill contains some very good and clear stuff, but this particular section is just about impossible for the ordinary person to read and understand. I suspect that the "ordinary person" includes almost everyone in this Chamber.
The noble and learned Lord, Lord Simon of Glaisdale, pointed out to the Minister earlier that there is a high-powered group chaired by my noble and learned friend Lord Howe of Aberavon, called the tax law rewrite project, whose motto is "making tax law clearer". If anywhere needs a little attention from this group and the people who advise it, it is these seven sections of the Bill, especially the one under discussion today. Will the Minister ask those who drafted this section—not just this clause—to make contact with that group? The group is not difficult to find. It is to be found in one of the Inland Revenue's own offices here in London at Bush House in the Strand. If those in the Scottish Office do not know the address, I shall be happy to write to them with such details. For goodness sake, surely the Government can consider simplifying the legislation between now and the Report stage, so that the ordinary Scot will be able to understand the tax provisions in the Scotland Bill. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 286B had been withdrawn from the Marshalled List.]
[Amendments Nos. 286BA, 286C and 286D not moved.]
Clause 72 agreed to.
Clause 73 [Accounting for additional Scottish tax]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 286E
Page 34, line 42, leave out subsection (5).
The noble Lord said: In moving the above amendment I shall speak also to Amendment No. 287A. In the two amendments involved here I suggest leaving out subsections (5) in Clauses 73 and 74. They appear to relate to adjustments to the money paid by the Inland Revenue or paid to the Inland Revenue if the Scottish rate of tax is varied downwards. It is suggested that corrections may be needed if a current or previous

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year's calculation turns out to be inaccurate. Perhaps the noble and learned Lord could explain why the Government need these two subsections. I caution him again with the words that I used earlier; namely, that he also ought to know the address of the tax law rewrite group. I beg to move.
The Lord Advocate (Lord Hardie): As Members of the Committee will be aware, where tax is varied upwards by the Scottish parliament, the amount raised as a result will be estimated by the Inland Revenue and paid into the Scottish Consolidated Fund. Clause 73 makes provision for this. Clause 74 provides the mirror image where tax is varied downwards. In that situation, payments of amounts are again estimated by the Inland Revenue to be deducted from the Scottish Consolidated Fund and to be paid back to the Inland Revenue.
While the detail of these arrangements has still to be finalised, it is envisaged that payments either way will be made on a set number of occasions through the year and that estimates of the appropriate amounts due will be updated throughout the year and, as necessary, beyond the year in question. This reflects the fact that forecasting of tax revenue is not a precise science. Many factors can change during the course of a tax year which can affect the amount of tax take. Clauses 73 and 74 are specifically designed to reflect this uncertainty and to ensure that whenever and to whatever extent the tax varying power is used will be accurately reflected in the amount of resources which the Scottish parliament takes in or, alternatively, pays back. Subsection (5) of each of these clauses is, in our view, a sensible, pragmatic provision to allow accuracy to be achieved and it should in each case be retained in the Bill. I hope that with that explanation the noble Lord will understand the reasons behind the subsection in each of these clauses. I invite the noble Lord to withdraw his amendments.
Lord Mackay of Ardbrecknish: I am grateful to the noble and learned Lord the Lord Advocate for that explanation. I understand what the subsections mean but I am nevertheless grateful for his explanation. I am still a little puzzled as to why they are needed. I commend to him—as I commended to his noble friend—the tax law re-write group and the whole principle of tax law simplicity. However, as I said, I am satisfied with the explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 73 agreed to.
7.30 p.m.
Lord Hoyle: I beg to move that the House do now resume. In moving this Motion I suggest that the Committee stage begins again not before 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Bullying in Secondary Schools
7.32 p.m.
Lord Tope Lord Tope rose to ask Her Majesty's Government what plans they have to address the problem of bullying of pupils in secondary schools.
The noble Lord said: My Lords. I begin by congratulating the noble Lord, Lord Hunt of Kings Heath, on his promotion to the Front Bench and welcome what I think I am right in saying will be his first speech from the Dispatch Box. I have certainly enjoyed many of his speeches when he spoke from the Back Benches and I am sure that this evening I shall enjoy his speech from the Front Bench even more. I am sure I speak for all your Lordships when I say we are also looking forward very much to hearing the maiden speech of the noble Lord, Lord Mackenzie. I know he has great experience to bring to your Lordships' House. I am sure we shall all hear his speech with great pleasure tonight.
My Question this evening is an open one which refers generally to bullying in secondary schools. I know this issue is of great concern to your Lordships and is one we discussed a number of times during the passage of the school standards Bill. This evening I intend to use all my allotted time to draw attention to why a small but significant group of pupils in all our secondary schools do not achieve as they might. They are not drug takers or from run-down council estates or are taught in large classes or are from broken homes, but the boys are gay and the girls are lesbian. Day after day and term after term they are taunted and humiliated. Some have their clothing or equipment ruined and some are beaten up and in some cases badly hurt. The tragic irony in all this is that many of them have yet to have sex with anyone, let alone a relationship. It has been said often in your Lordships' House that schoolchildren are too young to know their own sexuality. The reality in today's secondary schools is that streetwise teenagers spot "something different" all too readily and then the victimisation begins.
I became aware that there was a significant problem for pupils such as these from the study carried out in 1996 by Stonewall and the Terrence Higgins Trust. Of the respondents under 18 in that survey, 48 per cent. had experienced violent attack and 39 per cent. of those attacked had been attacked by four or more attackers. Most alarmingly for our education service, 40 per cent. of these attacks happened in school. Since then I have had access to much research, including that by Ian Rivers of the University of Luton, work done by the Health and Education Research Unit at the London University's Institute of Education, the London survey published this year by the organisation GALOP, and consultations with schools carried out in Leicester and Lancaster. Research is ongoing at Manchester Metropolitan University. All this work confirms that we have in our schools a serious problem that needs to be addressed.
Throughout the summer I have received a steady stream of letters from young people who are suffering from homophobic bullying and the letters are still

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arriving. I intend to spend some time tonight quoting from these letters because although I knew about this issue I was still surprised by the volume and the frankly heartrending content of many of the letters. Several spoke in their letters of their suicide attempts. One letter stated,
"I felt so distressed: alone and very depressed. One time I wrote all over my bedroom walls that I hated everyone and myself. I tried to take an overdose of pills four times, and tried to slit my wrists one time".
That letter was from Tom from the Midlands who is now 18. He was looking back at what some would say were the best days of his life. Michael, just 15, from Hertfordshire is still at school. He wrote,
"I don't care about exams or jobs and I definitely hate school, and take every chance to be sick and miss lessons. If it wasn't for the support group, it's very likely that I would end my life. Sorry".
A constant theme throughout the letters is isolation and loneliness. One asked why it is better to be black than gay. The answer,
"You don't have to tell your mum you're black".
Many of these boys and girls cannot turn to their parents. There are mums who tell them they are unnatural and who can no longer bring themselves even to touch their children. There are dads who beat them up and throw them out. The law about the age of consent, which some claim is there to protect youngsters, appears sometimes to do exactly the reverse. Stuart from Haringey wrote,
"During this period, I was raped by a man. But because I was under the age of consent, at the age of sixteen, I thought that if I told anyone, I would be arrested and put into prison. And so I did nothing".
The letters from girls were, if anything, even more distressing. Debbie from Lancashire was not untypical. She describes in detail how she was ambushed by a group of lads on the way home from school who beat her up amidst a torrent of filthy abuse. She wrote,
"I managed to get home and I was bleeding from the back of my head, and bruised and bleeding on my legs. I could hardly walk because of the bruising in my groin".
Of course not all the bullying is quite so violent or extreme.
The Government constantly and rightly want pupils and teachers to raise standards. But imagine trying to gain good academic results against a background such as the following. I quote again from another letter which stated,
"my books being defaced with filthy wording, or my file, folders and the contents of my bag being emptied out of a first-floor window as a punishment for being gay".
That letter was sent by Paul who wrote to me from Nottinghamshire. A steady drip-feed of insult gradually erodes all one's self-esteem. As Tony from Oxfordshire put it,
"I suppose I was lucky that I was never physically attacked. But going into school every day knowing that you were likely to be insulted or humiliated was like walking on a tightrope".
Your Lordships may ask where the teachers are in all this. A sad pattern has continued to emerge in the correspondence as the summer went on. Either teachers told these pupils to keep their heads down and avoid attention or they remonstrated ineffectively with the
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bullies and made the situation worse. Some took refuge behind a misinterpretation of Section 28 of the Local Government Act and said that they were legally forbidden to talk about homosexuality. I am afraid I have to report that some teachers—I am sure it is a small minority—even joined in the persecution. We heard of a deputy head in the north of England who, seeing an effeminate 16 year-old pupil standing by the school's Christmas tree, called out,
"Robert, shouldn't you be on the top of the tree"?
An RE teacher in Scotland required by his enlightened school to discuss homosexuality in his classes told the whole class: "I'm sure nobody wants to know about the poofs apart from Ben", and told the boy he would have to read the chapter on his own.
This year we celebrate the 50th anniversary of the Universal Declaration of Human Rights. I re-read it recently and was struck by how many of the articles apply directly to the situations I have described. Perhaps I may refer to Article 26, which states:
"Education shall be directed to the full development of the human personality, and to the strengthening of human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship.".
We have a long way to go before some of our secondary school pupils and teachers understand what those words mean.
An important first step towards that understanding would be for Her Majesty's Government to repeal Section 28 of the Local Government Act. I hope that tonight the Minister will be able to tell us what the Government's timescale is for fulfilling that manifesto commitment. In the meantime, perhaps the Minister will confirm that there is no legal bar to schools educating their pupils about the problems that homosexuals face. That would be helpful.
The recurring theme in our research has been the need for youngsters to have a teacher to whom they can turn for advice and support in their distress. We were told of a system operated in German schools where pupils elect "teachers of trust", who are then protected in offering confidentiality to pupils. I hope the Government will look into that since it apparently works well in Germany. In that connection will the Minister look into withdrawing paragraph 40 of Circular 5/94, which appears to advise teachers not to offer confidentiality to pupils?
It is time for sex education to deal properly with relationships and to face the problems of gay and lesbian pupils honestly. Teachers need appropriate training for that. Both in-service training and programmes appropriate to B.Ed and PGCE students need to be developed. Above all, the DfEE needs to tell governors and head teachers that their anti-bullying policies must include specific plans to stand up to homophobic bullying. I understand that the Government will issue a circular later this year on the subject of bullying. I hope that the Minister will confirm that that is so and, if it is, that the circular will deal specifically with homophobic bullying. We cannot leave these vulnerable youngsters out in the open and under attack.
Needless to say, this speech has not been vetted by the Prime Minister's Office. However, I wish to conclude, perhaps for the first and last time in my life, with a quote from the Prime Minister's speech at the conference last week. He said:
"Children with talent they will never use. Ability they'll never develop. Achievements within them that the world will never see. Leave injustice or discrimination unchecked and we lay waste the genius of the nation".
My Lords, I agree.
7.43 p.m.
Lord Mackenzie of Framwellgate: My Lords, it is with some humility and not a little trepidation that I rise to address your Lordships' House for the first time. Perhaps all I can hope for is to emulate the performance of the one-eyed javelin thrower at the last Olympics in as much as I shall probably not win any prizes but at least retain your Lordships' attention.
Having spent some 35 years in the Police Service, I can safely say that I have some little experience of giving evidence in a range of tribunals, from magistrates' courts and coroners' courts to Crown courts and appeal courts, but never did I dream that I should one day address this House.
Having entered this place in July, just before the Recess, I thought that one blessing about retiring from the Police Service would be that the annual leave, which as a policeman was constantly interrupted, would at last be undisturbed. It used to be continually interrupted, particularly in the CID, in order to give evidence in court or for serious investigations. Then, lo and behold, at the beginning of September the Prime Minister asked for a recall of Parliament. So nothing changes!
The question of bullying, graphically described by the noble Lord, Lord Tope, is an important one. Although in the Question it is confined to pupils in secondary schools, it is a problem with far wider ramifications and should be treated extremely seriously. It causes misery in the workplace, and in the Armed Services it can destroy careers. The noble Lord explained the problems that it can cause in schools. It can, of course, ultimately lead to murder.
In my experience as a police commander I have known of situations where I have had to "rescue" police officers by transferring them to different stations to avoid the intimidating and dominating influence of those in positions of power over them because for some reason they did not fit, or there was a clash of personalities. However it is described, it amounted to bullying by those in power.
One of the difficulties of those in command, whether it be school teachers or supervisors, is finding out that bullying is taking place. There is a fear, which I have experienced during my 35 years in the force, of being labelled as a "grass" or a "snitch". People are frightened of being intimidated because they have told the authorities what is going on. It needs to be made much easier to "whistle-blow", anonymously if necessary, and such information needs to be taken seriously by those in authority.
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My experience both as a child and as a police officer is that those who bully prey on the weak and have to be stood up to. Appeasement, as with blackmail demands, does not work with bullies. As a policeman I found that in dealing with an incident the one thing you never did was bark unless you were prepared to bite. If there was the glimmer of a suggestion that you were not going to carry out what you had suggested if the person did not desist from what they were doing, then you had lost the game. If you said to somebody, "If you don't stop doing that you'll be arrested", make no mistake, if they did not stop doing it, they had to be arrested. That is a rule that policemen learn very early on. In the same context bullying has to be confronted. Of that I have little doubt.
In this country we pride ourselves on the rule of law. If that phrase means anything, it means equality under the law. It means the protection of the weak from the strong, the protection of the frail from the powerful and the protection of the individual from the large organisation. Those are the values on which the British nation was built. What better place to start instilling those values than in our schools? In a civilised society the rule of law should run alongside our children in the playground.
To conclude on a lighter note, I recently opened a nursery school in my area and was asked by a youngster what it was like to be a Lord. I am proud of the answer I gave. I said that although it is nice to be important it is far more important to be nice. If we can get that message across, we are halfway there.
It is indeed an honour and a great privilege to be a Member of this House. I read recently that in the Middle Ages many Members had to be bullied and fined to attend. I hope that has stopped!—and as I say that, I look at the Whip. I look forward to participating fully in the work of this House. Perhaps I may add that this speech was not vetted by the Prime Minister either.
7.49 p.m.
The Lord Bishop of Ely: My Lords, I am happy to be the first to congratulate the noble Lord, Lord Mackenzie, on a delightful speech and to welcome him to the House. I was a resident of County Durham for 11 years and I am pleased to say that we never met! We shall want to hear frequently from the noble Lord, especially in the light of the great experience which he brings to the House.
I thank the noble Lord, Lord Tope, for initiating this debate and especially for the courtesy which he extended to me and my friends on this Bench in indicating the direction of his remarks.
The letters cited by the noble Lord are surely enough evidence of the importance and seriousness of the subject. The existing research, notably that to which he referred published by the Institute of Education in the University of London entitled Playing it Safe, demonstrates beyond a shadow of doubt that such bullying has to be taken seriously. On the other hand, that same report states that the needs of these students are increasingly recognised and acted on and also that HIV-related education and homophobic-related bullying have become matters of general concern, and I welcome

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that. But, as the evidence plainly suggests, there is much more to do. The secondary head teachers to whom I have spoken on this matter in my part of the world say that, although much of the old macho male bullying has receded through a good deal of vigilance by teachers, there is a kind of sophisticated viciousness which is much more difficult to challenge, and I think that that is what the noble Lord refers to.
The Church absolutely and unequivocally condemns all bullying, whether of the physical or verbal kind, for whatever cause, and that includes the open acknowledgment of homosexual inclinations. The root of bullying is a denial of the respect which is due to human beings. The religious root of that respect is a conviction that human beings are made in God's image and likeness; and that, as your Lordships undoubtedly recognise, binds Jews, Christians and Moslems in one single tradition. Reverence for life is the profound belief of most of the major religions of the world. It is due to human beings simply by virtue of their being members of the human race. It is due to the disabled and the deformed, to members of minorities and to anyone whose views or attitudes make them stand out or set them apart in any way from their contemporaries.
I wish to lay some emphasis on the positive side of the teaching of respect. It happened that last month I visited a church primary school in my diocese on its third day and was delighted to discover that the teachers had deliberately decided to make an issue out of the question of respect. To my astonishment, a small girl aged four or five who had been thumped the previous day during the lunch-hour was, as it were, supported publicly by a teacher who insisted, in my presence and that of the whole school, on the importance of respect for human beings. I welcome that. It is the commitment of the Church that that should happen.
The difficulty for the Churches is well known. All the recent official documents, without exception, condemn homophobic bullying: the Papal documents do so; the Church of England Bishops' Statement on Human Sexuality does so; and the resolution of the recent Lambeth Conference does so. Indeed, it goes further in making a clear statement about the status in the Church's eyes of Christians of homosexual orientation. The difficulty is that that is contained within a restatement of the traditional Christian attitude to sexuality and marriage. As your Lordships know, because it has been mentioned in this House before, on a redefinition of the word "homophobic" this traditional teaching is not infrequently represented as itself homophobic and all who maintain or teach it are said to be homophobes. I am sorry about that. I also believe that it is deeply mistaken. I think there ought now to be some convention in civilised discourse on this subject which does not involve this particular form of name-calling.
I should like to suggest that, when the Government come to reconsider Section 28 of the Local Government Act 1988, which I understand they are committed to repealing, some thought should be given to a distinction, with which county schools have long been familiar, between promoting a religion and teaching about a religion. Religious education in our county schools is
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about producing children who are religiously literate and is not, and should never be, about the promotion of this or that religion. It should not be impossible to give clear information about homosexuality and clear protection against homophobic bullying, including information about what different religions and moral philosophies say about homosexuality, without—to quote the Act—promoting it,
"as a pretended family relationship"
a term which I do not much care for. We shall await the Government's proposals with great interest.
I have two remarks by way of conclusion. One head teacher of a secondary school to whom I spoke said to me, apropos the general subject of bullying, that one of the most difficult problems which he faced was the distance, in some cases amounting to lack of interest, which a significant number of parents show in the behaviour of their offspring in school. If Her Majesty's Government are, as I believe, committed to a partnership between schools and parents, everything that can be done to extend and deepen a sense of parental responsibility should be done.
My final remark is a story which I believe to be true but for which I cannot personally vouch. It is about a school student, a lad, who refused to join in the laddish culture of the break-time, boasting about sexual conquests, because he was an open and practising Christian. He finally decided that the only way to get his tormentors off his back was to tell them that he was gay. He did so, and they left him alone. So, my Lords, all is not completely lost.
7.57 p.m.
Baroness Linklater of Butterstone: My Lords, I congratulate the noble Lord, Lord Mackenzie, on his excellent maiden speech.
I wish to contribute to this debate not because I have any blinding insights or foolproof answers to this most agonizing problem of bullying in secondary schools, but because in the school which I founded in Scotland it is one of the first issues which we have to address. There, all the children—whom we call "educationally fragile"—have had experience of bullying in their previous schools to a significant degree.
It is possible to argue that bullying is rather like sin—part of the human condition, something that most of us have encountered at some time or another and which we have to learn to deal with and overcome as part of the growing-up process. It can mean a multitude of things, from a casual shove or an unkind word to playground terrorism and the kind of fear and misery which lead children to take their own lives. It involves us all because the prevalence of such behaviour in any school is not only a reflection of the ethos of the school, the quality of its leadership and teachers, the children and the quality of their home lives but also of the attitudes of the wider society.
In Scotland, every school is required to have a whole-school anti-bullying policy. Much work has been done, including the appointment of an anti-bullying officer in 1993 by the Scottish Office for two years to extend and support good practice. This Government

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have also helped by supporting the much-needed continuance of the Bullying Helpline. There remains a long way to go.
Bullying is often at its worst among adolescents. While being rebellious, they are the most conformist group. To be outside the norm and different in any way is extremely threatening. To be fatter, thinner, to have a stammer, be of a different ethnic background or different sexual orientation is often unacceptable and is to invite the attentions of the bully. Adolescence is a time of turmoil and transition physically, emotionally and educationally when everyone is vulnerable at some level and struggling to discover who they are. The obvious vulnerable or less able ones are not only easy targets; they are the most threatening. I see many of them at my school. For them teasing and bullying had been a common experience in their previous mainstream school. It involves everything from social isolation and exclusion by their peers, to mockery because of clumsiness, slowness or being different in some slight way, to taking money or belongings, to quite severe physical attacks. These children have been identified as educationally fragile which means that because of a specific difficulty or multiple mild problems children are finding the mainstream experience overwhelming and are significantly underachieving. They are struggling, drowning quietly at the back of the class. So, on top of these difficulties they also become the target of the bully. Anyone with a child who has been the victim of such experiences will know what misery and torture this is and how it permeates every aspect of school life: the ability to learn effectively, to make friends and to cope with the demands of school. It affects home life too. I know; I have experienced it.
The bullied of today are often the bullies of tomorrow. Bullies are themselves often vulnerable, inadequate, dysfunctional children in some way. They too often have problems which need to be addressed just as those who are at the receiving end of bullying. It should follow that at my school, because of previous experiences we have a school full of bullies. The complete reverse is true. Instead, there is a remarkable level of mutual help and support between the children. The ethos of the school is based on mutual trust and respect—such easy words to use, but a different matter to put into practice. There is an understanding there that everyone has a difficulty of some kind and, crucially, that that is fine: it is absolutely great to be whoever you are, warts and all. Surely, this must be the goal of all schools.
The same principles affecting bullying apply to any school. Our children are taught that to be different is as acceptable as are the differences of others. To celebrate diversity is a hard lesson for all adolescents. In order that we can deal with the fallout from past bullying—the tears, the nightmares, the panic attacks, the refusal to try or risk failure in or out of the classroom—the children must know that they can trust the staff who are also role models; that they can talk and talk for as long as it takes; that they are believed and that they really matter as individuals. This takes time, but all schools must make time and strive to convey a belief in the
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worth of all their children. It also means that any sign of bullying is responded to immediately and seen to be so, and some appropriate sanction applied in action, not just words. This must always involve the parents who should be involved in the life of any school and with whom actions are agreed.
In an atmosphere where openness, acceptance and trust are the norm it is remarkable how quickly children will respond supportively to the needs of others rather than being threatened by them so the vulnerable do not become victims and bullying ceases to be a real issue.
8.4 p.m.
Baroness Maddock: My Lords, I congratulate the noble Lord, Lord Mackenzie, on his contribution to this debate this evening. He and others have spoken graphically about the seriousness and misery of bullying in our schools. He also spoke about other areas of life in which people experienced bullying. There are very many unhappy children in our schools, and parents too. Some young people are so miserable that they attempt suicide and sometimes succeed. The lives of many of these unhappy young people may well be blighted forever, not only because they find it difficult to relate to other people in all kinds of situations but because they will probably be unable to reach their full potential at school.
I should like to refer to two matters that I believe are at the heart of this problem: first, the unwillingness of many teachers and headteachers to acknowledge that bullying goes on in their schools. By not facing up to it they fail to put in place any effective strategy to deal with bullying. This is a "chicken and egg" situation. If parents are reluctant to pursue bullying because they know that heads are unsympathetic, or because they believe that there is a danger that it will be made worse by inappropriate action, there is a real problem. Sometimes no action will be taken; sometimes heads will be afraid to take action because they believe that a reputation for bullying will stick to their schools. The noble Lord, Lord Mackenzie, touched upon this matter earlier in the debate.
I have come across examples in my own life. My older daughter was bullied more or less continually throughout her school life, sometimes more seriously than at others. When she went to secondary school she was put into a tutor group with the very girl who had dogged her all her life. What should be done about it? Should one talk to the headmaster? Would he be sympathetic or make such an issue of it that the situation would be worse? After much discussion we both decided to leave it. I believe that that was the wrong decision. Now that I know the school and headmaster better perhaps we could have been more successful.
Another example of which I am aware was a woman who talked to the headmaster about her child who was being bullied. The response was, "What do you expect? You are a single mother". When that is the response people are afraid to tackle the problem and to talk to head teachers.
As we have heard from the right reverend Prelate, many schools are prepared to face up to the issue. At lunchtime today I heard from one young person. She

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told me how her school had used the school council of which she was a member to tackle the issue. By getting the bully, the person bullied and the friends of both together they were able to talk about respect for others and in many cases the bullying stopped. If that was the norm in all schools and effective action was taken it would be the school that failed to take action that would be the odd one out. I believe that at the moment the reverse is true. It is perhaps for that reason that we are having this debate this evening. I am aware that the Government have made a start on the issue. I hope that the debate this evening will encourage them to do more.
Secondly, I should like to touch on the issue raised by my noble friend Lord Tope: bullying associated with sexuality and sexual behaviour. Bullies try to find people who for some reason do not quite fit in with the norm. But sexuality and sexual behaviour are often the area that provides an opportunity to bully others. Today young people are bombarded by sex on television and in magazines and newspapers. I believe that young people find it very bewildering to try to come to terms with their sexual awakening as their bodies mature. To want to belong and to feel normal is human. Problems arise not only for gay young people but for straight young people if they do not want to become involved in sexual activity at a very early age. My younger daughter, in part because of her Christian faith—which is rather stronger than mine—and her friends were able to club together and support one another and to say that they did not want to be part of it. By giving that support to one another they could succeed. Giving young people the support to be themselves and to be confident about their choices in life must play a major part in tackling the misery of bullying for our young people.
Good sex education is vital. Knowledge and understanding, not just of the basic facts and mechanics but, as others have said, of the complex area of emotion and relationships, particularly the unique nature of sexual relationships, are important. For too long we have shied away from that issue in schools. In particular, we have failed to give support to teachers to deal with the topic and teach it successfully.
In conclusion, I hope that the Government will reassure us that, first, they will do much more to highlight the importance of tackling the issue of bullying in schools until every school is not afraid to talk openly about and deal with the subject; and, secondly, that more resources will be made available to our schools and teachers to ensure that all our young people receive the best sex education.
8.10 p.m.
Lord Pilkington of Oxenford: My Lords, I begin by congratulating the noble Lord, Lord Mackenzie, on his maiden speech, which was direct and practical as one would expect of someone from Durham. I learned both about bullying and the richness of life from Durham schools. So I realise what it is all about.
We all deplore bullying. It denies all the values which distinguish what we regard as a civilised society. In discussing the problem, we should not delude ourselves into believing that there are easy solutions. All noble
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Lords will be in some sense familiar with the book of William Golding, a former school teacher, called The Lord of the Flies in which he showed the darker side of human nature. He described how a group of children, young early adolescents stranded on an island, cast off all civilisation and began targeting individuals just because they were different.
Poor piggy, who was killed, was fat; he wore glasses; and he happened to be rather nice to people. That was enough to earn him death. It is from that dark side of humanity which, let us be honest, we all have within us—what we Christians call original sin—that bullying and persecution spring. It is there in us all.
It is often characteristic of persecution and bullying that it concentrates upon the person who is different—be it colour, interests or sexuality. There is misery in wide areas. It is a misery that exists not just in schools but in large parts of society. I am glad that the noble Lord, Lord Tope, has brought before us certain aspects of bullying as regards sexuality. We all deplore that. I want to underline what the right reverend Prelate said: that none of the Christian churches, or people of my viewpoint, being a Christian, promotes or supports homophobia. I hope that the Minister will bear in mind what the right reverend Prelate said—the moral stance that we take over this is not homophobic.
Bullying covers a great deal. That evil, and evil it is, is not solved by sections in an Act of Parliament or even—dare I say it?—debates in this House. In the end, bullying and persecution have to be dealt with by the society or group in which they occur. They carry the guilt; they must carry the solution. The society, he it a school or be it a country, has to promote a culture that sees the behaviour described by the noble Lord, Lord Tope, of which we all know, as unworthy and a breach of what constitutes true humanity.
Schools, as the noble Baroness, Lady Linklater, has pointed out, can, if they work hard begin—one can never perfect human nature—to achieve that end, not so much by mission statements which are often an escape, but by creating cultures—it is the culture that is so important—that promote those values. First, there must be close contact between teacher and pupil. They must know each other. Small tutorial groups with a teacher are more useful than talks in assembly. Individual teachers in informal groups achieve more than an address from the rostrum by a head teacher. In such groups bullying and persecution can be shown to be the mark of an inadequate personality and an insecure society.
The first headmaster under whom I served in England was a great man called Robert Birley. He showed how, indirectly, one can promote a culture that values true humanity. When he left Eton he went to teach in South Africa, then suffering under apartheid. He showed the sheer evil of apartheid, not by harangues, not by a political philosophy; he taught those persecuted Africans about the abolition of the slave trade. In that he showed a morality. The South African secret police sat at the back of his lectures and did not understand what he was getting at. In that way—the indirect way—one makes people realise what is true humanity.

