Examination of Witnesses (Questions 60-79)
RT HON
HELEN LIDDELL,
MP, MR GEORGE
FOULKES, MP, DR
LYNDA CLARK
QC, MP AND MR
IAN GORDON
WEDNESDAY 7 NOVEMBER 2001
Mr Lazarowicz
60. Could I take up one aspect of the relationship
between the Scotland Office and the Scottish Executive in so far
as participating in European affairs is concerned. Moving away
from the Memorandum of Understanding to the Concordat itself in
terms of actual participation, in what I still think it is called
Scotland House, in Brussels, what kind of participation does the
Scotland Office have in that shop window for Scotland and the
Scottish Executive?
(Mrs Liddell) We have a great deal and, again, it
is down to goodwill. It was Scotland Week in Brussels a fortnight
ago and I went out and worked with Scottish Executive Ministers
on a lot of promotional activity. I made a major speech to a seminar
on the future of Europe and how the United Kingdom wishes to sponsor
debate on the future of Europe, particularly in relation to the
Devolved Administrations. We find the Scotland House extremely
helpful. I, as indeed has the Minister of State, have served in
many Councils in all my many Ministerial guises and to some extent
I do not find myself needing to use formal structures as much
now I know how the system works. Scotland House adds great value,
it is greatly respected in Brussels, and it is a facility that
is available to Members of this Parliament as well as to Members
of the Scottish Parliament. I would encourage Members, especially
if you are making use of the visit that you are allowed to another
institution, to take the time to go and look at Scotland House
and how it functions.
Mr Carmichael
61. Specifically on the European affairs aspect
of the work of the Scotland Office, my constituents would argue
that the single most important aspect of European politics at
the moment is the proposed forum next year on the Common Fisheries
Policy, and equally they look to London to take a very strong
position on the promotion of some of the proposals in the Green
Paper. Can I ask what representations has the Scotland Office
in particular made to the Commission on the Common Fisheries Policy?
(Mrs Liddell) We keep in very close contact with Rhona
Brankin on these matters. It is, indeed, the Council where the
Scottish Executive has tended to lead the UK delegation. That
is an area where Scotland predominates over the United Kingdom
view from the point of view of the Scotland Office. We keep in
touch with our colleagues in the department down here but because
the great majority of fisheries' interests now are Scottish it
tends to be the Scottish Executive that is very much in the lead
on that, which I imagine should suit your constituents.
62. Something that we are not unhappy about
but we will judge it by the results.
(Mrs Liddell) Fishermen always do.
Ann McKechin
63. Mrs Liddell, you have mentioned the fact
that your staff are mostly seconded from the Scottish Executive
and I take it that you follow the Scottish Executive's equality
strategy for staff. Does your Department have any specific strategy
with regard to recruitment and equality issues?
(Mrs Liddell) Just on the general equality point,
we made a major breakthrough with the appointment of a woman Secretary
of State, the first for 116 years. Save the presence of the Minister
of State, at a Ministerial level I think we outnumber men, so
there may be other equality issues that have to be brought to
bear there. I think Mr Gordon can best fill you in.
(Mr Gordon) The Scotland Office is committed to the
same policies that the UK Government is requiring of all departments
in terms of promoting diversity in ethnic terms and in terms of
sexual discrimination. In terms of measuring diversity, we have
taken the view that, because the Office is really quite small
so that we would see huge movements in performance with one or
two movements of staff, and given that our staff are for the most
part almost entirely from the Scottish Executive, we would be
brought together with the Scottish Executive staff for monitoring
of diversity. If you would like specific figures for this—
64. I wonder if it would be possible in future
Departmental Reports to give information on targets and how that
is taken into account.
(Mr Gordon) There is certainly no difficulty doing
that.
65. If I could go on further from the staff
issue and equality to whether the Scotland Office makes any assessment
of the impact of policy decisions concerning Scotland on gender,
ethnic background and disability issues? A recent experience I
had was when I visited the Inland Revenue Scotland Office during
the summer recess and I was advised that they were only now producing
leaflets in ethnic languages on Tax Credits despite the fact that
they had been introduced 15 months ago. Has the Scotland Office
issued any guidelines to offices in Scotland about how they should
address these issues?
