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Lord Mayhew of Twysden: My Lords, I hesitate to interrupt the noble Lord and am grateful to him for giving way. I sensed a certain reproach. He was being as reproachful as his generous nature permits him to be when looking in my direction and kindly dealing with some, though not all, of the points that I made.

Perhaps I can ask him this. We all accept that there are matters of intelligence which must not be divulged. But there is one matter which is wholly in the public domain and many noble Lords adverted to it tonight; that is, that there are instances in the past where the Provisional IRA demonstrated their ability to turn off punishment beatings when it suited them. Do the Government accept that that is the case? If so, what conclusion do the Government draw from the fact that

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it has not chosen to exert that power in the present circumstances? Do the Government accept that punishment beatings are continuing virtually unabated?

Lord Dubs: My Lords, the noble Lord poses a difficult question. In so far as my words were words of reproach, they were couched in the gentlest possible terms.

As regards the substance of the question, there have been times when punishment beatings have declined and times when they have happened more frequently. But it is not easy to draw from those facts the conclusion that somehow on one occasion the IRA stopped them happening and on another it turned a blind eye or sanctioned them. I cannot go along with the noble Lord in drawing that conclusion. These are more difficult judgments than are susceptible simply to the statistics of these very regrettable incidents.

We have probably exhausted all the arguments. I thank noble Lords for their contributions to the debate. This is a very, very important piece of legislation; it is intrinsic to the agreement. The Government are optimistic that this agreement will lead to peace in Northern Ireland. We are taking an important step along that path tonight. I beg to move.

On Question, Motion agreed to.

Scotland Bill

8.30 p.m.

House again in Committee on Clause 61.

Lord Mackay of Ardbrecknish moved Amendment No. 275B:

Page 27, line 6, at end insert--
("( ) No payment shall be made under subsection (2) unless the Secretary of State is satisfied that appropriate rules have been made under section 66(1) for each of the purposes described in that provision.").

The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 275C.

These amendments refer to Clause 61, which deals with the Scottish Consolidated Fund. We have moved away from the discussion of how it will be arrived at--the actual total--and are moving into what should be done with it. As the Bill says, the Secretary of State will make payments into the fund out of money provided by Parliament. Amendment No. 275B makes clear that no payment should be made unless the Secretary of State is satisfied that all the proprieties in Clause 66(1) are in place.

These proprieties are that proper accounts should be kept, that the Auditor General for Scotland should ensure that the funds are being properly spent on proper purposes, and all the like things that go with proper financial control. We will come to that in greater detail later. By the nature of things we have come to it before the main portion of this matter, which comes in Clause 66.

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I am suggesting that the Secretary of State should be satisfied that all these proprieties are in place. Why the Secretary of State? Because he is the man who is handing out the money. He is the man or woman who is part of the Government which will raise the money, so he has some responsibility for its spending. By that I mean not how it is spent but that it is spent properly; that proper accounts are kept and that it is looked after properly.

Amendment No. 275C states that no payment should be made by the Secretary of State unless he has a report on the expenditure proposals. This is necessary not so that he can control them or double guess them, but so that he can lay a report before Parliament prior to Parliament voting the supply. At present, I think that the detailed supply estimates that go to the Scottish Office cover some 10 Votes and 73 line items.

We have to accept that the other place will have to continue to vote supply. They will, I assume, be able to ask questions about that vote. We cannot ask the other place to just vote £14 billion and ask no questions about how it is being spent or whether it is being properly spent. We cannot expect the House of Commons and its Public Accounts Committee simply to rubber stamp the sums that are being sent to Scotland. There has to be an accountability for the money. I suggest that it must remain with those who raise the money. They must therefore have some detail.

As the Bill is drafted, the Secretary of State is just about a postman. He picks up £14 billion from the Treasury and passes it on to the Scottish executive. Amendment No. 275B would hold the Secretary of State to account if there were no proper accounting or auditing rules. I am not interested in whether or not it has made a decision to spend more on health or less on education, or whatever decisions they take about money. I am concerned about the accounting procedures and the auditing rules. The House of Commons needs this information in order to judge; it can only get it from the Secretary of State; and he can only get it from the Scottish parliament.