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Another way in which schools can avoid persecution of those who are different is by ensuring that all talents are catered for; that music and chess are as important as games; that handicrafts are valued; that everyone in that school is valued for achieving something.
To put it bluntly, what is seen as the object of education is to cultivate a regard for the richness of life and the value of every individual. That is the way within a culture that one begins to talk about stopping bullying. It is not easy. I share the philosophy of the noble Baroness, Lady Linklater: in the end bullying and persecution spring from feelings of inadequacy and insecurity among the bullies. They feel afraid. They attack the weak and the different. Schools, educations and cultures can defeat and beat that by trying to see—every teacher must see it—that all acquire the gift of valuing themselves, of seeing that they have a value other than by kicking and banging someone else. Only if one values oneself; only if one loves oneself—self hate is a much more difficult problem than self love—for what one achieves, will one stop demeaning others.
It is an enormous task, but that is why those of us in education went into it. There is no easy answer. I am grateful to the noble Lord, Lord Tope, for initiating the debate. I hope that something of value may emerge.
8.18 p.m.
Lord Hunt of Kings Heath: My Lords, I thank the noble Lord, Lord Tope, for raising the issue and for his welcome to me this evening. The issue he raises is an important one and one with which I have a great deal of sympathy. As the noble Lord, Lord Mackenzie of Framwellgate, in his excellent maiden speech said, bullying in the workplace; in the office; in the home; causes misery and suffering to thousands of people every day in this country, but how much more pernicious is the impact of bullying on children in schools. It puts their emotional well-being and educational achievement at risk. It is disruptive and intolerable. Bullying can lead to disaffection, and truancy, blighting a young persons' life.
The Government attach high priority to helping schools prevent and combat bullying. The noble Lord, Lord Tope, has rightly drawn attention to a form of bullying that has, until recently, gone largely unnoticed and unreported; that of homophobic bullying in schools. I am sure many noble Lords will have been moved, like me, by the personal stories of gay people who suffer from such bullying that he has told us about.
We are aware of the findings of the report Playing It Safe which, for the first time, recorded incidents of homophobic bullying. The right reverend Prelate the Bishop of Ely emphasised that point.
In June the Minister for School Standards met representatives of Stonewall and the Terrence Higgins Trust, who commissioned the report, to discuss its recommendations. At that meeting the Minister made it clear that our concern is with all forms of bullying, be they racial, because of sexual orientation, or as a result of a child's special educational needs. We will
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emphasise this point in new guidance which this department is currently preparing on pupil behaviour and discipline.
My right honourable friend the Secretary of State has made his views known about the problems. He has stressed the need for schools to treat bullying very seriously and to deal with it promptly and firmly whenever and wherever it occurs.
We responded to the concerns expressed about bullying by noble Lords in June. The Schools Standards and Framework Act 1998 includes a specific duty on head teachers to determine measures to prevent all forms of bullying among pupils. For these measures to be effective, the whole school community, pupils and parents, as well as teaching and non-teaching staff, should be involved in their development and application. The new duty will require all schools to draw up policies in this area.
Research undertaken for the former Department of Education by Sheffield University between 1991 and 1993 showed that 10 per cent. of primary pupils and 4 per cent. of secondary pupils were bullied at least once a week, and 27 per cent. of primary pupils and 10 per cent. of secondary pupils were bullied at least sometimes. Subsequent surveys have broadly confirmed these findings. It is clear that bullying is widespread and no school is immune from it. The increasing number of calls to ChildLine from children who are bullied bears testimony to that. Last year bullying was the most frequent reason for calls to ChildLine: more than 14,000 children rang for help.
The noble Lord, Lord Pilkington of Oxenford, said that there are no easy solutions; there are not, but I believe there are some positive signs. Successive reports from Her Majesty's Chief Inspector for Schools have highlighted that most primary schools already have sound and sensible policies for dealing with bullying. An increasing number of schools are responding to the department's guidance, the anti-bullying pack Don't Suffer in Silence. This has had an effect. Independent research shows that schools just starting out on their anti-bullying work found the pack invaluable. Most schools thought that there had been a reduction in the number of bullying incidents since they started using the pack. We will also be producing a video later this year that will emphasise the simple but powerful message that children need not suffer in silence; they should speak out and let an adult know as soon as possible what has happened.
The noble Lord, Lord Mackenzie, underpinned that message when he said that bullying has to be confronted. We believe that confiding in someone is a vital first step in dealing with bullying at a local level. Even where a pupil knows that they have been bullied because of their sexual orientation or because other pupils say that they are somehow different, it is in their best interests to tell someone.
A great deal of good work is being done to raise awareness. My right honourable friend has lent his support to several anti-bullying campaigns. The issue of bullying will also feature in wide-ranging integrated guidance for schools and LEAs which is due to be

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issued for consultation later this month. This guidance will cover in one document all issues related to school attendance, discipline and behaviour, exclusion, reintegration and education out of school. It will address the issue of disaffected pupils and how their needs and the needs of other pupils can best be met by their inclusion within school, wherever possible. This is in line with our aim of ensuring that as many pupils as possible receive regular education in school, including pupils who have been bullied or have bullied others. The guidance will set out the most up-to-date legal requirements which come into effect in September 1999 and will provide case studies and examples of good practice.
In the development of anti-bullying policies it is very important that all pupils should be involved. Many schools may wish to draw up a charter of rights and responsibilities setting out a pupil's right not to be bullied and a pupil's responsibility not to put up with it but to report any bullying that is experienced or witnessed. Training of pupils in peer mediation, particularly where a pupil's difficulties are minor but could escalate if not addressed, is helpful and leaves teachers more time to deal with major issues.
The noble Baroness, Lady Maddock, raised the issue of where head teachers refuse to see that there is a problem. I know of this from my own personal experience. At the heart of this issue is the leadership given by the head teacher and the ethos of the school in general. Schools which are successful in dealing with bullying usually have the following characteristics: they accept that there is a problem; they have a clear anti-bullying policy in place which is implemented by staff, pupils, parents and governors; they have a climate of positive relationships, care and mutual respect, which is expressed in all aspects of school life; pupils are encouraged to regard telling as acceptable and responsible, and teaching and non-teaching staff are encouraged to regard combatting bullying as a top priority.
I very much agree with the point made by the noble Lord, Lord Pilkington, about the importance of the culture in a school. What is the situation if there is not the right kind of leadership? If parents have complained to the head teacher and the chair of governors about the school's response to an incident of bullying and have exhausted all other local channels of complaint, they can then complain to my right honourable friend the Secretary of State about the case if they remain dissatisfied. His officials would contact the school and ask for details of the action taken, although his powers of direct intervention in cases of bullying are very limited.
In OFSTED's framework for inspection it requires teams to obtain views of pupils, parents and teachers on how schools deal with bullying, and their reports include the evaluation of anti-bullying policies.
While bullying occurs in primary and secondary schools, it can be more of a problem in secondary schools. The noble Baroness, Lady Linklater, shared with us her own experiences in this area. Bullying in secondary schools might be one manifestation of wider
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problems of disaffection and poor behaviour. In addition, the impact upon another pupil's academic progress could be more significant because of difficulties in studying.
Wherever possible it is helpful to involve pupils in efforts to prevent and expose bullying. At the same time the school's approach to the problem should be made known to parents as well as pupils.
I do not underestimate the task that falls to teachers in dealing with bullying. The teacher needs to treat the matter seriously, but also needs to establish the facts of any case beyond doubt if possible.
Schools can raise the question of bullying with pupils during lesson time, but how and when they choose to do so is a matter for them. They could cover issues such as tolerance of others in personal, social and health education lessons. I think that schools will consider very carefully our forthcoming report on PSHE when planning these lessons.
The noble Lord, Lord Tope, raised the issue of Section 28 of the Local Government Act 1988. We have made clear our opposition to this Act and intend to repeal it when the legislative opportunity arises. Section 28 prohibits local authorities from intentionally promoting homosexuality, but it never has applied to the activities of individual schools. It does not prevent teachers from teaching about homosexuality.
I very much take the point made by the noble Baroness, Lady Maddock, on the need for good sex education in all schools.
I have noted the comments made by the right reverend Prelate the Bishop of Ely in relation to the definition of homophobia and the teaching of the Church, and the Church's input into this debate will be fully considered along with other comments.
In conclusion, I again thank the noble Lord, Lord Tope, for raising this important issue, and other noble Lords for their contribution to this debate. We may not eliminate bullying completely, but it is important that we all work together to produce and prevent it wherever possible. Only where children break their code of silence, speak to adults and explain what is happening, can we then hope to reach our common objective of tackling bullying effectively, giving our children the environment they deserve in which to learn.
It is important that we do not allow the misery and disruption that can be caused by bullying to go unchallenged in our schools. Mistakes can be too costly.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure until 8.35 p.m.
Moved accordingly, and on Question, Motion agreed to.
[The Sitting was suspended from 8.30 to 8.35 p.m.]

Scotland Bill
House again in Committee.
Clause 74 [Effect of tax reduction for Scottish taxpayers]:
[Amendments Nos. 287 and 287A not moved.]
Clause 74 agreed to.
Clause 75 [Supplemental powers to modify enactments]:
[Amendments Nos. 287B to 287D not moved.]
Lord Hardie Lord Hardie moved Amendment No. 287E:
Page 36, line 36, leave out from ("Act") to ("and") in line 37.
The noble and learned Lord said: This is a technical amendment. The drafting of the Bill generally is such that references to an enactment do not include the Bill itself or enactments made under it unless specific reference to the contrary is made. In Clause 75 the context is such that this general approach applies and so the words being deleted by the amendment are superfluous. It follows that the amendment makes no difference to the effect of the provision. I beg to move.
On Question, amendment agreed to.
Clause 75, as amended, agreed to.
Lord Hardie Lord Hardie moved Amendment No. 287F:
After Clause 75, insert the following new clause—

REIMBURSEMENT OF EXPENSES
(". The Scottish Ministers may reimburse any Minister of the Crown or government department for administrative expenses incurred by virtue of this Part at any time after the passing of this Act by the Minister or department.").
The noble and learned Lord said: This again is essentially a technical amendment. Its purpose is to ensure that all expenses incurred by the United Kingdom departments in connection with the Scottish tax-varying power can be reimbursed to those departments by means of payment out of the Scottish Consolidated Fund.
As the Bill is currently drafted, this method of reimbursement would not be possible in respect of certain expenses which will be incurred regardless of whether or not the tax power is actually used. In effect, the standing charges involved in having the infrastructure in place to allow the power to be used is what we are talking about. This is an anomaly and Amendment No. 287F corrects it. It does so by giving Scottish ministers a specific power to reimburse the administrative expenses. That in turn brings those expenses within the ambit of Clause 62 and allows them to be reimbursed out of the Scottish Consolidated Fund. I beg to move.
The Earl of Balfour: In the wording of the amendment after Clause 75, does "by virtue of this Part" refer to Part IV, the tax-varying power, or to Part V, miscellaneous and general?
The Earl of Mar and Kellie: When the amendment was published at least three months ago, I wondered about the scale of reimbursement. How many pence
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would be taken up reimbursing the UK Government? I hope that the noble and learned Lord the Lord Advocate will assist me by explaining the scale of reimbursement, and whether there will be any money left from a tax variation in that regard.
Lord Hardie: I deal first with the point made by the noble Earl, Lord Balfour. The issue relates to Part IV of the Bill. In relation to the point made by the noble Earl, Lord Mar and Kellie, I am unable to give precise figures. However, I assure him that not all the money will be used up. It is contemplated that certain mechanisms must be put in place and maintained in order to enable the Scottish parliament to exercise its tax raising power. These mechanisms involve some UK government departments, specifically the Inland Revenue and the Department of Social Security. They have incurred some set-up and continuing maintenance costs, so we are talking about those costs.
On Question, amendment agreed to.
Clause 76 [Remuneration of members of the Parliament and Executive]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 287G:
Page 36, line 42, at beginning insert ("In accordance with the provisions of this section,").
The noble Lord said: We turn to the salary and remuneration of MSPs and members of the Scottish executive. The amendments in my name ensure that the salaries and expenses of MSPs shall not be greater than those of Members of the other place. I know that the group set up by the Secretary of State and chaired by Mr. Henry McLeish is looking at these issues and perhaps the Minister will be telling us about that.
In future, I, like all my fellow Scots, will be represented—I do not know whether in my case that is the right word as I live in the Glasgow constituency of Govan—not by one Westminster MP but by two doing the work of the existing one; or, depending which way you look at it, the work the other one is not doing! One could reasonably argue, therefore, that neither should be paid as much as existing Westminster MPs, but I shall not do so. I believe that status and not workload should determine these matters.
I am prepared to consider equal pay between the two groups of representatives. As regards expenses, especially those involved in setting up and maintaining an office, I suspect that MSPs could be paid at a slightly lower rate than MPs. But I shall not argue that either. I am going to argue that both now and in the future members of the Scottish parliament should not be paid more in salary or expenses than Westminster MPs. I am, so to speak, capping the potential salary and expenses of MSPs.
I am also placing a ceiling on the salaries of members of the executive and I believe that it is a generous ceiling. The ceiling I am applying to the First Minister should be the salary paid to a Cabinet Minister in the Government of the UK. In other words, I do not care how much less he is paid, but he must not be paid more than a Cabinet Minister in the Government of the United Kingdom. The

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ceiling for the other Scottish ministers should be that of Ministers of State in the Government of the United Kingdom.
These are simple amendments and perhaps address some of the Government's thinking. But they might like to remember that their thinking today will not necessarily hold forever. I believe that we should consider our legislation more in that regard. Therefore, we might consider including a ceiling which at least ensures that MSPs will not vote themselves higher salaries and greater expenses than those obtaining at Westminster, and that the executive members, the ministers in the Scottish executive, will not do similar in comparison with Ministers of the United Kingdom Government. I beg to move.
8.45 p.m.
The Earl of Mar and Kellie: My Amendment No. 288A is grouped with this amendment so I shall speak to it briefly. It has the purpose of ensuring that parliamentary salaries, allowances and expenses are not only published but published in a specific journal. Earlier the noble Lord, Lord Mackay of Ardbrecknish, told me that probably one of the least read magazines is the Edinburgh Gazette. If the amendment is adopted its circulation might increase.
It will be important for the credibility of the parliament that easily distorted information of this nature can be made available to the public whenever there are any changes. It is important that anyone wishing to identify these rates of pay and allowances will know where authoritative information can be found.
The Earl of Balfour: I support the noble Earl, Lord Mar and Kellie. In many previous Bills that I have followed through this House it has been common practice to have information issued in the London and Edinburgh Gazette. A similar feature should be considered by the Government.
Perhaps I may take this opportunity to speak to my Amendment No. 288 in which, once again, I ask that the Secretary of State at the earliest stage should decide on the maximum payment of salaries or allowances to members of the Scottish parliament.
Lord Gray of Contin: It is most unusual for me not to be in full agreement with my noble friend Lord Mackay of Ardbrecknish, but on this issue I do not agree with him. In setting up the Scottish parliament, one of our objects is that it should be a unit able to take decisions on its own behalf. While certain decisions should be retained at Westminster, I believe that in this respect we should leave the Scottish parliament to use its own initiative.
I take the view, which differs from that of my noble friend, that there will be considerable restraints upon the Scottish parliament preventing it from abusing a privilege of this kind. The principle of those restraints will be that it will play right into the hands of the nationalists if whatever is decided at Scottish parliamentary level has already been virtually set out at Westminster. Immediately the nationalists will say, "We must hold our particular remuneration for this, that and the other thing to what Westminster suggests". In my view, that would be a great mistake.
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I am afraid that on this occasion I do not agree with my noble friend. I believe that whatever is paid should be left to the new Scottish parliament, in the belief that it will use its discretion appropriately.
Lord Steel of Aikwood: I am happy to agree with the noble Lord, Lord Gray of Contin. Perhaps I should declare an interest as I hope to be a member of the Scottish parliament. I do not have the foggiest idea of what the salary will be and the matter has not greatly motivated me, but I entirely agree with him in principle.
The trouble is that every time the noble Lord, Lord Mackay of Ardbrecknish, sees a clause he wants to put a collar and chain on it and hand it to the UK Government, saying, "You must not allow the Scottish parliament to do this, that and the next thing". That is the principle on which he operates every single time, whether on taxation, salaries, or whatever. The noble Lord, Lord Gray, is right in saying that we should trust the parliamentarians of Scotland to get the salary levels right and that, if they get it wrong, retribution will be at the hands of the electorate.
I cannot understand why the Conservative Party always tries to put a ball and chain on every aspect of the work of the Scottish parliament. This amendment is a piece of nonsense and I hope the Government will reject it.
Lord Hughes: I, too, agree with the noble Lord, Lord Gray of Contin, that members of the Scottish parliament should be allowed to decide these matters for themselves. Two interpretations can be put on what was said by the noble Lord, Lord Mackay of Ardbrecknish. He expects that the first thing members of the Scottish parliament will do is to be greedy and seek to pay themselves more. Today I looked to see what Members of the House of Commons receive. Including pay and allowances, it is of the order of £100,000 a year. I am certain that if members of the Scottish parliament propose to pay themselves more than that they will last only one term in the parliament.
Lord Mackie of Benshie: The pay of the Scottish parliament is important and should be decided by its members themselves. They should consider the workload. A great many people who are busy and distinguished in their own professions will be able to stand for Parliament and take part in work three days a week. Executive members should be paid more. It is very important that we do not close the door to the many people of distinction and ability who would like to play a part in Edinburgh and who would be excluded if it was to be made a full-time job. That should be considered. I would like to hear the views of the Government, although I believe this should be left to the Scottish parliament.
Lord Hardie: I am grateful to the noble Lords, Lord Gray of Contin and Lord Steel of Aikwood, to my noble friend Lord Hughes, and, I think, to the noble Lord, Lord Mackie of Benshie, for their support of the Government's opposition to these amendments.
The point has been made forcefully by other noble Lords, including my noble friend Lord Hughes, that the position is that, unlike at Westminster, the salaries of the members of the Scottish parliament and members of

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the executive will have to be met from the assigned budget in the same way as expenditure for education, health and other important issues will require to be found. As my noble friend Lord Hughes has pointed out, the Scottish electorate will be extremely keen to keep a close eye on the levels of pay coming out of the Scottish Consolidated Fund which might otherwise be available for health, education or the like.
Moreover, the Senior Salaries Review Board will make recommendations on the initial salary levels to the Secretary of State. It is hoped that after that initial setting of the salary the parliament will continue to consult that independent body before setting its future salary levels. As noble Lords have pointed out, these amendments would unduly fetter the discretion of members of the Scottish parliament. The members of that parliament will be answerable to the people who elected them. In those circumstances I envisage that the members will be responsible enough to set their own salaries and allowances at levels within appropriate parameters. Members of the parliament will be acutely aware that, at whatever level they set their salaries or allowances, the expenditure will have to be met from the budget.
The Government very much hope that the Scottish parliament will continue to take independent advice from bodies such as the Senior Salaries Review Board. We do not think that it is appropriate to require it to do so in the Bill. I would urge noble Lords to withdraw their amendments.
As to the amendment of the noble Earl, Lord Balfour, this would give power to the Secretary of State to set levels of remuneration before the first determination of the parliament. With respect to the noble Earl, this is an unnecessary amendment and, for that reason, the Government do not accept it.
The Committee will not be surprised to hear that we have given this matter some considerable thought. Clause 115(3) of the Bill confers a power by subordinate legislation to make provision for transitory or transitional purposes in connection with the coming into force of any provision of the Bill. This will enable the Secretary of State to set the initial salary and allowances levels for both members of the Scottish parliament and members of the executive until such time as the parliament can make its own determination.
The Committee will be aware that the Government have given a commitment in the White Paper produced last summer that the Senior Salaries Review Board would be invited to make independent recommendations about the levels of remuneration. I hope that that answers the noble Lord, Lord Mackie of Benshie. I am unable to give more detail other than that it is being considered by the board.
Lord Mackay of Ardbrecknish: Can the noble and learned Lord indicate whether the Government have sent any submissions to the review board on the question of salaries and, if so, what they have said?
Lord Hardie: I am not sure that submissions made by parties to that body are in the public domain. I can confirm
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that there has been communication between the Government and the body. I am not prepared to indicate the content of any communication.
The body has considerable experience and we would expect the first part of the report to come out next month. If the noble Lord can wait for that long he will no doubt find out what its recommendation is. The final stage of the report we expect to receive early next year. That relates to office costs, allowances and remunerations for members of the executive and other possible post-holders such as the presiding officer. The Government are aware of the need to have remuneration levels in place in time for the parliament's first sitting until it is able to make its own arrangements.
Amendment No. 288ZA is similar to Amendments Nos. 287G, 287H, 287J, 287ZZA and 287ZB, which I have already covered. This amendment deals specifically with the pension provisions for members of the Scottish parliament. The principle is the same and should be a matter for the parliament to decide.
We cannot accept the amendment of the noble Earl, Lord Mar and Kellie. The parliament will be answerable to the electorate and we are confident that its members, when elected, will make every effort to ensure that appropriate information is publicised as widely as possible. It is not appropriate for us to impose conditions or to say what publications should be used to give effect to the publicity. I am confident that the parliament will publicise these matters.
As to office-holders—the presiding officer, the deputies and members of the SPCB—we again oppose that. These office-holders are likely to receive additional remuneration for carrying out duties while the parliament is sitting and it is only fair that they should continue to receive a similar amount during the period after the end of a session and prior to the commencement of the next session. The Senior Salaries Review Board will be looking at the level of payment to these office-holders in addition to their normal recompense as members of the Scottish parliament.
As to the point the noble Lord, Lord Mackay of Ardbrecknish, raised in relation to the consultative steering group of my friend Mr. McLeish, I understand that it is making good progress in considering standing orders but salaries of MSPs are not within its remit. This would be a matter for the Senior Salaries Review Board to advise upon. With that explanation, I would invite noble Lords to withdraw their amendments.
Lord Mackay of Ardbrecknish: I can certainly recognise when I am being fired upon from all sides and when it is perhaps best to withdraw tactically for the moment. The Minister's answer to my question about what evidence the Government had presented to the senior salaries review board was quite staggering given that this is a Government who tell us about open government and freedom of information Acts. I am not sure that that sits consistently with the answer "Yes, we have said something to it but we are not telling you". But I shall leave that to one side.
We come across this line quite often. I suggest that something should be done and I am told it should be left to the parliament to decide. A little later I suggest that the

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parliament should be allowed to do something and I am told that it had better be kept at Westminster. I can understand the way these things web and weave, but I rather object to being attacked for my position when the position is so often reversed on other issues. But I shall also leave that to one side.
The idea that the parliament should be left free to decide its own salaries and expenses is all very well. I do not have any great complaint about that. But I do wonder whether the Government will continue with that devolutionary aspect of these considerations and give local government the power to decide its own allowances and expenses. After all, councillors are answerable to the electorate. If they pay themselves too many expenses or allowances, the electorate can hold them to account. It seems to me that what is sauce for the Scottish parliament's goose is sauce for the local government gander. If I were a local government councillor I would already be beating a path to St. Andrew's House clutching the words of the noble and learned Lord the Lord Advocate and saying, "If it's okay for you lot, then why not for us as well?" However, I shall leave it like that for today.
I hope the parliament will be wise. I do not have the same great confidence that the members will all be turfed out if they pay themselves great salaries. If they all agree to pay themselves great salaries, for whom will the electorate turf them out? All the parties will have agreed to the great salaries. I cannot say that this has applied to the other place, which has got itself into awful confusion over salaries over many years, to my detriment in the past and perhaps in the future when I come to collect my pension. There is no great evidence that the electorate take electoral retribution on MPs who increase their salaries. So I do not have a great deal of confidence about that aspect of the Scottish parliament. With that, and looking to the Government's evidence to the Senior Salaries Review Board being allowed out of the secrecy which surrounds the whole Government, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 287H to 288ZB not moved.]
On Question, Whether Clause 76 shall stand part of the Bill?
9 p.m.
Lord Monson: The Bill provides for two categories of MSP. The first category is conventional constituency members who will have all the normal onerous constituency duties and surgeries. Many of the constituencies will be large and will have the same massive and ever-growing volume of correspondence that MPs at Westminster must contend with. By contrast, in the second category there will be regional members with no constituency obligations—not unlike your Lordships in a sense. Even though, like your Lordships, they will have a certain amount of correspondence to cope with, it will not come anywhere near that of the constituency
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MSPs. My question is this. Do not those in the first category deserve substantially greater pay and expenses than those in the second category?
Lord Hardie: That would be a matter for the parliament and the Senior Salaries Review Board. There is a misunderstanding. Even the regional members would have a constituency. Their constituency would be the regions.
Clause 76 agreed to.
Clause 77 [Limits on salaries of members of the Parliament]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 288ZC:
Page 37, leave out lines 29 and 30.
The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 288ZD. Contrary to the principle enunciated by the noble and learned Lord the Lord Advocate of leaving these matters to the Scottish parliament, Clause 77 tells the Scottish parliament that it must do something about the salaries of those members of the Scottish parliament who are also either members of the other place or indeed of your Lordships' House, although where the Government get the idea that Members of your Lordships' House are paid a salary, I am not entirely sure. But never mind.
Lord Mackay of Drumadoon: We live in hope.
Lord Mackay of Ardbrecknish: My noble and learned friend Lord Mackay of Drumadoon says, "We live in hope".
Clause 77 tells the parliament what to do about those members of the Scottish parliament who are Members of this place or of the other place and/or members of the European Parliament. I find it odd that the same principle does not apply as applied a little while ago, that we should leave this matter to the parliament. In fact, I may decide to strike out Clause 77 if we come to that position because there seems to be a little nannying here. Perhaps the noble Lord, Lord Steel of Aikwood, might reprimand the Government in this regard.
However, I am consistent because I have no difficulty with the principle that something ought to be laid down about dual salaries and that there ought to be some way to prevent someone collecting both salaries. The public would not consider that right and I believe that the House has a responsibility to tackle this issue.
What bothers me is that the clause is so vaguely drawn. Subsection (2) states:
"The Parliament shall ensure that the amount of salary is reduced … to a particular proportion of what it would otherwise be or to a particular amount".
Would the Scottish parliament be obeying this clause if it decided that a person should receive a 99 per cent. proportion? It seems to me that it would. In fact it could even argue that a 100 per cent. proportion would be obeying the clause. Technically, 100 per cent. is a proportion of a salary. It is the total salary but it is still a proportion. However, let us not split hairs. Let us go to 99 per cent. or 90 per cent. It seems to me that that would be obeying the instruction in Clause 77.

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What do the Government mean by this? Do they have a ball-park figure? Is it 90 per cent., or 80 per cent., or are we looking at 50 per cent.? Before we pass such vague legislation we ought to have an indication, even within parameters—I am not too bothered about the parameters—of what the Government intend here. If they do not know what they intend, I suggest that they strike out the whole clause and leave it to the good sense of the Scottish parliament to realise that when it fixes the salaries it will have to deal with any of its members who are also Members of the House of Commons or members of the European Parliament.
I have no problem with people undertaking a dual role. We put far too many obstacles against people doing that. It is a pity that some Members of the other place are not also Members of the European Parliament. I know that some are for a brief time. One of my colleagues certainly is at present but I suspect that she will be resigning her European seat. It would not do any harm for the Scottish parliament to have some members who are dual-mandated for the other place and for the European Parliament. I want to make it clear that I am not opposed to that.
However, I am opposed to such a vague clause as this is. I hope that the Government will give me at least an indication of the kind of figures that they consider would be appropriate when it comes to defining the word "proportion". I beg to move.
Lord Sempill: I wish to support my noble friend on the Front Bench. In doing so, I declare an interest. I shall be standing for the Scottish parliament. I wish to address an issue which has not been raised so far.
Perhaps I may pick up the point made by my noble friend Lord Mackay of Ardbrecknish on the issue of claiming two salaries. It is my intention to have the hope of claiming one salary. As I am sure the Committee will be aware, a Conservative hereditary Peer is a fairly rare bird in Scottish politics. Therefore, the odds on my winning the seat are quite high.
I am sure that the Committee will sympathise with the fact that I shall have to spend a considerable amount of my time away from this Chamber, which I have great pleasure in attending and for which I am covered by my daily expenses, in order to give myself and my party a fair chance of winning the seat. That is the way it should be.
However, I must tell the Committee who I shall be opposing in that seat. It is not just applicable to my seat but is applicable to a few other seats. I shall be opposing an honourable Member from the other place. I am talking about the honourable Member for Edinburgh North and Leith, Mr. Malcolm Chisholm. He will have the huge advantage of being able to fight that seat while in receipt of a full parliamentary salary, with all the appropriate expenses, which I am sure is applicable to the Secretary of State, who will be doing the same thing. Therefore, for reasons which are fairly straightforward, I believe that I am getting a raw deal here.
Therefore, it strikes me that in the initial stages we have a few anomalies. I find it difficult that I should face an opponent who will have the ability to spend a
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considerable amount of time in his constituency, in reality representing his Westminster constituency while at the same time fighting a seat in a Scottish constituency without encountering any of the financial pitfalls that I must encounter.
I ask the Minister to give me a view on that potential anomaly.
Baroness Carnegy of Lour: In view of the fact that the last amendment was opposed on the grounds that people must take full responsibility, I do not understand why this clause tells the Scottish parliament the way in which it must calculate what people are paid but does not indicate the level at all. Why should the parliament be told the way in which that must be calculated?
We were told also that the workload should not be taken into account. I believe that the noble and learned Lord the Lord Advocate said that the workload of a member of the Scottish parliament was not relevant, did he not? Somebody said that. It seems to me extraordinary that the mechanism is provided but no amount is given. I do not understand that.
Lord Hardie: There appears to be a consensus at least to the extent that it would not be appropriate to have a double salary and there should be some recognition of the fact that members are also Members of another place or members of the European Parliament because obviously they may not be able to devote the same amount of time to the Scottish parliament. There is no doubt about the principle, as I understand the point made by the noble Lord, Lord Mackay of Ardbrecknish.
The only question then is whether we should acknowledge the principle within the legislation that there should be some abatement. I take the point made by the noble Baroness, Lady Carnegy of Lour, that all we have done is to set out a formula and we have not set out the abatement level.
I am able to advise the noble Lord, Lord Mackay of Ardbrecknish, that we referred the abatement levels to the Senior Salaries Review Board. Advice will be available to the Scottish parliament on that matter and no doubt the Scottish parliament will take that advice into account in formulating the appropriate abatement.
A fundamental difficulty arises with these amendments, and it is this. The effect of these amendments would be to reduce the salary of a member of the Scottish parliament by the amount that he or she receives as a Member of the other place or as a member of the European Parliament. I wonder whether that implication was intended.
What would happen if the Scottish parliament decided that its members should receive a lower level of salary than Members of the other place? In practice that would mean that if a member of the Scottish parliament was also a Member of the other place, he or she would not receive anything for being a member of the Scottish parliament. They would represent constituents in both parliaments but be in receipt of only one salary with no acknowledgement for their additional responsibilities as a member of the Scottish parliament. I am sure that that is not the intention behind the amendments.

