WEDNESDAY 21 JUNE 2000
_________
Members present:
Mr David Marshall, in the Chair
Miss Anne Begg
Mr Russell Brown
Mr Eric Clarke
Mr Mohammed Sarwar
Sir Robert Smith
Mr Desmond Swayne
Mr Bill Tynan
Mr Andrew Welsh
_________
MEMORANDUM SUBMITTED BY THE SCOTLAND OFFICE
EXAMINATION OF WITNESSES
DR J REID, a Member of the House, (Secretary of State for Scotland),
MR B WILSON, a Member of the House (Minister of State, Scotland
Office) and DR L CLARK, QC, a Member of the House, (Advocate General
for Scotland) examined.
Chairman
1. Order, order. Good morning and welcome to this meeting with the
Select Committee. I think this is the first time ever that all three House
of Commons Scotland Office Ministers have appeared before the Committee
together. Could I ask you please, for the purposes of the record, to
introduce yourselves to the Committee?
(Dr Reid) John Reid, Secretary of State. Accompanying me today is
Brian Wilson, Minister of State at the Scotland Office and Dr Lynda Clark, the
Advocate General. There are also several officials here who may in detailed
questioning be able to provide you with more helpful detail, depending on the
level to which you want to go. There is Ian Gordon, the Head of Department
at the Scotland Office, Norrie Kernohan who is the Principal Finance Officer
and Derek Miller, who is one of my officials.
2. I propose to put a number of general questions and also some
specific separate questions for the Minister of State and for the Advocate
General and to allow all of you to make separate brief opening statements at
the appropriate point. The Committee has decided that in addition to the
overview we should begin by asking questions about the Barnett Formula,
Structural Funds and additionality. This will obviously occupy a substantial
part of the meeting. May I ask you whether there are any brief opening
remarks which you would like to make, Secretary of State, to the Committee on
the work of the Scotland Office?
(Dr Reid) When I last appeared before the Committee, which I think was
on 29 March, I explained in some detail how I, on the basis of experience at
that date, felt that the new form of governance of Scotland was operating.
I said then that the radical restructuring of the governance of Scotland had
gone far better and far quicker than anyone could have foreseen or hoped.
That is worth repeating right at the beginning. The challenges have arisen
but they have been faced and problems which have arisen have been overcome in
both the United Kingdom and the Scottish Parliament. One thing is crystal
clear on the basis of our collective experience over the course of the last
12 months and that is that devolution works. It is in the interests of the
Scottish people and I and my colleagues will take every opportunity to
continue to say so. However, whereas it will be difficult not to discuss a
fundamental plank of my department's work, I understand this session will tend
to concentrate more on the role of myself and my two ministerial colleagues.
Brian Wilson and Lynda Clark will of course be happy to respond to your
invitation to make a short statement and to answer your questions about their
own particular roles. However, to set the scene it might be helpful if I
explained how we divide our respective duties. As I previously explained, my
role is to facilitate the devolution of settlement and to represent Scottish
interest in non-devolved areas. Contrary to what you might occasionally read
in the press and media, this is a big job. It involves considerable interest
in most areas of life in Scotland. I could not do it, quite frankly, on my
own and Brian Wilson is there to share that burden, both easing the transition
through and in representing the Scottish interest in the multi-faceted areas
which are dealt with here at the United Kingdom Parliament. Brian Wilson will
elaborate his priorities, including the representation of Scottish interests
domestically and abroad. Suffice it to say that unlike some other politicians
in other parties, we enjoy excellent relations and talk to each other on a
daily basis. Lynda Clark has a different role. I shall not steal her thunder
but it is not always understood that she is a law officer of the Crown in her
own right and the chief legal adviser to the United Kingdom Government on
matters of Scots law. So although part of the department, there is a distinct
identity there which she will speak to later. I should perhaps say something
briefly about the Scotland Office first Departmental Report. The document
sets out the aims and objectives of the department as well as the devolution
framework. The chapter on government expenditure explains the process by
which the Government funds the Scottish Executive budget and the document goes
on to explain the organisation and management of the department. Before I go
on, in the context of the partnership which has been developed, I should place
on the record, and I am sure I speak for all colleagues at Westminster, our
wishes for the First Minister Donald Dewar's speedy recovery. I have a very
simple view, which I hope is shared by the Committee, and that is whether at
Westminster or at Holyrood, we are all of us in politics to serve the Scottish
people. The very reason for our existence is partnership, partnership and
partnership again. If devolution continues to flourish, it is because we have
all proved we can work together, whether it be here in Westminster or in
Edinburgh or temporarily in Glasgow. However, it is not just Ministers and
senior politicians who need to work together and part of our aim is to foster
an extension of that in every MP and MSP who represents Scottish
constituencies. In order to foster this esprit de corps I propose later in
the year to mark it by holding a reception for all Scottish members, all of
whom are attempting to serve the interests of the Scottish people in whatever
capacity at Westminster. I should like to have done this in our new offices
in Melville Crescent, which you will see referred to in the report. Alas,
they are too modest for such a large gathering and I have therefore asked
officials to plan for such an event in the autumn at Edinburgh Castle. I hope
that this will have the desired effect of bringing the two parliaments and all
of us closer together. I and my colleagues are delighted to be here today.
We shall be happy to elaborate on any aspects of the departmental report, but
I suspect that the Committee members will want to question us on matters which
go beyond its pages. On those and all other matters within our remit, we
shall be happy to enter into that dialogue.
3. Thank you for that. I did say at the outset that we would begin
with questions on the Barnett Formula and Structural Funds and additionality.
The Barnett Formula in relation to Scotland was introduced in 1978 and has
been used continuously, with some modification, ever since. The formula is
a way of sharing out changes in public expenditure plans between the countries
in the UK. It does not determine the overall size of the Scottish budget, but
provides that, where comparable, changes to programmes in England result in
equivalent changes in the Scottish budget, calculated on the basis of
population share. The formula does not directly reflect public expenditure
need. In the Departmental Report you state that part of your role is to be
responsible for the financial settlement for Scotland. Exactly what does
being "responsible for the financial settlement for Scotland" actually
involve? Does it mean that negotiations with the Treasury over Barnett and
non-Barnett expenditure items are bilateral or even trilateral (including the
Scottish Executive Finance Department)?
(Dr Reid) The answer to your last question there is yes. I believe the
Barnett Formula is of immense benefit to the United Kingdom Government as well
as being of benefit to Scotland. You will be aware that it has been applied
over a number of years now. It does not dictate the income of the Scottish
Parliament or any other department. The Barnett Formula sets the limits on
public expenditure as far as Scotland is concerned. The income of course is
a separate thing which comes from various other sources. I believe the great
benefit of it is that in its simplicity and its relationship to both Scottish
needs and Scottish population, it avoids the need for an annual wrangling
session, or if it is in the comprehensive spending review a three-year
wrangling session. You will be aware, of course, that the Finance Minister,
Jack McConnell, in an article which has been published recently has outlined
this fact, that we do benefit from extra public expenditure per head in
Scotland. That is to represent the needs which were incorporated right at the
beginning of the Barnett Formula and which are still there and of course the
sparsity of population. I myself greatly favour the retention of the Barnett
Formula from both the point of view of the United Kingdom and Scotland. So
far as the second part of your question is concerned, the role of the
Secretary of State in this takes various aspects. Of course in the first
instance I am involved in discussions with other government departments on a
range of issues which affect Scotland and one of those departments would be
the Treasury. Secondly, it may well be that there are bilateral and will be
bilateral discussions on this matter, but there may also be, on the details
of this, trilateral discussions. What that means in practice is that I can
envisage circumstances where, on the details of overseeing the application of
the Barnett Formula and ensuring that all of us feel confident and assured
that it has been applied correctly, my colleagues on the Scottish Executive,
perhaps the Scottish Finance Minister, perhaps Donald Dewar or the Deputy
First Minister, would be involved in trilateral discussions with the Treasury.
The composition of spending increases agreed in the Spending Review 2000 will
have implications for Barnett Formula consequences.
4. What involvement do you and your officials have in the Spending
Review 2000? You referred to the Treasury. Do you and the Scottish Executive
have sufficient access to Treasury and other papers to be able to understand
the potential ramifications for Scotland of policy and expenditure changes in
England? Does the Scotland Office retain appropriate expertise to enable it
properly to assess the available information?
(Dr Reid) On the first one, yes. They are content that we have
sufficient overview of what is going on in various government departments and
that is precisely why the Scotland Office needs a critical mass of expertise
in those areas. As you probably know, the numbers of Scotland Office
officials had greatly diminished prior to devolution; it was in the area of
4,200. It is now, as of the end of March, around 86, 19 of whom actually work
on the legal side with the Advocate General. We intend to increase that in
the range I explained to the Committee the last time, to between 100 and 130,
or if you exclude the Advocate General, between 80 and 110. The reason we
want those is in order to be able to assure Ministers, myself and
Brian Wilson, that we have sufficient overview and expertise to deal with the
broad issues we need to deal with. However, what we have not done is attempt
to have a number of officials sufficient to allow us the detailed exposition
and oversight of all government departments and remember we deal with all of
them. Unlike most government departments we have an overview which is huge.
We have not attempted to get the number of officials we require to do that
because that would have required 4,200 which the previous Scottish Office had.
Therefore I work in partnership, as do my officials, and we are greatly
assisted by those officials who now work for the Scottish Executive. As a
matter of practice as well as principle, that partnership is essential in
seeing through not only the comprehensive spending review but any other
issues.
5. Is there a commitment by the UK Government regularly to update
the document A Statement of Funding Policy published by the Treasury in March
1999?
(Dr Reid) As far as the publications are concerned, they have given
that commitment. As far as sharing of information is concerned, not only is
there a willingness to share information with the Scottish Executive, if that
was implicit in your question, but of course that is set out in some detail
in one of the concordats which we agreed. I cannot remember the exact date
but you will recall they were delayed until after September of 1999; I think
these concordats were published around September 1999. One of the four
important concordats dealt with the sharing of information. There are several
reasons for this. We like to avoid surprises. Difficulties can sometimes
occur if one or other of the institutions, that is the Holyrood Parliament or
the Westminster Parliament, find out at the last moment that something is
proposed. In the very nature of the plethora of things we have to deal with,
occasionally that will occur. It is intrinsic to good government that we try
to avoid that happening.
Mr Swayne
6. Mr McConnell, the Executive's Finance Minister, has said that
Scotland has a larger allocation of Structural Funds than it can spend and it
will retain the surplus for the Parliament to spend on its own domestic
priorities. He specifically said to the European Committee on 30 May that as
things stand, because Scotland is in a post-devolution situation with an
agreed assigned budget, it gets to keep the money that it can no longer spend
on Structural Funds. It is not that it is making a surplus on the funds, it
is that it cannot spend up to that level, therefore it gets to keep what is
left and allocate it to other projects. With your United Kingdom perspective,
is that fair to the rest of the kingdom? Is it fair specifically to England?
(Dr Reid) My responsibility is to make sure that Scotland gets its fair
share of the Structural Funds. The allocation of those Structural Funds
within Scotland is of course a responsibility for the Scottish Executive. I
am content that they do. You have to distinguish between two things and this
is not commonly understood, at least not in a lot of the press comment and
indeed parliamentary comment I have seen. The Barnett Formula sets the limit
which can be spent by the Scottish Parliament as it does with all other
departments. It is a method of quantifying the external limits of
expenditure. That is quite different from the income which may make up that
expenditure. The sources of income to the Scottish Parliament, the Scottish
Executive, which make up that expenditure would include of course the block
grant we give and it would include within it, monies raised by local
government and various other sources of income and European Structural Funds.
It is impossible to do it on an individual case by case basis in terms of
additionality because what is passed to them is the aggregate sum. I am
content that the Scottish Parliament is fairly served by the monies given to
it as one of the sources of income which they then spend within the external
limit set by the Barnett Formula. I have not seen the comments to which you
referred. I do not know the context from which they are taken; I do not know
what Mr McConnell was being asked on that. If you wish, I shall write further
on those specific comments. As far as I am concerned, I am convinced that the
Barnett Formula gives a fair, not a favourite - no question of favouritism -
assessment of the limit which is appropriate to Scotland given its
geographical factors, its sparsity of population and indeed its need.
7. It would be helpful to have that written record. Forgive me, but
I do find this allocation of Structural Funds a fiendishly complicated
subject. My understanding is that if the Structural Funds are not actually
spent on such structural projects and re-allocated within the other priorities
and the domestic budget of the Parliament and the Executive, then the Treasury
cannot draw down those funds from Europe, which means that the provision of
those funds is a charge on the United Kingdom taxpayer, of which obviously the
Scottish taxpayer is a constituent part. Therefore there is the suggestion
that in that approach there is an element of unfairness to the other parts of
the United Kingdom. Do you have any comment on that?
(Dr Reid) I have three comments. First of all, yes, the whole system
is fiendishly complex. It would be even more fiendishly complex if we did not
have the Barnett Formula which is why it was introduced in the first place.