(Mr Foulkes) Can I say on that that, as you know,
during the summer I, on behalf of the Scotland Office, arranged
for Members of Parliament and invited Members to meetings with
the Inland Revenue, with the Disability Rights Commission and
with the Health and Safety Executive, all of which are reserved
areas and operate in Scotland. The officials in Scotland explained
their functions very well but also took on board some of the suggestions
that you and others made at the meetings. It was a particularly
useful one with the Disability Rights Commission and also, as
you say, with the Inland Revenue. I have had separate discussions
with the heads of the Inland Revenue and the Health and Safety
Executive in Scotland and that was one of the issues we discussed
with them.
John Robertson
66. With the link between health and social
security do you see yourself to be in an unusual position or a
special position, particularly in Scotland, particularly in dealing
with disabilities and for that matter any kind of benefit that
might come from social security where it is linked to health?
Carers, for instance, who are receiving benefit from social security
are linked to the health service and health system. Do you see
yourself as an important person in this as the link between them?
(Mrs Liddell) Brokering the bilateral relationships
between the two departments is very important and in this case
it is three departments. Often where we can add value is making
sure that the UK Department is aware of the issues that are specifically
Scottish. They need not necessarily be legislative issues. For
example, the high incidence of heart disease and cancer in Scotland
which is larger than it is in any other part of the United Kingdom,
issues related to diet and so on that we all know are significant
issues for Scottish people. We have worked quite hard to ensure
that colleagues here are alert to the fact that not everything
appears on the face of a Bill, there are a lot of issues that
are much wider, that are cultural and institutional. In terms
of overall equality policy the Minister of State sits on the Equality
Committee. We are not an employing department so we are not front
line in relation to that but making sure that in issues of diversity,
especially in relation to disability, that the specific needs
of Scotland are taken into account is something we do as a matter
of routine.
Chairman: We are going to move on to the funding
questions now. Before starting that can I say to the Secretary
of State, the Committee recognises the technical nature of many
of these questions therefore we would expect a broad reply but
followed by a detailed memorandum. They are important to us in
an attempt to follow and understand the funding arrangements.
Could I ask Mike Weir to pick that up.
Mr Weir
67. We were all given a copy of Funding the
Scottish Parliament National Assembly for Wales and Northern Ireland
Assembly, while it is a very interesting document one of the points
is that the figures that are followed through are not publicly
available, what role does the Scotland Office play in assisting
the funding for the Scottish Parliament described in the document?
(Mrs Liddell) We do not actually do the computations,
we have a route whereby the money goes to the Scottish Executive,
so the Barnett consequentials are all done by Treasury, although
it goes through us as a conduit, that is what we are, rather than
the arbiters of what should be actually done with the funding.
68. Do you have access to the Treasury figures?
(Mr Gordon) Yes, indeed we do. In the course of the
Spending Review one of the outcomes is that decisions are taken
on the spending programmes of United Kingdom departments. These
are the key components of the consequentials from which will be
calculated the Scottish budget. We, and indeed the Scottish Executive,
have access to those figures to make sure that a fair share is
coming to Scotland.
69. Are these figures published in any form?
(Mr Gordon) There were figures published at the time
of the announcement and we can produce those in the memorandum.[6]
(Mrs Liddell) Often the Red Book will give you a fair
amount of detail in relation to that.
70. On the funding of the Scotland Office itself
I was interested in the figures in Tab 1 on page 15 for the running
costs of the Office. I notice they seem to have gone up in the
first year fairly substantially and they remained steady thereafter.
I appreciate that in 1999-2000, which was a partial year, it seems
to come to about four point something million pounds. I am curious
as to why there seems to be a large difference. I would have thought
that the start-up costs would have been higher in the first year.
(Mrs Liddell) The reason they are small, firstly,
is because it was a nine month period. At the very beginning,
understandably, all of the focus of activity from our election
in 1997 was making sure that all of the systems were right in
the Scottish Parliament, that the Scottish Executive had all of
the staffing requirements put in place. I think it is fair to
say that we did underestimate what would be needed by the Scotland
Office to carry out our functions. As I said at the beginning,
we sit on something like 19 different Cabinet committees and that
requires advice and analysis. As we were talking in relation to
the legislative programme, there has to be detailed analysis of
every Bill that goes through for the impact on Scotland and we
had not really factored that in to the functioning of the Scotland
Office. My predecessor, Dr Reid, took a most worthwhile initiative
in raising the issue with the Chief Secretary and it was recognised
that we really did have to have a much more policy oriented Scotland
Office rather than a small functioning private office. That is
the point at which a bigger structure was put in place to make
sure we did have the kind of advice that was actually needed.