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With that explanation I invite the noble Lord to withdraw the amendment. However, perhaps I may deal briefly with the point raised by the noble Lord, Lord Sempill, though I am not sure of its relevance to the amendments. However, it must have some relevance and on that assumption I shall seek to answer his question.
First, the noble Lord appears to be under a misapprehension that his opponent is a Member of the Government; he is not. Mr. Chisholm is not a Member of the Government Front Bench. Equally, the issue as to what prospective candidates do, whether they are employed and how much time they spend in their prospective constituency is surely a matter for the candidates themselves. If the noble Lord wishes to have any prospect of winning that seat, I suggest that he spends more time there.
9.15 p.m.
Lord Sempill: Perhaps I can come back to the noble and learned Lord the Lord Advocate. I am aware that the Member for Edinburgh North left the Government Front Bench. I was simply pointing out that he was a member of the Labour Party.
The advantage that that Member has is that he must attend his constituency. At the moment, when he attends his constituency he is paid for the work he does in that constituency by his representation in Westminster. He has the advantage of being able to push forward his case underneath the auspices of being a Westminster MP. My point is that he has a considerable advantage over the rest of us who are not in that privileged position. That is the only point I wish to make. In backing my colleague on the Front Bench, I wished to point out the differences in the possibility of dual mandates and the advantages of a dual mandate.
Lord Hughes: The principle in the Bill seems a reasonable one. Because it is a reasonable one, why should we not expect the Scottish parliament to act in that reasonable way if it is left to do so? The point being made is that we are in an anomalous position. On the one hand we are saying that the parliament must be trusted to decide its own salaries; but on the other we must say no, we are not sure that they will do it right.
Having said that, I do not know that any Member of the House of Commons is also a member of the European Parliament, except those from Northern Ireland. Members from Northern Ireland are also members of the European Parliament. Does this principle apply to them? Do Dr. Paisley and Mr. Hume draw both salaries and are they diminished in any way?
Lord Hardie: I must advise my noble friend Lord Hughes that I do not know the answer to his query. Perhaps I can write to my noble friend to give him chapter and verse of the position. I am aware that another Member of the other place is also a member of the European Parliament. She is also a member of the Faculty of Advocates and represents a constituency in the south of England.
Lord Mackay of Ardbrecknish: Perhaps I can help the noble and learned Lord the Lord Advocate. In return
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for my help he will receive my bill in the morning. If I am paid by the minute for this Bill, the Committee will forgive me if I go on a bit. As I understand it, Members of the European Parliament and of the House of Commons are paid only one salary. As I have said, I have no problem with the principle.
My noble friend has raised an interesting matter as regards those candidates in the election to the Scottish parliament who find themselves opposing Members of the other place. The latter will be able to fight an election for the Scottish parliament on the basis of the taxpayers' payments to them for being Members of the other place. I rather suspect that their attendance there will be pretty sparse while they fight for their seats in the Scottish parliament. I believe that my noble friend has a point about the injustice of that situation.
But the injustice goes beyond that. I agree with the noble Lord, Lord Hughes: if I am told that my amendments to Clause 76 are a bit of a cheek because I should leave the matter to the good sense of the Scottish parliament, then I believe that the question of abating the salaries of dual Members should also be left to the Scottish parliament. Obviously, consistency does not run firmly through the Government's position on this Bill.
Again, we had no indication of any kind of ball park figure. I did not get an answer as to whether 99 per cent. would be a proportion, as it certainly would be. We had no answer as to what the Government believe would be roughly acceptable. That is totally inadequate. In fact, if it were not for the time of night I would be tempted, but I shall resist it. I may return to the matter and suggest to the Committee that this clause in its entirety should be removed from the Bill because these matters should be left to the parliament itself. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 288ZD not moved.]
Clause 77 agreed to.
Clause 78 [Remuneration: supplementary]:
[Amendments Nos. 288A and 288AA not moved.]
Clause 78 agreed to.
Clause 79 [Oaths]:
[Amendment No. 288AB not moved.]
Clause 79 agreed to.
Clause 80 [Exemption from jury service]:
The Earl of Mar and Kellie The Earl of Mar and Kellie moved Amendment No. 288B:
Page 38, leave out line 34.
The noble Earl said: Amendments Nos. 288B to 288D are focused on Clause 80 which deals with exemption from jury service. Perhaps I may say to the Committee that I can read the Marshalled List and the runes so I shall not go on about this set of amendments for very long. Amendment No. 288B seeks to remove junior Scottish Ministers from the list on the grounds that their position is already covered in the preceding description as members of the Scottish parliament.
Amendment No. 288BA seeks to add the new post of the Auditor General for Scotland to the list of those exempted from jury service. Given the need for effective

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accounting, I cannot see that that will be anything other than hindered by the possibility of a lengthy absence by the Auditor General for Scotland on jury service. I beg to move.
Baroness Ramsay of Cartvale: It may be helpful if at this point I say to the Committee that I intend to oppose the Question that Clause 80 stand part of the Bill. I shall explain my reason for doing so. It arises out of further consideration, prompted by these amendments, of the need for the clause. I realise that it is not often that I or any of my noble friends on the Front Bench have to oppose parts of this Bill. However, I suggest that this is evidence—should Members of the Committee require any—that we really do listen to what happens in the House and that the Government are prepared to consider amendments and all their implications.
We have considered whether it is necessary to provide for exemptions from jury service on the face of the Bill. We have concluded that it is not and that it would be more appropriate to make the necessary amendments to the Juries Act 1974 and the Law Reform (Miscellaneous Provisions) (Scotland) Act 1980, as well as the juries legislation in Northern Ireland in an order under Clause 96 of the Bill. If your Lordships agree to the deletion of Clause 80 we would intend to make the same amendments as are currently set out in Clause 80 under Clause 96. We would also give consideration as to whether further exemptions should be provided in consequence of the establishment of other new offices by the Bill.
An order under Clause 96 making the provision I have described would be laid before your Lordships' House, as well as the other place, in due course, assuming Clause 96 is duly enacted.
The parliament will have legislative competence in relation to jury service in Scotland and will be able to provide further exemptions if it sees fit.
In case your Lordships do not agree to leave out this clause, I should explain what the Government's position is on the noble Earl's amendments. As the noble Earl explained, these amendments raise his concerns about whether Clause 80 makes the appropriate exemptions from jury service. I understand that the noble Earl does not think it necessary to have a specific exemption for junior Scottish ministers since they should be covered by the general exemption for all members of the Scottish parliament. There was a good reason for this specific exemption. Junior Scottish ministers, like the members of the Scottish executive, could continue to hold office during a dissolution of the parliament until a new administration is formed. At that point they would not be MSPs. We think it is right that they should continue to be entitled as of right to be excused jury service in those circumstances.
Amendments Nos. 288BA and 288D probe why the Auditor General is not exempted from jury service as of right. We have listened carefully to the noble Earl's arguments and will consider his points. We thought that it was more appropriate to leave the parliament to
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consider whether the Auditor General needed to be exempt. The parliament will have to legislate anyway to enable the Auditor General to exercise his functions. But I shall consider the points that the noble Earl has made as to why we should make provision. The parliament will, of course, be able to make further provision about exemptions from jury service.
Lord Mackay of Drumadoon: I had not intended to intervene on this amendment, but in view of the Minister's helpful explanation of her reasons for opposing the Question that the clause stand part of the Bill, it might be helpful if I say a few words at this juncture.
I do not welcome, yet again, an attempt to put as little on the face of the Bill as possible and the further use of an order-making power to amend primary legislation. If Parliament, in its wisdom, in 1974, in the Juries Act of that year, and again in 1980 in the Law Reform (Miscellaneous Provisions) (Scotland) Act, set out provisions as to who was or was not excusable from jury service, such legislation (being primary legislation) should, in the absence of very good reason, be amended by primary legislation. Clearly, that was the Government's intention when Clause 80 was framed by the draftsmen when the Bill was debated in another place. It is somewhat disingenuous that only the amendments tabled by the noble Earl, Lord Mar and Kellie, have prompted a change at this stage. It seems to me that there is nothing wrong with the clause in its present form. It amends, by means of primary legislation, two Acts of Parliament. For that reason, I do not welcome the Government's intention to oppose part of the Bill, even as an example of a listening government.
Lord Rodger of Earlsferry: As the Government have given a great deal of thought to opposing the Question that the clause stand part of the Bill, it may appear slightly ungrateful to say that it would appear to me that there cannot be any doubt that one would wish to have exemption from jury service for the people specified in the clause. Therefore, even if it is intended to use the wide order-making powers under the clause to which reference has been made to add to the list of people who are exempted, I cannot see why it is desired to remove a clause that makes exemptions which, on any view, must be necessary. Otherwise, it appears to me that there will be a hiatus. Unless the Scottish parliament makes its very first Act the passing of subordinate legislation dealing with jury service of these ladies and gentlemen who are specified here, there will be a hiatus. Those people would actually be eligible for jury service and would, therefore, be liable to be summoned with all the complications that would follow from it.
It seems to me that the clause as it stands is a sensible one and one that perhaps could be added to later if the Scottish parliament so desired. However, to remove it would create an unfortunate hiatus. Therefore, I ask the Government to reconsider the matter.
9.30 p.m.
Baroness Ramsay of Cartvale: I believe that we could have this debate when we come to discuss Clause 96. For the reasons that I went into at some length—indeed, at greater length than I thought Members of the Committee would wish, but clearly it was not enough—we have decided that this is not the way forward in this case. We would prefer to do it under Clause 96. In any event, it is within the competence of the parliament. There is no hiatus because a Clause 96 order will be made before the MSPs come into office. Therefore, there is no such hiatus.
The Earl of Mar and Kellie: I am grateful to the Minister for her explanation. She and I both clearly read the same runes. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 288BA, 288C and 288D not moved.]
On Question, Whether Clause 80 shall stand part of the Bill?
Lord Fraser of Carmyllie: There are some serious arguments to be advanced about why this particular clause should stand part of the Bill. Frankly, it seems to me that we could resolve matters very quickly if we allowed it to stand part of the Bill and if we had a greater opportunity to understand and reflect upon the argument that the Minister advanced a few moments ago. I suggest that the appropriate course would be to leave the clause as part of the Bill. If the Government wish to remove it and can explain in greater detail why such action is necessary, they can do so on Report.
The Earl of Balfour: I have listened most carefully to what has been said. As I understand it, an auditor is not normally part of the executive and is in rather a special position. In that respect, I feel that what my noble and learned friends have said needs to be considered very carefully. For the moment, I should like Clause 80 to remain part of the Bill. With great respect, the Government will have the opportunity to repeal it at the next stage.
Baroness Ramsay of Cartvale: I shall make just one comment on what has been said about everyone needing time to reflect. In fact, when considering amendments, one hears the arguments for and against and then one decides the issue there and then. I find it very odd that some people need so much longer. However, we are a listening Government. I will say that Clause 80 can stand part of the Bill and that we will return to the matter on Report. Nevertheless, the points that I made about there being no hiatus and about the amendments certainly stand. In no way do I withdraw any of those comments.
Clause 80 agreed to.
Clause 81 [Scottish representation at Westminster]:
Lord Rowallan Lord Rowallan moved Amendment No. 289:
Page 39, line 2, at beginning insert—
("(A1) The Boundary Commission for Scotland shall, by the day on which the Parliament first meets or as soon as possible thereafter, submit a special report to the Secretary of State recommending the constituencies into which Scotland should be divided for the purposes of the first general election of members of the House of Commons after the commencement of this section.
(B1) The report referred to in subsection (A1) above shall be subject to the same provisions of the Parliamentary Constituencies Act 1986 as apply to reports under section 3(1) of that Act save for the provisions of subsection (2) of that section.").
The noble Lord said: We are dealing with a most important question here. It is absolutely essential that we do not cap the number of MPs that we send down to Westminster after devolution to answer the impossible-to-answer West Lothian question, as that could be taken as a sign of anti-Scottishness by Westminster. We must make a decision now as this Bill proceeds through this Chamber on the correct procedure of voting for both parliaments and the numbers who will represent Scotland in both parliaments. It is absolutely no good our MSPs having a loud voice in Edinburgh while our MPs are political eunuchs with the ability to speak with no more than a whimper here at Westminster because they are regarded as being totally over-represented.
As the noble Lord, Lord Sewel, made clear earlier in the Committee stage, the number of parliamentary seats is totally sacrosanct vis-à-vis the number of Scottish parliamentary seats. We must decide now if we are to have our 72 MPs and 129 MSPs, or whether it will be 58 and 108, or something completely different. We cannot permit these MPs and MSPs to be elected and then take away their constituencies at a later date. Can one imagine the scramble and fight for seats there would be within Scotland? Can one imagine the chagrin of the Scots nation as a whole at having its representation taken away from it—as would be its perception—by means of a Bill that we are putting through Parliament at this time?
This is a potential minefield. It is absolutely essential that we get the Boundary Commission to look at the situation now and decide what should happen before someone treads on one of the mines in this field and we have a tremendous backlash and a potential for this entire devolution Bill to fail before it has even started. I beg to move.
Lord Monson Lord Monson moved, as an amendment to Amendment No. 289, Amendment No. 289A:
Line 2, leave out from ("shall,") to ("submit") in line 3 and insert ("not later than three months after the day on which the Parliament first meets,").
The noble Lord said: When the first Marshalled List of amendments for the Committee stage of this Bill appeared a great many weeks ago it contained about 295 amendments, yet there were only two English names on the list, on two of the amendments. Although a handful more have subsequently been added, including my own and those of the noble Lord, Lord Ellenborough, and the noble Earl, Lord Onslow, the lack

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of English concern is still pretty astonishing given that the effects of this Bill are by no means confined to Scottish internal affairs. There is a United Kingdom dimension and there is very much an English dimension.
As the noble Lord, Lord Rowallan, pointed out, the West Lothian question has not gone away. It has not been resolved. I hope that the Official Opposition will agree that the Government really cannot wriggle out of coming forward with some solution on the complacent assumption that the English are too bovine and unobservant to mind one way or the other. They may appear that way at the moment but once the Scottish parliament is up and running things are likely to change rapidly. A former Home Secretary, the noble Lord, Lord Baker—I am sorry he is not here tonight—wrote a most interesting article in the Spectator on 1st August which is worth quoting from. The noble Lord, Lord Baker wrote,
"It is simply unacceptable that Scotland is over-represented at Westminster by at least ten MPs".
Actually he is wrong, the correct figure for over-representation is 14 or 15. He continued,
"English MPs will not for long tolerate the anomaly whereby they cannot vote on Scottish roads, schools, hospitals or laws while Scottish MPs at Westminster can vote on all these matters affecting England".
As some have suggested, an English parliament would mean yet more expense and yet more over-government, of which there are already signs. Better by far simply to debar Scottish MPs from voting on those English measures corresponding to those devolved to the Scottish parliament, as the noble Lord, Lord Baker, later suggests in the Spectator article and as, coincidentally, Paul Goodman advocates today in his interesting article on page 22 of the Daily Telegraph.
Clearly, such a proposal would take some time to set up. In the meantime it would be wrong for Scotland to be 25 per cent. over-represented at the next general election with a Scottish parliament already in full charge of Scotland's internal affairs—hence this amendment, which is designed to tighten up the well-thought-out amendment moved by the noble Lord, Lord Rowallan, although I do not agree with him as to what is the correct number of Scottish MPs. I beg to move.
Lord Monro of Langholme: I support this amendment tabled by the noble Lord, Lord Monson. I have been a severe critic of the West Lothian problem for many years. It is depressing that it is to be prolonged more than is necessary. The achievement of the Boundary Commission over the past two years in redefining local government seats in Scotland, sometimes with dramatic effect, as in Dumfries and Galloway where the number of seats has been reduced from 70 to 54, shows what can be done, if the spirit is willing, to get the number of constituencies right.
Were the Boundary Commission to start when this Bill reaches the statute book preparing future constituencies, they could come into force at the first forthcoming general election, not at the second. It seems that there will be five years of gross over-representation at the Westminster Parliament by Scottish Members of
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Parliament. I should like to hear the Government's reasons as to why such a solution does not seem possible in the light of this legislation.
Purely as a matter of interest I should like to know why it has been decided to split Orkney and Shetland into two constituencies both in the Scottish parliament and presumably in a future Westminster Parliament. Orkney and Shetland have always been adequately and exceptionally well represented. It may be a physical hardship for the constituency member to deal with two islands, but they are not so far apart in terms of air travel. I wonder why two very small constituencies are to be established when one is probably an over-representation at the present time, though there must be one for Orkney and Shetland. Why have the Government taken that decision? Secondly, is it still possible to redefine the number of constituencies for the Westminster Parliament before the first forthcoming general election and not the second?
Lord Ellenborough: I support the amendment tabled by the noble Lord, Lord Monson, to which I have my name. I thank my noble friend Lord Rowallan for providing a rare opportunity to touch briefly upon the English dimension at this late hour on the ninth Committee day.
The purpose of our Amendment No. 289A is to attempt to instil a sense of urgency in getting the Boundary Commission under starter's orders so that there can be a reduction in the number of Scottish MPs, not merely as soon as possible but certainly by the next general election in 2001 or 2002.
Scottish devolution will not work unless the Scots are satisfied—but it will not work unless the English are satisfied. We want the parliament to be successful, although many of us have grave reservations. It is essential that there should be fair play and justice for England, which after all constitutes 83 per cent. of the UK. I have referred previously to the ostrich-like attitude of the Government in their inability and unwillingness to face up to the English dimension, which could have fatal consequences for the Union. The Government are in a dilemma because of the ploy to give the Scots a parliament in such a way that will finish off the SNP—which has backfired and instead unleashed a truly Scottish monster—and perpetuate the over-representation of Scots MP at Westminster for as long as possible for the Government's political advantage.
Consequently, there is the vague and derisory proposal in the Bill which would have the effect of reducing the number of Scots MPs by a handful, not by the next general election but by the one after that, which will perhaps be in 2007, by which time the Scots parliament will have been up and running for eight years. Indeed, some who are better informed than I say that Scotland may be independent by then. If ever there was a case of hastening slowly, this would seem to be it, and it is quite outrageous. The establishment of a new parliament is a measure of enormous importance, affecting the whole of the UK. I suspect that the Government are sheltering behind so-called administrative difficulties in preventing the Boundary

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Commission making an early start. After all, it is not a case of reviewing some 660 constituencies of the entire UK; it is a matter of reviewing some 70 constituencies, about 10 per cent. of the whole. Obviously some adjustment would be needed for the few Highland and Island constituencies.
Of course, a reduction of a handful of 12 or so MPs is derisory, and a reduction of a much larger size is not the real answer. The problem is not the numbers but the manner in which Scots MPs exercise their votes on matters concerning England. Even so, any reduction that takes place at the next general election would at least show some willingness to face up to the problem. It would be a gesture. It would slightly alleviate the unfairness and give a breathing space for a lasting solution to be found, almost certainly by the next Conservative government, if not too late, to prevent a final dismantling of the Union.
In the meantime, the Government ignore the English dimension at their peril and should not wait for the crisis to occur. It will not happen yet, but that should not cause the Government to be lulled into a false sense of security. While Labour has a large majority in England the danger is obscured. Many people feel that the acute danger period will be in five years' time after a probable four years of Scots Labour rule in Edinburgh, more than enough to cause rampant Scottish nationalism and, by then, growing English resentment at interference by Scots MPs in English affairs when there may well be a Conservative majority in England, despite current trends.
My fear is that the danger will come when English people wake up to the fact that their affairs are being adversely affected by the votes of Scots MPs when English Members do not have a similar right. If looked upon favourably by the Government, this amendment and others grouped with it would very much help the situation.
9.45 p.m.
Lord Steel of Aikwood: The Liberal Democrats have always been absolutely clear that if and when we have a Scottish parliament the number of Scottish Members attending the Westminster Parliament should be reduced. We have never had any doubt about that; we have said it consistently over many years. I understand that both the Bill and the amendment of the noble Lord, Lord Monson, give effect to that.
As I said on a previous occasion, the constitutional convention did not deal with this issue because we felt that the consequential arrangements for Westminster were beyond our remit. Although before the election the Labour Party resisted this idea, immediately after the election it accepted that there should be such a reduction, not as an answer to the West Lothian question but certainly as an alleviation of the problem. I remind noble Lords that it is stated in the White Paper that,
"Scotland's MPs will continue to play a full and constructive part at Westminster. The number of Scottish seats will be reviewed".
That was clearly the position of the Government almost from day one after the election. It certainly argues that that reduction in the number of Scottish MPs at
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Westminster should take effect as soon as possible. I do not know where the idea came from that it should be delayed until after the next election. I believe that that would provoke a lot of reaction among English, Welsh and Northern Irish Members, and with some justification. I believe that that reduction should take place within the life of this Parliament so that at the next election the boundaries are based on the revised and reduced numbers. I believe that that is the logic of the situation.
In a debate in the other place three or four years ago I recall arguing that the right mechanism following the creation of a Scottish parliament was the formation of something like an English Grand Committee. That was thought to be rather an off-the-wall idea but it is now commonplace. Sir Malcolm Rifkind has advocated it. The Conservative Party is debating English institutions. All of this is very healthy. I can see no reason for the delay in bringing about a reduction in the number of Scottish Members at Westminster. I say in passing that that issue should not be tied in any way to the future numbers of members of the Scottish parliament. Although the Committee is not debating that matter at the moment, I take this opportunity to remind the Government of what they said in the White Paper. They said that the Scottish parliament would consist of 129 members, 73 directly elected on a constituency basis plus 56 additional members allocated to ensure that the overall result more directly reflected the share of votes cast for each party. There is nothing in the White Paper about reducing the numbers in the Scottish parliament after the numbers in the Westminster Parliament have been reduced. It would be a nonsense to start the Scottish parliament on day one with 129 members and to tell them on day two that 20 or so would be out at the next election. Apart from anything else, we are creating a new building. Let us have a little commonsense about this. Although I do not expect an answer from the Government in relation to this amendment, I hope that they will very clearly separate the two issues.
Lord Mackay of Ardbrecknish: I do not know which of us will be embarrassed the more, but I agree absolutely with everything that the noble Lord, Lord Steel of Aikwood, has just said on both counts. If the Government have accepted that the Scottish quota must move closer to the English quota, or even the UK quota, and that it will result in a redrawing of the Scottish constituency boundaries to reduce the number of Scottish Members of Parliament, frankly the sooner it is done the better. I hope that the Government do not say that it will take a long time to redraw 72 constituency boundaries. I pick out the noble Lord, Lord Desai, partly because he is present and partly because he is such an expert in this matter. I believe that the noble Lord and I could, at great salary and with a few calculators and some demography, easily draw up decent constituency boundaries within about three months. They would not be biased because the noble Lord and I would ensure that they were not. That is the easiest task under the sun. I can never understand why such a meal is made of the drawing and redrawing of

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constituency boundaries. That could be done easily in time for the next election so that the number of Scottish MPs at Westminster was properly aligned. I picked out the noble Lord in order to demonstrate bipartisanship about the whole process. I am not entirely sure that I can identify a numerate member on the Liberal Democrat Benches.
Lord Fraser of Carmyllie: I am extremely worried that my noble friend is about to commit an act of great political incorrectness. As I understand it, the chairman of the Boundary Commission for Scotland is Lady Cosgrove. I have no doubt that the noble Lord, Lord Desai, is more than capable of achieving such a task within a short space of time. But knowing Lady Cosgrove and her ability to drive things forward, I am sure that she could do it within an appropriate period.
Lord Mackay of Ardbrecknish: I am delighted to hear my noble friend's reference to Lady Cosgrove. I was relying on the track record of previous boundary commissions which appear to have taken years and failed to get their mathematics right. However, that is an issue to which we shall turn shortly. I do not believe that this is a big problem. With determination it can still be done, but it would have been easier to achieve the objective had the process been started some months ago.
The point that my noble friend Lord Rowallan makes in his amendment, and that other Members of the Committee have made, is that if the Government accept that the number of Scottish Members at the other place should be reduced in recognition of the Scottish parliament, then that should happen at the next election. I am absolutely clear about that.
I want to re-echo the second point made by the noble Lord, Lord Steel of Aikwood: the idea that that diminution in the number of Members will somehow trigger a similar decline in the number of members of the Scottish parliament is about the daftest proposal that could be brought up. One hundred and twenty-nine members of the Scottish parliament will be asked to look around and say to themselves, "Am I to be one of the 21 or not?". Nothing could be worse from the point of view of starting off the parliament.
This is one of the most important issues in the Bill so far as concerns the future relationship of the Scottish parliament to the UK parliament. I hope that the Government have reflected on the matter over the Recess. It would be nice were they to follow the noble Lord, Lord Steel of Aikwood, and myself and tell us that they have reconsidered this matter and will detach the membership of the Scottish parliament from membership of the other place, but I am not going to hold my breath. I hope that we hear some common sense about when we will have this reduction in Scottish Members of the other place. If we are going to have it, let us have it at the next election.
Lord Selkirk of Douglas: Does the Minister accept that there is a distinction to be drawn between the number of members of the Scottish parliament and the number of Scottish Members of Parliament in the
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Westminster Parliament? Because of geographical circumstances, far-flung communities, remote Highlands and Islands communities, the difficulties of air travel to remote communities and the health needs of those who have heart attacks on remote islands and have to be brought in by helicopter if they are to survive, higher expenditure is involved. Because the numbers in those communities are small they need a higher rate of representation than would otherwise be the case.
That is especially relevant for the Scottish parliament. If it is to make a success when it begins, to stop that continuity of provision and reduce the number of members would be a blow to the morale of the Scots parliament. It may be a different matter for Westminster where the West Lothian question still persists. I hope that the Minister will press the case for Scottish Members of Parliament in the Scots parliament and not concede too easily.
Lord Sewel: In this debate we have ranged a little beyond the terms of the amendment. We have again raised the issue of the relationship between the size of the Scottish parliament and the size of Scottish representation at Westminster. We dealt with that point earlier in the Committee's deliberations, and no doubt we will return to it on Report. I think that we will leave it until then.
Before I deal with the details of the amendments it might be of some use were I to explain briefly the purpose of Clause 81 and why we consider it necessary to include it in the Bill.
Clause 81 has two main purposes. First, it removes the requirement for Scotland to have a minimum of 71 seats at Westminster. Secondly, it provides that Orkney and Shetland cannot be included in a Westminster constituency which also includes part of some other local authority area. That is to ensure that Orkney and Shetland will each form a separate constituency in the Scottish parliament as provided in paragraph 1 of Schedule 1 to the Bill.
For the sake of clarity, I should deal with the point made by the noble Lord, Lord Munro. It is not the intention that Orkney and Shetland should be split for the purposes of representation at Westminster. It will remain the constituency as it is. The reduction in the number of Scottish MPs at Westminster is in recognition of the fact that once the Scottish parliament is established Westminster will no longer be the forum for scrutinising much of Scotland's domestic legislation, and the Government have accepted that it is no longer possible to justify the level of representation that Scotland has enjoyed in the other place over the years.
Clause 81 delivers a stable constitutional settlement and meets our commitment in the White Paper to provide independent representation for Orkney and the Shetland Islands within the Scottish parliament.
I shall now turn to the amendments, beginning with those tabled by the noble Lord, Lord Rowallan, and the amendment to Amendment No. 289 tabled by the noble Lords, Lord Monson and Lord Ellenborough. The Government cannot support Amendment No. 289 or even its revised form, Amendment No. 289A. We accept