It is to my astonishment that some people who purport to be serving Scotland's
interest apparently want to open the whole thing up. That would be
deleterious to Scotland's interest. It would undermine it, as well as the
United Kingdom's good government. The second point I would make is that
Barnett deals with aggregate expenditure. It does not deal with specific
issues of expenditure. It is right that those specific issues of expenditure
and allocation are decided by the Scottish Executive themselves. Thirdly,
there is a distinction between the Barnett Formula income which deals with the
total expenditure which is allowed by the Scottish Parliament and the sources
of income which go to make it up. They are even more fiendishly complicated
when you distinguish between the aggregate and the individual items. However,
if you are asking me whether the outcome was favourable as a result of Barnett
to Scotland and the United Kingdom, my answer to that is yes. It is the case
that Scotland receives something of the order of 19 per cent more per head
than the UK as a whole. That is accepted and that is appropriate because of
the sparsity of population and need and so on. Every year the Barnett Formula
allows for the major items of expenditure, not every individual one-off that
a UK department allocates but the major items in the spending round. It
allows a simple and fair formula which avoids continual wrangling every year
on every decision, which allocates an equivalent additional expenditure. The
Barnett Formula does not apply to the inherited expenditure. It only applies
to the extra money that is going every year or every three years. The
formula, to put it at its simplest, is that it is the additional expenditure
for the UK department multiplied by a factor which is an agreed factor as to
the proportion of that departmental work and expenditure which covers the
whole UK, multiplied by the population of Scotland, which is 10.34 at present
in percentage terms to the United Kingdom. That formula allows us both to
avoid the annual political wrangling and represent the particular features of
Scotland. It does means that as long as public expenditure keeps increasing,
then there will be a convergence upwards - not downwards - in the two figures
for England and for Scotland. The only way actually to keep the present
convergence in percentage terms would be to slash public expenditure and no-
one actually wants that.
8. My understanding of the evidence that Mr McConnell gave to the
European Committee is that all European Structural Funds for the next seven
years are now guaranteed as far as the Scottish block grant is concerned;
irrespective of whether there are projects actually to consume those, that
money is now guaranteed. The key question in my mind, if you take your time
horizon forward to a time when those Structural Funds are no longer available
because of the change in the nature of the EU with enlargement, is: does the
block grant fall, other things being equal?
(Dr Reid) As a matter of fact, if there were any unfairness in the
system of allocation of Structural Funds, the people who would immediately
bring that to everyone's attention would be the European Commission. Agreed?
Of course they would. The European Commission have not only accepted our way
of allocating funds to Scotland within the United Kingdom, they have
recommended it to others as a model of how to do it. I can assure you that
the European Commission are content that the purposes of those funds are such
that it not only meets their requirement but is in many ways a model of it.
If you are asking whether it is possible, with every allocated expenditure
over every indefinite period ahead to guarantee that if there are some changes
at the margin in this you will not rip up the whole formula, then the answer
is of course it is not the way to conduct government to do that. There has
to be some planning ahead on it, but I can assure you that the monitoring
process is not only one which would be carried out by this United Kingdom
Parliament but one which would be carried out by the European Commission who
oversee the Structural Funds.
9. I think the Secretary of State misunderstands my question. This
question is not about the fairness of the allocation. This question is about
additionality. The key question is: once the Structural Funds have
disappeared that are available to Scotland which are currently guaranteed but
once they have gone, does the block grant fall, other things remaining equal?
That is a yes or no answer.
(Dr Reid) No, it is not a yes or no answer. First of all, you brought
in the question of additionality. Additionality does not apply to aggregates.
Additionality only applies to specific projects and the Barnett Formula and
block grant deal with aggregates. The actual allocation of those, subject to
the Commission oversight of all of the things throughout Europe, is actually
done by the Scottish Parliament itself. No-one envisages the Scottish block
grant falling but hypothetically it is possible to conceive the whole of
British public expenditure being halved next week, if you want to ask me
hypothetical questions. However, it is not my job to deal with what are
highly hypothetical questions. It is my job to deal with what can be
foreseeably expected in the foreseeable future. What would be foreseeably
expected in the future is that the Barnett Formula, which gives a fair
allocation of resources to Scotland, or the limit for those fair resources and
to the United Kingdom and is a simple and more agreeable way of doing these
things than constant wrangling, will continue to apply over the next few
years.
10. The disappearance of Structural Funds is not an hypothesis, but
clearly I am not going to get a yes/no answer.
(Dr Reid) The question is not the disappearance of Structural Funds.
You also mentioned additionality. Your question in the beginning was
specifically about additionality. If we give money to the Scottish Parliament
- forget about the question of Structural Funds - and we give them a large
amount of money to cover the equivalent of education and health, it is within
the right of the Scottish Parliament to decide to allocate all of that money
to health rather than to education and health. That is a decision of the
Scottish Parliament. Within that block grant, they have the freedom, as the
devolution settlement is intended to give them, to allocate that money. If
what you are suggesting is that if they started using monies for purposes for
which they were not intended, and in breach of European regulations and
conventions, what I have already pointed out is that the European Commission,
among others, would be the first to point that out to us.
Mr Welsh
11. Could I ask the Secretary of State how it will affect the
Scottish budget if Scotland does not get ESF after 2006?
(Dr Reid) Why should it affect the Scottish budget? Are you arguing
for a decrease?
12. No, I am asking the Secretary of State how that would affect the
budget.
(Dr Reid) I can hear you. You can be assured that certainly
Brian Wilson and I shall be arguing that Scotland's budget at the moment
represents their needs. If you wish, implicitly or otherwise, to be arguing
that changes in Europe should result in a reduction in the Scottish budget,
all I can say is that you ---
13. You are not answering the question.
(Dr Reid) I am answering the question. I told you absolutely I would
be arguing for retention of the Scottish budget. You seem to be getting
yourself in a position where you are arguing for a reduction of it.
14. No, you are putting words in my mouth. I am asking, if Scotland
does not get ESF after 2006, how that will affect the Scottish budget.
(Dr Reid) There are two separate questions. Whether Scotland gets
specifically ESF depends on what happens in Europe. Whether Scotland gets a
fair budget depends on what happens in negotiations between the Treasury and
the Scotland Office as long as it exists and the Scottish Parliament. What
I am saying is that I would certainly be arguing for that as far as the
aggregate amount is concerned. If you are going to be arguing, as you seem
to be, that the mechanisms are such at present that you would feel compelled
to say that the Scottish budget should be reduced, I shall let others decide
on that, but I shall be on the other side of that argument.
15. You are slipping away. Are you saying there will be no effect?
(Dr Reid) I am not slipping away, I am coming right at you.
16. For the wrong reasons. Will there be no effect? Is that what
you are saying? Or will the Treasury make up the shortfall?
(Dr Reid) What do you mean, "make up the shortfall"?
17. Will there be no effect on the Scottish budget with the removal
of ESF for Scotland by 2006?
(Dr Reid) ESF is an entirely different thing from the block grant and
the aggregate budget which is given to Scotland which is a different thing
from the external limits which are put on. What I am saying is that I shall
be arguing for a fair share of any budget at the United Kingdom level to go
to Scotland. I certainly shall not be slipping into the argument you seem to
be slipping into.
18. I am not slipping into an argument but you are avoiding the
question.
(Dr Reid) The idea is that you ask the questions, as I understand it,
and I answer them. I shall certainly not be slipping into what I perceive you
to be slipping into, which is arguing for changes.
19. I would ask you not to put words into my mouth. You have not
answered my question.
(Dr Reid) Would you please allow me to speak for myself as I allow you
to speak for yourself. I shall certainly not be slipping into any argument
which I perceive you to be slipping into which is that changes in Europe
should automatically result in a reduction in the Scottish grant.
20. I feel I am being told what I am saying when I have not said
that. Could the Secretary of State clarify the mechanism for allocation of
Structural Funds? Does European Structural Funding go directly to the
Scottish Parliament from Europe or does it go to the UK Treasury and then to
the Scottish Executive as part of the assigned budget? What is the mechanism?
(Dr Reid) If you do not know that after all your years in Parliament
... The money which goes to the Scottish Executive to administer within the
Scottish Parliament comes from the United Kingdom block grant.
21. Perhaps you should tell your own Scottish Parliament Finance
Minister, because he does not seem to know the answer. He gave two separate
answers on two separate occasions saying opposite things.
(Dr Reid) The whole idea of devolution is that the people who are
accountable to the Scottish Parliament speak to the Scottish Parliament and
I have no intention of speaking to the committees or otherwise in the Scottish
Parliament because I am accountable to this Parliament and I have just given
you the answer. You did not hear the answer.
22. It would be better if you actually clarified that to your own
Scottish Executive Minister.
(Dr Reid) May I just correct you? Mr Welsh does not seem to know that
they are not my Scottish Executive Ministers. He is a Member of the Scottish
Parliament and they are his Scottish Executive Ministers.
23. I accept that. ... to say to the Scottish Finance Minister,
because this clearly involves UK Treasury and UK policy. May I say, had you
explained it to the Finance Minister in the Scottish Parliament then he would
not have been confused? Why did both you and the Chancellor of the Exchequer
refuse to give evidence to two major inquiries, to the Finance Committee and
to the European Committee of the Scottish Parliament? If you had there would
be no confusion in the statements made by the Finance Minister surely?
(Dr Reid) There are two questions. On the first one, I do not know
what was said by the Minister being referred to, so I am not prepared to take
that. I would make a general statement that if I am being held responsible
for every mistaken statement which occurs in the Scottish Parliament, it is
a responsibility which was not explained to me when I took this job and might
have affected my acceptance of it. So far as the second one is concerned,
which is why I chose on two occasions to feel it was more appropriate for
someone else to address the Scottish Committees, I do not know whether you are
aware of the guidelines. It is all in the Cabinet Office network, it is in
the House of Commons Library, it has been for a year.
24. May I say to the Secretary of State ---
(Dr Reid) May I answer your question, which is what you want me to do?
Are you aware of the guidelines about Ministers' appearances before Scottish
Committees? Are you?
25. Yes.
(Dr Reid) So you will be aware that it says, "If Ministers are invited
to attend in circumstances where they cannot be required to do so then it is
a matter for them as to whether they attend or not".
26. Certainly and you chose not to attend.
(Dr Reid) Do you accept that? This has been agreed between the
parliaments. You asked me a question and I am going to go right through the
guidelines and tell you why I did not go to that Committee.
27. If we accept that the Secretary of State can, because of
devolution, not appear before the Scottish committees, that he will accept
that is his decision, may I say that if he had he might have clarified the
problem clearly facing the Finance Minister and clarified these problems
regarding UK policy? I shall tell you what Mr McConnell said. He said that
the money from the European Commission goes directly to the Scottish Executive
and they pass it on to local problems. He said that on 15 June, but on 30 May
he said that money passed from the European Commission to the UK Treasury and
then to the Scottish Executive, a straight contradiction. I would suggest to
the Secretary of State that on UK policy if he appeared before those
committees he might be able to clarify those matters on UK policy and
statutory duty.
(Dr Reid) I am trying to answer questions and I am getting a series of
assertions. Would you prefer me to answer the question as to the rules and
regulations for Ministers appearing before committees and how I applied them
or do you want to deal with the matter of the European Structural Funds?
28. Both are connected.
(Dr Reid) May I deal with the second first then and make it absolutely
plain? These documents are agreed by both parliaments. They have been
published for a considerable amount of time. Some of the comment I have seen
suggest that the people asking the questions and writing letters have never
read them or been aware of them. "5. If Ministers are invited to attend in
circumstances where they cannot be required to do so then it is a matter for
them as to whether they attend or not". Then in the list of criteria and
considerations we should take into account the first one says, "Ministers'
primary duty of accountability is to the UK Parliament, which retains sole
authority for non-devolved matters". The third point is that one of the
considerations shall be - and this is highly relevant to the Committee if you
wish to listen rather than laugh.
29. I have seen this tactic before Secretary of State.
(Dr Reid) I am sorry, I am just reading out documents which two
parliaments agreed and you are a member of both so I thought you would be
aware of them.
30. We are all aware of them and what you are doing.
(Dr Reid) Let me read it then. One of the considerations when I was
invited to attend the committee investigating European Structural Funds was
"whether the Minister", me, "or another UK Government representative has
recently attended to give evidence on the same or a closely related topic;
or, in the case of the Scottish Parliament, where a Minister has recently
given, or been invited to give, evidence to a Commons or Lords Select
Committee on the same or a closely related subject". I was invited to this
Committee to do it. I am, under the first point, under a duty primarily to
this Committee and under the third point of the published and well-known
guidelines, invited to this Committee to discuss this subject or a closely
related subject. We have been discussing today the very subject which the
Scottish committee requested I attend to discuss and that is precisely on this
occasion why I did not go to the committee. I would have thought that all
members of this Committee in particular would have been well aware of
precisely the reasons laid down in the guidelines agreed between the two
parliaments.
31. We have a straightforward problem of the Finance Minister saying
he cannot speak on UK matters and will not speak on UK matters and the
Minister with UK responsibility not fulfilling his duty in allowing this
committee access to information. Could I ask the Secretary of State, if he
will not appear before the Scottish Parliament committees, will he give an
undertaking to provide the Scottish Parliament's inquiry with UK documentation
to the Commission on how additionality is fulfilled in the UK?
