Examination of Witnesses (Questions 1-19)
RT HON
DES BROWNE
MP, DAVID CAIRNS
MP AND MR
DAVID MIDDLETON
24 JUNE 2008
Q1 Chairman: Good afternoon. I would
like to welcome today's witnesses to our session. Before we start
detailed questions, would you like to make an opening statement?
Des Browne: Thank you, Chair.
First of all, can I say how pleased I am to be here! This is the
second time that I have been invited before your Committee to
answer questions on the Annual Report for the Scotland Office
and the Office of the Advocate General. I am supported by David
Cairns, the Minister of State for the Scotland Office, and by
David Middleton, who is the head of the office; and appropriately
I propose to bring them in on some of the questions! Can I say
on another subject—because I am conscious that this session
is about the annual report, but it will not have escaped your
notice that I released a written ministerial statement in relation
to the conclusion of our consultation on the Gould review, and
we made that available today earlier than would have been a normal
response to your report on that subject. This is about the annual
report, but we were pretty confident that Gould might come up
in the questions that were asked; and rather than refer you repeatedly
to a response which we had not yet published, we brought it forward
to today to give everybody an opportunity to discuss the issue
in the context of our responses. We promised to keep Parliament
in touch with our responses to Gould's original report, and that
is why I have released a ministerial statement today following
our consultations, to make sure that we could have a full discussion
on the range of issues that were to occur.
Q2 Chairman: Secretary of State,
in your view what are the key challenges facing you and the Scotland
Office in the coming years; and what policy areas do you expect
to spend most of your time on?
Des Browne: I think the key challenge
will be the consistent challenge that we have faced, which is
set out quite comprehensively in the annual report; and that is
in fulfilling the objectives we have set ourselves principally
and ensuring that Scottish issues are represented at the highest
level of government, and that we ensure that devolution works
in the best interests of the Scottish people. I suspect that they
will continue to pursue the objectives that we have set out in
the report: objective 1 to ensure Scotland's interests in relation
to reserved areas are known and represented; fulfil all requirements
of objective 2 in relation to UK Government Parliament activities;
and objective 3 to handle all financial matters timeously. I will
let David and others deal with those. It is difficult to anticipate
what of all that very broad range of public policy issues will
be the priority going forward, but I suspect they will relate
probably to the areas where the Government chooses to legislate—more
likely than not.
Q3 Mr MacNeil: You obviously act
in the best interests of the Scottish people. Would that also
include ensuring that attendance allowance reaches the Scottish
Government, and that if the Scottish Parliament votes to change
to local income tax that any monies that are currently paid to
Scotland with the council tax are still paid to Scotland after
the change?
Des Browne: Can I say first of
all that if I recollect this figure correctly, £470 million
of attendance allowance is paid to recipients in Scotland every
year; and of course I will continue to ensure that those people
who qualify for attendance allowance or any other benefits in
Scotland continue to get them. As far as any anticipated changes
to council tax are concerned, I have made my position clear on
a number of occasions in the House. I will repeat it, Mr MacNeil,
if you think it is necessary for me to do so. When we see an alternative
to the council tax that we think can be legislated upon in Scotland,
then I will be able to give you a detailed response to it; but
it strikes me as pretty obvious that council tax benefit is there
to benefit those who pay council tax; and if people are no longer
paying council tax then they will not need council tax benefit.
Q4 Mr MacNeil: Does that not leave
you open to the charge that you are more Westminster's man in
Scotland then Scotland's man in Westminster?
Des Browne: Well, I have to say,
Mr MacNeil it leaves me open to any sound-bite that you care to
advise! I am sure you were practising that in the corridor before
you came in here! I say it with respect to you, that I have been
representing Scottish people in this Parliament for a significant
period of time, and involved in Scottish politics and probably,
looking at your possible age, much longer than you have, and you
are the last person that needs to tell me how to represent Scottish
people.
Q5 Mr MacNeil: Maybe not!
Des Browne: Well, you are, with
respect, the last person to tell me how to represent Scottish
people.
Q6 David Mundell: I would like to
ask more questions about structural arrangements in relation to
carrying out all your responsibilities because I have to admit
I am not clear in relation to devolved settlement who does what.
You may recall that on the floor of the chamber I asked you previously
about a memorandum of understanding that you said was the responsibility
of the Minister for Justice. I have had written question responses
indicating that Paul Murphy, Secretary of State for Wales, has
a responsibility for the Joint Ministerial Council and the management
of that, although as I understand it, when that body meets, the
Minister of Justice is to chair it. Can you clarify, in terms
of carrying out your objectives what your role is in terms of
managing the devolved settlement, and where do these other individuals
or bodies fit in?
Des Browne: As far as the Joint
Ministerial Council is concerned, the key to that is in the title;
it is a joint ministerial committee. It was not designed to just
serve relations between Scotland and the United Kingdom—Scotland
in a devolved sense and the United Kingdom. It is intended to
be a joint committee. When it does meet tomorrow, under the chairmanship
of Jack Straw, then there will be representatives from both Northern
Ireland in a devolved sense, and representatives from the Welsh
Assembly Government, as well as representatives of the Scottish
Executive. All three Secretaries of State will be there as well.