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that there is a need to reduce Scottish representation at Westminster as a result of the creation of a Scottish parliament. However, the task of making that reduction must be left to the impartial and, I believe, well respected proceedings of the Boundary Commission. No boundary review should be rushed, especially not one as important as this. It is vital to allow sufficient time for public comment and public inquiries where objections can be raised to the commission's proposed recommendations. That is the flaw in the argument of the noble Lord, Lord Mackay of Ardbrecknish.
Anybody can sit down and draw lines on a map using a calculator to come up with some form of equal mathematical quota for constituencies, but in this area we have always proceeded on the basis of representation and inquiries, which, quite rightly, enable the public and other interested bodies to make representations about the Boundary Commission's initial views. That provision would have to be retained for the job to be done properly, and I suspect that it would require primary legislation to change the procedure that has been adopted heretofore by the Boundary Commission in the way it has proposed parliamentary boundaries.
It is for the commission to decide how it conducts its reviews within the provisions of the Parliamentary Constituency Act 1986, but under its current statutory timetable the earliest it could report would be December 2002. A major review, such as the next one will be, will take at least three years to complete, and the noble Lords' amendment would require the Boundary Commission to complete its review by the first meeting of the Scottish parliament or three months after it; in other words by August 1999. That represents an impossible timetable. The commission would be forced to carry out a review with indecent and improper haste.
If the amendments were made they would ride roughshod over any idea of allowing adequate public response and consultation and the holding of inquiries. I simply do not believe that such a cavalier attitude can be justified in relation to such a sensitive matter. It cannot be right. On that basis, I urge the noble Lords to withdraw their amendment.
Lord Monson: I am grateful to the noble Lords, Lord Monro, Lord Steel and Lord Mackay, for their support. As the noble Lord, Lord Steel, said, reducing over-representation is not a complete answer to the West Lothian problem but it does help to some extent. The Minister has confirmed that the Government are committed to reducing Scottish representation to English levels or thereabouts. The question is when.
With his great mathematical expertise, the noble Lord, Lord Mackay, has assured us that it could be done relatively quickly. The noble Lord, Lord Ellenborough, has pointed out that if something is not done relatively quickly—the amendment we have put forward may be a little too extreme—Scotland could be over-represented by 25 per cent. up until the year 2007. By that time the Scottish parliament will have been in existence for eight years. That seems to me totally unacceptable.
This is a matter to which we shall have to return at Report stage. However, in the meantime I beg leave to withdraw the amendment.
Amendment No. 289A, as an amendment to Amendment No. 289, by leave, withdrawn.
Lord Rowallan: As regards Amendment No. 289, I thank the noble Lord, Lord Steel of Aikwood, and the noble Lord, Lord Mackay of Ardbrecknish, for their support and understanding of my amendment. I was delighted to hear the Minister say that at Report stage we shall return to the issue of whether we are tying the number of MSPs vis-à-vis constituencies. I had thought that he had answered the point, but it is to be considered again.
I cannot emphasise enough—I feel strongly about it—that we are creating a Bill for a new parliament. It is the first of its kind. If we get it wrong, it is no one else's fault but our own. We cannot blame the new parliament when it is set up. We can blame no one but ourselves if we get it wrong. If we do so, the potential catastrophe for this country, for Scotland, is enormous.
We cannot leave the matter until after the parliament is up and running. I disagree wholeheartedly with the Minister. Three years to sort out 72 seats? Lady Cosgrove must be a little shocked to learn that she has to work so slowly. It cannot be beyond the wit of man or woman to come up with a solution. The alternative is so dreadful as regards the Scottish and English backlash that I think that we are heading into big trouble. I want more time to think about it. I shall definitely return to the issue at Report stage. I hope that the Government can do some serious thinking on the matter. This is probably the biggest minefield in the whole of the Bill. It could create so many problems that it could lead to the end of everything.
Lord Steel of Aikwood: Before the noble Lord withdraws the amendment, does he agree that there is no reason why the Boundary Commission could not start now and finish well before the three-year deadline?
Lord Rowallan: That is exactly what I should like to see happen. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 289B:
Page 39, line 9, at end insert—
("3B. A constituency which includes the Western Isles shall not include the whole or any part of a local government area other than the Western Isles."").
The noble Lord said: In moving the amendment, I speak also to Amendments Nos. 290A and 290B. The amendments seek to do two quite separate things, but I agreed to group them for convenience.
In Amendment No. 289B I seek to give the Western Isles the same privileged position as is given to Orkney and Shetland. The position is quite clear. The Bill states that no other part of Scotland can be added to the Orkney and Shetland constituency. That is one constituency. While that is my reading of the Bill, it is not the reading of my noble friend Lord Monro. I do not complain about that. However, I believe that the Western Isles deserve the same consideration.
When we discussed the matter in relation to the Scottish parliament, the Minister accepted the point I made and expressed his understanding and sympathy. An argument can be and indeed was made before the last Boundary Commission that the Western Isles could be enlarged to include Skye. There are now good transport links between the two. Indeed, there are probably better sea links between Skye and the Southern Isles of North Uist, Benbecula and South Uist than between the Southern Isles and Harris and Lewis in the Western Isles constituency.
Prior to the previous Boundary Commission inquiry there was some discussion about Skye being added to the Western Isles. I can see that proposal being returned to in a future boundary review. Therefore, I want to give the Western Isles the same protection as is afforded to Orkney and Shetland. That is what my amendment seeks to do and I hope that the Minister will view it sympathetically.
My second point on the other two amendments refers to a different issue; one to which I have drawn your Lordships' attention on a previous occasion. I shall try to be brief, but that does not mean that I do not believe the argument to be well-founded. Given the lateness of the hour and the business that has yet to be dealt with, I shall return to the matter on Report.
I am concerned that one of the main qualifications for the Boundary Commission has been a lack of numeracy, or that numeracy has been way down the list of qualifications. The intervention of my noble and learned friend Lord Fraser on behalf of Lady Cosgrove gives me confidence that her ability to count numbers of constituents is greater than that of her predecessors. Frankly, we have seen huge and totally illogical variations in the numbers and members in constituencies.
That is one of the things which leads to odd results at general elections where the proportionality of Members of the other place is quite out of line with the proportionality of the vote. One reason for that is that constituencies are not drawn on a nearly equal basis numerically. I am surprised that so many people fail to understand that and realise that, if we addressed the problem, we would remove part of the argument for going down the disastrous road of proportional representation which we are being invited to take.
I have already reminded the Committee of some of the amazing illogicalities in Scotland. I will give only one example, which is the difference between Edinburgh and Glasgow. Your Lordships will appreciate that, in terms of population density, demography and distance from Westminster, there is not much to choose between Edinburgh and Glasgow. There is much to choose in other ways, but not on those factors. I do not know, but perhaps Edinburgh Members of Parliament are better. Perhaps that is the secret. They manage to represent in excess of 60,000 electors apiece. The figures are 64,000 in Edinburgh Central; 64,000 in Edinburgh East and Musselburgh; 61,000 in Edinburgh North and Leith; 60,000 in Edinburgh Pentlands; 63,000 in Edinburgh South; and 61,000 in Edinburgh West. That is an average of 61,000 to 62,000 per constituency.
On the other hand, Glasgow is represented thus; 53,000, 49,000, 50,000, 50,000, 57,000, 53,000, 48,000, 51,000, 48,000 and 53,000. Not one of them approaches anywhere near the Edinburgh level. I would put the average at 52,000 or perhaps 53,000. There is no logic to that, other than my deep suspicion, which of course is wrong, that over time Edinburgh foolishly elected some Conservative Members of Parliament while Glasgow could be relied on not to do so. There is no "oh, come on" about it. That is the fact of the matter. One constituency less in Glasgow at the last election to bring the numbers up a little would have gone to a part of Scotland where perhaps the Labour Party would not have been guaranteed to pick up a seat the way it knew it could in the rotten boroughs of Glasgow. It is ludicrous and I could give examples of large rural constituencies which in electoral terms are much bigger than any of those Glasgow seats.
I shall give one example because I believe that I ought to be trying to shame the Government. It is not a political point because it is another Labour seat. Poor old George Foulkes in Carrick, Cumnock and the Doon Valley represents 66,500 electors over a huge rural constituency. If the conclusion is that he is a good man, does that mean that all the Glasgow MPs are incompetent, including the Secretary of State for Scotland who has a little tiddler of a constituency because he is unable to look after a bigger one? I do not believe that for a minute. It is totally unjust and ludicrous and therefore I wish to see us take action in legislation to give numbers a greater primacy than they have had in the past.
Of course I can see the justification for Caithness and Sutherland, for example, but I cannot see the justification for the Glasgow seats. My amendment would provide that only five seats outside Orkney and Shetland and the Western Isles should be outside a quota band of plus or minus 5 per cent. of the quota. That would be roughly 52,000 to 58,000. Five seats would be allowed outside it in addition to Western Isles and Orkney and Shetland. I suggest Caithness, Sutherland and Easter Ross is a clear first one. All the others would have to be within that range.
More than half the seats in Scotland are outwith that range at the moment. Some of them that are outwith the range are quite amazing. Some of the ones above the range are among the most difficult seats in terms of distance. Carrick, Cumnock and Doon Valley I have mentioned; Inverness East, Nairn and Lochaber has 66,500; Dumfries has 63,500. It is ludicrous that that should be the case.
As to the smaller constituencies, I cannot think who the MP is for Hamilton South but he is so incompetent that he can only cope with 47,000 constituents. Thankfully he could walk quite slowly from one end to the other in about an hour. It is totally illogical. Your Lordships, by your enjoyment of this, have illustrated that my point is well made. Nobody can defend these outcomes.
I am suggesting—and my point is made—that we really should try to put something in this legislation to tighten down the rules within which the Boundary

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Commission works and to make primacy of numbers a more important issue than it has ever been in the past. That would mean that the outcome of the first-past-the-post elections for the Scottish parliament and the other place were much more in line—I am not saying accurately in line—with the totality of the votes cast than is currently the case due to the huge imbalance between constituencies. On those two quite different issues, I beg to move.
10.15 p.m.
Lord Sanderson of Bowden: The Boundary Commission is tied up not only with the Parliamentary Boundary Commission but the Local Government Boundary Commission. If my recollection of what has gone on in the past is anything to go by, my thought must be in the case of Glasgow—which is an iniquitous situation—it all starts with the boundaries for the local government scene. Until that is tackled in legislation we shall never get to the right numbers as far as parliamentary boundaries are concerned.
I was not a little annoyed when a High Court judge was appointed to look at the situation in Glasgow and in Inverness, Nairn and Lochaber and came to the conclusion that it was a great idea to have a constituency that went from one sea to the other with 66,500 people but he had to decide that an extra seat in Glasgow was necessary, putting it up to 72 at that stage. It is all wrong. Unless we tackle the local government boundaries and the size of the local government wards in a proper way we will never get to the right numbers as far as parliamentary seats are concerned.
Lord Fraser of Carmyllie: I support my noble friend. The logic of his approach is absolutely correct. It is to recognise that there are parts of Scotland with very real geographical distances and very real areas of sparsity of population where there should be large constituencies with smaller numbers. The figure he gives of five or six seems about right. That must be the correct approach rather than these smaller ones in the centre of Glasgow and elsewhere.
As to his Amendment No. 289B, and the proposition that a constituency which includes the Western Isles should not include the whole or any part of a local government area other than the Western Isles, I am only sorry that my noble friend Lord Lang, does not have his name appended to it. Some will remember that in another place at another time my noble friend described such a proposal before the Boundary Commission as one of being "Give them a Minch and they will take an Isle."
Lord Sewel: I thank the noble Lord, Lord Mackay of Ardbrecknish, for reminding me in Amendment No. 289B of the undertaking I gave on the first day of Committee to consider whether it was necessary to provide in the Bill for a separate constituency for the Western Isles for the Scottish parliament. I said then that I would reflect on the matter. I have done so. I have to say that I am not yet convinced by the noble Lord's arguments.
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The Western Isles has formed a separate Westminster constituency for a number of years. I can see no reason why it should not continue to be so in the future. We can leave it to the Boundary Commission for Scotland to decide the appropriate boundaries. The comparison with Orkney and Shetland is not a true one. In the case of Orkney and Shetland, we are working from the present unit of a Westminster constituency—the Orkney and Shetland division—and splitting that into two constituencies for the Scottish parliament. That is why we are required to make special reference to that in the Bill. As the Western Isles already has its own constituency, there is no similar reason to make provision for that on the face of the Bill. So, on reflection, I came to the conclusion that we were not really comparing apples with apples; we were comparing apples with pears to an extent.
Lord Mackay of Ardbrecknish: I am grateful to the noble Lord for giving way. I do not quite follow the noble Lord's logic. If that is logical, why are the Government doing it when it comes to arrangements at Westminster? Currently, Orkney and Shetland are one constituency. There will not be any changes there. Unlike the Scottish parliamentary scene, they will remain one constituency. Why do we not leave that to the good sense of the Boundary Commission? The noble Lord's case is that, because they are splitting Orkney and Shetland in the Scottish situation, they feel they have to put in this point. I do not understand that, but I shall leave it aside this evening.
However, as far as concerns Westminster, they are not making any change to the position. Orkney and Shetland remain as they have been. Why do they have this special provision for Orkney and Shetland for Westminster when the logic of the first argument would suggest that they should not be doing that. They should leave it to the good sense of the Boundary Commission.
Lord Sewel: We are talking about representation in the Scottish parliament. That is why there is a necessity to make this point explicit on the face of the Bill in terms of representation of Orkney and Shetland within the Scottish parliament. There is no similar need to make that point in relation to the Western Isles.
Lord Mackay of Ardbrecknish: With all due respect, the rubric to Clause 81 says "Scottish representation at Westminster". That is what Clause 81 is about. So I do not see why we need the part about Orkney and Shetland at all. Nothing is changing. They are not being split in two; or are they? Are there going to be two constituencies at Westminster? It is totally illogical.
Lord Sewel: The key to this is in subsection (3), which states:
"After rule 3 there is inserted … '3A. A constituency which includes the Orkney Islands or the Shetland Islands shall not include the whole or any part of a local government area other than the Orkney Islands and the Shetland Islands'".
That is the building block which enables us then to make the provision for separate representation within the Scottish parliament for the Orkney Islands and the Shetland Islands.

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Perhaps I may move on to Amendments Nos. 290A and 290B. As a former principal teacher of mathematics at Oban High School, I recognise that quotas and mathematical formulae loom large in the mind of the noble Lord, Lord Mackay of Ardbrecknish. I have a strong degree of sympathy for the noble Lord's point that a mathematical balance should be taken very seriously into account. As I understand Amendment No. 290A, if I have interpreted it correctly, the noble Lord is simply attempting to ensure that most of the constituencies of the Scottish parliament are broadly of a similar size. That was a strong point which he made in his contribution.
The noble Lord has tabled his amendment to address his concerns about the Boundary Commission creating small constituencies predominantly in urban areas while allowing some geographically large rural constituencies to have a greater number of electors. That was one of the main points of his arguments.
The rules for determining constituency boundaries in the 1986 Act already include a rule that the electorate of a constituency is as near as is practical to the electoral quota. That is an instruction and a condition which the Boundary Commission already has regard to in carrying out its work. However, it is also given the flexibility to take a number of other factors into account; in particular, special geographical considerations, including the size, shape and accessibility of a constituency. In determining constituencies, it may take into account also boundaries of local government areas and the existence of any local ties.
The noble Lord is really trying completely to down-play all those other factors, whereas I can say from my experience of local government that they were the very factors which often caused the greatest local reaction when the Boundary Commission's initial proposals were published. People thought that the sense of belonging and ties were being broken, and broken in an arbitrary way, in order to achieve some form of mathematical quota. The approach which the noble Lord, Lord Mackay, offers is too arbitrary. We should allow the Boundary Commission the same flexibility that the commissions in England, Wales and Northern Ireland already have.
The noble Lord has drawn our attention also to the current discrepancy in electoral size. The points he makes are rightly made. Almost two-thirds of all the current constituencies are either 5 per cent. larger or 5 per cent. smaller than the current electoral quota of 55,500. I argue that that shows that it is impractical to expect 90 per cent. of all constituencies to be within 5 per cent. of the electoral quota. As I say, the Boundary Commission is working from a framework which gives it an electoral quota and a requirement to have that very much in mind. I certainly would not make the point that the Boundary Commission, very largely, I suspect, appointed by a previous government, is full of political stooges in any way, shape or form. They are honourable people trying to do a difficult job. But in trying to reach an acceptable outcome they have found it impossible to achieve that very close bunching around the electoral
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quota of 55,500 electors. If that is done, it produces constituencies which fail to have any grounding, any base or any identity.
10.30 p.m.
Lord Sanderson of Bowden: I thank the Minister for giving way. If the quota for the local government wards in Glasgow is set at too low a level—he pointed out that local government wards do have to be co-terminus—for instance, if one has a multiplication of three towards a parliamentary constituency in Glasgow, one ends up with the situation that one has in Glasgow where there is a lower electorate in each parliamentary constituency, as opposed to the situation in Edinburgh. Is not that something that goes back to the local government Boundary Commission's remit? It ought to look carefully at the whole of Scotland and decide what the quota should be for the local government wards.
Lord Sewel: The noble Lord has a point. As I indicated, the Boundary Commission can take into account—and effectively does—the local government divisions. I refer the noble Lord to the fourth report of the Boundary Commission specifically concerned with Glasgow and the arguments that it adduced to produce its final recommendations.
Perhaps I can return to the general argument. Much has been made of the over-representation of the central belt, particularly Glasgow. We want to ensure that we have a parliament which clearly represents the diversity of Scotland, and the electoral arrangements provided for in the Bill ensure that all areas will be properly represented. In looking at that, it is necessary not just to look at the constituency representation, but to bear in mind the modification that comes about by the application of the regional additional member factor. That is a point that has not been raised and has not been recognised by the noble Lord, Lord Mackay of Ardbrecknish, in his arguments.
Seven regional members will be elected from each of the eight regions. That means, in absolute terms, that there will be only two members more from Lothian and Glasgow combined than from the most rural regions of the Highlands and Islands and the South of Scotland. To put it another way, with 26.4 per cent. of the electorate, Glasgow and Lothian will have 25.6 per cent. of the seats. Highlands and Islands and South of Scotland, with 21.1 per cent. of the electorate, will have 24 per cent. of the seats. It is through the constant regional representation coming into play that one gets that broad balance between urban and rural areas.
Lord Mackay of Ardbrecknish: I am very impressed by that, but we are talking about a clause which deals with Scottish representation at Westminster where we do not have regional representation. We are actually talking about the House of Commons.
Lord Sewel: As I understood it, we were talking about the representation to the Scottish parliament.
Lord Mackay of Ardbrecknish: Perhaps I can help the Minister by another intervention and say that Clause 81 begins:
"Schedule 2 to the Parliamentary Constituencies Act 1986 (rules for redistribution of seats) is amended as follows".
That concerns Westminster. The note at the side says, "Scottish representation at Westminster". So we are actually discussing Scottish representation at Westminster, not representation in the Scottish parliament. I accept that I may be reading the Bill wrongly. But we are on a totally different argument if we are now saying that the regional seats somehow sort out the balance. I do not believe that they do. But that is not the argument here; the argument here is about Westminster.
Lord Steel of Aikwood: During this interregnum perhaps I may point out that I do not believe that the Minister was talking about the regional seats, but of the regional balance within Scotland. He was quite legitimately making the point that the rural areas of Scotland have, on the whole, a lower quota of members per constituency than urban areas and I thought that a fair point. Perhaps if he finishes with it we can get on with the next amendment.
Lord Sewel: We are dealing at this point with Scottish representation at Westminster under Clause 81 in that it has an effect on the composition of the Scottish parliament.
Lord Monro of Langholm: Perhaps the noble Lord can answer one question. There is obviously great concern in the House about the delay in redrawing the boundaries for Westminster. He has made his case that there is not time to do it. Can he ask the chairman of the Boundary Commission between now and Report stage whether she can carry it out in good time for the next election?
Lord Sewel: I believe that we dealt with that amendment in the relevant clause.
Lord Mackay of Ardbrecknish: If it were not for the fact that there are many important things to be done, we could go on discussing this matter for some time. I believe that we were in total confusion, as the Minister will discover when he reads what he said. I accept that the changes in Clause 81 as regards Westminster will have a knock-on effect for the Scottish parliament. That is a point that the noble Lord, Lord Steel, and myself do not like at all. But it starts off by having an effect at Westminster because of a re-drawing of the Westminster constituency boundaries. When that is done the argument about regional representation on the second vote does not exist. It is not relevant at all.
I hope that the Minister did not really believe the argument that he was asked to put forward. I think that that is the kindest thing I can say. He made no attempt to address my Glasgow-Edinburgh point. There can be absolutely no argument, on any of the grounds he mentioned, for creating seats of very different sizes. There can be no argument between Edinburgh and
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Glasgow although there can be huge arguments between the Border and Highland seats although that collapses when one looks at Inverness and Lochaber. There can be good arguments about those and the city seats, but there cannot be any argument along the lines put forward by the Minister for the seats in Edinburgh comprising 61,000 or 62,000 and the seats in Glasgow averaging out at about 52,000 or 53,000. There has been no argument at all and that is indefensible. The only defence was the one everyone knows, namely, that the Boundary Commission ran scared at the hearings of the Labour Party and its particular might in West Central Scotland. That is the only explanation because, as my noble friend Lord Sanderson rightly pointed out, if one more seat is given to the Highlands and Aberdeen, which richly deserve it, it would be necessary to take a seat away from Glasgow and that, it was said, could not be done. It is pathetic.
Lord Sewel: At this stage it would be appropriate if the noble Lord paused and reflected on what he said about the Boundary Commission—a major slur on the way in which an independent and respected body has carried out a difficult job. I have been involved in appeals before the Boundary Commission and the outcome has not always gone the way I would have liked. I would certainly not make the accusation that it has run scared as a result of any political fear or pressure. It is important, when we have independent bodies such as the Boundary Commission charged with doing difficult jobs, that we do not undermine their authority and impartiality. I hope that the noble Lord will reflect on what he said.
Lord Mackay of Ardbrecknish: I shall reflect on it. My reflection is that as I have not had a convincing answer for the conclusion it has come to—and I shall modify my remarks—it was perhaps over-persuaded by the might of the case presented to it by the Labour Party because that is what must have happened. The case presented to the Boundary Commission by the Labour Party was so overwhelming in its arguments that it decided that Glasgow deserved to have very small constituencies in comparison to Edinburgh and the rest of Scotland. If we put it like that, perhaps everybody's honour is satisfied and the Labour Party can preen itself for its brilliance and persuasiveness and the advocates that it chose to do the persuading. I do not know whether the noble and learned Lord the Lord Advocate was one of them in a previous existence, but if he was, he should take that as a tribute. However, we cannot get away from the point that the Government have made no attempt to explain why there is a difference between Glasgow and Edinburgh.
When the Labour Party told me that it is so important that local connections are taken into account, I just thought about Alloway and Ayr. Alloway and Ayr were removed from the Ayr constituency and put into that of Carrick, Cumnock and Doon Valley. That move was opposed by the Conservative Party, it has to be said, and approved by the Labour Party. The findings of the ultimate body agreed with the commission because that would have split local government boundaries. The fact

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that it completely split communities of interest was neither here nor there. I think that is—if I can use the word—"twaddle", and I hope that the Minister does not believe it.
The exchange that we have had has been puzzling because I do not think that the Government really understand what they are doing here. I did not understand the logic of the argument about Orkney and Shetland. It seems to me, in relation to Orkney and Shetland, that we do not need this part of the Bill at all. I shall carefully study what the Government say. As I understand it, this is required in order to pave the way for the split seat at the Scottish parliament, due to the linkage between the two. That seemed to me to be the nearest that I could get to a logical argument. I may well come back to the point by removing the special provision for Orkney and Shetland here and putting that constituency on the same basis as the Western Isles. They can put their faith, as the Minister clearly has put his faith, in the Boundary Commission. If the Western Isles have to put their faith in the Boundary Commission, I do not see why Orkney and Shetland should not put their faith in the commission as well. The Committee will not be surprised that I shall advise the Western Isles not to do so.
On the second point about numeracy, I have heard all that the noble Lord has said, and he has not convinced me at all. I have perhaps drawn it quite tightly at plus or minus 5 per cent., but I believe he could have persuaded me to go a little wider. I firmly believe that if we are to continue with first-past-the-post elections in this country, we shall have to address the question of a better distribution of seats as far as numbers are concerned. That is perfectly possible. As I understand it, the United States' House of Representatives redraws the boundaries every two years in order to have elections, to that house, on the basis of equality. They go for equality in a very big way. If it can be done in a country as large as the United States, it can certainly be done in a country as small as Scotland. I beg leave to withdraw my amendment, but I am not pleased with the Government's answers.
Amendment, by leave, withdrawn.
[Amendments Nos. 290 to 290B not moved.]
Lord Lyell: At this point, I wonder whether it would be in order to ask the Minister a question. I have to declare an interest in that 113 years ago my great-grandfather was a Member of Parliament at Westminster for Orkney and Shetland. He was, by the way, a Liberal, but far to the right of Ghengis Khan, so far as I am aware from the Kinnordy papers. Could the noble Lord advise me tonight or at a later stage of the geographical content of paragraph 3A—at lines six to nine inclusive on page 39—which he read out? Is there any alteration in the geographical area of what clearly was then, and is now, the constituency of Orkney and Shetland? From what he was saying earlier, I wondered
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whether the redrawing of the constituency might include some part of the mainland, but I put that out of my mind. Are there any other areas or islands that might be outwith the local government area? Is there any change in the geographical boundary or not?
Lord Sewel: I believe the answer to that is no.
10.45 p.m.
On Question, Whether Clause 81 shall stand part of the Bill?
The Earl of Mar and Kellie: I wish temporarily to oppose the Question that Clause 81 stand part of the Bill. The clause deals with Scottish representation at Westminster—but only with constituency representation in the other place. That is quite inadequate. It is important that there also be Scottish representation in this House. Bills with Scottish content will continue to be scrutinised in this House. There is a need for a guaranteed number of active or working Peers who are domiciled in Scotland.
I stress that, of the 27 working Peers announced in the summer who are now being introduced into your Lordships' House, not a single one is domiciled in Scotland, Wales or Northern Ireland. That does not bode well for the future. The unspoken charge has to be one of packing the House with English working Peers. I have examined the list of the 104 Peers who have been created since May 1997 and I can identify 11 who are domiciled in Scotland, but not all of those 104 are working Peers. The figures show that 78 are notionally working Peers, two are Lords of Appeal, seven are Peers as a result of the Birthday Honours, 10 as a result of the Resignation Honours and four as a result of the New Year Honours.
I hope to hear a satisfactory explanation of why there is no mention of Scottish representation in this House in this Bill. The credibility of the devolution settlement depends on there being a guaranteed number of working Peers who are domiciled in Scotland and who will scrutinise the Scottish content of UK legislation. Such an inclusion would be entirely within the spirit of the Treaty and the Act of Union.
Lord Sewel: I do not think that my briefing will help in this regard. I am sure that there will be a continuing number of working Peers domiciled in Scotland who will be active in your Lordships' House, but it would be most inappropriate in this Bill to make any reference to any requirement for a specific number of working Peers to come from one particular component of the UK. The great virtue of this House is that it works—some would say "reasonably effectively"; others would say "not quite as effectively as would a reformed House"—and that it works without any rules governing its geographical composition. I think that we should leave it there.
Clause 81 agreed to.
Clause 82 [The Advocate General for Scotland]:
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 290C:
Page 39, line 23, at cnd insert—
("(1A) The Advocate General for Scotland shall be qualified as either—

(a) an advocate, or

(b) a solicitor under the Solicitors (Scotland) Act 1980.").

The noble and learned Lord said: This is the first of two amendments dealing with the position of the Advocate General for Scotland who is referred to in Clause 82. The amendment raises the issue of the legal qualifications that should be held by the person who becomes a member of the United Kingdom Government and holds the new post of Advocate General for Scotland. Although in a number of instances the Bill refers to certain rights that the Advocate General will have—in particular in Clauses 31 and 32, which deal with the pre-legislative scrutiny of Bills by the Judicial Committee of the Privy Council, and in the provisions of Schedule 6 dealing with the resolution of devolution issues—nowhere in the Bill is there a full definition or description of the role which the Advocate General will play. Undoubtedly, the first and subsequent holders of that new office will have to establish themselves in Whitehall and have an office to support them in their work.
While listening to the debate earlier in relation to Amendment No. 289 moved by my noble friend Lord Rowallan and the contributions made by the noble Lord, Lord Monson, and others, it struck me that it is reasonable to anticipate that in the months and years ahead it will be difficult for Scottish MPs in Westminster to play quite as active a role in the affairs of the other place and to play as active a role as members of the Government as they have done up until the present time. Indeed, politicians of all parties are questioning whether there should be a reduction in their number, whether it is right that they should hold ministerial positions in departments such as the Home Office and whether they should participate in debates in another place which are restricted to English-only affairs.
It is against that background that the new post of Advocate General will require to be established. It will remain to be seen whether the one individual who will hold that post will be able to achieve as much influence in the affairs of Whitehall as the Lord Advocate and the Solicitor-General have done in the past and as they currently do with the present Government. They advise the Government on a wide range of legal issues which have UK implications, they make an input into policy formation where a legal input is required and they play a role in the legislative business of one or other—or, indeed, both—Houses of Parliament.
The amendment seeks to make it clear that the Advocate General must be either an advocate, a member of the Faculty of Advocates, or a solicitor under the Solicitors (Scotland) Act 1980. The reason why reference is made to Section 8 of the 1980 Act is to make it clear that the category of solicitor being referred to is one who is qualified to practise as a solicitor in
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Scotland and to be admitted to the roll of such solicitors, kept by the Law Society in accordance with its statutory duties.
Some Members of the Committee may recall that a previous amendment—namely, Amendment No. 255Q—raised a similar issue in relation to the qualifications of the Lord Advocate and the Solicitor-General, in respect of whose appointments certain provision is made in the Bill. When I moved that amendment, which sought to make it possible for a solicitor to serve as a Scottish Law Officer, I was met with opposition from the Government—founding on a memorandum written by the Lord President of the Court of Session in 1924 which had been submitted to the Prime Minister of the day after the new Labour Government under Ramsay MacDonald had mooted the idea of appointing a well-known Glasgow solicitor who was a Member of Parliament, a man who certainly subsequently became, if he was not already in 1924, a highly respected and much-loved Glasgow solicitor, Rosslyn Mitchell, as the Lord Advocate. In the event, they did not do so and it is of some amusement to reflect that they ended up appointing a Mr. MacMillan, as he then was, whose political affiliations were that he had once been selected as a unionist candidate. I have to say that he did not last very long in the post; indeed, a mere nine months.
As I indicated previously, this whole issue of the qualifications of the Lord Advocate and the Solicitor-General will need to be debated again on Report. However, in the light of what has changed in Scotland as regards the role which solicitors play in the legal work, not only with the extended rights of audience that they now have but also the very high-powered and detailed advisory work that they carry out in a huge range of subjects, we on this side of the Committee firmly believe that it would be quite wrong when looking to the future to restrict the new role of Advocate General only to members of faculty.
Clearly it will be competent for the Advocate General to initiate certain legal proceedings. It will be competent for him to be convened as a party to other legal proceedings. If he is a member of Faculty, he can, if he so chooses, appear on his own behalf or he can, as other Law Officers have done in the past, instruct counsel to appear on his behalf. Indeed in the past, particularly in civil matters, it has not been uncommon when the British Government are challenged in court, and a Minister is judicially reviewed, for the Law Officers not to appear but to instruct counsel independently of the Government altogether.
It seems to me that in choosing an Advocate General the United Kingdom Government should have free range to look for a lawyer, whether he be an advocate or a solicitor. It is for that reason that this amendment is proposed. The amendment has the full support of the Law Society, which drafted this amendment and Amendment No. 255Q. Last week I received a letter from the President of the Law Society indicating support