(Dr Reid) Of course and that is in the guidelines as well. Under the
concordats that information is already shared, which I should have thought the
honourable Gentleman would have known and under the guidelines ... I can read
chapter and verse.
32. Would that go to the inquiry?
(Dr Reid) It is as well to clear it. Since the honourable Gentleman
has been speaking at great length outside this Committee I should be allowed
a couple of minutes just to put him right on all the facts. Point 5 of the
guidelines and considerations covers this as well. One of the considerations
is "whether the devolved legislature might", that is Scottish Parliament in
this case, "acquire the information by some other means (evidence may have
recently been given to the Westminster Select Committee", it says here for
instance, "on the subject or if it is seeking mainly factual material might
a memorandum be provided, at least in the first instance)". It goes on to
outline the other methods by which it can be done. In other words, all of the
answers to the questions which the honourable Gentleman seeks to be making an
issue of have been available to him and everyone else for the past nine months
in the House of Commons Library and, as I understand it, in the Scottish
Parliament and indeed on the net.
33. Can you confirm that Structural Fund expenditure counts as
comparable expenditure in the Barnett Formula?
(Dr Reid) I cannot confirm that off the top of my head but I shall take
advice from behind me. Yes, it is, provided of course that it is spent on
comparable things.
34. That takes us back to earlier arguments which he has denied.
(Dr Reid) Sorry, which earlier argument did I deny?
35. Regarding ESF and its effect on the Barnett Formula and future
Scottish budgets. Could I say that we now have a situation where the
Secretary of State will not explain UK policy directly to two major
investigations by two Scottish Parliament committees and where a Scottish
Executive Minister says he cannot explain UK policy. Could I ask you how that
fulfils your department's objectives to "promote links between the Scottish
Parliament and Westminster"?
(Dr Reid) I have read out to you the agreement between the two
parliaments. That is agreed by the two parliaments, at least by a majority
within them. What I will not allow is those who have never accepted
devolution, those who do not support devolution, those who wish to undermine
devolution, attempting to use any partnership agreements to force either of
these parliaments into a battering ram against the other. I will not allow
that to happen. It is not the wish of the Scottish people. It is the wish
of a minority in the SNP. I will not allow it to happen.
36. I quite agree with you, Secretary of State.
(Dr Reid) Good.
37. There should not be a battering ram between two parliaments but
there should also be contact and you should explain UK policy to the Scottish
committees which are investigating matters which include UK policy because
that is not what has been happening.
(Dr Reid) You diminish your colleagues round this table. Most of them
are elected representatives of the Scottish people. This Committee represents
the political will of the Scottish people. This Committee has the power to
inquire into reserved matters. You are a member of this Committee. You could
have raised any of these matters at any time. You could have taken the
trouble to read the guidelines. Do not attempt to split asunder the
representatives of the Scottish people and do not attempt to insinuate that
the people on this Committee are somehow less capable of looking after
reserved affairs than you and your party sitting in Holyrood.
38. Again you are putting words in my mouth.
(Dr Reid) Those are your opinions; they are my words.
39. I in no way denigrate this Committee at all. I am a member of
it, in fact the longest serving member of it. What I am intent on doing is
asking you what use is the Scotland Office in fostering goodwill with the
Scottish Parliament and supplying information about UK matters which you have
not done to the committees. I do not think that would in any way infringe
your fears about problems, in fact it would help the two parliaments work
together. It is you who are undermining devolution by your failure to appear
properly before Scottish committees on this UK issue.
(Dr Reid) People can judge. They do not have to look in the crystal
ball, they can read the book. They can look at the last 25 years and can see
whether you or I have supported devolution and they can look at every
statement which is issued and see whether you or I are fostering partnership
between the two parliaments. People will make their own judgement on that and
I am content that as ever three quarters of the people of Scotland will decide
that those of us who hold my view, which is that the two parliaments should
work in partnership, will be in the vast majority compared to the minority,
who are yours, who want to see Great Britain broken up and parliaments rent
asunder.
Mr Welsh: Once again you have used your office for party-political
propaganda. I am happy to have my record over the past 26 years in this
Parliament on devolution, for which I voted. You know and I know that I want
independence for Scotland, but I fully supported devolution in that time.
Within the Scottish Parliament I am fully making sure that Parliament works
and works well for the Scottish people. You are lowering the status of your
office in making such accusations which are unfounded as far as I am
concerned.
Chairman
40. We have allowed this discussion to go far enough. It has always
been my practice in the Chair to allow members to ask questions as they see
fit and to tell our witnesses to answer them as they see fit, but quite
frankly we are not making much progress. It is becoming a party-political
argument which does no service to the Committee. I really do think we should
move on.
(Dr Reid) Absolutely.
Sir Robert Smith
41. I am trying to spread a bit more light into the heat of what is
being talked about in terms of (a) the Barnett Formula and (b) additionality.
On the Barnett Formula, earlier the Secretary of State talked about a needs
element, but it is not the reality now as it progresses, it is a straight
population ratio every time there is an adjustment in an expenditure head in
the UK department which has an effect on a devolved budget and the reality in
the long term is a ratio of populations when there is a change in expenditure.
(Dr Reid) Thank you for asking a factual question. I would merely say
that when I am asked party-political points, it is very difficult not to
respond. I am a Labour Secretary of State, which may have come as news to
some people and I am not going to go down the road of being a separatist
Secretary of State. On the question which is asked, it is because the Barnett
Formula deals only with additionals, then it does mean that the bulk of the
money which is inherited contains within it a reflection of the need which was
originally there. Of course as time passes a number of things happen. One
of them actually is that Scotland has become more prosperous than it was
relative to other areas in the United Kingdom previously. For instance, at
the moment, in terms of GDP, I think it is the third most prosperous region.
That may be temporary but that trend has been going up, the economy has been
going very well in Scotland as the honourable Member will know. I suppose one
balances out the other. What is certainly true is that as the years go on and
public expenditure increases, you would expect, with a higher and higher level
of public expenditure if that continues, there to be a convergence between
Scotland and the United Kingdom.
42. Again trying to get a light at the end of the tunnel on this
European issue, whilst there obviously are political agendas as well, at the
root of the practical question is trying to understand the consequence.
Because of the internal arrangements of the United Kingdom is the reality that
European funding makes really no difference to what is spent in Scotland in
a sense? That was the logic of the question being asked earlier. In taking
the natural assumption that there will be a growth in the European Union in
the number of countries and that the accepted reality is that there are likely
to be fewer Structural Funds coming from Europe to the United Kingdom and to
Scotland, what was trying to be teased out was the practical question that
that does not mean a reduction in expenditure in Scotland, in the same way as
over the years when there was European money coming in, it did not mean an
increase.
(Dr Reid) I suppose what the honourable Gentleman is saying is that if
there were an overall reduction of the money given to the United Kingdom, no
money would be given to Scotland by the European Structural Funds. It is
given to the Member State, that is effectively to the United Kingdom. If you
are saying that in coming years, if there is less money coming in to the
United Kingdom through Structural Funds or any other changes to the European
Union, that means that all areas of the United Kingdom will get less European
money, yes, it does mean that. That is a different question from: can you
tell me whether in six years' time you will therefore slash the grant. What
I have said is that Mr Welsh appeared to me to be following a logic which
would have him ending up arguing for a reduction of the block grant because
of the lack of money coming in from Europe. Let us take an example of, say,
the assisted areas. Assisted areas represent a challenge for us at the United
Kingdom level, first of all because, compared to the rest of Europe the United
Kingdom is now more prosperous than it was the last time we went into this
exercise and therefore is less likely to give need as a high criterion giving
us a high result. Secondly, because we are on the verge of bringing in many
more needy areas to Europe through the enlargement. Thirdly, because within
the United Kingdom Scotland is now more prosperous compared to the other areas
than it was the last time the assessment was done in assisted areas. That
involves therefore a very complex series of negotiations between the United
Kingdom and Europe where the Prime Minister was extremely successful in
getting a safety net beneath which we would not fall and then a series of
complicated negotiations inside the United Kingdom fairly distribute that
money. Of course, if the United Kingdom is relatively more prosperous or
alternatively there is a change in the Structural Funds, the way of paying
finance from Europe, the United Kingdom receives less, then there will be less
to distribute throughout the areas. The implication that somehow Scotland
would benefit less or be disadvantaged more than any other area of the United
Kingdom, is what I was trying to say does not necessarily follow from this.
43. It does seem that the expenditure in Scotland is limited by the
Barnett Formula and in a sense whether it comes from Europe or from London or
from anywhere else how it is financed is a secondary issue. The reality is
that expenditure limit is there regardless.
(Dr Reid) That is precisely the point I was trying to make. There is
a distinction between the limit which is decided by the Barnett Formula and
the sources of income which are decided by any number of other factors, for
instance how much local government raises, the level of taxation, the level
of the block grant. They are separate things and too often they are confused.
44. So possibly when a European flag appears on a bridge somewhere
that bridge might well still have been built whether the European flag money
was going to come to it or not.
(Dr Reid) Of course; of course. The fact that a European flag appears
on a bridge does not mean to say that if somebody said they were not going to
put a European flag on this no-one would ever have built the bridge from any
other source. Of course that is not the case. The fact that the European
flag appears on the bridge is an indication that this is a specific project
which has been allocated from money and deemed within the Scottish Executive's
own priorities to have come from money from Europe. That is why it is so
difficult to talk in these terms as regards the Barnett Formula which is
separate or even aggregate amounts because it is the aggregate amount which
is passed down.
45. The uncorrected transcript of this should appear on the internet
some time early next week hopefully, which will then be available to any
committees in the Scottish Parliament. We are straying around the place
because of the way the question has developed, but in terms of fostering those
links between the Scottish Parliament and the UK Parliament, if, as a result
of our deliberations, there are missing links in the information, then under
those guidelines you will be willing to provide additional information in a
memo in time for them to have the information they feel they need.
(Dr Reid) Of course. There has never been any question about the
sharing of information. That is the intention of the concordats, that is the
intention of the guidelines. You will know that any institution can be
misused as well and therefore it is as well to make sure that the criteria by
which such decisions are reached are set out. They have been set out. I hope
every member has taken the opportunity to look at them. They make it
absolutely clear. The simple fact is that my primary accountability is to
this Parliament and to this Committee. That is my primary responsibility.
However, that is not to say that we are somehow shielding information from
other people. We are not.
46. In terms of making devolution work, because it is going to happen
in some other areas of administration which are a mixture of reserved and
devolved function and not clear-cut, if a committee in the Scottish Parliament
tries to get to grips at the delivery end of a function and needs information
which comes from a reserved end and say we were not meeting all that, in
principle you would not object to giving them the evidence or appearing if
necessary to help them understand the context.
(Dr Reid) There is no principle objection. The guidelines are agreed,
they are set out there. The guidelines are set out there. It would not be
the norm because my primary responsibility is to the United Kingdom
Parliament. The primary responsibility of the Ministers in the Scottish
Parliament is to the Scottish Parliament. That is devolution. What cannot
happen is that this Parliament regards itself either be default or otherwise
as the masters of Ministers in the Scottish Parliament or vice-versa. If
there are people who want to create those circumstances, then I will oppose
them misusing the devolution settlement.
47. Whilst those people may be wanting to create those circumstances,
it does not mean that there is not a need for more understanding, even if it
is on a reserved matter, by a devolved committee in the Scottish Parliament,
given their experience at the coalface of delivering the function.
(Dr Reid) Of course and there could not be. We are now almost a year
into our relationship. I have not heard of any complaint from any Ministers
in Scotland that they have not been provided with sufficient information. We
have something like 17 concordats setting out these agreements. We have
guidelines. We have so many agreements and we provide it and people expect
that. They also expect that MPs elected by the Scottish people in this
Parliament are accountable primarily to this Parliament. Those elected to
deal with devolved issues are accountable to the Parliament in Holyrood. They
also expect that we will spend most of our time discussing those issues which
are reserved to Westminster and the Scottish people want to see the Scottish
Parliament spending their time discussing issues which are devolved to
Holyrood. We all know, we are not naive, there are people who will misuse
this. There are people who will attempt to use every debate in Holyrood to
debate reserved issues, precisely because their political philosophy dictates
that it should be not a complement to Westminster but a substitute and that
is integral to my thinking when I look at the guidelines here and this is also
integral to the way the guidelines have been drawn up. It is a devolution
settlement not a separatist one.
48. Given the urgency of their inquiry, if on the uncorrected
transcript they discover they still need more information by exchange of
memos, would that be a possibility?
(Dr Reid) Of course it is a possibility. If any Minister in the
Scottish Executive wished to get information to allow them to answer questions
up there, then we would do as much as we could possibly do to give them such
information. Of course we would.
Mr Welsh
49. Would that apply to committees? It is not your relationship to
the Scottish Executive but your relationship to the Scottish committees who
are requesting the information. Would that similarly apply?