If your question was intended to suggest that it would be appropriate
for an individual Secretary of State to convene and chair that,
then it strikes me that that would be entirely inappropriate.
A UK government minister of course should chair it, but the respective
Secretaries of State—and I will be one of them—will
be present. Why will I be there? I will be there to respond in
relation to the areas of policy that I have responsibility for
as Secretary of State for Scotland for any issues that are raised;
and that particularly necessarily will feed in to individual areas
of policy for other Secretaries of State who are not represented.
Q7 David Mundell: I was trying to
get to the extent of your responsibilities and the responsibilities
of the Scotland Office for managing the devolution settlement,
and where other parts of the UK Government come into that process.
Des Browne: The point I am making
to you, Mr Mundell, is that there is more than one devolution
settlement.
Q8 David Mundell: Indeed, but—
Des Browne: If you move off the
JMC, which in a sense has taken us down a cul-de-sac, the whole
purpose of this annual report is to set out what we do. I am not
going to bore the Committee by reading it all, but we set out
in some detail, and quite comprehensively, what we have done in
terms of engagement. We have a particular responsibility in the
Scotland Office in relation to devolved powers and the management
of them in terms of the structure that exists; so we record where
in terms of relevant sections of the Act we have devolved executive
powers that have devolved through that process to legislative
power. We set out where we have helped other departments manage
the effects of their legislation, for example policy development
where they impinge on devolved areas, and we have been singularly
successful in achieving consent from the Scottish Parliament to
legislation, which has transgressed—if I can use that word—has
crossed that border between reserved and devolved power. This
Sewel motion process or legislative consent process has been used
quite significantly, not just by the present Scottish Parliament
but last year on a number of occasions. By and large, at the heart
of what we do is ensuring that in policy development and engagement
where it is necessary between UK departments and the devolved
administration in Scotland, the Scottish Executive of the Scottish
Parliament, there is an awareness of where matters should be discussed,
and we facilitate bilateral relationships a lot of the time. It
is difficult without producing time sheets to say how much time
is involved doing that, but I know the Minister of State spends
a lot of time doing that. Not only that, but we have been quite
specifically engaging across Scotland geographically and in civic
Scotland, as the Scotland Office, in a concentrated fashion, allowing
people the opportunity to speak to us as representatives of the
UK Government to feed in issues back into parts of government
here. I know that you yourself have attended, as indeed have Mr
MacNeil and others, a number of events in the Scotland Office
where we allowed people who have particular interests the opportunity
to get across their point of view and give members of Parliament
to do that. That is essentially what the report says or presents
in more detail and produces the statistics; not only that but
we answer a lot of questions and have a lot of correspondence
on these issues.
Q9 David Mundell: I am not critical
of the Scotland Office performance on the issues you have mentioned;
but I am still unclear about the role, for example, of the Secretary
of State for Justice in matters in relation to the devolved settlement
to Scotland. Where does his responsibility end and yours begin
in terms of the management of that devolved settlement?
Des Browne: Issues about the shape
and machinery of government of course are matters for the Prime
Minister and always have been. This Prime Minister, who has now
been in office for about a year, at the beginning of his term
of office committed himself to a quite significant and challenging
agenda in relation to constitutional issues. There has been a
Green Paper and a bill is expected. There has been a significant
amount of communication from his department in that context with
the devolved administration. I know about that, and we have facilitated
quite a lot of that. The Minister for Justice and the Lord Chancellor
have a significant role in government in terms of these constitutional
matters, and over and above that, just for ease of administration
because of the size of our department, we take advantage of the
Ministry of Justice, as it were, as a parent department for administration
in terms of the administration of our office. It is quite clear
that necessarily in government there will be points at which one
department's responsibilities are shared or are very close to
another department's responsibilities. That is the structure.
Q10 Chairman: On the issue of local
income tax, the Secretary of State might be aware that Glasgow
City Council published a report stating that if they introduce
three pence in the pound there will be a shortfall of £60
million which will be devastating for jobs and subsidies in Glasgow.
Some councils might have to put it up to six pence in the pound.
What is your view on this? Who will pay the difference?
Des Browne: Council tax presently
raises over £2 billion in Scotland—£2.171 billion.
My understanding is that this proposal—but we have not seen
the detail of it so do not know precisely what it will raise.
Of course it as its effects in Scottish society become apparent,
for example as it affects students or student nurses—and
I have to say that as Secretary of State for Defence I have some
concern about the effect it may have on people who are deployed
into operational environments who at present enjoy a council-tax
holiday. As these become apparent and we get responses to these
that change what we understand the proposal to be—a three
pence local income tax is £1.35 billion, so there is a significant
shortfall. I am not surprised that the City of Glasgow Council's
view is that that shortfall will affect them; of course it will
if there is that difference. At the end of the day, we have to
see the detail of this. We have to see the legislation and how
this will affect things and test it. It seems to me that there
are more questions than there are answers, and I am not in a position
to be able to express any comprehensive responses until I see
how this will work.
