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Lord Sewel: My Lords, the income tax power will apply to all income that is subject to income tax except savings and dividend income. On the administrative cost of raising income tax, there is at chapter--

Lord Strathclyde: 7.19.

Lord Sewel: My Lords, I am most grateful to the Opposition Chief Whip for that. The White Paper states,

That refers to collection through PAYE which will generate additional cash for employers. Costs will fall upon the parliament in changing and administering the

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new tax system--the modification to the tax system--and there will, of course, be a compliance cost for employers.

Lord Mackie of Benshie: My Lords, I have been advocating a Scottish parliament longer than anyone else in this House. I started to do so in the election of 1950. I am delighted that this has come about at long last. I am astonished at how good the White Paper is. I did not think the Government could be so generous. I remember that the noble Lord, Lord Mackay, also advocated a Scottish parliament at one time. I am amazed that he does not praise the generosity with which the Government will throw away at least a dozen seats in Scotland and will introduce PR, which will give us a fair chance of a fair parliament in Scotland.

The White Paper is enormously promising. Of course there are difficulties, but in congratulating the Government on the White Paper which delights me, I ask them how they propose to apply the sensible provision in chapter 4.15 which might solve many of the problems referred to by the noble Lord, Lord Mackay of Ardbrecknish. Paragraph 4.15 states,

    "The Scottish Executive and the UK Government may from time to time take different views ... There will therefore be procedures for identifying and resolving".

That is a sensible measure. Will the Minister say a little more about that?

Lord Sewel: My Lords, I thank the noble Lord, Lord Mackie of Benshie, for what he has said about the White Paper. I repeat that our guiding principle in working towards the White Paper and its publication and the policies that it contains has been to establish a fair, stable and enduring settlement. In some areas that may work against the immediate interests of my party but that is a price worth paying.

The noble Lord asked about the dispute procedures on vires. That matter would be dealt with during the progress of legislation through the Scottish parliament. It would be for the presiding officer to reach a view on the competence of any piece of legislation, whether or not it fell within the competence of the Scottish parliament. However, it would be open to the UK Government to seek to challenge the vires of an Act of the Scottish parliament. If that could not be resolved by agreement, it would be resolved through the Judicial Committee of the Privy Council.

Lord Merlyn-Rees: My Lords, I refer to next steps. Legislation in this field and in the case of Welsh devolution will not necessarily be easy. Could not a series of research papers be produced which would not reflect government policy but provide ideas on how these various matters may be dealt with? It is worth looking at the Act concerning the government of Ireland which went through this Parliament in the 1920s. How did that Act deal with issues concerning Members of Parliament elected for this Parliament and Members of Parliament elected for the devolved administration? In my early days in the other place there were Unionist Members of Parliament from Northern Ireland voting on matters which affected the United Kingdom, although

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they had pronounced powers relating to devolution in Northern Ireland. The excellent ideas of the noble Viscount, Lord Whitelaw, for power sharing in the Province--they came to naught for other reasons--should be considered. All the papers relating to that are available. The rolling devolution of the noble Lord, Lord Prior, should be looked at.

Lastly, let us consider how Northern Ireland encompasses the European aspect. Northern Ireland has offices in Brussels, New York and London. The question of what to do about Europe is not new. I see people shaking their heads. It is answered for Northern Ireland; why not for Scotland?

Lord Sewel: My Lords, the noble Lord makes a number of powerful points. Some of us have been reading research papers, and even writing the odd research paper, on this issue for some long time. Some of us are even familiar with the precise details of the Government of Ireland Act 1920.

The valuable point that the noble Lord makes is to draw our attention to the Ulster situation. During the period of the Stormont Government, Westminster Members of Parliament from Ulster came to Westminster and voted on a full range of issues. There was never any questioning of that. We have never dealt with the problem of regional legislatures in the United Kingdom by adopting a two-tier membership approach, an in-out approach. Parliament has consistently set its face against that move. It is unworkable, and we have shown how we seek to move forward on the basis of a fair and just settlement.

Lord Renton: My Lords, will the Minister answer the question of my noble friend Lord Campbell of Croy about the ultimate responsibility of the Secretary of State to the United Kingdom Government and Parliament? Will he also tell us what is to happen when there is a conflict of interest between the United Kingdom Government and the Scottish executive and parliament on a European Union matter? The White Paper does not answer that question.

Lord Sewel: My Lords, I apologise if I did not answer the question of the noble Lord, Lord Campbell of Croy. Let me make clear that the ultimate responsibility for the Secretary of State for Scotland will be to the Westminster Parliament. It is unlikely that he will be a member of the Scottish parliament. He is a Member of the UK Government and will be a Member of this Parliament. He is responsible and accountable to the UK Parliament.

Lord Campbell of Croy: My Lords, that was not quite my question. I asked what functions that he now retains through the Scottish Office will he retain, if any?

Lord Sewel: My Lords, the areas of domestic policy that the noble Lord identified will pass to the Scottish parliament. Those functions will no longer stand to be exercised by the Secretary of State for Scotland.

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One of the clear responsibilities of the Secretary of State for Scotland in these devolved arrangements will be to represent Scotland's interest in the reserved matters: to make sure that Scotland's voice is heard across the important range of reserved matters which remain at Westminster. Secondly, he can make an effective contribution by acting--I believe that the noble Lord, Lord Crickhowell, amused us in an earlier debate with his use of the word "conduit"--as a means of communication. Heaven's above, my Lords, we are a mature democracy. We must recognise that a Scottish parliament and a UK Parliament may have differences of views. As we are mature politicians in a mature democracy, one of the important contributions that the Secretary of State could make is to act as an effective line of communication between those two governments.

There was a second point which escapes me.

Lord Renton: My Lords, who is to have the last word when there is a conflict of interest between the UK Government and the Scottish executive in parliament on a European Union proposal?

Lord Sewel: My Lords, we are absolutely clear on that in the White Paper. It is the fact that there will be an agreed UK line; and in the end it is the responsibility of the UK Government to represent the United Kingdom in Europe.

Lord Howie of Troon: My Lords, is my noble friend aware that I welcome the White Paper with great pleasure, apart from some uneasiness about which he knows concerning the proposed electorate for the referendum? I leave that aside.

I wish to question the Minister on the unicameral nature of the proposed assembly. He says that scrutiny will be done largely through pre-legislative committees. It may be more complicated than that. But is it not a weakness that in the proposal the scrutiny and legislation will be carried out by the same people? Under the Westminster system the legislation, and the scrutiny of it, are undertaken by two different sets of people, with two different sets of expertise? Is the noble Lord quite sure that the proposal is better than the bicameral nature of the Westminster Parliament?

Lord Sewel: My Lords, I am grateful to my noble friend for his endorsement of the White Paper. The noble Lord makes a valid point, but I do not think that it is persuasive. The point can equally well be made that in a unicameral system one can set up scrutiny committees which have that specific role. Therefore the same people are not scrutinising the legislation. There is a difference of function built into the committee structure of the parliament.

My noble friend Lady Ramsay of Cartvale is the expert in this area, but I am aware that there are some extremely interesting and effective examples of how Scandinavian parliaments build a scrutinising

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mechanism into the structure of unicameral parliaments. That is a matter that the new parliament will wish to examine, and perhaps adopt.

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