(Dr Reid) My relationship to the committees is that I am responsible to
this Committee and this House.
50. So you would not appear before Scottish committees.
(Dr Reid) I have not said I would not appear before them. I have said
my responsibility, my primary accountability is towards this House. I fully
appreciate that you have your own views on these matters, but I am elected by
the Scottish people, as is everybody around here, to consider matters in the
Westminster Parliament. We have gone to extraordinary lengths to set up a
system of providing information and working in partnership with the Parliament
in Scotland. I fear we are going to go down the same road.
Chairman: This Committee unanimously agreed to request the Secretary of
State to appear before us to answer questions on his department and I think
we should stick to that at the moment. We did agree a structure at a private
meeting. There will be an opportunity at the end to sweep up all remaining
issues but we do need to make progress.
Mr Welsh: I assume that part of your fair ruling is that in any
unprovoked attacks from the Secretary of State he will stick to the subject
too. That would suit everybody because he accuses other people of party
politics and indulges in them himself.
Chairman: People are perfectly capable of defending themselves. What
I am trying to defend is the best interests of this Committee and have a
constructive meeting this morning. That is what I am trying to do, not to
have a disagreement between individual members of the Committee or witnesses.
Miss Begg
51. It strikes me that if we as a committee can get on with holding
the Scotland Office to account and the committees of the Scottish Parliament
get on with their job of holding the Scottish Executive to account, then we
will not actually have a lot of this confusion. I should not like to
denigrate this Committee, or suggest we cannot ask the questions that would
be able to wheedle out from the Secretary of State exactly what the position
is with regard to financing both the Scottish Parliament and the Scottish
block grant. A couple of questions occurred to me ages ago. One, if I may
take you back, is that you talked about the fact that the new Scotland Office
has a much smaller staff and as a result the officials from the Scottish
Executive are in liaison over the issues that are reserved such as any extra
spending which comes through the Barnett Formula. What kind of access do
Scottish Executive officials have to Treasury papers in order to be able to
analyse or look at in detail and find out whether in fact the Scottish
Executive is getting its fair share through the Barnett Formula?
(Dr Reid) They have considerable access to papers of all departments.
They have the access and sharing of information enshrined in concordats agreed
between both parliaments. My officials have a higher level of access
obviously because of departmental confidentiality within the UK Government.
I envisage that as this process of discussions on the Barnett Formula
continues there will be an increasing sharing of information and indeed the
potential for trilateral meetings with myself and Scottish Executive
officials.
52. I wonder whether you would agree with me that because the
decision as to the extra spending that Scotland acquires through the Barnett
Formula is determined on the spending in England and Wales it is incumbent on
all of those of us who are backbenchers in this Parliament to pay very close
attention to any spending commitments which are made on something which may
appear to be wholly English.
(Dr Reid) I would go even further than that. Not only should we all
take an interest in it, we have a legitimate interest and right to vote on it.
That is one of the reasons why I have always rejected this spurious idea that
Scottish MPs should have unequal rights. Yes, we should take an interest in
that because the offshoot of that is through the Barnett Formula and
determination of the extra expenditure which goes to Scotland. Recently there
has been a fairly massive additional allocation of expenditure to the Scottish
Parliament as a result of decisions made by the Chancellor. I think from
memory it is œ183 million extra on the Health Service this year, increasing
to well over œ1 billion extra in four years' time. Another œ80 million has
gone into education. We have a very legitimate interest as Scottish MPs in
decisions which have been made by the departments.
Mr Sarwar: I should like to ask two very brief questions. One is about
the Barnett Formula. I agree with you that this is based on need and it is
good for Scotland, it is good for Britain. I am sure all of those who
represent Scottish constituencies will support the retention of the Barnett
Formula. You will be well aware that some of the English MPs are very keen
to change this Barnett Formula. Are you under pressure or is there any move
within the Cabinet to change this formula? I believe that will only benefit
my honourable Friend. This will not be helpful for the Scottish people but
obviously it will benefit my friend Mr Welsh's party. I am not trying to make
a party-political point. I want to change the subject for my second question
to Govan shipyard.
Chairman
53. Order. There will be a time later on for such points.
(Dr Reid) Without being party-political but stating objective facts,
there are several people who were anti devolution, who now seek to open up the
Barnett Formula. Wearing my Secretary of State hat, I find it very
disappointing that they get encouragement and solace from other sections of
the Scottish representatives at Westminster, Mr Welsh and his colleagues.
Mr Tynan
54. I understand that the Finance Minister did indicate, when he
spoke to the European Committee of the Scottish Parliament, that Scotland's
record had been second to none in the utilisation of the European Structural
Funds and in fact they have been used as an example and are assisting other
countries to see how best they could maximise that. Obviously we are
benefiting in Scotland at the present time from European Structural Funds.
The question would be, if we had a demise or a cessation of the European
Structural Funds, would there be an argument based on the Barnett Formula, to
seek an improvement in order to take up a void which could exist because of
that elimination?
(Dr Reid) Yes. This is the point I was trying to make earlier.
Basically the Barnett Formula does not provide money. The Barnett Formula
says this is the maximum you can spend. However that is made up, whether it
is European Structural Funds or whatever, if you take one element out, since
you are allowed to spend that you can argue for other elements to make it up.
55. So it would be beneficial if the present formula were in
existence if the European Structural Funds were removed.
(Dr Reid) Absolutely. Maybe I failed to get this across. This is
precisely what I am trying to say and there are people who are quite frankly
misrepresenting this. The final comment I would make on this is that the
people of Scotland are not walking about their daily lives discussing
endlessly the mechanics of the Barnett Formula and they are not interested in
anybody who is wanting to use that either way for their own political ends.
What the people of Scotland want to know is whether they are getting a fair
deal out of membership of the United Kingdom. They recognise that if they are
getting an 18 to 19 per cent increase over the rest of the United Kingdom,
then this formula has delivered a fair deal for Scotland. That is why I want
to keep it, will fight to keep it, and if others want to open it up, whether
they are English MPs who feel it gives us too many advantages or Scottish MPs
who for their own reasons want to open it up, they ill serve the Scottish
people.
Chairman
56. One thing which is not going to help is if I allow the Committee
to open this up any more. I have deliberately allowed this to run for over
an hour because it was arguably the meat of this morning's meeting. It is an
extremely complex and complicated and emotive issue, as we have seen. If any
member has not read the guidelines, I am sure they will read them after the
meeting.
(Dr Reid) I hope so.
Chairman: There are several other important issues to the people of
Scotland which we want to discuss. We shall move back to the Departmental
Report and the objectives for the department.
Sir Robert Smith
57. In the Departmental Report you list four objectives: to
represent effectively Scottish interests across the range of reserved matters
and to develop effective working relations with the Whitehall departments;
to maintain a strategy for the effective operation of the devolution
settlement; to promote links between the Scottish Parliament and the UK
Parliament; and to complete implementation of the Scotland Act and to act
promptly and effectively when necessary under the Act. To what extent have
the objectives outlined in the Departmental Report been met?
(Dr Reid) I think that most of them have been met faster and more
smoothly than anyone could have anticipated. If someone had said a year ago
that we would have settled down the devolution settlement in 12 months and
seen off those who were opposed to devolution because they wanted everything
centralised, or those who were opposed to devolution because they wanted
everything separate, then I think that most people would have said they were
wildly over-optimistic. I think the partnership is working well at all
levels, including at the level of the Civil Service and the exchange of
information. I would say that we are well on our way to meeting those
objectives. Nothing is guaranteed and the price of defending the devolution
settlement is constant vigilance against the enemies of devolution.
58. It talks about the effective working relationships between the
Scottish interests in Whitehall and the Scottish Executive. Is it part of
your role to promote the direct bilateral relationships between reserved and
devolved departments?
(Dr Reid) Yes, of course. That is what Brian and I try to do. We try
to represent the Scottish interests within reserved areas and there are some
very important subjects coming up around this time, not least the textile
industry which Brian Wilson has specific responsibility for. We try to do
that on industrial policy, on employment policy, Treasury matters. We try to
make sure the Scottish interest is represented in all these great issues which
are decided at the United Kingdom level. However, my primary task is to get
the departments to work together smoothly so that as they begin to talk
bilaterally, I and Mr Wilson can withdraw from that settlement and the better
that is working, the more successful it is, the better pleased I shall be and
the more we shall have met our objectives. I certainly feel at the moment,
from talking to advisers to civil servants to Ministers, that tremendous
progress has been made at last. There are those who do not want progress to
be made, I accept that; they want the two parliaments to be at loggerheads.
However, I do not think that has happened.
59. When we get to the Minister of State we shall get into more
detail on that issue and cashmere and so on. One of those concrete examples
where it broke down was the relationship between MAFF and the Scottish
Executive over the mixup on GMCs. Do you think the lessons have been learned
there?
(Dr Reid) I hope they have? I do not think there was any malevolence
at all there. May I say that of all the departments ironically my personal
view is that probably the relations between the Scottish and British Ministers
at MAFF and Roslin[?] have been excellent. I say that because they have been
tested. There have been several tricky problems which have come up on beef
bans and other matters and the two sets of Ministers have dealt with them in
a very professional fashion which met the needs of both sets of Ministers.
Inevitably there will be times when, either through oversight or lack of
foresight or sometimes with the best will in the world by British departments
thinking we now have our own people in Scotland, let us not interfere there,
things will go awry. The key thing is to try to learn from those and I
certainly hope that the lesson is learned. The only other point I would make
from that is that I think it is true to say that this was not an exclusively
Scottish thing. I think MAFF feel that perhaps they could have alerted other
people in the British Government to it quicker than they did as well. We
should not feel somehow that Scotland was badly done to here, because it was
a Scottish/English divide. It was not. It was an oversight for which the
Minister held his hands up, said sorry and we shall learn from it.
Mr Tynan
60. Obviously we have a tremendous advantage at the present time as
Scottish MPs because of the Scottish Parliament, if it is working in
conjunction with the Scotland Office and working well together. I am
heartened by the fact that you are saying very clearly that you feel the last
year has been a success story and something we have to develop.
(Dr Reid) Yes; indeed.
61. If everyone were working in order to ensure we moved forward on
behalf of the Scottish people on that basis, then we could achieve much more
than we have. How does the Secretary of State set about his task of promoting
Scottish interests within the UK Government bodies? How do you do that?
(Dr Reid) Mr Wilson and I sit on committees and Dr Clark does as well
and I cannot remember the exact number but it certainly seems in the
thousands; I doubt that it is that but perhaps 17 to 20 major government
committees. The Cabinet Committee system is such that before the final
decision is taken, all relevant Ministers are represented on committees
looking at the key issues of any particular piece of legislation or any
particular decision. For instance, recently the whole issue of rural post
offices is obviously an important matter for Scotland. Therefore the
committee system is one way. Bilateral discussions and contacts are a second
way. On the question that Mr Sarwar asked you would not be surprised to know
that I have had an exchange of information with colleagues on the whole
situation regarding future orders from the Ministry of Defence. That is the
second sort of way in which it is done. Thirdly in Cabinet, through Cabinet
discussions. Fourthly there are sometimes specific issues where we would find
ourselves on a common platform with our counterparts in the Scottish
Executive, Scottish Ministers and so on, where we would make a joint
representation where I am convinced that the case the Scottish Minister is
putting up is important. Fifthly and finally the joint ministerial
committees. One of the signs of how well devolution is progressing is the
joint ministerial committees: on poverty, combatting poverty, on modernising
the Scottish economy, on the knowledge economy and now on health, chaired by
the Prime Minister in the last case. These are the issues which people in
Scotland really want to see delivered. In all of those ways Mr Wilson and I
and Dr Clark on certain occasions, though she has a distinct identity as a law
officer influence or hopefully shape for the better decisions taken in
government to make sure they reflect the Scottish interests and Scottish
circumstances.
62. In your view, when they are formulating policy how aware are
government departments of the Scottish dimension?
(Dr Reid) Increasingly aware because we now have Scottish Ministers as
well as Scottish officials. One of the great benefits of devolution was that
prior to this, as you know, not only did Scottish MPs have to do the whole of
the legislative programme and participate in it here at Westminster, but we
also had to do detailed scrutiny of separate Scottish legislation. The
argument was that we could do that better if we had a separate body dealing
with the separate Scottish legislation. I just take as sour grapes those who
claim that MPs at Westminster are now not working as hard as they were. The
reason we established devolution was that it was impossible to do as well as
we wanted to do, both the scrutiny of separate legislation and the
participation in the general United Kingdom legislative process. I think that
we have benefited from devolution and one of the ways we have benefited is now
that we have more Scottish Ministers in charge of the civil servants they are
more likely to be demanding early warning. They want more information and all
of these are enshrined in the concordats which we have signed up so that we
supply that to them. Hopefully we shall get more legislation on Scotland and
it will be better legislation.