If you look at the range of issues where the reserved matters
apply they are very, very considerable indeed and even to have
the ability to analyse the anti-terrorism legislation, for example,
that was of huge, huge importance to us. At the beginning we had
a blank sheet of paper, we wrote down what we thought was a template
for what the Scotland Office should be, we did not get it right
and basically that is why we have had to put in place a Scotland
Office that has a bigger infrastructure than we had initially
envisaged.
71. That may be the remit of the Scotland Office
but as such how do the running costs compare to the previous costs?
(Mrs Liddell) It is infinitesimal.
(Mr Gordon) I cannot give you specific figures but
the direct running costs of the core of the Scottish Office, leaving
aside the large agencies which surrounds it, was of the order
of £200 million.
72. I notice the staff numbers seem to have
gone up from 1999, again that is partly due to the 53 going to
110, is that the same reasoning?
(Mrs Liddell) Yes.
Mr Carmichael
73. Do you actually see a long term future for
the Scotland Office, you yourself, when in your introductory remarks
you are saying that you saw there was a degree of uncertainty
about it before the election? I have listened with great care
to all that you are saying today and I accept that there is a
legitimate role for representing the interests of the various
devolved assemblies within the Westminster Government, do you
not think there will come a time when it is no longer appropriate
that that be done by the Scotland Office, the Wales Office or
the Northern Ireland Office but that some over arching body could
do it just as effectively?
(Mrs Liddell) If you cast your mind back to the time
before the General Election or just immediately after the establishment
of the Scottish Parliament there was quite a debate in Scotland
about, was there a case for a Secretary of State for Scotland.
What I have found very interesting is the extent to which that
debate has changed. In the run up to the General Election explicit
statements came from the business community and the trade union
community about their desire to maintain a Secretary of State
for Scotland. Some of that may be down to the nuts and bolts way
that we actually work. If a business has encountered a difficulty
it is not unusual now for them to phone me directly and often
our intervention can resolve a difficulty within 24 hours, they
see a facility there they can respond to. I mentioned earlier
on the whole issue of Chester Street Holdings, the insurance company
that went into liquidation leaving victims of asbestosis high
and dry. The trade union movement contacted me and I was able
to use my office as a way of moving along very rapidly and as
a means whereby these issues were dealt with. Whilst there was
a debate I think we have shown by our ability to respond to situations
that we do add value. Indeed the Prime Minister made it clear
during the General Election campaign that he saw a role for the
Scotland Office and the Wales Office into the future. I have heard
these debates in terms of an over arching department, the reality
is my job as champion of Scotland in the Cabinet has actually
not changed that much from the role of Secretary of State before.
What is different is that I do not take executive functions, they
are now devolved to the First Minister and to the Scottish Executive.
It is a wider ranging role than even I anticipated it would be
when I became Secretary of State in January of this year. There
are other areas where we can add even more value. One of the areas
that we have tried in the past to have stabs at was getting the
profile of Scotland up abroad, not just in trade or in tourism
but the generic quality issues about Scotland. I as Secretary
of State for Scotland have access to the whole panoply of Her
Majesty's Government's international posts internationally and
I see it as one of my responsibilities to promote Scotland internationally,
to act in a small way as an Ambassador for Scotland. Just two
weeks ago I was in New York where I was able to represent the
Scottish Police and Fire Service in laying a wreath at Ground
Zero but also to address the Scottish/American Foundation. It
is not generally recognised that there are twice as many people
in the United States claiming to be Scottish as there are living
in Scotland. That is a resource that historically we have never
properly plugged into. The Irish are very good at it, there is
no reason why we should not be good at it and it is something
that I am determined we should do.
74. Do you see your department continuing to
build?
(Mrs Liddell) In terms of resources we are stretched,
there is no doubt about that, but I see no need for empire building.
What I think would be useful would be for us to have more of an
interchange with other Whitehall departments. It would be useful
for people from the FCO and Treasury to have experience in a department
such as ours, which has very wide ranging experience because everyone
has to be multi-disciplined in a department that is as small as
this department is. I do believe we do add value. There was a
point where we were dangerously under resourced and I think that
was the point where you could have put a question mark over it.
75. Do you think it is still necessary for the
Scotland Office to have the presence in Edinburgh that it does?