Q11 Mr MacNeil: What are the figures
for the local income tax that are raised currently by council
tax? What is the equivalence then of the current council tax,
say, for the average wage? What is the equivalent pence in the
pound, because you are saying local income tax will be three pence
in the pound. Council tax is rising more than that. What is the
equivalent at the moment of the council tax? Does it move on to
six pence in the pound?
Des Browne: I do not think it
is. The three pence local income tax and poll would generate that.
But you have to understand that there is quite a substantial amount
of people's income which is otherwise taxed in Scotland that would
be excluded from this process.
Q12 Mr MacNeil: On the specific ...
.
Des Browne: I have to say, on
specifics, that I do not know what the calculation is. I have
not had to do it. I am just looking back, with respect, Mr MacNeil
to you—
Q13 Mr MacNeil: It would seem to
be higher than three pence in the pound ...
Des Browne: But I am responding
to the difference that is generated.
Q14 Mr MacNeil: Would you agree it
seemed to be higher than three pence in the pound?
Des Browne: No, I would not agree
it would seem to be anything of the sort. It depends what your
income base is. You have restricted yourself with this income
tax to earned income only whereas I would not be prepared to restrict
any progressive tax to earned income only.
Q15 Mr Devine: Secretary of State,
we have what we call the Barnett bonus, and I will give you a
practical example. Tom Clark sets up an all-party group looking
at the deficiencies in services for disabled children. They successfully
negotiate £365 million from Government, £36 million
of which goes to Scotland. I can find nobody in my health board
or local authority who can tell me where this money has gone,
and I am having great difficulties. It is the very practical things
like wheelchairs, aids and house improvements. I can find that
information nowhere. If you are thinking of Crossrail, for example,
with £150 million in the Scottish Government and various
other initiatives that give us the Barnett bonus, I wonder whether
we should be talking about ring-fencing this money so that if
we make a decision here it means that the Scottish Government
benefit—that we should be saying this money is solely for
disabled children, which is not happening in this case?
Des Browne: In this particular
case it is what quite often happens. The Government at UK level
makes an in-year change in public expenditure. In this case a
colleague, Tom Clark, was instrumental in persuading both the
Chancellor and the Prime Minister to find an additional £340
million towards respite care for families. That had a Barnett
consequence of £34 million which went to Scotland, but that
then becomes part of the Scottish grant. Of course it is up then
to the Executive of the Scottish Parliament to decide how they
are going to spend that money. Of course, they have to be accountable
for it. My understanding is—and this has been made clear
to me by ministers in the Scottish Executive—that they do
not feel obliged to spend that £34 million on families who
have disabled children—but that is their choice. It would
be inappropriate for the UK Government to ring-fence that sort
of money. We need a degree of transparency so that the Scottish
voters know that the money is not being spent on that particular
subject, and then they can ask those making the decisions what
they have chosen to spend the money on; and then they can make
a decision as to whether they think that is a more important priority
for example than people with disabled children.
Q16 Mr Davidson: Would you agree
that there is a need for Barnett consequentials to be identified
in some way, and would you be agreeable to setting up a mechanism
that would notify either the Scottish Affairs Select Committee
or every Scottish MP every time that there is a Barnett consequential,
in order that we can identify where the additional money is being
provided, and follow up politically, rather than by ring-fencing
the question of where that money then goes?
Des Browne: The present process
is that departments, and in this case our department, by a process
of estimates responding to the estimates of spring and winter—we
provide a memorandum to the Scottish Affairs Select Committee
identifying any changes to the estimates for both spring and winter.
In the future, if the Committee wishes us to do that we would
be prepared to make clear that these changes arose from Barnett
consequentials and explain the UK government spending that gives
rise to them.[1]
That would give that a degree of transparency and people would
be able to see why, for example, Scotland had these additional
resources, because the department down here got that money for
a purpose and then—
Q17 Mr Davidson: It is clearly helpful
to have identified what the sums of money are rather than simply
waiting for the quarterly or half-yearly reports.
Des Browne: I think spring and
winter estimates are the process.
Q18 Mr Davidson: Could it not come
forward as soon as that is decided, rather than waiting for the
estimates, rather than having several lumped together? Each time
a decision is taken at UK level that has Barnett consequentials
we are immediately notified as a committee about the level of
finance that would go to Scotland in order that that can be pursued
right away?
Des Browne: I hear what you are
saying, Mr Davidson. I would prefer to discuss this with my Treasury
colleagues. There are settled ways of reporting changes in public
expenditure to Parliament, and I am not prepared here, without
further consultation, to change those ways. At the moment there
is this process of the memoranda that we send, explaining any
changes that there are to the estimates. I am offering to make
that more detailed; but I do not think that that would in any
way fundamentally change the relationship between the Executive
and Parliament in terms of accountability.[2]
It may well be that what you are suggesting would not either,
but I would prefer just to test it—but I hear what you say.
Q19 Mr Davidson: I know that you hear
what I say, but will we get a reply back from you maybe be in
time for the next meeting, because I would not like to wait until
the next quarterly report to find out that you have agreed with
us.
Des Browne: You will get a reply
back from me just as soon as I have an answer to give you.
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