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for the view that this provision should be stated on the face of the Bill. The letter states:
"The society is of the view that either an advocate or a solicitor should be entitled to be appointed as Advocate General for Scotland. The important issue is that the person so qualified should be the right person for the job. irrespective of to which branch of the legal profession in Scotland he or she belongs".
I beg to move.
Lord Hope of Craighead: I wish to say a few words in support of the principle of the amendment. As the noble and learned Lord, Lord Mackay of Drumadoon, mentioned in his introduction, the Advocate General appears in one or two provisions in this Bill but remarkably little is said about him or her as to qualifications. From the point of view of the court—I think both of the Privy Council and, with respect, of the Court of Session—the Advocate General will be a person of some importance. One of the things that he can do, as indeed can the Lord Advocate, under this Bill is refer a question about the competence of a measure of the Scottish parliament to the Privy Council for its decision. It may well be that if the Lord Advocate were to refer such a question to the Privy Council, the Privy Council would wish to seek the views of the Advocate General too in order that it may be properly informed about the issue.
In Schedule 6 we see that the Advocate General is included in provisions about the institution of proceedings in the courts and that a court or tribunal before which a devolution issue is raised must intimate the fact that proceedings have been raised on such an issue both to the Advocate General and to the Lord Advocate. Therefore from the point of view of these proceedings it is of great importance that we should know what the proposals are about the qualifications that this member of the government is to have.
From my point of view the most important thing is that it should be clearly understood that this Minister of the Crown should be someone who has a proper qualification to advise the Government and indeed advise the court on matters of Scots law. In the past, of course, one has turned to members of the Faculty of Advocates for that qualification. However, the proposal which is put forward now is certainly not without precedent as regards qualifications for appointment to the Bench. I would not wish to go into the detail but it may be appropriate to include a reference to solicitors as potential candidates for appointment. But from my point of view the important thing is the requirement of a Scottish legal qualification to ensure that this Minister can perform the functions that are required of him by the Bill and those which are implied by his position, which are those of advising the Government on matters relating to Scots law.
11 p.m.
Lord Fraser of Carmyllie: I welcome the probe that my noble and learned friend Lord Mackay has introduced with this amendment and the comments made by the noble and learned Lord, Lord Hope.
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Subsection (1) of Clause 82 seems to start well but finishes badly. As we look to the schedule and to the Ministerial and other Salaries Act 1975 we find that the Advocate General for Scotland is to fall in provision after the Solicitor-General for Scotland. That would seem to accord him a certain status. If he is to have that status in government one would expect him, albeit a new constitutional creature, to have the status of a law officer. I regard it as wholly desirable that the United Kingdom Government should be advised on matters of Scots law by someone who has both qualification and experience in the law of that part of the United Kingdom. To that point I am reassured.
However, in subsection (3) I discover that,
"If that office is vacant or the Advocate General is for any reason unable to act, his functions shall be exercisable by such other Minister of the Crown as the Prime Minister may determine".
Does that mean that some junior Minister at the Home Office who maybe went to a Scottish university and once had a brush with the Procurator Fiscal is to assume the role of offering advice to the United Kingdom Government on these important matters? It is a real issue. There is no necessary restriction, as I understand it, on how long a Prime Minister might consider leaving the office of Advocate General vacant. It might be for a protracted period. We need to understand what this new constitutional creature is to be. What is to be his status in the United Kingdom Government and what is to happen if he is unable to perform his duties? It is extraordinary so far as subsection (3) is concerned that he should seem to be put in a position that is no different to that of any junior Minister.
As I am sure the noble and learned Lord the Lord Advocate recognises from the position that he presently holds, the advice that a Law Officer gives to government occupies a separate status within our constitution. During the period of the Thatcher administration there was at least one Secretary of State who I guess to this day regrets revealing the advice he received from a Law Officer.
I am interested to know, if the Advocate General when his office is vacant is to have his functions exercised by some other potentially very junior Minister, whether what he or she has to say in such circumstances enjoys the sort of status that the opinion or advice of a Law Officer enjoys; or is it to be in exactly the same category as any other views expressed by Ministers in government?
It is important that we understand what is to be the position of the Advocate General. Is he truly a law officer? Is he in some way a hybrid character whose task can be fulfilled by someone with little or no legal qualification? If that is the case, I consider it to be thoroughly undesirable. If the distinctive status and importance of Scots law are to be maintained within the United Kingdom Parliament, we wish to see him, and rightly so, as someone who is both qualified and experienced in the law of Scotland.
Lord Rodger of Earlsferry: I support the remarks of my noble and learned friend Lord Hope of Craighead. The post of Advocate General is a new one. We cannot

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fall back on any conventions as to the status of the person who would be appointed. Therefore there is nothing to tell us what this person would be.
I have no doubt that the noble and learned Lord the Lord Advocate will tell us that a Scottish lawyer would be appointed. It is, however, a post of particular sensitivity. I suspect that the post will prove to be a bed of nails for the holder. He or she is unlikely to win many friends. It will be a difficult post.
It is therefore imperative, because of the sensitivity of the legal issues and the potential for political and constitutional difficulty in some of the decisions which would fall to be taken, that that person should be a person who holds a Scottish legal qualification and a person of the very highest standing. I can therefore see no disadvantage and every advantage in putting the minimum qualification on to the face of the Bill so that we can be assured that the Advocate General will indeed be a person who has a Scottish legal qualification. I can see no reason why it should not be open for this office to be held by a solicitor of distinction as much as by an advocate of distinction.
It is important that these matters should be set down and understood. If what happened in 1924 shows anything, it is that these crises can emerge of a sudden, out of a clear blue sky, when the whole position is uncertain. It would be unfortunate if the position were left uncertain; it would be much preferable if the matter were simply dealt with on the face of the Bill.
Lord Selkirk of Douglas: It seems that the case advanced by my noble and learned friend Lord Mackay of Drumadoon is unanswerable. It has been strongly supported by the Lord Justice General and President of the Court of Session. It is obviously necessary for the Advocate General to have the necessary expertise for that function, especially in cases of emergency. If I may say so, if the noble and learned Lord the Lord Advocate were in an aircraft hurtling towards the ground, he would very much want to have someone at the controls who was highly qualified and had the necessary expertise in order to ensure a successful outcome. I am sure that that should be the situation with this post in case of emergency in the future.
Lord Hardie: I can assure Members of the Committee and the noble Lord, Lord Selkirk of Douglas, that I certainly would wish to have someone competent at the controls of the aircraft, just as I am sure the Prime Minister would wish someone with appropriate expertise in Scots law to be appointed to the new office of Advocate General.
The amendment would require the Advocate General for Scotland to be legally qualified in Scotland, as either an advocate or a solicitor. I agree entirely with what has been said by Members about the principle that whoever is appointed to this post should have appropriate standing and qualification in Scots law to enable him or her to advise the United Kingdom Government. The only points between us are whether it is necessary to put on the face of the Bill what the qualifications have to be and whether the qualifications set out in the amendment are the appropriate ones.
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If one starts from the principle that the person appointed should be someone who has appropriate qualification and expertise in Scots law, it may be that such a person exists who is neither an advocate nor a solicitor. For instance, there may be a professor of law who is not a member of either profession. There may even be a sheriff who is not a member of either profession or a member of the Law Society of Scotland. Having said that, I suspect the answer to the latter point would be that a sheriff would probably have been qualified under the solicitors' legislation or as an advocate, so perhaps that last example was a bad one. Certainly the professor of law would be an example of someone who had the necessary academic experience but may also have had the experience of giving opinions to people on constitutional and other matters. Accordingly, if there is to be any qualification on the face of the Bill, the amendment would be drawn too narrowly and restrictively as far as the choice available to the Prime Minister is concerned.
As noble Lords will be aware, the offices of Lord Advocate and Solicitor-General are held by custom by members of the Scottish Bar. It has not been felt necessary in the past to prescribe the qualifications for those offices. It is not clear why that should be necessary in respect of the new office. Effectively, although the office of Advocate General is new, it will have functions similar to those held by the Lord Advocate. He or she will have to give advice to the United Kingdom Government on Scots law and the Advocate General will be required to represent the UK Government in litigation. There are also particular functions in relation to devolution in Schedule 6. It is clear that the United Kingdom Government would wish only to appoint a Scots lawyer of appropriate standing to fulfil those ministerial duties. However, the Government question whether it is necessary to set out on the face of the Bill what those qualifications should be. I believe that this is a matter that should properly be left to the discretion of the Prime Minister of the day.
I suggest that the question of the possible appointment of a solicitor to this office is not appropriate to this Bill. The advent of rights of audience for solicitors and solicitor-advocates may well give rise to a question as to whether it is appropriate for the Advocate General to be drawn from their ranks as well as the Faculty of Advocates. I suggest to the noble and learned Lord, Lord Mackay of Drumadoon, that it would be appropriate to consult a number of interests before proceeding along this line. In view of the wide range of the Advocate General's responsibilities, both formal and informal, it is essential that he commands the full confidence of the courts. Ultimately, the question of who should be appointed is a matter for the Prime Minister of the day. Someone of standing in the law will undoubtedly be required. Why should we confine the choice of the Prime Minister to advocates and solicitors? Why should the Prime Minister not be entitled, if he thinks it appropriate, to appoint a professor who is not a member of either branch of the profession?

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I turn to the point raised by the noble and learned Lord, Lord Fraser of Carmyllie. The purpose of the subsection is to deal with the situation in which there is a temporary vacancy and to mirror the situation which applies in relation to the Lord Advocate. If the Lord Advocate is temporarily absent or the office is temporarily vacant, then the duties of that office are fulfilled by the Solicitor-General for Scotland. It was felt necessary to have a provision to enable the duties to be performed during a short period of time pending the appointment of a replacement Advocate General. This subsection arises because there is no second Scottish law officer to the United Kingdom Government.
Lord Fraser of Carmyllie: I am very grateful for the explanation just given by the noble and learned Lord. I appreciate that in the event of, say, the sudden death of the Advocate General something may have to be done. I just wonder whether at Report stage the noble and learned Lord will, given the argument that he has just advanced, accept an amendment tabled by me based on the temporary vacancy of the office of Advocate General. Would that satisfy the noble and learned Lord?
Lord Hardie: As always, I shall consider any amendment that the noble and learned Lord tables at the appropriate time. If he chooses to table such an amendment, it will be given appropriate consideration. With those explanations, I invite the noble and learned Lord to withdraw his amendment.
Lord Mackie of Benshie: Will the noble and learned Lord answer a question from me on this important matter? Can he think of another suitable example other than a professor of law?
Lord Hardie: The examples that I gave were thought up as I sat on the Front Bench. At present I cannot, but I should not want that to be taken as indicating that there are no other examples.
Lord Mackay of Drumadoon: As I understand what the noble and learned Lord said, the position may be slightly different from what was said in relation to the previous amendment, where I understood the response was that it would not be appropriate for a solicitor, whatever his qualifications and experience, to be Lord Advocate or Solicitor-General. The noble and learned Lord asked me, "Why confine the Prime Minister"?. In the Bill the Government are seeking to create a new post—that of Advocate General for Scotland. For the reasons advanced so eloquently by the noble and learned Lords, Lord Hope and Lord Rodger, it is important that the qualifications for holding that post should be on the face of the Bill.
I regret to say that I do not find the answer acceptable. There is an important point of principle here as to whether the Government accept that a solicitor could hold the post. I seek to test the Committee's opinion.
11.16 p.m.
On Question, Whether the said amendment (No. 290C) shall be agreed to?
Their Lordships divided: Contents, 21; Not-Contents, 46.

Division No. 2

CONTENTS

Balfour, E.

Lyell, L.

Biddulph, L.

Mackay of Ardbrecknish, L.

Chesham, L.

Mackay of Drumadoon, L.

Clyde, L.

Monro of Langholm, L.

Courtown, E. [Teller.]

Montrose, D.

Newton of Braintree, L.

Ellenborough, L.

Rowallan, L.

Fraser of Carmyllie, L.

Sanderson of Bowden, L.

HolmPatrick, L.

Selkirk of Douglas, L.

Hope of Craighead, L.

Sempill, L. [Teller.]

Kintore, E.

Stair, E.

NOT-CONTENTS

Alli, L.

Hunt of Kings Heath, L.

Amos, B.

Irvine of Lairg, L. [Lord Chancellor.]

Bach, L.

Brooks of Tremorfa, L.

Jay of Paddington, B. [Lord Privy Seal.]

Burlison, L.

Carter, L. [Teller.]

Linklater of Butterstone, B.

Clinton-Davis, L.

McIntosh of Haringey, L. [Teller.]

Crawley, B.

Davies of Coity, L.

Mackie of Benshie, L.

Davies of Oldham, L.

Mar and Kellie, E.

Dean of Thornton-le-Fylde, B.

Monkswell, L.

Pitkeathley, B.

Desai, L.

Ramsay of Cartvale, B.

Dubs, L.

Rea, L.

Evans of Parkside, L.

Rendell of Babergh, B.

Falconer of Thoroton, L.

Sewel, L.

Farrington of Ribbleton, B.

Simon, V.

Gordon of Strathblane, L.

Smith of Gilmorehill, B.

Goudie, B.

Steel of Aikwood, L.

Grenfell, L.

Thornton, B.

Hacking, L.

Tomlinson, L.

Hardie, L.

Uddin, B.

Hayman, B.

Watson of Invergowrie, L.

Hoyle, L.

Whitty, L.

Hughes of Woodside, L.

Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.
11.23 p.m.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 290D:
Page 39, line 28, at end insert—
("(4) The Advocate General may appoint persons to be members of the Advocate General's Secretariat.
(5) The Advocate General's Secretariat shall include a Legal Secretary and First Scottish Parliamentary Counsel and such additional Scottish Parliamentary Counsel as the Advocate General shall deem necessary.
(6) No person may serve as Legal Secretary to the Advocate General or as a Scottish Parliamentary Counsel, unless he is qualified as either—

(a) an advocate, or

(b) a solicitor under the Solicitors (Scotland) Act 1980.").

The noble and learned Lord said: This is the second of the amendments dealing with the position of the Advocate General. It seeks to raise an issue relating to what is described in the amendment as "the appointment of the Advocate General's secretariat".
It is necessary to understand the background of the amendment and its relationship to the future work of your Lordships' House by outlining the present arrangements for supporting the Scottish Law Officers in their work. This may be known to some noble Lords, but probably not to all.
In London, the Lord Advocate maintains an office known as the Lord Advocate's Department where there are based a number of very experienced lawyers who constitute the team of Scottish parliamentary counsel. The senior official in the department, who currently holds a very high grade in the Civil Service, is appointed to the post of Legal Secretary and First Scottish Parliamentary Counsel. To assist him in his work, he has a number of legally qualified colleagues. The legal staff in the department act as parliamentary draftsmen and assist the two Scottish Law Officers in the advisory work they carry out in tandem with their English counterparts, the Attorney-General and the Solicitor-General.
The Scottish parliamentary draftsmen are entirely responsible for the drafting of Bills that deal only with the law of Scotland. They also draft Scottish provisions in Bills such as the Crime and Disorder Bill, which was considered by your Lordships' House during the current Session, in which a number of the provisions relate only to England and Wales and others relate only to Scotland. A further aspect of the drafting work is in relation to legislation which has UK application, for example, that relating to misuse of drugs.
In addition to drafting work, officials help the Scottish Law Officers in connection with the Lord Advocate's membership of various Cabinet committees dealing with the approval of legislation, helping him to advise on the ECHR implications of proposed legislation, and the like. A third aspect of their duties is the opinion work.
After devolution it is clear that some of the drafting work currently undertaken will disappear: it will be done in Scotland by draftsmen working to support the Scottish executive in presenting legislation to the new parliament. However, there will remain a fair amount of work in London in connection with legislation going through this House and another place—drafting which is necessary to take account of the particular circumstances and principles of Scots law and scrutiny of draft legislation to ensure that if it is intended to apply on a UK basis it is compatible with the existing common law of Scotland and does not unintentionally serve to amend that law in a way which was not proposed.
In my submission, in carving out this new role as I have described it—the bed of nails, as the noble and learned Lord, Lord Rodger of Earlsferry, described it—it is entirely appropriate that the Advocate General should be supported by officials who hold qualifications which entitle them to practise in Scotland, whether as
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advocates or solicitors. They can possess those qualifications only if they have studied Scots law and passed certain examinations, whether at university or through the Law Society or the Faculty of Advocates, in connection with that law.
It is for that reason that I put forward the amendment. It is essential to the work of this House and another place that in the years to come the legislation which we are invited to scrutinise and pass has been properly drafted and scrutinised, long before it reaches us, by a draftsman schooled in the law of Scotland.
In view of the fact that after devolution there will be only one Scottish Law Officer, it is quite possible that that Law Officer will not be a Member of your Lordships' House. He or she can be a Member of only one House. In the years to come, through membership of your Lordships' House of Lords of Appeal in Ordinary, and in other ways, no doubt there will be some Members of your Lordships' House who have practised or still practise as Scottish lawyers. But there may not be a Scottish Law Officer as such. That seems to me to make it even more important that the Government clearly indicate to the Committee, and to the wider public, their plans for ensuring the proper drafting and scrutiny of legislation to take account of Scots law. I beg to move.
11.30 p.m.
Lord Hardie: As was mentioned in connection with the previous amendment, the Advocate General will be the Scottish Law Officer of the United Kingdom Government. Like any other member of the United Kingdom Government, the Advocate General ought to be able to create whatever posts are needed within his or her own department and to decide what qualifications holders of those posts should have.
At best, therefore, these amendments are unnecessary. At worst, they could damage the ability of the Advocate General to organise his or her department in the best and most efficient way. The Advocate General should have the same powers in this regard as the Lord Advocate to appoint his own staff, who become members of the Civil Service. It would be inappropriate to specify in statute how the Lord Advocate should organise his department or what qualifications his staff should have. I venture to suggest that it would be equally inappropriate to make such provisions in statute for the Advocate General.
This is not a matter which should be put on the face of the Bill and in that circumstance I ask the noble and learned Lord to withdraw the amendment.
Lord Mackay of Drumadoon: Before the noble and learned Lord sits down, could he give some indication to the Committee what the Government have in mind in this regard? He said that it is inappropriate to put the provision on the face of the Bill. Leaving aside that argument, what do the Government propose? Is it intended to have Scottish parliamentary counsel? Is it intended to have some counsel who are qualified in the law of Scotland? Is it intended to have only one department for parliamentary counsel in London, the

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first parliamentary counsel being in charge of that department, and it being a matter of chance as to whether any of his team are Scottish lawyers?
Whether or not it is appropriate to put the provision on the face of the Bill, I suggest that they are important issues. I believe that the Committee would be favoured by some explanation of the Government's proposals? I assume that some thought has been given to it and I for one would like to hear their thinking.
Lord Hardie: Of course, considerable thought has been given to the allocation and reallocation of staff and is still being given by a committee of civil servants who are concerned about the proper disposition of staff. What I can say is that the Advocate General will be properly resourced with properly qualified members of staff; in other words, people qualified in Scots law.
Lord Mackay of Drumadoon: It is a matter of regret that it is not possible to give a fuller answer to the questions I asked, in particular to address the issue of whether there will be a separate department and whether the senior official will be qualified. In the light of the previous vote, it would be a needless exercise to press this amendment to a vote. I certainly intend to reflect on what the noble and learned Lord the Lord Advocate said about it being damaging to the role of the Advocate General to ensure that he has in his staff people qualified in the law of Scotland. That is an argument which I and others will wish to consider with interest. Against that background, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 82 agreed to.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 290E:
After Clause 82, insert the following new clause—
>SOLICITOR'S OFFICE FOR SCOTLAND
(" .—(1) Following upon the commencement of this Act, the Secretary of State for Scotland shall maintain within his Department a Solicitor's Office.
(2) The Secretary of State shall appoint a person to be Solicitor to the Secretary of State for Scotland.
(3) The Solicitor to the Secretary of State for Scotland shall serve as head of the Solicitor's Office.
(4) The Solicitor to the Secretary of State for Scotland shall appoint such Assistant Solicitors to serve within the Solicitor's Office as he deems necessary.
(5) No person may serve as Solicitor to the Secretary of State for Scotland or as an Assistant Solicitor, unless he is qualified as either—

(a) an advocate, or

(b) a solicitor under the Solicitors (Scotland) Act 1980.

(6) The Solicitor to the Secretary of State for Scotland and Assistant Solicitors serving in the Solicitor's Office may not provide legal advice and assistance to the Scottish Parliament, the Scottish Executive or any member of the Parliament or represent such persons in legal proceedings in such courts and tribunals in which they enjoy rights of audience.
(7) The Solicitor to the Secretary of State for Scotland and Assistant Solicitors serving in the Solicitor's Office may provide legal advice and assistance to any Minister of the Crown or
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Government Department or represent such persons in legal proceedings in such courts and tribunals in which they enjoy rights of audience.").
The noble and learned Lord said: This is a similar amendment dealing with a slightly different topic; namely, the provision of legal advice and assistance following upon devolution. It raises an issue which I have little doubt has been considered by the Government, possibly by the same committee of officials to whom the noble and learned Lord the Lord Advocate referred a moment ago, as part of the allocation of staff, officials and resources after devolution.
I am anxious to explore whether it is intended that the lawyers who are employed by the Government to act as solicitors to the Secretary of State for Scotland are to form part of a legal office separate from those who will be acting for the First Minister and his colleagues who are members of the Scottish executive. In accordance with common practice, they can be either solicitors or advocates and act for the Secretary of State's colleagues in Government. I refer, for example, to the Secretary of State for Defence who becomes involved in litigation in Scotland whether as a result of accidents to employees or whatever. From a study of the provisions of the Bill, the Committee will appreciate that there are many instances where it is possible—indeed, some people may say highly likely—that from time to time there will be litigations taking place in which a member of the Scottish executive will be involved on the one side and an individual UK Government Minister on the other. In such circumstances the potential for conflict of interest undoubtedly exists.
The noble and learned Lord the Lord Advocate will be aware from the letter I have received from the president of the Law Society—I understand the letter was copied to his office—that the society supports this amendment regarding the maintenance of an independent office of Solicitor to the Secretary of State for Scotland. The president says in his letter:
"In particular, the provisions of your amendments in sub-clause (6) and sub-clause (7) will help to ensure that the Solicitor's Office is not in a position which could be potentially one of conflict of interest".
Again I invite the noble and learned Lord the Lord Advocate to explain to the Committee the Government's thinking on this important issue. I beg to move.
Lord Hardie: As the noble and learned Lord observed, this is very similar to the previous amendment in that it attempts to say to whom the Solicitor to the Secretary of State for Scotland should or should not provide advice. As the Committee will be aware, the Secretary of State for Scotland will retain his role as a member of the United Kingdom Government. Like any other member of the Government, the Secretary of State for Scotland should be able to create whatever posts are needed within his own department and decide what qualifications holders of those posts should have, as should the Advocate General.
As I have said in relation to Amendment No. 290D, this amendment is at best unnecessary. At worst it could interfere with the ability of the Secretary of State to

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organise his or her department in the best and most efficient way. Having said that, I would advise the Committee that it is inconceivable that the Secretary of State would not have the benefit of separate legal advice from the First Minister. How that is achieved is a matter for the respective executives.
With that explanation I urge the noble and learned Lord to withdraw his amendment.
Lord Mackay of Drumadoon: Once again I, the Law Society and others will reflect on what the noble and learned Lord said in response to this probing amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sewel Lord Sewel moved Amendment No. 290EA:
Page 39, line 32, leave out ("sections 106, 107 and 108") and insert ("section 106").
The noble Lord said: Amendment No. 290EA is consequential on Amendment No. 292TNA, to which we shall come later. However, for convenience, I speak to it now.
Amendment No. 292TNA provides a clearer list of those persons to whom the functions in Clause 107 apply. In particular the existing reference to the functions of any person, subject to certain exclusions, is broader and vaguer than it needs to be. We are really concerned with the devolved functions of the members of the Scottish executive and this amendment simply clarifies that and lists them. It also has the effect of excluding the functions of cross-border public authorities from the definition, which was always the intention.
Government Amendment No. 290EA is a consequential amendment. It removes a reference to Clauses 107 and 108 in Clause 83 which is made redundant by Amendment No. 292TNA. I beg to move.
The Earl of Balfour: I am rather confused here. Clause 83 is headed, "Cross-border public authorities: initial status". The clause, as amended, commences:
"(1) Sections 49, 106, 107 and 108 shall not apply in relation to any function which is specifically exercisable in relation to a cross-border public authority and section 106 shall not apply in relation to any function of such an authority".
Clause 107 is entitled "Consolidated Fund, etc." The clause commences, as amended, with the words on page 34 of the Marshalled List. I am fascinated as the two amendments were grouped together but they seem to be poles apart. I am rather confused.
Lord Mackay of Drumadoon: While the Minister is thinking about how he might alleviate the confusion in the mind of my noble friend Lord Balfour, who, if I may say so, very frequently puts his finger on a matter of some significance even in the very detail of a clause, perhaps I may say that I welcome the amendments. I see why they have been brought forward and I hope that when my noble friend considers the matter further he
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will appreciate that there is an intention to clarify and simplify here. From these Benches, I offer no opposition to the amendments.
Lord Sewel: I thank the noble and learned Lord for his words. I wonder whether we can leave it at this stage, and if there is a further matter of clarification we can deal with it later.
The Earl of Balfour: I am happy with that.
On Question, amendment agreed to.
[Amendment No. 290F not moved.]
11.45 p.m.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 290G:
Page 39, line 45, at end insert—
("(3A) The Parliament shall be entitled to require any representative of a cross-border public body—

(a) to attend its proceedings for the purpose of giving evidence, or

(b) to produce documents in his custody or under his control,

in respect of functions within the responsibility of that body which are exercisable in or as regards Scotland.").
The noble and learned Lord said: This amendment seeks to extend the powers of the Scottish parliament to take evidence in both oral and documentary form in relation to the activities of cross-border public authorities. The Committee will recall from the provisions of Clause 23 that the Scottish parliament is given power to require any person to attend its proceedings for the purpose of giving evidence or to produce documents in his custody or under his control, provided that that oral or documentary evidence relates to matters mentioned in subsection (2) of the clause. Subsection (2) of Clause 23 states that the matters are:

"(a) devolved matters concerning Scotland,

(b) other matters in relation to which functions are exercisable by the Scottish Ministers".

Those would include not just the matters which are devolved to the Scottish executive because they lie within the legislative competence of the Scottish executive but also matters transferred to Scotland and to the Scottish executive by the operation of a Section 59 order. As it has been described by one Minister—I regret that I do not remember which one—it indicates how executive devolution is marching ahead of legislative devolution. It is that to which I understand Section 22(2)(b) to be primarily referring.
This amendment seeks to address the powers in relation to cross-border public authorities. I am extremely grateful to the officials of the noble Lord, Lord Sewel, for responding very promptly to a fax which I sent in the small hours of Monday morning asking for a copy of the draft order, which reached me today. It enables me to understand more fully what my amendment is about and I hope to enable the Committee to do likewise.
The guide to the working draft, which is attached to the front of it, contains one or two surprising comments. It indicates that, as the White Paper indicated, the Scottish parliament will be able to require the

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submission of reports and the presentation of oral evidence from cross-border public authorities. The Bill makes provision for such authorities in Clauses 83 to 85. It makes it clear, as the Bill does when one studies it carefully, that an authority can be specified as a cross-border public authority under Clause 83(5) only if it has, in addition to other functions, functions exercisable in or as regards Scotland which do not relate to reserved matters.
We then come to the somewhat surprising part:
"It should be noted that a cross-border public authority is not necessarily an authority with functions which cross the border between England and Scotland. Rather, as indicated above, they will be authorities which exercise functions in or as regards Scotland which do not relate to reserved matters as well as other functions. Thus cross-border public authorities could include Scotland-only authorities which have functions which relate to reserved matters and matters which are not reserved".
I should indicate that in the draft which has been prepared, and very helpfully prepared, it sets out the current thinking as to what those cross-border public authorities shall be, as specified under Clause 83(5). It includes some fairly major authorities such as the Criminal Injuries Compensation Board, the new appeals panel, the Forestry Commission, the National Radiological Protection Board, whose activities obviously have a bearing on the nuclear establishments in Scotland, the Sea Fish Industry Authority and others.
As I read the provisions of Clause 23, it would entitle the parliament to require those authorities to produce witnesses and to produce documents covering the matters specified by Clause 23(2); in other words, if they were touching on devolved matters or other matters in relation to which functions are exercisable by Scottish Ministers. However, it would not cover all the activities of the cross-border public authorities even if the cross-border public authority in question was a Scotland-only authority; in other words, if it operated only in Scotland but had functions which related to reserved matters and matters which were not reserved.
I can well see that there is a problem in not wanting to make Ministers of the Crown and other public bodies accountable to two parliaments. But it is inevitable that that principle will be breached in relation to cross-border public authorities because some of them such as the Forestry Commission, the NRPB and the Sea Fish Authority will all be accountable to this Parliament and will, in certain respects, be accountable to the Scottish parliament.
It is against that background that it is inappropriate that on certain issues relating to Scotland, the Scottish parliament could require them to come and give evidence and produce documents but on other issues it could not.
In so far as the structure of the Bill makes those authorities accountable to both parliaments, there is merit in looking again as to whether the terms of Clause 23 might be broadened or whether one accepts the amendment which I propose. That would enable the Scottish parliament to call one of those bodies in front of it in relation to any activity in Scotland, whether it is one that touches on reserved matters or one that touches on devolved matters.
I accept that this is a complicated matter, but I hope that the amendment will be accepted as a constructive suggestion which, in the light of the draft order which is available, might merit some reconsideration as suggested in Amendment No. 290G. There is also a small drafting amendment, Amendment No. 290K, tagged on to the grouping. I pose this question. Why is not what I suggest more understandable, at least to the lay Minister? I beg to move.
Lord Sewel: I thank the noble and learned Lord for explaining very clearly his point. Matters of cross-border authorities, particularly where they are dealing with devolved matters and reserved matters—as could well be the case with cross-border authorities—are always extremely complicated. It is useful to take as an illustration the Forestry Commission wherein a cross-border public authority, through its activities in Scotland, will be accountable to the Scottish parliament. For its activities in Wales it will be accountable to the Welsh assembly, and for its activities in England it will be accountable to Westminster.
The difficulty is that the amendment as proposed would entitle the parliament to require a cross-border public authority to give evidence and produce documents in respect of any functions exercisable in or as regards Scotland. The important words are "any functions". That would include reserved as well as devolved matters. Clearly it would be inappropriate, in relation to reserved matters, for the cross-border public authority to be required to give evidence and produce documents to the Scottish parliament. That is the point where there is either a difference of understanding between us or we disagree.
Where a cross-border public authority is exercising devolved matters concerning Scotland or other matters in relation to which functions are exercisable by Scottish Ministers—the noble and learned Lord made the point about executive devolution and the exercise of executive functions marching ahead of legislative devolution—then it is quite proper that the cross-border public authority should provide evidence and produce documents to the Scottish parliament. But it is not proper that a cross-border public authority should produce documents and provide evidence in relation to the reserved matters that it may be carrying out in Scotland.
Lord Mackay of Drumadoon: I hope that the Minister will be prepared to reflect further. I am sure he will. There seem to me to be three situations. One is that the cross-border public authority is dealing with devolved matters. If it is, it clearly can be required to produce witnesses and documentary evidence under Clause 23(2)(a).
If it is dealing with reserved matters which also happen to be matters in relation to which functions are exercisable by Scottish Ministers, then again it could be required to produce witnesses and documents, so we have a breach of the principle that the Minister referred to that it is inappropriate for it to be accountable in relation to reserved matters. Under Clause 23(2)(b) the authority will be accountable in relation to reserved

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matters, but only if they are also covered by a Clause 59 order. We have a third situation where there are truly reserved matters which are not covered by Clause 59.
It may well be that in the course of an investigation a committee of the Scottish parliament is carrying out there is a wish to examine the operations of a cross-border public authority touching on all aspects of its work such as devolved and reserved matters covered by Clause 23(2)(b) and others which are not. In relation to the first two of these categories it would have the right to cite the witness to give evidence.
The question arises that if having done that the questioner strays into the third category, the witness can say that he or she is not going to answer because they were not invited to come but were ordered to do so. That would be very undesirable. This matter merits further consideration as to whether it is desirable to have the right to order a witness to appear to answer certain questions but not others even though they are, in layman's terms, relevant to the work of the Scottish parliament, and equally in relation to documents.
I do not intend to insist on this amendment tonight, but I suggest further consideration in the light of what we now understand to be the potential cross-border public authorities, some of which are very important bodies indeed and others possibly less so except to people who have a great interest in plant varieties and the unrelated live transplant regulatory authority, which is of interest to medics but not to a large number of other people.
There are groups of authorities which include very important bodies. Before Report we ask the Minister to consider whether some extension to Clause 23 might be appropriate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 290H:
Page 40, line 1, leave out ("(2) and") and insert ("(1) to").
The noble Baroness said: Amendments Nos. 290H, 290L and 290M are technical amendments aimed at ensuring that the powers under Clauses 83 and 84 can make appropriate provision to ensure that cross-border public authorities are properly dealt with on devolution.
Government Amendments Nos. 290H and 290N make it clear that a Clause 84 order can modify the application of Clause 83(1) in relation to the authority which is the subject of that order. This means, for example, that the Order in Council could apply Clause 49 in relation to certain ministerial functions in relation to the authority so that those functions would transfer to the Scottish Ministers.
Government Amendment No. 290L simply makes it clear that an order made under this clause may make provision in respect of any individual function of an authority. At present it could be read as an enabling provision to be made only in respect of all the functions of an authority, and that would be too restrictive and is not what was meant.
Government Amendment No. 290M introduces a new subparagraph in Clause 84(2) to make it clear that new functions can be conferred by the clause. This might be
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used, for example, to give the Scottish ministers a new function of determining the form of accounts of such an authority.
The provisions of Clause 84 are necessary to accommodate the wide range of arrangements which may be appropriate for individual cross-border public authorities to enable them to continue to operate effectively after devolution. There are, of course, significant and appropriate safeguards upon the use of these powers. The authorities subject to a Clause 84 order must be consulted prior to an order being made and the order is subject to procedure in both parliaments. Together these requirements provide considerable scope for scrutiny.
I hope that the Committee will welcome this series of amendments as bringing clarification to the scope of the powers under this clause. I beg to move.
On Question, amendment agreed to.
Midnight
[Amendment No. 290J had been withdrawn from the Marshalled List.]
[Amendment No. 290K not moved.]
Clause 83 agreed to.
Clause 84 [Power to adapt etc. cross-border public authorities]:
Lord Sewel Lord Sewel moved Amendments Nos. 290L to 290N:
Page 40, line 17, leave out ("the functions") and insert ("any function").
Page 40, line 18, at end insert—
("() conferring any function on a cross-border public authority or on a Minister of the Crown or the Scottish Ministers in relation to such an authority,").
Page 40, line 21, leave out (" 83(2)") and insert 83(1), (2)").
On Question, amendments agreed to.
Clause 84 agreed to.
Clause 85 agreed to.
Lord Selkirk of Douglas Lord Selkirk of Douglas moved Amendment No. 291.
Before Clause 86, insert the following new clause—
CONCORDATS
(" .—(1) There shall be a Register of Concordats where each concordat shall be registered.
(2) The Register shall be held by—

(a) the Public Record Office; and

(b) the Keeper of the Records of Scotland.