I am thinking particularly of the building that was acquired as
a replacement for Bute House. Is that adding value or is it just
duplication?
(Mrs Liddell) We do not have a replacement for Bute
House, we just have a functioning office in Edinburgh. That is
my key base for liaising and, indeed, the Minister of State and
the Advocate General are there as well. That is where we are formally
based as part of our carrying out the job of liaison with the
Scottish Executive, working with the Advocate General's solicitors
at Victoria Quay. We have a tiny outpost in Glasgow which is more
functional than anything else. For us to operate in a portakabin
somewhere around about the Gyle Centre would not be appropriate
for the good conduct of the business of the Scotland Office. George,
do you want to add anything?
(Mr Foulkes) I just want to add a word because I think
there was perhaps a slight misunderstanding in Mr Carmichael's
first question about representing the Scottish Executive in Westminster.
Although we deal with the Scottish Executive and liaise with them
and are the custodians, as the Secretary of State said, of the
Scotland Act, we do not represent the devolved administration
but we represent the people of Scotland in the reserved areas,
just as you all do as Members of Parliament. Just a personal point:
I was Under-Secretary at the Department for International Development
and felt I worked very hard there and was busy morning, noon and
night and everyone said when I was going to come to this job that
there was not really a job to be done. I have got my diary for
this week if anyone would like to have a look at it, at the various
meetings, the Clyde Task Force on Friday and I spoke to the Coal
Industry Society on Monday and I am talking to the Scottish Council
on Single Homeless on Westminster Still Matters. A lot
of people are very interested to hear from us that Westminster
is still vitally important for the people of Scotland.
Chairman: Mark, did you want to come in on this
point?
Mr Lazarowicz
76. It was not on this point, it was a point
that we discussed earlier. A question was asked in relation to
the memorandum which has been promised and I wondered would it
be possible for that memorandum specifically to look at the way
in which the operation of the Barnett Formula has generated increases
to the Assigned Budget in the years covered by Spending Review
2000? I wonder if that could be included as a specific point in
the memorandum.
(Mr Gordon) I think we can try to include a worked
example to show how the Barnett Formula actually works, yes.
(Mrs Liddell) If it would help the Committee to have
a seminar on the actual functioning, I promise you it is something
to look at when you are having difficulty sleeping because it
is quite complex. I was around at the time when the Barnett Formula
was put together. Officials could take people through the arithmetic
if they wanted.
77. It was not so much a worked example but
actually showing how the Barnett Formula had resulted in increases
in Assigned Budget for the years covered by the Spending Review
2000.
(Mr Gordon) We will have to discuss that with the
Treasury and come back to you.[7]
Mr Lyons
78. Secretary of State, could I just turn to
the question on the July 2000 Funding Policy document. Do you
still think it is an accurate description of the operation of
the devolution financing system? When are we likely to see an
updated document?
(Mrs Liddell) I think in relation to the July 2000
Funding Policy document it is the current up-to-date version and
there are no plans for any further edition of the statement on
Funding Policy. If there are any specific areas that you are anxious
about we will seek to give you a more detailed answer in writing.
Mr Weir
79. We appreciate that not all of the money
comes through Barnett. Page 27 of the Funding Policy document
shows the part of the Departmental Expenditure Limit which falls
outwith the formula and also the main items within Annually Managed
Expenditure, but there are no numbers there. I wonder if the Secretary
of State could provide us with a table for the years 1998-99 to
2003-04 showing numbers for these separate items?
(Mrs Liddell) We certainly can provide a memorandum
on that. I think Mr Gordon could probably give some simplified
figures if it is useful to the Committee to have them right now.
(Mr Gordon) The detailed forward projections, the
kind of breakdown that is implied by that table, are decisions
for the Scottish Executive to take and I do not know whether they
have taken and projected those details as far forward as that.
There is, I think, a reasonably helpful table in the Departmental
Report which gives you at least some sense of scale of these various
components. The assigned budget essentially embraces what is called
a departmental expenditure limit. Certain items which are handled
outside departmental expenditure limits toll under what is called
annually managed expenditure. These are elements that are more
difficult to forecast. Within the departmental expenditure limit
the Barnett Formula applies to almost all expenditure. There are
a very small number of items, as you will see in table 27, which
are outside the Barnett Formula, and they represent a fraction
of one per cent of the departmental expenditure.
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