Mr Swayne
63. In my view the role of the Secretary of State is more about
liaison and promoting partnerships than anything else. In that respect, in
your letter to the Convener of the European Committee of 16 May you actually
promote partnerships in a way. First of all you tell him quite properly why
you cannot attend his committee because you have already given a commitment
to us to attend ours. But you tell him two other important things. First of
all that the answers to his questions can be had from Mr McConnell. In the
event the committee were disappointed in that because I also have his letter
to them telling them why he could not answer their questions. Vitally
important, in answer to that you draw to their attention that the proceedings
of this Committee, this morning, will be available to them and will be
published. So you know that they can get the information they require on the
back of this Committee and you whet their appetites to an extent by drawing
that to their attention. When I asked you at the outset of this meeting to
comment on remarks given by Mr McConnell in his evidence to the Scottish
European Committee, you said that you did not know the context in which those
remarks were made. Now I would suggest to you that that is contributory
negligence on your part. You knew that the interests of that committee were
riding on the proceedings of this Committee today. I am not sitting on a
department costing the taxpayer œ6 million a year, yet I have managed to brief
myself with the proceedings of that committee. Are you taking a rather
cavalier attitude to your role in promoting partnerships and in liaison?
(Dr Reid) I would never take a cavalier attitude to you or to this
Committee. When I said I do not have the context, what I mean is I do not
have the letter in front of me. I quite accept that perhaps with the grand
total of 66 civil servants I should have every piece of correspondence or
every piece of Hansard from the Scottish Parliament in front of me. I do not
have it in front of me. What I did say, and you will be generous enough to
accept that, was that if you want me to I can write immediately after this
meeting, having looked at these comments in the context of a document in front
of me; of course. However, you would not expect me to be so irresponsible
as just to take a quote out of context from a document I do not have in front
of me and give a detailed reply to it.
Sir Robert Smith
64. You mentioned the liaison you do in connection with the situation
facing post offices. In my constituency I have just analysed the results of
a survey which alarmingly show that if nothing is done in the event of
benefits being paid through banks and pensions which are paid through banks,
half of the post offices in my constituency feel they face closure. Obviously
I have sent these to the department here but the Secretary of State is
involved too. Does he have any information from his involvement as to when
concrete proposals are going to come forward to honour the Government's
commitment to maintaining the post office network?
(Dr Reid) I hope soon. I cannot go any further than that. This is
ultimately an announcement for the Department of Trade and Industry.
65. Obviously the uncertainty hanging over those people needs to be
ended.
(Dr Reid) That is precisely one of the reasons we have been looking at
how we can both ensure the modernisation of the post office for the future and
reassure those not just in rural areas but in other areas about their access
to modern services and to the traditional methods of payment. That is why we
have spent so much time in doing it.
Chairman: Secretary of State, in answer to Mr Tynan, you referred to
Mr Sarwar's question, so it would perhaps be appropriate if I were to allow
him to ask his question of you at this stage in our proceedings.
Mr Sarwar
66. May I thank the Secretary of State for his personal involvement
and support to save jobs in my constituency in Govan shipyard? I think it is
a perfect example of working together, the Scotland Office and Scottish
Executive, to save jobs and industry in Scotland. May I ask, now that the
Ministry of Defence have asked for final bids for the roll-on roll-off ferries
order, whether you can update us on this and what the chances are of success
to save jobs in the Govan shipyard.
(Dr Reid) What I can say is that everything we have done has been done
in a proper fashion. It has been done within the European regulations and
rules and it has been done to seek best value for the British taxpayer. To
that end the Ministry of Defence felt that because of particular circumstances
those objectives would be best served by going to best and final offer. That
was to be a matter concluding in weeks and then they will assess those offers.
I am pleased that they have done that. I am sure that the fullest
consideration will be given to any bid which is put in by Govan, by the
SeaLine consortium or any other combination of ways in which the bids can be
put in. Naturally I am somewhat circumscribed by the fact that this is a
collective decision which will have to be taken ultimately by the Ministry of
Defence, but I am convinced that the fullest and fairest consideration will
be given to Govan, as indeed to all the bids.
Mr Tynan
67. This is a supplementary question because I am conscious that this
is being recorded and obviously if it appears on the internet then it could
be of additional concern. In response to the question on post offices, I am
a bit concerned about the uncertainty which exists because misinformation is
being given that after the year 2003 pensioners will not be able to receive
their benefit from a post office. That is clearly not true. It is also true
that TSB have made it clear that where the post offices are rural, they will
assist them in every way possible by ensuring that their services are provided
in those post offices in order to make sure rural communities do not suffer.
What I am heartened by is what the Government have done as regards post
offices. I do not want to leave a misinformation situation where it is
possible to frighten people into believing that their post office is under
attack when it certainly is not, when the opposite is true. If we are able
to provide and encourage people to develop the services they are able to give
then it will protect and reduce the number of closures we have had for the
last ten years.
(Dr Reid) Absolutely. It is not just the question of closures, there
is also the question of what services are provided through a post office. It
certainly is the intention of the Government to give the widest possible
choice to people and the widest possible access and to ensure that the post
offices are modernised in order to meet the needs of the consumer. This is
what this is about, not meeting the needs of politicians or anyone else, but
meeting the needs of the consumer. We have spent some considerable time
looking at how that can be done and I am hopeful that in the not too distant
future there will perhaps be a statement to the House on this by the Secretary
of State for Trade and Industry.
Chairman
68. We now move on to the role of the Minister of State. Mr Wilson
would you like to make any brief remarks to us before we ask you a few
questions?
(Mr Wilson) Very briefly. I do not want to go over the same ground.
When I came into the Scotland Office, Dr Reid and I agreed that we would not
have very well defined demarcation lines as there were only two of us. The
sensible way was to deal with things as they came in the most appropriate way.
In general terms I tend to specialise in employment issues, particularly the
New Deal, and trade and industry, particularly exporting, Highland and Islands
issues, broadcasting, the Lottery and the post office. That does not mean I
deal with all of these issues or that the Secretary of State deals with none
of them or indeed that I go outside that territory. I liaise on a daily basis
with Scottish Executive Ministers and officials and also with Ministers and
officials of other Whitehall departments. I see my role in a very pragmatic
way as adding value wherever possible.
Chairman: Perhaps I should not have allowed you to make your statement.
You have answered most of the questions we wanted to put to you.
Miss Begg
69. You have just said what your principal duties are as Minister of
State. How would you answer the cynics - of course I am not one of them - who
say that hardly constitutes a full-time occupation?
(Mr Wilson) I would just say it is wrong. It is an easy jibe but if
you are going through a dozen case studies of things we are involved in ---
70. Can you give us some of the case studies then?
(Mr Wilson) Post office is a very important one and I just want to
endorse what Bill Tynan said. If Sir Robert had been a little less pejorative
in what he said he would also have told us how many post offices in his
constituency had closed in the past 20 years. That is the real test. One
quarter of post offices in Scotland have closed in the past 20 years. What
we are trying to do is give a future rather than allow that rate of
haemorrhaging and that is very much the point that Mr Tynan made. It is
extremely important that there should be a Scottish input into the plans which
come forward to make the post office network viable. I therefore believe that
is a good example of where the Scotland Office has a role. It may be in time
that many of these things are done through liaison committees with the
Scottish Executive but certainly for the foreseeable future Scotland would be
very ill-served by not having that distinctive input, whether it is I or
anyone else who is doing it. Another one which was mentioned earlier is an
obvious one just now, cashmere. There is not the slightest doubt there is a
particular Scottish dimension to that dispute. If there were not a Scotland
Office and Scotland Office Ministers then the Scottish dimension to that
dispute would not be obtaining the profile it is and also we would not have
had a voice arguing for the issue to be raised at the very highest levels of
government both nationally and internationally. If you want more examples,
I am very happy to give them but these are a couple for starters.
71. You said you liaise on a daily basis with people in the Scottish
Executive and you have just given two examples. The post office on in
particular is clearly a reserved matter. The cashmere one possibly is not but
it affects jobs and employment is sometimes reserved and in some cases is not.
How do you deal with those grey areas where it is not quite so clear that
perhaps the big strategic things are reserved matters but the implementation
is a devolved issue?
(Mr Wilson) It has to be pragmatically and there has to be common
sense and goodwill. There is no issue on the face of the universe where you
could not find a reserved element and a devolved element if you went looking
for it hard enough. Equally, you recognise when you see it whether it is a
primarily reserved or primarily devolved issue. On cashmere, for instance,
of course there are jobs implications and of course there is a very proper
Scottish interest in this. Equally clearly the problem stems from a trade
policy matter which is not even a UK issue, it is an EU issue because the
dispute is between the United States and the European Union. I would
encourage and have encouraged the interest of my colleagues in the Scottish
Executive, both Ministers and officials, but equally they recognise that in
this case it is maybe more appropriate that we have the lead in the input we
make. You can go through each case like that and anyone who wanted to make
difficulty could say that is reserved or that is devolved and you keep out.
On a day-to-day basis it does not really happen like that and it works quite
well.
72. On issues which are wholly reserved, where the Scottish
Parliament seeks a bigger interest - I suppose Mike Tyson has been one
recently - there is one which is close to my heart which is broadcasting.
Broadcasting is definitely a reserved matter but there is a committee of the
Scottish Parliament which has media in its title and broadcasting is clearly
a reserved matter. Does that create tensions where you find the Scottish
Parliament are looking to discuss issues over which they have no power and in
fact a committee of the Scottish Parliament calling evidence on something
which they cannot change, cannot legislate for?
(Mr Wilson) I am not sure it creates tensions. It creates puzzlement
sometimes at why some members of the Scottish Parliament seem to want to spend
so much time discussing things which they have no remit over. That is
probably a political ploy rather than an attempt to do anything very
constructive. It would be thought very odd if this Parliament or this
Committee spent its time debating things which we did not have responsibility
over because we have devolved them to the Scottish Parliament. It is a matter
of common sense and I should have thought it likely that eventually they will
run out of reserved things to discuss and they will probably spend more time
discussing devolved things. However, that is a matter for the Scottish
Parliament, not for me.
73. You do not see it as part of your role, when it is an issue such
as broadcasting, to be jumping up and down saying it should really be
discussed by the Scottish Members of the UK Parliament rather than just in the
Scottish Parliament or to remind the press or remind the media who are very
often the ones who are getting it wrong that if it is something to do with BBC
Scotland they go to an MSP for comment and forget that there is a legitimate
Scottish interest in the Scottish MPs. Do you see that as your role, that you
should be reminding the media in these circumstances who perhaps have gone to
the wrong source of information?
(Mr Wilson) You can only remind them through deeds and by proactivity
in these fields. We cannot send round notes saying speak to us on this and
not to them. That is not a way I should recommend. Maybe the Scottish media
is on a learning curve as well and they have 129 new politicians, virtually
that number, a significant minority of whom will comment on anything given the
chance, including the state of the weather in China. If you have a new group
of politicians who do not respect these parameters, then some people are going
to go for comment. If you want informed comment or influential comment, then
you go to the representatives who sit in the chamber in the institution which
has responsibility in this field. Nobody should come to me and ask questions
about Scottish schools or the detailed operation of the Health Service in
Scotland and by the same token it is not really logical to go to MSPs to ask
them about broadcasting issues or trade policy issues or all the matters which
are reserved to Westminster.
74. You have 13 staff in your Private Office. What are their
functions? What do they do?
(Mr Wilson) Not in my personal Private Office. If I do, then they
have been hiding somewhere.
75. The Ministerial Private Office then.
(Mr Wilson) I shall order an instant search. I have a small Private
Office, probably between the two Private Offices there are 13. We are in the
position of having offices in both Scotland and in Whitehall and we have staff
who do not commute all the time between the two. It is a real dead-end to try
to portray the Scotland Office as some kind of profligate organisation awash
with staff and money because it just is not like that. It is a pretty tight
operation which adds a lot of value and costs the taxpayer very little.
Mr Clarke
76. You made a statement at the Scottish Grand Committee on the
textile industries which I welcomed. Obviously I have a vested interest
because Laidlaw & Fairgreaves is closing and Ballantynes has gone and others.
I should like to know what progress you made with the industry. When I met
the Vice-Chairman of Dawson International in Kinross he was not very
enthusiastic about what you said. He said it was all spiel. I challenged him
to meet you, but he did not want to meet you at all. I think he wants to
wallow in his ignorance. What I should like to ask is what progress we have
made with other people or the textile industry as a whole. This was a very
important statement.
(Mr Wilson) May I just confirm what Mr Clarke says, that I certainly
had no approach from that company to meet them? I did meet them in my
previous incarnations in Trade and previously when in the Scottish Office and
it is well recognised in the textile industry that there are particular
problems in Dawson International which do not necessarily apply to other
companies in that industry. Maybe if they had spent more time meeting us and
taking advantage of the support which is available, then some of the things
which have happened to that particular company would not have been quite so
extreme. There are many companies in that industry who work extremely
closely, not only with myself but also with the DTI and export services which
they can produce and of course with the Scottish Executive. There are various
forums and trade associations which have excellent relations with government
to mutual benefit. I cannot really expand on what I said at the Scottish
Grand Committee. Everyone understands that there is a process of change in
the textile and garment industry where we are not going to be able to compete
in the mass production market where wages are the main determinant. Maybe we
should not even be trying to do that. I would equally say that there are many
excellent companies in Scotland who are doing extremely well and it may be
coincidental but I think they are ones who work closely with us and take full
advantage of the support government is able to offer. I also think that what
was announced by the DTI last week, complemented by the Scottish Executive
statement of an action plan for the textile industry, has been very widely
welcomed and will add further benefit to the industry in Scotland.
