Second Standing Committee
on Delegated Legislation
Wednesday 22 January 2003
[Mr. John Cummings in the Chair]
Draft Scotland Act 1998
(Transfer of Functions to the
Scottish Ministers etc.) Order 2003
The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): I thank those on both sides of the Committee who have been eagerly looking forward to this sitting. In particular, I welcome those from firth of Hadrian's wall, including your good self, Mr. Cummings, as well as those on my side of the Committee. I am sure that they will enjoy their exposure to the intricacies of the order.
As is usual with such orders, copies of the explanatory memorandum have been distributed to Members. The order before the Committee is constitutional in nature, as it executively devolves responsibilities in three separate areas and gives additional responsibilities to Scottish Ministers. An important part of the Scotland Office's role is to manage the passage of such orders as an element of its supervision of the process and boundaries of the devolution settlement. My officials, therefore, have co-ordinated the process of parcelling the order together. The Scotland Office has worked with UK Government Departments and the Scottish Executive, and the text and policy effects of the order have been agreed by all parties.
The order involves three distinct policy areas: the rehabilitation of offenders, freight facilities grants and taxes management. Thus, it has an omnibus feel to it. Those three issues on which the Government propose to use the same power to legislate under the Scotland Act have been brought together to make the most efficient use of parliamentary time.
I shall explain section 63 of the Scotland Act. It is proposed to make the order under that section, which confers a power on Her Majesty to provide by Order in Council for any statutory or non-statutory function of a UK Minister of the Crown, so far as those are exercisable in or as regards Scotland, to be exercisable by the Scottish Ministers instead of or concurrently with UK Ministers of the Crown. You will appreciate, Mr. Cummings, that that is a bit of a mouthful, but it refers to a mechanism better known as Executive devolution.
Such orders are subject to the affirmative procedure in the UK Parliament, but they must also be agreed to by the Scottish Parliament. The order was agreed to by the Justice 1 Committee of the Scottish Parliament on 14 January, and it is due to be put to the full Parliament on 23 January.
The draft order was laid before both Houses on 12 December, and it is hoped that, subject to parliamentary approval, it will be made at the Privy Council in February. No regulatory impact assessment
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has been carried out on the order's effects, as it will not have any significant effect on society, business or industry.
The order authorises the transfer of functions under certain provisions of the Taxes Management Act 1970, the Access to Justice Act 1999, the Rehabilitation of Offenders Act 1974 and the Transport Act 2000. In respect of the function under the 2000 Act, which relates to the payment of a transport grant, the power will be exercisable concurrently by the Scottish Ministers and the Secretary of State for Transport, so the Secretary of State will continue to be able to exercise that function, notwithstanding this order.
Pete Wishart (North Tayside): Will the Minister please explain what would happen if there were a disagreement between the Secretary of State and the relevant Minister? Who would have the final say on those issues?
Mrs. McGuire: I shall come back to that point specifically during my general comments, although the hon. Gentleman has had his answer—the Secretary of State will continue to be able to exercise that function, notwithstanding this order. This is a functional devolution rather than the exporting of a power.
Regarding the relevant functions under the 1970 Act, the 1999 Act and the rehabilitation of offenders provisions, the order will have the effect of making them exercisable, in or as regards to Scotland, by the Scottish Ministers instead of by a UK Minister. That is slightly different from the first provision, as I hope the hon. Member for North Tayside (Pete Wishart) appreciates.
The order will transfer to Scottish Ministers the power to commence in Scotland sections 101 to 103 of the 1999 Act, which will have the effect of amending the 1970 Act. The amendments concern immunity of and indemnity for the general commissioners of income tax and their clerks in relation to legal proceedings arising from the execution of their duties.
The amendments have already been implemented in England, Wales and Northern Ireland, where general commissioners are appointed by the Lord Chancellor. As the power to appoint general commissioners in Scotland has already been executively devolved to the Scottish Ministers, it is appropriate for them to implement the changes there, once the necessary powers have been given to Scottish Ministers by the order. The order will also transfer to Scottish Ministers powers under those amendments to make associated regulations.
I turn to the exceptions relating to the 1974 Act. The order makes provision in relation to that Act, which aims to make life easier for people who have been convicted of a criminal offence and who have not reoffended. If someone does not receive a further conviction by the end of their prescribed rehabilitation period, their conviction becomes spent. In general, that means that they do not have to declare it and they cannot be prejudiced by it.
Sections 4(4) and 7(4) of the 1974 Act allow subordinate legislation to be made that excludes or modifies the application of, or makes exceptions to,
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the regime for the rehabilitation of offenders under that Act. The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975, as amended, is made under those sections, and it sets out categories of employment involving a particular level of trust to which the Act does not apply and for the purposes of which convictions never become spent.
As the rehabilitation of offenders generally is not a reserved area, the transfer of functions under the order will give certainty to the exercise of powers by the Scottish Ministers to make or amend the exceptions order under the 1974 Act. The Scottish Ministers will therefore have the power to amend all aspects of the exceptions order, even if an amendment may have an impact on a reserved area, such as financial services. Liaison will continue between the Home Office and the Scottish Executive to ensure consistency, but the order will allow Scottish Ministers to amend the exceptions order for Scottish purposes.
Under article 3, the order will also transfer to the Scottish Ministers the power under section 272 of the 2000 Act to make certain awards of financial assistance to shipping services. That power will be exercisable concurrently with that of UK Ministers.