(3) A concordat shall not be effective unless it is registered under subsection (1) above within two weeks of its execution.
(4) A concordat shall be capable of being challenged by court action only before—

(a) the High Court in England and Wales; or

(b) the Court of Session in Scotland.

(5) Any party having an interest may challenge a concordat.
(6) In this section "concordat" means any agreement between the Secretary of State and the Scottish Executive regarding the consultation arrangements and common United Kingdom guidelines in respect of—

(a) any reserved matter under Schedule 5;

(b) any devolved matter under section 29(4);

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(c) any transfer of ministerial functions under section 49;

(d) any functions exercisable with agreement under section 51;

(e) any shared power tinder section 52;

(f) any cross-border public authority under section 83, 84 or 85; or

(g) any agency arrangements under section 87.").

The noble Lord said: Amendment No. 291 creates a register of concordats. Concordats are referred to in various sections of the White Paper, for example, on forestry matters. Only a few moments ago the Minister made particular mention of forestry. The Lord Advocate has decided that there should be concordats in relation to scrutiny of Scots legislation by the Advocate General. Surely, those concordats should be known and in the public domain. The new clause seeks to do that. I look forward to hearing what the Minister or the Lord Advocate has to say in reply.
Lord Mackay of Ardbrecknish: My amendment, Amendment No. 291ZA, is linked with the amendment of my noble friend, who has explained his amendment. We discussed concordats at some length in Committee on the Welsh Bill, and, to be honest, I am not entirely sure that we arrived at a satisfactory outcome. The position of the Welsh Bill was a little different in that the devolution to the Welsh assembly is not as significant as will be the devolution to the Scottish parliament. Therefore, I believe there are some differences, one of which is that all the concordats between the Welsh and the UK had to be made in the name of the Welsh assembly because that was how the Welsh legislation was devised. The Welsh assembly was one party and the UK Government was the other. In Scottish terms, I presume, the situation is a little different because the executive has a different role, and, therefore, the concordat may be between ministers of the Scottish parliament and Ministers of the UK Parliament, or between officials of the Scottish executive and UK officials.
My amendment and to a certain extent that of my noble friend explore how Members of your Lordships' House, Members of the House of Commons, ordinary members of the Scottish parliament and the Scottish public can find out about concordats. Will they be part of the open government system or of the secret government system?
My amendment states that any concordat relating to a devolved matter to be discussed at the Council of Ministers or to be made subject to representations to the European Commission should have to come before Parliament. We are dealing specifically with the raft of concordats that will surround the problems that we have already discussed relating to the relationship of the Scottish parliament and executive to the European Union through the United Kingdom Parliament. Such concordats should have to be laid before Parliament, be approved by a resolution of both Houses and be signed by a member of the Scottish executive and a Minister of the Crown, In other words, I want to give them some proper status. I shall not say "legal status" because such
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issues will be addressed by my noble and learned friend Lord Mackay of Drumadoon, but they should be given proper and open status.
The second part of my amendment deals with concordats on the financial dealings between the two parliaments. The same procedure should apply there also.
In a way, this is a probing amendment, but it is a little more than that. I want to know how the Government see concordats being publicised. I want to know how their existence will be made known both to the parliament in Scotland and to that here in the UK. I have no strong views on this. I have been through all this in the Welsh Bill, so I know where I stand on this in relation to the Government. I am asking in my amendment that the concordats should be laid before both Houses of this Parliament and, indeed, before the Scottish parliament, and that they should be approved. Frankly, I am relaxed about their approval because I know from the Welsh Bill that Ministers are determined that parliamentary scrutiny of concordats will not be allowed. I disapprove of that. I think that parliamentary scrutiny of concordats should be allowed, but I recognise an intransigent government when I see one. Unless the Scottish Office is a good deal more open to argument than was the noble Lord, Lord Williams of Mostyn, I am probably wasting my time.
However, at a minimum, I think that concordats should be laid before both Houses here as parliamentary papers, or whatever. Every day our Order Paper, and that of another place, contains a list of papers to be laid before the House. They do not have to be debated and one cannot table negative resolutions, but the papers are listed and are drawn to Members' attention. We can access them. We can get at them. We know what they say. In the Welsh Bill, we were told that some concordats would be kept secret. We never managed to tease out of the Minister what possible material might have to be kept secret in concordats between the Welsh assembly and here. We drew a blank. We came up against a brick wall. I hope that there is no brick wall here.
Will any concordats be kept secret or will they all be made public? How will they be made public? Will they be laid before both Houses? Are the Government prepared to go further and to have them approved by both Houses here and by the Scottish parliament? I ask that because the position of MSPs must also be addressed. I may not be among those of your Lordships who fancy themselves as an MSP, but I do believe that MSPs have a right of scrutiny of concordats, just as I believe that Westminster has that right.
My amendment is very much a probing amendment. I hope that the Minister will not spend too much time taking a knock at it. but that he will use it as a vehicle to explain how he sees concordats working in the context of the Scotland-United Kingdom relationship. I hope that I shall get better answers than I received

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from the noble Lord, Lord Williams of Mostyn, on the question of concordats between the Welsh assembly and the United Kingdom.
Lord Sewel: I certainly do not wish to knock the noble Lord's amendment; indeed, I always try to respond as positively and as helpfully as I can. As the guidance note which my right honourable friend the Secretary of State made available on 27th February made clear, the purpose of concordats is to promote effective communication and good administrative practice in relations between UK government departments and the Scottish executive. Essentially, they are documents about working arrangements.
Concordats arise from the statement in the White Paper that the Scottish executive will need to keep in close touch with departments of the UK Government and that good communication systems would be vital. They will cover a range of matters, such as procedures for the exchange of information, advance notification and joint working. It is intended that concordats will provide the Scottish executive and UK departments with confidence that working relationships will be conducted properly and in accordance with agreed procedures. It is not intended that they should constrain the Scottish executive within its fields of competence, nor that they should constrain UK departments in reserved areas.
It is important to recognise the limitations of what it is intended to achieve through concordats. These agreements will not make provision in respect of matters more properly dealt with on the face of the Bill. They are not intended to create legal obligations upon either party; nor are they a means for avoiding proper scrutiny either by Parliament or elsewhere. Unless it would cause substantial harm on one of the clearly defined grounds set out in the recent White Paper on freedom of information—and only in that context—concordats will, of course, be published. If the noble Lord, Lord Mackay of Ardbrecknish, wishes to push me on whether some concordats will remain secret, I have to tell him that there is a theoretical possibility that some of them may remain so but only in terms covered by the White Paper on the freedom of information. That will be the only basis upon which concordats will not be published.
The work on draft concordats will proceed before devolution, but they cannot be agreed until the Scottish executive is established. The coverage of each agreement will be a matter for the incoming Scottish ministers and the departments of the UK Government to agree, because it is a document which will define relationships between the UK Government and the Scottish executive. I hope that that explanation givesa flavour of the background and of what they are. In a way, I hope that that demystifies the idea of concordats, which I believe have taken on something of a life beyond themselves at present. Indeed, they are not some great and wonderful construction; they are really just pretty ordinary attempts to describe sensible working relationships.
I turn now to Amendment No. 291, which would place several requirements on concordats. The amendment would require concordats to be registered; it would set out rules relating to the jurisdiction of the
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courts over them; and also touches upon the matter of the rights of third parties. Requiring concordats to be registered would be unusual and, as I have already indicated, they will be published in the vast majority of cases in any event.
Concordats are not intended—and this is important—to create legal obligations on the parties. It cannot be ruled out that they may feature in legal action, and I will say some more in respect of these matters shortly. At this stage, however, I hope that the noble Lord will accept the logic of the argument that, in these circumstances, it would not be appropriate to make rules regarding the jurisdiction of the courts in relation to concordats. These are, of course, working documents intended to aid the process of efficient administration. It is difficult to conceive of a third party wishing to challenge their terms, but where they can conceive of a case for such action there is nothing peculiar about these documents which either would or should prevent them doing so. I hope that the noble Lord will accept those reassurances and that he will feel able to withdraw the amendment.
I move on now to Amendment No. 291ZA, which would introduce a formal parliamentary procedure in relation to concordats dealing specifically with European and financial matters. I am afraid that these non-statutory agreements do not merit this treatment. They are, as I have said, administrative agreements providing for co-operation and exchange of information between the administrations. They are intended to be flexible documents to assist that process and will be reviewed and adjusted in the light of experience. They are very much organic, dynamic documents.
To introduce a formal element of parliamentary scrutiny into these arrangements and thereby put these concordats onto a semi-statutory footing would undermine the flexibility and informality of concordats as instruments for facilitating co-operation between the administrations and give these documents a status which, frankly, they do not merit. The informal process of adjustment and review that is an essential part of these arrangements would probably become subject to parliamentary procedures as well.
It is, of course, the case that the Scottish ministers will always be accountable to the parliament for their policies and will need to be able to justify any approach which is based on arrangements agreed with the UK Government in a concordat, just as the UK Government will be accountable to Westminster in regard to such matters.
Amendment No. 291ZA concerns concordats covering negotiations in Europe and finance. As I indicated in our previous exchange on Europe on 30th July, the essential point is that negotiations with the European Union, including those at the Council of Ministers, are reserved because foreign affairs are reserved and EU negotiations are a foreign affairs matter. The Government fully intend, however, that the Scottish ministers should have a role to play in developing UK positions on EU matters and, where appropriate, in presenting them to the Council. It is therefore made clear in paragraph 7 of Schedule 5 that

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the reservation of foreign affairs does not reserve assisting Ministers of the Crown in relation to that matter. The administrative arrangements for how this will be achieved do not change that position in the slightest. They will do no more than set out the practical details relating to that commitment.
The proposed EU concordat is intended to facilitate the full involvement of the Scottish ministers and officials in these matters. It will outline an overarching approach to the handling of EU issues between the Scottish ministers and the UK Government. More detailed provisions may, if necessary, be contained in bilateral concordats on specific subjects.
We also dealt with financial arrangements in some detail on 30th July and I would not wish to go over that ground again today. Suffice to say that the Government have made their position on financial arrangements abundantly clear already. I doubt whether the noble Lords are proposing that the block and formula rules should be enshrined in legislation—as I indicated previously, I would certainly not accept that—but it is not entirely clear what would be achieved by the amendment in this regard. Any finance concordat would be likely therefore to be concerned simply with the practical arrangements for implementing agreed (and published) rules and possibly with other practicalities such as the provision of information. It would seem odd to require prior parliamentary approval of these arrangements when the rules themselves are not the subject of legislation.
The important point is that a concordat cannot impose unacceptable requirements upon either the Scottish ministers or the UK Government. Their terms have to be agreed by both administrations and will, as I have said, follow the provisions set out in the Bill. Concordats are intended to help make these arrangements work more efficiently and effectively. It is of course in the interests of both administrations to ensure that these arrangements work effectively and concordats will merely set out practical arrangements to ease that process.
I have spoken at some length on this matter because I have been aware during discussions on the Bill that the idea of concordats has not been an easy one for all noble Lords to grasp. Some have thought that we are creating some new, strange creature under whose auspices just about everything will be ordained, designed and structured. That is not the case. These are modest documents which will set out agreed working relationships between the two administrations.
I take the point made by the noble Lord, Lord Mackay, about open government. I reiterate that the full intention is that they will be published, except in the very exceptional circumstances covered by the freedom of information Act. I hope that on that basis there is enough reassurance for both noble Lords to be able to withdraw their amendments.
Lord Mackay of Ardbrecknish: Before my noble friend Lord Selkirk of Douglas decides what to do with his lead Amendment No. 291, let me say that I am
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grateful to the Minister for his explanations. I indicated that I thought from my experience that I was perhaps going a bridge too far in expecting parliamentary scrutiny and approval.
The Minister was very clear that the documents would be published. Will he return to the question of how they are to be published? I suggested that they could be published by means of being placed as papers before this House and presumably, if the same procedures exist in Edinburgh, before the Edinburgh parliament. It is all very well to say that matters will be published, but they have to be published somewhere. I should be hugely reassured if I could be told where they will be published. If the Minister cannot give that reassurance tonight, perhaps I may return with the helpful suggestion that they simply be laid as parliamentary papers. and that is sufficient for publication. Members here or in Edinburgh would be able to get hold of them, as would the press, and they would become more widely available. That is the only unanswered question I have on the subject of concordats. They are new; we are entering a new situation. Therefore there should not be any surprise that we as a responsible Opposition wish to probe the Government as to what exactly they will do, how they will work and how we shall know about them. If the Minister could tell me where he thinks they might be published, we might then allow my noble friend Lord Selkirk of Douglas to conclude this debate.
Lord Sewel: I should like to come back to the noble Lord with a considered response on the particular point of the whys, wherefores and hows of publication.
Lord Selkirk of Douglas: I thank the Minister for his assurances, and in the light of those assurances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 291ZA and 291ZB not moved.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 291ZBA:
Before Clause 86, insert the following new clause—
CONCORDATS: DUTIES AND LIABILITIES
(" .—(1) No concordat shall give rise to any duties or liabilities owed by one party to the concordat to the other.
(2) In this section "concordat" means any agreement between a Minister of the Crown and the Scottish Executive regarding the consultation arrangements and common United Kingdom guidelines in respect of—

(a) any reserved matter under Schedule 5,

(b) any devolved matter under section 29(4),

(c) any transfer of ministerial functions under section 49,

(d) any functions exercisable by agreement under section 51,

(e) any shared power under section 52,

(f) any cross-border public body under sections 83, 84 and 85. or

(g) any agency arrangements under section 87.").

The noble and learned Lord said: In moving this amendment, with the leave of the Committee I shall also speak briefly to Amendment No. 291ZBB.
These amendments deal with the separate issue of the legal significance, if any, of a concordat and the persons who are entitled to rely on the existence and terms of a concordat in legal proceedings. The first effectively provides that,
"No concordat shall give rise to any duties or liabilities owed by one party to the concordat to the other".
The gist of the second amendment is in the first subsection:
"The existence or terms of a concordat may not be relied upon in any legal proceedings before a court or tribunal by a person who is not a party to the concordat".
When we were first introduced to the issue of concordats in a White Paper there followed shortly thereafter a short guidance note prepared by the Scottish Office entitled, Guidance on Concordats Between the Scottish Executive and UK Government Departments. In view of the lateness of the hour, I shall do no more than indicate that the note states quite explicitly that the purpose of concordats is not to create legal obligations or restrictions on any party but to set the ground rules for administrative co-operation and exchange of information, as the Minister has helpfully explained to us. However, it states in paragraph 10 of the note:
"Any necessary statutory provisions are included in the devolution legislation and it is not intended that duties and liabilities should be imposed indirectly through concordats".
I believe that the intention that concordats should not give rise to any legal duties or liabilities received something of a dent during the Second Reading debate on the Government of Wales Bill, when the noble and learned Lord, Lord Falconer of Thoroton, made it clear that, while concordats would not take the form of binding contracts or statutory documents, they would not be without legal significance. He said on 21st April:
"it may well be the case that [concordats] will create a legitimate expectation of consultation. For instance, if one party to a concordat suddenly ceased to consult the other in accordance with the concordat, the result might be that its decisions could be challenged by way of judicial review, so it is wrong to say that there will be no legal underpinning to these concordats. The precise limits of that underpinning would have to be worked out by the courts in the context of the terms of the concordat itself. But the important point about judicial review is that it will not permit one party suddenly to whip away the concordat and then act entirely contrary to its terms-.—[Official Report, 21/4/98; cols. 1131–32.]
Against that background, a number of questions arise. First, does the Minister who is to reply on the amendment agree with the views expressed by the noble and learned Lord, Lord Falconer, in relation to the Government of Wales Bill? Secondly, if he does, is it the Government's intention that a failure to adhere to the terms of a concordat could be founded on only by the other party to a concordat, or is it something that a third party could also found on? One could well imagine a situation where, if the British Government breached a concordat, they might not only annoy the members of the Scottish executive, who might feel that their interests had been prejudiced, but they might also annoy and upset a Scottish company which was faced with legislation, whether primary or secondary, which impinged adversely on its business activities, cost it money or restricted it to one field of activity or another and which was able to say that the legislation, be it primary or secondary, had been enacted or approved in
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breach of the terms of a concordat. If, as the noble and learned Lord, Lord Falconer, said, the other party can seek judicial review of the actions of the party which has acted in breach, can a third party who may be adversely affected by such actions and who may also have had a legitimate expectation that a consultation would be undertaken rely on it as well?
These are questions which seem to me to arise and lie behind the second of the two amendments. I am sure the Minister has already worked out that the first amendment merely seeks to put on the face of the Bill what has been stated in terms this evening and what is to be found in the helpful guidance note to which I have referred. In principle, I cannot see any objection to Amendment No. 291ZBA, apart from the one which we have heard occasionally during the debates on the Bill that it may be unnecessary because the matter is self-evident. There is an argument that more should be on the face of the Bill, self-evident or not. I believe that a more difficult issue arises on the second amendment. I shall be interested to hear the Minister's reply. I beg to move.
12.30 a.m.
Lord Sewel: As the noble and learned Lord indicated, these amendments deal in a focused way with the extent to which concordats give rise to legal rights and obligations. I start by reiterating that these are non-statutory documents that are not intended to make provision in respect of matters more properly dealt with in the Bill. They will not fetter the discretion of either party in their areas of responsibility; nor are they intended to create legally binding obligations.
Understandably, the noble and learned Lord picks up a point from the comments of my noble and learned friend Lord Falconer. It cannot be ruled out that concordats may be cited in legal action on the ground that they have given rise to legitimate expectations that a particular consultation procedure will be followed. It will be for the courts to consider such matters. But the Government intend that these should be flexible arrangements subject to review in the light of experience which will ease the process of providing efficient administration. We hope that they will be viewed in that light.
One comes to the question of third parties being able to found a case upon a legitimate expectation of consultation between the two governments. If they feel that they have been adversely affected by lack of such consultation, it will be for the courts to decide whether or not that is a basis on which action can proceed and that legitimate expectation exists. As to that, we recognise that there is a degree of doubt which ultimately will be resolved by the courts.
Lord Mackay of Drumadoon: The answer of the Minister is helpful. As I understand it, it admits the possibility that a court may entitle a third party to rely on the terms of a concordat entered into by a Minister of the Crown on the one hand and the Scottish executive on the other. The particular circumstances in which a third party may be entitled to do so are for the courts to decide. I believe I have received the clear answer that it

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is not the intention of the Government to exclude that in all circumstances. Certainly, that follows from the Minister's adoption of the approach of the noble and learned Lord, Lord Falconer; namely, that one or other party can undoubtedly rely on the existence and terms of a concordat in judicial review proceedings.
If and when these matters get to the courts it may well be that everything will not be considered and construed in such a co-operative manner. The individual parties will wish to win their case. Whatever may or may not have been the spirit of co-operation between the Government and the Scottish executive at an earlier stage, once the matter gets to court in metaphorical terms the gloves will be off. But the matter has been clarified. I believe it is accepted that Amendment No. 291ZBA is not objectionable in principle; it is just unnecessary. On that basis, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 291ZBB not moved.]
Clause 86 [Maladministration]:
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 291ZC:
Page 41, line 36, at end insert—
("() any action taken by or on behalf of the Parliamentary corporation,").
The noble Baroness said: Amendments Nos. 291 ZC and 293ZAA are intended to clarify the various references in the Bill to Scottish public authorities and the extent to which those references should apply to the SPCB.
The only provision in the Bill applying to Scottish public authorities which was intended to apply to the SPCB was Clause 86(3) which deals with maladministration. Rather than leave the matter unclear, we think that Clause 86 should be amended so that there is an express reference to the SPCB. Clause 112(1) should also be amended so that the SPCB does not fall within the definition of Scottish public authority. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 86, as amended, shall stand part of the Bill?
Lord Mackay of Drumadoon: I oppose clause stand part for the purpose of raising certain questions about the clause which I hope can be answered tonight or by letter. What would happen if the complaint made by a member of the public to the member of the Scottish parliament touched upon issues which fall within the remit of the existing parliamentary commissioner and of any official established by the Scottish parliament under Clause 86 to investigate complaints? In other words, within the factual situation which has given rise to the member of the public's complaint there are issues which fall within the responsibilities of those two bodies: the existing parliamentary commissioner and the new one. Has any thought been given as to how such an investigation would be carried out?
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Secondly, I should be grateful for clarification of the relationship between Clause 86(1) and Clause 86(3). The fault may be entirely mine, but I have some difficulty in understanding what is added to the clause which provides in subsection (1) (b) that it can be in relation to action taken by or on behalf of any other office holder in the Scottish administration by the provision set out in subsection (3)(a) which seems to refer to the same words; namely:
"any action taken by or on behalf of an office-holder in the Scottish Administration".
Thirdly, it would be helpful if it could be confirmed that the intention which lies behind the clause is that members of the Scottish executive and their officials should, in practical terms, be investigated only to the same extent as is possible with Ministers of the Crown. Fourthly, I should be interested to know whether it is intended that the procedures set up under the clause should be subject to the scrutiny of the courts. That is another example of a matter raised from time to time, which is the additional role to be given to the courts in Scotland in supervising the organs of government. These are discrete questions. I accept that it may not be possible to answer all of them on this occasion. I hope that at least an undertaking will be given that they will be addressed.
Lord Sewel: I am happy to take away the points made by the noble and learned Lord. We shall endeavour to provide him with answers in due course.
Clause 86, as amended, agreed to.
Clause 87 [Agency arrangements]:
[Amendment No. 291ZD not moved.]
Clause 87 agreed to.
Clause 88 [Private legislation]:
Lord Sewel Lord Sewel moved Amendment No. 291A:
Page 42, line 29, leave out subsection (3).
On Question, amendment agreed to.
Clause 88, as amended, agreed to.
Clause 89 [Appointment and removal of judges]:
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No.291AA:
Page 42, line 35, at end insert ("as suitably qualified and experienced").
The noble and learned Lord said: This is a series of important amendments dealing with the appointment of judges. It is unfortunate that we come to these amendments at such a late hour.
In considering these amendments and the amendments in the next grouping in regard to the removal of judges from office, it is important to bear in mind that back in 1978, when the Scotland Act was enacted, the approach taken to the courts and the appointment of judges was entirely different.
In the White Paper that was published prior to the introduction of the Bill which gave rise to the Scotland Act 1978 it was stated that the Government had considered with special care where responsibility should lie for the main Scottish courts: the Supreme Court, the Sheriff Court and the District Court. The Government

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were satisfied that responsibility for the different levels ought not to be split because separation would pose difficult problems in relation to jurisdiction, procedure and administration. They believed that Supreme Court judges should continue to be appointed by the Queen on the recommendation of the Government and that responsibility for their tenure and conditions of office should not be devolved.
The Government also believed that questions affecting the right of appeal from the court of Session to the House of Lords and the court of final appeal in civil matters from the courts in every part of the United Kingdom must remain the responsibility of the United Kingdom.
An entirely different approach is followed in this Bill and the amendments seek to challenge that approach. However, I believe that it is right to draw attention to it when considering the amendments in this grouping and the next.
Amendment No. 291AA should be read in tandem with the subsequent amendment, Amendment No. 291AB. I fully accept that it is inconceivable that the Prime Minister would recommend to Her Majesty the appointment of a person as Lord President of the Court of Session or Lord Justice Clerk who was not suitably qualified and experienced. But because Amendment No. 291AB seeks to deal with the situation where the convention is that there is more than one name on the list provided to the Prime Minister by the Secretary of State of the day, it seems to me that subsection (1) also falls to be amended.
The purpose of Amendment No. 291AB is identical to that in government Amendment No. 291AAA. For obvious reasons I prefer my amendment, but it may be possible to take a different view on the drafting. The point that lies behind the amendment is important. In England the task is performed by the Lord Chancellor and in Scotland by the Secretary of State. The convention is that when one of the chairs of the Appeal Courts is being appointed the nominations which go to the Prime Minister for him to make a recommendation to Her Majesty include more than one name. The matter was explained at some length to the Home Affairs Select Committee in another place by the noble and learned Lord, Lord Mackay of Clashfern, during an investigation which that committee carried out during the last parliament.
Amendment No. 291AC stands in my name and that of my noble friend Lord Mackay of Ardbrecknish. Amendment No. 291B was originally tabled by the noble and learned Lord, Lord McCluskey. I added my name because the noble and learned Lord could not find it possible to be present because of other commitments at one of the Committee days in July. They seek to achieve much the same effect: that the First Minister should be under an obligation to consult other named parties before putting forward his nominations to the Prime Minister. In Amendment No. 291AC three names are mentioned: the Secretary of State, the Lord Advocate and the Advocate General for Scotland. In the amendment in the name of the noble and learned Lord, Lord McCluskey, it is only that of the Lord Advocate.
It should be made clear that in neither of the amendments is there any attempt to exclude any other procedure to be introduced by the Scottish parliament, whether by way of the establishment of a judicial appointments board, a commission or any other form of procedure it might deem appropriate, in addition to the consultation with which the two amendments deal.
Amendment No. 291BA deals with the appointment of Court of Session judges and sheriffs. Amendment No. 291C seeks to remove subsection (5) from the Bill. Although I was prepared to ventilate that matter on behalf of the noble and learned Lord, Lord McCluskey, in his absence in July, having given the matter further consideration I shall be content that it remain there provided that the Bill is amended in the way that he and I propose in the earlier amendments to which I have referred.
I hope that I have explained my position on these important amendments. I beg to move.
Lord McCluskey: Clause 89 is an extremely important clause. It has two aspects: one relating to the appointment of judges; and to the removal of judges. I deeply regret that we have not reached the amendment until 11 minutes to one in the morning, with only a dozen or so Members of the Committee present.
I shall try to be brief in relation to the first aspect of the Bill. I must declare an interest. As a serving judge I have a possible interest in being appointed as Lord President of the Court of Session, although I have no ambition for such an appointment. I sincerely hope that the present holder of that office, the noble and learned Lord, Lord Rodger of Earlsferry, will continue to hold it for many years. I also hope to retire before the First Minister requests that I should be sacked!
I wish to draw attention to a point made earlier by the noble and learned Lord, Lord Rodger of Earlsferry, on Amendment No. 290C. We have no conventions to fall back on in relation to Scotland. Accordingly, when the Lord Advocate says, "I ask whether it is necessary to put this on the face of the Bill", the answer often will be, "Yes, it is necessary", because there are no conventions. I am not prepared to put my faith—and I do not think that the Committee should be prepared to put its faith—in the discretion of the Prime Minister of the day. If there are no constitutional conventions, and there will be none for Scotland after the enactment of the Bill, we must put the provisions into the Bill.
In relation to the appointment of judges, my Amendment No. 291B recognises the fact that the Lord Advocate plays an essential but not necessarily decisive role in selecting judges. I believe that he should be involved in the future as he is at present and has been in the past. The reason is that the role of the Lord Advocate is much less political than that of the Secretary of State or of the first minister in the future.
In future, the role of judges will be much more concerned with political matters. Those are the two principal reasons. We are enacting a human rights Bill, which gives judges a greater jurisdiction and is bound to be characterised as political. Furthermore, the Scotland Bill gives the judges a more political role. As