Sir Robert Smith
77. Obviously you are working on the trade dispute at the moment
which is of serious concern to sectors of the textile industry. Do you have
any update as to whether there have been any concrete announcements yet from
the USA?
(Mr Wilson) There has not been an announcement, certainly not at the
time of coming into this meeting. The latest estimate we had of when an
announcement was likely was Friday, but that is not definitive. It could be
sooner and hopefully it will be never. All I can assure the Committee is that
representations have been made at the very highest levels and every level of
government with two messages. The first is that the United Kingdom in
Brussels is part of the solution to this dispute and that therefore it is
illogical for the United States to target UK products and industries. The
second message which has been equally forcefully delivered to the European
Union is that this has to be sorted out and that there have been 15 months
since WTO final ruling on the banana importing dispute and that should have
been enough time to get a solution. While I obviously do not like the
American tactics, I do understand their frustration that after 15 months this
has still not been sorted out and it is not going to go away unless there is
a WTO compliant banana importing regime in the European Union.
78. Does the European Union have any duty to pick up the consequences
of its failure to work with the WTO for individual producers which are
affected?
(Mr Wilson) It is not a very promising line but in theory I suppose
companies could raise actions. Certainly the advice I have received is that
it would not be a very fruitful avenue to pursue. I just make the point that
of course companies have been suffering from this all the way through for the
past 15 months, including some companies in Scotland, including a company
called Arden Aromatics in my own constituency which has lost œ1 million of
hard-won exports to the United States because of this. I think I could be
pretty sure that if there are any prospects of legal redress then they would
have been pursued by these industries and companies.
79. You touched on broadcasting and you have shown your commitment
to the regional broadcasting and obviously in Scotland we have seen with
companies like Grampian TV the benefits of regional broadcasting. The digital
rollout is going on now and you have expressed in the House that digital will
be available to everyone and eventually the government wants to switch off the
analogue transmission. At the moment ITV is not available as a digital
transmission. In your broadcasting role, do you see a solution to that
problem that there will still be regional broadcasting when the analogue
transmitters get switched off?
(Mr Wilson) As I am sure you know, there is a major consultation going
on just now by the ITC on the future of regional broadcasting which is very
much off the back of the comments they have made about Grampian and it is very
important that everybody participates in that and stresses the importance of
reinforcing the regional identity in broadcasting. On the technical aspect,
I repeat what I have said in the House and in response to Miss Begg, that
there will be no analogue switch-off until at least the same threshold is
reached of coverage as exists at present. We are talking about 98 per cent,
a very high level. Indeed interestingly because of my remarks about the use
of satellite to enhance the digital coverage, I have had a very interesting
letter in the past few days from a company which wants to work with us to get
even further into the pockets which would not have coverage. One particular
thing which I am working on is the Gaelic broadcasting task force with a view
to creating a dedicated channel in Gaelic which would be carried on digital.
I agree with all of what you say. We must protect the regional identity and
we must have the technology in place to reinforce it.
80. The technical problem for those living in areas which are going
to have to rely on the satellite digital is that there is no independent
television available on satellite, it is only available on terrestrial
digital. Do you see a solution to that problem?
(Mr Wilson) Just off the top of my head the solution to that, which
is perfectly feasible, is that all regional television would be carried
nationally and therefore the tantalising prospect exists of people in the rest
of the UK or indeed the world being able to watch Grampian.
Mr Welsh
81. We had a meeting about the European assistance map and the
exclusion specifically of Arbroath which in terms of unemployment and lost
manufacturing jobs was the third most qualified area in Scotland, was on the
original map but was taken off. Could you clarify the relationship between
the Scotland Office and the Scottish Executive regarding this kind of issue?
Who took the decision? Was it the Scottish Executive or was it the Scotland
Office? What was the relationship?
(Mr Wilson) The relationship is that obviously the UK as the Member
State put forward the map to the European Union and there is close involvement
of the officials of the Scottish Executive in that. Once we have a map, the
administration of regional selective assistance is a matter for the Executive.
The officials who have been working on the map I assure you have been doing
so with the utmost diligence and effort to do their best for Scotland and they
are officials of the Scottish Executive working with officials in the DTI.
In the case of Arbroath, as I explained, what we tried to do initially to get
the absolutely best result was, to be honest, to do some cherrypicking and to
get in all the areas of Scotland where the benefit would be greatest. What
that essentially meant doing was getting in an awful lot of industrial estates
and leaving out quite a lot of residential areas. Essentially what happened
was that the European Union came back, not only to us but to other countries
who had tried the same thing, and said it was not on, there had to be a
contiguity between the industrial areas which are designated and the areas of
population attached to them. As you know, the result of this in Tayside has
been that the actual population covered in Tayside is going to increase
substantially on the new recommendations as opposed to the original map.
There is going to be much more of Dundee in it because of this approach than
there was previously. The problem is that you cannot on this basis get every
pocket in that you would want to do or that we had done on the original map.
So nobody is going around saying we are taking that out, we are going to
discriminate against this place, that place. What we are faced with is a
practical problem of getting as many of the areas we want in consistent with
the categoric principles that the EU has insisted on. We have done our very,
very best to do that and if there are any adjustments they will be in line
with that principle.
82. I did appreciate the opportunity of meeting you and your
officials but it still hurts. I will not rehearse the arguments but the
extremities of Dundee never have had and probably will not have industry in
them but Arbroath will certainly suffer. Could you clarify the criteria on
which the decisions were made? Would you make those available? Would it be
yourself as Minister of State or would the criteria on which these decisions
were actually made come from the Scottish Executive?
(Mr Wilson) The criteria are very much laid down by Europe. It was
the criteria laid down by Europe which forced us to change the map. All I am
saying to Andrew Welsh here is that I know it hurts, I do not disguise that.
All I am asking reciprocally for that recognition is that there should be some
recognition that this is not something which has been done by a stroke of a
bureaucrat's pen. It has been a process in which we tried very, very hard to
include Arbroath and a number of other places which now will not be included
but we simply in the last analysis could not include them all. The particular
problem in Arbroath is that in order to include it then you have to include
everything along the coast from Dundee northwards until you get to Arbroath.
If we could have gone around cherrypicking then Arbroath would be in but we
were not allowed to go around cherrypicking to that extent and that is a
particular problem with Arbroath and I regret it.
83. I should like to know what made the bureaucrat's pen move. What
I seek, if it is possible, is an exact description of the basis on which the
decision was made. Angus Council has not received that yet and that would be
helpful.
(Dr Reid) May I perhaps be helpful because I have been involved in
this? There are three levels of criteria. The first one is: how many people
can you include in it and that is a UK criterion sub-divided and Scotland got
its fair share of that. The second level of criteria is how you decide which
areas might qualify for inclusion. That is done on the basis of need and
development potential. The third criterion is the one which has caused
particular problems which the Minister of State has outlined and that is what
size of units you can have. The problem with that is that we had chosen very
small units in order that we could ringfence an area with development
potential and need but not include lots of other people in it because that
then pushes you up against the ceiling. It is an inefficient way of doing it.
We had tried to get that through the European Commission and the European
Commission refused to accept that. The result is that we have had to go back
and try to draw bigger units and to review the units we had originally and to
see, if they are going to be bigger, whether it is including a huge population
in an area compared to the development potential and need for it. That is
what has caused the problem. These have not been done with some bureaucratic
decisionmaking. A great deal of time and effort and consideration has been
given to them, but because we have a reduced population coverage, because we
are relatively more prosperous than we were the last time the map was written,
and because we have to use bigger units than we wanted, then it means
unfortunately that some areas we ideally would have liked to see in it, have
had to be taken out. Those are the three levels of criteria.
84. Given the damage which may be caused by the decision, as you will
understand, I may well be back to request a further meeting with you to see
what can be done to help.
(Mr Wilson) As I said when we met, you are welcome to another meeting
and certainly the officials of Angus had another meeting with the officials
involved and it is a very open process. If it were possible to devise a
solution ... There is no point telling you that is a solution when we know
it is not a solution. There is no point going back to Brussels with something
which we know is going to be knocked back. I was as open as possible at that
meeting in sharing the problem with you, which is a problem for us in I accept
maybe to a less local extent than to you, but it is certainly not something
anyone wishes to happen.
Chairman
85. We shall now move on to questions on the role of the Advocate
General for Scotland. Dr Clark, it would be helpful in your opening remarks
if you described your role and in particular your statutory responsibilities
under the Scotland Act.
(Dr Clark) I am very grateful to have this opportunity because this is
the very first appearance of the Advocate General before this Select
Committee. The Advocate General is one of three UK law officers along with
the Attorney General and the Solicitor General. Following devolution I am the
Chief Legal Adviser to the UK Government on all matters of Scots law, that is
both devolved and reserved matters. My functions include firstly giving
formal legal advice to the Government on Scots law and that would include also
legal questions on matters of common interest to the UK, such as European
Community law and human rights. Thus I might advise for example with the
Attorney General or the Solicitor General about human rights issues generally
or indeed about European Community law, even in situations where there is no
particular Scots law speciality. Secondly, I serve on a number of Ministerial
committees of the Cabinet and my legal officials serve on official committees.
Thirdly, in relation to the statutory functions under the Scotland Act, these
fall into two main categories. Firstly, devolution issues, that is under
schedule 6 of the Scotland Act. Basically where devolution issues arise, that
is essentially issues about the competence of legislation of the Scottish
Parliament or actings of the Scottish Executive, where these are raised in
Scottish courts it is provided that I must receive notice of them and I have
the right to intervene personally or through counsel to make representations.
I can also raise such issues myself if I think fit. This area is very
interesting. If you wish further information about it, there have been about
700 issues and I should be more than happy to give you a broad outline if
anybody is interested. Secondly, under section 33, the second statutory
function, that concerns legislation that the Scottish Parliament has passed,
I can within four weeks refer it to the Judicial Committee of the Privy
Council for a decision on the competence of the Scottish legislation. The
fourth general function is that I am Ministerial head of the Office of the
Solicitor to the Advocate General and that office gives day to day advice on
Scots law to most major UK government departments as well as to the Scotland
Office itself. Fifthly, I have responsibilities for representing myself or
arranging for representation of the UK Government in court proceedings in
Scotland. That would include House of Lords or Privy Council which might of
course be in England. Lastly, I have other activities related to my function,
for example parliamentary business obviously, attending at joint ministerial
committees, speeches, meetings, conferences. I have done a whole range of
things in relation to these matters also.
Mr Tynan
86. Obviously there is some concern as regards clarification for
people in Carstairs who have appeals in. That was a very concerning issue for
the people of Scotland. How would you describe your relationship with the
Scottish Executive in that kind of circumstance?
(Dr Clark) That raises a very interesting issue. As you may know, the
challenge in that case was to the very first piece of legislation made by the
Scottish Parliament and when the Scottish Parliament were putting that
legislation through, last autumn, the Ministers came to me to see whether I
would do a certificate intimating that I would not intervene. That was really
to bypass the 28 days which I had to allow them to get the legislation through
at an earlier stage than was possible. Obviously when that happened, which
would not be standard practice, I considered the legislation most urgently.
I had been involved with my officials earlier looking at the legislation as
it developed, so I was in a position to give an early decision in relation to
whether or not I was going to intervene or not. I intimated that I was not
going to intervene, in other words that I was not going to take that
legislation to the Judicial Committee of the Privy Council. Subsequently
there was, as we all expected, a very serious challenge to the legislation and
this came about eventually by way of three individual prisoners who were
patients in Carstairs Hospital challenging the legislation because they said,
amongst other things, that it would affect their appeal rights. Because it
was so important as the first challenge to a major piece of Scottish
legislation and because I had done the section 33 certificate, I decided to
appear personally, as I was entitled to as Advocate General in the case. The
Scottish Executive were separately represented. They also were obviously
parties to the proceedings. The case took a little time to obtain court days
but was actually heard over two weeks, a total of six court days, a few weeks
ago and last Friday the decision was issued by the court. The challenge was
very interesting and raised new and interesting matters going beyond the
Scottish legislation because it was basically a challenge under the Convention
of Human Rights based mainly on article 5 of the Convention of Human Rights.
The decision of the courts, which is now available publicly, and indeed I have
a copy with me if anybody wants to see it, runs to many many pages. In
summary, the decision of the three judges was to the effect that the challenge
was unsuccessful and that the Scottish parliamentary legislation would not
therefore be struck down in whole or in part. There may of course be an
appeal on behalf of the patients to the Privy Council. We do not yet know;
the appeal dates are still open, so that may happen, in which case we shall
have to argue the case again if that happens.