Under current legislation, the Scottish Executive are able to award freight facilities grants for waterborne services that begin and end in Scotland, but they have no power to do so where one end of the service lies elsewhere in the UK or abroad. Financial assistance for shipping services that start or finish outside Scotland is, of course, a reserved matter.
The power in the order will principally enable Scottish Ministers to award freight facilities grant for short sea shipping movements that do not begin or end in Scotland, such as the Rosyth to Zeebrugge ferry. The additional function will thus enable the Scottish Executive to develop an integrated and more sustainable transport system for Scotland by, in this instance, encouraging the removal of heavy-goods vehicles from Scottish roads. The grant scheme is discretionary. It is understood from the Executive that any increase in costs associated with the transfer of powers can be catered for within existing resources.
As always, I am willing—happy, indeed—to answer any specific questions on the order.
Mr. Peter Duncan (Galloway and Upper Nithsdale): I am delighted to hear that the Minister is happy to answer questions on the order, because we on this side of the Committee have been looking forward to the debate for some weeks. We relish the opportunity to put questions to her. Interestingly, we are revisiting the transfer of functions under the Scotland Act despite doing so relatively recently.
As to most of the questions that I shall raise with the Minister, on which I seek her guidance or a reply in due course, why is it necessary to discuss them once more and why were not certain aspects apparent when we last discussed these matters? Why, indeed, were they not considered some time ago? Interestingly, while the Government are free and easy in introducing orders in respect of the Scotland Act, they are perhaps
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somewhat less so over introducing a Bill to amend the Scotland Act before the Scottish parliamentary elections in May.
However, it is reasonable to suggest that there is genuine evolution here, and my scrutiny will focus on the major points of principle that are apparent in some of the functions that are being effected. First, as regards the exceptions order under the 1974 Act, will the Minister tell me why the Government have decided that it is particularly necessary at this point to devolve that power? There has to be a reason for everything, and I suggest to her that it would be helpful to share with the Committee the reason for the power being effected now.
Will the Minister share with us specific examples of where it has been impractical for the Scottish and UK Ministers to co-operate on those issues? It seemed to us perfectly reasonable that co-operation would happen, and I cannot imagine that relations between the Government and the Scottish Executive have broken down to the extent that it is impossible. Perhaps she will share with us why co-operation is no longer possible.
Obviously the order affects other agencies, so will the Minister confirm what consultations the Government had on those issues with, for example, the Financial Services Authority before they introduced the order? Certain agencies depend on the Government for the provision of a constant legal framework across the UK. What was the FSA's response to those consultations? Did it have concerns regarding transferring the function to the Scottish Executive? If so, have they been ignored or not?
Moving on to the 2000 Act, as the Minister confirmed, the provisions as they affect that legislation relate to the payment of transport grants, particularly freight facilities grants, to links that go outwith the bounds of Scotland. Obviously, we are revisiting territory that we covered in a debate, which I recall with affection, held on 20 May 2002 and relating to shipping services between Scotland and Northern Ireland. Again, will the Minister confirm why the order is particularly necessary? She mentioned the obvious example—the Rosyth to Zeebrugge ferry. Was it not anticipated last May that that service would require support? Indeed, what has changed since?
What sums of money are likely to be involved? In debating the transfer of such functions, it is reasonable to ask the Committee to consider what sums might immediately be payable due to the transfer of functions taking place now. Will those sums be met from the existing Scottish Executive budget or is a further Treasury grant being sought?
In general terms, I say on behalf of this side of the Committee that there may be a justifiable case for providing support to ferry journeys that begin or end outside Scotland, but that link Scotland to some other port. It seems to us, however, that the power could also provide support to services that start and finish outside Scotland. Why does it have to be devolved to the Scottish Executive if there is no particular route in mind regarding such support and why is the order necessary here?
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In relation to the 1999 Act and the 1970 Act, will the Minister confirm what specific instances have led the Government to conclude that the transfer of the power is required? Have they received representations from the Inland Revenue? That strikes us as a significant item that we should highlight, so I seek the Minister's specific guidance. The explanatory notes, which, as usual, are helpful, state:
''The inserted sections will give General Commissioners of Income Tax immunity against action and expenses in legal proceedings arising from the execution of their duties, provided that bad faith is not proved. The Order also transfers to the Scottish Ministers the power to indemnify Commissioners and their clerks in relation to expenses they reasonably incur or are ordered to pay in any legal proceedings arising out of the execution of their duties.''
It is obvious, of course, that those duties are in respect of taxation matters, which I thought were one of the most clear-cut cases of a reserved power. We on this side of the Committee certainly seek clear guidance from the Minister that this is not the start of a trend.
I cannot for the life of me see why that power needs to be devolved at this particular time, but perhaps the Minister can reassure us on that point. Why cannot the Treasury continue to exercise such powers alongside Scottish Ministers? Does not the change undermine the principle of reservation in taxation matters?
I should have mentioned one other point in referring to the 2000 Act. I seek the Minister's reassurance that there is no suggested extension through the introduction of a similar order in respect of other forms of transport. There is obviously a read-across in terms of shipping freight to aviation freight and an obvious comparison, but we on this side of the Committee seek a reassurance that there is no general trend to seek further devolution of those powers.
If the Minister reassures us on those points, our anticipation of the debate will be satisfied in full.