These two amendments are suggested ways by which we might link the Scottish parliament and executive into the House of Commons and into the monitoring that the House of Commons does, through the Comptroller and Auditor General and the Public Accounts Committee, of the amount of money spent. Although I will try other methods, the only person available to make sure that the proper accounting and auditing procedures are in place to satisfy the House of Commons before it dishes out £14 billion, is the Secretary of State. I beg to move.

Lord Sewel: Amendment No. 275B is designed to ensure that the Secretary of State is satisfied that appropriate arrangements are in place for accounts and audit matters before he makes any payments to the Scottish Consolidated Fund.

I agree--particularly as a former member of the Accounts Commission for Scotland--that it is important for the parliament to legislate to put in place its rules for accounts and audit as early as possible, but it must be for the parliament to decide for itself what the proper

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arrangements should be, subject to the requirements in Clause 66. It would not be appropriate for the Secretary of State to decide whether these arrangements are proper.

As well as that, it is also important that there is a smooth transfer of audit responsibility from the current arrangements for the Scottish Office to the new arrangements provided by the parliament. That will be all the more essential as there is to be a transfer of functions during the course of a financial year.

The transitional provisions that the Government will bring forward under the Bill will deal with this important point and set out rules for the transitional period until the parliament has put in place its own legislation under Clause 66, which it is required to do. We expect this to be in place for the financial year beginning 1st April 2000, but if it is not the transitional arrangements will continue. With this reassurance, I hope the noble Lords will withdraw this amendment.

Turning to Amendment No. 275C, this suggests that the other place should receive a report of the spending proposals of the executive before it votes the supply for the grant the Secretary of State will make to the Scottish Consolidated Fund.

The amendment is very specific. It states:

    "The Scottish Executive has submitted to the Secretary of State a report containing particulars of the expenditure proposals to which the payment relates".

So it is asking for the fine details of the Scottish executive budget. That would amount to the UK Parliament being asked to approve the Scottish parliament's spending proposals. That is at odds--fundamentally--with the whole essence of devolution. The allocation of resources, within the overall budget, is quite clearly a matter for the parliament. Indeed, it is also a matter for the parliament whether or not to vary the amount of that budget, upwards or downwards, using its own tax raising power.

The UK Parliament will continue to have a strong locus in that it will grant, by the normal means of approving Estimates, the sums to be paid by the Secretary of State into the Scottish Consolidated Fund. There are also provisions in relation to the accounting and auditing arrangements of such sums paid to the Scottish Consolidated Fund. Under Clause 62, rules will have to be made by or under an Act of the Scottish parliament in relation to payments out of the Scottish Consolidated Fund; and under Clause 66 in relation to accounting and auditing arrangements. It is right and proper that these matters should be for the Scottish parliament itself. Indeed, I believe that to accept the noble Lord's amendments would provide a recipe for ongoing friction between the two parliaments as well as cutting across one of the key features of devolution--that the Scottish parliament makes its own decisions in relation to devolved matters.

The noble Lord assumed that the other place could ask questions when it came to voting supply for the Scottish parliament. The theoretical position is clear. The answer is yes. However, the proceedings are purely formal in a way and I think that the convention will

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quickly develop that it would not be appropriate for the other place to question the details of the budget of the Scottish parliament. If we were to get into the position of detailed questioning in relation to the granting of supply, we would get very much into second guessing, which would be a recipe for friction and conflict between the two parliaments.

I hope I have said enough on the first amendment to indicate that there is a safeguard in the transitional arrangements which will be required to ensure proper auditing and scrutiny of accounts and that those transitional arrangements will remain in force until proper arrangements are put in place by the Scottish parliament. On that basis, I hope that the noble Lord will feel able to withdraw the amendment.

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