87. That would be an example of working together, would it not?
(Dr Clark) Yes, that was an example where I happened to take the same
view as the advisers to the Scottish Parliament and the Scottish Executive
about the competence of the legislation in terms of its compliance with the
Convention of Human Rights. You could imagine a situation where differing
views were taken and obviously it is possible and envisaged in certain
circumstances that I might be on a different side legally, making different
representations to the Scottish Executive, but that is of course part of my
role. In this particular case, because of my earlier involvement, because of
the view which I took and because it was so important to the devolution
settlement that the first piece of legislation if it was not incompetent
should not be held incompetent, I obviously wanted to go in there to give such
support as I could to the Scottish Executive's position.
88. Have there been any problems concerning the Scottish Parliament's
legislative remit which have caused concern to yourself?
(Dr Clark) To begin with of course when I was first appointed the
Scottish Parliament were not yet legislating. When I was first in post I did
not really have any work to do in relation to Scottish parliamentary
legislation because there was none. The more that the Scottish Parliament
become involved in legislation the more work there is for my office and for
me to do. We have actually been increasingly busy looking at the Scottish
legislation as it comes through. We and the officials will be involved in
discussions about it. We would raise points of concern possibly to us and we
would discuss these with interested UK departments to see whether there is a
UK concern or interest and a whole range of discussions go on behind closed
doors about a whole range of matters, different issues, not just human rights
but devolved and reserved areas and sometimes European matters as well. There
is no standard way of dealing with it but we are trying to put in place
methods whereby we can be informed about the Scottish legislation, we can be
involved in the sense that we will be discussing that legislation with
specialist UK departments who might be affected or might have expertise in the
area. We would then make informal representations, meetings, etcetera, about
it. At some point I would have to decide whether or not there was reason to
intervene as I would be entitled to do and to take the matter to the Judicial
Committee of the Privy Council. Obviously I would regard that as a very
serious thing to do and I would not want to do that if the matters could be
resolved informally at an earlier stage. The fact that I have not as yet
taken any reference to the Judicial Committee of the Privy Council I would
regard as a plus point in a way, that we have been successful to date in
trying to sort out any difficulties in advance.
Mr Clarke
89. I am very interested in the Bill which is coming through the
Scottish Parliament because I had in a Private Member's Bill and it became an
Act and led up to this. This is a tidying up of the Scottish legislation for
mental health and physical health, a whole gamut of legal terms, so much so
that the Law Society has been very interested in that for a long number of
years and they want this tidying up. Are you directly involved with this
proposed legislation?
(Dr Clark) I am directly involved in the sense that I make it my job and
the job of my officials to interest themselves in what is going on. Obviously
the responsibility for the Bill is not mine. The responsibility for the Bill
is the responsibility of the Scottish Minister who is in charge of the Bill.
You must remember that the prime responsibility for the competence of any Bill
going through Scottish Parliament lies with the Minister who is taking forward
the Bill and indeed the presiding officer, both of whom have to make
statements to the Scottish Parliament that the Bill of the Scottish Parliament
is within the competence of the Parliament. You must not think that I have
any technical responsibility in that sense for the legislation because I do
not and I have no responsibility whatsoever for any of the policy matters in
the Bill. However, as I tried to explain for the previous example, I am
interested in the Scottish legislation, partly because I have to keep the UK
departments informed of what is going on to make sure that there are no legal
problems which they might bring to my attention, either because there was a
problem because it was going into reserved matters unwittingly or
deliberately, or because there was some great human rights problem at the
heart of it. Because of that I have to try to keep abreast with the
legislation and there comes a point at the end of the legislation when I have
a particular statutory function and I have to make a decision either to
intervene or not to intervene and I have 28 days in which to do that.
Obviously it would not make much sense to do nothing and then at the very last
stage start raising problems or issues.
Sir Robert Smith
90. What is the main function of the 19 staff of the Office of the
Solicitor to the Advocate General? In a way you have touched on it but do you
have a breakdown?
(Dr Clark) Basically in Scotland at Victoria Quay, where the staff of my
office share library and research facilities with the legal staff of the
solicitors to the Scottish Executive, there are two main divisions and there
is a bit of specialisation within these divisions because it is necessary for
these divisions and the lawyers within them to give day-to-day advice to the
UK departments about Home Office matters, Social Security, a whole range of
matters. The individual solicitors are really very much involved with
Whitehall departments. They come down for meetings, they attend various
training sessions with Whitehall lawyers and advise them about all matters
Scottish and they also take through litigation on behalf of UK departments,
for example the Home Office litigation would be physically handled by a lawyer
from that office. They do all sorts of other things as well. For example,
they would be involved in helping with UK legislation in relation to Scotland,
but if there is a UK Bill going through with Scottish bits then they would be
involved in that.
91. Are they in a sense elements of work which was being done by the
Lord Advocate's department?
(Dr Clark) Yes.
92. So the additional work in a sense is purely to do with the Privy
Council.
(Dr Clark) Yes, the additional work is the new statutory functions which
did not exist before devolution.
93. At this stage, given that UK legislation varies in what its
target is or whether it affects Scotland or not from year to year, is there
an ability to fluctuate the staff up and down, depending on the projected
work?
(Dr Clark) Yes. It is fair to say we started off with a core staff and
there have been some small increases to take account for example of the
increasing work involved with the Scottish Parliament legislation because in
a sense that is a new role for them. They have a new thing to do in relation
to that legislation. Obviously the human rights issues and the bringing into
court of the Human Rights Act which will extend the present application of the
Convention in Scotland are all new areas of law which are really quite
difficult and technical in some ways and there is a need for legal advice.
I also have a small legal secretariat who more or less follow me around but
are mainly based where I am based in Dover House in London. They attend
official meetings with the Whitehall departments. It is very important that
the office and indeed myself have a good relationships with the Whitehall
lawyers who are staffing the various departments and that they come to us and
we use them as resources. It is that way that we manage to try to fulfil our
duties. For example, it would be quite impossible for my office, without the
assistance of the specialised lawyers at UK level on certain aspects to do the
work unless I had many more lawyers. We are dependent on their expertise in
certain areas to assist us in doing what we have to do. We are trying to
create partnerships with them to do that.
94. In the two-way communication between Scottish Executive and
Whitehall, has your department fulfilled any role given that the Scottish
Executive has experience of being subject to the European Convention of Human
Rights earlier than the reserved matters? Has their been an attempt to learn
from their experience?
(Dr Clark) Yes. One of the things we have done through my office with
the help of the Scottish Executive lawyers is to make a report to interested
Whitehall departments about the 700 devolution issues I talked about. The
Whitehall departments who have areas of interest in that field have been kept
up to date, partly through my office, about what is going on, have been very
interested in what is going on in Scotland.
Miss Begg
95. While the Scotland Bill was going through the Houses of
Parliament this Committee undertook an investigation into multilayer democracy
and there was a lot of discussion as to whether the Judicial Committee of the
Privy Council was in fact an appropriate body to decide when there were
disputes between the two parliaments yet in practice it would appear that the
challenges to the legislation from the Scottish Parliament had not in fact
come from this place, it had been external. Do you think that is a pattern
which will continue, that the two parliaments will see eye to eye on
legislation and it is unlikely that you will challenge in your role or refer
a piece of legislation to the Judicial Committee? Or is it more likely that
it is going to come from outside? I do not think when we were looking at
that, that the people actually envisaged that the challenges would be external
challenges.
(Dr Clark) I am not sure I necessarily agree with you. It was always
envisaged that there would be an appeal structure from Scotland and the
dispute was whether it would be to the House of Lords or the Judicial
Committee of the Privy Council. The decision was taken that it would be the
Judicial Committee of the Privy Council. It was always envisaged, as I
understand it anyway, that in addition to any references which might be made
by the Advocate General or indeed by the Lord Advocate or the Attorney
General, there would be an appeal structure because of things like human
rights and common interests and the need to sort these matters out. You
cannot draw any assumptions at the moment from the fact that there has not
been a reference by any of the law officers to the Judicial Committee of the
Privy Council. You have to remember that there have only been seven pieces
of legislation passed by the Scottish Parliament so far and as I have tried
to explain, I see part of my role as trying to obviate the need to end up
making a reference by having an input at an earlier stage and by discussing
problems that may be of concern to UK departments' legal problems at an early
stage and thereby hopefully trying to sort them out before we get to the stage
where we have not sorted them out and they still remain live. You also have
to remember that as time goes on, the parliaments could diverge more, there
could be different administrations north and south of the border. In that
situation there might be more deliberate attempts to go beyond vires, in which
case plainly the role of the Advocate General would be important to step in,
to challenge these deliberate attempts on behalf of the UK Government.
96. You are essentially saying today that the reporting relationships
between your office and the people drafting the legislation in the Scottish
Executive is sufficiently close that it is unlikely that at present there
would be a reference to the Judicial Committee of the Privy Council.
(Dr Clark) I hope it is unlikely but the fact that a reference is made
is not necessarily a negative thing. One might, for instance, make a
reference in situations where the law was plainly just unclear and really
nobody on either side knew exactly what was the best way. In that situation
it is not so much a challenge, it is more an attempt to obtain clarification,
a helpful intervention more than an attempt to challenge what is going on
elsewhere. I do not see a challenge as being a negative thing at all
necessarily, but so far we have not needed to do that for any reason.
Chairman: Dr Clark, thank you very much for your answers to our
questions.
Miss Begg
97. I believe that the Scotland Office has just drawn up an action
plan to address the relevant elements in the Modernising Government White
Paper and the more detailed proposals for Civil Service Reform. What does
that action plan entail?
(Dr Reid) First of all I should say that we started a bit later than
others on the modernising of government.
Chairman
98. Why was that?
(Dr Reid) Because most of the departments have been around for about
100 years. We only started last July. That is basically the reason for it.
Miss Begg
99. You had a head start then, did you?
(Dr Reid) We had a late start because we were only formed last year.
We do take it seriously and the bulk of what was the Scottish Office will now
be with the Scottish Executive.
100. So it is their responsibility is it to modernise that bit?
(Dr Reid) Yes; it is not my responsibility and we have been trying
today to make sure that we only spoke to our own responsibilities rather than
for Ministers in another Parliament. The White Paper set out the five key
commitments on modernising government: on policymaking, responsive public
services and quality public services, on information age, government service
to value public service not to denigrate it. You will understand that our
range of activities precludes some of the things we are not involved in but
we are trying to carry forward, within the fifth key commitment, the
Modernising Government White Paper, our commitment to modernise the Civil
Service. Sir Richard Wilson has sent out a subsidiary report on that. We are
trying to carry that forward as far as we can. It only has three Ministers
and around a total, it is envisaged, of 110 staff when it is up to complement.
It does not have a significant policymaking role other than in relation to the
Scottish devolution settlement. It says that at the end of the day the
decisions are made by others and we can influence them. We have minimal
programme expenditure because out of the œ16,000 million to œ17,000 million,
while we have been talking today about the œ6 million, the rest of that, the
œ16,000 million less œ6 million, goes to the Scottish Executive and they do
that. We have no responsibilities for delivering services directly to the
public. We are somewhat constrained but within that context we have drawn up
an action plan to address the relevant elements in both the Modernising
Government White Paper to which you referred and the proposals for the Civil
Service reforms. I shall not go through them but our main focus will be the
key actions which contribute to the delivery of our functions and make us
operate efficiently, effectively and economically. Part of that is versing
myself on e-mail, laptops and thereby getting to the stage where the Minister
of State and I can correspond with each other at all hours of the day and
night on issues of importance to people in Scotland, including the football
results.
101. Is that action plan going to be published and be accessible
to everyone and indeed to this Committee so we can measure your success
against the action plan?
(Dr Reid) I am not sure. We publish so many things; I mentioned
concordats and guidelines this morning. Is there an intention to publish some
sort of plan? Yes, some of the targets will be published in the expenditure
review. On some of the larger issues we shall have to work with the Scottish
Executive and monitor jointly with them as well.
Mr Welsh
102. Your previous answer applies. Paragraph 6 of the
Departmental Report refers to Ministerial correspondence. The Scotland Office
has a target of replying to Ministerial correspondence within 15 working day.
It has only met that target in 66 per cent of cases since October 1999. Why
is the target for replies to Ministerial correspondence achieved in only
66 per cent of cases?
(Dr Reid) I am very glad you asked me that because the two reasons are:
one, that we have such a small number of staff that we are not even up to the
levels that we are allowed by the Treasury and have been recruiting. Two, on
the basis of partnership we have to consult much more widely and deeply with
the Scottish Executive than any other department. The small number of staff
and the requirement, the obligation, but also goodwill to consult on so many
of these replies with our colleagues in the Scottish Parliament mean that we
are a lesser figure than others because of those particular circumstances.
As we get up to the staff which we would want there should be some mitigation
of that. While I accept that target completely, it is of crucial importance
that on areas where we have common interests with the Scottish Executive
Ministers we should give the widest consultation before writing out. That
does not mean to say of course that there will be a writing out on each
other's responsibilities. I shall, as I have today, try not to comment on
other Ministers' in other parliaments policy.
103. Did I understand the Minister to say he looks to recruit more
staff? I thought you said you were reducing numbers.