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the Bill stands, the appointment of a judge could be purely political—we know of some countries where appointments are made purely on a political basis—and this amendment seeks to reduce the risk of that happening. It reduces the risk of political patronage and political cronyism, which are not unknown in Scotland in this century, and it reduces generally the risk of politicising appointments to the Bench. For those reasons, I speak to Amendment No. 291B.
With that amendment is grouped Amendment No. 291C, a probing amendment. I am asking the Government to explain what the subsection means. Enactment is defined in Clause 112(1) on page 52. It appears to me to mean that an Act of the Scottish parliament passed by a simple majority can require the First Minister to nominate or to decline to nominate a person to the Bench. For example, it may be possible for the Scottish parliament to instruct the First Minister not to nominate to the Bench any more men, any women or any advocates, but to nominate solicitors. This appears to be under the control of a simple majority. The purpose of the amendment is to ask the Government to explain the subsection.
Lord Hope of Craighead: I wish to say a few words in support of the noble and learned Lord, Lord McCluskey. I do so against the background of having been Lord President of the Court of Session for seven years. During that period, I was consulted by a succession of Lords Advocate about the appointment of a substantial number of those who are at present serving as judges on the Court of Session Bench.
I wish to make two points. First, from the point of view of the Lord President, the skill, knowledge and ability of the Lord Advocate is absolutely crucial to the selection of people who are appropriate for service on the Court of Session Bench. I do not wish in advance of his appointment to suggest that the First Minister would be unable to take proper advice in various ways, but the crucial person in giving advice to the First Minister is bound to be the Lord Advocate. After all, he has experience of appearing in court, probably has very close contacts with those who are equipped with the necessary skills to serve on the Bench and therefore is a person whose advice the Lord President and the first minister can have confidence in.
It should not be forgotten that the circuit described in the subsection to which Amendment No. 291B refers involves the Lord President as well as the First Minister. If I were still the Lord President and was consulted by the First Minister the first question I would ask is: what is the view of the Lord Advocate about the proposal? That is said in order to emphasise the point which the noble and learned Lord made about the crucial position of the Lord Advocate in this whole process.
As to the need for a reference on the face of the Bill, I endorse entirely what the noble and learned Lord said. I know that the noble and learned Lord, Lord Rodger of Earlsferry, shares this view because he has made the point several times in Committee. We are facing a new situation, with no conventions to guide us. On crucial matters such as the appointment of judges, we should
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err on the side of caution by writing on to the face of the Bill the necessary steps which should be taken in order to ensure that properly qualified persons are appointed to serve.
I can see no reason why the Lord Advocate should not be mentioned expressly in the terms suggested by the noble and learned Lord. It is inevitable that the Lord Advocate will be involved and it is far better that that matter should be recognised expressly on the face of the Bill to avoid any possible confusion.
Lord Clyde: I wish to add my pennyworth to this discussion by endorsing the speeches made by my noble and learned friend Lord McCluskey and the noble and learned Lord, Lord Hope of Craighead.
As to the last point, it may be thought that one of the current criticisms of the appointment of judges is that the whole process appears to be conducted in secrecy. It may well be that there is no system which would satisfactorily operate without a degree of secrecy, but it is right that at the very least the public should know what the system is. It may well be that we will be told that in practice those who are making the recommendations or nominations will consult with various people. It is right—and it is the length to which one can go to avoid the criticism of secrecy—that the people who are to be consulted should be clearly laid down. In that way the public will know what the process is. I strongly support the suggestion that the people who are to be consulted and whose advice is to be taken should be specified in the Bill.
The other curiosity is that the money, the remuneration for the judges, comes from Westminster. I understand that remuneration is a reserved matter. It is somewhat curious to have the appointments made by people who will not be answerable to the Westminster Parliament, apart from the appointment of the Lord President and the Lord Justice Clerk. If it is made clear that someone is to be consulted who would be answerable to that Parliament, in the one House or the other, then at least there may be some attachment to the source of the remuneration.
My final comment is by way of a question. I do not understand who is to dictate the terms and conditions of service of these judges. In particular, who is to organise their pensions and pay for them?
Lord Hardie: I shall confine my comments at this stage to the issue of the appointment of judges in the knowledge that the second issue of the removal of judges is embodied in the next group of amendments.
As to the background, which the noble and learned Lord, Lord Mackay of Drumadoon, set out under reference to the 1978 Act, paragraph 2.4 of the White Paper, which was endorsed overwhelmingly by the people of Scotland in the referendum more than a year ago, made clear that unlike 1978 judicial appointments would be a devolved matter. Apart from the appointments of the Lord President of the Court of Session and the Lord Justice Clerk being made by Her Majesty on the advice of the Prime Minister, all other

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judicial appointments would be made on the basis of nominations by the Scottish executive and first minister. Clause 89 delivers that commitment in the White Paper.
Subsections (1) to (3) deal with the special position of the Lord President and the Lord Justice Clerk. As has been observed, these appointments will continue to be based on the recommendation from the Prime Minister to the Queen, but we have provided that the Prime Minister's recommendation must be a person nominated by the First Minister, who in turn must consult with the Lord President and the Lord Justice Clerk, assuming that they are both in office at that time. Subsection (4) deals with judges of the Court of Session other than the two senior judges. It also deals with sheriffs principal and sheriffs. For other appointments, the recommendation to Her Majesty will come directly from the First Minister. Apart from those details, we have not set out in any further detail the precise processes which are to be followed any more than for those that are provided for in legislation at present.
The various amendments here seek to add to the statutory provision for judicial appointments. With one exception, to which I shall come in a few minutes, we do not think that they are suggestions which we should take on board, either because we disagree with the principle of what is proposed or because we do not think that the Bill requires to enshrine in so much detail how those matters will continue to work. I do not think that is inconsistent with the principles which the noble and learned Lord. Lord Clyde, set out a few moments ago about avoiding secrecy. In one case we are happy to accept the principle of the amendment but hope we can persuade the Committee to adopt a slightly different form of words by accepting the government amendment.
I propose to take each amendment in turn. Amendment No. 291AA provides that the First Minister should nominate to the Prime Minister a person who is suitably qualified and experienced to be appointed as Lord President or Lord Justice Clerk. It would be inconceivable, as the noble and learned Lord, Lord Mackay of Drumadoon, acknowledged, that the First Minister would ever nominate a person who was not suitably qualified. I would go further and say that even in the context of a list of people it would be inconceivable that anyone on the list would not be suitably qualified. Therefore, I do not believe that this amendment is a necessary or an appropriate addition to the Bill.
The next amendment is Amendment No. 291AB. But in the light of Government Amendment No. 291AAA, I would hope that the noble and learned Lord will not seek to move his amendment. The Government have accepted the intention behind Amendment No. 291AB. I agree that the First Minister should be able to nominate more than one person for the appointment of Lord President or Lord Justice Clerk for the Prime Minister to consider. Once again, that reflects what currently happens. Although I have not been involved in any appointment of either of the judges who are presently holders of these offices, I am aware that the practice is to nominate two or three people. Amendment
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No. 291AAA is designed to make it clear that this will be the case. I would urge Members of the Committee to support the Government's amendment.
I turn to Amendment No. 291B, which stands in the name of the noble and learned Lord, Lord McCluskey. The amendment is similar to that tabled by the noble and learned Lord, Lord Mackay of Drumadoon, and the noble Lord, Lord Mackay of Ardbrecknish, in the previous group and would place a duty on the First Minister to take the advice of the Lord Advocate before consulting the Lord President about possible nomination for judges, sheriffs or sheriffs principal.
The traditional role of the Lord Advocate in advising about judicial appointments has already been outlined. I suggest that it is honourable and important, but it has never been a statutory role. Of course, I take on board what the noble and learned Lord, Lord McCluskey, said about setting up a new arrangement. Nevertheless, I am confident that the tradition of the involvement of the Lord Advocate will continue.
It is inconceivable that the First Minister would not consult the Lord Advocate, even more so as the Lord Advocate will be a member of the Scottish executive. But in view of the comments of the noble and learned Lord, Lord Hope of Craighead, it is equally clear that, had the noble and learned Lord still held the high office of Lord President, he would have insisted on knowing what was the attitude of the Lord Advocate and would have asked the First Minister that question. I anticipate that the present holder of that office would adopt a similar attitude, and subsequent holders of the office, understandably, would wish to know what was the attitude of the Lord Advocate. It is inconceivable that the First Minister would not be aware that he should consult the Lord Advocate and that he would not consult him.
Lord Hope of Craighead: May we take it from those comments that if the Lord President were to ask the First Minister to consult the Lord Advocate before he—that is the Lord President—expressed his view in reply to the inquiry from the First Minister, that the First Minister would comply with that request?
Lord Hardie: I cannot give any guarantee as to what would be the reaction of the First Minister. But, again, I would be very surprised, given the relationship which exists at present between the holder of the office of Secretary of State for Scotland and the Lord President and the relationship which I fully expect to continue to exist between the First Minister and the Lord President, if the holder of that office did not take on board what the Lord President said and seek the advice of the Lord Advocate.
However, my position is that that stage would not be reached. It is inconceivable that the First Minister would not follow the traditions which have existed in the past and particularly in view of the Lord Advocate's membership of the Scottish executive.
Indeed, if Members of the Committee accept that I am correct in that approach, I suggest that that obligation or requirement to consult should not be enshrined in

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legislation. Such a step might have the undesirable effect of discouraging the First Minister from undertaking wider consultation. The First Minister should be free to consult as widely as he thinks appropriate.
I turn to the second amendment in the name of the noble and learned Lord, Lord McCluskey. Clause 89(5) was introduced by the Government as a means of enabling the Scottish parliament, if it wished, to propose changes in the way in which judicial appointments should be recommended. The final responsibility for making nominations and recommendations lies with the First Minister. But Clause 89(5) would allow parliament to add to those basic arrangements, perhaps through the establishment of a judicial appointments committee, for example. If one is talking about openness, then that is one option which is available to be considered by the parliament. It is not for us to provide that there should be such a committee, but that is an option which Members of the Committee will be aware has been much discussed by people of different political persuasions.
If the parliament introduced a judicial appointments committee, Clause 89(5) would have the effect of requiring the First Minister to take its recommendations into account. Such a committee could have a role in advising the First Minister on the choice of candidates to be recommended or nominated for judicial office.
Lord McCluskey: Can the noble and learned Lord explain the words he just used in relation to taking the recommendation into account? The words of the statute are that he "shall" comply with any requirement in the enactment; it is not a question of taking into account. He "shall" comply. Surely the Lord Advocate will agree that he was wrong about that.
Lord Hardie: Perhaps I was anticipating what the legislation might say. It will depend on what the legislation says about the judicial appointments committee; it would depend on what form the committee took—whether it was an advisory committee, as one has in the Republic of Ireland, or whether it was a committee which comprised the senior judge and the Lord Advocate as members who would make the recommendation to the First Minister. That is what is behind the subsection to enable the arrangements to give effect to any changes of that nature which the Scottish parliament may introduce.
The subsection provides parliament with such flexibility while preserving and entrenching certain basic requirements on judicial appointments in the Bill. I believe that that is the correct approach.
I turn to Amendments Nos. 291 AC and 291BA. I do not find anything in those amendments that the Government can support. They simply add to the number of people the First Minister is required to consult when considering nominations for Lord President or Lord Justice Clerk on recommending judicial or shrieval appointments to Her Majesty. While Members of the Committee have put forward arguments that such consultation should take place, it would not be
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appropriate to enshrine those arrangements in statute. We should allow the procedures to develop. I am sure that the First Minister will consult all those he or she feels it is appropriate to consult and I am sure that that will include the Lord Advocate.
I turn to the point raised by the noble and learned Lord, Lord Clyde, in relation to the question of payment of salary and pensions of the judges. Although the terms and conditions are regulated by the United Kingdom Parliament, the payment of rations of salary and pensions for the Scottish judiciary will actually come out of the Scottish Consolidated Fund. Therefore the level of salary and the level of pension will be fixed by the United Kingdom Parliament but the actual payment will be a charge on the Scottish Consolidated Fund. I hope that that is of some assistance to the noble and learned Lord.
With those explanations, I invite the noble and learned Lord to withdraw his amendment.
Lord Steel of Aikwood: I hesitate to intervene in the judicial section of this Chamber. However, I was impressed by the argument put forward by the noble and learned Lord, Lord Clyde, in relation to the current criticism of the appointment of judges as being too much wrapped in secrecy. I believe that to be true. Several times it was said that it was "inconceivable" that the Lord Advocate would not be consulted, or that the noble and learned Lord would be "astonished" that he would not be consulted. If that is so, why not, in the interests of open government and clear legislation, accept Amendment No. 291B and have that practice enshrined quite clearly for everybody to read and understand and not keep this as a cosy matter to be understood only by those who are deeply involved? That seems to me to be an argument in favour of including this on the face of the Bill.
Lord Hardie: Perhaps I may deal with that point. I apologise to the noble and learned Lord, Lord Clyde, for not dealing earlier with it more fully. Putting it on the face of the Bill may have the effect of restricting what the Scottish parliament can do by way of a judicial appointments commission. It would depend on the form of the commission that the parliament decided on, if it decided on any. If it decided on a commission which followed the Southern Ireland approach of making a recommendation to the First Minister, then the legislation might simply require that he considers the commission's recommendation, although the Lord Advocate may be a member of it. By requiring a specific reference to the advice of the Lord Advocate as opposed to him being a part of the commission might have a restricting effect on the wishes of the Scottish parliament.
1.15 a.m.
Lord Steel of Aikwood: I do not follow that at all because subsection (5) would still be in the Bill and still apply. Therefore, it does not seem to me to inhibit in any way a future enactment of the Scottish parliament.
Lord Hope of Craighead: Perhaps I may follow that point. The Bill already mentions the Lord President who

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has to be consulted. It is very hard to see why there should be a restriction in mentioning the Lord Advocate. It is quite likely that he will either sit on or be represented on any appointments commission. So it seems to me that the argument that it restricts the freedom of the Scottish parliament to build an appointments commission around this system is quite ill-founded.
Lord Mackie of Benshie: Perhaps I may make one point on this matter. The Lord Advocate constantly used the phrase, "It is inconceivable" that they should not consult the Lord Advocate. One must realise that this is a new parliament and that one is not talking about a traditional parliament in this building, with hundreds of years of tradition. There is probably some excitement which might lead people astray in a new parliament. It would be conceivable that they might not consult because there is a great difference between the influence of tradition and a settled system and the excitement of power in a new parliament. In this case it would be wise to put these measures on the face of the Bill.
Lord McCluskey: The Lord Advocate is ignoring the ordinary, every day device that we see in legislation, which is the use of the words "without prejudice". If the Bill says that one should consult the Lord Advocate, one can avoid the restriction of which he spoke by saying "without prejudice to his consultation with anyone else". So it is perfectly simple. What we seek is that there should continue to be consultation with the Lord Advocate.
The noble and learned Lord said that we have not set out any more than is contained in legislation at present. But with all due respect, that totally ignores the vital point, which is that the rules do not derive from legislation at present but from constitutional convention which will not be born in Scotland after this Bill is enacted in the way in which it exists now in the United Kingdom. So we cannot talk about how these matters will, as he said, "continue to work". They will not continue to do so because this is an entirely new beginning. It is very important that we should put these matters into the Bill. I hope that the Government will consider the debate tonight very carefully. I hope that we shall also be able to move on to the second part of the clause, which raises even more important matters, without further delay at 20 minutes past one in the morning.
Lord Hardie: The noble and learned Lord, Lord McCluskey, is well aware that there is a professional family connection between him and me. Having listened to him and to other noble and learned Lords and others, it is appropriate that I agree to reflect further on including consultation with the Lord Advocate on the face of the Bill.
Lord Mackay of Drumadoon: I hope, while that reflection is being undertaken, that the noble and learned Lord and his colleagues will reflect on all the amendments and not just the one relating to consultation with the Lord Advocate.
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On the basis that we have achieved some success in persuading the Government to think again, I shall not press the amendment.
Amendment, by leave, withdrawn.
Lord Hardie Lord Hardie moved Amendment No. 291AAA:
Page 42, line 37, leave out ("making such a nomination") and insert ("nominating persons for such appointment").
On Question, amendment agreed to.
[Amendments Nos. 291AB to 291C not moved.]
[Amendment No. 291ZCA had been withdrawn from the Marshalled List.]
The Chairman of Committees: We now come to Amendment No. 291ZCB. I must inform the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 291CA to 291DA inclusive.
Lord McCluskey Lord McCluskey moved Amendment No. 291ZCB:
Page 43, line 6, leave out subsections (6) to (8).
The noble and learned Lord said: I shall speak also to those amendments grouped with Amendment No. 291ZCB and I shall also address my remarks to the Question that Clause 89 stand part of the Bill.
The point of principle which lies behind this matter in relation to the removal of judges was first raised in this House by my noble and learned friend Lord Hope of Craighead on 17th June 1998 (at col. 1639 of Hansard) and I took up the same point at col. 1660. It was supported by other noble Lords: the noble Lords, Lord Campbell of Croy, Lord Mackie of Benshie and Lord Mackay of Drumadoon; and the Lord Advocate referred at col. 1783 to the willingness of the Government to wait to hear what suggestions were made.
My first point is that in relation to the removal of judges it should not be for other Members of this House to make suggestions about how that should be done. The suggestions ought to come from Her Majesty's Government, and they ought to respect Her Majesty's Government's commitment both under the Human Rights Bill, to which I shall refer, and under agreements made with the Commonwealth Heads of Government, to which I shall also refer. It should not be for us to make suggestions.
In the absence of any suggestions from the Government, I have made certain suggestions, and I am happy to say that others support them to some extent. We do not have in our constitution any full separation of powers. Obviously, if we had full separation of powers I would not be standing on my feet here in this legislature as a judge.
We have an independent judiciary, to which there are two main aspects: one is the appointment of judges and the other is the removal of judges. At present the appointment of judges is, and is likely to remain, under political control. Although formally it is under political control, it is rarely alleged that politics or cronyism affect appointments. But those factors are not unknown, and, if pressed, I could give several examples in my life-time of judges who have been appointed to the bench who should not have been appointed and would

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not have been appointed but for political and crony-ist influences. I am conscious of those things and I am anxious to avoid their repetition under the new regime.
I should not have to argue the case for an independent judiciary in this country. We need independent judges because judges are involved in all litigations and the Government are involved in a great many of them. The Government are a frequent litigator in civil and criminal cases, and they will be more so in the future because of two Bills which are passing through Parliament at present: the Human Rights Bill, which enlarges the role of judges a good deal and the Scotland Bill, which also enlarges the role of judges.
We must avoid the danger that judges can be removed from office by politicians. Judges who can be so removed cannot be independent because independence in practice means freedom from government pressure, freedom from populist pressure and freedom from political pressure. It means that we, the judges, do not have to look over our shoulders at what others are saying about the kind of decisions we take.
I refer for brevity to an article I wrote in fairly strong terms, which was published in the Herald, I was going to say today, but it appeared substantially yesterday, 6th October.
In Clause 89 the Bill gives the power of removal entirely to politicians. The wickedness, if you like, of the Government's thinking is seen in the fact that in the original draft of the Bill all that was required to remove a judge was a simple majority of members of the Scottish parliament. The first minister was to move such a motion, and the majority then had to approve that removal. An amendment was made in another place with the result that the first minister can now move a motion for the removal; a two-thirds majority is then required. He is not required to prove that the judge is incompetent in any way. All that the Bill requires is that he should be satisfied that the judge should be removed and that he should specify the ground for removal.
I want to draw the Government's attention to certain matters that they seem to have missed. First, the Human Rights Bill sets out Article 6 of the convention which states:
"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law".
According to that, it would be illegal for the first minister, even with a two-thirds or unanimous vote in the Scottish parliament, to remove a judge from office. I want to be informed—I am sure that the Committee will want to know—what is the basis for the Government ignoring the terms of Article 6 of the Europe Convention on Human Rights, which is contained in the Human Rights Bill currently before Parliament?
Secondly, I draw attention to the fact that the recently approved Latimer House guidelines for the Commonwealth, discussed when the Commonwealth Heads of Government meeting in Edinburgh approved the Harare Principles, contain the following provision.
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Under the heading of "Accountability and judicial accountability" and the general heading of "discipline" it is stated:
"In cases where a judge is at risk of removal, the judge must have the right to be fully informed of the charges, to be represented at a hearing, to make a full defence, and to be judged by an independent and impartial tribunal. Grounds for removal of a judge should be limited to,

(a) inability to perform judicial duties, and

(b) serious misconduct".

All such matters, whether in the Human Rights Bill, the Harare Declaration or the Latimer House principles, are completely and utterly ignored in this Bill.
It is also a matter of some importance that at present—this has been so for more than a century—a mere sheriff or a sheriff principal cannot be removed from office without an inquiry conducted by an independent and impartial tribunal. It so happens that under the legislation, that consists of the Lord President and the Lord Justice Clerk, but I do not contend that such a mechanism should be adopted in the case of judges of the Court of Session because such office holders may be too close to the persons concerned and they may have been involved in other matters concerning conduct in the past. However, I envisage that there must be an independent and impartial tribunal. Whether it consists of judges or non-judges is not of great importance, but it must be independent and impartial.
We cannot put the independence of the judiciary in the new Scotland at risk by enacting this clause. Unless the Government table their own amendments I hope to move a suitable amendment at another stage, recognising that the tribunal does not have to consist of judges but may include others—that is, if the Government do not accept the principle behind the amendment. I beg to move.
1.30 a.m.
Lord Steel of Aikwood: Could the noble and learned Lord explain one other matter to Members of the Committee? As regards the Harare Declaration and the human rights legislation, how would these affect the present procedure for removing judges who I understand would fall foul of them?
Lord McCluskey: The interesting point is that no one really knows what the present procedure is for removing judges of the Court of Session or the President of the Land Court. There is a very learned article written by the noble and learned Lord, Lord Jauncey, in the Stair Encyclopedia which suggests that this has to be done by an Act of Parliament. As far as I am aware, no judge of the Court of Session has been removed. There are two possibilities: the first is that an Act of Parliament is required and the second is that a petition to the noble mobile officium of the Court of Session is required.
If you have an Act of Parliament, that involves bicameral legislature. What worries me about the present proposals in the Bill is the fact that there is a single body—the Scottish parliament—sitting in Holyrood, with a motion by the first minister without any proof of incompetence being required. In relation to

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judges of the Sheriff Court, as I said, the present system has stood for more than a century and that requires an independent investigation. I am satisfied that judges ought to be removed if they are shown to be incompetent or guilty of serious misconduct as the Harare Declaration and the Latimer House principles recognise, but I want to see that established not by politicians but by impartial and independent persons as our other obligations require.
Lord Hope of Craighead: I should like to add a few words to the debate based on the experience to which I referred earlier. As I said, I served for seven years as Lord President and, during the course of those years, I have to say that I had to turn my mind on a number of occasions to the question of the removal of judges and sheriffs. It would not be right for me to go into the details involved for obvious reasons. However, I can assure Members of the Committee that I had to look very closely into the procedures. Indeed, in one case, which has come before this Chamber in its judicial capacity, I was involved in the procedures for the removal of a sheriff. Therefore, I had to face up to the demands of the kind of human rights requirements to which the noble and learned Lord referred.
It is a tribute to the capacity and the skill of those who have been responsible in the past for the appointment of judges to the Court of Session that we have not had to face the ultimate point as to how exactly, under the present procedures, a judge of the Court of Session should be removed. As it happens, during my tenure of office a judge resigned and, therefore, we were never in the position of having to work out finally how the question of removal should be dealt with. However, I believe that it would have required at least the tabling of a Motion before the two Houses in Parliament to achieve that result.
As for the future, I believe that the choice has to be faced as to whether removal should be a responsibility of the Parliament here at Westminster or the parliament at Holyrood. I know that one of the amendments which we may later consider suggests a hybrid involving the House of Commons as well as the parliament in Scotland. But, based on my experience, my own view is that it would be undesirable to complicate matters to that degree.
Lord Hughes of Woodside: As a simple layman, I wonder whether the noble and learned Lord could tell me what the difference is between Acts of Parliament and Motions moved in the other place and here and the same kind of procedures being conducted in the Scottish parliament? After all, we are all politicians so what is the difference between politicians in Holyrood and those in London?
Lord Hope of Craighead: I was about to explain to the Committee the point which would trouble me. Perhaps I may best introduce it in the following way. I still believe that it is the responsibility of the Lord President of the Court of Session to ensure that all the judges on his court fulfil the duties of their office. They are, after all, paid substantial salaries and a tremendous
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responsibility rests on their shoulders to see that the administration of justice in Scotland is properly carried on. Therefore I felt it was my responsibility to respond to criticisms of the judges in the court and ultimately, if the criticisms reached the point of persuading me that they were unfit to serve on the grounds now stated in the Bill, I would have felt that it was my duty to initiate procedures in order to deal with the situation.
We know from experience both in England and Scotland that on occasion judges can be persuaded to resign but looking into the future one cannot be confident that that will always be the position. Therefore we may have to face up to the fact that a procedure for removal will be required. The point I suggest we should bear in mind is the following. If a procedure is thought to be necessary by the Lord President of the court—this has nothing whatever to do with politics—and it is his decision that a member of his court is no longer fit to serve, it is essential for the well-being of the system that that procedure should be capable of being carried out fairly in the interests of the judge concerned, but also speedily in the public interest. We should remember that the judge will continue to be paid his salary while the procedure is continuing and he will probably not be capable of being used in the court while the procedure is continuing. Therefore the court will be short of a judge who is required to make the system work. The short answer to the point the noble Lord raised is that to complicate matters by requiring resolutions or decisions by two different Houses in different places would delay the process and for that reason would be undesirable.
I come back to the point that the procedure for removal must measure up to the requirements of the Human Rights Act and to the points which were developed at the Latimer House conference. In the case of the sheriff who was removed, I had the responsibility of trying to devise procedures with little to guide me. I know from the experience I had in that case how very difficult it was to satisfy the requirements of human rights even a few years ago before the Bill currently before Parliament was introduced. In the future that will be much more difficult. It seems to me essential as regards this Bill at least to lay the basis for a procedure along the lines the noble and learned Lord is proposing to the Committee in his various amendments. But I stress that we should bear in mind that the initiative may come from the Lord President himself in the interests of his court. It would be wrong to look on this as something which will be initiated by politicians for political reasons. Of course the ultimate decision has to be taken by the parliament and therefore politicians will be involved. It is right that the matter should be placed before parliament by the Minister but I should like to see written into the Bill the requirement that that should be done only after a proper inquiry conducted by appropriate persons.
Lord Clyde: To my mind the vital consideration here is the essential necessity of preserving the independence of the judiciary. That independence is not secured if there is a threat that they can be removed by a guillotine procedure by politicians. The future prospect for judges