(Dr Reid) No, what I said was that we were not anywhere near the limit
which was previously agreed and intimated to this Committee, which you will
recall from your previous notes was 130. You will recall from what I said
today that we are at 86 at present, 19 of whom are actually for the Advocate
General's department.
104. May I ask the Secretary of State what exactly is meant by
"replying" to referred cases? Does that mean an acknowledgement card or
actual considered correspondence? Is this a systemic problem or something
which is temporary?
(Dr Reid) No, it means a reply to the correspondence. It does not mean
a card, it means a reply. I have told you the two reasons for it: one is our
political requirement to share responses. No other department has to share
in the way that we do because that is not the nature of devolution. Rather
than me just write off the top of my head or purely from the Scotland Office
point of view, in many of these case we want to alert other Ministers that
this issue has been raised, we want to share with them how we think we should
answer it, we want to listen to the Scottish Office Ministers and officials
as to any problems that might cause them and that would be expected of us.
The second problem is systemic in the sense that we only set the system up
last year. The department was only formed last year and we have only
gradually been recruiting up to the figures previously agreed.
105. Why are you spending œ3 million more each year on office
costs when you have fewer staff?
(Dr Reid) I do not know where you get your figures from. Three million
pounds more than what?
106. More than your predecessors spent.
(Dr Reid) You seem to be implying that my predecessor ran 2,400 civil
servants on a budget of œ3 million which would suggest an annual income for
each civil servant of œ600. I am not aware they were all working for œ12 a
week.
107. I was referring to office costs.
(Dr Reid) The total cost of the previous Scotland Office was in the
region of œ240 million. I think that means it is a reduction of œ234 million
rather than an addition of œ3 million.
108. The figure given is that it cost œ2.85 million for office
costs as opposed to œ5.5 million.
(Dr Reid) Ah, you are reading from an article in the Sunday Mail which
was briefed by your colleague Mr Wilson and was so wildly inaccurate that even
a child who could do simple arithmetic would have worked it out.
109. Here is your opportunity.
(Dr Reid) I am answering your question. You are actually quoting from
the document. Anyone who thought that you could run an office of 4,200 civil
servants, which is what is asserted in the article, on the basis of a
œ3.8 million annual budget just cannot do simple arithmetic. We did explain
that and it is why the Sunday Mail decided to give me a call the following
week, they were so embarrassed by the figures they had unwittingly published.
I hope that fully answers your question.
110. I doubt if it does but I am interested in your answer.
(Mr Wilson) I am puzzled. What does this figure of œ3 million relate
to?
(Dr Reid) It actually relates to the provisional estimates for the
eight-month period for the early plans for the new Scotland Office. Mr Wilson
apparently thought it applied to the total annual cost of running the whole
Scottish Office under Donald Dewar.
(Mr Wilson) Another Mr Wilson.
Mr Brown
111. Can we turn to the Scotland Office grants to support
expenditure by the Scottish Parliament in expenditure outside departmental
expenditure limits. A couple of questions. First of all, can you explain
what the reason was for the increase from œ93 million last financial year to
œ271 million this current financial year in Scotland Office grants to support
expenditure by the Scottish Parliament in this other expenditure outside
departmental expenditure limits? They increased from œ93 million to
œ271 million.
(Dr Reid) Yes. This was not expenditure by the Scotland Office, this
was expenditure by the Scottish Executive. I think from memory that will
probably include the extra money which was allocated as a result of the
budget. Is that what we are talking about on that one? Sorry, it is a
reclassification process as a result of the student loans issue.
112. The shadow resource-based Estimate for the Scotland Office
for the current year indicates that all the grants from the Scotland Office
to the Scottish Executive will be treated outside the Resource Budget. Can
you explain why that should be the case?
(Dr Reid) On the previous one, the increase in grant, may I just
clarify that? The apparently large increase in grants to support expenditure
by the Scottish Parliament, the œ93 million and the œ271 million, mainly
reflects a change in the classification of expenditure and refers to
expenditure on higher education and student loans and student awards. If you
want further details on that we can of course send them to you. I am sorry
we are getting into the detail of some of the budgeting and accounting
measures rather than the substantial elements so I may occasionally have to
take advice. We shall certainly write again.
113. That would be helpful. The other part I was asking about was
the shadow resource-based Estimate for the current year which indicates that
all the grants from the Scotland Office to the Scottish Executive are treated
outside the Resource Budget. Why should that be the case?
(Dr Reid) That will essentially be paid as cash as soon as that comes
through but at the moment it is not allocated on that basis.
Chairman
114. We could do with some clarification on that point as well.
(Dr Reid) All right.
Mr Sarwar
115. Could you explain to us in what ways the introduction of
resource accounting and budgeting will improve the accountability of the
Scotland Office to Parliament?
(Dr Reid) At this time of day to do a quick synopsis of what resource-
based accountancy is! Essentially, just to give you a 30 second explanation
as I understand it, previously all accountancy has been done on the basis of
income and outgoing. Now departments are going to be judged on the share of
the national wealth that they actually hold and that includes capital assets.
Instead of just what the grant is, what proportion of the national wealth you
are taking up. So it takes in the resources as well as the actual income.
We shall obviously implement the Government's commitment to introduce resource
accounting again. As in the other case, it has again required a little bit
of effort for us to catch up in the department on the timetable set for
introducing resource accounting because the department was so young and had
to build basically from a staff of 20 or 30 in the first instance. I
understand that the Principal Finance Office wrote to the Clerk recently
confirming that the Scotland Office was on track to produce resource estimates
and accounts in line with the Government's plans.
Mr Tynan
116. Are there any issues which would allow the National Audit
Office to argue against implementation of resource accounting and budgeting
in the year 2001-2002?
(Dr Reid) I hope there are not. I have been given an assurance that we
are on track and I should like to think that as in other areas we conduct
ourselves in a way where the National Audit Office would not be given grounds
for objecting to anything that we are going to do.
117. What are the implications for the operation of the Barnett
Formula of the implementation of resource accounting and budgeting, if any?
(Dr Reid) Good God. How long do you have?
Chairman
118. We are not going back over the first hour again. Are there
any implications?
(Dr Reid) As far as I am aware it does not have implications because,
just because you go to resource-based accountancy does not mean to say that
you have to get rid of departmental spending limits or for that matter that
you somehow stop putting limits. The Barnett Formula is actually calculated
to do the limit in income. In other words, because you are taking capital and
resources into account does not mean to say you are abandoning income. I do
not see immediately that it has any great effect on that. That was an
excellent question to throw in at exactly one minute to one.
Chairman: We might return to that at a future session. Finally we have
some interesting questions on the Scottish economy.
Mr Brown
119. How would you actually describe the performance of the
Scottish economy over the last years? Do you believe there have been any
perceptible changes since devolution in the way in which the economy has
performed?
(Dr Reid) The economy in Scotland has performed very robustly. You
will know, as I do, the basic facts and figures. We have the highest
employment we have had for 25 to 30 years. We have the lowest unemployment
that we have had for a generation. We have the lowest sustainable inflation
that we have had for over 30 years. We are creating far more jobs than we are
losing. We have slashed youth unemployment by 71 per cent since the
Government came in. We have taken 21 per cent off the long-term unemployed.
I am very pleased with the way it is going, not only in absolute terms but
also in relative terms within the United Kingdom; we have become relatively
more prosperous in terms of GDP. What are the problems of this that we have
to face? The weakness of the euro has obviously created a problem for some
manufacturing producers and exporters, though I would have to say that
manufacturing output went up last year by something like 1.9 per cent and
manufacturing exports went up by six per cent. It is not a completely bleak
picture, even in that area. By and large we are doing very well. The second
part: what about devolution, how does that assist us? If it is done in
partnership and with goodwill it helps us because the Parliament in Scotland
can supplement what is being done at the UK level. Our job is to create the
economic stability and framework but through Henry McLeish, through
Jack McConnell, through others who are deeply now involved in implementing
aspects of the New Deal, which Brian Wilson is dealing with in particular,
aspects of the industrial policy, aspects of employment policy, in other words
the partnership where we are setting the framework, they are closer to the
ground in actually implementing and assisting small- and medium-sized
enterprises and so on and I think will be an added bonus. Doing very well.
I have avoided sound-bites all day of course but: a lot done but a lot still
to do.
120. May I follow that with what might seem to be a bit of a
contentious question, especially for the Chairman? Is there any evidence to
suggest that the economic success of Edinburgh is actually having a
detrimental effect on the economy of the rest of Scotland?
(Dr Reid) No. I have never taken the view that you assist others by
pulling some down. It was inevitable in a sense that the whole interest and
excitement internationally surrounding the establishment of the Parliament and
so on would have some form of effect. It is also the case that Edinburgh is
doing very well but so are other areas of Scotland; other areas of Scotland
are also doing very well. Generally speaking, so far as the UK Government is
concerned my job is to try to satisfy myself and do what little I can - he
said modestly - to contribute towards a Government policy which sets a stable
economic framework. If that happens people will invest, people will employ
others, people will get value for money and in Scotland everyone, year on year
since the Government came in, is better off materially. It is the job of the
Scottish Executive then to look at the micro level, in some sense to assist
particularly but not exclusively small- and medium-sized enterprises.
Certainly the response I get when talking to businesses or industry or
employers in Scotland is that they feel the benefit now of having both access,
proximity, geographical proximity and openness with the Scottish Executive
Ministers, of whom there are 22, so there are more of them to meet as well,
and at the same time having access to the United Kingdom through Brian Wilson
and myself in particular in this field. That is one of the reasons why we
established our offices up there as well.
121. Do you see a risk of Edinburgh's economy actually over-
heating and possibly bringing with it some of the environmental difficulties
and pressure on wages and property prices such as have been characterised in
the South East of England? If that is the case, how is it possible to avoid
it?
(Dr Reid) First of all I do not see the signs of that happening. I am
not unaware of the great social problems we have in many areas like Glasgow
in terms of poverty, in terms of health, in some ways in terms of employment,
which is why we are trying to help with some government schemes to give
particular attention to Glasgow, which is why I want to see that in Govan, for
instance, they get a fair chance. That is all the workers there want; a
decent kick at the ball, put us on the park and give us a chance to fight.
I do not think there are any immediate signs of overheating in Edinburgh.
Were it to happen, on the property market or in wages or anything else, the
market mechanism operates because employers will stop going to that area and
go to another area where they can get labour cheaper or they can get better
access to facilities or homes or whatever. There is a self-correcting
mechanism for this to some extent.
Chairman
122. Russell Brown cast his bait and the Chairman will take it.
I shall not refer to Glasgow but to the West of Scotland. How do you respond
to the comment that the problem in Scotland is not the North/South divide but
the East/West divide with the East Coast becoming ever more prosperous and the
West Coast suffering ever more problems?
(Dr Reid) I would make a general comment about that if I might. This
is why in the early stage of this session I was very reticent to second-guess
comments made by my colleague the Finance Minister in Scotland. It is a
genuine attempt ... Incidentally I now have the letter which Jack McConnell
sent, which actually says that while he will of course endeavour to answer all
questions of a factual nature with regard to UK Government policy, it should
be appreciated that he will not be in a position to comment on that policy.
That seems to me absolutely defensible. That is precisely what I have been
saying here and it is also why I wanted to see what Jack McConnell wrote in
the official letter he sent. You will forgive me for not commenting before
I had the document in front of me because it is not entirely what I understood
others to be saying that Mr McConnell had said. As regards the internal
allocation of resources in Scotland and assessment that is properly more of
a job for Jack McConnell and Scottish Ministers there. I would say that as
regards the difference in regions and nations within the United Kingdom, which
has always been stressed about North/South divide and so on, I agree entirely
with the point the Prime Minister was making some months ago which was that
there are in fact as many big differences within nations and regions as there
are between nations and regions. Perhaps up to this point we have not paid
enough attention to that, so that within Scotland perhaps we have been
concentrating a little too much on how we compare with others outside of the
Scottish borders and perhaps we ought to think just a little more on what the
differences are within Scotland in terms of poverty, in terms of prosperity.
I am sure that is one of the things the establishment of a Scottish Parliament
will enable us to do better.
123. The Committee has exhausted all the questions which we wish
to put to you. Are there any comments any one of you would like to make to
the Committee?
(Dr Reid) No, I should just like to thank you very much for seeing us.
I think this is a precedent that three Ministers should come. I hope you
found it useful; it has certainly been robust from time to time. My general
comment at the end would be that at the beginning. Devolution is something
which has been fought for long and hard. It is working and working well and
it has to be protected. It has to be fostered and protected. With goodwill
and partnership on both sides it will be of enormous benefit to the people of
Scotland and all we have to do here at Westminster is to recognise that we are
equal in terms of being representatives of the Scottish people here and hope
that everyone in the Scottish Parliament will view it the same way. If that
happens we will be able to work productively for the people of Scotland
because they are the people who put us here and what they want is a better
life, not internal squabbles or squabbles between parliaments.
Chairman: We have had a long, interesting and perhaps provocative
session this morning. On behalf of the Committee I should like to thank you,
your Ministerial colleagues and your officials for your attendance before us
today. Order, order.