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in Scotland opens up many opportunities for conflict between the citizen and the state. The judges may well be required to enter into the political arena to an extent they have not previously experienced. It is all the more necessary therefore that their independence should be safeguarded. Would it be tolerated in England that the Lord Chief Justice of England should be removed from his office at the whim of the Prime Minister with a two-thirds majority of the House of Commons? Is it to be tolerated that any judge should be exposed to such a sudden removal from office without even an opportunity of stating his case?
Whatever the proper solution is—and I can see that it may be difficult to find the correct formula—what is proposed here goes right against one of the fundamental bulwarks of the constitution. I strongly support the amendment moved by my noble and learned friend.
Lord Mackay of Drumadoon: As my name appears on a number of the amendments perhaps I may make a short contribution. Clearly it is a matter of concern that so late in the history of the Bill's passage through Parliament we are faced with a number of important issues. The Government have been warned—I use the word advisedly—for a number of months now that the Bill as originally drafted did not satisfactorily deal with the issue of the removal of judges from office. The Faculty of Advocates submitted a memorandum to the Government following publication of the Bill stating in terms that,
"The Faculty is concerned that the provisions of the Bill relating to removal of the judiciary will significantly undermine the independence of the judiciary".
The document went on to set out, over a number of pages, why the Faculty held that fairly clear view.
The amendments in my name deal with a number of aspects of this issue. Amendment No. 291CA seeks to extend the same protection to all Scottish judges employed by the state—as opposed to district stipendiary magistrates, who are employed by local authorities—whether they be High Court judges, sheriffs principal or sheriffs. It does so for the reason that all these judges are to be granted similar powers under the Bill to rule on the vires of legislation passed by the Scottish Parliament or laid by members of the Scottish executive. All will equally be required to adjudicate as to the executive competence of action or inaction on the part of members of the Scottish executive. These issues will arise in both civil and criminal matters. They will traverse not only devolved matters but also issues relating to reserved matters. I firmly believe that, for the reason stressed by noble and learned Lords who have spoken, it is important for High Court judges to have their rights safeguarded. The same applies to sheriffs principal and sheriffs.
I have no objection to make to Government Amendment No. 291CAA.
Amendment No. 291CB raises for discussion, and I hope the further consideration that the Government will give to this issue, the desirability of requiring a two-thirds majority in the Scottish parliament. It is proposed on the basis that my Amendment No. 291CC
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raises the issue of the need to have a Motion passed in another place that is moved or made by the Prime Minister.
What troubles me about the two-thirds majority is this. If we reach the stage of bringing the matter before the Scottish parliament following an inquiry, the First Minister being of the opinion that it is appropriate for him to move the Motion or resolution, what happens if the necessary two-thirds majority is not reached but a simply majority is reached? I should have thought that would be an intolerable position for everybody, including the judge concerned. One can only speculate as to what the Scottish press would make of a situation where, by the sort of vote that applies to virtually every other matter in the Scottish parliament, a judge is deemed to be a man who should be removed from office. I recognise that the two-thirds protection was introduced by the Government for commendable reasons but I am concerned as to whether it is as good an idea as it first sounded.
I stress that I link Amendment No. 291CB to Amendment No. 291CC. I do so because it is clear that after devolution the work of the Scottish judges at all levels will cover the whole ambit of reserved and devolved matters. In particular, the work of judges at all levels will involve adjudicating on disputes between members of the United Kingdom Government, on the one hand, and members of the Scottish executive, on the other. The work of all judges will involve scrutinising the legislation coming out of the Scottish parliament and subordinate legislation made in London and subordinate legislation made in Edinburgh.
1.45 a.m.
Lord Steel of Aikwood: I am most grateful to the noble and learned Lord. He has just repeated something he said earlier which I wanted to query. I cannot imagine any circumstances in which the vires of legislation would be contested in sheriff courts. Perhaps he could enlighten me on that.
Lord Mackay of Drumadoon: I am happy to do so. This is a matter which we shall come to on later clauses of the Bill. In the prosecution of crime, for example, it could well be raised that the charge upon which the accused is being prosecuted is based on legislation enacted by the Scottish parliament outwith its legislative competence, whether it is to the substance of the charge or the preliminary procedure by which an accused was arrested. I am sure that the noble and learned Lord the Lord Advocate will be able to confirm, if it is he who is to reply to the amendment, that planning is already in hand to work out how devolution issues can be dealt with, if they arise, in criminal matters in summary criminal courts, in sheriff and jury trials and in High Court trials, and how they can ultimately be dealt with speedily by the Judicial Committee of the Privy Council so that the traditional speed with which Scottish criminal cases are tried and brought to a conclusion is not interfered with beyond what is necessary.
How often that will happen I know not. What I believe will happen is that, founding on the Human Rights Bill, there will be numerous challenges in the

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courts to the framing of charges and the procedures that are followed and that, for the same reason, it will have to be planned how these can be dealt with. I have no doubt whatever that it will be competent for such matters to arise and that, while ultimately the final decision may well be taken by the Inner House of the Court of Session, the High Court of Justiciary or ultimately by the Judicial Committee of the Privy Council, they will arise initially at the lower level. Indeed, this happened in a sheriff court not far from where the noble Lord stays in a case concerning the beef-on-the-bone regulations. The sheriff had to reach an adjudication which it turned out was not supported by the High Court of Justiciary on appeal, but he had to address the issue as to whether the subordinate legislation was ultra vires for the reasons which were advanced. It was debated before him over some days and he ended up taking a decision which was not supported on appeal.
It is for these reasons that I believe there is an argument which merits consideration. I would be surprised if it had not already been considered as to whether there is scope for involving the English Parliament, as well as the Scottish parliament, in this procedure.
I now move on to Amendments Nos. 291D, 291DA, 291E, 291F and 291FA, the terms of which are fairly self-explanatory. They set out in differing ways the procedures which might be followed for investigating and reporting to the First Minister on any allegations of unfitness for office which may be directed against a judge in whatever circumstances they arise.
As the noble and learned Lord, Lord McCluskey, said, the whole issue of human rights is very much involved. Once the Human Rights Bill comes into operation an argument may well be advanced that the procedure that currently exists to investigate whether or not a sheriff principal or sheriff should be removed from office under Section 12 of the Sheriff Courts (Scotland) Act 1971 is flawed compared with the provisions of Article 6, for the reason that in all probability before such an investigation takes place the Lord President of the Court of Session and the Lord Justice Clerk will already have been involved because of informal complaints by procurators fiscal, the Lord Advocate, the President of the Law Society and whomsoever as to the behaviour of a local sheriff. If the Lord President has already dealt with these matters on an informal basis there may well be a strong case that he is not the right person to hold an independent inquiry of the nature required by Article 6 or as described in the Latimer House agreement to which the noble and learned Lord, Lord McCluskey, referred.
These are important issues. Clearly, at this time of night there is no question of dividing on any of the amendments in my name in this grouping. However, I have no doubt that my hope that these matters will be considered very seriously before we get to Report stage will be recognised and responded to positively by the Lord Advocate. Unless there is a change I have little doubt that those who sit on these Benches and my noble friends will be more than happy to support the noble and learned Lord, Lord McCluskey, in any amendment
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that he tables and any amendments that we table at Report stage to ensure that the matter is fully debated again at that time.
Lord McCluskey: I should like to deal briefly with two matters. First, I direct the attention of the noble and learned Lord the Lord Advocate to the precise words of Article 6 of the Convention on Human Rights. That article provides that the independent and impartial tribunal must be established by law. One cannot have an ad hoc tribunal; it must be one established by law, which means that it must flow from an Act of Parliament. There is no such establishment in this provision. Secondly, the noble and learned Lord, Lord Mackay of Drumadoon, referred to the submission by the Faculty of Advocates. The Law Society of Scotland has written to me to confirm that the amendment tabled by myself and the noble and learned Lord, Lord Mackay of Drumadoon, has been considered by that body. It draws attention to the report of the Joint Colloquium on Parliamentary Supremacy and Judicial Independence held at Latimer House in June 1998. The society goes on:
"In the Society's view, your amendment accurately reflects these guidelines which it is intended [should] be presented to the next Commonwealth Heads of Government Meeting".
That is a reference to Amendment No. 291E.
I hope the Government recognise that the principle underlying these amendments, though not necessarily the detail, is supported by the judiciary, the Law Society, the Faculty of Advocates and, as far as I can tell, everyone in the Committee who has spoken.
Lord Hardie: Before I turn to the detailed amendments it may help if I make clear the Government's position on the removal of judges. A number of noble and learned Lords have referred to the importance of judicial independence as a bulwark against the power of the state. I share those views and agree that an independent judiciary is an essential safeguard and key element in our constitution. It is for that reason that Clause 89 is in the Bill. Without it the Scottish parliament would be entirely free to enact such provisions as it wished, potentially without even the basic safeguards included in this Bill.
The Government regard it as anomalous—I believe that the noble and learned Lord, Lord McCluskey, shares this view—that there is no express provision in Scots law to deal with the removal of judges of the Court of Session. There is no specific statutory provision that allows for the removal of a judge, even if the judge is patently unable to perform the duties imposed upon him or her. Clause 89 addresses that gap, but does so in a way which we feel guarantees minimum safeguards for the judiciary.
I refer to the position in England and Wales by way of contrast. The Supreme Court Act 1981 provides for the removal of judges. Section 11(3) makes explicit provision for the removal of a judge by Her Majesty on an address presented to her by both Houses of Parliament. No one is suggesting that the provision in the 1981 Act has undermined the independence of the judiciary in England and Wales. Yet that provision is

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subject to fewer safeguards than are contained in Clause 89; for example, Clause 89 requires the first minister to specify the grounds for removal, which must relate to inability, neglect of duty or misbehaviour.
No right thinking person would suggest that those were not proper grounds for the removal of anyone from high office, including a judge.
No such specification in England is required by the 1981 Act. Clause 89 also requires a qualified majority of the members of the Scottish parliament to vote for the removal of a judge. I take the point made by the noble and learned Lord, Lord McCluskey, that the original draft did not provide for that; it provided for a simple majority. The reason it provided for a simple majority is that the English provision provides for a simple majority of each House of this Parliament, whereas what is required now by an amendment introduced in the other place is that there should be a two-thirds vote of the total membership of the Scottish parliament in favour of the removal of a judge before that can have effect.
By having that requirement, the judge who is the subject of the motion benefits from absentee members because they count in his favour.
In the Government's view, Clause 89 takes a balanced approach which protects the independence of the judiciary but provides a mechanism for the removal of judges should that be needed. It provides a basic minimum and entrenched framework to the procedures, but leaves it free to practice and convention or the parliament to develop the detail, on such matters as consultation and inquiry. I believe that is the right way to proceed. I shall now turn to the individual amendments before us.
I shall deal with some of the amendments in the name of the noble and learned Lord, Lord McCluskey; that is, Amendments Nos. 291D and 291E and 291ZCV. The Government do not support Amendments Nos. 291D and 291E which would entrench a procedure which would ensure that there was a judicial input to the review process, preceding the moving by the first minister of a motion under Clause 89(7).
Lord McCluskey: Does the noble and learned Lord recognise that I accept that there does not have to be a complete adjudication by judges for reasons that are easy to understand? What is required is that there should be an impartial, independent tribunal which may include judges but does not have to include nothing but judges.
Lord Hardie: I was going to recognise that the noble and learned Lord said that. I intended to deal with that point later in my response. This is an important issue, as noble Lords have recognised. I am anxious to give as full a reply as possible to all the points that have been raised.
We do not support any procedure which ensures that there is a judicial input preceding the moving by the first minister of the motion under Clause 89(7).
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Amendment No. 291E goes further and specifies a pool of judges who might be called on to prepare such a report, and requires that they should include in any report a statement of their reasons for reaching their conclusions.
In advancing the amendments, the noble and learned Lord, Lord McCluskey, is giving tangible form to the general expressions of concern he expressed at Second Reading and again more recently in a different way.
I repeat that I entirely agree with him that the procedures for the removal of judges are matters of the greatest sensitivity and importance. The Government understand this concern for the independence of the judiciary. I trust that the noble and learned Lord will agree that I, too, am committed to preserving the independence of the judiciary as much as the independence of the office of the Lord Advocate.
I agree with the noble and learned Lord, Lord McCluskey, that we should not seek in the Bill to replicate the provisions in Clause 12 of the Sheriff Courts (Scotland) Act 1971 which would enable judges to be removed only following a report by the Lord President and the Lord Justice Clerk. I can see that that would lead to some practical difficulties.
The noble and learned Lord made the point that it is not necessary to have judges, and that other procedures may be available. While it is not impossible that the first minister might want to develop a mechanism not dissimilar to that outlined by the noble and learned Lord, before presenting a motion to the parliament, we do not think that it is appropriate to entrench it in the Bill. There should be scope for procedures to evolve in the light of experience.
Amendment No. 291ZCB takes a different approach and simply deletes from the Bill all provisions dealing with the removal of judges. Let us be quite clear: the appointment and, by extension, the removal of judges, will be a matter which is devolved. We have included express provisions in the Bill, and therefore entrenched them, for the purpose of preserving the independence of the judiciary. I do not see how the noble and learned Lord, with his deeply-held and strongly expressed concerns, can reconcile the amendment, which simply removes any such framework. The amendment would leave the Scottish parliament with a completely free hand.
Amendment No. 291CA would extend to sheriffs and sheriffs principal the provisions in Clause 89 relating to the removal of judges of the Court of Session and the Chairman of the Scottish Land Court. There are already powers under Section 12 of the 1971 Act dealing with this matter. Under the general provisions of the Bill these powers will pass to Scottish ministers in the Scottish parliament, and I can see no reason to include anything in the Scotland Bill which would make any additional provision. The noble and learned Lord will be aware that under the provisions of the Sheriff Courts (Scotland) Act 1971 there requires to be an inquiry by the two senior judges, and unless they make a recommendation or finding to the Secretary of State for Scotland that in their opinion the sheriff is unfit to hold office, the matter cannot proceed any further. The matter stops at their report unless they make an adverse finding.

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It then goes on to the Secretary of State who considers the matter and does not need to follow the recommendation or finding of the senior judges.
Lord Mackay of Drumadoon: Does the noble and learned Lord accept the point which I raised that there may be an argument that the 1971 legislation would not survive scrutiny against convention rights? We do not need to decide whether or not the argument is well founded but there is an argument which may have figured in the Stewart case which went to the Appellate Committee of your Lordships' House not so long ago. If it is to be the case that all the judges in Scotland—whether High Court judges, sheriffs principal or sheriffs—are dealing with similar issues under the Bill and under the human rights legislation, there is an argument for treating them all the same so far as concerns their removal from office. It would be unfortunate in the extreme if the Government missed the opportunity of dealing with it in this Bill and a year or two down the line were faced with the problem of the Court of Session being invited to make a declaration of incompatibility of Section 12 with convention rights. I suspect that that is a problem we could well do without.
All I ask is that the matter be looked at. That is one of the reasons why the amendment was tabled.
Lord Hardie: I intend to deal with the question of human rights which was raised in another context by the noble and learned Lords, Lord McCluskey and Lord Hope. I shall deal with the point at that stage.
Amendment No. 291CC attempts to provide that before the First Minister can recommend the removal of the judge of the Court of Session or chairman of the Land Court, Members of another place would need to support a Motion to do so. We presume that Amendment 291CB, removing the special majority, is linked to that proposal, as the noble and learned Lord explained. The Government cannot accept any suggestion that Westminster should be involved in this process. It is a matter for the Scottish executive and the Scottish parliament and is quite inappropriate that their actions should be subject to review in Westminster. We are devolving responsibility for judicial appointments to the Scottish parliament and we should allow it the freedom to exercise its powers properly without the interference of Westminster.
I take some comfort from the response of the noble and learned Lord, Lord Hope, to my noble friend earlier. He expressed some reservations about having a mixed jurisdiction.
Amendments Nos. 291DA, 291F and 291FA attempt to prescribe how the First Minister should satisfy himself that the judge of the Court of Session or sheriff is unfit for office. I have already explained that the procedures for the removal of a sheriff are provided in the 1971 Act, and we do not intend to amend them in this Bill. The Bill does not specify what steps the first minister should take to inform his decision to move a motion specifying grounds of unfitness. It is inconceivable that he would move such a motion other than on sound advice. The advice might be medical or it might come from other sources. I see no reason to
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prescribe this on the face of the Bill. Indeed, if it is medical, the decision of the First Minister may well be informed simply by the production of appropriate medical certificates (assuming that the judge concerned submitted himself or herself to examination).
I see no reason to prescribe the procedure on the face of the Bill. It is appropriate for us to rely on the First Minister to take advice, and we would not want to prescribe how he should take such advice.
Amendment No. 291FA adds to Amendments Nos. 291DA and 291F and specifies that no report recommending the removal of the judge, sheriff principal or sheriff may be submitted to the First Minister without the person who is the subject of the report having first been interviewed as far as this is reasonably practical and given an opportunity to comment on the factual basis of any proposed finding that he is unfit for office. Again, I think that it is unimaginable, with all due respect to the fears expressed by the noble and learned Lord, that in except the most extreme cases the entire process of the First Minister satisfying himself that a person is unfit, moving a recommendation and gaining the agreement of two-thirds of the parliament could be completed without the person in question being offered a reasonable opportunity to make representations, including comments on their factual basis at some, and possibly more than one, stage in the proceedings.
It is beyond belief that the parliament would not ask the First Minister what his reasons were. It is beyond belief that if there were a dispute as to fact members of the Scottish parliament would not ask the First Minister what the attitude of the judge was. That is so particularly in view of the two-thirds safeguard and given the background of the change in the electoral system which will probably ensure that no one party can achieve a two-thirds majority of all the members elected to the parliament.
There is a further attempt to write into the Bill details of procedures which we are sure should be left to the First Minister and to parliament to develop and defend in each particular case. I believe that these details should be left to the parliament. We should not try to second-guess every aspect of the process. What matters is that the Bill should contain certain minimum safeguards and provide a framework within which the parliament can operate. I believe that Clause 89 achieves that. On that basis, I shall in due course invite noble Lords to withdraw their amendments.
Lord Hope of Craighead: I am grateful to the noble and learned Lord for giving way. A few moments ago and at the beginning of his remarks he said that we should leave these procedures to be evolved in the light of experience. Can he explain a little more what he means by that?
Bear in mind that if a judge is unfit for one reason or another the first step that everyone will want to take is to persuade him to resign without the need to go through these procedures. Therefore, the procedures will almost certainly be required only where the judge is resisting his removal. If he is resisting his removal, he will in all

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likelihood take every opportunity to challenge his removal at every stage in the process. The more one leaves to chance the more the risk of the procedure breaking down after an inquiry, after a vote has been taken in Parliament or even later on. The hostages to fortune which are created by allowing procedures to evolve by experience are very great. I wonder whether the Government have taken on board the risks to which they are exposing Scotland if they allow the matter to evolve in the way suggested by the noble and learned Lord.
Lord Hardie: I am grateful to the noble and learned Lord for that intervention. The Bill sets down the basic framework. It will then be for the parliament and the First Minister to set out the detail of the procedure. That procedure will evolve and change as time goes on in the light of any experience that one has. Obviously a procedure will be required to be laid down by the Scottish parliament as regards what should be undertaken.
I turn to government Amendment No. 291CAA. It is intended to ensure that judges may be removed from office only by Her Majesty and that any recommendation to do so should be made only by the First Minister. Clause 89 provides a role for the First Minister in recommending the removal of the judge. The amendment would make it clear that only Her Majesty can remove a judge of the Court of Session or the Land Court and that the recommendation that she should do so can come only from the First Minister and not via any other route. The amendment was tabled in response to a concern by the judiciary in Scotland that the clause as framed did not make that clear and there would be a possibility that the Scottish parliament would pass a separate Act independently of that. We did not believe that that was a real issue, but, in view of the concerns expressed to us on behalf of the judiciary, we addressed the matter and incorporated that amendment.
Before sitting down I will deal with the CHOGM point and the ECHR point. As to the Commonwealth conference, the Bill does not preclude the possibility of the parliament making provision to expand on the procedures to cover the concerns which the noble and learned Lord, Lord McCluskey, has raised. Clause 89 simply contains minimum requirements. which are entrenched. The Scottish parliament can and should build on these.
As to ECHR, Article 6 is already binding on the United Kingdom. The Human Rights Act is simply bringing those rights home. As far as I am aware, there has been no challenge of the procedures for the removal of a judge in England. There has been no suggestion that that is contrary to Article 6. According to those procedures it would appear there would not be any public hearing other than a Motion being presented to each House.
Clearly any procedures which the Scottish parliament introduce in this regard will have to take on board its obligations in terms of the human rights legislation. I am not convinced that the proposals in the Bill as they stand would be in contravention of Article 6 if one
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appreciates that what is being laid down are the basic minimum requirements. The detailed procedures will be developed by the parliament.
In the light of what noble and learned Lords have said, we will consider these matters further. I would invite noble and learned Lords to withdraw their amendments.
2.15 a.m.
Lord McCluskey: I do not propose to press my amendments further. I would ask the noble and learned Lord the Lord Advocate to read what he said to the effect that judges will, because of the provisions of Clause 89(7)(b), have the benefit of absentees. Is this any way to think about the removal of judges, that they may be lucky that if a few of the members of the Scottish parliament are elsewhere the judge will have the benefit of the absentees?
Lord Hardie: If I gave that impression I certainly did not intend to do so. I would withdraw any suggestion of that sort. The Committee will appreciate that it is quarter-past two in the morning and perhaps the line that I used was less appropriate than it should have been. I do not wish to give any impression that judges are being shown any favours here. What I was trying to get over to the Committee and to the noble and learned Lord is that by imposing a requirement of two-thirds of the members who are eligible to sit in the parliament it is a very high standard indeed when compared with the equivalent provision in England. I hope that the noble and learned Lord will take the remark in that spirit.
Lord McCluskey: I am happy to do exactly that and I accept what the noble and learned Lord has said.
The noble and learned Lord has used the expressions "unimaginable" or "beyond belief" more than once. It is simply not so. Judges are removed from office by the political power in most countries of the world. There is nothing unimaginable about it at all. They are not removed for political reasons in this country by reason of conventions. As I and others have said repeatedly, these conventions will not necessarily apply to a new Scottish dispensation. It is very important that these matters should be dealt with in the Bill.
Lastly, because of the requirements in Article 6 that an independent and impartial tribunal should be established by law, it is important that that law should be passed—and it should be passed in the course of the enactment of this Bill.
In the light of what has been said, I do not propose to press any of the amendments standing in my name. I shall beg leave to withdraw each of them in turn.
Amendment, by leave, withdrawn.
[Amendment No. 291CA not moved.]
Lord Hardie Lord Hardie moved Amendment No. 291CAA:
Page 43, line 7, leave out ("by Her Majesty on the recommendation of") and insert ("only by Her Majesty; and any recommendation to Her Majesty for such removal shall be made by").
On Question, amendment agreed to.
[Amendments Nos. 291CB to 291FA not moved.]
Clause 89, as amended, agreed to.
Clause 90 agreed to.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 291G:
Before Clause 91, insert the following new clause—
PRIVILEGE OF THE SCOTTISH PARLIAMENT
(" .—(1) In the Bill of Rights, there shall be inserted at the end of Article IX (freedom of speech) the words "; and in this Article, "Parlyament" shall include the Scottish Parliament".
(2) In the Claim of Right Act 1689, there shall be inserted at the end of Article XXV the words "of those Parliaments (including the Scottish Parliament)".
(3) Proceedings of the Parliament shall not be questioned on grounds of non-conformity with the Parliament's standing orders except where such non-conformity—

(a) raises a devolution issue within the meaning of Schedule 6 to this Act, or

(b) constitutes non-conformity with any provision of this Act relating to the content of the Parliament's standing orders.

(4) In considering any matter relating to an Act of the Scottish Parliament and subordinate legislation made by the Scottish Executive, a court shall apply, so far as possible, the same tests for deciding the extent to which reference may be made to speeches in the Parliament in the interpretation of proceedings of the Parliament as it would apply for deciding the extent to which reference could be made to speeches made in Parliament in the interpretation of proceedings in Parliament.").
The noble and learned Lord said: I turn to a new topic at 2.20 a.m. I have to say that the only privilege most of us are interested in at the moment is the privilege of going home to our beds. I see the cheery face of the Government Chief Whip. It is cheery but the noble Lord is shaking his head from side to side, so we are not yet free to go. Therefore, I shall deal briefly with the amendment. It is not one that I would press to a Division at this hour. For that reason it is clearly one which it may be necessary to look at again at Report stage. In such ways do we make progress.
The amendment raises the issue of parliamentary privilege and seeks to explore the extent to which the courts should be limited in their interference with what goes on in the new parliament. Perhaps I should make it clear that it is not in any way the intention of the amendment to interfere with the powers which the Bill gives the courts to address and adjudicate on devolution issues. Nor is it the intention to limit the power which the Court of Session already has to entertain judicial review proceedings.
In that regard, I would welcome an answer to the question I posed back in July on the fourth day of the Committee stage and for it to be clearly indicated on behalf of the Government whether or not there is any intention that the Bill's provisions should interfere in any way with either the existence or the extent of the supervisory jurisdiction of the Court of Session. My understanding is that this issue has troubled a number of members of faculty. They have discussed this matter
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informally with Scottish Office officials at conferences which they have attended. It would be helpful if the matter could be clarified.
I fully recognise that in Clause 37 the Bill deals with freedom of speech in the new parliament in the sense that it will protect members from defamation proceedings. I fully accept that there are other provisions in the Bill which would entitle standing orders to regulate the extent to which members of the public are allowed to open their mouths if they happen to be in attendance in an observing capacity for the proceedings of the committee or the parliament itself. The amendment seeks to explore whether the new parliament, which will be a body enacting primary legislation which will have the same force in Scotland as primary legislation coming out of the Westminster Parliament and indeed will have the same force throughout the United Kingdom as primary legislation coming out of the Westminster Parliament, should have to have regard to the provisions of Article IX of the Bill of Rights Act of 1688, which applies in England and Wales and Northern Ireland and provides that the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament, and whether they should also be bound by what is understood to be a comparable provision in the Scottish Claim of Right of 1689 which is understood, although there is no clear judicial authority on this point, to secure the same effect in the Scottish courts when Westminster legislation comes before the courts and when what is said by Members of this Parliament, whether of another place or here, falls to be considered.
As Members of the Committee will be aware, there is currently a joint committee of the two Houses of Parliament addressing the whole issue of parliamentary privilege. It has already taken evidence from a number of individuals, including senior government Ministers such as the Home Secretary, and senior judges such as the Lord Chief Justice and the noble and learned Lord, Lord Rodger of Earlsferry.
It appears to be recognised in the evidence which the Government submitted to the committee that to some extent at least parliamentary privilege restricts the extent to which the courts can seek to go behind what is said by Members of Parliament during debates and by doing so use evidence of what was said to impugn parliamentary conduct and in particular the conduct of individual Members. The reason for that would be that to do so would undermine the basic concept which lies behind Article 9 of the Bill of Rights and the equivalent provisions of the Claim of Right; that is, the need to ensure, as far as possible, that a member of the legislature can speak freely without fear that what he says will later be held against him in the courts, not just in defamation proceedings but in any other proceedings upon which his words must be founded.
The matter is dealt with at some length in a memorandum submitted by the Home Office to the joint committee. In view of the lateness of the hour, I shall not repeat or read out in any detail what it says. My

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concern is that when the courts consider what has taken place in the Scottish parliament, they should treat it with the same respect and with the same degree of reservation against undue interference as the courts throughout the United Kingdom treat what is said in this Parliament. Clearly, there will be judicial review proceedings in which it may be necessary to refer to what a government Minister said. Clearly, in addressing questions of the vires of the primary legislation coming out of the Scottish parliament, it may be necessary to refer to what was said in a Pepper v. Hart statement, as has previously been discussed in our debates in Committee. But beyond that, I believe the courts should not go.
The amendment seeks to place the new Scottish parliament on exactly the same basis as this parliament in relation to freedom from interference from the courts which would infringe the provisions of the Bill of Rights or the Claim of Right. If, once the joint committee has reported, the Government are minded to bring forward legislation to change the present status or present effect of ramifications of parliamentary privilege as it affects this Parliament, one would expect a similar change to be implemented in the Scottish parliament because my thesis is that both should be treated equally. However, it will clearly be some months, if not longer, before the committee reports. One suspects that it may be a year or two at the minimum before difficult, complex and sensitive legislation of the nature which would be involved to change the rules of parliamentary privilege is brought forward for consideration by your Lordships' House and another place.
In the interim, we should try to place the Scottish parliament on an equal footing. It is on that basis that I bring forward this amendment. It is in no sense to interfere with the need to scrutinise vires and the need to scrutinise issues arising under the human rights legislation; it is to encourage the courts to treat the new parliament with the same respect as the United Kingdom courts have traditionally treated the proceedings of this Parliament. I beg to move.
2.30 a.m.
Lord Hope of Craighead: I believe I can say on behalf of the courts that the last thing that they would want to do is to indulge in criticism of the procedures of the parliament. For that reason I strongly support the principle of the amendment proposed by the noble and learned Lord.
Lord Sewel: I recognise that the amendment deals with important issues. The relationship between the parliament and the court is clearly a matter of considerable importance. It is an area upon which I genuinely wish to reflect further. Some protections are already built in, as the noble and learned Lord indicated.
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There is perhaps a strong case that they do not go far enough at the moment and I should like the opportunity to think a little more and perhaps find an acceptable way forward. I am not convinced that we can put the Scottish parliament on all fours with the Westminster Parliament in that respect, but there is room to develop further the line that has been taken. I hope that we will be able to see progress certainly by Report Stage and on that basis I hope that the noble and learned Lord will feel able to withdraw his amendment.
Lord Mackay of Ardbrecknish: I am happy to accept that response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 91 agreed to.
Lord Sewel Lord Sewel moved Amendment No. 291GA:
After Clause 91, insert the following new clause—
HUMAN RIGHTS
(" .—(1) This Act does not enable a person—

(a) to bring any proceedings in a court or tribunal on the ground that an act is incompatible with the Convention rights, or

(b) to rely on any of the Convention rights in any such proceedings,

unless he would be a victim for the purposes of Article 34 of the Convention (within the meaning of the Human Rights Act 1998) if proceedings in respect of the act were brought in the European Court of Human Rights.
(2) Subsection (1) does not apply to the Lord Advocate, the Advocate General, the Attorney General or the Attorney General for Northern Ireland.
(3) This Act does not enable a court or tribunal to award any damages in respect of an act which is incompatible with any of the Convention rights which it could not award if section 8(3) and (4) of the Human Rights Act 1998 applied.
(4) In this section "act" means—

(a) making any legislation,

(b) any other act or failure to act, if it is the act or failure of a member of the Scottish Executive.").

The noble Lord said: I can be brief or I can be long in relation to this amendment. I shall start by being brief and leave it to others to see whether I then need to go long. In essence, the amendment deals with the European Convention on Human Rights. The Government are fully committed to the rights and freedoms set out in that convention and believe that giving effect to them in UK domestic legislation through the Human Rights Bill will bring considerable benefits. The Scotland Bill also contains provisions to ensure that the convention rights are observed by the Scottish parliament and the Scottish executive. We want to ensure that the approaches taken in the Scotland Bill and the Human Rights Bill are consistent so far as possible. That is what the amendments set out to achieve. I beg to move.
Lord Mackay of Drumadoon: At this time of night I merely indicate that I do not intend to oppose the new

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clause. As I believe the Minister is well aware, there are some objections to this approach which have been advanced from the Liberal Democrat Benches by the noble Lord, Lord Lester, about the victim test under Article 34 of the convention. That means that litigants before the Scottish courts raising issues of vires may be entitled to advance certain arguments but not others, even though another party half-way along the bar represented by other lawyers can advance all the arguments. I regret to say that it is a situation which may give rise to a measure of confusion. We can discuss these matters later. On the basis that this clause in
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similar form is to be found in the Government of Wales Bill, it will be clearly wrong to oppose it becoming a part of this Bill at this stage.
On Question, amendment agreed to.
Lord McIntosh of Haringey: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-three minutes before three o'clock.